<PAGE>
<PAGE>
WARBURG PINCUS ADVISOR FUNDS OCTOBER 31, 1996
FIXED INCOME FUND
GLOBAL FIXED INCOME FUND
NEW YORK INTERMEDIATE MUNICIPAL FUND
A
ANNUAL REPORT
A Prospectus containing more complete information, including
charges and expenses and, where applicable, the special
considerations and risks associated with international
investing, may be obtained by calling 800-369-2728 or by writing
to Warburg Pincus Funds, P.O. Box 9030, Boston, MA 02205-9030.
Investors should read the Prospectus carefully before investing.
[WARBURG PINCUS LOGO]
INVESTMENTS
<PAGE>
<PAGE>
The views of the Funds' management are as of the date of the letters and
portfolio holdings described in this annual report are as of October 31, 1996;
these views and portfolio holdings may have changed subsequent to these dates.
Nothing in this annual report is a recommendation to purchase or sell
securities.
<PAGE>
<PAGE>
WARBURG PINCUS ADVISOR FIXED INCOME FUND
ANNUAL INVESTMENT ADVISER'S REPORT
- --------------------------------------------------------------------------------
Dear Shareholder: December 11, 1996
The objective of Warburg Pincus Advisor Fixed Income Fund (the 'Fund') is
high current income consistent with reasonable risk. Capital appreciation is a
secondary objective. The Fund invests in a broadly diversified portfolio of
securities, including both corporate and U.S. government issues.
For the period July 3, 1996 to October 31, 1996 (the Class's inception date
was July 3, 1996), the total return for the Fund was 3.93%*, vs. a 3.27% gain in
the Lehman Intermediate Government/Corporate Bond Index. The Fund's 30-day
annualized current yield was 6.09% as of October 31. Its total net assets were
$152,095,378.
The reporting period ultimately proved a positive one for the U.S. bond
market, with virtually all major indexes showing gains for the 12 months. But
trading was volatile and marked by several major shifts in investor sentiment
regarding inflation and the economy. The first three months of the period --
November 1995 through January 1996 -- saw bonds rally in response to evidence of
moderate economic growth and controlled inflation. The market struggled through
much of the next eight months, however, on signs of renewed economic vigor,
reacting particularly sharply to a series of strong gains in monthly employment.
By late September, the market had reversed course once more, with bond prices
rising strongly on indications of a slowing economy and the continued absence of
inflationary pressures. At the end of October, the yield on the U.S. Treasury's
30-year bond had fallen below 6.7%, after climbing above 7.2% in July.
We attempted to maintain an optimal positioning of the Fund on the yield
curve throughout the period. In general, we positioned the Fund conservatively
relative to our benchmark index when rates were rising, and extended its average
maturity and duration when fundamentals suggested a more aggressive stance.
Timely management of the Fund's interest-rate exposure contributed significantly
to its performance through the period.
We also strove to enhance the Fund's returns through proper sector
allocation. Our heaviest concentration throughout the period was in U.S.
Treasuries, which we deemed most attractive on a risk-adjusted basis. This
reflected, in large measure, the general tightening of yield spreads in the
market through the 12 months. With yield spreads between higher- and
lower-quality bonds relatively
- ------------
* Returns are historical and include changes in share price and reinvestment of
dividends and capital gains. Past performance cannot guarantee future results.
Returns and share price will fluctuate, and redemption value may be more or
less than original cost.
From time to time, the Fund's investment adviser and co-administrators may
waive some fees and/or reimburse some expenses, without which performance
would be lower. Waivers and/or reimbursements are subject to change.
1
<PAGE>
<PAGE>
WARBURG PINCUS ADVISOR FIXED INCOME FUND
ANNUAL INVESTMENT ADVISER'S REPORT (CONT'D)
- --------------------------------------------------------------------------------
narrow, we concluded that there was little incentive for assuming greater credit
risk in pursuit of higher yield.
That said, we were able to identify some attractive opportunities in other
areas of the market, including the mortgage-backed arena, where we found
particularly good values among commercial mortgage-backed bonds. We also found
selective values among corporate bonds, though in general we found much of the
sector to be fully priced. We held smaller weightings in convertible and
preferred securities and in real-estate investment trusts, equity securities
with bond-like yields. All of these contributed positively to the Fund's
returns.
<TABLE>
<S> <C>
Dale C. Christensen M. Anthony E. van Daalen
Co-Portfolio Manager Co-Portfolio Manager
</TABLE>
2
<PAGE>
<PAGE>
WARBURG PINCUS ADVISOR GLOBAL FIXED INCOME FUND
ANNUAL INVESTMENT ADVISER'S REPORT
- --------------------------------------------------------------------------------
Dear Shareholder: December 11, 1996
The objective of Warburg Pincus Advisor Global Fixed Income Fund (the 'Fund')
is maximum total return -- consistent with prudent management -- through a
combination of interest income, currency gains and capital appreciation. The
Fund's holdings mainly include a wide range of investment-grade,
income-producing securities of governmental and corporate issuers.
For the period August 12, 1996 to October 31, 1996 (the Class's inception
date was August 12, 1996), the total return for the Fund was 3.41%*, vs. gains
of 3.77% for the Salomon Brothers World Government Bond Index (Currency-Hedged)
and 3.66% for the Lipper World Income Funds Average. The Fund's 30-day
annualized current yield was 5.75% as of October 31. Its total net assets were
$131,110,893.
The reporting period saw gains for the majority of foreign bond markets,
supported by a general backdrop of stable inflation and moderate economic
growth. The Fund's largest geographical concentration throughout the 12 months
was in Europe, where markets benefited from an easing of monetary policy from
many of the region's central banks (reflecting the subdued rate of economic
expansion across the Continent and the near absence of inflation) and from
favorable investor reaction to progress toward European monetary union. We
placed particular emphasis on the markets of Germany, the United Kingdom,
Ireland and Denmark, whose bonds we favored for their attractive yields and for
their price-appreciation potential. These holdings contributed significantly to
the Fund's performance for the period.
The Fund's exposure to less-developed markets, which collectively generated
exceptionally strong gains over the 12 months, also enhanced its performance.
Our holdings here included dollar-denominated securities from Latin America
(consisting primarily of corporate issues of Argentine and Brazilian banks) and
Asia. The Fund's Asian weighting included conventional bonds from Indonesia and
convertible bonds from Hong Kong, the Philippines and Thailand. We deemed the
latter to represent particularly good values, and they proved rewarding
investments.
- ------------
* Returns are historical and include changes in share price and reinvestment of
dividends and capital gains. Past performance cannot guarantee future results.
Returns and share price will fluctuate, and redemption value may be more or
less than original cost.
From time to time, the Fund's investment adviser and co-administrators may
waive some fees and/or reimburse some expenses, without which performance
would be lower. Waivers and/or reimbursements are subject to change.
3
<PAGE>
<PAGE>
WARBURG PINCUS ADVISOR GLOBAL FIXED INCOME FUND
ANNUAL INVESTMENT ADVISER'S REPORT (CONT'D)
- --------------------------------------------------------------------------------
We hedged the majority of the Fund's foreign-currency exposure through the
period. This had a favorable impact on its returns, given the U.S. dollar's rise
against most currencies. The unhedged portion of the portfolio represented
primarily bonds from the United Kingdom. Our decision to leave this exposure
unhedged proved timely, as the pound appreciated vs. the dollar.
<TABLE>
<S> <C>
Dale C. Christensen Laxmi C. Bhandari
Co-Portfolio Manager Co-Portfolio Manager
</TABLE>
4
<PAGE>
<PAGE>
WARBURG PINCUS ADVISOR NEW YORK INTERMEDIATE MUNICIPAL FUND
ANNUAL INVESTMENT ADVISER'S REPORT
- --------------------------------------------------------------------------------
Dear Shareholder: December 11, 1996
The objective of Warburg Pincus Advisor New York Intermediate Municipal Fund
(the 'Fund') is maximum current income -- free from federal, New York state and
New York City taxes -- consistent with capital preservation and prudent
management. The Fund's assets consist primarily of investment-grade municipal
securities with an average maturity of between three and 10 years.
For the period August 5, 1996 to October 31, 1996, (the Class's inception
date was August 5, 1996) the total return for the Fund was 0.88%*, vs. gains of
1.70% for the Lehman 5-year Municipal Bond Index and 1.82% for the Lipper
Intermediate Municipal Debt Funds Average. The Fund's 30-day annualized current
yield as of October 31 was 4.23%. Its total net assets were $77,560,451.
The management of interest-rate volatility had a significant impact on the
performance of New York municipal bonds during the 12 months. Rates fell during
the first three months of the period (November 1995 through January 1996) on
data signaling moderate economic growth and low inflation, resulting in price
gains for municipal securities. But rates rose for much of the rest of the
period, as mounting evidence of accelerating economic growth kindled fears of
inflation and a tightening of monetary policy by the Federal Reserve. This took
a proportional toll on bond prices. Finally, the last several weeks of the
period (from mid-September through the end of October) saw a fairly sharp rally
for bonds on signs that the economy was slowing and that inflationary pressures
remained modest.
We actively managed the Fund's interest-rate exposure through the period, in
order to preserve capital when interest rates were rising and to realize price
gains when rates declined. One defensive hedging technique we employed with good
results was the sale of futures contracts. Specifically, we took short positions
in U.S. Treasury futures contracts when interest rates were rising from February
through mid-September, which allowed us to shorten the Fund's duration without
having to sell securities.
We maintained the Fund's emphasis on high-quality New York municipal bonds
throughout the period, as yield spreads between these and lower-quality
securities were relatively narrow and there was thus little incentive for taking
on greater credit risk in pursuit of higher yield. As of October 31, the Fund's
average credit quality was AA. We found attractively valued securities across a
range of sectors, though in general we continued to underweight hospital bonds
due to ongoing credit concerns regarding consolidation within the industry.
- ------------
* Returns are historical and include changes in share price and reinvestment of
dividends and capital gains. Past performance cannot guarantee future results.
Returns and share price will fluctuate, and redemption value may be more or
less than original cost.
From time to time, the Fund's investment adviser and co-administrators may
waive some fees and/or reimburse some expenses, without which performance
would be lower. Waivers and/or reimbursements are subject to change.
5
<PAGE>
<PAGE>
WARBURG PINCUS ADVISOR NEW YORK INTERMEDIATE MUNICIPAL FUND
ANNUAL INVESTMENT ADVISER'S REPORT (CONT'D)
- --------------------------------------------------------------------------------
Our outlook on the relative prospects for New York's municipal market over
the coming months remains, in general, positive, given the attractive yields
currently offered by New York municipal bonds vs. those of taxable issues. One
area of concern, however, is the recent overhaul of the nation's welfare system.
The new legislation effectively passes the financing burden of welfare from the
federal government to the states themselves. This stands to be particularly
burdensome for New York, given its large number of welfare recipients. We will
continue to keep a close watch on developments, and to structure the Fund
accordingly.
<TABLE>
<S> <C>
Dale C. Christensen Sharon B. Parente
Co-Portfolio Manager Co-Portfolio Manager
</TABLE>
6
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUND
SCHEDULE OF INVESTMENTS
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS`D'
PAR (MOODY'S/S&P) MATURITY RATE% VALUE
- ---------- -------------- -------- ------- ------------
<C> <S> <C> <C> <C> <C>
CORPORATE BONDS/NOTES (14.8%)
$2,000,000 ABN-AMRO Bank N.V. New York Branch
Subordinate Deposit Notes (Callable
08/01/04 @ $100.00) (Aa2, NR) 08/01/09 8.250 $ 2,142,500
1,300,000 Burlington North Santa Fe Debentures
(Putable 06/01/08 @ $100.00) (Baa2, BBB) 06/01/36 7.290 1,334,125
1,550,000 Connecticut Lighting & Power Series A
Notes (Baa3, BBB-) 02/01/99 5.500 1,520,938
1,000,000 First USA Bank Series BKNT Notes (Baa3, BBB-) 08/20/01 7.000 1,008,750
1,000,000 Lenfest Communications, Inc. Senior
Note (Ba3, BB+) 11/01/05 8.375 915,000
1,600,000 Lockheed Martin Corp. Debentures
(Putable 05/01/08 @ $100.00) (A3, BBB+) 05/01/36 7.200 1,646,000
1,000,000 Loewen Group International, Inc.
Senior Guaranteed Notes (Callable
10/15/00 @ $104.125) (Ba1, BB+) 10/15/03 8.250 1,027,500
2,500,000 Nationwide Health Properties, Inc.
Medium-Term Note, Series B (Baa2, BBB) 04/18/03 7.670 2,546,875
1,000,000 Nationwide Mutual Insurance Co.
Surplus Notes 144A (A1, A+) 02/15/04 6.500 972,500
250,000 OCWEN Financial Corp. Notes (Callable
10/01/01 @ $105.94) (B1, B+) 10/01/03 11.875 266,250
1,250,000 Paging Network, Inc. Senior
Subordinate Notes (Callable 08/01/00
@ $105.06) (B2, B) 08/01/07 10.125 1,243,750
1,500,000 PIV Investment Financial Convertible
Bond (Euro) (Callable 02/02/97 @
$100.00) (NR, NR) 12/01/00 4.500 1,293,750
1,000,000 Pueblo Xtra International, Inc.
Senior Notes (Callable 08/01/98 @
$104.75) (B2, B-) 08/01/03 9.500 900,000
2,000,000 Seventh Mexican Acceptance Corp. SA # (NR, NR) 08/15/99 10.000 740,000
3,800,000 Spieker Properties LP Notes (Baa3, BBB) 12/15/00 6.650 3,724,000
1,000,000 State Street Boston Corp. Debentures
(Putable 06/15/06 @ $100.00) (A1, AA-) 06/15/26 7.350 1,047,500
------------
TOTAL CORPORATE BONDS/NOTES
(Cost $23,507,852) 22,329,438
------------
MORTGAGE-BACKED SECURITIES (25.3%)
2,350,000 Asset Securitization Corporation
(Nomura Asset Securities Corp.)
Series 1996-D2, Class A2+ (NR, AA) 02/14/29 7.363 2,366,891
499,835 Bankers Trust Company Series 1988-1,
Class D (NR, AAA) 04/01/18 8.625 518,232
577,274 Donaldson, Lufkin, & Jenrette
Acceptance Trust
Series 1989-1, Class F (Aaa, AAA) 08/01/19 11.000 617,021
286,016 Federal Home Loan Mortgage Corp. (Aaa, AAA) 10/01/01 8.750 294,030
2,120,865 Federal Home Loan Mortgage Corp.
Series-1589, Class Z (Aaa, AAA) 09/15/23 6.250 1,679,885
1,000,000 First Street NB Commercial Mortgage
Pass-Through CTFS Series FSI, Class
B (NR, NR) 10/20/23 7.607 1,008,750
7,000,000 Government National Mortgage
Association (Aaa, AAA) 10/15/26 8.000 7,161,862
1,000,000 Midland Realty Acceptance Corporation
Series 1996-C1, Class B+ (NR, AA) 08/25/28 7.764 1,036,719
5,000,000 Morgan Stanley Mortgage Trust Series
40, Class 8 (NR, AAA) 07/20/21 7.000 4,946,350
</TABLE>
See Accompanying Notes to Financial Statements.
7
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUND
SCHEDULE OF INVESTMENTS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS`D'
PAR (MOODY'S/S&P) MATURITY RATE% VALUE
- ---------- -------------- -------- ------- ------------
MORTGAGE-BACKED SECURITIES (CONT'D)
<C> <S> <C> <C> <C> <C>
$3,291,579 Mortgage Capital Funding, Inc. Series
1995-MC1,
Class A1A (NR, AAA) 05/25/27 7.700 $ 3,370,783
4,000,000 Nomura Asset Securities Corp. Series
1993-1, Class B1 (NR, BBB) 12/15/01 6.680 3,868,125
1,794,158 Nomura Asset Securities Corp. Series
1994-4B,
Class 4A (Aaa, AAA) 09/25/24 8.300 1,836,769
4,000,000 Resolution Trust Corp. Series
1994-C1, Class B (NR, AA) 06/25/26 8.000 4,121,875
2,200,000 Resolution Trust Corp. Series
1995-C1, Class A2C (Aaa, NR) 02/25/27 6.900 2,210,484
1,000,000 Security Pacific Corp. Home Equity
Loan Series 1991-1, Class B (Aaa, AAA) 05/15/98 8.850 1,030,700
2,000,000 Shurgard Pass-Through CTFS Trust
(Nomura Asset Securities Corp.)
Series 1, Class 1 (NR, NR) 06/15/04 8.240 2,102,500
------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $37,515,773) 38,170,976
------------
UNITED STATES TREASURY OBLIGATIONS (46.0%)
37,705,000 U.S. Treasury Note 11/15/97 8.875 38,956,048
3,500,000 U.S. Treasury Note 07/15/98 8.250 3,643,780
8,000,000 U.S. Treasury Note 04/15/99 7.000 8,214,640
9,000,000 U.S. Treasury Note 05/15/01 8.000 9,687,149
5,000,000 U.S. Treasury Note 07/31/01 6.625 5,110,350
3,675,000 U.S. Treasury Note 02/15/05 7.500 3,953,381
------------
TOTAL UNITED STATES TREASURY
OBLIGATIONS (Cost $69,004,803) 69,565,348
------------
AGENCY OBLIGATIONS (1.1%)
1,596,392 Small Business Administration
Guaranteed Development Participation
Certificate Series 1992-20D (Cost
$1,596,392) 04/01/12 8.200 1,680,202
------------
</TABLE>
See Accompanying Notes to Financial Statements.
8
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUND
SCHEDULE OF INVESTMENTS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES RATE% VALUE
- ---------- ------- ------------
COMMON STOCK (3.9%)
<C> <S> <C> <C>
50,000 American Health Properties, Inc. REIT $ 1,075,000
25,000 Boykin Lodging Company 500,000
30,000 Healthcare Realty Trust, Inc. REIT 738,750
120,000 Innkeepers USA Trust REIT 1,410,000
20,000 The Macerich Company REIT 440,000
20,000 U.S. Restaurant Properties Master LP 467,500
19,600 Universal Health Realty Income Trust
SBI REIT 374,850
39,000 Wellsford Residential Property Trust
SBI REIT 897,000
------------
TOTAL COMMON STOCK (Cost $5,598,805) 5,903,100
------------
PREFERRED STOCK (7.2%)
36,800 Banco Totta & Acores Financial Corp. Series A (Callable 10/11/06
@ $25.00) 8.875 933,800
40,000 Banesto Holdings Ltd Series A 144A (Callable 06/30/12 @ $25.00) 10.500 1,182,500
50,000 Credit Lyonnaise Capital SCA ADR Series DTC 144A (Callable
07/12/03 @ $25.00) 9.500 1,206,250
41,800 CRIIMI MAE Inc. Series B (Convertible) (Callable 09/30/06 @
$25.00) 10.875 1,128,600
56,400 Equity Residential Properties Inc. Series C (Callable 09/09/06
@$25.00) 9.125 1,438,200
25,000 First Union Real Estate (Convertible)
(Callable 10/29/01 @ $25.00) 8.400 659,375
15,000 Globalstar Telecommunications, Ltd. 144A (Convertible) (Callable
12/10/96 $65.00) 6.500 676,875
2,096 Time Warner, Inc., Series K 144A (Callable 07/01/06 @ $1,051.30) 10.250 2,216,520
56,250 Walden Residential Properties, Inc.
Series B (Convertible) 9.160 1,476,563
------------
TOTAL PREFERRED STOCK (Cost
$10,452,920) 10,918,683
------------
SHORT-TERM INVESTMENTS (1.7%)
PAR
- ----------
$2,567,000 Repurchase agreement with State Street Bank and Trust Co. dated
10/31/96 at 5.51% to be repurchased at $2,567,393 on 11/01/96.
(Collateralized by $2,590,000 U.S. Treasury Note 6.125% due
03/31/98. Market value of collateral is $2,619,138.) (Cost
$2,567,000) 2,567,000
------------
TOTAL INVESTMENTS AT VALUE (100.0%) (Cost $150,243,545) $151,134,747
------------
------------
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<C> <S>
ADR = American Depository Receipt
CTFS = Certificates
NR = Not Rated
REIT = Real Estate Investment Trust
SBI = Small Business Investment
</TABLE>
- --------------------------------------------------------------------------------
`D' Credit ratings given by Moody's Investors Service Inc., and Standard &
Poor's Ratings Group are unaudited.
# Illiquid security.
+ The interest rate shown is the rate as of October 31, 1996.
* Cost for Federal income tax purposes is $150,263,210.
See Accompanying Notes to Financial Statements.
9
<PAGE>
<PAGE>
WARBURG PINCUS GLOBAL FIXED INCOME FUND
STATEMENT OF NET ASSETS
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS`D'
PAR+ (MOODY'S/S&P) MATURITY RATE% VALUE
- ----------- ------------- -------- ------ ------------
<C> <S> <C> <C> <C> <C>
BONDS (85.9%)
Argentina (2.3%)
1,000,000(A) Banco de Galicia & Buenos Aires
SA (Callable 11/01/98 at
$103.375) (B1, BB-) 11/01/03 9.000 $ 924,375
2,000,000(A) Bridas Corp. (B1, BB-) 11/15/99 12.500 2,112,500
------------
3,036,875
------------
Brazil (2.3%)
900,000(A) Banco Bandeirantes Sa (B1, BB-) 12/20/97 12.000 919,125
1,000,000(A) Banco Braseg Ag (B1, NR) 12/07/97 11.250 1,025,000
1,000,000(A) Banco Itamarati Sa (B1, NR) 11/23/97 11.625 1,031,250
------------
2,975,375
------------
Canada (4.2%)
7,000,000 Canadian Government (Aaa, AAA) 08/01/99 6.500 5,460,334
------------
Cayman Islands (1.7%)
2,500,000(A) PIV Investment Financial
(Convertible) (Callable 02/02/97
at $100) (A, A) 12/01/00 4.500 2,162,500
------------
Colombia (0.8%)
1,000,000(A) Comp de Desarollo Aeropu (NR, BBB-) 05/31/11 10.190 1,022,500
------------
Denmark (14.1%)
30,000,000 Kingdom of Denmark (NR, AAA) 11/15/98 9.000 5,608,841
63,750,000 Kingdom of Denmark (NR, AAA) 03/15/06 8.000 11,801,454
5,912,000 Nykredit (Aa3, NR) 10/01/22 11.000 1,108,468
------------
18,518,763
------------
France (0.6%)
1,100,000(B) Electricite de France (Aaa, AAA) 07/20/98 5.375 745,237
------------
Germany (30.9%)
6,500,000 DSL Finance NV (Aaa, NR) 02/21/06 6.000 4,245,573
12,000,000 German Government (Aaa, AAA) 11/11/04 7.500 8,744,284
9,500,000 German Government (Aaa, AAA) 10/14/05 6.500 6,491,939
3,700,000 German Government (Aaa, AAA) 01/04/24 6.250 2,271,488
5,000,000 Land Hessen (Putable 11/29/03 at
100.00 DMK) (Aaa, AAA) 11/29/03 6.000 3,310,427
7,000,000 Landesbank Rheinland Finance BV (Aa1, AA+) 04/20/05 7.250 4,939,870
9,500,000 Treuhandanstalt (Aaa, AAA) 09/09/04 7.500 6,921,931
5,000,000 International Bank for
Reconstruction and Development (Aaa, AAA) 10/13/99 7.250 3,571,429
------------
40,496,941
------------
Hong Kong (1.5%)
2,000,000(A) Paliburg International Finance
(Convertible) (Matures at
$121.85) (Ba, BB) 02/06/01 3.500 2,030,000
------------
Indonesia (2.7%)
1,500,000(A) Indah Kiat International Finance
Co. (Callable 06/15/01 at
$106.25) (Ba2, BB) 06/15/06 12.500 1,623,750
2,000,000(A) Polymax (Convertible) (Putable
02/27/01 at $125.10) (Baa, BBB) 02/27/01 2.000 1,865,000
------------
3,488,750
------------
Luxembourg (3.5%)
3,000,000(C) Landesbank Schlewig-Holstein
Girozentrale (Aa1, NR) 02/04/04 6.500 4,527,684
------------
</TABLE>
See Accompanying Notes to Financial Statements.
10
<PAGE>
<PAGE>
WARBURG PINCUS GLOBAL FIXED INCOME FUND
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS`D'
PAR+ (MOODY'S/S&P) MATURITY RATE% VALUE
- ----------- ------------- -------- ------ ------------
BONDS (CONT'D)
<C> <S> <C> <C> <C> <C>
Mexico (0.6%)
2,000,000(A) Seventh Mexican Acceptance Corp.
SA # (Caa, D) 08/15/99 10.000 $ 740,000
------------
Netherlands (5.6%)
3,000,000(B) ABN AMRO Holdings NV (Aa2, NR) 04/15/98 6.125 2,046,716
9,000,000 Netherlands Government (Aaa, AAA) 01/15/06 6.000 5,351,409
------------
7,398,125
------------
Philippines (0.8%)
1,000,000(A) C.E. Casecnan Water and Energy
Co., Inc. (Ba2, BB) 11/15/10 11.950 1,110,000
------------
Thailand (1.8%)
500,000(A) Property Perfect Public Co., Ltd.
(Convertible) (Matures at
$128.00) (Ba, BB) 03/28/01 3.250 393,750
500,000(A) Tanayong Public Co., Ltd.
(Convertible) (Putable 03/01/99
at $118.03) (B, B) 03/01/04 3.500 465,000
1,000,000(A) Tipco Asphalt Public Co., Ltd.
(Convertible) (Putable 09/19/01
at $132.56) (Baa1, BBB-) 09/19/06 2.750 1,046,250
500,000(A) United Communication Industry
Public Co., Ltd. (Convertible)
(Putable 04/04/01 at $126.33) (Baa, BBB) 04/04/06 2.750 495,625
------------
2,400,625
------------
United Kingdom (12.5%)
3,500,000 Lloyds TSB Group PLC (A1, NR) 03/29/06 8.500 5,741,474
2,000,000 North American Capital Corp. (Aa2-, AA-) 11/17/03 8.250 3,256,434
4,320,000 United Kingdom Treasury (Aaa, AAA) 03/03/00 9.000 7,433,700
------------
16,431,608
------------
TOTAL CORPORATE BONDS (Cost $111,108,485) 112,545,317
------------
PREFERRED STOCK (1.1%)
<CAPTION>
NUMBER
OF SHARES
- -----------
<C> <S> <C> <C> <C> <C>
France (0.9%)
50,000 Credit Lyonnaise Capital SCA ADR
(Callable 09/12/03 at $25.00) 9.500 1,206,250
------------
United States (0.2%)
5,000 Globalstar Telecommunications,
Ltd. (Convertible) (Callable
12/10/96 at $65.00) 6.500 225,625
------------
TOTAL PREFERRED STOCK
(Cost $1,308,500) 1,431,875
------------
TIME DEPOSITS (18.1%)
<CAPTION>
PAR
- -----------
<C> <S> <C> <C> <C> <C>
$12,774,000 Canadian Imperial Bank 11/01/96 5.625 12,774,000
11,000,000 Credit Lyonnaise 11/01/96 5.600 11,000,000
------------
TOTAL TIME DEPOSITS
(Cost $23,774,000) 23,774,000
------------
</TABLE>
See Accompanying Notes to Financial Statements.
11
<PAGE>
<PAGE>
WARBURG PINCUS GLOBAL FIXED INCOME FUND
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C> <C> <C> <C>
PAR+
- ----------- VALUE
------------
TOTAL INVESTMENTS AT VALUE (105.1%)
(Cost $136,190,985*) $137,751,192
LIABILITIES IN EXCESS OF OTHER ASSETS (5.1%) (6,640,299)
------------
NET ASSETS (100.0%) (applicable to 11,730,638
Common Shares and 3,456 Advisor Shares) $131,110,893
------------
------------
NET ASSET VALUE, offering and redemption price
per Common Share
($131,072,301[div]11,730,638) $11.17
NET ASSET VALUE, offering and redemption price
per Advisor Share ($38,592[div]3,456) $11.17
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<C> <S>
ADR = American Depository Receipt
DMK = German Marks
NR = Not Rated
</TABLE>
- --------------------------------------------------------------------------------
`D' Credit ratings given by Moody's Investors Service Inc., and Standard &
Poor's Ratings Group are unaudited.
* Also cost for Federal income tax purposes.
# Illiquid security.
+ Unless otherwise indicated below, all securities are denominated in the
currency of the issuers' country of origin.
(A) Denominated in U.S. Dollars
(B) Denominated in German Marks
(C) Denominated in British Pounds
See Accompanying Notes to Financial Statements.
12
<PAGE>
<PAGE>
WARBURG PINCUS NEW YORK INTERMEDIATE MUNICIPAL FUND
STATEMENT OF NET ASSETS
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS`D'
PAR (MOODY'S/S&P) MATURITY RATE% VALUE
- ---------- -------------- -------- ------- -----------
<C> <S> <C> <C> <C> <C>
NEW YORK (84.5%)
$ 750,000 Canandaigua New York City School
District General Obligation Bond
(FGIC Insured) (Aaa, AAA) 06/01/99 7.125 $ 801,562
1,000,000 Municipal Assistance Corp. for New
York City Revenue Bond Series #59
(MBIA-IBC Insured) (Callable
07/01/97 @ $102) (Aaa, AAA) 07/01/01 7.750 1,045,770
225,000 Municipal Assistance Corp. for New
York City Revenue Bond Series #67
(Callable 07/01/99 @ $102) (Aa, AA-) 07/01/01 7.400 244,969
1,000,000 Municipal Assistance Corp. for New
York City Revenue Bond Series #67
(Callable 07/01/99 @ $102) (Aa, AA-) 07/01/04 7.600 1,092,500
640,000 Municipal Assistance Corp. for New
York City Revenue Bond Series #68
(Callable 07/01/99 @ $102) (Aa, AA-) 07/01/03 7.200 692,800
1,045,000 Nassau County New York General
Obligation Bond Series L (FGIC
Insured) (Escrowed To Maturity) (Aaa, AAA) 11/15/01 6.300 1,131,212
1,350,000 Nassau County New York General
Obligation Bond General
Improvements Series R (FGIC
Insured) (Aaa, AAA) 11/01/02 5.125 1,387,125
1,000,000 Nassau County New York General
Obligation Bond General
Improvements Series T (FGIC
Insured) (Aaa, AAA) 09/01/06 5.200 1,011,250
2,000,000 New York City Municipal Water
Finance Authority Water & Sewer
System Revenue Bond Series C
(Pre-refunded 06/15/01 @ $101.50) (Aaa, A-) 06/15/01 7.750 2,292,500
3,000,000 New York City Municipal Water
Finance Authority Water & Sewer
System Revenue Bond Series A
(Callable 06/15/06 @ $101) (A, A-) 06/15/24 5.500 2,861,250
2,000,000 New York City General Obligation
Bond Series J (Baa1, BBB+) 02/15/01 5.100 2,007,500
1,000,000 New York City General Obligation
Bond Series G (Baa1, BBB+) 02/01/06 5.750 997,500
3,000,000 New York City General Obligation
Bond Series A (Baa1, BBB+) 08/01/06 7.000 3,266,250
500,000 New York State Dormitory Authority
Revenue Bond City University 3rd
General Reserve-2 (Baa1, BBB) 07/01/98 4.500 501,250
1,515,000 New York State Dormitory Authority
Revenue Bond City University
Series B (FGIC Insured) (Aaa, AAA) 07/01/99 6.900 1,621,050
1,500,000 New York State Dormitory Authority
Revenue Bond City University
(AMBAC Insured) (Aaa, AAA) 07/01/03 6.000 1,620,000
3,000,000 New York State Dormitory Authority
Revenue Bond City University
Series A (Baa1, BBB) 07/01/05 5.700 3,033,750
1,000,000 New York State Dormitory Authority
Revenue Bond City University (FGIC
Insured) (Callable 07/01/05 @
$102) (Aaa, AAA) 07/01/14 5.375 978,750
2,495,000 New York State Dormitory Authority
Lease Revenue Bond State
University Dormitory Facilities
Series A (AMBAC Insured) (Aaa, AAA) 07/01/06 5.750 2,657,175
775,000 New York State Dormitory Authority
Revenue Bond State University
Educational Facilities Series A
(Pre-refunded 05/15/99 @ $102) (Baa1, BBB+) 05/15/99 7.000 839,906
</TABLE>
See Accompanying Notes to Financial Statements.
13
<PAGE>
<PAGE>
WARBURG PINCUS NEW YORK INTERMEDIATE MUNICIPAL FUND
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS`D'
PAR (MOODY'S/S&P) MATURITY RATE% VALUE
- ---------- -------------- -------- ------- -----------
NEW YORK (CONT'D)
<C> <S> <C> <C> <C> <C>
$1,000,000 New York State Dormitory Authority
Revenue Bond State University
Educational Facilities Series B
(Pre-refunded 05/15/00 @ $102) (Aaa, BBB+) 05/15/00 7.250 $ 1,108,750
2,000,000 New York State Dormitory Authority
Revenue Bond State University
Educational Facilities Series A (Baa1, BBB+) 05/15/02 5.400 2,025,000
1,000,000 New York State Dormitory Authority
Revenue Bond Upstate Community
Colleges Series A
(Pre-refunded 07/01/00 @ $102) (Baa1, NR) 07/01/00 7.600 1,122,500
750,000 New York State Dormitory Authority
Revenue Bond Upstate Community
Colleges Series A (Baa1, BBB-) 07/01/01 5.200 754,688
1,000,000 New York State Dormitory Authority
Revenue Bond Upstate Community
Colleges Series A (Baa1, BBB-) 07/01/02 5.300 1,002,500
225,000 New York State Dormitory Authority
Revenue Bond State University
Educational Facilities Series A
(Callable 05/15/99 @ $102) (Baa1, BBB+) 05/15/02 7.000 240,469
2,000,000 New York State General Obligation
Bond Series C (A, A-) 10/01/03 6.000 2,152,500
1,200,000 New York State General Obligation
Bond Series C (A, A-) 10/01/04 6.000 1,294,500
2,500,000 New York State Housing Finance
Agency Service Contract Obligation
Revenue Bond Series C
(Pre-refunded 09/15/01 @ $102) (Aaa, AAA) 09/15/01 7.300 2,843,750
1,000,000 New York State Local Government
Assistance Corp. Revenue Bond
Series A (A, A) 04/01/99 6.000 1,037,500
1,730,000 New York State Local Government
Assistance Corp. Revenue Bond
Series B (Pre-refunded 04/01/01 @
$102) (Aaa, AAA) 04/01/01 7.500 1,963,550
1,000,000 New York State Local Government
Assistance Corp. Revenue Bond
Series A (A, A) 04/01/05 5.400 1,031,250
2,000,000 New York State Medicare Facilities
Finance Agency Revenue Bond
(Pre-refunded 02/15/99 @ $102) (Aaa, AAA) 02/15/99 7.800 2,187,500
750,000 New York State Power Authority
Revenue Bond Series V (Callable
01/01/98 @ $102) (Aa, AA-) 01/01/03 7.600 789,375
850,000 New York State Thruway Authority
Service Contract Revenue Bond
Local Highway & Bridge (Baa1, BBB) 04/01/01 5.500 870,187
3,000,000 New York State Thruway Authority
Service Contract Revenue Bond
Local Highway & Bridge Series A
(MBIA Insured) (Aaa, AAA) 01/01/04 6.000 3,228,750
2,500,000 New York State Urban Development
Corp. Revenue Bond Correctional
Capital Facilities Series 1
(Pre-refunded 01/01/00 @ $102)
(FSA Insured) (Aaa, Aaa) 01/01/00 7.500 2,768,750
1,300,000 New York State Urban Development
Corp. Revenue Bond State
Facilities (Baa1, BBB) 04/01/11 5.750 1,304,875
3,000,000 Port Authority of New York & New
Jersey Revenue Bond Consolidated
72nd Series (Pre-refunded 10/01/02
@ $101) (A1, AA-) 10/01/02 7.350 3,427,500
880,000 Suffolk County New York Water
Authority Water-Works Revenue Bond
(Pre-refunded 06/01/00 @ $102)
(AMBAC Insured) (Aaa, AAA) 06/01/00 6.875 965,800
</TABLE>
See Accompanying Notes to Financial Statements.
14
<PAGE>
<PAGE>
WARBURG PINCUS NEW YORK INTERMEDIATE MUNICIPAL FUND
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS`D'
PAR (MOODY'S/S&P) MATURITY RATE% VALUE
- ---------- -------------- -------- ------- -----------
NEW YORK (CONT'D)
<C> <S> <C> <C> <C> <C>
$1,000,000 Triborough Bridge & Tunnel
Authority New York Revenue Bond
Series O (Pre-refunded 01/01/99 @
$101.50) (Aaa, AAA) 01/01/99 7.700 $ 1,083,750
2,000,000 Triborough Bridge & Tunnel
Authority New York Revenue Bond
Series T (Pre-refunded 01/01/01 @
$102) (Aaa, A+) 01/01/01 7.000 2,220,000
-----------
TOTAL NEW YORK (Cost $64,432,681) 65,507,513
-----------
PUERTO RICO (13.9%)
265,000 Puerto Rico Commonwealth Aqueduct &
Sewer Authority Revenue Bond
(Escrowed To Maturity) (Aaa, AAA) 07/01/99 7.875 276,594
1,000,000 Puerto Rico Commonwealth Aqueduct &
Sewer Authority Revenue Bond (MBIA
Insured) (Aaa, AAA) 07/01/07 6.000 1,085,000
3,000,000 Puerto Rico Commonwealth General
Obligation Bond (MBIA Insured) (Aaa, AAA) 07/01/01 5.500 3,131,250
185,000 Puerto Rico Commonwealth General
Obligation Bond (Callable 07/01/97
@ $102) (NR, A) 07/01/02 7.125 191,999
2,000,000 Puerto Rico Electric Power
Authority Revenue Bond Series 0
(MBIA Insured) (Aaa, AAA) 07/01/99 6.400 2,110,000
500,000 Puerto Rico Electric Power
Authority Revenue Bond Series N
(Callable 07/01/99 @ $101.50) (Baa1, BBB+) 07/01/00 6.800 534,375
1,500,000 Puerto Rico Commonwealth Highway
Authority Revenue Bond Series P
(Pre-refunded 07/01/98 @
$102)`D'`D' (Aaa, AAA) 07/01/98 8.125 1,627,500
1,700,000 Puerto Rico Public Building
Authority Revenue Bond Series I
(FGIC Insured) (Aaa, AAA) 07/01/99 6.850 1,806,250
-----------
TOTAL PUERTO RICO (Cost
$10,578,196) 10,762,968
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
15
<PAGE>
<PAGE>
WARBURG PINCUS NEW YORK INTERMEDIATE MUNICIPAL FUND
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
- ---------- -----------
MONEY MARKET FUNDS (0.1%)
<C> <S> <C> <C> <C> <C>
$ 117,594 Federated Investments New York
Municipal Cash Trust $ 117,594
4,842 Nuveen Tax Exempt Money Fund 4,842
-----------
TOTAL MONEY MARKET FUNDS (Cost $122,436) 122,436
-----------
TOTAL INVESTMENTS AT VALUE (98.5%) (Cost $75,133,313*) 76,392,917
OTHER ASSETS IN EXCESS OF LIABILITIES (1.5%) 1,167,534
-----------
NET ASSETS (100.0%) (applicable to 7,500,689 Common Shares and 112
Advisor Shares) $77,560,451
-----------
-----------
NET ASSET VALUE, offering and redemption price per Common Share
($77,559,293[div]7,500,689) $10.34
NET ASSET VALUE, offering and redemption price per Advisor Share
($1,158[div]112) $10.34
</TABLE>
<TABLE>
<S> <C> <C>
INVESTMENT ABBREVIATIONS
AMBAC = American Municipal Bond Assurance Corporation
FGIC = Financial Guaranty Insurance Company
FSA = Financial Security Assurance Inc.
MBIA = Municipal Bond Investors Assurance Inc.
NR = Not Rated
</TABLE>
- --------------------------------------------------------------------------------
`D' Credit Ratings given by Moody's Investors Service, Inc., and Standard &
Poor's Ratings Group are unaudited.
`D'`D' Principal amount of $350,000 pledged as initial margin for futures
transactions.
* Also cost for Federal income tax purposes.
See Accompanying Notes to Financial Statements.
16
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments at value (Cost $150,243,545) $151,134,747
Receivable for investment securities sold 7,042,237
Dividends and interest receivable 2,876,942
Receivable for Fund shares sold 299,254
Other assets 17,231
------------
Total assets 161,370,411
------------
LIABILITIES:
Payable for investment securities purchased 8,943,288
Accrued expenses 132,574
Dividends payable 132,526
Payable for Fund shares redeemed 62,152
Other liabilities 4,493
------------
Total liabilities 9,275,033
------------
NET ASSETS applicable to 14,966,435 Common Shares outstanding and 90,174
Advisor Shares outstanding $152,095,378
------------
------------
NET ASSET VALUE, offering and redemption price per Common Share
($151,184,433 [div] 14,966,435) $10.10
NET ASSET VALUE, offering and redemption price per Advisor Share
($910,945 [div] 90,174) $10.10
</TABLE>
See Accompanying Notes to Financial Statements.
17
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
STATEMENTS OF OPERATIONS
For the Year Ended October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WARBURG PINCUS
WARBURG PINCUS NEW YORK
WARBURG PINCUS GLOBAL INTERMEDIATE
FIXED INCOME FIXED INCOME MUNICIPAL
FUND FUND FUND
-------------- -------------- --------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 1,136,693 $ 344,878 $ 43,574
Interest 8,006,345 7,626,884 3,727,531
-------------- -------------- --------------
Total investment income 9,143,038 7,971,762 3,771,105
-------------- -------------- --------------
EXPENSES:
Investment advisory 648,732 1,031,630 301,602
Administrative services 247,458 212,177 144,379
Audit 15,302 15,307 13,179
Custodian/Sub-custodian 44,537 66,363 25,056
Directors'/Trustees 10,000 10,000 10,000
Distribution 1,239 25 0
Insurance 5,524 4,934 3,863
Legal 36,523 27,119 26,853
Printing 13,302 12,204 4,256
Registration 75,467 81,101 15,404
Transfer agent 60,803 79,425 23,868
Miscellaneous 17,082 20,096 14,110
-------------- -------------- --------------
1,175,969 1,560,381 582,610
Less: fees waived and expenses reimbursed (201,632) (580,308) (134,243)
-------------- -------------- --------------
Total expenses 974,337 980,073 448,367
-------------- -------------- --------------
Net investment income 8,168,701 6,991,689 3,322,738
-------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENTS AND FOREIGN CURRENCY RELATED ITEMS:
Net realized gain from security
transactions 1,064,692 104,145 576,307
Net realized gain from futures contracts 0 0 519,896
Net realized gain from foreign currency
related items 0 2,480,864 0
Net change in unrealized appreciation
(depreciation) from investments, futures
contracts and foreign currency related
items (385,137) 1,114,089 (841,945)
-------------- -------------- --------------
Net realized and unrealized gain
(loss) from investments and foreign
currency related items 679,555 3,699,098 254,258
-------------- -------------- --------------
Net increase in net assets resulting
from operations $ 8,848,256 $ 10,690,787 $ 3,576,996
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>
See Accompanying Notes to Financial Statements.
18
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WARBURG PINCUS
WARBURG PINCUS WARBURG PINCUS NEW YORK INTERMEDIATE
FIXED INCOME FUND GLOBAL FIXED INCOME FUND MUNICIPAL FUND
--------------------------- --------------------------- ---------------------------
FOR THE YEAR ENDED OCTOBER FOR THE YEAR ENDED OCTOBER FOR THE YEAR ENDED OCTOBER
31, 31, 31,
1996 1995 1996 1995 1996 1995
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income $ 8,168,701 $ 8,013,396 $ 6,991,689 $ 6,324,709 $ 3,322,738 $ 3,553,765
Net realized gain from
security transactions 1,064,692 1,132,052 104,145 508,655 576,307 818,720
Net realized gain
(loss) from futures
contracts 0 (606,653) 0 (849,500) 519,896 0
Net realized gain
(loss) from foreign
currency related
items 0 49,446 2,480,864 (961,036) 0 0
Net change in
unrealized
appreciation
(depreciation) from
investments and
foreign currency
related items (385,137) 4,869,743 1,114,089 2,015,972 (841,945) 1,979,229
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net
assets resulting
from operations 8,848,256 13,457,984 10,690,787 7,038,800 3,576,996 6,351,714
------------ ------------ ------------ ------------ ------------ ------------
FROM DISTRIBUTIONS:
Dividends from net
investment income:
Common Shares (8,154,206) (8,013,396) (9,128,236) (3,445,878) (3,322,728) (3,553,765)
Advisor Shares (14,495) 0 (278) 0 (10) 0
Distributions from
realized gains:
Common Shares 0 0 0 0 (818,543) (47,531)
Advisor Shares 0 0 0 0 0 0
------------ ------------ ------------ ------------ ------------ ------------
Net decrease in net
assets from
distributions (8,168,701) (8,013,396) (9,128,514) (3,445,878) (4,141,281) (3,601,296)
------------ ------------ ------------ ------------ ------------ ------------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from sale of
shares 66,060,140 47,678,747 119,701,285 42,488,917 35,406,045 32,441,402
Reinvested dividends 6,574,716 6,555,741 7,544,393 2,941,954 3,601,550 3,073,742
Net asset value of
shares redeemed (38,201,941) (44,942,286) (61,338,102) (75,776,818) (34,244,336) (40,620,180)
------------ ------------ ------------ ------------ ------------ ------------
Net increase
(decrease) in net
assets from
capital share
transactions 34,432,915 9,292,202 65,907,576 (30,345,947) 4,763,259 (5,105,036)
------------ ------------ ------------ ------------ ------------ ------------
Net increase
(decrease) in net
assets 35,112,470 14,736,790 67,469,848 (26,753,025) 4,198,974 (2,354,618)
NET ASSETS:
Beginning of year 116,982,908 102,246,118 63,641,044 90,394,069 73,361,477 75,716,095
------------ ------------ ------------ ------------ ------------ ------------
End of year $152,095,378 $116,982,908 $131,110,893 $ 63,641,044 $ 77,560,451 $ 73,361,477
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
</TABLE>
See Accompanying Notes to Financial Statements.
19
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUND
FINANCIAL HIGHLIGHTS
(For an Advisor Share of the Fund Outstanding Throughout the Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIXED INCOME FUND
-----------------------
ADVISOR SHARES
-----------------------
JULY 3, 1996
(COMMENCEMENT OF
OPERATIONS) THROUGH
OCTOBER 31, 1996
-----------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.90
-----
Income from Investment Operations:
Net Investment Income .19
Net Gain on Securities (both realized and unrealized) .20
-----
Total from Investment Operations .39
-----
Less Distributions:
Dividends from Net Investment Income (.19)
Distributions from Capital Gains .00
-----
Total Distributions (.19)
-----
NET ASSET VALUE, END OF PERIOD $ 10.10
-----
-----
Total Return 3.93%`D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $911
Ratios to average daily net assets:
Operating expenses 1.00%*
Net investment income 5.85%*
Decrease reflected in above operating expense ratio due to
waivers/reimbursements .11%*
Portfolio Turnover Rate 194.23%`D'
</TABLE>
- --------------------------------------------------------------------------------
`D' Non-Annualized
* Annualized
See Accompanying Notes to Financial Statements
TAX STATUS OF 1996 DIVIDENDS (Unaudited)
Taxable dividends paid by the Fund on a per share basis were as follows:
Ordinary income $.19
Because the Fund's fiscal year is not the calendar year, amounts to be used
by calendar year taxpayers on their Federal return will be reflected on Form
1099-DIV and will be mailed in January 1997.
20
<PAGE>
<PAGE>
WARBURG PINCUS GLOBAL FIXED INCOME FUND
FINANCIAL HIGHLIGHTS
(For an Advisor Share of the Fund Outstanding Throughout the Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL FIXED INCOME FUND
------------------------
ADVISOR SHARES
------------------------
AUGUST 12, 1996
(COMMENCEMENT OF
OPERATIONS) THROUGH
OCTOBER 31, 1996
------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.90
-----
Income from Investment Operations:
Net Investment Income .10
Net Gain on Securities and Foreign Currency Related Items (both
realized and unrealized) .27
-----
Total from Investment Operations .37
-----
Less Distributions:
Dividends from Net Investment Income (.10)
Distributions from Capital Gains .00
-----
Total Distributions (.10)
-----
NET ASSET VALUE, END OF PERIOD $11.17
-----
-----
Total Return 3.41%`D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $39
Ratios to average daily net assets:
Operating expenses 1.45%*
Net investment income 5.69%*
Decrease reflected in above operating expense ratio due to
waivers/reimbursements .21%*
Portfolio Turnover Rate 123.90%`D'
</TABLE>
- --------------------------------------------------------------------------------
`D' Non-Annualized
* Annualized
See Accompanying Notes to Financial Statements
TAX STATUS OF 1996 DIVIDENDS (Unaudited)
Taxable dividends paid by the Fund on a per share basis were as follows:
Ordinary income $.10
Because the Fund's fiscal year is not the calendar year, amounts to be used
by calendar year taxpayers on their Federal return will be reflected on Form
1099-DIV and will be mailed in January 1997.
21
<PAGE>
<PAGE>
WARBURG PINCUS NEW YORK INTERMEDIATE MUNICIPAL FUND
FINANCIAL HIGHLIGHTS
(For an Advisor Share of the Fund Outstanding Throughout the Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NEW YORK INTERMEDIATE
MUNICIPAL FUND
-----------------------
ADVISOR SHARES
-----------------------
AUGUST 5, 1996
(COMMENCEMENT OF
OPERATIONS) THROUGH
OCTOBER 31, 1996
-----------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.34
-----
Income from Investment Operations:
Net Investment Income .09
Net Gain on Securities (both realized and unrealized) .00
-----
Total from Investment Operations .09
-----
Less Distributions:
Dividends from Net Investment Income (.09)
Distributions from Capital Gains .00
-----
Total Distributions (.09)
-----
NET ASSET VALUE, END OF PERIOD $ 10.34
-----
-----
Total Return .88%`D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $1
Ratios to average daily net assets:
Operating expenses .63%*
Net investment income 3.88%*
Decrease reflected in above operating expense ratio due to
waivers/reimbursements .01%*
Portfolio Turnover Rate 69.23%`D'
</TABLE>
- --------------------------------------------------------------------------------
`D' Non-Annualized
* Annualized
See Accompanying Notes to Financial Statements
22
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS
October 31, 1996
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Warburg Pincus Fixed Income Funds (the 'Funds') are comprised of the
Warburg Pincus Fixed Income Fund (the 'Fixed Income Fund') which is registered
under the Investment Company Act of 1940, as amended (the '1940 Act'), as a
diversified, open-end management investment company and the Warburg Pincus
Global Fixed Income Fund (the 'Global Fixed Income Fund') and the Warburg Pincus
New York Intermediate Municipal Fund (the 'New York Municipal Fund') which are
registered under the 1940 Act as non-diversified, open-end management investment
companies.
Investment objectives for each Fund are as follows: the Fixed Income Fund
seeks to generate high current income consistent with reasonable risk with
capital appreciation a secondary objective; the Global Fixed Income Fund seeks
to maximize total investment return consistent with prudent investment
management, consisting of a combination of interest income, currency gains and
capital appreciation; and the New York Municipal Fund seeks to maximize current
interest income exempt from Federal income tax and New York State and New York
City personal income tax to the extent consistent with prudent investment and
preservation of capital.
Each Fund offers two classes of shares, one class being referred to as Common
Shares and one class being referred to as Advisor Shares. Common and Advisor
Shares in each Fund represent an equal pro rata interest in each Fund, except
that they bear different expenses which reflect the difference in the range of
services provided to them. Advisor Shares for each fund bear expenses paid
pursuant to a distribution plan adopted by each Fund at an annual rate not to
exceed .75% of the average daily net asset value of each Fund's outstanding
Advisor Shares. The Advisor Shares for the Fixed Income Fund and the New York
Municipal Fund currently bear expenses of .25% of average daily net assets. The
Advisor Shares of the Global Fixed Income Fund currently bear expenses of .50%
of average daily net assets.
The net asset value of each Fund is determined daily as of the close of
regular trading on the New York Stock Exchange. Each Fund's investments are
valued at market value, which is currently determined using the last reported
sales price. If no sales are reported, investments are generally valued at the
last reported mean price. In the absence of market quotations, investments are
generally valued at fair value as determined by or under the direction of the
Fund's governing Board. Short-term investments that mature in 60 days or less
are valued on the basis of amortized cost, which approximates market value.
The books and records of the Funds are maintained in U.S. dollars.
Transactions denominated in foreign currencies are recorded at the current
prevailing exchange rates. All assets and liabilities denominated in foreign
currencies are translated into U.S. dollar amounts at the current exchange rate
at
23
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
the end of the period. Translation gains or losses resulting from changes in the
exchange rate during the reporting period and realized gains and losses on the
settlement of foreign currency transactions are reported in the results of
operations for the current period. The Global Fixed Income Fund isolates that
portion of gains and losses on investments in debt securities which are due to
changes in the foreign exchange rate from that which are due to changes in
market prices of debt securities.
Security transactions are accounted for on a trade date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date. Income, expenses (excluding class-specific expenses,
principally distribution, shareholder servicing fees and transfer agency) and
realized/unrealized gains/losses are allocated proportionately to each class of
shares based upon the relative net asset value of the outstanding shares. The
cost of investments sold is determined by use of the specific identification
method for both financial reporting and income tax purposes.
Dividends from net investment income are declared daily and paid monthly for
the Fixed Income Fund and the New York Municipal Fund. Dividends from net
investment income are declared and paid quarterly for the Global Fixed Income
Fund. Distributions for all Funds of net realized capital gains, if any, are
declared and paid annually. However, to the extent that a net realized capital
gain can be reduced by a capital loss carryover, such gain will not be
distributed. Income and capital gain distributions are determined in accordance
with Federal income tax regulations which may differ from generally accepted
accounting principles.
No provision is made for Federal taxes as it is each Fund's intention to
continue to qualify for and elect the tax treatment applicable to regulated
investment companies under the Internal Revenue Code and make the requisite
distributions to its shareholders which will be sufficient to relieve it from
Federal income and excise taxes.
Each Fund may enter into repurchase agreement transactions. Under the terms
of a typical repurchase agreement, a Fund acquires an underlying security
subject to an obligation of the seller to repurchase. The value of the
underlying security collateral will be maintained at an amount at least equal to
the total amount of the purchase obligation, including interest. The collateral
is in the Fund's possession.
The Funds, together with other Warburg-advised funds, (collectively the
'Warburg Funds'), have established committed and uncommitted line of credit
facilities with certain banks for temporary or emergency purposes primarily
relating to fund share redemptions and funding payments of dividend or capital
gain distributions. Under the terms of the committed line of credit, the Warburg
24
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
Funds with access to the facility pay a commitment fee at a rate of .10% per
annum on the amount of the line of credit. In addition, under the terms of both
the committed and uncommitted facilities, the Warburg Funds will pay interest on
borrowings at the banks base rate plus .55%. Aggregate borrowings for each fund
under these credit facilities may not exceed the lower of (a) the maximum amount
permitted by such fund's investment policies and restrictions or (b) thirty
three and one-third percent (33 1/3%) of such fund's total assets. At October
31, 1996 there were no outstanding balances under these line of credit
facilities for any of the funds.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from these estimates.
The Funds have an arrangement with their transfer agent whereby interest
earned on uninvested cash balances was used to offset a portion of the transfer
agent expense. For the year ended October 31, 1996, the Funds received credits
or reimbursements under this arrangement as follows:
<TABLE>
<CAPTION>
FUND AMOUNT
- ---------------------------------------------------------------- ------
<S> <C>
Fixed Income $9,692
Global Fixed Income 7,594
New York Municipal 5,728
</TABLE>
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR
Warburg, Pincus Counsellors, Inc. ('Warburg'), a wholly owned subsidiary of
Warburg, Pincus Counsellors G.P. ('Counsellors G.P.'), serves as each Fund's
investment adviser. For its investment advisory services, Warburg receives the
following fees based on each Fund's average daily net assets:
<TABLE>
<CAPTION>
FUND ANNUAL RATE
- ------------------------------------------------ ----------------------------------
<S> <C>
Fixed Income .50% of average daily net assets
Global Fixed Income 1.00% of average daily net assets
New York Municipal .40% of average daily net assets
</TABLE>
For the year ended October 31, 1996, investment advisory fees and waivers
were as follows:
<TABLE>
<CAPTION>
GROSS NET
FUND ADVISORY FEE WAIVER ADVISORY FEE
- ---------------------------------------- ------------ --------- ------------
<S> <C> <C> <C>
Fixed Income $ 648,732 $(163,311) $485,421
Global Fixed Income 1,031,630 (514,200) 517,430
New York Municipal 301,602 (102,812) 198,790
</TABLE>
25
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR (CONT'D)
Counsellors Funds Service, Inc. ('CFSI'), a wholly owned subsidiary of
Warburg, and PFPC Inc. ('PFPC'), an indirect, wholly owned subsidiary of PNC
Bank Corp. ('PNC'), serve as each Fund's co-administrators. For administrative
services, CFSI currently receives a fee calculated at an annual rate of .10% of
each Fund's average daily net assets. For the year ended October 31, 1996,
administrative services fees earned by CFSI were as follows:
<TABLE>
<CAPTION>
FUND CO-ADMINISTRATION FEE
- ------------------------------------------------------- ---------------------
<S> <C>
Fixed Income $ 129,747
Global Fixed Income 103,163
New York Municipal 75,401
</TABLE>
For its administrative services, PFPC currently receives a fee at an annual
rate of .05% of each Fund's average daily net assets.
For the year ended October 31, 1996, administrative services fees earned and
voluntarily waived by PFPC were as follows:
<TABLE>
<CAPTION>
FUND GROSS FEE WAIVER NET
- ---------------------------------------------- --------- -------- -------
<S> <C> <C> <C>
Fixed Income $117,711 $(28,629) $89,082
Global Fixed 109,014 (58,514) 50,500
New York Municipal 68,978 (25,703) 43,275
</TABLE>
Counsellors Securities Inc. ('CSI'), also a wholly owned subsidiary of
Warburg, serves as each Fund's distributor. For its shareholder servicing and
distribution services, CSI currently receives a fee calculated at an annual rate
of .25% of the average daily net assets of the Advisor Shares of the Fixed
Income Fund, and the New York Municipal Fund and .50% of the average daily net
assets of the Global Fixed Income Fund. For the period ended October 31, 1996,
distribution fees earned by CSI were as follows:
<TABLE>
<CAPTION>
FUND DISTRIBUTION FEE
- ----------------------------------------------------------- ----------------
<S> <C>
Fixed Income $1,239
Global Fixed Income 25
</TABLE>
3. INVESTMENTS IN SECURITIES
For the year ended October 31, 1996, purchases and sales of investment
securities (excluding short-term investments) and United States government and
agency obligations were as follows:
<TABLE>
<CAPTION>
U.S. GOVERNMENT AND
INVESTMENT SECURITIES AGENCY OBLIGATIONS
----------------------------- -----------------------------
FUND PURCHASES SALES PURCHASES SALES
- ------------------------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Fixed Income $ 85,379,858 $ 67,505,807 $193,409,268 $177,685,481
Global Fixed Income 166,610,855 114,039,788 0 0
New York Municipal 58,684,023 51,114,806 0 0
</TABLE>
26
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
At October 31, 1996, the net unrealized appreciation from investments for
those securities having an excess of value over cost and net unrealized
depreciation from investments for those securities having an excess of cost over
value (based on cost for Federal income tax purposes) was as follows:
<TABLE>
<CAPTION>
NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
FUND APPRECIATION DEPRECIATION (DEPRECIATION)
- ------------------------------------- ------------ ------------ --------------
<S> <C> <C> <C>
Fixed Income $2,686,012 $(1,814,475) $ 871,537
Global Fixed Income 3,198,533 (1,638,326) 1,560,207
New York Municipal 1,306,082 (46,478) 1,259,604
</TABLE>
4. FORWARD FOREIGN CURRENCY CONTRACTS
The Fixed Income Fund and the Global Fixed Income Fund may enter into forward
currency contracts for the purchase or sale of a specific foreign currency at a
fixed price on a future date. Risks may arise upon entering into these contracts
from the potential inability of counterparties to meet the terms of their
contracts and from unanticipated movements in the value of a foreign currency
relative to the U.S. dollar. The Funds will enter into forward contracts
primarily for hedging purposes. The forward currency contracts are adjusted by
the daily exchange rate of the underlying currency and any gains or losses are
recorded for financial statement purposes as unrealized until the contract
settlement date.
At October 31, 1996, the Global Fixed Income Fund had the following open
forward foreign currency contracts:
<TABLE>
<CAPTION>
FORWARD FOREIGN UNREALIZED
CURRENCY EXPIRATION CURRENCY CONTRACT CONTRACT FOREIGN EXCHANGE
CONTRACT DATE TO BE SOLD AMOUNT VALUE GAIN (LOSS)
- -------------- ---------- ---------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
German Marks 11/12/96 14,115,400 $ 9,333,113 $ 9,334,347 $ (1,234)
British Pounds 11/18/96 6,500,000 10,185,500 10,572,900 (387,400)
British Pounds 11/18/96 5,000,000 7,820,500 8,133,000 (312,500)
British Pounds 11/18/96 1,560,000 2,427,360 2,537,496 (110,136)
German Marks 11/29/96 34,860,000 22,859,016 23,078,451 (219,435)
Netherlands
Gilders 11/29/96 13,730,000 8,029,240 8,108,906 (79,666)
Canadian
Dollars 12/02/96 1,783,140 1,305,851 1,332,690 (26,839)
Canadian
Dollars 12/02/96 116,860 85,800 87,340 (1,540)
Danish Krone 01/02/97 71,280,000 12,247,423 12,249,948 (2,525)
Danish Krone 01/02/97 32,620,000 5,601,924 5,605,967 (4,043)
Canadian
Dollars 02/03/97 5,330,000 3,956,060 3,999,400 (43,340)
----------- ----------- ----------------
$83,851,787 $85,040,445 $ (1,188,658)
----------- ----------- ----------------
----------- ----------- ----------------
</TABLE>
27
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
5. FUTURES CONTRACTS
Each Fund may enter into futures contracts to the extent permitted by its
investment policies and objectives. Upon entering into a futures contract, a
Fund is required to make a deposit of an initial margin with its custodian in a
segregated account. Subsequent payments, which are dependent on the daily
fluctuations in the value of the underlying instrument, are made or received by
a Fund each day (daily variation margin) and are recorded as unrealized gains or
losses until the contracts are closed. When the contract is closed, a Fund
records a realized gain or loss equal to the difference between the proceeds
from (or cost of) the closing transactions and a Fund's basis in the contract.
Risks of entering into futures contracts include the possibility that a change
in the value of the contract may not correlate with the changes in the value of
the underlying instruments. Second, it is possible that a lack of liquidity for
futures contracts could exist in the secondary market, resulting in an inability
to close a futures position prior to its maturity date. Third, the purchase of a
futures contract involves the risk that a Fund could lose more than the original
margin deposit required to initiate a futures transaction. During the year ended
October 31, 1996, the New York Municipal Fund entered into futures contracts
which resulted in net realized gains of $519,896. At October 31, 1996, the New
York Municipal Bond Fund had the following open futures contracts:
<TABLE>
<CAPTION>
VALUE AT VALUE AT
NUMBER OF EXPIRATION TRADE OCTOBER 31, UNREALIZED
CONTRACTS TYPE DATE DATE 1996 DEPRECIATION
- --------- -------------- ------------- ---------- ----------- ------------
Short
Positions:
<S> <C> <C> <C> <C> <C>
50 30 yr. T-Bond December 1996 $5,503,750 $5,650,000 ($146,250)
</TABLE>
28
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
6. CAPITAL SHARE TRANSACTIONS
The Global Fixed Income Fund is authorized to issue three billion full and
fractional shares of capital stock, $.001 par value per share, of which one
billion shares are designated Series 2 Shares (the Advisor Shares). The Fixed
Income Fund and the New York Municipal Fund are each authorized to issue an
unlimited number of full and fractional shares of beneficial interest, $.001 par
value per share, of which one billion shares are designated Series 2 Shares (the
Advisor Shares).
Transactions in shares of each Fund were as follows:
<TABLE>
<CAPTION>
GLOBAL FIXED INCOME
FIXED INCOME FUND -----------------------------------------------
----------------------------------------------- ADVISOR
ADVISOR SHARES
SHARES -------------
------------- FOR THE
FOR THE PERIOD
PERIOD AUGUST 12,
JULY 3, 1996 1996
COMMON SHARES (COMMENCEMENT COMMON SHARES (COMMENCEMENT
-------------------------------- OF -------------------------------- OF
OPERATIONS) OPERATIONS)
FOR THE YEAR ENDED OCTOBER 31, THROUGH FOR THE YEAR ENDED OCTOBER 31, THROUGH
-------------------------------- OCTOBER 31, -------------------------------- OCTOBER 31,
1996 1995 1996 1996 1995 1996
--------------- --------------- ------------- --------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 6,500,524 4,918,036 91,451 10,872,405 4,066,768 3,441
Shares issued to
shareholders on
reinvestment of
dividends 655,650 672,751 1,432 696,550 281,288 25
Shares redeemed (3,807,785) (4,609,035) (2,709) (5,602,659) (7,231,335) (10)
--------------- --------------- ------------- --------------- --------------- ------
Net increase
(decrease) in
shares outstanding 3,348,389 981,752 90,174 5,966,296 (2,883,279) 3,456
--------------- --------------- ------------- --------------- --------------- ------
--------------- --------------- ------------- --------------- --------------- ------
Proceeds from sale
of shares $65,153,259 $ 47,678,747 $ 906,881 $ 119,663,378 $ 42,488,917 $37,907
Reinvested dividends 6,560,447 6,555,741 14,269 7,544,115 2,941,954 278
Net asset value of
shares redeemed (38,174,913) (44,942,286) (27,028) (61,337,990) (75,776,818) (112)
--------------- --------------- ------------- --------------- --------------- ------
Net increase
(decrease) from
capital share
transactions $33,538,793 $ 9,292,202 $ 894,122 $ 65,869,503 $ (30,345,947) $38,073
--------------- --------------- ------------- --------------- --------------- ------
--------------- --------------- ------------- --------------- --------------- ------
</TABLE>
<TABLE>
<CAPTION>
NEW YORK INTERMEDIATE MUNICIPAL FUND
-----------------------------------------------
ADVISOR
SHARES
-------------
FOR THE
PERIOD
AUGUST 5,
1996
COMMON SHARES (COMMENCEMENT
-------------------------------- OF
OPERATIONS)
FOR THE YEAR ENDED OCTOBER 31, THROUGH
-------------------------------- OCTOBER 31,
1996 1995 1996
--------------- --------------- -------------
<S> <C> <C> <C>
Shares sold 3,417,172 3,181,012 111
Shares issued to shareholders on reinvestment of
dividends 348,363 299,821 1
Shares redeemed (3,306,747) (3,957,382) 0
--------------- --------------- -----
Net increase (decrease) in shares outstanding 458,788 (476,549) 112
--------------- --------------- -----
--------------- --------------- -----
Proceeds from sale of shares $35,404,895 $ 32,441,402 $ 1,150
Reinvested dividends 3,601,541 3,073,742 9
Net asset value of shares redeemed (34,244,336) (40,620,180) 0
--------------- --------------- -----
Net increase (decrease) from capital share
transactions $ 4,762,100 $ (5,105,036) $ 1,159
--------------- --------------- -----
--------------- --------------- -----
</TABLE>
29
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
7. NET ASSETS
Net assets at October 31, 1996 consisted of the following:
<TABLE>
<CAPTION>
FIXED GLOBAL FIXED NEW YORK
INCOME FUND INCOME FUND MUNICIPAL FUND
------------ ------------ --------------
<S> <C> <C> <C>
Capital contributed, net $151,174,399 $129,871,491 $ 75,343,895
Accumulated net investment income 0 2,677,415 0
Accumulated net realized gain (loss) from
security transactions 29,777 (1,844,771) 1,096,568
Net unrealized appreciation from investments and
foreign currency related items 891,202 406,758 1,119,988
------------ ------------ --------------
Net assets $152,095,378 $131,110,893 $ 77,560,451
------------ ------------ --------------
------------ ------------ --------------
</TABLE>
8. CAPITAL LOSS CARRYOVER
At October 31, 1996, capital loss carryovers available to offset possible
future capital gains of each Fund were as follows:
<TABLE>
<CAPTION>
CAPITAL LOSS CARRYOVER
EXPIRING IN
----------------------- TOTAL CAPITAL
FUND 2002 2003 LOSS CARRYOVER
- ----------------------------------------------- -------- ---------- --------------
<S> <C> <C> <C>
Global Fixed Income $560,159 $1,284,612 $1,844,771
</TABLE>
30
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
9. OTHER FINANCIAL HIGHLIGHTS
Each Fund currently offers one other class of shares, Common Shares,
representing equal prorata interests in each of the respective Warburg Pincus
Fixed Income Funds. The financial highlights for a Common Share of each Fund are
as follows:
<TABLE>
<CAPTION>
FIXED INCOME FUND
-----------------------------------------------------
COMMON SHARES
-----------------------------------------------------
FOR THE YEAR ENDED OCTOBER 31,
-----------------------------------------------------
1996 1995 1994 1993 1992
------ ------ ------ ------ -----
<S> <C> <C> <C> <C> <C>
NET VALUE, BEGINNING OF YEAR $10.07 $ 9.61 $10.42 $ 9.90 $9.61
------ ------ ------ ------ -----
Income from Investment Operations:
Net Investment Income .63 .70 .63 .56 .67
Net Gain (Loss) on Securities and Foreign
Currency Related Items (both realized
and unrealized) .03 .46 (.70) .52 .29
------ ------ ------ ------ -----
Total from Investment Operations .66 1.16 (.07) 1.08 .96
------ ------ ------ ------ -----
Less Distributions:
Dividends from Net Investment Income (.63) (.70) (.65) (.56) (.67)
Distributions from Capital Gains .00 .00 (.09) .00 .00
------ ------ ------ ------ -----
Total Distributions (.63) (.70) (.74) (.56) (.67)
------ ------ ------ ------ -----
NET ASSET VALUE, END OF YEAR $10.10 $10.07 $ 9.61 $10.42 $9.90
------ ------ ------ ------ -----
------ ------ ------ ------ -----
Total Return 6.80% 12.59% (.60%) 11.63% 10.28%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year (000s) $151,184 $116,983 $102,246 $81,181 $65,095
Ratios to average daily net assets:
Operating expenses .75% .75% .75% .75% .75%
Net investment income 6.30% 7.25% 6.53% 5.99% 6.82%
Decrease reflected in above operating
expense ratios due to
waivers/reimbursements .16% .18% .18% .09% .27%
Portfolio Turnover Rate 194.23% 182.93% 179.44% 227.37% 122.04%
</TABLE>
- --------------------------------------------------------------------------------
TAX STATUS OF 1996 DIVIDENDS (Unaudited)
Taxable dividends paid by the Fund on a per share basis were as follows:
<TABLE>
<S> <C>
Ordinary income $.63
</TABLE>
Because the Fund's fiscal year is not the calendar year, amounts to be used by
calendar year taxpayers on their Federal return will be reflected on
Form 1099-DIV and will be mailed in January 1997.
31
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
9. OTHER FINANCIAL HIGHLIGHTS (CONT'D)
<TABLE>
<CAPTION>
GLOBAL FIXED INCOME FUND
------------------------------------------------------
COMMON SHARES
------------------------------------------------------
FOR THE YEAR ENDED OCTOBER 31,
------------------------------------------------------
1996 1995 1994 1993 1992
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $11.04 $10.45 $11.38 $10.68 $10.40
------ ------ ------ ------ ------
Income from Investment Operations:
Net Investment Income .62 .99 .34 .54 .86
Net Gain (Loss) on Securities and Foreign
Currency Related Items (both realized
and unrealized) .57 .09 (.64) 1.13 .28
------ ------ ------ ------ ------
Total from Investment Operations 1.19 1.08 (.30) 1.67 1.14
------ ------ ------ ------ ------
Less Distributions:
Dividends from Net Investment Income (1.06) (.49) (.45) (.85) (.67)
Distributions from Capital Gains .00 .00 (.14) (.12) (.19)
Return of Capital .00 .00 (.04) .00 .00
------ ------ ------ ------ ------
Total Distributions (1.06) (.49) (.63) (.97) (.86)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR $11.17 $11.04 $10.45 $11.38 $10.68
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total Return 11.35% 10.65% (2.79%) 16.72% 11.08%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year (000s) $131,072 $63,641 $90,394 $61,994 $17,092
Ratios to average daily net assets:
Operating expenses .95% .95% .95% .49% .45%
Net investment income 6.78% 8.18% 6.96% 8.60% 8.66%
Decrease reflected in above operating
expense ratios due to
waivers/reimbursements .56% .63% .65% 1.44% 2.42%
Portfolio Turnover Rate 123.90% 128.70% 178.11% 109.54% 93.14%
</TABLE>
- --------------------------------------------------------------------------------
TAX STATUS OF 1996 DIVIDENDS (Unaudited)
Taxable dividends paid by the Fund on a per share basis were as follows:
<TABLE>
<S> <C>
Ordinary income $1.06
</TABLE>
Because the Fund's fiscal year is not the calendar year, amounts to be used by
calendar year taxpayers on their Federal return will be reflected on Form
1099-DIV and will be mailed in January 1997.
32
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
9. OTHER FINANCIAL HIGHLIGHTS (CONT'D)
<TABLE>
<CAPTION>
NEW YORK INTERMEDIATE MUNICPAL FUND
-----------------------------------------------
COMMON SHARES
-----------------------------------------------
FOR THE YEAR ENDED OCTOBER 31,
-----------------------------------------------
1996 1995 1994 1993 1992
------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $10.42 $10.07 $10.65 $10.02 $ 9.88
------- ------ ------ ------ ------
Income from Investment Operations:
Net Investment Income .45 .47 .46 .47 .50
Net Gain (Loss) on Securities (both realized
and unrealized) .04 .36 (.45) .68 .14
------- ------ ------ ------ ------
Total from Investment Operations .49 .83 .01 1.15 .64
------- ------ ------ ------ ------
Less Distributions:
Dividends from Net Investment Income (.45) (.47) (.46) (.47) (.50)
Distributions from Capital Gains (.12) (.01) (.13) (.05) .00
------- ------ ------ ------ ------
Total Distributions (.57) (.48) (.59) (.52) (.50)
------- ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR $10.34 $10.42 $10.07 $10.65 $10.02
------- ------ ------ ------ ------
------- ------ ------ ------ ------
Total Return 4.87% 8.31% .04% 11.67% 6.63%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year (000s) $77,559 $73,361 $75,716 $69,578 $54,012
Ratios to average daily net assets:
Operating expenses .59% .60% .60% .58% .55%
Net investment income 4.41% 4.50% 4.41% 4.50% 4.99%
Decrease reflected in above operating expense
ratios due to
waivers/reimbursements .18% .26% .20% .20% .40%
Portfolio Turnover Rate 69.23% 105.17% 167.09% 115.98% 47.79%
</TABLE>
- --------------------------------------------------------------------------------
TAX STATUS OF 1996 DIVIDENDS (Unaudited)
Taxable dividends paid by the Fund on a per share basis were as follows:
<TABLE>
<S> <C>
Ordinary income $.09
Long-term capital gain .03
</TABLE>
Because the Fund's fiscal year is not the calendar year, amounts to be used by
calendar year taxpayers on their Federal return will be reflected on
Form 1099-DIV and will be mailed in January 1997.
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WARBURG PINCUS FIXED INCOME FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
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To the Boards of Directors, Trustees and Shareholders of
WARBURG PINCUS FIXED INCOME FUNDS:
We have audited the accompanying statement of assets and liabilities including
the schedule of investments of Warburg Pincus Fixed Income Fund and the
statements of net assets of Warburg Pincus Global Fixed Income Fund and Warburg
Pincus New York Intermediate Municipal Fund (all Funds collectively referred to
as the 'Warburg Pincus Fixed Income Funds') as of October 31, 1996, and the
related statements of operations for the year then ended, the related statements
of changes in net assets for each of the two years in the period then ended and
the financial highlights for each of the four years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights of each of the Warburg Pincus Fixed Income Funds for the period ended
October 31, 1992, were audited by other auditors, whose report dated December
15, 1992, expressed an unqualified opinion.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1996, by correspondence with the custodians and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the Warburg Pincus Fixed Income Funds as of October 31, 1996, and the results
of their operations for the year then ended, the changes in their net assets for
each of the two years in the period then ended and the financial highlights for
each of the four years in the period then ended, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, PA
December 18, 1996
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WARBURG PINCUS
ADVISOR FUNDS
COUNSELLORS
SECURITIES INC.,
DISTRIBUTOR
800-369-2728
[WARBURG PINCUS LOGO]
INVESTMENTS ADBDF-2-1096
STATEMENT OF DIFFERENCES
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The dagger symbol shall be expressed as `D'
The division sign shall be expressed as [div]
