<PAGE>
<PAGE>
WARBURG PINCUS ADVISOR FUNDS APRIL 30, 1998
FIXED INCOME FUND
GLOBAL FIXED INCOME FUND
INTERMEDIATE MATURITY GOVERNMENT FUND
NEW YORK INTERMEDIATE MUNICIPAL FUND
S
SEMIANNUAL REPORT
More complete information about the Funds,
including charges and expenses, is provided in the
Prospectus which must precede or accompany this
document and which should be read carefully before
investing. You may obtain additional copies by
calling 800-369-2728 or by writing to Warburg
Pincus Advisor Funds, P.O. Box 4906, Grand Central
Station, New York, NY 10163.
[LOGO]
<PAGE>
<PAGE>
From time to time, the Funds' investment adviser and co-administrators may waive
some fees and/or reimburse some expenses, without which performance would be
lower. Waivers and/or reimbursements are subject to change.
Returns are historical and include change in share price and reinvestment of
dividends and capital gains. Past performance cannot guarantee future results.
Returns and share price will fluctuate, and redemption value may be more or less
than original cost.
The views of the Funds' management are as of the date of the letters and
portfolio holdings described in this semiannual report are as of April 30, 1998;
these views and portfolio holdings may have changed subsequent to these dates.
Nothing in this semiannual report is a recommendation to purchase or sell
securities.
<PAGE>
<PAGE>
WARBURG PINCUS ADVISOR FIXED INCOME FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998
- --------------------------------------------------------------------------------
Dear Shareholder: June 16, 1998
The objective of Warburg Pincus Advisor Fixed Income Fund (the 'Fund') is
high current income consistent with reasonable risk and, secondarily, capital
appreciation. The Fund pursues its objective by investing in a diversified
portfolio of fixed-income securities, including both corporate and U.S.
government issues.
For the six months ended April 30, 1998, the Fund had a total return of
2.52%, vs. a 3.12% gain for the Lehman Intermediate Government/Corporate Bond
Index.* The Fund's one-year return through April 30, 1998 was 8.96%. Its
since-inception (on July 3, 1996) average annual total return was 8.8%.
The November-through-April span was ultimately a positive one for the
domestic fixed-income market. The period began on a strong note, with bonds
benefiting from an Asia-related flight to quality and a consensus that Asia's
turmoil would further ease already-low inflation. Against this backdrop, the
yield on the U.S. Treasury's 30-year bond fell from 6.14% at the start of the
period to 5.69% by mid-January, a two-decade low. The economy remained buoyant,
however, raising the specter of potential inflation, and bonds gave up some of
their gains over the latter part of the period.
We made a few noteworthy changes to the Fund during the period in terms of
interest-rate exposure and sector allocation. Regarding the former, we modestly
reduced the Fund's duration in March based on risk-vs.-reward considerations.
That said, we kept the Fund's duration longer than that of its benchmark
throughout, reflecting our generally favorable view of inflation and interest
rates.
In terms of sector concentration, we continued to emphasize Treasuries, since
we viewed them as most attractive on a risk-adjusted basis. We did, however,
reduce our weighting here near the end of the period, using the proceeds to
raise our stake in mortgage-backed issues. We were underweighted in the
mortgage-backed sector through much of the six months, due in large part to
prepayment concerns. We found a number of attractive buying opportunities late
in the period, however, within both the government-agency and commercial
mortgage-backed areas.
We maintained a significant position in corporate bonds, where our focus
remained on investment-grade debt. With few exceptions, we deemed the higher
yields offered by below-investment-grade bonds to be insufficient compensation
for their underlying credit risk. Our corporate bonds
- ------------
* The Lehman Intermediate Government/Corporate Bond Index is an unmanaged index
(with no defined investment objective) of intermediate- term government and
corporate bonds, and is calculated by Lehman Brothers Inc.
1
<PAGE>
<PAGE>
WARBURG PINCUS ADVISOR FIXED INCOME FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998 (CONT'D)
- --------------------------------------------------------------------------------
contributed positively to the Fund's November-through-April performance, buoyed
by the economy's continued health.
Elsewhere, we held a relatively small weighting in foreign bonds, one we
trimmed during the period. Most specifically, we sold our South Korean issues in
December due to the country's rapidly deteriorating financial condition. These
issues hampered the Fund's performance for the period. We also held a small
position in preferred securities, which contributed positively to the Fund's
return.
<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
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998
- --------------------------------------------------------------------------------
Dear Shareholder: June 16, 1998
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 fixed-income obligations of
government and corporate issuers.
Effective March 31, 1998, Laxmi C. Bhandari no longer serves as Co-Portfolio
Manager of the Fund. Effective May 29, 1998 Charles C. van Vleet is a
Co-Portfolio Manager of the Fund, along with Co-Portfolio Manager Dale C.
Christensen.
MANAGER COMMENTARY
For the six months ended April 30, 1998, the Fund gained 0.09%, vs. gains of
4.88% for the Salomon Brothers World Government Bond Index (Currency-Hedged)**
and 3.85% for the Lipper World Income Funds Average.*** The Fund's one-year
return as of April 30, 1998 was 2.07%. Its since-inception (on August 12, 1996)
average annual total return was 5.06%.
The November-through-April span was a positive one for most global bond
markets, though performance varied significantly by region. In Europe, markets
showed universal strength, reflecting the region's continued benign inflation,
falling deficits and optimism regarding the launch of European Monetary Union.
Dollar-bloc markets (most specifically, the U.S., Canada, Australia and New
Zealand), though not as strong as Europe, also saw good performances, thanks in
part to subdued inflation. Elsewhere, emerging markets had mixed results. While
some recovered nicely from Asia-related declines early in the period, others,
including Asian markets in which the Fund had significant positions, continued
to be plagued by currency and debt concerns.
We made several noteworthy changes to the Fund during the period in terms of
regional allocation. We increased our weighting in Europe, reflecting our view
that the area's low inflation and fiscal austerity will continue to provide a
hospitable environment for bonds. Our primary focus remained on
- ------------
* The Salomon Brothers World Government Bond Index (Currency-Hedged) is a
market capitalization-weighted index designed to track major government debt
markets and is currency-hedged into U.S. dollars.
** The Lipper World Income Funds Average is an arithmetic average of all world
income funds, tracked by Lipper Analytical Services, that invest in non-U.S.
dollar and U.S. dollar debt instruments with unspecified maturities and
durations, or other income-producing securities.
3
<PAGE>
<PAGE>
WARBURG PINCUS ADVISOR GLOBAL FIXED INCOME FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998 (CONT'D)
- --------------------------------------------------------------------------------
bonds from Europe's 'core' economies (e.g., Germany), which we generally deemed
to have the most attractive risk-adjusted yields.
We also raised our exposure to dollar-bloc issues, in particular
intermediate-term U.S. Treasuries. Our heightened emphasis on these securities
was based on their historically compelling inflation-adjusted yields. In
addition, we viewed the supply/demand backdrop for Treasuries as increasingly
supportive, given the U.S. government's improving fiscal situation and reduced
borrowing needs.
We reduced our weighting in Asia during the six months. We held a relatively
large weighting here through much of the period, which weighed heavily on the
Fund's performance, given the negative impact the region's financial crisis had
on bonds there generally. Due to the area's deteriorating financial backdrop, we
opted to sell most of our Indonesia and Thailand issues and selectively pare our
exposure to South Korea.
Elsewhere, we eliminated the bulk of our position in Latin America during the
period. Most of our exposure here was in the form of intermediate-term Brazilian
bank holdings, which we sold on profit-taking against what we viewed as an
increasingly risky near-term economic environment.
In terms of currency exposure, the majority of the Fund's portfolio
securities was dollar-denominated in or hedged into dollars throughout the six
months. This proved beneficial to the Fund's performance, given the continued
rise of the dollar against most currencies during the period.
Dale C. Christensen
Co-Portfolio Manager
Charles C. van Vleet
Co-Portfolio Manager
International investing entails special risk considerations, including
currency fluctuations, lower liquidity, economic and political risks, and
differences in accounting methods.
4
<PAGE>
<PAGE>
WARBURG PINCUS ADVISOR INTERMEDIATE MATURITY GOVERNMENT FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998
- --------------------------------------------------------------------------------
Dear Shareholder: June 16, 1998
The objective of Warburg Pincus Advisor Intermediate Maturity Fund (the
'Fund') is a high level of current income consistent with capital preservation.
The Fund invests primarily in obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. Under normal market conditions,
the Fund will maintain a weighted average portfolio maturity of between three
and 10 years.
For the six months ended April 30, 1998, the Fund had a total return of
2.69%, vs. a 3.06% return for the Lehman Intermediate Government Bond Index.*
The Fund's since-inception (on August 15, 1997) average annual total return was
4.98%.
The period was a positive one for the domestic fixed-income market, supported
by continued benign inflation, an Asia-related focus on quality and projected
federal budget surpluses. These factors ultimately outweighed fears that a
strong economy would prompt the Federal Reserve to raise interest rates as a
preemptive strike against potential inflation. Against this backdrop, virtually
all major bond indexes advanced, albeit modestly.
Our strategy throughout was to manage the Fund's interest-rate exposure from
a risk-reward perspective. In practical terms, this meant extending the Fund's
duration when inflation-adjusted yields were, in our view, attractive, and
reducing duration when we believed market fundamentals were less favorable. We
sought to keep a firm hand on risk, and thus attempted to err on the side of
caution.
In terms of sectors, we maintained a primary emphasis on Treasuries during
the period, as we continued to find them most attractive on a risk-reward basis.
We did, however, reduce our weighting here late in the period, using the
proceeds to add to our position in mortgage-backed bonds, where we found a
number of compelling values. Other areas in which we found good values included
U.S.-agency issues and, to a lesser extent, asset-backed securities,
specifically issues backed by Small Business Administration loans.
<TABLE>
<S> <C>
Dale C. Christensen M. Anthony E. van Daalen
Co-Portfolio Manager Co-Portfolio Manager
</TABLE>
- ------------
* The Lehman Intermediate Bond Index is an unmanaged index (with no defined
investment objective) of intermediate-term government bonds, and is calculated
by Lehman Brothers Inc.
5
<PAGE>
<PAGE>
WARBURG PINCUS ADVISOR NEW YORK INTERMEDIATE MUNICIPAL FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998
- --------------------------------------------------------------------------------
Dear Shareholder: June 16, 1998
The objective of Warburg Pincus Advisor New York Intermediate Municipal Fund
(the 'Fund') is maximum current interest income -- exempt from federal income
tax and New York State and New York City personal income taxes -- to the extent
consistent with prudent investment and the preservation of capital. A portion of
the Fund's income may be subject to state and city taxes or the federal
alternative minimum tax.
Effective May 29, 1998, Patrick A. Bittner serves as Co-Portfolio Manager of
the Fund, along with Co-Portfolio Managers Dale C. Christensen and Sharon B.
Parente.
MANAGER COMMENTARY
For the six months ended April 30, 1998, the Fund had a total return of
1.43%, vs. gains of 2.83% for the Lehman 5-year Municipal Bond Index* and 2.07%
for the Lipper New York Intermediate Municipal Debt Funds Average.** The Fund's
one-year return as of April 30, 1998 was 5.00%. Its since-inception (on August
5, 1996) average annual total return was 4.32%.
The period was a positive one for municipal bonds, supported by continued
benign inflation and improving federal and state budgets. Municipal bonds
periodically struggled, however, due to fears of potential inflation, given the
continued strong economy. A surge in municipal-bond issuance also weighed on the
market, particularly during the second half of the period. Thus, most major
municipal-bond indexes posted only modest gains for the six months.
We made few noteworthy changes to the Fund during the period. We did,
however, extend the Fund's duration as the period progressed, reflecting our
more-positive view of inflation and interest rates. As a result, the Fund's
duration was modestly longer than that of its Lehman benchmark at the end of
period.
In terms of credit quality, we kept the majority of the Fund invested in
bonds rated AAA. In our judgment, yield spreads between these and lower-rated
bonds generally remained too narrow to justify 'dropping down the credit ladder'
in pursuit of higher yields. The Fund's average credit quality increased during
the period, in large measure due to a credit upgrade of New
- ------------
* The Lehman 5-year Municipal Bond Index is an unmanaged index of municipal
bonds that is compiled by Lehman Brothers Inc. and has no defined investment
objective.
** The Lipper New York Intermediate Municipal Debt Funds Average measures the
average total return of all New York intermediate municipal debt funds
tracked by Lipper Analytical Services Inc.
6
<PAGE>
<PAGE>
WARBURG PINCUS ADVISOR NEW YORK INTERMEDIATE MUNICIPAL FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998 (CONT'D)
- --------------------------------------------------------------------------------
York City debt by a major rating agency. This had a favorable impact on the
prices of the City's bonds, and hence the Fund's performance: We had a
significant position in New York City debt, one we increased early in the period
in continued anticipation of a credit upgrade.
We made few changes in term of industry/sector allocation during the period.
We remained most heavily weighted in the general-obligation, education and
infrastructure areas. Sectors we continued to largely avoid included hospitals,
against a questionable funding backdrop, and utilities, due to regulatory
uncertainties.
Going forward, we believe the New York municipal market's longer-term
supply/demand fundamentals remain sound. We note with encouragement the relative
ease with which May's $4.9 billion Long Island Power Authority issuance -- part
of an eventual $7 billion issuance funding the state's partial takeover of the
Long Island Lighting Company -- was absorbed by the market. We will, of course,
continue to closely monitor shorter-term supply/demand trends, adjusting the
Fund as we deem appropriate while seeking the most attractive risk-adjusted
after-tax yields.
Sharon B. Parente
Co-Portfolio Manager
Patrick A. Bittner
Co-Portfolio Manager
Dale C. Christensen
Co-Portfolio Manager
7
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUND
STATEMENT OF NET ASSETS
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
PAR (MOODY'S/S&P) MATURITY RATE% VALUE
- ----------- ------------- -------- ------ ------------
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS (27.4%)
$ 2,000,000 ABN-AMRO Bank NV New York Branch
Subordinate Deposit Notes (Callable
08/01/04 @ $100.00) (Aa2, NR) 08/01/09 8.250 $ 2,170,000
4,140,000 Aetna Services, Inc. (A2, A) 08/15/06 7.125 4,290,075
500,000 Belco Oil & Gas Corp. (Callable 09/15/02 @
$104.44) (B1, B) 09/15/07 8.875 510,000
1,125,000 Citicorp (A1, A) 03/15/04 7.125 1,168,594
2,485,000 Comcast Cellular Corp. (Callable 5/01/02 @
$104.75) (Ba3, BB+) 05/01/07 9.500 2,596,825
2,270,000 Conagra, Inc. Senior Notes (Putable
08/01/00) (Baa1, BBB+) 08/01/27 6.700 2,326,750
5,000,000 Countrywide Home Loan, Inc. Medium Term
Notes (A3, A) 10/08/02 6.380 5,018,750
4,015,000 Deutsche Bank Financial Notes (Aa2, AA+) 04/25/09 7.500 4,311,106
4,890,000 First Industrial LP (Putable 05/15/02 @
$100.00) (Baa2, BBB) 05/15/27 7.150 5,036,700
5,930,000 First Union Corp. Subordinate Debentures
(Putable 10/15/05 @ $100.00) (A2, A-) 10/15/35 6.550 6,070,837
3,000,000 Glenborough Realty Trust (Ba1, NR) 03/15/05 7.625 3,003,750
1,000,000 Globalstar Capital Corp. Senior Notes
(Callable 02/15/02 @ $105.69)) (B3, B) 02/15/04 11.375 1,030,000
5,000,000 HSBC America Capital Trust (Callable
05/15/07 @ $104.19) (NR, NR) 05/15/27 8.380 5,243,750
5,355,000 Ingersoll-Rand Co. Medium Term Note (A3, A-) 11/19/27 6.230 5,381,775
5,500,000 J.C. Penney & Co. Inc. Debentures (Putable
8/15/26 @ $100) (A2, A) 08/15/26 6.900 5,733,750
1,000,000 Kingdom of Thailand Yankee Notes (A3, A) 08/15/01 7.840 986,250
1,000,000 Lenfest Communications, Inc. Senior Notes (Ba3, BB+) 11/01/05 8.375 1,040,000
1,500,000 Leucadia Capital Trust I (Callable
01/15/07 @ $104.28) (A1, BBB) 01/15/27 8.650 1,642,500
3,000,000 Lowe's Companies (Putable 5/15/07 @ $100) (A2, A) 05/15/37 7.110 3,176,250
2,045,000 Merck & Company, Inc. Medium Term Note
(Putable 05/03/99 @ $100) (Aaa, AAA) 05/03/37 5.760 2,080,787
1,955,000 Midland Bank PLC Yankee Subordinate Notes
(Putable 05/01/07 @ $100.00) (A1, A) 05/01/25 7.650 2,140,725
1,235,000 Paging Network, Inc. (Callable 10/15/01 @
105) (B2, B) 10/15/08 10.000 1,287,487
1,250,000 Paging Network, Inc. Senior Subordinate
Notes (Callable 08/01/00 @ $105.06) (B2, B) 08/01/07 10.125 1,318,750
3,250,000 Philip Morris Companies, Inc. Notes (NR, NR) 07/15/05 7.000 3,319,062
2,750,000 Philips Electronics NV Notes (Putable
06/01/06 @ $100.00) (A3, BBB+) 06/01/26 7.200 2,890,937
1,000,000 Riggs Capital Trust II Preferred
Securities Series C (Callable 03/15/07 @
$104.44) (Baa3, BB-) 03/15/27 8.875 1,080,000
1,560,000 Rose Hills Acquisition Senior Subordinate
Notes (Callable 11/15/00 @ $100) (B2, B) 11/15/04 9.500 1,632,150
5,175,000 Salomon Smith Barney Holdings (A2, A) 10/01/04 6.375 5,194,406
4,750,000 Southtrust Bank Birmingham (A1, A) 02/06/06 5.580 4,702,500
1,000,000 State Street Boston Corp. Debentures
(Putable 06/15/06 @ $100) (A1, AA-) 06/15/26 7.350 1,116,250
1,000,000 TIG Capital Trust I Debentures (Callable
1/15/07 @ $100) (Baa2, A-) 01/15/27 8.597 1,092,500
3,200,000 Times Mirror Co. Notes (Putable 9/15/04 @
$100) (A2, A+) 09/15/27 6.610 3,288,000
2,000,000 U.S. West Capital Funding Guaranteed
(Putable 1/15/04 @ $100) (Baa1, BBB+) 01/15/37 6.950 2,080,000
2,090,000 Unova, Inc. (Baa2, BBB-) 03/15/05 6.875 2,097,838
2,500,000 Viacom, Inc. (Callable 7/07/99 @ 103) (B1, BB-) 07/07/06 8.000 2,543,750
------------
TOTAL CORPORATE BONDS (Cost $96,577,396) 98,602,804
------------
</TABLE>
See Accompanying Notes to Financial Statements.
8
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
PAR (MOODY'S/S&P) MATURITY RATE% VALUE
- ----------- ------------- -------- ------ ------------
<S> <C> <C> <C> <C> <C>
MORTGAGE-BACKED SECURITIES (26.5%)
$ 2,350,000 Asset Securitization Corp. (Nomura Asset
Securities Corp.) Series 1996-D2, Class
A2 (NR, AA) 02/14/29 7.210+ $ 2,495,039
282,108 Bankers Trust Co. Pass-Through CTFS Series
1988-1, Class 1D (NR, AAA) 04/01/18 8.625 288,411
402,690 Donaldson, Lufkin, & Jenrette, Inc.
Acceptance Trust Series 1989-1, Class F (Aaa, AAA) 08/01/19 11.000 444,288
4,920,000 Fannie Mae, Series 1997-51, Class KB
Guaranteed REMIC TR (Aaa, AAA) 03/20/08 7.000 5,003,341
11,000,000 Fannie Mae, Series 1997-79, Class KB (Aaa, AAA) 07/18/26 6.000 10,618,438
4,700,000 Fannie Mae, Series 1998-M4, Class B (NR, NR) 12/25/23 6.424 4,705,640
8,800,000 Federal Home Loan Bank (Putable 12/03/02 @
$100) (Aaa, NR) 12/03/07 5.680 8,855,704
3,040,000 Federal Home Loan Bank Zero Coupon (NR, NR) 11/30/99 5.867# 2,780,293
155,902 Federal Home Loan Mortgage Corp. PC Pool
#220014 (Aaa, AAA) 10/01/01 8.750 159,690
5,000,000 First Chicago/Lennar Trust, Series
1997-CHl1, Class B (NR, NR) 04/29/06 8.035+ 5,253,125
1,000,000 First Street NB Commercial Mortgage
Pass-Through CTFS Series FSI, Class B (NR, NR) 10/20/23 7.607 1,000,781
1,500,000 General Motors Acceptance Corp. Series
96C-2B (NR, A) 10/15/11 7.530 1,566,563
1,000,000 General Motors Acceptance Corp. Series
98-C1, Class E (NR, NR) 06/03/09 7.153 1,003,900
5,000,000 Morgan Stanley Mortgage Trust Series 40,
Class 8 (NR, AAA) 07/20/21 7.000 5,086,777
4,970,000 Mortgage Capital Funding, Inc. Series
1998-MC1, Class E (NR, NR) 01/19/08 7.060 5,008,100
10,000,000 Nomura Asset Securities Corp. Series
1998-D6, Class A3 (NR, NR) 03/16/13 6.979 10,151,563
4,000,000 Nomura Asset Securities Corp. Series
1993-1, Class B1 (NR, BBB) 12/15/01 6.680 4,024,375
1,071,259 Nomura Asset Securities Corp. Series
1994-4B, Class 4A (Aaa, AAA) 09/25/24 8.300 1,105,238
10,986,099 Nomura Depository Trust Series 1998-ST1,
Class A1 (Aaa, AAA) 01/15/03 5.905+ 10,987,816
6,084,703 Residential Funding Mortgage Securities I
Series 96-S2, Class A1 (NR, AAA) 01/25/11 6.750 6,105,154
4,000,000 Resolution Trust Corp. 1994-C1, Class B (NR, AA) 06/25/26 8.000 4,050,312
1,294,257 Resolution Trust Corp. Pass-Through CTFS
Series-95 C1, Class A-2C (Aaa, NR) 02/25/27 6.900 1,291,224
783,664 Security Pacific Corp. Home Equity Loan
Series 1991-1, Class B (Aaa, AAA) 05/15/98 8.850 787,568
2,500,000 Shurgard Pass-Through CTFS Trust (Nomura
Asset Securities Corp.) Series 1, Class 1 (NR, NR) 06/15/04 8.240 2,625,781
------------
TOTAL MORTGAGE-BACKED SECURITIES (Cost $94,255,368) 95,399,121
------------
UNITED STATES TREASURY OBLIGATIONS (40.7%)
U.S. Treasury Notes (27.0%)
8,350,000 U.S. Treasury Note (Aaa, AAA) 07/15/98 8.250 8,404,358
49,000,000 U.S. Treasury Note (Aaa, AAA) 02/29/00 5.500 48,928,455
37,000,000 U.S. Treasury Note (Aaa, AAA) 05/15/01 8.000 39,437,926
450,000 U.S. Treasury Note (Aaa, AAA) 08/15/02 6.375 461,880
U.S. Treasury Principal Strip Notes (13.7%)
24,000,000 U.S. Treasury Principal Strip (Aaa, AAA) 08/15/99 5.819# 22,353,600
33,800,000 U.S. Treasury Principal Strip (Aaa, AAA) 05/15/02 5,840# 26,978,143
------------
TOTAL UNITED STATES TREASURY OBLIGATIONS
(Cost $146,143,416) 146,564,362
------------
AGENCY OBLIGATIONS (0.4%)
1,419,905 Small Business Administration
Guaranteed-Development Participation
Certificate Debenture Series 1992-20D
(Callable 4/1/98 @ 100) (Cost $1,149,905) (NR, NR) 04/01/12 8.200 1,519,742
------------
</TABLE>
See Accompanying Notes to Financial Statements.
9
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES RATE% VALUE
- ----------- -------- ------------
<S> <C> <C> <C> <C>
PREFERRED STOCK (3.8%)
Banks & Savings & Loans (0.3%)
36,800 Banco Totta & Acores Financial Corp.
Series A
(Callable 10/11/06 @ $25.00) 8.875 $ 977,500
------------
Communications & Media (0.9%)
5,263 American Radio Systems Series B (Callable
01/15/02 @ 105.69) 11.375 621,034
2,376 Time Warner, Inc. Series M (Callable
07/01/06 @ $1,051.30) 10.250 2,664,090
------------
3,285,124
------------
Financial Services (0.5%)
64,800 MEPC International Capital Series A
(Callable 9/21/05 @ $25) 9.125 1,729,350
------------
Real Estate (2.1%)
72,000 Equity Residential Properties Series D
REIT 8.600 1,876,500
30,000 Glenborough Realty Trust Series A
(Convertible) REIT (Callable 01/16/03 @
$25.95) 7.750 765,000
58,200 Loewen Group Capital Series A REIT 9.450 1,564,125
76,650 Prime Retail, Inc. Series B (Convertible)
REIT (Callable 03/31/99 @ $27.125) 8.500 1,786,903
26,250 Security Capital Industrial Trust Series C
REIT (Callable 11/13/26 @ $50) 8.540 1,403,325
15,000 Walden Residential Properties, Inc. REIT
(Callable 12/31/06 @ $25) 9.200 396,563
------------
7,792,416
------------
TOTAL PREFERRED STOCK (Cost $13,176,357) 13,784,390
------------
<CAPTION>
PAR
- -----------
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS (0.5%)
$1,869,000 Repurchase agreement with Goldman, Sachs &
Co. dated 04/30/98 at 5.47% to be
repurchased at $1,869,284 on 05/01/98.
(Collateralized by a pro rata amount of
U.S. Treasury Notes ranging in par values
from $39,650,000 to $50,000,000,
5.750%-7.250%, 09/30/01-05/15/04. Market
value of collateral is $1,907,759.) (Cost
$1,869,000) 1,869,000
------------
TOTAL INVESTMENTS AT VALUE (99.4%)
(Cost $353,441,442*) 357,739,419
OTHER ASSETS IN EXCESS OF LIABILITIES (0.6%) 2,323,996
------------
NET ASSETS (100.0%) (applicable to 34,520,584 Common
Shares and 339,670 Advisor Shares) $360,063,415
------------
------------
NET ASSET VALUE, offering and redemption price per Common Share
($356,556,362[div]34,520,584) $10.33
------
------
NET ASSET VALUE, offering and redemption price per
Advisor Share
($3,507,053[div]339,670) $10.32
------
------
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<C> <S>
CTFS = Certificates
NR = Not Rated
REIT = Real Estate Investment Trust
REMIC = Real Estate Mortgage Investment Conduit
</TABLE>
- --------------------------------------------------------------------------------
+ On instruments with variable rates, the interest rate shown reflects the
current rate as of April 30, 1998.
# Rate shown reflects yield to maturity on date of purchase.
* Cost for federal income tax purposes is $353,453,436.
See Accompanying Notes to Financial Statements.
10
<PAGE>
<PAGE>
WARBURG PINCUS GLOBAL FIXED INCOME FUND
STATEMENT OF NET ASSETS
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
PAR+ (MOODY'S/S&P) MATURITY RATE% VALUE
- ----------- ----------- -------- ------ ------------
<S> <C> <C> <C> <C> <C>
BONDS (96.0%)
Australia (2.4%)
1,000,000 BMW Australia Finance (A1, NR) 07/09/01 9.000 $ 709,449
2,000,000 Societe Generale Australia (AA2, AA-) 06/19/00 9.250 1,401,757
3,000,000 State Bank of New South Wales (Aaa, AAA) 02/26/01 12.250 2,292,117
------------
4,403,323
------------
Bermuda (2.7%)
5,000,000(A) Bacardi-Martini Finance BV (A, A) 07/23/98 5.750 4,995,055
------------
Brazil (0.9%)
1,000,000(A) Parmalat Brazil # (BB, BB) 05/14/98 8.500 999,160
600,000(A) Rocal, Ltd. (B, B) 08/03/98 10.250 599,112
------------
1,598,272
------------
Canada (3.9%)
10,000,000 Canadian Government (Aa1, AAA) 08/01/99 6.500 7,126,708
------------
Cayman Islands (7.2%)
450,000(A) Ayala Corp. International Finance
(Zero Coupon) (Convertible) (BBB, BBB) 12/08/00 8.280## 361,125
1,000,000(A) Ayala Corp. International Finance
(Convertible) (BBB, BBB) 07/30/02 0.500 1,000,000
2,000,000(A) APP Global Finance FRN (B3, NR) 04/17/02 9.969 1,500,000
1,000,000(A) JG Summit (Cayman), Ltd.
(Convertible) (Callable 12/23/96
@ $100.00) (BB, BB) 12/23/03 3.500 586,250
10,000,000(A) Santander International FRN (Aa3, AA-) 08/14/02 5.625 9,982,500
------------
13,429,875
------------
China (0.5%)
1,000,000(A) Guangdong Enterprises (Baa3, BB) 05/22/07 8.875 888,750
------------
Denmark (4.5%)
50,000,000 Kingdom of Denmark (Aaa, AAA) 11/15/07 7.000 8,252,012
------------
France (1.1%)
1,000,000(D) Banque National de Paris (Aa3, A+) 08/13/02 9.000 724,920
1,000,000(D) Credit Local de France (Aa1, AA+) 07/23/01 8.750 707,398
1,100,000(B) Electricite de France (Aaa, AAA) 07/20/98 5.375 614,647
------------
2,046,965
------------
Germany (20.2%)
6,500,000 DSL Finance NV (Aaa, NR) 02/21/06 6.000 3,828,190
28,500,000 German Government (Aaa, AAA) 10/14/05 6.500 17,363,639
4,300,000 German Government (Aaa, AAA) 06/20/16 6.000 2,568,977
5,000,000 Land Hessen Step Up Coupon
(Putable 11/29/03
at 100.00 DMK) (Aaa, AAA) 11/29/13 6.000 3,092,784
7,000,000 Landesbank Rheinland Finance (Aa1, AA+) 04/20/05 7.250 4,395,723
9,500,000 Treuhandanstalt (Aaa, AAA) 09/09/04 7.500 6,035,107
------------
37,284,420
------------
Hong Kong (0.9%)
2,000,000(A) Hong Kong Chinese Bank FRN
(Callable 09/29/97 at $100.00)# (Baa3, BBB-) 03/27/07 7.250 1,720,000
------------
</TABLE>
See Accompanying Notes to Financial Statements.
11
<PAGE>
<PAGE>
WARBURG PINCUS GLOBAL FIXED INCOME FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
PAR+ (MOODY'S/S&P) MATURITY RATE% VALUE
- ----------- ----------- -------- ------ ------------
BONDS (CONT'D)
<S> <C> <C> <C> <C> <C>
Indonesia (0.3%)
500,000(A) Daya Guna Samudera International
Finance Co. BV (Callable
06/01/02 at $105.00) (Ba2, BB+) 06/01/07 10.000 $ 437,500
50,000(A) Indah Kiat International Finance
Co. (Callable 06/15/01 at
$106.25) (Ba2, BB) 06/15/06 12.500 46,000
------------
483,500
------------
Japan (2.5%)
5,000,000(A) Fuji Bank, Ltd. FRN (Callable
08/08/02 at $100.00) (A3, NR) 08/29/49 6.425 4,525,000
------------
Korea (3.7%)
2,400,000(A) Korean Development Bank (A1, A+) 03/15/01 9.500 2,433,000
2,600,000(A) Korean Development Bank (A1, A+) 03/30/01 9.500 2,635,750
2,000,000(A) South Korea Telecom (A1, A+) 04/29/04 7.750 1,840,000
------------
6,908,750
------------
Netherlands (3.3%)
11,000,000 Netherlands Government (Aaa, AAA) 01/15/01 9.000 6,067,778
------------
Portugal (5.4%)
10,000,000(A) IMI Bank International FRN (Aa3, AA-) 08/05/02 5.625 9,972,500
------------
South Africa (1.6%)
3,000,000(A) South African Government (Baa3, BB+) 06/23/17 8.500 3,011,250
------------
SupraNational (1.5%)
5,000,000(B) International Bank For
Reconstruction and Development (Aaa, AAA) 10/13/99 7.250 2,906,450
------------
Thailand (1.1%)
500,000(A) Property Perfect Public Co., Ltd.
(Convertible) (Callable 03/28/99
at $100.00) (Matures at
$128.00)** (D, D) 03/28/01 3.250 50,000
2,000,000(A) Thailand Kingdom (Baa1, BBB) 08/01/99 8.700 2,010,000
------------
2,060,000
------------
United Kingdom (1.9%)
2,000,000(C) North American Capital Corp. (Aa2, AA-) 11/17/03 8.250 3,538,349
------------
United States (30.4%)
11,000,000 Federal Home Loan Banks (Aaa, AAA) 11/30/99 5.870## 10,060,269
4,800,000 U.S. Treasury Note (Aaa, AAA) 03/31/00 5.500 4,793,712
9,800,000 U.S. Treasury Note (Aaa, AAA) 02/15/01 5.375 9,742,865
5,000,000 U.S. Treasury Note (Aaa, AAA) 02/28/01 5.625 5,000,200
21,000,000 U.S. Treasury Note (Aaa, AAA) 08/15/07 6.125 21,558,390
6,500,000 U.S. Treasury Principal Strip (Aaa, AAA) 08/15/02 5.780## 5,116,215
------------
56,271,651
------------
TOTAL BONDS (Cost $182,956,127) 177,490,608
------------
<CAPTION>
NUMBER OF
SHARES
- -----------
<S> <C> <C> <C> <C> <C>
PREFERRED STOCK (0.3%)
U.S. (0.3%)
15,000 WBK Strypes Trust (Convertible)
(Cost $458,400) 10.000 511,875
------------
</TABLE>
See Accompanying Notes to Financial Statements.
12
<PAGE>
<PAGE>
WARBURG PINCUS GLOBAL FIXED INCOME FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
- ----------- ------------
<S> <C> <C> <C> <C> <C>
SHORT TERM INVESTMENTS (0.6%)
$ 1,109,000 Repurchase agreement with
Goldman, Sachs & Co. dated
04/30/98 at 5.47% to be
repurchased at $1,109,000 on
05/01/98. (Collateralized by a
pro rata amount of U.S. Treasury
Notes ranging in par value from
$39,650,000-$50,000,000,
5.75%-6.50%, 09/30/01-5/15/04.
Market value of collateral is
$1,131,998) (Cost $1,109,000.) $ 1,109,000
------------
TOTAL INVESTMENTS AT VALUE (96.9%)
(Cost $184,523,527*) 179,111,483
OTHER ASSETS IN EXCESS OF LIABILITES (3.1%) 5,701,924
------------
NET ASSETS (100.0%) (applicable to 17,127,625 Common Shares
and 706,067 Advisor Shares) $184,813,407
------------
------------
NET ASSET VALUE, offering and redemption price per Common
Share
($177,510,001[div]17,127,625) $10.36
------
------
NET ASSET VALUE, offering and redemption price per Advisor
Share
($7,303,406[div]706,067) $10.34
------
------
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<S> <C>
DMK = German Marks
FRN = Floating Rate Note
NR = Not Rated
</TABLE>
- --------------------------------------------------------------------------------
+ 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) Denomninated in British Pounds.
(D) Denominated in Australian Dollars.
# Not readily marketable security.
## Rate shown reflects yield to maturity on date of purchase.
** Security is in default.
* Also cost for federal income tax purposes.
See Accompanying Notes to Financial Statements.
13
<PAGE>
<PAGE>
WARBURG PINCUS INTERMEDIATE MATURITY GOVERNMENT FUND
STATEMENT OF NET ASSETS
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
PAR (MOODY'S/S&P) MATURITY RATE% VALUE
- ---------- -------------- -------- ------ -----------
<S> <C> <C> <C> <C> <C>
AGENCY OBLIGATIONS (6.8%)
Agency Obligations (3.8%)
$ 425,000 AID Israel Series 1-B [Aaa, AAA] (Aaa, AAA) 04/01/06 8.500 $ 468,563
658,195 Small Business Administration Guaranteed
Development Participation Certificate
Series 1992-10B (Aaa, AAA) 04/01/02 7.450 666,114
757,184 Small Business Administration Guaranteed
Development Participation Certificate
Series 1992-10C (Aaa, AAA) 07/01/02 6.600 754,344
-----------
1,889,021
-----------
Other (3.1%)
1,500,000 Private Export Funding Corp. Secured Notes
Series BB (Aaa, AAA) 10/30/98 9.100 1,524,375
-----------
TOTAL AGENCY OBLIGATIONS (Cost $3,434,756) 3,413,396
-----------
MORTGAGE-BACKED SECURITIES (37.0%)
551,985 Federal Home Loan Bank Series Dt-02 Class
1 (Aaa, AAA) 12/20/02 6.250 548,651
2,000,000 Federal Home Loan Bank Series El-04 Class
1 (Aaa, AAA) 04/23/04 7.130 2,021,660
2,000,000 Federal Home Loan Mortgage Corp. Series
1275 Class VN (Aaa, AAA) 02/15/05 7.000 2,022,747
2,000,000 Federal Home Loan Mortgage Corp. Series
1490 Class CA (Aaa, AAA) 04/15/08 6.500 2,031,099
1,500,000 Federal National Mortgage Association
Series G97-1 Class J (Aaa, AAA) 02/18/04 6.750 1,513,336
2,000,000 Federal National Mortgage Association
1997-51, Class KB (Aaa, AAA) 03/20/08 7.000 2,033,878
4,033,000 Federal National Mortgage Association
Series G93-13 Class H (Aaa, AAA) 09/25/22 6.000 3,923,688
2,400,000 Federal National Mortgage Association
REMIC 98-M4 (Aaa, AAA) 12/25/23 6.424 2,402,880
973,826 GE Capital Mortgage Services, Inc. Series
1994-7 Class A10 (Aaa, AAA) 02/25/09 6.000 950,452
1,000,000 Morgan Stanley Mortgage Trust Series 40
Class 8 (Aaa, AAA) 07/20/21 7.000 1,017,355
-----------
TOTAL MORTGAGE-BACKED SECURITIES (Cost $18,298,315) 18,465,746
-----------
UNITED STATES TREASURY OBLIGATIONS (51.1%)
U.S. Treasury Bonds/Notes (41.1%)
2,000,000 U.S. Treasury Bond (Aaa, AAA) 11/15/11 14.000 3,083,220
3,000,000 U.S. Treasury Bond (Aaa, AAA) 11/15/12 10.375 3,971,130
2,300,000 U.S. Treasury Note (Aaa, AAA) 07/15/98 8.250 2,314,973
4,320,000 U.S. Treasury Note (Aaa, AAA) 05/15/01 8.000 4,604,644
5,935,000 U.S. Treasury Note (Aaa, AAA) 02/15/05 7.500 6,518,233
U.S. Treasury Principal Strip Notes (10.0%)
4,700,000 U.S. Treasury Principal Strip (Aaa, AAA) 08/15/99 5.562# 4,377,580
795,000 U.S. Treasury Principal Strip (Aaa, AAA) 05/15/02 5.840# 634,545
-----------
TOTAL UNITED STATES TREASURY OBLIGATIONS (Cost $25,052,838) 25,504,325
-----------
SHORT TERM INVESTMENTS (4.0%)
2,000,000 Repurchase agreement with Goldman, Sachs &
Co. dated 04/30/98 at 5.47% to be
repurchased at $2,000,303.80
on 05/01/98. (Collateralized by a pro rata
amount of
U.S. Treasury Notes ranging in par values
from
$39,650,000-$50,000,000, 5.750%-7.250%,
09/30/01-05/15/04. Market value of
collateral is $2,041,475.)
(Cost $2,000,000) 2,000,000
-----------
TOTAL INVESTMENTS AT VALUE (99.0%) (Cost $48,785,909*) 49,383,467
OTHER ASSETS IN EXCESS OF LIABILITIES (1.0%) 488,600
-----------
NET ASSETS (100.0%) (applicable to 4,960,814 Common Shares and 640 Advisor Shares) $49,872,067
-----------
-----------
NET ASSET VALUE, offering and redemption price per Common Share ($49,865,631[div]4,960,814) $10.05
------
------
NET ASSET VALUE, offering and redemption price per Advisor Share ($6,436[div]640) $10.06
------
------
INVESTMENT ABBREVIATIONS
REMIC = Real Estate Mortgage Investment Conduit.
</TABLE>
- --------------------------------------------------------------------------------
# Rate shown reflects yield to maturity on date of purchase.
* Cost for federal income tax purposes is $48,981,627.
See Accompanying Notes to Financial Statements.
14
<PAGE>
<PAGE>
WARBURG PINCUS NEW YORK INTERMEDIATE MUNICIPAL FUND
STATEMENT OF NET ASSETS
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
PAR (MOODY'S/S&P) MATURITY RATE% VALUE
- ---------- ------------ -------- ------ -----------
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS (97.4%)
NEW YORK (84.8%)
$1,000,000 Housing N Y Corp. Revenue Bond (A1, AA) 11/01/03 6.000 $ 1,073,750
2,000,000 Metropolitan Transportation
Authority Commuter Facilities
Revenue Bond Series C-2 (Aaa, AAA) 07/01/05 6.000 2,172,500
1,750,000 Metropolitan Transportation
Authority Commuter Facilities
Revenue Bond Series D (Aaa, AAA) 07/01/05 6.000 1,900,937
3,000,000 Municipal Assistance Corp. for New
York City Revenue Bond Series L (Aa2) 07/01/04 6.000 3,240,000
500,000 Municipal Assistance Corp. for New
York City Revenue Bond Series J (Aa2, AA-) 07/01/04 5.000 513,125
300,000 Municipal Assistance Corp. for New
York City Revenue Bond Series J (Aa2, AA-) 07/01/04 6.000 324,000
1,100,000 Nassau County New York General
Obligation Bond General
Improvements Series S (Aaa, AAA) 03/01/06 5.000 1,116,500
1,350,000 Nassau County New York General
Obligation Bond General
Improvements Series R (FGIC
Insured) (Aaa, AAA) 11/01/02 5.125 1,390,500
1,045,000 Nassau County New York General
Obligation Bond Series L (FGIC
Insured) (Escrowed To Maturity) (Aaa, AAA) 11/15/01 6.300 1,124,681
3,000,000 New York City General Obligation
Bond Series A (Baa1, BBB) 08/01/06 7.000 3,420,000
1,000,000 New York City General Obligation
Bond Series C-Subseries C-1
(Pre-Refunded 08/01/02 @ $101.50) (Aaa, AAA) 08/01/02 6.375 1,090,000
2,000,000 New York City General Obligation
Bond Series E (Baa1, BBB+) 08/01/10 5.900 2,117,500
1,000,000 New York City General Obligation
Bond Series G (Baa1, BBB+) 02/01/06 5.750 1,053,750
2,000,000 New York City General Obligation
Bond Series L (Baa1, BBB+) 08/01/02 5.500 2,072,500
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 2,227,500
1,000,000 New York NY General Obligation Bond
Series G (Baa1, BB) 08/01/03 5.000 1,015,000
1,500,000 New York State Dormitory Authority
Revenue Bond City University
Series B (AMBAC Insured) (Aaa, AAA) 07/01/03 6.000 1,606,875
3,000,000 New York State Dormitory Authority
Revenue Bond City University
Series A (Baa1, BB) 07/01/05 5.700 3,157,500
2,000,000 New York State Dormitory Authority
Revenue Bond Education Facilities
Improvement (Aaa, A-) 05/15/07 6.000 2,175,000
1,000,000 New York State Dormitory Authority
Revenue Bond Hospital Insd Mtg.
Series A (Aaa, AAA) 02/15/08 5.250 1,040,000
1,000,000 New York State Dormitory Authority
Revenue Bond New York University
Series A (Aaa, AAA) 07/01/07 5.000 1,023,750
1,000,000 New York State Dormitory Authority
Revenue Bond Rockefeller
University (Callable 07/01/08 @
$101) (Aaa, AAA) 07/01/16 5.000 975,000
1,000,000 New York State Dormitory Authority
Revenue Bond Sloan Kettering
Memorial Cancer Center (Aaa, AAA) 07/01/19 5.750 1,073,750
</TABLE>
See Accompanying Notes to Financial Statements.
15
<PAGE>
<PAGE>
WARBURG PINCUS NEW YORK INTERMEDIATE MUNICIPAL FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
PAR (MOODY'S/S&P) MATURITY RATE% VALUE
- ---------- ------------ -------- ------ -----------
NEW YORK (Cont'd.)
<S> <C> <C> <C> <C> <C>
$2,000,000 New York State Dormitory Authority
Revenue Bond State University
Educational Facilities Series A (A3, A-) 05/15/02 5.400 $ 2,075,000
225,000 New York State Dormitory Authority
Revenue Bond State University
Educational Facilities Series A
(Pre-Refunded 05/15/99 @ $102) (A3, A-) 05/15/99 7.000 236,281
1,000,000 New York State Dormitory Authority
Revenue Bond State University
Educational Facilities Series B
(Pre-Refunded 05/15/00 @ $102) (Aaa, A-) 05/15/00 7.250 1,078,750
2,495,000 New York State Dormitory Authority
Revenue Bond State University
Facilities Lease Revenue Series A (Aaa, AAA) 07/01/06 5.750 2,682,125
1,000,000 New York State Dormitory Authority
Revenue Bond Upstate Community
Colleges Series A (Pre-Refunded
07/01/00 @ $102) (Baa1, BBB+) 07/01/00 7.600 1,087,500
1,000,000 New York State Dormitory Authority
Revenue Bond Upstate Community
Colleges Series A (Baa1, BBB+) 07/01/02 5.300 1,028,750
750,000 New York State Dormitory Authority
Revenue Bond Upstate Community
Colleges Series A (Baa1, BBB+) 07/01/01 5.200 765,938
1,000,000 New York State Environmental
Facility Corp. Revenue Bond Series
A (Aaa, AAA) 06/15/04 4.300 996,250
2,000,000 New York State General Obligation
Bond Series C (A2, A) 10/01/03 6.000 2,150,000
1,200,000 New York State General Obligation
Bond Series C (A2, A) 10/01/04 6.000 1,297,500
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 2,781,250
1,000,000 New York State Local Government
Assistance Corp. Revenue Bond
Series A (Aaa, AAA) 04/01/05 5.000 1,025,000
1,000,000 New York State Local Government
Assistance Corp. Revenue Bond
Series A (A3, A+) 04/01/05 5.400 1,042,500
600,000 New York State Local Government
Assistance Corp. Revenue Bond
Series A (A3, A+) 04/01/06 6.000 649,500
1,000,000 New York State Local Government
Assistance Corp. Revenue Bond
Series A (A3, A+) 04/01/07 6.000 1,087,500
1,000,000 New York State Local Government
Assistance Corp. Revenue Bond
Series A (Pre-Refunded 04/01/02 @
$102) (Aaa, AAA) 04/01/02 7.125 1,115,000
1,730,000 New York State Local Government
Assistance Corp. Revenue Bond
Series B (Aaa, AAA) 04/01/01 7.500 1,911,650
2,000,000 New York State Local Government
Assistance Corp. Revenue Bond
Series B (Aaa, AAA) 04/01/21 5.000 1,910,000
1,000,000 New York State Thruway Authority
Service Contract Revenue Bond (Baa1, BBB+) 01/01/01 7.250 1,092,500
2,000,000 New York State Thruway Authority
General Revenue Bond Series D (Aa3, AA-) 01/01/01 4.700 2,017,500
850,000 New York State Thruway Authority
Service Contract Revenue Bond
Local Highway & Bridges Series A (Baa1, BBB+) 04/01/01 5.500 870,188
3,000,000 New York State Thruway Authority
Service Contract Revenue Bond
Local Highway & Bridges Series A (Aaa, AAA) 01/01/04 6.000 3,228,750
</TABLE>
See Accompanying Notes to Financial Statements.
16
<PAGE>
<PAGE>
WARBURG PINCUS NEW YORK INTERMEDIATE MUNICIPAL FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
PAR (MOODY'S/S&P) MATURITY RATE% VALUE
- ---------- ------------ -------- ------ -----------
<S> <C> <C> <C> <C> <C>
NEW YORK (Cont'd.)
$1,000,000 New York State Urban Development
Corp. Revenue Bond Correctional
Capital A (AMBAC Insured) (Aaa, AAA) 01/01/06 5.400 $ 1,050,000
2,500,000 New York State Urban Development
Corp. Revenue Bond Correctional
Capital Facilicities Series 1
(Pre-Refunded 01/01/00 @ $102)
(FSA Insured) (Aaa, Aaa) 01/01/00 7.500 2,681,250
3,000,000 Port Authority of New York & New
Jersey Revenue Bond Consolidated
72nd Series (Pre-Refunded 10/01/92
@ $101) (A1, AA-) 10/01/02 7.350 3,375,000
1,000,000 Triborough Bridge & Tunnel
Authority General Purpose Revenue
Bond Series A (Aa3, A+) 01/01/07 5.500 1,060,000
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 2,172,500
-----------
TOTAL NEW YORK (Cost $77,929,947) 79,372,300
-----------
PUERTO RICO (12.6%)
1,000,000 Puerto Rico Commonwealth Aqueduct &
Sewer Authority Revenue Bond (MBIA
Insured) (Aaa, AAA) 07/01/07 6.000 1,111,250
140,000 Puerto Rico Commonwealth Aqueduct &
Sewer Authority Revenue Bond
(Escrowed To Maturity) (Callable
07/01/98 @ $100) (Aaa, AAA) 07/01/99 7.875 143,325
1,000,000 Puerto Rico Commonwealth General
Obligation Bond (Baa1, A) 07/01/00 5.500 1,027,500
3,000,000 Puerto Rico Commonwealth General
Obligation Bond (MBIA Insured) (Aaa, AAA) 07/01/01 5.500 3,112,500
2,000,000 Puerto Rico Commonwealth
Infrastructure Finance Authority
Revenue Bond Series 1997 Class A (Aaa, BAA1) 07/01/11 5.000 2,027,500
2,000,000 Puerto Rico Electric Power
Authority Power Revenue Bond
Series EE (Callable 07/01/08 @
$101.5) (Aaa, AAA) 07/01/16 5.250 2,042,500
500,000 Puerto Rico Electric Power
Authority Series N (Callable
07/01/99 @ $101.50) (Baa1, BBB+) 07/01/00 6.800 522,500
1,700,000 Puerto Rico Public Building
Authority Revenue Bond Series I
(FGIC Insured) (Aaa, AAA) 07/01/99 6.850 1,759,500
-----------
TOTAL PUERTO RICO (Cost $11,554,108) 11,746,575
-----------
TOTAL MUNICIPAL BONDS (Cost $89,484,055) $91,118,875
-----------
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
17
<PAGE>
<PAGE>
WARBURG PINCUS NEW YORK INTERMEDIATE MUNICIPAL FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- -----------
<S> <C> <C> <C> <C> <C>
MONEY MARKET FUNDS (1.5%)
$1,421,513 Federated Investments New York Municipal
Cash Trust $ 1,421,513
5,066 Nuveen Tax Exempt Money Fund 5,066
-----------
TOTAL MONEY MARKETS FUNDS (Cost $1,426,579) 1,426,579
-----------
TOTAL INVESTMENTS AT VALUE (98.9%) (Cost $90,910,634*) 92,545,454
OTHER ASSETS IN EXCESS OF LIABILITIES (1.1%) 1,046,420
-----------
NET ASSETS (100.0%) (applicable to 9,091,493 Common Shares and 15.46 Advisor Shares) $93,591,874
-----------
-----------
NET ASSET VALUE, offering and redemption price per Common Share
($93,591,715[div]9,091,493) $10.29
------
------
NET ASSET VALUE, offering and redemption price per Advisor Share ($159[div]15.46) $10.28
------
------
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<S> <C>
AMBAC = American Municipal Bond Assurance Corporation
FGIC = Financial Guaranty Insurance Company
FSA = Financial Security Assurance Inc.
MBIA = Municipal Bonds Investors Assurance Inc.
</TABLE>
- --------------------------------------------------------------------------------
* Also cost for federal income tax purposes.
See Accompanying Notes to Financial Statements.
18
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
STATEMENTS OF OPERATIONS
For the Six Months Ended April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WARBURG PINCUS WARBURG PINCUS
WARBURG PINCUS INTERMEDIATE NEW YORK
WARBURG PINCUS GLOBAL MATURITY INTERMEDIATE
FIXED INCOME FIXED INCOME GOVERNMENT MUNICIPAL
FUND FUND FUND FUND
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 728,071 $ 23,513 $ 0 $ 19,896
Interest 9,846,447 6,030,755 1,550,256 2,289,953
-------------- -------------- -------------- --------------
Total investment income 10,574,518 6,054,268 1,550,256 2,309,849
-------------- -------------- -------------- --------------
EXPENSES:
Investment advisory 812,885 935,070 123,188 189,216
Administrative services 246,637 141,956 38,131 73,832
Audit 7,449 7,218 5,953 6,023
Custodian 28,368 79,744 7,550 7,634
Directors/Trustees 4,959 4,959 4,959 4,959
Insurance 1,808 1,371 686 788
Interest 411 1,627 145 163
Legal 11,430 18,990 7,438 5,752
Printing 16,065 12,434 3,472 4,464
Registration 39,458 43,141 32,059 5,279
Shareholder
servicing/distribution 4,835 21,974 6 0
Transfer agent 69,023 70,957 14,626 7,617
Miscellaneous 14,675 7,934 6,265 6,306
-------------- -------------- -------------- --------------
1,258,003 1,347,375 244,478 312,033
Less: fees waived, expenses
reimbursed and transfer
agent offsets (33,841) (437,084) (96,647) (28,209)
-------------- -------------- -------------- --------------
Total expenses 1,224,162 910,291 147,831 283,824
-------------- -------------- -------------- --------------
Net investment income 9,350,356 5,143,977 1,402,425 2,026,025
-------------- -------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN
(LOSS) FROM INVESTMENTS AND
FOREIGN CURRENCY RELATED ITEMS:
Net realized gain (loss) from
security transactions 287,581 (8,393,503) 102,019 224,663
Net realized loss from
futures contracts 0 0 0 (129,543)
Net realized gain from
foreign currency related
items 0 3,080,454 0 0
Net change in unrealized
appreciation (depreciation)
from investments and
foreign currency related
items (929,190) 754,044 (108,236) (554,583)
-------------- -------------- -------------- --------------
Net realized and
unrealized loss from
investments and
foreign currency
related items (641,609) (4,559,005) (6,217) (459,463)
-------------- -------------- -------------- --------------
Net increase in net
assets resulting from
operations $ 8,708,747 $ 584,972 $1,396,208 $1,566,562
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
</TABLE>
See Accompanying Notes to Financial Statements.
19
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WARBURG PINCUS WARBURG PINCUS
FIXED INCOME GLOBAL FIXED INCOME
FUND FUND
------------------------------- -------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED MONTHS ENDED
APRIL 30, FOR THE APRIL 30, FOR THE
1998 YEAR ENDED 1998 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1997 (UNAUDITED) OCTOBER 31, 1997
------------ ---------------- ------------ ----------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment
income $ 9,350,356 $ 11,763,370 $ 5,143,977 $ 9,571,069
Net realized gain
(loss) from
security
transactions 287,581 2,567,404 (8,393,503) 997,045
Net realized loss
from futures
contracts 0 0 0 0
Net realized gain
from foreign
currency related
items 0 0 3,080,454 5,666,273
Net change in
unrealized
appreciation
(depreciation)
from investments
and foreign
currency related
item (929,190) 4,335,965 754,044 (7,300,971)
------------ -------- ------------ --------
Net increase
in net assets
resulting
from
operations 8,708,747 18,666,739 584,972 8,933,416
------------ -------- ------------ --------
FROM DISTRIBUTIONS:
Dividends from
net investment
income:
Common Shares (9,109,844) (11,629,029) (2,609,813) (5,284,076)
Advisor Shares (240,512) (134,341) (119,028) (138,557)
Distributions in
excess of net
investment
income:
Common Shares 0 (43,878) 0 0
Advisor Shares 0 (507) 0 0
Distributions
from realized
gains:
Common Shares (2,591,321) (48,275) (7,174,030) (8,015,321)
Advisor Shares (32,099) (295) (369,562) (217,278)
Distributions in
excess of
realized gains:
Common Shares 0 0 0 0
Advisor Shares 0 0 0 0
------------ -------- ------------ --------
Net decrease
in net assets
from
distributions (11,973,776) (11,856,325) (10,272,433) (13,655,232)
------------ -------- ------------ --------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from
sale of shares 149,465,694 162,592,301 52,745,014 143,481,964
Reinvested
dividends 9,349,005 10,208,471 9,433,087 11,976,799
Net asset value
of shares
redeemed (64,901,496) (62,291,323) (71,342,790) (78,182,283)
------------ -------- ------------ --------
Net increase
(decrease) in
net assets
from capital
share
transactions 93,913,203 110,509,449 (9,164,689) 77,276,480
------------ -------- ------------ --------
Net increase
(decrease) in
net assets 90,648,174 117,319,863 (18,852,150) 72,554,664
NET ASSETS:
Beginning of year 269,415,241 152,095,378 203,665,557 131,110,893
------------ -------- ------------ --------
End of year $360,063,415 $269,415,241 $184,813,407 $203,665,557
------------ -------- ------------ --------
------------ -------- ------------ --------
Undistributed net
investment
income $ 0 $ 0 $ 2,211,523 $ 4,259,525
------------ -------- ------------ --------
------------ -------- ------------ --------
<PAGE>
<CAPTION>
WARBURG PINCUS
INTERMEDIATE MATURITY
GOVERNMENT WARBURG PINCUS
FUND NEW YORK INTERMEDIATE MUNICIPAL
----------------------------- FUND
FOR THE SIX -------------------------------
MONTHS FOR THE SIX
ENDED MONTHS ENDED
APRIL 30, FOR THE APRIL 30, FOR THE
1998 YEAR ENDED 1998 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1997 (UNAUDITED) OCTOBER 31, 1997
----------- ---------------- ------------ ----------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment
income $ 1,402,425 $ 2,729,091 $ 2,026,025 $ 3,661,370
Net realized gain
(loss) from
security
transactions 102,019 90,816 224,663 36,485
Net realized loss
from futures
contracts 0 0 (129,543) (200,642)
Net realized gain
from foreign
currency related
items 0 0 0 0
Net change in
unrealized
appreciation
(depreciation)
from investments
and foreign
currency related
item (108,236) 353,152 (554,583) 1,078,145
----------- -------- ------------ --------
Net increase
in net assets
resulting
from
operations 1,396,208 3,173,059 1,566,562 4,575,358
----------- -------- ------------ --------
FROM DISTRIBUTIONS:
Dividends from
net investment
income:
Common Shares (1,402,312) (2,729,076) (2,026,023) (3,661,362)
Advisor Shares (113) (15) (2) (8)
Distributions in
excess of net
investment
income:
Common Shares 0 0 0 0
Advisor Shares 0 0 0 0
Distributions
from realized
gains:
Common Shares 0 (348,504) 0 (950,202)
Advisor Shares 0 0 0 (2)
Distributions in
excess of
realized gains:
Common Shares 0 (197,030) 0 0
Advisor Shares 0 0 0 0
----------- -------- ------------ --------
Net decrease
in net assets
from
distributions (1,402,425) (3,274,625) (2,026,025) (4,611,574)
----------- -------- ------------ --------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from
sale of shares 13,925,864 22,575,023 22,076,495 48,740,584
Reinvested
dividends 955,031 2,608,543 1,434,644 4,063,047
Net asset value
of shares
redeemed (13,426,316) (24,347,987) (18,403,524) (41,384,144)
----------- -------- ------------ --------
Net increase
(decrease) in
net assets
from capital
share
transactions 1,454,579 835,579 5,107,615 11,419,487
----------- -------- ------------ --------
Net increase
(decrease) in
net assets 1,448,362 734,013 4,648,152 11,383,271
NET ASSETS:
Beginning of year 48,423,705 47,689,692 88,943,722 77,560,451
----------- -------- ------------ --------
End of year $49,872,067 $ 48,423,705 $ 93,591,874 $ 88,943,722
----------- -------- ------------ --------
----------- -------- ------------ --------
Undistributed net
investment
income $ 0 $ 0 $ 0 $ 0
----------- -------- ------------ --------
----------- -------- ------------ --------
</TABLE>
See Accompanying Notes to Financial Statements.
20
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUND
FINANCIAL HIGHLIGHTS
(For an Advisor Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED JULY 3, 1996
APRIL 30, FOR THE (COMMENCEMENT OF
1998 YEAR ENDED OPERATIONS) THROUGH
(UNAUDITED) OCTOBER 31, 1997 OCTOBER 31, 1996
------------ ---------------- -------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.43 $10.10 $ 9.90
----- ----- -----
Income from Investment Operations:
Net Investment Income .28 .60 .19
Net Gain (Loss) on Securities and Foreign
Currency Related Items (both realized
and unrealized) (.02) .33 .20
----- ----- -----
Total from Investment Operations .26 .93 .39
----- ----- -----
Less Distributions:
Dividends from Net Investment Income (.28) (.60) (.19)
Distributions in Excess of Net Investment
Income .00 .00 .00
Distributions from Realized Gains (.09) .00 .00
----- ----- -----
Total Distributions (.37) (.60) (.19)
----- ----- -----
NET ASSET VALUE, END OF PERIOD $10.32 $10.43 $ 10.10
----- ----- -----
----- ----- -----
Total Return 2.52%'D' 9.51% 3.93%'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $3,507 $3,963 $911
Ratios to average daily net assets:
Operating expenses 1.01%*@ 1.00%@ 1.00%*@
Net investment income 5.50%* 5.62% 5.85%*
Decrease reflected in above operating
expense ratios due to
waivers/reimbursements .01%* .08% .11%*
Portfolio Turnover Rate 69.74%'D' 129.06% 194.23%'D'
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-annualized.
* Annualized.
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements resulted in a reduction to the
Advisor Shares net expense ratio by .01% for the six months ended April 30,
1998 and by .00% and .00% for the year or period ended October 31, 1997 and
1996, respectively. The Advisor Shares' operating expense ratios after
reflecting these arrangements were 1.00% for the six months ended April 30,
1998, 1.00% and 1.00% for the year or period ended October 31, 1997 and
1996, respectively.
See Accompanying Notes to Financial Statements.
21
<PAGE>
<PAGE>
WARBURG PINCUS GLOBAL FIXED INCOME FUND
FINANCIAL HIGHLIGHTS
(For an Advisor Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED AUGUST 12, 1996
APRIL 30, FOR THE (COMMENCEMENT OF
1998 YEAR ENDED OPERATIONS) THROUGH
(UNAUDITED) OCTOBER 31, 1997 OCTOBER 31, 1996
------------ ---------------- ------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.90 $11.17 $10.90
----- ----- -----
Income from Investment Operations:
Net Investment Income .15 .41 .10
Net Gain (Loss) on Securities and
Foreign Currency Related Items (both
realized and unrealized) (.15) .15 .27
----- ----- -----
Total from Investment Operations .00 .56 .37
----- ----- -----
Less Distributions:
Dividends from Net Investment Income (.13) (.29) (.10)
Distributions from Realized Gains (.43) (.54) .00
----- ----- -----
Total Distributions (.56) (.83) (.10)
----- ----- -----
NET ASSET VALUE, END OF PERIOD $10.34 $10.90 $11.17
----- ----- -----
----- ----- -----
Total Return .09%'D' 5.18% 3.41%'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $7,303 $8,935 $39
Ratios to average daily net assets:
Operating expenses 1.46%*@ 1.45%@ 1.45%*@
Net investment income 5.05%* 4.76% 5.69%*
Decrease reflected in above operating
expense ratios due to
waivers/reimbursements .40%* .33% .21%*
Portfolio Turnover Rate 54.17%'D' 202.92% 123.90%'D'
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-annualized.
* Annualized.
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements resulted in a reduction to the
Advisor Shares net expense ratio by .01% for the six months ended April 30,
1998 and by .00% and .00% for the year or period ended October 31, 1997 and
1996, respectively. The Advisor Shares' operating expense ratios after
reflecting these arrangements were 1.45% for the six months ended April 30,
1998, 1.45% and 1.45% for the year or period ended October 31, 1997 and
1996, respectively.
See Accompanying Notes to Financial Statements.
22
<PAGE>
<PAGE>
WARBURG PINCUS INTERMEDIATE MATURITY GOVERNMENT FUND
FINANCIAL HIGHLIGHTS
(For an Advisor Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AUGUST 15,
1997
(COMMENCEMENT
FOR THE SIX OF
MONTHS ENDED OPERATIONS)
APRIL 30, THROUGH
1998 OCTOBER 31,
(UNAUDITED) 1997
------------ -------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.06 $ 9.95
----- -----
Income from Investment Operations:
Net Investment Income .27 .11
Net Gain on Securities (both realized and unrealized) .00 .11
----- -----
Total from Investment Operations .27 .22
----- -----
Less Distributions:
Dividends from Net Investment Income (.27) (.11)
----- -----
Total Distributions (.27) (.11)
----- -----
NET ASSET VALUE, END OF PERIOD $10.06 $ 10.06
----- -----
----- -----
Total Return 2.69%'D' 2.22'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $6 $2
Ratios to average daily net assets:
Operating expenses .86%*@ .85%*@
Net investment income 5.46%* 5.62%*
Decrease reflected in above operating expense ratio due to
waivers/reimbursements .35%* .00%
Portfolio Turnover Rate 56.13%'D' 104.34%*
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-annualized.
* Annualized.
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements resulted in a reduction to the
Advisor Shares net expense ratio by .01% for the six months ended April 30,
1998 and by .00% for the period ended October 31, 1997. The Advisor Shares'
operating expense ratios after reflecting these arrangements were .85% for
the six months ended April 30, 1998, and .85% for the period ended
October 31, 1997.
See Accompanying Notes to Financial Statements.
23
<PAGE>
<PAGE>
WARBURG PINCUS NEW YORK INTERMEDIATE MUNICIPAL FUND
FINANCIAL HIGHLIGHTS
(For an Advisor Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED AUGUST 5, 1996
APRIL 30, FOR THE (COMMENCEMENT OF
1998 YEAR ENDED OPERATIONS) THROUGH
(UNAUDITED) OCTOBER 31, 1997 OCTOBER 31, 1996
------------ ---------------- -----------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.33 $10.34 $ 10.34
----- ----- -----
Income from Investment Operations:
Net Investment Income .20 .41 .09
Net Gain (Loss) on Securities (both
realized and unrealized) (.05) .11 .00
----- ----- -----
Total from Investment Operations .15 .52 .09
----- ----- -----
Less Distributions:
Dividends from Net Investment Income (.20) (.41) (.09)
Distributions from Realized Gains .00 (.12) .00
----- ----- -----
Total Distributions (.20) (.53) (.09)
----- ----- -----
NET ASSET VALUE, END OF PERIOD $10.28 $10.33 $ 10.34
----- ----- -----
----- ----- -----
Total Return 1.43%'D' 5.19% .88%'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $0 $0 $1
Ratios to average daily net assets:
Operating expenses .85%*@ 35.75%@ .63%*@
Net investment income 3.80%* 3.93% 3.88%*
Decrease reflected in above operating
expense ratios due to
waivers/reimbursements 424.56%* 450.88% .01%*
Portfolio Turnover Rate 22.71%'D' 69.84% 69.23%'D'
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-annualized.
* Annualized.
@ Interest earned on uninvested cash balances is used to offset portions of
the transfer agent expense. These arrangements resulted in a reduction
to the Advisor Shares' expenses by .00% for the six months ended April 30,
1998 and by 35.92% and .00% for the year or period ended October 31,
1997 and 1996, respectively. The Advisor Shares' operating expense ratios
after reflecting these arrangements were .85% for the six months ended
April 30, 1998, .83% and .63% for the year or period ended October 31, 1997
and 1996, respectively.
See Accompanying Notes to Financial Statements.
24
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
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') and the Warburg
Pincus Intermediate Maturity Government Fund (the 'Intermediate Government
Fund') which are registered under the Investment Company Act of 1940, as amended
(the '1940 Act'), as diversified, open-end management investment companies 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; the Intermediate Government Fund seeks to achieve as high
a level of current income as is consistent with preservation of capital; 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, the Intermediate
Government 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 generally determined using the last reported
sales price. If no sales are reported, investments are generally valued at the
mean between the last reported bid and asked 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 Board. Short-term investments that mature in
60 days or less are valued on the basis of amortized cost, which approximates
market value.
When a Fund writes or purchases a call or a put option, an amount equal to
the premium received or paid by the Fund is recorded as a liability or asset,
the value of which is marked-to-market daily to reflect the current market value
of the
25
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
option. When the option expires, the Fund realizes a gain or loss equal to the
amount of the premium received or paid. When the Fund exercises an option or
enters into a closing transaction by purchasing or selling an offsetting option,
it realizes a gain or loss without regard to any unrealized gain or loss on the
underlying security. The potential loss associated with purchasing an option is
limited to the premium paid, and the premium would partially offset any gains
achieved from its use.
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 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 realized 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.
The Fixed Income and Global Fixed Income Funds may invest in securities of
foreign issuers, which involve certain risks in addition to those inherent in
domestic investments. Such risks generally include, among other things,
fluctuations in currency exchange rates, revaluation of currencies, adverse
political and economic developments and the imposition of other laws and
restrictions. Securities of foreign issuers are often subject to less rigorous
regulatory practices and requirements than those applied in the United States
and may also be less liquid (and their prices more volatile) than securities of
comparable U.S companies. Moreover, individual foreign economies may differ
favorably or unfavorably from the U.S. economy in many respects.
The Fixed Income and Global Fixed Income Funds' investments in securities of
issuers located in less developed countries considered to be 'emerging markets'
involve risks in addition to those generally applicable to foreign securities.
Investments in the securities of issuers located in emerging markets expose the
Fund to economic structures that are generally less diverse and mature than, and
to political systems that can be expected to have less stability than, those of
developed countries. The typically small size of the markets for securities of
issuers located in emerging markets may also result in a lack of liquidity and
greater price volatility.
The Funds may each invest up to 15% of its assets in non-publicly traded
securities. Non-publicly traded securities may be less liquid than
publicly-traded securities, and the Fund may take longer to liquidate these
positions than would be the case for publicly traded securities. Consequently,
26
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
these securities may involve a high degree of business and financial risk and
may result in substantial losses.
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, the Intermediate Government 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.
The Funds, together with other funds advised by Warburg Pincus Asset
Management, Inc., the Funds' investment adviser ('Warburg') (collectively the
'Warburg Funds'), have established committed and uncommitted lines of credit
facilities with PNC Bank, National Association ('PNC') and an uncommitted line
of credit facility with Deutsche Bank, AG, ('Deutsche Bank') for temporary or
emergency purposes primarily relating to unanticipated fund share redemptions.
Effective December 31, 1997, the terms of the committed line of credit with PNC
was amended. Under the terms of the committed line of credit, the Warburg Funds
with access to the facility pay a commitment fee at a rate of .07% per annum on
the average daily balance of the line of credit, which is undisbursed and
uncanceled during the preceding quarter. In addition, the Warburg Funds will pay
interest on borrowings at the bank's base rate plus .45%. Under the terms of the
Uncommitted lines of credit, the Warburg Funds will pay interest on borrowings
at the banks base rate plus .55%. Aggregate borrowings for each fund under the
committed and uncommitted lines of credit with PNC may not exceed the lowest of
(a) thirty-three and one-third percent (33 1/3%) of the assets of such fund, for
any fund that does not invest at least sixty-five percent (65%) of its assets in
international equity or fixed income securities (an 'International Fund') and
twenty-five percent (25%) of the assets of any fund
27
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
that is an International Fund or (b) the maximum amount permitted by such fund's
investment policies and restrictions. Aggregate borrowings for each fund under
the uncommitted line of credit facility with Deutsche Bank may not exceed
thirty-three and one-third percent (33 1/3%) of the net assets of such fund. At
April 30, 1998, there were no outstanding balances under these line of credit
facilities for any of the Funds.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, each Fund, along with other Warburg Funds, transfers uninvested cash
balances to a pooled cash account, which is invested in repurchase agreements
secured by U.S. government securities. Securities pledged as collateral for
repurchase agreements are held by the Funds' custodian bank until the agreements
mature. Each agreement requires that the market value of the collateral be
sufficient to cover payments of interest and principal; however, in the event of
default or bankruptcy by the other party to the agreement, retention of the
collateral may be subject to legal proceedings.
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 six months ended April 30, 1998, the Funds received
credits or reimbursements under this arrangement as follows:
<TABLE>
<CAPTION>
FUND AMOUNT
- ---------------------------------------------------------------- ------
<S> <C>
Fixed Income $8,011
Global Fixed Income 4,523
Intermediate Government 1,207
New York Municipal 2,348
</TABLE>
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR
Warburg, which is indirectly controlled by Warburg, Pincus & Co., 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
Intermediate Government .50% of average daily net assets
New York Municipal .40% of average daily net assets
</TABLE>
28
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
For the six months ended April 30, 1998, investment advisory fees and
voluntary waivers were as follows:
<TABLE>
<CAPTION>
GROSS NET
FUND ADVISORY FEE WAIVER ADVISORY FEE
- --------------------------------------- ------------ --------- ------------
<S> <C> <C> <C>
Fixed Income $812,885 $ (25,830) $787,055
Global Fixed Income 935,070 (432,561) 502,509
Intermediate Government 123,188 (83,121) 40,067
New York Municipal 189,216 (25,861) 163,355
</TABLE>
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 six months ended April 30, 1998,
administrative services fees earned by CFSI were as follows:
<TABLE>
<CAPTION>
FUND CO-ADMINISTRATION FEE
- ------------------------------------------------------ ---------------------
<S> <C>
Fixed Income $ 162,577
Global Fixed Income 93,507
Intermediate Government 24,638
New York Municipal 47,304
</TABLE>
The Funds each pay PFPC a fee calculated at an annual rate of .05% of each
Fund's average daily net assets. For the six months ended April 30, 1998,
administrative services fees earned and voluntarily waived by PFPC (including
out-of-pocket expenses) were as follows:
<TABLE>
<CAPTION>
FUND CO-ADMINISTRATION FEE WAIVER NET CO-ADMINISTRATION
- ------------------------ --------------------- -------- -------------------------
<S> <C> <C> <C>
Fixed Income $84,060 $ 0 $84,060
Global Fixed Income 48,449 0 48,449
Intermediate Government 13,493 (12,319) 1,174
New York Municipal 26,528 0 26,528
</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 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,
the Intermediate Government Fund and the New York Municipal Fund and .50% of the
average daily net assets of the Advisor shares of the Global Fixed Income Fund
pursuant to Rule 12b-1 under the 1940 Act. For the six months ended April 30,
1998, shareholder servicing and distribution fees earned by CSI were as follows:
<TABLE>
<CAPTION>
SHAREHOLDER SERVICING/
FUND DISTRIBUTION FEE
- ------------------------------------------------------ ----------------------
<S> <C>
Fixed Income $ 4,835
Global Fixed Income 21,974
Intermediate Government 6
</TABLE>
29
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
3. INVESTMENTS IN SECURITIES
For the six months ended April 30, 1998, purchases and sales of investment
securities (excluding short-term investments) and U.S. 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 $95,952,153 $39,632,014 $221,684,285 $183,990,956
Global Fixed Income 33,430,552 58,359,583 89,846,990 34,022,893
Intermediate Government 475,690 0 27,509,738 27,260,638
New York Municipal 24,178,730 20,027,652 0 0
</TABLE>
At April 30, 1998, 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 $4,636,359 $ (350,376) $ 4,285,983
Global Fixed Income 1,206,729 (6,618,773) (5,412,044)
Intermediate Government 469,047 (67,207) 401,840
New York Municipal 1,780,090 (145,270) 1,634,820
</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. Each Fund will enter into forward contracts
primarily for hedging purposes. However, on occasion the Funds may enter into
forward contracts for speculative purposes, which may increase the Fund's
investment risk. 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 April 30, 1998, the Global Fixed Income Fund had the following open
forward foreign currency contracts:
30
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<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>
Australian
Dollars 06/19/98 8,300,000 $ 5,547,512 $ 5,417,410 $ 130,102
Canadian
Dollars 08/04/98 9,475,000 6,507,555 6,637,013 (129,458)
German Marks 07/14/98 40,000,000 21,937,041 22,382,631 (445,590)
Danish Krone 11/16/98 50,000,000 7,189,073 7,372,348 (183,275)
British Pounds 07/15/98 1,500,000 2,501,550 2,498,850 2,700
Netherlands
Guilders 07/15/98 12,012,618 5,882,771 5,971,080 (88,309)
----------- ----------- -------
$49,565,502 $50,279,332 $ (713,830)
----------- ----------- -------
----------- ----------- -------
</TABLE>
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 for hedging purposes 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 six months ended April 30, 1998, the New York
Municipal Fund entered into futures contracts which resulted in net realized
losses of $129,543. At April 30, 1998, the New York Municipal Fund did not have
any open futures contracts.
6. CAPITAL SHARE TRANSACTIONS
The Global Fixed Income Fund and the Intermediate Government Fund are each
authorized to issue three billion full and fractional shares of capital stock,
$.001 par value per share, of which two billion shares are designated 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 as Common Shares and two billion shares are designated Advisor
Shares.
31
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
6. CAPITAL SHARE TRANSACTIONS (CONT'D)
<TABLE>
<CAPTION>
FIXED INCOME FUND
--------------------------------------------------------------
COMMON SHARES ADVISOR SHARES
------------------------------ ------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED MONTHS ENDED
APRIL 30, FOR THE APRIL 30, FOR THE
1998 YEAR ENDED 1998 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1997 (UNAUDITED) OCTOBER 31, 1997
------------ ---------------- ------------ ----------------
<S> <C> <C> <C> <C>
Shares sold 14,332,639 15,469,113 48,872 412,064
Shares issued to shareholders on
reinvestment of dividends 891,304 983,594 11,853 13,154
Shares redeemed (6,150,738) (5,971,763) (101,097) (135,350)
------------ ---------------- ------------ --------
Net increase (decrease) in shares
outstanding 9,073,205 10,480,944 (40,372) 289,868
------------ ---------------- ------------ --------
------------ ---------------- ------------ --------
Proceeds from sale of shares $148,958,443 $158,412,176 $ 507,251 $4,180,125
Reinvested dividends 9,226,358 10,073,335 122,647 135,136
Net asset value of shares redeemed (63,853,226) (60,912,911) (1,048,270) (1,378,412)
------------ ---------------- ------------ --------
Net increase (decrease) from capital
share transactions $94,331,575 $107,572,600 $ (418,372) $2,936,849
------------ ---------------- ------------ --------
------------ ---------------- ------------ --------
</TABLE>
<TABLE>
<CAPTION>
GLOBAL FIXED INCOME FUND
--------------------------------------------------------------
COMMON SHARES ADVISOR SHARES
------------------------------ ------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED MONTHS ENDED
APRIL 30, FOR THE APRIL 30, FOR THE
1998 YEAR ENDED 1998 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1997 (UNAUDITED) OCTOBER 31, 1997
------------ ---------------- ------------ ----------------
<S> <C> <C> <C> <C>
Shares sold 4,889,908 12,111,016 134,730 797,711
Shares issued to shareholders on
reinvestment of dividends 862,672 1,058,355 45,444 31,874
Shares redeemed (6,473,341) (7,051,623) (294,161) (12,987)
------------ ---------------- ------------ --------
Net increase (decrease) in shares
outstanding (720,761) 6,117,748 (113,987) 816,598
------------ ---------------- ------------ --------
------------ ---------------- ------------ --------
Proceeds from sale of shares $ 51,325,660 $134,607,066 $1,419,354 $8,874,898
Reinvested dividends 8,961,672 11,625,183 471,415 351,616
Net asset value of shares redeemed (68,303,728) (78,037,370) (3,039,062) (144,913)
------------ ---------------- ------------ --------
Net increase (decrease) from capital
share transactions $ (8,016,396) $ 68,194,879 $(1,148,293) $9,081,601
------------ ---------------- ------------ --------
------------ ---------------- ------------ --------
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE GOVERNMENT FUND
--------------------------------------------------------------
COMMON SHARES ADVISOR SHARES
------------------------------ ------------------------------
FOR THE
PERIOD ENDED
FOR THE SIX FOR THE SIX AUGUST 15, 1997
MONTHS ENDED MONTHS ENDED (COMMENCEMENT OF
APRIL 30, FOR THE APRIL 30, OPERATIONS)
1998 YEAR ENDED 1998 THROUGH OCTOBER
(UNAUDITED) OCTOBER 31, 1997 (UNAUDITED) 31, 1997
------------ ---------------- ------------ ----------------
<S> <C> <C> <C> <C>
Shares sold 1,377,423 2,276,846 403 227
Shares issued to shareholders on
reinvestment of dividends 94,770 263,058 9 1
Shares redeemed (1,329,358) (2,460,001) 0 0
------------ ---------------- ----- -----
Net increase (decrease) in shares
outstanding 142,835 79,903 412 228
------------ ---------------- ----- -----
------------ ---------------- ----- -----
Proceeds from sale of shares $13,921,802 $ 22,572,753 $4,062 $2,270
Reinvested dividends 954,947 2,608,528 84 15
Net asset value of shares redeemed (13,426,316) (24,347,987) 0 0
------------ ---------------- ----- -----
Net increase (decrease) from capital
share transactions $ 1,450,433 $ 833,294 $4,146 $2,285
------------ ---------------- ----- -----
------------ ---------------- ----- -----
</TABLE>
32
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NEW YORK MUNICIPAL FUND
--------------------------------------------------------------
COMMON SHARES ADVISOR SHARES
------------------------------ ------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED MONTHS ENDED
APRIL 30, FOR THE APRIL 30, FOR THE
1998 YEAR ENDED 1998 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1997 (UNAUDITED) OCTOBER 31, 1997
------------ ---------------- ------------ ----------------
<S> <C> <C> <C> <C>
Shares sold 2,124,769 4,731,647 0 0
Shares issued to shareholders on
reinvestment of dividends 137,939 394,988 0 0
Shares redeemed (1,768,888) (4,029,651) 0 (97)
------------ ---------------- - ------
Net increase (decrease) in shares
outstanding 493,820 1,096,984 0 (97)
------------ ---------------- - ------
------------ ---------------- - ------
Proceeds from sale of shares $22,076,495 $ 48,740,584 $0 $ 0
Reinvested dividends 1,434,642 4,063,047 2 0
Net asset value of shares redeemed (18,403,524) (41,383,138) 0 (1,006)
------------ ---------------- - ------
Net increase (decrease) from capital
share transactions $ 5,107,613 $ 11,420,493 $2 $ (1,006)
------------ ---------------- - ------
------------ ---------------- - ------
</TABLE>
7. LIABILITIES
At April 30, 1998 each Fund had the following liabilities:
<TABLE>
<CAPTION>
GLOBAL
FIXED FIXED INTERMEDIATE NEW YORK
INCOME FUND INCOME FUND GOVERNMENT FUND MUNICIPAL FUND
----------- ----------- --------------- --------------
<S> <C> <C> <C> <C>
Payable for securities purchased (at
value) $8,597,090 $ 0 $ 0 $ 0
Investment advisory fee payable 145,338 79,302 5,324 25,024
Administrative services fees payable 29,764 15,204 4,067 7,792
Payable for fund shares redeemed 0 0 0 0
Distributions payable 1,655,922 2,009 230,146 333,730
</TABLE>
8. NET ASSETS
At April 30, 1998, capital contributions, undistributed net investment
income, accumulated net realized gain (loss) from security transactions and
current period distributions have been adjusted for current period permanent
book/tax differences which arose principally from differing book/tax treatments
of foreign currency transactions. The Global Fixed Income reclassified
$3,080,454 from accumulated net realized gain on foreign currency related items
to undistributed net investment income and also reclassified $7,543,592 of
distributions from accumulated net realized gain (loss) from security
transactions to undistributed net investment income. Net investment income, net
realized gain (loss) on foreign currency related items and net assets were not
affected by this reclassification.
Net Assets at April 30, 1998 consisted of the following:
<TABLE>
<CAPTION>
FIXED GLOBAL FIXED INTERMEDIATE NEW YORK
INCOME FUND INCOME FUND GOVERNMENT FUND MUNICIPAL FUND
------------ ------------ --------------- --------------
<S> <C> <C> <C> <C>
Capital contributed, net $355,597,051 $197,983,282 $49,372,119 $ 91,870,997
Undistributed net investment income 0 2,211,523 0 0
Accumulated net realized gain
(loss) from security transactions 168,387 (9,241,229) (97,610) 77,327
Net unrealized appreciation
(depreciation) from investments
and foreign currency related items 4,297,977 (6,140,169) 597,558 1,643,550
------------ ------------ --------------- --------------
Net assets $360,063,415 $184,813,407 $49,872,067 $ 93,591,874
------------ ------------ --------------- --------------
------------ ------------ --------------- --------------
</TABLE>
33
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
9. CAPITAL LOSS CARRYOVER
At April 30, 1998, capital loss carryovers available to offset possible
future capital gains of each Fund were as follows:
<TABLE>
<CAPTION>
CAPITAL LOSS
CARRYOVER EXPIRES IN
--------------------------- TOTAL CAPITAL
FUND 2004 2005 LOSS CARRYOVER
- ------------------------------------------- ----------- ----------- --------------
<S> <C> <C> <C>
Global Fixed Income $ 847,726 $ 0 $847,726
Intermediate Government 0 181 181
New York Municipal 0 142,594 142,594
</TABLE>
10. YEAR 2000 COMPLIANCE
Many services provided to the Funds and their shareholders by Warburg and
certain of its affiliates (the 'Warburg Service Providers') and the Funds' other
service providers rely on the functioning of their respective computer systems.
Many computer systems cannot distinguish the year 2000 from the year 1900,
resulting in potential difficulty performing various calculations (the 'Year
2000 Issue'). The Year 2000 Issue could potentially have an adverse impact on
the handling of security trades, the payment of interest and dividends, pricing,
account services and other Fund operations.
The Warburg Service Providers recognize the importance of the Year 2000 Issue
and are taking appropriate steps necessary in preparation for the year 2000. At
this time, there can be no assurance that these steps will be sufficient to
avoid any adverse impact on the Funds nor can there be any assurance that the
Year 2000 Issue will not have an adverse effect on the Funds' investments or on
global markets or economies, generally. In addition, it has been reported that
foreign institutions have made less progress in addressing the Year 2000 Issue
than major U.S. entities, which could adversely effect the Funds' foreign
investments.
The Warburg Service Providers anticipate that their systems and those of the
Funds' other service providers will be adapted in time for the year 2000. To
further this goal, the Warburg Service Providers have coordinated a plan to
repair, adapt or replace systems that are not year 2000 compliant, and are
seeking to obtain similar representations from the Funds' other major service
providers. The Warburg Service Providers will be monitoring the Year 2000 Issue
in an effort to ensure appropriate preparation.
34
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
11. OTHER FINANCIAL HIGHLIGHTS
Each Fund currently offers one other class of shares, Common Shares,
representing equal pro rata 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 SIX
MONTHS ENDED FOR THE YEAR ENDED OCTOBER 31,
APRIL 30, 1998 ------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
-------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
NET VALUE, BEGINNING OF YEAR $10.43 $10.10 $10.07 $ 9.61 $10.42 $ 9.90
----- ------ ------ ------ ------ ------
Income from Investment
Operations:
Net Investment Income .30 .62 .63 .70 .63 .56
Net Gain (Loss) on
Securities and Foreign
Currency Related Items
(both realized and
unrealized) (.01) .33 .03 .46 (.70) .52
----- ------ ------ ------ ------ ------
Total from Investment
Operations .29 .95 .66 1.16 (.07) 1.08
----- ------ ------ ------ ------ ------
Less Distributions:
Dividends from Net
Investment Income (.30) (.62) (.63) (.70) (.65) (.56)
Distributions in Excess of
Net Investment Income .00 .00 .00 .00 .00 .00
Distributions from Realized
Gains (.09) .00 .00 .00 (.09) .00
----- ------ ------ ------ ------ ------
Total Distributions (.39) (.62) (.63) (.70) (.74) (.56)
----- ------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR $10.33 $10.43 $10.10 $10.07 $ 9.61 $10.42
----- ------ ------ ------ ------ ------
----- ------ ------ ------ ------ ------
Total Return 2.75%'D' 9.78% 6.80% 12.59% (.60%) 11.63%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year (000s) $356,556 $265,453 $151,184 $116,983 $102,246 $81,181
Ratios to average daily net
assets:
Operating expenses .75%*@ .75%@ .76%@ .75% .75% .75%
Net investment income 5.75%* 6.05% 6.30% 7.25% 6.53% 5.99%
Decrease reflected in above
operating expense ratios
due to
waivers/reimbursements .02%* .08% .15% .18% .18% .09%
Portfolio Turnover Rate 69.74%'D' 129.06% 194.23% 182.93% 179.44% 227.37%
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-annualized.
* Annualized.
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements resulted in a reduction to the
Common Shares' expenses by .00% for the six months ended April 30, 1998
and by .00% and .01% for the years ended October 31, 1997 and 1996,
respectively. The Common Shares' operating expense ratios after reflecting
these arrangements were .75% for the six months ended April 30, 1998 and
.75% and .75% for the years ended October 31, 1997 and 1996, respectively.
35
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
11. OTHER FINANCIAL HIGHLIGHTS (CONT'D)
<TABLE>
<CAPTION>
GLOBAL FIXED INCOME FUND
--------------------------------------------------------------------------
COMMON SHARES
--------------------------------------------------------------------------
FOR THE SIX
MONTHS ENDED FOR THE YEAR ENDED OCTOBER 31,
APRIL 30, 1998 ------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
-------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
YEAR $10.91 $11.17 $11.04 $10.45 $11.38 $10.68
----- ------ ------ ------ ------ ------
Income from Investment
Operations:
Net Investment Income .30 .54 .62 .99 .34 .54
Net Gain (Loss) on
Securities and Foreign
Currency Related Items
(both realized and
unrealized) (.26) .08 .57 .09 (.64) 1.13
----- ------ ------ ------ ------ ------
Total from Investment
Operations .04 .62 1.19 1.08 (.30) 1.67
----- ------ ------ ------ ------ ------
Less Distributions:
Dividends from Net
Investment Income (.16) (.34) (1.06) (.49) (.45) (.85)
Distributions from Realized
Gains (.43) (.54) .00 .00 (.14) (.12)
Return of Capital .00 .00 .00 .00 (.04) .00
----- ------ ------ ------ ------ ------
Total Distributions (.59) (.88) (1.06) (.49) (.63) (.97)
----- ------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR $10.36 $10.91 $11.17 $11.04 $10.45 $11.38
----- ------ ------ ------ ------ ------
----- ------ ------ ------ ------ ------
Total Return .39%'D' 5.76% 11.35% 10.65% (2.79%) 16.72%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year (000s) $177,510 $194,731 $131,072 $63,641 $90,394 $61,994
Ratios to average daily net
assets:
Operating expenses .95%*@ .96%@ .95%@ .95% .95% .49%
Net investment income 5.52%* 5.40% 6.78% 8.18% 6.96% 8.60%
Decrease reflected in above
operating expense ratios
due to
waivers/reimbursements .47%* .39% .56% .63% .65% 1.44%
Portfolio Turnover Rate 54.17%'D' 202.92% 123.90% 128.70% 178.11% 109.54%
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-annualized.
* Annualized.
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements resulted in a reduction to the
Common Shares' expenses by .00% for the six months ended April 30, 1998 and
by .01% and .00% for the years ended October 31, 1997 and 1996,
respectively. The Common Shares' operating expense ratios after reflecting
these arrangements were .95% for the six months ended April 30, 1998 and
.95% and .95% for the years ended October 31, 1997 and 1996, respectively.
36
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERMEDIATE GOVERNMENT FUND
--------------------------------------------------------------------------
COMMON SHARES
--------------------------------------------------------------------------
FOR THE SIX
MONTHS ENDED FOR THE YEAR ENDED OCTOBER 31,
APRIL 30, 1998 -----------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
-------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
YEAR $10.05 $10.07 $10.22 $ 9.66 $11.03 $11.23
----- ------ ------ ------ ------ ------
Income from Investment
Operations:
Net Investment Income .28 .58 .58 .59 .54 .59
Net Gain (Loss) on
Securities (both realized
and unrealized) .00 .10 (.06) .56 (.73) .34
----- ------ ------ ------ ------ ------
Total from Investment
Operations .28 .68 .52 1.15 (.19) .93
----- ------ ------ ------ ------ ------
Less Distributions:
Dividends from Net
Investment Income (.28) (.58) (.58) (.59) (.55) (.59)
Distributions from Realized
Gains .00 (.08) (.09) .00 (.63) (.54)
Distribution in Excess of
Realized Gains .00 (.04) .00 .00 .00 .00
----- ------ ------ ------ ------ ------
Total Distributions (.28) (.70) (.67) (.59) (1.18) (1.13)
----- ------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR $10.05 $10.05 $10.07 $10.22 $ 9.66 $11.03
----- ------ ------ ------ ------ ------
----- ------ ------ ------ ------ ------
Total Return 2.86%'D' 6.99% 5.16% 12.32% (1.78%) 8.79%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year (000s) $49,866 $48,421 $47,690 $55,898 $46,734 $77,565
Ratios to average daily net
assets:
Operating expenses .60%*@ .61%@ .61%@ .60% .60% .60%
Net investment income 5.69%* 5.81% 5.68% 6.00% 5.43% 5.34%
Decrease reflected in
above operating expense
ratios due to
waivers/reimbursements .39%* .33% .46% .49% .42% .21%
Portfolio Turnover Rate 56.13%'D' 104.34% 163.59% 105.79% 115.37% 108.00%
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-annualized.
* Annualized.
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements resulted in a reduction to the
Common Shares' expenses by .00% for the six months ended April 30, 1998 and
by .01% and .01% for the years ended October 31, 1997 and 1996,
respectively. The Common Shares' operating expense ratios after reflecting
these arrangements were .60% for the six months ended April 30, 1998 and
.60% and .60% for the years ended October 31, 1997 and 1996, respectively.
37
<PAGE>
<PAGE>
WARBURG PINCUS FIXED INCOME FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
11. OTHER FINANCIAL HIGHLIGHTS (CONT'D)
<TABLE>
<CAPTION>
NEW YORK INTERMEDIATE
MUNICIPAL FUND
--------------------------------------------------------------------
COMMON SHARES
--------------------------------------------------------------------
FOR THE SIX
MONTHS ENDED FOR THE YEAR ENDED OCTOBER 31,
APRIL 30, 1998 --------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
-------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
YEAR $10.35 $10.34 $10.42 $10.07 $10.65 $10.02
----- ------ ------ ------ ------ ------
Income from Investment
Operations:
Net Investment Income .22 .45 .45 .47 .46 .47
Net Gain (Loss) on
Securities (both realized
and unrealized) (.06) .13 .04 .36 (.45) .68
----- ------ ------ ------ ------ ------
Total from Investment
Operations .16 .58 .49 .83 .01 1.15
----- ------ ------ ------ ------ ------
Less Distributions:
Dividends from Net
Investment Income (.22) (.45) (.45) (.47) (.46) (.47)
Distributions from Realized
Gains .00 (.12) (.12) (.01) (.13) (.05)
----- ------ ------ ------ ------ ------
Total Distributions (.22) (.57) (.57) (.48) (.59) (.52)
----- ------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR $10.29 $10.35 $10.34 $10.42 $10.07 $10.65
----- ------ ------ ------ ------ ------
----- ------ ------ ------ ------ ------
Total Return 1.55%'D' 5.83% 4.87% 8.31% .04% 11.67%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year (000s) $93,592 $88,944 $77,559 $73,361 $75,716 $69,578
Ratios to average daily net
assets:
Operating expenses .61%*@ .60%@ .61%@ .60% .60% .58%
Net investment income 4.28%* 4.40% 4.41% 4.50% 4.41% 4.50%
Decrease reflected in above
operating expense ratios
due to
waivers/reimbursements .05%* .08% .17% .26% .20% .20%
Portfolio Turnover Rate 22.71%'D' 69.84% 69.23% 105.17% 167.09% 115.98%
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-annualized.
* Annualized.
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements resulted in a reduction to the
Common Shares' expenses by .01% for the six months ended April 30, 1998
and by .00% and .01% for the years ended October 31, 1997 and 1996,
respectively. The Common Shares operating expense ratios after reflecting
these arrangements were .60% for the six months ended April 30, 1998 and
.60% and .60% for the years ended October 31, 1997 and 1996, respectively.
38
<PAGE>
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
<PAGE>
WARBURG PINCUS
ADVISOR FUNDS
COUNSELLORS
SECURITIES INC.,
DISTRIBUTOR
800-369-2728
[LOGO]
ADBDF-3-0498
STATEMENT OF DIFFERENCES
------------------------
The dagger symbol shall be expressed as............................... 'D'
The division symbol shall be expressed as............................. [div]
