<PAGE>
Warburg Pincus Advisor Funds April 30, 1999
Intermediate Maturity Government Fund
New York Intermediate Municipal Fund
Fixed Income Fund
Global Fixed Income Fund
[GRAPHIC]
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 800-222-8977 or by writing to Warburg Pincus Advisor Funds,
P.O. Box 9030, Boston, MA 02205-9030.
[GRAPHIC]
<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 document are as of April 30, 1999; these
views and portfolio holdings may have changed subsequent to these dates. Nothing
in this document is a recommendation to purchase or sell securities.
<PAGE>
Warburg Pincus Intermediate Maturity Government Fund
Semiannual Investment Adviser's Report -- April 30, 1999
- --------------------------------------------------------------------------------
June 15, 1999
Dear Shareholder:
For the six months ended April 30, 1999, Warburg Pincus Intermediate
Maturity Government Fund had a return of 0.26%, vs. a return of 0.78% for the
Lehman Brothers Intermediate Government Bond Index.* The fund's one-year return
through April 30, 1999 was 5.64%. Its five-year, 10-year and since-inception (on
August 22, 1988)** average annual total returns through April 30, 1999 were
6.76%, 7.81% and 7.87%, respectively. Note: Effective December 24, 1998, Dale C.
Christensen no longer serves as the fund's Co-Portfolio Manager. M. Anthony E.
van Daalen, formerly Co-Portfolio Manager, continues to serve as the fund's
Portfolio Manager.
Manager Commentary
The reporting period was a generally difficult one for the domestic bond
market, despite a Federal Reserve interest-rate reduction in November 1998
(which was preceded by rate cuts in September and October). Hampering bonds was
the persistent strength of the U.S. economy, which raised fears that the Federal
Reserve would, at some point, reverse course in order to head off potential
inflation (it should be noted, however, that actual inflation remained subdued
through the period, thanks partly to impressive gains in productivity). These
concerns weighed on most bond prices, and bond yields rose along much of the
yield curve.
Against this backdrop, the fund had a marginal loss, and lagged its
benchmark for the six months. The fund's performance largely reflected its
interest-rate sensitivity. We maintained a modestly longer-than-neutral duration
through the period, in order to maintain what we viewed as attractive levels of
risk-adjusted yield. This stance cost the fund in terms of total return,
however, given the decline in bond prices.
With respect to sectors, we increased the fund's weighting in U.S. agency
bonds (including mortgage-backed bonds). Yield spreads between these issues and
Treasuries widened significantly during the latter part of 1998, prompting us to
shift in favor of agencies. This move proved timely, as these issues
outperformed Treasuries for the six months.
1
<PAGE>
Warburg Pincus Intermediate Maturity Government Fund
Semiannual Investment Adviser's Report -- April 30, 1999 (cont'd)
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Going forward, our efforts will remain devoted to providing what we deem to
be attractive levels of yield while maintaining a high-quality portfolio. In
this context, we will continue to make duration and sector adjustments to the
fund based on risk-vs.-reward considerations.
M. Anthony E. van Daalen
Portfolio Manager
- ------------------
* The Lehman Brothers Intermediate Bond Index is an unmanaged index (with no
defined investment objective) of intermediate-term government bonds, and is
calculated by Lehman Brothers Inc.
** Performance shown for the Advisor Class also includes the performance of the
fund's Common Class since inception (on August 22, 1988) until the fund's
Advisor Class was first offered on August 15, 1997. Because the Common Class
had no distribution fees, the expenses of the Common Class are lower than
those of the Advisor Class. (Additionally, the fund's Common Class
performance was favorably affected by expense waivers and/or reimbursements.)
The performnace shown has not been restated to reflect the lower expenses of
the Common Class (or to adjust for the Common Class expense waivers and/or
reimbursements). If it had, performance shown would have been lower.
2
<PAGE>
Warburg Pincus New York Intermediate Municipal Fund
Semiannual Investment Adviser's Report -- April 30, 1999
- --------------------------------------------------------------------------------
June 15, 1999
Dear Shareholder:
For the six months ended April 30, 1999, Warburg Pincus New York
Intermediate Municipal Fund had a gain of 1.42%, vs. a gain of 1.87% for the
Lehman Brothers Five-Year Municipal Bond Index.* The fund's one-year return
through April 30, 1999 was 6.10%. Its five-year, 10-year and since-inception (on
April 1, 1987) average annual total returns through April 30, 1999 were 5.53%,
6.38% and 5.87%, respectively.
The reporting period was a generally positive one for municipal bonds.
Despite a surprisingly robust economy--which fueled inflation fears, pushing up
bond yields--most major municipal bond indexes had modest gains in terms of
total return (i.e., bond-price changes plus coupon payments). Notably, these
bonds performed well compared to their taxable counterparts (e.g., Treasuries),
buoyed by a significant slowdown in municipal-bond issuance.
Against this backdrop, the fund had a positive, albeit modest, return,
supported by a more-favorable supply/demand balance (of note, the easing of
issuance by New York municipalities was significant compared to that of most
states). The fund modestly trailed its benchmark, however, reflecting its
longer-than-neutral duration through the period. Although this cost the fund
somewhat in terms of total return, given the rise in bond yields, it allowed us
to maintain exposure to bonds offering what we believe were attractive
risk-adjusted yields (most specifically, bonds within the five- to eight-year
maturity range).
We made few noteworthy changes to the fund during the period. We remained
broadly diversified by sector, holding a mix of essential-services revenue and
general-obligation bonds representing a range of issuers. We also continued to
emphasize high-quality bonds, since yield spreads between these issues and
lower-rated bonds remained modest (in contrast to the taxable-bond arena). This
provided little incentive, in our view, to "drop down the quality ladder" in
pursuit of marginally higher yields.
3
<PAGE>
Warburg Pincus New York Intermediate Municipal Fund
Semiannual Investment Adviser's Report -- April 30, 1999 (cont'd)
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Looking ahead, we remain optimistic regarding the backdrop for New York
municipal bonds. Demand for these bonds is unlikely to ebb, given the state's
large base of highly taxed individuals (many of which bear a "triple tax" rate
approaching 50%). Supply, meanwhile, should remain relatively firm, thanks to
the state's improved fiscal health (that said, we will continue to closely
monitor ongoing state-budget negotiations). Set within this environment, we will
continue to strive to provide what we deem to be attractive levels of
risk-adjusted after-tax yield.
Sharon B. Parente Patrick A. Bittner
Co-Portfolio Manager Co-Portfolio Manager
A portion of the fund's income may be subject to state and city taxes or
the federal alternative minimum tax.
- ------------------
* The Lehman Brothers Five-Year Municipal Bond Index is an unmanaged index (with
no defined investment objective) of municipal bonds, and is compiled by Lehman
Brothers Inc.
4
<PAGE>
Warburg Pincus Fixed Income Fund
Semiannual Investment Adviser's Report -- April 30, 1999
- --------------------------------------------------------------------------------
June 15, 1999
Dear Shareholder:
For the six months ended April 30, 1999, Warburg Pincus Fixed Income Fund
had a gain of 0.77%, vs. a 0.52% gain for the Lehman Brothers Intermediate
Government/Corporate Bond Index.* The fund's one-year return through April 30,
1999 was 4.39%. Its five-year, 10-year and since-inception (on August 17,
1987)** average annual total returns through April 30, 1999 were 7.55%, 7.89%
and 7.84%, respectively. Note: Effective December 24, 1998, Dale C. Christensen
no longer serves as Co-Portfolio of the fund. M. Anthony E. van Daalen, formerly
the fund's Co-Portfolio Manager, now serves as Portfolio Manager.
Manager Commentary
The period was a generally difficult one for the domestic bond market (with
the notable exception of high-yield bonds), reflecting surprising strength in
the U.S. economy. The economy's strength created fears that the Federal
Reserve--which lowered interest rates three times between September and
November--would, in the not-too-distant future, raise rates, in order to contain
potential inflation (it should be stressed that actual inflation remained
well-contained through the period). As a result, bond yields rose along much of
the yield curve, sending most bond prices lower.
Against this backdrop, the fund managed a modest gain, aided by its
overweighting in corporate bonds (including asset-backed bonds, such as bonds
backed by credit-card receivables), which outperformed Treasuries, supported by
the economy's health. We significantly increased our position in corporate
issues over the latter part of 1998, taking advantage of these issues' wider
yield spreads over Treasuries. Our particular focus was on high-quality
corporate bonds, though we also added a few high-yield issues we deemed to be
attractive.
Another factor that helped the fund's performance was its weighting in
mortgage-backed bonds, which also outperformed Treasuries. We continued to hold
a mix of conventional mortgage-backed bonds (i.e., those issued by government
agencies) and commercial mortgage-backed securities. Our bias remained toward
the latter, which often carry "lockout" provisions precluding early repayment of
principal. As such, these securities tend to be backed by relatively predictable
longer-term cash flows.
5
<PAGE>
Warburg Pincus Fixed Income Fund
Semiannual Investment Adviser's Report -- April 30, 1999 (cont'd)
- --------------------------------------------------------------------------------
With respect to interest-rate exposure, we kept the fund's duration fairly
close to that of its benchmark during much of the period. The fund had a
modestly longer-than-neutral duration entering the period, but we reduced it
somewhat on our concerns regarding the near-term backdrop for interest rates.
Going forward, we plan to maintain a diverse mix of Treasury and
non-Treasury issues, adjusting our sector exposure as we deem appropriate on a
risk-vs.-reward basis. Overall, our focus will remain on high-quality,
intermediate-term bonds that have what we deem to be attractive risk-adjusted
yields and potential for longer-term appreciation.
M. Anthony E. van Daalen
Portfolio Manager
- --------------------
* The Lehman Brothers 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.
** Performance shown for the Advisor Class also includes the performance of the
fund's Common Class since inception (on August 17, 1987) until the fund's
Advisor Class was first offered on July 3, 1996. Because the Common Class had
no distribution fees, the expenses of the Common Class are lower than those
of the Advisor Class. (Additionally, the fund's Common Class performance was
favorably affected by expense waivers and/or reimbursements.) The performnace
shown has not been restated to reflect the lower expenses of the Common Class
(or to adjust for the Common Class expense waivers and/or reimbursements). If
it had, performance shown would have been lower.
6
<PAGE>
Warburg Pincus Global Fixed Income Fund
Semiannual Investment Adviser's Report -- April 30, 1999
- --------------------------------------------------------------------------------
June 15, 1999
Dear Shareholder:
For the six months ended April 30, 1999, Warburg Pincus Global Fixed Income
Fund had a return of 3.93%, vs. returns of 2.28% for the Salomon Brothers World
Government Bond Index (Currency-Hedged),* 0.69% for the Lehman Brothers
Aggregate Bond Index** and 2.97% for a Composite Benchmark.*** The fund's
one-year return through April 30, 1999 was 7.48%. Its five-year and
since-inception (on November 1, 1990)**** average annual total returns through
April 30, 1999 were 7.21% and 7.98%, respectively. Note: Effective December 24,
1998, Dale C. Christensen no longer serves as the fund's Co-Portfolio Manager.
Charles C. Van Vleet, formerly the fund's Co-Portfolio Manager, continues to
serve as Portfolio Manager.
Manager Commentary
The reporting period was a positive one for most global bond markets,
though performance varied significantly by region. The best performances
belonged to emerging bond markets, reflecting an easing of the financial crisis
that gripped financial markets last summer and investors' renewed tolerance for
risk. European markets had generally good results, buoyed by optimism over the
launch of European Monetary Union in January (these markets had significant
losses in U.S. dollar, or unhedged, terms, however, as the U.S. dollar
strengthened vs. the euro and most other European currencies). Elsewhere of
note, the U.S. market struggled due to fears of higher interest rates, though
certain sectors (most notably, high-yield bonds) had good performance.
Against this backdrop, the fund had a good showing in both absolute and
relative terms. Helping the fund's performance was its weighting in high-yield
bonds, including emerging-market debt, and its large position in Europe (where
we continued to hedge the bulk of the fund's currency exposure). The fund also
benefited from its focus, within the U.S., on corporate and mortgage-backed
bonds, which outperformed U.S. Treasuries.
We made a few noteworthy adjustments to the fund during the period with
respect to the three "sources of return" of global fixed-income investing:
duration, credit quality and currency exposure. With regard to the first, we
modestly extended the fund's overall duration during the six months, reflecting
our more-positive view of the backdrop for interest rates in Europe
(particularly within the region's "peripheral" countries, such as Sweden and
Greece). This proved timely, given the continued decline in rates across the
Continent.
7
<PAGE>
Warburg Pincus Global Fixed Income Fund
Semiannual Investment Adviser's Report -- April 30, 1999 (cont'd)
- --------------------------------------------------------------------------------
With respect to credit quality, we significantly increased our weighting in
high-yield bonds during the period (as of April 30, high-yield securities
accounted for about 21% of the fund's assets, up from about 8% at the start of
the period).Yield spreads between these issues and higher-quality debt widened
significantly during last summer's financial-asset selloff. Since we considered
this widening excessive, given the markets' underlying fundamentals, we
selectively added emerging-market bonds (most specifically, from Latin America
and South Africa) as well as high-yield U.S. corporate issues we deemed to
represent good value.
In terms of currency management, we remained largely positive on the U.S.
dollar, and hence maintained relatively limited exposure to foreign currencies.
That said, at the end of the period we had unhedged positions in Canadian
dollars and the South African rand, reflecting our view that these
commodity-sensitive currencies stand to benefit from an improving global
economy. All told, our currency strategies had a positive impact on the fund's
return for the period.
Looking ahead, while we have a generally positive view on global inflation
and interest rates, particularly with respect to Europe, an improving global
economy could create inflationary pressures in certain areas, such as the U.S.
In this light, we will continue to emphasize, at least over the near term,
high-yield and high-coupon mortgage bonds within the U.S., since these bonds
tend to perform relatively well in rising interest-rate environments.
Charles C. Van Vleet
Portfolio Manager
International investing entails special risk considerations, including
currency fluctuations, economic and political risks, lower liquidity and
differences in accounting methods.
8
<PAGE>
Warburg Pincus Global Fixed Income Fund
Semiannual Investment Adviser's Report -- April 30, 1999 (cont'd)
- --------------------------------------------------------------------------------
- ----------------
* 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 Lehman Brothers Aggregate Bond Index is composed of the Lehman Brothers
Government/Corporate Bond Index and the Lehman Brothers Mortgage-Backed
Securities Index. The Aggregate Index includes U.S. Treasury and agency
issues, corporate bond issues and mortgage-backed securities rated
investment-grade or higher by Moody's Investors Service, Standard & Poor's
Corporation or Fitch Investors' Service.
*** The Composite Benchmark measures the weighted performance of three
component indexes. The weights of the component indexes--50% Lehman
Brothers Aggregate Index, 35% Salomon Brothers World Government Bond Index
Excluding the U.S. (Currency-Hedged), and 15% Merrill Lynch High Yield
Master II Index--correspond to the investment strategy of the fund's
manager. The Merrill Lynch High Yield Master II Index provides a
broad-based measure of the performance of the non-investment-grade U.S.
domestic bond market.
**** Performance shown for the Advisor Class also includes the performance of
the fund's Common Class since inception (on November 1, 1990) until the
fund's Advisor Class was first offered on August 12, 1996. Because the
Common Class had no distribution fees, the expenses of the Common Class are
lower than those of the Advisor Class. (Additionally, the fund's Common
Class performance was favorably affected by expense waivers and/or
reimbursements.) The performance shown has not been restated to reflect the
lower expenses of the Common Class (or to adjust for the Common Class
expense waivers and/or reimbursements). If it had, performance shown would
have been lower.
9
<PAGE>
Warburg Pincus Intermediate Maturity Government Fund
Statement of Net Assets--April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings
Par (Moody's/S&P) Maturity Rate% Value
--- ------------- -------- ----- -----
<S> <C> <C> <C> <C>
AGENCY OBLIGATIONS (10.2%)
$6,180,000 Federal Farm Credit Bank, Zero Coupon
Discount Note (Aaa, AAA) 09/13/99 4.797# $ 6,073,604
390,727 Small Business Administration Guaranteed
Development Participation Certificate
Series 1992-10B (Aaa, AAA) 04/01/02 7.45 397,693
558,691 Small Business Administration Guaranteed
Development Participation Certificate
Series 1992-10C (Aaa, AAA) 07/01/02 6.60 562,881
-----------
TOTAL AGENCY OBLIGATIONS
(Cost $7,023,148) 7,034,178
-----------
MORTGAGE BACKED SECURITIES (71.6%)
2,882,121 Fannie Mae (Aaa, AAA) 12/01/05 6.62 2,960,479
1,968,785 Fannie Mae (Aaa, AAA) 08/01/07 6.75 2,028,464
5,000,000 Fannie Mae (Aaa, AAA) 05/15/08 6.00 5,037,969
2,000,000 Fannie Mae (Aaa, AAA) 02/18/21 5.75 1,970,094
2,400,000 Fannie Mae, REMIC 98-M4 (Aaa, AAA) 12/25/23 6.42 2,415,276
887,025 Fannie Mae, Series G97-1, Class J (Aaa, AAA) 02/18/04 6.75 897,851
1,675,000 Fannie Mae, Series MTN (Aaa, AAA) 12/10/07 6.56 1,688,704
2,000,000 Fannie Mae, 1997-51, Class KB (Aaa, AAA) 03/20/08 7.00 2,036,196
2,400,000 Fannie Mae, Series 1993-50 (Aaa, AAA) 09/25/20 5.00 2,303,772
2,000,000 Fannie Mae, Series 1993-196, Class J (Aaa, AAA) 10/25/08 5.50 1,938,090
2,250,000 Federal Home Loan Bank (Aaa, AAA) 03/06/03 5.72 2,262,109
3,000,000 Federal Home Loan Bank (Aaa, AAA) 09/02/03 5.57 2,992,339
2,315,000 Federal Home Loan Bank (Aaa, AAA) 09/15/03 5.12 2,272,761
1,546,000 Federal Home Loan Bank, Series El-04, Class 1 (Aaa, AAA) 04/23/04 7.13 1,546,000
2,300,000 Federal Home Loan Bank (Aaa, AAA) 04/25/02 5.25 2,288,723
2,450,000 Financial Assistance Corp.
(Callable 09/27/00 @ $100.00) (Aaa, AAA) 09/27/05 9.20 2,575,019
4,000,000 Freddie Mac (Aaa, AAA) 12/14/01 4.75 3,943,864
1,495,000 Freddie Mac (Aaa, AAA) 07/15/03 5.75 1,503,148
1,000,000 Freddie Mac, Series 10Nc3
(Callable 04/29/02 @ $100.00) (Aaa, AAA) 04/29/09 6.45 997,848
2,000,000 Freddie Mac, Series 1490, Class CA (Aaa, AAA) 04/15/08 6.50 2,033,901
2,000,000 Freddie Mac, Series 1275, Class VN (Aaa, AAA) 02/15/05 7.00 2,014,281
973,826 GE Capital Mortgage Services, Inc.
Series 1994-7 Class A10 (Aaa, AAA) 02/25/09 6.00 963,028
983,079 Morgan Stanley Mortgage Trust,
Series 40, Class 8 (Aaa, AAA) 07/20/21 7.00 996,428
-----------
TOTAL MORTGAGE BACKED SECURITIES
(Cost $49,848,929) 49,666,344
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
10
<PAGE>
Warburg Pincus Intermediate Maturity Government Fund
Statement of Net Assets (cont'd)--April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings
Par (Moody's/S&P) Maturity Rate% Value
--- ------------- -------- ----- -----
<S> <C> <C> <C> <C>
UNITED STATES TREASURY OBLIGATIONS (10.8%)
$1,410,000 U.S. Treasury Bond (Aaa, AAA) 11/15/11 14.000 $ 2,133,137
1,800,000 U.S. Treasury Bond (Aaa, AAA) 11/15/12 10.375 2,369,510
1,775,000 U.S. Treasury Note (Aaa, AAA) 02/15/05 7.500 1,963,519
1,000,000 U.S. Treasury Note (Aaa, AAA) 08/15/07 6.125 1,045,111
-----------
TOTAL UNITED STATES TREASURY OBLIGATIONS
(Cost $7,304,579)(0 7,511,277
-----------
SHORT-TERM INVESTMENTS (6.8%)
3,271,463 RBB Select Sweep 3,271,463
1,461,326 Institutional Money Market Trust 1,461,326
-----------
TOTAL SHORT-TERM INVESTMENTS (Cost $4,732,789) 4,732,789
-----------
TOTAL INVESTMENTS AT VALUE (99.4%) (Cost $68,909,445*) 68,944,588
-----------
OTHER ASSETS IN EXCESS OF LIABILITIES (0.6%) 421,638
-----------
NET ASSETS (100%) (applicable to 6,910,062 Common Shares and 1,303 Advisor Shares) $69,366,226
===========
NET ASSET VALUE, offering and redemption price per Common Share ($69,353,145 divided by 6,910,062) $10.04
===========
NET ASSET VALUE, offering and redemption price per Advisor Share ($13,081 divided by 1,303) $10.04
===========
</TABLE>
INVESTMENT ABBREVIATIONS
NR = Not Rated
REMIC = Real Estate Investment Conduit
- -------------------------------------------------------------------------------
# Rate shown reflects yield to maturity on date of purchase.
* Cost for federal income tax purposes is $69,026,876.
See Accompanying Notes to Financial Statements.
11
<PAGE>
Warburg Pincus New York Intermediate Municipal Fund
Statement of Net Assets--April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings
Par (Moody's/S&P) Maturity Rate% Value
---- ------------- -------- ----- -----
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (97.7%)
New York (87.7%)
$1,750,000 Metropolitan Transportation Authority Commuter
Facilities Revenue Bond Series C-1 (Aaa, AAA) 07/01/05 6.000 $ 1,933,750
2,000,000 Metropolitan Transportation Authority Commuter
Facilities Revenue Bond Series C-2 (Aaa, AAA) 07/01/05 6.000 2,210,000
3,000,000 Municipal Assistance Corp. for New York City
Revenue Bond Series L (Aa2, AA) 07/01/04 6.000 3,288,750
3,000,000 Municipal Assistance Corp. for New York City
Revenue Bond Series M (Aa2, AA) 07/01/06 5.250 3,210,000
1,000,000 Municipal Assistance Corp. for New York City
Revenue Bond Series O (Aa2, AA) 07/01/07 5.250 1,071,250
1,100,000 Nassau County New York General Obligation
Bond General Improvement Series S (Aaa, AAA) 03/01/06 5.000 1,155,000
1,350,000 Nassau County New York General Obligation
Bond General Improvements
Series R (FGIC Insured) (Aaa, AAA) 11/01/02 5.125 1,414,125
1,045,000 Nassau County New York General Obligation
Bond Series L (FGIC Insured)
(Escrowed to Maturity) (Aaa, AAA) 11/15/01 6.300 1,114,231
3,000,000 New York City General Obligation Bond
Series A (A3, A-) 08/01/06 7.000 3,487,500
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 1,096,250
60,000 New York City General Obligation Bond Series L (A3, NR) 08/01/02 5.500 63,300
1,000,000 New York City Municipal Water Finance Authority
& Sewer System Revenue Bond Series A
(Pre-Refunded 06/15/05 @ $101.00) (Aaa, AAA) 06/15/05 6.000 1,115,000
600,000 New York City Municipal Water Finance Authority
& Sewer System Revenue Bond Series C
(FGIC Insured) (VMIG-1, A1+) 05/01/99 4.250 600,000
2,000,000 New York City Municipal Water Finance Authority
& Sewer System Revenue Bond Series C
(Pre-Refunded 06/15/01 @ $101.50) (Aaa, A) 06/15/01 7.750 2,197,500
1,000,000 New York State Dormitory Authority Jewish
Medical Center, Series L Revenue Bond (Aaa, AAA) 07/01/05 5.000 1,047,500
1,500,000 New York State Dormitory Authority Revenue
Bond City University Series B (Aaa, AAA) 07/01/03 6.000 1,627,500
3,000,000 New York State Dormitory Authority Revenue
Bond Consolidated City University Series A (Baa1, BBB+) 07/01/05 5.700 3,232,500
2,000,000 New York State Dormitory Authority Revenue
Bond Education Facilities Improvement (A3, A-) 05/15/07 6.000 2,215,000
1,000,000 New York State Dormitory Authority Revenue
Bond Hospital Series A (Aaa, AAA) 02/15/08 5.250 1,067,500
</TABLE>
See Accompanying Notes to Financial Statements.
12
<PAGE>
Warburg Pincus New York Intermediate Municipal Fund
Statement of Net Assets (cont'd)--April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings
Par (Moody's/S&P) Maturity Rate% Value
---- ------------- -------- ----- -----
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (cont'd)
New York (cont'd)
$1,000,000 New York State Dormitory Authority Revenue
Bond New York University Series A (Aaa, AAA) 07/01/07 5.000 $ 1,050,000
1,000,000 New York State Dormitory Authority Revenue
Bond Rockefeller University
(Callable 07/01/08 @ $101.00) (Aaa, AAA) 07/01/16 5.000 1,010,000
1,000,000 New York State Dormitory Authority Revenue
Bond Sloan Kettering Memorial Cancer Center (Aaa, AAA) 07/01/19 5.750 1,096,250
2,000,000 New York State Dormitory Authority Revenue
Bond State University Education Facilities
Series A (A3, A-) 05/15/02 5.400 2,090,000
2,495,000 New York State Dormitory Authority Revenue
Bond State University Facilities Lease Revenue
Series A (Aaa, AAA) 07/01/06 5.750 2,738,262
750,000 New York State Dormitory Authority Revenue
Bond Upstate Community Colleges Series A (Baa1, BBB+) 07/01/01 5.200 772,500
1,000,000 New York State Dormitory Authority Revenue
Bond Upstate Community Colleges Series A (Baa1, BBB+) 07/01/02 5.300 1,041,250
700,000 New York State Energy Research & Development
Revenue Bond Series 1985 (NR, NR) 04/16/00 4.200 700,000
1,000,000 New York State Environmental Facilities Clean
Water & Drinking Revenue Bond Series F
(Callable 06/15/08 @ $101.00) (Aa2, AA-) 06/15/14 5.250 1,036,250
2,000,000 New York State General Obligation Bond Series C (A2, A) 10/01/03 6.000 2,177,500
1,200,000 New York State General Obligation Bond Series C (A2, A) 10/01/04 6.000 1,318,500
1,000,000 New York State General Obligation Bond Series F (A2, A) 09/15/04 5.000 1,051,250
2,245,000 New York State General Obligation Bond Series F (A2, A) 09/15/06 5.000 2,362,862
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 2,756,250
1,000,000 New York State Local Government Assistance
Corp. Revenue Bond Series A (Aaa, AAA) 04/01/05 5.000 1,050,000
1,000,000 New York State Local Government Assistance
Corp. Revenue Bond Series A (A3, A+) 04/01/05 5.400 1,071,250
600,000 New York State Local Government Assistance
Corp. Revenue Bond Series A (A3, A+) 04/01/06 6.000 663,750
1,000,000 New York State Local Government Assistance
Corp. Revenue Bond Series A (A3, A+) 04/01/07 6.000 1,111,250
2,415,000 New York State Local Government Assistance
Corp. Revenue Bond Series A (FGIC Insured) (Aaa, AAA) 04/01/04 5.000 2,529,712
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 1,113,750
</TABLE>
See Accompanying Notes to Financial Statements.
13
<PAGE>
Warburg Pincus New York Intermediate Municipal Fund
Statement of Net Assets (cont'd)--April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings
Par (Moody's/S&P) Maturity Rate% Value
---- ------------- -------- ----- -----
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (cont'd)
New York (cont'd)
$1,000,000 New York State Local Government Assistance
Corp. Revenue Bond Series B (Aaa, AAA) 04/01/21 5.000 $ 986,250
1,730,000 New York State Local Government Assistance
Corp. Revenue Bond Series B
(Pre-Refunded 04/01/01 @ $102.00) (Aaa, AAA) 04/01/01 7.500 1,887,863
1,000,000 New York State Power Authority Revenue Bond
Series C (Aa3, AA-) 02/15/04 5.000 1,048,750
2,000,000 New York State Thruway Authority General
Revenue Bond Series E (Aa3, AA-) 01/01/15 5.250 2,065,000
1,000,000 New York State Thruway Authority Local
Highway & Bridge Series A Class 2 (Aaa, AAA) 04/01/15 5.250 1,035,000
850,000 New York State Thruway Authority Service
Contract Revenue Bond Local Highway &
Bridges Series A (Baa1, BBB+) 04/01/01 5.500 877,625
3,000,000 New York State Thruway Authority Service
Contract Revenue Bond Local Highway &
Bridges Series A (Aaa, AAA) 01/01/04 6.000 3,262,500
1,000,000 New York State Urban Development Corp.
Revenue Bond Series B (Aaa, AAA) 01/01/14 5.250 1,043,750
1,190,000 New York State Urban Development Corp.
Revenue Bond (MBIA Insured) (Aaa, AAA) 04/01/06 6.500 1,355,113
1,000,000 New York State Urban Development Corp.
Revenue Bond Correctional Capital A
(AMBAC Insured) (Aaa, AAA) 01/01/06 5.400 1,071,250
3,000,000 Port Authority of New York & New Jersey
Revenue Bond Consolidated 72nd Series
(Pre-Refunded 10/01/02 @ $101.00) (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 1,083,750
1,790,000 Triborough Bridge & Tunnel Authority New York
Revenue Bond Series A (MBIA Insured)
(Callable 01/01/09 @ $101.00) (Aaa, AAA) 01/01/12 5.125 1,854,888
1,000,000 Triborough Bridge & Tunnel Authority New York
Revenue Bond Series T (GO of Auth. Insured)
(Prerefunded 01/01/01 @ $102.00) (Aaa, A+) 01/01/01 7.000 1,073,750
2,000,000 Triborough Bridge & Tunnel Authority New York
Revenue Bond Series T
(Pre-Refunded 01/01/01 @ $102.00) (Aaa, A+) 01/01/01 7.000 2,147,500
2,000,000 Triborough Bridge & Tunnel Authority New York
Revenue Bond Series Y (GO of Auth. Insured) (Aa3, A+) 01/01/08 5.900 2,232,500
-----------
TOTAL NEW YORK (Cost $85,992,868) 88,287,731
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
14
<PAGE>
Warburg Pincus New York Intermediate Municipal Fund
Statement of Net Assets (cont'd)--April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings
Par (Moody's/S&P) Maturity Rate% Value
---- ------------- -------- ----- -----
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (cont'd)
Puerto Rico (10.0%)
$1,000,000 Puerto Rico Commonwealth Aqueduct & Sewer
Authority Revenue Bond (Aaa, AAA) 07/01/07 6.000 $ 1,125,000
50,000 Puerto Rico Commonwealth Aqueduct & Sewer
Authority Revenue Bond (Escrowed To Maturity) (Aaa, AAA) 07/01/99 7.875 50,381
1,000,000 Puerto Rico Commonwealth General Obligation
Bond (Baa1, A) 07/01/05 5.000 1,050,000
3,000,000 Puerto Rico Commonwealth General Obligation
Bond (MBIA Insured) (Aaa, AAA) 07/01/01 5.500 3,123,750
2,000,000 Puerto Rico Commonwealth Infrastructure
Finance Authority Revenue Bond Series 1997
Class A (OID) (Aaa, AAA) 07/01/11 5.000 2,092,500
2,000,000 Puerto Rico Electric Power Authority Series EE
Revenue Bond (Callable 07/01/08 @ 101.50) (Aaa, AAA) 07/01/16 5.250 2,082,500
500,000 Puerto Rico Electric Power Authority Series N
(Callable 07/01/99 @ $101.50) (Baa1, BBB+) 07/01/00 6.800 509,875
------------
10,034,006
------------
TOTAL MUNICIPAL BONDS (Cost $95,742,515) $ 98,321,737
============
Shares
------
MONEY MARKET (1.3%)
1,288,843 Federated Investments New York Municipal Cash Trust $ 1,288,843
5,205 Nuveen Tax Exempt Money Fund 5,205
------------
TOTAL MONEY MARKET (Cost $1,294,048) 1,294,048
------------
TOTAL INVESTMENTS AT VALUE (99.0%) (Cost $97,036,563*) 99,615,785
------------
OTHER ASSETS IN EXCESS OF LIABILITIES (1.0%) 1,021,414
------------
NET ASSETS (100.0%) $100,637,199
============
</TABLE>
INVESTMENT ABBREVIATIONS
FGIC = Financial Guaranty Insurance Company
NR = Not Rated
MBIA = Municipal Bonds Investors Assurance, Inc.
AMBAC = American Municipal Bond Assurance Corporation
- --------------------------------------------------------------------------------
* Also cost for federal income tax purposes.
See Accompanying Notes to Financial Statements.
15
<PAGE>
Warburg Pincus Fixed Income Fund
Schedule of Investments--April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings
Par (Moody's/S&P) Maturity Rate% Value
---- ------------- -------- ----- -----
<S> <C> <C> <C> <C>
CORPORATE BONDS (30.5%)
$2,000,000 ABN-AMRO Bank NV New York Branch
Subordinate Deposit Notes
(Callable 08/01/04 @ $100.00) (Aa2, AA-) 08/01/09 8.250 $ 2,157,500
4,140,000 Aetna Services, Inc. (A3, A) 08/15/06 7.125 4,238,325
7,450,000 AT&T Capital Corp. (Baa3, BBB) 11/15/00 7.500 7,630,252
2,740,000 Charter Communications Holdings LLC (B2, B+) 04/01/09 8.625 2,815,350
4,500,000 Countrywide Home Loan Co. (A3, A) 04/15/09 6.250 4,387,500
6,950,000 Delphi Auto Systems Corp. (Baa2, BBB) 05/01/04 6.125 6,915,250
2,980,000 Echostar Corp.
(Callable 02/01/04 @ $104.688) (B2, B) 02/01/09 9.375 3,114,100
4,890,000 First Industrial LP
(Putable 05/15/02 @ $100.00) (Baa2, BBB) 05/15/27 7.150 4,926,675
1,000,000 Globalstar Capital Corp. Senior Notes
(Callable 02/15/02 @ $105.69) (CAA, B) 02/15/04 11.975 730,000
2,980,000 Golden State Escrow Corp.
(Callable @ Make Whole + 50BP) (Ba1, BB+) 08/01/03 7.000 2,983,725
2,980,000 HMH Properties, Inc. (Ba3, NR) 05/15/05 9.500 3,184,875
1,370,000 Household Finance Corp. (A2, A) 05/01/04 6.000 1,364,862
5,910,000 Household Finance Corp. (A2, A) 11/15/08 6.500 5,910,000
5,355,000 Ingersoll-Rand Co. Medium Term Note (A3, A-) 11/19/27 6.230 5,448,712
1,000,000 Kingdom of Thailand Yankee Notes (Baa3, A-) 08/15/01 7.840 1,035,000
1,500,000 Leucadia Capital Trust I
(Callable 01/15/07 @ $104.28) (Ba1, BBB) 01/15/27 8.650 1,089,375
3,000,000 Lowe's Companies
(Putable 05/15/07 @ $100.00) (A2, A) 05/15/37 7.110 3,123,750
2,985,000 National Semiconductor (Convertible
Subordinate Debentures)
(Callable 10/01/99 @ $102.79) (Ba2, BB) 10/01/02 6.500 2,552,175
4,940,000 Nationwide Health Properties, Inc.
(Putable 07/01/03 @ $100.00) (Baa2, BBB) 07/07/38 6.590 4,779,450
7,195,000 Niagara Mohawk Power Corp. Series D
(Callable 04/01/99 to 12/31/00 @ Make
Whole + 50BP ) (Ba2, BB+) 10/01/02 7.250 7,365,881
6,185,000 Noble Drilling Corp. (Baa2, A-) 03/15/09 6.950 6,409,206
3,100,000 NTL, Inc. Senior Notes
(Callable 10/01/03 @ $105.75) (B3, B-) 10/01/08 11.500 3,510,750
4,140,000 Occidental Petroleum (Baa3, BBB) 02/15/06 7.650 4,264,200
4,760,000 Philip Morris Cos., Inc.
(Putable 06/01/01 @ $100.00) (A2, A) 06/01/06 6.950 4,819,500
2,000,000 Potomac Electric Power Co.
(Callable 05/15/02 @ $103.21) (A1, A) 05/15/27 8.500 2,105,000
6,020,000 Qwest Communications International, Inc.
Senior Notes (Ba1, BB+) 11/01/08 7.500 6,321,000
3,400,000 Riggs Capital Trust II Preferred Securities,
Series C (Callable 03/15/07 @ $104.44) (Baa3, BB-) 03/15/27 8.875 3,468,000
</TABLE>
See Accompanying Notes to Financial Statements.
16
<PAGE>
Warrburg Pincus Fixed Income Fund
Schedule of Investments (cont'd)--April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings
Par (Moody's/S&P) Maturity Rate% Value
---- ------------ --------- ------ ------
<S> <C> <C> <C> <C>
Corporate Bonds (cont'd)
$ 1,560,000 Rose Hills Acquisition Senior Subordinate Notes
(Callable 11/15/00 @ $100.00)++ (B2, B) 11/15/04 9.500 $ 1,380,600
9,500,000 Sears Roebuck Acceptance Corp. (A2, A-) 05/01/09 6.250 9,392,745
1,000,000 State Street Boston Corp. Debentures
(Putable 06/15/06 @ $100.00) (A1, AA-) 06/15/06 7.350 1,038,750
5,000,000 Terra Nova Insurance (UK) Holdings
(Callable @ Make Whole +20BP) (Baa1, BBB) 05/15/08 7.000 4,987,500
1,000,000 TIG Capital Trust I Debentures
(Callable 01/15/07 @ $100.00) (Baa2, A-) 01/15/27 8.597 846,250
2,090,000 Unova, Inc. (Baa2, BBB-) 03/15/05 6.875 2,121,350
------------
Total Corporate Bonds
(Cost $127,450,894) 126,417,608
------------
Asset/Mortgage-Backed Securities (43.6%)
11,000,000 Amresco Commercial Mortgage Funding I
Series 1997-C1, Class B (NR, AA) 06/17/29 7.240 11,403,865
2,425,000 Asset Securitization Corp. (Nomura Asset
Securities Corp.) Series 1996-D2, Class A2++ (NR, AA) 02/14/29 7.207+ 2,539,133
170,377 Bankers Trust Co. Pass-Through CTFS
Series 1988-1, Class 1D (NR, NR) 04/01/18 8.625 173,869
4,660,000 California Infrastructure PG&E-1 Series 97-1,
Class A7 (Callable 09/25/06 @ $100.00) (Aaa, AAA) 09/25/08 6.420 4,767,149
6,200,000 California Infrastructure SCE-1 Series 1997-1,
Class A7 (Callable 12/26/07 @ $100.00) (Aaa, AAA) 12/26/09 6.420 6,166,178
5,650,000 Commonwealth Edison Transitional Funding Trust
Series 1998-1, Class A6 (Aaa, AAA) 06/25/09 5.630 5,504,089
5,000,000 Credit Suisse First Boston Series 1998-FL (A2, NA) 12/01/00 6.047 4,910,938
267,912 Donaldson, Lufkin, & Jenrette, Inc. Acceptance
Trust Series 1989-1, Class F (NR, NR) 08/01/19 11.000 298,911
3,038,000 Fannie Mae, Series 1993-196, Class J (Aaa,AAA) 10/25/08 5.500 2,943,959
4,920,000 Fannie Mae Series 1997-51, Class KB Guaranteed
REMIC TR (Aaa, AAA) 03/20/08 7.000 5,009,043
11,000,000 Fannie Mae Series 1997-79, Class KB (Aaa, AAA) 07/18/26 6.000 10,442,872
4,700,000 Fannie Mae Series 1998-M4, Class B (Aaa, AAA) 12/25/23 6.424 4,729,916
11,910,000 Fannie Mae Pool #492402 (Aaa, AAA) 04/01/29 6.500 11,843,006
5,000,000 Federal Farm Credit Bank (Aaa, NR) 06/01/99 4.840 4,999,577
3,040,000 Federal Home Loan Bank Zero Coupon (Aaa, NR) 11/30/99 5.867# 2,956,889
85,630 Federal Home Loan Mortgage Corp.
PC Pool #220014 (Aaa, AAA) 10/01/01 .750 87,794
3,000,000 Federal-Mogul Corp. (Ba2, BB+) 01/15/06 7.375 2,943,750
5,000,000 First Chicago/Lennar Trust, Series 1997-CHI1,
Class B (N/A, N/A) 04/29/06 8.055+ 4,850,000
3,000,000 First USA Credit Card Master Trust
Series 1998-4, Class A (Aaa, AAA) 03/18/08 5.049+ 2,992,845
12,800,000 Freddie Mac (Callable 04/29/02 @ $100.00) (Aaa, AAA) 04/29/09 6.450 12,772,454
</TABLE>
See Accompanying Notes to Financial Statements.
17
<PAGE>
Warrburg Pincus Fixed Income Fund
Schedule of Investments (cont'd)--April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings
Par (Moody's/S&P) Maturity Rate% Value
---- ------------ --------- ------ ------
<S> <C> <C> <C> <C>
Asset/Mortgage-Backed Securities (cont'd)
$ 1,500,000 General Motors Acceptance Corp.
Series 96C-2B, Class B (NR, A) 10/15/11 7.530 $ 1,577,993
1,000,000 General Motors Acceptance Corp.
Series 1998-C1, Class E (NR, NR) 06/03/09 7.153 967,695
4,838,052 General Motors Acceptance Corp.
Series 1996-C2, Class A (NR, AA) 10/15/11 7.350 4,924,229
11,798,715 GNMA (NR, NR) 10/15/28 6.500 11,732,347
9,000,000 LB Commercial Conduit Mortgage Trust
Series 1996-C2, Class C (A2, NR) 10/25/26 7.743+ 9,378,045
4,915,395 Morgan Stanley Mortgage Trust
Series 40, Class 8 (NR, AAA) 07/20/21 7.000 4,982,142
4,970,000 Mortgage Capital Funding, Inc.
Series 1998-MC1, Class E (NR, BBB+) 01/19/08 7.060+ 4,904,073
10,000,000 Nomura Asset Securites Corp.
Series 1998-D6, Class A3 (NR, BBB+) 03/16/13 6.980+ 9,795,350
4,000,000 Nomura Asset Securities Corp.
Series 1993-1, Class B1 (NR, BBB) 12/15/01 6.680 4,032,660
712,414 Nomura Asset Securities Corp.
Series 1994-4B, Class 4A (Aaa, AAA) 09/25/24 8.300 728,974
10,028,591 Nomura Depository Trust (Aaa, AAA) 01/15/03 5.206+ 9,889,121
2,635,841 Residential Funding Mortgage Securities I
Series 96 - S2, Class A1 (NR, NR) 01/25/11 6.750 2,643,879
2,624,578 Resolution Trust Corp. 1994-C1, Class B (NR, AA) 06/25/26 8.000 2,618,017
694,369 Resolution Trust Corp. Pass-Through CTFS
Series-95 C1, Class A-2C (Aaa, NR) 02/25/27 6.900 703,413
2,500,000 Shurgard Pass-Through CTFS Trust (Nomura
Asset Securities Corp.) Series 1, Class 1 (NR, NR) 06/15/04 8.240+ 2,585,547
6,790,000 Standard Credit Card Master Trust
Series 1995-9, Class A (NR, NR) 10/07/07 6.550 6,959,535
------------
Total ASSET/Mortgage-Backed Securities
(Cost $182,476,711) 180,759,257
------------
United States Treasury Obligations (13.9%)
U.S. Treasury Inflation Protection (6.6%)
6,950,000 U.S. Treasury Note (Aaa, AAA) 01/15/09 3.875 6,955,653
20,000,000 U.S. Treasury Note (Aaa, AAA) 07/15/02 3.625 20,471,136
------------
27,426,789
------------
U.S. Treasury Notes (6.8%)
27,935,000 U.S. Treasury Note (Aaa, AAA) 02/29/00 5.500 28,078,228
120,000 U.S. Treasury Note (Aaa, AAA) 05/15/01 8.000 126,637
------------
28,204,865
------------
U.S. Treasury Principal Strip Notes (0.5%)
2,025,000 U.S. Treasury Principal Strip (Aaa, AAA) 08/15/99 5.53# 1,998,134
------------
Total United States Treasury Obligations
(Cost $57,611,322) 57,629,788
------------
</TABLE>
See Accompanying Notes to Financial Statements.
18
<PAGE>
Warrburg Pincus Fixed Income Fund
Schedule of Investments (cont'd)--April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings
Par (Moody's/S&P) Maturity Rate% Value
---- ------------ --------- ------ ------
<S> <C> <C> <C> <C>
Agency Obligations (3.2%)
12,178,000 Fannie Mae (Aaa, AAA) 02/18/21 5.750 $ 11,995,904
1,209,570 Small Business Administration Guaranteed-
Development Participation Certificate
Debenture Series 1992-20D
(Callable 10/01/02 @ $100.00) (Aaa, AAA) 04/01/12 8.200 1,318,432
------------
Total Agency Obligations
(Cost $13,199,023) 13,314,336
------------
PREFERRED STOCK (2.6%)
Number
of Shares
---------
Banks & Saving & Loan (1.9%)
36,800 Banco Totta & Acores Financial Corp. Series A
(Callable 10/11/06 @ $25.00) 8.875 963,700
65,050 Natexis Bank Series A
(Callable 06/30/08 @ $100.00) 8.440 6,521,263
-----------
7,484,963
-----------
Real Estate (0.7%)
72,000 Equity Residential Properties Trust Series D REIT
(Callable 07/15/07 @ $25.00) 8.600 1,854,000
26,250 Prologis Trust, Series C REIT
(Callable 11/13/26 @ $50.00) 8.540 1,223,906
-----------
3,077,906
-----------
Total Preferred Stock
(Cost $10,528,001) 10,562,869
-----------
Short Term Investments (6.2%)
Shares
----
5,809,694 RBB Money Market Fund 5,809,694
Par
----
20,000,000 Student Loan Marketing Association (Aaa, NR) 07/15/99 4.926+ 20,003,000
------------
Total Short Term Investments (Cost $25,809,694)(0 25,812,694
------------
Total Investments at Value (100.0%) (Cost $417,075,645*) $414,496,552
============
</TABLE>
INVESTMENT ABBREVIATIONS
CTFS = Certificates
NR = Not Rated
REIT = Real Estate Investment Trust
REMIC = Real Estate Mortgage Investment Conduit
- --------------------------------------------------------------------------------
++ Illiquid Security.
+ On instruments with variable rates, the interest rate shown reflects the
current rate as of April 30, 1999.
# Rate shown reflects yield to maturity
on date of purchase.
* Also cost for federal income tax purposes.
See Accompanying Notes to Financial Statements.
19
<PAGE>
Warburg Pincus Global Fixed Income Fund
Schedule of Investments--April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings
Par (Moody's/S&P) Maturity Rate% Value
---- ------------ --------- ------ ------
<S> <C> <C> <C> <C>
Bonds (93.5%)
Canada (10.7%)
$ 19,400,000 Canadian Government (Aa1, AAA) 06/01/04 6.500 $ 14,205,743
1,960,000 (A) Newcourt Credit Group (Baa3, BBB) 12/17/03 7.125 2,028,600
------------
16,234,343
------------
Chile (1.0%)
1,464,000 (A) Republic of Chile (Baa1, A-) 04/28/09 6.875 1,469,490
------------
Colombia (1.9%)
2,931,000 (A) Republic of Colombia (Baa3, BBB-) 04/23/09 9.750 2,843,070
------------
Costa Rica (1.9%)
2,940,000 (A) Republic of Costa Rica (Ba1, BB) 05/15/09 9.335 2,940,000
------------
Denmark (4.6%)
40,400,000 Kingdom of Denmark (Aaa, AAA) 11/15/07 7.000 6,923,448
------------
Germany (6.9%)
4,548,000 Republic of Germany (Aaa, AAA) 10/14/05 6.500 5,643,981
4,598,737 Republic of Germany (Aaa, AAA) 07/04/28 4.750 4,813,684
------------
10,457,665
------------
Greece (3.0%)
1,244,000,000 Hellenic Republic (A2, NR) 03/21/04 8.900 4,499,830
------------
Mexico (1.2%)
1,500,000 (A) United Mexican States (Ba2, BB) 05/15/26 11.500 1,781,250
------------
Norway (4.0%)
45,000,000 Norwegian Government (Aaa, AAA) 11/30/04 5.750 6,100,723
------------
Panama (1.0%)
1,465,000 Republic of Panama (Ba1, BB+) 04/01/29 9.375 1,512,613
------------
Philippines (1.7%)
2,448,000 Republic of Philippines (Ba1, BB+) 01/15/19 9.875 2,539,800
------------
South Africa (3.2%)
32,990,000 Republic of South Africa (Baa1, BBB+) 02/28/05 12.000 4,935,845
------------
Sweden (6.0%)
39,000,000 Swedish Government (Aa1, AAA) 01/15/04 5.000 4,941,741
32,700,000 Swedish Government, Series 1043 (Aa1, AAA) 01/28/09 5.000 4,141,944
------------
9,083,685
------------
</TABLE>
See Accompanying Notes to Financial Statements.
20
<PAGE>
Warburg Pincus Global Fixed Income Fund
Schedule of Investments--April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratings
Par (Moody's/S&P) Maturity Rate% Value
---- ------------ --------- ------ ------
<S> <C> <C> <C> <C>
Bonds (cont'd)
United States (44.5%)
$ 25,000,000 Bayerische Landesbank Ny, Zero Coupon
(Callable 08/04/00 @ $12.028) (Aaa, AAA) 08/04/27 7.967## $ 2,750,000
4,510,000 California Infrastructure San Diego Gas &
Electric Rate Reduction,
Series 1997-1 Class A7 (Aaa, AAA) 12/26/09 6.370 4,550,793
1,200,000 Charter Communications Holdings LLC (B2, B+) 04/01/09 8.625 1,233,000
2,500,000 Commonwealth Edison Transitional Funding
Trust, Series 1998-1, Class A6 (Aaa, AAA) 06/25/09 5.630 2,435,438
1,310,000 Echostar DBS Corp.
(Callable 02/01/04 @ $104.688) (B2, B) 02/01/09 9.375 1,368,950
6,900,000 Freddie Mac Discount Note (Aaa, AAA) 05/17/99 4.785## 6,887,495
3,000,000 Federal-Mogul Co.
(Callable @ Greater of Par or
Make Whole + 50BP) (Ba2, BB+) 01/15/06 7.375 2,943,750
9,789,538 GNSF Pool (Aaa, AAA) 03/15/29 6.500 9,734,472
1,600,000 Golden State Escrow Corp.
(Callable @ Make Whole + 50BP) (Ba1, BB+) 08/01/03 7.000 1,602,000
3,920,000 Household Finance Corp. (A2, A) 11/15/08 6.500 3,920,000
3,400,000 Illinois Power Transitional Funding Trust,
Series 1998-1, Class A6 (Aaa, AAA) 06/25/09 5.540 3,290,095
2,150,000 Massachusetts State Water Resource Authority (Aaa, AAA) 08/01/24 5.000 2,082,813
6,850,000 Nomura Asset Securities Co. (Aaa, AAA) 03/16/13 6.690 6,757,011
1,840,000 NTL, Inc.
(Callable 10/01/03 @ $105.75) (B3, B-) 10/01/08 11.500 2,083,800
6,000,000 PECO Energy Transition Trust (Aaa, AAA) 03/01/09 6.050 5,971,050
2,060,000 Qwest Communications International, Inc.
(Callable @ Make Whole + 37.5BP) (Ba1, BB+) 11/01/08 7.500 2,163,000
1,950,000 Triborough Bridge & Tunnel Auth.,
Series A (Callable 01/01/09 @ $101.00) (Aa3, A+) 01/01/19 5.000 1,930,500
5,775,000 U.S. Treasury Note (Aaa, AAA) 02/15/04 4.750 5,659,500
------------
67,363,667
------------
Venezuela (1.9%)
3,642,845 (A) Republic of Venezuela, Series DL
(Callable 06/18/99 @ $100.00) (B2, B+) 12/18/07 5.938 2,930,305
------------
Total Bonds (Cost $141,117,740) 141,615,734
------------
</TABLE>
See Accompanying Notes to Financial Statements.
21
<PAGE>
Warburg Pincus Global Fixed Income Fund
Schedule of Investments (cont'd)--April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
Shares Maturity Rate% Value
------- --------- ------ ------
<S> <C> <C> <C>
Preferred Stock (1.6%)
United States
23,900 Natexis AMBS Co. Series A
(Callable 06/30/08 @ $100.00) (Cost $2,387,492) $ 2,395,975
------------
Rights & Warrants (0.0%)
Argentina (0.0%)
1,940 Republic of Argentina Warrants, 12/03/99
(Cost $0) 5,820
------------
Repurchase Agreements (4.9%)
Par
----
7,438,000 Repurchase agreement with State
Street Bank & Trust Co. dated
04/30/99 at 4.82% to be
repurchased at $7,440,987 on
05/03/99. (Collateralized by a pro
rata amount of U.S. Treasury Notes
ranging in par values from
$26,210,000 to $50,000,000.
6.000%-8.500%
07/31/02-02/15/20. Pro rata market
value of collateral is $7,587,504
(Cost $7,438,000) 05/03/99 4.820 7,438,000
------------
Total Investments AT VALUE (100.0%) (Cost $150,943,232*) $151,455,529
============
</TABLE>
INVESTMENT ABBREVIATIONS
NR = Not Rated
- --------------------------------------------------------------------------------
+ Unless otherwise indicated below, all securities are denominated in the
currency of the issuers' country of origin.
(A) Denominated in U.S. Dollars.
## Rate shown reflects yield to maturity on date of purchase.
* Also cost for federal income tax purposes.
See Accompanying Notes to Financial Statements.
22
<PAGE>
Warburg Pincus Fixed Income Fund
Statement of Assets and Liabilities
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Assets
Investments at value (Cost $417,075,645) $414,496,552
Receivable for investments sold 26,964,443
Interest and dividend receivable 4,325,555
Receivable for fund shares sold 142,627
Other assets 46,072
------------
Total Assets 445,975,249
------------
Liabilities
Payable for investments purchased 28,855,931
Dividend payable 1,842,093
Investment advisory fee payable 172,195
Accrued expenses payable 156,467
Administrative services fees payable 34,429
------------
Total Liabilities 31,061,125
------------
Net Assets, applicable to 40,396,805 Common Class shares and
329,153 Advisor Class shares $414,914,124
============
Net Asset Value, offering and redemption price per Common Class
share ($411,562,236 divided by 40,396,805) $10.19
======
Net Asset Value, offering and redemption price per Advisor Class
share ($3,351,888 divided by 329,153) $10.18
======
See Accompanying Notes to Financial Statements.
23
<PAGE>
Warburg Pincus Fixed Income Fund
Statement of Assets and Liabilities
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Assets
Investments at value (Cost $150,943,232) $151,455,529
Receivable for investment sold (Cost $4,859,992) 4,859,992
Interest and dividend receivable (Cost $2,366,419) 2,349,959
Receivable for unrealized gain on forward currency contracts 628,049
Receivable for fund shares sold 253,290
Other assets 24,052
------------
Total Assets 159,570,871
------------
Liabilities
Payable for investments purchased (Cost $8,662,360) 8,662,360
Investment advisory fee payable 66,971
Accrued expenses payable 59,028
Payable for realized losses on forward currency contracts 18,583
Administrative services fees payable 12,097
Distribution payable 3,906
Other liabilities 1,186
------------
Total Liabilities 8,824,131
------------
Net Assets, applicable to 14,025,034 Common Class shares and
6,954 Advisor Class shares $150,746,740
============
Net Asset Value, offering and redemption price per Common Class
share ($150,672,083 divided by 14,025,034) $10.74
======
Net Asset Value, offering and redemption price per Advisor Class
share ($74,657 divided by 6,954) $10.74
======
See Accompanying Notes to Financial Statements.
24
<PAGE>
Warburg Pincus Funds
Statements of Operations
For the Six Months Ended April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Warburg Pincus Warburg Pincus
Intermediate New York Warburg Pincus
Maturity Intermediate Warburg Pincus Global
Government Municipal Fixed Income Fixed Income
Fund Fund Fund Fund
---------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Investment Income:
Dividends $ 0 $ 26,855 $ 366,708 $ 83,978
Interest 2,108,421 2,429,116 12,596,988 4,328,201
Foreign taxes withheld 0 0 0 (6,929)
------------ ------------ ------------ ------------
Total investment income 2,108,421 2,455,971 12,963,696 4,405,250
------------ ------------ ------------ ------------
Expenses:
Investment Advisory 182,975 213,304 1,044,774 777,718
Administrative services 55,830 88,417 319,989 119,822
Audit 5,952 6,159 9,169 8,378
Custodian/Sub-custodian 7,497 8,551 35,487 67,177
Directors/Trustees 6,822 7,184 6,503 6,759
Insurance 283 703 2,541 1,539
Interest (112) 32 31 82
Legal 6,524 9,285 14,128 10,406
Printing 3,674 6,474 27,857 9,109
Registration 16,966 9,592 52,887 30,580
Shareholder servicing/distribution 15 0 4,016 12,210
Transfer Agent 13,686 11,297 132,734 76,542
Miscellaneous 79 1,217 1,675 3,169
------------ ------------ ------------ ------------
300,191 362,215 1,651,791 1,123,491
Less: fees waived, expenses
reimbursed and transfer agent
offsets (80,605) (42,258) (82,057) (372,449)
------------ ------------ ------------ ------------
Total expenses 219,586 319,957 1,569,734 751,042
------------ ------------ ------------ ------------
Net investment income 1,888,835 2,136,014 11,393,962 3,654,208
------------ ------------ ------------ ------------
Net Realized and Unrealized Gain (Loss)
from Investments and Foreign Currency
Related Items:
Net realized gain (loss) from security
transactions 133,777 157,071 873,146 (847,635)
Net realized gain from foreign currency
related items 0 0 0 617,846
Net change in unrealized appreciation
(depreciation) from investments
and foreign currency related items (2,073,875) (777,042) (8,129,865) 3,385,746
------------ ------------ ------------ ------------
Net realized and unrealized gain
(loss) from investments and
foreign currency related items (1,940,098) (619,971) (7,256,719) 3,155,957
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations $ (51,263) $ 1,516,043 $ 4,137,243 $ 6,810,165
============ ============ ============ ============
</TABLE>
See Accompanying Notes to Financial Statements.
25
<PAGE>
Warburg Pincus Funds
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Warburg Pincus Warburg Pincus
Intermediate Maturity New York Intermediate
Government Fund Municipal Fund
-------------------------------- ---------------------------------
For the For the
Six Months For the Six Months For the
Ended Year Ended Ended Year Ended
April 30, 1999 October 31, April 30, 1999 October 31,
(Unaudited) 1998 (Unaudited) 1998
-------------- ------------ -------------- --------------
<S> <C> <C> <C> <C>
From Operations:
Net investment income $ 1,888,835 $ 3,037,610 $ 2,136,014 $ 4,098,648
Net realized gain from security transactions 133,777 484,032 157,071 771,345
Net realized loss from futures contracts 0 0 0 (129,543)
Net change in unrealized appreciation
(depreciation) from investments and foreign
currency related items (2,073,875) 1,403,224 (777,042) 1,158,201
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
resulting from operations (51,263) 4,924,866 1,516,043 5,898,651
------------- ------------- ------------- -------------
From Distributions:
Dividends from net investment income:
Common Shares (1,888,525) (3,037,272) (2,136,014) (4,098,642)
Advisor Shares (310) (338) 0 (6)
Distributions from realized gains:
Common Shares (420,771) 0 (624,104) 0
Advisor Shares (80) 0 0 0
Distributions in excess of realized gains:
Common Shares (62,660) 0 0 0
Advisor Shares 0 0 0 0
------------- ------------- ------------- -------------
Net decrease in net assets from distributions (2,372,346) (3,037,610) (2,760,118) (4,098,648)
------------- ------------- ------------- -------------
From Capital Share Transactions:
Proceeds from sale of shares 39,827,537 79,574,872 37,964,403 49,747,129
Reinvested dividends 1,879,516 2,564,065 2,182,153 3,489,604
Net asset value of shares redeemed (48,128,942) (54,238,174) (45,187,679) (37,058,061)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets from
capital share transactions (6,421,889) 27,900,763 (5,041,123) 16,178,672
------------- ------------- ------------- -------------
Net increase (decrease) in net assets (8,845,498) 29,788,019 (6,285,198) 17,978,675
Net Assets:
Beginning of period 78,211,724 48,423,705 106,922,397 88,943,722
------------- ------------- ------------- -------------
End of period $ 69,366,226 $ 78,211,724 $ 100,637,199 $ 106,922,397
============= ============= ============= =============
Undistributed net investment income: $ 0 $ 0 $ 0 $ 0
============= ============= ============= =============
</TABLE>
See Accompanying Notes to Financial Statements.
26
<PAGE>
Warburg Pincus Funds
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Warburg Pincus Warburg Pincus
Fixed Income Fund Global Fixed Income Fund
-------------------------------- -------------------------------
For the For the
Six Months For the Six Months For the
Ended Year Ended Ended Year Ended
April 30, 1999 October 31, April 30, 1999 October 31,
(Unaudited) 1998 (Unaudited) 1998
------------- ------------- -------------- ------------
<S> <C> <C> <C> <C>
From Operations:
Net investment income $ 11,393,962 $ 20,301,303 $ 3,654,208 $ 9,393,375
Net realized gain (loss) from security
transactions 873,146 1,801,417 (847,635) (6,983,874)
Net realized loss from futures contracts 0 0 0 0
Net realized gain (loss) from foreign
currency related items 0 0 617,846 (523,167)
Net change in unrealized appreciation
(depreciation) from investments and
foreign currency related items (8,129,865) 323,605 3,385,746 4,632,353
------------- ------------- ------------- -------------
Net increase in net assets resulting
from operations 4,137,243 22,426,325 6,810,165 6,518,687
------------- ------------- ------------- -------------
From Distributions:
Dividends from net investment income:
Common Shares (11,310,321) (20,111,834) (4,500,952) (11,720,477)
Advisor Shares (83,641) (189,469) 0 (562,512)
Distributions in excess of net investment income:
Common Shares (40,837) 0 0 0
Advisor Shares (326) 0 0 0
Distributions from realized gains:
Common Shares (1,686,769) (2,591,321) (458,808) 0
Advisor Shares (12,946) (32,099) (148,403) 0
------------- ------------- ------------- -------------
Net decrease in net assets from
distributions (13,134,840) (22,924,723) (5,108,163) (12,282,989)
------------- ------------- ------------- -------------
From Capital Share Transactions:
Proceeds from sale of shares 110,292,365 275,617,900 45,575,353 105,148,731
Reinvested dividends 9,913,437 20,421,111 4,519,395 11,252,140
Net asset value of shares redeemed (122,888,282) (138,361,653) (61,698,455) (153,653,681)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
from capital share transactions (2,682,480) 157,677,358 (11,603,707) (37,252,810)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets (11,680,077) 157,178,960 (9,901,705) (43,017,112)
Net Assets:
Beginning of period 426,594,201 269,415,241 160,648,445 203,665,557
------------- ------------- ------------- -------------
End of period $ 414,914,124 $ 426,594,201 $ 150,746,740 $ 160,648,445
============= ============= ============= =============
Undistributed (or distributions in excess of)
net investment income $ (41,163) $ 0 $ 10,635 $ 846,744
============= ============= ============= =============
</TABLE>
See Accompanying Notes to Financial Statements.
27
<PAGE>
Warburg Pincus Intermediate Maturity Government Fund
Financial Highlights
(For an Advisor Class Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six
Months Ended For the Year Ended October 31,
April 30, 1999 ------------------------------
PERIOD ENDED: (Unaudited) 1998 1997**
-------------- ------------ --------------
<S> <C> <C> <C>
Per-share data
Net asset value, beginning of period $10.38 $ 10.06 $ 9.95
------ ------- -------
Investment activities:
Net investment income 0.25 0.53 0.11
Net gains or losses on investments
(both realized and unrealized) (0.28) 0.32 0.11
------ ------- -------
Total from investment activities (0.03) 0.85 0.22
------ ------- -------
Distributions:
From net investment income (0.25) (0.53) (0.11)
From realized gains (0.06) 0.00 0.00
------ ------- -------
Total distributions (0.31) (0.53) (0.11)
------ ------- -------
Net asset value, end of period $10.04 $ 10.38 $ 10.06
====== ======= =======
Total return 0.26%+ 8.99% 2.22%+
Ratios/Supplemental Data:
Net assets, end of period (000s omitted) $ 13 $ 12 $ 2
Ratio of expenses to average net assets 0.85%*@ 0.85%@ 0.85%*@
Ratio of net income to average net assets 4.94%* 5.28% 5.62%*
Decrease reflected in above operating ratios
due to waviers/reimbursements 0.25%* 3.30% 0.00%*
Portfolio turnover rate 38.81%+ 133.98% 104.34%+
</TABLE>
- -------------------------------------------------------------------------------
+ Non-annualized.
* Annualized.
** For the period August 15, 1997 (Commencement of Operations) through October
31, 1997.
@ Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements had no effect on the fund's
expense ratio.
See Accompanying Notes to Financial Statements.
28
<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 For the Year Ended October 31,
April 30, 1999 ------------------------------------
PERIOD ENDED: (Unaudited) 1998 1997** 1996**
-------------- -------- --------- ---------
<S> <C> <C> <C> <C>
Per-share data
Net asset value, beginning of period $ 10.41 $ 10.43 $ 10.10 $ 9.90
--------- --------- --------- ---------
Investment activities:
Net investment income 0.27 0.56 0.60 0.19
Net gains or losses on investments and foreign currency
related items (both realized and unrealized) (0.19) 0.07 0.33 0.20
--------- --------- --------- ---------
Total from investment activities 0.08 0.63 0.93 0.39
--------- --------- --------- ---------
Distributions:
From net investment income (0.27) (0.56) (0.60) (0.19)
From realized capital gains (0.04) (0.09) 0.00 0.00
--------- --------- --------- ---------
Total distributions (0.31) (0.65) (0.60) (0.19)
--------- --------- --------- ---------
Net asset value, end of period $ 10.18 $ 10.41 $ 10.43 $ 10.10
========= ========= ========= =========
Total return 0.77%+ 6.21% 9.51% 3.93%+
Ratios/Supplemental Data:
Net assets, end of period (000s omitted) $ 3,352 $ 3,058 $ 3,963 $ 911
Ratio of expenses to average net assets 1.00%*@ 1.00%@ 1.00%@ 1.00%*@
Ratio of net income to average net assets 5.21%* 5.40% 5.62% 5.85%*
Decrease reflected in above operating ratios
due to waviers/reimbursements 0.03%* 0.04% 0.08% 0.11%*
Portfolio turnover rate 101.68%+ 124.04% 129.06% 194.23%+
</TABLE>
- --------------------------------------------------------------------------------
+ Non-annualized.
* Annualized.
** For the period July 3, 1996 (Commencement of Operations) through October 31,
1996.
@ Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements had no effect on the fund's
expense ratio.
See Accompanying Notes to Financial Statements.
29
<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 For the Year Ended October 31,
April 30, 1999 ------------------------------------
PERIOD ENDED: (Unaudited) 1998 1997 1996**
-------------- -------- --------- ---------
<S> <C> <C> <C> <C>
Per-share data
Net asset value, beginning of period $ 10.57 $ 10.90 $ 11.17 $ 10.90
--------- --------- --------- ---------
Investment activities:
Net investment income 0.18 0.37 0.41 0.10
Net gains or losses on investments and foreign currency
related items (both realized and unrealized) 0.23 (0.02) 0.15 0.27
--------- --------- --------- ---------
Total from investment activities 0.41 0.35 0.56 0.37
--------- --------- --------- ---------
Distributions:
From net investment income 0.00 (0.68) (0.29) (0.10)
From realized capital gains (0.24) 0.00 (0.54) 0.00
In excess of realized capital gains 0.00 0.00 0.00 0.00
--------- --------- --------- ---------
Total distributions (0.24) (0.68) (0.83) (0.10)
--------- --------- --------- ---------
Net asset value, end of period $ 10.74 $ 10.57 $ 10.90 $ 11.17
========= ========= ========= =========
Total return 3.93%+ 3.51% 5.18% 3.41%+
Ratios/Supplemental Data:
Net assets, end of period (000s omitted) $ 75 $ 6,518 $ 8,935 $ 39
Ratio of expenses to average net assets 1.45%*@ 1.45%@ 1.45%@ 1.45%*@
Ratio of net income to average net assets 4.13%* 4.75% 4.76% 5.69%*
Decrease reflected in above operating expense
ratios due to waviers/reimbursements 0.48%* 0.37% 0.33% 0.21%*
Portfolio turnover rate 248.51%+ 233.73% 202.92% 123.90%+
</TABLE>
- --------------------------------------------------------------------------------
+ Non-annualized.
* Annualized.
** For the period August 12, 1996 (Commencement of Operations) through October
31, 1996.
@ Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements had no effect on the fund's
expense ratio.
See Accompanying Notes to Financial Statements.
30
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
The Warburg Pincus Intermediate Maturity Government Fund and the Warburg
Pincus Fixed Income Fund are registered under the Investment Company Act of
1940, as amended (1940 Act), as diversified, open-end management investment
companies. And the Warburg Pincus New York Intermediate Municipal Fund and the
Warburg Pincus Global Fixed Income 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 Intermediate
Government Fund seeks to achieve as high a level of current income as is
consistent with the 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 the preservation of capital; the Fixed Income Fund seeks
to generate high current income consistent with reasonable risk and,
secondarily, capital appreciation; and 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.
Each fund (except the New York Intermediate Municipal Fund) offers two
classes of shares, one class being referred to as the Common Class and one class
being referred to as the Advisor Class. Common and Advisor Class 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 Class 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 Class. The
Advisor Class 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 Class of the Global Fixed Income Fund currently bear
expenses of .50% of average daily net assets. Prior to October 30, 1998, the New
York Intermediate Municipal Fund offered an Advisor Class.
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 market quotations.
If no sales are reported, investments are generally valued at the mean between
the last reported bid and asked prices. If market quotations are not readily
available, securities and other assets are valued by another
31
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements (cont'd)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
1. Significant Accounting Policies -- (cont'd)
method that the Board of Directors/Trustees believe accurately reflects fair
value. Debt that will mature in 60 days or less is valued on the basis of
amortized cost, which approximates market value, unless the Board determines
that using this method would not reflect an investment's 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 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 Fixed Income Fund and the Global Fixed
Income Fund isolate 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 Fund and the Global Fixed Income Funds may invest in
securities of foreign countries and governments, which involve certain risks in
addition to those inherent in domestic investments. Such risks generally
include, among other things, currency risk (fluctuations in currency exchange
rates), information risk (key information may be inaccurate or unavailable) and
political risk (expropriation, nationalization or the imposition of capital or
currency controls or punitive taxes). Other risks of investing in foreign
securities include liquidity and valuation risks.
The Fixed Income Fund and the 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
32
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements (cont'd)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
1. Significant Accounting Policies -- (cont'd)
foreign securities. Focusing on emerging (less developed) markets involves
higher levels of risk, including increased currency, information, liquidity,
market, political and valuation risks. Deficiencies in regulatory oversight,
market infrastructure, shareholder protections and company laws could expose the
portfolio to operational and other risks as well. Some countries may have
restrictions that could limit the portfolio's access to attractive
opportunities. Additionally, emerging markets often face serious economic
problems (such as high external debt, inflation and unemployment) that could
subject the portfolio to increased volatility or substantial declines in value.
Each fund 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 they may be difficult or impossible to sell at the time
and the price the fund would like. In addition, the lack of an active market may
make it difficult to obtain an accurate price for a fund security.
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 and shareholder servicing fees) and realized/unrealized
gains/losses are allocated proportionately to each class of shares based upon
the relative net asset value of the outstanding shares of that class. 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 for all funds.
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 of 1986, as amended,
33
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements (cont'd)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
1. Significant Accounting Policies -- (cont'd)
and make the requisite distributions to its shareholders which will be
sufficient to relieve it from Federal income and excise taxes.
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 their
transfer agent expense. For the six months ended April 30, 1999, the funds
received credits or reimbursements under this arrangement as follows:
Fund Amount
---- ------
Intermediate Government $1,324
New York Municipal 2,033
Fixed Income 7,888
Global Fixed Income 2,922
2. Investment Adviser, Co-Administrators and Distributor
Warburg Pincus Asset Management, Inc. (Warburg), which is indirectly
controlled by Warburg, Pincus & Co., serves as each fund's investment adviser.
On February 15, 1999, Warburg, Pincus & Co. and Credit Suisse Group announced
that they reached an agreement for Credit Suisse to acquire Warburg. Under the
terms of the arrangement, no immediate changes are planned to Warburg investment
portfolio managers and investment professionals. The Warburg Pincus Funds' Board
of Directors and shareholders have approved the "assignment" of each Fund's
current investment advisory agreement with Warburg. The transaction is expected
to be
34
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements (cont'd)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
2. Investment Adviser, Co-Administrators and Distributor -- (cont'd)
completed in mid-1999. For its investment advisory services, Warburg receives
the following fees based on each fund's average daily net assets:
Fund Annual Rate
------ --------------------------------------
Intermediate Government .50% of average daily net assets
New York Municipal .40% of average daily net assets
Fixed Income .50% of average daily net assets
Global Fixed Income 1.00% of average daily net assets
For the six months ended April 30, 1999, investment advisory fees and
voluntary waivers were as follows:
Gross Net
Fund Advisory Fee Waiver Advisory Fee
---- -------------- ----------- --------------
Intermediate Government $ 182,975 $ (79,281) $103,694
New York Municipal 213,304 (40,225) 173,079
Fixed Income 1,044,774 (74,169) 970,605
Global Fixed Income 777,718 (369,527) 408,191
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 its 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, 1999,
administrative services fees earned by CFSI were as follows:
Fund Co-Administration Fee
---- ---------------------
Intermediate Government $ 36,595
New York Municipal 53,326
Fixed Income 208,955
Global Fixed Income 77,772
For administrative services, PFPC currently receives a fee calculated at an
annual rate of .05% of each Fund's average daily net assets.
For the six months ended April 30, 1999, administrative services fees
earned and voluntarily waived by PFPC (including out-of-pocket expenses) were as
follows:
<TABLE>
<CAPTION>
Net
Fund Co-Administration Fee Waiver Co-Administration Fee
---- --------------------- -------- --------------------------
<S> <C> <C> <C>
Intermediate Government $ 19,235 $ 0 $ 19,235
New York Municipal 35,091 0 35,091
Fixed Income 111,034 0 111,034
Global Fixed Income 42,050 0 42,050
</TABLE>
35
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements (cont'd)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
2. Investment Adviser, Co-Administrators and Distributor -- (cont'd)
Counsellors Securities Inc. (CSI), also a wholly-owned subsidiary of
Warburg, serves as each fund's distributor. No compensation is paid by the
Common Class to CSI for distribution services. For its distribution services,
CSI receives a fee calculated at an annual rate of .25% of the average daily net
assets of the Advisor Class of the Fixed Income Fund and the Intermediate
Government Fund and .50% of the average daily net assets of the Advisor Class of
the Global Fixed Income Fund pursuant to Rule 12b-1 under the 1940 Act. CSI pays
all of the Advisor Class fees to institutions and financial-services firms that
offer the Advisor Class. For the six months ended April 30, 1999, distribution
fees earned by CSI were as follows:
Shareholder Servicing/
Fund Distribution Fee
---- -------------------------
Intermediate Government $ 15
Fixed Income 4,016
Global Fixed Income 12,210
3. Line ofCredit
The funds, together with certain other Warburg Pincus Funds have
established committed and uncommitted line of credit facilities with PNC for
temporary or emergency purposes primarily relating to unanticipated fund share
redemptions. Under the terms of the committed line of credit, the Warburg Pincus
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 Pincus
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 Pincus 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
that is an International Fund or (b) the maximum amount permitted by such fund's
investment policies and restrictions. At April 30, 1999, there were no
outstanding balances under these line of credit facilities for any of the funds.
36
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements (cont'd)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
4. Investments in Securities
At April 30, 1999, 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
----------------------------- -----------------------------
Purchases Sales Purchases Sales
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Intermediate Government $ 0 $ 0 $ 26,929,830 $ 36,900,787
New York Municipal 27,655,453 33,750,420 0 0
Fixed Income 253,140,829 253,236,242 237,102,844 242,547,812
Global Fixed Income 192,454,297 196,397,982 151,237,584 162,671,790
</TABLE>
At April 30, 1999, 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:
Net
Unrealized
Unrealized Unrealized Appreciation
Fund Appreciation Depreciation (Depreciation)
---- ------------ ------------- --------------
Intermediate Government $ 305,990 $ (388,278) $ (82,288)
New York Municipal 2,639,617 (60,396) 2,579,222
Fixed Income 2,084,644 (4,663,737) (2,579,093)
Global Fixed Income 5,362,375 (4,850,078) 512,297
5. 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 and from movements
in the value of a foreign currency relative to the U.S. dollar and from the
potential default of counterparties to the contract. 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.
37
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements (cont'd)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
5. Forward Foreign Currency Contracts -- (cont'd)
For the six months ended April 30, 1999, the Global Fixed Income Fund had
the following open forward foreign currency contracts:
<TABLE>
<CAPTION>
Unrealized
Foreign
Sold Expiration Foreign Currency Contract Exchange
Forward Currency Contract Date Amount Amount Contract Value Gain/(Loss)
- ----------------------- ---------- ----------------- ----------- --------------- -------------
<S> <C> <C> <C> <C> <C>
European Economic Unit 07/28/99 37,137,275 $40,142,814 $39,517,774 $625,040
<CAPTION>
Unrealized
Foreign
Purchased Expiration Foreign Currency Contract Exchange
Forward Currency Contract Date Amount Amount Contract Value Gain/(Loss)
- ----------------------- ---------- ----------------- ----------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Norwegian krone 07/28/99 11,500,000 $ 1,468,275 $ 1,471,284 $ 3,009
</TABLE>
6. 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. In addition, the
purchase of a futures contract involves the risk that a Fund could lose more
than the original margin deposit and subsequent payments required for a futures
transaction. For the six months ended April 30, 1999, the funds did not enter
into futures contracts. At April 30, 1999 the funds did not have have any open
futures contracts.
7. Capital Share Transactions
The Intermediate Government Fund and the Global Fixed Income 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 classified as the
Advisor Class. The New York Municipal Fund and the Fixed Income 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
classified as the Common Class and two billion shares are classified the Advisor
Class.
38
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements (cont'd)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
7. Capital Share Transactions -- (cont'd)
<TABLE>
<CAPTION>
Intermediate Government Fund
------------------------------------------------------------------
Common Class Advisor Class
------------------------------ ------------------------------
For the Six For the For the Six For the
Months Ended Year Ended Months Ended Year Ended
April 30, 1999 October 31, April 30,1999 October 31,
(Unaudited) 1998 (Unaudited) 1998
------------- ------------ ------------- -----------
<S> <C> <C> <C> <C>
Shares sold 3,917,681 7,804,541 476 861
Shares issued to shareholders on reinvestment
of dividends 184,331 252,353 34 33
Shares redeemed (4,732,451) (5,334,372) (309) (20)
------------ ------------ ------------ ------------
Net increase in shares outstanding (630,439) 2,722,522 201 874
============ ============ ============ ============
Proceeds from sale of shares $ 39,822,695 $ 79,566,141 $ 4,842 $ 8,731
Reinvested dividends 1,879,178 2,563,729 338 336
Net asset value of shares redeemed (48,125,824) (54,237,972) (3,118) (202)
------------ ------------ ------------ ------------
Net increase (decrease) from capital
share transactions $ (6,423,951) $ 27,891,898 $ 2,062 $ 8,865
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
New York Municipal Fund
------------------------------------------------------------------
Common Class Advisor Class
------------------------------ ------------------------------
For the Six For the For the Six For the
Months Ended Year Ended Months Ended Year Ended
April 30, 1999 October 31, April 30,1999 October 31,
(Unaudited) 1998 (Unaudited) 1998
------------- ------------ ------------- -----------
<S> <C> <C> <C> <C>
Shares sold 3,612,064 4,761,389 0 0
Shares issued to shareholders on reinvestment
of dividends 208,216 334,796 0 0
Shares redeemed (4,307,051) (3,553,241) 16 0
------------ ------------ ------------ ------------
Net increase in shares outstanding (486,771) 1,542,944 16 0
============ ============ ============ ============
Proceeds from sale of shares $ 37,964,403 $ 49,747,129 0 $ 0
Reinvested dividends 2,182,153 3,489,600 0 4
Net asset value of shares redeemed (45,187,514) (37,058,061) (165) 0
------------ ------------ ------------ ------------
Net increase (decrease) from capital
share transactions $ (5,040,958) $ 16,178,668 $ (165) $ 4
============ ============ ============ ============
</TABLE>
39
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements (cont'd)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
7. Capital Share Transactions -- (cont'd)
<TABLE>
<CAPTION>
Fixed Income Fund
------------------------------------------------------------------
Common Class Advisor Class
------------------------------ ------------------------------
For the Six For the For the Six For the
Months Ended Year Ended Months Ended Year Ended
April 30, 1999 October 31, April 30,1999 October 31,
(Unaudited) 1998 (Unaudited) 1998
------------- ------------ ------------- -----------
<S> <C> <C> <C> <C>
Shares sold 10,659,250 26,398,769 50,668 100,566
Shares issued to shareholders on reinvestment
of dividends 953,544 1,946,842 8,036 21,378
Shares redeemed (11,901,138) (13,107,841) (23,434) (208,103)
------------- ------------- ------------- -------------
Net increase in shares outstanding 288,344 15,237,770 35,270 (86,159)
============= ============= ============= =============
Proceeds from sale of shares $ 109,769,837 $ 274,574,003 $ 522,528 $ 1,043,897
Reinvested dividends 9,830,658 20,199,526 82,779 221,585
Net asset value of shares redeemed (122,646,810) (136,202,146) (241,472) (2,159,507)
------------- ------------- ------------- -------------
Net increase (decrease) from capital
share transactions $ (3,046,315) $ 158,571,383 $ 363,835 $ (894,025)
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
Global Fixed Income Fund
------------------------------------------------------------------
Common Class Advisor Class
------------------------------ ------------------------------
For the Six For the For the Six For the
Months Ended Year Ended Months Ended Year Ended
April 30, 1999 October 31, April 30,1999 October 31,
(Unaudited) 1998 (Unaudited) 1998
------------- ------------ ------------- -----------
<S> <C> <C> <C> <C>
Shares sold 4,270,297 9,874,066 6,615 157,868
Shares issued to shareholders on reinvestment
of dividends 414,134 1,031,287 14,067 52,605
Shares redeemed (5,175,910) (14,237,226) (630,376) (413,879)
------------- ------------- ------------- -------------
Net increase in shares outstanding (491,479) (3,331,873) (609,694) (203,406)
============= ============= ============= =============
Proceeds from sale of shares $ 45,505,614 $ 103,490,118 $ 69,739 $ 1,658,613
Reinvested dividends 4,370,993 10,706,804 148,402 545,336
Net asset value of shares redeemed (54,997,374) (149,374,012) (6,701,081) (4,279,669)
------------- ------------- ------------- -------------
Net increase (decrease) from capital
share transactions $ (5,120,767) $ (35,177,090) $ (6,482,940) $ (2,075,720)
============= ============= ============= =============
</TABLE>
40
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements (cont'd)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
8. Liabilities
At April 30, 1999 the Intermediate Government Fund and the New York
Intermediate Municipal Funds had the following liabilities:
Intermediate New York
Government Fund Municipal Fund
--------------- --------------
Investment advisory fee payable $ 5,954 $ 28,241
Administration services fee payable 5,473 8,387
Distributions payable 283,093 332,401
9. Net Assets
At April 30, 1999, 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 Fund reclassified
($10,635 of undistributed gains from foreign currency related items) from
accumulated net realized gain (loss) on foreign currency related items to
undistributed net investment income.
Net Assets at April 30, 1999 consisted of the following:
<TABLE>
<CAPTION>
Intermediate New York Fixed Global Fixed
Government Fund Municipal Fund Income Fund Income Fund
--------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
Capital contributed, net $ 69,393,743 $ 97,901,045 $ 416,722,328 $ 158,291,454
Undistributed (or distributions in excess of)
net investment income 0 0 (41,163) 10,635
Accumulated (or distributions in excess of)
net realized gain (loss) from security
transactions (62,660) 156,862 812,052 (8,679,235)
Net unrealized appreciation (depreciation)
from investments and foreign currency
related items 35,143 2,579,292 (2,579,093) 1,123,886
------------- ------------- ------------- -------------
Net assets $ 69,366,226 $ 100,637,199 $ 414,914,124 $ 150,746,740
============= ============= ============= =============
</TABLE>
10. Capital Loss Carryover
At April 30, 1999, capital loss carryovers available to offset possible
future capital gains of the Global Fixed Income Fund were as follows:
Capital Loss Carryover Expires in
----------------------------------------- Total Capital
2002 2003 2006 Loss Carryover
-------- -------- ---------- --------------
$517,856 $329,870 $6,945,772 $7,793,498
41
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements (cont'd)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
11. Other Financial Highlights
Each fund (other than the New York Intermediate Municipal Fund) currently
offers one other class of shares, the Common Class, representing equal pro rata
interests in each of the respective funds. The financial highlights for a Common
Class share of each fund are as follows:
<TABLE>
<CAPTION>
Intermediate Government Fund
--------------------------------------------------------------------------------------
Common Class
--------------------------------------------------------------------------------------
For the Six
Months Ended For the Year Ended October 31,
April 30, 1999 ------------------------------------------------------------------
(Unaudited) 1998 1997 1996 1995 1994
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PERIOD ENDED:
Per-share data
Net asset value, beginning of period $ 10.37 $ 10.05 $ 10.07 $ 10.22 $ 9.66 $ 11.03
-------- -------- -------- -------- -------- --------
Investment activities:
Net investment income 0.26 0.56 0.58 0.58 0.59 0.54
Net gains or losses on
investments (both realized
and unrealized) (0.27) 0.32 0.10 (0.06) 0.56 (0.73)
-------- -------- -------- -------- -------- --------
Total from investment activities (0.01) 0.88 0.68 0.52 1.15 (0.19)
-------- -------- -------- -------- -------- --------
Distributions:
From net investment income (0.26) (0.56) (0.58) (0.58) (0.59) (0.55)
From realized capital gains (0.05) 0.00 (0.08) (0.09) 0.00 (0.63)
In excess of realized capital gains (0.01) 0.00 (0.04) 0.00 0.00 0.00
-------- -------- -------- -------- -------- --------
Total distributions (0.32) (0.56) (0.70) (0.67) (0.59) (1.18)
-------- -------- -------- -------- -------- --------
Net asset value, end of period $ 10.04 $ 10.37 $ 10.05 $ 10.07 $ 10.22 $ 9.66
======== ======== ======== ======== ======== ========
Total return (0.04)%+ 9.35% 6.99% 5.16% 12.32% (1.78)%
Ratios/Supplemental Data:
Net assets, end of period
(000s omitted) $ 69,353 $ 78,200 $ 48,421 $ 47,690 $ 55,898 $ 46,734
Ratio of expenses to average net assets 0.60%*@ 0.60%@ 0.61%@ 0.61%@ 0.60% 0.60%
Ratio of net income to average
net assets 5.16%* 5.54% 5.81% 5.68% 6.00% 5.43%
Decrease reflected in above
operating ratios due to
waivers/reimbursements 0.22%* 0.34% 0.33% 0.46% 0.49% 0.42%
Portfolio turnover rate 38.81%+ 133.98% 104.34% 163.59% 105.79% 115.37%
</TABLE>
- --------------------------------------------------------------------------------
+ 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 net expense ratio by .00% for the six months ended April 30, 1999 and
by .00%, .01% and .01% for the years ended October 31, 1998, 1997 and 1996,
respectively. The Common Shares' operating expense ratios after reflecting
these arrangements was .60% for the six months ended April 30, 1999 and
.60% for each of the years ended October 31, 1998, 1997 and 1996,
respectively.
42
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements (cont'd)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
11. Other Financial Highlights -- (cont'd)
<TABLE>
<CAPTION>
New York Intermediate Municipal Fund
-----------------------------------------------------------------------------------------
Common Class
-----------------------------------------------------------------------------------------
For the Six
Months Ended For the Year Ended October 31,
April 30, 1999 -------------------------------------------------------------------------
(Unaudited) 1998 1997 1996 1995 1994
------------- ---------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PERIOD ENDED:
Per-share data
Net asset value,
beginning of period $ 10.54 $ 10.35 $ 10.34 $ 10.42 $ 10.07 $ 10.65
--------- --------- -------- -------- -------- --------
Investment activities:
Net investment income 0.21 0.44 0.45 0.45 0.47 0.46
Net gains or losses on
investments (both realized
and unrealized) (0.06) 0.19 0.13 0.04 0.36 (0.45)
--------- --------- -------- -------- -------- --------
Total from investment
activities 0.15 0.63 0.58 0.49 0.83 0.01
--------- --------- -------- -------- -------- --------
Distributions:
From net investment income (0.21) (0.44) (0.45) (0.45) (0.47) (0.46)
In excess of realized capital gains (0.06) 0.00 (0.12) (0.12) (0.01) (0.13)
--------- --------- -------- -------- -------- --------
Total distributions (0.27) (0.44) (0.57) (0.57) (0.48) (0.59)
--------- --------- -------- -------- -------- --------
Net asset value, end of period $ 10.42 $ 10.54 $ 10.35 $ 10.34 $ 10.42 $ 10.07
========= ========= ======== ======== ======== ========
Total return 1.42%+ 6.24% 5.83% 4.87% 8.31% 0.04%
Ratios/Supplemental Data:
Net assets, end of period
(000s omitted) $ 100,637 $ 106,922 $ 88,944 $ 77,559 $ 73,361 $ 75,716
Ratio of expenses to
average net assets 0.60%*@ 0.60%@ 0.60%@ 0.61%@ 0.60% 0.60%
Ratio of net income to
average net assets 4.01%* 4.24% 4.40% 4.41% 4.50% 4.41%
Decrease reflected in above
operating ratios due to
waivers/reimbursements 0.08%* 0.07% 0.08% 0.17% 0.26% 0.20%
Portfolio turnover rate 26.69%+ 37.25% 69.84% 69.23% 105.17% 167.09%
</TABLE>
- --------------------------------------------------------------------------------
+ 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 net expense ratio by .00% for the six months ended April 30, 1999 and
by .00%, .00% and .01% for the years ended October 31, 1998, 1997 and 1996,
respectively. The Common Shares' operating expense ratios after reflecting
these arrangements was .60% for the six months ended April 30, 1999 and
.60% for each of the years ended October 31, 1998, 1997 and 1996,
respectively.
43
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements (cont'd)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
11. Other Financial Highlights -- (cont'd)
<TABLE>
<CAPTION>
Fixed Income Fund
-----------------------------------------------------------------------------------------
Common Class
-----------------------------------------------------------------------------------------
For the Six
Months Ended For the Year Ended October 31,
April 30, 1999 -------------------------------------------------------------------------
(Unaudited) 1998 1997 1996 1995 1994
------------- ---------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PERIOD ENDED:
Per-share data
Net asset value,
beginning of period $ 10.41 $ 10.43 $ 10.10 $ 10.07 $ 9.61 $ 10.42
-------- -------- -------- -------- -------- --------
Investment activities:
Net investment income 0.28 0.59 0.62 0.63 0.70 0.63
Net gains or losses on
investments and foriegn
currency related items
(both realized and unrealized) (0.18) 0.07 0.33 0.03 0.46 (0.70)
-------- -------- -------- -------- -------- --------
Total from investment
activities 0.10 0.66 0.95 0.66 1.16 (0.07)
-------- -------- -------- -------- -------- --------
Distributions:
From net investment income (0.28) (0.59) (0.62) (0.63) (0.70) (0.65)
From realized capital gains (0.04) (0.09) 0.00 0.00 0.00 (0.09)
-------- -------- -------- -------- -------- --------
Total distributions (0.32) (0.68) (0.62) (0.63) (0.70) (0.74)
-------- -------- -------- -------- -------- --------
Net asset value, end of period $ 10.19 $ 10.41 $ 10.43 $ 10.10 $ 10.07 $ 9.61
======== ======== ======== ======== ======== ========
Total return 0.99%+ 6.48% 9.78% 6.80% 12.59% (0.60)%
Ratios/Supplemental Data:
Net assets, end of period
(000s omitted) $411,562 $423,536 $265,453 $151,184 $116,983 $102,246
Ratio of expenses to
average net assets 0.75%*@ 0.75%@ 0.75%@ 0.76%@ 0.75% 0.75%
Ratio of net income to
average net assets 5.45%* 5.64% 6.05% 6.30% 7.25% 6.53%
Decrease reflected in above
operating ratios due to
waivers/reimbursements 0.04%* 0.04% 0.08% 0.15% 0.18% 0.18%
Portfolio turnover rate 101.68%+ 124.04% 129.06% 194.23% 182.93% 179.44%
</TABLE>
- --------------------------------------------------------------------------------
+ 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 net expenses ratio by .00% for the six months ended April 30, 1999 and
by .00%, .00% and .01% for the years ended October 31, 1998, 1997 and 1996,
respectively. The Common Shares' operating expense ratios after reflecting
these arrangements was .75% for the six months ended April 30, 1999 and
.75% for each of the years ended October 31, 1998, 1997 and 1996,
respectively.
44
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements (cont'd)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
11. Other Financial Highlights -- (cont'd)
<TABLE>
<CAPTION>
Global Fixed Income Fund
-----------------------------------------------------------------------------------------
Common Class
-----------------------------------------------------------------------------------------
For the Six
Months Ended For the Year Ended October 31,
April 30, 1999 -------------------------------------------------------------------------
(Unaudited) 1998 1997 1996 1995 1994
------------- ---------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PERIOD ENDED:
Per-share data
Net asset value,
beginning of period $ 10.62 $ 10.91 $ 11.17 $ 11.04 $ 10.45 $ 11.38
--------- -------- -------- -------- ------- -------
Investment activities:
Net investment income 0.25 0.58 0.54 0.62 0.99 0.34
Net gains or losses on
investments and foriegn
currency related items (both
realized and unrealized) 0.21 (0.16) 0.08 0.57 0.09 (0.64)
--------- -------- -------- -------- ------- -------
Total from investment
activities 0.46 0.42 0.62 1.19 1.08 (0.30)
--------- -------- -------- -------- ------- -------
Distributions:
From net investment income (0.31) (0.71) (0.34) (1.06) (0.49) (0.45)
From realized capital gains (0.03) 0.00 (0.54) 0.00 0.00 (0.14)
Return of capital 0.00 0.00 0.00 0.00 0.00 (0.04)
--------- -------- -------- -------- ------- -------
Total distributions (0.34) (0.71) (0.88) (1.06) (0.49) (0.63)
--------- -------- -------- -------- ------- -------
Net asset value, end of period $ 10.74 $ 10.62 $ 10.91 $ 11.17 $ 11.04 $ 10.45
========= ======== ======== ======== ======= =======
Total return 4.40%+ 4.10% 5.76% 11.35% 10.65% (2.79)%
Ratios/Supplemental Data:
Net assets, end of period
(000s omitted) $ 150,672 $154,131 $194,731 $131,072 $63,641 $90,394
Ratio of expenses to
average net assets 0.95%*@ 0.95%@ 0.96%@ 0.95%@ 0.95% 0.95%
Ratio of net income to
average net assets 4.72%* 5.21% 5.40% 6.78% 8.18% 6.96%
Decrease reflected in above
operating ratios due to
waivers/reimbursements 0.47%* 0.46% 0.39% 0.56% 0.63% 0.65%
Portfolio turnover rate 248.51%+ 233.73% 202.92% 123.90% 128.70% 178.11%
</TABLE>
- --------------------------------------------------------------------------------
+ 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 net expenses ratio by .00% for the six months ended April 30, 1999 and
by .00%, .01% and .00% for the years ended October 31, 1998, 1997 and 1996,
respectively. The Common Shares' operating expense ratios after reflecting
these arrangements was .95% for the six months ended April 30, 1999 and
.95% for each of the years ended October 31, 1998, 1997 and 1996,
respectively.
45
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WARBURG PINCUS
ADVISOR FUNDS
COUNSELLORS
SECURITIES INC.,
DISTRIBUTOR
800-222-8977
WARBURG PINCUS
ADBDF-3-0499
