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SIGNATURE GRACE TORRES
TITLE TREASURER
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For the period ended (b) December 31, 1998
File number (c) 811-5019
SUB-ITEM 77J
Restatement of Capital Share Account
The Nicholas-Applegate Growth Equity Fund, Inc.
accounts for and reports distributions to shareholders in
accordance with the American Institute of Certified Public
Accountants' Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distributions by
Investment Companies. The effect of applying this statement
was to decrease accumulated net investment loss by
$6,566,635 and decrease paid-in capital by $6,566,635 due to
the Fund experiencing a net investment loss during the year.
Net realized gains and net assets were not affected by this
change.
Report of Independent Auditors
To the Board of Directors of the
Nicholas-Applegate Fund, Inc.
In planning and performing our audit of the financial
statements of the Nicholas-Applegate Fund, Inc. for the year
ended December 31, 1998, we considered its internal control,
including control activities for safeguarding securities, in
order to determine our auditing procedures for the purpose
of expressing our opinion on the financial statements and to
comply with the requirements of Form N-SAR, and not to
provide assurance on the internal control.
The management of the Nicholas-Applegate Fund, Inc. is
responsible for establishing and maintaining internal
control. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected
benefits and related costs of controls. Generally, controls
that are relevant to an audit pertain to the entity's
objective of preparing financial statements for external
purposes that are fairly presented in conformity with
generally accepted accounting principles. Those controls
include the safeguarding of assets against unauthorized
acquisition, use or disposition.
Because of inherent limitations in internal control, errors
or fraud may occur and not be detected. Also, projection of
any evaluation of internal control to future periods is
subject to the risk that it may become inadequate because of
changes in conditions or that the effectiveness of the
design and operation may deteriorate.
Our consideration of internal control would not necessarily
disclose all matters in internal control that might be
material weaknesses under standards established by the
American Institute of Certified Public Accountants. A
material weakness is a condition in which the design or
operation of one or more of specific internal control
components does not reduce to a relatively low level the
risk that errors or fraud in amounts that would be material
in relation to the financial statements being audited may
occur and not be detected within a timely period by
employees in the normal course of performing their assigned
functions. However, we noted no matters involving internal
control and its operation, including controls for
safeguarding securities, that we consider to be material
weaknesses as defined above at December 31, 1998.
This report is intended solely for the information and use
of the board of directors and management of Nicholas-
Applegate Fund, Inc. and the Securities and Exchange
Commission.
February 12, 1999
