<PAGE>
(ICON)
Annual Report
December 31, 1999
Nicholas-Applegate
Growth Equity Fund
(LOGO)
<PAGE>
Portfolio Manager's Report
- -------------------------------------------------------------------------------
(PHOTO)
William H. Chenoweth
Fund Manager
Investment Goals and Style
At Nicholas-Applegate, we build portfolios one company at a time. We start with
detailed, fundamental analysis of thousands of individual companies. We don't
make investment decisions based on "top-down" projections such as predicting
the direction of interest rates or forecasting economic strength. Instead, we
investigate opportunities from the "bottom up," analyzing strengths and
weaknesses on a company-by-company basis.
Nicholas-Applegate Growth Equity Fund seeks to deliver capital appreciation
through investment in growth companies with market capitalizations
predominantly between $1 billion and $10 billion.
We focus on stocks with
- - evidence of positive change;
- - sustainability of that change;
- - timeliness of investment.
There can be no assurance that the Fund will achieve its investment objective.
Performance at a Glance
During the 12-month period ending December 31, 1999, outstanding stock
selection resulted in the high double-digit returns for Nicholas-Applegate
Growth Equity Fund. Stock selection in the commercial/industrial and technology
sectors was the primary contributor to the Fund's outperformance of the Russell
Midcap Growth Index. Your Fund delivered a 98.35% return during the period
versus a 51.29% gain for the Russell Midcap Growth Index and a 52.34% advance
for the Lipper Multi-Cap Growth Fund Average.
Cumulative Total Returns1 As of 12/31/99
<TABLE>
<CAPTION>
One Five Ten Since
Year Years Years Inception2
<S> <C> <C> <C> <C>
Class A 98.35% 301.19% 564.84% 744.50%
Class B 96.71 285.34 N/A 464.00
Class C 96.71 285.34 N/A 283.35
Class Z 99.30 N/A N/A 173.45
Lipper Multi-Cap Growth Fund Avg.3 52.34 258.07 492.89 ***
</TABLE>
Average Annual Total Returns1 As of 12/31/99
<TABLE>
<CAPTION>
One Five Ten Since
Year Years Years Inception2
<S> <C> <C> <C> <C>
Class A 88.43% 30.68% 20.24% 17.77%
Class B 91.71 30.90 N/A 22.40
Class C 93.74 30.71 N/A 27.93
Class Z 99.30 N/A N/A 43.42
</TABLE>
Past performance is not indicative of future results. Principal and investment
return will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
1 Source: Prudential Investments Fund Management LLC and Lipper Inc. The
cumulative total returns do not take into account sales charges. The average
annual total returns do take into account applicable sales charges. The Fund
charges a maximum front-end sales charge of 5% for Class A shares. Class B
shares are subject to a declining contingent deferred sales charge (CDSC) of
5%, 4%, 3%, 2%, 1%, and 1% for six years. Class B shares will automatically
convert to Class A shares, on a quarterly basis, approximately seven years
after purchase. Class C shares are subject to a front-end sales charge of 1%
and a CDSC of 1% for 18 months. Class Z shares are not subject to a sales
charge or distribution and service (12b-1) fees.
2 Inception dates: Class A, 4/9/87; Class B, 6/10/91; Class C, 8/1/94; and
Class Z, 3/18/97.
3 Lipper average returns are for all funds in each share class for the one- ,
five- , and ten-year periods in the Multi-Cap Growth Fund category. The Lipper
average is unmanaged. Multi-Cap Growth funds, by portfolio practice, invest in
a variety of market capitalization ranges.
***Lipper Since Inception returns are 650.93% for Class A, 393.55% for Class B,
270.81% for Class C, and 143.69% for Class Z, based on all funds in each share
class.
<PAGE>
Performance Review
- -------------------------------------------------------------------------------
Performance At A Glance Cont'd
In technology, our investments in the telecommunications, software and semi-
conductor industries made significant contributions to returns. The Fund's top-
performing holdings in the period included Veritas Software and Verisign, a
provider of digital IDs designed to protect access to data and transactions
sent over the Internet, intranets, and extranets. In the commercial/industrial
sector, holdings in the telecommunications services industry boosted the Fund's
performance. VoiceStream Wireless, a telecommunications service provider, was
among the Fund's best-performing holdings in 1999.
Selectivity remains critical
During the 12-month period ending December 31, 1999, the U.S. stock market was
characterized by
- - a strong U.S. economy with subdued inflation;
- - outperformance of growth stocks versus value stocks;
- - investor preference for technology stocks.
U.S. equity indexes from all market-capitalization segments posted impressive
gains in 1999, with large-cap and technology stocks reaching record highs.
Escalating investor interest in mid-cap growth stocks--especially
technology-related issues--lifted them to double-digit gains that outdistanced
large-cap stocks. The Russell Midcap Growth Index gained 51.3% in 1999 versus
21.0% for the larger-cap S&P 500 Index. Investors showed greater recognition
for mid caps' strong earnings growth rates and attractive relative valuations.
With the continued strength in the U.S. economy, the Federal Reserve Board
raised short-term interest rates by a quarter of a percentage point three times
in 1999, reversing 1998's loose monetary policy. The interest-rate increases
were aimed at combating inflationary pressures in the economy.
Throughout 1999, stock selection remained critical as a narrow advance masked
broader market weakness. For example, 58% of NYSE, AMEX and Nasdaq common
stocks underperformed the S&P 500 by 15% or more over the 12 months ended
December 1999.
Exposure to select technology and Internet-related companies during the year
contributed to your Fund's better-than-benchmark results. Stocks such as
Veritas Software and Verisign were among the best performers in 1999. Verisign
provides solutions for conducting secure communications and commerce over the
Internet. Other top-performing holdings included JDS Uniphase, CMGI and
VoiceStream Wireless.
Technology holdings help returns
Despite the outperformance of value stocks over growth stocks in the second
quarter, growth stocks reasserted their leadership in the third and fourth
quarters. Returns for growth stocks outpaced those of value stocks for the
whole year, with technology stocks at the forefront of the advance.
Your Fund's significant weighting in technology helped Fund returns for the
most part of the year. We continue to see attractive investment opportunities
in the technology sector, especially within the telecommunications and wireless
communications industries, which benefit from escalating demand worldwide. For
example, among
Five Largest Holdings
Expressed as a percentage of net assets as of 12/31/99
VoiceStream Wireless Corp. 4.1%
Telecommunications Services
VERITAS Software Corp. 3.5
Computer Software
Verisign Inc. 3.2
Computer Services
CMGI Inc. 2.8
Other Financial Services
JDS Uniphase Corp. 2.6
Semiconductors
<PAGE>
the Fund's best-performing holdings for the year was Conexant Systems, a
manufacturer of semiconductor products for communications applications.
Shifting sector exposure
Both appreciation and additional investment increased our exposure to
technology stocks to 70.1% on December 31, 1999, up from 34.4% on December 31,
1998. Exposure to commercial/industrial services, utilities and energy also
increased.
We believe that technology will continue to lead the market, as some stocks
still have attractive prospects. Over the long term, these stocks will benefit
from the powerful growth potential of technology companies worldwide. However,
we are not ruling out a correction in U.S. technology stock prices in the short
term, given high valuations in the sector. We have also uncovered opportunities
among individual companies in the commercial/industrial, healthcare and energy
sectors that have strong business fundamentals.
Rising interest rates during much of the year hurt retail trade and the
financial services industries. Evidence of robust economic growth and tight
labor markets contributed to concerns that the Federal Reserve Board would
raise interest rates to combat inflationary pressures. Amid these concerns, we
reduced exposure to the retail trade and financial services sector on a
stock-specific basis. We also reduced exposure to consumer services and
healthcare services sectors.
With changing conditions in the market, selectivity remains key to finding
attractive companies. Applying our bottom-up stock selection, we continue to
identify attractive companies in various sectors of the market.
Looking Ahead
Based on the fundamental strength of our holdings, we remain optimistic. We are
encouraged by the continued growth in corporate profits in 2000. We continue to
find attractive candidates with robust earnings growth rates that meet each of
our strict investment criteria. While the possibility of higher interest rates
raises concerns, we viewed the Federal Reserve Board's decision to raise
short-term interest rates by 25 basis points three times in 1999 as a signal of
the Fed's proactive approach to keep the economy at a modest growth pace and to
hold inflation in check--both good developments for stocks.
We were also encouraged by the market's broader advance, with small- and
mid-cap growth stocks outdistancing larger-cap shares starting in the fourth
quarter of 1998. For much of the past few years, investors showed a decided
preference for large-cap stocks. Mid-cap stocks, despite their fundamental
strengths, were largely overlooked. Based on their recent gains, mid-cap growth
stocks appear to have earned increased investor recognition.
Our bottom-up investment approach is highly adaptable and helps us capture
areas of strength wherever they're occurring. In essence, we remain confident
of our ability to find solid investment opportunities in any environment and
deliver exceptional long-term results.
Portfolio Composition
Expressed as a percentage of net assets as of 12/31/99
Technology 70.1%
General Business 8.8
Consumer Non-Durables 7.8
Capital Goods 6.2
Energy 5.4
Financial Services 1.9
Cash & Equivalents <0.2>
1
<PAGE>
Comparing a $10,000 Investment
- -----------------------------------------------------------
Nicholas-Applegate Growth Equity Fund vs. the S&P 500 Index
Class A
(GRAPH)
Average Annual Total Returns
With Sales Charge As of 12/31/99
Since Inception 17.77%
Ten Years 20.24
Five Years 30.68
One Year 88.43
- ------------------------------------------
Without Sales Charge As of 12/31/99
Since Inception 18.25%
Ten Years 20.86
Five Years 32.03
One Year 98.35
Class B
(GRAPH)
Average Annual Total Returns
With Sales Charge As of 12/31/99
Since Inception 22.40%
Five Years 30.90
One Year 91.71
- ------------------------------------------
Without Sales Charge As of 12/31/99
Since Inception 22.40%
Five Years 30.97
One Year 96.71
Past performance is not indicative of future results. Principal and investment
return will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than their original cost. The information beneath the graphs
is designed to give you an idea of how much the Fund's returns canfluctuate
from year to year by measuring the best and worst calendar years in terms of
total annual return since inception of each share class (or for the past ten
years for Class A shares).
These graphs compare a $10,000 investment in Nicholas-Applegate Growth Equity
Fund (Class A, B, C, and Z shares) with a similar investment in the Standard &
Poor's 500 Composite Stock Price Index (S&P 500 Index) by portraying the
initial account values of Class B, C, and Z shares at thecommencement of
operations, at the beginning of the ten-year period for Class A shares, and at
the end of the fiscal year (December31), as measured on a quarterly basis,
beginning in 1989 for Class A, 1991 for Class B, 1994 for Class C, and 1997 for
Class Z shares. For purposes of the graphs, and unlessotherwise indicated, it
has been assumed that (a) the maximum applicable front-end sales charge was
deducted from the initial $10,000 investment in
<PAGE>
Class C
(GRAPH)
Average Annual Total Returns
With Sales Charge As of 12/31/99
Since Inception 27.93%
Five Years 30.71
One Year 93.74
- -----------------------------------------
Without Sales Charge As of 12/31/99
Since Inception 28.16%
Five Years 30.97
One Year 96.71
Class Z
(GRAPH)
Average Annual Total Returns
As of 12/31/99
Since Inception 43.42%
One Year 99.30
Class A and Class C shares; (b) the maximum applicable contingent deferred
sales charges were deducted from the value of the investment in Class B and
Class C shares, assuming full redemption on December 31, 1999; (c) all
recurring fees (including management fees) were deducted; and (d) all dividends
and distributions were reinvested. Class B shares will automatically convert to
Class A shares, on a quarterly basis, approximately seven years after purchase.
This conversion feature is not reflected in the graphs. Class Z shares are not
subject to a sales charge or distribution and service (12b-1) fees.
The S&P 500 Index is an unmanaged index of 500 stocks of large U.S. companies.
It gives a broad look at how stock prices have performed. The S&P 500 Index
returns include the reinvestment of all dividends, but do not include the
effect of sales charges or operating expenses of a mutual fund. The securities
in the Index may differ substantially from the securities in the Fund. The
Index is not the only one that may be used to characterize performance of
equity funds, and other indexes may portray different comparative performance.
Investors cannot invest directly in an index.
These graphs are furnished to you in accordance with SEC regulations.
<PAGE>
The Prudential Mutual Fund Family
- -------------------------------------------------------------------------------
Prudential offers a broad range of mutual funds designed to meet your
individual needs. For information about these funds, contact your financial
adviser or call us at (800) 225-1852. Read the prospectus carefully before you
invest or send money.
STOCK FUNDS
Prudential Emerging Growth Fund, Inc.
Prudential Equity Fund, Inc.
Prudential Equity Income Fund
Prudential Index Series Fund
Prudential Small-Cap Index Fund
Prudential Stock Index Fund
The Prudential Investment Portfolios, Inc.
Prudential Jennison Growth Fund
Prudential Jennison Growth & Income Fund
Prudential Mid-Cap Value Fund
Prudential Real Estate Securities Fund
Prudential Sector Funds, Inc.
Prudential Financial Services Fund
Prudential Health Sciences Fund
Prudential Technology Fund
Prudential Utility Fund
Prudential Small-Cap Quantum Fund, Inc.
Prudential Small Company Value Fund, Inc.
Prudential Tax-Managed Funds
Prudential Tax-Managed Equity Fund
Prudential 20/20 Focus Fund
Nicholas-Applegate Fund, Inc.
Nicholas-Applegate Growth Equity Fund
Target Funds
Large Capitalization Growth Fund
Large Capitalization Value Fund
Small Capitalization Growth Fund
Small Capitalization Value Fund
Asset Allocation/Balanced Funds
Prudential Balanced Fund
Prudential Diversified Funds
Conservative Growth Fund
Moderate Growth Fund
High Growth Fund
The Prudential Investment Portfolios, Inc.
Prudential Active Balanced FundGLOBAL FUNDS
GLOBAL FUNDS
Global Stock Funds
Prudential Developing Markets Fund
Prudential Developing Markets Equity Fund
Prudential Latin America Equity Fund
Prudential Europe Growth Fund, Inc.
Prudential Global Genesis Fund, Inc.
Prudential Index Series Fund
Prudential Europe Index Fund
Prudential Pacific Index Fund
Prudential Natural Resources Fund, Inc.
Prudential Pacific Growth Fund, Inc.
Prudential World Fund, Inc.
Prudential Global Growth Fund
Prudential International Value Fund
Prudential Jennison International Growth Fund
Global Utility Fund, Inc.
Target Funds
International Equity Fund
Global Bond Funds
Prudential Global Total Return Fund, Inc.
Prudential International Bond Fund, Inc.
BOND FUNDS
Taxable Bond Funds
Prudential Diversified Bond Fund, Inc.
Prudential Government Income Fund, Inc.
Prudential Government Securities Trust
Short-Intermediate Term Series
Prudential High Yield Fund, Inc.
Prudential High Yield Total Return Fund, Inc.
Prudential Index Series Fund
Prudential Bond Market Index Fund
Prudential Structured Maturity Fund, Inc.
Income Portfolio
Target Funds
Total Return Bond Fund
Tax-Exempt Bond Funds
Prudential California Municipal Fund
California Series
California Income Series
Prudential Municipal Bond Fund
High Income Series
Insured Series
Prudential Municipal Series Fund
Florida Series
Massachusetts Series
New Jersey Series
New York Series
North Carolina Series
Ohio Series
Pennsylvania Series
Prudential National Municipals Fund, Inc.
MONEY MARKET FUNDS
Taxable Money Market Funds
Cash Accumulation Trust
Liquid Assets Fund
National Money Market Fund
Prudential Government Securities Trust
Money Market Series
U.S. Treasury Money Market Series
Prudential Special Money Market Fund, Inc.
Money Market Series
Prudential MoneyMart Assets, Inc.
Tax-Free Money Market Funds
Prudential Tax-Free Money Fund, Inc.
Prudential California Municipal Fund
California Money Market Series
Prudential Municipal Series Fund
Connecticut Money Market Series
Massachusetts Money Market Series
New Jersey Money Market Series
New York Money Market Series
COMMAND FUNDS
Command Money Fund
Command Government Fund
Command Tax-Free Fund
Institutional Money Market Funds
Prudential Institutional Liquidity Portfolio, Inc.
Institutional Money Market Series
<PAGE>
NICHOLAS-APPLEGATE FUND, INC. Portfolio of Investments
NICHOLAS-APPLEGATE GROWTH EQUITY FUND December 31, 1999
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
COMMON STOCKS--100.2%
CAPITAL GOODS--6.2%
Drugs & Healthcare--3.8%
30,200 Affymetrix, Inc.*.......... $ 5,124,563
59,400 Medical Manager Corp.*..... 5,004,450
44,200 PE Corp-Celera Genomics
Group*................... 6,585,800
74,800 PE Corp-PE Biosystems
Group.................... 8,999,375
------------
25,714,188
------------
Retail/Wholesale Specialty Chain--2.4%
54,600 American Eagle Outfitters,
Inc.*.................... 2,457,000
58,700 Kohl's Corp.*.............. 4,237,406
156,800 Pacific Sunwear of
California, Inc.*........ 4,998,000
173,000 Starbucks Corp.*........... 4,195,250
------------
15,887,656
------------
CONSUMER NON-DURABLES--7.8%
Business Services--0.5%
130,050 Concord EFS, Inc.*......... 3,348,788
------------
Containers--0.6%
170,700 Smurfit-Stone Container
Corp.*................... 4,182,150
------------
Drugs & Healthcare--6.7%
40,400 Biogen, Inc.*.............. 3,413,800
92,200 Forest Laboratories, Inc.*. 5,664,537
71,200 Genentech, Inc.*........... 9,576,400
75,500 Immunex Corp.*............. 8,267,250
82,900 MedImmune, Inc.*........... 13,751,037
106,600 Watson Pharmaceuticals,
Inc.*.................... 3,817,613
------------
44,490,637
------------
ENERGY--5.4%
Electrical Utilities--1.6%
96,800 AES Corp.*................. 7,235,800
50,600 Calpine Corp.*............. 3,238,400
------------
10,474,200
------------
Oil & Gas-Production/Pipeline--1.0%
88,000 Apache Corp................ $ 3,250,500
159,500 Rowan Companies, Inc.*..... 3,459,156
------------
6,709,656
------------
Oil Services--2.8%
126,300 BJ Services Co.*........... 5,280,919
212,900 ENSCO International Inc.... 4,870,087
85,000 Smith International,
Inc.*.................... 4,223,438
106,200 Weatherford International,
Inc.*.................... 4,241,362
------------
18,615,806
------------
FINANCIAL SERVICES--1.9%
Financial/Business Services--1.9%
66,700 Capital One Financial Corp. 3,214,106
120,400 Knight/Trimark Group,
Inc.*.................... 5,538,400
46,200 Lehman Brothers Holdings
Inc...................... 3,912,563
------------
12,665,069
------------
GENERAL BUSINESS--8.8%
Advertising--1.5%
20,000 DoubleClick Inc.*.......... 5,061,250
52,000 Omnicom Group Inc.......... 5,200,000
------------
10,261,250
------------
Media--4.4%
39,700 Hispanic Broadcasting
Corp.*................... 3,661,084
79,000 Spanish Broadcasting
System, Inc.*............ 3,179,750
127,200 TV Guide, Inc.*............ 5,469,600
51,800 Univision Communications
Inc.*.................... 5,293,313
99,100 USA Networks, Inc.*........ 5,475,275
87,000 Westwood One, Inc.*........ 6,612,000
------------
29,691,022
------------
Other Financial Services--2.9%
68,700 CMGI Inc................... 19,021,312
------------
</TABLE>
See Notes to Financial Statements. 2
<PAGE>
NICHOLAS-APPLEGATE FUND, INC. Portfolio of Investments
NICHOLAS-APPLEGATE GROWTH EQUITY FUND December 31, 1999
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
TECHNOLOGY--70.1%
Computer Networks--11.8%
131,300 3Com Corp.*................ $ 6,171,100
5,752,500
32,500 Brocade Communications
Systems, Inc.*...........
39,500 Comverse Technology,
Inc.*.................... 5,717,625
137,200 Exodus Communications,
Inc.*.................... 12,185,075
14,100 Foundry Networks, Inc.*.... 4,253,794
181,200 Network Appliance, Inc.*... 15,050,925
80,100 Network Solutions, Inc.*... 17,426,756
28,200 Redback Networks Inc.*..... 5,005,500
107,900 RF Micro Devices Inc.*..... 7,384,406
------------
78,947,681
------------
Computer Services--8.0%
42,800 Apple Computer, Inc.*...... 4,400,375
40,600 Ariba, Inc.*............... 7,201,425
79,700 Covad Communications Group,
Inc.*.................... 4,458,219
40,800 QLogic Corp.*.............. 6,522,900
112,200 Verisign Inc*.............. 21,423,187
57,600 Vignette Corp.*............ 9,388,800
------------
53,394,906
------------
Computer Software--13.6%
13,700 Akamai Technologies Inc.*.. 4,488,463
80,500 BMC Software Corp.*........ 6,434,969
57,700 BroadVision Inc.*.......... 9,812,606
67,100 Citrix Systems, Inc.*...... 8,253,300
46,300 Internap Network Services
Corp.*................... 8,009,900
61,700 Mercury Interactive
Corp.*................... 6,659,744
99,200 Peregrine Systems, Inc.*... 8,351,400
87,000 RealNetworks, Inc.*........ 10,467,187
22,800 VA Linux Systems, Inc.*.... 4,711,050
163,850 VERITAS Software Corp.*.... 23,451,031
------------
90,639,650
------------
Electronic Components--5.4%
103,800 Analog Devices, Inc.*...... $ 9,653,400
160,300 Conexant Systems, Inc.*.... 10,639,912
51,400 Lam Research Corp.*........ 5,734,313
128,200 Maxim Integrated Products,
Inc.*.................... 6,049,438
38,600 Sanmina Corp.*............. 3,855,175
------------
35,932,238
------------
Internet Software--4.3%
36,000 CacheFlow Inc.*............ 4,704,750
66,300 eSPEED, Inc.*.............. 2,357,794
37,100 F5 Networks, Inc.*......... 4,229,400
11,200 FreeMarkets, Inc.*......... 3,822,700
57,000 Siebel Systems, Inc.*...... 4,788,000
98,800 Verio Inc.*................ 4,563,325
54,200 Visual Networks, Inc.*..... 4,295,350
------------
28,761,319
------------
Semiconductors--8.1%
55,500 Applied Micro Circuits
Corp.*................... 7,062,375
22,700 Broadcom Corp.*............ 6,182,912
108,400 JDS Uniphase Corp.*........ 17,486,275
128,600 LSI Logic Corp.*........... 8,680,500
93,800 Vitesse Semiconductor
Corp.*................... 4,918,638
212,000 Xilinx, Inc.*.............. 9,639,375
------------
53,970,075
------------
Telecommunication Equipment--5.2%
232,400 CIENA Corp.*............... 13,363,000
77,800 EchoStar Communications
Corp.*................... 7,585,500
58,500 Next Level Communications,
Inc.*.................... 4,380,188
13,700 Sycamore Networks, Inc.*... 4,219,600
77,200 Teradyne, Inc.*............ 5,095,200
------------
34,643,488
------------
</TABLE>
See Notes to Financial Statements. 3
<PAGE>
NICHOLAS-APPLEGATE FUND, INC. Portfolio of Investments
NICHOLAS-APPLEGATE GROWTH EQUITY FUND December 31, 1999
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
Telecommunication Services--13.7%
187,500 Crown Castle International
Corp.*................... $ 6,023,438
89,400 Internet Capital Group,
Inc.*.................... 15,198,000
93,900 McLeodUSA Inc.*............ 5,528,363
126,700 Metromedia Fiber Network,
Inc.*.................... 6,073,681
111,500 Nextel Communications,
Inc.*.................... 11,498,437
63,700 NEXTLINK Communications,
Inc.*.................... 5,291,081
117,900 Time Warner Telecom
Inc.*.................... 5,887,631
190,100 VoiceStream Wireless
Corp.*................... 27,053,606
111,900 WinStar Communications,
Inc.*.................... 8,420,475
------------
90,974,712
------------
Total common stocks
(cost $341,500,124)...... 668,325,803
------------
<CAPTION>
Principal
Amount
(000)
- ----------
<C> <S> <C>
SHORT-TERM INVESTMENTS--1.6%
Commercial Paper
Exxon Corporation
$ 10,412 4.50%, 1/3/00.............. 10,409,397
Other
41 Seven Seas Money Market
Fund..................... 40,841
------------
Total short-term
investments
(cost $10,450,238)....... 10,450,238
------------
Total Investments--101.8%
(cost $351,950,362; Note
4)....................... 678,776,041
Liabilities in excess of
other assets--(1.8%)..... (11,772,376)
------------
Net Assets--100%........... $667,003,665
------------
------------
</TABLE>
- ---------------
* Non-income producing.
See Notes to Financial Statements. 4
<PAGE>
NICHOLAS-APPLEGATE FUND, INC.
NICHOLAS-APPLEGATE GROWTH EQUITY FUND
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
Assets December 31, 1999
-----------------
<S> <C>
Investments, at value (cost $351,950,362)............................................. $ 678,776,041
Cash.................................................................................. 98,965
Receivable for Fund shares sold....................................................... 2,146,488
Receivable for investments sold....................................................... 1,011,029
Prepaid expenses...................................................................... 29,248
Dividends and interest receivable..................................................... 15,433
-----------------
Total assets...................................................................... 682,077,204
-----------------
Liabilities
Payable for investments purchased..................................................... 9,220,716
Payable for Fund shares reacquired.................................................... 4,871,655
Management fee payable................................................................ 478,329
Distribution fee payable.............................................................. 301,281
Accrued expenses...................................................................... 201,558
-----------------
Total liabilities................................................................. 15,073,539
-----------------
Net Assets............................................................................ $ 667,003,665
-----------------
-----------------
Net assets were comprised of:
Common stock, at par................................................................ $ 276,692
Paid-in capital in excess of par.................................................... 284,877,910
-----------------
285,154,602
Accumulated net realized gain on investments........................................ 55,023,384
Net unrealized appreciation on investments.......................................... 326,825,679
-----------------
Net assets, December 31, 1999......................................................... $ 667,003,665
-----------------
-----------------
Class A:
Net asset value and redemption price per share
($329,955,213 / 12,789,496 shares of common stock issued and outstanding)......... $25.80
Maximum sales charge (5% of offering price)......................................... 1.36
-----------------
Maximum offering price to public.................................................... $27.16
-----------------
-----------------
Class B:
Net asset value, offering price and redemption price per share
($324,418,521 / 14,333,840 shares of common stock issued and outstanding)......... $22.63
-----------------
-----------------
Class C:
$22.63
Net asset value and redemption price per share
($10,597,567 / 468,218 shares of common stock issued and outstanding).............
Sales charge (1% of offering price)................................................. .23
-----------------
Offering price to public............................................................ $22.86
-----------------
-----------------
Class Z:
Net asset value, offering price and redemption price per share
($2,032,364 / 77,688 shares of common stock issued and outstanding)............... $26.16
-----------------
-----------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 5
<PAGE>
NICHOLAS-APPLEGATE FUND, INC.
NICHOLAS-APPLEGATE GROWTH EQUITY FUND
Statement of Operations
<TABLE>
<CAPTION>
Year Ended
December 31,
Net Investment Loss 1999
-------------
<S> <C>
Income
Dividends.......................... $ 498,797
Interest........................... 335,251
-------------
Total income..................... 834,048
-------------
Expenses
Management fees.................... 4,095,486
Distribution fee--Class A.......... 380,238
Distribution fee--Class B.......... 2,361,010
Distribution fee--Class C.......... 74,767
Transfer agent's fees and
expenses........................... 642,000
Custodian's fees and expenses...... 103,000
Reports to shareholders............ 100,000
Directors' fees.................... 77,000
Registration fees.................. 50,000
Audit fees and expense............. 39,800
Insurance expense.................. 33,000
Legal fees and expenses............ 24,000
Miscellaneous...................... 4,763
-------------
Total expenses................... 7,985,064
-------------
Net investment loss.................. (7,151,016)
-------------
Realized and Unrealized
Gain on Investments
Net realized gain on investment
transactions....................... 102,118,443
Net change in unrealized appreciation
of investments..................... 239,153,601
-------------
Net gain on investments.............. 341,272,044
-------------
Net Increase in Net Assets
Resulting from Operations............ $334,121,028
-------------
-------------
</TABLE>
NICHOLAS-APPLEGATE FUND, INC.
NICHOLAS-APPLEGATE GROWTH EQUITY FUND
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended December 31,
Increase (Decrease) -----------------------------------
in Net Assets 1999 1998
<S> <C> <C>
Operations
Net investment loss... $ (7,151,016) $ (6,566,635)
Net realized gain on
investment
transactions........ 102,118,443 35,691,553
Net change in
unrealized
appreciation of
investments......... 239,153,601 13,250,865
------------------ -------------
Net increase in net
assets resulting
from operations..... 334,121,028 42,375,783
------------------ -------------
Distributions from net
realized gains on
investments
(Note 1)
Class A............. (35,790,946) (7,262,297)
Class B............. (45,458,919) (15,902,446)
Class C............. (1,404,651) (391,936)
Class Z............. (222,648) (81,237)
------------------ -------------
(82,877,164) (23,637,916)
------------------ -------------
Fund share transactions
(Note 5)
(Net of share
conversions)
Net proceeds from
shares sold......... 316,705,219 176,084,464
Net asset value of
shares issued to
shareholders in
reinvestment of
distributions....... 77,276,027 21,975,782
Cost of shares
reacquired.......... (352,620,773) (267,946,119)
------------------ -------------
Net increase
(decrease) in net
assets from Fund
share
transactions........ 41,360,473 (69,885,873)
------------------ -------------
Total increase
(decrease)............ 292,604,337 (51,148,006)
Net Assets
Beginning of year....... 374,399,328 425,547,334
------------------ -------------
End of year............. $ 667,003,665 $ 374,399,328
------------------ -------------
------------------ -------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 6
<PAGE>
NICHOLAS-APPLEGATE FUND, INC.
NICHOLAS-APPLEGATE GROWTH EQUITY FUND
Notes to Financial Statements
Nicholas-Applegate Growth Equity Fund (the 'Fund') is currently the only
series of Nicholas-Applegate Fund, Inc. The Fund is an open-end, diversified
management investment company.
The Fund's investment objective is capital appreciation. It seeks to achieve
this objective by investing primarily in common stocks of U.S. companies, the
earnings and securities prices of which the investment adviser expects to grow
at a rate above that of the S&P 500. The Fund intends to invest primarily in
stocks from a universe of U.S. companies with market capitalizations
corresponding to the middle 90% of the Russell Midcap Growth Index at time of
purchase. Capitalization of companies in the Index will change with market
conditions.
Note 1. Accounting
Policies The following is a summary
of significant accounting poli-
cies followed by the Fund in the preparation of
its financial statements.
Security Valuation: Investments are stated at value. Investments for which
market quotations are readily available are valued at the last reported sales
price. If there are no sales on the date of valuation, then investments are
valued at the mean between the most recently quoted bid and asked prices
provided by principal market makers. Securities for which market quotations are
not readily available are valued at fair value as determined in good faith by or
under the direction of the Fund's Board of Directors. Short-term securities less
than 60 days are valued at amortized cost.
In connection with transactions in repurchase agreements, it is the Fund's
policy that its custodian or designated subcustodians, take possession of the
underlying collateral securities, the value of which exceeds the principal
amount of the repurchase transaction, including accrued interest. If the seller
defaults and the value of the collateral declines or if bankruptcy proceedings
are commenced with respect to the seller of the security, realization of the
collateral by the Fund may be delayed or limited.
Securities Transactions and Net Investment Income: Securities transactions are
recorded on the trade date. Realized and unrealized gains and losses from
security transactions are calculated on the identified cost basis. Dividend
income is recorded on the ex-dividend date and interest income is recorded on an
accrual basis. Expenses are recorded on the accrual basis which may require the
use of certain estimates by management.
Net investment income (other than distribution fees) and unrealized and
realized gains or losses are allocated daily to each class of shares based upon
the relative proportion of net assets of each class at the beginning of the day.
Dividends and Distributions: Dividends from net investment income and
distributions of net capital gains in excess of capital loss carryforwards, if
any, are declared and paid annually. Dividends and distributions are recorded on
the ex-dividend date.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
Federal Income Taxes: It is the Fund's policy to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to shareholders.
Therefore, no tax provision is required.
Reclassification of Capital Accounts: The Fund accounts and reports for
distributions to shareholders in accordance with the American Institute of
Certified Public Accountant's Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain and
Return of Capital Distributions by Investment Companies. For the year ended
December 31, 1999 the Fund decreased accumulated net investment loss and
decreased paid-in capital by $7,151,016 due to the Fund experiencing a net
investment loss during the year. Net realized gains and net assets were not
affected by this change.
Note 2. Agreements The Fund has a management
agreement with Prudential Investments Fund
Management LLC ('PIFM'). Pursuant to the management agreement, PIFM has
responsibility for all investment advisory services and supervises the
subadviser's performance of such services. PIFM has entered into a subadvisory
agreement with Nicholas-Applegate Capital Management ('NACM'); NACM furnishes
investment advisory services in connection with the management of the Fund. PIFM
pays for the services of the subadviser, the compensation of certain officers of
the Fund, occupancy and
- --------------------------------------------------------------------------------
7
<PAGE>
certain clerical and bookkeeping costs of the Fund. The Fund bears all other
costs and expenses.
The management fee paid PIFM is computed daily and payable monthly at an
annual rate of .95% of the Fund's average daily net assets. PIFM pays NACM, as
compensation for its services pursuant to the subadvisory agreement, a fee at
the rate of .75% of the average daily net assets of the Fund. During the year
ended December 31, 1999, PIFM earned $4,095,486 in management fees of which it
paid $3,235,434 to NACM under the foregoing agreements.
The Fund has a distribution agreement with Prudential Investment Management
Services LLC ('PIMS'), which acts as the distributor of the Class A, Class B,
Class C and Class Z shares. The Fund compensates PIMS for distributing and
servicing the Fund's Class A, Class B and Class C shares, pursuant to plans of
distribution (the 'Class A, B and C Plans'), regardless of expenses actually
incurred. The distribution fees are accrued daily and payable monthly. No
distribution or service fees were paid to PIMS as distributor of the Class Z
shares of the Fund.
Pursuant to the Class A, B and C Plans, the Fund compensates PIMS for
distribution-related activities at an annual rate of up to .30 of 1%, 1% and 1%,
of the average daily net assets of the Class A, B and C shares, respectively.
Such expenses under the Plans were .20 of 1% of average daily net assets of the
Class A shares and 1% of the average daily net assets of both the Class B and
Class C shares, respectively, for the year ended December 31, 1999.
PIMS has advised the Fund that it has received approximately $152,300 and
$9,400 in front-end sales charges resulting from sales of Class A shares and
Class C shares, respectively, during the year ended December 31, 1999. From
these fees, PIMS paid such sales charges to an affiliated broker-dealer, which
in turn paid commission to salespersons and incurred other distribution costs.
PIMS has advised the Fund that for the year ended December 31, 1999, it
received approximately $333,700 and $2,600 in contingent deferred sales charges
imposed upon certain redemptions by Class B and C shareholders, respectively.
PIFM and PIMS and are wholly owned subsidiaries of The Prudential Insurance
Company of America ('Prudential').
As of March 11, 1999, the Fund, along with other affiliated registered
investment companies (the 'Funds'), entered into a syndicated credit agreement
('SCA') with an unaffiliated lender. The maximum commitment under the SCA is $1
billion. Interest on any borrowing will be at market rates.
The Funds pay a commitment fee at an annual rate of .065 of 1% on the unused
portion of the credit facility, which is accrued and paid quarterly on a pro
rata basis by the Funds. The SCA expires on March 9, 2000. Prior to March 11,
1999, the Funds had a credit agreement with a maximum commitment of
$200,000,000. The commitment fee was .055 of 1% on the unused portion of the
credit facility. The Fund did not borrow any amounts pursuant to either
agreement during the year ended December 31, 1999. The purpose of the agreement
is to serve as an alternative source of funding for capital share redemptions.
Note 3. Other Prudential Mutual Fund Ser-
vices LLC ('PMFS'), a Transactions
wholly owned subsidiary of with Affiliates
PIFM, serves as the Fund's transfer agent. During
the year ended December 31, 1999, the Fund incurred fees of approximately
$547,000 for the services of PMFS. As of December 31, 1999, approximately
$47,600 of such fees were due to PMFS. Transfer agent fees and expenses in the
Statement of Operations also include certain out of pocket expenses paid to
nonaffiliates.
For the year ended December 31, 1999, Prudential Securities Incorporated
('PSI') earned approximately $1,900 in brokerage commissions from portfolio
transactions executed on behalf of the Fund. PSI is a wholly owned subsidiary of
Prudential.
Note 4. Portfolio Purchases and sales of invest-
Securities ment securities of the Fund
other than short-term investments, for the year
ended December 31, 1999 were $745,585,637 and $788,159,346, respectively.
The cost basis of investments for federal income tax purposes at December 31,
1999 was $352,572,123 and, accordingly, net unrealized appreciation of
investments for federal income tax purposes was $326,203,918 (gross unrealized
appreciation--$329,937,375; gross unrealized depreciation--$3,733,457).
Note 5. Capital The Fund offers Class A,
Class B, Class C and Class Z shares. Class A
shares are sold with a front-end sales charge of up to 5%. Class B shares are
sold with a contingent deferred sales charge which declines from 5% to zero
depending upon the period of time the shares are held. Class C shares are sold
with a front-end sales charge of 1% and a contingent deferred sales charge of 1%
during the first 18 months. Class B shares will automatically convert to Class A
shares on a quarterly basis approximately seven years after purchase. A special
- --------------------------------------------------------------------------------
8
<PAGE>
exchange privilege is also available for shareholders who qualified to purchase
Class A shares at net asset value. Class Z shares are not subject to any sales
or redemption charge and are offered exclusively for sale to a limited group of
investors.
The Fund has authorized 200 million shares of common stock at $.01 par value
per share equally divided into four classes, designated Class A, Class B, Class
C and Class Z shares.Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
- ------------------------------ ----------- -------------
<S> <C> <C>
Year ended
December 31, 1999:
Shares sold................... 11,659,477 $ 212,703,922
Shares issued in reinvestment
of distributions............ 1,650,288 32,182,396
Shares reacquired............. (11,712,869) (212,664,693)
----------- -------------
Net increase in shares
outstanding before
conversion.................. 1,596,896 32,221,625
Shares issued upon conversion
from Class B................ 2,717,422 48,326,630
----------- -------------
Net increase in shares
outstanding................. 4,314,318 $ 80,548,255
----------- -------------
----------- -------------
Year ended
December 31, 1998:
Shares sold................... 7,446,667 $ 106,396,040
Shares issued in reinvestment
of distributions............ 449,538 6,346,234
Shares reacquired............. (9,167,087) (131,574,252)
----------- -------------
Net decrease in shares
outstanding before
conversion.................. (1,270,882) (18,831,978)
Shares issued upon conversion
from Class B................ 489,749 7,024,166
----------- -------------
Net decrease in shares
outstanding................. (781,133) $ (11,807,812)
----------- -------------
----------- -------------
<CAPTION>
Class B
- ------------------------------
<S> <C> <C>
Year ended
December 31, 1999:
Shares sold................... 5,962,259 $ 96,957,185
Shares issued in reinvestment
of distributions............ 2,556,598 43,554,915
Shares reacquired............. (8,158,255) (131,371,351)
----------- -------------
Net increase in shares
outstanding before
conversion.................. 360,602 9,140,749
Shares reacquired upon
conversion into Class A..... (3,033,400) (48,326,630)
----------- -------------
Net decrease in shares
outstanding................. (2,672,798) $ (39,185,881)
----------- -------------
----------- -------------
<CAPTION>
Class B Shares Amount
- ------------------------------ ----------- -------------
<S> <C> <C>
Year ended
December 31, 1998:
Shares sold................... 5,070,770 $ 65,665,558
Shares issued in reinvestment
of distributions............ 1,182,446 15,174,732
Shares reacquired............. (10,146,490) (131,935,822)
----------- -------------
Net decrease in shares
outstanding before
conversion.................. (3,893,274) (51,095,532)
Shares reacquired upon
conversion into Class A..... (538,840) (7,024,166)
----------- -------------
Net decrease in shares
outstanding................. (4,432,114) $ (58,119,698)
----------- -------------
----------- -------------
<CAPTION>
Class C
- ------------------------------
<S> <C> <C>
Year ended
December 31, 1999:
Shares sold................... 310,372 $ 5,226,338
Shares issued in reinvestment
of distributions............ 77,640 1,323,380
Shares reacquired............. (362,253) (6,189,054)
----------- -------------
Net increase in shares
outstanding................. 25,759 $ 360,664
----------- -------------
----------- -------------
Year ended
December 31, 1998:
Shares sold................... 178,150 $ 2,342,004
Shares issued in reinvestment
of distributions............ 29,154 373,747
Shares reacquired............. (274,036) (3,655,185)
----------- -------------
Net decrease in shares
outstanding................. (66,732) $ (939,434)
----------- -------------
----------- -------------
<CAPTION>
Class Z
- ------------------------------
<S> <C> <C>
Year ended
December 31, 1999:
Shares sold................... 93,143 $ 1,817,774
Shares issued in reinvestment
of distributions............ 11,139 215,336
Shares reacquired............. (133,081) (2,395,675)
----------- -------------
Net decrease in shares
outstanding................. (28,799) $ (362,565)
----------- -------------
----------- -------------
Year ended
December 31, 1998:
Shares sold................... 111,423 $ 1,680,862
Shares issued in reinvestment
of distributions............ 5,739 81,069
Shares reacquired............. (54,259) (780,860)
----------- -------------
Net increase in shares
outstanding................. 62,903 $ 981,071
----------- -------------
----------- -------------
</TABLE>
- --------------------------------------------------------------------------------
9
<PAGE>
NICHOLAS-APPLEGATE FUND, INC.
NICHOLAS-APPLEGATE GROWTH EQUITY FUND
Financial Highlights
<TABLE>
<CAPTION>
Class A
------------------------------------------------------------
Year Ended December 31,
------------------------------------------------------------
1999 1998 1997 1996 1995(a)
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year................. $ 15.38 $ 14.47 $ 15.41 $ 15.18 $ 11.99
-------- -------- -------- -------- --------
Income from investment operations:
Net investment loss................................ (.18) (.17) (.12) (.14) (.11)
Net realized and unrealized gain on investment
transactions..................................... 14.01 1.95 2.60 2.64 3.82
-------- -------- -------- -------- --------
Total from investment operations................. 13.83 1.78 2.48 2.50 3.71
-------- -------- -------- -------- --------
Less distributions:
Distributions from net realized gains from
investment transactions.......................... (3.41) (.87) (3.42) (2.27) (.52)
-------- -------- -------- -------- --------
Net asset value, end of year....................... $ 25.80 $ 15.38 $ 14.47 $ 15.41 $ 15.18
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
TOTAL RETURN(b):................................... 98.35% 12.83% 17.33% 16.45% 31.20%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000)...................... $329,955 $130,362 $133,973 $145,120 $124,340
Average net assets (000)........................... $186,192 $124,408 $139,933 $136,482 $109,740
Ratios to average net assets:
Expenses, including distribution fee............. 1.40% 1.45% 1.37% 1.41% 1.44%
Expenses, excluding distribution fee............. 1.20% 1.24% 1.19% 1.23% 1.27%
Net investment loss.............................. (1.21)% (1.19)% (.82)% (.93)% (.83)%
For Class A, B, C and Z shares:
Portfolio turnover rate(c)......................... 173% 171% 182% 113% 106%
</TABLE>
- ---------------
(a) Calculated based upon weighted average shares outstanding during the year.
(b) Total return does not consider the effects of sales loads. Total return
is calculated assuming a purchase of shares on the first day and a sale on
the last day of each year reported and includes reinvestment of dividends
and distributions.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 10
<PAGE>
NICHOLAS-APPLEGATE FUND, INC.
NICHOLAS-APPLEGATE GROWTH EQUITY FUND
Financial Highlights
<TABLE>
<CAPTION>
Class B
------------------------------------------------------------
Year Ended December 31,
------------------------------------------------------------
1999 1998 1997 1996 1995(a)
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year................. $ 13.89 $ 13.26 $ 14.48 $ 14.49 $ 11.56
-------- -------- -------- -------- --------
Income from investment operations:
Net investment loss................................ (.33) (.29) (.23) (.24) (.22)
Net realized and unrealized gain on investment
transactions..................................... 12.48 1.79 2.43 2.50 3.67
-------- -------- -------- -------- --------
Total from investment operations................. 12.15 1.50 2.20 2.26 3.45
-------- -------- -------- -------- --------
Less distributions:
Distributions from net realized gains from
investment transactions.......................... (3.41) (.87) (3.42) (2.27) (.52)
-------- -------- -------- -------- --------
Net asset value, end of year....................... $ 22.63 $ 13.89 $ 13.26 $ 14.48 $ 14.49
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
TOTAL RETURN(b):................................... 96.71% 11.87% 16.48% 15.54% 30.11%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000)...................... $324,419 $236,242 $284,191 $317,768 $290,751
Average net assets (000)........................... $236,101 $250,317 $300,520 $304,841 $265,597
Ratios to average net assets:
Expenses, including distribution fee............. 2.20% 2.24% 2.19% 2.23% 2.27%
Expenses, excluding distribution fee............. 1.20% 1.24% 1.19% 1.23% 1.27%
Net investment loss.............................. (2.00)% (1.98)% (1.64)% (1.75)% (1.66)%
</TABLE>
- ---------------
(a) Calculated based upon weighted average shares outstanding during the year.
(b) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on
the last day of each year reported and includes reinvestment of dividends
and distributions.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 11
<PAGE>
NICHOLAS-APPLEGATE FUND, INC.
NICHOLAS-APPLEGATE GROWTH EQUITY FUND
Financial Highlights
<TABLE>
<CAPTION>
Class C Class Z
----------------------------------------------- ---------------------------------
March 18,
Year Ended 1997(d)
Year Ended December 31, December 31, Through
----------------------------------------------- ---------------- December 31,
1999 1998 1997 1996 1995(a) 1999 1998 1997
------- ------ ------ ------ ------ ------ ------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.... $ 13.89 $13.26 $14.48 $14.49 $11.56 $15.49 $14.53 $ 14.48
------- ------ ------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment loss..................... (.32) (.28) (.22) (.22) (.22) (.17) (.12) (.22)
Net realized and unrealized gain on
investment transactions............... 12.47 1.78 2.42 2.48 3.67 14.25 1.95 3.18
------- ------ ------ ------ ------ ------ ------ ------
Total from investment operations...... 12.15 1.50 2.20 2.26 3.45 14.08 1.83 2.96
------- ------ ------ ------ ------ ------ ------ ------
Less distributions:
Distributions from net realized gains
from investment transactions.......... (3.41) (.87) (3.42) (2.27) (.52) (3.41) (.87) (2.91)
------- ------ ------ ------ ------ ------ ------ ------
Net asset value, end of period.......... $ 22.63 $13.89 $13.26 $14.48 $14.49 $26.16 $15.49 $ 14.53
------- ------ ------ ------ ------ ------ ------ ------
------- ------ ------ ------ ------ ------ ------ ------
TOTAL RETURN(b):........................ 96.71% 11.87% 16.48% 15.54% 30.11% 99.30% 13.13% 21.90%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)......... $10,598 $6,146 $6,750 $6,735 $4,897 $2,032 $1,649 $ 633
Average net assets (000)................ $ 7,477 $6,164 $6,796 $5,862 $2,961 $1,334 $1,318 $ 121
Ratios to average net assets:
Expenses, including distribution
fee................................. 2.20% 2.24% 2.19% 2.23% 2.27% 1.20% 1.24% 1.19%(c)
Expenses, excluding distribution
fee................................. 1.20% 1.24% 1.19% 1.23% 1.27% 1.20% 1.24% 1.19%(c)
Net investment loss................... (2.00)% (1.98)% (1.64)% (1.75)% (1.63)% (1.00)% (.99)% (.85)%(c)
</TABLE>
- ---------------
(a) Calculated based upon weighted average shares outstanding during the year.
(b) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on
the last day of each period reported and includes reinvestment of
dividends and distributions. Total returns for periods less than a full
year are not annualized.
(c) Annualized.
(d) Commencement of offering Class Z shares.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 12
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Shareholders of
Nicholas-Applegate Fund, Inc.
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Nicholas-Applegate Growth Equity
Fund, the only series of Nicholas-Applegate Fund, Inc. (the Fund) as of December
31, 1999, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended for Class A, B, C shares, and for each of the three fiscal years in
the period then ended for Z shares. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of December 31, 1999 by correspondence with
the custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Nicholas-Applegate Growth Equity Fund as of December 31, 1999, the results of
its operations for the year then ended, and the changes in its net assets for
each of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended for Class A, B, C shares, and
for each of the three fiscal years in the period then ended for Z shares, in
conformity with accounting principles generally accepted in the United States.
ERNST & YOUNG LLP
Los Angeles, California
February 11, 2000
TAX INFORMATION
We are required by the Internal Revenue Code to advise you within 60 days of
the Fund's fiscal year end (December 31, 1999) as to the federal income tax
status of dividends and distributions paid by the Fund during such fiscal year.
Accordingly, we are advising you that in the fiscal year ended December 31,
1999, the Fund paid distributions for Class A, Class B, Class C and Class Z
shares totaling $1.89 per share, comprised of short-term capital gains which are
taxable as ordinary income. The Fund paid distributions for Class A, Class B,
Class C and Class Z shares totaling $1.52 per share, comprised of long-term
capital gains.
We wish to advise you that the corporate dividends received deduction for the
Fund is zero. For the purpose of preparing your annual federal income tax return
you should report the amounts reflected on the appropriate Form 1099-DIV or
substitute 1099.
- --------------------------------------------------------------------------------
13
<PAGE>
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
visit our website at www.prudential.com
Fund Symbols NASDAQ CUSIP
Class A NAPGX 653698209
Class B NAGBX 653698308
Class C -- 653698407
Class Z -- 653698506
Directors
Arthur E. Nicholas, Chairman
Dann V. Angeloff
Fred C. Applegate
Theodore J. Coburn
Robert F. Gunia
Arthur B. Laffer
Charles E. Young
Officers
Arthur E. Nicholas, Chairman and President
Robert F. Gunia, Vice President
Grace C. Torres, Treasurer
Stephen M. Ungerman, Assistant Treasurer
Deborah A. Docs, Secretary
Robert E. Carlson, Assistant Secretary
Manager
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Adviser
Nicholas-Applegate Capital Management
600 West Broadway
San Diego, CA 92101
Distributor
Prudential Investment Management Services LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 15005
New Brunswick, NJ 08906
Independent Accountants
Ernst & Young LLP
725 South Figueroa Street
Los Angeles, CA 90071
Legal Counsel
Paul, Hastings, Janofsky & Walker LLP
555 South Flower Street
Los Angeles, CA 90017
The views expressed in this report and information about the Fund's portfolio
holdings are for the period covered by this report and are subject to change
thereafter.
This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus.
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