<PAGE>
SEMIANNUAL REPORT JUNE 30, 2000
Nicholas-Applegate(r) Growth Equity Fund
Fund Type Stock
Objective Capital appreciation
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.
(GRAPHIC)
This report is not authorized for distribution to prospective investors
unless preceded or accompanied by a current prospectus.
(LOGO)
<PAGE>
Build on the Rock
Investment Goals and Style
At Nicholas-Applegate, we build portfolios one company at a time. Our search
for promising investments starts 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.
The Nicholas-Applegate Growth Equity Fund seeks to deliver capital
appreciation through investment in growth companies with market
capitalizations predominantly between $1 billion and $15 billion.
The market capitalization range of the stocks in the portfolio is
selected from the middle 90% of the Russell Midcap Growth Index. Our
company-by-company research focuses on identifying and investing in
stocks exhibiting each of the following traits:
- Evidence of positive change
- Sustainability of that change
- Timeliness of investment
Our search for stocks meeting these criteria produces a well-diversified
portfolio of successful companies capable of exceptional growth. There can
be no assurance that the Fund will achieve its investment objective.
Portfolio Composition
Sectors expressed as a percentage of net assets as of 6/30/00
54.8% Technology
16.0 Healthcare Services
11.3 Commercial/Industrial Services
9.1 Energy
2.8 Consumer Services
2.2 Retail Trade
1.4 Utilities
2.4 Cash & Equivalents
Five Largest Holdings
Expressed as a percentage of net assets as of 6/30/00
4.3% JDS Uniphase Corp.
Semiconductors
3.2 Ciena Corp.
Telecommunications Equipment
3.1 Veritas Software Corp.
Computer Software
2.9 Network Appliance, Inc.
Computer Networks
2.8 VoiceStream Wireless Corp.
Telecommunications Services
<PAGE>
www.prudential.com (800) 225-1852
Performance at a Glance
Cumulative Total Returns1 As of 6/30/00
Six One Five Ten Since
Months Year Years Years Inception2
Class A 10.77% 80.14% 282.52% 603.81% 835.49%
Class B 10.34 78.62 267.33 N/A 522.29
Class C 10.34 78.62 267.33 N/A 322.97
Class Z 10.86 80.59 N/A N/A 203.15
Lipper Multi-Cap Growth
Fund Avg.3 6.47 45.76 225.31 476.09 ***
Average Annual Total Returns1 As of 6/30/00
One Five Ten Since
Year Years Years Inception2
Class A 71.13% 29.44% 20.93% 17.96%
Class B 73.62 29.65 N/A 22.37
Class C 75.83 29.46 N/A 27.40
Class Z 80.59 N/A N/A 40.11
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 six-month, 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 662.75% for Class A, 211.85% for Class
B, 132.51% for Class C, and 43.34% for Class Z, based on all funds in each
share class.
1
<PAGE>
Nicholas-Applegate(r) Growth Equity Fund
Semiannual Report June 30, 2000
Investment Adviser's Report
During the six-month period ended June 30, 2000, the Nicholas-Applegate Growth
Equity Fund advanced 10.8% versus 12.1% for the Russell Midcap Growth Index
and 6.5% for the Lipper Multi-Cap Growth Fund Average.
Following the gains that your Fund delivered in the first quarter, a broad
sell-off in the U.S. equity market in April and May-particularly among
technology stocks-negatively affected performance in the second quarter.
Some of the Fund's best-performing stocks in the first half of the year were
in the technology sector, helping returns for the period. Those included JDS
Uniphase Corp., a telecommunications switching and transmissions equipment
company, and Network Solutions, a computer network and services company.
Medimmune, a biotechnology firm that develops drugs for transplants and
infectious diseases, contributed positively to returns.
Stock selection in the commercial/industrial and health technology sectors was
the primary contributor to the fund's slight underperformance versus the
Russell Midcap Growth Index during the six-month period. Amid the sell-off in
technology stocks in April and May, holdings in the technology and
commercial/industrial sectors suffered declines. These included mobile phone
operator VoiceStream Wireless and Ariba, Inc., a computer software and services
company. Despite the decline in their stock prices, we believe the long-term
fundamentals for these companies, as well as other technology holdings in the
Fund, remain attractive.
The U.S. stock market welcomed the millennium on a strong note, with many
indexes reaching record levels during the first quarter of 2000. However,
concerns over rising interest rates, the threat of inflation, and lofty
valuations sent stocks lower in April and May. High-priced technology names
were especially hard hit, with the tech-heavy Nasdaq Composite tumbling
approximately 32% from its peak on March 10 through the end of May.
2
<PAGE>
www.prudential.com (800) 225-1852
In June, optimism that the Federal Reserve was close to completing its series
of interest rate hikes sparked a rally, most notably among rapidly growing
healthcare and technology stocks. Amid this volatile backdrop, several major
indexes ended the six-month period on negative turf. The Dow Jones Industrial
Average fell 8.6%; the Nasdaq shed 2.5%; and the S&P 500 Index dipped 0.4%.
After raising rates three times in 1999, the Fed continued its efforts to
moderate economic growth, boosting interest rates a total of 1.0% on three
separate occasions from January 1 to June 30. Throughout the period, stock
prices moved in tandem with rate expectations and uncertainty over the Fed's
ability to engineer a "soft landing" for the red-hot U.S. economy.
Value-oriented, rate-sensitive financial, consumer cyclical, and basic
materials stocks were among the market's worst-performing sectors. In the
first six months of the year, the Russell 3000 Value Index fell 3.6%. Growth
stocks proved to be more resilient, with the Russell 3000 Growth Index
advancing 4.0%.
During the period, investors exhibited a preference for small- and
mid-capitalization names. The Russell 2000 Index, a small-cap benchmark, and
the Russell Midcap Index were up 3.0% and 5.1%, respectively, while the
Russell 1000 rose only 0.8%. Within the growth stock universe, however,
small-cap growth stocks trailed mid- and large-cap growth stocks-two of the
market's best-performing sectors.
Throughout the period, selectivity remained critical amid heightened
volatility in stock prices. Although fundamentals for the market remain solid,
changing investor perceptions and the risk associated with technology stocks'
valuations have caused increased daily price swings. For instance, during
every single trading day between January 1 and April 30, there was at least a
1% difference between the Nasdaq's high and low prices, and intraday moves of
2% or more occurred close to 80% of the time.
3
<PAGE>
Nicholas-Applegate(r) Growth Equity Fund
Semiannual Report June 30, 2000
Technology helped then hurt returns
The Fund delivered strong gains in the first three months of the year, rising
23.2% versus 21.1% for the Russell Midcap Growth Index and 13.1% for the Lipper
Multi-Cap Growth Fund Average. Good stock selection in the technology sector,
specifically within the software, computers/office automation, and
telecommunications industries boosted returns in the first quarter.
In the second quarter, that trend was reversed, with some of the Fund's
best-performing holdings in the first quarter hurting returns in the second.
Amid the sell-off in April and May, holdings such as Applied Micro Circuits
and Veritas Software negatively affected performance. Despite the decline in
their stock prices, we believe the long-term fundamentals for these companies,
as well as other technology holdings in the portfolio, remain attractive.
As of June 30 the Fund had a slight overweighting in the technology sector
versus the Russell Midcap Growth Index. During the six-month period, we
increased the Fund's weighting in the healthcare services and energy sectors,
as we uncovered attractive stocks meeting our investment criteria in these
areas.
Looking Ahead
Despite changing market conditions, we continue to find companies with solid
fundamentals.
At Nicholas-Applegate, changing market conditions, such as expectations of
slowing economic and corporate profit growth, as well as prevailing
stock-price volatility, do not affect our focus on finding the companies with
attractive fundamentals and accelerating earnings growth.
Our investment philosophy guides us to move our portfolios toward strength and
away from weakness each day in any market environment. Consistent with that
philosophy, we look for industry leaders capable of robust earnings growth,
and with strong potential for positive earnings surprise.
4
<PAGE>
www.prudential.com (800) 225-1852
We hold the view that the prospects for mid-cap growth stocks remain
attractive. We continue to monitor our holdings and the investment environment
closely, and we remain poised to act swiftly and decisively to maintain the
strongest possible position for our clients.
Our bottom-up investment approach is highly adaptable, and helps us capture
areas of strength wherever they're occurring. We remain confident of our
ability to find solid investment opportunities in any environment and deliver
exceptional long-term results.
Nicholas-Applegate Growth Equity Fund Management Team
5
<PAGE>
Nicholas-Applegate(r) Growth Equity Fund
Semiannual Report June 30, 2000
Financial
Statements
<PAGE>
Nicholas-Applegate Fund, Inc. Nicholas-Applegate Growth Equity Fund
Portfolio of Investments as of June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
<C> <S> <C>
------------------------------------------------------------------------------------------
COMMON STOCKS 97.6%
-------------------------------------------------------------------------------------
CAPITAL GOODS 10.0%
Drugs & Healthcare 7.0%
33,400 Abgenix, Inc.* $ 4,003,303
39,000 Affymetrix, Inc.* 6,439,875
101,000 ALZA Corp.* 5,971,625
41,400 Human Genome Sciences, Inc.* 5,521,725
61,400 IDEC Pharmaceuticals Corp.* 7,202,988
47,800 Incyte Genomics, Inc.* 3,928,563
71,800 Millennium Pharmaceuticals, Inc.* 8,032,625
50,900 PE Corp-Celera Genomics Group* 4,759,150
156,200 PE Corp-PE Biosystems Group 10,289,675
----------------
56,149,529
-------------------------------------------------------------------------------------
Retail/Wholesale Specialty Chain 3.0%
75,700 Best Buy Co., Inc.* 4,788,025
108,700 Circuit City Stores-Circut City Group 3,607,481
164,900 Kohl's Corp.* 9,172,563
181,200 Starbucks Corp.* 6,919,575
----------------
24,487,644
-------------------------------------------------------------------------------------
COMMERCIAL/INDUSTRIAL SERVICES 11.3%
Other Commercial/Industrial Services 2.6%
93,100 Ariba, Inc.* 9,128,164
94,000 Exodus Communications, Inc.* 4,329,875
127,300 InfoSpace, Inc.* 7,033,325
----------------
20,491,364
-------------------------------------------------------------------------------------
Telecommunication Services 8.7%
327,000 Crown Castle International Corp.* 11,935,500
297,200 McLeodUSA Inc.* 6,148,325
263,000 Metromedia Fiber Network, Inc.* 10,437,812
187,900 Nextel Partners, Inc.* 6,118,494
134,000 NEXTLINK Communications, Inc.* 5,083,625
58,800 Time Warner Telecom Inc.* 3,785,250
</TABLE>
See Notes to Financial Statements 7
<PAGE>
Nicholas-Applegate Fund, Inc. Nicholas-Applegate Growth Equity Fund
Portfolio of Investments as of June 30, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
<C> <S> <C>
194,200 VoiceStream Wireless Corp.* $ 22,584,853
132,350 WinStar Communications, Inc.* 4,483,356
----------------
70,577,215
-------------------------------------------------------------------------------------
CONSUMER NON-DURABLES 9.0%
Drugs & Healthcare 9.0%
118,900 Allergan, Inc. 8,858,050
109,800 Forest Laboratories, Inc.* 11,089,800
52,000 Genentech, Inc.* 8,944,000
71,300 Genzyme Corp.* 4,237,894
175,200 MedImmune, Inc.* 12,964,800
27,000 MiniMed Inc.* 3,186,000
76,900 Sepracor Inc.* 9,276,062
112,200 Waters Corp.* 14,003,962
----------------
72,560,568
-------------------------------------------------------------------------------------
ENERGY 10.6%
Electrical Utilities 1.4%
168,900 Calpine Corp.* 11,105,175
-------------------------------------------------------------------------------------
Oil & Gas-Production/Pipeline 3.2%
99,800 Anadarko Petroleum Corp. 4,921,387
137,800 Diamond Offshore Drilling, Inc. 4,840,225
99,800 Nabors Industries, Inc.* 4,147,938
258,700 Rowan Companies, Inc.* 7,858,012
104,200 UTI Energy Corp.* 4,181,025
----------------
25,948,587
-------------------------------------------------------------------------------------
Oil Field Equipment 1.2%
172,600 Grant Prideco, Inc.* 4,315,000
179,900 National-Oilwell, Inc.* 5,914,213
----------------
10,229,213
-------------------------------------------------------------------------------------
Oil Services 4.8%
163,400 Baker Hughes Inc. 5,228,800
159,800 BJ Services Co.* 9,987,500
221,200 ENSCO International Inc. 7,921,725
117,100 Smith International, Inc.* 8,526,344
172,600 Weatherford International, Inc.* 6,871,637
----------------
38,536,006
</TABLE>
8 See Notes to Financial Statements
<PAGE>
Nicholas-Applegate Fund, Inc. Nicholas-Applegate Growth Equity Fund
Portfolio of Investments as of June 30, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
<C> <S> <C>
GENERAL BUSINESS 1.9%
Media 1.9%
148,000 Hispanic Broadcasting Corp.* $ 4,902,500
132,400 TV Guide, Inc.* 4,534,700
54,500 Univision Communications, Inc.* 5,640,750
----------------
15,077,950
-------------------------------------------------------------------------------------
TECHNOLOGY 54.8%
Computer Networks 10.3%
98,600 Brocade Communications Systems, Inc.* 18,091,559
0(a) Cisco Systems, Inc.* 11
84,000 Comverse Technology, Inc.* 7,812,000
291,700 Network Appliance, Inc.* 23,481,850
43,300 ONI Systems Corp.* 5,074,895
77,200 Redback Networks, Inc.* 13,741,600
111,900 RF Micro Devices Inc.* 9,805,238
61,350 StorageNetworks, Inc.* 5,536,838
----------------
83,543,991
-------------------------------------------------------------------------------------
Computer Services 3.1%
101,468 VeriSign, Inc.* 17,909,014
139,000 Vignette Corp.* 7,230,172
----------------
25,139,186
-------------------------------------------------------------------------------------
Computer Software 7.4%
40,100 Akamai Technologies Inc.* 4,761,248
175,300 BroadVision Inc.* 8,907,431
43,900 I2 Technologies, Inc.* 4,577,261
127,600 Mercury Interactive Corp.* 12,345,300
154,300 Universal Access, Inc.* 3,780,350
221,875 VERITAS Software Corp.* 25,075,342
----------------
59,446,932
-------------------------------------------------------------------------------------
Electronic Components 5.8%
219,400 Analog Devices, Inc.* 16,674,400
36,600 E-Tek Dynamics, Inc.* 9,655,537
162,100 Maxim Integrated Products, Inc.* 11,012,669
</TABLE>
See Notes to Financial Statements 9
<PAGE>
Nicholas-Applegate Fund, Inc. Nicholas-Applegate Growth Equity Fund
Portfolio of Investments as of June 30, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
<C> <S> <C>
35,200 SDL, Inc.* $ 10,038,600
----------------
47,381,206
-------------------------------------------------------------------------------------
Internet Software 4.2%
64,900 Agile Software Corp.* 4,587,619
44,000 Inktomi Corp.* 5,203,000
102,100 Siebel Systems, Inc.* 16,699,731
72,500 TIBCO Software Inc.* 7,774,492
----------------
34,264,842
-------------------------------------------------------------------------------------
Semiconductors 15.1%
115,500 Applied Micro Circuits Corp.* 11,405,625
71,300 Broadcom Corp.* 15,610,244
78,400 Credence Systems Corp.* 4,326,700
292,600 JDS Uniphase Corp.* 35,075,425
128,700 KLA-Tencor Corp.* 7,536,994
220,900 Lam Research Corp .* 8,283,750
119,200 Micrel, Inc.* 5,177,750
88,500 PMC-Sierra, Inc.* 15,725,344
81,400 Vitesse Semiconductor Corp.* 5,987,987
156,800 Xilinx, Inc.* 12,945,800
----------------
122,075,619
-------------------------------------------------------------------------------------
Telecommunication Equipment 8.9%
128,000 ADC Telecommunications, Inc.* 10,736,000
109,300 American Tower Corp. 4,556,444
51,600 Avanex Corp.* 4,927,800
155,900 CIENA Corp.* 25,986,581
247,400 Finisar Corp.* 6,478,788
133,700 Scientific-Atlanta, Inc. 9,960,650
26,800 Sonus Networks, Inc.* 4,231,050
68,000 Teradyne, Inc.* 4,998,000
----------------
71,875,313
----------------
Total common stocks (cost $496,665,221) 788,890,340
----------------
</TABLE>
10 See Notes to Financial Statements
<PAGE>
Nicholas-Applegate Fund, Inc. Nicholas-Applegate Growth Equity Fund
Portfolio of Investments as of June 30, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C>
-----------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS 2.0%
Other
$ 48 Seven Seas Money Market Fund $ 47,680
-------------------------------------------------------------------------------------
Repurchase Agreement 2.0%
16,167 State Street Bank & Trust Co.,
5.25%, in the principal amount of $16,167,000,
repurchase price $16,174,073, due 7/3/00 (cost
$16,167,000), value of the collateral including
accrued interest was $16,490,388 16,167,000
----------------
Total short-term investments
(cost $16,214,680) 16,214,680
----------------
Total Investments 99.6%
(cost $512,879,901; Note 4) 805,105,020
Other assets in excess of liabilities 0.4% 3,441,626
----------------
Net Assets 100% $ 808,546,646
----------------
----------------
</TABLE>
------------------------------
* Non-income producing.
(a) Fractional share.
See Notes to Financial Statements 11
<PAGE>
Nicholas-Applegate Fund, Inc. Nicholas-Applegate Growth Equity Fund
Statement of Assets and Liabilities (Unaudited)
<TABLE>
<CAPTION>
June 30, 2000
<S> <C>
---------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $512,879,901) $ 805,105,020
Cash 90,158
Receivable for investments sold 22,803,731
Receivable for Fund shares sold 3,908,805
Prepaid expenses 14,883
Dividends and interest receivable 11,348
-------------
Total assets 831,933,945
-------------
LIABILITIES
Payable for investments purchased 18,159,875
Payable for Fund shares reacquired 4,164,772
Management fee payable 615,098
Distribution fee payable 376,240
Accrued expenses 71,314
-------------
Total liabilities 23,387,299
-------------
NET ASSETS $ 808,546,646
-------------
-------------
Net assets were comprised of:
Common stock, at par $ 316,550
Paid-in capital in excess of par 391,903,333
-------------
392,219,883
Accumulated net investment loss (6,017,439)
Accumulated net realized gain on investments 130,119,083
Net unrealized appreciation on investments 292,225,119
-------------
Net assets, June 30, 2000 $ 808,546,646
-------------
-------------
</TABLE>
12 See Notes to Financial Statements
<PAGE>
Nicholas-Applegate Fund, Inc. Nicholas-Applegate Growth Equity Fund
Statement of Assets and Liabilities (Unaudited) Cont'd.
<TABLE>
<CAPTION>
June 30, 2000
---------------------------------------------------------------------------------------
<S> <C>
Class A:
Net asset value and redemption price per share
($422,843,995 / 15,476,224 shares of common stock issued
and outstanding) $27.32
Maximum sales charge (5% of offering price) 1.44
-------------
Maximum offering price to public $28.76
-------------
-------------
Class B:
Net asset value, offering price and redemption price per
share
($353,470,264 / 14,905,847 shares of common stock issued
and outstanding) $23.71
-------------
-------------
Class C:
Net asset value and redemption price per share
($18,147,334 / 765,275 shares of common stock issued and
outstanding) $23.71
Sales charge (1% of offering price) .24
-------------
Offering price to public $23.95
-------------
-------------
Class Z:
Net asset value, offering price and redemption price per
share ($14,085,053 / 507,696 shares of common stock
issued and outstanding) $27.74
-------------
-------------
</TABLE>
See Notes to Financial Statements 13
<PAGE>
Nicholas-Applegate Fund, Inc. Nicholas-Applegate Growth Equity Fund
Statement of Operations (Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
June 30, 2000
<S> <C>
---------------------------------------------------------------------------------------
NET INVESTMENT LOSS
Income
Dividends $ 54,463
Interest 507,893
--------------
Total income 562,356
--------------
Expenses
Management fees 3,721,539
Distribution fee--Class A 366,249
Distribution fee--Class B 1,837,648
Distribution fee--Class C 75,383
Transfer agent's fees and expenses 372,000
Reports to shareholders 50,000
Custodian's fees and expenses 50,000
Directors' fees 39,000
Registration fees 25,000
Audit fees and expense 20,000
Legal fees and expenses 12,000
Insurance expense 10,000
Miscellaneous 976
--------------
Total expenses 6,579,795
--------------
Net investment loss (6,017,439)
--------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investment transactions 105,394,630
Net change in unrealized appreciation (depreciation) of
investments (34,600,559)
--------------
Net gain on investments 70,794,071
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 64,776,632
--------------
--------------
</TABLE>
14 See Notes to Financial Statements
<PAGE>
Nicholas-Applegate Fund, Inc. Nicholas-Applegate Growth Equity Fund
Statement of Changes in Net Assets (Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
June 30, 2000 December 31, 1999
<S> <C> <C>
----------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment loss $ (6,017,439) $ (7,151,016)
Net realized gain on investment
transactions 105,394,630 102,118,443
Net change in unrealized appreciation
(depreciation) on investments (34,600,559) 239,153,601
------------- -----------------
Net increase in net assets resulting from
operations 64,776,632 334,121,028
------------- -----------------
Distributions to shareholders from net
realized gains on investments
Class A (13,919,560) (35,790,946)
Class B (15,118,036) (45,458,919)
Class C (683,862) (1,404,651)
Class Z (577,474) (222,648)
------------- -----------------
(30,298,932) (82,877,164)
------------- -----------------
Fund share transactions (Note 5) (Net of
share conversions)
Net proceeds from shares subscribed 434,237,799 316,705,219
Net asset value of shares issued to
shareholders in reinvestment of
distributions 28,566,985 77,276,027
Cost of shares reacquired (355,739,503) (352,620,773)
------------- -----------------
Net increase in net assets from Fund share
transactions 107,065,281 41,360,473
------------- -----------------
Total increase 141,542,981 292,604,337
NET ASSETS
Beginning of period 667,003,665 374,399,328
------------- -----------------
End of period $ 808,546,646 $ 667,003,665
------------- -----------------
------------- -----------------
</TABLE>
See Notes to Financial Statements 15
<PAGE>
Nicholas-Applegate Fund, Inc. Nicholas-Applegate Growth Equity Fund
Notes to Financial Statements (Unaudited)
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 policies 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
16
<PAGE>
Nicholas-Applegate Fund, Inc. Nicholas-Applegate Growth Equity Fund
Notes to Financial Statements (Unaudited) Cont'd.
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.
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 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 six
months ended June 30, 2000, PIFM earned $3,721,539 in management fees of which
it paid $2,940,016 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 .19 of 1% of average daily net assets of the
Class A shares and
17
<PAGE>
Nicholas-Applegate Fund, Inc. Nicholas-Applegate Growth Equity Fund
Notes to Financial Statements (Unaudited) Cont'd.
1% of the average daily net assets of both the Class B and Class C shares,
respectively, for the six months ended June 30, 2000.
PIMS has advised the Fund that it has received approximately $437,700 and
$75,700 in front-end sales charges resulting from sales of Class A shares and
Class C shares, respectively, during the six months ended June 30, 2000. 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 six months ended June 30, 2000, it
received approximately $169,000 and $6,700 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').
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 such borrowings will be at market rates. The purpose of the
agreement is to serve as an alternative source of funding for capital share
redemptions. The Funds pay a commitment fee of .080 of 1% of the unused portion
of the credit facility. The commitment fee is accrued and paid quarterly on a
pro rata basis by the Funds. The expiration date of the SCA is March 9, 2001.
Prior to March 9, 2000, the commitment fee was .065 of 1% of the unused portion
of the credit facility. The Fund did not borrow any amounts pursuant to the SCA
during the six months ended June 30, 2000.
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC ('PMFS'), a wholly owned subsidiary of PIFM,
serves as the Fund's transfer agent. During the six months ended June 30, 2000,
the Fund incurred fees of approximately $354,400 for the services of PMFS. As of
June 30, 2000, approximately $63,900 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.
Note 4. Portfolio Securities
Purchases and sales of investment securities of the Fund other than short-term
investments, for the six months ended June 30, 2000 were $478,417,398 and
$428,646,841, respectively.
The cost basis of investments for federal income tax purposes at June 30,
2000 was $514,001,093 and, accordingly, net unrealized appreciation of
investments for federal income tax purposes was $291,103,927 (gross unrealized
appreciation--$313,391,433; gross unrealized depreciation--$22,287,506).
18
<PAGE>
Nicholas-Applegate Fund, Inc. Nicholas-Applegate Growth Equity Fund
Notes to Financial Statements (Unaudited) Cont'd.
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 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>
Six months ended June 30, 2000:
Shares sold 9,329,601 $ 265,802,114
Shares issued in reinvestment of distributions 594,992 12,792,336
Shares reacquired (9,126,819) (257,124,185)
----------- -------------
Net increase in shares outstanding before conversion 797,774 21,470,265
Shares issued upon conversion from Class B 1,888,954 62,928,589
----------- -------------
Net increase in shares outstanding 2,686,728 $ 84,398,854
----------- -------------
----------- -------------
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
----------- -------------
----------- -------------
<CAPTION>
Class B
----------------------------------------------------------
<S> <C> <C>
Six months ended June 30, 2000:
Shares sold 4,257,226 $ 110,651,143
Shares issued in reinvestment of distributions 779,415 14,551,677
Shares reacquired (2,298,852) (56,980,236)
----------- -------------
Net increase in shares outstanding before conversion 2,737,789 68,222,584
Shares reacquired upon conversion into Class A (2,165,782) (62,928,589)
----------- -------------
Net increase in shares outstanding 572,007 $ 5,293,995
----------- -------------
----------- -------------
</TABLE>
19
<PAGE>
Nicholas-Applegate Fund, Inc. Nicholas-Applegate Growth Equity Fund
Notes to Financial Statements (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class B Shares Amount
---------------------------------------------------------- ----------- -------------
Year ended December 31, 1999:
<S> <C> <C>
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 C
----------------------------------------------------------
<S> <C> <C>
Six months ended June 30, 2000:
Shares sold 462,004 $ 12,028,737
Shares issued in reinvestment of distributions 34,699 647,821
Shares reacquired (199,646) (5,483,195)
----------- -------------
Net increase in shares outstanding 297,057 $ 7,193,363
----------- -------------
----------- -------------
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
----------- -------------
----------- -------------
<CAPTION>
Class Z
----------------------------------------------------------
<S> <C> <C>
Six months ended June 30, 2000:
Shares sold 1,584,384 $ 45,755,805
Shares issued in reinvestment of distributions 26,359 575,151
Shares reacquired (1,180,735) (36,151,887)
----------- -------------
Net increase in shares outstanding 430,008 $ 10,179,069
----------- -------------
----------- -------------
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)
----------- -------------
----------- -------------
</TABLE>
20
<PAGE>
Nicholas-Applegate Fund, Inc.
Financial
Highlights
<PAGE>
Nicholas-Applegate Fund, Inc. Nicholas-Applegate Growth Equity Fund
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
Class A
----------------
Six Months Ended
June 30, 2000(a)
----------------------------------------------------------------------------------------
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 25.80
----------------
Income from investment operations:
Net investment loss (.16)
Net realized and unrealized gain on investment transactions 2.69
----------------
Total from investment operations 2.53
----------------
Less distributions:
Distributions from net realized gains from investment
transactions (1.01)
----------------
Net asset value, end of period $ 27.32
----------------
----------------
TOTAL RETURN(b): 10.77%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $422,844
Average net assets (000) $393,978
Ratios to average net assets:
Expenses, including distribution fee 1.29%(c)
Expenses, excluding distribution fee 1.10%(c)
Net investment loss (1.14)%(c)
Portfolio turnover rate 56%
</TABLE>
------------------------------
(a) Calculated based upon weighted average shares outstanding during the period.
(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. Total returns for periods less than a full year are not
annualized.
(c) Annualized.
22 See Notes to Financial Statements
<PAGE>
Nicholas-Applegate Fund, Inc. Nicholas-Applegate Growth Equity Fund
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class A
----------------------------------------------------------------------------------------------------------
Year Ended December 31,
----------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995(a)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 15.38 $ 14.47 $ 15.41 $ 15.18 $ 11.99
---------------- ---------------- ---------------- ---------------- ----------------
(.18) (.17) (.12) (.14) (.11)
14.01 1.95 2.60 2.64 3.82
---------------- ---------------- ---------------- ---------------- ----------------
13.83 1.78 2.48 2.50 3.71
---------------- ---------------- ---------------- ---------------- ----------------
(3.41) (.87) (3.42) (2.27) (.52)
---------------- ---------------- ---------------- ---------------- ----------------
$ 25.80 $ 15.38 $ 14.47 $ 15.41 $ 15.18
---------------- ---------------- ---------------- ---------------- ----------------
---------------- ---------------- ---------------- ---------------- ----------------
98.35% 12.83% 17.33% 16.45% 31.20%
$329,955 $130,362 $133,973 $145,120 $124,340
$186,192 $124,408 $139,933 $136,482 $109,740
1.40% 1.45% 1.37% 1.41% 1.44%
1.20% 1.24% 1.19% 1.23% 1.27%
(1.21)% (1.19)% (.82)% (.93)% (.83)%
173% 171% 182% 113% 106%
</TABLE>
See Notes to Financial Statements 23
<PAGE>
Nicholas-Applegate Fund, Inc. Nicholas-Applegate Growth Equity Fund
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class B
----------------
Six Months Ended
June 30, 2000(a)
----------------------------------------------------------------------------------------
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 22.63
----------------
Income from investment operations:
Net investment loss (.24)
Net realized and unrealized gain on investment transactions 2.33
----------------
Total from investment operations 2.09
----------------
Less distributions:
Distributions from net realized gains from investment
transactions (1.01)
----------------
Net asset value, end of period $ 23.71
----------------
----------------
TOTAL RETURN(b): 10.34%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $353,470
Average net assets (000) $369,549
Ratios to average net assets:
Expenses, including distribution fee 2.10%(c)
Expenses, excluding distribution fee 1.10%(c)
Net investment loss (1.95)%(c)
Portfolio turnover rate 56%
</TABLE>
------------------------------
(a) Calculated based upon weighted average shares outstanding during the period.
(b) 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. Total returns for periods less than a full
year are not annualized.
(c) Annualized.
24 See Notes to Financial Statements
<PAGE>
Nicholas-Applegate Fund, Inc. Nicholas-Applegate Growth Equity Fund
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class B
----------------------------------------------------------------------------------------------------------
Year Ended December 31,
----------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995(a)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 13.89 $ 13.26 $ 14.48 $ 14.49 $ 11.56
---------------- ---------------- ---------------- ---------------- ----------------
(.33) (.29) (.23) (.24) (.22)
12.48 1.79 2.43 2.50 3.67
---------------- ---------------- ---------------- ---------------- ----------------
12.15 1.50 2.20 2.26 3.45
---------------- ---------------- ---------------- ---------------- ----------------
(3.41) (.87) (3.42) (2.27) (.52)
---------------- ---------------- ---------------- ---------------- ----------------
$ 22.63 $ 13.89 $ 13.26 $ 14.48 $ 14.49
---------------- ---------------- ---------------- ---------------- ----------------
---------------- ---------------- ---------------- ---------------- ----------------
96.71% 11.87% 16.48% 15.54% 30.11%
$324,419 $236,242 $284,191 $317,768 $290,751
$236,101 $250,317 $300,520 $304,841 $265,597
2.20% 2.24% 2.19% 2.23% 2.27%
1.20% 1.24% 1.19% 1.23% 1.27%
(2.00)% (1.98)% (1.64)% (1.75)% (1.66)%
173% 171% 182% 113% 106%
</TABLE>
See Notes to Financial Statements 25
<PAGE>
Nicholas-Applegate Fund, Inc. Nicholas-Applegate Growth Equity Fund
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class C
----------------
Six Months Ended
June 30, 2000(a)
----------------------------------------------------------------------------------------
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 22.63
--------
Income from investment operations:
Net investment loss (.24)
Net realized and unrealized gain on investment transactions 2.33
--------
Total from investment operations 2.09
--------
Less distributions:
Distributions from net realized gains from investment
transactions (1.01)
--------
Net asset value, end of period $ 23.71
--------
--------
TOTAL RETURN(b): 10.34%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 18,148
Average net assets (000) $ 15,159
Ratios to average net assets:
Expenses, including distribution fee 2.10%(c)
Expenses, excluding distribution fee 1.10%(c)
Net investment loss (1.95)%(c)
Portfolio turnover rate 56%
</TABLE>
------------------------------
(a) Calculated based upon weighted average shares outstanding during the period.
(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.
26 See Notes to Financial Statements
<PAGE>
Nicholas-Applegate Fund, Inc. Nicholas-Applegate Growth Equity Fund
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class C
----------------------------------------------------------------------------------------------------------
Year Ended June 30,
----------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995(a)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 13.89 $13.26 $14.48 $14.49 $11.56
-------- ------- ------- ------- -------
(.32) (.28) (.22) (.22) (.22)
12.47 1.78 2.42 2.48 3.67
-------- ------- ------- ------- -------
12.15 1.50 2.20 2.26 3.45
-------- ------- ------- ------- -------
(3.41) (.87) (3.42) (2.27) (.52)
-------- ------- ------- ------- -------
$ 22.63 $13.89 $13.26 $14.48 $14.49
-------- ------- ------- ------- -------
-------- ------- ------- ------- -------
96.71% 11.87% 16.48% 15.54% 30.11%
$ 10,598 $6,146 $6,750 $6,735 $4,897
$ 7,477 $6,164 $6,796 $5,862 $2,961
2.20% 2.24% 2.19% 2.23% 2.27%
1.20% 1.24% 1.19% 1.23% 1.27%
(2.00)% (1.98)% (1.64)% (1.75)% (1.63)%
173% 171% 182% 113% 106%
</TABLE>
See Notes to Financial Statements 27
<PAGE>
Nicholas-Applegate Fund, Inc. Nicholas-Applegate Growth Equity Fund
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
Class Z
---------------------------------------------------
March 18,
Six Months Year Ended December 1997(c)
Ended 31, Through
June 30, ------------------- December 31,
2000(d) 1999 1998 1997
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period $ 26.16 $15.49 $14.53 $14.48
---------- ------- ------- ------------
Income from investment
operations:
Net investment loss (.14) (.17 ) (.12 ) (.22)
Net realized and unrealized gain
on investment transactions 2.73 14.25 1.95 3.18
---------- ------- ------- ------------
Total from investment
operations 2.59 14.08 1.83 2.96
---------- ------- ------- ------------
Less distributions:
Distributions from net realized
gains from investment
transactions (1.01) (3.41 ) (.87 ) (2.91)
---------- ------- ------- ------------
Net asset value, end of period $ 27.74 $26.16 $15.49 $14.53
---------- ------- ------- ------------
---------- ------- ------- ------------
TOTAL RETURN(a): 10.86% 99.30 % 13.13 % 21.90%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 14,085 $2,032 $1,649 $ 633
Average net assets (000) $ 9,101 $1,334 $1,318 $ 121
Ratios to average net assets:
Expenses, including
distribution fee 1.10%(b) 1.20 % 1.24 % 1.19%(b)
Expenses, excluding
distribution fee 1.10%(b) 1.20 % 1.24 % 1.19%(b)
Net investment loss (0.95)%(b) (1.00 )% (.99 )% (.85)%(b)
Portfolio turnover rate 56% 173 % 113 % 182%
</TABLE>
------------------------------
(a) 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.
(b) Annualized.
(c) Commencement of offering Class Z shares.
(d) Calculated based upon weighted average shares outstanding during the period.
28 See Notes to Financial Statements
<PAGE>
www.prudential.com (800) 225-1852
For More Information
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
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
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
194 Wood Avenue South
Iselin, NJ 08830
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
Fund Symbols NASDAQ CUSIP
Class A NAPGX 653698209
Class B NAGBX 653698308
Class C PNACX 653698407
Class Z PNAZX 653698506
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.
The accompanying financial statements as of June 30, 2000, were not audited
and, accordingly, no opinion is expressed on them.
<PAGE>
(LOGO)
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
MF151E2 653698209 653698308 653698407 653698506
(LOGO) Printed on Recycled Paper
