<PAGE>
PIMCO Funds Semi-Annual Report
[GRAPHIC APPEARS HERE]
Stock market volatility is at its highest level in a decade. That's why more
people are diversifying their portfolios with bond funds. Story on page 4.
December 31, 1997
Multi-Manager Series
Equity Income
Renaissance
Value
Capital Appreciation
Growth
Mid Cap Growth
Target
Small Cap Value
Opportunity
International Developed
International
Emerging Markets
Innovation
Precious Metals
Balanced
Tax Exempt
Inside this report:
- --------------------------------------------------------------------------------
Page 2 Letter From PIMCO Funds' President
Where We've Been and What's Ahead
- --------------------------------------------------------------------------------
Page 4 Today's Investor
Staying Above Market Volatility
- --------------------------------------------------------------------------------
Page 6 Fund Spotlight
PIMCO Capital Appreciation and
Mid Cap Growth Funds
- --------------------------------------------------------------------------------
Page 7 In The News
Recent News on PIMCO Funds
- --------------------------------------------------------------------------------
Page 8 Investor Services
PIMCO Funds' Web Site and Roth IRA
- --------------------------------------------------------------------------------
Page 9 Overview: Comprehensive Fund Family
- --------------------------------------------------------------------------------
Page 10 PIMCO Funds Financial Information
P I M C O
--------------
F U N D S
---------
<PAGE>
President's
Letter
Dear Fellow Shareholder:
The financial markets generated outstanding returns for investors in 1997. For
the one-year period ended December 31, 1997, the stock market, as measured by
the Standard & Poor's 500 Index of stocks, rose 33.4%. The overall bond market,
as measured by the Lehman Aggregate Bond Index, posted a 9.7% return.
Positive Market Conditions. The last twelve months have been an exhilarating
experience for many investors, as the value of their portfolios grew
substantially. However, the stock market provided more than its share of nervous
moments. In March, the overall stock market fell nearly 10%, based on unfounded
fears of rising inflation. Then, in reaction to the escalating financial crisis
in Southeast Asia, the Dow Jones Industrial Average fell 554 points on October
27th. But, as we have seen on so many occasions in recent years, individual
investors viewed the market declines as buying opportunities, and stock prices
rebounded sharply.
As we anticipated, bond yields fluctuated in a fairly narrow range in 1997. We
expect this trend to persist, as long-term interest rates should remain between
5 and 7% through the year 2000. Given this environment, we believe bonds will
continue to post relatively strong returns in the coming years.
Looking Ahead. As we head into 1998, there are signs that the financial markets
could provide solid, but less spectacular returns. We are in the midst of an
economy that has grown at a steady pace, but not so fast that it has triggered
an increase in inflation. This phenomenon has been a major factor in the stock
and bond markets' ascent during the past several years.
However, it is highly unlikely that we will see a repeat of the recent dramatic
stock market gains. Historically, from 1926-1997, stocks have posted an annual
11% return, yet for the three-year period ended December 31, 1997, stocks have
risen 31% annually. As a result, going forward it will be important to
adequately diversify your portfolio and maintain realistic expectations about
your investments.
On the next page, you will find a more complete review of the stock and bond
markets, followed by a number of investment strategies to consider with your
financial advisor given today's market conditions. We then provide a recent
interview with David Breed, from the management team of PIMCO Capital
Appreciation and Mid Cap Growth Funds.
As always, we appreciate the trust you have placed in us, and we will continue
to work hard to help you meet your financial objectives. If you have any
questions regarding your investment, please contact your financial advisor. You
can also call us at 1-800-426-0107, or visit our website at www.pimcofunds.com.
Sincerely,
/s/ Stephen Treadway
Stephen Treadway
President
January 16, 1998
2
<PAGE>
Market
Review
The Stock Market
A Record-Breaking Year
Despite the largest single-day point drop in the Dow, stocks rebounded and
posted outstanding results in 1997.
[LINE GRAPH APPEARS HEAR]
S&P 500 Index
- -------------
748.03
759.5
776.17
770.52
786.16
789.56
808.48
801.77
790.82
804.97
793.17
784.1
773.88
757.9
737.65
766.34
765.37
812.97
824.78
829.75
847.03
848.28
858.01
893.27
898.7
887.3
916.92
938.79
947.14
933.54
900.81
923.54
899.47
929.05
923.91
950.51
945.22
965.03
966.98
944.16
941.64
914.62
927.51
928.35
963.09
955.4
983.79
953.39
946.78
936.46
All told, 1997 was another outstanding year in the equity market. For the first
time in its history, the overall stock market posted annual back-to-back-to-back
20%+ returns. During that three-year period the market rose 125%--its best
cumulative performance since the 1933-1935 period.
1997 was largely known as the year of large-cap stocks, specifically the
largest 50 companies. For much of the year investors flocked to these highly
liquid, household names, as they looked for solace amid market volatility. The
exception occurred during the third quarter of 1997, as small- and mid-cap
stocks led the pack due to concerns that large-cap stocks were becoming
overvalued. However, when the Asian currency crisis escalated in the fourth
quarter, large-cap stocks were again the best performers, in particular stocks
of companies with minimal reliance on overseas business.
Aside from the historic bull run, the other noteworthy news has been
the market's volatility. During 1997, the market rose or fell more than one
percent from the previous day 32% of the time. That was more than double the
1996 level and triple that of 1995. Based on current market conditions there is
little indication that this volatility will subside in the near future.
The question on the minds of many investors is how much longer can the
stock market's ascent continue? When the bull market began in October 1990, the
Dow Jones Industrial Average stood at 2365. In July 1997, the Dow eclipsed 8000
and ended the year at 7908. During that seven year period the stock market has
only had one correction of over 10%--another record.
As we look ahead, we remain cautiously optimistic about the prospects
for the stock market. The optimism lies in the fact that the current environment
is positive and corporate profits, especially in companies with minimal exposure
to Asian markets, are generally healthy. However, if the Asian situation
intensifies and leads to disappointing corporate earnings, we could see a
reversal of fortune. Therefore, it's important for investors to ensure that
their portfolios are adequately diversified, and to maintain a long-term outlook
during periods of market volatility.
The Bond Market
A Strong Rebound Takes Place
After surging in early 1997, interest rates fell dramatically--causing bond
prices to rise.
[LINE GRAPH APPEARS HERE]
30 Year Treasury Rates
- ----------------------
6.734
6.848
6.825
6.893
6.792
6.706
6.527
6.645
6.805
6.816
6.944
6.971
7.09
7.126
7.169
7.056
7.145
6.877
6.893
6.9
6.989
6.908
6.776
6.726
6.663
6.744
6.629
6.531
6.532
6.456
6.456
6.636
6.548
6.651
6.612
6.643
6.588
6.379
6.368
6.295
6.431
6.44
6.274
6.154
6.156
6.114
6.034
6.055
6.085
5.926
5.923
5.901
In our report to shareholders six months ago we stated that "the prospects for
the bond market are bright." At the time, our optimism may have looked like
wishful thinking. In March, the Federal Reserve Board had raised interest rates
1/4 of a percentage point as a preemptive strike against inflation. This caused
long-term interest rates to surge above 7.1% by the end of the first quarter of
1997.
However, our forecast was correct, as the bond market shook off its
early-year losses and rebounded dramatically. By the end of 1997, long-term
interest rates had plunged to 5.9%. Virtually every sector of the bond market
participated in the rally, led by high yield bonds.
There were several factors that contributed to the bond market's
rebound, including the strong U.S. dollar, signs of a slowing U.S. economy due
to the Asian financial crisis, low inflation, and a subsequent reduced threat of
a Federal Reserve interest rate hike. In addition, the volatility in the stock
market caused many investors to reallocate assets into bonds. This led to
positive supply-and-demand considerations for bonds.
Looking ahead, we believe that interest rates will continue to fall,
but not at the pace we have experienced in the past few months. Should the
economy experience a few quarters of sluggish 1% growth, the yield on long-term
Treasuries could drop to 5.5%. This would lead to strong returns in the bond
market, especially relative to the low inflationary environment we anticipate
going forward.
In terms of specific sectors of the market, we foresee attractive
opportunities in lower-coupon mortgage securities, provided that long-term
interest rates do not fall below 5.5%. Emerging market debt in selective
countries might also become attractive in 1998.
3
<PAGE>
Today's
Investor
Staying Above Market Volatility
The protection and potential benefits of bond funds
[ARTWORK APPEARS HERE]
By all measures, 1997 was a volatile period for the stock market. On any given
day it was not uncommon for the market to swing up or down 50, 100, even 150
points. According to The New York Times, 1997's stock market logged in as the
fourth most volatile in the last half century.
So how can you stay above market volatility? In 1997, investors who looked
beyond market gyrations and the daily headlines were amply rewarded. But the
stock market has now provided a record seven years of growth with only one 10%
correction. And looking ahead, many financial experts expect the lengthy bull
market, coupled with turmoil in Asia, to breed even greater stock market
fluctuations.
Volatility Returns
After years of relative calm, stock market volatility substantially increased in
1997
[BAR GRAPH APPEARS HERE]
Volatility Returns Chart pg. 4
- ------------------------------
1
0.625
0.84
0.62
0.48
0.64
0.58
0.9
0.75
0.82
0.61
0.62
0.65
0.5
1.05
0.53
0.31
0.42
0.73
0.51
0.62
0.65
0.97
0.625
0.62
1
1.37
0.96
0.71
0.61
0.76
0.68
1.05
0.82
1.15
0.81
0.79
0.625
0.9
2.01
1.08
0.8
1
0.88
0.63
0.58
0.63
0.48
0.72
1.4
Source: Standard & Poor's, Bloomberg Financial Markets. Volatility based on
standard deviation of daily percentage changes in the S&P 500. Past performance
is no guarantee of future results.
Of course, no one can predict how increased volatility will affect the stock
market's future course. As 1997 showed, it's often best to avoid overreacting to
short-term events. Instead, work with your financial advisor to ensure you have
a balanced portfolio, one that will allow you to sleep at night during an
erratic market environment.
Schedule a Portfolio Checkup
When reviewing your portfolio with your financial advisor, it's important to
keep in mind the amount of risk you can tolerate, and the time frame available
for reaching your investment goals. These factors are critical to determining
the type of investments you should have. For example, if you need money for your
child's education in the next couple of years, you would want to invest in less
aggressive mutual funds that have lower risk potential.
On the other hand, if you have a longer-term investment goal like retirement,
you may consider concentrating your assets in more aggressive mutual funds that
have greater reward potential.
Proper Asset Allocation Is Key
Whether you're investing to meet short- or long-term needs, you can't totally
escape market volatility. One way to temper this volatility is by allocating an
adequate portion of your portfolio's assets to bond mutual funds. As you can see
from the chart below, during the market crash of 1987 a portfolio diversified
with bonds fell less, and rebounded faster, than an all-stock portfolio.
A Diversified Portfolio Tempers Volatility
A $10,000 investment in a diversified portfolio fared better than an all-stock
portfolio during the 1987 market decline
[PERFORMANCE GRAPH APPEARS HERE]
Diversified Portfolio Tempers Volatility
- ----------------------------------------
Diversified Portfolio All-Stocks
--------------------- ----------
10,000 10,000
8,750 7,750
8,200 7,100
8,625 7,610
8,875 8,050
9,490 8,350
9,050 7,925
9,070 8,010
9,090 8,005
9,625 8,610
9,550 8,500
9,300 8,090
9,700 8,590
10,375 8,950
9,740 8,650
10,400 8,920
All-stock portfolio represented by the S&P 500 Index, an unmanaged index of
common stocks. Diversified portfolio consists of 60% S&P 500 Index and 40%
Lehman Aggregate Bond Index (an unmanaged index of a variety of bonds). It is
not possible to directly invest in an unmanaged index. Results not indicative of
any PIMCO Fund and past performance is no guarantee of future results.
In addition to lower volatility, many people don't realize that investing in
bonds can provide capital appreciation potential on top of dividend income. This
is due to the inverse relationship between interest rates and bond prices.
Assume an investor buys a $10,000 bond with a yield of 6%. If interest rates
fall to 4%, the demand for a bond paying 6% would increase, and the price of
that bond would rise above $10,000, generating a gain on the initial investment.
Of course, the opposite scenario can also occur. If rates increase to 7%, the
demand for a bond that pays only 6% would fall, so the price of that bond would
drop below $10,000.
4
<PAGE>
The Benefits of Bonds
The capital appreciation potential of bonds is only one of several unknown or
misunderstood principles of investing in fixed income securities. The questions
and answers that follow are aimed at clearing up some other misconceptions about
bonds, and at helping you understand why it's a good idea to always make bonds a
part of your portfolio.
Q. Don't returns on stocks and bonds move in the same direction?
A. Generally speaking, the returns on stocks and bonds do not move in tandem,
because in many cases profits are driven by different factors. Gains on stocks
often stem from earnings, while returns on bonds depend more on economic
factors, such as interest rates and inflation. Although in recent years returns
on both types of securities have moved more in sync, this has not been the case
over the long run.
Q. Wouldn't an economic slowdown hurt the performance of bonds?
A. No, just the opposite. A slower economy would likely lead to lower interest
rates, which drive bond prices up. Again, the key concept here is the inverse
relationship between interest rates and bond prices. Because of the turmoil in
Southeast Asia, many economists are projecting slower economic growth in the
U.S. during 1998.
Q. Are the yields on bonds lower now than they have been in recent years?
A. It's true that bond yields are lower than they were five or ten years ago,
but it's important to look at the "real" rate of return, which is a better way
to judge performance. An investment's "real" return is its return after
inflation. So, in the case of bonds, it's the yield less the rate of inflation.
As of December 31, 1997, the real rate of return on 30-year U.S. Treasuries was
3.7% (5.9% yield minus 2.2% inflation rate). This "real" return is more than
double the historical average rate of 1.8%.
Real rates of return (yield minus inflation) are now significantly higher than
their historical average.
[BAR GRAPH APPEARS HERE]
Historical 1.8%
Real Rate of Return
Current 3.7%
Real Rate of Return
Real rate of return and historical average based on yield of 30-year Treasury
bonds, less the rate of inflation (represented by the CPI). Current real rate of
return as of 12/31/97. Historical rate of return from 12/31/25-12/31/97.
Past performance is no indication of future results.
To further illustrate this point, compare the real rate of return on bonds with
that of another investment, such as CDs. CDs and other government-insured
instruments are widely viewed as safe investments (unlike bond funds, CDs are
guaranteed as to repayment of principal and interest), but in the end you can
lose earning potential. In the early 1980s, for example, CDs were yielding
around 15%, but after taxes and inflation a 15% CD barely broke even.
Don't Limit Your Earning Potential
Some safe investments can be a losing proposition
[PERFORMANCE GRAPH APPEARS HERE]
Don't Limit your Earning Potential
- --------------------------------------------
CD Rate CD Rate After Tax and Inflation
- ------- -------------------------------
7.9 -0.85
5.3 0
5.1 -1
8.6 -3.3
10.4 -8
7.1 -2.5
5.8 -1.1
6.1 -2.9
8.9 -4.8
12 -7.83
13.8 -6.3
16.9 -0.85
13.3 2.5
9.6 1.5
11.2 2
8.5 0.85
6.7 2.4
7.2 0.02
8.2 0.8
9.5 1.5
8.5 -0.7
6.1 0.8
3.8 -0.5
3.3 -0.6
5 0.5
6.2 1.4
5.6 0.3
5.8 1.5
Source: CD rate is based on the annualized average of 6-month CDs from the
Federal Reserve Bulletin. Inflation based on the CPI, and tax rate is based on
the maximum federal income tax rate. Past performance is no guarantee of future
results. Unlike an investment in stocks and bonds, CDs are guaranteed as to
repayment of principal and interest. Investment return from stocks and bonds
will fluctuate and the value of an investor's shares will fluctuate and may be
worth more or less than original cost when redeemed.
Q. Does a bond fund's yield differ from its total return?
A. A bond fund's yield only indicates the income it is generating at a given
point in time. Total return not only takes into account the income a bond fund
pays, but also any change in its share price. Once again, keep in mind the
previous example showing how the price of a bond goes up and down. A bond's
appreciation or depreciation plays a key role in its total return. For example,
if you invest in a bond fund with a yield of 7% but its market share price falls
8%, you're losing money. So, when you're considering bond funds, it's more
important to look at a fund's total return rather than its current yield.
Q. What percentage of my portfolio should be in stocks versus bonds?
A. It depends on your financial objectives, time frame and risk tolerance. If
you previously targeted a percentage of your portfolio for bonds you may need to
make a reallocation. That's because the strong stock market rally has caused
many portfolios to become top-heavy with equities. To determine what percentage
of bonds fits your individual needs, contact your financial advisor. He or she
can review your portfolio and recommend what steps you should take.
5
<PAGE>
Fund Spotlight
PIMCO Capital Appreciation and
Mid Cap Growth Funds
Despite the increased volatility in the stock market due to the crisis in
Southeast Asia, the two mutual funds managed by PIMCO Advisors' Cadence Capital
Management continue to post outstanding results. While past performance is no
guarantee of future results, both the PIMCO Capital Appreciation and Mid Cap
Growth Funds have outperformed their respective indices over the 1-, 3-, 5-year
and since inception periods ended December 31, 1997. We spoke with David Breed,
Chief Investment Officer at Cadence, for an update on the Funds.
[PHOTO OF DAVID BREED APPEARS HERE]
Q: What's the secret behind your Funds' outstanding performance records?
A: First, we follow a "growth-at-a-reasonable-price" investment strategy. In
other words, we look for strong growth companies, but we won't pay through the
nose to get them. Second, as primarily an institutional manager we strictly
adhere to our investment strategy. We simply will not jeopardize our portfolios
by following the latest hot industry or investment trend.
Q: Can you briefly describe your investment process?
A: Our investment strategy begins with taking a universe of roughly 4,000
stocks, and applying a systematic stock selection process. This helps us rank
each security by growth and price considerations, such as expected earnings per
share growth and price-to-earnings ratio. We then conduct fundamental research
to select about 400 companies we believe can sustain their growth rates.
Q: When do you sell a stock?
A: Our decision to sell a stock is as disciplined as our decision to buy a
stock. To ensure adequate diversification we automatically trim holdings that
grow to more than 2% of a fund's portfolio. In addition, we continually monitor
and analyze our portfolios for holdings that we think should be sold. We
consider selling a stock when it shows declining earnings expectations or
announces a negative earnings surprise. A stock is also sold when it reaches an
excessive relative valuation, a practice that has won praise from Morningstar
for its tax efficiency.
Q: Can you explain how selling certain stocks results in tax efficiency?
A: We help to offset realized capital gains by quickly selling off holdings
that are underperforming. This reduces the amount of taxable capital gains
distributions, and has helped to improve our funds' after-tax return potential.
Q: How are you positioning the Capital Appreciation Fund given the high
valuations in the large-cap market?
A: We have a smaller market capitalization in the Fund relative to its
benchmark, the S&P 500 Index. We have done this in reaction to the high prices
of many large-cap stocks, and our belief that there is risk to the earnings of
larger multinational corporations as a result of the crisis in Southeast Asia.
We believe a more domestically-oriented portfolio that is not heavily weighted
in multinationals will perform relatively well in a market that is affected by
overseas turbulence.
Q: What is your outlook for the mid-cap market and the Mid Cap Growth Fund?
A: Generally, mid-caps are not as exposed to the Asian crisis as larger-cap
stocks. This is especially true among the large multinational companies that
rely on foreign sales to boost their earnings. In addition, as a whole, mid-caps
are well-positioned to participate in the ongoing acquisition wave, which we
expect to be prevalent in 1998 as companies look for ways to boost their
earnings in the aftermath of Southeast Asia.
Q: What sets Cadence Capital Management apart from other investment managers?
A: Our "blended" approach of investing in growth stocks that are reasonably
priced differentiates us from many of our peers. And given the high valuations
in many sectors of the stock market, we believe this strategy will be
particularly beneficial in the coming year.
The views of Mr. Breed are not indicative of any future performance of any PIMCO
Fund. Refer to pages 14 and 16 for more complete performance information on the
Capital Appreciation and Mid Cap Growth Funds.
6
<PAGE>
In The News
Recent News on PIMCO Funds
The PIMCO Funds and their institutional portfolio managers are regularly
featured in the press. Here is a sample of some recent articles.
[_] The insights of Bill Gross, manager of the PIMCO Total Return and Low
Duration Funds continue to be sought out by the press. In recent months his
views appeared in The Wall Street Journal, Forbes, Barron's, The New York Times
and on CNN and CNBC.
[_] Ben Fischer of the PIMCO Small Cap Value Fund was interviewed in an August
issue of Barron's. In a feature story Mr. Fischer explained his strict
investment discipline and his secrets for identifying undervalued small-cap
issues.
[_] In July and August both The Wall Street Journal and Kiplinger's Personal
Finance praised the PIMCO StocksPLUS Fund. Both highlighted the Fund in articles
explaining how it seeks to consistently outperform the S&P 500 Index by
investing in stock futures backed with short-term bonds.
[_] PIMCO Renaissance Fund was featured in a December issue of Barron's. The
article highlighted the Fund manager's astute stock-picking and praised its
track record.
[_] David Breed of the PIMCO Capital Appreciation and Mid Cap Growth Funds was
interviewed in a November issue of Investor's Business Daily. In a feature
story, Mr. Breed explained his strict investment discipline and the secrets
behind his Funds' performance.
[_] The January edition of Money explained the virtues of regularly investing
and dollar cost averaging in an article entitled "The Best Funds for Steady
Savers." In it, PIMCO Opportunity Fund was listed as a fund to consider.
Morningstar Inc., an independent organization, provides investors with
information regarding a wide range of investment products. One service offered
by Morningstar is assigning star ratings to the mutual funds they track. Their
highest rating is five-stars, and the lowest rating is one-star. Following are
the PIMCO Fund family's five- and four-star rated Funds as of December 31, 1997.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
STOCK FUNDS Overall 3 Year 5 Year 10 Year
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
StocksPLUS Fund ***** 5* - -
Equity Income Fund **** 5* 4* -
Renaissance Fund ***** 5* 5* -
Value Fund **** 4* 4* -
Capital Appreciation Fund ***** 5* 5* -
Mid Cap Growth Fund ***** 5* 5* -
Small Cap Value Fund **** 5* 4* -
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
BOND FUNDS Overall 3 Year 5 Year 10 Year
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Foreign Bond Fund ***** 5* 5* -
High Yield Fund ***** 5* 5* -
Total Return Fund ***** 4* 4* 5*
Low Duration Fund **** 4* 4* 4*
Short-Term Fund **** 4* 4* 4*
</TABLE>
The chart above is based on December 31, 1997 Morningstar ratings. Overall
rating is a weighted average of a fund's 3-, 5- and 10-year ratings (when
applicable). During the 3-, 5- and 10-year periods there were 2,332, 1,292 and
676 domestic equity funds and 1,371, 771 and 337 taxable bond funds rated,
respectively.
Morningstar ratings reflect historical risk-adjusted performance and are subject
to monthly changes. Therefore, past ratings are not a guarantee of future
results. The ratings are calculated from a fund's average annual total return
with appropriate sales charge adjustment and a risk factor that reflects fund
performance relative to three month Treasury bill returns. With the exception of
the Renaissance Fund, ratings are based on institutional class shares, which
generally have a $5 million minimum investment. Under special circumstances,
institutional shares may be available. Call for details.
Class A, B and C shares, which were initially offered on 1/17/97, have not yet
been rated by Morningstar. Had Class A, B and C shares been in existence for the
same time period as the institutional class shares they may have received
different ratings due to Class A, B and C shares' higher expense and sales
charges. 5-star ratings are limited to the top 10% of funds in an investment
category and the next 22.5% earn 4-stars.
See page 27 for additional information.
7
<PAGE>
Investor
Services
PIMCO Funds is on the Web
www.pimcofunds.com
[GRAPHIC APPEARS HERE]
We're pleased to announce the launch of the PIMCO Funds Web site. You now have
around-the-clock access to the most timely and comprehensive information
available on all of the PIMCO Funds. In addition, the site includes daily
commentary from our fund managers, with insights on the economy and other
factors affecting the financial markets. We can be found on the Worldwide Web at
www.pimcofunds.com.
The site is divided into three main sections:
Investment Insight provides complete details on each fund's investment manager,
including their process, biographies, a manager's update and more.
Fund Information contains profiles of all the PIMCO Funds, including performance
data, a summary of each fund's portfolio and fund share prices (NAVs), updated
each business day.
Resources features a document library that contains prospectuses, applications
and other forms that you can view or print, as well as other literature you can
order. It also has information about our convenient shareholder services, and a
listing of the retirement plans offered by PIMCO Funds.
We're sure you'll find the PIMCO Funds Web site to be an invaluable tool. If you
have any comments or questions about the site, please call us today at
1-800-426-0107. Or, use the e-mail feature of the site to contact us.
Introducing PIMCOFunds Roth IRA
Many investors are now eligible to open a new Roth IRA account or convert their
"traditional" IRA into a Roth. These new retirement accounts have many tax
advantages that could help you hold on to more of your money when you redeem
your IRA dollars.
[GRAPHIC APPEARS HERE]
How it works
With a Roth IRA, you can make annual, non- deductible contributions of up to
$2,000. What sets Roth and traditional IRAs apart are the potential tax savings
on redemptions from your account.
While contributions to a Roth are never deductible, distributions
(including contributions) and earnings after age 59 1/2 are completely tax-free
if the Roth has been held for at least five years.
Along with its tax benefits, the Roth IRA gives you more flexibility than
traditional IRAs when it comes to making contributions and taking distributions.
The Roth allows you to make contributions after you reach age 70 1/2 if you are
still working, and doesn't require you to begin taking distributions at that
age.
Should You Consider Converting?
Although the Roth has many tax advantages, it's important to note that it's not
for everyone. While there are no early-withdrawal penalties for converting your
traditional IRA into a Roth, you will have to pay income taxes on your prior IRA
earnings and deductible contributions. For conversions made by December 31,
1998, the resulting taxable income is spread equally over four tax years.
Therefore, you should consult with your financial or tax advisor to determine
how big a tax bill you could incur by converting your IRA into a Roth.
Eligibility Requirements
To be eligible to make the maximum contribution to a Roth IRA, you must be
either single with an adjusted gross income of $95,000 or less, or a married
couple filing jointly with an adjusted gross income of $150,000 or less. Your
tax or financial advisor can explain how smaller annual contribution amounts are
allowed for certain other income levels. Married couples filing separately are
not eligible for the Roth IRA. As of January 1, 1998, you can convert your
traditional IRA into a Roth if your adjusted gross income in the year of the
conversion is $100,000 or less.
How to open an account
If you'd like to learn more about the Roth IRA you should consult with your
financial advisor. He or she can determine if you are an appropriate candidate
for a Roth. To receive an application to open a new Roth account, or a Roth IRA
Conversion Form speak with your advisor, or call us today at 1-800-426-0107.
Note: PIMCO Funds IRAs, including the new Roth IRA, have no set-up or annual
account maintenance fees.
8
<PAGE>
The PIMCO Funds Family
PIMCO Funds offers unique access to the institutional investment capabilities of
PIMCO Advisors L.P., manager of over $190 billion. PIMCO Advisors consists of
seven independent investment firms, each seeking the highest caliber performance
in a specific discipline. Six of these firms currently manage PIMCO Funds.
Together, their superior standard of expertise has attracted many prestigious
clients, including 42 of the 100 largest U.S. corporations. To learn more about
any of the PIMCO Funds, please call us at 1-800-227-7337.
<TABLE>
<CAPTION>
Stock Funds Objective Primary Portfolio Composition PIMCO Advisors Manager
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Equity Income Current income and long-term growth Stocks of companies with below-average NFJ Investment Group
P/Es and above-average dividends
- ------------------------------------------------------------------------------------------------------------------------------------
Renaissance Long-term growth of capital and Income-producing stocks and convertible Columbus Circle
income securities Investors
- ------------------------------------------------------------------------------------------------------------------------------------
StocksPLUS Total return exceeding the S&P S&P 500 stock index futures backed by Pacific Investment
500 Index a portfolio of short-term, fixed-income Management Company
securities
- ------------------------------------------------------------------------------------------------------------------------------------
Value Long-term growth of capital and Stocks of companies with below-average NFJ Investment Group
income P/Es
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Appreciation Long-term growth of capital and income Stocks of larger-capitalized companies Cadence Capital
the manager believes are reasonably priced Management
- ------------------------------------------------------------------------------------------------------------------------------------
Growth Long-term growth of capital Stocks of larger-capitalized companies Columbus Circle
Investors
- ------------------------------------------------------------------------------------------------------------------------------------
Mid Cap Growth Growth of capital Stocks of medium-capitalized companies Cadence Capital
the manager believes are reasonably priced Management
- ------------------------------------------------------------------------------------------------------------------------------------
Target Capital appreciation Stocks of medium-capitalized companies Columbus Circle
Investors
- ------------------------------------------------------------------------------------------------------------------------------------
Small Cap Value Long-term growth of capital and income Stocks of smaller-capitalized companies NFJ Investment Group
with below-average P/Es
- ------------------------------------------------------------------------------------------------------------------------------------
Opportunity Capital appreciation Stocks of smaller-capitalized companies Columbus Circle
Investors
- ------------------------------------------------------------------------------------------------------------------------------------
International
Developed Long-term growth of capital Stocks of non-U.S. companies in developed Blairlogie Capital
markets Management
- ------------------------------------------------------------------------------------------------------------------------------------
International Capital appreciation Stocks of non-U.S. companies in developed Blairlogie Capital
and emerging markets Management
- ------------------------------------------------------------------------------------------------------------------------------------
Emerging Markets Long-term growth of capital Stocks of non-U.S. companies in emerging Blairlogie Capital
markets Management
- ------------------------------------------------------------------------------------------------------------------------------------
Innovation Capital appreciation Stocks of technology-related companies Columbus Circle
Investors
- ------------------------------------------------------------------------------------------------------------------------------------
Precious Metals Capital appreciation Stocks of precious metals-related Van Eck Associates*
companies
<CAPTION>
Stock & Bond Funds Objective Primary Portfolio Composition PIMCO Advisors Manager
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balanced Total return Stocks, bonds and money market instruments Cadence/NFJ/Pacific
Investment Management
<CAPTION>
Bond Funds Objective Primary Portfolio Composition PIMCO Advisors Manager
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Long-Term U.S. Maximum total return Long-term U.S. government bonds Pacific Investment
Government (8+ year duration) Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Exempt High current income exempt Investment grade municipal bonds Columbus Circle
from federal income tax (3-10 year duration) Investors
- ------------------------------------------------------------------------------------------------------------------------------------
Emerging Markets Maximum total return Emerging market bonds Pacific Investment
Bond (0-8 year duration) Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
Foreign Bond Maximum total return Investment grade foreign bonds Pacific Investment
(3-6 year duration) Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
Global Bond II Maximum total return Investment grade U.S. and foreign Pacific Investment
bonds (3-6 year duration) Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
High Yield Maximum total return High-yield bonds (2-6 year duration) Pacific Investment
Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return Maximum total return Investment grade bonds Pacific Investment
(3-6 year duration) Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
Real Return Bond Maximum real return Inflation-indexed government bonds Pacific Investment
Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
Low Duration Maximum total return Shorter-term, investment grade bonds Pacific Investment
(1-3 year duration) Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
Short-Term Maximum current income Money market securities and short-term bonds Pacific Investment
consistent with preservation (up to 1 year duration) Management Company
of capital and daily
liquidity
- ------------------------------------------------------------------------------------------------------------------------------------
Money Market Maximum current income Short-term money market Pacific Investment
consistent with preservation instruments (duration less than 1 year) Management Company
of capital and daily
liquidity
</TABLE>
See page 27 for additional information.
*Van Eck Associates serves as a sub-advisor to the Fund and is unaffiliated
with PIMCO Advisors L.P.
9
<PAGE>
PIMCO Funds Financial Information
We are pleased to present an in-depth review of the PIMCO Multi-Manager Series
Funds as of December 31, 1997. In order to help analyze, compare and contrast
the Funds, the report is broken down into a number of sections. Listed below is
a table of contents and descriptions of the various sections.
Pages 11-27 Fund Summary
A summary of a Fund's performance record and portfolio composition, and a review
from the Fund's investment manager.
Pages 28-51 Schedule of Investments
The schedule of investments includes a listing of securities in the Fund's
portfolio as of December 31, 1997, including the number of shares or principal
amount and value as of that date.
Schedule of
Stock Funds Fund Summary Investments
Equity Income Fund Page 11 Page 28
Renaissance Fund Page 12 Page 29
Value Fund Page 13 Page 30
Capital Appreciation Fund Page 14 Page 31
Growth Fund Page 15 Page 32
Mid Cap Growth Fund Page 16 Page 34
Target Fund Page 17 Page 36
Small Cap Value Fund Page 18 Page 37
Opportunity Fund Page 19 Page 39
International Developed Fund Page 20 Page 40
International Fund Page 21 Page 42
Emerging Markets Fund Page 22 Page 44
Innovation Fund Page 23 Page 46
Precious Metals Fund Page 24 Page 47
Stock & Bond Funds
Balanced Fund Page 25 Page 48
Bond Funds
Tax Exempt Fund Page 26 Page 50
Pages 52-63 Financial Highlights
This chart shows a per share breakdown of the factors that affect a Fund's NAV
for the current and past reporting periods. In addition to showing total return,
the chart reports distributions, asset size, expense ratios and portfolio
turnover rate.
Pages 64-65 Statement of Assets and Liabilities
A "balance sheet" of a Fund as of the last day of the fiscal period. It includes
the Fund's Class level NAVs per share by dividing the Fund's Class level net
assets (assets minus liabilities) by the number of Class level shares
outstanding.
Pages 66-67 Statement of Operations
This statement lists a Fund's income, expenses, and gains and losses on
securities and currency transactions, and appreciation or depreciation from
portfolio holdings.
Pages 68-71 Statement of Changes in Net Assets
This reports the increase or decrease in a Fund's net assets during the
reporting period. Changes in net assets are due to a variety of factors,
including investment operations, dividends, distributions and capital share
transactions.
Pages 72-80 Notes to Financial Statements
A description of the significant accounting policies of the funds, and more
detailed information about the schedules and tables that appear in the report.
10
<PAGE>
PIMCO Equity Income Fund
December 31, 1997
Objective
Current income as a primary objective and long-term growth of capital.
Portfolio
Primarily common stocks with below-average price-to-earnings ratios and higher
dividend yields relative to their industry groups.
Total Net Assets
$172 million
Number of Securities in the Portfolio
46 (not including short-term instruments)
PIMCO Advisors Institutional Manager
NFJ Investment Group
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/97
<TABLE>
<CAPTION>
A Shares B Shares C Shares Lipper
(INCEP. 3/8/91) (INCEP. 3/8/91) (INCEP. 3/8/91) S&P 500 Equity Inc.
Adjusted Adjusted Adjusted Index Fund Avg.
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 30.0% 23.7% 30.0% 25.0% 29.0% 33.4% 27.4%
3 years 28.5% 26.1% 28.2% 27.6% 28.2% 31.2% 25.5%
5 years 17.8% 16.4% 17.6% 17.4% 17.6% 20.3% 17.0%
Inception 17.7% 16.7% 17.6% 17.6% 17.6% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
EQUITY INCOME EQUITY INCOME EQUITY INCOME S&P 500
CLASS A B C
INCEPTION 3/8/91 3/8/91 3/8/91
================ ============= ============= ============= =============
<S> <C> <C> <C> <C>
12/31/83
03/31/84
06/30/84
09/30/84
12/31/84
03/31/85
06/30/85
09/30/85
12/31/85
03/31/86
06/30/86
09/30/86
12/31/86
03/31/87
06/30/87
09/30/87
12/31/87
03/31/88
06/30/88
09/30/88
12/31/88
03/31/89
06/30/89
09/30/89
12/31/89
03/31/90
06/30/90
09/30/90
12/31/90
03/31/91 9,450.00 10,000.00 10,000.00 10,000.00
06/30/91 9,704.45 10,269.26 10,269.26 9,978.10
09/30/91 10,457.34 11,065.97 11,065.97 10,512.05
12/31/91 11,001.19 11,641.48 11,641.48 11,393.18
03/31/92 11,372.91 12,034.82 12,034.82 11,105.76
06/30/92 11,607.28 12,282.84 12,282.84 11,317.34
09/30/92 11,875.80 12,566.98 12,566.98 11,674.10
12/31/92 12,623.25 13,357.94 13,357.94 12,261.88
03/31/93 13,248.55 14,019.63 14,019.63 12,797.36
06/30/93 13,321.63 14,096.96 14,096.96 12,859.67
09/30/93 13,758.16 14,558.90 14,558.90 13,191.94
12/31/93 13,691.84 14,488.72 14,488.72 13,497.81
03/31/94 13,289.09 14,062.52 14,062.52 12,985.95
06/30/94 13,286.87 14,060.18 14,060.18 13,040.60
09/30/94 14,023.86 14,840.07 14,840.07 13,678.26
12/31/94 13,472.14 14,256.24 14,256.24 13,676.11
03/31/95 14,779.68 15,639.87 15,639.87 15,007.69
06/30/95 15,772.77 16,690.76 16,690.76 16,440.43
09/30/95 16,991.71 17,980.64 17,980.64 17,746.82
12/31/95 17,980.55 19,027.03 19,027.03 18,815.30
03/31/96 18,863.24 19,961.10 19,961.10 19,825.23
06/30/96 19,693.78 20,839.98 20,839.98 20,714.90
09/30/96 20,103.42 21,273.47 21,273.47 21,355.13
12/31/96 21,841.74 23,112.96 23,112.96 23,135.28
03/31/97 22,182.88 23,448.26 23,443.40 23,755.54
06/30/97 25,094.47 26,480.29 26,474.67 27,902.77
09/30/97 27,691.75 29,146.86 29,148.62 29,992.92
12/31/97 28,586.20 30,044.58 30,040.56 30,853.98
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. All
returns represent the blended performance of the Fund's retail class shares
(for the period from 1/20/97) and the prior performance of the Fund's
institutional class shares (for the period from 3/8/91). Retail class shares
have higher expenses than institutional class shares. Therefore, total return
of retail class shares would have been lower had they been in existence since
the Fund's inception. Past performance is not an indication of future results.
See page 27 for Footnotes, which include additional details.
- -------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- -------------------------------------------------------------------------------
Top 10 Stocks % of Total Investments
- -------------------------------------------------------------------------------
Southern New England Telecom. 4.5%
Telecommunication services supplier
- -------------------------------------------------------------------------------
PNC Bank Corporation 4.3%
Commercial banking
- -------------------------------------------------------------------------------
RJR Nabisco Holdings Corp. 4.1%
Tobacco/food products manufacturer
- -------------------------------------------------------------------------------
Supervalu, Inc. 4.0%
Food wholesaler; retailer
- -------------------------------------------------------------------------------
GATX Corporation 2.2%
Railcar leasing/equipment financing
- -------------------------------------------------------------------------------
Washington Water Power Co. 2.2%
Hydroelectric power, national gas
- -------------------------------------------------------------------------------
Maytag Corp. 2.2%
Major home appliances manufacturer
- -------------------------------------------------------------------------------
U.S. West Communications Group 2.2%
Telecommunication services
- -------------------------------------------------------------------------------
Bell Atlantic Corp. 2.1%
Telecommunication services
- -------------------------------------------------------------------------------
Peoples Energy Corp. 2.1%
Gas utility in Chicago
- -------------------------------------------------------------------------------
Top Ten Total 29.9%
- -------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- -------------------------------------------------------------------------------
Utilities 21.3%
- -------------------------------------------------------------------------------
Consumer Discretionary 18.4%
- -------------------------------------------------------------------------------
Financial and Business Services 12.9%
- -------------------------------------------------------------------------------
Materials and Processing 11.1%
- -------------------------------------------------------------------------------
Consumer Staples 10.1%
- -------------------------------------------------------------------------------
Portfolio Composition
- -------------------------------------------------------------------------------
Common Stock 97%
- -------------------------------------------------------------------------------
Cash Equivalents 3%
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The Equity Income Fund provided investors with strong performance over the six
months ended December 31, 1997. Specifically, the Fund returned 13.9%, 13.5% and
13.5% during this period for its Class A, B and C shares, respectively. These
returns handily outperformed the S&P 500 Index return of 10.6% for the same time
period, and the 11.1% average return of funds with the same objective (as
measured by the Lipper Equity Income Fund Average).
During the third quarter of 1997, the stock market as a whole did very well.
The Fund manager's astute stock selection further enhanced performance, most
notably from holdings in the finance and consumer staples sectors. Examples of
stocks that buoyed returns during the period were Bankers Trust, Bear Stearns,
Chase Manhattan and Maytag.
Unfortunately, the broader market success did not continue into the fourth
quarter. Turmoil in Asia caused investors to quickly reassess the short-term
prospects for many sectors of the marketplace. Fortunately, the Equity Income
Fund continued to perform relatively well, due to good sector selection by the
Fund's manager. For example, the Fund held an overweighted position in the
utility sector, which did extremely well during the quarter. And, by
underweighting the technology sector, the Fund managed to avoid much of the poor
performance that occurred in that industry.
In particular, during the fourth quarter, the Fund benefited from holdings
such as Southern New England Telecommunications, which was subject to takeover
rumors. In addition, PG&E Corp., PNC Bank Corp., RJR Nabisco and Supervalu did
very well for the Fund during the period.
On the downside, Fund performance was hurt somewhat during the fourth quarter
by holdings such as Capstead Mortgage and Phelps Dodge. In addition, the Fund
suffered from the continuing lag of value versus growth stocks. A study done by
a major brokerage firm concluded that dividend yield (a major factor to the
Fund's manager and other value-oriented investors) was one of the least-used
factors in portfolio selection in 1997. The Fund's manager believes this
situation is likely to change, perhaps sooner than later. As more baby boomers
near retirement, income derived from equities should take on increased
importance. And lower tax rates will increase the attractiveness of dividend-
paying stocks.
Overall, the manager currently believes the Fund is well positioned heading
into 1998, with a dividend yield still more than double that of the S&P 500
Index, and an average price-to-earnings ratio of only about two-thirds of the
Index.
See page 28 for financial details. 11
<PAGE>
PIMCO Renaissance Fund
December 31, 1997
Objective
Long-term growth of capital and current income.
Portfolio
Primarily income-producing stocks and convertible securities of companies with
small, medium, and large market capitalizations.
Total Net Assets
$471 million
Number of Securities in the Portfolio
51 (not including short-term instruments)
PIMCO Advisors Institutional Manager
Columbus Circle Investors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/97
<TABLE>
<CAPTION>
A Shares B Shares C Shares Lipper
(INCEP. 2/1/91) (INCEP. 5/22/95) (INCEP. 4/18/88) S&P 500 Equity Inc.
Adjusted Adjusted Adjusted Index Fund Avg.
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 35.9% 28.4% 34.9% 29.9% 33.9% 33.4% 27.4%
3 years 29.9% 27.5% -- -- 28.9% 31.2% 25.5%
5 years 20.7% 19.3% -- -- 19.8% 20.3% 17.0%
Inception 20.4% 19.4% 30.9% 30.2% 13.8% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
QUARTERLY
<TABLE>
<CAPTION>
RENAISSANCE S&P 500 GROWTH S&P 500
CLASS C C
INCEPTION 4/18/88 4/30/88 2/24/84 2/29/84
============== ============= ============= ============= =============
<S> <C> <C> <C> <C>
12/31/83 10,000.00 10,000.00
03/31/84 10,250.00 10,173.18
06/30/84 10,180.32 9,911.89
09/30/84 10,986.38 10,872.72
12/31/84 11,211.05 11,076.74
03/31/85 12,138.35 12,093.98
06/30/85 13,073.11 12,980.99
09/30/85 12,627.67 12,449.46
12/31/85 14,632.19 14,591.12
03/31/86 16,917.01 16,649.13
06/30/86 17,948.98 17,630.44
09/30/86 17,409.21 16,400.58
12/31/86 18,025.65 17,314.55
03/31/87 22,171.64 21,011.62
06/30/87 23,276.81 22,066.36
09/30/87 24,640.76 23,522.05
12/31/87 19,396.43 18,223.64
03/31/88 10,000.00 10,000.00 20,073.57 19,257.86
06/30/88 10,230.00 10,547.78 21,608.44 20,537.40
09/30/88 10,190.28 10,583.60 21,007.12 20,607.15
12/31/88 10,571.93 10,909.62 21,213.96 21,241.92
03/31/89 10,914.85 11,682.74 23,104.02 22,747.27
06/30/89 11,585.87 12,712.07 26,246.52 24,751.46
09/30/89 12,009.93 14,071.33 29,902.82 27,398.04
12/31/89 11,753.31 14,360.48 29,159.72 27,961.05
03/31/90 11,446.82 13,928.48 28,351.53 27,119.90
06/30/90 11,716.28 14,802.63 31,667.40 28,821.94
09/30/90 9,846.87 12,770.92 27,507.91 24,866.03
12/31/90 9,936.00 13,914.06 29,245.93 27,091.82
03/31/91 11,106.84 15,931.82 33,486.61 31,020.58
06/30/91 11,376.74 15,893.76 33,555.43 30,946.46
09/30/91 12,451.48 16,741.82 37,155.18 32,597.70
12/31/91 13,239.15 18,143.92 41,492.79 35,327.71
03/31/92 13,448.79 17,686.35 39,837.70 34,436.79
06/30/92 13,428.69 18,021.95 38,913.92 35,090.23
09/30/92 13,678.81 18,590.40 39,722.22 36,197.04
12/31/92 14,268.49 19,524.27 42,356.04 38,015.37
03/31/93 14,889.15 20,376.33 43,420.36 39,674.41
06/30/93 15,395.40 20,474.00 43,932.82 39,864.57
09/30/93 17,011.69 21,001.27 46,415.69 40,891.22
12/31/93 17,298.24 21,488.50 46,303.24 41,839.90
03/31/94 16,609.37 20,704.00 45,392.79 40,319.00
06/30/94 16,016.00 20,791.00 44,352.00 40,488.00
09/30/94 17,132.00 21,807.00 46,650.00 42,468.00
12/31/94 16,424.66 21,804.00 45,958.33 42,461.00
03/31/95 17,261.04 23,927.00 48,645.55 46,595.00
06/30/95 18,031.81 26,212.03 53,790.31 51,044.82
09/30/95 19,726.71 28,295.88 57,281.40 55,102.89
12/31/95 20,959.00 29,999.30 58,583.00 58,420.08
03/31/96 22,100.00 31,610.26 62,342.00 61,557.24
06/30/96 23,011.00 33,029.56 63,612.00 64,321.16
09/30/96 23,971.00 34,050.17 65,997.00 66,308.68
12/31/96 26,070.86 36,889.96 68,848.07 72,690.28
03/31/97 26,151.68 37,878.61 66,286.92 74,638.38
06/30/97 30,409.17 44,492.21 76,070.87 87,670.24
09/30/97 34,584.35 47,824.68 83,799.67 94,236.74
12/31/97 35,168.83 49,197.25 83,875.09 96,941.34
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. The
line graph above reflects the performance of the Class C shares since
inception. Past performance is not an indication of future results. See page 27
for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Dean Foods Co. 4.4%
Milk & dairy, food items
- --------------------------------------------------------------------------------
AT&T Corp. 3.1%
Telecomm. services and business systems
- --------------------------------------------------------------------------------
SCI Systems, Inc. 3.0%
Electronic products/systems
- --------------------------------------------------------------------------------
Bell Atlantic Corp. 2.9%
Telecommunication services
- --------------------------------------------------------------------------------
SBC Communications, Inc. 2.8%
Telecommunication services
- --------------------------------------------------------------------------------
Capital One Financial Corp. 2.8%
Bank card issuer/services
- --------------------------------------------------------------------------------
Tandy Corp. 2.8%
Consumer electronics retailer
- --------------------------------------------------------------------------------
Banc One Corp. 2.8%
Commercial banking
- --------------------------------------------------------------------------------
Ball Corp. 2.6%
Containers: metal/aerospace
- --------------------------------------------------------------------------------
Trinity Industries, Inc. 2.5%
Railcars: containers, steel
- --------------------------------------------------------------------------------
Top Ten Total 29.7%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Financial and Business Services 19.6%
- --------------------------------------------------------------------------------
Communications 11.3%
- --------------------------------------------------------------------------------
Materials and Processing 9.5%
- --------------------------------------------------------------------------------
Consumer Discretionary 8.8%
- --------------------------------------------------------------------------------
Consumer Staples 7.7%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stocks 87%
- --------------------------------------------------------------------------------
Convertible Bonds & Notes 6%
- --------------------------------------------------------------------------------
Cash Equivalents 5%
- --------------------------------------------------------------------------------
Convertible Preferred Stocks 2%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The Renaissance Fund turned in excellent results for the six months ended
December 31, 1997, posting returns of 16.2% for Class A shares, and 15.7% for
Class B and C shares. This performance handily outperformed the 10.6% return of
the Standard & Poor's 500 Index (an unmanaged index of common stocks) and the
11.1% average return of funds with the same objective (as measured by the Lipper
Equity Income Fund Average). The Fund has also provided strong results over the
longer term, outpacing the Lipper Average for the 1-, 3-, and 5-year periods.
The manager's investment approach focuses on seeking out stocks of companies
that have underperformed for several quarters. It then determines the causes of
the underperformance and whether a company can begin to beat analysts' earnings
estimates through restructuring and industry upturns. The manager believes that
this philosophy worked especially well late in 1997, as the market recognized
the improvement in stocks held in the portfolio compared to many others that had
Asian exposure.
One example that illustrated this turnaround philosophy was the Fund's top
holding, milk and food distributor Dean Foods. The company announced a
restructuring plan in 1996 following several quarters of underperformance. Dean
Foods has reworked its lagging vegetable business, and has been expanding its
dairy products area through a series of acquisitions over the past year. Since
then, it has consistently beaten analysts' earnings estimates, and was the top
per-former for the Fund during the fourth quarter.
Another success story for the Fund was toymaker Hasbro, which announced a
restructuring plan in December. The company said it planned to trim 20 percent
of its work force, and would spend up to $500 million for a stock buy-back. In
addition, Hasbro said it would shut down a manufacturing plant in New Zealand,
streamline several marketing units, and discontinue some unprofitable business
lines. The company's stock price rose on the news of these initiatives.
The worst performers for the Fund were in those sectors with the clearest
connection to the Asian weakness that occured during the fourth quarter. In
particular, technology and basic materials stocks suffered sharp setbacks.
Although prompt action was taken to reduce exposure to these sectors, the Fund
was still adversely affected, leading to underperformance in the quarter.
Looking ahead, the Fund manager currently intends to monitor domestic and
international economic developments closely to determine whether anxiety over
Asia is warranted.
See page 29 for financial details. 12
<PAGE>
PIMCO Value Fund
December 31, 1997
Objective
Long-term growth of capital and current income.
Portfolio
Primarily stocks the manager believes are undervalued and/or offer above-average
dividend yields.
Total Net Assets
$208 million
Number of Securities in the Portfolio
55 (not including short-term instruments)
PIMCO Advisors Institutional Manager
NFJ Investment Group
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/97
<TABLE>
<CAPTION>
A Shares B Shares C Shares Lipper Gr.
(INCEP. 12/30/91) (INCEP. 12/30/91) (INCEP. 12/30/91) S&P 500 & Income
Adjusted Adjusted Adjusted Index Fund Avg.
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 25.7% 18.8% 24.9% 19.9% 23.8% 33.4% 27.0%
3 years 28.1% 25.7% 27.8% 27.2% 27.8% 31.2% 26.5%
5 years 18.6% 17.3% 18.4% 18.2% 18.4% 20.3% 17.5%
Inception 17.8% 16.7% 17.7% 17.7% 17.7% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
QUARTERLY
<TABLE>
<CAPTION>
VALUE VALUE VALUE S&P 500
CLASS A B C
INCEPTION 12/30/91 12/30/91 12/30/91
============== ============= ============= ============= =============
<S> <C> <C> <C> <C>
12/31/83
03/31/84
06/30/84
09/30/84
12/31/84
03/31/85
06/30/85
09/30/85
12/31/85
03/31/86
06/30/86
09/30/86
12/31/86
03/31/87
06/30/87
09/30/87
12/31/87
03/31/88
06/30/88
09/30/88
12/31/88
03/31/89
06/30/89
09/30/89
12/31/89
03/31/90
06/30/90
09/30/90
12/31/90
03/31/91
06/30/91
09/30/91
12/31/91 9,450.00 10,000.00 10,000.00 10,000.00
03/31/92 9,826.52 10,398.44 10,398.44 9,747.72
06/30/92 9,577.38 10,134.79 10,134.79 9,933.43
09/30/92 9,764.58 10,332.89 10,332.89 10,246.57
12/31/92 10,692.23 11,314.53 11,314.53 10,762.47
03/31/93 11,380.21 12,042.55 12,042.55 11,232.47
06/30/93 11,419.31 12,083.93 12,083.93 11,287.16
09/30/93 12,012.63 12,711.78 12,711.78 11,578.81
12/31/93 12,446.26 13,170.65 13,170.65 11,847.27
03/31/94 12,124.74 12,830.42 12,830.42 11,398.00
06/30/94 11,702.29 12,383.38 12,383.38 11,445.97
09/30/94 12,320.36 13,037.42 13,037.42 12,005.66
12/31/94 11,939.47 12,634.36 12,634.36 12,003.77
03/31/95 13,166.82 13,933.14 13,933.14 13,172.52
06/30/95 14,284.03 15,115.38 15,115.38 14,430.06
09/30/95 15,518.64 16,421.84 16,421.84 15,576.70
12/31/95 16,584.67 17,549.91 17,549.91 16,514.53
03/31/96 17,577.30 18,600.32 18,600.32 17,400.96
06/30/96 18,091.77 19,144.73 19,144.73 18,181.84
09/30/96 18,274.12 19,337.69 19,337.69 18,743.78
12/31/96 19,958.27 21,119.87 21,119.87 20,306.25
03/31/97 20,238.74 21,386.49 21,386.49 20,850.67
06/30/97 22,814.23 24,066.51 24,068.86 24,490.76
09/30/97 25,230.26 26,554.99 26,557.58 26,325.32
12/31/97 25,091.49 26,363.79 26,350.43 27,081.09
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. All
returns represent the blended performance of the Fund's retail class shares
(for the period from 1/13/97) and the prior performance of the Fund's
institutional class shares (for the period from 12/30/91). Retail class shares
have higher expenses than institutional class shares. Therefore, total return
of retail class shares would have been lower had they been in existence since
the Fund's inception. Past performance is not an indication of future results.
See page 27 for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Stocks % of Total Investments
- --------------------------------------------------------------------------------
Supervalu, Inc. 3.0%
Food wholesaler; retailer
- --------------------------------------------------------------------------------
American Greetings Corp. `A' 3.0%
Cards & gift wrappings
- --------------------------------------------------------------------------------
Atlantic Richfield Co. 3.0%
Integrated oil enterprise
- --------------------------------------------------------------------------------
Bear Stearns Cos. 3.0%
Investment banking
- --------------------------------------------------------------------------------
PG&E Corp. 2.9%
Electric and gas utilities
- --------------------------------------------------------------------------------
Bell Atlantic Corp. 2.9%
Telecommunication services
- --------------------------------------------------------------------------------
Maytag Corp. 2.9%
Major home appliances manufacturer
- --------------------------------------------------------------------------------
DTE Energy Co. 2.7%
Electric and steam utility
- --------------------------------------------------------------------------------
Westvaco Corp. 2.7%
Printing and converting paper
- --------------------------------------------------------------------------------
Southern New England Telecom. 2.4%
Telecommunication services supplier
- --------------------------------------------------------------------------------
Top Ten Total 28.5%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Consumer Discretionary 20.8%
- --------------------------------------------------------------------------------
Utilities 13.7%
- --------------------------------------------------------------------------------
Financial and Business Services 11.9%
- --------------------------------------------------------------------------------
Energy 10.4%
- --------------------------------------------------------------------------------
Consumer Staples 10.4%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 99%
- --------------------------------------------------------------------------------
Cash Equivalents 1%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
Like many of its competitors, the PIMCO Value Fund had trouble keeping up with
the more growth-oriented S&P 500 Index for the six months ended December 31,
1997. During this period the Fund's Class A shares returned 10.0%, outperforming
an average of funds with the same objective (as measured by the Lipper Growth
and Income Fund Average), but narrowly trailing the S&P 500 Index return of
10.6%. The Fund's Class B and C shares returned 9.6% and 9.5% respectively for
the six months. The Fund's longer-term performance remains very strong relative
to its competitors, however, with Class A, B and C shares posting an average
annual return of 18.6%, 18.4% and 18.4%, respectively, for the five years ended
December 31, 1997, compared with only 17.5% for the Lipper Growth and Income
Fund Average for the same time period.
The Value Fund started out the six-month period very strong, posting
excellent third quarter 1997 results. Much of this success was due to better
broad market performance. During the first half of the year, most of the stock
market's advancers were clustered among the largest stocks in the S&P 500 Index.
But, during the third quarter, investors began to see a wider distribution of
success stories, allowing numerous Fund holdings to make significant
contributions. For example, Adobe Systems, Inc., a graphic software development
company, was a very strong performer for the Fund during this period. The firm
reported better-than-expected earnings based on strong sales of its desktop
publishing software, and an announcement that it would be buying back
approximately 20% of its outstanding stock shares over the next two years.
The market narrowed again in the fourth quarter of 1997, however, dragging
down the Fund's results for the six-month period. Overall, the manager's stock
selection was fairly neutral during these three months, with the exception of
some significant losses in the health care and consumer staples sector. In
particular, Foundation Health and IBP hurt performance. Fortunately, the Fund's
policy of wide diversification prevented any single holding or sector from
causing extensive damage.
Heading into 1998, the manager currently believes the Value Fund's
characteristics are appealing -- the relative price-to-earnings ratio of the
portfolio is 67% that of the S&P 500 Index, and the relative yield of 137% is
working its way toward the all-time high of 140% (set in 1980). Together with
investors' increasing concerns over the situation in Asia and its potential
impact on the domestic market, the Value Fund's manager believes it represents
an attractive option for defensive investors in the present environment.
See page 30 for financial details. 13
<PAGE>
PIMCO Capital Appreciation Fund
December 31, 1997
Objective
Long-term growth of capital and current income.
Portfolio
Primarily common stocks of companies with market capitalizations of at least
$100 million that have improving fundamentals and whose stock is reasonably
valued by the market.
Total Net Assets
$753 million
Number of Securities in the Portfolio
79 (not including short-term instruments)
PIMCO Advisors Institutional Manager
Cadence Capital Management
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/97
<TABLE>
<CAPTION>
A Shares B Shares C Shares Lipper Cap.
(INCEP. 3/8/91) (INCEP. 3/8/91) (INCEP. 3/8/91) S&P 500 App. Fund
Adjusted Adjusted Adjusted Index Avg.
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 33.7% 26.4% 32.8% 27.8% 31.8% 33.4% 20.3%
3 years 32.5% 30.0% 32.3% 31.6% 32.2% 31.2% 21.5%
5 years 21.3% 19.9% 21.1% 20.9% 21.1% 20.3% 15.2%
Inception 20.0% 19.0% 19.9% 19.9% 19.9% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
QUARTERLY
<TABLE>
<CAPTION>
CAPITAL CAPITAL CAPITAL S&P 500
APPRECIATION APPRECIATION APPRECIATION
CLASS A B C
INCEPTION 3/8/91 3/8/91 3/8/91
============== ============= ============= ============= =============
<S> <C> <C> <C> <C>
12/31/83
03/31/84
06/30/84
09/30/84
12/31/84
03/31/85
06/30/85
09/30/85
12/31/85
03/31/86
06/30/86
09/30/86
12/31/86
03/31/87
06/30/87
09/30/87
12/31/87
03/31/88
06/30/88
09/30/88
12/31/88
03/31/89
06/30/89
09/30/89
12/31/89
03/31/90
06/30/90
09/30/90
12/31/90
03/31/91 9,450.00 10,000.00 10,000.00 10,000.00
06/30/91 9,109.92 9,640.12 9,640.12 9,978.10
09/30/91 9,928.77 10,506.64 10,506.64 10,512.05
12/31/91 11,356.11 12,017.05 12,017.05 11,393.18
03/31/92 10,995.69 11,635.65 11,635.65 11,105.76
06/30/92 10,671.87 11,292.98 11,292.98 11,317.34
09/30/92 10,992.35 11,632.12 11,632.12 11,674.10
12/31/92 12,209.10 12,919.69 12,919.69 12,261.88
03/31/93 13,049.01 13,808.48 13,808.48 12,797.36
06/30/93 13,519.93 14,306.80 14,306.80 12,859.67
09/30/93 14,222.60 15,050.37 15,050.37 13,191.94
12/31/93 14,370.64 15,207.03 15,207.03 13,497.81
03/31/94 13,943.37 14,754.89 14,754.89 12,985.95
06/30/94 13,592.06 14,383.13 14,383.13 13,040.60
09/30/94 13,956.32 14,768.59 14,768.59 13,678.26
12/31/94 13,758.99 14,559.77 14,559.77 13,676.11
03/31/95 15,070.85 15,947.99 15,947.99 15,007.69
06/30/95 16,860.11 17,841.38 17,841.38 16,440.43
09/30/95 18,682.23 19,769.56 19,769.56 17,746.82
12/31/95 18,869.56 19,967.79 19,967.79 18,815.30
03/31/96 20,282.25 21,462.70 21,462.70 19,825.23
06/30/96 21,018.86 22,242.18 22,242.18 20,714.90
09/30/96 22,098.83 23,385.01 23,385.01 21,355.13
12/31/96 23,925.15 25,317.62 25,317.62 23,135.28
03/31/97 24,132.34 25,510.36 25,510.71 23,755.54
06/30/97 27,603.61 29,126.75 29,127.15 27,902.77
09/30/97 31,192.07 32,854.97 32,855.42 29,992.92
12/31/97 31,993.71 33,633.63 33,627.52 30,853.98
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. All
returns represent the blended performance of the Fund's retail class shares
(for the period from 1/20/97) and the prior performance of the Fund's
institutional class shares (for the period from 3/8/91). Retail class shares
have higher expenses than institutional class shares. Therefore, total return
of retail class shares would have been lower had they been in existence since
the Fund's inception. Past performance is not an indication of future results.
See page 27 for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Stocks % of Total Investments
- --------------------------------------------------------------------------------
Kroger Co. 1.7%
Supermarket/convenience stores
- --------------------------------------------------------------------------------
Safeway, Inc. 1.7%
Food supermarket chain
- --------------------------------------------------------------------------------
TJX Corp., Inc. 1.7%
Off-price specialty stores
- --------------------------------------------------------------------------------
Omnicom Group 1.7%
Major international advertising company
- --------------------------------------------------------------------------------
Carnival Corp. `A' 1.6%
Cruise ships
- --------------------------------------------------------------------------------
Costco Co. 1.6%
Cash & carry merchandising
- --------------------------------------------------------------------------------
Schering-Plough Corp. 1.6%
Pharmaceutical/consumer products
- --------------------------------------------------------------------------------
Southtrust Corp. 1.5%
Commercial banking, Alabama
- --------------------------------------------------------------------------------
Travelers Group, Inc. 1.5%
Diversified financial services
- --------------------------------------------------------------------------------
Computer Assoc. International, Inc. 1.4%
Systems software packages
- --------------------------------------------------------------------------------
Top Ten Total 16.0%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Financial and Business Services 26.2%
- --------------------------------------------------------------------------------
Consumer Discretionary 15.7%
- --------------------------------------------------------------------------------
Capital Goods 9.8%
- --------------------------------------------------------------------------------
Energy 8.9%
- --------------------------------------------------------------------------------
Healthcare 7.7%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 95%
- --------------------------------------------------------------------------------
Cash Equivalents 5%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The Capital Appreciation Fund posted outstanding results for the six-month
period ended December 31, 1997, with returns of 15.9% for Class A shares, and
15.5% for Class B and C shares. These results outpaced the 10.6% return of the
Standard & Poor's 500 Index (an unmanaged index of common stocks), and the 9.0%
average return of funds with the same objective (as measured by the Lipper
Capital Appreciation Fund Average). The Fund has also posted strong results for
the longer term, with all three share classes surpassing both the S&P 500 Index
and the Lipper Average for the 1-, 3-, 5-year and since inception periods.
In recent months, the Fund benefited from its large exposure to the retail
sector, particularly through its holdings in the supermarket industry.
Technological and logistical upgrades have led to higher profits at many
supermarkets. Enhanced technology has improved the communications systems
linking stores with distribution centers and suppliers, while better logistics
have helped move inventory faster. These types of changes provide one of the few
ways left for this industry to boost its earnings in a market that traditionally
has had very thin margins.
One example of this trend was the Fund's top holding, retail supermarket
chain Kroger. The company has improved its operating and financial performance,
and has made good progress toward reducing its debt. Kroger has very strong
market share in its various locations, and competes successfully against lower-
cost food retailers through its emphasis on large stores that offer multiple
products in addition to food.
Another winner for the Fund was Carnival Corp., which announced its sixth
dividend increase in seven years. This positive news stemmed from continued
heavy consumer demand and strong pricing activity. The company also unveiled
plans to expand its fleet over the next three years with seven new ships.
One factor that hindered the Fund's performance in the fourth quarter was its
overweighted position in the energy sector. Falling oil prices at the end of
1997 resulted in declining stock prices for oil and natural gas drilling
companies, including Fund holding Nabors Industries, Inc. The sell-off in oil
stemmed from concerns about a possible oversupply and decreasing demand in
Southeast Asia, and from fear that easing tensions with Iraq and increased OPEC
production will lead to a glut.
Looking ahead, the Fund manager currently anticipates maintaining a more
domestically-oriented portfolio that is not heavily weighted in the larger
multinational corporations. And, as always, the manager plans to stay focused on
its strategy of investing in growing, profitable companies with stock prices
that are still selling at reasonable levels.
See page 31 for financial details. 14
<PAGE>
PIMCO Growth Fund
December 31, 1997
Objective
Long-term growth of capital; income is incidental.
Portfolio
Primarily stocks of larger, well-established companies.
Total Net Assets
$1,777 million
Number of Securities in the Portfolio
47 (not including short-term instruments)
PIMCO Advisors Institutional Manager
Columbus Circle Investors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/97
<TABLE>
<CAPTION>
A Shares B Shares C Shares Lipper
(INCEP. 10/26/90) (INCEP. 5/23/95) (INCEP. 2/24/84) S&P 500 Growth
Adjusted Adjusted Adjusted Index Fund Avg.
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 22.8% 16.0% 21.9% 16.9% 20.8% 33.4% 25.2%
5 years 15.5% 14.2% -- -- 14.6% 20.3% 16.4%
10 years -- -- -- -- 15.8% 18.1% 15.9%
Inception 17.6% 16.7% 20.2% 19.3% 16.6% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
QUARTERLY
<TABLE>
<CAPTION>
GROWTH S&P 500
CLASS C
INCEPTION 2/24/84 2/29/84
========= ========= =========
<S> <C> <C>
12/31/83 10,000.00 10,000.00
03/31/84 10,250.00 10,173.18
06/30/84 10,180.32 9,911.89
09/30/84 10,986.38 10,872.72
12/31/84 11,211.05 11,076.74
03/31/85 12,138.35 12,093.98
06/30/85 13,073.11 12,980.99
09/30/85 12,627.67 12,449.46
12/31/85 14,632.19 14,591.12
03/31/86 16,917.01 16,649.13
06/30/86 17,948.98 17,630.44
09/30/86 17,409.21 16,400.58
12/31/86 18,025.65 17,314.55
03/31/87 22,171.64 21,011.62
06/30/87 23,276.81 22,066.36
09/30/87 24,640.76 23,522.05
12/31/87 19,396.43 18,223.64
03/31/88 20,073.57 19,257.86
06/30/88 21,608.44 20,537.40
09/30/88 21,007.12 20,607.15
12/31/88 21,213.96 21,241.92
03/31/89 23,104.02 22,747.27
06/30/89 26,246.52 24,751.46
09/30/89 29,902.82 27,398.04
12/31/89 29,159.72 27,961.05
03/31/90 28,351.53 27,119.90
06/30/90 31,667.40 28,821.94
09/30/90 27,507.91 24,886.03
12/31/90 29,245.93 27,091.82
03/31/91 33,846.61 31,020.58
06/30/91 33,555.43 30,946.46
09/30/91 37,155.18 32,597.70
12/31/91 41,492.79 35,327.71
03/31/92 39,837.70 34,436.79
06/30/92 38,913.92 35,090.23
09/30/92 39,722.22 36,197.04
12/31/92 42,356.04 38,015.37
03/31/93 43,420.36 39,674.41
06/30/93 43,932.82 39,864.57
09/30/93 46,415.69 40,891.22
12/31/93 46,303.24 41,839.90
03/31/94 45,392.79 40,319.00
06/30/94 44,352.00 40,488.00
09/30/94 46,650.00 42,468.00
12/31/94 45,958.33 42,461.00
03/31/95 48,645.55 46,595.00
06/30/95 53,790.31 51,044.82
09/30/95 57,281.40 55,102.89
12/31/95 58,583.00 58,420.08
03/31/96 62,342.00 61,557.24
06/30/96 63,612.00 64,321.16
09/30/96 65,997.00 66,308.68
12/31/96 68,848.07 72,690.28
03/31/97 66,286.92 74,638.38
06/30/97 76,070.87 87,670.24
09/30/97 83,799.67 94,236.74
12/31/97 83,875.09 96,941.34
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. The
line graph above reflects the performance of the Class C shares since
inception. Past performance is not an indication of future results. See page 27
for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Stocks % of Total Investments
- --------------------------------------------------------------------------------
HBO & Co. 4.7%
Hospital information systems
- --------------------------------------------------------------------------------
Eli Lilly & Co. 3.9%
Pharmaceuticals
- --------------------------------------------------------------------------------
Cendant Corp. 3.6%
Commercial services
- --------------------------------------------------------------------------------
Schlumberger Limited 3.5%
Oil field services
- --------------------------------------------------------------------------------
Pfizer, Inc. 3.3%
Healthcare services
- --------------------------------------------------------------------------------
Safeway, Inc. 3.2%
Food supermarket chain
- --------------------------------------------------------------------------------
AT&T Corp. 3.1%
Telecommunication services and business systems
- --------------------------------------------------------------------------------
Tele-Communications `A' 2.8%
Cable TV systems operator
- --------------------------------------------------------------------------------
Cisco Systems, Inc. 2.7%
Computer network products
- --------------------------------------------------------------------------------
America Online, Inc. 2.7%
Online computer services provider
- --------------------------------------------------------------------------------
Top Ten Total 33.5%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Health Care 18.1%
- --------------------------------------------------------------------------------
Consumer Discretionary 17.1%
- --------------------------------------------------------------------------------
Technology 14.1%
- --------------------------------------------------------------------------------
Financial and Business Services 13.6%
- --------------------------------------------------------------------------------
Communications 7.9%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 93%
- --------------------------------------------------------------------------------
Cash Equivalents 7%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-month period ended December 31, 1997, the Growth Fund produced
returns of 10.7% for Class A shares, and 10.3% for Class B and C shares. These
results were similar to that of the Standard & Poor's 500 Index (an unmanaged
index of common stocks), and outpaced the 9.2% average return of funds with the
same objective (as measured by the Lipper Growth Fund Average).
The Fund maintained its large exposure to the healthcare sector during the
fourth quarter, as the world's aging population continued to accelerate demand
for certain prescription medicines. In particular, drugs aimed at treating or
preventing cardiovascular problems have been among the top sellers for U.S.
pharmaceutical companies.
HBO & Company, the Fund's top holding, illustrated the healthcare industry's
good fortunes, as it posted excellent results during the fourth quarter. The
company, which provides computerized information systems to the healthcare
sector, expanded its business through the acquisition of NHES, a demand
management firm. This industry is integral to the healthcare sector's growth as
a supplier of referrals, enrollment services, and customer service. The manager
believes the acquisition of NHES makes HBO & Co. one of the premier firms in the
health care information technology field.
Another winner for the Fund was AT&T Corp., which outperformed all other
stocks in the Dow Jones Industrial Average during the latter half of 1997. This
success was attributed to the company's new Chief Executive Officer, Michael
Armstrong, who is moving swiftly to reverse AT&T's profit decline. His
priorities include cutting administrative costs, and boosting investment in
fast-growing areas, such as wireless and data services and Internet access.
Although the healthcare sector in general stood out as a solid performer, one
particular stock in this industry hampered results not only in the Growth Fund,
but across the entire large-cap market as well. Oxford Health Plans, Inc., one
of the nation's largest HMOs, surprised investors when it announced that
earnings would fall significantly short of expectations in the fourth quarter
due to higher medical costs. Oxford's shares lost nearly half of their value as
a result of this news.
Looking ahead, the manager currently anticipates maintaining the Fund's large
exposure to the healthcare sector. Changing demographics, cost containment, and
a faster approval process for drugs and medical devices should continue to drive
the strength of this industry. The manager also foresees de-emphasizing the
technology sector, in an effort to avoid companies with heavy international
exposure that may still be experiencing the effects of the Southeast Asian
currency crisis.
See page 32 for financial details. 15
<PAGE>
PIMCO Mid Cap Growth Fund
December 31, 1997
Objective
Growth of capital.
Portfolio
Primarily common stocks of companies with medium capitalizations that have
improving fundamentals and whose stock is reasonably valued.
Total Net Assets
$571 million
Number of Securities in the Portfolio
99 (not including short-term instruments)
PIMCO Advisors Institutional Manager
Cadence Capital Management
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/97
<TABLE>
<CAPTION>
A Shares B Shares C Shares Lipper
(INCEP. 8/26/91) (INCEP. 8/26/91) (INCEP. 8/26/91) S&P Mid- Mid-Cap
Adjusted Adjusted Adjusted Cap Index Fund Avg.
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 33.6% 26.3% 32.7% 27.7% 31.7% 32.3% 19.6%
3 years 31.3% 28.8% 31.0% 30.4% 31.0% 27.3% 22.5%
5 years 20.7% 19.3% 20.5% 20.3% 20.5% 17.8% 15.2%
Inception 19.9% 18.8% 19.7% 19.7% 19.7% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
QUARTERLY
<TABLE>
<CAPTION>
MID CAP MID CAP MID CAP S&P 500
GROWTH GROWTH GROWTH MID CAP
CLASS A B C
INCEPTION 8/26/91 8/26/91 8/26/91
========= =========== =========== =========== ===========
<S> <C> <C> <C> <C>
12/31/83
03/31/84
06/30/84
09/30/84
12/31/84
03/31/85
06/30/85
09/30/85
12/31/85
03/31/86
06/30/86
09/30/86
12/31/86
03/31/87
06/30/87
09/30/87
12/31/87
03/31/88
06/30/88
09/30/88
12/31/88
03/31/89
06/30/89
09/30/89
12/31/89
03/31/90
06/30/90
09/30/90
12/31/90
03/31/91
06/30/91 9,450.00 10,000.00 10,000.00 10,000.00
09/30/91 9,402.66 9,949.90 9,949.90 9,967.45
12/31/91 10,707.41 11,330.60 11,330.60 11,191.96
03/31/92 10,500.70 11,111.85 11,111.85 11,135.40
06/30/92 10,164.66 10,756.25 10,756.25 10,789.48
09/30/92 10,472.61 11,082.13 11,082.13 11,208.93
12/31/92 11,690.41 12,370.81 12,370.81 12,525.27
03/31/93 12,229.10 12,940.84 12,940.84 12,936.20
06/30/93 12,787.52 13,531.76 13,531.76 13,237.63
09/30/93 13,611.38 14,403.57 14,403.57 13,903.11
12/31/93 13,534.28 14,321.99 14,321.99 14,273.20
03/31/94 13,292.60 14,066.24 14,066.24 13,731.08
06/30/94 12,663.56 13,400.59 13,400.59 13,230.40
09/30/94 13,279.23 14,052.10 14,052.10 14,126.14
12/31/94 13,214.27 13,983.36 13,983.36 13,761.63
03/31/95 14,330.83 15,164.90 15,164.90 14,888.42
06/30/95 16,053.61 16,987.95 16,987.95 16,186.88
09/30/95 17,957.59 19,002.74 19,002.74 17,766.75
12/31/95 18,142.18 19,198.07 19,198.07 18,020.66
03/31/96 19,188.00 20,304.77 20,304.77 19,130.01
06/30/96 19,515.12 20,650.92 20,650.92 19,681.07
09/30/96 20,970.73 22,191.24 22,191.24 20,254.02
12/31/96 22,379.95 23,682.49 23,682.49 21,481.00
03/31/97 22,241.99 23,493.88 23,495.46 21,161.90
06/30/97 25,434.09 26,819.38 26,834.00 24,271.94
09/30/97 29,681.58 31,247.26 31,248.20 28,175.07
12/31/97 29,910.13 31,434.75 31,435.69 28,409.42
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. All
returns represent the blended performance of the Fund's retail class shares
(for the period from 1/13/97) and the prior performance of the Fund's
institutional class shares (for the period from 8/26/91). Retail class shares
have higher expenses than institutional class shares. Therefore, total return
of retail class shares would have been lower had they been in existence since
the Fund's inception. Past performance is not an indication of future results.
See page 27 for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Stocks % of Total Investments
- --------------------------------------------------------------------------------
Cullen/Frost Bankers, Inc. 1.5%
Commercial banking
- --------------------------------------------------------------------------------
Falcon Drilling Co., Inc. 1.5%
Contract drilling: oil/gas
- --------------------------------------------------------------------------------
Compuware Corp. 1.4%
Systems software products developer
- --------------------------------------------------------------------------------
Borders Group, Inc. 1.4%
Book superstores
- --------------------------------------------------------------------------------
Consolidated Stores Corp. 1.3%
Retail, close-out merchandise
- --------------------------------------------------------------------------------
Bed, Bath & Beyond, Inc. 1.3%
Domestics/home product superstores
- --------------------------------------------------------------------------------
Dean Foods Co. 1.3%
Milk & dairy, food items
- --------------------------------------------------------------------------------
Union Planters Corp. 1.2%
Commercial banking
- --------------------------------------------------------------------------------
Mercantile BanCorp. 1.2%
Commercial banking
- --------------------------------------------------------------------------------
Richfood Holdings, Inc. 1.2%
Wholesale food distributors
- --------------------------------------------------------------------------------
Top Ten Total 13.3%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Financial and Business Services 27.4%
- --------------------------------------------------------------------------------
Consumer Discretionary 15.8%
- --------------------------------------------------------------------------------
Energy 10.7%
- --------------------------------------------------------------------------------
Technology 7.8%
- --------------------------------------------------------------------------------
Materials and Processing 7.1%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 91%
- --------------------------------------------------------------------------------
Cash Equivalents 9%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The Mid Cap Growth Fund posted excellent results for the six-month period ended
December 31, 1997, with returns of 17.6% for Class A shares, and 17.2% for Class
B and C shares. These results beat the 17.0% return of the Standard & Poor's
Mid-Cap Index and the 10.6% average return of funds with the same objective (as
measured by the Lipper Mid-Cap Fund Average). The Fund has also provided strong
results over the longer term, as all three share classes kept pace with the S&P
Mid-Cap Index and outperformed the Lipper Average for the 1-, 3-, 5-year and
since inception periods.
Financial services was the top performing sector and the largest weighting for
the Mid Cap Growth Fund during the fourth quarter of 1997. These strong results
were aided by the acquisition trend within the banking industry, as two of the
Fund's largest holdings enhanced their business strategies by purchasing smaller
competitors. The manager believes this activity will continue, as the banking
industry as a whole recognizes the need for consolidation in order to serve the
widest geographical base of clients at the lowest expense.
An example of this trend was Cullen/Frost Bankers, Inc., a multi-bank holding
company. Cullen/Frost helped boost the Fund's returns, as investors reacted
favorably to its plan to acquire Harrisburg Bancshares, Inc., a Houston-based
bank holding company. With its customer base expanded through the acquisition,
Cullen/Frost's total assets reached $5 billion for the first time in its
history. The combination with Harrisburg is also expected to enhance
Cullen/Frost's growth and enable it to maintain continuity of service.
The Fund was also helped by the strong performance of milk and food
distributor Dean Foods. The company announced a restructuring plan in 1996
following several quarters of underperformance. Since then, it has consistently
beaten analysts' earnings estimates. Dean Foods has reworked its lagging
vegetable business, and has been expanding its dairy products area through a
series of acquisitions over the past year.
One factor that hindered the Fund's performance during the fourth quarter was
its overweighted position in the energy sector. Falling oil prices at the end of
1997 resulted in declining stock prices for oil and natural gas drilling
companies. The sell-off in oil stemmed from concerns about a possible oversupply
and decreasing demand in Southeast Asia, and from fear that easing tensions with
Iraq and increased OPEC production will lead to a glut.
Looking ahead, the Fund manager currently believes that mid-cap stocks are
generally well-positioned to participate in the ongoing acquisition wave. This
trend could be prevalent in 1998, as companies look for ways to boost their
earnings in the aftermath of the Southeast Asian currency crisis. And, as
always, the manager plans to stay focused on its strategy of investing in
growing, profitable companies with stock prices that are still selling at
reasonable levels.
See page 34 for financial details. 16
<PAGE>
December 31, 1997
PIMCO Target Fund
Objective
Capital appreciation; no consideration given to income.
Portfolio
Primarily common stocks of companies with medium-sized capitalizations.
Total Net Assets
$1,171 million
Number Of Securities In The Portfolio
51 (not including short-term instruments)
PIMCO Advisors Institutional Manager
Columbus Circle Investors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN For periods ended 12/31/97
<TABLE>
<CAPTION>
A Shares B Shares C Shares S&P Lipper
(INCEP. 12/17/92) (INCEP. 5/22/95) (INCEP.12/17/92) Mid-Cap Mid-Cap
Adjusted Adjusted Adjusted Index Fund Avg.
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 16.4% 10.0% 15.4% 10.4% 14.4% 32.3% 19.6%
3 years 21.2% 19.0% -- -- 20.3% 27.3% 22.5%
5 years 18.4% 17.0% -- -- 17.4% 17.8% 15.2%
Inception 18.5% 17.1% 19.3% 18.5% 17.6% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
QUARTERLY
TARGET FUND CHART
<TABLE>
<CAPTION>
TARGET TARGET S&P 500
MID CAP
CLASS A C
INCEPTION 12/17/92 12/17/92 12/31/92
========= ========== ========== ==========
<S> <C> <C> <C>
12/31/83
03/31/84
06/30/84
09/30/84
12/31/84
03/31/85
06/30/85
09/30/85
12/31/85
03/31/86
06/30/86
09/30/86
12/31/86
03/31/87
06/30/87
09/30/87
12/31/87
03/31/88
06/30/88
09/30/88
12/31/88
03/31/89
06/30/89
09/30/89
12/31/89
03/31/90
06/30/90
09/30/90
12/31/90
03/31/91
06/30/91
09/30/91
12/31/91
03/31/92
06/30/92
09/30/92 9,450.00 10,000.00 10,000.00
12/31/92 9,553.95 10,110.00 10,000.00
03/31/93 10,092.60 10,660.00 10,328.00
06/30/93 10,791.90 11,380.00 10,568.64
09/30/93 12,020.40 12,650.00 11,100.25
12/31/93 11,991.15 12,589.07 11,395.51
03/31/94 11,695.43 12,255.92 10,962.48
06/30/94 11,304.00 11,822.00 10,563.00
09/30/94 12,525.00 13,074.00 11,278.00
12/31/94 12,454.29 12,978.17 10,987.00
03/31/95 13,372.18 13,908.84 11,876.00
06/30/95 14,512.29 15,064.50 12,923.46
09/30/95 15,845.65 16,414,47 14,184.79
12/31/95 16,344.72 16,912.00 14,387.64
03/31/96 17,208.00 17,759.00 15,273.91
06/30/96 18,556.00 19,122.00 15,713.80
09/30/96 18,459.00 18,984.00 16,171.07
12/31/96 19,060.76 19,563.01 17,151.04
03/31/97 18,132.50 18,575.08 16,895.49
06/30/97 20,524.18 20,982.41 19,385.89
09/30/97 23,672.59 24,157.05 20,500.57
12/31/97 22,181.22 22,586.84 21,296.00
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. The
line graph above reflects the performance of the Class A and C shares since
inception. Past performance is not an indication of future results. See page 27
for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Stocks % of Total Investments
- --------------------------------------------------------------------------------
Dime Bancorp, Inc. 5.3%
Savings bank
- --------------------------------------------------------------------------------
Teleport Communications Group 3.3%
Local telecommunication services
- --------------------------------------------------------------------------------
Intuit, Inc. 3.3%
Financial software products
- --------------------------------------------------------------------------------
Federal-Mogul Corp. 3.2%
Bearings, transmission parts
- --------------------------------------------------------------------------------
Weatherford Enterra, Inc. 2.7%
Oil field equipment
- --------------------------------------------------------------------------------
Nordstrom, Inc. 2.6%
Department stores:upscale apparel
- --------------------------------------------------------------------------------
Sunbeam-Oster, Inc. 2.5%
Consumer products, outdoor, household
- --------------------------------------------------------------------------------
Unisys Corp. 2.5%
Business information systems
- --------------------------------------------------------------------------------
Fred Meyer, Inc. 2.5%
Regional general merchandise retailer
- --------------------------------------------------------------------------------
Charter One Financial, Inc. 2.4%
Savings Bank
- --------------------------------------------------------------------------------
Top Ten Total 30.3%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Financial and Business Services 21.0%
- --------------------------------------------------------------------------------
Consumer Discretionary 20.2%
- --------------------------------------------------------------------------------
Technology 15.4%
- --------------------------------------------------------------------------------
Energy 8.5%
- --------------------------------------------------------------------------------
Communications 7.8%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 92%
- --------------------------------------------------------------------------------
Cash Equivalents 8%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six months ended December 31, 1997, the results of the Target Fund
posted returns of 8.1% for Class A shares, and 7.6% for Class B and C shares.
These results trailed the Fund's benchmark, the Standard & Poor's Mid-Cap Index.
However, since the Fund's inception it has outperformed the S&P Mid-Cap Index.
The finance sector was the best performing industry for the Target Fund
during the fourth quarter of 1997, with numerous factors adding to its strong
results. Most important was the declining interest rate environment, as the
yield on the 30-year Treasury bond decreased from 6.4% to 5.9%. These lower
rates enabled financial institutions to expand their margins, as the price at
which they borrow money declines as interest rates fall. Combined with a very
favorable merger and acquisition trend, banks and brokerage firms enjoyed a
quarter where they were able to expand their earnings by lowering costs and
growing their business.
An example of this trend was Dime Bancorp, Inc., which boosted the Fund's
returns through its acquisition of North American Mortgage Co., a national
mortgage banker. The combination with North American substantially enhances
Dime's business profile, as its mortgage banking operations will be spread
broadly across products and locations, and will be balanced between retail and
wholesale business. Dime is also expected to have enhanced financial
flexibility, particularly in the areas of funding and capital management.
Acquisition activity in the retail industry also benefited the Fund. Fred
Meyer, Inc., a retail chain offering multiple products, including food,
announced plans to buy Quality Food Centers, Inc. and Ralph's Grocery Co. The
combination will create one of the largest supermarket companies in the United
States, as it will enable Meyer to expand from a 213-store operation in seven
states to an 800-store operation in 14 states. This move is the latest in a wave
of mergers among U.S. food retailers, as they attempt to cut costs and hold off
stiff competition from warehouse outlets and non-food retailers.
One area that hampered the Fund's returns was its overweighted exposure to
the technology sector, which performed poorly as a result of the Southeast Asian
currency crisis. The market quickly concluded that 1998 growth in global
technology spending would be negatively impacted due to lower sales in Asian
countries. The manager believes that the abrupt reversal of Asia's role in this
industry is likely to upset the supply and demand dynamics of many sub-sectors
of technology going forward.
Looking ahead, the Fund manager currently anticipates maintaining an
exposure to the technology sector that is lower than previous levels. The
manager will continue to monitor developments in this industry to identify
surprises relative to market expectations.
See page 36 for financial details. 17
<PAGE>
December 31, 1997
PIMCO Small Cap Value Fund
Objective
Long-term growth of capital and income.
Portfolio
Primarily common stocks of companies with small-sized capitalizations and
below-average price-to-earnings ratios relative to their industry groups.
Total Net Assets
$236 million
Number Of Securities In The Portfolio
105 (not including short-term instruments)
PIMCO Advisors Institutional Manager
NFJ Investment Group
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN For periods ended 12/31/97
<TABLE>
<CAPTION>
A Shares B Shares C Shares Lipper
(INCEP. 10/1/91) (INCEP. 10/1/91) (INCEP. 10/1/91) Russell Small-Cap
Adjusted Adjusted Adjusted 2000 Index Fund Avg.
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 34.5% 27.1% 33.6% 28.6% 32.6% 22.4% 20.6%
3 years 29.2% 26.8% 28.9% 28.3% 28.9% 22.3% 22.8%
5 years 18.8% 17.4% 18.6% 18.4% 18.6% 16.4% 16.5%
Inception 19.1% 18.0% 19.0% 19.0% 19.0% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
QUARTERLY
<TABLE>
<CAPTION>
SMALL CAP SMALL CAP SMALL CAP
VALUE VALUE VALUE
CLASS A B C
INCEPTION 10/1/91 10/1/91 10/1/91 RUSSELL 2000
========= ========= ========= ========= ============
<S> <C> <C> <C> <C>
12/31/83
03/31/84
06/30/84
09/30/84
12/31/84
03/31/85
06/30/85
09/30/85
12/31/85
03/31/86
06/30/86
09/30/86
12/31/86
03/31/87
06/30/87
09/30/87
12/31/87
03/31/88
06/30/88
09/30/88
12/31/88
03/31/89
06/30/89
09/30/89
12/31/89
03/31/90
06/30/90
09/30/90
12/31/90
03/31/91
06/30/91
09/30/91 9,450.00 10,000.00 10,000.00 10,000.00
12/31/91 10,031.57 10,615.42 10,615.42 10,572.71
03/31/92 10,982.49 11,621.68 11,621.68 11,365.71
06/30/92 10,423.81 11,030.49 11,030.49 10,590.34
09/30/92 10,683.80 11,305.61 11,305.61 10,893.79
12/31/92 11,911.45 12,604.71 12,604.71 12,519.32
03/31/93 12,698.04 13,437.08 13,437.08 13,054.44
06/30/93 12,604.43 13,338.02 13,338.02 13,339.43
09/30/93 13,191.17 13,958.91 13,958.91 14,505.71
12/31/93 13,559.45 14,348.62 14,348.62 14,886.33
03/31/94 13,418.89 14,199.88 14,199.88 14,491.29
06/30/94 12,908.99 13,660.31 13,660.31 13,926.93
09/30/94 13,304.23 14,078.55 14,078.55 14,893.71
12/31/94 13,059.78 13,819.88 13,819.88 14,615.16
03/31/95 13,801.10 14,604.34 14,604.34 15,288.95
06/30/95 14,927.78 15,796.59 15,796.59 16,722.09
09/30/95 16,288.44 17,236.44 17,236.44 18,373.58
12/31/95 16,385.85 17,339.52 17,339.52 18,771.74
03/31/96 17,173.46 18,172.97 18,172.97 19,729.44
06/30/96 18,210.19 19,270.04 19,270.04 20,716.44
09/30/96 18,582.09 19,663.58 19,663.58 20,786.60
12/31/96 20,927.93 22,145.96 22,145.96 21,868.01
03/31/97 20,867.96 22,048.75 22,048.75 20,737.00
06/30/97 23,989.77 25,319.27 25,319.27 24,098.70
09/30/97 27,782.55 29,269.08 29,251.35 27,685.93
12/31/97 28,146.50 29,573.47 29,578.97 26,758.68
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. All
returns represent the blended performance of the Fund's retail class shares (for
the period from 1/20/97) and the prior performance of the Fund's institutional
class shares (for the period from 10/1/91). Retail class shares have higher
expenses than institutional class shares. Therefore, total return of retail
class shares would have been lower had they been in existence since the Fund's
inception. Past performance is not an indication of future results. See page 27
for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Stocks % of Total Investments
- --------------------------------------------------------------------------------
Continental Homes Holding Corp. 1.1%
Single-family home builder
- --------------------------------------------------------------------------------
Interra Financial, Inc. 1.0%
Brokerage/investment banking services
- --------------------------------------------------------------------------------
Fleetwood Enterprises, Inc. 1.0%
Recreational vehicle/housing manufacturer
- --------------------------------------------------------------------------------
McGrath Rentcorp 1.0%
Rents/sells modular offices
- --------------------------------------------------------------------------------
Rochester Gas & Electric Corp. 1.0%
Electric & gas utility
- --------------------------------------------------------------------------------
Del Webb Corp. 1.0%
Real estate development
- --------------------------------------------------------------------------------
Westinghouse Air Brake Corp. 1.0%
Train air brakes manufacturer
- --------------------------------------------------------------------------------
Roadway Express, Inc. 1.0%
Less-then truckload freight services
- --------------------------------------------------------------------------------
Southwest Securities Group, Inc. 1.0%
Securities/brokerage services
- --------------------------------------------------------------------------------
Harman International Industries, Inc. 1.0%
Audio/video systems components
- --------------------------------------------------------------------------------
Top Ten Total 10.1%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Financial and Business Services 19.6%
- --------------------------------------------------------------------------------
Materials and Processing 17.6%
- --------------------------------------------------------------------------------
Consumer Discretionary 13.0%
- --------------------------------------------------------------------------------
Capital Goods 8.5%
- --------------------------------------------------------------------------------
Utilities 8.0%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 91%
- --------------------------------------------------------------------------------
Cash Equivalents 9%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
Shareholders of the Small Cap Value Fund experienced very strong returns over
the six months ended December 31, 1997. Specifically, during the six month
period the Fund's Class A, B and C shares returned 17.3%, 16.8% and 16.8%,
respectively. These results compare favorably to the 11.0% return of the Fund's
benchmark (the Russell 2000 Index) and the 10.6% average return of funds with
the same objective (the Lipper Small Cap Fund Average). The Fund's longer-term
results are equally impressive, with all three share classes of the Small Cap
Value Fund soundly outperforming the Russell 2000 and the Lipper Small-Cap Fund
Average for the 1-, 3- and 5-year periods ended December 31, 1997.
Much of the Fund's success over the previous six months can be traced to
the third quarter of 1997. While the majority of the stock market's gains have
been contained to large-cap stocks, the third quarter saw a small-cap stock
surge. The Fund benefited heavily from this rally, posting a 15% return for the
quarter. In particular, the Fund saw strong contributions from the financial
services sector, where takeovers in the banking and brokerage industries drove
up stock prices. Also benefiting from merger activity was Fund holding Computer
Data Systems, Inc. This provider of information technology solutions is the
announced takeover target of Affiliated Computer Service, Inc., and as a result
saw a significant price gain.
Unfortunately, the return of small-cap stocks was short-lived. Troubles in
the Asian markets frightened U.S. investors enough to cause a flight back to
size and liquidity. As a result, the Russell 2000 Index fell 3.4% during the
fourth quarter. However, the Fund once again shined, as it generated a positive
return during the period -- helped no doubt by the fact that most of the damage
in the small-cap market was done to growth, versus more value-oriented, stocks.
The Fund's success during the fourth quarter was found primarily in the
utilities and building-related sectors, with Continental Homes, Rochester Gas &
Electric and Eastern Utilities some of the Fund's biggest winners. An example of
a holding that hurt the Fund was Applebee's. Poor performance from Applebee's
can be attributed to its announcement that it was breaking away from its biggest
franchisee, Apple South, which in turn led to warnings of lower-than-expected
profits for the quarter.
The manager currently continues to anticipate success for the Fund going
into 1998, pointing to the relative attractiveness of small-cap stocks compared
to over-valued large-caps. In pursuing this success, the Fund will remain
committed to its strategy of investing in reasonably priced small-cap stocks,
offering investors an opportunity to invest in the growth of the small-cap
market while attempting to control the risks.
18 See page 37 for financial details.
<PAGE>
December 31, 1997
PIMCO Opportunity Fund
Objective
Capital appreciation; no consideration given to income.
Portfolio
Primarily stocks of small-capitalization companies.
Total Net Assets
$762 million
Number of Securities in the Portfolio
43 (not including short-term instruments)
PIMCO Advisors Institutional Manager
Columbus Circle Investors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN For periods ended 12/31/97
A Shares C Shares Lipper
(INCEP. 12/17/90) (INCEP. 2/24/84) Russell Cap. App.
Adjusted Adjusted 2000 Index Fund Avg.
- --------------------------------------------------------------------------------
1 year -4.0% -9.3% -5.7% 22.4% 20.3%
5 years 15.1% 13.9% 14.3% 16.4% 15.2%
10 years -- -- 19.3% 15.8% 14.5%
Inception 24.2% 23.2% 17.6% -- --
CHANGE IN VALUE
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
QUARTERLY
<TABLE>
<CAPTION>
OPPORTUNITY RUSSELL 2000
CLASS C
INCEPTION 2/24/84 2/29/84
========= ============ =============
<S> <C> <C>
12/31/83 10,000.00 10,000.00
03/31/84 10,090.00 10,059.49
06/30/84 10,279.96 9,757.09
09/30/84 11,213.52 10,293.48
12/31/84 11,199.44 9,995.24
03/31/85 12,752.05 11,385.91
06/30/85 13,310.99 11,789.44
09/30/85 12,462.23 11,275.88
12/31/85 14,542.86 13,098.82
03/31/86 16,247.27 14,953.36
06/30/86 17,824.81 15,678.09
09/30/86 14,610.13 13,758.34
12/31/86 15,196.89 13,843.13
03/31/87 19,250.20 17,209.07
06/30/87 18,858.34 17,087.21
09/30/87 20,487.02 17,802.73
12/31/87 16,170.12 12,629.18
03/31/88 17,980.79 15,037.92
06/30/88 19,476.57 16,029.07
09/30/88 18,642.08 15,878.12
12/31/88 18,437.40 15,773.09
03/31/89 20,011.90 16,988.22
06/30/89 22,137.48 18,069.81
09/30/89 24,845.61 19,289.84
12/31/89 24,089.32 18,335.18
03/31/90 23,503.94 17,929.70
06/30/90 25,632.60 18,621.26
09/30/90 21,162.42 14,052.02
12/31/90 22,320.32 14,758.38
03/31/91 28,718.44 19,147.21
06/30/91 27,914.10 18,850.40
09/30/91 32,667.00 20,387.29
12/31/91 37,516.87 21,554.89
03/31/92 40,314.54 23,193.22
06/30/92 37,476.62 21,590.63
09/30/92 39,449.08 22,209.03
12/31/92 48,194.60 25,524.17
03/31/93 51,898.74 26,614.08
06/30/93 57,353.20 27,195.06
09/30/93 66,694.97 29,572.75
12/31/93 65,621.66 30,347.55
03/31/94 61,282.12 29,542.00
06/30/94 52,978.00 28,393.00
09/30/94 61,767.00 30,364.00
12/31/94 62,515.22 29,797.00
03/31/95 66,996.85 31,170.00
06/30/95 76,733.55 34,090.63
09/30/95 85,628.55 37,359.92
12/31/95 88,479.00 38,170.63
03/31/96 91,692.00 40,128.78
06/30/96 101,529.00 42,135.22
09/30/96 100,591.00 42,278.48
12/31/96 98,689.83 44,476.96
03/31/97 78,418.94 42,177.50
06/30/97 91,130.65 49,014.48
09/30/97 105,173.88 56,312.73
12/31/97 93,993.90 54,426.26
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. The
line graph above reflects the performance of the Class C shares since inception.
Past performance is not an indication of future results. See page 27 for
Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Stocks % of Total Investments
- --------------------------------------------------------------------------------
Computer Horizons Corp. 5.6%
Data processing services
- --------------------------------------------------------------------------------
Golden State Bancorp., Inc. 4.7%
Savings bank
- --------------------------------------------------------------------------------
Airborne Freight Corp. 4.7%
International air express/freight
- --------------------------------------------------------------------------------
Veritas DGC, Inc. 4.0%
Seismic data services
- --------------------------------------------------------------------------------
Network Appliance, Inc. 3.4%
Network data storage devices
- --------------------------------------------------------------------------------
Wind River Systems 3.2%
Software operating systems developer
- --------------------------------------------------------------------------------
Winstar Communications, Inc. 3.1%
Telecommunication and information services
- --------------------------------------------------------------------------------
Linens'n Things, Inc. 2.9%
Retail home accessories
- --------------------------------------------------------------------------------
Lernout & Haupsie Speech Products 2.9%
Advanced speech technology
- --------------------------------------------------------------------------------
Manugistics Group, Inc. 2.8%
Management software/services
- --------------------------------------------------------------------------------
Top Ten Total 37.3%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Technology 32.3%
- --------------------------------------------------------------------------------
Consumer Discretionary 9.3%
- --------------------------------------------------------------------------------
Capital Goods 8.2%
- --------------------------------------------------------------------------------
Health Care 7.0%
- --------------------------------------------------------------------------------
Energy 6.6%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 89%
- --------------------------------------------------------------------------------
Cash Equivalents 11%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six months ended December 31, 1997, the Opportunity Fund returned 3.5%
for Class A shares and 3.1% for Class C shares. These results trailed the Fund's
benchmark, the Russell 2000 Index (an unmanaged index of small-cap stocks). The
Fund's recent underperformance can be attributed to several factors, including
poor results from some companies the manager believed fit its selection
criteria. In those cases the penalty for being wrong was swift and significant.
However, over the long term the Fund has posted outstanding
results--outperforming the Russell 2000 Index for the 10-year and since
inception periods ended December 31, 1997.
Through much of 1997, large-cap stocks outperformed small-caps. This was
particularly evident in the fourth quarter, as investors fled small-cap stocks
due to concern that these companies would be unable to sustain their growth in
the midst of the Southeast Asian currency crisis.
As a result, the Fund's manager focused on companies with domestically-
based earnings, avoiding areas that could suffer from the market turmoil caused
by the crisis in Southeast Asia. In order to accomplish this, the manager
decreased the Fund's holdings in sectors that are weighted towards multinational
corporations. Despite recent weakness in some areas of the technology sector,
the Fund's manager was able to identify several stocks that posted strong
results in recent months. One winner for the Fund was Computer Horizons, an
information technology services firm. Computer Horizons opened an additional
Millennium Refurbishment Center to meet growing demand for solutions to the Year
2000 computing problem. This newest facility is also part of the company's
international expansion, as it positions itself to win outsourcing contracts
globally.
Another technology success story was Network Appliance, Inc., a designer
and manufacturer of network data storage devices. The company reached two major
milestones with its NetCache Web caching product, which improves Internet access
times by creating read-only copies of Web pages that reside closer to users.
Network Appliance announced that there are now more than 2.5 million users
depending on NetCache-based Web sites, the largest number for any commercial Web
caching product.
Looking ahead, the manager currently intends to continue to seek
fundamentally sound, positively surprising companies. Along with this focus, the
manager will continue to monitor domestic and international economic
developments closely to determine whether anxiety over Asia is warranted. The
manager believes that companies with connections in that region may be
susceptible to earnings disappointments, and is attempting to position the
portfolio to best avoid this negative trend.
See page 39 for financial details. 19
<PAGE>
December 31, 1997
PIMCO International Developed Fund
Objective
Long-term growth of capital.
Portfolio
Primarily international equity securities (developed markets).
Total Net Assets
$95 million
Number of Securities in the Portfolio
150 (not including short-term instruments)
Pimco Advisors Institutional Manager
Blairlogie Capital Management
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN For periods ended 12/31/97
<TABLE>
<CAPTION>
A Shares B Shares C Shares MSCI Lipper
(INCEP. 6/8/93) (INCEP. 6/8/93) (INCEP. 6/8/93) EAFE International
Adjusted Adjusted Adjusted Index Fund Avg.
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 1.5% -4.1% 0.9% -4.1% -0.1% 2.1% 5.5%
3 years 8.0% 5.9% 7.8% 6.9% 7.7% 6.6% 8.6%
Inception 8.1% 6.8% 8.0% 7.6% 8.0% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
QUARTERLY
<TABLE>
<CAPTION>
INTERNATIONAL INTERNATIONAL INTERNATIONAL EAFE
DEVELOPED DEVELOPED DEVELOPED
CLASS A B C
INCEPTION 6/8/93 6/8/93 6/8/93
========= ============= ============= ============= ==========
<S> <C> <C> <C> <C>
12/31/83
03/31/84
06/30/84
09/30/84
12/31/84
03/31/85
06/30/85
09/30/85
12/31/85
03/31/86
06/30/86
09/30/86
12/31/86
03/31/87
06/30/87
09/30/87
12/31/87
03/31/88
06/30/88
09/30/88
12/31/88
03/31/89
06/30/89
09/30/89
12/31/89
03/31/90
06/30/90
09/30/90
12/31/90
03/31/91
06/30/91
09/30/91
12/31/91
03/31/92
06/30/92
09/30/92
12/31/92
03/31/93
06/30/93 9,450.00 10,000.00 10,000.00 10,000.00
09/30/93 10,251.34 10,847.98 10,847.98 10,670.29
12/31/93 10,356.11 10,958.85 10,958.85 10,769.51
03/31/94 10,799.95 11,428.51 11,428.51 11,153.00
06/30/94 11,381.86 12,044.30 12,044.30 11,730.43
09/30/94 11,362.13 12,023.42 12,023.42 11,749.56
12/31/94 11,086.01 11,731.23 11,731.23 11,637.74
03/31/95 11,456.23 12,122.99 12,122.99 11,863.61
06/30/95 11,559.07 12,231.82 12,231.82 11,959.18
09/30/95 12,505.18 13,233.00 13,233.00 12,467.29
12/31/95 12,985.22 13,740.97 13,740.97 12,982.09
03/31/96 13,389.30 14,168.57 14,168.57 13,366.97
06/30/96 13,695.09 14,492.16 14,492.16 13,588.33
09/30/96 13,520.35 14,307.25 14,307.25 13,581.61
12/31/96 13,741.90 14,541.70 14,541.70 13,807.96
03/31/97 13,547.86 14,323.47 14,323.47 13,601.54
06/30/97 15,029.83 15,879.64 15,879.64 15,377.17
09/30/97 14,742.76 15,550.93 15,550.93 15,277.60
12/31/97 13,949.60 14,473.86 14,670.75 14,091.96
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. All
returns represent the blended performance of the Fund's retail class shares
(for the period from 1/20/97) and the prior performance of the Fund's
institutional class shares (for the period from 6/8/93). Retail class shares
have higher expenses than institutional class shares. Therefore, total return
of retail class shares would have been lower had they been in existence since
the Fund's inception. Past performance is not an indication of future results.
See page 27 for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top Holdings in % of Total
Selected Countries Investments
- --------------------------------------------------------------------------------
Finland/Nokia 2.6%
- --------------------------------------------------------------------------------
Belgium/Webs-Belgium 2.1%
- --------------------------------------------------------------------------------
Netherlands/Royal Dutch Petroleum 2.0%
- --------------------------------------------------------------------------------
Switzerland/Novartis 2.0%
- --------------------------------------------------------------------------------
Germany/Mannesmann 1.6%
- --------------------------------------------------------------------------------
Switzerland/Roche Holding 1.5%
- --------------------------------------------------------------------------------
Germany/Veba 1.4%
- --------------------------------------------------------------------------------
Italy/ENI 1.4%
- --------------------------------------------------------------------------------
France/Societe Generale 1.3%
- --------------------------------------------------------------------------------
Japan/NEC 1.3%
- --------------------------------------------------------------------------------
Top 5 Countries % of Total Investments
- --------------------------------------------------------------------------------
Japan 14.7%
- --------------------------------------------------------------------------------
France 13.1%
- --------------------------------------------------------------------------------
United Kingdom 10.7%
- --------------------------------------------------------------------------------
Germany 10.2%
- --------------------------------------------------------------------------------
Italy 8.8%
- --------------------------------------------------------------------------------
Regional Breakdown
- --------------------------------------------------------------------------------
Stocks: Europe 74.7%
- --------------------------------------------------------------------------------
Japan 14.7%
- --------------------------------------------------------------------------------
Pacific/Far East 0.7%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 90%
- --------------------------------------------------------------------------------
Cash Equivalents 10%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six months ended December 31, 1997, the International Developed Fund
posted a negative 7.2% for Class A shares, and a negative 7.6% for Class B and C
shares. However, these returns outperformed the 8.5% decline in the return of
the MSCI EAFE Index, the Fund's benchmark.
International markets in 1997, and more notably the fourth quarter,
produced mixed returns. Most European stock markets had relatively strong
results, several of which outperformed the Dow Jones Industrial Average. On the
other hand, Asian markets, harmed by the growing currency crisis, declined
severely. The Fund benefited from being underweighted in many of those falling
markets, including Japan, while emphasizing some countries that performed
particularly well, such as Switzerland.
Among the Fund's recent winning holdings was Lloyds TSB Group PLC, a U.K.-
based banking and financial services holding company. Its stock price rose on
news that Bank of New York Corp. and Beneficial Corp. will acquire one of
Lloyd's business lines, as both companies are seeking to expand internationally.
The Fund's manager believes Lloyds is positioned to be the dominant retail
financial services company in the United Kingdom, as it has a group of strong
businesses and a management strategy focused on maximizing shareholder value.
Another success was Societe Generale, a banking and financial services
company headquartered in Paris with more than 2,000 branch offices worldwide.
This company was one of the top performers for the Fund during the latter half
of 1997. Management continued to make great progress in improving the company's
financial strength, as evidenced by its higher-than-expected commission growth
from both capital markets and the retail network. The Fund's manager felt that
this concerted effort should greatly build on Societe Generale's position as one
of France's strongest and most diversified financial institutions.
As a whole, the weakness in Asia has taken the luster off of international
stock prices. As a result, these markets have become more fairly valued compared
to the United States. Therefore, the Fund's manager currently believes that
exposure to international stocks continues to make sense for investors looking
to diversify their portfolios.
Looking ahead, the Fund's manager presently intends to remain overweighted
in European stocks. The European Monetary Union is moving steadily towards
becoming a reality, and the manager expects more political, economic, and
financial convergence in Europe. This could lead to strong long-term stock
market performance as this process unfolds. One exception to this strategy is
the United Kingdom, where the manager currently plans to remain underweighted
due to the potential for a slowdown in the economy.
See page 40 for financial details.
20
<PAGE>
PIMCO International Fund
December 31, 1997
Objective
Capital appreciation; income is incidental.
Portfolio
Primarily stocks of foreign (non-U.S.) companies.
Total Net Assets
$154 million
Number of Securities in the Portfolio
201 (not including short-term instruments)
PIMCO Advisors Institutional Manager
Blairlogie Capital Management
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/97
<TABLE>
<CAPTION>
A Shares B Shares C Shares MSCI Lipper
(INCEP. 2/1/91) (INCEP. 5/22/95) (INCEP. 8/25/86) World International
Adjusted Adjusted Adjusted ex-USA Index Fund Avg.
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 2.6% -3.0% 1.9% -3.2% 0.9% 2.6% 5.5%
5 years 7.7% 6.5% -- -- 6.9% 11.9% 12.1%
10 years -- -- -- -- 6.6% 6.7% 9.4%
Inception 7.2% 6.4% 4.9% 3.8% 6.3% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
QUARTERLY
INTERNATIONAL FUND CHART
<TABLE>
<CAPTION>
INTERNATIONAL MSCI WORLD
EX-USA
CLASS C
INCEPTION 8/25/86 8/31/86
========= ============= ==========
<S> <C> <C>
12/31/83
03/31/84
06/30/84
09/30/84
12/31/84
03/31/85
06/30/85
09/30/85
12/31/85
03/31/86
06/30/86 10,000.00 10,000.00
09/30/86 9,700.00 9,914.00
12/31/86 9,920.00 10,312.85
03/31/87 11,890.00 12,784.80
06/30/87 12,100.00 13,649.14
09/30/87 12,870.00 14,464.95
12/31/87 10,507.27 12,846.65
03/31/88 11,067.80 14,766.33
06/30/88 11,408.52 14,174.92
09/30/88 11,067.80 14,236.43
12/31/88 11,617.35 16,419.43
03/31/89 12,100.95 16,513.73
06/30/89 12,826.34 15,575.95
09/30/89 14,650.83 17,485.03
12/31/89 14,929.18 18,293.96
03/31/90 13,507.36 14,773.54
06/30/90 14,856.89 16,110.63
09/30/90 12,097.56 12,811.39
12/31/90 12,615.04 14,122.78
03/31/91 13,556.06 15,171.07
06/30/91 13,160.56 14,417.46
09/30/91 14,306.14 15,601.95
12/31/91 15,127.54 15,879.68
03/31/92 14,114.41 14,055.66
06/30/92 14,003.38 14,346.10
09/30/92 13,767.45 14,510.83
12/31/92 14,243.58 13,983.78
03/31/93 15,588.73 15,649.99
06/30/93 16,336.03 17,216.17
09/30/93 17,815.69 18,289.25
12/31/93 19,010.96 18,544.94
03/31/94 18,203.60 19,147.21
06/30/94 18,432.00 20,058.84
09/30/94 19,133.00 20,191.60
12/31/94 17,455.78 19,962.18
03/31/95 16,957.93 20,358.74
06/30/95 17,424.67 20,574.60
09/30/95 18,280.34 21,426.35
12/31/95 18,467.00 22,309.85
03/31/96 19,323.00 22,999.64
06/30/96 19,914.00 23,394.24
09/30/96 19,401.00 23,431.63
12/31/96 19,530.99 23,918.09
03/31/97 19,739.97 23,566.57
06/30/97 21,763.32 26,642.90
09/30/97 21,441.22 26,564.76
12/31/97 19,891.02 24,534.96
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. The
line graph above reflects the performance of the Class C shares since
inception. Past performance is not an indication of future results. See page 27
for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top Holdings in % of Total
Selected Countries Investments
- --------------------------------------------------------------------------------
Finland/Nokia 3.6%
- --------------------------------------------------------------------------------
Switzerland/Novartis 2.3%
- --------------------------------------------------------------------------------
Netherlands/Royal Dutch Petroleum 1.8%
- --------------------------------------------------------------------------------
Portugal/Portugal Telecom 1.7%
- --------------------------------------------------------------------------------
Switzerland/Roche Holding 1.7%
- --------------------------------------------------------------------------------
Mexico/Telefonos de Mexico 1.7%
- --------------------------------------------------------------------------------
Italy/ENI 1.5%
- --------------------------------------------------------------------------------
Ireland/Allied Irish Banks 1.4%
- --------------------------------------------------------------------------------
Switzerland/UBS 1.3%
- --------------------------------------------------------------------------------
Chile/Compania de
Telecomunicaciones de Chile 1.3%
- --------------------------------------------------------------------------------
Top 5 Countries % of Total Investments
- --------------------------------------------------------------------------------
France 11.2%
- --------------------------------------------------------------------------------
Italy 9.9%
- --------------------------------------------------------------------------------
Switzerland 9.4%
- --------------------------------------------------------------------------------
Japan 9.4%
- --------------------------------------------------------------------------------
Finland 8.2%
- --------------------------------------------------------------------------------
Regional Breakdown
- --------------------------------------------------------------------------------
Stocks: Europe 66.9%
- --------------------------------------------------------------------------------
Latin America 12.5%
- --------------------------------------------------------------------------------
Japan 9.4%
- --------------------------------------------------------------------------------
Middle East 7.9%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 97%
- --------------------------------------------------------------------------------
Cash Equivalents 3%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-month period ended December 31, 1997, the International Fund
returned a negative 8.2% for Class A shares, and a negative 8.6% for Class B and
C shares. These returns outperformed the negative 9.8% return of the Fund's
benchmark, the MSCI World ex-USA Index.
The Fund's overweighted position in Italy aided its performance in 1997, as
the Milan market was up 34% for the year. Italy's market rallied, as interest
rates plunged during the year on hopes that the country's budget-cutting efforts
would earn it a place in the European Monetary Union. As a result of this drop
in yields, Italy's investors reallocated a large portion of their massive
savings accounts from government securities to stocks, further driving the
equity market higher.
As for emerging markets, this past year, and especially the fourth quarter,
was historically poor for these countries. The economic unplugging in Southeast
Asia, led by the collapse of the Korean won and the Thai baht, dragged down the
entire Asian emerging market category, as foreign debt became increasingly hard
to service from local resources. Most Asian markets suffered a combination of
falling currencies and collapsing stock markets.
Not surprisingly, the best performers for the Fund were located outside of
Asia. One success story was Portugal Telecom SA, the principal
telecommunications provider in Portugal. The company entered an agreement with
Telefonica de Espana SA, a Spanish telecommunications firm, to provide
preferential services and prices to each other's major customers. This plan is
part of a wider alliance formed by the two companies last year, and is expected
to lower the cost of phone calls between Spain and Portugal.
Another winner for the Fund was Mannesman, a machinery and telecommunications
manufacturer. The company announced that it will acquire a 65 percent stake in
Philips Car Systems. This combination creates one of the largest global
suppliers of integrated information, navigation and traffic telematics systems,
and will give Mannesman greater access to the U.S. market. The company is poised
to widen its telecommunications business next year when Deutsche Telekom loses
its monopoly over voice telephone services, opening the German market to
competitors.
Looking ahead, although emerging markets have been the hardest hit in recent
months, the manager currently believes that as a group they offer the most
exciting prospects for 1998. Outside of Asia, the manager at present anticipates
good returns in Europe's emerging markets, such as Turkey and Hungary. As for
developed markets, the Fund's manager currently plans to remain overweighted in
European stocks. One exception to this strategy is the United Kingdom, which the
manager plans to de-emphasize due to the potential for a slowdown in the
economy.
See page 42 for financial details. 21
<PAGE>
PIMCO Emerging Markets Fund
December 31, 1997
Objective
Long-term growth of capital.
Portfolio
Primarily common stocks of companies located in emerging market countries.
Total Net Assets
$40 million
Number of Securities in the Portfolio
153 (not including short-term instruments)
Pimco Advisors Institutional Manager
Blairlogie Capital Management
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/97
<TABLE>
<CAPTION>
A Shares B Shares C Shares MSCI Lipper
(INCEP. 6/1/93) (INCEP. 6/1/93) (INCEP. 6/1/93) EMF Emg. Mkts
Adjusted Adjusted Adjusted Index Fund Avg.
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year -2.3% -7.7% -3.0% -7.9% -4.0% -11.6% -2.4%
3 years -3.6% 5.4% -3.8% -4.8% -3.8% -3.9% 0.7%
Inception 5.8% 4.5% 5.6% 5.2% 5.6% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
QUARTERLY
<TABLE>
<CAPTION>
EMERGING EMERGING EMERGING MSCI
MARKETS MARKETS MARKETS EMERGING MKTS
CLASS A B C
INCEPTION 6/1/93 6/1/93 6/1/93
========= ======== ======== ======== =============
<S> <C> <C> <C> <C>
12/31/83
03/31/84
06/30/84
09/30/84
12/31/84
03/31/85
06/30/85
09/30/85
12/31/85
03/31/86
06/30/86
09/30/86
12/31/86
03/31/87
06/30/87
09/30/87
12/31/87
03/31/88
06/30/88
09/30/88
12/31/88
03/31/89
06/30/89
09/30/89
12/31/89
03/31/90
06/30/90
09/30/90
12/31/90
03/31/91
06/30/91
09/30/91
12/31/91
03/31/92
06/30/92
09/30/92
12/31/92
03/31/93 9,450.00 10,000.00 10,000.00 10,000.00
06/30/93 9,591.75 10,150.00 10,150.00 10,296.33
09/30/93 11,065.95 11,710.00 11,710.00 11,880.00
12/31/93 14,785.92 15,646.48 15,646.48 15,753.27
03/31/94 14,120.51 14,942.34 14,942.34 14,328.99
06/30/94 13,660.59 14,455.65 14,455.65 14,122.73
09/30/94 16,596.25 17,562.16 17,562.16 17,054.29
12/31/94 13,635.77 14,429.39 14,429.39 14,600.91
03/31/95 11,057.15 11,700.68 11,700.68 12,793.40
06/30/95 12,233.00 12,944.97 12,944.97 14,121.02
09/30/95 12,140.17 12,846.74 12,846.74 14,030.46
12/31/95 11,926.42 12,620.55 12,620.55 13,842.76
03/31/96 12,717.35 13,457.52 13,457.52 14,704.89
06/30/96 13,175.26 13,942.08 13,942.08 15,318.79
09/30/96 12,613.28 13,347.39 13,347.39 14,765.43
12/31/96 12,501.72 13,229.33 13,229.33 14,675.11
03/31/97 13,580.10 14,348.40 14,348.40 15,917.06
06/30/97 14,585.25 15,378.85 15,378.85 17,280.32
09/30/97 13,549.70 14,260.80 14,260.80 15,730.57
12/31/97 12,210.99 12,831.87 12,631.87 12,974.98
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. All
returns represent the blended performance of the Fund's retail class shares
(for the period from 1/20/97) and the prior performance of the Fund's
institutional class shares (for the period from 6/1/93). Retail class shares
have higher expenses than institutional class shares. Therefore, total return
of retail class shares would have been lower had they been in existence since
the Fund's inception. Past performance is not an indication of future results.
See page 27 for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top Holdings in % of Total
Selected Countries Investments
- --------------------------------------------------------------------------------
Mexico/Telefonos de Mexico 3.3%
- --------------------------------------------------------------------------------
Portugal/Portugal Telecom 2.4%
- --------------------------------------------------------------------------------
Hungary/Magyar Tavkozlesi Rt. 2.3%
- --------------------------------------------------------------------------------
Chile/Compania de 2.1%
Telecomunicaciones de Chile
- --------------------------------------------------------------------------------
Brazil/Telecomunicaciones Brasileiras 2.1%
- --------------------------------------------------------------------------------
Brazil/Centrais Electricas Brasileiras 2.0%
- --------------------------------------------------------------------------------
Venezuela/Compania Anonima 2.0%
Nacional Telefonos de Venezuela
- --------------------------------------------------------------------------------
Argentina/YPF Sociedad Anonima 1.9%
- --------------------------------------------------------------------------------
Argentina/Telefonica de Argentina 1.9%
- --------------------------------------------------------------------------------
Hungary/MOL Magyar Olaj-es Gazipare 1.5%
- --------------------------------------------------------------------------------
Top 5 Countries % of Total Investments
- --------------------------------------------------------------------------------
Mexico 13.2%
- --------------------------------------------------------------------------------
Portugal 9.4%
- --------------------------------------------------------------------------------
Brazil 9.3%
- --------------------------------------------------------------------------------
Israel 8.6%
- --------------------------------------------------------------------------------
Chile 8.5%
- --------------------------------------------------------------------------------
Regional Breakdown
- --------------------------------------------------------------------------------
Stocks: Latin America 45.2%
- --------------------------------------------------------------------------------
Europe 30.4%
- --------------------------------------------------------------------------------
Mid-East/Africa 13.0%
- --------------------------------------------------------------------------------
Pacific/Far East 7.1%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 96%
- --------------------------------------------------------------------------------
Cash Equivalents 4%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-month period ended December 31, 1997, the Emerging Markets Fund
returned a negative 16.3% for Class A shares, and a negative 16.6% for Class B
and C shares. These results outperformed the negative 19.1% average return of
funds with the same objective (as measured by the Lipper Emerging Markets Fund
Average), and widely outpaced the negative 25.6% return of the MSCI Emerging
Markets Free Index, the Fund's benchmark.
This past year, and especially the fourth quarter, was historically poor for
emerging market countries. The economic unplugging in Southeast Asia, led by the
collapse of the Korean won and the Thai baht, dragged down the entire Asian
emerging market category, as foreign debt became increasingly hard to service
from local resources. Most Asian markets suffered a combination of falling
currencies and collapsing stock markets. The Fund had no weighting in Korea for
the entire fourth quarter, which helped it outperform much of the competition.
While Asian markets and economies still look generally weak, the manager
believes there are several reasons why there should still be investment
opportunities in the region going forward. First, collapsed currencies make
Asian goods highly competitive in world markets. Second, there has been a rise
in consumer expectations stemming from higher educational levels and real income
growth in the region over the past 15 years. Finally, at the most basic economic
level, there is always demand for food, building materials, transportation, and
other everyday needs. Companies in these sectors have their earnings tied to
this economic environment.
Not surprisingly, the Fund's best performers over the last six months were
located outside of Asia. One winner was Matav, the largest telecommunications
service provider in Hungary, which posted solid returns and was a top holding of
the Fund during the fourth quarter. Matav is currently unrolling an operational
nationwide support system for integrated billing and call collection that is
expected to lower administrative costs and enhance productivity. The company
also announced plans to increase call rates beginning this year.
Looking ahead, although emerging markets have been the hardest hit in recent
months, the manager currently believes that as a group they offer the most
exciting prospects for 1998. However, these stocks will continue to be closely
tied to the mood swings of investors in the coming year. Beyond Asia, the
continuing restructuring, capital investment, and convergence into the European
Union over the next ten years should continue to provide good returns in
Europe's emerging markets in 1998. The Fund manager continues to believe that
exposure to emerging market stocks makes sense for aggressive investors looking
to diversify their portfolios.
See page 44 for financial details. 22
<PAGE>
PIMCO Innovation Fund
December 31, 1997
Objective
Capital appreciation; no consideration given to income.
Portfolio
Primarily technology-related stocks of companies of all sizes.
Total Net Assets
$285 million
Number of Securities in the Portfolio
42 (not including short-term instruments)
PIMCO Advisors Institutional Manager
Columbus Circle Investors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/97
<TABLE>
<CAPTION>
A Shares B Shares C Shares Lipper
(INCEP. 12/22/94) (INCEP. 5/22/95) (INCEP. 12/22/94) S&P 500 Sc. & Tech.
Adjusted Adjusted Adjusted Index Fund Avg.
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 9.0% 3.0% 8.2% 3.2% 7.1% 33.4% 9.6%
3 years 25.1% 22.8% -- -- 24.2% 31.2% 20.5%
Inception 24.8% 22.5% 20.3% 19.4% 23.8% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
QUARTERLY
<TABLE>
<CAPTION>
INNOVATION INNOVATION S&P 500
CLASS A C
INCEPTION 12/22/94 12/22/94 12/31/94
========= ========== ========== ========
<S> <C> <C> <C>
12/31/83
03/31/84
06/30/84
09/30/84
12/31/84
03/31/85
06/30/85
09/30/85
12/31/85
03/31/86
06/30/86
09/30/86
12/31/86
03/31/87
06/30/87
09/30/87
12/31/87
03/31/88
06/30/88
09/30/88
12/31/88
03/31/89
06/30/89
09/30/89
12/31/89
03/31/90
06/30/90
09/30/90
12/31/90
03/31/91
06/30/91
09/30/91
12/31/91
03/31/92
06/30/92
09/30/92
12/31/92
03/31/93
06/30/93
09/30/93
12/31/93
03/31/94
06/30/94
09/30/94 9,450.00 10,000.00 10,000.00
12/31/94 9,431.10 9,980.00 10,000.00
03/31/95 10,253.25 10,830.00 10,974.00
06/30/95 12,162.15 12,820.00 12,022.02
09/30/95 13,929.30 14,650.00 12,977.77
12/31/95 13,706.28 14,394.00 13,759.03
03/31/96 14,064.00 14,752.00 14,497.89
06/30/96 16,144.00 16,892.00 15,148.84
09/30/96 16,695.00 17,445.00 15,616.94
12/31/96 16,940.42 17,664.81 17,119.93
03/31/97 14,811.01 15,410.78 17,578.74
06/30/97 17,096.34 17,747.05 20,647.99
09/30/97 20,578.87 21,330.18 22,194.53
12/31/97 18,469.54 19,094.78 22,831.51
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. The
line graph above reflects the performance of the Class A and C shares since
inception. Past performance is not an indication of future results. See page 27
for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Stocks % of Total Investments
- --------------------------------------------------------------------------------
America Online, Inc. 6.2%
Online services provider
- --------------------------------------------------------------------------------
Cisco Systems, Inc. 5.8%
Computer network products
- --------------------------------------------------------------------------------
Saville Systems 3.9%
Telecommunication industry billing systems
- --------------------------------------------------------------------------------
AT&T Corp. 3.8%
Telecommunication services
- --------------------------------------------------------------------------------
Yahoo, Inc. 3.6%
Internet navigational service
- --------------------------------------------------------------------------------
Microsoft Corp. 3.4%
Software for microcomputers
- --------------------------------------------------------------------------------
Lucent Technologies, Inc. 3.1%
Telecommunication systems
- --------------------------------------------------------------------------------
Motorola, Inc. 3.0%
Semiconductors: communication equipment
- --------------------------------------------------------------------------------
Sofamor Danek Group, Inc. 2.9%
Spinal implant devices
- --------------------------------------------------------------------------------
Intel Corp. 2.9%
Semiconductor memory circuits
- --------------------------------------------------------------------------------
Top Ten Total 38.6%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Technology 71.6%
- --------------------------------------------------------------------------------
Communications 10.3%
- --------------------------------------------------------------------------------
Health Care 9.8%
- --------------------------------------------------------------------------------
Consumer Discretionary 1.2%
- --------------------------------------------------------------------------------
Materials and Processing 1.2%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 95%
- --------------------------------------------------------------------------------
Cash Equivalents 5%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six months ended December 31, 1997, the Innovation Fund posted
returns of 0.93%, 0.53%, and 0.47% for its Class A, B, and C shares,
respectively.
Following an outstanding third quarter, events shifted in the technology
sector, where the Fund has its greatest exposure. The financial turmoil in
Southeast Asia placed a black cloud over many multinational corporations, as
investors feared the slowing in these countries' economies would negatively
impact the earnings of companies that rely heavily on sales from those areas. As
a result, the Fund shifted its focus to companies whose earnings are more
dependent on U.S. operations than on overseas business. By concentrating on
domestically-driven companies, the Fund was able to outperform its benchmark,
the S&P 500 Index, by three percentage points during the fourth quarter.
One example of a domestically-oriented holding that helped the Fund's
returns was Internet access provider America Online. Addressing its earlier
capacity problems, AOL dramatically built out its network by upgrading its
technological capability to support subscribers. In addition, it added 5,000 new
customer service representatives, helping the company win back subscribers and
add to its already astounding growth. Unlike other technology companies, AOL's
subscriber base and business operations are located almost entirely in the
United States, making it a technology "safe haven" for investors that have been
trying to avoid exposure to Southeast Asia. The manager believes the long-term
outlook for the company is strong as well, as its upcoming merger with
CompuServe is expected to result in continued growth.
Another winner for the Fund was AT&T Corp., which outperformed all other
stocks in the Dow Jones Industrial Average during the latter half of 1997. This
success was attributed to the company's new Chief Executive Officer, Michael
Armstrong, who is moving swiftly to reverse AT&T's profit decline. His
priorities include cutting administrative costs, and boosting investment in
fast-growing areas, such as wireless and data services and Internet access.
Looking ahead, the Fund manager currently anticiates further diversifying
the Fund's holdings and seeking a wider range of investment opportunities, in
response to the Asian crisis. The manager has adopted a broad definition of
technology, which includes companies in other industries that use technology in
innovative ways to advance their business. As such, the manager presently plans
to continue to seek non-traditional technology securities that positively
surprise the market relative to expectations.
See page 46 for financial details. 23
<PAGE>
PIMCO Precious Metals Fund
December 31, 1997
Objective
Capital appreciation; no consideration given to income.
Portfolio
Primarily stocks of companies that extract, process, distribute or market
precious metals.
Total Net Assets
$21 million
Number of Securities in the Portfolio
67 (not including short-term instruments)
Manager
Van Eck Associates (an independent sub-advisor not owned by PIMCO Advisors L.P.)
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/97
<TABLE>
<CAPTION>
A Shares B Shares C Shares Phil. Gold Lipper
(INCEP. 2/1/91) (INCEP. 6/15/95) (INCEP. 10/10/88) & Silver Gold Oriented
Adjusted Adjusted Adjusted Index Fund Avg.
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year -47.6% -50.5% -48.0% -50.6% -48.6% -36.5% -42.0%
3 years -21.0% -22.4% -- -- -21.5% -12.1% -14.5%
5 years -3.0% -4.1% -- -- -3.7% 0.8% 0.3%
Inception -2.7% -3.5% -24.7% -25.6% -6.0% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
QUARTERLY
PRECIOUS METALS FUND CHART
<TABLE>
<CAPTION>
METALS XAU
CLASS C PHIL. GOLD & SILVER INDEX
INCEPTION 10/10/88 9/30/88
========= ======== =========================
<S> <C> <C>
12/31/83
03/31/84
06/30/84
09/30/84
12/31/84
03/31/85
06/30/85
09/30/85
12/31/85
03/31/86
06/30/86
09/30/86
12/31/86
03/31/87
06/30/87
09/30/87
12/31/87
03/31/88
06/30/88
09/30/88 10,000.00 10,000.00
12/31/88 9,460.93 9,504.10
03/31/89 9,731.24 10,337.52
06/30/89 9,130.55 10,097.22
09/30/89 9,871.41 11,338.07
12/31/89 10,992.70 13,099.95
03/31/90 9,951.50 12,311.31
06/30/90 8,629.97 11,081.38
09/30/90 9,410.87 11,833.97
12/31/90 8,239.52 10,599.67
03/31/91 7,738.94 9,206.99
06/30/91 8,189.46 9,848.17
09/30/91 7,468.63 8,610.60
12/31/91 7,799.01 8,824.69
03/31/92 7,298.43 7,868.92
06/30/92 7,588.77 8,576.73
09/30/92 7,448.61 8,787.55
12/31/92 6,837.90 7,788.09
03/31/93 8,279.57 9,483.34
06/30/93 11,263.01 12,718.73
09/30/93 10,121.69 11,371.93
12/31/93 12,954.97 14,408.23
03/31/94 12,454.39 14,604.19
06/30/94 11,774.00 12,589.00
09/30/94 13,766.00 14,443.00
12/31/94 11,703.52 11,942.00
03/31/95 11,343.11 13,323.00
06/30/95 11,202.94 13,124.49
09/30/95 11,913.76 13,557.60
12/31/95 11,213.00 13,150.87
03/31/96 13,466.00 15,570.63
06/30/96 12,294.00 13,515.30
09/30/96 11,633.00 12,582.75
12/31/96 10,931.53 12,752.62
03/31/97 10,208.96 11,372.78
06/30/97 8,571.44 10,442.49
09/30/97 8,540.58 11,956.65
12/31/97 5,653.01 8,106.61
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. The
line graph above reflects the performance of the Class C shares since inception.
Past performance is not an indication of future results. See page 27 for
Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Stocks % of Total Investments
- --------------------------------------------------------------------------------
Newmont Mining Corp. 5.8%
- --------------------------------------------------------------------------------
Getchell Gold Corp. 5.2%
- --------------------------------------------------------------------------------
Barrick Gold Corp. 4.7%
- --------------------------------------------------------------------------------
Homestake Mining Co. 4.6%
- --------------------------------------------------------------------------------
Meridian Gold, Inc. 3.9%
- --------------------------------------------------------------------------------
Normandy Mining Limited 3.7%
- --------------------------------------------------------------------------------
Plutonic Resources Limited 3.5%
- --------------------------------------------------------------------------------
Euro-Nevada Mining Corp. 2.9%
- --------------------------------------------------------------------------------
Franco-Nevada Mining Corp. Limited 2.2%
- --------------------------------------------------------------------------------
Elandsrand Gold Mining Co. Limited 2.0%
- --------------------------------------------------------------------------------
Top Ten Total 38.5%
- --------------------------------------------------------------------------------
Regions % of Total Investments
- --------------------------------------------------------------------------------
Stocks: Canada 25.6%
- --------------------------------------------------------------------------------
South Africa 18.7%
- --------------------------------------------------------------------------------
United States 18.3%
- --------------------------------------------------------------------------------
Australia 12.4%
- --------------------------------------------------------------------------------
Other 1.7%
- --------------------------------------------------------------------------------
Investment Breakdown
- --------------------------------------------------------------------------------
Common Stocks 77%
- --------------------------------------------------------------------------------
Cash Equivalents 23%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The volatile gold and precious metals markets experienced sharp downward price
pressures throughout most of 1997. During the six-month period ended December
31, 1997, the price of gold decreased from $334.20 to $289.50 per ounce. As the
shares of the Precious Metals Fund are tied closely to the price of gold, the
Fund was adversely affected. As a result, returns for the six months ended
December 31, 1997 decreased 33.6% for the Fund's Class A shares, and dropped
34.0% for its Class B and C shares.
The price of gold was hit harder than that of any other commodity during
the fourth quarter of 1997. Low U.S. inflation and widespread negative
sentiment, leading to intense speculative pressure from central banks, were the
main factors driving the gold price down. In December, the spot gold price hit
an 18-year low and gold futures hit a 12-year low, before prices ended the year
down 21 percent. Central bank gold sales throughout the year left many high-cost
mine operations unprofitable and vulnerable to closing, a trend that could help
stabilize the gold price by forcing excess supply to diminish.
Although the climate for the precious metals markets was generally
negative, there was some good news for the Fund, such as Euro-Nevada Mining
Corp. This company, which mines gold in North and South America, Australia and
Indonesia, achieved record revenues and earnings despite the dramatic decline in
the gold price. The strong revenue stream stemmed from growing cash flow at the
Meikle Mine in Nevada, where gold production is projected to increase to 650,000
ounces in 1998. Other factors boosting revenue were the growing number of
royalty properties in Australia, and the recent start-up in production from the
Rosebud property in Nevada.
Another positive turn for the Fund came from Plutonic Resources, Limited,
an Australian gold mining concern. The company's stock price rose on news that
it will be acquired by U.S.-based Homestake Mining Co.
Looking ahead, the manager currently believes there are several
developments that could positively affect the price of gold. First, gold demand
continues to exceed new supply, as it has for each of the last ten years.
Second, the Asian currency crisis is fundamentally bullish for gold, as are the
international credit-based rescue operations of Asian economies and the
potential resulting trade disruptions. In addition, if the problems associated
with the Asian crisis spread, the risk may arise that extensions of credit by
the world's banking system to support these economies may hurt the value of
major currencies, and result in sudden, unexpected global inflation.
As a result, the Fund's manager continues to view gold-related investments
as portfolio protection against unforeseeable changes in general investment and
monetary conditions that can affect national currency values.
See page 47 for financial details. 24
<PAGE>
PIMCO Balanced Fund
December 31, 1997
Objective
Total return consistent with prudent investment management.
Portfolio
Primarily common stocks, fixed income securities and money market instruments.
Total Net Assets
$66 million
Number of Securities in the Portfolio
173 (not including short-term instruments)
PIMCO Advisors Institutional Managers
Cadence Capital Management, NFJ Investment Group and Pacific Investment
Management Company
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/97
<TABLE>
<CAPTION>
A Shares B Shares C Shares S&P500/ Lipper
(INCEP. 6/25/92) (INCEP. 6/25/92) (INCEP. 6/25/92) Leh. Agg. Balanced
Adjusted Adjusted Adjusted Hybrid Index Fund Avg.
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 21.3% 14.7% 20.6% 15.6% 19.7% 23.6% 19.0%
3 years 20.3% 18.1% 20.1% 19.4% 20.1% 22.6% 19.4%
5 years 12.9% 11.7% 12.8% 12.5% 12.8% 15.1% 13.2%
Inception 13.6% 12.4% 13.4% 13.3% 13.4% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
QUARTERLY
<TABLE>
<CAPTION>
BALANCED BALANCED BALANCED UPPER 60% S&P 500
BALANCED 40% LBAG
CLASS A B C
INCEPTION 6/25/92 6/25/92 6/25/92
========= ========== ========== ========== ========== ===========
<S> <C> <C> <C> <C> <C>
12/31/83
03/31/84
06/30/84
09/30/84
12/31/84
03/31/85
06/30/85
09/30/85
12/31/85
03/31/86
06/30/86
09/30/86
12/31/86
03/31/87
06/30/87
09/30/87
12/31/87
03/31/88
06/30/88
09/30/88
12/31/88
03/31/89
06/30/89
09/30/89
12/31/89
03/31/90
06/30/90
09/30/90
12/31/90
03/31/91
06/30/91
09/30/91
12/31/91
03/31/92
06/30/92 9,450.00 10,000.00 10,000.00 10,000.00 10,000.00
09/30/92 9,956.22 10,535.69 10,535.69 10,315.14 10,362.49
12/31/92 10,304.40 10,904.13 10,904.13 10,702.58 10,685.59
03/31/93 10,608.01 11,225.40 11,225.40 11,206.23 11,142.80
06/30/93 10,656.25 11,276.46 11,276.46 11,435.39 11,295.43
09/30/93 10,874.55 11,507.46 11,507.46 11,854.00 11,589.27
12/31/93 10,960.26 11,598.15 11,598.15 11,981.74 11,752.99
03/31/94 10,568.48 11,183.58 11,183.58 11,616.24 11,351.92
06/30/94 10,533.70 11,146.78 11,146.78 11,528.02 11,335.10
09/30/94 10,874.35 11,507.25 11,507.25 11,865.39 11,695.38
12/31/94 10,856.23 11,488.08 11,488.08 11,736.57 11,714.45
03/31/95 11,626.93 12,303.63 12,303.63 12,444.91 12,633.46
06/30/95 12,446.92 13,171.35 13,171.35 13,315.81 13,664.10
09/30/95 13,092.90 13,854.93 13,854.93 14,030.60 14,421.25
12/31/95 13,782.86 14,585.04 14,585.04 14,657.20 15,189.49
03/31/96 13,932.74 14,743.64 14,743.64 14,985.20 15,564.97
06/30/96 14,329.99 15,164.01 15,164.01 15,289.02 16,019.07
09/30/96 14,535.09 15,381.05 15,381.05 15,690.19 16,442.69
12/31/96 15,592.08 16,499.56 16,499.56 16,563.39 17,463.84
03/31/97 15,688.83 16,579.79 16,593.42 16,634.81 17,712.66
06/30/97 17,210.84 18,168.96 18,164.17 18,408.91 19,804.18
09/30/97 18,653.11 19,666.09 19,664.53 19,591.31 20,969.63
12/31/97 18,917.98 19,798.15 19,912.30 19,876.62 21,588.25
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. All
returns represent the blended performance of the Fund's retail class shares
(for the period from 1/20/97) and the prior performance of the Fund's
institutional class shares (for the period from 6/25/92). Retail class shares
have higher expenses than institutional class shares. Therefore, total return
of retail class shares would have been lower had they been in existence since
the Fund's inception. Past performance is not an indication of future results.
See page 27 for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 5 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Federal Home Loan 5.3%
Mortgage Corp.-6.50%
- --------------------------------------------------------------------------------
Federal Home Loan 5.3%
Mortgage Corp.-6.50%
- --------------------------------------------------------------------------------
Long Island 3.0%
Lighting Co.-9.00%
- --------------------------------------------------------------------------------
U.S. Treasury Bonds -6.50% 2.8%
- --------------------------------------------------------------------------------
Government National 2.1%
Mortgage Association-7.38%
- --------------------------------------------------------------------------------
Top Five Total 18.5%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 50%
- --------------------------------------------------------------------------------
Mortgage-Backed Securities 30%
- --------------------------------------------------------------------------------
Cash Equivalents 12%
- --------------------------------------------------------------------------------
Corporate Bonds & Notes 5%
- --------------------------------------------------------------------------------
U.S. Treasury Obligations 3%
- --------------------------------------------------------------------------------
Bond Analysis
- --------------------------------------------------------------------------------
Average Quality AA+
- --------------------------------------------------------------------------------
Average Maturity 10.6 Years
- --------------------------------------------------------------------------------
Duration 5.6 Years
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The Balanced Fund turned in solid results for the six-month period ended
December 31, 1997, as it posted returns of 9.9% for Class A shares, 9.5% for
Class B shares, and 9.6% for Class C shares. These results outperformed the 7.9%
average return of funds with the same objective (as measured by the Lipper
Balanced Fund Average). The Fund has also performed well over the longer term,
outpacing its Lipper average for the 1-, 3- year and since inception periods.
During the six-month period, the allocation of the Fund's assets was
maintained at 60% stocks and 40% bonds. The Fund's managers felt that by
utilizing each of their investment firms' expertise in a particular investment
style, the Fund offered diversification while maintaining a consistent, high
level of investment quality.
Among the winners in the Fund's stock portfolio was PNC Bank Corp., a
financial services company. PNC has demonstrated steady control in managing its
traditional banking business, while progressing in the areas of asset
management, capital markets and treasury management. The manager felt that the
long-term outlook for the company was strong, based on its shifting business mix
and more disciplined risk management.
Another stock success story for the Fund was PG&E Corp., a holding company
that markets energy services throughout northern and central California.
Investors were attracted to the domestically-based earnings of the company, at a
time when many multinational corporations suffered from market turmoil caused by
the currency crisis in Southeast Asia.
On the bond side, the Fund's manager continued to invest based on the view
that interest rates would decline further over the long term. This strategy is
exemplified by a high-quality portfolio focused on low-coupon mortgages and
Treasuries, with an above-average duration relative to the benchmark. Over the
six-month period, this strategy was rewarded, as long-term interest rates fell
and bond prices rose.
One factor that hindered the Fund's performance in the fourth quarter was its
overweighted position in the energy sector. Falling oil prices at the end of
1997 resulted in declining stock prices for oil and natural gas drilling
companies. There were also some significant losses in the health care and
consumer staples sector. In particular, Foundation Health and IBP hurt
performance. Fortunately, the Fund's policy of wide diversification prevented
any single holding or sector from causing extensive damage.
With the continued volatility in the stock market, the manager believes that
more than ever it is important to maintain an investment portfolio that is
diversified between stocks and bonds. For this reason, the Fund currently
expects to maintain its 60% stock/40% bond allocation in the coming months.
See page 48 for financial details. 25
<PAGE>
PIMCO Tax Exempt Fund
December 31, 1997
Objective
High current income exempt from federal income tax, with preservation of
capital.
Portfolio
Primarily investment grade municipal securities (tax-exempt bonds).
Duration Range
3-10 years
Total Net Assets $48 million
PIMCO Advisors Institutional Manager
Columbus Circle Investors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/97
<TABLE>
<CAPTION>
A Shares B Shares C Shares Lehman Lipper Muni.
(INCEP. 3/14/91) (INCEP. 5/30/95) (INCEP. 11/1/85) Muni. Bond Fund
Adjusted Adjusted Adjusted Index Avg.
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 7.6% 2.8% 6.7% 1.7% 6.0% 9.2% 9.1%
5 years 6.2% 5.2% -- -- 5.4% 7.4% 6.8%
10 years -- -- -- -- 6.9% 8.6% 8.2%
Inception 7.1% 6.3% 5.4% 4.3% 7.6% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
QUARTERLY
TAX EXEMPT FUND CHART
<TABLE>
<CAPTION>
TAX EXEMPT LEHMAN MUNI 6 MONTH CD
CLASS C
INCEPTION 11/1/85 10/31/85 10/31/85
========= ========== =========== ==========
<S> <C> <C> <C>
12/31/83
03/31/84
06/30/84
09/30/84
12/31/84
03/31/85
06/30/85
09/30/85 10,000.00 10,000.00 10,000.00
12/31/85 10,522.97 10,449.89 10,130.42
03/31/86 11,707.42 11,507.85 10,323.10
06/30/86 11,487.72 11,436.98 10,495.41
09/30/86 12,159.28 12,051.38 10,653.63
12/31/86 12,697.02 12,467.73 10,808.85
03/31/87 12,948.03 12,770.19 10,972.89
06/30/87 12,306.57 12,423.44 11,166.04
09/30/87 11,907.32 12,114.65 11,367.10
12/31/87 12,514.55 12,655.66 11,587.90
03/31/88 12,739.42 13,090.99 11,787.18
06/30/88 13,008.10 13,344.72 12,007.79
09/30/88 13,382.70 13,697.04 12,262.94
12/31/88 13,690.05 13,942.04 12,535.95
03/31/89 13,708.03 14,034.42 12,846.87
06/30/89 14,648.82 14,865.22 13,157.66
09/30/89 14,555.08 14,875.35 13,442.58
12/31/89 15,133.08 15,446.09 13,721.41
03/31/90 14,918.35 15,515.06 14,008.79
06/30/90 15,230.97 15,877.63 14,306.46
09/30/90 15,215.89 15,886.48 14,597.40
12/31/90 15,842.97 16,571.75 14,886.86
03/31/91 16,028.40 16,946.34 15,138.37
06/30/91 16,236.56 17,308.28 15,371.17
09/30/91 16,856.80 17,981.52 15,598.23
12/31/91 17,418.06 18,583.90 15,789.30
03/31/92 17,278.72 18,639.58 15,955.67
06/30/92 17,964.68 19,345.74 16,115.76
09/30/92 18,368.89 19,860.79 16,249.89
12/31/92 18,719.73 20,222.10 16,391.67
03/31/93 19,410.49 20,973.17 16,526.45
06/30/93 20,017.34 21,659.71 16,660.68
09/30/93 20,810.12 22,391.80 16,799.34
12/31/93 21,035.66 22,705.29 16,938.78
03/31/94 19,324.09 21,460.00 17,094.00
06/30/94 19,365.00 21,696.00 17,295.00
09/30/94 19,408.00 21,845.00 17,522.00
12/31/94 19,031.49 21,533.00 17,795.00
03/31/95 20,542.88 23,054.00 18,087.00
06/30/95 20,913.73 23,609.60 18,361.92
09/30/95 21,357.50 24,287.20 18,628.17
12/31/95 22,318.00 25,290.26 18,892.69
03/31/96 21,804.00 24,986.78 19,140.18
06/30/96 21,842.00 25,176.67 19,406.23
09/30/96 22,311.00 25,753.22 19,683.74
12/31/96 22,768.38 26,409.93 19,955.38
03/31/97 22,547.52 26,346.54 20,234.75
06/30/97 23,239.73 27,255.50 20,532.20
09/30/97 23,850.94 28,075.89 20,834.03
12/31/97 24,351.81 28,836.75 21,138.20
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. The
line graph above reflects the performance of the Class C shares since
inception. Past performance is not an indication of future results. See page 27
for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Sector Breakdown % of Total Investments
- --------------------------------------------------------------------------------
Municipals:
- --------------------------------------------------------------------------------
General Obligation 20%
- --------------------------------------------------------------------------------
Transportation Revenue 15%
- --------------------------------------------------------------------------------
Utilities Revenue 9%
- --------------------------------------------------------------------------------
Facilities Revenue 8%
- --------------------------------------------------------------------------------
Airport Revenue 7%
- --------------------------------------------------------------------------------
Pollution Revenue 7%
- --------------------------------------------------------------------------------
Power Revenue 7%
- --------------------------------------------------------------------------------
Medical Revenue 7%
- --------------------------------------------------------------------------------
Higher Education 5%
- --------------------------------------------------------------------------------
Development Revenue 4%
- --------------------------------------------------------------------------------
Housing Revenue 4%
- --------------------------------------------------------------------------------
General Revenue 2%
- --------------------------------------------------------------------------------
School Revenue 2%
- --------------------------------------------------------------------------------
Water Revenue 2%
- --------------------------------------------------------------------------------
Cash Revenue 1%
- --------------------------------------------------------------------------------
Quality Breakdown
- --------------------------------------------------------------------------------
AAA 56%
- --------------------------------------------------------------------------------
AA 17%
- --------------------------------------------------------------------------------
A 15%
- --------------------------------------------------------------------------------
BBB 12%
- --------------------------------------------------------------------------------
Maturity Profile
- --------------------------------------------------------------------------------
greater than 1 year 1%
- --------------------------------------------------------------------------------
1-5 years 16%
- --------------------------------------------------------------------------------
5-10 years 48%
- --------------------------------------------------------------------------------
10-20 years 23%
- --------------------------------------------------------------------------------
20-30 years 12%
- --------------------------------------------------------------------------------
Average Maturity: 10.7 years
- --------------------------------------------------------------------------------
Duration: 7.2 years
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The Tax Exempt Fund continues to provide a high level of federally tax-exempt
current income for its investors. As of December 31, 1997, the Fund's current
tax-free standardized yield for A shares was 4.1%+ , which translates to a 6.4%
taxable yield for investors in the 36% tax bracket. For B and C shares, the
current tax-free yield was 3.5%+ , the equivalent of a 5.5% taxable yield.
In terms of total return, for the six-month period ended December 31, 1997,
the Fund's A shares returned 5.2%, while the B and C shares returned 4.8%,
slightly underperforming the Lipper General Municipal Debt Fund Average.
As in the past, the Fund sought to meet its investment objective by
investing in high-quality municipal bonds. As of December 31, 1997, the Fund's
average quality was AA, as rated by Standard & Poor's (AAA is the highest rating
a municipal bond can receive). This proved to be a prudent strategy, as the
difference in yields offered by high- and low-quality bonds hit all-time lows.
The manager anticipates maintaining this stance until signs appear that credit
risk will once again be rewarded with commensurately higher yields.
Another reason for the small differences in yields between high- and
low-quality municipals is the prevalence of bond insurance. Currently, almost
60% of all new municipal issuance come with some form of insurance. The fact
that more issues come to the marketplace insured means that the available pool
of "yield" product continues to shrink.
Current marketplace conventional wisdom holds that the strong national
economy over the past few years has lifted all boats and therefore credit risk
is a concern of the past. The Fund's manager strongly disagrees, and believes a
slowing economy could quickly reacquaint market participants with more "normal"
yield spreads between high- and low-quality municipal securities.
Looking ahead, the Fund's manager currently plans to overweight the
portfolio's exposure in the short- to intermediate-term sectors. This is due to
small yield spreads and the relative value those securities offer as the economy
begins to exhibit signs of slowing. The Fund will continue to look to lengthen
its duration at the appropriate time, due to the benign inflation outlook,
coupled with the potential for attractive total returns should interest rates
fall.
See page 50 for financial details. 26
<PAGE>
- --------------------------------------------------------------------------------
FOOTNOTES
- --------------------------------------------------------------------------------
A few notes and definitions are needed for a complete understanding of the
performance figures.
Past performance is no indication of future results. Investment return will
fluctuate and the value of an investor's shares will fluctuate and may be worth
more or less than original cost when redeemed. Total return measures
performance, assuming that all dividends and capital gains distributions were
reinvested.
Total return, both with and without a sales charge, has been presented. For
shareholders who have not bought or sold shares during the period quoted, the
non-adjusted figures are probably more meaningful than the adjusted figures. The
adjusted figures for Class A shares include the effect of paying the maximum
initial sales charge of either 5.5% (for all stock funds) or 4.5% (Tax Exempt
Fund). The adjusted figures for Class B shares include the effect of paying the
contingent deferred sales charge (CDSC), which declines from 5% in the first
year to 0% at the beginning of the seventh year. The adjusted figures for Class
C shares include the effect of paying the 1% CDSC, which may apply to shares
redeemed during the first year of ownership.
+ Yield is calculated in accordance with current Securities and Exchange
Commission regulations and is based on the one-month period ended
December 31, 1997.
The PIMCO stock funds can invest in foreign securities and the International,
International Developed and Emerging Markets Funds invest primarily in these
securities, which can involve special risks due to foreign economic and
political developments. These risks can be more pronounced with emerging market
securities. The Opportunity and Small-Cap Value Funds generally invest in
small-cap stocks, which can be riskier than the overall stock market. The
Innovation and Precious Metals Funds concentrate their portfolios in one sector,
making them more volatile than a more diversified stock portfolio, and,
therefore, should be considered as only part of a diversified portfolio.
The Tax Exempt Fund can invest in high yield bonds, which entail greater risk,
such as less liquidity and possibility of default. Income from the Tax Exempt
Fund is subject to state and local taxes and may at times be subject to the
alternative minimum tax.
Line graphs have been included so an investor can compare a Fund's historical
performance to that of an appropriate broad-based index. Each index reflects a
group of unmanaged securities, and it is not possible to invest directly in an
unmanaged index. The Standard & Poor's 500 Index and Standard & Poor's Mid-Cap
Index are indices of stocks of companies with larger- and medium-sized
capitalizations, respectively. The Russell 2000 Index is an index of stocks of
companies with small capitalizations. The MSCI EAFE Index is an index of foreign
stocks. The MSCI World ex-USA Index is an index of foreign developed and
emerging market stocks. The MSCI Emerging Markets Free Index is an index of
emerging market stocks. The S&P 500/Lehman Aggregate Bond Hybrid Index is an
index represented by 60% S&P 500 Index and 40% Lehman Aggregate Bond Index (an
index containing a variety of bonds). The Philadelphia Gold and Silver Index is
an index of stocks of companies in the gold and silver mining industry. The
Lehman Municipal Bond Index is an index of municipal securities rated Baa or
better.
Lipper averages are calculated by Lipper Analytical Services, Inc., a nationally
recognized mutual fund performance evaluation firm. They are performance
averages of those funds that are tracked by Lipper, with the investment
objective noted. Lipper rankings are based on total returns, not adjusted for
sales charges.
For additional details on the PIMCO taxable bond funds, contact your financial
advisor to receive a prospectus that contains more complete information,
including charges and expenses. Or contact PIMCO Funds Distributors LLC at 2187
Atlantic Street, Stamford, CT 06902, 1-800-227-7337, www.pimcofunds.com. Please
read the prospectus carefully before you invest or send money.
27
<PAGE>
Schedule of Investments
Equity Income Fund
December 31, 1997 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 96.5%
- --------------------------------------------------------------------------------
Capital Goods 3.9%
GATX Corp. 52,900 $ 3,839
BFGoodrich Co. 71,100 2,946
----------
6,785
Consumer Discretionary 18.5%
Maytag Corp. 101,100 3,772
Ford Motor Co. 72,600 3,535
American Greetings Corp. `A' 89,700 3,510
Springs Industries, Inc. `A' 66,500 3,458
Penny J.C., Inc. 53,000 3,196
Chrysler Corp. 89,360 3,144
Brunswick Corp. 103,000 3,122
VF Corp. 66,600 3,059
Whirlpool Corp. 55,500 3,053
John H. Harland Co. 85,100 1,787
----------
31,636
Consumer Staples 10.1%
RJR Nabisco Holdings Corp. 190,200 7,132
SUPERVALU, Inc. 163,300 6,838
Anheuser Busch Cos., Inc. 77,700 3,419
----------
17,389
Energy 9.2%
Occidental Petroleum Corp. 122,500 3,591
Atlantic Richfield Co. 39,500 3,165
Repsol SA SP - ADR 73,000 3,107
Ultramar Diamond Shamrock Corp. 96,400 3,073
Amoco Corp. 34,700 2,954
----------
15,890
Financial and Business Services 12.9%
PNC Bank Corp. 129,900 7,412
CIGNA Corp. 19,500 3,375
Ohio Casualty Corp. 70,000 3,124
Bankers Trust New York Corp. 26,500 2,980
Chase Manhattan Corp. 27,156 2,973
Capstead Mortgage Corp. 117,500 2,343
----------
22,207
Health Care 4.0%
Pharmacia & Upjohn, Inc. 96,895 3,549
American Home Products Corp. 44,700 3,420
----------
6,969
Materials and Processing 11.1%
Dow Chemical Co. 34,500 3,502
Vulcan Materials Co. 31,700 3,237
USX-U.S. Steel Group, Inc. 102,400 3,200
Westvaco Corp. 101,200 3,181
Phelps Dodge Corp. 48,500 3,019
Union Carbide Corp. 68,000 2,920
----------
19,059
Technology 3.8%
International Business Machines Corp. 32,500 3,398
Harris Corp. 69,200 3,175
----------
6,573
Transportation 1.7%
Illinois Central Corp. 87,300 2,974
Utilities 21.3%
Southern New England Telecommunications Corp. 155,200 7,809
Washington Water Power Co. 157,000 3,817
U.S. West Communications Group 83,000 3,745
Bell Atlantic Corp. 40,166 3,655
Peoples Energy Corp. 92,000 3,622
PG & E Corp. 118,600 3,610
DTE Energy Co. 103,000 3,573
NICOR, Inc. 82,200 3,468
P.P. & L. Resources, Inc. 140,000 3,351
----------
36,650
----------
Total Common Stocks 166,132
(Cost $132,695) ==========
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 3.4%
- --------------------------------------------------------------------------------
Repurchase Agreements 3.4%
State Street Bank
4.250% due 01/02/98 $ 5,854 $ 5,854
(Dated 12/31/97. Collateralized by U.S.
Treasury Note 6.000% 05/31/98 valued at
$5,974,598 Repurchase proceeds
are $5,855,382.)
----------
Total Short-Term Instruments 5,854
(Cost $5,854) ==========
Total Investments (a) 99.9% $ 171,986
(Cost $138,549)
Other Assets and Liabilities (Net) 0.1% 152
----------
Net Assets 100.0% $ 172,138
==========
Notes to Schedule of Investments ($ in thousands):
(a) At December 31, 1997, the net unrealized
appreciation (depreciation) of investments based
on cost for federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 35,052
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value. (1,615)
---------
Unrealized appreciation-net $ 33,437
==========
(b) Non-income producing security.
28 See accompanying notes
<PAGE>
Schedule of Investments
Renaissance Fund
December 31, 1997 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 87.7%
- --------------------------------------------------------------------------------
Capital Goods 5.3%
Trinity Industries, Inc. 266,500 $ 11,893
Kuhlman Corp. 192,200 7,520
Eaton Corp. 62,900 5,614
----------
25,027
Communications 11.4%
AT&T Corp. 243,900 14,939
Bell Atlantic Corp. 151,500 13,787
SBC Communications, Inc. 184,300 13,500
U.S. West Media Group (b) 395,400 11,417
----------
53,643
Consumer Discretionary 8.9%
Tandy Corp. 343,900 13,262
Pier 1 Imports, Inc. 441,987 10,000
Ford Motor Co. 194,700 9,479
Hasbro, Inc. 292,200 9,204
----------
41,945
Consumer Staples 7.7%
Dean Foods Co. 353,100 21,009
International Home Foods, Inc. (b) 200,200 5,606
American Italian Pasta Co. `A' (b) 206,100 5,153
Fresh Del Monte Produce, Inc. (b) 316,000 4,622
----------
36,390
Energy 5.5%
Sun Co., Inc. 243,400 10,238
Atlantic Richfield Co. 83,900 6,722
Valero Energy Corp. 147,200 4,628
Texaco, Inc. 83,100 4,519
----------
26,107
Environmental Services 2.2%
Browning Ferris Industries, Inc. 280,500 10,379
Financial and Business Services 19.8%
Capital One Financial Corp. 247,900 13,433
Banc One Corp. 243,000 13,198
Fremont General Corp. 198,300 10,857
First Union Corp. 182,050 9,330
Conseco, Inc. 187,500 8,519
Equitable Cos., Inc. 170,200 8,467
Transamerica Corp. 75,700 8,062
CIT Group, Inc. `A' (b) 225,100 7,259
Allstate Corp. 78,300 7,115
BankAmerica Corp. 94,800 6,920
----------
93,160
Health Care 2.0%
McKesson Corp. 85,900 9,293
Materials and Processing 9.6%
Ball Corp. 355,200 12,543
Martin Marietta Materials, Inc. 251,200 9,185
Akzo Nobel NV SP - ADR 102,600 8,913
Vulcan Materials Co. 80,100 8,180
Calmat Co. 221,800 6,183
----------
45,004
Technology 6.0%
Electronic Data Systems Corp. 254,300 11,173
International Business Machines Corp. 104,100 10,885
Gateway 2000, Inc. (b) 191,600 6,251
----------
28,309
Transportation 4.3%
Canadian National Railway Co. 192,300 9,086
U.S. Airways Group, Inc. (b) 109,100 6,819
USFreightways Corp. 139,800 4,544
----------
20,449
Utilities 5.0%
Florida Progress Corp. 233,400 9,161
Boston Edison Co. 143,800 5,446
UtiliCorp United, Inc. 116,500 4,522
FirstEnergy Corp. (b) 144,800 4,199
----------
23,328
----------
Total Common Stocks 413,034
(Cost $354,269) ==========
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CONVERTIBLE BONDS AND NOTES 5.6%
- --------------------------------------------------------------------------------
Industrial 5.6%
Pier 1 Imports, Inc.
5.750% due 10/01/03 $ 2,650 $ 5,042
SCI Systems, Inc.
5.000% due 05/01/06 7,750 14,463
Solectron Corp.
6.000% due 03/01/06 5,000 6,906
----------
Total Convertible Bonds and Notes 26,411
(Cost $19,328) ==========
- --------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK 2.1%
- --------------------------------------------------------------------------------
Shares
Consumer Discretionary 1.1%
TJX Cos 14,100 5,358
Financial Services 1.0%
American Bankers Insurance 50,900 4,769
----------
Total Convertible Preferred Stock 10,127
(Cost $5,438) ==========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 5.4%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Commercial Paper 5.4%
BBV Finance Delaware, Inc.
5.820% due 01/09/98 $ 6,900 6,892
CIESCO LP
6.150% due 01/12/98 1,000 998
E.I. Du Pont de Nemours
6.000% due 01/13/98 5,500 5,490
Goldman Sachs & Co.
5.900% due 01/07/98 7,000 6,994
UBS Finance (de), Inc.
6.250% due 01/02/98 3,800 3,800
6.500% due 01/02/98 1,300 1,300
----------
Total Short-Term Instruments 25,474
(Cost $25,474) ==========
Total Investments (a) 100.8% $ 475,046
(Cost $404,509)
Other Assets and Liabilities (Net)(0.8%) (3,943)
----------
Net Assets 100.0% $ 471,103
==========
Notes to Schedule of Investments ($ in thousands):
(a) At December 31, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of
value over tax cost $ 73,511
Aggregate gross unrealized depreciation for all
investments in which there was an excess of
tax cost over value (2,974)
----------
Unrealized appreciation-net $ 70,537
==========
(b) Non-income producing security.
See accompanying notes 29
<PAGE>
Schedule of Investments
Value Fund
December 31, 1997 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 98.0%
- --------------------------------------------------------------------------------
Capital Goods 4.5%
Northrop Grumman Corp. 37,000 $ 4,255
AGCO Corp. 69,700 2,012
Wheelabrator Technologies, Inc. 115,000 1,847
GATX Corp. 17,000 1,234
---------
9,348
Consumer Discretionary 20.6%
American Greetings Corp. `A' 160,000 6,260
Maytag Corp. 160,000 5,970
Dillards, Inc. `A' 120,000 4,230
Chrysler Corp. 120,000 4,222
Washington Post Co. 8,600 4,184
VF Corp. 91,000 4,180
Tupperware Corp. 145,000 4,042
Brunswick Corp. 130,000 3,940
Tandy Corp. 100,000 3,856
Springs Industries, Inc. `A' 19,000 988
Goodyear Tire & Rubber Co. 14,700 935
---------
42,807
Consumer Staples 10.3%
SUPERVALU, Inc. 150,000 6,281
RJR Nabisco Holdings Corp. 111,300 4,174
Anheuser Busch Cos., Inc. 90,200 3,969
Whitman Corp. 146,500 3,818
Unilever NV 32,400 2,023
IBP, Inc. 55,000 1,151
---------
21,416
Energy 10.3%
Atlantic Richfield Co. 76,400 6,122
Ultramar Diamond Shamrock Corp. 150,800 4,807
Amoco Corp. 45,000 3,831
Repsol SA SP - ADR 83,000 3,533
Tidewater, Inc. 55,800 3,076
---------
21,369
Financial and Business Services 11.8%
Bear Stearns Cos 128,782 6,117
CIGNA Corp. 27,700 4,794
Chase Manhattan Corp. 37,000 4,051
PNC Bank Corp. 70,000 3,994
Countrywide Credit Industries, Inc. 60,000 2,572
Loews Corp. 19,000 2,016
Bankers Trust New York Corp. 9,000 1,012
---------
24,556
Health Care 5.3%
American Home Products Corp. 55,000 4,208
Beckman Instruments, Inc. 80,000 3,200
Pharmacia & Upjohn, Inc. 68,410 2,505
Foundation Health Systems `A' (b) 52,000 1,164
---------
11,077
Materials and Processing 10.2%
Westvaco Corp. 175,000 5,501
USG Corp. (b) 90,000 4,410
Phelps Dodge Corp. 65,500 4,077
Union Carbide Corp. 91,300 3,920
Wellman, Inc. 171,100 3,336
---------
21,244
Technology 9.3%
Adobe Systems, Inc. 104,700 4,319
Harris Corp. 89,700 4,115
International Business Machines Corp. 38,300 4,005
Tektronix, Inc. 87,000 3,453
Teradyne, Inc. (b) 113,200 2,385
Seagate Technology, Inc. (b) 51,700 995
---------
19,272
Transportation 2.1%
UAL Corp. (b) 47,100 4,357
Utilities 13.6%
PG & E Corp. 198,300 $ 6,036
Bell Atlantic Corp. 66,300 6,033
DTE Energy Co. 163,000 5,654
Southern New England Telecommunications Corp. 100,000 5,031
NICOR, Inc. 111,300 4,695
Peoples Energy Corp. 22,000 866
---------
28,315
---------
Total Common Stocks 203,761
(Cost $178,005) =========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 1.1%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreements 1.1%
State Street Bank
4.250% due 01/02/98 $ 2,239 2,239
(Dated 12/31/97. Collateralized by U.S.
Treasury Note 6.000% 05/31/98 valued
at $2,285,145. Repurchase proceeds
are $2,239,529.)
---------
Total Short-Term Instruments 2,239
(Cost $2,239) =========
Total Investments (a) 99.1% $206,000
(Cost $180,244)
Other Assets and Liabilities (Net) 0.9% 1,965
---------
Net Assets 100.0% $207,965
=========
Notes to Schedule of Investments ($ in thousands):
(a) At December 31, 1997, the net unrealized
appreciation (depreciation) of investments based
on cost for federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost $ 31,113
Aggregate gross unrealized depreciation for all
investments in which there was an excess of
tax cost over value (5,357)
---------
Unrealized appreciation-net $ 25,756
=========
(b) Non-income producing security.
30 See accompanying notes
<PAGE>
Schedule of Investments
Capital Appreciation Fund
December 31, 1997 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 96.7%
- --------------------------------------------------------------------------------
Capital Goods 9.9%
Textron, Inc. 166,900 $ 10,431
Illinois Tool Works, Inc. 160,300 9,638
Unifi, Inc. 231,100 9,403
Dresser Industries, Inc. 217,500 9,122
Ingersoll Rand Co. 217,150 8,795
Johnson Controls, Inc. 184,000 8,786
AlliedSignal, Inc. 188,500 7,340
United Technologies Corp. 95,300 6,939
Paccar, Inc. 75,800 3,980
---------
74,434
Communications 2.6%
SBC Communications, Inc. 138,100 10,116
AT&T Corp. 153,200 9,384
---------
19,500
Consumer Discretionary 15.9%
Kroger Co. (b) 358,800 13,253
TJX Corp., Inc. 381,200 13,104
Omnicom Group 302,600 12,823
Costco Cos. (b) 269,900 12,044
New York Times Co. 157,500 10,415
Gannett, Inc. 166,000 10,261
Dayton Hudson Corp. 136,800 9,234
Tribune Co. 142,700 8,883
Jones Apparel Group, Inc. (b) 175,900 7,564
Federated Department Stores, Inc. (b) 173,600 7,476
Sunbeam-Oster, Inc. 177,400 7,473
Brunswick Corp. 238,100 7,217
---------
119,747
Consumer Services 3.0%
Carnival Corp. `A' 226,600 12,548
Marriott International, Inc. 146,400 10,138
---------
22,686
Consumer Staples 5.6%
Safeway, Inc. (b) 208,600 13,194
Campbell Soup Co. 178,400 10,370
Hershey Foods Corp. 156,300 9,681
Albertson's, Inc. 186,700 8,845
---------
42,090
Energy 9.0%
Transocean Offshore, Inc. 202,900 9,777
Halliburton Co. 179,900 9,344
Schlumberger Limited 110,500 8,895
ENSCO International, Inc. (b) 258,500 8,660
Noble Drilling Corp. (b) 279,200 8,551
Rowan Cos., Inc. (b) 251,100 7,659
Global Marine, Inc. (b) 312,300 7,651
Nabors Industries, Inc. (b) 238,800 7,507
---------
68,044
Financial and Business Services 26.6%
Southtrust Corp. 183,300 11,628
Travelers Group, Inc. 207,000 11,152
Norwest Corp. 278,200 10,745
Bear Stearns Cos 220,803 10,488
BankBoston Corp. 105,100 9,873
Associates First Capital Corp. `A' 136,100 9,680
American Express Co. 104,700 9,344
PNC Bank Corp. 163,015 9,302
Federal National Mortgage Assn. 161,200 9,198
National City Corp. 135,700 8,922
CarrAmerica Realty Corp. 279,200 8,847
Federal Home Loan Mortgage Corp. 208,600 8,748
BankAmerica Corp. 118,600 8,658
Citicorp 68,100 8,610
Capital One Financial Corp. 156,900 8,502
Lincoln National Corp. 108,800 8,500
Hartford Financial Services Group, Inc. 90,800 8,495
Alliance Capital Management LP 212,300 8,452
First Union Corp. 158,700 8,133
Chase Manhattan Corp. 73,800 8,081
Household International, Inc. 58,100 7,411
Simon DeBartolo Group, Inc. 226,200 7,394
---------
200,163
Health Care 7.8%
Schering-Plough Corp. 192,300 11,947
Cognizant Corp. 230,700 10,281
Tenet Healthcare Corp. (b) 302,305 10,014
Health Management Assn., Inc. `A' (b) 360,200 9,095
Biomet, Inc. 340,500 8,725
Eli Lilly & Co. 124,200 8,647
---------
58,709
Materials and Processing 4.6%
Sealed Air Corp. (b) 160,400 9,905
Rohm & Haas Co. 92,600 8,866
Tyco International Limited (b) 186,100 8,386
Fort James Corp. 185,700 7,103
---------
34,260
Technology 7.0%
Computer Associates International, Inc. 205,000 10,839
BMC Software, Inc. (b) 151,400 9,936
International Business Machines Corp. 86,100 9,003
Bay Networks, Inc. (b) 344,300 8,801
Cisco Systems, Inc. (b) 132,900 7,409
Dell Computer Corp. (b) 82,500 6,930
---------
52,918
Transportation 2.3%
U.S. Airways Group, Inc. (b) 145,400 9,088
Continental Airlines, Inc. `B' (b) 166,200 7,998
---------
17,086
Utilities 2.4%
Ameritech Corp. 116,100 9,346
American Electric Power, Inc. 166,800 8,611
---------
17,957
---------
Total Common Stocks 727,594
(Cost $545,397) ---------
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 4.6%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreements 4.6%
State Street Bank
4.250% due 01/02/98 $ 34,993 34,993
(Dated 12/31/97. Collateralized by
U.S. Treasury Note 6.000% 05/31/98
valued at $35,696,589. Repurchase
proceeds are $35,001,262.)
---------
Total Short-Term Instruments 34,993
(Cost $34,993) =========
Total Investments (a) 101.3% $ 762,587
(Cost $580,390)
Other Assets and Liabilities (Net) (1.3%) (9,688)
---------
Net Assets 100.0% $ 752,899
=========
Notes to Schedule of Investments ($ in thousands):
(a) At December 31, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 184,864
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (2,667)
---------
Unrealized appreciation-net $ 182,197
---------
(b) Non-income producing security.
See accompanying notes 31
<PAGE>
Schedule of Investments
Growth Fund
December 31, 1997 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 94.2%
- --------------------------------------------------------------------------------
Aerospace 1.1%
Boeing Co. 400,000 $ 19,575
Communications 8.1%
AT&T Corp. 900,000 55,125
Tele-Communications `A' (b) 1,800,001 50,287
Nextel Communications, Inc. `A' (b) 1,400,000 36,400
---------
141,812
Consumer Discretionary 17.3%
Cendant Corp. (b) 1,900,000 65,313
TJX Corp., Inc. 1,420,000 48,812
Home Depot, Inc. 800,000 47,100
CVS Corp. 730,000 46,766
Costco Cos. (b) 1,000,000 44,625
Dayton Hudson Corp. 480,000 32,400
Mattel, Inc. 590,000 21,977
---------
306,993
Consumer Services 2.6%
CBS Corp. 1,588,000 46,747
Consumer Staples 4.2%
Safeway, Inc. (b) 900,000 56,925
Sara Lee Corp. 310,000 17,457
---------
74,382
Energy 6.5%
Schlumberger Limited 780,000 62,790
Atlantic Richfield Co. 340,000 27,243
AES Corp. (b) 540,000 25,178
---------
115,211
Financial and Business Services 13.7%
Washington Mutual, Inc. 660,000 42,116
Morgan Stanley, Dean Witter, Discover and Co. 627,000 37,071
Associates First Capital Corp. `A' 510,000 36,274
Travelers Group, Inc. 600,000 32,325
BankAmerica Corp. 415,000 30,295
Capital One Financial Corp. 450,000 24,384
Countrywide Credit Industries, Inc. 540,000 23,153
CIT Group, Inc. `A' (b) 552,000 17,802
---------
243,420
Health Care 18.2%
HBO & Co. 1,770,000 84,960
Eli Lilly & Co. 1,000,000 69,625
Pfizer, Inc. 800,000 59,650
Warner Lambert Co. 310,000 38,440
Guidant Corp. 500,000 31,125
Medtronic, Inc. 400,000 20,925
Cardinal Health, Inc. 260,000 19,533
---------
324,258
Materials and Processing 4.6%
Tyco International Limited (b) 840,000 37,853
Fort James Corp. 680,000 26,010
Georgia-Pacific Corp. 300,000 18,225
---------
82,088
Technology 14.2%
Cisco Systems, Inc. (b) 880,000 49,060
America Online, Inc. (b) 550,000 49,053
Microsoft Corp. (b) 290,000 37,482
Intel Corp. 530,000 37,232
Lucent Technologies, Inc. 400,000 31,950
Electronic Data Systems Corp. 610,000 26,802
Gateway 2000, Inc. (b) 660,000 21,532
---------
253,111
Transportation 3.7%
Delta Air Lines, Inc. 350,000 41,650
Federal Express Corp. (b) 400,000 24,425
---------
66,075
---------
Total Common Stocks 1,673,672
(Cost $1,300,850) =========
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES 0.0%
- --------------------------------------------------------------------------------
Banking and Finance 0.0%
Cabbell Financial Grantor Trust
7.188% due 05/01/98 $ 764 $ 755
-----------
Total Corporate Bonds and Notes 755
(Cost $761)
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 0.2%
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations 0.2%
IMC Home Equity Loan Trust
6.590% due 07/25/11 812 811
Tryon Mortgage Funding, Inc.
6.350% due 05/20/01 2,330 2,329
-----------
Total Mortgage-Backed Securities 3,140
(Cost $3,138)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 6.6%
- --------------------------------------------------------------------------------
Commercial Paper 6.6%
BBV Finance Delaware, Inc.
5.820% due 01/09/98 16,500 16,481
Bell Atlantic Network Funding
5.870% due 01/13/98 10,000 9,982
CIESCO LP
5.870% due 01/20/98 11,000 10,968
CommerzBank
5.830% due 01/16/98 12,000 11,973
CSW Credit, Inc.
5.900% due 01/12/98 10,000 9,984
CXC, Inc.
5.970% due 01/05/98 21,000 20,990
E.I. Du Pont de Nemours
5.950% due 01/08/98 11,000 10,989
Goldman Sachs & Co.
5.850% due 01/06/98 5,700 5,696
6.050% due 01/07/98 10,000 9,991
Windmill Funding Corp.
6.050% due 01/15/98 9,750 9,729
-----------
Total Short-Term Instruments 116,783
===========
(Cost $116,783)
Total Investments (a) 101.0% $ 1,794,350
(Cost $1,421,532)
Written Options (c) (0.1)% (1,792)
(Premiums $1,129)
Other Assets and Liabilities (Net) (0.9%) (15,394)
-----------
Net Assets 100.0% $ 1,777,164
===========
32 See accompanying notes
<PAGE>
<TABLE>
================================================================================
<S> <C>
Notes to Schedule of Investments ($ in thousands):
(a) At December 31, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost. $ 384,077
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value. (11,259)
-----------
Unrealized appreciation-net $ 372,818
===========
(b) Non-income producing security.
(c) Premiums received on written options:
</TABLE>
<TABLE>
<CAPTION>
Premiums Value
Type Contracts Received (000s)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Call - Guidant Corp.
Strike @ 65.00 Exp. 01/15/98 464 $ 91 $ (58)
Call - HBO & Co.
Strike @ 45.00 Exp. 01/15/98 3702 683 (1,296)
Call - Schlumberger Limited
Strike @ 80.00 Exp. 01/15/98 1298 355 (438)
----------------------
$ 1,129 $ (1,792)
----------------------
</TABLE>
See accompanying notes 33
<PAGE>
Schedule of Investments
Mid Cap Growth Fund
December 31, 1997 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 96.0%
- --------------------------------------------------------------------------------
Building 0.0%
Medusa Corp. 4,300 $ 180
Capital Goods 4.9%
General Dynamics Corp. 81,600 7,053
B.F. Goodrich Co. 133,900 5,548
Snap-On, Inc. 126,700 5,527
Waters Corp. (b) 141,700 5,331
Mark IV Industries, Inc. 210,351 4,601
---------
28,060
Consumer Discretionary 16.7%
Borders Group, Inc. (b) 264,000 8,266
Consolidated Stores Corp. (b) 181,956 7,995
Bed, Bath & Beyond, Inc. (b) 204,300 7,866
HON Industries 122,300 7,216
Lancaster Colony Corp. 127,700 7,199
Maytag Corp. 192,800 7,194
U.S. Industries, Inc. (b) 229,300 6,908
Herman Miller, Inc. 122,900 6,706
Tiffany & Co. 171,300 6,178
Alberto-Culver Co. 'A' 222,600 6,010
Dial Corp. 287,700 5,988
Kroger Co. (b) 153,000 5,651
Proffitt's, Inc. (b) 192,800 5,483
Liz Claiborne, Inc. 125,800 5,260
Callaway Golf Co. 44,100 1,260
---------
95,180
Consumer Services 3.1%
Promus Hotel Corp. (b) 147,938 6,213
Royal Caribbean Cruises Limited 111,600 5,950
GTECH Holdings Corp. (b) 178,900 5,714
---------
17,877
Consumer Staples 5.7%
Dean Foods Co. 132,000 7,854
Richfood Holdings, Inc. 256,450 7,245
Interstate Bakeries Corp. 176,000 6,578
Flowers Industries, Inc. 316,100 6,500
Suiza Foods Corp. (b) 73,000 4,348
---------
32,525
Energy 11.2%
Falcon Drilling Co., Inc. (b) 249,900 8,762
Cooper Cameron Corp. (b) 115,800 7,064
Baker Hughes, Inc. 154,700 6,749
EVI, Inc. (b) 121,400 6,282
Weatherford Enterra, Inc. (b) 138,300 6,051
Tosco Corp. 157,700 5,963
BJ Services Co. (b) 81,300 5,849
Smith International, Inc. (b) 93,600 5,745
Parker Drilling Co. (b) 465,100 5,668
Diamond Offshore Drilling, Inc. 111,600 5,371
Camco International, Inc. 10,000 637
---------
64,141
Financial and Business Services 28.9%
Cullen/Frost Bankers, Inc. 148,900 9,036
Union Planters Corp. 110,100 7,480
Mercantile BanCorp. 118,113 7,264
Valassis Communications, Inc. (b) 194,600 7,200
Crestar Financial Corp. 125,100 7,131
Allmerica Financial Corp. 141,300 7,056
SunAmerica, Inc. 163,450 6,987
AmSouth Bancorp. 128,400 6,974
Equity Residential Properties Trust 134,500 6,801
Progressive Corp. 55,600 6,665
Crescent Real Estate Equities Co. 166,200 6,544
Protective Life Corp. 109,500 6,543
Ambac, Inc. 134,500 6,187
Equifax, Inc. 171,900 6,092
Summit Bancorp 113,990 6,070
Finova Group, Inc. 120,500 5,987
PaineWebber Group, Inc. 168,400 5,820
Mutual Risk Management Limited 194,230 5,807
Public Storage, Inc. 196,000 5,757
Penncorp Financial Group, Inc. 160,300 5,721
PMI Group, Inc. 78,900 5,705
Travelers Property Casualty `A' 125,500 5,522
Popular, Inc. 104,600 5,178
Bank United Corp. 90,900 4,448
LNR Property Corp. 150,100 3,546
BB&T Corp. 47,500 3,043
City National Corp. 25,000 923
HCC Insurance Holdings, Inc. 36,550 777
Magna Group, Inc. 15,000 686
Associated Banc-Corp 12,000 661
Reinsurance Group of America 15,000 638
Crescent Operating, Inc. (b) 14,330 351
First Midwest Bancorp, Inc. 1,250 55
---------
164,655
Health Care 4.4%
Health Management Assn., Inc. 'A' (b) 275,125 6,947
Watson Pharmaceutical, Inc. (b) 204,000 6,617
DePuy, Inc. (b) 208,600 5,997
Guidant Corp. 84,800 5,279
---------
24,840
Materials and Processing 7.4%
Fort James Corp. 178,512 6,828
Sealed Air Corp. (b) 104,100 6,428
Southdown, Inc. 104,900 6,189
Cytec Industries, Inc. (b) 129,800 6,092
Lennar Corp. 275,700 5,945
Lear Corp. (b) 120,700 5,733
BetzDearborn, Inc. 75,600 4,616
Mueller Industries, Inc. (b) 10,000 590
---------
42,421
Technology 8.2%
Compuware Corp. (b) 264,100 8,451
Sanmina Corp. (b) 94,300 6,389
Tech Data Corp. (b) 156,400 6,080
Comdisco, Inc. 178,775 5,978
American Power Conversion Corp. (b) 245,500 5,800
SCI Systems, Inc. (b) 118,600 5,167
Iomega Corp. (b) 364,200 4,530
Network Associates, Inc. (b) 79,700 4,214
---------
46,609
Transportation 2.3%
Comair Holdings, Inc. 291,700 7,037
CNF Transportation, Inc. 153,300 5,883
---------
12,920
Utilities 3.2%
El Paso Natural Gas Co. 94,900 6,311
IPALCO Enterprises, Inc. 143,400 6,014
National Fuel Gas Co. 114,600 5,580
Oneok, Inc. 15,000 606
---------
18,511
---------
Total Common Stocks 547,919
=========
(Cost $418,184)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 9.3%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreements 9.3%
State Street Bank
4.250% due 01/02/98 $ 53,269 53,269
(Dated 12/31/97. Collateralized by U.S.
Treasury Note 6.000% 05/31/98
valued at $54,335,121. Repurchase
proceeds are $53,281,577.)
---------
Total Short-Term Instruments 53,269
=========
(Cost $53,269)
Total Investments (a) 105.3% $ 601,188
(Cost $471,453)
Other Assets and Liabilities (Net) (5.3%) (30,423)
---------
Net Assets 100.0% $ 570,765
=========
34 See accompaning notes
<PAGE>
- --------------------------------------------------------------------------------
Notes to Schedule of Investments ($ in thousands):
(a) At December 31, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost. $ 132,823
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value. (3,088)
----------
Unrealized appreciation-net $ 129,735
==========
(b) Non-income producing security.
See accompanying notes 35
<PAGE>
Schedule of Investments
Target Fund
December 31, 1997 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 93.4%
- --------------------------------------------------------------------------------
Capital Goods 1.5%
Trinity Industries, Inc. 389,900 $ 17,399
Communications 7.9%
Teleport Communications Group, Inc. (b) 713,200 39,137
Paging Network, Inc. (b) 2,664,000 28,638
Nextel Communications, Inc. `A' (b) 502,900 13,076
360 Communications Co. (b) 597,200 12,056
------------
92,907
Consumer Discretionary 20.4%
Intuit, Inc. (b) 946,200 39,031
Nordstrom, Inc. 504,700 30,471
Sunbeam-Oster, Inc. 706,500 29,761
Fred Meyer, Inc. (b) 804,100 29,249
Outback Steakhouse, Inc. (b) 831,800 23,914
Scholastic Corp. (b) 457,900 17,171
Michaels Stores, Inc. (b) 551,600 16,134
HON Industries 270,000 15,930
Hasbro, Inc. 468,700 14,764
Payless ShoeSource, Inc. (b) 175,200 11,760
Black & Decker Corp. 278,800 10,891
------------
239,076
Consumer Services 3.3%
Jacor Communications, Inc. (b) 365,900 19,439
Pittston Brink's Group 482,500 19,421
------------
38,860
Consumer Staples 1.9%
International Home Foods, Inc. (b) 807,000 22,596
Energy 8.6%
Weatherford Enterra, Inc. (b) 723,100 31,636
Sun Co., Inc. 674,600 28,375
Santa Fe Energy Resources, Inc. (b) 1,708,200 19,217
Anadarko Petroleum Corp. 198,400 12,041
Grey Wolf, Inc. (b) 1,693,800 9,104
------------
100,373
Environmental Services 2.3%
Allied Waste Industries, Inc. (b) 1,149,700 26,802
Financial and Business Services 21.3%
Dime Bancorp, Inc. 2,063,800 62,430
Charter One Financial, Inc. 456,720 28,830
Providian Financial Corp. (b) 551,600 24,926
Marshall & Ilsley Corp. 385,200 23,931
AccuStaff, Inc. (b) 949,800 21,846
Golden West Financial Corp. 198,700 19,435
Union Planters Corp. 247,200 16,794
First Tennessee National Corp. 209,700 13,997
Catellus Development Corp. (b) 642,000 12,840
Capital One Financial Corp. 234,000 12,680
CIT Group, Inc. `A' (b) 347,500 11,207
------------
248,916
Materials and Processing 1.0%
Solutia, Inc. 445,700 11,895
Miscellaneous 5.2%
Federal-Mogul Corp. 944,700 38,260
Ceridian Corp. (b) 503,900 23,085
------------
61,345
Technology 15.5%
Unisys Corp. (b) 2,126,800 29,509
Symantec Corp. (b) 1,137,300 24,950
Electronic Arts, Inc. (b) 611,000 23,103
National Semiconductor Corp. (b) 771,100 20,001
Sanmina Corp. (b) 287,200 19,458
American Power Conversion Corp. (b) 762,800 18,021
Check Point Software Technologies Limited (b) 438,800 17,881
Apollo Group, Inc. `A' (b) 252,800 11,945
Lam Research Corp. (b) 396,100 11,586
Adtran, Inc. (b) 201,500 5,541
------------
181,995
Transportation 4.5%
Kansas City Southern Industries, Inc. 841,600 26,721
Southwest Airlines Co. 1,039,650 25,601
------------
52,322
------------
Total Common Stocks 1,094,486
(Cost $1,029,794) ============
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 7.8%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Commercial Paper 7.8%
BBV Finance Delaware, Inc.
5.820% due 01/09/98 $ 18,300 18,279
CIESCO LP
5.900% due 01/07/98 13,000 12,989
CXC, Inc.
5.970% due 01/05/98 10,000 9,995
E.I. Du Pont de Nemours
6.000% due 01/13/98 9,500 9,483
Goldman Sachs & Co.
5.850% due 01/06/98 15,000 14,990
UBS Finance (de), Inc.
6.250% due 01/02/98 13,500 13,500
6.500% due 01/02/98 1,300 1,300
Windmill Funding Corp.
6.050% due 01/15/98 10,000 9,978
------------
Total Short-Term Instruments 90,514
(Cost $90,514) ============
Total Investments (a) 101.2% $ 1,185,000
(Cost $1,120,308)
Other Assets and Liabilities (Net) (1.2%) (13,639)
------------
Net Assets 100.0% $ 1,171,361
============
Notes to Schedule of Investments ($ in thousands):
(a) At December 31, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost. $ 112,841
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value. (48,149)
------------
Unrealized appreciation-net $ 64,692
============
(b) Non-income producing security.
36 See accompanying notes
<PAGE>
Schedule of Investments
Small Cap Value Fund
December 31, 1997 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 91.0%
- --------------------------------------------------------------------------------
Capital Goods 8.5%
Del Webb Corp. 91,100 $ 2,368
Westinghouse Air Brake Co. 91,000 2,332
C&D Technologies, Inc. 46,800 2,258
Zurn Industries, Inc. 67,000 2,106
Gleason Corp. 78,100 2,104
Allied Products Corp. 85,500 2,052
Barnes Group, Inc. 90,000 2,048
Tecumseh Products Co. `A' 41,900 2,043
Oshkosh Truck Corp. `B' 109,400 1,976
Nacco Industries, Inc. `A' 7,800 836
----------
20,123
Consumer Discretionary 13.0%
Fleetwood Enterprises, Inc. 57,700 2,449
Harman International Industries, Inc. 54,000 2,292
Stanhome, Inc. 88,000 2,261
Borg-Warner Automotive, Inc. 43,000 2,236
Fedders USA, Inc. 350,000 2,188
Toro Co. 50,500 2,153
Bowne & Co., Inc. 53,100 2,117
Guilford Mills, Inc. 77,050 2,109
Garan, Inc. 81,600 2,101
La-Z-Boy Inc. 48,200 2,079
Sturm Ruger & Co., Inc. 112,500 2,074
Brown Group, Inc. 150,000 1,997
Ennis Business Forms 213,800 1,978
Rival Co. 144,300 1,894
Burlington Coat Factory Warehouse Corp. 42,500 698
----------
30,626
Consumer Services 2.5%
Lubys Cafeterias, Inc. 118,500 2,081
Chemed Corp. 49,700 2,059
Applebee's International, Inc. 94,400 1,705
----------
5,845
Consumer Staples 3.5%
DIMON, Inc. 83,000 2,179
Nash Finch Co. 114,400 2,174
Universal Corp. 49,700 2,044
Marsh Supermarkets, Inc. `B' 111,400 1,664
Great Atlantic & Pacific Tea Co., Inc. 4,000 119
----------
8,180
Energy 6.6%
Vintage Petroleum, Inc. 120,000 2,280
World Fuel Services Corp. 108,500 2,278
Offshore Logistics, Inc. (b) 105,450 2,254
Mitchell Energy & Development Corp. `B' 77,000 2,243
Snyder Oil Corp. 120,000 2,190
Western Gas Resources, Inc. 97,000 2,146
Aquila Gas Pipeline Corp. 160,000 2,060
----------
15,451
Financial and Business Services 19.6%
Interra Financial, Inc. 35,600 2,456
McGrath Rentcorp 99,000 2,426
Southwest Securities Group, Inc. 89,200 2,297
BankAtlantic Bancorp, Inc. `A' 135,500 2,210
Merrill Corp. 94,700 2,202
PXRE Corp. 66,000 2,190
Orion Capital Corp. 47,000 2,183
Centris Group, Inc. 97,000 2,164
FirstBank Puerto Rico 63,500 2,163
Capstead Mortgage Corp. 108,000 2,153
Glimcher Realty Trust 95,100 2,146
AmerUs Life Holdings, Inc. 57,894 2,135
TriNet Corp. Realty Trust, Inc. 55,000 2,128
Excel Realty Trust, Inc. 67,200 2,117
Kelly Services, Inc. 70,000 2,100
United Dominion Realty Trust 148,815 2,074
Eaton Vance Corp. 54,600 2,061
Commercial Federal Corp. 57,750 2,054
American Health Properties, Inc. 74,300 2,048
Sovereign Bancorp, Inc. 97,720 2,028
SIS Bancorp, Inc. 37,700 1,515
First Hawaiian, Inc. 24,100 958
Chittenden Corp. 9,162 321
----------
46,129
Health Care 2.8%
Bergen Brunswig Corp. `A' 52,618 2,217
Bindley Western Industries, Inc. 71,000 2,192
Integrated Health Services, Inc. 68,300 2,130
----------
6,539
Materials and Processing 17.6%
Continental Homes Holding Corp. 62,200 2,503
GenCorp, Inc. 91,000 2,275
Commonwealth Industries, Inc. 152,000 2,204
Caraustar Industries, Inc. 62,700 2,147
Kaman Corp. 131,000 2,145
Ethyl Corp. 277,000 2,129
Zeigler Coal Holding Co. 130,500 2,129
Butler Manufacturing Co. 65,600 2,116
Universal Forest Products, Inc. 155,000 2,112
Quanex Corp. 75,000 2,109
Southdown, Inc. 35,700 2,106
Wausau-Mosinee Paper Corp. 104,000 2,093
Castle (A.M.) & Co. 91,100 2,084
Park Electrochemical Corp. 72,900 2,068
Texas Industries, Inc. 45,900 2,066
Intermet Corp. 118,000 2,065
Commercial Metals Co. 65,000 2,051
Cleveland-Cliffs, Inc. 44,400 2,034
Mississippi Chemical Corp. 106,700 1,947
Wellman, Inc. 53,300 1,039
----------
41,422
Technology 5.3%
Innovex, Inc. 98,300 2,255
Dallas Semiconductor Corp. 53,000 2,160
Cohu, Inc. 69,000 2,113
Thiokol Corp. 26,000 2,113
Pioneer Standard Electronics, Inc. 138,000 2,104
MTS Systems Corp. 45,700 1,714
----------
12,459
Transportation 3.6%
Roadway Express, Inc. 104,000 2,301
USFreightways Corp. 69,000 2,242
Sea Containers Limited `A' 65,000 2,080
ASA Holdings, Inc. 69,100 1,965
----------
8,588
Utilities 8.0%
Rochester Gas & Electric Corp. 70,000 2,380
Public Service Co. of New Mexico 92,500 2,191
United Illuminating Co. 47,600 2,187
Commonwealth Energy System 64,900 2,158
Eastern Enterprises 47,600 2,142
Eastern Utilities Assn 80,700 2,118
Aliant Communications, Inc. 65,200 2,046
Southern California Water Co. 80,700 2,027
Energen Corp. 39,000 1,550
----------
18,799
----------
Total Common Stocks 214,161
(Cost $193,361) ==========
See accompanying notes 37
<PAGE>
Schedule of Investments (Cont.)
Small Cap Value Fund
December 31, 1997 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 9.1%
- --------------------------------------------------------------------------------
Repurchase Agreements 9.1%
State Street Bank
4.250% due 01/02/98 $ 21,526 21,526
(Dated 12/31/97. Collateralized by U.S.
Treasury Note 6.000% 05/31/98 valued
at $21,960,550. Repurchase proceeds
are $21,531,083.)
Total Short-Term Instruments 21,526
(Cost $21,526) -----------
Total Investments (a) 100.1% $ 235,687
(Cost $214,887)
Other Assets and Liabilities (Net) (0.1%) (140)
-----------
Net Assets 100.0% $ 235,547
===========
Notes to Schedule of Investments ($ in thousands):
(a) At December 31, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost. $ 26,762
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value. (5,962)
-----------
Unrealized appreciation-net $ 20,800
===========
(b) Non-income producing security.
38 See accompanying notes
<PAGE>
Schedule of Investments
Opportunity Fund
December 31, 1997 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 93.7%
- --------------------------------------------------------------------------------
Building 6.0%
U.S. Home Corp. (b) 500,000 $ 19,625
Lone Star Industries, Inc. 175,000 9,297
Medusa Corp. 200,000 8,362
Champion Enterprises, Inc. (b) 400,000 8,225
----------
45,509
Capital Goods 8.6%
Halter Marine Group, Inc. (b) 754,200 21,777
Tower Automotive, Inc. (b) 400,000 16,825
Motivepower Industries, Inc. (b) 638,900 14,854
Terex Corp. (b) 500,000 11,750
----------
65,206
Communications 5.4%
Winstar Communications, Inc. (b) 995,000 24,813
Premiere Technologies, Inc. 600,000 16,575
----------
41,388
Consumer Discretionary 9.8%
Linens`N Things, Inc. (b) 540,000 23,557
Windmere Corp. 850,000 19,178
The Men's Wearhouse, Inc. (b) 500,000 17,375
CapStar Hotel Co. (b) 300,000 10,294
North Face, Inc. (b) 100,000 2,200
Knoll, Inc. (b) 63,300 2,034
----------
74,638
Consumer Staples 4.5%
Whole Foods Market, Inc. (b) 350,100 17,899
Smithfield Foods (b) 500,000 16,500
----------
34,399
Energy 7.0%
Veritas DGC, Inc. (b) 800,000 31,600
Offshore Logistics, Inc. (b) 604,200 12,915
UTI Energy Corp. (b) 331,000 8,565
----------
53,080
Financial and Business Services 6.5%
Golden State Bancorp, Inc. (b) 1,000,000 37,375
First Alliance Corp. (b) 645,000 11,852
----------
49,227
Health Care 7.2%
Cytyc Corp. (b) 750,000 18,656
Curative Health Services, Inc. (b) 450,000 13,669
Concentra Managed Care, Inc. (b) 357,200 12,055
Dura Pharmaceuticals, Inc. (b) 250,000 11,469
----------
55,849
Technology 33.8%
Computer Horizons Corp. (b) 1,000,000 45,000
Network Appliance, Inc. (b) 770,000 27,335
Wind River Systems (b) 635,000 25,201
Lernout & Hauspie Speech Products NV (b) 500,000 23,250
Manugistics Group, Inc. (b) 500,000 22,312
BEA Systems, Inc. (b) 1,000,000 17,313
Brightpoint, Inc. (b) 1,200,000 16,650
Tracor, Inc. (b) 500,000 15,188
DSP Communications, Inc. (b) 918,000 11,016
Data General Corp. (b) 600,000 10,462
Credence Systems Corp. (b) 350,000 10,369
Kent Electronics Corp. (b) 400,000 10,050
Vanstar Corp. (b) 850,000 9,616
Davox Corp. (b) 250,000 8,156
MRV Communications, Inc. (b) 260,000 6,208
----------
258,126
Transportation 4.9%
Airborne Freight Corp. 600,000 37,275
----------
Total Common Stocks 714,697
(Cost $553,568) ==========
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 11.2%
- --------------------------------------------------------------------------------
Commercial Paper 11.2%
BBV Finance Delaware, Inc.
5.820% due 01/09/98 $ 10,800 $ 10,788
CIESCO LP
5.870% due 01/20/98 13,000 12,962
CommerzBank
5.830% due 01/16/98 1,000 998
CXC, Inc.
5.970% due 01/05/98 13,000 12,994
E.I. Du Pont de Nemours
5.950% due 01/08/98 2,500 2,497
Goldman Sachs & Co.
5.900% due 01/07/98 2,300 2,298
6.000% due 01/13/98 13,000 12,976
UBS Finance (de), Inc.
6.250% due 01/02/98 5,300 5,300
Windmill Funding Corp.
6.050% due 01/07/98 13,000 12,989
6.050% due 01/15/98 11,300 11,275
----------
Total Short-Term Instruments 85,077
(Cost $85,077) ==========
Total Investments (a) 104.9% $ 799,774
(Cost $638,645)
Written Options (c) (0.1%) (1,119)
(Premiums $753)
Other Assets and Liabilities (Net) (4.8%) (36,341)
----------
Net Assets 100.0% $ 762,314
==========
Notes to Schedule of Investments ($ in thousands):
(a) At December 31, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for
all investments in which there was an excess
of value over tax cost. $ 181,193
Aggregate gross unrealized depreciation for
all investments in which there was an excess
of tax cost over value. (20,064)
----------
Unrealized appreciation-net $ 161,129
=========
(b) Non-income producing security.
(c) Premiums received on written options:
Premiums
Type Contracts Received
- --------------------------------------------------------------------------------
Call - Cytyc Corp.
Strike @ 25.00 Exp. 01/15/98 1000 $ 168 $ (144)
Call - Manugistics Group, Inc.
Strike @ 40.00 Exp. 01/15/98 2000 585 (975)
-------------------------
$ 753 $ (1,119)
=========================
See accompanying notes 39
<PAGE>
Schedule of Investments
International Developed Fund
December 31, 1997 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 89.4%
- --------------------------------------------------------------------------------
Australia 0.7%
Westpac Banking Corp. 26,700 $ 171
Broken Hill Property Co. 12,022 112
News Corp. Limited 18,600 103
Pasminco Limited 84,000 96
Comalco Limited 16,200 67
Amcor Limited `A' 14,800 65
Tabcorp Holdings Limited 8,850 42
Leighton Holdings Limited 10,400 36
QNI Limited 20,000 13
--------
705
Belgium 2.1%
Webs-Belgium 118,700 1,966
Finland 5.9%
Nokia Corp. 34,810 2,492
Werner Soderstrom Osakey `B' 15,000 559
Hartwall OY AB 5,110 422
UPM-Kymmene Corp. 19,880 398
Okobank `A' 22,300 354
Metsa Serla `B' 41,540 324
Rautaruukki OY 30,600 247
Neste OY 9,030 219
Yit-Yhtyma OY 18,580 210
Enso OY `R' 21,700 168
Viking Line AB 4,000 162
Rauma Group OY 400 6
--------
5,561
France 13.0%
Societe Generale 8,810 1,201
Banque National de Paris 21,350 1,135
Compagnie Generale des Eaux 6,700 935
PSA Peugeot Citroen 7,050 889
L'OREAL 2,250 881
Alcatel Alsthom 6,410 815
Elf Aquitaine SA 6,642 773
Pinault-Printemps-Redoute SA 1,390 742
Groupe Danone 4,000 715
France Telecom SA (b) 18,000 653
AXA-UAP 7,740 599
Groupe GTM 8,800 592
Lafarge SA 9,000 591
Total SA 5,080 553
Compagnie de Saint Gobain 3,390 482
Valeo 6,910 469
Credit Commercial de France 5,250 360
Compagnie Gen de Eaux Warrants (b) 2,800 2
--------
12,387
Germany 10.1%
Mannesmann AG 3,063 1,538
VEBA AG 19,990 1,362
Bayer AG 29,660 1,101
Allianz AG 3,330 859
RWE AG 14,100 757
Siemens AG 10,000 603
Degussa AG 9,900 490
MAN AG 2,150 488
Daimler Benz AG 6,600 466
BASF AG 12,700 453
Commerzbank AG 11,300 440
Deutsche Bank AG 5,700 399
Volkswagen AG 630 352
Dresdner Bank AG 6,760 307
--------
9,615
Ireland 3.4%
Allied Irish Banks PLC 116,300 1,129
CRH PLC 69,000 809
Jefferson Smurfit Group PLC 228,000 644
Irish Life PLC 76,500 440
Kerry Group PLC `A' 20,700 222
--------
3,244
Italy 8.7%
ENI SpA 228,800 $ 1,297
Telecom Italia Mobile SpA 211,000 974
Telecom Italia SpA 142,220 908
Istituto Mobiliare Italiano SpA 70,000 831
Banca Commerciale Italiana 214,000 744
Assicuazioni Generali 23,000 565
Edison SpA 88,000 532
Fiat SpA 161,000 468
Instituto Nazionale delle Assicurazioni 226,000 458
Benetton Group SpA 27,040 443
Alleanza Assicurazioni 39,000 388
Italcementi SpA 54,000 376
Danieli & Co. 45,000 309
--------
8,293
Japan 14.6%
NEC Corp. 112,000 1,194
Fuji Photo Film 31,000 1,189
Sumitomo Bank Limited 104,000 1,188
Fanuc 31,000 1,174
Nippon Telegraph & Telephone 264 1,134
Fujisawa Pharmaceutical 107,000 935
Murata Manufacturing Co. 28,000 704
Toyota Motor Corp. 24,000 688
Aoyama Trading Co. Limited 36,700 656
Tokio Marine & Fire Insurance Co. 56,000 636
Sumitomo Trust & Banking 114,000 593
Mitsui O.S.K. Lines Limited (b) 424,000 588
Kirin Brewery Co. Limited 72,000 524
Canon, Inc. 21,000 489
Matsushita Electric Industrial Co. Limited 33,000 483
Hitachi Limited 66,000 471
Tokyo Electric Power 23,600 431
Bridgestone Corp. 19,000 412
Ito-Yokado Co. Limited 7,000 357
--------
13,846
Netherlands 5.9%
Royal Dutch Petroleum Co. 33,900 1,862
Unilever NV 11,064 682
Verernigde Nederlandse Uitgeversbedrijven
Verenigd Bezit 16,800 474
ING Groep NV 9,195 387
Vendex International NV 6,800 375
PolyGram NV 7,000 335
Akzo Noble NV 1,940 335
ABN-AMRO Holdings 16,280 317
Royal PTT Nederland NV 7,600 317
Philips Electronics NV 5,100 306
Elsevier NV 16,200 262
--------
5,652
Portugal 3.9%
Portugal Telecom SA 25,500 1,184
Banco Espirito Santo e Comercial de Lisboa SA 20,000 595
Banco Comercial Portugues SA `R' 21,000 430
EDP-Electricidade de Portugal SA 22,500 426
Cimpor-Cimentos de Portugal SGPS SA 15,000 393
Sonae Investimentor-Sociedade Gestora de
Participacoes Sociais SA 5,300 214
Jeronimo Martins, SGPS, SA Rights (b) 4,600 210
Jeronimo Martins, SGPS, SA (b) 4,600 146
Brisa-Auto Estradas de Portugal SA (b) 3,600 129
--------
3,727
Spain 2.5%
Telefonica de Espana 13,650 390
Banco Bilbao Vizcaya, SA 10,800 349
Iberdrola SA 25,500 335
Banco Popular Espanol SA 4,300 301
Corporacion Bancaria de Espana SA 4,700 286
Repsol SA 6,700 286
Gas Y Electricidad SA `2' 3,100 224
Gas Natural SDG SA `E' 4,100 213
--------
2,384
Switzerland 8.0%
Novartis AG 1,141 1,850
Roche Holding AG 140 1,389
UBS (Schweiz Bankgesellschaft) 710 1,026
40 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Value
Shares (000s)
================================================================================
<S> <C> <C>
Nestle SA 601 $ 900
Credit Suisse Group 3,344 517
Kuoni Reisen AG 130 487
Clariant AG 545 455
ABB AG 294 369
Holderbank Financiere Glarus AG 385 314
Tag Heuer International SA (b) 3,040 264
Ciba Specialty Chemicals AG (b) 6 1
---------
7,572
United Kingdom 10.6%
Lloyds TSB Group PLC 81,404 1,057
Zeneca Group 21,560 762
SmithKline Beecham PLC 64,896 670
Scottish Power PLC 72,280 640
Unilever PLC 71,200 613
Abbey National PLC 31,900 553
Scottish & Newcastle PLC 43,800 532
Boots Co. PLC 36,200 528
Prudential 45,100 526
Commercial Union PLC 34,900 518
Shell Transport & Trading Co. 69,900 510
LASMO PLC 98,000 438
Glaxo Wellcome PLC 17,000 404
Wolseley PLC 48,800 389
HSBC Holdings PLC 14,000 363
IMI PLC 50,100 336
EMI Group PLC 38,700 335
British Telecommunications PLC 41,500 329
Tesco PLC 40,000 324
British Petroleum Co. PLC 22,900 303
---------
10,130
---------
Total Common Stocks 85,082
=========
(Cost $77,365)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 9.8%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Time Deposits 9.8%
State Street Bank
5.250% due 01/02/98 $ 9,331 9,331
---------
TOTAL SHORT-TERM INSTRUMENTS 9,331
=========
(Cost $9,331)
Total Investments (a) 99.2% $ 94,413
(Cost $86,696)
Other Assets and Liabilities (Net) 0.8% 762
---------
Net Assets 100.0% $ 95,175
=========
Notes to Schedule of Investments ($ in thousands):
(a) At December 31, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost. $ 12,589
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value. (4,872)
---------
Unrealized appreciation-net $ 7,717
=========
(b) Non-income producing security.
</TABLE>
See accompanying notes 41
<PAGE>
Schedule of Investments
International Fund
December 31, 1997 (Unaudited)
<TABLE>
<CAPTION>
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 97.1%
- --------------------------------------------------------------------------------
<S> <C> <C>
Chile 5.2%
Compania de Telecomunicaciones de Chile SA SP - ADR 65,700 $ 1,963
Enersis SA SP - ADR 50,100 1,453
Empresa Nacional de Electricidad SA SP - ADR 59,200 1,047
Chilgener SA SP - ADR 38,133 934
Banco Santander Chile SP - ADR 60,350 852
Compania Cervecerias Unidas SA SP - ADR 20,300 596
Quimica Minera Chile SA SP - ADR 12,200 537
Madeco SA - ADR 20,742 316
Maderas Y Sinteticos SP - ADR 30,400 289
-------
7,987
Finland 8.2%
Nokia Corp. 78,100 5,591
Werner Soderstrom Osakey `B' 38,500 1,435
Hartwall OY AB 11,480 948
Okobank `A' 59,200 939
UPM-Kymmene Corp. 35,650 713
Rautaruukki OY 80,900 653
Metsa Serla `B' 79,470 620
Neste OY 25,250 612
Yit-Yhtyma OY 45,500 514
Enso OY `R' 57,400 445
Viking Line AB 5,750 232
Rauma Group OY 630 10
-------
12,712
France 11.2%
Societe Generale 11,730 1,599
Banque National de Paris 26,450 1,406
PSA Peugeot Citroen 10,120 1,277
L'OREAL 3,220 1,260
Compagnie Generale des Eaux 8,910 1,244
Alcatel Alsthom 9,130 1,161
Groupe Danone 6,400 1,144
Elf Aquitaine SA 9,072 1,055
Pinault-Printemps-Redoute SA 1,890 1,009
Lafarge SA 14,300 938
France Telecom SA (b) 23,300 845
Groupe GTM 12,000 808
AXA-UAP 10,214 791
Total SA 6,760 736
Compagnie de Saint Gobain 4,720 671
Credit Commercial de France 7,150 490
Schneider SA 8,231 447
Valeo 6,360 432
Compagnie Gen de Eaux Warrants (b) 2,750 2
-------
17,315
Germany 6.0%
Mannesmann AG 2,830 1,421
VEBA AG 18,710 1,274
Bayer AG 27,340 1,015
Allianz AG 3,360 867
RWE AG 13,100 703
Siemens AG 10,020 605
Commerzbank AG 12,600 490
MAN AG 2,050 465
Degussa AG 9,370 464
Daimler Benz AG 6,200 438
BASF AG 11,700 418
Deutsche Bank AG 5,250 367
Volkswagen AG 640 358
Dresdner Bank AG 6,320 287
-------
9,172
Hungary 3.8%
Magyar Tavkozlesi Rt. (b) 336,000 1,784
MOL Magyar Olaj-es Gazipare 54,200 1,314
Richter Gedeon 11,000 1,250
OTP Bank 25,400 963
Danubius Hotel (b) 10,000 304
Graboplast 5,650 299
-------
5,914
Ireland 3.9%
Allied Irish Banks PLC 216,000 $ 2,096
CRH PLC 127,000 1,490
Jefferson Smurfit Group PLC 422,000 1,192
Irish Life PLC 142,000 817
Kerry Group PLC `A' 38,500 413
-------
6,008
Israel 4.6%
ECI Telecommunications Limited 37,100 946
Israel Chemicals Limited 602,000 815
Teva Pharmaceutical Industries Limited 15,860 752
Bank Hapoalim Limited 301,000 722
Blue Square Chain Stores (b) 64,200 613
Industrial Buildings Corp. 356,000 606
Bezek Israeli Telecommunication Corp. Limited 199,800 552
Formula Systems Limited (b) 17,300 532
Clal Israel Limited 1,768,000 525
Elite Industries Limited 13,800 410
Elco Holdings Limited 48,100 394
Agis Industries Limited 27,800 226
-------
7,093
Italy 9.9%
ENI SpA 402,400 2,281
Telecom Italia Mobile SpA 382,000 1,763
Telecom Italia SpA 266,665 1,703
Istituto Mobiliare Italiano SpA 134,000 1,591
Assicuazioni Generali 53,000 1,302
Banca Commerciale Italiana 310,000 1,078
Fiat SpA 332,600 967
Edison SpA 159,000 962
Instituto Nazionale delle Assicurazioni 465,000 942
Benetton Group SpA 44,720 732
Italcementi SpA 98,000 683
Danieli & Co. 96,000 659
Alleanza Assicurazioni 62,000 617
-------
15,280
Japan 9.4%
Fuji Photo Film 36,000 1,380
Sumitomo Bank Limited 113,000 1,291
Nippon Telegraph & Telephone 290 1,245
Fanuc 31,900 1,208
Hitachi Limited 168,000 1,198
Fujisawa Pharmaceutical 103,000 900
Murata Manufacturing Co. 32,000 805
Tokio Marine & Fire Insurance Co. 59,000 670
Sumitomo Trust & Banking 128,000 665
Toyota Motor Corp. 23,000 660
Aoyama Trading Co. Limited 35,400 632
Kirin Brewery Co. Limited 84,000 612
Mitsui O.S.K. Lines Limited (b) 439,000 609
Canon, Inc. 24,000 559
Matsushita Electric Industrial Co. Limited 34,000 498
NEC Corp. 45,000 480
Tokyo Electric Power 22,800 416
Bridgestone Corp. 18,000 390
Ito-Yokado Co. Limited 7,000 357
-------
14,575
Mexico 6.4%
Telefonos de Mexico - ADR 45,570 2,555
Grupo Modelo SA de CV `C' 86,600 726
Kimberly Clark de Mexico SA de CV `A' 137,750 656
Grupo Financiero Banamex Accival `L' (b) 212,981 549
Cemex SA de CV 118,800 539
Grupo Carso SA de CV `A1' 75,750 506
Grupo Mexico SA `B' 121,900 454
Grupo Televisa SA SP - GDR (b) 11,400 441
Cifra SA de CV `V' 169,356 416
Fomento Economico Mexicano 47,400 381
Grupo Industrial Bimbo SA de CV `A' 38,734 375
Alfa SA de CV `A' 53,250 359
Industrias Penoles SA 77,700 352
Controladora Comercial Mexicana SA de CV 241,600 315
Empresas ICA Sociedad Controladora SA de CV 111,310 300
Desc SA de CV `B' 28,400 271
</TABLE>
42 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Value
Shares (000s)
- --------------------------------------------------------------------------------
<S> <C> <C>
Empresas La Moderna SA de CV (b) 39,100 $ 209
Apasco SA de CV 25,600 176
Tubos de Acero de Mexico SA SP (b) 7,400 159
TV Azteca SA de CV SP - ADR (b) 6,000 135
Desc SA de CV `C' 1,567 15
Transport Maritima - ADR 750 6
---------
9,895
Netherlands 5.8%
Royal Dutch Petroleum Co. 51,720 2,841
Unilever NV 16,840 1,039
Verernigde Nederlandse
Uitgeversbedrijven Verenigd Bezit 27,500 776
Vendex International NV 12,200 674
ING Groep NV 15,455 651
Akzo Noble NV 3,280 566
ABN-AMRO Holdings 27,300 532
PolyGram NV 10,650 510
Philips Electronics NV 8,400 504
Royal PTT Nederland NV 11,500 480
Elsevier NV 24,800 401
---------
8,974
Portugal 6.5%
Portugal Telecom SA 58,290 2,706
Banco Espirito Santo e Comercial de Lisboa SA 39,600 1,179
EDP-Electricidade de Portugal SA 58,600 1,110
Companhia de Seguros Mundial Confianca SA (b) 49,100 894
Cimpor-Cimentos de Portugal SGPS SA 31,370 823
Sonae Investimentor-Sociedade Gestora de
Participacoes Sociais SA 15,030 608
Jeronimo Martins, SGPS, SA Rights (b) 12,780 584
Investec-Consultoria Internacional SA (b) 17,100 507
Colep-Companhia Portuguesa de Embalagens (b) 30,600 433
Jeronimo Martins, SGPS, SA (b) 12,780 406
Brisa-Auto Estradas de Portugal SA (b) 9,800 351
Banco Comercial Portugues SA `R' 17,000 348
---------
9,949
Switzerland 9.5%
Novartis AG 2,154 3,492
Roche Holding AG 259 2,570
UBS (Schweiz Bankgesellschaft) 1,410 2,037
Nestle SA 1,215 1,819
Credit Suisse Group 6,295 973
Kuoni Reisen AG 240 899
Clariant AG 1,024 854
ABB AG 494 620
Holderbank Financiere Glarus AG 724 590
Tag Heuer International SA (b) 5,600 486
Ciba Specialty Chemicals AG (b) 2,034 242
---------
14,582
Turkey 3.3%
Yapi ve Kredi Bankasi AS 3,810,200 725
Bagfas Bandirma Gubre Fabrikalari AS 180,000 586
Akbank TAS 1,254,586 552
Migros Turk TAS 100,880 456
Otosan Otomobil Sanayii AS 99,200 412
Haci Omer Sabanci Holding AS (b) 1,234,800 379
Eregli Demir Ve Celik Fabrikalari TAS 448,000 345
Adana Cimento Sanayii `A' 784,700 331
Northern Elektrik Telekomunikasyon AS (b) 162,600 294
Turk Sise Ve Cam Fabrikalari AS (b) 656,006 241
Izmir Demir Celik Sanayii AS (b) 3,875,600 229
Arcelik AS 425,750 200
Ak-Al Tekstil Sanayii AS 851,088 162
Ege Biracilik Ve Malt Sanajii AS 357,200 161
---------
5,073
United Kingdom 2.4%
Lloyds TSB Group PLC 30,396 395
Zeneca Group 6,900 244
Scottish Power PLC 26,672 236
Scottish & Newcastle PLC 19,100 232
Boots Co. PLC 15,400 225
Unilever PLC 26,000 224
SmithKline Beecham PLC 20,700 214
Prudential 18,000 210
LASMO PLC 43,000 192
Abbey National PLC 10,100 175
Commercial Union PLC 11,100 165
Shell Transport & Trading Co. 20,000 146
EMI Group PLC 16,740 145
British Telecommunications PLC 17,800 141
Tesco PLC 17,000 138
HSBC Holdings PLC 5,300 138
Wolseley PLC 17,000 136
Glaxo Wellcome PLC 5,400 128
IMI PLC 16,900 113
British Petroleum Co. PLC 6,700 89
---------
3,686
Venezuela 1.0%
Compania Anonima Nacional
Telefonos de Venezuela - ADR 31,850 1,326
Mavesa SA - ADR 25,350 162
---------
1,488
---------
Total Common Stocks 149,703
(Cost $129,995) =========
<CAPTION>
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 3.2%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
<S> <C>
Time Deposits 3.2%
State Street Bank
4.500% due 01/02/98 $ 4,992 4,992
---------
Total Short-Term Instruments 4,992
(Cost $4,992) =========
Total Investments (a) 100.3% $154,695
(Cost $134,987)
Other Assets and Liabilities (Net) (0.3%) (450)
---------
Net Assets 100.0% $154,245
=========
Notes to Schedule of Investments ($ in thousands):
(a) At December 31, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for
all investments in which there was an excess
of value over tax cost. $ 27,116
Aggregate gross unrealized depreciation for
all investments in which there was an excess
of tax cost over value. (7,408)
---------
Unrealized appreciation-net $ 19,708
=========
</TABLE>
(b) Non-income producing security.
See accompanying notes 43
<PAGE>
Schedule of Investments
Emerging Markets Fund
December 31, 1997 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 95.8%
- --------------------------------------------------------------------------------
Argentina 8.1%
YPF Sociedad Anonima - ADR 22,650 $ 774
Telefonica de Argentina - ADR 20,633 769
Compania Naviera Perez Co. - ADR 33,512 479
Siderca SA `A' 131,516 366
Banco Frances del Rio de la Plata SA 25,921 241
Astra Cia Argentina de Petro SA 136,757 239
Banco de Galicia y Buenos Aires SA de CV 34,442 220
Inversiones Y Representaciones SA - GDR 2,306 87
Molinos Rio de La Plata SA 31,266 75
Renault Argentina 11,160 16
Siderar SAIC `A' (b) 2,946 12
----------
3,278
Brazil 9.3%
Telecomunicacoes Brasileiras - ADR 7,260 845
Centrais Electricas Brasileiras SA `B' 16,126,000 824
Banco Itau SA 592,000 318
Banco Bradesco SA 27,740,000 273
Telecomunicacoes Brasileiras SA 2,485,000 253
Petroleo Brasileiro SA 1,051,000 246
Companhia Vale do Rio Doce 11,762 237
Companhia Energetica de Minas Gerais 4,300,000 187
Usimas Siderurgicas Minas Gerais SA PR 24,219,000 143
Companhia Siderurgica Nacional 3,472,000 96
White Martins SA 62,555 91
Companhia Paulista de Forca e Luz 680,000 90
Aracruz Celulose SA `B' 60,600 84
Companhia Cervejaria Brahma 56,000 37
Souza Cruz SA 4,500 36
Banco Brasileiro Rights 1,186 4
Companhia Vale do Rio Doce Rights 29,662 0
Souza Cruz SA Rights 4,500 0
----------
3,764
Chile 8.5%
Compania de Telecomunicaciones de Chile SA SP - ADR 28,922 864
Enersis SA SP - ADR 21,300 618
Empresa Nacional de Electricidad SA SP - ADR 27,350 484
Chilgener SA SP - ADR 16,128 395
Banco Santander Chile SP - ADR 26,800 378
Quimica Minera Chile SA SP - ADR 5,330 235
Compania Cervecerias Unidas SA SP - ADR 7,300 214
Maders Y Sinteticos Sociedad - ADS 14,090 134
Madeco SA - ADR 8,057 123
----------
3,445
Hungary 7.3%
Magyar Tavkozlesi Rt. (b) 173,000 919
MOL Magyar Olaj-es Gazipare 25,800 626
Richter Gedeon 5,500 625
OTP Bank 11,800 447
Danubius Hotel (b) 5,700 173
Graboplast 2,700 143
----------
2,933
India 6.0%
India Public Sector Fund Limited 33,000 322
Videsh Sanchar Nigam Limited - ADR (b) 22,900 321
Hindalco Industries Limited SP - GDR 12,210 244
Tata Engineering and Locomotive Co. Limited SP - GDR 27,924 233
Bajaj Auto Limited 11,100 223
Indian Hotels Co. - GDR 11,330 216
State Bank of India - GDR (b) 11,800 215
Larsen & Tourbro Limited - GDR 15,180 168
EIH Limited 11,780 157
Gujarat Ambuja- GDR 15,100 108
BSES Limited - GDR (b) 5,900 102
Indian Rayon & Industries Limited - GDR (b) 18,825 81
Steel Authority of India 15,300 49
----------
2,439
Israel 8.7%
Teva Pharmaceutical Industries Limited 8,400 398
Bank Hapoalim Limited 155,900 374
Israel Chemicals Limited 276,000 374
ECI Telecommunications Limited 13,800 352
Formula Systems Limited (b) 11,100 342
Clal Israel Limited 1,138,000 338
Industrial Buildings Corp. 152,000 259
Blue Square Chain Stores (b) 26,900 257
Elco Holdings Limited 29,000 238
Bezek Israeli Telecommunication Corp. Limited 83,300 230
Elite Industries Limited 6,600 196
Agis Industries Limited 16,800 137
----------
3,495
Kazakhstan 1.1%
Central Asia Regional 54,458 449
Mexico 13.2%
Telefonos de Mexico - ADR 23,700 1,329
Cifra SA de CV `V' 204,580 503
Grupo Modelo SA de CV `C' 46,800 392
Cemex SA de CV 80,800 366
Grupo Carso SA de CV `A1' 54,300 363
Grupo Televisa SA SP - GDR (b) 8,910 345
Grupo Financiero Banamex Accival `L' (b) 114,507 295
Kimberly Clark de Mexico SA de CV `A' 58,300 278
Grupo Mexico SA `B' 71,710 267
Alfa SA de CV `A' 34,100 230
Fomento Economico Mexicano 25,800 207
Empresas La Moderna SA de CV (b) 30,600 164
Industrias Penoles SA 35,400 160
Grupo Industrial Bimbo SA de CV `A' 16,266 157
Desc SA de CV `B' 16,200 154
TV Azteca SA de CV SP - ADR (b) 5,400 122
----------
5,332
Peru 1.1%
Telefonica del Peru SA `B' 85,738 192
Credicorp Limited 4,142 75
Cerveceria Backus Y Johnston SA `T' 40,981 38
Luz del Sur Servicios SA `B' 29,900 35
Compania de Minas Buenaventura SA `A' 4,147 31
Banco Wiese SP - ADR 6,000 30
Ferreyros SA 18,303 19
Cementos Lima SA 7,241 16
Compania de Minas Buenaventura SA `B' 1,574 12
Southern Peru Copper Corp. `T' (b) 2,200 8
Minsur SA 3,000 6
----------
462
Poland 1.7%
Elektrim Spolka Akcyjna SA 23,031 223
Bank Rozwoju Eksportu SA 5,310 110
Amica Wronki SA (b) 5,900 100
Polifarb-Cieszyn-Wroclaw SA (b) 15,213 72
Bank Slaski SA W Katawicach 1,080 60
Debica SA 2,180 53
Agros Holding SA (b) 2,300 48
----------
666
Portugal 9.4%
Portugal Telecom SA 21,110 980
Banco Espirito Santo e Comercial de Lisboa SA 14,250 424
EDP-Electricidade de Portugal SA 22,200 421
Companhia de Seguros Mundial Confianca SA (b) 18,600 339
Cimpor-Cimentos de Portugal SGPS SA 11,140 292
Investec-Consultoria Internacional SA (b) 9,300 275
Sonae Investimentor-Sociedade Gestora de
Participacoes Sociais SA 5,700 231
Colep-Companhia Portuguesa de Embalagens (b) 15,100 213
Jeronimo Martins, SGPS SA Rights (b) 4,338 198
Banco Comercial Portugues SA `R' 7,000 143
Jeronimo Martins, SGPS SA (b) 4,338 138
Brisa-Auto Estradas de Portugal SA (b) 3,700 133
----------
3,787
Russia 3.4%
Lukoil Holding SP - ADR 5,000 459
Unified Energy Systems - GDR (b) 12,250 371
AO Tatneft SP - ADR 1,500 214
Mosenergo SP - ADR (b) 5,100 191
Surgutneftegaz SP - ADR 12,600 129
----------
1,364
South Africa 7.3%
Nedcor Limited 20,350 450
Liberty Life Association of Africa 12,350 317
44 See accompanying notes
<PAGE>
Value
Shares (000s)
================================================================================
De Beers Centenary AG 15,120 $ 308
South African Breweries Limited 11,690 288
Sasol Limited 24,400 255
Rembrandt Group Limited 34,940 255
Barlow Limited 24,280 206
Nasionale Pers Beperk Limited 25,000 205
Smith C.G. Limited 44,730 184
Driefontein Consolidated Limited 22,800 155
ABSA Group Limited - GDR 12,317 140
Metro Cash & Carry Limited 142,500 124
Norwich Holdings SA Limited 47,800 74
----------
2,961
Turkey 5.7%
Yapi ve Kredi Bankasi AS 1,761,600 335
Akbank TAS 626,296 275
Bagfas Bandirma Gubre Fabrikalari AS 80,400 261
Migros Turk TAS 45,080 204
Otosan Otomobil Sanayii AS 44,200 184
Haci Omer Sabanci Holding AS (b) 551,800 170
Eregli Demir Ve Celik Fabrikalari TAS 200,200 154
Adana Cimento Sanayii `A' 350,740 148
Northern Elektrik Telekomunikasyon AS (b) 72,600 131
Turk Sise Ve Cam Fabrikalari AS (b) 293,070 108
Izmir Demir Celik Sanayii AS (b) 1,731,400 102
Arcelik AS 190,150 89
Ege Biracilik Ve Malt Sanajii AS 162,000 73
Ak-Al Tekstil Sanayii AS 380,276 72
----------
2,306
Venezuela 5.0%
Compania Anonima Nacional Telefonos
de Venezuela - ADR 19,200 799
La Electricidad de Caracas 485,100 582
Banco Provincial SA 104,485 192
Siderurgica Venezolana Sivensa `A' 406,700 170
Corporacion Venezolana de Cementos, SACA 103,900 168
Mavesa SA - ADR 15,350 98
----------
2,009
----------
Total Common Stocks 38,690
(Cost $33,809) ==========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 4.4%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Time Deposits 4.4%
State Street Bank
4.500% due 01/02/98 $ 1,759 1,759
----------
Total Short-Term Instruments 1,759
(Cost $1,759) ==========
Total Investments (a) 100.2% $ 40,449
(Cost $35,568)
Other Assets and Liabilities (Net) (0.2%) (84)
----------
Net Assets 100.0% $ 40,365
==========
Notes to Schedule of Investments ($ in thousands):
(a) At December 31, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost. $ 8,029
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value. (3,148)
----------
Unrealized appreciation-net $ 4,881
==========
(b) Non-income producing security.
See accompanying notes 45
<PAGE>
Schedule of Investments
Innovation Fund
December 31, 1997 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 95.8%
- --------------------------------------------------------------------------------
Capital Goods 1.0%
Motivepower Industries, Inc (b) 120,000 $ 2,790
Communications 10.4%
AT&T Corp. 180,000 11,025
Nextel Communications, Inc. `A' (b) 250,000 6,500
Mobile Telecommunication Technologies Corp. (b) 240,000 5,280
Clearnet Communications, Inc. `A' (b) 320,000 3,640
Paging Network, Inc. (b) 300,000 3,225
--------
29,670
Consumer Discretionary 1.2%
Tefron Limited (b) 150,000 3,450
Health Care 9.9%
Sofamor Danek Group, Inc (b) 130,000 8,458
Quintiles Transnational Corp. (b) 160,000 6,120
STERIS Corp. (b) 100,000 4,825
Guidant Corp. 70,000 4,358
Theragenics Corp. (b) 120,000 4,320
--------
28,081
Materials and Processing 1.2%
Lear Corp. (b) 70,000 3,325
Technology 72.1%
America Online, Inc. (b) 200,000 17,837
Cisco Systems, Inc. (b) 300,000 16,725
Saville Systems - ADR (b) 270,000 11,205
Yahoo, Inc. (b) 150,000 10,387
Microsoft Corp. (b) 75,000 9,694
Lucent Technologies, Inc. 110,000 8,786
Motorola, Inc. 150,000 8,559
Intel Corp. 120,000 8,430
Nokia Corp. - ADR 120,000 8,400
International Business Machines Corp. 80,000 8,365
CBT Group PLC SP - ADR (b) 100,000 8,212
Tellabs, Inc. (b) 150,000 7,931
Checkfree Corp. (b) 250,000 6,750
Electronic Data Systems Corp. 150,000 6,591
National Semiconductor Corp. (b) 230,000 5,966
Premisys Communications, Inc. (b) 220,000 5,748
Aspect Development, Inc. (b) 110,000 5,720
American Power Conversion Corp. (b) 240,000 5,670
Qualcomm, Inc. (b) 100,000 5,050
Dell Computer Corp. (b) 60,000 5,040
Pairgain Technologies, Inc. (b) 250,000 4,844
Bay Networks, Inc. (b) 185,000 4,729
Tekelec (b) 150,000 4,575
Wind River Systems (b) 100,000 3,969
ANTEC Corp. (b) 250,000 3,906
Adaptec, Inc. (b) 100,000 3,712
Gateway 2000, Inc. (b) 100,000 3,263
Semtech Corp. (b) 70,000 2,739
Orbotech Limited (b) 80,000 2,550
--------
205,353
--------
Total Common Stocks 272,669
(Cost $216,293) ========
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 5.0%
- --------------------------------------------------------------------------------
Commercial Paper 5.0%
CXC, Inc.
5.970% due 01/05/98 $1,000 $ 999
E.I. Du Pont de Nemours
5.950% due 01/08/98 2,000 1,998
Goldman Sachs & Co.
6.050% due 01/07/98 6,500 6,495
UBS Finance (de), Inc.
6.250% due 01/02/98 3,200 3,200
Windmill Funding Corp.
6.050% due 01/15/98 1,600 1,597
---------
Total Short-Term Instruments 14,289
(Cost $14,289) =========
Total Investments (a) 100.8% $ 286,958
(Cost $230,582)
Written Options (c) (0.2%) (538)
(Premiums $230)
Other Assets and Liabilities (Net) (0.6%) (1,734)
---------
Net Assets 100.0% $ 284,686
=========
Notes to Schedule of Investments ($ in thousands):
(a) At December 31, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost. $ 65,868
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value. (9,492)
---------
Unrealized appreciation-net $ 56,376
=========
(b) Non-income producing security.
(c) Premiums received on written options:
Premiums
Type Contracts Received
- --------------------------------------------------------------------------------
Call - Yahoo, Inc.
Strike @ 60.00 Exp. 01/15/98 500 $ 230 $ (538)
46 See accompanying notes
<PAGE>
Schedule of Investments
Precious Metals Fund
December 31, 1997 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 86.3%
- --------------------------------------------------------------------------------
Australia 13.9%
Normandy Mining Limited 890,000 $ 864
Plutonic Resources Limited 290,000 809
Sons of Gwalia Limited `A' 120,000 274
Acacia Resources Limited (b) 250,000 228
Ranger Minerals NL (b) 104,000 223
Delta Gold NL 170,000 179
Macraes Mining Co. Limited 130,000 86
Resolute Samantha Limited 100,000 73
Menzies Gold NL (b) 500,000 59
Emperor Mines Limited (b) 190,000 56
Gullewa Gold NL (b) 2,000,000 16
----------
2,867
Canada 28.8%
Barrick Gold Corp. 58,000 1,080
Meridian Gold, Inc. (b) 325,000 910
Euro-Nevada Mining Corp. 50,000 677
Franco-Nevada Mining Corp. Limited 25,600 503
Namibian Minerals Corp. (b) 110,000 327
Richmont Mines, Inc. (b) 130,000 300
Battle Mountain Canada Limited 50,000 289
TVX Gold, Inc. (b) 68,000 230
Goldcorp, Inc. `A' (b) 55,000 213
Cambior, Inc. 32,000 189
Greenstone Resources Limited (b) 35,000 167
Agnico-Eagle Mines Limited 30,000 163
IAMGOLD (b) 48,000 151
Battle Mountain Gold Co. 25,000 147
Romarco Minerals, Inc. (b) 45,000 96
Royal Oak Mines, Inc. (b) 60,000 94
Miramar Mining Corp. 40,000 76
Echo Bay Mines Limited 30,000 73
Rio Narcea Gold Mines Limited (b) 20,000 59
Viceroy Resources Corp. (b) 32,000 59
Pangea Goldfields, Inc. (b) 45,000 54
Pegasus Gold, Inc. (b) 55,000 34
Minefinders Corp. Limited (b) 24,000 33
Pacific Rim Mining Corp. (b) 9,900 12
----------
5,936
Ghana 0.7%
Ashanti Goldfields Co. - GDR 20,000 150
South Africa 21.1%
Elandsrand Gold Mining Co. Limited - ADR 190,000 474
Gold Fields of South Africa Limited SP - ADR 30,000 465
Driefontein Consolidated Limited SP - ADR 70,000 464
Joel Gold Mining Limited (b) 900,000 444
Western Deep Levels - ADR 22,000 410
Free State Consolidated Gold Mines Limited - ADR 80,000 355
Vaal Reefs Exploration & Mining Co. Limited - ADR 80,000 308
Anglo American Platinum Corp. Limited 15,000 200
St. Helens Gold Mine - ADR 80,000 200
Randgold & Exploration `C' (b) 140,000 181
Harmony Gold Mining Co. (b) 70,000 171
Kloof Gold Mining Co. - ADR 50,000 166
Gencor Limited 80,000 132
Anglo American Gold Investment Co. Limited 2,000 76
Randfontein Estates Gold Mining Co.
Witwatersrand Limited 50,000 75
Durban Roodepoort Deep 41,961 69
Western Areas Gold Mining Co. Limited 10,000 55
West Rand Consolidated Mines Limited (b) 50,000 40
Durban Roodepoort Deep Options 41,961 24
Harmony Gold Mining Co. Limited SP - ADR (b) 10,000 22
Kalahari Goldridge Mining (b) 64,500 10
Durban Roodepoort Deep Options `B' 20,980 4
----------
4,345
United Kingdom 1.2%
Golden Star Resources Limited (b) 35,000 125
Rangold Resources (b) 17,000 85
Reunion Mining PLC (b) 30,000 41
----------
251
United States 20.6%
Newmont Mining Corp. 46,000 1,351
Getchell Gold Corp. (b) 50,000 1,200
Homestake Mining Co. 120,000 1,065
Stillwater Mining Co. (b) 25,000 419
Royal Gold, Inc. (b) 36,000 171
Alta Gold Co. (b) 34,000 46
----------
4,252
----------
Total Common Stocks 17,801
(Cost $30,361) ==========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 26.1%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Commercial Paper 15.5%
American Express Credit
6.450% due 01/02/98 $ 1,600 1,600
General Electric Co.
5.650% due 01/02/98 1,600 1,600
----------
3,200
Repurchase Agreements 10.6%
State Street Bank
4.250% due 01/02/98 2,176 2,176
(Dated 12/31/97. Collateralized by U.S.
Treasury Note 6.125% 05/15/98 valued
at $2,224,294. Repurchase proceeds
are $2,176,514.)
----------
Total Short-Term Instruments 5,376
(Cost $5,376) ==========
Total Investments (a) 112.4% $ 23,177
(Cost $35,737)
Other Assets and Liabilities (Net) (12.4%) (2,557)
----------
Net Assets 100.0% $ 20,620
==========
Notes to Schedule of Investments ($ in thousands):
(a) At December 31, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess
of value over tax cost. $ 183
Aggregate gross unrealized depreciation for all
investments in which there was an excess of
tax cost over value. (12,743)
----------
Unrealized depreciation-net $ (12,560)
==========
(b) Non-income producing security.
See accompanying notes 47
<PAGE>
Schedule of Investments
Balanced Fund
December 31, 1997 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 56.8%
- --------------------------------------------------------------------------------
Aerospace 0.6%
Northrop Grumman Corp. 3,200 $ 368
Capital Goods 3.6%
Textron, Inc. 4,700 294
Illinois Tool Works, Inc. 4,400 265
Johnson Controls, Inc. 5,300 253
Dresser Industries, Inc. 6,000 252
Ingersoll Rand Co. 6,200 251
Unifi, Inc. 5,600 228
AlliedSignal, Inc. 5,500 214
United Technologies Corp. 2,700 197
Wheelabrator Technologies, Inc. 11,700 188
AGCO Corp. 6,300 184
Paccar, Inc. 1,000 53
---------
2,379
Communications 2.2%
Bell Atlantic Corp. 6,129 558
Southern New England Telecommunications Corp. 8,000 403
SBC Communications, Inc. 3,800 278
AT&T Corp. 4,000 245
---------
1,484
Consumer Discretionary 10.7%
American Greetings Corp. `A' 15,100 591
Maytag Corp. 15,200 567
Brunswick Corp. 18,500 561
Tupperware Corp. 14,600 407
Omnicom Group 9,200 390
TJX Corp., Inc. 10,900 375
Chrysler Corp. 10,600 373
VF Corp. 8,000 368
Dillards, Inc. `A' 10,400 367
Tandy Corp. 9,400 362
Costco Cos. (b) 7,900 353
Washington Post Co. 700 341
Kroger Co. (b) 8,900 329
New York Times Co. 4,700 311
Gannett, Inc. 4,400 272
Dayton Hudson Corp. 3,700 250
Tribune Co. 3,700 230
Jones Apparel Group, Inc. (b) 5,100 219
Sunbeam-Oster, Inc. 5,100 215
Federated Department Stores, Inc. (b) 4,600 198
Goodyear Tire & Rubber Co. 1,400 89
---------
7,168
Consumer Services 1.0%
Carnival Corp. `A' 6,100 338
Marriott International, Inc. 4,300 298
---------
636
Consumer Staples 4.5%
SUPERVALU, Inc. 14,000 586
Anheuser Busch Cos., Inc. 8,800 387
RJR Nabisco Holdings Corp. 10,300 386
Whitman Corp. 14,500 378
Safeway, Inc. (b) 5,500 348
Campbell Soup Co. 5,100 296
Hershey Foods Corp. 4,500 279
Unilever NV 2,900 181
IBP, Inc. 8,300 174
---------
3,015
Energy 6.0%
Atlantic Richfield Co. 6,500 521
Ultramar Diamond Shamrock Corp. 14,000 446
Repsol SA SP - ADR 8,800 374
Amoco Corp. 4,300 366
Transocean Offshore, Inc. 6,000 289
Tidewater, Inc. 5,200 287
Halliburton Co. 5,400 280
Noble Drilling Corp. (b) 9,000 276
Schlumberger Limited 3,300 266
ENSCO International, Inc. (b) 7,100 238
Global Marine, Inc. (b) 9,100 223
Rowan Cos., Inc. (b) 7,300 223
Nabors Industries, Inc. (b) 5,600 176
---------
3,965
Financial and Business Services 10.3%
Bear Stearns Cos. 13,555 644
PNC Bank Corp. 11,200 639
Chase Manhattan Corp. 5,200 569
CIGNA Corp. 2,500 433
Southtrust Corp. 5,300 336
Travelers Group, Inc. 6,050 326
Norwest Corp. 7,800 301
BankBoston Corp. 3,000 282
Federal National Mortgage Assn. 4,700 268
American Express Co. 3,000 268
Citicorp 2,000 253
Federal Home Loan Mortgage Corp. 6,000 252
National City Corp. 3,800 250
BankAmerica Corp. 3,400 248
Lincoln National Corp. 3,100 242
Associates First Capital Corp. `A' 3,300 235
Hartford Financial Services Group, Inc. 2,500 234
Countrywide Credit Industries, Inc. 5,400 232
First Union Corp. 4,500 231
CarrAmerica Realty Corp. 6,200 196
Simon DeBartolo Group, Inc. 5,900 193
Loews Corp. 1,700 180
Household International, Inc. 700 89
---------
6,901
Health Care 4.1%
American Home Products Corp. 5,100 390
Pharmacia & Upjohn, Inc. 10,500 385
Beckman Instruments, Inc. 9,000 360
Schering-Plough Corp. 5,300 329
Cognizant Corp. 6,700 299
Tenet Healthcare Corp. (b) 8,575 284
Biomet, Inc. 9,500 243
Eli Lilly & Co. 3,400 237
Foundation Health Systems `A' (b) 7,400 165
Health Management Assn., Inc. `A' (b) 900 23
---------
2,715
Materials and Processing 4.5%
Westvaco Corp. 17,600 553
Phelps Dodge Corp. 7,000 436
USG Corp. (b) 7,400 363
Union Carbide Corp. 8,200 352
Wellman, Inc. 17,700 345
Rohm & Haas Co. 2,800 268
Tyco International Limited (b) 5,400 243
Sealed Air Corp. (b) 3,800 235
Fort James Corp. 5,387 206
---------
3,001
Technology 5.0%
International Business Machines Corp. 4,300 450
Teradyne, Inc. (b) 12,700 406
Adobe Systems, Inc. 9,700 400
Harris Corp. 8,200 376
Tektronix, Inc. 8,550 339
Computer Associates International, Inc. 5,550 293
BMC Software, Inc. (b) 4,100 269
Dell Computer Corp. (b) 2,500 210
Cisco Systems, Inc. (b) 3,750 209
Bay Networks, Inc. (b) 8,100 207
Seagate Technology, Inc. (b) 7,300 141
---------
3,300
Transportation 1.2%
UAL Corp. (b) 4,300 398
Continental Airlines, Inc. `B' (b) 4,800 231
U.S. Airways Group, Inc. (b) 2,800 175
---------
804
Utilities 3.1%
PG & E Corp. 18,200 554
DTE Energy Co. 15,000 520
NICOR, Inc. 10,000 422
Ameritech Corp. 3,500 282
American Electric Power, Inc. 5,100 263
---------
2,041
---------
Total Common Stocks 37,777
(Cost $30,174) =========
48 See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS 3.2%
- --------------------------------------------------------------------------------
U.S. Treasury Bonds 3.2%
6.500% due 11/15/26 $ 2,000 $ 2,136
---------
Total U.S. Treasury Obligations 2,136
(Cost $1,973) =========
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES 5.7%
- --------------------------------------------------------------------------------
Industrials 2.3%
AMR Corp.
10.000% due 02/01/01 400 442
9.430% due 05/10/01 1,000 1,092
---------
1,534
Utilities 3.4%
Long Island Lighting Co.
9.000% due 11/01/22 2,000 2,229
---------
Total Corporate Bonds and Notes 3,763
(Cost $3,420) =========
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 33.5%
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations 3.2%
Capstead Mortgage Corp.
8.900% due 12/25/21 205 208
Federal Home Loan Mortgage Corp.
10.150% due 04/15/06 36 36
Federal National Mortgage Assn.
9.500% due 06/25/18 480 515
Independent National Mortgage Corp.
8.158% due 11/25/24 547 562
8.268% due 11/25/24 (c) 718 736
PNC Mortgage Securities Corp.
7.500% due 06/25/10 94 94
---------
2,151
Federal Home Loan Mortgage Corporation 12.8%
6.500% due 01/14/28-02/12/28 (d) 8,000 7,905
8.500% due 03/01/23 635 673
---------
8,578
Federal Housing Administration 0.9%
7.000% due 07/01/14 (c) 578 598
Federal National Mortgage Association 7.8%
7.825% due 12/01/23 (c) 428 447
8.500% due 01/01/08-03/01/25 (d) 4,515 4,715
---------
5,162
Government National Mortgage Association 7.4%
6.500% due 01/15/24-01/22/27 (d) 1,402 1,388
7.000% due 08/20/24 (c) 698 713
7.375% due 04/20/23 (c) 1,536 1,585
7.500% due 05/15/17 13 14
8.000% due 01/22/28-09/15/06 (d) 572 593
9.500% due 09/15/09-10/15/09 (d) 148 161
10.750% due 09/15/00-10/15/00 (d) 105 110
16.000% due 10/15/11-04/15/12 (d) 287 332
---------
4,896
Other Mortgage-Backed Securities 1.4%
Home Savings of America
5.833% due 05/25/27 (c) 939 914
---------
Total Mortgage-Backed Securities 22,299
(Cost $22,100) =========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 13.5%
- --------------------------------------------------------------------------------
Commercial Paper 9.9%
BellSouth Telecommunications, Inc.
5.710% due 02/12/98 700 695
E.I. Du Pont de Nemours
5.830% due 01/28/98 200 199
5.740% due 02/13/98 100 99
Federal National Mortgage Assn
5.760% due 01/26/98 300 299
Florida Power Corp.
5.730% due 02/04/98 100 99
Ford Motor Credit Corp.
5.540% due 01/08/98 1,000 999
General Electric Capital Corp.
5.840% due 01/23/98 700 698
IBM Credit Corp.
5.680% due 01/16/98 300 299
New Center Asset Trust
5.610% due 01/30/98 500 498
Pitney Bowes Credit Corp.
6.240% due 01/15/98 700 698
Procter & Gamble Co.
5.750% due 01/26/98 1,000 996
Wisconsin Electric Power & Light
5.770% due 01/28/98 1,000 996
---------
6,575
Repurchase Agreements 3.4%
State Street Bank
4.250% due 01/02/98 2,242 2,242
(Dated 12/31/97. Collateralized by U.S.
Treasury Note 6.000% 05/31/98 valued
at $2,295,215. Repurchase proceeds
are $2,242,530.)
U.S. Treasury Bills (e) 0.2%
5.067% due 02/05/98 145 145
---------
Total Short-Term Instruments 8,962
(Cost $8,962) =========
Total Investments (a) 112.7% $ 74,937
(Cost $66,629)
Other Assets and Liabilities (Net) (12.7%) (8,438)
---------
Net Assets 100.0% $ 66,499
=========
Notes to Schedule of Investments ($ in thousands):
(a) At December 31, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost. $ 8,934
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value. (626)
---------
Unrealized appreciation-net $ 8,308
=========
(b) Non-income producing security.
(c) Variable rate security. The rate listed is as of December 31, 1997.
(d) Securities are grouped by coupon and represent a range of maturities.
(e) Securities with an aggregate market value of $145 have been segregated with
the custodian to cover margin requirements for the following open futures
contracts at December 31, 1997:
Unrealized
Type Contracts Appreciation
- --------------------------------------------------------------------------------
U.S. Treasury 10 Year Note (03/98) 29 $ 25
U.S. Treasury 30 Year Bond (03/98) 30 44
---------
$ 69
=========
See accompanying notes 49
<PAGE>
Schedule of Investments
Tax Exempt Fund
December 31, 1997 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES 98.8%
- --------------------------------------------------------------------------------
Arizona 2.6%
Scottsdale, Arizona Industrial Development
Authority Hospital Revenue Bonds,
(AMBAC Insured), Series 1997 A, 6.500%, 09/01/04 $ 1,130 $ 1,264
California 11.7%
Los Angeles Convention & Exhibition Center Authority,
Certificates of Participation, Series 1985,
(Prerefunded 12/01/05), 9.000%, 12/01/20 1,750 2,297
Los Angeles Convention & Exhibition Center Authority,
Certificates of Participation, Series 1985,
(Prerefunded 12/01/05), 9.000%, 12/01/10 1,250 1,634
Los Angeles County Transportation Commission,
Sales Tax Revenue Refunding Bonds,
Series 1991 B, 6.500%, 07/01/13 1,000 1,075
City of San Jose Redevelopment Agency Merged Area
Project, Tax Allocation Bonds, (MBIA Insured), Series
1993, 6.000%, 08/01/15 500 567
----------
5,573
Colorado 3.1%
Colorado Public Highway Authority Revenue Bond,
Series 1997, 5.000%, 09/01/26 1,500 1,461
Florida 6.6%
Dade County, Florida General Obligation Bonds,
(AMBAC Insured), Series 1988, 7.600%, 10/01/06 1,690 2,079
Jacksonville Electric Authority, Bulk Power Supply
System Revenue Bonds, (Prerefunded 10/01/00), Scherer
4-1-A Project, Issue One, Series 1991, 6.750%, 10/01/21 1,000 1,084
----------
3,163
Georgia 6.9%
State of Georgia, General Obligation Bond,
Series 1993, 6.500%, 12/01/04 2,000 2,288
Georgia State Housing and Finance Authority
Revenue Bonds, Series 1997, 5.750%, 12/01/20 1,000 1,020
----------
3,308
Hawaii 2.5%
State of Hawaii, Airport System Revenue Bonds,
Second Series of 1991, 6.900%, 07/01/12 1,000 1,188
Illinois 2.3%
State of Illinois, Sales Tax Revenue Refunding Bonds,
Series Q, 6.000%, 06/15/12 1,000 1,121
Indiana 2.5%
Indiana Local Public Improvement Bonds Bank,
Transportation Revenue Bonds, Series 1992,
6.750%, 02/01/14 1,000 1,195
Louisianna 1.3%
East Baton Rouge Parish, Louisianna Pollution Control
Revenue Bond, Series 1989, 3.750%, 11/01/19 600 600
Michigan 2.7%
Michigan State Environmental Protection General
Obligation Bonds, Series 1992, 6.250%, 11/01/12 1,100 1,279
New Hampshire 2.4%
New Hampshire Turnpike System, Refunding
Revenue Bonds, (FGIC Insured), Series 1991 A,
6.750%, 11/01/11 1,000 1,159
New Mexico 2.3%
Los Alamos County, Utility Revenue Bonds,
Series 1994 A, 6.000%, 07/01/08 1,000 1,097
New York 20.0%
New York State Dorm Authority Mental
Health Services Revenue Bonds,
Series 1997 B, 6.000%, 08/15/05 1,850 1,996
New York City General Obligation Bonds,
Series 1996 A, 7.000%, 08/01/07 1,000 1,165
New York City, Municipal Water Finance
Authority Water & Sewer Revenue Bonds,
Series 1991 C, 7.375%, 06/15/13 1,000 1,119
State of New York Thruway Authority Revenue Bonds,
(AMBAC-TCRS Insured), Series 1996, 6.000%, 04/01/05 1,000 1,109
New York City General Obligation Bonds,
Series 1995 B, 6.750%, 08/15/03 1,000 1,106
State of New York Thruway Authority Revenue Bonds,
(MBIA Insured), Series 1995 A, 5.500%, 04/01/15 1,000 1,039
New York Metropolitan Transit Authority Commuter
Revenue Bonds, Series 1997, 5.500%, 07/01/21 1,000 1,011
New York State Environmental Facilities
Special Obligation Revenue Bonds,
Series 1996, 5.125%, 04/01/22 1,000 990
----------
9,535
North Carolina 2.4%
North Carolina Municipal Power Agency,
Catawaba Electric Revenue Bonds, (AMBAC Insured),
Series 1992, 6.000%, 01/01/08 1,000 1,126
North Dakota 2.3%
Mercer County Pollution Control Revenue Bonds,
Series 1991, 6.900% 02/01/19 1,000 1,084
Ohio 4.5%
Ohio State Water Development Authority Pollution
Control Revenue Bonds, (MBIA Insured), Series 1995,
6.000%, 06/01/05 1,000 1,106
Cleveland Water and Sewer Refunding and
Improvement Revenue Bonds, (MBIA Insured),
Series 1993 G, Number 1, 5.500%, 01/01/21 1,000 1,051
----------
2,157
Pennsylvania 3.5%
Pittsburgh, Pennsylvania General Obligation Bonds,
(AMBAC Insured), Series 1993 A, 5.500%, 09/01/14 1,525 1,656
South Carolina 2.2%
Piedmont Municipal Power Agency Electric
Revenue Bonds, (MBIA Insured),
Series 1996 B, 5.250%, 01/01/13 1,000 1,029
Tennessee 2.1%
Memphis-Shelby County Tennessee Airport Authority
Special Facilities and Project Revenue Bonds, Series
1997, 5.350%, 09/01/12 1,000 1,025
Texas 8.1%
Houston, Texas, Water & Sewer System Revenue Bonds,
Series 1993 B, 5.000%, 12/01/18 2,000 1,967
University of Texas Revenue Bonds,
Series 1996, 5.250%, 08/15/07 1,000 1,076
Board of Regents of the University of Texas System,
Revenue Financing System Refunding Bonds, Prefunded
and Unrefunded Series 1991 B, 6.750%, 08/15/13 735 807
----------
3,850
Virginia 4.5%
Metropolitan Washington DC Airports
Authority System Revenue Bonds,
(MBIA Insured), Series 1992 A, 6.625%, 10/01/19 1,000 1,079
50 See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
Virginia State Public School Authority
Revenue Bonds, (Local Issuer Insured),
Series 1995 A, 5.300%, 08/01/04 $ 1,000 $ 1,057
----------
2,136
Washington, DC 2.1%
District of Columbia Housing Finance Agency Mortgage
Revenue Bonds, Series 1997 B, 5.850%, 12/01/18 1,000 1,031
Wyoming 0.2%
Lincoln County Wyoming Pollution Control
Revenue Bond, Series 1984, 3.750%, 11/01/14 100 100
----------
Total Investments (a) 98.8% $ 47,137
(Cost $43,411)
Other Assets and Liabilities (Net) 1.2% 552
----------
Net Assets 100.0% $ 47,689
==========
Notes to Schedule of Investments ($ in thousands):
(a) At December 31, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of
value over tax cost. $ 3,726
Aggregate gross unrealized depreciation for all
investments in which there was an excess of
tax cost over value. 0
----------
Unrealized appreciation-net $ 3,726
==========
See accompanying notes 51
<PAGE>
Financial Highlights
A, B and C Classes
<TABLE>
<CAPTION>
Net Realized/
Selected Per Share Data Net Asset Value Net Unrealized Total Income
for the Period Ended: Beginning Investment Gain (Loss) on From Investment
of Period Income (Loss) Investments Operations
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Equity Income Fund
Class A
12/31/97 (b) $ 15.39 $ 0.22(a) $ 1.90(a) $ 2.12
- ---------------------------------- ------------ ----------- ----------- -----------
01/20/97-06/30/97 13.94 0.15 1.48 1.63
- ---------------------------------- ------------ ----------- ----------- -----------
Class B
12/31/97 (b) 15.37 0.14(a) 1.91(a) 2.05
- ---------------------------------- ------------ ----------- ----------- -----------
01/20/97-06/30/97 13.94 0.11 1.48 1.59
- ---------------------------------- ------------ ----------- ----------- -----------
Class C
12/31/97 (b) 15.37 0.14(a) 1.91(a) 2.05
- ---------------------------------- ------------ ----------- ----------- -----------
01/20/97-06/30/97 13.94 0.11 1.48 1.59
- ---------------------------------- ------------ ----------- ----------- -----------
Renaissance Fund
Class A
12/31/97 (b) $ 17.73 $ 0.06(a) $ 2.76(a) $ 2.82
- ---------------------------------- ------------ ----------- ----------- -----------
10/01/96-06/30/97 16.08 0.12(a) 3.90(a) 4.02
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/96 14.14 0.23 2.79 3.02
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/95 12.50 0.36 1.61 1.97
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/94 12.88 0.34 (0.17) 0.17
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/93 10.57 0.33 2.30 2.63
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/92 9.92 0.34 0.71 1.05
- ---------------------------------- ------------ ----------- ----------- -----------
Class B
12/31/97 (b) 17.77 (0.01)(a) 2.75(a) 2.74
- ---------------------------------- ------------ ----------- ----------- -----------
10/01/96-06/30/97 16.12 0.03(a) 3.92(a) 3.95
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/96 14.13 0.09 2.83 2.92
- ---------------------------------- ------------ ----------- ----------- -----------
05/22/95-09/30/95 12.55 0.11 1.55 1.66
- ---------------------------------- ------------ ----------- ----------- -----------
Class C
12/31/97 (b) 17.69 (0.01)(a) 2.73(a) 2.72
- ---------------------------------- ------------ ----------- ----------- -----------
10/01/96-06/30/97 16.05 0.03(a) 3.90(a) 3.93
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/96 14.09 0.12 2.78 2.90
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/95 12.47 0.27 1.59 1.86
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/94 12.85 0.24 (0.16) 0.08
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/93 10.56 0.25 2.29 2.54
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/92 9.91 0.29 0.68 0.97
- ---------------------------------- ------------ ----------- ----------- -----------
Value Fund
Class A
12/31/97 (b) $ 14.80 $ 0.09(a) $ 1.38(a) $ 1.47
- ---------------------------------- ------------ ----------- ----------- -----------
01/13/97-06/30/97 13.17 0.47 1.26 1.73
- ---------------------------------- ------------ ----------- ----------- -----------
Class B
12/31/97 (b) 14.80 0.03(a) 1.38(a) 1.41
- ---------------------------------- ------------ ----------- ----------- -----------
01/13/97-06/30/97 13.16 0.44 1.26 1.70
- ---------------------------------- ------------ ----------- ----------- -----------
Class C
12/31/97 (b) 14.80 0.03(a) 1.37(a) 1.40
- ---------------------------------- ------------ ----------- ----------- -----------
01/13/97-06/30/97 13.15 0.43 1.28 1.71
- ---------------------------------- ------------ ----------- ----------- -----------
Capital Appreciation Fund
Class A
12/31/97 (b) $ 21.16 $ 0.02(a) $ 3.36(a) $ 3.38
- ---------------------------------- ------------ ----------- ----------- -----------
01/20/97-06/30/97 19.31 0.09 1.76 1.85
- ---------------------------------- ------------ ----------- ----------- -----------
Class B
12/31/97 (b) 21.10 (0.06)(a) 3.34(a) 3.28
- ---------------------------------- ------------ ----------- ----------- -----------
01/20/97-06/30/97 19.31 0.01 1.78 1.79
- ---------------------------------- ------------ ----------- ----------- -----------
Class C
12/31/97 (b) 21.10 (0.06)(a) 3.34(a) 3.28
- ---------------------------------- ------------ ----------- ----------- -----------
01/20/97-06/30/97 19.31 0.02 1.77 1.79
- ---------------------------------- ------------ ----------- ----------- -----------
Growth Fund
Class A
12/31/97 (b) $ 27.03 $ (0.04)(a) $ 2.93(a) $ 2.89
- ---------------------------------- ------------ ----------- ----------- -----------
10/01/96-06/30/97 26.58 0.69 3.27 3.96
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/96 25.73 0.06 3.72 3.78
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/95 22.01 0.12 4.79 4.91
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/94 23.64 0.12 0.12 0.24
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/93 20.76 0.09 3.53 3.62
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/92 20.63 0.14 1.38 1.52
- ---------------------------------- ------------ ----------- ----------- -----------
<CAPTION>
Dividends Dividends in Distributions Distributions
Selected Per Share Data From Net Excess of Net From Net in Excess of
for the Period Ended: Investment Investment Realized Capital Net Realized
Income Income Gains Capital Gains
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Equity Income Fund
Class A
12/31/97 (b) $ (0.23) $ 0.00 $ (2.09) $ 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
01/20/97-06/30/97 (0.18) 0.00 0.00 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
Class B
12/31/97 (b) (0.18) 0.00 (2.09) 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
01/20/97-06/30/97 (0.16) 0.00 0.00 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
Class C
12/31/97 (b) (0.17) 0.00 (2.09) 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
01/20/97-06/30/97 (0.16) 0.00 0.00 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
Renaissance Fund
Class A
12/31/97 (b) $ (0.08) $ 0.00 $ (3.53) $ 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
10/01/96-06/30/97 (0.12) 0.00 (2.25) 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/96 (0.23) (0.07) (0.78) 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/95 (0.33) 0.00 0.00 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/94 (0.33) 0.00 (0.22) 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/93 (0.32) 0.00 0.00 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/92 (0.40) 0.00 0.00 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
Class B
12/31/97 (b) (0.02) 0.00 (3.53) 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
10/01/96-06/30/97 (0.05) 0.00 (2.25) 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/96 (0.11) (0.04) (0.78) 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
05/22/95-09/30/95 (0.08) 0.00 0.00 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
Class C
12/31/97 (b) (0.01) 0.00 (3.53) 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
10/01/96-06/30/97 (0.04) 0.00 (2.25) 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/96 (0.13) (0.03) (0.78) 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/95 (0.24) 0.00 0.00 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/94 (0.24) 0.00 (0.22) 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/93 (0.25) 0.00 0.00 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/92 (0.32) 0.00 0.00 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
Value Fund
Class A
12/31/97 (b) $ (0.10) $ 0.00 $ (1.63) $ 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
01/13/97-06/30/97 (0.10) 0.00 0.00 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
Class B
12/31/97 (b) (0.05) 0.00 (1.63) 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
01/13/97-06/30/97 (0.06) 0.00 0.00 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
Class C
12/31/97 (b) (0.05) 0.00 (1.63) 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
01/13/97-06/30/97 (0.06) 0.00 0.00 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
Capital Appreciation Fund
Class A
12/31/97 (b) $ (0.09) $ 0.00 $ (1.68) $ 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
01/20/97-06/30/97 0.00 0.00 0.00 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
Class B
12/31/97 (b) (0.07) 0.00 (1.68) 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
01/20/97-06/30/97 0.00 0.00 0.00 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
Class C
12/31/97 (b) (0.05) 0.00 (1.68) 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
01/20/97-06/30/97 0.00 0.00 0.00 0.00
Growth Fund
Class A
12/31/97 (b) $ 0.00 $ 0.00 $ (4.32) $ 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
10/01/96-06/30/97 0.00 0.00 (3.51) 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/96 0.00 0.00 (2.93) 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/95 0.00 0.00 (1.19) 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/94 0.00 0.00 (1.87) 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/93 0.00 0.00 (0.74) 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
09/30/92 (0.14) 0.00 (1.25) 0.00
- ---------------------------------- ------------ ----------- ----------- -----------
</TABLE>
*Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
(b) Unaudited
52 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Distributions Tax Basis Net Asset
From Return of Total Value End of Total
Equalization Capital Distributions Period Return
------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
Equity Income Fund
Class A
12/31/97 (b) $ 0.00 $ 0.00 $ (2.32) $ 15.19 13.92%
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
01/20/97-06/30/97 0.00 0.00 (0.18) 15.39 11.77
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
Class B
12/31/97 (b) 0.00 0.00 (2.27) 15.15 13.45
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
01/20/97-06/30/97 0.00 0.00 (0.16) 15.37 11.45
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
Class C
12/31/97 (b) 0.00 0.00 (2.26) 15.16 13.46
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
01/20/97-06/30/97 0.00 0.00 (0.16) 15.37 11.42
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
Renaissance Fund
Class A
12/31/97 (b) $ 0.00 $ 0.00 $ (3.61) $ 16.94 16.17
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
10/01/96-06/30/97 0.00 0.00 (2.37) 17.73 27.53
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
09/30/96 0.00 0.00 (1.08) 16.08 22.37
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
09/30/95 0.00 0.00 (0.33) 14.14 16.10
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
09/30/94 0.00 0.00 (0.55) 12.50 1.40
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
09/30/93 0.00 0.00 (0.32) 12.88 25.30
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
09/30/92 0.00 0.00 (0.40) 10.57 10.70
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
Class B
12/31/97 (b) 0.00 0.00 (3.55) 16.96 15.67
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
10/01/96-06/30/97 0.00 0.00 (2.30) 17.77 26.88
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
09/30/96 0.00 0.00 (0.93) 16.12 21.54
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
05/22/95-09/30/95 0.00 0.00 (0.08) 14.13 13.30
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
Class C
12/31/97 (b) 0.00 0.00 (3.54) 16.87 15.65
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
10/01/96-06/30/97 0.00 0.00 (2.29) 17.69 26.86
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
09/30/96 0.00 0.00 (0.94) 16.05 21.52
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
09/30/95 0.00 0.00 (0.24) 14.09 15.20
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
09/30/94 0.00 0.00 (0.46) 12.47 0.70
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
09/30/93 0.00 0.00 (0.25) 12.85 24.40
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
09/30/92 0.00 0.00 (0.32) 10.56 9.90
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
Value Fund
Class A
12/31/97 (b) $ 0.00 $ 0.00 $ (1.73) $ 14.54 9.98%
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
01/13/97-06/30/97 0.00 0.00 (0.10) 14.80 13.19
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
Class B
12/31/97 (b) 0.00 0.00 (1.68) 14.53 9.55
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
01/13/97-06/30/97 0.00 0.00 (0.06) 14.80 12.93
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
Class C
12/31/97 (b) 0.00 0.00 (1.68) 14.52 9.48
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
01/13/97-06/30/97 0.00 0.00 (0.06) 14.80 13.02
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
Capital Appreciation Fund
Class A
12/31/97 (b) $ 0.00 $ 0.00 $ (1.77) $ 22.77 15.90%
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
01/20/97-06/30/97 0.00 0.00 0.00 21.16 9.58
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
Class B
12/31/97 (b) 0.00 0.00 (1.75) 22.63 15.47
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
01/20/97-06/30/97 0.00 0.00 0.00 21.10 9.27
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
Class C
12/31/97 (b) 0.00 0.00 (1.73) 22.65 15.45
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
01/20/97-06/30/97 0.00 0.00 0.00 21.10 9.27
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
Growth Fund
Class A
12/31/97 (b) $ 0.00 $ 0.00 $ (4.32) $ 25.60 10.68%
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
10/01/96-06/30/97 0.00 0.00 (3.51) 27.03 15.93
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
09/30/96 0.00 0.00 (2.93) 26.58 16.11
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
09/30/95 0.00 0.00 (1.19) 25.73 23.70
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
09/30/94 0.00 0.00 (1.87) 22.01 1.30
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
09/30/93 0.00 0.00 (0.74) 23.64 17.70
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
09/30/92 0.00 0.00 (1.39) 20.76 7.70
- ---------------------------------------------- ------------ ------------ ------------ ------------ -----------
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses to Income (Loss) Portfolio Average
Net Assets End Average Net To Average Turnover Commission
of Period (000s) Assets Net Assets Rate Rate
---------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Equity Income Fund
Class A
12/31/97 (b) $ 9,494 1.11%* 2.73%* 17% $ 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
01/20/97-06/30/97 1,756 1.13* 2.85* 45 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
Class B
12/31/97 (b) 6,932 1.85* 1.77* 17 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
01/20/97-06/30/97 2,561 1.87* 2.11* 45 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
Class C
12/31/97 (b) 12,430 1.85* 1.73* 17 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
01/20/97-06/30/97 6,624 1.87* 2.15* 45 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
Renaissance Fund
Class A
12/31/97 (b) $ 45,857 1.26%* 0.64%* 105% $ 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
10/01/96-06/30/97 33,606 1.23* 0.95* 131 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
09/30/96 20,631 1.25 1.60 203 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
09/30/95 12,933 1.30 2.90 177
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
09/30/94 14,942 1.30 2.70 175
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
09/30/93 6,328 1.30 2.90 168
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
09/30/92 2,593 1.40 3.30 149
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
Class B
12/31/97 (b) 53,661 2.01* (0.11)* 105 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
10/01/96-06/30/97 37,253 1.97* 0.20* 131 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
09/30/96 15,693 2.00 0.85 203 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
05/22/95-09/30/95 1,760 2.10* 2.20* 177
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
Class C
12/31/97 (b) 370,999 2.01* (0.12)* 105 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
10/01/96-06/30/97 313,226 1.97* 0.21* 131 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
09/30/96 230,058 2.00 0.85 203 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
09/30/95 174,316 2.10 2.10 177
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
09/30/94 178,892 2.00 2.00 175
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
09/30/93 94,247 2.10 2.20 168
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
09/30/92 45,101 2.10 2.70 149
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
Value Fund
Class A
12/31/97 (b) $ 18,436 1.10%* 1.17%* 33% $ 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
01/13/97-06/30/97 15,648 1.11* 1.71* 71 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
Class B
12/31/97 (b) 30,370 1.86* 0.43* 33 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
01/13/97-06/30/97 25,433 1.86* 0.96* 71 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
Class C
12/31/97 (b) 76,988 1.86* 0.43* 33 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
01/13/97-06/30/97 64,110 1.86* 0.97* 71 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
Capital Appreciation Fund
Class A
12/31/97 (b) $ 14,771 1.10%* 0.19%* 25% $ 0.05
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
01/20/97-06/30/97 6,534 1.11* 0.59* 87 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
Class B
12/31/97 (b) 12,836 1.84* (0.54)* 25 0.05
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
01/20/97-06/30/97 3,022 1.85* (0.26)* 87 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
Class C
12/31/97 (b) 38,243 1.84* (0.55)* 25 0.05
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
01/20/97-06/30/97 13,093 1.86* (0.23)* 87 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
Growth Fund
Class A
12/31/97 (b) $ 159,976 1.16%* (0.27)%* 76% $ 0.06
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
10/01/96-06/30/97 147,276 1.11* 0.13* 94 0.05
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
09/30/96 151,103 1.11 0.24 104 0.07
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
09/30/95 134,819 1.10 0.50 111
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
09/30/94 107,269 1.10 0.60 115
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
09/30/93 97,509 1.10 0.40 110
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
09/30/92 71,209 1.10 0.70 92
- ------------------------------------------ ------------ ------------ ------------ ------------ ------------
</TABLE>
See accompanying notes 53
<PAGE>
Financial Highlights
A, B and C Classes (Cont.)
<TABLE>
<CAPTION>
Net Asset Net Realized/
Value Net Unrealized Total Income
Selected Per Share Data Beginning Investment Gain (Loss) on From Investment
for the Period Ended: of Period Income (Loss) Investments Operations
--------- ------------- -------------- ---------------
<S> <C> <C> <C> <C>
Class B
12/31/97 (b) 25.59 (0.14)(a) 2.77(a) 2.63
- ------------------------ --------- ------------ -------------- ---------------
10/01/96-06/30/97 25.46 0.35 3.29 3.64
- ------------------------ --------- ------------ -------------- ---------------
09/30/96 24.94 0.07 3.52 3.45
- ------------------------ --------- ------------ -------------- ---------------
05/23/95-09/30/95 22.63 (0.03) 2.34 2.31
- ------------------------ --------- ------------ -------------- ---------------
Class C
12/31/97 (b) 25.58 (0.14)(a) 2.77(a) 2.63
- ------------------------ --------- ------------ -------------- ---------------
10/01/96-06/30/97 25.46 0.45 3.18 3.63
- ------------------------ --------- ------------ -------------- ---------------
09/30/96 24.94 (0.12) 3.57 3.45
- ------------------------ --------- ------------ -------------- ---------------
09/30/95 21.52 (0.04) 4.65 4.61
- ------------------------ --------- ------------ -------------- ---------------
09/30/94 23.32 (0.04) 0.11 0.07
- ------------------------ --------- ------------ -------------- ---------------
09/30/93 20.64 (0.07) 3.49 3.42
- ------------------------ --------- ------------ -------------- ---------------
09/30/92 20.54 (0.01) 1.37 1.36
- ------------------------ --------- ------------ -------------- ---------------
Mid Cap Growth Fund
Class A
12/31/97 (b) $ 20.24 $ 0.01(a) $ 3.57(a) $ 3.58
- ------------------------ --------- ------------ -------------- ---------------
01/13/97-06/30/97 18.14 (0.04) 2.14 2.10
- ------------------------ --------- ------------ -------------- ---------------
Class B
12/31/97 (b) 20.17 (0.08)(a) 3.57(a) 3.49
- ------------------------ --------- ------------ -------------- ---------------
01/13/97-06/30/97 18.14 (0.11) 2.14 2.03
- ------------------------ --------- ------------ -------------- ---------------
Class C
12/31/97 (b) 20.18 (0.08)(a) 3.56(a) 3.48
- ------------------------ --------- ------------ -------------- ---------------
01/13/97-06/30/97 18.14 (0.10) 2.14 2.04
- ------------------------ --------- ------------ -------------- ---------------
Target Fund
Class A
12/31/97 (b) $ 16.82 $ (0.04)(a) $ 1.53(a) $ 1.49
- ------------------------ --------- ------------ -------------- ---------------
10/01/96-06/30/97 17.11 (0.04)(a) 1.82(a) 1.78
- ------------------------ --------- ------------ -------------- ---------------
09/30/96 16.40 (0.05) 2.54 2.49
- ------------------------ --------- ------------ -------------- ---------------
09/30/95 13.13 (0.02) 3.45 3.43
- ------------------------ --------- ------------ -------------- ---------------
09/30/94 12.72 (0.04) 0.57 0.53
- ------------------------ --------- ------------ -------------- ---------------
12/17/92-09/30/93 10.00 (0.02) 2.74 2.72
- ------------------------ --------- ------------ -------------- ---------------
Class B
12/31/97 (b) 16.14 (0.10)(a) 1.46(a) 1.36
- ------------------------ --------- ------------ -------------- ---------------
10/01/96-06/30/97 16.58 (0.12)(a) 1.75(a) 1.63
- ------------------------ --------- ------------ -------------- ---------------
09/30/96 16.06 (0.09) 2.39 2.30
- ------------------------ --------- ------------ -------------- ---------------
05/22/95-09/30/95 13.93 (0.05) 2.18 2.13
- ------------------------ --------- ------------ -------------- ---------------
Class C
12/31/97 (b) 16.13 (0.10)(a) 1.47(a) 1.37
- ------------------------ --------- ------------ -------------- ---------------
10/01/96-06/30/97 16.58 (0.12)(a) 1.74(a) 1.62
- ------------------------ --------- ------------ -------------- ---------------
09/30/96 16.05 (0.16) 2.47 2.31
- ------------------------ --------- ------------ -------------- ---------------
09/30/95 12.95 (0.12) 3.38 3.26
- ------------------------ --------- ------------ -------------- ---------------
09/30/94 12.65 (0.14) 0.56 0.42
- ------------------------ --------- ------------ -------------- ---------------
12/17/92-09/30/93 10.00 (0.09) 2.74 2.65
Small Cap Value Fund
Class A
12/31/97 (b) $ 15.75 $ 0.13(a) $ 2.59(a) $ 2.72
- ------------------------ --------- ------------ -------------- ---------------
01/20/97-06/30/97 14.02 0.10 1.63 1.73
- ------------------------ --------- ------------ -------------- ---------------
Class B
12/31/97 (b) 15.71 0.07(a) 2.56(a) 2.63
- ------------------------ --------- ------------ -------------- ---------------
01/20/97-06/30/97 14.02 0.08 1.61 1.69
- ------------------------ --------- ------------ -------------- ---------------
Class C
12/31/97 (b) 15.71 0.07(a) 2.57(a) 2.64
- ------------------------ --------- ------------ -------------- ---------------
01/20/97-06/30/97 14.02 0.08 1.61 1.69
- ------------------------ --------- ------------ -------------- ---------------
Opportunity Fund
Class A
12/31/97 (b) $ 29.35 $ (0.13)(a) $ 1.20(a) $ 1.07
- ------------------------ --------- ------------ -------------- ---------------
10/01/96-06/30/97 37.36 0.00 (3.10) (3.10)
- ------------------------ --------- ------------ -------------- ---------------
09/30/96 39.08 (0.11) 6.12 6.01
- ------------------------ --------- ------------ -------------- ---------------
09/30/95 28.87 (0.11) 11.19 11.08
- ------------------------ --------- ------------ -------------- ---------------
09/30/94 33.43 (0.17) (2.02) (2.19)
- ------------------------ --------- ------------ -------------- ---------------
09/30/93 19.84 (0.15) 14.00 13.85
- ------------------------ --------- ------------ -------------- ---------------
09/30/92 17.95 (0.04) 3.61 3.57
- ------------------------ --------- ------------ -------------- ---------------
<CAPTION>
Dividends Dividends in Distributions Distributions
From Net Excess of Net From Net in Excess of
Selected Per Share Data Investment Investment Realized Net Real
for the Period Ended: Income Income Capital Gains Capital Gains
---------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
Class B
12/31/97 (b) 0.00 0.00 (4.32) 0.00
- ------------------------ ---------- ------------ ------------- -------------
10/01/96-06/30/97 0.00 0.00 (3.51) 0.00
- ------------------------ ---------- ------------ ------------- -------------
09/30/96 0.00 0.00 (2.93) 0.00
- ------------------------ ---------- ------------ ------------- -------------
05/23/95-09/30/95 0.00 0.00 0.00 0.00
- ------------------------ ---------- ------------ ------------- -------------
Class C
12/31/97 (b) 0.00 0.00 (4.32) 0.00
- ------------------------ ---------- ------------ ------------- -------------
10/01/96-06/30/97 0.00 0.00 (3.51) 0.00
- ------------------------ ---------- ------------ ------------- -------------
09/30/96 0.00 0.00 (2.93) 0.00
- ------------------------ ---------- ------------ ------------- -------------
09/30/95 0.00 0.00 (1.19) 0.00
- ------------------------ ---------- ------------ ------------- -------------
09/30/94 0.00 0.00 (1.87) 0.00
- ------------------------ ---------- ------------ ------------- -------------
09/30/93 0.00 0.00 (0.74) 0.00
- ------------------------ ---------- ------------ ------------- -------------
09/30/92 (0.01) 0.00 (1.25) 0.00
- ------------------------ ---------- ------------ ------------- -------------
Mid Cap Growth Fund
Class A
12/31/97 (b) $ (0.04) $ 0.00 $ (1.33) $ 0.00
- ------------------------ ---------- ------------ ------------- -------------
01/13/97-06/30/97 0.00 0.00 0.00 0.00
- ------------------------ ---------- ------------ ------------- -------------
Class B
12/31/97 (b) 0.00 0.00 (1.33) 0.00
- ------------------------ ---------- ------------ ------------- -------------
01/13/97-06/30/97 0.00 0.00 0.00 0.00
- ------------------------ ---------- ------------ ------------- -------------
Class C
12/31/97 (b) 0.00 0.00 (1.33) 0.00
- ------------------------ ---------- ------------ ------------- -------------
01/13/97-06/30/97 0.00 0.00 0.00 0.00
- ------------------------ ---------- ------------ ------------- -------------
Target Fund
Class A
12/31/97 (b) $ 0.00 $ 0.00 $ (4.45) $ 0.00
- ------------------------ ---------- ------------ ------------- -------------
10/01/96-06/30/97 0.00 0.00 (2.07) 0.00
- ------------------------ ---------- ------------ ------------- -------------
09/30/96 0.00 0.00 (1.78) 0.00
- ------------------------ ---------- ------------ ------------- -------------
09/30/95 0.00 0.00 (0.16) 0.00
- ------------------------ ---------- ------------ ------------- -------------
09/30/94 0.00 0.00 (0.12) 0.00
- ------------------------ ---------- ------------ ------------- -------------
12/17/92-09/30/93 0.00 0.00 0.00 0.00
- ------------------------ ---------- ------------ ------------- -------------
Class B
12/31/97 (b) 0.00 0.00 (4.45) 0.00
- ------------------------ ---------- ------------ ------------- -------------
10/01/96-06/30/97 0.00 0.00 (2.07) 0.00
- ------------------------ ---------- ------------ ------------- -------------
09/30/96 0.00 0.00 (1.78) 0.00
- ------------------------ ---------- ------------ ------------- -------------
05/22/95-09/30/95 0.00 0.00 0.00 0.00
- ------------------------ ---------- ------------ ------------- -------------
Class C
12/31/97 (b) 0.00 0.00 (4.45) 0.00
- ------------------------ ---------- ------------ ------------- -------------
10/01/96-06/30/97 0.00 0.00 (2.07) 0.00
- ------------------------ ---------- ------------ ------------- -------------
09/30/96 0.00 0.00 (1.78) 0.00
- ------------------------ ---------- ------------ ------------- -------------
09/30/95 0.00 0.00 (0.16) 0.00
- ------------------------ ---------- ------------ ------------- -------------
09/30/94 0.00 0.00 (0.12) 0.00
- ------------------------ ---------- ------------ ------------- -------------
12/17/92-09/30/93 0.00 0.00 0.00 0.00
- ------------------------ ---------- ------------ ------------- -------------
Small Cap Value Fund
Class A
12/31/97 (b) $ (0.13) $ 0.00 $ (0.76) $ 0.00
- ------------------------ ---------- ------------ ------------- -------------
01/20/97-06/30/97 0.00 0.00 0.00 0.00
- ------------------------ ---------- ------------ ------------- -------------
Class B
12/31/97 (b) (0.09) 0.00 (0.76) 0.00
- ------------------------ ---------- ------------ ------------- -------------
01/20/97-06/30/97 0.00 0.00 0.00 0.00
- ------------------------ ---------- ------------ ------------- -------------
Class C
12/31/97 (b) (0.09) 0.00 (0.76) 0.00
- ------------------------ ---------- ------------ ------------- -------------
01/20/97-06/30/97 0.00 0.00 0.00 0.00
- ------------------------ ---------- ------------ ------------- -------------
Opportunity Fund
Class A
12/31/97 (b) $ 0.00 $ 0.00 $ (1.94) $ 0.00
- ------------------------ ---------- ------------ ------------- -------------
10/01/96-06/30/97 0.00 0.00 (4.91) 0.00
- ------------------------ ---------- ------------ ------------- -------------
09/30/96 0.00 0.00 (7.73) 0.00
- ------------------------ ---------- ------------ ------------- -------------
09/30/95 0.00 0.00 (0.87) 0.00
- ------------------------ ---------- ------------ ------------- -------------
09/30/94 0.00 0.00 (2.26) 0.00
- ------------------------ ---------- ------------ ------------- -------------
09/30/93 0.00 0.00 (0.26) 0.00
- ------------------------ ---------- ------------ ------------- -------------
09/30/92 0.00 0.00 (1.68) 0.00
- ------------------------ ---------- ------------ ------------- -------------
</TABLE>
* Annualized
(a) Per Share amounts based on average number od shares outstanding during the
period.
(b) Unaudited
54 See accompanying notes
<PAGE>
Financial Highlights
A, B, C Classes (Cont.)
<TABLE>
<CAPTION>
Distributions Tax Basis Net Asset
Selected Per Share Data from Return of Total Value End of
for the Period Ended: Equalization Capital Distributions Period Total Return
------------ --------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
12/31/97 (b) 0.00 0.00 (4.32) 23.90 10.26
- ------------------------------- ------------ --------- ------------- ------------ ------------
10/01/96-06/30/97 0.00 0.00 (3.51) 25.59 15.32
- ------------------------------- ------------ --------- ------------- ------------ ------------
09/30/96 0.00 0.00 (2.93) 25.46 15.22
- ------------------------------- ------------ --------- ------------- ------------ ------------
05/23/95-09/30/95 0.00 0.00 0.00 24.94 10.20
- ------------------------------- ------------ --------- ------------- ------------ ------------
Class C
12/31/97 (b) 0.00 0.00 (4.32) 23.89 10.26
- ------------------------------- ------------ --------- ------------- ------------ ------------
10/01/96-06/30/97 0.00 0.00 (3.51) 25.58 15.27
- ------------------------------- ------------ --------- ------------- ------------ ------------
09/30/96 0.00 0.00 (2.93) 25.46 15.22
- ------------------------------- ------------ --------- ------------- ------------ ------------
09/30/95 0.00 0.00 (1.19) 24.94 22.80
- ------------------------------- ------------ --------- ------------- ------------ ------------
09/30/94 0.00 0.00 (1.87) 21.52 0.50
- ------------------------------- ------------ --------- ------------- ------------ ------------
09/30/93 0.00 0.00 (0.74) 23.32 16.90
- ------------------------------- ------------ --------- ------------- ------------ ------------
09/30/92 0.00 0.00 (1.26) 20.64 6.90
- ------------------------------- ------------ --------- ------------- ------------ ------------
Mid Cap Growth Fund
Class A
12/31/97 (b) $ 0.00 $ 0.00 $ (1.37) $ 22.45 17.60%
- ------------------------------- ------------ --------- ------------- ------------ ------------
01/13/97-06/30/97 0.00 0.00 0.00 20.24 11.58
- ------------------------------- ------------ --------- ------------- ------------ ------------
Class B
12/31/97 (b) 0.00 0.00 (1.33) 22.33 17.20
- ------------------------------- ------------ --------- ------------- ------------ ------------
01/13/97-06/30/97 0.00 0.00 0.00 20.17 11.19
- ------------------------------- ------------ --------- ------------- ------------ ------------
Class C
12/31/97 (b) 0.00 0.00 (1.33) 22.33 17.15
- ------------------------------- ------------ --------- ------------- ------------ ------------
01/13/97-06/30/97 0.00 0.00 0.00 20.18 11.25
- ------------------------------- ------------ --------- ------------- ------------ ------------
Target Fund
Class A
12/31/97 (b) $ 0.00 $ 0.00 $ (4.45) $ 13.86 8.07%
- ------------------------------- ------------ --------- ------------- ------------ ------------
10/01/96-06/30/97 0.00 0.00 (2.07) 16.82 11.19
- ------------------------------- ------------ --------- ------------- ------------ ------------
09/30/96 0.00 0.00 (1.78) 17.11 16.50
- ------------------------------- ------------ --------- ------------- ------------ ------------
09/30/95 0.00 0.00 (0.16) 16.40 26.50
- ------------------------------- ------------ --------- ------------- ------------ ------------
09/30/94 0.00 0.00 (0.12) 13.13 4.20
- ------------------------------- ------------ --------- ------------- ------------ ------------
12/17/92-09/30/93 0.00 0.00 0.00 12.72 27.20
- ------------------------------- ------------ --------- ------------- ------------ ------------
Class B
12/31/97 (b) 0.00 0.00 (4.45) 13.05 7.58
- ------------------------------- ------------ --------- ------------- ------------ ------------
10/01/96-06/30/97 0.00 0.00 (2.07) 16.14 10.58
- ------------------------------- ------------ --------- ------------- ------------ ------------
09/30/96 0.00 0.00 (1.78) 16.58 15.58
- ------------------------------- ------------ --------- ------------- ------------ ------------
05/22/95-09/30/95 0.00 0.00 0.00 16.06 15.30
- ------------------------------- ------------ --------- ------------- ------------ ------------
Class C
12/31/97 (b) 0.00 0.00 (4.45) 13.05 7.64
- ------------------------------- ------------ --------- ------------- ------------ ------------
10/01/96-06/30/97 0.00 0.00 (2.07) 16.13 10.52
- ------------------------------- ------------ --------- ------------- ------------ ------------
09/30/96 0.00 0.00 (1.78) 16.58 15.66
- ------------------------------- ------------ --------- ------------- ------------ ------------
09/30/95 0.00 0.00 (0.16) 16.05 25.60
- ------------------------------- ------------ --------- ------------- ------------ ------------
09/30/94 0.00 0.00 (0.12) 12.95 3.40
- ------------------------------- ------------ --------- ------------- ------------ ------------
12/17/92-09/30/93 0.00 0.00 0.00 12.65 26.50
- ------------------------------- ------------ --------- ------------- ------------ ------------
Small Cap Value Fund
Class A
12/31/97 (b) $ 0.00 $ 0.00 $ (0.89) $ 17.58 17.33%
- ------------------------------- ------------ --------- ------------- ------------ ------------
01/20/97-06/30/97 0.00 0.00 0.00 15.75 12.34
- ------------------------------- ------------ --------- ------------- ------------ ------------
Class B
12/31/97 (b) 0.00 0.00 (0.85) 17.49 16.80
- ------------------------------- ------------ --------- ------------- ------------ ------------
01/20/97-06/30/97 0.00 0.00 0.00 15.71 12.05
- ------------------------------- ------------ --------- ------------- ------------ ------------
Class C
12/31/97 (b) 0.00 0.00 (0.85) 17.50 16.82
- ------------------------------- ------------ --------- ------------- ------------ ------------
01/20/97-06/30/97 0.00 0.00 0.00 15.71 12.05
- ------------------------------- ------------ --------- ------------- ------------ ------------
Opportunity Fund
Class A
12/31/97 (b) $ 0.00 $ 0.00 $ (1.94) $ 28.48 3.51%
- ------------------------------- ------------ --------- ------------- ------------ ------------
10/01/96-06/30/97 0.00 0.00 (4.91) 29.35 (8.87)
- ------------------------------- ------------ --------- ------------- ------------ ------------
09/30/96 0.00 0.00 (7.73) 37.36 18.35
- ------------------------------- ------------ --------- ------------- ------------ ------------
09/30/95 0.00 0.00 (0.87) 39.08 39.70
- ------------------------------- ------------ --------- ------------- ------------ ------------
09/30/94 0.00 (0.11) (2.37) 28.87 (6.70)
- ------------------------------- ------------ --------- ------------- ------------ ------------
09/30/93 0.00 0.00 (0.26) 33.43 70.40
- ------------------------------- ------------ --------- ------------- ------------ ------------
09/30/92 0.00 0.00 (1.68) 19.84 21.60
- ------------------------------- ------------ --------- ------------- ------------ ------------
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses to Income(Loss)
Net Assets End Average Net to Average Portfolio Average
of Period (000s) Assets Net Assets Turnover Rate Commission Rate
---------------- ----------- ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C>
Class B
12/31/97 (b) 63,052 1.91* (1.01)* 76 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
10/01/96-06/30/97 55,626 1.86* (0.62)* 94 0.05
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
09/30/96 37,256 1.86 (0.51) 104 0.07
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
05/23/95-09/30/95 7,671 1.90* (0.40)* 111
- ----------------------- ---------------- ----------- ------------ -------------
Class C
12/31/97 (b) 1,554,136 1.86* (1.02)* 76 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
10/01/96-06/30/97 1,514,432 1.86* (0.61)* 94 0.05
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
09/30/96 1,450,216 1.86 (0.51) 104 0.07
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
09/30/95 1,290,152 1.90 (0.20) 111
- ----------------------- ---------------- ----------- ------------ -------------
09/30/94 1,085,427 1.90 (0.20) 115
- ----------------------- ---------------- ----------- ------------ -------------
09/30/93 1,077,490 1.90 (0.30) 110
- ----------------------- ---------------- ----------- ------------ -------------
09/30/92 853,121 1.90 (0.10) 92
- ----------------------- ---------------- ----------- ------------ -------------
Mid Cap Growth Fund
Class A
12/31/97 (b) $ 24,043 1.11%* 0.07%* 29% $0.05
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
01/13/97-06/30/97 12,184 1.11* 0.17* 82 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
Class B
12/31/97 (b) 49,941 1.85* (0.68)* 29 0.05
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
01/13/97-06/30/97 28,259 1.85* (0.58)* 82 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
Class C
12/31/97 (b) 93,258 1.85* (0.68)* 29 0.05
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
01/13/97-06/30/97 53,686 1.86* (0.58)* 82 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
Target Fund
Class A
12/31/97 (b) $ 158,794 1.21%* (0.40)%* 121% $0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
10/01/96-06/30/97 150,689 1.20* (0.31)* 145 0.04
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
09/30/96 156,027 1.18 (0.34) 141 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
09/30/95 121,915 1.20 (0.10) 128
- ----------------------- ---------------- ----------- ------------ -------------
09/30/94 90,527 1.20 (0.30) 104
- ----------------------- ---------------- ----------- ------------ -------------
12/17/92-09/30/93 48,787 1.30* (0.30)* 76
- ----------------------- ---------------- ----------- ------------ -------------
Class B
12/31/97 (b) 70,531 1.96* (1.16)* 121 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
10/01/96-06/30/97 67,531 1.94* (1.05)* 145 0.04
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
09/30/96 49,851 1.93 (1.09) 141 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
05/22/95-09/30/95 7,554 2.00* (0.90)* 128
- ----------------------- ---------------- ----------- ------------ -------------
Class C
12/31/97 (b) 942,036 1.96* (1.16)* 121 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
10/01/96-06/30/97 969,317 1.94* (1.06)* 145 0.04
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
09/30/96 974,948 1.93 (1.09) 141 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
09/30/95 780,355 2.00 (0.90) 128
- ----------------------- ---------------- ----------- ------------ -------------
09/30/94 556,043 2.00 (1.10) 104
- ----------------------- ---------------- ----------- ------------ -------------
12/17/92-09/30/93 298,238 2.00* (1.00)* 76
- ----------------------- ---------------- ----------- ------------ -------------
Cap Value Fund
Class A
12/31/97 (b) $ 32,115 1.26%* 1.48%* 18% $0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
01/20/97-06/30/97 6,563 1.30* 1.94* 48 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
Class B
12/31/97 (b) 60,582 2.01* 0.75* 18 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
01/20/97-06/30/97 11,077 2.04* 1.23* 48 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
Class C
12/31/97 (b) 86,913 2.01* 0.75* 18 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
01/20/97-06/30/97 20,637 2.05* 1.13* 48 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
Opportunity Fund
Class A
12/31/97 (b) $ 200,463 1.31%* (0.85)%* 37% $0.05
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
10/01/96-06/30/97 213,484 1.25* (0.12)* 69 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
09/30/96 134,859 1.13 (0.32) 91 0.07
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
09/30/95 120,830 1.20 (0.40) 102
- ----------------------- ---------------- ----------- ------------ -------------
09/30/94 95,261 1.10 (0.60) 78
- ----------------------- ---------------- ----------- ------------ -------------
09/30/93 106,666 1.20 (0.60) 105
- ----------------------- ---------------- ----------- ------------ -------------
09/30/92 22,454 1.30 (0.20) 94
- ----------------------- ---------------- ----------- ------------ -------------
</TABLE>
*Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
(b) Unaudited
See accompanying notes 55
<PAGE>
Financial Highlights
A, B and C Classes (Cont.)
<TABLE>
<CAPTION>
Net Asset Net Realized/
Value Net Unrealized Total Income
Selected Per Share Data Beginning Investment Gain (Loss) on From Investment
for the Period Ended: of Period Income (Loss) Investments Operations
--------- ------------- -------------- ---------------
<S> <C> <C> <C> <C>
Class C
12/31/97 (b) 27.38 (0.23)(a) 1.13(a) 0.90
- ----------------------------- --------- ------------- -------------- ---------------
10/01/96-06/30/97 35.38 (0.04) (3.05) (3.09)
- ----------------------------- --------- ------------- -------------- ---------------
09/30/96 37.64 (0.35) 5.82 5.47
- ----------------------------- --------- ------------- -------------- ---------------
09/30/95 28.04 (0.34) 10.81 10.47
- ----------------------------- --------- ------------- -------------- ---------------
09/30/94 32.77 (0.38) (1.98) (2.36)
- ----------------------------- --------- ------------- -------------- ---------------
09/30/93 19.60 (0.34) 13.77 13.43
- ----------------------------- --------- ------------- -------------- ---------------
09/30/92 17.87 (0.18) 3.59 3.41
- ----------------------------- --------- ------------- -------------- ---------------
International Developed Fund
Class A
12/31/97 (b) $ 13.08 $ 0.01(a) $ (0.95)(a) $ (0.94)
- ----------------------------- --------- ------------- -------------- ---------------
01/20/97-06/30/97 11.71 0.09(a) 1.28(a) 1.37
- ----------------------------- --------- ------------- -------------- ---------------
Class B
12/31/97 (b) 13.06 (0.04)(a) (0.95)(a) (0.99)
- ----------------------------- --------- ------------- -------------- ---------------
01/20/97-06/30/97 11.71 0.06(a) 1.29(a) 1.35
- ----------------------------- --------- ------------- -------------- ---------------
Class C
12/31/97 (b) 13.06 (0.04)(a) (0.95)(a) (0.99)
- ----------------------------- --------- ------------- -------------- ---------------
01/20/97-06/30/97 11.71 0.06(a) 1.29(a) 1.35
- ----------------------------- --------- ------------- -------------- ---------------
International Fund
Class A
12/31/97 (b) $ 14.26 $ (0.03)(a) $ (1.15)(a) $ (1.18)
- ----------------------------- --------- ------------- -------------- ---------------
10/01/96-06/30/97 13.03 0.29 1.33 1.62
- ----------------------------- --------- ------------- -------------- ---------------
09/30/96 12.19 0.07 0.77 0.84
- ----------------------------- --------- ------------- -------------- ---------------
09/30/95 12.92 0.07 (0.56) (0.49)
- ----------------------------- --------- ------------- -------------- ---------------
09/30/94 12.17 0.04 0.94 0.98
- ----------------------------- --------- ------------- -------------- ---------------
09/30/93 10.04 0.07 2.80 2.87
- ----------------------------- --------- ------------- -------------- ---------------
09/30/92 10.54 0.05 (0.37) (0.32)
- ----------------------------- --------- ------------- -------------- ---------------
Class B
12/31/97 (b) 13.56 (0.07)(a) (1.10)(a) (1.17)
- ----------------------------- --------- ------------- -------------- ---------------
10/01/96-06/30/97 12.48 0.16 1.31 1.47
- ----------------------------- --------- ------------- -------------- ---------------
09/30/96 11.75 0.00(a) 0.73(a) 0.73
- ----------------------------- --------- ------------- -------------- ---------------
05/22/95-09/30/95 11.30 0.00 0.45 0.45
- ----------------------------- --------- ------------- -------------- ---------------
Class C
12/31/97 (b) 13.55 (0.07)(a) (1.10)(a) (1.17)
- ----------------------------- --------- ------------- -------------- ---------------
10/01/96-06/30/97 12.47 0.18 1.29 1.47
- ----------------------------- --------- ------------- -------------- ---------------
09/30/96 11.75 (0.05) 0.77 0.72
- ----------------------------- --------- ------------- -------------- ---------------
09/30/95 12.56 (0.02) (0.55) (0.57)
- ----------------------------- --------- ------------- -------------- ---------------
09/30/94 11.92 (0.06) 0.93 0.87
- ----------------------------- --------- ------------- -------------- ---------------
09/30/93 9.92 (0.01) 2.75 2.74
- ----------------------------- --------- ------------- -------------- ---------------
09/30/92 10.49 (0.06) (0.33) (0.39)
- ----------------------------- --------- ------------- -------------- ---------------
Emerging Markets Fund
Class A
12/31/97 (b) $ 13.94 $ (0.02)(a) $ (2.25)(a) $ (2.27)
- ----------------------------- --------- ------------- -------------- ---------------
01/20/97-06/30/97 12.82 0.09(a) 1.03(a) 1.12
- ----------------------------- --------- ------------- -------------- ---------------
Class B
12/31/97 (b) 13.89 (0.07)(a) (2.23)(a) (2.30)
- ----------------------------- --------- ------------- -------------- ---------------
01/20/97-06/30/97 12.82 0.03(a) 1.04(a) 1.07
- ----------------------------- --------- ------------- -------------- ---------------
Class C
12/31/97 (b) 13.89 (0.07)(a) (2.23)(a) (2.30)
- ----------------------------- --------- ------------- -------------- ---------------
01/20/97-06/30/97 12.82 0.04(a) 1.03(a) 1.07
- ----------------------------- --------- ------------- -------------- ---------------
Innovation Fund
Class A
12/31/97 (b) $ 17.43 $ (0.09)(a) $ 1.54(a) $ 1.45
- ----------------------------- --------- ------------- -------------- ---------------
10/01/96-06/30/97 17.26 0.07 0.36 0.43
- ----------------------------- --------- ------------- -------------- ---------------
09/30/96 14.74 (0.07) 2.94 2.87
- ----------------------------- --------- ------------- -------------- ---------------
12/22/94-09/30/95 10.00 (0.06) 4.80 4.74
- ----------------------------- --------- ------------- -------------- ---------------
Class B
12/31/97 (b) 17.10 (0.16)(a) 1.51(a) 1.35
- ----------------------------- --------- ------------- -------------- ---------------
10/01/96-06/30/97 17.04 (0.03) 0.35 0.32
- ----------------------------- --------- ------------- -------------- ---------------
09/30/96 14.66 (0.11) 2.84 2.73
- ----------------------------- --------- ------------- -------------- ---------------
05/22/95-09/30/95 11.81 (0.08) 2.93 2.85
- ----------------------------- --------- ------------- -------------- ---------------
<CAPTION>
Dividends Dividends in Distributions Distributions
From Net Excess of Net From Net in Exces of
Selected Per Share Data Investment Investment Realized Net Real
for the Period Ended: Income Income Capital Gains Capital Gains
---------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Class C
12/31/97 (b) 0.00 0.00 (1.94) 0.00
- --------------------------- ---------- ------------- ------------- -------------
10/01/96-06/30/97 0.00 0.00 (4.91) 0.00
- --------------------------- ---------- ------------- ------------- -------------
09/30/96 0.00 0.00 (7.73) 0.00
- --------------------------- ---------- ------------- ------------- -------------
09/30/95 0.00 0.00 (0.87) 0.00
- --------------------------- ---------- ------------- ------------- -------------
09/30/94 0.00 0.00 (2.26) 0.00
- --------------------------- ---------- ------------- ------------- -------------
09/30/93 0.00 0.00 (0.26) 0.00
- --------------------------- ---------- ------------- ------------- -------------
09/30/92 0.00 0.00 (1.68) 0.00
- --------------------------- ---------- ------------- ------------- -------------
International Developed Fund
Class A
12/31/97 (b) $ (0.10) $ 0.00 $ (0.58) $ 0.00
- --------------------------- ---------- ------------- ------------- -------------
01/20/97-06/30/97 0.00 0.00 0.00 0.00
- --------------------------- ---------- ------------- ------------- -------------
Class B
12/31/97 (b) (0.06) 0.00 (0.58) 0.00
- --------------------------- ---------- ------------- ------------- -------------
01/20/97-06/30/97 0.00 0.00 0.00 0.00
- --------------------------- ---------- ------------- ------------- -------------
Class C
12/31/97 (b) (0.06) 0.00 (0.58) 0.00
- --------------------------- ---------- ------------- ------------- -------------
01/20/97-06/30/97 0.00 0.00 0.00 0.00
- --------------------------- ---------- ------------- ------------- -------------
International Fund
Class A
12/31/97 (b) $ 0.00 $ 0.00 $ (1.12) $ 0.00
- --------------------------- ---------- ------------- ------------- -------------
10/01/96-06/30/97 0.00 0.00 (0.39) 0.00
- --------------------------- ---------- ------------- ------------- -------------
09/30/96 0.00 0.00 0.00 0.00
- --------------------------- ---------- ------------- ------------- -------------
09/30/95 0.00 0.00 (0.24) 0.00
- --------------------------- ---------- ------------- ------------- -------------
09/30/94 0.00 0.00 (0.23) 0.00
- --------------------------- ---------- ------------- ------------- -------------
09/30/93 0.00 0.00 (0.74) 0.00
- --------------------------- ---------- ------------- ------------- -------------
09/30/92 0.00 0.00 (0.18) 0.00
- --------------------------- ---------- ------------- ------------- -------------
Class B
12/31/97 (b) 0.00 0.00 (1.12) 0.00
- --------------------------- ---------- ------------- ------------- -------------
10/01/96-06/30/97 0.00 0.00 (0.39) 0.00
- --------------------------- ---------- ------------- ------------- -------------
09/30/96 0.00 0.00 0.00 0.00
- --------------------------- ---------- ------------- ------------- -------------
05/22/95-09/30/95 0.00 0.00 0.00 0.00
- --------------------------- ---------- ------------- ------------- -------------
Class C
12/31/97 (b) 0.00 0.00 (1.12) 0.00
- --------------------------- ---------- ------------- ------------- -------------
10/01/96-06/30/97 0.00 0.00 (0.39) 0.00
- --------------------------- ---------- ------------- ------------- -------------
09/30/96 0.00 0.00 0.00 0.00
- --------------------------- ---------- ------------- ------------- -------------
09/30/95 0.00 0.00 (0.24) 0.00
- --------------------------- ---------- ------------- ------------- -------------
09/30/94 0.00 0.00 (0.23) 0.00
- --------------------------- ---------- ------------- ------------- -------------
09/30/93 0.00 0.00 (0.74) 0.00
- --------------------------- ---------- ------------- ------------- -------------
09/30/92 0.00 0.00 (0.18) 0.00
- --------------------------- ---------- ------------- ------------- -------------
Emerging Markets Fund
Class A
12/31/97 (b) $ 0.00 $ 0.00 $ 0.00 $ 0.00
- --------------------------- ---------- ------------- ------------- -------------
01/20/97-06/30/97 0.00 0.00 0.00 0.00
- --------------------------- ---------- ------------- ------------- -------------
Class B
12/31/97 (b) 0.00 0.00 0.00 0.00
- --------------------------- ---------- ------------- ------------- -------------
01/20/97-06/30/97 0.00 0.00 0.00 0.00
- --------------------------- ---------- ------------- ------------- -------------
Class C
12/31/97 (b) 0.00 0.00 0.00 0.00
- --------------------------- ---------- ------------- ------------- -------------
01/20/97-06/30/97 0.00 0.00 0.00 0.00
- --------------------------- ---------- ------------- ------------- -------------
Innovation Fund
Class A
12/31/97 (b) $ 0.00 $ 0.00 $ (1.17) $ 0.00
- --------------------------- ---------- ------------- ------------- -------------
10/01/96-06/30/97 0.00 0.00 (0.26) 0.00
- --------------------------- ---------- ------------- ------------- -------------
09/30/96 0.00 0.00 (0.35) 0.00
- --------------------------- ---------- ------------- ------------- -------------
12/22/94-09/30/95 0.00 0.00 0.00 0.00
- --------------------------- ---------- ------------- ------------- -------------
Class B
12/31/97 (b) 0.00 0.00 (1.17) 0.00
- --------------------------- ---------- ------------- ------------- -------------
10/01/96-06/30/97 0.00 0.00 (0.26) 0.00
- --------------------------- ---------- ------------- ------------- -------------
09/30/96 0.00 0.00 (0.35) 0.00
- --------------------------- ---------- ------------- ------------- -------------
05/22/95-09/30/95 0.00 0.00 0.00 0.00
</TABLE>
* Annualized
(a) Per share amounts based upon average number of shares outstanding during
the period.
(b) Unaudited
56 See accompanying notes
<PAGE>
Financial Highlights
A, B, C Classes (Cont.)
<TABLE>
<CAPTION>
Distributions Tax Basis Net Asset
Selected Per Share Data from Return of Total Value End of
for the Periuod Ended: Equalization Capital Distributions Period Total Return
------------ --------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Class C
12/31/97 (b) 0.00 0.00 (1.94) 26.34 3.14
- ----------------------------- ------------ --------- ------------- ------------ ------------
10/01/96-06/30/97 0.00 0.00 (4.91) 27.38 (9.40)
- ----------------------------- ------------ --------- ------------- ------------ ------------
09/30/96 0.00 0.00 (7.73) 35.38 17.47
- ----------------------------- ------------ --------- ------------- ------------ ------------
09/30/95 0.00 0.00 (0.87) 37.64 38.60
- ----------------------------- ------------ --------- ------------- ------------ ------------
09/30/94 0.00 (0.11) (2.37) 28.04 (7.40)
- ----------------------------- ------------ --------- ------------- ------------ ------------
09/30/93 0.00 0.00 (0.26) 32.77 69.10
- ----------------------------- ------------ --------- ------------- ------------ ------------
09/30/92 0.00 0.00 (1.68) 19.60 20.80
- ----------------------------- ------------ --------- ------------- ------------ ------------
International Developed Fund
Class A
12/31/97 (b) $ 0.00 $ 0.00 $ (0.68) $ 11.46 (7.19)%
- ----------------------------- ------------ --------- ------------- ------------ ------------
01/20/97-06/30/97 0.00 0.00 0.00 13.08 11.70
- ----------------------------- ------------ --------- ------------- ------------ ------------
Class B
12/31/97 (b) 0.00 0.00 (0.64) 11.43 (7.59)
- ----------------------------- ------------ --------- ------------- ------------ ------------
01/20/97-06/30/97 0.00 0.00 0.00 13.06 11.53
- ----------------------------- ------------ --------- ------------- ------------ ------------
Class C
12/31/97 (b) 0.00 0.00 (0.64) 11.43 (7.61)
- ----------------------------- ------------ --------- ------------- ------------ ------------
01/20/97-06/30/97 0.00 0.00 0.00 13.06 11.53
- ----------------------------- ------------ --------- ------------- ------------ ------------
International Fund
Class A
12/31/97 (b) $ 0.00 $ 0.00 $ (1.12) $ 11.96 (8.23)%
- ----------------------------- ------------ --------- ------------- ------------ ------------
10/01/96-06/30/97 0.00 0.00 (0.39) 14.26 12.82
- ----------------------------- ------------ --------- ------------- ------------ ------------
09/30/96 0.00 0.00 0.00 13.03 6.89
- ----------------------------- ------------ --------- ------------- ------------ ------------
09/30/95 0.00 0.00 (0.24) 12.19 (3.70)
- ----------------------------- ------------ --------- ------------- ------------ ------------
09/30/94 0.00 0.00 (0.23) 12.92 8.20
- ----------------------------- ------------ --------- ------------- ------------ ------------
09/30/93 0.00 0.00 (0.74) 12.17 30.40
- ----------------------------- ------------ --------- ------------- ------------ ------------
09/30/92 0.00 0.00 (0.18) 10.04 (3.10)
- ----------------------------- ------------ --------- ------------- ------------ ------------
Class B
12/31/97 (b) 0.00 0.00 (1.12) 11.27 (8.59)
- ----------------------------- ------------ --------- ------------- ------------ ------------
10/01/96-06/30/97 0.00 0.00 (0.39) 13.56 12.17
- ----------------------------- ------------ --------- ------------- ------------ ------------
09/30/96 0.00 0.00 0.00 12.48 6.21
- ----------------------------- ------------ --------- ------------- ------------ ------------
05/22/95-09/30/95 0.00 0.00 0.00 11.75 4.00
- ----------------------------- ------------ --------- ------------- ------------ ------------
Class C
12/31/97 (b) 0.00 0.00 (1.12) 11.26 (8.60)
- ----------------------------- ------------ --------- ------------- ------------ ------------
10/01/96-06/30/97 0.00 0.00 (0.39) 13.55 12.18
- ----------------------------- ------------ --------- ------------- ------------ ------------
09/30/96 0.00 0.00 0.00 12.47 6.13
- ----------------------------- ------------ --------- ------------- ------------ ------------
09/30/95 0.00 0.00 (0.24) 11.75 (4.50)
- ----------------------------- ------------ --------- ------------- ------------ ------------
09/30/94 0.00 0.00 (0.23) 12.56 7.40
- ----------------------------- ------------ --------- ------------- ------------ ------------
09/30/93 0.00 0.00 (0.74) 11.92 29.40
- ----------------------------- ------------ --------- ------------- ------------ ------------
09/30/92 0.00 0.00 (0.18) 9.92 (3.80)
- ----------------------------- ------------ --------- ------------- ------------ ------------
Emerging Markets Fund
Class A
12/31/97 (b) $ 0.00 $ 0.00 $ 0.00 $ 11.67 (16.28)%
- ----------------------------- ------------ --------- ------------- ------------ ------------
01/20/97-06/30/97 0.00 0.00 0.00 13.94 8.74
- ----------------------------- ------------ --------- ------------- ------------ ------------
Class B
12/31/97 (b) 0.00 0.00 0.00 11.59 (16.56)
- ----------------------------- ------------ --------- ------------- ------------ ------------
01/20/97-06/30/97 0.00 0.00 0.00 13.89 8.35
- ----------------------------- ------------ --------- ------------- ------------ ------------
Class C
12/31/97 (b) 0.00 0.00 0.00 11.59 (16.56)
- ----------------------------- ------------ --------- ------------- ------------ ------------
01/20/97-06/30/97 0.00 0.00 0.00 13.89 8.35
- ----------------------------- ------------ --------- ------------- ------------ ------------
Innovation Fund
Class A
12/31/97 (b) $ 0.00 $ 0.00 $ (1.17) $ 17.71 8.03%
- ----------------------------- ------------ --------- ------------- ------------ ------------
10/01/96-06/30/97 0.00 0.00 (0.26) 17.43 2.41
- ----------------------------- ------------ --------- ------------- ------------ ------------
09/30/96 0.00 0.00 (0.35) 17.26 19.86
- ----------------------------- ------------ --------- ------------- ------------ ------------
12/22/94-09/30/95 0.00 0.00 0.00 14.74 47.40
- ----------------------------- ------------ --------- ------------- ------------ ------------
Class B
12/31/97 (b) 0.00 0.00 (1.17) 17.28 7.60
- ----------------------------- ------------ --------- ------------- ------------ ------------
10/01/96-06/30/97 0.00 0.00 (0.26) 17.10 1.79
- ----------------------------- ------------ --------- ------------- ------------ ------------
09/30/96 0.00 0.00 (0.35) 17.04 18.99
- ----------------------------- ------------ --------- ------------- ------------ ------------
05/22/95-09/30/95 0.00 0.00 0.00 14.66 24.10
- ----------------------------- ------------ --------- ------------- ------------ ------------
<CAPTION>
Ratio of Investment
Expenses to Income(Loss)
Net Assets End Average Net to Average Portfolio Average
of Period (000s) Assets Net Assets Turnover Rate Commission Rate
---------------- ----------- ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C>
Class C
12/31/97 (b) 561,851 2.06* (1.60)* 37 0.05
- --------------------- ---------------- ----------- ------------ ------------- ---------------
10/01/96-06/30/97 629,446 1.97* (0.95)* 69 0.06
- --------------------- ---------------- ----------- ------------ ------------- ---------------
09/30/96 800,250 1.88 (1.07) 91 0.07
- --------------------- ---------------- ----------- ------------ ------------- ---------------
09/30/95 715,191 1.90 (1.10) 102
- --------------------- ---------------- ----------- ------------ -------------
09/30/94 553,460 1.90 (1.40) 78
- --------------------- ---------------- ----------- ------------ -------------
09/30/93 618,193 2.00 (1.30) 105
- --------------------- ---------------- ----------- ------------ -------------
09/30/92 179,081 2.00 (1.00) 94
- --------------------- ---------------- ----------- ------------ -------------
International Developed Fund
Class A
12/31/97 (b) $ 487 1.51%* 0.10%* 37% $ 0.03
- --------------------- ---------------- ----------- ------------ ------------- ---------------
01/20/97-06/30/97 318 1.54* 1.74* 77 0.03
- --------------------- ---------------- ----------- ------------ ------------- ---------------
Class B
12/31/97 (b) 2,102 2.26* (0.60)* 37 0.03
- --------------------- ---------------- ----------- ------------ ------------- ---------------
01/20/97-06/30/97 1,123 2.28* 1.08* 77 0.03
- --------------------- ---------------- ----------- ------------ ------------- ---------------
Class C
12/31/97 (b) 3,612 2.26* (0.62)* 37 0.03
- --------------------- ---------------- ----------- ------------ ------------- ---------------
01/20/97-06/30/97 2,526 2.28* 1.07* 77 0.03
- --------------------- ---------------- ----------- ------------ ------------- ---------------
International Fund
Class A
12/31/97 (b) $ 17,084 1.47%* (0.47)%* 37% $ 0.00
- --------------------- ---------------- ----------- ------------ ------------- ---------------
10/01/96-06/30/97 18,287 1.51* 0.58* 59 0.00
- --------------------- ---------------- ----------- ------------ ------------- ---------------
09/30/96 20,056 1.41 0.49 110 0.00
- --------------------- ---------------- ----------- ------------ ------------- ---------------
09/30/95 17,951 1.50 0.60 170
- --------------------- ---------------- ----------- ------------ -------------
09/30/94 23,289 1.40 0.30 55
- --------------------- ---------------- ----------- ------------ -------------
09/30/93 11,992 1.40 0.60 68
- --------------------- ---------------- ----------- ------------ -------------
09/30/92 471 1.90 0.50 160
- --------------------- ---------------- ----------- ------------ -------------
Class B
12/31/97 (b) 7,781 2.22* (1.16)* 37 0.00
- --------------------- ---------------- ----------- ------------ ------------- ---------------
10/01/96-06/30/97 8,676 2.26* 0.18* 59 0.00
- --------------------- ---------------- ----------- ------------ ------------- ---------------
09/30/96 5,893 2.16 (0.26) 110 0.00
- --------------------- ---------------- ----------- ------------ ------------- ---------------
05/22/95-09/30/95 503 2.30* (0.10)* 170
- --------------------- ---------------- ----------- ------------ -------------
Class C
12/31/97 (b) 129,380 2.22* (1.15)* 37 0.00
- --------------------- ---------------- ----------- ------------ ------------- ---------------
10/01/96-06/30/97 168,446 2.25* (0.25)* 59 0.00
- --------------------- ---------------- ----------- ------------ ------------- ---------------
09/30/96 203,544 2.16 (0.26) 110 0.00
- --------------------- ---------------- ----------- ------------ ------------- ---------------
09/30/95 215,349 2.20 (0.20) 170
- --------------------- ---------------- ----------- ------------ -------------
09/30/94 294,492 2.20 (0.50) 55
- --------------------- ---------------- ----------- ------------ -------------
09/30/93 147,194 2.20 (0.10) 68
- --------------------- ---------------- ----------- ------------ -------------
09/30/92 28,299 2.60 (0.60) 160
- --------------------- ---------------- ----------- ------------ -------------
Emerging Markets Fund
Class A
12/31/97 (b) $ 231 1.78%* (0.39)%* 34% $ 0.01
- --------------------- ---------------- ----------- ------------ ------------- ---------------
01/20/97-06/30/97 214 1.89* 1.52* 74 0.00
- --------------------- ---------------- ----------- ------------ ------------- ---------------
Class B
12/31/97 (b) 507 2.53* (1.09)* 34 0.01
- --------------------- ---------------- ----------- ------------ ------------- ---------------
01/20/97-06/30/97 308 2.62* 0.47* 74 0.00
- --------------------- ---------------- ----------- ------------ ------------- ---------------
Class C
12/31/97 (b) 1,465 2.53* (1.10)* 34 0.01
- --------------------- ---------------- ----------- ------------ ------------- ---------------
01/20/97-06/30/97 1,833 2.63* 0.66* 74 0.00
- --------------------- ---------------- ----------- ------------ ------------- ---------------
Innovation Fund
Class A
12/31/97 (b) $ 60,231 1.31%* (0.95)%* 62% $ 0.05
- --------------------- ---------------- ----------- ------------ ------------- ---------------
10/01/96-06/30/97 56,215 1.28* (0.68)* 80 0.05
- --------------------- ---------------- ----------- ------------ ------------- ---------------
09/30/96 50,067 1.31 (0.61) 123 0.06
- --------------------- ---------------- ----------- ------------ ------------- ---------------
12/22/94-09/30/95 28,239 1.40* (0.60)* 86
- --------------------- ---------------- ----------- ------------ -------------
Class B
12/31/97 (b) 57,418 2.06* (1.69)* 62 0.05
- --------------------- ---------------- ----------- ------------ ------------- ---------------
10/01/96-06/30/97 51,472 2.03* (1.43)* 80 0.05
- --------------------- ---------------- ----------- ------------ ------------- ---------------
09/30/96 33,778 2.06 (1.36) 123 0.06
- --------------------- ---------------- ----------- ------------ ------------- ---------------
05/22/95-09/30/95 6,509 2.30* (1.70)* 86
- --------------------- ---------------- ----------- ------------ -------------
</TABLE>
See accompanying notes 57
<PAGE>
Financial Highlights
A, B and C Classes (Cont.)
<TABLE>
<CAPTION>
Net Asset Net Realized/
Value Net Unrealized Total Income
Selected Per Share Data Beginning Investment Gain (Loss) on From Investment
for the Period Ended: of Period Income (Loss) Investments Operations
------------- ------------- -------------- ---------------
<S> <C> <C> <C> <C>
Class C
12/31/97 (b) 17.09 (0.16)(a) 1.51 (a) 1.35
- --------------------------- ------------- ------------- -------------- ---------------
10/01/96-06/30/97 17.04 (0.02) 0.33 0.31
- --------------------------- ------------- ------------- -------------- ---------------
09/30/96 14.65 (0.15) 2.89 2.74
- --------------------------- ------------- ------------- -------------- ---------------
12/22/94-09/30/95 10.00 (0.13) 4.78 4.65
- --------------------------- ------------- ------------- -------------- ---------------
Precious Metals Fund
Class A
12/31/97 (b) $ 8.83 $ 0.02 (a) $ (2.99)(a) $ (2.97)
- --------------------------- ------------- ------------- -------------- ---------------
10/01/96-06/30/97 12.12 0.17 (3.29) (3.12)
- --------------------------- ------------- ------------- -------------- ---------------
09/30/96 12.33 0.03 (0.24) (0.21)
- --------------------------- ------------- ------------- -------------- ---------------
09/30/95 14.14 0.07 (1.88) (1.81)
- --------------------------- ------------- ------------- -------------- ---------------
09/30/94 10.32 0.08 3.74 3.82
- --------------------------- ------------- ------------- -------------- ---------------
09/30/93 7.54 0.06 2.72 2.78
- --------------------------- ------------- ------------- -------------- ---------------
09/30/92 7.51 (0.01) 0.04 0.03
- --------------------------- ------------- ------------- -------------- ---------------
Class B
12/31/97 (b) 8.42 (0.01)(a) (2.85)(a) (2.86)
- --------------------------- ------------- ------------- -------------- ---------------
10/01/96-06/30/97 11.62 0.00 (3.03) (3.03)
- --------------------------- ------------- ------------- -------------- ---------------
09/30/96 11.90 (0.03) (0.25) (0.28)
- --------------------------- ------------- ------------- -------------- ---------------
06/15/95-09/30/95 11.61 (0.01) 0.30 0.29
- --------------------------- ------------- ------------- -------------- ---------------
Class C
12/31/97 (b) 8.43 0.00 (a) (2.87)(a) (2.87)
- --------------------------- ------------- ------------- -------------- ---------------
10/01/96-06/30/97 11.62 (0.03) (2.99) (3.02)
- --------------------------- ------------- ------------- -------------- ---------------
09/30/96 11.90 (0.07) (0.21) (0.28)
- --------------------------- ------------- ------------- -------------- ---------------
09/30/95 13.75 (0.02) (1.83) (1.85)
- --------------------------- ------------- ------------- -------------- ---------------
09/30/94 10.11 (0.02) 3.66 3.64
- --------------------------- ------------- ------------- -------------- ---------------
09/30/93 7.44 (0.02) 2.69 2.67
- --------------------------- ------------- ------------- -------------- ---------------
09/30/92 7.46 (0.06) 0.04 (0.02)
- --------------------------- ------------- ------------- -------------- ---------------
Balanced Fund
Class A
12/31/97 (b) $ 11.40 $ 0.01 (a) $ 1.12 (a) $ 1.13
- --------------------------- ------------- ------------- -------------- ---------------
01/20/97-06/30/97 10.77 0.21 0.58 0.79
- --------------------------- ------------- ------------- -------------- ---------------
Class B
12/31/97 (b) 11.39 0.11(a) 0.98 (a) 1.09
- --------------------------- ------------- ------------- -------------- ---------------
01/20/97-06/30/97 10.77 0.19 0.58 0.77
- --------------------------- ------------- ------------- -------------- ---------------
Class C
12/31/97 (b) 11.39 0.11 (a) 0.99 (a) 1.10
- --------------------------- ------------- ------------- -------------- ---------------
01/20/97-06/30/97 10.77 0.18 0.58 0.76
- --------------------------- ------------- ------------- -------------- ---------------
Tax Exempt Fund
Class A
12/31/97 (b) $ 11.97 $ 0.27 (a) $ 0.35 (a) $ 0.62
- --------------------------- ------------- ------------- -------------- ---------------
10/01/96-06/30/97 11.87 0.42 0.11 0.53
- --------------------------- ------------- ------------- -------------- ---------------
09/30/96 11.83 0.62 (0.01) 0.61
- --------------------------- ------------- ------------- -------------- ---------------
09/30/95 11.21 0.57 0.63 1.20
- --------------------------- ------------- ------------- -------------- ---------------
09/30/94 12.74 0.56 (1.31) (0.75)
- --------------------------- ------------- ------------- -------------- ---------------
09/30/93 11.94 0.61 1.02 1.63
- --------------------------- ------------- ------------- -------------- ---------------
09/30/92 11.53 0.65 0.42 1.07
- --------------------------- ------------- ------------- -------------- ---------------
Class B
12/31/97 (b) 11.97 0.23 (a) 0.34 (a) 0.57
- --------------------------- ------------- ------------- -------------- ---------------
10/01/96-06/30/97 11.89 0.36 0.09 0.45
- --------------------------- ------------- ------------- -------------- ---------------
09/30/96 11.84 0.53 0.00 0.53
- --------------------------- ------------- ------------- -------------- ---------------
05/30/95-09/30/95 11.90 0.16 (0.07) 0.09
- --------------------------- ------------- ------------- -------------- ---------------
Class C
12/31/97 (b) 11.97 0.23 (a) 0.34 (a) 0.57
- --------------------------- ------------- ------------- -------------- ---------------
10/01/96-06/30/97 11.86 0.36 0.11 0.47
- --------------------------- ------------- ------------- -------------- ---------------
09/30/96 11.82 0.52 0.00 0.52
- --------------------------- ------------- ------------- -------------- ---------------
09/30/95 11.21 0.48 0.62 1.10
- --------------------------- ------------- ------------- -------------- ---------------
09/30/94 12.73 0.47 (1.30) (0.83)
- --------------------------- ------------- ------------- -------------- ---------------
09/30/93 11.94 0.52 1.01 1.53
- --------------------------- ------------- ------------- -------------- ---------------
09/30/92 11.53 0.58 0.41 0.99
- --------------------------- ------------- ------------- -------------- ---------------
<CAPTION>
Dividends Dividends in Distributions Distributions
From Net Excess of Net From Net in Excess of
Selected Per Share Data Investment Investment Realized Net Real
for the Period Ended: Income Income Capital Gains Capital Gains
------------- ------------- -------------- ---------------
<S> <C> <C> <C> <C>
Class C
12/31/97 (b) 0.00 0.00 (1.17) 0.00
- --------------------------- ------------- ------------- -------------- ---------------
10/01/96-06/30/97 0.00 0.00 (0.26) 0.00
- --------------------------- ------------- ------------- -------------- ---------------
09/30/96 0.00 0.00 (0.35) 0.00
- --------------------------- ------------- ------------- -------------- ---------------
12/22/94-09/30/95 0.00 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
Precious Metals Fund
Class A
12/31/97 (b) $ 0.00 $ 0.00 $ 0.00 $ 0.00
- --------------------------- ------------- ------------- -------------- ---------------
10/01/96-06/30/97 0.00 0.00 0.00 (0.17)
- --------------------------- ------------- ------------- -------------- ---------------
09/30/96 0.00 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
09/30/95 0.00 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
09/30/94 0.00 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
09/30/93 0.00 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
09/30/92 0.00 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
Class B
12/31/97 (b) 0.00 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
10/01/96-06/30/97 0.00 0.00 0.00 (0.17)
- --------------------------- ------------- ------------- -------------- ---------------
09/30/96 0.00 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
06/15/95-09/30/95 0.00 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
Class C
12/31/97 (b) 0.00 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
10/01/96-06/30/97 0.00 0.00 0.00 (0.17)
- --------------------------- ------------- ------------- -------------- ---------------
09/30/96 0.00 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
09/30/95 0.00 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
09/30/94 0.00 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
09/30/93 0.00 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
09/30/92 0.00 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
Balanced Fund
Class A
12/31/97 (b) $ (0.18) $ 0.00 $ (1.09) $ 0.00
- --------------------------- ------------- ------------- -------------- ---------------
01/20/97-06/30/97 (0.16) 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
Class B
12/31/97 (b) (0.16) 0.00 (1.09) 0.00
- --------------------------- ------------- ------------- -------------- ---------------
01/20/97-06/30/97 (0.15) 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
Class C
12/31/97 (b) (0.16) 0.00 (1.09) 0.00
- --------------------------- ------------- ------------- -------------- ---------------
01/20/97-06/30/97 (0.14) 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
Tax Exempt Fund
Class A
12/31/97 (b) $ (0.28) $ 0.00 $ 0.00 $ 0.00
- --------------------------- ------------- ------------- -------------- ---------------
10/01/96-06/30/97 (0.43) 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
09/30/96 (0.52) (0.05) 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
09/30/95 (0.58) 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
09/30/94 (0.58) 0.00 (0.20) 0.00
- --------------------------- ------------- ------------- -------------- ---------------
09/30/93 (0.64) 0.00 (0.19) 0.00
- --------------------------- ------------- ------------- -------------- ---------------
09/30/92 (0.66) 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
Class B
12/31/97 (b) (0.23) 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
10/01/96-06/30/97 (0.37) 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
09/30/96 (0.44) (0.04) 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
05/30/95-09/30/95 (0.15) 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
Class C
12/31/97 (b) (0.23) 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
10/01/96-06/30/97 (0.36) 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
09/30/96 (0.44) (0.04) 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
09/30/95 (0.49) 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
09/30/94 (0.49) 0.00 (0.20) 0.00
- --------------------------- ------------- ------------- -------------- ---------------
09/30/93 (0.55) 0.00 (0.19) 0.00
- --------------------------- ------------- ------------- -------------- ---------------
09/30/92 (0.58) 0.00 0.00 0.00
- --------------------------- ------------- ------------- -------------- ---------------
</TABLE>
*Annualized
(a) Per share amounts based upon average number of shares outstanding during
the period.
(b) Unaudited
58 See accompanying notes
<PAGE>
Financial Highlights
A, B, C Classes (Cont.)
<TABLE>
<CAPTION>
Distributions Tax Basis Net Asset
Selected Per Share Data from Return of Total Value End of
for the Period Ended: Equalization Capital Distributions Period Total Return
------------- ------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Class C
12/31/97 (b) 0.00 0.00 (1.17) 17.27 7.60
- ------------------------------- ------------- ------------- ------------- -------------- -------------
10/01/96-06/30/97 0.00 0.00 (0.26) 17.09 1.73
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/96 0.00 0.00 (0.35) 17.04 19.08
- ------------------------------- ------------- ------------- ------------- -------------- -------------
12/22/94-09/30/95 0.00 0.00 0.00 14.65 46.50
- ------------------------------- ------------- ------------- ------------- -------------- -------------
Precious Metals Fund
Class A
12/31/97 (b) $ 0.00 $ 0.00 $ 0.00 $ 5.86 (33.64)%
- ------------------------------- ------------- ------------- ------------- -------------- -------------
10/01/96-06/30/97 0.00 0.00 (0.17) 8.83 (26.05)
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/96 0.00 0.00 0.00 12.12 (1.70)
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/95 0.00 0.00 0.00 12.33 (12.80)
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/94 0.00 0.00 0.00 14.14 37.00
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/93 0.00 0.00 0.00 10.32 36.90
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/92 0.00 0.00 0.00 7.54 0.40
- ------------------------------- ------------- ------------- ------------- -------------- -------------
Class B
12/31/97 (b) 0.00 0.00 0.00 5.56 (33.97)
- ------------------------------- ------------- ------------- ------------- -------------- -------------
10/01/96-06/30/97 0.00 0.00 (0.17) 8.42 (26.40)
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/96 0.00 0.00 0.00 11.62 (2.35)
- ------------------------------- ------------- ------------- ------------- -------------- -------------
06/15/95-09/30/95 0.00 0.00 0.00 11.90 2.50
- ------------------------------- ------------- ------------- ------------- -------------- -------------
Class C
12/31/97 (b) 0.00 0.00 0.00 5.56 (34.05)
- ------------------------------- ------------- ------------- ------------- -------------- -------------
10/01/96-06/30/97 0.00 0.00 (0.17) 8.43 (26.31)
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/96 0.00 0.00 0.00 11.62 (2.35)
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/95 0.00 0.00 0.00 11.90 (13.50)
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/94 0.00 0.00 0.00 13.75 36.00
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/93 0.00 0.00 0.00 10.11 35.90
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/92 0.00 0.00 0.00 7.44 (0.30)
- ------------------------------- ------------- ------------- ------------- -------------- -------------
Balanced Fund
Class A
12/31/97 (b) $ 0.00 $ 0.00 $ (1.27) $ 11.26 9.91%
- ------------------------------- ------------- ------------- ------------- -------------- -------------
01/20/97-06/30/97 0.00 0.00 (0.16) 11.40 7.42
- ------------------------------- ------------- ------------- ------------- -------------- -------------
Class B
12/31/97 (b) 0.00 0.00 (1.25) 11.23 9.51
- ------------------------------- ------------- ------------- ------------- -------------- -------------
01/20/97-06/30/97 0.00 0.00 (0.15) 11.39 7.15
- ------------------------------- ------------- ------------- ------------- -------------- -------------
Class C
12/31/97 (b) 0.00 0.00 (1.25) 11.24 9.62
- ------------------------------- ------------- ------------- ------------- -------------- -------------
01/20/97-06/30/97 0.00 0.00 (0.14) 11.39 7.12
- ------------------------------- ------------- ------------- ------------- -------------- -------------
Tax Exempt Fund
Class A
12/31/97 (b) $ 0.00 $ 0.00 $ (0.28) $ 12.31 5.19%
- ------------------------------- ------------- ------------- ------------- -------------- -------------
10/01/96-06/30/97 0.00 0.00 (0.43) 11.97 4.65
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/96 0.00 0.00 (0.57) 11.87 5.22
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/95 0.00 0.00 (0.58) 11.83 11.00
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/94 0.00 0.00 (0.78) 11.21 (6.10)
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/93 0.00 0.00 (0.83) 12.74 14.20
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/92 0.00 0.00 (0.66) 11.94 9.50
- ------------------------------- ------------- ------------- ------------- -------------- -------------
Class B
12/31/97 (b) 0.00 0.00 (0.23) 12.31 4.79
- ------------------------------- ------------- ------------- ------------- -------------- -------------
10/01/96-06/30/97 0.00 0.00 (0.37) 11.97 3.79
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/96 0.00 0.00 (0.48) 11.89 4.54
- ------------------------------- ------------- ------------- ------------- -------------- -------------
05/30/95-09/30/95 0.00 0.00 (0.15) 11.84 0.80
- ------------------------------- ------------- ------------- ------------- -------------- -------------
Class C
12/31/97 (b) 0.00 0.00 (0.23) 12.31 4.79
- ------------------------------- ------------- ------------- ------------- -------------- -------------
10/01/96-06/30/97 0.00 0.00 (0.36) 11.97 4.07
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/96 0.00 0.00 (0.48) 11.86 4.46
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/95 0.00 0.00 (0.49) 11.82 10.10
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/94 0.00 0.00 (0.69) 11.21 (6.70)
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/93 0.00 0.00 (0.74) 12.73 13.30
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/92 0.00 0.00 (0.58) 11.94 8.80
- ------------------------------- ------------- ------------- ------------- -------------- -------------
<CAPTION>
Ratio of Net
Ratio of Investment
Net Assets Expenses to Income(Loss) Average
End of Average Net to Average Portfolio Commission
Period (000s) Assets Net Assets Turnover Rate Rate
------------- ------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Class C
12/31/97 (b) 167,037 2.06* (1.70)* 62 0.05
- ------------------------------- ------------- ------------- ------------- -------------- -------------
10/01/96-06/30/97 162,889 2.03* (1.43)* 80 0.05
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/96 137,752 2.06 (1.36) 123 0.06
- ------------------------------- ------------- ------------- ------------- -------------- -------------
12/22/94-09/30/95 63,952 2.20* (1.40)* 86
- ------------------------------- ------------- ------------- ------------- --------------
Precious Metals Fund
Class A
12/31/97 (b) $ 3,526 1.37%* 0.46%* 18% $ 0.02
- ------------------------------- ------------- ------------- ------------- -------------- -------------
10/01/96-06/30/97 4,016 1.37* 0.33* 46 0.03
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/96 6,245 1.32 0.19 35 0.02
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/95 7,670 1.40 0.60 9
- ------------------------------- ------------- ------------- ------------- --------------
09/30/94 11,229 1.30 0.60 11
- ------------------------------- ------------- ------------- ------------- --------------
09/30/93 3,425 1.40 0.60 10
- ------------------------------- ------------- ------------- ------------- --------------
09/30/92 668 1.90 (0.10) 30
- ------------------------------- ------------- ------------- ------------- --------------
Class B
12/31/97 (b) 3,417 2.12* (0.17)* 18 0.02
- ------------------------------- ------------- ------------- ------------- -------------- -------------
10/01/96-06/30/97 4,248 2.13* (0.33)* 46 0.03
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/96 2,218 2.07 (0.56) 35 0.02
- ------------------------------- ------------- ------------- ------------- -------------- -------------
06/15/95-09/30/95 251 2.20* (0.20)* 9
- ------------------------------- ------------- ------------- ------------- --------------
Class C
12/31/97 (b) 13,677 2.12* (0.10)* 18 0.02
- ------------------------------- ------------- ------------- ------------- -------------- -------------
10/01/96-06/30/97 25,113 2.15* (0.41)* 46 0.03
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/96 37,609 2.07 (0.56) 35 0.02
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/95 42,341 2.20 (0.20) 9
- ------------------------------- ------------- ------------- ------------- --------------
09/30/94 62,825 2.10 (0.20) 11
- ------------------------------- ------------- ------------- ------------- --------------
09/30/93 23,884 2.20 (0.20) 10
- ------------------------------- ------------- ------------- ------------- --------------
09/30/92 6,633 2.60 (0.80) 30
- ------------------------------- ------------- ------------- ------------- --------------
Balanced Fund
Class A
12/31/97 (b) $ 6,065 1.11%* 2.62%* 85% $ 0.06
- ------------------------------- ------------- ------------- ------------- -------------- -------------
01/20/97-06/30/97 366 1.15* 3.01* 199 0.06
- ------------------------------- ------------- ------------- ------------- -------------- -------------
Class B
12/31/97 (b) 3,931 1.85* 1.88* 85 0.06
- ------------------------------- ------------- ------------- ------------- -------------- -------------
01/20/97-06/30/97 1,124 1.90* 2.28* 199 0.06
- ------------------------------- ------------- ------------- ------------- -------------- -------------
Class C
12/31/97 (b) 4,146 1.85* 1.87* 85 0.06
- ------------------------------- ------------- ------------- ------------- -------------- -------------
01/20/97-06/30/97 921 1.90* 2.26* 199 0.06
- ------------------------------- ------------- ------------- ------------- -------------- -------------
Tax Exempt Fund
Class A
12/31/97 (b) $5,916 0.96%* 4.46%* 48% N/A
- ------------------------------- ------------- ------------- ------------- -------------- -------------
10/01/96-06/30/97 5,503 1.09* 4.76* 70 N/A
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/96 5,864 1.07 5.12 49 N/A
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/95 2,701 1.10 5.00 35
- ------------------------------- ------------- ------------- ------------- --------------
09/30/94 2,726 1.10 4.70 63
- ------------------------------- ------------- ------------- ------------- --------------
09/30/93 2,852 1.10 5.00 56
- ------------------------------- ------------- ------------- ------------- --------------
09/30/92 2,295 1.10 5.60 107
- ------------------------------- ------------- ------------- ------------- --------------
Class B
12/31/97 (b) 3,026 1.71* 3.71* 48 N/A
- ------------------------------- ------------- ------------- ------------- -------------- -------------
10/01/96-06/30/97 2,542 1.82* 4.02* 70 N/A
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/96 2,258 1.82 4.37 49 N/A
- ------------------------------- ------------- ------------- ------------- -------------- -------------
05/30/95-09/30/95 288 1.90* 4.00* 35
- ------------------------------- ------------- ------------- ------------- --------------
Class C
12/31/97 (b) 38,747 1.71* 3.73* 48 N/A
- ------------------------------- ------------- ------------- ------------- -------------- -------------
10/01/96-06/30/97 41,464 1.83* 4.01* 70 N/A
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/96 47,082 1.82 4.37 49 N/A
- ------------------------------- ------------- ------------- ------------- -------------- -------------
09/30/95 54,224 1.80 4.30 35
- ------------------------------- ------------- ------------- ------------- --------------
09/30/94 68,214 1.80 4.00 63
- ------------------------------- ------------- ------------- ------------- --------------
09/30/93 81,475 1.80 4.20 56
- ------------------------------- ------------- ------------- ------------- --------------
09/30/92 52,113 1.80 4.90 107
- ------------------------------- ------------- ------------- ------------- --------------
</TABLE>
*Annualized
(a) Per share amounts based upon average number of shares outstanding during
the period.
(b) Unaudited
See accompanying notes 59
<PAGE>
Financial Highlights
Institutional and Administrative Classes
<TABLE>
<CAPTION>
Net Asset Net Realized/
Value Net Unrealized Total Income
Selected Per Share Data Beginning Investment Gain (Loss) on From Investment
for the Period Ended: of Period Income (Loss) Investments Operations
--------- ------------- -------------- ---------------
<S> <C> <C> <C> <C>
Equity Income Fund
Institutional Class
12/31/97 (b) $ 15.41 $ 0.23(a) $ 1.93(a) $ 2.16
- ------------------------ --------- ------------ -------------- ---------------
06/30/97 14.36 0.40 3.17 3.57
- ------------------------ --------- ------------ -------------- ---------------
11/01/95-06/30/96 13.09 0.78 1.31 2.09
- ------------------------ --------- ------------ -------------- ---------------
10/31/95 11.75 0.46 1.67 2.13
- ------------------------ --------- ------------ -------------- ---------------
10/31/94 11.95 0.42 (0.16) 0.26
- ------------------------ --------- ------------ -------------- ---------------
10/31/93 10.92 0.40 1.40 1.80
- ------------------------ --------- ------------ -------------- ---------------
10/31/92 10.77 0.45 0.93 1.38
Administrative Class
12/31/97 (b) 15.40 0.21(a) 1.93(a) 2.14
- ------------------------ --------- ------------ -------------- ---------------
06/30/97 14.35 0.27 3.26 3.53
- ------------------------ --------- ------------ -------------- ---------------
11/01/95-06/30/96 13.13 0.75 1.31 2.06
- ------------------------ --------- ------------ -------------- ---------------
11/30/94-10/31/95 11.12 0.39 2.35 2.74
- ------------------------ --------- ------------ -------------- ---------------
Renaissance Fund
Institutional Class
12/30/97-12/31/97 (b) $ 16.73 $ 0.00 $ 0.14 $ 0.14
- ------------------------ --------- ------------ -------------- ---------------
Value Fund
Institutional Class
12/31/97 (b) $ 14.81 $ 0.12(a) $ 1.38(a) $ 1.50
- ------------------------ --------- ------------ -------------- ---------------
06/30/97 12.46 1.05 2.11 3.16
- ------------------------ --------- ------------ -------------- ---------------
11/01/95-06/30/96 12.53 0.25 1.62 1.87
- ------------------------ --------- ------------ -------------- ---------------
10/31/95 11.55 0.30 2.18 2.48
- ------------------------ --------- ------------ -------------- ---------------
10/31/94 11.92 0.30 (0.28) 0.02
- ------------------------ --------- ------------ -------------- ---------------
10/31/93 10.05 0.28 2.36 2.64
- ------------------------ --------- ------------ -------------- ---------------
12/30/91-10/31/92 10.00 0.24 0.23 0.47
- ------------------------ --------- ------------ -------------- ---------------
Administrative Class
08/21/97-12/31/97 (b) 15.66 0.07(a) 0.58(a) 0.65
- ------------------------ --------- ------------ -------------- ---------------
Capital Appreciation Fund
Institutional Class
12/31/97 (b) $ 21.19 $ 0.07(a) $ 3.37(a) $ 3.44
- ------------------------ --------- ------------ -------------- ---------------
06/30/97 18.10 0.24 5.08 5.32
- ------------------------ --------- ------------ -------------- ---------------
11/01/95-06/30/96 16.94 0.35 1.99 2.34
- ------------------------ --------- ------------ -------------- ---------------
10/31/95 13.34 0.18 3.60 3.78
- ------------------------ --------- ------------ -------------- ---------------
10/31/94 13.50 0.14 (0.12) 0.02
- ------------------------ --------- ------------ -------------- ---------------
10/31/93 11.27 0.11 2.73 2.84
- ------------------------ --------- ------------ -------------- ---------------
10/31/92 11.02 0.14 1.05 1.19
- ------------------------ --------- ------------ -------------- ---------------
Administrative Class
12/31/97 (b) 21.16 0.04(a) 3.37(a) 3.41
- ------------------------ --------- ------------ -------------- ---------------
07/31/96-06/30/97 17.19 0.16 6.03 6.19
- ------------------------ --------- ------------ -------------- ---------------
Mid Cap Growth Fund
Institutional Class
12/31/97 (b) $ 20.28 $ 0.05(a) $ 3.58(a) $ 3.63
- ------------------------ --------- ------------ -------------- ---------------
06/30/97 19.44 (0.07) 5.25 5.18
- ------------------------ --------- ------------ -------------- ---------------
11/01/95-06/30/96 18.16 0.32 1.53 1.85
- ------------------------ --------- ------------ -------------- ---------------
10/31/95 13.97 0.07 4.19 4.26
- ------------------------ --------- ------------ -------------- ---------------
10/31/94 13.97 0.06 0.01 0.07
- ------------------------ --------- ------------ -------------- ---------------
10/31/93 11.29 0.07 2.70 2.77
- ------------------------ --------- ------------ -------------- ---------------
10/31/92 10.28 0.10 1.03 1.13
- ------------------------ --------- ------------ -------------- ---------------
Administrative Class
12/31/97 (b) 20.24 0.03(a) 3.57(a) 3.60
- ------------------------ --------- ------------ -------------- ---------------
06/30/97 19.44 (0.13) 5.25 5.12
- ------------------------ --------- ------------ -------------- ---------------
11/01/95-06/30/96 18.17 0.28 1.53 1.81
- ------------------------ --------- ------------ -------------- ---------------
11/30/94-10/31/95 13.31 0.03 4.85 4.88
- ------------------------ --------- ------------ -------------- ---------------
<CAPTION>
Dividends Dividends in Distributions Distributions
From Net Excess of Net From Net in Exces of
Selected Per Share Data Investment Investment Realized Net Real
for the Period Ended: Income Income Capital Gains Capital Gains
---------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
Equity Income Fund
Institutional Class
12/31/97 (b) $ (0.25) $ 0.00 $ (2.09) $ 0.00
- ------------------------- ---------- ------------ ------------- -------------
06/30/97 (0.55) 0.00 (1.97) 0.00
- ------------------------- ---------- ------------ ------------- -------------
11/01/95-06/30/96 (0.34) 0.00 (0.48) 0.00
- ------------------------- ---------- ------------ ------------- -------------
10/31/95 (0.46) 0.00 (0.33) 0.00
- ------------------------- ---------- ------------ ------------- -------------
10/31/94 (0.42) 0.00 (0.04) 0.00
- ------------------------- ---------- ------------ ------------- -------------
10/31/93 (0.40) 0.00 (0.37) 0.00
- ------------------------- ---------- ------------ ------------- -------------
10/31/92 (0.43) 0.00 (0.57) 0.00
- ------------------------- ---------- ------------ ------------- -------------
Administrative Class
12/31/97 (b) (0.23) 0.00 (2.09) 0.00
- ------------------------- ---------- ------------ ------------- -------------
06/30/97 (0.51) 0.00 (1.97) 0.00
- ------------------------- ---------- ------------ ------------- -------------
11/01/95-06/30/96 (0.36) 0.00 (0.48) 0.00
- ------------------------- ---------- ------------ ------------- -------------
11/30/94-10/31/95 (0.40) 0.00 (0.33) 0.00
- ------------------------- ---------- ------------ ------------- -------------
Renaissance Fund
Institutional Class
12/30/97-12/31/97 (b) $ 0.00 $ 0.00 $ 0.00 $ 0.00
- ------------------------- ---------- ------------ ------------- -------------
Value Fund
Institutional Class
12/31/97 (b) $ (0.13) $ 0.00 $ (1.63) $ 0.00
- ------------------------- ---------- ------------ ------------- -------------
06/30/97 (0.31) 0.00 (0.50) 0.00
- ------------------------- ---------- ------------ ------------- -------------
11/01/95-06/30/96 (0.17) 0.00 (1.77) 0.00
- ------------------------- ---------- ------------ ------------- -------------
10/31/95 (0.30) 0.00 (1.20) 0.00
- ------------------------- ---------- ------------ ------------- -------------
10/31/94 (0.29) 0.00 (0.10) 0.00
- ------------------------- ---------- ------------ ------------- -------------
10/31/93 (0.28) 0.00 (0.49) 0.00
- ------------------------- ---------- ------------ ------------- -------------
12/30/91-10/31/92 (0.24) 0.00 (0.18) 0.00
- ------------------------- ---------- ------------ ------------- -------------
Administrative Class
08/21/97-12/31/97 (b) (0.13) 0.00 (1.63) 0.00
- ------------------------- ---------- ------------ ------------- -------------
Capital Appreciation Fund
Institutional Class
12/31/97 (b) $ (0.12) $ 0.00 $ (1.68) $ 0.00
- ------------------------- ---------- ------------ ------------- -------------
06/30/97 (0.10) 0.00 (2.13) 0.00
- ------------------------- ---------- ------------ ------------- -------------
11/01/95-06/30/96 (0.15) 0.00 (1.03) 0.00
- ------------------------- ---------- ------------ ------------- -------------
10/31/95 (0.18) 0.00 0.00 0.00
- ------------------------- ---------- ------------ ------------- -------------
10/31/94 (0.14) 0.00 (0.04) 0.00
- ------------------------- ---------- ------------ ------------- -------------
10/31/93 (0.11) 0.00 (0.50) 0.00
- ------------------------- ---------- ------------ ------------- -------------
10/31/92 (0.14) 0.00 (0.72) 0.00
- ------------------------- ---------- ------------ ------------- -------------
Administrative Class
12/31/97 (b) (0.14) 0.00 (1.68) 0.00
- ------------------------- ---------- ------------ ------------- -------------
07/31/96-06/30/97 (0.09) 0.00 (2.13) 0.00
- ------------------------- ---------- ------------ ------------- -------------
Mid Cap Growth Fund
Institutional Class
12/31/97 (b) $ (0.08) $ 0.00 $ (1.33) $ 0.00
- ------------------------- ---------- ------------ ------------- -------------
06/30/97 (0.05) 0.00 (4.29) 0.00
- ------------------------- ---------- ------------ ------------- -------------
11/01/95-06/30/96 (0.14) 0.00 (0.43) 0.00
- ------------------------- ---------- ------------ ------------- -------------
10/31/95 (0.07) 0.00 0.00 0.00
- ------------------------- ---------- ------------ ------------- -------------
10/31/94 (0.06) 0.00 (0.01) 0.00
- ------------------------- ---------- ------------ ------------- -------------
10/31/93 (0.07) 0.00 (0.02) 0.00
- ------------------------- ---------- ------------ ------------- -------------
10/31/92 (0.10) 0.00 0.00 0.00
- ------------------------- ---------- ------------ ------------- -------------
Administrative Class
12/31/97 (b) (0.08) 0.00 (1.33) 0.00
- ------------------------- ---------- ------------ ------------- -------------
06/30/97 (0.03) 0.00 (4.29) 0.00
- ------------------------- ---------- ------------ ------------- -------------
11/01/95-06/30/96 (0.11) 0.00 (0.43) 0.00
- ------------------------- ---------- ------------ ------------- -------------
11/30/94-10/31/95 (0.02) 0.00 0.00 0.00
- ------------------------- ---------- ------------ ------------- -------------
</TABLE>
* Annualized
(a) Per share amounts based upon average number of shares outstanding during
the period.
(b) Unaudited
60 See accompanying notes
<PAGE>
Financial Highlights
Institutional and Administrative Classes
<TABLE>
<CAPTION>
Distributions Tax Basis Net Asset
Selected Per Share Data from Return of Total Value End of
for the Period Ended: Equalization Capital Distributions Period Total Return
------------ --------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C>
Equity Income Fund
Institutional Class
12/31/97 (b) $ 0.00 $ 0.00 $ (2.34) $ 15.23 14.13%
- ------------------------------- ------------ --------- ------------- ------------ --------------
06/30/97 0.00 0.00 (2.52) 15.41 27.67
- ------------------------------- ------------ --------- ------------- ------------ --------------
11/01/95-06/30/96 0.00 0.00 (0.82) 14.36 16.35
- ------------------------------- ------------ --------- ------------- ------------ --------------
10/31/95 0.00 0.00 (0.79) 13.09 19.36
- ------------------------------- ------------ --------- ------------- ------------ --------------
10/31/94 0.00 0.00 (0.46) 11.75 2.25
- ------------------------------- ------------ --------- ------------- ------------ --------------
10/31/93 0.00 0.00 (0.77) 11.95 16.65
- ------------------------------- ------------ --------- ------------- ------------ --------------
10/31/92 (0.23) 0.00 (1.23) 10.92 12.89
- ------------------------------- ------------ --------- ------------- ------------ --------------
Administrative Class
12/31/97 (b) 0.00 0.00 (2.32) 15.22 14.01
- ------------------------------- ------------ --------- ------------- ------------ --------------
06/30/97 0.00 0.00 (2.48) 15.40 27.40
- ------------------------------- ------------ --------- ------------- ------------ --------------
11/01/95-06/30/96 0.00 0.00 (0.84) 14.35 16.08
- ------------------------------- ------------ --------- ------------- ------------ --------------
11/30/94-10/31/95 0.00 0.00 (0.73) 13.13 25.69
- ------------------------------- ------------ --------- ------------- ------------ --------------
Renaissance Fund
Institutional Class
12/30/97-12/31/97 (b) $ 0.00 $ 0.00 $ 0.00 $ 16.87 0.83%
- ------------------------------- ------------ --------- ------------- ------------ --------------
Value Fund
Institutional Class
12/31/97 (b) $ 0.00 $ 0.00 $ (1.76) $ 14.55 10.17%
- ------------------------------- ------------ --------- ------------- ------------ --------------
06/30/97 0.00 0.00 (0.81) 14.81 26.38
- ------------------------------- ------------ --------- ------------- ------------ --------------
11/01/95-06/30/96 0.00 0.00 (1.94) 12.46 16.24
- ------------------------------- ------------ --------- ------------- ------------ --------------
10/31/95 0.00 0.00 (1.50) 12.53 24.98
- ------------------------------- ------------ --------- ------------- ------------ --------------
10/31/94 0.00 0.00 (0.39) 11.55 0.15
- ------------------------------- ------------ --------- ------------- ------------ --------------
10/31/93 0.00 0.00 (0.77) 11.92 26.35
- ------------------------------- ------------ --------- ------------- ------------ --------------
12/30/91-10/31/92 0.00 0.00 (0.42) 10.05 4.68
- ------------------------------- ------------ --------- ------------- ------------ --------------
Administrative Class
08/21/97-12/31/97 (b) 0.00 0.00 (1.76) 14.55 4.19
- ------------------------------- ------------ --------- ------------- ------------ --------------
Capital Appreciation Fund
Institutional Class
12/31/97 (b) $ 0.00 $ 0.00 $ (1.80) $ 22.83 16.17%
- ------------------------------- ------------ --------- ------------- ------------ --------------
06/30/97 0.00 0.00 (2.23) 21.19 31.52
- ------------------------------- ------------ --------- ------------- ------------ --------------
11/01/95-06/30/96 0.00 0.00 (1.18) 18.10 14.65
- ------------------------------- ------------ --------- ------------- ------------ --------------
10/31/95 0.00 0.00 (0.18) 16.94 28.47
- ------------------------------- ------------ --------- ------------- ------------ --------------
10/31/94 0.00 0.00 (0.18) 13.34 0.15
- ------------------------------- ------------ --------- ------------- ------------ --------------
10/31/93 0.00 0.00 (0.61) 13.50 25.30
- ------------------------------- ------------ --------- ------------- ------------ --------------
10/31/92 (0.08) 0.00 (0.94) 11.27 10.75
- ------------------------------- ------------ --------- ------------- ------------ --------------
Administrative Class
12/31/97 (b) 0.00 0.00 (1.82) 22.75 16.02
- ------------------------------- ------------ --------- ------------- ------------ --------------
07/31/96-06/30/97 0.00 0.00 (2.22) 21.16 38.26
- ------------------------------- ------------ --------- ------------- ------------ --------------
Mid Cap Growth Fund
Institutional Class
12/31/97 (b) $ 0.00 $ 0.00 $ (1.41) $ 22.50 17.83%
- ------------------------------- ------------ --------- ------------- ------------ --------------
06/30/97 0.00 0.00 (4.34) 20.28 30.58
- ------------------------------- ------------ --------- ------------- ------------ --------------
11/01/95-06/30/96 0.00 0.00 (0.57) 19.44 10.37
- ------------------------------- ------------ --------- ------------- ------------ --------------
10/31/95 0.00 0.00 (0.07) 18.16 30.54
- ------------------------------- ------------ --------- ------------- ------------ --------------
10/31/94 0.00 0.00 (0.07) 13.97 0.58
- ------------------------------- ------------ --------- ------------- ------------ --------------
10/31/93 0.00 0.00 (0.09) 13.97 24.57
- ------------------------------- ------------ --------- ------------- ------------ --------------
10/31/92 (0.02) 0.00 (0.12) 11.29 10.91
- ------------------------------- ------------ --------- ------------- ------------ --------------
Administrative Class
12/31/97 (b) 0.00 0.00 (1.41) 22.43 17.72
- ------------------------------- ------------ --------- ------------- ------------ --------------
06/30/97 0.00 0.00 (4.32) 20.24 30.23
- ------------------------------- ------------ --------- ------------- ------------ --------------
11/01/95-06/30/96 0.00 0.00 (0.54) 19.44 10.17
- ------------------------------- ------------ --------- ------------- ------------ --------------
11/30/94-10/31/95 0.00 0.00 (0.02) 18.17 36.64
- ------------------------------- ------------ --------- ------------- ------------ --------------
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses to Income(Loss)
Selected Per Share Data Net Assets End Average Net to Average Portfolio Average
for the Period Ended: of Period (000s) Assets Net Assets Turnover Rate Commission Rate
---------------- ----------- ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C>
Equity Income Fund ---------------- ----------- ------------ ------------- ---------------
Institutional Class
12/31/97 (b) $ 133,405 0.71%* 2.82%* 17% $ 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
06/30/97 121,138 0.72 3.03 45 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
11/01/95-06/30/96 116,714 0.70* 3.41* 52 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
10/31/95 118,015 0.70 3.83 46 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
10/31/94 92,365 0.70 3.77 36
- ----------------------- ---------------- ----------- ------------ -------------
10/31/93 67,854 0.70 3.55 39
- ----------------------- ---------------- ----------- ------------ -------------
10/31/92 30,506 0.70 3.83 47
- ----------------------- ---------------- ----------- ------------ -------------
Administrative Class
12/31/97 (b) 9,877 0.96* 2.57* 17 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
06/30/97 8,145 0.97 2.79 45 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
11/01/95-06/30/96 6,097 0.95* 3.19* 52 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
11/30/94-10/31/95 140 0.95* 3.43* 43 N/A
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
Renaissance Fund
Institutional Class
12/30/97-12/31/97 (b) $ 586 0.86%* 0.04%* 105% $ 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
Value Fund
Institutional Class
12/31/97 (b) $ 77,926 0.71%* 1.57%* 33% $ 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
06/30/97 74,613 0.73 2.02 71 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
11/01/95-06/30/96 52,727 0.70* 2.40* 29 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
10/31/95 14,443 0.70 2.50 71 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
10/31/94 15,442 0.70 2.34 44
- ----------------------- ---------------- ----------- ------------ -------------
10/31/93 22,930 0.70 2.43 28
- ----------------------- ---------------- ----------- ------------ -------------
12/30/91-10/31/92 18,083 0.70* 2.57* 73
- ----------------------- ---------------- ----------- ------------ -------------
Administrative Class
08/21/97-12/31/97 (b) 4,245 0.95* 1.31* 33 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
Capital Appreciation Fund
Institutional Class
12/31/97 (b) $ 656,315 0.71%* 0.58%* 25% $ 0.05
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
06/30/97 536,187 0.71 1.02 87 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
11/01/95-06/30/96 348,728 0.70* 1.33* 73 0.04
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
10/31/95 236,220 0.70 1.22 83 0.05
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
10/31/94 165,441 0.70 1.17 77
- ----------------------- ---------------- ----------- ------------ -------------
10/31/93 84,990 0.70 0.94 81
- ----------------------- ---------------- ----------- ------------ -------------
10/31/92 36,334 0.70 1.13 134
- ----------------------- ---------------- ----------- ------------ -------------
Administrative Class
12/31/97 (b) 30,734 0.95* 0.37* 25 0.05
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
07/31/96-06/30/97 3,115 0.96* 0.66* 87 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
Mid Cap Growth Fund
Institutional Class
12/31/97 (b) $392,946 0.71%* 0.46%* 29% $ 0.05
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
06/30/97 291,374 0.71 0.53 82 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
11/01/95-06/30/96 231,011 0.70* 1.11* 79 0.04
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
10/31/95 189,320 0.70 0.43 78 0.04
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
10/31/94 121,791 0.70 0.45 61
- ----------------------- ---------------- ----------- ------------ -------------
10/31/93 67,625 0.70 0.56 98
- ----------------------- ---------------- ----------- ------------ -------------
10/31/92 21,213 0.70 0.87 66
- ----------------------- ---------------- ----------- ------------ -------------
Administrative Class
12/31/97 (b) 10,577 0.95* 0.25* 29 0.05
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
06/30/97 2,066 0.96 0.28 82 0.06
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
11/01/95-06/30/96 1,071 0.95* 0.89* 79 0.04
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
11/30/94-10/31/95 892 0.94* 0.23* 72 N/A
- ----------------------- ---------------- ----------- ------------ ------------- ---------------
</TABLE>
* Annualized
(a) Per share amounts based upon average number of shares outstanding during
the period.
(b) Unaudited
See accompanying notes 61
<PAGE>
Financial Highlights
Institutional and Administrative Classes (Cont.)
<TABLE>
<CAPTION>
Net Asset Net Realized/
Value Net Unrealized Total Income
Selected Per Share Data Beginning Investment Gain (Loss) on From Investment
for the Period Ended: of Period Income (Loss) Investments Operations
--------- ------------- -------------- ---------------
<S> <C> <C> <C> <C>
Small Cap Value Fund
Institutional Class
12/31/97 (b) $ 15.78 $ 0.16(a) $ 2.60(a) $ 2.76
- ---------------------------- --------- ------------ -------------- ---------------
06/30/97 14.20 0.46 3.63 4.09
- ---------------------------- --------- ------------ -------------- ---------------
11/01/95-06/30/96 13.10 0.56 1.49 2.05
- ---------------------------- --------- ------------ -------------- ---------------
10/31/95 12.07 0.28 1.92 2.20
- ---------------------------- --------- ------------ -------------- ---------------
10/31/94 12.81 0.29 (0.65) (0.36)
- ---------------------------- --------- ------------ -------------- ---------------
10/31/93 10.98 0.24 2.33 2.57
- ---------------------------- --------- ------------ -------------- ---------------
10/31/92 10.09 0.22 1.17 1.39
- ---------------------------- --------- ------------ -------------- ---------------
Administrative Class
12/31/97 (b) 15.76 0.14(a) 2.59(a) 2.73
- ---------------------------- --------- ------------ -------------- ---------------
06/30/97 14.20 0.38 3.68 4.06
- ---------------------------- --------- ------------ -------------- ---------------
11/01/95-06/30/96 13.16 0.54 1.43 1.97
- ---------------------------- --------- ------------ -------------- ---------------
International Developed Fund
Institutional Class
12/31/97 (b) $ 13.12 $ 0.03(a) $ (0.96)(a) $ (0.93)
- ---------------------------- --------- ------------ -------------- ---------------
06/30/97 12.54 0.10(a) 1.09(a) 1.19
- ---------------------------- --------- ------------ -------------- ---------------
11/01/95-06/30/96 11.74 0.72 0.72 1.44
- ---------------------------- --------- ------------ -------------- ---------------
10/31/95 11.86 0.10 0.30 0.40
- ---------------------------- --------- ------------ -------------- ---------------
10/31/94 10.69 0.09 1.15 1.24
- ---------------------------- --------- ------------ -------------- ---------------
06/08/93-10/31/93 10.00 0.05 0.69 0.74
- ---------------------------- --------- ------------ -------------- ---------------
Administrative Class
12/31/97 (b) 13.05 0.02(a) (0.95)(a) (0.93)
- ---------------------------- --------- ------------ -------------- ---------------
06/30/97 12.51 0.06(a) 1.09(a) 1.15
- ---------------------------- --------- ------------ -------------- ---------------
11/01/95-06/30/96 11.73 0.69(a) 0.72(a) 1.41
- ---------------------------- --------- ------------ -------------- ---------------
11/30/94-10/31/95 11.21 0.02 1.01 1.03
- ---------------------------- --------- ------------ -------------- ---------------
Emerging Markets Fund
Institutional Class
12/31/97 (b) $ 13.96 $ 0.00(a) $ (2.25)(a) $ (2.25)
- ---------------------------- --------- ------------ -------------- ---------------
06/30/97 12.66 0.06(a) 1.30(a) 1.36
- ---------------------------- --------- ------------ -------------- ---------------
11/01/95-06/30/96 11.27 0.03 1.40 1.43
- ---------------------------- --------- ------------ -------------- ---------------
10/31/95 16.53 0.07 (4.55) (4.48)
- ---------------------------- --------- ------------ -------------- ---------------
10/31/94 12.27 (0.01) 4.45 4.44
- ---------------------------- --------- ------------ -------------- ---------------
06/01/93-10/31/93 10.00 0.03 2.52 2.55
- ---------------------------- --------- ------------ -------------- ---------------
Administrative Class
12/31/97 (b) 13.95 (0.01)(a) (2.26)(a) (2.27)
- ---------------------------- --------- ------------ -------------- ---------------
06/30/97 12.63 0.00(a) 1.32(a) 1.32
- ---------------------------- --------- ------------ -------------- ---------------
11/01/95-06/30/96 11.24 0.02(a) 1.40(a) 1.42
- ---------------------------- --------- ------------ -------------- ---------------
10/31/95 16.95 0.00 (4.95) (4.95)
- ---------------------------- --------- ------------ -------------- ---------------
Balanced Fund
Institutional Class
12/31/97 (b) $ 11.42 $ 0.18(a) $ 0.99(a) $ 1.17
- ---------------------------- --------- ------------ -------------- ---------------
06/30/97 11.64 0.89 1.21 2.10
- ---------------------------- --------- ------------ -------------- ---------------
11/01/95-06/30/96 11.89 0.27 0.76 1.03
- ---------------------------- --------- ------------ -------------- ---------------
10/31/95 10.35 0.44 1.54 1.98
- ---------------------------- --------- ------------ -------------- ---------------
10/31/94 10.84 0.34 (0.34) 0.00
- ---------------------------- --------- ------------ -------------- ---------------
10/31/93 10.42 0.35 0.68 1.03
- ---------------------------- --------- ------------ -------------- ---------------
06/25/92-10/31/92 10.00 0.12 0.52 0.64
- ---------------------------- --------- ------------ -------------- ---------------
<CAPTION>
Dividends Dividends in Distributions Distributions
From Net Excess of Net From Net in Exces of
Selected Per Share Data Investment Investment Realized Net Real
for the Period Ended: Income Income Capital Gains Capital Gains
<S> <C> <C> <C> <C>
Small Cap Value Fund
Institutional Class
12/31/97 (b) $ (0.13) $ 0.00 $ (0.76) $ 0.00
- ---------------------------- ---------- ------------ ------------- -------------
06/30/97 (0.13) 0.00 (2.38) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
11/01/95-06/30/96 (0.21) 0.00 (0.74) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
10/31/95 (0.28) 0.00 (0.89) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
10/31/94 (0.29) 0.00 (0.09) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
10/31/93 (0.24) 0.00 (0.50) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
10/31/92 (0.22) 0.00 (0.24) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
Administrative Class
12/31/97 (b) (0.11) 0.00 (0.76) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
06/30/97 (0.12) 0.00 (2.38) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
11/01/95-06/30/96 (0.19) 0.00 (0.74) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
International Developed Fund
Institutional Class
12/31/97 (b) $ (0.11) $ 0.00 $ (0.58) $ 0.00
- ---------------------------- ---------- ------------ ------------- -------------
06/30/97 0.00 0.00 (0.61) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
11/01/95-06/30/96 (0.07) (0.36) (0.21) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
10/31/95 (0.09) 0.00 (0.43) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
10/31/94 (0.03) 0.00 (0.04) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
06/08/93-10/31/93 (0.04) 0.00 (0.01) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
Administrative Class
12/31/97 (b) (0.03) 0.00 (0.58) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
06/30/97 0.00 0.00 (0.61) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
11/01/95-06/30/96 (0.07) (0.35) (0.21) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
11/30/94-10/31/95 (0.08) 0.00 (0.43) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
Emerging Markets Fund
Institutional Class
12/31/97 (b) $ 0.00 $ 0.00 $ 0.00 $ 0.00
- ---------------------------- ---------- ------------ ------------- -------------
06/30/97 (0.06) 0.00 0.00 0.00
- ---------------------------- ---------- ------------ ------------- -------------
11/01/95-06/30/96 (0.04) 0.00 0.00 0.00
- ---------------------------- ---------- ------------ ------------- -------------
10/31/95 (0.06) 0.00 (0.72) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
10/31/94 0.00 0.00 (0.18) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
06/01/93-10/31/93 (0.02) 0.00 (0.26) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
Administrative Class
12/31/97 (b) 0.00 0.00 0.00 0.00
- ---------------------------- ---------- ------------ ------------- -------------
06/30/97 0.00 0.00 0.00 0.00
- ---------------------------- ---------- ------------ ------------- -------------
11/01/95-06/30/96 (0.03) 0.00 0.00 0.00
- ---------------------------- ---------- ------------ ------------- -------------
10/31/95 (0.05) 0.00 (0.71) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
Balanced Fund
Institutional Class
12/31/97 (b) $ (0.20) $ 0.00 $ (1.09) $ 0.00
- ---------------------------- ---------- ------------ ------------- -------------
06/30/97 (0.36) 0.00 (1.96) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
11/01/95-06/30/96 (0.27) 0.00 (1.01) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
10/31/95 (0.44) 0.00 0.00 0.00
- ---------------------------- ---------- ------------ ------------- -------------
10/31/94 (0.34) 0.00 (0.15) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
10/31/93 (0.35) 0.00 (0.26) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
06/25/92-10/31/92 (0.12) 0.00 (0.10) 0.00
- ---------------------------- ---------- ------------ ------------- -------------
</TABLE>
*Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
(b) Unaudited
62 See accompanying notes
<PAGE>
Financial Highlights
Institutional and Administrative Classes (Cont.)
<TABLE>
<CAPTION>
Distributions Tax Basis Net Asset
Selected Per Share Data from Return of Total Value End of
for the Period Ended: Equalization Capital Distributions Period Total Return
------------ --------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Small Cap Value Fund
Institutional Class
12/31/97 (b) $ 0.00 $ 0.00 $ (0.89) $ 17.65 17.57%
- ------------------------------- ------------ --------- ------------- ------------ ------------
06/30/97 0.00 0.00 (2.51) 15.78 31.99
- ------------------------------- ------------ --------- ------------- ------------ ------------
11/01/95-06/30/96 0.00 0.00 (0.95) 14.20 16.35
- ------------------------------- ------------ --------- ------------- ------------ ------------
10/31/95 0.00 0.00 (1.17) 13.10 19.88
- ------------------------------- ------------ --------- ------------- ------------ ------------
10/31/94 0.00 0.00 (0.38) 12.07 (2.89)
- ------------------------------- ------------ --------- ------------- ------------ ------------
10/31/93 0.00 0.00 (0.74) 12.81 23.60
- ------------------------------- ------------ --------- ------------- ------------ ------------
10/31/92 (0.04) 0.00 (0.50) 10.98 13.75
- ------------------------------- ------------ --------- ------------- ------------ ------------
Administrative Class
12/31/97 (b) 0.00 0.00 (0.87) 17.62 17.35
- ------------------------------- ------------ --------- ------------- ------------ ------------
06/30/97 0.00 0.00 (2.50) 15.76 31.70
- ------------------------------- ------------ --------- ------------- ------------ ------------
11/01/95-06/30/96 0.00 0.00 (0.93) 14.20 15.64
- ------------------------------- ------------ --------- ------------- ------------ ------------
International Developed Fund
Institutional Class
12/31/97 (b) $ 0.00 $ 0.00 $ (0.69) $ 11.50 (7.09)%
- ------------------------------- ------------ --------- ------------- ------------ ------------
06/30/97 0.00 0.00 (0.61) 13.12 10.07
- ------------------------------- ------------ --------- ------------- ------------ ------------
11/01/95-06/30/96 0.00 0.00 (0.64) 12.54 12.54
- ------------------------------- ------------ --------- ------------- ------------ ------------
10/31/95 0.00 0.00 (0.52) 11.74 3.83
- ------------------------------- ------------ --------- ------------- ------------ ------------
10/31/94 0.00 0.00 (0.07) 11.86 11.68
- ------------------------------- ------------ --------- ------------- ------------ ------------
06/08/93-10/31/93 0.00 0.00 (0.05) 10.69 7.39
- ------------------------------- ------------ --------- ------------- ------------ ------------
Administrative Class
12/31/97 (b) 0.00 0.00 (0.61) 11.51 (7.17)
- ------------------------------- ------------ --------- ------------- ------------ ------------
06/30/97 0.00 0.00 (0.61) 13.05 9.77
- ------------------------------- ------------ --------- ------------- ------------ ------------
11/01/95-06/30/96 0.00 0.00 (0.63) 12.51 12.33
- ------------------------------- ------------ --------- ------------- ------------ ------------
11/30/94-10/31/95 0.00 0.00 (0.51) 11.73 9.61
- ------------------------------- ------------ --------- ------------- ------------ ------------
Emerging Markets Fund
Institutional Class
12/31/97 (b) $ 0.00 $ 0.00 $ 0.00 $ 11.71 (16.12)%
- ------------------------------- ------------ --------- ------------- ------------ ------------
06/30/97 0.00 0.00 (0.06) 13.96 10.85
- ------------------------------- ------------ --------- ------------- ------------ ------------
11/01/95-06/30/96 0.00 0.00 (0.04) 12.66 12.70
- ------------------------------- ------------ --------- ------------- ------------ ------------
10/31/95 0.00 0.00 (0.78) 11.27 (27.70)
- ------------------------------- ------------ --------- ------------- ------------ ------------
10/31/94 0.00 0.00 (0.18) 16.53 36.31
- ------------------------------- ------------ --------- ------------- ------------ ------------
06/01/93-10/31/93 0.00 0.00 (0.28) 12.27 25.55
- ------------------------------- ------------ --------- ------------- ------------ ------------
Administrative Class
12/31/97 (b) 0.00 0.00 0.00 11.68 (16.27)
- ------------------------------- ------------ --------- ------------- ------------ ------------
06/30/97 0.00 0.00 0.00 13.95 10.45
- ------------------------------- ------------ --------- ------------- ------------ ------------
11/01/95-06/30/96 0.00 0.00 (0.03) 12.63 12.70
- ------------------------------- ------------ --------- ------------- ------------ ------------
10/31/95 0.00 0.00 (0.76) 11.24 (27.96)
- ------------------------------- ------------ --------- ------------- ------------ ------------
Balanced Fund
Institutional Class
12/31/97 (b) $ 0.00 $ 0.00 $ (1.29) $ 11.30 10.22%
- ------------------------------- ------------ --------- ------------- ------------ ------------
06/30/97 0.00 0.00 (2.32) 11.42 20.37
- ------------------------------- ------------ --------- ------------- ------------ ------------
11/01/95-06/30/96 0.00 0.00 (1.28) 11.64 9.07
- ------------------------------- ------------ --------- ------------- ------------ ------------
10/31/95 0.00 0.00 (0.44) 11.89 19.47
- ------------------------------- ------------ --------- ------------- ------------ ------------
10/31/94 0.00 0.00 (0.49) 10.35 0.08
- ------------------------------- ------------ --------- ------------- ------------ ------------
10/31/93 0.00 0.00 (0.61) 10.84 10.06
- ------------------------------- ------------ --------- ------------- ------------ ------------
06/25/92-10/31/92 0.00 0.00 (0.22) 10.42 6.40
- ------------------------------- ------------ --------- ------------- ------------ ------------
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses to Income(Loss)
Net Assets End Average Net to Average Portfolio Average
of Period (000s) Assets Net Assets Turnover Rate Commission Rate
---------------- ----------- ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C>
Small Cap Value Fund
Institutional Class
12/31/97 (b) $ 46,841 0.86%* 1.79%* 18% $ 0.06
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
06/30/97 34,639 0.90 1.92 48 0.06
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
11/01/95-06/30/96 29,017 0.85* 2.12* 35 0.04
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
10/31/95 35,093 0.85 2.25 50 0.04
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
10/31/94 31,236 0.85 2.23 48
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
10/31/93 46,523 0.85 2.05 42
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
10/31/92 18,261 0.85 2.16 27
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
Administrative Class
12/31/97 (b) 9,096 1.11* 1.54* 18 0.06
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
06/30/97 5,916 1.16 1.68 48 0.06
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
11/01/95-06/30/96 4,433 1.10* 1.86* 35 0.04
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
International Developed Fund
Institutional Class
12/31/97 (b) $ 86,977 1.11%* 0.55%* 37% $ 0.03
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
06/30/97 94,044 1.13 0.85 77 0.03
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
11/01/95-06/30/96 70,207 1.10* 0.81* 60 0.02
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
10/31/95 63,607 1.10 1.10 63 0.03
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
10/31/94 22,569 1.10 1.12 89
- ---------------------------- ---------------- ----------- ------------ -------------
06/08/93-10/31/93 8,299 1.10* 0.91* 20
- ---------------------------- ---------------- ----------- ------------ -------------
Administrative Class
12/31/97 (b) 1,997 1.36* 0.28* 37 0.03
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
06/30/97 2,302 1.38 0.52 77 0.03
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
11/01/95-06/30/96 5,624 1.35* 1.04* 60 0.02
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
11/30/94-10/31/95 675 1.34* 0.50* 58 N/A
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
Emerging Markets Fund
Institutional Class
12/31/97 (b) $ 37,412 1.38%* 0.02%* 34% $ 0.01
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
06/30/97 52,703 1.45 0.45 74 0.00
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
11/01/95-06/30/96 80,545 1.35* 0.84* 74 0.01
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
10/31/95 73,539 1.35 0.57 118 0.03
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
10/31/94 79,620 1.35 (0.06) 79
- ---------------------------- ---------------- ----------- ------------ -------------
06/01/93-10/31/93 14,625 1.34* 0.64* 37
- ---------------------------- ---------------- ----------- ------------ -------------
Administrative Class
12/31/97 (b) 750 1.63* (0.10)* 34 0.01
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
06/30/97 117 1.69 0.02 74 0.00
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
11/01/95-06/30/96 368 1.61* 0.18* 74 0.01
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
10/31/95 830 1.62 0.02 118 N/A
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
Balanced Fund
Institutional Class
12/31/97 (b) $ 52,357 0.71%* 3.00%* 85% $ 0.06
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
06/30/97 61,518 0.74 3.33 199 0.06
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
11/01/95-06/30/96 82,562 0.70* 3.46* 140 0.05
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
10/31/95 72,638 0.70 3.73 43 0.04
- ---------------------------- ---------------- ----------- ------------ ------------- ---------------
10/31/94 130,694 0.70 3.25 47
- ---------------------------- ---------------- ----------- ------------ -------------
10/31/93 126,410 0.70 3.10 19
- ---------------------------- ---------------- ----------- ------------ -------------
06/25/92-10/31/92 99,198 0.70* 3.36* 39
- ---------------------------- ---------------- ----------- ------------ -------------
</TABLE>
*Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
(b) Unaudited
See accompanying notes 63
<PAGE>
Statement of Assets and Liabilities
December 31, 1997 (Unaudited)
<TABLE>
<CAPTION>
Capital
Equity Renaissance Appreciation
Amounts in thousands, except per share amounts Income Fund Fund Value Fund Fund
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Assets:
Investments, at value $ 171,986 $ 475,046 $ 206,000 $ 762,587
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Cash and foreign currency 1 132 1 0
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Receivable for investments and foreign currency sold 0 6,165 16,046 1,483
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Receivable for Fund shares sold 692 3,203 714 2,065
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Interest and dividends receivable 607 681 451 553
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Variation margin receivable 0 0 0 0
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
173,286 485,227 223,212 766,688
====================================================== =============== =============== =============== ===============
Liabilities:
Payable for investments and foreign currency purchased $ 0 $ 10,424 $ 14,778 $ 13,011
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Written options outstanding 0 0 0 0
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Payable for Fund shares redeemed 1,012 2,624 175 264
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Dividends payable 9 300 45 13
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Accrued investment advisor's fee 67 237 80 285
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Accrued administrator's fee 41 158 60 166
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Accrued distribution and/or servicing fee 19 367 96 50
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Other liabilities 0 14 13 0
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
1,148 14,124 15,247 13,789
====================================================== =============== =============== =============== ===============
Net Assets $ 172,138 $ 471,103 $ 207,965 $ 752,899
====================================================== =============== =============== =============== ===============
Net Assets Consist of:
Paid in capital $ 134,334 $ 390,763 $ 177,423 $ 557,139
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Undistributed (overdistributed) net investment income 2,045 28,159 6,582 6,647
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Accumulated undistributed net realized gain (loss) 2,323 (18,356) (1,796) 6,915
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Net unrealized appreciation (depreciation) 33,436 70,537 25,756 182,198
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
$ 172,138 $ 471,103 $ 207,965 $ 752,899
====================================================== =============== =============== =============== ===============
Shares Issued and Outstanding:
Class A 625 2,707 1,268 649
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Class B 458 3,164 2,091 567
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Class C 820 21,989 5,302 1,688
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Institutional Classes 9,408 35 5,649 30,103
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Net Asset Value and Redemption Price* Per Share
(Net Assets Per Share Outstanding):
Class A $ 15.19 $ 16.94 $ 14.54 $ 22.77
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Class B 15.15 16.96 14.53 22.63
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Class C 15.16 16.87 14.52 22.65
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Institutional Class 15.23 16.87 14.55 22.83
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Administrative Class 15.22 0 14.55 22.75
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Cost of Investments Owned 138,549 404,509 180,244 580,390
====================================================== =============== =============== =============== ===============
Cost of Foreign Currency Held 0 0 0 0
====================================================== =============== =============== =============== ===============
<CAPTION>
Mid Cap
Amounts in thousands, except per share amounts Growth Fund Growth Fund
--------------- ---------------
<S> <C> <C>
Assets:
Investments, at value $ 1,794,350 $ 601,188
- ------------------------------------------------------ --------------- ---------------
Cash and foreign currency 127 (23)
- ------------------------------------------------------ --------------- ---------------
Receivable for investments and foreign currency sold 13,028 226
- ------------------------------------------------------ --------------- ---------------
Receivable for Fund shares sold 11,303 4,003
- ------------------------------------------------------ --------------- ---------------
Interest and dividends receivable 651 304
- ------------------------------------------------------ --------------- ---------------
Variation margin receivable 0 0
- ------------------------------------------------------ --------------- ---------------
1,819,459 605,698
====================================================== =============== ===============
Liabilities:
Payable for investments and foreign currency purchased $ 33,498 $ 31,672
- ------------------------------------------------------ --------------- ---------------
Written options outstanding 1,792 0
- ------------------------------------------------------ --------------- ---------------
Payable for Fund shares redeemed 3,316 2,702
- ------------------------------------------------------ --------------- ---------------
Dividends payable 843 58
- ------------------------------------------------------ --------------- ---------------
Accrued investment advisor's fee 756 213
- ------------------------------------------------------ --------------- ---------------
Accrued administrator's fee 605 139
- ------------------------------------------------------ --------------- ---------------
Accrued distribution and/or servicing fee 1,415 121
- ------------------------------------------------------ --------------- ---------------
Other liabilities 70 28
- ------------------------------------------------------ --------------- ---------------
42,295 34,933
====================================================== =============== ===============
Net Assets $ 1,777,164 $ 570,765
====================================================== =============== ===============
Net Assets Consist of:
Paid in capital $ 1,411,326 $ 435,081
- ------------------------------------------------------ --------------- ---------------
Undistributed (overdistributed) net investment income 28,365 (536)
- ------------------------------------------------------ --------------- ---------------
Accumulated undistributed net realized gain (loss) (34,683) 6,485
- ------------------------------------------------------ --------------- ---------------
Net unrealized appreciation (depreciation) 372,156 129,735
- ------------------------------------------------------ --------------- ---------------
$ 1,777,164 $ 570,765
====================================================== =============== ===============
Shares Issued and Outstanding:
Class A 6,249 1,071
- ------------------------------------------------------ --------------- ---------------
Class B 2,639 2,237
- ------------------------------------------------------ --------------- ---------------
Class C 65,048 4,177
- ------------------------------------------------------ --------------- ---------------
Institutional Classes 0 17,936
- ------------------------------------------------------ --------------- ---------------
Net Asset Value and Redemption Price* Per Share
(Net Assets Per Share Outstanding):
Class A $ 25.60 $ 22.45
- ------------------------------------------------------ --------------- ---------------
Class B 23.90 22.33
- ------------------------------------------------------ --------------- ---------------
Class C 23.89 22.33
- ------------------------------------------------------ --------------- ---------------
Institutional Class 0 22.50
- ------------------------------------------------------ --------------- ---------------
Administrative Class 0 22.43
- ------------------------------------------------------ --------------- ---------------
Cost of Investments Owned 1,421,532 471,453
====================================================== =============== ===============
Cost of Foreign Currency Held 0 0
====================================================== =============== ===============
</TABLE>
* With respect to the Retail Classes, the redemption price varies by the
length of time the shares are held.
64 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Small Cap
Amounts in thousands, except per share amounts Target Fund Value Fund
--------------- ------------------
<S> <C> <C>
Assets:
Investments, at value $ 1,185,000 $ 235,687
- ------------------------------------------------------ --------------- ------------------
Cash and foreign currency 289 1
- ------------------------------------------------------ --------------- ------------------
Receivable for investments and foreign currency sold 0 294
- ------------------------------------------------------ --------------- ------------------
Receivable for Fund shares sold 567 4,646
- ------------------------------------------------------ --------------- ------------------
Interest and dividends receivable 206 420
- ------------------------------------------------------ --------------- ------------------
Variation margin receivable 0 0
- ------------------------------------------------------ --------------- ------------------
1,186,062 241,048
====================================================== =============== ==================
Liabilities:
Payable for investments and foreign currency purchased $ 2,985 $ 4,974
- ------------------------------------------------------ --------------- ------------------
Written options outstanding 0 0
- ------------------------------------------------------ --------------- ------------------
Payable for Fund shares redeemed 9,086 193
- ------------------------------------------------------ --------------- ------------------
Dividends payable 630 28
- ------------------------------------------------------ --------------- ------------------
Accrued investment advisor's fee 558 113
- ------------------------------------------------------ --------------- ------------------
Accrued administrator's fee 406 68
- ------------------------------------------------------ --------------- ------------------
Accrued distribution and/or servicing fee 917 125
- ------------------------------------------------------ --------------- ------------------
Other liabilities 119 0
- ------------------------------------------------------ --------------- ------------------
14,701 5,501
====================================================== =============== ==================
Net Assets $ 1,171,361 $ 235,547
====================================================== =============== ==================
Net Assets Consist of:
Paid in capital $ 1,100,335 $ 210,786
- ------------------------------------------------------ --------------- ------------------
Undistributed (overdistributed) net investment income 65,812 1,478
- ------------------------------------------------------ --------------- ------------------
Accumulated undistributed net realized gain (loss) (59,478) 2,483
- ------------------------------------------------------ --------------- ------------------
Net unrealized appreciation (depreciation) 64,692 20,800
- ------------------------------------------------------ --------------- ------------------
$ 1,171,361 $ 235,547
====================================================== =============== ==================
Shares Issued and Outstanding:
Class A 11,460 1,827
- ------------------------------------------------------ --------------- ------------------
Class B 5,404 3,463
- ------------------------------------------------------ --------------- ------------------
Class C 72,186 4,967
- ------------------------------------------------------ --------------- ------------------
Institutional Classes 0 3,171
- ------------------------------------------------------ --------------- ------------------
Net Asset Value and Redemption Price* Per Share
(Net Assets Per Share Outstanding):
Class A $ 13.86 $ 17.58
- ------------------------------------------------------ --------------- ------------------
Class B 13.05 17.49
- ------------------------------------------------------ --------------- ------------------
Class C 13.05 17.50
- ------------------------------------------------------ --------------- ------------------
Institutional Class 0 17.65
- ------------------------------------------------------ --------------- ------------------
Administrative Class 0 17.62
- ------------------------------------------------------ --------------- ------------------
Cost of Investments Owned 1,120,308 214,887
====================================================== =============== ==================
Cost of Foreign Currency Held 0 0
====================================================== =============== ==================
<CAPTION>
International
Opportunity Developed International Emerging
Amounts in thousands, except per share amounts Fund Fund Fund Markets Fund
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Assets:
Investments, at value $ 799,774 $ 94,413 $ 154,695 $ 40,449
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Cash and foreign currency 39 1,392 2,945 352
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Receivable for investments and foreign currency sold 0 126 115 104
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Receivable for Fund shares sold 505 113 911 150
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Interest and dividends receivable 0 117 293 57
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Variation margin receivable 0 0 0 0
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
800,318 96,161 158,959 41,112
====================================================== =============== =============== =============== ===============
Liabilities:
Payable for investments and foreign currency purchased $ 13,628 $ 592 $ 1,722 $ 66
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Written options outstanding 1,119 0 0 0
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Payable for Fund shares redeemed 21,511 294 2,536 630
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Dividends payable 484 3 178 3
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Accrued investment advisor's fee 433 50 72 29
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Accrued administrator's fee 267 42 85 17
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Accrued distribution and/or servicing fee 536 5 121 2
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Other liabilities 26 0 0 0
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
38,004 986 4,714 747
====================================================== =============== =============== =============== ===============
Net Assets $ 762,314 $ 95,175 $ 154,245 $ 40,365
====================================================== =============== =============== =============== ===============
Net Assets Consist of:
Paid in capital $ 617,471 $ 93,081 $ 147,501 $ 51,988
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Undistributed (overdistributed) net investment income (6,065) 491 1,500 (76)
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Accumulated undistributed net realized gain (loss) (9,855) (6,160) (14,427) (16,428)
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Net unrealized appreciation (depreciation) 160,763 7,763 19,671 4,881
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
$ 762,314 $ 95,175 $ 154,245 $ 40,365
====================================================== =============== =============== =============== ===============
Shares Issued and Outstanding:
Class A 7,038 43 1,428 20
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Class B 0 184 690 44
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Class C 21,330 316 11,489 126
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Institutional Classes 0 7,734 0 3,259
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Net Asset Value and Redemption Price* Per Share
(Net Assets Per Share Outstanding):
Class A $ 28.48 $ 11.46 $ 11.96 $ 11.67
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Class B 0 11.43 11.27 11.59
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Class C 26.34 11.43 11.26 11.59
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Institutional Class 0 11.50 0 11.71
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Administrative Class 0 11.51 0 11.68
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Cost of Investments Owned 638,645 86,696 134,987 35,568
====================================================== =============== =============== =============== ===============
Cost of Foreign Currency Held 0 1,401 2,924 347
====================================================== =============== =============== =============== ===============
<CAPTION>
Innovation Precious Balanced Tax Exempt
Amounts in thousands, except per share amounts Fund Metals Fund Fund Fund
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Assets:
Investments, at value $ 286,958 $ 23,177 $ 74,937 $ 47,137
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Cash and foreign currency 558 2 2 67
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Receivable for investments and foreign currency sold 0 3,479 3,522 0
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Receivable for Fund shares sold 3,946 1,120 591 28
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Interest and dividends receivable 77 6 224 760
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Variation margin receivable 0 0 27 0
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
291,539 27,784 79,303 47,992
====================================================== =============== =============== =============== ===============
Liabilities:
Payable for investments and foreign currency purchased $ 2,347 $ 0 $ 12,754 $ 0
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Written options outstanding 538 0 0 0
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Payable for Fund shares redeemed 3,361 7,126 0 100
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Dividends payable 143 0 1 132
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Accrued investment advisor's fee 159 12 26 13
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Accrued administrator's fee 98 9 16 17
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Accrued distribution and/or servicing fee 207 17 7 38
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Other liabilities 0 0 0 3
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
6,853 7,164 12,804 303
====================================================== =============== =============== =============== ===============
Net Assets $ 284,686 $ 20,620 $ 66,499 $ 47,689
====================================================== =============== =============== =============== ===============
Net Assets Consist of:
Paid in capital $ 232,014 $ 39,213 $ 55,689 $ 43,673
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Undistributed (overdistributed) net investment income (2,358) (18) 2,770 195
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Accumulated undistributed net realized gain (loss) (1,038) (6,016) (336) 94
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Net unrealized appreciation (depreciation) 56,068 (12,559) 8,376 3,727
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
$ 284,686 $ 20,620 $ 66,499 $ 47,689
====================================================== =============== =============== =============== ===============
Shares Issued and Outstanding:
Class A 3,401 602 538 481
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Class B 3,323 615 350 246
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Class C 9,670 2,460 369 3,148
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Institutional Classes 0 0 4,634 0
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Net Asset Value and Redemption Price* Per Share
(Net Assets Per Share Outstanding):
Class A $ 17.71 $ 5.86 $ 11.26 $ 12.31
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Class B 17.28 5.56 11.23 12.31
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Class C 17.27 5.56 11.24 12.31
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Institutional Class 0 0 11.30 0
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Administrative Class 0 0 0 0
- ------------------------------------------------------ --------------- --------------- --------------- ---------------
Cost of Investments Owned 230,582 35,737 66,629 43,411
====================================================== =============== =============== =============== ===============
Cost of Foreign Currency Held 0 0 0 0
====================================================== =============== =============== =============== ===============
</TABLE>
65 See accompanying notes
<PAGE>
Statement of Operations
For the six months ended December 31, 1997 (Unaudited)
<TABLE>
<CAPTION>
Capital
Equity Renaissance Appreciation
$ in thousands Income Fund Fund Value Fund Fund
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 2,718 $ 3,334 $ 2,168 $ 3,474
- ------------------------------------------------------------------- ------------ ------------ ------------ ------------
Interest 144 840 105 876
- ------------------------------------------------------------------- ------------ ------------ ------------ ------------
Total Income 2,862 4,174 2,273 4,350
=================================================================== ============ ============ ============ ============
Expenses:
Investment advisory fees 363 1,322 448 1,512
- ------------------------------------------------------------------- ------------ ------------ ------------ ------------
Administration fees 216 881 337 871
- ------------------------------------------------------------------- ------------ ------------ ------------ ------------
Distribution fees - Class B 17 174 108 26
- ------------------------------------------------------------------- ------------ ------------ ------------ ------------
Distribution fees - Class C 36 1,329 272 90
- ------------------------------------------------------------------- ------------ ------------ ------------ ------------
Servicing fees - Class A 6 50 22 13
- ------------------------------------------------------------------- ------------ ------------ ------------ ------------
Servicing fees - Class B 6 58 36 9
- ------------------------------------------------------------------- ------------ ------------ ------------ ------------
Servicing fees - Class C 12 443 91 30
- ------------------------------------------------------------------- ------------ ------------ ------------ ------------
Distribution and/or servicing fees - Administrative Class 12 0 2 19
- ------------------------------------------------------------------- ------------ ------------ ------------ ------------
Trustees' fees 8 20 9 30
- ------------------------------------------------------------------- ------------ ------------ ------------ ------------
Miscellaneous 0 1 0 0
- ------------------------------------------------------------------- ------------ ------------ ------------ ------------
Total Expenses 676 4,278 1,325 2,600
- ------------------------------------------------------------------- ------------ ------------ ------------ ------------
Net Investment Income (Loss) 2,186 (104) 948 1,750
=================================================================== ============ ============ ============ ============
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments 9,075 53,037 13,892 34,094
- ------------------------------------------------------------------- ------------ ------------ ------------ ------------
Net realized gain (loss) on futures contracts and written options 0 71 0 0
- ------------------------------------------------------------------- ------------ ------------ ------------ ------------
Net realized gain (loss) on foreign currency transactions 0 0 0 0
- ------------------------------------------------------------------- ------------ ------------ ------------ ------------
Net change in unrealized appreciation (depreciation) on investments 9,446 9,052 3,003 57,536
- ------------------------------------------------------------------- ------------ ------------ ------------ ------------
Net change in unrealized appreciation (depreciation) on futures
contracts and written options 0 0 0 0
- ------------------------------------------------------------------- ------------ ------------ ------------ ------------
Net change in unrealized appreciation (depreciation) on translation
of assets and liabilities denominated in foreign currencies 0 0 0 0
- ------------------------------------------------------------------- ------------ ------------ ------------ ------------
Net Gain (Loss) 18,521 62,160 16,895 91,630
- ------------------------------------------------------------------- ------------ ------------ ------------ ------------
Net Increase (Decrease) in Assets Resulting from Operations $ 20,707 $ 62,056 $ 17,843 $ 93,380
=================================================================== ============ ============ ============ ============
<CAPTION>
Mid Cap
$ in thousands Growth Fund Growth Fund
------------ ------------
<S> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 5,667 $ 2,087
- ------------------------------------------------------------------- ------------ ------------
Interest 2,490 760
- ------------------------------------------------------------------- ------------ ------------
Total Income 8,157 2,847
=================================================================== ============ ============
Expenses:
Investment advisory fees 4,561 1,094
- ------------------------------------------------------------------- ------------ ------------
Administration fees 3,649 704
- ------------------------------------------------------------------- ------------ ------------
Distribution fees - Class B 233 146
- ------------------------------------------------------------------- ------------ ------------
Distribution fees - Class C 6,022 269
- ------------------------------------------------------------------- ------------ ------------
Servicing fees - Class A 195 22
- ------------------------------------------------------------------- ------------ ------------
Servicing fees - Class B 78 49
- ------------------------------------------------------------------- ------------ ------------
Servicing fees - Class C 2,007 90
- ------------------------------------------------------------------- ------------ ------------
Distribution and/or servicing fees - Administrative Class 0 7
- ------------------------------------------------------------------- ------------ ------------
Trustees' fees 89 21
- ------------------------------------------------------------------- ------------ ------------
Miscellaneous 9 0
- ------------------------------------------------------------------- ------------ ------------
Total Expenses 16,843 2,402
- ------------------------------------------------------------------- ------------ ------------
Net Investment Income (Loss) (8,686) 445
=================================================================== ============ ============
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments 115,591 23,995
- ------------------------------------------------------------------- ------------ ------------
Net realized gain (loss) on futures contracts and written options (11,483) 0
- ------------------------------------------------------------------- ------------ ------------
Net realized gain (loss) on foreign currency transactions 0 0
- ------------------------------------------------------------------- ------------ ------------
Net change in unrealized appreciation (depreciation) on investments 82,949 47,693
- ------------------------------------------------------------------- ------------ ------------
Net change in unrealized appreciation (depreciation) on futures
contracts and written options (1,884) 0
- ------------------------------------------------------------------- ------------ ------------
Net change in unrealized appreciation (depreciation) on translation
of assets and liabilities denominated in foreign currencies 0 0
- ------------------------------------------------------------------- ------------ ------------
Net Gain (Loss) 185,173 71,688
- ------------------------------------------------------------------- ------------ ------------
Net Increase (Decrease) in Assets Resulting from Operations $ 176,487 $ 72,133
=================================================================== ============ ============
</TABLE>
66 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
International
Small Cap Opportunity Developed
$ in thousands Target Fund Value Fund Fund Fund
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 2,593 $ 1,779 $ 314 $ 579
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Interest 2,481 314 1,693 225
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Total Income 5,074 2,093 2,007 804
=================================================================== ============= ============= ============= =============
Expenses:
Investment advisory fees 3,460 461 2,813 291
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Administration fees 2,516 269 1,731 246
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Distribution fees - Class B 278 130 0 7
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Distribution fees - Class C 3,825 191 2,404 12
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Servicing fees - Class A 205 23 280 1
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Servicing fees - Class B 93 43 0 2
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Servicing fees - Class C 1,275 64 801 4
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Distribution and/or servicing fees - Administrative Class 0 10 0 2
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Trustees' fees 62 5 43 5
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Miscellaneous 6 0 0 1
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Total Expenses 11,720 1,196 8,072 571
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Net Investment Income (Loss) (6,646) 897 (6,065) 233
=================================================================== ============= ============= ============= =============
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments 174,792 8,316 33,192 (3,205)
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Net realized gain (loss) on futures contracts and written options 0 0 3,147 0
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Net realized gain (loss) on foreign currency transactions 0 0 0 (515)
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Net change in unrealized appreciation (depreciation) on investments (72,279) 10,188 (54) (3,238)
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Net change in unrealized appreciation (depreciation) on futures
contracts and written options 0 0 1,268 0
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Net change in unrealized appreciation (depreciation) on translation
of assets and liabilities denominated in foreign currencies 0 0 0 73
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Net Gain (Loss) 102,513 18,504 37,553 (6,885)
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Net Increase (Decrease) in Assets Resulting from Operations $ 95,867 $ 19,401 $ 31,488 $ (6,652)
=================================================================== ============= ============= ============= =============
<CAPTION>
International Emerging Innovation Precious
$ in thousands Fund Markets Fund Fund Metals Fund
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 785 $ 249 $ 226 $ 229
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Interest 162 96 331 84
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Total Income 947 345 557 313
=================================================================== ============= ============= ============= =============
Expenses:
Investment advisory fees 489 208 994 96
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Administration fees 579 125 612 71
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Distribution fees - Class B 32 2 224 16
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Distribution fees - Class C 572 6 683 81
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Servicing fees - Class A 21 0 80 7
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Servicing fees - Class B 11 1 75 5
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Servicing fees - Class C 191 2 228 27
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Distribution and/or servicing fees - Administrative Class 0 1 0 0
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Trustees' fees 11 3 18 3
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Miscellaneous 4 4 1 8
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Total Expenses 1,910 352 2,915 314
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Net Investment Income (Loss) (963) (7) (2,358) (1)
=================================================================== ============= ============= ============= =============
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments (7,403) (5,951) 14,717 (4,996)
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Net realized gain (loss) on futures contracts and written options 0 0 285 0
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Net realized gain (loss) on foreign currency transactions (671) (130) 0 (8)
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Net change in unrealized appreciation (depreciation) on investments (4,451) (3,036) 9,583 (5,458)
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Net change in unrealized appreciation (depreciation) on futures
contracts and written options 0 0 (308) 0
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Net change in unrealized appreciation (depreciation) on translation
of assets and liabilities denominated in foreign currencies (19) (1) 0 (1)
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Net Gain (Loss) (12,544) (9,118) 24,277 (10,463)
- ------------------------------------------------------------------- ------------- ------------- ------------- -------------
Net Increase (Decrease) in Assets Resulting from Operations $ (13,507) $ (9,125) $ 21,919 $ (10,464)
=================================================================== ============= ============= ============= =============
<CAPTION>
Balanced Tax Exempt
$ in thousands Fund Fund
------------- -------------
<S> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 337 $ 0
- ------------------------------------------------------------------- ------------- -------------
Interest 973 1,334
- ------------------------------------------------------------------- ------------- -------------
Total Income 1,310 1,334
=================================================================== ============= =============
Expenses:
Investment advisory fees 159 74
- ------------------------------------------------------------------- ------------- -------------
Administration fees 94 98
- ------------------------------------------------------------------- ------------- -------------
Distribution fees - Class B 8 11
- ------------------------------------------------------------------- ------------- -------------
Distribution fees - Class C 8 151
- ------------------------------------------------------------------- ------------- -------------
Servicing fees - Class A 4 7
- ------------------------------------------------------------------- ------------- -------------
Servicing fees - Class B 3 4
- ------------------------------------------------------------------- ------------- -------------
Servicing fees - Class C 3 50
- ------------------------------------------------------------------- ------------- -------------
Distribution and/or servicing fees - Administrative Class 0 0
- ------------------------------------------------------------------- ------------- -------------
Trustees' fees 3 3
- ------------------------------------------------------------------- ------------- -------------
Miscellaneous 0 0
- ------------------------------------------------------------------- ------------- -------------
Total Expenses 282 398
- ------------------------------------------------------------------- ------------- -------------
Net Investment Income (Loss) 1,028 936
=================================================================== ============= =============
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments 4,419 630
- ------------------------------------------------------------------- ------------- -------------
Net realized gain (loss) on futures contracts and written options 204 0
- ------------------------------------------------------------------- ------------- -------------
Net realized gain (loss) on foreign currency transactions 0 0
- ------------------------------------------------------------------- ------------- -------------
Net change in unrealized appreciation (depreciation) on investments 779 731
- ------------------------------------------------------------------- ------------- -------------
Net change in unrealized appreciation (depreciation) on futures
contracts and written options 51 0
- ------------------------------------------------------------------- ------------- -------------
Net change in unrealized appreciation (depreciation) on translation
of assets and liabilities denominated in foreign currencies 0 0
- ------------------------------------------------------------------- ------------- -------------
Net Gain (Loss) 5,453 1,361
- ------------------------------------------------------------------- ------------- -------------
Net Increase (Decrease) in Assets Resulting from Operations $ 6,481 $ 2,297
=================================================================== ============= =============
</TABLE>
See accompanying notes 67
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
$ in thousands Equity Income Fund Renaissance Fund
------------------------------------ ------------------------------------
Six Months Ended Year Ended Six Months Ended Nine Months Ended
December 31, 1997 June 30, 1997 December 31, 1997 June 30, 1997
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from:
Operations:
Net investment income (loss) $ 2,186 $ 3,710 $ (104) $ 664
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Net realized gain (loss) 9,075 20,609 53,108 42,917
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Net change in unrealized appreciation (depreciation) 9,446 6,318 9,052 33,883
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Net increase (decrease) resulting from operations 20,707 30,637 62,056 77,464
======================================================= ==================================== ====================================
Distributions to Shareholders:
From net investment income
Class A (104) (15) (170) (221)
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Class B (67) (17) (42) (82)
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Class C (121) (47) (213) (670)
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Institutional Classes (2,229) (4,580) 0 0
- ------------------------------------------------------- ------------------------------------ ------------------------------------
In excess of net investment income
Class A 0 0 0 0
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Class B 0 0 0 0
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Class C 0 0 0 0
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Institutional Classes 0 0 0 0
- ------------------------------------------------------- ------------------------------------ ------------------------------------
From net realized capital gains
Class A (1,062) 0 (7,515) (3,107)
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Class B (745) 0 (8,922) (2,821)
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Class C (1,348) 0 (64,285) (32,865)
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Institutional Classes (17,553) (14,904) 0 0
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Total Distributions (23,229) (19,563) (81,147) (39,766)
======================================================= ==================================== ====================================
Fund Share Transactions:
Receipts for shares sold
Class A 8,812 1,691 36,065 17,402
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Class B 4,042 3,040 14,224 21,111
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Class C 5,996 7,063 84,692 112,880
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Institutional Classes 8,811 16,418 581 0
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Class B 0 0 0 0
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Class C 0 0 0 0
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Issued as reinvestment of distributions
Class A 1,142 13 7,011 200
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Class B 750 15 8,021 73
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Class C 1,390 43 59,199 613
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Institutional Classes 19,470 18,898 0 0
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Cost of shares redeemed
Class A (1,738) (69) (28,958) (7,973)
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Class B (149) (670) (3,242) (3,265)
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Class C (1,253) (899) (71,484) (61,037)
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Institutional Classes (12,837) (39,204) 0 0
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Net increase (decrease) resulting from Fund share
transactions 34,436 6,339 106,109 80,004
- ------------------------------------------------------- ------------------------------------ ------------------------------------
Total Increase (Decrease) in Net Assets 31,914 17,413 87,018 117,702
======================================================= ==================================== ====================================
Net Assets:
Beginning of period 140,224 122,811 384,085 266,383
- ------------------------------------------------------- ------------------------------------ ------------------------------------
End of period * $ 172,138 $ 140,224 $ 471,103 $ 384,085
- ------------------------------------------------------- ------------------------------------ ------------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 2,045 $ 2,380 $ 28,159 $ 28,688
- ------------------------------------------------------- ------------------------------------ ------------------------------------
<CAPTION>
$ in thousands Value Fund
------------------------------------
Six Months Ended Year Ended
December 31, 1997 June 30, 1997
(Unaudited)
<S> <C> <C>
Increase (Decrease) in Net Assets from:
Operations:
Net investment income (loss) $ 948 $ 1,702
- ------------------------------------------------------- ------------------------------------
Net realized gain (loss) 13,892 13,315
- ------------------------------------------------------- ------------------------------------
Net change in unrealized appreciation (depreciation) 3,003 19,593
- ------------------------------------------------------- ------------------------------------
Net increase (decrease) resulting from operations 17,843 34,610
======================================================= ====================================
Distributions to Shareholders:
From net investment income
Class A (120) (105)
- ------------------------------------------------------- ------------------------------------
Class B (104) (99)
- ------------------------------------------------------- ------------------------------------
Class C (260) (247)
- ------------------------------------------------------- ------------------------------------
Institutional Classes (706) (1,517)
- ------------------------------------------------------- ------------------------------------
In excess of net investment income
Class A 0 0
- ------------------------------------------------------- ------------------------------------
Class B 0 0
- ------------------------------------------------------- ------------------------------------
Class C 0 0
- ------------------------------------------------------- ------------------------------------
Institutional Classes 0 0
- ------------------------------------------------------- ------------------------------------
From net realized capital gains
Class A (1,819) 0
- ------------------------------------------------------- ------------------------------------
Class B (3,061) 0
- ------------------------------------------------------- ------------------------------------
Class C (7,703) 0
- ------------------------------------------------------- ------------------------------------
Institutional Classes (8,104) (2,344)
- ------------------------------------------------------- ------------------------------------
Total Distributions (21,877) (4,312)
======================================================= ====================================
Fund Share Transactions:
Receipts for shares sold
Class A 9,229 3,387
- ------------------------------------------------------- ------------------------------------
Class B 4,160 1,609
- ------------------------------------------------------- ------------------------------------
Class C 16,969 16,250
- ------------------------------------------------------- ------------------------------------
Institutional Classes 7,417 17,251
- ------------------------------------------------------- ------------------------------------
Shares issued in reorganization
Class A 0 11,374
- ------------------------------------------------------- ------------------------------------
Class B 0 20,538
- ------------------------------------------------------- ------------------------------------
Class C 0 48,923
- ------------------------------------------------------- ------------------------------------
Issued as reinvestment of distributions
Class A 1,792 95
- ------------------------------------------------------- ------------------------------------
Class B 2,817 86
- ------------------------------------------------------- ------------------------------------
Class C 7,437 225
- ------------------------------------------------------- ------------------------------------
Institutional Classes 8,778 3,854
- ------------------------------------------------------- ------------------------------------
Cost of shares redeemed
Class A (7,839) (1,972)
- ------------------------------------------------------- ------------------------------------
Class B (1,364) (1,562)
- ------------------------------------------------------- ------------------------------------
Class C (9,803) (12,509)
- ------------------------------------------------------- ------------------------------------
Institutional Classes (7,398) (10,770)
- ------------------------------------------------------- ------------------------------------
Net increase (decrease) resulting from Fund share
transactions 32,195 96,779
- ------------------------------------------------------- ------------------------------------
Total Increase (Decrease) in Net Assets 28,161 127,077
======================================================= ====================================
Net Assets:
Beginning of period 179,804 52,727
- ------------------------------------------------------- ------------------------------------
End of period * $ 207,965 $ 179,804
- ------------------------------------------------------- ------------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 6,582 $ 6,824
- ------------------------------------------------------- ------------------------------------
</TABLE>
68 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
$ in thousands Capital Appreciation Fund Growth Fund
------------------------------------ ------------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
December 31, 1997 June 30, 1997 December 31, 1997 June 30, 1997
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from:
Operations:
Net investment income (loss) $ 1,750 $ 4,349 $ (8,686) $ (6,859)
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Net realized gain (loss) 34,094 45,370 104,108 209,267
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Net change in unrealized appreciation (depreciation) 57,536 74,013 81,065 38,690
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Net increase (decrease) resulting from operations 93,380 123,732 176,487 241,098
========================================================= ==================================== ====================================
Distributions to Shareholders:
From net investment income
Class A (56) 0 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class B (40) 0 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class C (81) 0 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Institutional Classes (3,653) (2,210) 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
In excess of net investment income
Class A 0 0 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class B 0 0 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class C 0 0 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Institutional Classes 0 0 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
From net realized capital gains
Class A (881) 0 (22,078) (19,626)
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class B (754) 0 (9,680) (5,682)
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class C (2,428) 0 (241,892) (198,720)
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Institutional Classes (46,282) (44,170) 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Total Distributions (54,175) (46,380) (273,650) (224,028)
========================================================= ==================================== ====================================
Fund Share Transactions:
Receipts for shares sold
Class A 9,353 6,440 102,022 139,954
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class B 9,549 2,819 6,702 22,425
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class C 26,913 13,152 130,114 428,074
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Institutional Classes 144,598 168,885 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class B 0 0 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class C 0 0 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Issued as reinvestment of distributions
Class A 887 20,743 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class B 737 8,980 3
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class C 2,441 226,695 4
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Institutional Classes 39,039 36,688 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Cost of shares redeemed
Class A (2,458) (415) (104,203) (147,335)
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class B (401) (11) (4,304) (5,108)
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class C (4,320) (1,161) (229,756) (376,328)
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Institutional Classes (74,595) (90,526) 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Net increase (decrease) resulting from Fund share
transactions 151,743 135,871 156,993 61,689
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Total Increase (Decrease) in Net Assets 190,948 213,223 59,830 78,759
========================================================= ==================================== ====================================
Net Assets:
Beginning of period 561,951 348,728 1,717,334 1,638,575
- --------------------------------------------------------- ------------------------------------ ------------------------------------
End of period * $ 752,899 $ 561,951 $ 1,777,164 $ 1,717,334
- --------------------------------------------------------- ------------------------------------ ------------------------------------
*Including net undistributed (overdistributed) investment
income of: $ 6,647 $ 8,727 $ 28,365 $ 37,051
- --------------------------------------------------------- ------------------------------------ ------------------------------------
<CAPTION>
$ in thousands Mid Cap Growth Fund Target Fund
------------------------------------ ------------------------------------
Six Months Ended Year Ended Six Months Ended Nine Months
December 31, 1997 June 30, 1997 December 31, 1997 Ended
(Unaudited) (Unaudited) June 30, 1997
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from:
Operations:
Net investment income (loss) $ 445 $ 1,077 $ (6,646) $ (8,571)
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Net realized gain (loss) 23,995 30,855 174,792 188,697
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Net change in unrealized appreciation (depreciation) 47,693 50,902 (72,279) (60,110)
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Net increase (decrease) resulting from operations 72,133 82,834 95,867 120,016
========================================================= ==================================== ====================================
Distributions to Shareholders:
From net investment income
Class A (41) 0 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class B 0 0 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class C 0 0 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Institutional Classes (1,453) (606) 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
In excess of net investment income
Class A 0 0 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class B 0 0 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class C 0 0 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Institutional Classes 0 0 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
From net realized capital gains
Class A (1,205) 0 (35,689) (19,003)
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class B (2,602) 0 (18,642) (6,747)
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class C (4,570) 0 (248,455) (120,762)
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Institutional Classes (21,861) (43,786) 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Total Distributions (31,732) (44,392) (302,786) (146,512)
========================================================= ==================================== ====================================
Fund Share Transactions:
Receipts for shares sold
Class A 26,604 673 542,803 550,283
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class B 20,863 1,840 5,843 27,085
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class C 38,752 8,401 82,571 293,453
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Institutional Classes 102,586 72,315 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Shares issued in reorganization
Class A 0 11,362 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class B 0 22,472 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class C 0 41,588 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Issued as reinvestment of distributions
Class A 1,158 0 32,769 4
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class B 2,327 0 17,255 1
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class C 4,187 0 234,137 1
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Institutional Classes 22,767 43,184 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Cost of shares redeemed
Class A (17,174) (2,743) (547,752) (553,973)
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class B (4,255) (1,818) (6,533) (8,959)
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Class C (8,928) (7,250) (170,350) (274,688)
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Institutional Classes (46,092) (72,979) 0 0
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Net increase (decrease) resulting from Fund share
transactions 142,795 117,045 190,743 33,207
- --------------------------------------------------------- ------------------------------------ ------------------------------------
Total Increase (Decrease) in Net Assets 183,196 155,487 (16,176) 6,711
========================================================= ==================================== ====================================
Net Assets:
Beginning of period 387,569 232,082 1,187,537 1,180,826
- --------------------------------------------------------- ------------------------------------ ------------------------------------
End of period * $ 570,765 $ 387,569 $ 1,171,361 $1,187,537
- --------------------------------------------------------- ------------------------------------ ------------------------------------
*Including net undistributed (overdistributed) investment
income of: $ (536) $ 513 $ 65,812 $ 72,458
- --------------------------------------------------------- ------------------------------------ ------------------------------------
<CAPTION>
$ in thousands Small Cap Value Fund
-------------------------------------
Six Months Ended Year Ended
December 31, 1997 June 30, 1997
(Unaudited)
<S> <C> <C>
Increase (Decrease) in Net Assets from:
Operations:
Net investment income (loss) $ 897 $ 742
- --------------------------------------------------------- ------------------------------------
Net realized gain (loss) 8,316 5,616
- --------------------------------------------------------- ------------------------------------
Net change in unrealized appreciation (depreciation) 10,188 6,732
- --------------------------------------------------------- ------------------------------------
Net increase (decrease) resulting from operations 19,401 13,090
- --------------------------------------------------------- ------------------------------------
Distributions to Shareholders:
From net investment income
Class A (226) 0
- --------------------------------------------------------- ------------------------------------
Class B (310) 0
- --------------------------------------------------------- ------------------------------------
Class C (410) 0
- --------------------------------------------------------- ------------------------------------
Institutional Classes (393) (343)
- --------------------------------------------------------- ------------------------------------
In excess of net investment income
Class A 0 0
- --------------------------------------------------------- ------------------------------------
Class B 0 0
- --------------------------------------------------------- ------------------------------------
Class C 0 0
- --------------------------------------------------------- ------------------------------------
Institutional Classes 0 0
- --------------------------------------------------------- ------------------------------------
From net realized capital gains
Class A (1,098) 0
- --------------------------------------------------------- ------------------------------------
Class B (2,248) 0
- --------------------------------------------------------- ------------------------------------
Class C (2,980) 0
- --------------------------------------------------------- ------------------------------------
Institutional Classes (2,032) (5,390)
- --------------------------------------------------------- ------------------------------------
Total Distributions (9,697) (5,733)
========================================================= ====================================
Fund Share Transactions:
Receipts for shares sold
Class A 27,136 6,136
- --------------------------------------------------------- ------------------------------------
Class B 48,136 10,821
- --------------------------------------------------------- ------------------------------------
Class C 67,153 19,512
- --------------------------------------------------------- ------------------------------------
Institutional Classes 21,363 6,922
- --------------------------------------------------------- ------------------------------------
Shares issued in reorganization
Class A 0 0
- --------------------------------------------------------- ------------------------------------
Class B 0 0
- --------------------------------------------------------- ------------------------------------
Class C 0 0
- --------------------------------------------------------- ------------------------------------
Issued as reinvestment of distributions
Class A 1,246 0
- --------------------------------------------------------- ------------------------------------
Class B 2,393 0
- --------------------------------------------------------- ------------------------------------
Class C 3,224 0
- --------------------------------------------------------- ------------------------------------
Institutional Classes 2,197 5,710
- --------------------------------------------------------- ------------------------------------
Cost of shares redeemed
Class A (3,625) (78)
- --------------------------------------------------------- ------------------------------------
Class B (2,215) (588)
- --------------------------------------------------------- ------------------------------------
Class C (6,740) (535)
- --------------------------------------------------------- ------------------------------------
Institutional Classes (13,257) (9,875)
- --------------------------------------------------------- ------------------------------------
Net increase (decrease) resulting from Fund share
transactions 147,011 38,025
- --------------------------------------------------------- ------------------------------------
Total Increase (Decrease) in Net Assets 156,715 45,382
========================================================= ====================================
Net Assets:
Beginning of period 78,832 33,450
- --------------------------------------------------------- ------------------------------------
End of period * $ 235,547 $ 78,832
- --------------------------------------------------------- ------------------------------------
*Including net undistributed (overdistributed) investment
income of: $ 1,478 $ 1,920
- --------------------------------------------------------- ------------------------------------
</TABLE>
See accompanying notes 69
<PAGE>
Statement of Changes in Net Assets (Cont.)
<TABLE>
<CAPTION>
$ in thousands Opportunity Fund International Developed Fund
------------------------------------- -----------------------------------
Six Months Ended Nine Months Ended Six Months Ended Year Ended
December 31, 1997 June 30, 1997 December 31, 1997 June 30, 1997
(Unaudited) (Unaudited)
Increase (Decrease) in Net Assets from:
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ (6,065) $ (4,857) $ 233 $ 729
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Net realized gain (loss) 36,339 7,066 (3,720) 3,808
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Net change in unrealized appreciation (depreciation) 1,214 (90,676) (3,165) 4,764
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Net increase (decrease) resulting from operations 31,488 (88,467) (6,652) 9,301
======================================================= ======================================= =================================
Distributions to Shareholders:
From net investment income
Class A 0 0 (4) 0
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Class B 0 0 (11) 0
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Class C 0 0 (18) 0
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Institutional Classes 0 0 (838) 0
- ------------------------------------------------------- --------------------------------------- ---------------------------------
In excess of net investment income
Class A 0 0 0 0
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Class B 0 0 0 0
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Class C 0 0 0 0
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Institutional Classes 0 0 0 0
- ------------------------------------------------------- --------------------------------------- ---------------------------------
From net realized capital gains
Class A (13,050) (17,083) (23) 0
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Class B 0 0 (100) 0
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Class C (40,210) (109,891) (169) 0
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Institutional Classes 0 0 (4,281) (4,444)
- ------------------------------------------------------- --------------------------------------- ---------------------------------
In excess of net realized capital gains
Class A 0 0 0 0
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Class B 0 0 0 0
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Class C 0 0 0 0
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Institutional Classes 0 0 0 0
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Total Distributions (53,260) (126,974) (5,444) (4,444)
======================================================= ======================================= =================================
Fund Share Transactions:
Receipts for shares sold
Class A 159,544 225,467 367 477
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Class B 0 0 1,267 1,057
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Class C 285,726 587,295 2,244 2,759
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Institutional Classes 0 0 18,557 45,331
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Class B 0 0 0 0
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Class C 0 0 0 0
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Issued as reinvestment of distributions
Class A 12,054 0 25 0
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Class B 0 0 77 0
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Class C 36,776 0 183 0
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Institutional Classes 0 0 4,340 3,704
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Cost of shares redeemed
Class A (181,247) (114,318) (159) (189)
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Class B 0 0 (93) (15)
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Class C (371,697) (575,183) (912) (433)
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Institutional Classes 0 0 (18,938) (33,066)
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Net increase (decrease) resulting from Fund
share transactions (58,844) 123,261 6,958 19,625
- ------------------------------------------------------- --------------------------------------- ---------------------------------
Total Increase (Decrease) in Net Assets (80,616) (92,180) (5,138) 24,482
======================================================= ======================================= =================================
Net Assets:
Beginning of period 842,930 935,110 100,313 75,831
- ------------------------------------------------------- --------------------------------------- ---------------------------------
End of period * $ 762,314 $ 842,930 $ 95,175 $ 100,313
- ------------------------------------------------------- --------------------------------------- ---------------------------------
*Including net undistributed (overdistributed)
investment income of: $ (6,065) $ 0 $ 491 $ 1,129
- ------------------------------------------------------- --------------------------------------- ---------------------------------
<CAPTION>
$ in thousands International Fund
--------------------------------------
Six Months Ended Nine Months Ended
December 31, 1997 June 30, 1997
(Unaudited)
Increase (Decrease) in Net Assets from:
<S> <C> <C>
Operations:
Net investment income (loss) $ (963) $ (244)
- --------------------------------------------------------- -------------------------------------
Net realized gain (loss) (8,074) 11,683
- --------------------------------------------------------- -------------------------------------
Net change in unrealized appreciation (depreciation) (4,470) 11,771
- --------------------------------------------------------- -------------------------------------
Net increase (decrease) resulting from operations (13,507) 23,210
========================================================= =====================================
Distributions to Shareholders:
From net investment income
Class A 0 0
- --------------------------------------------------------- -------------------------------------
Class B 0 0
- --------------------------------------------------------- -------------------------------------
Class C 0 0
- --------------------------------------------------------- -------------------------------------
Institutional Classes 0 0
- --------------------------------------------------------- -------------------------------------
In excess of net investment income
Class A 0 0
- --------------------------------------------------------- -------------------------------------
Class B 0 0
- --------------------------------------------------------- -------------------------------------
Class C 0 0
- --------------------------------------------------------- -------------------------------------
Institutional Classes 0 0
From net realized capital gains
Class A (1,244) (597)
- --------------------------------------------------------- -------------------------------------
Class B (719) (203)
- --------------------------------------------------------- -------------------------------------
Class C (11,750) (6,105)
- --------------------------------------------------------- -------------------------------------
Institutional Classes 0 0
- --------------------------------------------------------- -------------------------------------
In excess of net realized capital gains
Class A 0 0
- --------------------------------------------------------- -------------------------------------
Class B 0 0
- --------------------------------------------------------- -------------------------------------
Class C 0 0
- --------------------------------------------------------- -------------------------------------
Institutional Classes 0 0
- --------------------------------------------------------- -------------------------------------
Total Distributions (13,713) (6,905)
========================================================= =====================================
Fund Share Transactions:
Receipts for shares sold
Class A 104,455 126,751
- --------------------------------------------------------- -------------------------------------
Class B 3,907 2,790
- --------------------------------------------------------- -------------------------------------
Class C 89,997 87,308
- --------------------------------------------------------- -------------------------------------
Institutional Classes 0 0
- --------------------------------------------------------- -------------------------------------
Shares issued in reorganization
Class A 0 0
- --------------------------------------------------------- -------------------------------------
Class B 0 0
- --------------------------------------------------------- -------------------------------------
Class C 0 0
- --------------------------------------------------------- -------------------------------------
Issued as reinvestment of distributions
Class A 1,179 0
- --------------------------------------------------------- -------------------------------------
Class B 643 0
- --------------------------------------------------------- -------------------------------------
Class C 10,909 0
- --------------------------------------------------------- -------------------------------------
Institutional Classes 0 0
- --------------------------------------------------------- -------------------------------------
Cost of shares redeemed
Class A (105,554) (130,471)
- --------------------------------------------------------- -------------------------------------
Class B (3,989) (702)
- --------------------------------------------------------- -------------------------------------
Class C (115,491) (136,065)
- --------------------------------------------------------- -------------------------------------
Institutional Classes 0 0
- --------------------------------------------------------- -------------------------------------
Net increase (decrease) resulting from Fund
share transactions (13,944) (50,389)
- --------------------------------------------------------- -------------------------------------
Total Increase (Decrease) in Net Assets (41,164) (34,084)
========================================================= =====================================
Net Assets:
Beginning of period 195,409 229,493
- --------------------------------------------------------- -------------------------------------
End of period * $ 154,245 $ 195,409
- --------------------------------------------------------- -------------------------------------
*Including net undistributed (overdistributed) investment
income of: $ 1,500 $ 2,463
- --------------------------------------------------------- -------------------------------------
</TABLE>
70 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
$ in thousands Emerging Markets Fund Innovation Fund
------------------------------------ ------------------------------------
Six Months Ended Year Ended Six Months Ended Nine Months Ended
December 31, 1997 June 30, 1997 December 31, 1997 June 30, 1997
(Unaudited) (Unaudited)
Increase (Decrease) in Net Assets from:
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ (7) $ 282 $ (2,358) $ (2,397)
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Net realized gain (loss) (6,081) 3,040 15,002 3,357
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Net change in unrealized appreciation (depreciation) (3,037) 1,585 9,275 2,593
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Net increase (decrease) resulting from operations (9,125) 4,907 21,919 3,553
======================================================= ===================================== =================================
Distributions to Shareholders:
From net investment income
Class A 0 0 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class B 0 0 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class C 0 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Institutional Classes 0 (310) 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
In excess of net investment income
Class A 0 0 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class B 0 0 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class C 0 0 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Institutional Classes 0 0 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
From net realized capital gains
Class A 0 0 (3,522) (776)
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class B 0 0 (3,639) (599)
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class C 0 0 (10,741) (2,217)
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Institutional Classes 0 0 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
In excess of net realized capital gains
Class A 0 0 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class B 0 0 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class C 0 0 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Institutional Classes 0 0 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Total Distributions 0 (310) (17,902) (3,592)
======================================================= ===================================== =================================
Fund Share Transactions:
Receipts for shares sold
Class A 1,332 214 131,972 86,364
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class B 503 362 8,210 28,789
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class C 684 2,021 34,901 97,510
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Institutional Classes 15,002 13,089 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class B 0 0 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class C 0 0 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Issued as reinvestment of distributions
Class A 0 0 3,237 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class B 0 0 3,439 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class C 0 0 10,260 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Institutional Classes 0 222 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Cost of shares redeemed
Class A (1,271) (10) (133,171) (80,778)
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class B (212) (73) (5,853) (11,137)
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class C (752) (277) (42,902) (71,730)
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Institutional Classes (20,971) (45,883) 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Net increase (decrease) resulting from Fund share transactions (5,685) (30,335) 10,093 49,018
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Total Increase (Decrease) in Net Assets (14,810) (25,738) 14,110 48,979
======================================================= ===================================== =================================
Net Assets:
Beginning of period 55,175 80,913 270,576 221,597
- ------------------------------------------------------- ------------------------------------- ---------------------------------
End of period * $ 40,365 $ 55,175 $ 284,686 $ 270,576
- ------------------------------------------------------- ------------------------------------- ---------------------------------
*Including net undistributed (overdistributed) investment
income of: $ (76) $ (69) $ (2,358) $ 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
</TABLE>
<TABLE>
<CAPTION>
$ in thousands Precious Metals Fund Balanced Fund
------------------------------------- ----------------------------------
Six Months Ended Nine Months Ended Six Months Ended Year Ended
December 31, 1997 June 30, 1997 December 31, 1997 June 30, 1997
(Unaudited) (Unaudited)
Increase (Decrease) in Net Assets from:
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ (1) $ (93) $ 1,028 $ 2,252
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Net realized gain (loss) (5,004) 87 4,623 12,663
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Net change in unrealized appreciation (depreciation) (5,459) (11,122) 830 (3,065)
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Net increase (decrease) resulting from operations (10,464) (11,128) 6,481 11,850
======================================================= ===================================== =================================
Distributions to Shareholders:
From net investment income
Class A 0 0 (57) (4)
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class B 0 0 (42) (10)
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class C 0 0 (43) (8)
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Institutional Classes 0 0 (976) (2,191)
- ------------------------------------------------------- ------------------------------------- ---------------------------------
In excess of net investment income
Class A 0 0 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class B 0 0 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class C 0 0 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Institutional Classes 0 0 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
From net realized capital gains
Class A 0 0 (495) 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class B 0 0 (247) 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class C 0 0 (285) 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Institutional Classes 0 0 (5,071) (10,060)
- ------------------------------------------------------- ------------------------------------- ---------------------------------
In excess of net realized capital gains
Class A 0 (98) 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class B 0 (36) 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class C 0 (575) 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Institutional Classes 0 0 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Total Distributions 0 (709) (7,216) (12,273)
======================================================= ===================================== =================================
Fund Share Transactions:
Receipts for shares sold
Class A 198,880 228,982 5,747 354
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class B 4,387 4,276 2,761 1,113
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class C 52,669 93,686 3,485 969
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Institutional Classes 0 0 2,466 10,422
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class B 0 0 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class C 0 0 0 0
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Issued as reinvestment of distributions
Class A 0 89 534 3
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class B 0 32 252 9
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class C 0 529 315 7
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Institutional Classes 0 0 6,034 12,237
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Cost of shares redeemed
Class A (198,366) (230,377) (127) (4)
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class B (3,650) (1,186) (82) (44)
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Class C (56,213) (96,889) (399) (91)
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Institutional Classes 0 0 (17,681) (43,185)
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Net increase (decrease) resulting from Fund share
transactions (2,293) (858) 3,305 (18,210)
- ------------------------------------------------------- ------------------------------------- ---------------------------------
Total Increase (Decrease) in Net Assets (12,757) (12,695) 2,570 (18,633)
======================================================= ===================================== ================================
Net Assets:
Beginning of period 33,377 46,072 63,929 82,562
- ------------------------------------------------------- ------------------------------------- ---------------------------------
End of period * $ 20,620 $ 33,377 $ 66,499 $ 63,929
- ------------------------------------------------------- ------------------------------------- ---------------------------------
*Including net undistributed (overdistributed) investment
income of: $ (18) $ (17) $ 2,770 $ 2,860
- ------------------------------------------------------- ------------------------------------- ---------------------------------
</TABLE>
<TABLE>
<CAPTION>
$ in thousands Tax Exempt Fund
-------------------------------------
Six Months Ended Nine Months Ended
December 31, 1997 June 30, 1997
(Unaudited)
Increase (Decrease) in Net Assets from:
<S> <C> <C>
Operations:
Net investment income (loss) $ 936 $ 1,584
- ------------------------------------------------------- -------------------------------------
Net realized gain (loss) 630 528
- ------------------------------------------------------- -------------------------------------
Net change in unrealized appreciation (depreciation) 731 (23)
- ------------------------------------------------------- -------------------------------------
Net increase (decrease) resulting from operations 2,297 2,089
======================================================= =====================================
Distributions to Shareholders:
From net investment income
Class A (131) (195)
- ------------------------------------------------------- -------------------------------------
Class B (54) (78)
- ------------------------------------------------------- -------------------------------------
Class C (745) (1,353)
- ------------------------------------------------------- -------------------------------------
Institutional Classes 0 0
- ------------------------------------------------------- -------------------------------------
In excess of net investment income
Class A 0 0
- ------------------------------------------------------- -------------------------------------
Class B 0 0
- ------------------------------------------------------- -------------------------------------
Class C 0 0
- ------------------------------------------------------- -------------------------------------
Institutional Classes 0 0
- ------------------------------------------------------- -------------------------------------
From net realized capital gains
Class A 0 0
- ------------------------------------------------------- -------------------------------------
Class B 0 0
- ------------------------------------------------------- -------------------------------------
Class C 0 0
- ------------------------------------------------------- -------------------------------------
Institutional Classes 0 0
- ------------------------------------------------------- -------------------------------------
In excess of net realized capital gains
Class A 0 0
- ------------------------------------------------------- -------------------------------------
Class B 0 0
- ------------------------------------------------------- -------------------------------------
Class C 0 0
- ------------------------------------------------------- -------------------------------------
Institutional Classes 0 0
- ------------------------------------------------------- -------------------------------------
Total Distributions (930) (1,626)
======================================================= =====================================
Fund Share Transactions:
Receipts for shares sold
Class A 528 2,047
- ------------------------------------------------------- -------------------------------------
Class B 481 551
- ------------------------------------------------------- -------------------------------------
Class C 1,963 2,193
- ------------------------------------------------------- -------------------------------------
Institutional Classes 0 0
- ------------------------------------------------------- -------------------------------------
Shares issued in reorganization
Class A 0 0
- ------------------------------------------------------- -------------------------------------
Class B 0 0
- ------------------------------------------------------- -------------------------------------
Class C 0 0
- ------------------------------------------------------- -------------------------------------
Issued as reinvestment of distributions
Class A 87 98
- ------------------------------------------------------- -------------------------------------
Class B 28 31
- ------------------------------------------------------- -------------------------------------
Class C 539 766
- ------------------------------------------------------- -------------------------------------
Institutional Classes 0 0
- ------------------------------------------------------- -------------------------------------
Cost of shares redeemed
Class A (361) (2,535)
- ------------------------------------------------------- -------------------------------------
Class B (103) (312)
- ------------------------------------------------------- -------------------------------------
Class C (6,349) (8,997)
- ------------------------------------------------------- -------------------------------------
Institutional Classes 0 0
- ------------------------------------------------------- -------------------------------------
Net increase (decrease) resulting from Fund share transactions (3,187) (6,158)
- ------------------------------------------------------- -------------------------------------
Total Increase (Decrease) in Net Assets (1,820) (5,695)
======================================================= =====================================
Net Assets:
Beginning of period 49,509 55,204
- ------------------------------------------------------- -------------------------------------
End of period * $ 47,689 $ 49,509
- ------------------------------------------------------- -------------------------------------
*Including net undistributed (overdistributed) investment
income of: $ 195 $ 189
- ------------------------------------------------------- -------------------------------------
</TABLE>
See accompanying notes 71
<PAGE>
Notes to Financial Statements
December 31, 1997 (Unaudited)
1. Organization
PIMCO Funds: Multi-Manager Series (the "Trust"), formerly known as PIMCO Funds:
Equity Advisors Series, was established as a Massachusetts business trust on
August 24, 1990. The Trust is registered under the Investment Company Act of
1940, as amended, as an open-end management investment company. The Trust
currently consists of twenty two separate investment funds (the "Funds"): the
Equity Income Fund; the Renaissance Fund; the Small Cap Value Fund; the Value
Fund; the Capital Appreciation Fund; the Mid Cap Growth Fund; the Micro Cap
Growth Fund; the Small Cap Growth Fund; the Core Equity Fund; the Mid Cap Equity
Fund; the Innovation Fund; the Enhanced Equity Fund; the Emerging Markets Fund;
the International Fund; the International Developed Fund; the Target Fund; the
Tax Exempt Fund; the Growth Fund; the Opportunity Fund; the Precious Metals
Fund; the Structured Emerging Markets Fund; and the Balanced Fund. The
Structured Emerging Markets Fund had not commenced operations as of December 31,
1997. As used in the financial statements, "Institutional Classes" refers to the
Institutional and Administrative Classes and "Retail Classes" refers to the A,
B, and C Classes of the Trust.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Trust in preparation of its financial statements. These policies
are in conformity with generally accepted accounting principles. The preparation
of financial statements in accordance with generally accepted accounting
principles requires management to make estimates and assumptions that affect the
reported amounts and disclosures in the financial statements. Actual results
could differ from those estimates.
Security Valuation. Portfolio securities and other financial instruments for
which market quotations are readily available are stated at market value. Market
value is determined on the basis of last reported sales prices, or if no sales
are reported, as is the case for most securities traded over-the-counter, the
mean between representative bid and asked quotations obtained from a quotation
reporting system or from established market makers. Foreign currency amounts are
converted to U.S. dollars using foreign exchange quotations received from
independent dealers. Short-term investments having a maturity of 60 days or less
are valued at amortized cost, which approximates market value. Certain fixed
income securities for which daily market quotations are not readily available
may be valued, pursuant to guidelines established by the Board of Trustees, with
reference to fixed income securities whose prices are more readily obtainable.
Securities Transactions and Investment Income. Securities transactions are
recorded as of the trade date. Securities purchased or sold on a when-issued or
delayed-delivery basis may be settled a month or more after the trade date.
Realized gains and losses from securities sold are recorded on the identified
cost basis. Dividend income is recorded on the ex-dividend date, except certain
dividends from foreign securities where the ex-dividend date may have passed,
are recorded as soon as the Fund is informed of the ex-dividend date. Interest
income, adjusted for the accretion of discounts and amortization of premiums, is
recorded on the accrual basis.
Dividends and Distributions to Shareholders. Dividends from net investment
income, if any, are declared daily and paid monthly to shareholders of record by
the Tax Exempt Fund and declared and paid quarterly to shareholders of record by
the Equity Income, Renaissance, Value and Balanced Funds. Dividends from net
investment income, if any, are declared and paid at least annually to
shareholders of record by the other Funds. Net long-term capital gains earned by
a Fund, if any, will be distributed no less frequently than once each year.
Foreign exchange gains or losses on investments and the income generated from
such investments, arising from fluctuations of exchange rates of the non-dollar
denominated investments relative to the U.S. dollar, are reported to
shareholders as income in accordance with the provisions of the Internal Revenue
Code.
Income dividends and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for such
items as wash sales, foreign currency transactions, net operating losses and
capital loss carryforwards. Certain amounts have been reclassified between
undistributed net investment income, accumulated undistributed net realized
gains or losses and paid in capital to more appropriately conform financial
accounting and tax characterizations of dividend distributions.
72
<PAGE>
Multiclass Operations. Each class offered by the Trust has equal rights as to
assets and voting privileges. Income, non-class specific expenses and realized
and unrealized capital gains and losses are allocated to each class of shares
based on the relative net assets of each class, except the Tax Exempt Fund which
allocates income and non-class specific expenses based on the value of settled
shares.
Federal Income Taxes. Each Fund intends to qualify as a regulated investment
company and distribute all of its taxable income and net realized gains, if
applicable, to shareholders. Accordingly, no provision for Federal income taxes
has been made.
Foreign Taxes on Dividends. Dividend income in the statement of operations is
shown net of foreign taxes withheld on dividends from foreign securities.
Foreign taxes withheld were as follows: Equity Income Fund - $6,396; Renaissance
Fund - $22,966; Value Fund - $15,793; Mid Cap Growth Fund - $2,380; Target Fund
- - $1,402; Small Cap Value Fund - $1,166; International Developed Fund - $34,634;
International Fund - $123,045; Emerging Markets Fund - $15,422; Innovation Fund
- - $1,463; Precious Metals Fund - $12,707; and Balanced Fund - $1,657.
Futures and Options. Certain Funds are authorized to enter into futures
contracts and options. A Fund may use futures contracts to manage its exposure
to the stock and bond markets or change in interest rates and currency values,
or for gaining exposure to markets. The primary risks associated with the use of
futures contracts and options are imperfect correlation between the change in
market value of the securities held by a Fund and the prices of futures
contracts and options, the possibility of an illiquid market, and the inability
of the counterparty to meet the terms of the contract. Futures contracts and
purchased options are valued based upon their quoted daily settlement prices.
The premium received for a written option is recorded as an asset with an equal
liability which is marked to market based on the option's quoted daily
settlement price. Fluctuations in the value of such instruments are recorded as
unrealized appreciation (depreciation) until terminated, at which time realized
gains and losses are recognized.
Forward Currency Transactions. Certain Funds are authorized to enter into
forward foreign exchange contracts for the purpose of hedging against foreign
exchange risk arising from the Fund's investment or anticipated investment in
securities denominated in foreign currencies. A Fund may also enter into these
contracts for purposes of increasing exposure to a foreign currency or to shift
exposure to foreign currency fluctuations from one country to another. All
commitments are marked to market daily at the applicable translation rates and
any resulting unrealized gains or losses are recorded. Realized gains or losses
are recorded at the time the forward contract matures or by delivery of the
currency. Risks may arise upon entering these contracts from the potential
inability of counterparties to meet the terms of their contracts and from
unanticipated movements in the value of a foreign currency relative to the U.S.
dollar. The following foreign forward currency contracts were outstanding at
December 31, 1997 (amounts in thousands):
Principal
Amount Unrealized
Covered by Expiration Appreciation
Fund Type Contract Month (Depreciation)
- --------------------------------------------------------------------------------
Emerging
Markets Fund Buy Hungarian Forint 13,419 1/98 $ 0
Sell Mexican Peso 2,760 1/98 (1)
------------
$ (1)
============
International
Developed Fund Buy British Pound 3,700 1/98 $ 47
For assets and liabilities other than investments in securities, net realized
and unrealized gains and losses from foreign currency transactions arise from
changes in currency exchange rates.
73
<PAGE>
Notes to Financial Statements (Cont.)
December 31, 1997 (Unaudited)
Repurchase Agreements. Each Fund may engage in repurchase transactions. Under
the terms of a typical repurchase agreement, the Fund takes possession of an
underlying debt obligation subject to an obligation of the seller to repurchase,
and the Fund to resell, the obligation at an agreed-upon price and time. The
market value of the collateral must be equal at all times to the total amount of
the repurchase obligations, including interest. Generally, in the event of
counterparty default, the Fund has the right to use the collateral to offset
losses incurred.
3. Fees, Expenses, and Related Party Transactions Investment Advisory Fee. PIMCO
Advisors L.P. ("PIMCO Advisors") serves as investment advisor to the Trust,
pursuant to an Investment Advisory Agreement. PIMCO Advisors receives from the
Trust a fee based on an annual percentage of the average daily net assets of
each Fund as follows: 0.30% for the Tax Exempt Fund; 0.50% for the Growth Fund;
0.55% for the Target and International Funds; 0.60% for the Renaissance, Small
Cap Value, International Developed and Precious Metals Funds; 0.65% for the
Opportunity and Innovation Funds; 0.85% for the Emerging Markets Fund; and 0.45%
for all other Funds. Each of the Funds also has a sub-advisor which, under the
supervision of PIMCO Advisors, directs the investments of the Fund's assets.
Other than the sub-advisor of the Precious Metals Fund, all of the sub-advisors
are affiliates of PIMCO Advisors. The advisory fees received by PIMCO Advisors
are paid in all or in part to each of the sub-advisors in accordance with the
portfolio management agreements.
In conjunction with the reorganization of the PIMCO Advisors Funds, the
Renaissance, Growth, Target, Opportunity, International, Innovation, Precious
Metals and Tax Exempt Funds adopted a unified fee structure on January 17, 1997
whereby PIMCO provides services necessary for the operation of the Fund for a
single administration fee.
Administration Fee. PIMCO provides administrative services to the Trust for
which it receives from each Fund a monthly administrative fee based on each
share class's average daily net assets. The Administration Fee for the Retail
Classes is charged at the annual rate of 0.65% for the International Developed,
International and Emerging Markets Funds; 0.45% for the Precious Metals Fund;
and 0.40% for all other Funds. The Administration Fee for the Institutional
Classes is charged at the annual rate of 0.50% for the Emerging Markets and
International Developed and 0.25% for all other Funds.
Distribution and Servicing Fees. PIMCO Funds Distributors LLC ("PFD"), formerly
PIMCO Funds Distribution Company, a wholly-owned subsidiary of PIMCO Advisors
L.P., serves as the distributor of the Trust's shares.
The Trust is permitted to reimburse out of the Administrative Class assets of
each Fund offering Administrative Class Shares, in an amount up to 0.25% on an
annual basis of the average daily net assets of that class, financial
intermediaries that provide services in connection with the distribution of
shares or administration of plans or programs that use Fund shares as their
funding medium. The effective rate paid to PFD was 0.25% during the current
fiscal year.
Pursuant to the Distribution and Servicing Plans adopted by the Retail
Classes of the Trust, the Trust compensates PFD for services provided and
expenses incurred in connection with assistance rendered in the sale of shares
and services rendered to shareholders and for maintenance of shareholder
accounts of the Retail Classes. The Trust paid PFD distribution and servicing
fees at an effective rate as set forth below (calculated as a percentage of
average daily net assets attributable to each class):
Distribution Fee (%) Servicing Fee (%)
- --------------------------------------------------------------------------------
Class A
All Funds - 0.25
Class B
All Funds 0.75 0.25
Class C
All Funds 0.75 0.25
PFD also receives the proceeds of the initial sales charges paid by the
shareholders upon the purchase of Class A shares and the contingent deferred
sales charges paid by the shareholders upon certain redemptions of Class A,
Class B and Class C shares. For the period ended December 31, 1997, the Funds
were informed that PFD received $2,418,787 representing commissions (sales
charges) and contingent deferred sales charges related to the Retail Classes.
74
<PAGE>
Expenses. The Trust is also responsible for the following expenses: (i)
salaries and other compensation of any of the Trust's executive officers and
employees who are not officers, directors, stockholders or employees of PIMCO
Advisors, PIMCO, or its subsidiaries or affiliates; (ii) taxes and governmental
fees; (iii) brokerage fees and commissions and other portfolio transaction
expenses; (iv) the cost of borrowing money, including interest expenses; (v)
fees and expenses of the Trustees who are not "interested persons" of the
Advisor, PIMCO, Portfolio Managers, or the Trust, and any counsel retained
exclusively for their benefit; (vi) extraordinary expenses, including costs of
litigation and indemnification expenses; (vii) expenses such as organizational
expenses, which are capitalized in accordance with generally accepted accounting
principles; and (viii) any expenses allocated or allocable to a specific class
of shares, which include service fees payable with respect to the Administrative
Class shares and may include certain other expenses as permitted by the Trust's
Multiple Class Plan adopted pursuant to Rule 18f-3 under the Investment Company
Act of 1940 and subject to review and approval by the Trustees. The ratio of
expenses to average net assets per share class, as disclosed in Financial
Highlights, may differ from the annual fund operating expenses per share class
as disclosed in the Prospectus for the reasons set forth above.
Each unaffiliated Trustee receives an annual retainer of $45,000, plus
$2,000 for each Board of Trustees meeting attended, plus reimbursement of
related expenses. The chairman of the unaffiliated Trustees and each committee
chair receives annual retainers of $6,000 and $2,000, respectively. Each
unaffiliated committee member receives an annual retainer of $1,000 and a fee of
$500 per meeting. These expenses are allocated to the Funds of the Trust
according to their respective net assets.
4. Purchases and Sales of Securities
Purchases and sales of securities (excluding short-term investments) for the
period ended December 31, 1997 were as follows ($ in thousands):
U.S. Government/Agency All Other
- --------------------------------------------------------------------------------
Purchases Sales Purchases Sales
- --------------------------------------------------------------------------------
Equity Income Fund $ 40,152 $ 26,161
Renaissance Fund 454,294 435,021
Value Fund 79,850 63,469
Capital Appreciation Fund 149,707 193,739
Growth Fund 1,284,393 1,412,982
Mid Cap Growth Fund 235,716 129,801
Target Fund 1,396,883 1,569,736
Small Cap Value Fund 149,461 24,617
Opportunity Fund 293,763 405,402
International Developed Fund 32,086 40,087
International Fund 62,160 89,536
Emerging Markets Fund 15,223 20,656
Innovation Fund 178,142 191,674
Precious Metals Fund 4,939 10,168
Balanced Fund $ 13,868 $ 19,601 45,316 43,579
Tax Exempt Fund 23,170 25,038
75
<PAGE>
Notes to Financial Statements (Cont.)
December 31, 1997 (Unaudited)
5. Transactions in Written Call and Put Options
Transactions in written call and put options were as follows ($ in thousands):
<TABLE>
<CAPTION>
Growth Fund Opportunity Fund Innovation Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Premium Contracts Premium Contracts Premium Contracts
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at 06/30/97 $ 3,218 4,500 $ 938 5,690 $ 0 0
Sales 69,677 17,236 6,740 32,805 832 2,400
Closing Buys (56,915) (7,982) (3,010) (13,780) (358) (900)
Expirations (13,834) (8,252) (1,987) (13,408) (244) (1,000)
Exercised (1,017) (38) (1,928) (8,307) 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at 12/31/97 $ 1,129 5,464 $ 753 3,000 $ 230 500
====================================================================================================================================
</TABLE>
6. Institutional Class Summaries
The following amounts relate to items accumulated in the Statement of Assets and
Liabilities, and the Statement of Changes in Net Assets (amounts in thousands):
<TABLE>
<CAPTION>
Capital
Equity Renaissance Value Appreciation Mid Cap
For the period ended 12/31/97 Income Fund Fund Fund Fund Growth Fund
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Shares Issued and Outstanding
Institutional Class 8,759 35 5,357 28,752 17,464
Administrative Class 649 0 292 1,351 472
------------------------------------------------------------------------
9,408 35 5,649 30,103 17,936
========================================================================
Distributions to Shareholders
From net investment income
Institutional Class $ 2,089 $ 0 $ 686 $ 3,482 $ 1,419
Administrative Class 140 0 20 171 34
------------------------------------------------------------------------
$ 2,229 $ 0 $ 706 $ 3,653 $ 1,453
========================================================================
From net realized capital gains
Institutional Class $16,364 $ 0 $7,693 $44,475 $21,351
Administrative Class 1,189 0 411 1,807 510
------------------------------------------------------------------------
$17,553 $ 0 $8,104 $46,282 $21,861
========================================================================
<CAPTION>
International
Small Cap Developed Emerging Balanced
For the period ended 12/31/97 Value Fund Fund Markets Fund Fund
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares Issued and Outstanding
Institutional Class 2,655 7,560 3,195 4,634
Administrative Class 516 174 64 0
------------------------------------------------------------
3,171 7,734 3,259 4,634
============================================================
Distributions to Shareholders
From net investment income
Institutional Class $ 339 $ 834 $ 0 $ 976
Administrative Class 54 4 0 0
------------------------------------------------------------
$ 393 $ 838 $ 0 $ 976
============================================================
From net realized capital gains
Institutional Class $1,659 $4,187 $ 0 $5,071
Administrative Class 373 94 0 0
------------------------------------------------------------
$2,032 $4,281 $ 0 $5,071
============================================================
</TABLE>
<TABLE>
<CAPTION>
Capital International Emerging
Equity Appreciation Mid Cap Small Cap Developed Markets Balanced
For the period ended 6/30/97 (Audited) Income Fund Value Fund Fund Growth Fund Value Fund Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares Issued and Outstanding
Institutional Class 7,860 5,039 25,299 14,370 2,195 7,171 3,776 5,387
Administrative Class 529 0 147 102 375 176 8 0
---------------------------------------------------------------------------------------------
8,389 5,039 25,446 14,472 2,570 7,347 3,784 5,387
=============================================================================================
Distributions to Shareholders
From net investment income
Institutional Class $ 4,331 $ 1,517 $ 2,203 $ 604 $ 302 $ 0 $ 310 $ 2,191
Administrative Class 249 0 7 2 41 0 0 0
---------------------------------------------------------------------------------------------
$ 4,580 $ 1,517 $ 2,210 $ 606 $ 343 $ 0 $ 310 $ 2,191
=============================================================================================
From net realized capital gains
Institutional Class $14,051 $ 2,344 $44,041 $43,528 $4,690 $4,189 $ 0 $10,060
Administrative Class 853 0 129 258 700 255 0 0
---------------------------------------------------------------------------------------------
$14,904 $ 2,344 $44,170 $43,786 $5,390 $4,444 $ 0 $10,060
=============================================================================================
</TABLE>
76
<PAGE>
7. Federal Income Tax Matters
As of June 30, 1997, the Funds listed in the table below have remaining capital
loss carryforwards that were realized in prior years (amounts in thousands):
Capital Loss Carryforwards
---------------------------------------------------
Realized Acquired
Losses Losses Expiration
---------------------------------------------------
Emerging Markets Fund $ 10,105 $ 0 06/30/03
Tax Exempt fund 536 0 06/30/03
Each Fund will resume capital gain distributions in the future to the extent
gains are realized in excess of the available carryforward.
8. Reorganization
On September 17, 1996, the Board of Trustees approved the reorganization of
certain funds of PIMCO Advisors Funds ("PAF"), an affiliated management
investment company, into the Trust. The reorganization occurred on January 17,
1997. In conjunction with the reorganization, the name of the Trust was changed
to "PIMCO Funds: Multi-Manager Series." from "PIMCO Funds: Equity Advisors
Series." Certain PAF funds were acquired intact and became new Funds of the
Trust. Two Funds of the Trust, the NFJ Diversified Low P/E and the Cadence Mid
Cap Growth Funds, were combined with funds acquired from PAF.
Also, as part of the reorganization, the NFJ Diversified Low P/E Fund and the
Blairlogie International Active Fund were renamed Value Fund and International
Developed Fund, respectively, to more accurately describe their investment
styles.
Each Acquiring Fund, as listed below, acquired the assets and certain
liabilities of the Acquired Fund, also listed below, in a tax-free exchange for
shares of the Acquiring Fund, pursuant to a plan of reorganization approved by
the Acquired Fund's shareholders (amounts in thousands):
<TABLE>
<CAPTION>
Total
Value of Total Total Net Assets
Shares Issued Shares Issued Net Assets Net Assets of Acquiring Acquired Fund
by Acquiring by Acquiring of Acquired of Acquiring Fund After Unrealized
Acquiring Fund Acquired Fund Date Fund Fund Fund Fund Acquisition Appreciation
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PIMCO NFJ Diversified PIMCO Advisors
Low P/E Fund (renamed Value Fund
Value Fund) 01/17/97 5,988 $ 80,835 $ 80,835 $ 67,334 $ 148,169 $ 9,962
- ------------------------------------------------------------------------------------------------------------------------------------
PIMCO Cadence Mid PIMCO Advisors
Cap Growth Fund (renamed Discovery Fund
Mid Cap Growth Fund) 01/17/97 4,103 75,421 75,421 237,494 312,915 11,691
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
On January 17, 1997, the Renaissance, Growth, Target, Opportunity,
International, Innovation, Precious Metals and Tax Exempt Funds, portfolios in
PAF, were reorganized as portfolios of the Trust pursuant to an agreement and
plan of reorganization approved by each Fund's shareholders. In connection with
the reorganization, the year end dates of the Funds were changed from September
30 to June 30.
77
<PAGE>
Notes to Financial Statements (Cont.)
December 31, 1997 (Unaudited)
9. Shares of Beneficial Interest
The Trust may issue an unlimited number of shares of beneficial interest with a
$.0001 par value. Changes in shares of beneficial interest were as follows
(amounts in thousands):
<TABLE>
<CAPTION>
Equity Income Fund
---------------------------------------------------------------
Six Months Ended Year Ended
12/31/97 6/30/97
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 454 $ 7,398 1,004 $ 14,387
- ------------------------------------------------------------------------------------------------------------
Administrative Class 85 1,413 142 2,032
- ------------------------------------------------------------------------------------------------------------
Class A 543 8,812 118 1,691
- ------------------------------------------------------------------------------------------------------------
Class B 250 4,042 213 3,040
- ------------------------------------------------------------------------------------------------------------
Class C 375 5,996 488 7,063
- ------------------------------------------------------------------------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Class B 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Class C 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 1,185 18,142 1,299 17,796
- ------------------------------------------------------------------------------------------------------------
Administrative Class 87 1,328 80 1,101
- ------------------------------------------------------------------------------------------------------------
Class A 75 1,142 1 13
- ------------------------------------------------------------------------------------------------------------
Class B 49 750 1 15
- ------------------------------------------------------------------------------------------------------------
Class C 92 1,390 3 43
- ------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (739) (11,987) (2,573) (37,514)
- ------------------------------------------------------------------------------------------------------------
Administrative Class (52) (850) (118) (1,690)
- ------------------------------------------------------------------------------------------------------------
Class A (107) (1,738) (5) (69)
- ------------------------------------------------------------------------------------------------------------
Class B (9) (149) (47) (670)
- ------------------------------------------------------------------------------------------------------------
Class C (78) (1,253) (60) (899)
- ------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting
from Fund share transactions 2,210 $ 34,436 546 $ 6,339
============================================================================================================
<CAPTION>
Renaissance Fund
---------------------------------------------------------------
Six Months Ended Nine Months Ended
12/31/97 6/30/97
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional Class 35 $ 581 0 $ 0
- ------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Class A 1,926 36,065 1,108 17,402
- ------------------------------------------------------------------------------------------------------------
Class B 760 14,224 1,321 21,111
- ------------------------------------------------------------------------------------------------------------
Class C 4,523 84,692 7,139 112,880
- ------------------------------------------------------------------------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Class B 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Class C 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Class A 418 7,011 12 200
- ------------------------------------------------------------------------------------------------------------
Class B 478 8,021 5 73
- ------------------------------------------------------------------------------------------------------------
Class C 3,550 59,199 39 613
- ------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Institutional Class 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Class A (1,532) (28,958) (509) (7,973)
- ------------------------------------------------------------------------------------------------------------
Class B (171) (3,242) (203) (3,265)
- ------------------------------------------------------------------------------------------------------------
Class C (3,794) (71,484) (3,802) (61,037)
- ------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting
from Fund share transactions 6,193 $ 106,109 5,110 $ 80,004
- ------------------------------------------------------------------------------------------------------------
<CAPTION>
Value Fund
---------------------------------------------------------------
Six Months Ended Year Ended
12/31/97 6/30/97
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 210 $ 3,173 1,317 $ 17,251
- ------------------------------------------------------------------------------------------------------------
Administrative Class 263 4,244 0 0
- ------------------------------------------------------------------------------------------------------------
Class A 594 9,229 349 3,387
- ------------------------------------------------------------------------------------------------------------
Class B 267 4,160 303 1,609
- ------------------------------------------------------------------------------------------------------------
Class C 1,090 16,969 1,607 16,250
- ------------------------------------------------------------------------------------------------------------
Shares issued in reorganization
Class A 0 0 843 11,374
- ------------------------------------------------------------------------------------------------------------
Class B 0 0 1,521 20,538
- ------------------------------------------------------------------------------------------------------------
Class C 0 0 3,624 48,923
- ------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 570 8,347 293 3,854
- ------------------------------------------------------------------------------------------------------------
Administrative Class 30 431 0 0
- ------------------------------------------------------------------------------------------------------------
Class A 123 1,792 7 95
- ------------------------------------------------------------------------------------------------------------
Class B 193 2,817 6 86
- ------------------------------------------------------------------------------------------------------------
Class C 511 7,437 16 225
- ------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (462) (7,392) (803) (10,770)
- ------------------------------------------------------------------------------------------------------------
Administrative Class 0 (6) 0 0
- ------------------------------------------------------------------------------------------------------------
Class A (506) (7,839) (142) (1,972)
- ------------------------------------------------------------------------------------------------------------
Class B (89) (1,364) (112) (1,562)
- ------------------------------------------------------------------------------------------------------------
Class C (632) (9,803) (913) (12,509)
- ------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting
from Fund share transactions 2,162 $ 32,195 7,916 $ 96,779
- ------------------------------------------------------------------------------------------------------------
<CAPTION>
Small Cap Value Fund
---------------------------------------------------------------
Six Months Ended Year Ended
12/31/97 6/30/97
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 1,070 $ 18,821 395 $ 5,653
- ------------------------------------------------------------------------------------------------------------
Administrative Class 141 2,542 90 1,269
- ------------------------------------------------------------------------------------------------------------
Class A 1,546 27,136 422 6,136
- ------------------------------------------------------------------------------------------------------------
Class B 2,747 48,136 743 10,821
- ------------------------------------------------------------------------------------------------------------
Class C 3,851 67,153 1,351 19,512
- ------------------------------------------------------------------------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Class B 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Class C 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Issued as reinvestment
of distributions
Institutional Class 101 1,770 368 4,969
- ------------------------------------------------------------------------------------------------------------
Administrative Class 24 427 55 741
- ------------------------------------------------------------------------------------------------------------
Class A 71 1,246 0 0
- ------------------------------------------------------------------------------------------------------------
Class B 137 2,393 0 0
- ------------------------------------------------------------------------------------------------------------
Class C 185 3,224 0 0
- ------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (711) (12,824) (612) (8,698)
- ------------------------------------------------------------------------------------------------------------
Administrative Class (25) (433) (82) (1,177)
- ------------------------------------------------------------------------------------------------------------
Class A (206) (3,625) (5) (78)
- ------------------------------------------------------------------------------------------------------------
Class B (126) (2,215) (38) (588)
- ------------------------------------------------------------------------------------------------------------
Class C (383) (6,740) (37) (535)
- ------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting
from Fund share transactions 8,422 $147,011 2,650 $ 38,025
- ------------------------------------------------------------------------------------------------------------
<CAPTION>
Opportunity Fund
---------------------------------------------------------------
Six Months Ended Nine Months Ended
12/31/97 6/30/97
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 0 $ 0 0 $ 0
- ------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Class A 5,177 159,544 7,683 225,467
- ------------------------------------------------------------------------------------------------------------
Class B 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Class C 9,873 285,726 21,251 587,295
- ------------------------------------------------------------------------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Class B 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Class C 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Issued as reinvestment
of distributions
Institutional Class 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Class A 416 12,054 0 0
- ------------------------------------------------------------------------------------------------------------
Class B 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Class C 1,371 36,776 0 0
- ------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Institutional Class 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Class A (5,828) (181,247) (4,019) (114,318)
- ------------------------------------------------------------------------------------------------------------
Class B 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Class C (12,901) (371,697) (20,883) (575,183)
- ------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting
from Fund share transactions (1,892) $ (58,844) 4,032 $ 123,261
- ------------------------------------------------------------------------------------------------------------
<CAPTION>
International Developed Fund
---------------------------------------------------------------
Six Months Ended Year Ended
12/31/97 6/30/97
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 1,356 $ 16,968 3,568 $ 43,648
- ------------------------------------------------------------------------------------------------------------
Administrative Class 127 1,589 140 1,683
- ------------------------------------------------------------------------------------------------------------
Class A 29 367 39 477
- ------------------------------------------------------------------------------------------------------------
Class B 99 1,267 87 1,057
- ------------------------------------------------------------------------------------------------------------
Class C 180 2,244 228 2,759
- ------------------------------------------------------------------------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Class B 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Class C 0 0 0 0
- ------------------------------------------------------------------------------------------------------------
Issued as reinvestment
of distributions
Institutional Class 367 4,242 296 3,449
- ------------------------------------------------------------------------------------------------------------
Administrative Class 8 98 22 255
- ------------------------------------------------------------------------------------------------------------
Class A 2 25 0 0
- ------------------------------------------------------------------------------------------------------------
Class B 7 77 0 0
- ------------------------------------------------------------------------------------------------------------
Class C 16 183 0 0
- ------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (1,334) (17,202) (2,294) (27,613)
- ------------------------------------------------------------------------------------------------------------
Administrative Class (138) (1,736) (435) (5,453)
- ------------------------------------------------------------------------------------------------------------
Class A (13) (159) (15) (189)
- ------------------------------------------------------------------------------------------------------------
Class B (8) (93) (1) (15)
- ------------------------------------------------------------------------------------------------------------
Class C (73) (912) (35) (433)
- ------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting
from Fund share transactions 625 $ 6,958 1,600 $ 19,625
- ------------------------------------------------------------------------------------------------------------
</TABLE>
78
<PAGE>
<TABLE>
<CAPTION>
Capital Appreciation
------------------------------------------------------------------------
Six Months Ended Year Ended
12/31/97 6/30/97
Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 4,967 $ 11,6242 8,723 $ 165,774
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 1,206 28,356 157 3,111
- ----------------------------------------------------------------------------------------------------------------------------------
Class A 404 9,353 330 6,440
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 409 9,549 144 2,819
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 1,149 26,913 676 13,152
- ----------------------------------------------------------------------------------------------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 1,599 37,066 2,018 36,552
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 86 1,973 8 136
- ----------------------------------------------------------------------------------------------------------------------------------
Class A 38 887 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 32 737 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 106 2,441 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (3,114) (72,523) (4,708) (90,177)
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class (88) (2,072) (17) (349)
- ----------------------------------------------------------------------------------------------------------------------------------
Class A (102) (2,458) (21) (415)
- ----------------------------------------------------------------------------------------------------------------------------------
Class B (17) (401) (1) (11)
- ----------------------------------------------------------------------------------------------------------------------------------
Class C (187) (4,320) (55) (1,161)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting
from Fund share transactions 6,488 $ 151,743 7,254 $ 135,871
==================================================================================================================================
<CAPTION>
Growth Fund
------------------------------------------------------------------------
Six Months Ended Nine Months Ended
12/31/97 6/30/97
Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 0 $ 0 0 $ 0
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class A 3,612 102,022 5,519 139,954
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 248 6,702 923 22,424
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 4,825 130,114 17,754 428,075
- ----------------------------------------------------------------------------------------------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class A 809 20,743 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 375 8,980 0 3
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 9,473 226,695 0 4
- ----------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Institutional Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class A (3,620) (104,203) (5,755) (147,335)
- ----------------------------------------------------------------------------------------------------------------------------------
Class B (159) (4,304) (213) (5,108)
- ----------------------------------------------------------------------------------------------------------------------------------
Class C (8,447) (229,756) (15,525) (376,328)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting
from Fund share transactions 7,116 $ 156,993 2,703 $ 61,689
==================================================================================================================================
<CAPTION>
Mid Cap Growth Fund
------------------------------------------------------------------------
Six Months Ended Year Ended
12/31/97 6/30/97
Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 4,058 $ 92,630 3,798 $ 71,437
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 430 9,956 47 878
- ----------------------------------------------------------------------------------------------------------------------------------
Class A 1,163 26,604 133 673
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 919 20,863 277 1,840
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 1,729 38,752 792 8,401
- ----------------------------------------------------------------------------------------------------------------------------------
Shares issued in reorganization
Class A 0 0 618 11,362
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 0 0 1,223 22,472
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 0 0 2,262 41,588
- ----------------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 975 22,223 2,481 42,923
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 24 544 15 261
- ----------------------------------------------------------------------------------------------------------------------------------
Class A 51 1,158 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 103 2,327 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 185 4,187 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (1,938) (44,127) (3,791) (72,699)
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class (85) (1,965) (15) (280)
- ----------------------------------------------------------------------------------------------------------------------------------
Class A (745) (17,174) (149) (2,743)
- ----------------------------------------------------------------------------------------------------------------------------------
Class B (186) (4,255) (99) (1,818)
- ----------------------------------------------------------------------------------------------------------------------------------
Class C (399) (8,928) (392) (7,250)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting
from Fund share transactions 6,284 $ 142,795 7,200 $ 117,045
==================================================================================================================================
<CAPTION>
Target Fund
------------------------------------------------------------------------
Six Months Ended Nine Months Ended
12/31/97 6/30/97
Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class A 31,335 542,803 34,398 550,283
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 344 5,843 1,754 27,085
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 4,970 82,571 19,148 293,453
- ----------------------------------------------------------------------------------------------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class A 2,292 32,769 0 4
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 1,280 17,255 0 1
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 17,369 234,137 0 1
- ----------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Institutional Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class A (31,126) (547,752) (34,558) (553,973)
- ----------------------------------------------------------------------------------------------------------------------------------
Class B (406) (6,533) (575) (8,959)
- ----------------------------------------------------------------------------------------------------------------------------------
Class C (10,239) (170,350) (17,874) (274,688)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting
from Fund share transactions 15,819 $ 190,743 2,293 $ 33,207
==================================================================================================================================
<CAPTION>
International Fund
-----------------------------------------------------------------------
Six Months Ended Nine Months Ended
12/31/97 6/30/97
Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 0 $ 0 0 $ 0
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class A 7,924 104,455 9,707 126,752
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 320 3,907 224 2,790
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 7,167 89,997 6,983 87,308
- ----------------------------------------------------------------------------------------------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class A 99 1,179 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 57 643 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 973 10,909 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Institutional Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class A (7,877) (105,554) (9,963) (130,472)
- ----------------------------------------------------------------------------------------------------------------------------------
Class B (327) (3,989) (56) (702)
- ----------------------------------------------------------------------------------------------------------------------------------
Class C (9,088) (115,491) (10,866) (136,065)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting
from Fund share transactions (752) $ (13,944) (3,971) $ (50,389)
==================================================================================================================================
<CAPTION>
Emerging Markets Fund
------------------------------------------------------------------------
Six Months Ended Year Ended
12/31/97 6/30/97
Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 1,174 $ 14,262 1,007 $ 12,784
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 58 740 26 305
- ----------------------------------------------------------------------------------------------------------------------------------
Class A 111 1,332 16 214
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 40 503 28 362
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 55 684 153 2,021
- ----------------------------------------------------------------------------------------------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 0 0 19 222
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class A 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (1,755) (20,941) (3,613) (45,330)
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class (2) (30) (46) (553)
- ----------------------------------------------------------------------------------------------------------------------------------
Class A (107) (1,271) (1) (10)
- ----------------------------------------------------------------------------------------------------------------------------------
Class B (18) (212) (5) (73)
- ----------------------------------------------------------------------------------------------------------------------------------
Class C (61) (752) (21) (277)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting
from Fund share transactions (505) $ (5,685) (2,437) $(30,335)
==================================================================================================================================
<CAPTION>
Innovation Fund
------------------------------------------------------------------------
Six Months Ended Nine Months Ended
12/31/97 6/30/97
Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 0 $ 0 0 $ 0
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class A 6,744 131,972 5,118 86,364
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 432 8,210 1,700 28,789
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 1,824 34,901 5,804 97,510
- ----------------------------------------------------------------------------------------------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class A 174 3,237 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 190 3,439 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 566 10,260 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Institutional Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class A (6,744) (133,171) (4,792) (80,778)
- ----------------------------------------------------------------------------------------------------------------------------------
Class B (308) (5,853) (672) (11,137)
- ----------------------------------------------------------------------------------------------------------------------------------
Class C (2,249) (42,902) (4,360) (71,730)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting
from Fund share transactions 629 $ 10,093 2,798 $ 49,018
==================================================================================================================================
<CAPTION>
Precious Metals Fund
------------------------------------------------------------------------
Six Months Ended Nine Months Ended
12/31/97 6/30/97
Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 0 $ 0 0 $ 0
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class A 26,472 198,880 21,209 228,982
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 657 4,387 423 4,275
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 7,519 52,669 8,931 93,686
- ----------------------------------------------------------------------------------------------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class A 0 0 8 89
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 0 0 3 32
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 0 0 49 530
- ----------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Institutional Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Class A (26,325) (198,366) (21,276) (230,377)
- ----------------------------------------------------------------------------------------------------------------------------------
Class B (547) (3,650) (112) (1,186)
- ----------------------------------------------------------------------------------------------------------------------------------
Class C (8,039) (56,213) (9,238) (96,889)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting
from Fund share transactions (263) $ (2,293) (3) $ (858)
==================================================================================================================================
</TABLE>
79
<PAGE>
Notes to Financial Statements (Cont.)
December 31, 1997 (Unaudited)
9. Shares of Beneficial Interest (Cont.)
<TABLE>
<CAPTION>
Balanced Fund Tax Exempt Fund
------------------------------------------ ------------------------------------------
Six Months Ended Year Ended Six Months Ended Nine Months Ended
12/31/97 6/30/97 12/31/97 6/30/97
Shares Amount Shares Amount Shares Amount Shares Amount
- ---------------------------------------------------------------------------- ------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 206 $ 2,466 926 $ 10,421 0 $ 0 0 $ 0
- ---------------------------------------------------------------------------- ------------------------------------------
Administrative Class 0 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------- ------------------------------------------
Class A 470 5,747 32 354 44 528 171 2,047
- ---------------------------------------------------------------------------- ------------------------------------------
Class B 236 2,761 102 1,113 40 481 46 551
- ---------------------------------------------------------------------------- ------------------------------------------
Class C 295 3,485 89 969 161 1,963 184 2,193
- ---------------------------------------------------------------------------- ------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------- ------------------------------------------
Class B 0 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------- ------------------------------------------
Class C 0 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------- ------------------------------------------
Issued as reinvestment
of distributions
Institutional Class 527 6,034 1,158 12,237 0 0 0 0
- ---------------------------------------------------------------------------- ------------------------------------------
Administrative Class 0 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------- ------------------------------------------
Class A 47 534 0 3 7 87 8 98
- ---------------------------------------------------------------------------- ------------------------------------------
Class B 22 252 1 9 2 28 3 31
- ---------------------------------------------------------------------------- ------------------------------------------
Class C 28 315 1 7 44 539 64 766
- ---------------------------------------------------------------------------- ------------------------------------------
Cost of shares redeemed
Institutional Class (1,485) (17,681) (3,794) (43,185) 0 0 0 0
- ---------------------------------------------------------------------------- ------------------------------------------
Administrative Class 0 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------- ------------------------------------------
Class A (11) (127) 0 (4) (30) (361) (213) (2,535)
- ---------------------------------------------------------------------------- ------------------------------------------
Class B (7) (82) (4) (44) (8) (103) (26) (312)
- ---------------------------------------------------------------------------- ------------------------------------------
Class C (35) (399) (8) (90) (522) (6,349) (756) (8,997)
- ---------------------------------------------------------------------------- ------------------------------------------
Net increase (decrease) resulting
from Fund share transactions 293 $ 3,305 (1,497) $(18,210) (262) $(3,187) (519) $(6,158)
- ---------------------------------------------------------------------------- ------------------------------------------
</TABLE>
80
<PAGE>
PIMCO Funds: Access to the highest standard
PIMCO Funds offers unique access to the institutional investment capabilities of
PIMCO Advisors L.P., manager of over $190 billion. PIMCO Advisors consists of
seven institutional investment firms, each seeking the highest caliber
performance in a single discipline. Six of these firms currently manage
PIMCO Funds. Together, their superior standard of expertise has attracted many
prestigious institutional clients, including 42 of the 100 largest U.S.
corporations.
[ART APPEARS HERE]
- --------------------------------------------------------------------------------
Manager PIMCO Advisors L.P., 800 Newport Center Drive,
Suite 100, Newport Beach, CA 92660
- --------------------------------------------------------------------------------
Distributor PIMCO Funds Distributors LLC, 2187 Atlantic Street,
Stamford, CT 06902
- --------------------------------------------------------------------------------
Custodian Investors Fiduciary Trust Company, 801 Pennsylvania,
Kansas City, MO 64105
- --------------------------------------------------------------------------------
Shareholder Shareholder Services, Inc., P.O. Box 5866, Denver,
Servicing Agent and CO 80217
Transfer Agent
- --------------------------------------------------------------------------------
Independent Price Waterhouse LLP, 1055 Broadway, Kansas City,
Accountant MO, 64105
- --------------------------------------------------------------------------------
Legal Counsel Ropes & Gray, One International Place,
Boston, MA 02110
- --------------------------------------------------------------------------------
For Account For PIMCO Funds account information contact your
Information financial advisor, or if you receive account statements
directly from PIMCO Funds, you can also call 1-800-426-
0107. Telephone representatives are available Monday-
Friday 8:30 am to 8:00 pm eastern time.
- --------------------------------------------------------------------------------
This is a copy of a report by PIMCO Funds to its shareholders. Distribution of
this report to persons other than shareholders of the Trust is authorized only
when accompanied by the Trust's Prospectus. This report does not offer for sale
or solicit orders to buy any securities.
This material is authorized for use only when preceded or accompanied by a
current PIMCO Funds prospectus, which describes in greater detail the investment
policies, management fees and other matters of interest to prospective
investors. Please read the prospectus carefully before you invest or send money.
PZ005.2/98
----------------
BULK RATE
U.S. POSTAGE
PAID
SMITHTOWN, NY
PERMIT NO. 700
----------------
P I M C O
---------
FUNDS
PIMCO Funds
Distributors LLC
2187 Atlantic Street
Stamford, CT 06902
