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Previous: STEINROE INVESTMENT TRUST, DEFA14A, 1995-07-05 |
Next: PIONEER MONEY MARKET TRUST, 497, 1995-07-05 |
<PAGE>
[Logo]
SEMIANNUAL
REPORT
APRIL 30, 1995
[ ] WARBURG PINCUS CAPITAL APPRECIATION FUND
[ ] WARBURG PINCUS EMERGING GROWTH FUND
[ ] WARBURG PINCUS INTERNATIONAL EQUITY FUND
[ ] WARBURG PINCUS JAPAN OTC FUND
<PAGE>
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WARBURG PINCUS CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
June 15, 1995
Dear Shareholder:
The objective of Warburg Pincus Capital Appreciation Fund (the 'Fund') is
long-term capital appreciation. The Fund invests primarily in a diversified
selection of medium-sized domestic companies with above-average earnings growth
prospects or where significant fundamental changes are taking place that augur
well for improved earnings.
The Fund rose 6.37% for the six months ended April 30, 1995, vs. a gain of
10.61% in the unmanaged Standard & Poor's 500 Index, an increase of 6.99% in the
Lipper Growth Fund Index and an advance of 6.41% in the S&P MidCap 400 Index.
For the trailing 12 months, the Fund had a total return of 14.89%, vs. returns
of 17.51%, 10.99% and 9.89%, respectively, for the S&P 500 Index, the Lipper
Growth Fund Index and the S&P MidCap 400 Index.
In the past few months, we've taken two strategic steps worth noting. We've
increased our emphasis on mid-cap issues (i.e., those with market
capitalizations in the $500 million to $4.5 billion range), and will ordinarily
keep at least 80% of the Fund's assets in these stocks in the future. Secondly,
we've narrowed the Fund's focus with regard to the number of securities held,
and expect to hold approximately 50 to 60 stocks going forward (vs. the 75 to 85
stocks typically held by the Fund in previous years). This more concentrated
approach will give us the ability to develop a more detailed understanding of
the stocks we own, yet still allow us to maintain an adequate level of
diversification.
Two specific themes we are emphasizing in the portfolio are financial
services and communications & media. In the former we've found attractive
valuations among selected banking and insurance names, and believe the banking
industry in particular is poised for a period of prolonged growth. Companies
involved in the latter -- e.g., Gannett, Infinity Broadcasting, Multimedia, News
Corp. and Viacom -- all benefit from the strong franchise value and cash flows
of their properties. We believe such companies will continue to benefit as
communication and the transfer of information become more global in nature.
Another, broader theme that we continue to emphasize is companies that have
undergone or are undergoing a management change. Struggling companies can often
be turned around by a new management team, and that improvement ultimately
reflects itself in the company's share price. We will continue to seek out
companies that are likely to benefit from such a change.
<TABLE>
<S> <C>
George U. Wyper Susan L. Black
Co-Portfolio Manager Co-Portfolio Manager
</TABLE>
1
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<PAGE>
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WARBURG PINCUS EMERGING GROWTH FUND
- --------------------------------------------------------------------------------
June 15, 1995
Dear Shareholder:
The objective of Warburg Pincus Emerging Growth Fund (the 'Fund') is
maximum capital appreciation. The Fund targets small and medium-sized U.S.
companies that have successfully completed the start-up phase, show positive
earnings momentum and have the potential to achieve significant capital gains
within a relatively short period of time.
For the six months ended April 30, 1995, the Fund gained 7.46%. That
compares to a 5.17% rise in the Lipper Small Company Growth Fund Index, a 5.36%
increase in the Russell 2000 Index and a 10.61% advance in the Standard & Poor's
500 Index. For the 12 months ended April 30, 1995, the Fund gained 15.62%, the
Lipper Index rose 10.01%, the Russell 2000 increased 7.21% and the S&P 500
advanced 17.51%.
Contributing heavily to the Fund's performance through the six-month period
were its technology holdings, which as a group represent the largest portion of
the Fund's assets. We remain extremely bullish on these companies' prospects,
and believe they will continue to benefit from the growing world-wide emphasis
on improving productivity through increased capital spending. One large
technology commitment is in telecommunications & equipment (8% of assets), and
all of our holdings in this sector reported first-quarter earnings that exceeded
analysts' expectations, a trend we expect to continue.
Another overweighted sector in the Fund is health care (12% of assets). We
have found outstanding opportunities in companies that are involved in the
cost-containment side of the industry. While many of these stocks had been
beaten down due to the threat of government intervention, that cloud has begun
to lift, and we believe the prospects for health-care companies are promising.
Many smaller health-care companies in particular stand to benefit from the
industry's trend toward consolidation, and virtually all of the companies we've
invested in represent strategic value as takeover candidates.
Overall, we remain extremely bullish on the outlook for small and
medium-sized companies, and believe we are in the midst of a multi-year cycle of
outperformance relative to large-cap stocks. We will continue to search for
dynamic, growing companies with above-average long-term potential.
<TABLE>
<S> <C>
Elizabeth B. Dater Stephen J. Lurito
Co-Portfolio Manager Co-Portfolio Manager
</TABLE>
2
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<PAGE>
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WARBURG PINCUS INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
June 15, 1995
Dear Shareholder:
The objective of Warburg Pincus International Equity Fund (the 'Fund') is
long-term capital appreciation and international diversification. The Fund aims
to tap into the strong growth potential of today's world stock markets by
investing primarily in companies whose principal business activities and
interests are outside the U.S.
For the six months ended April 30, 1995, the Fund fell 8.85%, vs. a loss of
5.03% in the Lipper International Fund Index and a gain of 1.25% in the Morgan
Stanley -- Europe, Australia and Far East ('EAFE') Index. For the trailing 12
months, the Fund lost 1.63%, vs. a loss of 1.31% in the Lipper Index and a gain
of 5.59% in the EAFE Index. Shareholders should note that although the EAFE
Index outperformed the Fund in the six- and 12-month periods ended April 30, the
Fund's long-term record is superior. From its inception on May 2, 1989, through
April 30, 1995, the Fund generated an average annual return of 12.65%, compared
to 3.70% for the EAFE Index. In addition, relative to the Index, the Fund's
diversification across more countries has historically provided a lower level of
volatility.
Foreign markets displayed considerable volatility over the past several
months, with European markets on balance outperforming their Pacific Rim
counterparts in both dollar and local-currency terms. One European market on
which we are particularly positive is France, which represented 8% of the Fund's
assets through April. The French market has been impacted by high real interest
rates, which have largely been a consequence of German monetary policies.
Recently, however, corporate earnings have begun to improve, and we believe that
our holdings will likely benefit from both continued restructuring efforts and
the potential for a further easing of interest rates across Europe.
Our largest country weighting among Far Eastern markets remains Japan,
which comprised 28% of the portfolio through April. While we think the Japanese
market will likely remain volatile over the short term, we believe there are
many attractively priced stocks at the market's current level based on
traditional long-term measures of value (e.g., price relative to book value,
sales and cash flow). It is inevitable that Japan's government will at some
point be forced to pursue more expansionary economic policies, which should have
a direct and substantial impact on share prices.
Another Pacific Rim market we are emphasizing is South Korea (5% of the
Fund's assets), a high-growth emerging market that suffered unduly following
Mexico's peso crisis in December. Other markets we favor due to their attractive
valuations include Australia and New Zealand, which combined account for over
10% of the portfolio.
Richard H. King
Portfolio Manager
3
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<PAGE>
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WARBURG PINCUS JAPAN OTC FUND
- --------------------------------------------------------------------------------
June 15, 1995
Dear Shareholder:
The objective of Warburg Pincus Japan OTC Fund (the 'Fund') is long-term
capital appreciation. The Fund invests primarily in securities traded on the
Japanese over-the-counter (OTC) market. At all times, except during temporary
defensive periods, the Fund maintains at least 65% of its assets in these OTC
securities.
For the six months ended April 30, 1995, the Fund lost 20.30%, vs. a 24.71%
decline in the yen-denominated JASDAQ Index. In dollar terms, the JASDAQ Index
lost 13.11%. Throughout the period, we fully hedged the Fund's holdings against
currency fluctuations, and hence the Fund did not benefit from the yen's
appreciation against the dollar. We have employed that same hedging strategy
since the Fund's September 30, 1994, inception. From its inception through April
30, 1995, the Fund lost 21.50%, vs. losses of 26.96% and 13.97% for the JASDAQ
Index in yen and dollar terms, respectively.
Japan's economic woes have been much publicized of late, particularly those
centered on its troubled banking system. These difficulties have had a
depressing effect on share prices of both larger companies and over-the-counter
stocks. Yet we think that the market's pessimism is reaching its peak, and that
there is potential for a major shift in market direction within the next several
months. Reasons for our optimism are as follows:
First, we believe the value of the yen is near its top, and that a trend
reversal will likely occur in several months' time. Irrespective of the outcome
of the current U.S.-Japan trade squabbles over automobiles and related parts, it
is probable that Japan will take definitive action to reduce its trade surplus.
This, plus the government's stated intentions of bailing out the country's
beleaguered banking system, should help stem the yen's rise relative to other
currencies, auguring well for a turnaround in Japan's equity markets.
Second, the markets stand to receive a substantial boost from even a slight
improvement in investor sentiment. The yield spread (government bond yields less
equity earnings yields) stood below 1% as of May 31, 1995, substantially less
than the lowest post-1984 level on record (2%). This reflects an extremely
bearish sentiment, one that has fully discounted Japan's economic plight. We
believe that at these levels the market has limited downside yet considerable
upside potential, and we are particularly bullish on OTC stocks.
Currently, most of our research efforts are focused on finding OTC
companies that are likely to experience strong earnings growth over the long
term. Examples of these are personal computer-related companies and those
involved in the leasing of construction machinery. We think these stocks have
the best prospects over the coming months.
<TABLE>
<S> <C>
Shuhei Abe Nicholas P.W. Horsley
Co-Portfolio Manager Co-Portfolio Manager
</TABLE>
4
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<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS CAPITAL APPRECIATION FUND
STATEMENT OF NET ASSETS
April 30, 1995 (Unaudited)
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
--------- ---------
<S> <C> <C>
COMMON STOCK (97.4%)
BASIC INDUSTRIES
Chemicals (5.6%)
Avery Dennison Corp. 77,900 $ 3,164,688
Grace & Co., W.R. 20,000 1,072,500
Hercules, Inc. 90,000 4,488,750
Praxair, Inc. 76,800 1,824,000
----------
10,549,938
----------
Conglomerates (2.0%)
Thermo Electron Corp. + 69,600 3,749,700
----------
CAPITAL GOODS
Capital Equipment (7.4%)
Clark Equipment Co. 165,000 14,107,500
----------
Computers (6.2%)
Alliant Techsystems Inc. 70,000 2,581,250
Informix Corp. + 56,100 2,208,932
Parametric Technology Corp. 79,500 3,776,250
Platinum Technology, Inc. + 33,000 660,000
Synopsys, Inc. + 48,100 2,609,425
----------
11,835,857
----------
Distribution (2.7%)
Alco Standard Corp. 71,400 5,060,475
----------
Electronics (5.6%)
Cabletron Systems, Inc. 49,000 2,327,500
Linear Technology Corp. 70,000 4,182,500
Molex, Inc. 41,543 1,568,248
Xilinx, Inc. + 33,400 2,563,450
----------
10,641,698
----------
CONSUMER
Agriculture (1.2%)
Pioneer Hi-Bred International Inc. 62,900 2,358,750
----------
Business Services (7.1%)
Block (H & R), Inc. 42,800 1,802,950
First Data Corp. 56,400 3,172,500
Manpower, Inc. 81,000 2,703,375
Olsten Corp. Class B 104,400 3,562,650
Omnicom Group Inc. 40,800 2,269,500
----------
13,510,975
----------
Consumer Non-Durables (6.6%)
Premark International, Inc. 52,000 2,509,000
Reebok International, Ltd. 185,000 5,781,250
Scott Paper Co. 48,600 4,331,475
----------
12,621,725
----------
</TABLE>
See Accompanying Notes to Financial Statements.
5
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
WARBURG PINCUS CAPITAL APPRECIATION FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1995 (Unaudited)
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
--------- ---------
<S> <C> <C>
COMMON STOCK (cont'd)
Leisure & Entertainment (2.6%)
Carnival Cruise Lines Inc. 33,400 $ 830,825
Disney (Walt) Co. 73,500 4,070,063
----------
4,900,888
----------
Retail (1.7%)
Tandy Corp. 35,000 1,732,500
Toys R Us, Inc. + 60,000 1,515,000
----------
3,247,500
----------
ENERGY AND RELATED
Energy (2.9%)
Noble Affiliates, Inc. 125,500 3,388,500
Nuevo Energy Co. + 115,300 2,205,113
----------
5,593,613
----------
Healthcare (8.9%)
Bard, Inc. C.R. 77,500 2,257,188
Becton Dickinson & Co. 50,000 2,787,500
Health Care & Retirement Corp. + 84,400 2,384,300
Health Management Association 75,000 2,175,000
McKesson Corp. 100,000 3,962,500
PacifiCare Health Systems, Inc. Class B + 50,000 3,100,000
----------
16,666,488
----------
FINANCE
Banks & Savings & Loans (11.0%)
Corestate Financial Corp. 125,000 4,078,125
First Fidelity Bancorp 41,800 2,016,850
Midlantic Corp. 50,000 1,825,000
PNC Financial Corp. 234,500 5,891,813
Wells Fargo & Co. 42,500 7,049,688
----------
20,861,476
----------
Financial Services (5.9%)
Federal Home Loan Mortgage Corp. 55,700 3,634,425
Fund American Enterprises Holdings, Inc. + 12,196 879,637
John Nuveen Co. Class A 72,100 1,613,238
Mercury Finance Co. 40,000 605,000
Travelers, Inc. 110,000 4,551,250
----------
11,283,550
----------
MEDIA
Communications & Media (10.6%)
Bell Cablemedia, PLC ADR + 60,000 997,500
Evergreen Media Corp. 49,000 912,625
Gannett, Inc. 100,000 5,262,500
Gaylord Entertainment Co. 110,000 2,598,750
Infinity Broadcasting Corp. Class A + 67,500 2,877,188
LIN Television Corp. + 30,250 1,089,000
Multimedia Inc. 75,000 2,821,875
</TABLE>
See Accompanying Notes to Financial Statements.
6
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
WARBURG PINCUS CAPITAL APPRECIATION FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1995 (Unaudited)
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
--------- ---------
<S> <C> <C>
COMMON STOCK (cont'd)
News Corp. Ltd. ADR 65,000 $1,267,500
Viacom, Inc. Class B + 51,800 2,376,325
----------
20,203,263
----------
Publishing (4.6%)
Harcourt General, Inc. 105,700 4,320,488
Houghton Mifflin Co. 50,000 2,406,250
Wiley (John) & Sons Inc. 36,300 2,032,800
----------
8,759,538
----------
Telecommunications & Equipment (3.7%)
Intermedia Communications of Florida, Inc. + 50,000 525,000
Picturetel Corp. 41,600 1,773,200
Tellabs, Inc. + 35,000 2,415,000
Vodafone Group PLC ADR 70,700 2,253,563
----------
6,966,763
----------
MISCELLANEOUS
Automobiles (1.1%)
Chrysler Corporation Holding Company 50,000 2,156,250
----------
TOTAL COMMON STOCK (Cost $151,520,797) 185,075,947
-----------
PREFERRED STOCK (0.5%)
MEDIA
Communications & Media (0.5%)
News Corp. ADR + (Cost $621,032) 52,500 945,000
---------
PAR
---------
SHORT-TERM INVESTMENTS (2.4%)
Repurchase agreement with State Street Bank & Trust Co. dated 04/28/95
at 5.87% to be repurchased at $4,548,224 on 05/01/95. (Collateralized
by $4,605,000 U.S. Treasury Note at 6.25%, due 08/31/96, with a market
value of $4,639,538.) (Cost $4,546,000) $4,546,000 4,546,000
----------
TOTAL INVESTMENTS AT VALUE (100.3%) (Cost $156,687,829*) 190,566,947
LIABILITIES IN EXCESS OF OTHER ASSETS (0.3%) (492,437)
------------
NET ASSETS (100.0%) (applicable to 12,852,921 Common Shares and 641,227
Advisor Shares**) $190,074,510
------------
------------
NET ASSET VALUE, offering and redemption price per Common Share
($181,108,676[div]12,852,921) $14.09
------
------
NET ASSET VALUE, offering and redemption price per Advisor Share**
($8,965,834[div]641,227) $13.98
------
------
</TABLE>
+ Non-income producing security.
* Also cost for Federal income tax purposes.
** Advisor Shares refer to Series 2 Shares herein and in the prospectus.
See Accompanying Notes to Financial Statements.
7
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EMERGING GROWTH FUND
STATEMENT OF NET ASSETS
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK (91.5%)
BASIC INDUSTRIES
Metals & Mining (0.4%)
Pegasus Gold Inc. 120,000 $ 1,455,000
------------
CAPITAL GOODS
Capital Equipment (1.1%)
Applied Power Inc. Class A 157,800 4,161,975
------------
Computers (13.3%)
Auspex Systems, Inc. + 290,000 3,008,750
Cognex Corp. + 215,500 6,465,000
Continuum Co., Inc. 25,500 841,500
Filenet Corp. + 117,400 3,932,900
HBO & Co. 106,400 4,867,800
Network General Corp. + 145,000 3,788,125
Norand Corp. + 110,700 3,376,350
Platinum Technology, Inc. + 418,500 8,370,000
Synopsys, Inc. + 190,000 10,307,500
System Software Associates, Inc. 265,500 6,670,688
------------
51,628,613
------------
Electronics (10.8%)
Altera Corp. + 90,600 7,327,275
Glenayre Technologies, Inc. + 134,250 8,256,375
Maxim Integrated Products, Inc. + 281,600 10,208,000
Mentor Graphics Corp. 255,000 4,303,125
Microchip Technology, Inc. + 161,900 4,573,675
Xilinx, Inc. + 92,250 7,080,188
------------
41,748,638
------------
Office Equipment (0.8%)
Boise Cascade Office Products 136,000 3,179,000
------------
Office Equipment & Supplies (3.1%)
Nu Kote Holdings, Inc. Class A + 151,500 4,166,250
Viking Office Products, Inc. + 287,000 7,892,500
------------
12,058,750
------------
CONSUMER
Business Services (9.0%)
American Management Systems, Inc. 188,000 3,971,500
Catalina Marketing Corp. + 95,500 4,488,500
Checkpoint Systems, Inc. 142,000 2,999,750
GMIS, Inc. + 207,000 4,502,250
Itron, Inc. + 140,000 3,535,000
Norrell Corp. + 149,900 3,597,600
On Assignment, Inc. + 160,500 3,069,563
QuickResponse Services, Inc. + 241,200 4,492,350
Solectron Corp. + 141,200 4,147,750
------------
34,804,263
------------
Consumer Durables (1.0%)
Allen Group, Inc. 172,000 3,891,500
------------
</TABLE>
See Accompanying Notes to Financial Statements.
8
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EMERGING GROWTH FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
--------- ------------
COMMON STOCK (CONT'D)
Consumer Non-Durables (1.7%)
Nutramax Products, Inc. + 430,100 $ 3,494,563
Westpoint Stevens Inc. 178,500 3,235,313
------------
6,729,876
------------
Consumer Services (1.9%)
Devry Inc. + 102,800 3,932,100
ITT Education Services 243,700 3,320,413
------------
7,252,513
------------
Leisure & Entertainment (0.8%)
Carmike Cinemas Inc. Class A + 136,900 3,046,025
------------
Pharmaceuticals (2.3%)
AL Pharmaceuticals Inc. Class A 90,700 2,165,463
Gilead Sciences, Inc. + 361,800 5,427,000
Somatix Therapy Corp. + 351,440 1,186,111
------------
8,778,574
------------
Retail (2.1%)
Copart Inc. 35,000 713,125
PetsMart, Inc. + 143,600 4,792,650
Rhodes, Inc. + 277,500 2,740,313
------------
8,246,088
------------
ENERGY AND RELATED
Energy (4.1%)
Barrett Resources Corp. + 178,100 4,185,350
Tesoro Petroleum Corp. + 392,000 3,871,000
Texas Meridian Resources Corp. + 366,500 4,489,625
Tom Brown, Inc. + 227,000 3,206,375
------------
15,752,350
------------
Healthcare (12.1%)
Genzyme Corp. 75,000 3,206,250
Haemonetics Corp. + 193,000 2,991,500
Healthcare Compare Corp. + 250,000 7,515,625
Healthsource, Inc. + 146,000 5,237,750
Incontrol, Inc. + 105,000 958,125
Integrated Health Services, Inc. + 152,850 5,292,431
Lincare Holdings, Inc. + 191,300 5,906,388
Mariner Health Group + 293,500 4,292,438
Ostex International, Inc. 190,000 1,686,250
Quorum Health Group, Inc. 185,000 3,815,625
Sun Healthcare Group Inc. + 240,500 5,802,063
------------
46,704,445
------------
Oil Services (3.1%)
Input/Output, Inc. + 192,900 6,534,488
Petroleum Geo Services 206,500 5,640,031
------------
12,174,519
------------
</TABLE>
See Accompanying Notes to Financial Statements.
9
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EMERGING GROWTH FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
--------- ------------
COMMON STOCK (CONT'D)
FINANCE
Banks & Savings & Loans (0.9%)
Roosevelt Financial Group, Inc. 207,000 $ 3,312,000
------------
Financial Services (5.4%)
CMAC Investment Corp. 26,800 991,600
Foothill Group, Inc. DE Class A 339,000 7,373,250
John Nuveen Co. Class A 127,000 2,841,625
Olympic Financial Limited 250,000 3,031,250
United Companies Financial Corp. 75,000 2,859,375
Vesta Insurance 115,000 3,838,125
------------
20,935,225
------------
MEDIA
Communications & Media (2.7%)
Central European Media Ent. + 320,500 3,926,125
Infinity Broadcasting Corp. Class A + 157,450 6,711,306
------------
10,637,431
------------
Publishing (1.8%)
Scholastic Corp. + 103,900 5,818,400
Wiley (John) & Sons Inc. 19,200 1,075,200
------------
6,893,600
------------
Telecommunications & Equipment (7.9%)
Arch Communications Group, Inc. + 195,000 3,412,500
California Microwave, Inc. + 183,000 5,695,875
International Cable Telecommunications, Inc. + 194,200 5,728,900
Methode Electronics, Inc. Class A 208,000 3,588,000
Mobile Telecommunications Technologies Corp. + 262,500 6,201,563
Paging Network, Inc. + 222,400 6,116,000
------------
30,742,838
------------
Transportation (2.3%)
American Freightways Corp. + 234,800 5,488,450
M.S. Carriers, Inc. + 135,200 3,278,600
------------
8,767,050
------------
MISCELLANEOUS
Miscellaneous (2.9%)
Medeva ADR 391,200 6,357,000
Tracor, Inc. + 302,500 3,932,500
Wellington Underwriting PLC ADR + 47,229 749,990
------------
11,039,490
------------
TOTAL COMMON STOCK (Cost $291,505,675) 353,939,763
------------
WARRANTS (0.0%)
Xoma Corp. 06/12/95 + (Cost $102) 102 102
------------
</TABLE>
See Accompanying Notes to Financial Statements.
10
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EMERGING GROWTH FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
----------- ------------
<S> <C> <C>
SHORT-TERM INVESTMENTS (9.1%)
Repurchase agreement with State Street Bank & Trust Co. dated 04/28/95 at
5.87% to be repurchased at $35,167,194 on 05/01/95. (Collateralized by
$35,590,000 United States Treasury Note at 6.25%, due 08/31/96,
with a market value of $35,788,485.) (Cost $35,150,000) $35,150,000 $ 35,150,000
------------
TOTAL INVESTMENTS AT VALUE (100.6%) (Cost $326,655,777*) 389,089,865
LIABILITIES IN EXCESS OF OTHER ASSETS (0.6%) (2,138,389)
------------
NET ASSETS (100.0%) (applicable to 12,027,678 Common Shares and 4,135,207 Advisor
Shares**) $386,951,476
------------
------------
NET ASSET VALUE, offering and redemption price per Common Share
($289,225,986 [div] 12,027,678) $24.05
------
------
NET ASSET VALUE, offering and redemption price per Advisor Share**
($97,725,490 [div] 4,135,207) $23.63
------
------
</TABLE>
+ Non-income producing security.
* Cost for Federal income tax purposes is $326,695,161.
** Advisor Shares refer to Series 2 Shares herein and in the prospectus.
See Accompanying Notes to Financial Statements.
11
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------------ --------------
<S> <C> <C>
COMMON STOCK (87.7%)
Argentina (2.6%)
Banco De Galicia & Buenos Aires SA 365,990 $ 1,502,362
Banco De Galicia & Buenos Aires SA ADR 209,720 3,381,735
Banco Frances del Rio de la Plata SA 465,100 2,956,933
Banco Frances del Rio de la Plata SA ADR 461,600 8,481,900
Capex SA GDR + 706,500 10,685,813
YPF SA ADR 1,319,500 26,719,875
--------------
53,728,618
--------------
Australia (4.7%)
BTR Nylex Ltd. 13,197,369 25,727,373
News Corp., Ltd. 1,817,927 8,833,365
Niugini Mining Ltd. + 1,385,000 4,382,403
Pasminco Ltd. + 8,629,600 9,290,213
Reinsurance Australia Corp., Ltd. + 9,523,400 16,625,571
United Construction Group Ltd. 1,600,000 744,858
Woodside Petroleum Ltd. 7,670,800 31,358,139
--------------
96,961,922
--------------
Austria (3.1%)
Bohler-Uddeholm 262,000 15,651,103
Maculan Holdings AG Vorzuege 71,360 2,995,703
V.A. Technologie AG + 399,555 44,127,519
--------------
62,774,325
--------------
Denmark (0.5%)
Copenhagen Airport 101,300 6,535,484
International Service System Class B 115,000 3,289,318
--------------
9,824,802
--------------
Finland (1.4%)
Metsa-Serla Class B 658,650 28,708,089
--------------
France (7.8%)
Bouygues 131,320 16,012,352
Cetelem 44,126 9,332,705
Fives-Lille (Compagnie De) 84,060 8,042,382
Lagardere Groupe 1,355,075 30,425,399
Scor SA 664,153 14,871,619
Societe Nationale Elf Aquitaine SA 27,830 2,224,700
Societe Nationale Elf Aquitaine SA ADR 969,600 38,541,600
Total Cie Franc Des Petroles Class B 645,030 40,336,533
Total Petroles SA ADR 30,600 960,075
--------------
160,747,365
--------------
</TABLE>
See Accompanying Notes to Financial Statements.
12
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------------ --------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Hong Kong (2.3%)
Hong Kong Electric 3,072,500 $ 9,429,719
HSBC Holdings PLC 1,486,900 17,244,850
HSBC Holdings PLC (UK) 190,000 2,238,630
Jardine Matheson 2,245,400 17,850,930
--------------
46,764,129
--------------
India (1.6%)
Hindalco Industries Ltd. GDR 627,300 16,623,450
Reliance Industries Ltd. GDS 1,035,500 16,697,438
--------------
33,320,888
--------------
Indonesia (0.5%)
P.T. Dynaplast Ltd. 1,732,200 1,863,415
P.T. Modem Photo Film Co. 835,000 3,499,440
P.T. Tri Polyta Indonesia ADR + 273,200 5,873,800
--------------
11,236,655
--------------
Israel (0.8%)
Ampal-American Israel Corp. Class A + 1,374,000 8,759,250
ECI Telecommunications Ltd. 465,200 7,850,250
--------------
16,609,500
--------------
Japan (26.0%)
Canon Inc. 2,028,000 33,558,571
Canon Inc. ADR 98,040 8,174,085
DDI Corp. 3,675 32,375,000
East Japan Railway Co. 9,636 50,130,143
Fujitsu Ltd. 2,496,000 25,524,571
Hitachi Ltd. 4,147,250 42,213,080
Japan Securities Finance Co., Ltd. 970,000 15,242,857
Kao Corp. 3,107,000 37,727,857
Kirin Beverage 74,000 1,154,048
Murata Mfg. Co., Ltd. 281,310 11,319,379
NEC Corp. 1,853,000 20,515,357
Nippon Communication Systems Corp. 1,204,700 16,779,750
Nippon Express Co., Ltd. 761,000 7,528,464
Nippon Telegraph & Telephone Corp. 5,877 51,983,464
Sankyo Co., Ltd. (Gunma) 107,000 6,203,452
Seikisui House Ltd. 1,345,000 17,773,214
Shin-Etsu Chemical Co., Ltd. 1,843,400 35,770,738
Sony Corp. 547,800 27,650,857
Sony Corp. ADR 113,500 5,774,313
TDK Corp. 884,000 40,411,429
Toho Co., Ltd. 118,400 21,283,810
Tsuchiya Home Co. 334,620 5,776,179
York-Benimaru Co., Ltd. 487,900 19,283,668
--------------
534,154,286
--------------
</TABLE>
See Accompanying Notes to Financial Statements.
13
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------------ --------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Korea (4.7%)
Daewoo Heavy Industries 567,406 $ 6,996,742
Hana Bank 421,150 7,568,877
Hanil Bank 1,827,292 23,071,869
Korea Electric Power Corp. 634,610 24,387,905
Korea Europe Fund Ltd. 1,210 4,310,625
Korea Long Term Credit Bank 243,584 7,414,880
Samsung Electronics Co., Ltd. 41,315 7,170,372
Samsung Electronics Co., Ltd. GDR 77,814 3,832,340
Samsung Heavy Industries Co., Ltd. 421,706 12,613,008
--------------
97,366,618
--------------
Malaysia (0.4%)
Arab-Malaysian Merchant Bank BHD 120,000 1,186,049
Westmont BHD 1,525,000 6,609,754
--------------
7,795,803
--------------
Mexico (2.0%)
Cemex SA de CV ADR 2,824,750 17,654,687
Grupo Financiero Banamex Accival SA de CV Class B 165,000 277,200
Grupo Financiero Banamex Accival SA de CV Class C 3,864,500 6,440,833
Telefonos de Mexico SA de CV ADR 529,400 16,014,350
--------------
40,387,070
--------------
New Zealand (5.3%)
Brierley Investments Ltd. 38,776,304 29,214,998
Fletcher Challenge Ltd. 10,019,687 26,960,974
Fletcher Forestry 8,123,000 11,365,832
Lion Nathan Ltd. 13,328,200 29,049,452
Wrightson Ltd. 14,548,459 11,744,097
--------------
108,335,353
--------------
Norway (2.1%)
Norsk Hydro AS ADR 1,096,022 43,977,883
--------------
Pakistan (0.5%)
Pakistan Telecommunications Corp. 1,430 156,317
Pakistan Telecommunications Corp. GDR + 93,200 9,739,400
--------------
9,895,717
--------------
Singapore (1.5%)
DBS Land Ltd. 3,866,000 10,655,642
Development Bank of Singapore Ltd. 1,123,250 12,012,938
Development Bank of Singapore Ltd. ADR 79,500 3,408,563
IPC Corp., Ltd. + 10,026,000 5,397,286
--------------
31,474,429
--------------
South Africa (0.0%)
Anglovaal Ltd. 23,000 787,954
--------------
</TABLE>
See Accompanying Notes to Financial Statements.
14
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------------ --------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Spain (3.5%)
Banco De Santander 144,866 $ 5,300,551
Banco De Santander ADR 1,172,200 42,492,250
Repsol SA ADR 757,400 24,236,800
--------------
72,029,601
--------------
Sweden (3.3%)
Asea AB Series B 244,500 20,587,491
Astra AB Series B 968,400 27,580,254
Celsius Industrier Series B 536,850 8,420,365
Foreningsbaken AB Series A + 6,107,100 10,587,141
--------------
67,175,251
--------------
Switzerland (2.5%)
BBC Brown Boveri AG 39,008 38,531,046
Danzas Holding AG 12,824 10,528,000
Immuno International AG 5,120 2,459,389
--------------
51,518,435
--------------
Taiwan (1.7%)
Baring International Taiwan Fund + 120,000 1,200,000
Evergreen Marine Corp., Ltd. + 4,348,000 9,072,956
Grand Pacific Fund 2,872,000 944,179
Kwang Hua Growth Fund 6,346,000 2,823,332
Tuntex Distinct Corp. 13,533,368 15,558,657
Tuntex Distinct Corp. GDS + 545,425 6,272,387
--------------
35,871,511
--------------
Thailand (0.9%)
Industrial Finance Corp. of Thailand 6,992,400 14,971,493
Thai Military Bank Ltd. 855,250 2,755,495
--------------
17,726,988
--------------
United Kingdom (8.0%)
AAF Industries PLC + 847,750 477,262
British Air Authority PLC 3,721,908 28,376,906
BTR PLC 5,570,800 29,480,479
Govett and Co., Ltd. 3,005,000 13,872,267
International Cabletel Inc. 128,500 3,790,750
Queens Moat Houses PLC + 1,649,500 0
Reckitt & Colman PLC 1,952,000 20,126,067
Singer and Friedlander Group PLC 9,093,000 12,285,916
Takare PLC 5,657,400 18,108,857
Thorn EMI PLC 1,931,631 35,326,914
Trio Holdings PLC 7,868,850 2,151,697
--------------
163,997,115
--------------
</TABLE>
See Accompanying Notes to Financial Statements.
15
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------------ --------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Zimbabwe (0.0%)
Delta Corp., Ltd. 53,000 $ 741,331
--------------
TOTAL COMMON STOCK (Cost $1,773,211,885) 1,803,911,638
--------------
PREFERRED STOCK (1.0%)
Australia (0.4%)
News Corp. 1,695,899 7,487,933
--------------
Austria (0.2%)
Maculan Holdings AG Vorzuege 113,775 4,694,546
--------------
Korea (0.3%)
Samsung Electronics Co., Ltd. 57,547 5,181,721
--------------
United Kingdom (0.1%)
Queens Moat Houses PLC, 7.50% Convertible + 82,700 0
Singer & Friedlander Group PLC, 8.50% Convertible 1,435,737 2,442,172
--------------
2,442,172
--------------
TOTAL PREFERRED STOCK (Cost $22,372,969) 19,806,372
--------------
STOCK RIGHTS AND WARRANTS (0.2%)
India (0.1%)
Hindalco Industries Ltd. Wts., 11/02/95 + 156,650 1,801,475
--------------
Israel (0.0%)
Ampal-American Israel Corp. Class A Wts., 01/31/99 + 455,000 241,719
--------------
Japan (0.1%)
Bandai Industries Wts., 11/04/97 + 2,936 1,468,000
--------------
Switzerland (0.0%)
Danzas Holding AG Wts., 08/02/96 + 9,050 5,928
--------------
Thailand (0.0%)
Thai Military Bank Ltd. Rts., 05/08/95 + 171,050 341,821
--------------
TOTAL STOCK RIGHTS AND WARRANTS (Cost $5,672,707) 3,858,943
--------------
OPTIONS (0.4%) CONTRACTS
------------
Japan (0.3%)
Topix Index, 03/08/96 strike price 1,251.24 + 20,426 2,786,923
Topix Index, 03/08/96 strike price 1,261.12 + 21,024 2,721,977
Topix Index, 03/08/96 strike price 1,349.00 + 9,152 695,460
--------------
6,204,360
--------------
Korea (0.1%)
Korea Composite Index, 09/24/95 + 6,000,000 1,354,200
--------------
Mexico (0.0%)
Mexican Index, 09/95 + 308 7,700
Mexican Inmex, 03/29/96 + 249,080 4,982
--------------
12,682
--------------
</TABLE>
See Accompanying Notes to Financial Statements.
16
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CONTRACTS VALUE
<S> <C> <C>
OPTIONS (CONT'D) ------------ --------------
Switzerland (0.0%)
Danzas Holding AG, 08/02/96 + 1,000 $ 6,550
--------------
TOTAL OPTIONS (Cost $8,311,011) 7,577,792
--------------
CONVERTIBLE BONDS/NOTES (3.5%) PAR
------------
Argentina (0.3%)
Banco De Galicia 7.00%, 08/01/02 $ 7,648,000 5,353,600
--------------
Australia (0.2%)
BTR Nylex 9.00%, 11/30/49 (C) 57,300,000 4,543,122
--------------
India (0.2%)
Reliance Industries Ltd. 3.50%, 11/03/99 $ 3,850,000 3,888,500
--------------
Japan (1.5%)
Matsushita Electric Works Ltd. 2.70%, 05/31/02 (B) 2,385,000,000 31,658,036
--------------
New Zealand (0.0%)
Brierley Investments Ltd. 9.00%, 06/30/98 (A) 1,314,875 902,207
--------------
Taiwan (1.3%)
United Microelectronics Corp. 1.25%, 06/08/04 $ 7,160,000 11,259,100
Yang Ming Marine Transport Corp. 2.00%, 10/06/01 14,870,000 15,241,750
--------------
26,500,850
--------------
TOTAL CONVERTIBLE BONDS/NOTES (Cost $67,027,378) 72,846,315
--------------
SHORT-TERM INVESTMENTS (7.1%)
Repurchase agreement with State Street Bank & Trust dated 04/28/95 at 5.87% to be
repurchased at $146,171,467 on 05/01/95. (Collateralized by $147,920,000 U.S.
Treasury Note, due 08/31/96, with a market value of $150,561,859.) (Cost
$146,100,000) 146,100,000 146,100,000
--------------
TOTAL INVESTMENTS (99.9%) (Cost $2,022,695,950*) 2,054,101,060
OTHER ASSETS IN EXCESS OF LIABILITIES (0.1%) 1,468,145
--------------
NET ASSETS (100.0%) (applicable to 99,206,770 Common Shares and 14,392,117 Advisor
Shares**) $2,055,569,205
--------------
--------------
NET ASSET VALUE, offering and redemption price per Common Share
($1,796,703,177 [div] 99,206,770) $18.11
------
------
NET ASSET VALUE, offering and redemption price per Advisor
Share**($258,866,028 [div] 14,392,117) $17.99
------
------
</TABLE>
+ Non-income producing security.
* Also cost for Federal income tax purposes.
** Advisor Shares refer to Series 2 Shares herein and in the prospectus.
Unless otherwise indicated below, all convertible bonds/notes are denominated in
$U.S.
(A) Denominated in New Zealand Dollars.
(B) Denominated in Japanese Yen.
(C) Denominated in Australian Dollars.
See Accompanying Notes to Financial Statements.
17
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS JAPAN OTC FUND
SCHEDULE OF INVESTMENTS
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- -----------
<S> <C> <C>
JAPAN COMMON STOCK (90.0%)
Automotive Parts-Equipment (1.9%)
Harada Industry Co., Ltd. + 8,000 $ 185,714
SNT Corp. 28,000 270,000
-----------
455,714
-----------
Building Materials (2.6%)
Furusato Industries 35,000 379,167
Nozawa Corp. + 48,000 241,143
-----------
620,310
-----------
Computers (5.6%)
I.O. Data Device Inc. 26,000 1,247,381
Toyo Information Systems 11,000 116,547
-----------
1,363,928
-----------
Construction (18.8%)
Kawasho Lease System Corp. 56,500 975,298
Nishio Rent All 20,000 554,762
Onoken Co., Ltd. 38,900 1,004,917
Sacos Corp. 13,000 386,905
Sankyo Frontier Co., Ltd. 20,000 647,619
Tokai Lease Co., Ltd. 38,000 440,619
Yamadai Corp. + 10,000 103,571
Yamazaki Construction Co., Ltd. 18,000 349,286
Yokogawa Construction Co., Ltd. 5,000 122,619
-----------
4,585,596
-----------
Cosmetics/Personal Care (2.9%)
Mandom Corp. 37,500 709,821
-----------
Distribution/Wholesale (2.8%)
Arc Land Sakamoto Co., Ltd. 12,500 224,702
Hakuto Co., Ltd. 5,000 103,571
Trusco Nakayama Corp. 15,200 358,286
-----------
686,559
-----------
Electronics (13.0%)
Apic Yamada Corp. 500 17,798
KDK Corp. 17,000 155,833
New Japan Radio Co., Ltd. + 74,000 925,000
Satori Electric 17,000 847,976
Yaesu Musen Co., Ltd. 35,000 520,833
Yamaichi Electronics Co., Ltd. 41,000 707,738
-----------
3,175,178
-----------
Financial Services (1.7%)
Acom Co., Ltd. 4,400 126,238
Japan Associated Finance Co., Ltd. 2,000 245,238
Promise Co., Ltd. 1,200 52,429
-----------
423,905
-----------
Food Processing (7.8%)
Ito En Ltd. 15,000 300,000
Iwatsuka Confectionery Co., Ltd. 21,000 237,500
Sato Food Industries Co., Ltd. 35,000 650,000
Taiyo Kagaku Co., Ltd. 54,000 707,143
-----------
1,894,643
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
18
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS JAPAN OTC FUND
SCHEDULE OF INVESTMENTS (CONT'D)
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- -----------
<S> <C> <C>
JAPAN COMMON STOCK (CONT'D)
Glass Products (4.3%)
Kuramoto Seisakusho Co., Ltd. 16,000 $ 1,051,429
-----------
Home Furnishings/Housewares (3.2%)
Hikari Furniture 39,000 580,357
Nikku Sangyo Co., Ltd. 13,200 194,857
-----------
775,214
-----------
Lodging (1.9%)
Royal Hotel 46,000 461,095
-----------
Machinery/Heavy Equipment (5.6%)
Iseki Poly-Tech Inc. 34,000 485,714
Kito Corp. 45,000 883,929
-----------
1,369,643
-----------
Mail Order (1.2%)
Belluna Co., Ltd. 11,700 285,536
-----------
Manufacturing (5.7%)
Nakakita Seisakusho Co., Ltd. 44,000 209,000
Nitta Industrial Corp. 81,000 1,176,429
-----------
1,385,429
-----------
Pharmaceutical (5.6%)
Seikagaku Corp. 30,000 1,375,000
-----------
Printing/Publishing (0.8%)
Asia Securities Printing Co. 4,400 193,810
-----------
Restaurants/Food Service (1.3%)
Plenus Co., Ltd. 6,500 324,226
-----------
Retail Merchandising (0.7%)
Kraft Inc. + 8,000 175,238
-----------
Shipbuilding (1.2%)
Namura Shipbuilding 51,000 303,571
-----------
Transportation (1.4%)
Daito Koun Co., Ltd. 28,000 340,000
-----------
TOTAL JAPAN COMMON STOCK (Cost $21,905,994) 21,955,845
-----------
SHORT-TERM INVESTMENTS (10.0%) PAR
----------
Repurchase agreement with State Street Bank & Trust Co. dated 04/28/95 at 5.87% to be
repurchased at $2,439,193 on 05/01/95. (Collateralized by $2,475,000 U.S. Treasury
Note 6.50%, due 09/30/96, with a market value of $2,488,835.) (Cost $2,438,000) $2,438,000 2,438,000
-----------
TOTAL INVESTMENTS (100.0%) (Cost $24,343,994*) $24,393,845
-----------
-----------
</TABLE>
+ Non-income producing security.
* Also cost for Federal income tax purposes.
See Accompanying Notes to Financial Statements.
19
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS JAPAN OTC FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments at value (Cost $24,343,994) $24,393,845
Foreign currency (Cost $1,726,495) 1,692,568
Receivable for investments sold (Cost $383,328) 382,536
Deferred organizational costs 190,166
Dividends and interest receivable (Cost $78,651) 83,602
Receivable for Fund shares sold 30,313
Receivable for unrealized gain on forward contracts 13,751
Other receivables 115,556
-----------
Total assets 26,902,337
-----------
LIABILITIES
Payable for investments purchased (Cost $293,187) 292,097
Accrued expenses 36,528
Other liabilities 181
-----------
328,806
Total liabilities -----------
$26,573,531
NET ASSETS applicable to 3,386,751 Common Shares outstanding and -----------
115 Advisor Shares* outstanding -----------
NET ASSET VALUE, offering and redemption price per Common Share ($26,572,630 [div] 3,386,751) $7.85
-----
-----
NET ASSET VALUE, offering and redemption price per Advisor Share* $7.84
($901 [div] 115) -----
-----
</TABLE>
* Advisor Shares refer to Series 2 Shares herein and in the prospectus.
See Accompanying Notes to Financial
Statements.
20
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
STATEMENTS OF OPERATIONS
For the Six Months Ended April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Warburg Pincus Warburg Pincus Warburg Pincus Warburg Pincus
Capital Appreciation Emerging Growth International Equity Japan OTC
Fund Fund Fund Fund
-------------------- --------------- -------------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 866,566 $ 385,287 $ 16,884,622 $ 92,394
Interest 417,191 777,120 6,035,578 52,639
Foreign taxes withheld (2,423) 0 (2,632,413) (13,859)
-------------------- --------------- -------------------- --------------
Total investment income 1,281,334 1,162,407 20,287,787 131,174
-------------------- --------------- -------------------- --------------
EXPENSES:
Investment advisory 572,180 1,428,874 8,871,020 141,840
Administrative services 163,480 317,528 1,516,613 53,847
Audit 11,486 11,348 25,098 9,837
Custodian/Sub-custodian 26,453 56,264 900,807 22,943
Directors/Trustees 4,960 4,960 4,960 3,720
Distribution 0 0 0 28,368
Insurance 7,467 7,935 20,767 2,266
Legal 13,889 13,785 24,437 12,397
Organizational 0 0 0 19,066
Printing 12,853 16,604 39,399 7,690
Registration 16,018 43,913 292,491 24,613
Shareholder servicing 20,418 188,426 532,559 0
Transfer agent 37,099 60,883 532,321 41,327
Miscellaneous 17,498 15,667 38,126 3,712
-------------------- --------------- -------------------- --------------
903,801 2,166,187 12,798,598 371,626
Less: fees waived and expenses
reimbursed 0 0 0 (258,152)
-------------------- --------------- -------------------- --------------
Total expenses 903,801 2,166,187 12,798,598 113,474
-------------------- --------------- -------------------- --------------
Net investment income (loss) 377,533 (1,003,780) 7,489,189 17,700
-------------------- --------------- -------------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENTS AND
FOREIGN CURRENCY RELATED ITEMS:
Net realized gain (loss) from security
transactions 6,497,435 14,451,273 (53,266,705) (1,943,522)
Net realized gain (loss) from foreign
currency related items 0 0 3,272,321 (3,394,945)
Net increase (decrease) in unrealized
appreciation from investments and
foreign currency related items 3,936,137 11,679,784 (110,594,381) 70,023
-------------------- --------------- -------------------- --------------
Net realized and unrealized gain
(loss) from investments and
foreign currency related
items 10,433,572 26,131,057 (160,588,765) (5,268,444)
-------------------- --------------- -------------------- --------------
Net increase (decrease) in net
assets from operations $ 10,811,105 $25,127,277 $ (153,099,576) $ (5,250,744)
-------------------- --------------- -------------------- --------------
-------------------- --------------- -------------------- --------------
</TABLE>
See Accompanying Notes to Financial Statements.
21
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Warburg Pincus Warburg Pincus
Capital Appreciation Emerging Growth
Fund Fund
----------------------------------- -----------------------------------
For the For the
Six Months Ended For the Six Months Ended For the
April 30, 1995 Year Ended April 30, 1995 Year Ended
(Unaudited) October 31, 1994 (Unaudited) October 31, 1994
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ 377,533 $ 384,246 $ (1,003,780) $ (1,678,646)
Net realized gain (loss) from security
transactions 6,497,435 11,173,174 14,451,273 (5,721,525)
Net realized gain (loss) from foreign currency
related items 0 0 0 0
Net change in unrealized appreciation
(depreciation) from investments and foreign
currency related items 3,936,137 (9,106,613) 11,679,784 10,930,919
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets
resulting from operations 10,811,105 2,450,807 25,127,277 3,530,748
---------------- ---------------- ---------------- ----------------
FROM DISTRIBUTIONS:
Dividends from net investment income:
Common shares 0 (419,337) 0 0
Advisor shares 0 (27,724) 0 0
Distributions in excess of net investment
income:
Common shares 0 0 0 0
Advisor shares 0 0 0 0
Distributions from capital gains:
Common shares (10,460,742) (12,899,141) 0 (10,576,150)
Advisor shares (575,892) (852,608) 0 (1,639,316)
---------------- ---------------- ---------------- ----------------
Net decrease from distributions (11,036,634) (14,198,810) 0 (12,215,466)
---------------- ---------------- ---------------- ----------------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 39,742,671 45,617,531 111,724,784 180,813,270
Reinvested dividends 10,763,492 13,809,167 347,867 12,758,387
Net asset value of shares redeemed (27,720,617) (49,851,500) (54,921,210) (71,767,717)
---------------- ---------------- ---------------- ----------------
Net increase in net assets from capital
share transactions 22,785,546 9,575,198 57,151,441 121,803,940
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets 22,560,017 (2,172,805) 82,278,718 113,119,222
NET ASSETS:
Beginning of period 167,514,493 169,687,298 304,672,758 191,553,536
---------------- ---------------- ---------------- ----------------
End of period $190,074,510 $167,514,493 $386,951,476 $304,672,758
---------------- ---------------- ---------------- ----------------
---------------- ---------------- ---------------- ----------------
</TABLE>
See Accompanying Notes to Financial Statements.
22
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Warburg Pincus Warburg Pincus
International Equity Japan OTC
Fund Fund
------------------------------------ ---------------------------------------
For the Period
For the For the September 30, 1994
Six Months Ended For the Six Months Ended (Commencement of
April 30, 1995 Year Ended April 30, 1995 Operations) through
(Unaudited) October 31, 1994 (Unaudited) October 31, 1994
---------------- ---------------- ---------------- -------------------
<S> <C> <C> <C> <C>
$ 7,489,189 $ 1,310,933 $ 17,700 $ 5,115
(53,266,705) 48,091,665 (1,943,522) 0
3,272,321 (2,772,944) (3,394,945) (294,437)
(110,594,381) 82,484,415 70,023 (35,099)
---------------- ---------------- ---------------- -------------------
(153,099,576) 129,114,069 (5,250,744) (324,421)
---------------- ---------------- ---------------- -------------------
(5,808,212) (1,764,380) 0 0
(332,184) (218,961) 0 0
0 (223,659) 0 0
0 0 0 0
(42,332,078) (1,047,367) 0 0
(5,756,403) (129,979) 0 0
---------------- ---------------- ---------------- -------------------
(54,228,877) (3,384,346) 0 0
---------------- ---------------- ---------------- -------------------
826,097,889 1,430,739,923 17,783,234 20,287,158
49,503,945 2,950,772 0 0
(345,979,679) (249,050,078) (5,837,595) (185,101)
---------------- ---------------- ---------------- -------------------
529,622,155 1,184,640,617 11,945,639 20,102,057
---------------- ---------------- ---------------- -------------------
322,293,702 1,310,370,340 6,694,895 19,777,636
1,733,275,503 422,905,163 19,878,636 101,000
---------------- ---------------- ---------------- -------------------
$2,055,569,205 $1,733,275,503 $ 26,573,531 $19,878,636
---------------- ---------------- ---------------- -------------------
---------------- ---------------- ---------------- -------------------
</TABLE>
23
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS CAPITAL APPRECIATION FUND
FINANCIAL HIGHLIGHTS
(For a Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common Shares
-----------------------------------------------------------------
For the Six
Months
Ended
April 30, For the Year Ended October 31,
1995 -------------------------------------------------
(Unaudited) 1994 1993 1992 1991 1990
----------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF
PERIOD $14.29 $15.32 $13.30 $12.16 $9.78 $11.48
----------- ------ ------ ------ ------ ------
Income From
Investment
Operations:
Net Investment
Income (Loss) .03 .04 .05 .04 .15 .20
Net Gain (Loss)
from Securities
(both realized
and unrealized) .75 .17 2.78 1.21 2.41 (1.28)
----------- ------ ------ ------ ------ ------
Total From
Investment
Operations .78 .21 2.83 1.25 2.56 (1.08)
----------- ------ ------ ------ ------ ------
Less
Distributions:
Dividends from net
investment
income .00 (.05) (.05) (.06) (.18) (.21)
Distributions from
capital gains (.98) (1.19) (.76) (.05) .00 (.41)
----------- ------ ------ ------ ------ ------
Total
Distributions (.98) (1.24) (.81) (.11) (.18) (.62)
----------- ------ ------ ------ ------ ------
NET ASSET VALUE, END
OF PERIOD $14.09 $14.29 $15.32 $13.30 $12.16 $9.78
----------- ------ ------ ------ ------ ------
----------- ------ ------ ------ ------ ------
Total Return 13.25%* 1.65% 22.19% 10.40% 26.39% (10.11%)
RATIOS/SUPPLEMENTAL
DATA:
Net Assets, End of
Period (000s) $181,109 $159,346 $159,251 $117,900 $115,191 $76,537
Ratios to average
daily net assets:
Operating expenses 1.08%* 1.05% 1.01% 1.06% 1.08% 1.04%
Net investment
income (loss) .49%* .26% .30% .41% 1.27% 2.07%
Decrease reflected
in above expense
ratios due to
waivers/reimbursements 00% .01% .00% .01% .00% .01%
Portfolio turnover
rate 153.53%* 51.87% 48.26% 55.83% 39.50% 37.10%
</TABLE>
<TABLE>
<CAPTION>
Advisor Shares
------------------------------------------------------------------
For the Period
For the Six April 4, 1991
Months Ended For the Year Ended October (Initial Issuance)
April 30, 31, Through
1995 ---------------------------- October 31,
(Unaudited) 1994 1993 1992 1991
------------ ------ ------ ------ ------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF
PERIOD $14.22 $15.28 $13.28 $12.16 $12.04
------ ------ ------ ------ ------
Income From
Investment
Operations:
Net Investment
Income (Loss) .00 .05 .00 (.01) .05
Net Gain (Loss)
from Securities
(both realized
and unrealized) .74 .10 2.76 1.20 .13
------ ------ ------ ------ ------
Total From
Investment
Operations .74 .15 2.76 1.19 .18
------ ------ ------ ------ ------
Less
Distributions:
Dividends from net
investment
income .00 (.02) .00 (.02) (.06)
Distributions from
capital gains (.98) (1.19) (.76) (.05) .00
------ ------ ------ ------ ------
Total
Distributions (.98) (1.21) (.76) (.07) (.06)
------ ------ ------ ------ ------
NET ASSET VALUE, END
OF PERIOD $13.98 $14.22 $15.28 $13.28 $12.16
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total Return 12.70%* 1.23% 21.64% 9.83% 2.66%*
RATIOS/SUPPLEMENTAL
DATA:
Net Assets, End of
Period (000s) $8,966 $8,169 $10,437 $1,655 $443
Ratios to average
daily net assets:
Operating expenses 1.58%* 1.55% 1.51% 1.56% 1.63%*
Net investment
income (loss) (.01%)* (.24%) (.25%) (.11%) .25%*
Decrease reflected
in above expense
ratios due to
waivers/reimburs .00% .01% .00% .01% .01%*
Portfolio turnover
rate 153.53%* 51.87% 48.26% 55.83% 39.50%
</TABLE>
* Annualized
See Accompanying Notes to Financial Statements.
- --------------------------------------------------------------------------------
24
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EMERGING GROWTH FUND
FINANCIAL HIGHLIGHTS
(For a Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common Shares
---------------------------------------------------------------
For the Six
Months
Ended
April 30, For the Year Ended October 31,
1995 -----------------------------------------------
(Unaudited) 1994 1993 1992 1991 1990
----------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF
PERIOD $ 22.38 $23.74 $18.28 $16.97 $10.83 $13.58
----------- ------ ------ ------ ------ ------
Income From
Investment
Operations:
Net Investment
Income (Loss) (.05) .00 (.10) (.03) .05 .13
Net Gain (Loss)
from Securities
(both realized
and unrealized) 1.72 .00 5.93 1.71 6.16 (2.32)
----------- ------ ------ ------ ------ ------
Total From
Investment
Operations 1.67 .00 5.83 1.68 6.21 (2.19)
----------- ------ ------ ------ ------ ------
Less
Distributions:
Dividends from net
investment
income .00 .00 .00 (.01) (.07) (.18)
Distributions from
capital gains .00 (1.36) (.37) (.36) .00 (.38)
----------- ------ ------ ------ ------ ------
Total
Distributions .00 (1.36) (.37) (.37) (.07) (.56)
----------- ------ ------ ------ ------ ------
NET ASSET VALUE, END
OF PERIOD $ 24.05 $22.38 $23.74 $18.28 $16.97 $10.83
----------- ------ ------ ------ ------ ------
----------- ------ ------ ------ ------ ------
Total Return 15.62%* .16% 32.28% 9.87% 57.57% (16.90%)
RATIOS/SUPPLEMENTAL
DATA:
Net Assets, End of
Period (000s) $289,226 $240,664 $165,525 $99,562 $42,061 $23,075
Ratios to average
daily net assets:
Operating expenses 1.25%* 1.22% 1.23% 1.24% 1.25% 1.25%
Net investment
income (loss) (.52%)* (.58%) (.60%) (.25%) .32% 1.05%
Decrease reflected
in above expense
ratios due to
waivers/reimbursements .00% .04% .00% .08% .47% .42%
Portfolio turnover
rate 97.48%* 60.38% 68.35% 63.35% 97.69% 107.30%
</TABLE>
<TABLE>
<CAPTION>
Advisor Shares
----------------------------------------------------------------
For the Period
For the Six April 4, 1991
Months Ended For the Year Ended October (Initial Issuance)
April 30, 31, Through
1995 --------------------------- October 31,
(Unaudited) 1994 1993 1992 1991
------------ ------ ------ ------ ------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF
PERIOD $ 22.05 $23.51 $18.19 $16.99 $15.18
------ ------ ------ ------ ------
Income From
Investment
Operations:
Net Investment
Income (Loss) (.09) .00 (.08) (.06) .00
Net Gain (Loss)
from Securities
(both realized
and unrealized) 1.67 (.10) 5.77 1.62 1.82
------ ------ ------ ------ ------
Total From
Investment
Operations 1.58 (.10) 5.69 1.56 1.82
------ ------ ------ ------ ------
Less
Distributions:
Dividends from net
investment
income .00 .00 .00 .00 (.01)
Distributions from
capital gains .00 (1.36) (.37) (.36) .00
------ ------ ------ ------ ------
Total
Distributions .00 (1.36) (.37) (.36) (.01)
------ ------ ------ ------ ------
NET ASSET VALUE, END
OF PERIOD $ 23.63 $22.05 $23.51 $18.19 $16.99
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total Return 14.97%* (.29%) 31.67% 9.02% 23.43%*
RATIOS/SUPPLEMENTAL
DATA:
Net Assets, End of
Period (000s) $97,725 $64,009 $26,029 $5,398 $275
Ratios to average
daily net assets:
Operating expenses 1.75%* 1.72% 1.73% 1.74% 1.74%*
Net investment
income (loss) (1.01%)* (1.08%) (1.09%) (.87%) (.49%)*
Decrease reflected
in above expense
ratios due to
waivers/reimburs .00% .04% .00% .06% .42%*
Portfolio turnover
rate 97.48%* 60.38% 68.35% 63.38% 97.69%
</TABLE>
* Annualized
See Accompanying Notes to Financial Statements.
- --------------------------------------------------------------------------------
25
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
(For a Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common Shares
------------------------------------------------------------------
For the Six
Months
Ended
April 30, For the Year Ended October 31,
1995 ------------------------------------------------
(Unaudited) 1994 1993 1992 1991 1990
----------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF
PERIOD $20.51 $17.00 $12.22 $13.66 $11.81 $11.35
----------- ------ ------ ------ ------ ------
Income from
Investment
Operations:
Net Investment
Income (Loss) .09 .09 .09 .15 .19 .13
Net Gain (Loss)
from Securities
and Foreign
Currency Related
Items (both
realized and
unrealized) (1.89) 3.51 4.84 (1.28) 2.03 .55
----------- ------ ------ ------ ------ ------
Total From
Investment
Operations (1.80) 3.60 4.93 (1.13) 2.22 .68
----------- ------ ------ ------ ------ ------
Less
Distributions:
Dividends from net
investment
income (.07) (.04) (.02) (.16) (.33) (.10)
Distributions in
excess of net
investment
income .00 (.01) .00 .00 .00 .00
Distributions from
capital gains (.53) (.04) (.13) (.15) (.04) (.12)
----------- ------ ------ ------ ------ ------
Total
Distributions (.60) (.09) (.15) (.31) (.37) (.22)
----------- ------ ------ ------ ------ ------
NET ASSET VALUE, END
OF PERIOD $18.11 $20.51 $17.00 $12.22 $13.66 $11.81
----------- ------ ------ ------ ------ ------
----------- ------ ------ ------ ------ ------
Total Return (17.05%)* 21.22% 40.68% (8.44%) 19.42% 5.92%
RATIOS/SUPPLEMENTAL
DATA:
Net Assets, End of
Period (000s) $1,796,703 $1,533,872 $378,661 $101,763 $72,553 $38,946
Ratios to average
daily net assets:
Operating expenses 1.38%* 1.44% 1.48% 1.49% 1.50% 1.46%
Net investment
income (loss) .90%* .19% .38% .88% 1.19% 1.58%
Decrease reflected
in above expense
ratios due to
waivers/reimbursement .00% .00% .00% .07% .17% .38%
Portfolio turnover
rate 22.67%* 17.02% 22.60% 53.29% 54.95% 66.12%
</TABLE>
<TABLE>
<CAPTION>
Advisor Shares
-----------------------------------------------------------------
For the Period
For the Six April 4, 1991
Months Ended For the Year Ended October (Initial Issuance)
April 30, 31, Through
1995 --------------------------- October 31,
(Unaudited) 1994 1993 1992 1991
------------ ------ ------ ------ ------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF
PERIOD $20.38 $16.91 $12.20 $13.66 $13.14
------ ------ ------ ------ ------
Income from
Investment
Operations:
Net Investment
Income (Loss) .05 .16 (.01) .13 .00
Net Gain (Loss)
from Securities
and Foreign
Currency Related
Items (both
realized and
unrealized) (1.88) 3.35 4.86 (1.32) .58
------ ------ ------ ------ ------
Total From
Investment
Operations (1.83) 3.51 4.85 (1.19) .58
------ ------ ------ ------ ------
Less
Distributions:
Dividends from net
investment
income (.03) .00 (.01) (.12) (.06)
Distributions in
excess of net
investment
income .00 .00 .00 .00 .00
Distributions from
capital gains (.53) (.04) (.13) (.15) .00
------ ------ ------ ------ ------
Total
Distributions (.56) (.04) (.14) (.27) (.06)
------ ------ ------ ------ ------
NET ASSET VALUE, END
OF PERIOD $17.99 $20.38 $16.91 $12.20 $13.66
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total Return (17.44%)* 20.77% 40.06% (8.86%) 7.85%*
RATIOS/SUPPLEMENTAL
DATA:
Net Assets, End of
Period (000s) $ 258,866 $199,404 $44,244 $1,472 $ 153
Ratios to average
daily net assets:
Operating expenses 1.88%* 1.94% 2.00% 2.00% 2.23%*
Net investment
income (loss) .44%* (.29%) (.36%) .54% .30%*
Decrease reflected
in above expense
ratios due to
waivers/reimburs .00% .00% .00% .07% .17%*
Portfolio turnover
rate 22.67%* 17.02% 22.60% 53.29% 54.95%
</TABLE>
* Annualized
See Accompanying Notes to Financial Statements.
- --------------------------------------------------------------------------------
26
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS JAPAN OTC FUND
FINANCIAL HIGHLIGHTS
(For a Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common Shares Advisor Shares
----------------------------------- -----------------------------------
For the Six For the Period For the Six For the Period
Months Ended September 30, 1994 Months Ended September 30, 1994
April 30, (Commencement of April 30, (Commencement of
1995 Operations) through 1995 Operations) through
(Unaudited) October 31, 1994 (Unaudited) October 31, 1994
------------ ------------------- ------------ -------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.85 $ 10.00 $ 9.85 $ 10.00
----- ------ ----- ------
Income from Investment Operations:
Net Investment Income .01 .00 .00 .00
Net Loss from Securities and Foreign
Currency Related Items (both realized and
unrealized) (2.01) (.15) (2.01) (.15)
----- ------ ----- ------
Total From Investment Operations (2.00) (.15) (2.01) (.15)
----- ------ ----- ------
Less Distributions:
Dividends from net investment income .00 .00 .00 .00
Distributions from capital gains .00 .00 .00 .00
----- ------ ----- ------
Total Distributions .00 .00 .00 .00
----- ------ ----- ------
NET ASSET VALUE, END OF PERIOD $ 7.85 $ 9.85 $ 7.84 $ 9.85
----- ------ ----- ------
----- ------ ----- ------
Total Return (36.72%)* (15.84%)* (36.89%)* (15.84%)*
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $26,573 $19,878 $ 1 $ 1
Ratios to average daily net assets:
Operating expenses 1.00%* 1.00%* 1.25%* 1.18%*
Net investment income (loss) .16%* .49%* (.16%)* .12%*
Decrease reflected in above expense ratios
due to waivers/reimbursements 2.28%* 4.96%* 2.28%* 4.74%*
Portfolio turnover rate 138.17%* .00% 138.17%* .00%
* Annualized
</TABLE>
See Accompanying Notes to Financial Statements.
27
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Warburg Pincus Equity Funds are comprised of Warburg Pincus Capital
Appreciation Fund (the 'Capital Appreciation Fund') and Warburg Pincus
International Equity Fund (the 'International Equity Fund') which are registered
under the Investment Company Act of 1940, as amended (the '1940 Act'), as
diversified, open-end management investment companies, and Warburg Pincus
Emerging Growth Fund (the 'Emerging Growth Fund') and Warburg Pincus Japan OTC
Fund (the 'Japan OTC Fund,' together with the Capital Appreciation Fund, the
International Equity Fund and the Emerging Growth Fund, the 'Funds') which are
registered under the 1940 Act as non-diversified, open-end management investment
companies.
Investment objectives for each Fund are as follows: the Capital
Appreciation Fund, the International Equity Fund and the Japan OTC Fund seek
long-term capital appreciation; the Emerging Growth Fund seeks maximum capital
appreciation.
The net asset value of each Fund is determined daily as of the close of
regular trading on the New York Stock Exchange. Each Fund's investments are
generally valued at market value, which is currently determined using the last
reported sales price. If no sales are reported, investments are valued at the
last reported bid price. In the absence of market quotations, investments are
generally valued at fair value as determined by or under the direction of the
Fund's governing Board. Short-term investments that mature in 60 days or less
are valued on the basis of amortized cost, which attempts to approximate market
value.
The books and records of the Funds are maintained in U.S. dollars.
Transactions denominated in foreign currencies are recorded at the current
prevailing exchange rates. All assets and liabilities denominated in foreign
currencies are translated into U.S. dollar amounts at the current exchange rate.
Translation gains or losses resulting from changes in the exchange rate during
the reporting period and realized gains and losses on the settlement of foreign
currency transactions are reported in the results of operations for the current
period. The Funds do not isolate that portion of gains and losses on investments
in equity securities which are due to changes in the foreign exchange rate from
that which are due to changes in market prices of equity securities.
Security transactions are accounted for on trade date. Interest income is
recorded on the accrual basis. Dividends are recorded on the ex-dividend date.
Income, expenses (excluding class-specific expenses) and realized/unrealized
gains/losses are allocated proportionately to each class of shares based upon
the relative net asset value of outstanding shares. The cost of investments sold
is determined by use of the specific identification method for both financial
reporting and income tax purposes.
Dividends from net investment income are declared and paid semiannually for
all Funds. Distributions of net realized capital gains, if any, are declared
annually. However, to the extent that a net realized capital gain can be reduced
by a capital loss carryover, such gain will not be distributed. Income and
capital gain distributions are determined in accordance with Federal income tax
regulations which may differ from generally accepted accounting principles.
Each Fund intends to continue to comply with the special provisions of the
Internal Revenue Code available to investment companies and therefore no Federal
income tax provision is required.
28
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
Costs incurred by the Japan OTC Fund in connection with its organization
have been deferred and are being amortized over a period of five years from the
date the Japan OTC Fund commenced its operations.
Each Fund may enter into repurchase agreement transactions. Under the terms
of a typical repurchase agreement, a Fund acquires an underlying security
subject to an obligation of the seller to repurchase. The value of the
underlying security collateral will be maintained at an amount at least equal to
the total amount of the purchase obligation, including interest. The collateral
is in the Fund's possession.
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR
Warburg, Pincus Counsellors, Inc. ('Counsellors'), a wholly owned
subsidiary of Warburg, Pincus Counsellors G.P. ('Counsellors G.P.'), serves as
each Fund's investment adviser. For its investment advisory services,
Counsellors receives the following fees based on each Fund's average daily net
assets:
<TABLE>
<CAPTION>
FUND ANNUAL RATE
- --------------------------------- ----------------------------------
<S> <C>
Capital Appreciation .70% of average daily net assets
Emerging Growth .90% of average daily net assets
International Equity 1.00% of average daily net assets
Japan OTC 1.25% of average daily net assets
</TABLE>
For the six months ended April 30, 1995, investment advisory fees, waivers
and reimbursements were as follows:
<TABLE>
<CAPTION>
GROSS NET EXPENSE
FUND ADVISORY FEE WAIVER ADVISORY FEE REIMBURSEMENTS
- ------------------------------------------ ------------ ---------- ------------ --------------
<S> <C> <C> <C> <C>
Capital Appreciation $ 572,180 $ 0 $ 572,180 $ 0
Emerging Growth 1,428,874 0 1,428,874 0
International Equity 8,871,020 0 8,871,020 0
Japan OTC 141,840 (141,840) 0 116,312
</TABLE>
SPARX Investment & Research, USA, Inc. ('SPARX USA') serves as
sub-investment adviser for the Japan OTC Fund. From its investment advisory fee,
Counsellors pays SPARX USA a fee at an annual rate of .625% of the average daily
net assets of the Japan OTC Fund. No compensation is payable by the Japan OTC
Fund to SPARX USA for its sub-investment advisory services.
Counsellors Funds Service, Inc. ('CFSI'), a wholly owned subsidiary of
Counsellors, and PFPC Inc. ('PFPC'), an indirect, wholly owned subsidiary of PNC
Bank Corp. ('PNC'), serve as each Fund's co-administrators. For its
administrative services, CFSI receives a fee calculated at an annual rate of
.10% of each Fund's average daily net assets. For the six months ended April 30,
1995, administrative services fees earned by CFSI were as follows:
<TABLE>
<CAPTION>
FUND CO-ADMINISTRATION FEE
- ------------------------------------------- ------------------------------
<S> <C>
Capital Appreciation $ 81,740
Emerging Growth 158,764
International Equity 887,102
Japan OTC 11,347
</TABLE>
29
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
For the six months ended April 30, 1995, administrative services fees
earned by PFPC were as follows:
<TABLE>
<CAPTION>
FUND CO-ADMINISTRATION FEE
- ------------------------------------------- ------------------------------
<S> <C>
Capital Appreciation $ 81,740
Emerging Growth 158,764
International Equity 629,511
Japan OTC 42,500
</TABLE>
Counsellors Securities Inc. ('CSI'), also a wholly owned subsidiary of
Counsellors, serves as each Fund's distributor. No compensation is payable by
the Capital Appreciation Fund, the Emerging Growth Fund or the International
Equity Fund to CSI for distribution services. For distribution services with
respect to the Common Shares of the Japan OTC Fund, CSI receives a fee at an
annual rate of .25% of the Japan OTC Fund's average daily net assets
attributable to the Common Shares; no compensation is payable to CSI with
respect to the Fund's Advisor Shares. For the six months ended April 30, 1995,
CSI earned $28,368 in distribution fees.
3. INVESTMENTS IN SECURITIES
For the six months ended April 30, 1995, purchases and sales of investment
securities (excluding short-term investments) were as follows:
<TABLE>
<CAPTION>
FUND PURCHASES SALES
- ------------------------------------------------------------- ------------ ------------
<S> <C> <C>
Capital Appreciation $132,677,612 $117,699,248
Emerging Growth 191,272,370 144,738,127
International Equity 550,909,981 176,630,818
Japan OTC 23,632,862 13,544,562
</TABLE>
At April 30, 1995, the net unrealized appreciation from investments for
those securities having an excess of value over cost and net unrealized
depreciation from investments for those securities having an excess of cost over
value (based on cost for Federal income tax purposes) was as follows:
<TABLE>
<CAPTION>
NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
FUND APPRECIATION DEPRECIATION (DEPRECIATION)
- --------------------------------- ------------ -------------- --------------
<S> <C> <C> <C>
Capital Appreciation $ 35,905,406 $ (2,026,288) $ 33,879,118
Emerging Growth 69,461,748 (7,067,044) 62,394,704
International Equity 174,273,357 (142,868,247) 31,405,110
Japan OTC 1,197,112 (1,147,261) 49,851
</TABLE>
4. FORWARD FOREIGN CURRENCY CONTRACTS
The International Equity Fund and the Japan OTC Fund may enter into forward
currency contracts for the purchase or sale of a specific foreign currency at a
fixed price on a future date. Risks may arise upon entering into these contracts
from the potential inability of counterparties to meet the
30
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
terms of their contracts and from unanticipated movements in the value of a
foreign currency relative to the U.S. dollar. Each Fund may enter into forward
contracts for hedging purposes or to increase income and total return. The
forward currency contracts are adjusted by the daily exchange rate of the
underlying currency and any gains or losses are recorded for financial statement
purposes as unrealized until the contract settlement date.
At April 30, 1995, the International Equity Fund had the following open
forward currency contract and had recorded an unrealized loss of $1,662,070:
<TABLE>
<CAPTION>
SETTLEMENT CURRENCY CURRENCY
DATE BOUGHT SOLD
- ---------- ------------------------ ---------------------------
<S> <C> <C>
06/21/95 55,000,000 U.S. Dollars 4,725,050,000 Japanese Yen
</TABLE>
At April 30, 1995, the Japan OTC Fund had the following open forward
currency contract and had recorded an unrealized gain of $13,751:
<TABLE>
<CAPTION>
SETTLEMENT CURRENCY CURRENCY
DATE BOUGHT SOLD
- ---------- ------------------------ ---------------------------
<S> <C> <C>
05/31/95 23,000,000 U.S. Dollars 1,922,340,000 Japanese Yen
</TABLE>
5. CAPITAL SHARE TRANSACTIONS; ADVISOR SHARES
The Emerging Growth Fund, the International Equity Fund and the Japan OTC
Fund are each authorized to issue three billion full and fractional shares of
capital stock, $.001 par value per share, of which one billion shares are
designated Advisor Shares. The Capital Appreciation Fund is authorized to issue
an unlimited number of full and fractional shares of beneficial interest, $.001
par value per share, of which one billion shares are classified as Advisor
Shares. Advisor Shares are identical to Common Shares in all respects except
that Advisor Shares are sold to institutions ('Service Organizations') that
perform certain distribution, shareholder servicing, accounting and/or
administrative services for their customers who are beneficial owners of Advisor
Shares. Advisor Shares bear the fees paid pursuant to a distribution plan
adopted by each Fund in an amount not to exceed .75% (on an annualized basis) of
the average daily net asset value of the shares held by the Service
Organizations for the benefit of their customers and enjoy certain exclusive
voting rights on matters relating to those fees.
With respect to Advisor Shares, Service Organizations earned the following
shareholder servicing fees for the six months ended April 30, 1995:
<TABLE>
<CAPTION>
FUND SHAREHOLDER SERVICING FEES
- ----------------------------------------------- --------------------------
<S> <C>
Capital Appreciation $ 20,418
Emerging Growth 188,426
International Equity 532,559
</TABLE>
31
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
Transactions in shares of each Fund were as follows:
<TABLE>
<CAPTION>
CAPITAL APPRECIATION FUND EMERGING GROWTH FUND
Common Shares Advisor Shares Common Shares Advisor Shares
-------------------------- -------------------------- -------------------------- --------------------------
For the Six For the Six For the Six For the Six
Months Ended For the Months Ended For the Months Ended For the Months Ended For the
April 30, Year Ended April 30, Year Ended April 30, Year Ended April 30, Year Ended
1995 October 31, 1995 October 31, 1995 October 31, 1995 October 31,
(Unaudited) 1994 (Unaudited) 1994 (Unaudited) 1994 (Unaudited) 1994
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 2,912,613 2,958,494 78,480 290,193 3,619,699 6,133,751 1,394,795 2,233,737
Shares issued to
shareholders on
reinvestment of
dividends 818,282 920,210 46,554 61,526 15,653 506,720 0 80,473
Shares redeemed (2,028,054 ) (3,126,497 ) (58,310) (460,020 ) (2,361,976 ) (2,859,413 ) (162,815 ) (517,898 )
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Net increase
(decrease) in
shares
outstanding 1,702,841 752,207 66,724 (108,301 ) 1,273,376 3,781,058 1,231,980 1,796,312
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Proceeds from
sale of shares $38,700,495 $41,570,590 $1,042,176 $ 4,046,941 $81,131,951 $132,922,995 $30,592,833 $47,890,275
Reinvested
dividends 10,187,616 12,945,690 575,876 863,477 347,867 11,015,146 0 1,743,241
Net asset value
of shares
redeemed (26,954,367 ) (43,449,501 ) (766,250) (6,401,999 ) (51,476,215 ) (61,126,667 ) (3,444,995 ) (10,641,050 )
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Net increase
(decrease) from
capital share
transactions $21,933,744 $11,066,779 $ 851,802 $(1,491,581 ) $30,003,603 $82,811,474 $27,147,838 $38,992,466
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
</TABLE>
6. NET ASSETS
Net Assets at April 30, 1995, consisted of the following:
<TABLE>
<CAPTION>
CAPITAL APPRECIATION FUND EMERGING GROWTH FUND
Common Shares Advisor Shares Total Common Shares Advisor Shares Total
------------- -------------- ------------ ------------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Capital contributed, net $140,449,920 $8,912,717 $149,362,637 $228,499,590 $ 87,395,078 $315,894,668
Accumulated net investment
income (loss) 377,867 (334) 377,533 0 0 0
Accumulated net realized
gain (loss) from security
transactions 6,503,951 (48,729) 6,455,222 7,352,467 1,270,253 8,622,720
Net unrealized appreciation
(depreciation) from
investments and foreign
currency related items 33,776,938 102,180 33,879,118 53,373,929 9,060,159 62,434,088
------------- -------------- ------------ ------------- -------------- ------------
Net assets $181,108,676 $8,965,834 $190,074,510 $289,225,986 $ 97,725,490 $386,951,476
------------- -------------- ------------ ------------- -------------- ------------
------------- -------------- ------------ ------------- -------------- ------------
</TABLE>
32
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND
Common Shares Advisor Shares
----------------------------- ---------------------------
For the Six For the Six
Months Ended For the Months Ended For the
April 30, Year Ended April 30, Year Ended
1995 October 31, 1995 October 31,
(Unaudited) 1994 (Unaudited) 1994
------------ -------------- ------------ ------------
<S> <C> <C> <C> <C>
Shares sold 41,252,304 64,218,907 4,502,485 7,956,088
Shares issued to
shareholders on
reinvestment of
dividends 2,339,190 147,031 329,647 6,879
Shares redeemed (19,160,200) (11,861,720) (224,062) (795,406)
------------ -------------- ------------ ------------
Net increase
(decrease) in
shares
outstanding 24,431,294 52,504,218 4,608,070 7,167,561
------------ -------------- ----------- ------------
------------ -------------- ----------- ------------
Proceeds from
sale of shares $745,654,489 $1,275,306,263 $80,443,400 $155,433,660
Reinvested
dividends 43,415,366 2,820,903 6,088,579 129,869
Net asset value
of shares
redeemed (341,896,486) (233,614,600) (4,083,193) (15,435,478)
------------ -------------- ------------ ------------
Net increase
(decrease) from
capital share
transactions $447,173,369 $1,044,512,566 $82,448,786 $140,128,051
------------ -------------- ------------ ------------
------------ -------------- ------------ ------------
</TABLE>
<TABLE>
<CAPTION>
JAPAN OTC FUND
Common Shares Advisor Shares
----------------------------------- ----------------------------------
For the Period For the Period
For the Six September 30, 1994 For the Six September 30, 1994
Months Ended (Commencement of Months Ended (Commencement of
April 30, Operations) Through April 30, Operations) Through
1995 October 31, 1995 October 31,
(Unaudited) 1994 (Unaudited) 1994
------------- ------------------- ------------ -------------------
<S> <C> <C> <C> <C>
Shares sold 2,027,520 2,025,697 0 15
Shares issued to
shareholders on
reinvestment of
dividends 0 0 0 0
Shares redeemed (657,861) (18,605) 0 0
------------ ---------- -- ---
Net increase
(decrease) in
shares
outstanding 1,369,659 2,007,092 0 15
------------- ----------- -- ---
------------- ----------- -- ---
Proceeds from
sale of shares $ 17,783,234 $20,287,008 $0 $150
Reinvested
dividends 0 0 0 0
Net asset value
of shares
redeemed (5,837,595) (185,101) 0 0
------------- ----------- -- ---
Net increase
(decrease) from
capital share
transactions $ 11,945,639 $20,101,907 $0 $150
------------- ----------- -- ----
------------- ----------- -- ----
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND JAPAN OTC FUND
Common Shares Advisor Shares Total Common Shares Advisor Shares Total
-------------- -------------- -------------- ------------- -------------- -----------
<S> <C> <C> <C> <C> <C>
Capital contributed, net $1,815,331,961 $262,660,894 $2,077,992,855 $28,492,692 $1,028 $28,493,720
Accumulated net investment
income (loss) 8,381,424 977,793 9,359,217 0 0 0
Accumulated net realized
gain (loss) from security
transactions (54,458,264) (7,888,102) (62,346,366) (1,955,020) (93) (1,955,113)
Net unrealized appreciation
(depreciation) from
investments and foreign
currency related items 27,448,056 3,115,443 30,563,499 34,958 (34) 34,924
-------------- -------------- -------------- ------------- ------ -----------
Net assets $1,796,703,177 $258,866,028 $2,055,569,205 $26,572,630 $ 901 $26,573,531
-------------- -------------- -------------- ------------- ------ -----------
-------------- -------------- -------------- ------------- ------ -----------
</TABLE>
33
- --------------------------------------------------------------------------------
<PAGE>
FURTHER INFORMATION IS CONTAINED IN THE
PROSPECTUS, WHICH MUST PRECEDE OR
ACCOMPANY THIS REPORT.
WARBURG PINCUS FUNDS
P.O. BOX 9030
BOSTON, MASSACHUSETTS 02205-9030
SHAREHOLDER SERVICES
1-800-888-6878
PROSPECTUSES
1-800-257-5614
[LOGO]
SEMIANNUAL
REPORT
APRIL 30, 1995
[ ] WARBURG PINCUS
CAPITAL APPRECIATION FUND
[ ] WARBURG PINCUS
EMERGING GROWTH FUND
[ ] WARBURG PINCUS
INTERNATIONAL EQUITY FUND
[ ] WARBURG PINCUS
JAPAN OTC FUND
COUNSELLORS SECURITIES INC., DISTRIBUTOR
WPEQF-3-0495
STATEMENT OF DIFFERENCES
The division symbol shall be expressed as ................ [div]
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