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Previous: WARBURG PINCUS CAPITAL APPRECIATION FUND, N-30D, 1996-01-08 |
Next: ALLIANCE PORTFOLIOS, N-30D, 1996-01-08 |
<PAGE>
<PAGE>
WARBURG PINCUS ADVISOR FUNDS
ANNUAL REPORT
October 31, 1995
WARBURG PINCUS ADVISOR
CAPITAL APPRECIATION FUND
WARBURG PINCUS ADVISOR
EMERGING GROWTH FUND
WARBURG PINCUS ADVISOR
INTERNATIONAL EQUITY FUND
WARBURG PINCUS ADVISOR
JAPAN OTC FUND
WARBURG PINCUS ADVISOR
EMERGING MARKETS FUND
WARBURG PINCUS ADVISOR
POST-VENTURE CAPITAL FUND
Prospectuses containing more complete
information, including management fees
and expenses, and where applicable, the
special considerations and risks associated
with international investing, may be
obtained by calling 1-800-257-5614 or by
writing to Warburg Pincus Advisor Funds,
P.O. Box 9030, Boston, MA 02205-9030.
Investors should read the prospectus care-
fully before investing.
[LOGO]
<PAGE>
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WARBURG PINCUS CAPITAL APPRECIATION FUND -- ADVISOR SHARES
- --------------------------------------------------------------------------------
December 8, 1995
Dear Shareholder:
The objective of the Advisor Shares of Warburg Pincus Capital Appreciation
Fund (the 'Fund') is long-term capital appreciation. The Fund invests primarily
in a diversified selection of medium-size domestic companies deemed to have
above-average earnings growth prospects or where significant fundamental changes
are taking place that augur well for improved earnings.
The Fund rose 23.41% for the 12 months ended October 31, 1995, vs. a gain
of 26.36% in the S&P 500 Index, an increase of 23.98% in the Lipper Growth Fund
Index, and an advance of 21.24% in the S&P MidCap 400 Index.
The Fund's performance during the period was driven by the broad market's
strength and by particularly solid gains across our most heavily weighted
areas -- technology, financial services, health care and global
media/entertainment. The performance of the technology sector, in particular, as
a whole was extremely strong over the past 12 months, and a number of our
holdings within the category generated exceptional returns. We remain bullish on
technology issues, and believe that the stocks held in the portfolio have
above-average prospects.
Financial stocks represent a significant portion of the portfolio, and
these also contributed positively to the Fund's performance during the fiscal
year. These issues have benefited from a favorable interest-rate environment and
a sweeping trend toward consolidation within the industry, particularly the
banking sector. We expect consolidation to continue within the banking industry,
and hold a number of excellent banks that may stand to gain from this trend,
either as acquirers or as takeover targets.
Healthcare is another area of emphasis in the Fund. Within the sector, we
have chosen to concentrate most heavily on drug and pharmaceutical companies,
which have been among the market's better performers in 1995. These companies
have taken major steps toward increasing their profitability in recent years,
through both consolidation and work-force reductions, and hence have thrived
despite difficulty in raising prices domestically. We believe that the specific
names held in the portfolio have outstanding potential. They are at the
forefront of new-product development and are well-positioned to capitalize on
the growing overseas demand for healthcare-related products. This demand should
be particularly strong in emerging nations, which stand to devote increasing
amounts of resources toward maintaining and improving the health of their
citizens as their economies develop.
We are similarly positive on the prospects of our media and entertainment
holdings, which include Walt Disney, a company we consider to be the premier
entertainment business in the world. Disney's proposed union with Capital
Cities/ABC highlights the rapid growth in consolidation within the entertainment
industry. This trend has been favorably received by the stock market, and a
number of companies in the portfolio have seen their share prices pushed sharply
higher as a result.
Looking ahead, we remain positive on the market's prospects. Data on
inflation suggest that bond yields will remain low and possibly fall further,
boosting equity valuations. At the same time, corporate profits should remain
strong, even in the face of a slowdown in revenue growth, underpinned by the
cost-cutting and productivity-enhancing efforts corporate America has made over
the past several years. We believe that the Fund is well-positioned to take
advantage of these twin forces.
<TABLE>
<S> <C>
George U. Wyper Susan L. Black
Co-Portfolio Manager Co-Portfolio Manager
</TABLE>
2
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<PAGE>
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WARBURG PINCUS CAPITAL APPRECIATION FUND -- ADVISOR SHARES
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTED IN ADVISOR SHARES OF WARBURG PINCUS CAPITAL
APPRECIATION FUND
SINCE INCEPTION AS OF OCTOBER 31, 1995
The graph below illustrates the hypothetical investment of $10,000 in
Advisor Shares of Warburg Pincus Capital Appreciation Fund (the 'Fund') from
April 4, 1991 (inception) to October 31, 1995, assuming the reinvestment of
dividends and capital gains at net asset value, compared to the S&P 500* for the
same time period.
PERFORMANCE GRAPH
Average Annual
Total Returns
for periods
Fund ending 10/31/95
(Advisor Shares) S&P 500 (Advisor Shares)
---------------- --------- ----------------
4/4/91............... $10,000.0 $10,000.0 1 year
10/31/91.............. 10,153.0 10,653.0 23.41%
10/31/92.............. 11,151.0 11,710.0
10/31/93.............. 13,564.0 13,456.0 Since Inception
10/31/94.............. 13,730.0 13,970.0 (4/4/91)
10/31/95.............. 16,944.0 17,652.0 12.20%
<TABLE>
<CAPTION>
FUND
-----
<S> <C>
1 Year Total Return (9/30/94-9/30/95)................................................. 24.67%
Average Annual Total Return Since Inception (4/04/91-9/30/95)......................... 12.40%
</TABLE>
All figures cited here represent past performance and do not guarantee
future results. Investment return and principal value of an investment will
fluctuate so that an investor's shares upon redemption may be worth more or less
than original cost.
- ------------
* The S&P 500 is an unmanaged index, composed of approximately 500 common
stocks, most of which are listed in the New York Stock Exchange, and has no
defined investment objective.
3
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WARBURG PINCUS EMERGING GROWTH FUND -- ADVISOR SHARES
- --------------------------------------------------------------------------------
December 8, 1995
Dear Shareholder:
The objective of the Advisor Shares of Warburg Pincus Emerging Growth Fund
(the 'Fund') is maximum capital appreciation. The Fund targets small and
medium-size U.S. companies that have successfully completed the start-up phase,
show positive earnings momentum and are deemed to have the potential to achieve
significant capital gains within a relatively short period of time.
For the 12 months ended October 31, 1995, the Fund gained 33.24%, vs. gains
of 23.58% in the Lipper Small Company Growth Fund Index, 18.33% in the Russell
2000 Index, and 26.36% in the S&P 500 Index.
The Fund's strong returns over the period are attributable to timely stock
selection, particularly in our more heavily weighted areas. Our technology
position, which represents a diversified mix of companies spanning a number of
industries, performed extremely well. The emphasis on these stocks is not a
short-term sector bet, but rather a direct result of our research process, which
seeks companies possessing a catalyst or dynamic of change (e.g., new
management, a new product or distribution channel, etc.) that tend to result in
accelerated earnings growth. A considerable number of such companies are
involved in technology and related areas, hence their significant weighting in
the portfolio. Top performers for the Fund during the reporting period included
Maxim Integrated Products, Synopsys, and System Software Associates.
Another area of emphasis in the Fund is healthcare. Healthcare in the U.S.
is fraught with inefficiencies, and that fact, coupled with an aging population,
presents a wide window of opportunity for companies nimble and innovative enough
to provide solutions to these problems. We see vast potential, in particular,
for companies able to bring technological applications to the healthcare
industry, and we hold the stocks of a number of promising companies in this
area. We are also bullish on the prospects of selected pharmaceutical companies
(e.g., Gilead Sciences), which should continue to show strong earnings growth
despite the likelihood of healthcare and welfare reform.
A third area of concentration in the portfolio is companies involved in the
communications industry -- i.e., those benefiting from the marriage of
telecommunications to computer technology. This includes firms that manufacture
and service computer hardware and software, telephones and telephone equipment,
as well as those involved in broadcasting, publishing, and music and
entertainment. Our holdings in these areas proved rewarding investments over the
past 12 months, in particular our holdings of Glenayre Technologies and Paging
Network.
Looking ahead, we think the outlook remains favorable for the
small-capitalization market as a whole. We believe that small-cap stocks, in
aggregate, are less than midway through a multiyear cycle of outperformance
relative to larger-company stocks, and that the potential exists for further,
substantial gains over the next several years. Set within this context, we will
continue to strive to identify those stocks that have the best prospects for
above-average returns.
<TABLE>
<S> <C>
Elizabeth B. Dater Stephen J. Lurito
Co-Portfolio Manager Co-Portfolio Manager
</TABLE>
4
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WARBURG PINCUS EMERGING GROWTH FUND -- ADVISOR SHARES
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTED IN ADVISOR SHARES OF WARBURG PINCUS EMERGING GROWTH
FUND
SINCE INCEPTION AS OF OCTOBER 31, 1995
The graph below illustrates the hypothetical investment of $10,000 in
Advisor Shares of Warburg Pincus Emerging Growth Fund (the 'Fund') from April 4,
1991 (inception) to October 31, 1995, assuming the reinvestment of dividends and
capital gains at net asset value, compared to the S&P 500* and Lipper Small
Company Growth Fund Index ('Lipper Small Co.')** for the same time period.
PERFORMANCE GRAPH
Average Annual
Total Returns
for periods
Fund Lipper ending 10/31/95
(Advisor Shares) S&P 500 Small Co. (Advisor Shares)
---------------- --------- --------- ----------------
4/4/91........ $10,000.0 $10,000.0 $10,000.0 1 year
10/31/91....... 11,197.0 10,653.0 11,224.0 33.24%
10/31/92....... 12,223.0 11,710.0 12,011.0
10/31/93....... 16,094.0 13,456.0 15,554.0 Since Inception
10/31/94....... 16,048.0 13,970.0 15,879.0 (4/4/91)
10/31/95....... 21,382.0 17,652.0 19,623.0 18.05%
<TABLE>
<CAPTION>
FUND
-----
<S> <C>
1 Year Total Return (9/30/94-9/30/95)................................................. 40.79%
Average Annual Total Return Since Inception (4/04/91-9/30/95)......................... 19.27%
</TABLE>
All figures cited here represent past performance and do not guarantee
future results. Investment return and principal value of an investment will
fluctuate so that an investor's shares upon redemption may be worth more or less
than original cost.
- ------------
* The S&P 500 is an unmanaged index, composed of approximately 500 common
stocks, most of which are listed on the New York Stock Exchange, and has no
defined investment objective.
** The Lipper Small Company Growth Fund index is a net asset value weighted
index of the 30 largest small company growth funds that is compiled by Lipper
Analytical Services, Inc. It is unmanaged with no defined investment
objective.
5
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WARBURG PINCUS INTERNATIONAL EQUITY FUND -- ADVISOR SHARES
- --------------------------------------------------------------------------------
December 8, 1995
Dear Shareholder:
The objective of the Advisor Shares of Warburg Pincus International Equity
Fund (the 'Fund') is long-term capital appreciation. 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 United States.
For the 12 months ended October 31, 1995, the Fund fell 3.04%, vs. losses
of 0.61% in the Lipper International Fund Index and 0.37% in the Morgan Stanley
Europe, Australia and Far East ('EAFE') Index. Exposure to emerging markets (the
Lipper Emerging Markets Fund Index fell 18.35% during the period) accounted for
much of the Fund's underperformance. Shareholders should note, though, that
while the Fund's performance lagged that of the EAFE Index for the fiscal year,
its long-term record is superior. From its inception on April 5, 1991, through
October 31, 1995, the Fund generated an average annual return of 10.22%,
compared to 6.98% for the EAFE Index. Also noteworthy is the fact that the Fund
managed to outperform its benchmark with a lower level of volatility.
After a disappointing first half of its fiscal year, the Fund showed a
considerable improvement in performance in the second half, aided greatly by a
sharp rebound in its Japanese holdings (27.6% of the portfolio through October).
Particularly strong gains were recorded by the Fund's Japanese technology
issues. We believe that these stocks still hold considerable upside potential,
and that most of the broader Japanese market remains significantly undervalued
based on traditional long-term measures of value (e.g., price relative to book
value, sales and cash flow).
Other Asian countries we remain positive on are South Korea and Taiwan, two
emerging markets that have suffered in 1995. Taiwan has seen its stock market
lose roughly a third of its value since the year began, the result of ongoing
political tensions with China. This has created particularly attractive values
in Taiwan's market, and we have used the opportunity to increase our Taiwanese
stake, adding to positions in well-managed companies in the shipping and
industrial sectors. In general, we feel that emerging markets have been
oversold, given their outstanding long-term attractions.
The Fund's European holdings contributed positively to its performance over
the trailing 12 months, supported by falling interest rates. By country, the
Fund's largest weightings as of October 31 were in the United Kingdom and France
(7.2% and 5.9%, respectively, of the portfolio). Our British holdings were
strong performers during the period. French issues generated less impressive
results, hampered by concerns regarding fiscal policies of the Chirac
administration and doubts about the country's ability to meet the criteria for
European economic and monetary union in 1999. But we remain positive on the
outlook for the French companies held in the portfolio, believing they are
strong, well-managed businesses.
Richard H. King
Portfolio Manager
6
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<PAGE>
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WARBURG PINCUS INTERNATIONAL EQUITY FUND -- ADVISOR SHARES
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTED IN ADVISOR SHARES OF WARBURG PINCUS INTERNATIONAL
EQUITY FUND
SINCE INCEPTION AS OF OCTOBER 31, 1995
The graph below illustrates the hypothetical investment of $10,000 in
Advisor Shares of Warburg Pincus International Equity Fund (the 'Fund') from
April 5, 1991 (inception) to October 31, 1995, assuming the reinvestment of
dividends and capital gains at net asset value, compared to the Morgan Stanley
Europe, Australia and Far East Index ('EAFE')* for the same time period.
[PERFORMANCE GRAPH]
Average Annual
Total Returns
for periods
Fund ending 10/31/95
(Advisor Shares) EAFE (Advisor Shares)
---------------- ---- ----------------
4/5/91............... $10,000.0 $10,000.0 1 year
10/31/91.............. 10,444.0 10,410.0 -3.04%
10/31/92.............. 9,519.0 9,034.0
10/31/93.............. 13,333.0 12,418.0 Since Inception
10/31/94.............. 16,102.0 13,672.0 (4/5/91)
10/31/95.............. 15,612.0 13,621.0 10.22%
<TABLE>
<CAPTION>
FUND
------
<S> <C>
1 Year Total Return (9/30/94-9/30/95)................................................ -0.43%
Average Annual Total Return Since Inception (4/05/91-9/30/95)........................ 10.97%
</TABLE>
All figures cited here represent past performance and do not guarantee
future results. Investment return and principal value of an investment will
fluctuate so that an investor's shares upon redemption may be worth more or less
than original cost.
- ------------
* EAFE is an unmanaged index of international equities with no defined
investment objective that is compiled by Morgan Stanley Capital International.
7
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WARBURG PINCUS JAPAN OTC FUND -- ADVISOR SHARES
- --------------------------------------------------------------------------------
December 8, 1995
Dear Shareholder:
The objective of the Advisor Shares 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 12 months ended October 31, 1995, the Fund lost 7.82%, vs. a 15.58%
decline in the yen-denominated JASDAQ Index. In dollar terms, the JASDAQ Index
lost 19.93%.
Though the Japanese market finished the period with a net loss, its rebound
in recent months is encouraging. For example, the six-month total return of the
Fund (4/30/95 - 10/31/95) is 15.82%. We believe that there are additional,
significant grounds for optimism regarding Japan, and that the stock market's
rally reflects a secular change under way in the Japanese economy, one that will
provide excellent opportunities for smaller companies.
There are several reasons for optimism. First, the yen's reversal suggests
that Japanese finance officials are finally committed to taking the necessary
steps to reverse the country's protracted economic slide. Recent money-supply
data confirm the liquidity growth that we first suspected earlier this year,
while the Bank of Japan's increasing willingness to discuss the country's
troubled banking system is also encouraging and likely foreshadows a
taxpayer-financed bailout of the financial sector. This will have a significant
impact on the economy and the broad stock market.
Second, there is a strong earnings recovery taking place in the
manufacturing sector. The strongest growth in earnings is occurring in the
electronics area, especially among semiconductor- and personal-computer-related
companies, which are well-represented in the OTC market. Many other basic
industries (e.g., paper and petrochemicals) are seeing good earnings growth as
well, the result of aggressive restructuring efforts and strategic mergers.
Third, on a longer-term basis, opportunities continue to appear for
companies nimble enough to take advantage of inefficiencies within the Japanese
economy. Though deregulation of Japan's overregulated economy is likely to
remain slow, the rapidly expanding OTC market is presenting an increasing range
of smaller companies that benefit from these changes.
Our primary areas of focus in the portfolio currently are in
personal-computer-related and consumption-related companies (e.g., retailers),
which we believe have the best prospects over the coming months. We are also
looking at opportunities in the housing sector, which stands to benefit from the
current low level of interest rates and the reconstruction efforts necessitated
by the Kobe earthquake.
<TABLE>
<S> <C>
Shuhei Abe Nicholas P.W. Horsley
Co-Portfolio Manager Co-Portfolio Manager
</TABLE>
8
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<PAGE>
<PAGE>
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WARBURG PINCUS JAPAN OTC FUND -- ADVISOR SHARES
- --------------------------------------------------------------------------------
GRAPH OF $10,000 INVESTED IN ADVISOR SHARES OF WARBURG PINCUS JAPAN OTC FUND
SINCE INCEPTION AS OF OCTOBER 31, 1995
The graph below illustrates the hypothetical investment of $10,000 in
Advisor Shares of Warburg Pincus Japan OTC Fund (the 'Fund') from September 30,
1994 (inception) to October 31, 1995, assuming the reinvestment of dividends and
capital gains at net asset value, compared to the JASDAQ* for the same time
period.
[PERFORMANCE GRAPH]
Average Annual
Total Returns
for periods
Fund ending 10/31/95
(Advisor Shares) JASDAQ** JASDAQI*** (Advisor Shares)
---------------- --------- ---------- ----------------
9/30/94....... $10,000.0 $10,000.0 $10,000.0 6 months
10/31/94....... 9,858.0 9,698.0 9,901.0 15.82%+
10/31/95....... 9,080.0 8,187.0 7,931.0
1 year
-7.82%
Since Inception
(9/30/94)
-8.49%
<TABLE>
<CAPTION>
FUND
---------
<S> <C>
1 Year Total Return (09/30/94 - 09/30/95)............................................ -9.20 %
</TABLE>
All figures cited here represent past performance and do not guarantee
future results. Investment return and principal value of an investment will
fluctuate so that an investor's shares upon redemption may be worth more or less
than original cost. Without waivers or reimbursements of Fund expenses, average
annual total returns for the 1 year period ending 9/30/95 and the 1 year and
since inception periods ending 10/31/95, respectively, would have been
- -11.20%, -9.44% and -10.35%.
- ------------
* The JASDAQ Over-The-Counter Composite Index is an unmanaged index comprised
of stocks traded over-the-counter in Japan.
** Stated in Yen
*** Stated in US dollars
+ Non-annualized
9
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WARBURG PINCUS EMERGING MARKETS FUND -- ADVISOR SHARES
- --------------------------------------------------------------------------------
December 8, 1995
Dear Shareholder:
The objective of the Advisor Shares of Warburg Pincus Emerging Markets Fund
(the 'Fund') is growth of capital. The Fund is a non-diversified management
company that invests primarily in equity securities of companies in emerging
securities markets around the world.
Total return since inception through October 31, 1995 (the Fund was
launched December 30, 1994), was 13.29%, vs. a loss of -7.49% in the Lipper
Emerging Markets Fund Index.
The Fund's outperformance of its benchmark index resulted from good stock
selection and a relatively large cash position in the first few months following
its inception. In addition, the Fund's focus on Asian stocks due to their good
fundamental values and sound economies meant that it avoided many of the
problems in Latin America following the Mexican peso devaluation in December
1994.
Currently, we are finding many compelling values in emerging markets,
particularly in Asia. By region, our largest concentration among Asian markets
is in Northeast Asia, principally Taiwan and South Korea (12.2% and 15% of the
portfolio, respectively, as of October 31, 1995). Though Taiwan's market has
fallen sharply in 1995 due to political tensions with China, we have viewed the
situation as a buying opportunity, since we believe investors' concerns are
largely overdone and that the long-term argument for investing in Taiwan remains
strong. We are similarly bullish on South Korea, and hold the stocks of
excellent companies in the banking, technology and industrial sectors.
Other large Asian weightings in the portfolio include China/Hong Kong
(13.9%) and Indonesia (10.4%), where we have found undemanding valuations in
relation to prospective growth. The portfolio remains underweighted in Latin
America, since we are finding better values and less economic uncertainty
elsewhere. Among Latin American markets, our heaviest weighting is in Argentina,
which represented 7.8% of the portfolio at the end of the reporting period.
<TABLE>
<S> <C>
Richard H. King Nicholas P.W. Horsley
Co-Portfolio Manager Co-Portfolio Manager
</TABLE>
10
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<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EMERGING MARKETS FUND -- ADVISOR SHARES
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTED IN ADVISOR SHARES OF WARBURG PINCUS EMERGING MARKETS
FUND
SINCE INCEPTION AS OF OCTOBER 31, 1995
The graph below illustrates the hypothetical investment of $10,000 in
Advisor Shares of Warburg Pincus Emerging Markets Fund (the 'Fund') from
December 30, 1994 (inception) to October 31, 1995, assuming the reinvestment of
dividends and capital gains at net asset value, compared to the Lipper Emerging
Markets Fund Index* for the same time period.
[PERFORMANCE GRAPH]
Average Annual
Total Returns
for periods
Fund ending 10/31/95
(Advisor Shares) Lipper (Advisor Shares)
---------------- --------- ----------------
12/30/94.............. $10,000.0 $10,000.0 Since Inception
10/31/95.............. 11,329.0 92,51.0 (12/30/94)
13.29%+
<TABLE>
<CAPTION>
FUND
-----
<S> <C>
1 Year Total Return (12/30/94-9/30/95)................................................ 18.40%+
</TABLE>
All figures cited here represent past performance and do not guarantee
future results. Investment return and principal value of an investment will
fluctuate so that an investor's shares upon redemption may be worth more or less
than original cost. Without waivers or reimbursements of Fund expenses,
aggregate total return since inception for the periods ending 9/30/95 and
10/31/95, respectively, would have been 5.50% and - 0.80%.
- ------------
* The Lipper Emerging Markets Funds Index contains Funds which seek long-term
capital appreciation by investing at least 65% of total assets in emerging
market equity securities, where 'Emerging Markets' is defined by a country's
GNP per capita or other economic measures.
+ Non-annualized
11
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<PAGE>
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WARBURG PINCUS POST-VENTURE CAPITAL FUND -- ADVISOR SHARES
- --------------------------------------------------------------------------------
December 8, 1995
Dear Shareholder:
The objective in Advisor Shares of Warburg Pincus Post-Venture Capital Fund
(the 'Fund') is long-term growth of capital. The Fund pursues its objective by
investing primarily in equity securities of companies deemed to be in their
post-venture-capital stage.
From the Fund's inception on September 29, 1995, through October 31, 1995,
it gained 6.80%*. Its total net assets were $3,025,429.
We are quite optimistic about the Fund's prospects. A major study assessing
the impact of venture-capital financing on firms' performance** concluded that
venture-backed companies generate superior results relative to those that lacked
such backing. According to the study, venture-backed firms create innovative
products and services. Relative to Fortune 500 companies, they create jobs at a
faster pace, spend more on research and development, and create
sales -- especially export sales -- at a faster rate. Our own considerable
experience researching and evaluating the performance of venture-backed
companies yields similarly favorable conclusions.
We believe that the Fund's focus on such companies offers a unique and
attractive opportunity to aggressive investors.
<TABLE>
<S> <C>
Elizabeth B. Dater Stephen J. Lurito
Co-Portfolio Manager Co-Portfolio Manager
</TABLE>
* Non-annualized return. This figure represents past performance and does not
guarantee future results. Investment return and principal value of an
investment will fluctuate so that an investor's shares upon redemption may be
worth more or less than original cost.
** Fifth Annual Economic Impact of Venture Capital Study, National Venture
Capital Association/ Coopers & Lybrand L.L.P. (U.S.A.), 1995.
12
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<PAGE>
<PAGE>
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WARBURG PINCUS CAPITAL APPRECIATION FUND
STATEMENT OF NET ASSETS
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
--------- ---------
COMMON STOCK (95.5%)
<S> <C> <C>
Basic Industries
Aerospace & Defense (2.4%)
Loral Corp. 120,000 $ 3,555,000
Sundstrand Corp. 40,000 2,450,000
-----------
6,005,000
-----------
Agriculture (0.8%)
First Mississippi Corp. 100,000 2,050,000
-----------
Chemicals (3.4%)
Avery Dennison Corp. 90,000 4,027,500
Hercules, Inc. 80,000 4,270,000
-----------
8,297,500
-----------
Conglomerates (2.0%)
Thermo Electron Corp. + 104,400 4,802,400
-----------
CAPITAL GOODS
Capital Equipment (2.0%)
American Standard Companies + 116,000 3,103,000
Federal-Mogul Corp. 105,000 1,876,875
-----------
4,979,875
-----------
Computers (5.1%)
Checkfree Corp. + 15,000 316,875
Compaq Computer Corp. + 50,000 2,787,500
Informix Corp. + 42,500 1,237,812
Logic Works, Inc. 5,000 76,250
Parametric Technology Corp. + 70,000 4,681,250
Synopsys, Inc. + 96,200 3,607,500
-----------
12,707,187
-----------
Distribution (5.3%)
Alco Standard Corp. + 60,000 5,310,000
Anixter International Corp. + 160,000 3,060,000
Rykoff-Sexton, Inc. 205,900 4,632,750
-----------
13,002,750
-----------
Electronics (6.7%)
Cabletron Systems, Inc. + 60,000 4,717,500
Linear Technology Corp. 160,200 7,008,750
Pixtech, Inc. + 25,500 251,812
Xilinx, Inc. + 100,200 4,609,200
-----------
16,587,262
-----------
CONSUMER
Business Services (5.7%)
Equifax, Inc. 126,900 4,949,100
First Data Corp. 60,000 3,967,500
Manpower, Inc. + 70,000 1,898,750
Olsten Corp. 80,000 3,080,000
</TABLE>
See Accompanying Notes to Financial Statements.
13
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS CAPITAL APPRECIATION FUND
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
--------- ---------
COMMON STOCK (CONT'D)
<S> <C> <C>
Union Corp. 10,000 $ 161,250
-----------
14,056,600
-----------
Consumer Non-Durables (7.8%)
Luxottica Group SPA Sponsored ADR 20,000 975,000
Nine West Group, Inc. + 83,500 3,715,750
Reebok International, Ltd. 140,000 4,760,000
Scott Paper Co. 186,600 9,936,450
-----------
19,387,200
-----------
Food, Beverage & Tobacco (0.8%)
Whitman Corp. 100,000 2,125,000
-----------
Healthcare (10.2%)
Becton Dickinson & Co. 45,000 2,925,000
Caremark International, Inc. 169,900 3,504,187
Health Management Associates, Inc. Class A + 180,000 3,870,000
Mallinckrodt Group, Inc. 100,000 3,475,000
McKesson Corp. 75,000 3,581,250
Pacificare Health Systems, Inc. Class B + 45,000 3,273,750
St. Jude Medical, Inc. 83,000 4,419,750
-----------
25,048,937
-----------
Leisure & Entertainment (1.7%)
Disney (Walt) Co. 73,500 4,235,438
-----------
Retail (2.0%)
CUC International, Inc. + 142,500 4,934,063
-----------
ENERGY AND RELATED
Energy (1.6%)
Ensco International, Inc. + 100,000 1,687,500
Union Pacific Resources Group 100,000 2,275,000
-----------
3,962,500
-----------
Oil Services (0.4%)
Input/Output, Inc. 28,300 1,057,712
-----------
FINANCE
Banks & Savings & Loans (14.7%)
California Federal Bank 100,000 1,475,000
Citicorp 140,000 9,082,500
Compass Bancshares, Inc. 109,600 3,397,600
CoreStates Financial Corp. 100,000 3,637,500
Greenpoint Financial Corp. 124,800 3,369,600
Long Island Bancorp, Inc. 50,000 1,143,750
Mercantile Bancorp 75,000 3,300,000
TCF Financial Corp. 22,600 1,327,750
UJB Financial Corp. 100,000 3,187,500
Wells Fargo & Co. 30,000 6,303,750
-----------
36,224,950
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
14
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS CAPITAL APPRECIATION FUND
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
--------- ---------
COMMON STOCK (CONT'D)
<S> <C> <C>
Financial Services (7.7%)
ALLmerica Financial Corp. 40,900 $ 1,027,612
Federal Home Loan Mortgage Corp. 40,000 2,770,000
Household International, Inc. 55,000 3,093,750
Leucadia National Corp. 80,700 4,448,588
Prudential Reinsurance Holdings 100,200 2,041,575
Transport Holdings Class A 30,550 1,199,088
Travelers Group, Inc. 87,700 4,428,850
-----------
19,009,463
-----------
MEDIA
Communications & Media (7.3%)
Evergreen Media Corp. Class A + 49,000 1,335,250
Gannett, Inc. 50,000 2,718,750
Gaylord Entertainment Co., Class A 100,000 2,575,000
Infinity Broadcast Corp. + 91,800 2,983,500
News Corp. Ltd. ADR 35,000 695,625
Telecommunications Inc., Liberty Media Group A 90,000 2,216,250
Viacom, Inc. Class B + 110,000 5,500,000
-----------
18,024,375
-----------
Publishing (2.1%)
Harcourt General Inc. 75,000 2,971,875
Wiley, (John) & Sons, Inc. Class A 73,600 2,189,600
-----------
5,161,475
-----------
Telecommunications & Equipment (5.8%)
Picturetel Corp. + 85,000 5,610,000
Qualcomm Inc. + 70,000 2,695,000
Tel-Save Holdings, Inc. + 25,000 346,875
Tellabs, Inc. + 85,000 2,890,000
Vodafone Group PLC ADR 70,700 2,889,863
-----------
14,431,738
-----------
TOTAL COMMON STOCK (Cost $193,683,742) 236,091,425
------------
PREFERRED STOCK (0.3%)
Communications & Media
News Corp. ADR (Cost $990,500) 50,000 912,500
------------
<CAPTION>
PAR
---------
<S> <C> <C>
SHORT-TERM INVESTMENTS (4.2%)
Repurchase agreement with State Street Bank & Trust Co. dated
10/31/95 at 5.83% to be repurchased at $10,355,677 on 11/01/95.
(Collateralized by $10,445,000 U.S. Treasury Note at 6.875%,
due 10/31/96, with a market value of $10,575,563.)
(Cost $10,354,000) $10,354,000 10,354,000
-----------
TOTAL INVESTMENTS AT VALUE (100.0%) (Cost $205,028,242*) 247,357,925
LIABILITIES IN EXCESS OF OTHER ASSETS (52,060)
-----------
NET ASSETS (100.0%) (applicable to 14,382,203 Common Shares and
712,812 Advisor Shares) $247,305,865
------------
------------
NET ASSET VALUE, offering and redemption price per Common Share
($235,712,242[div]14,382,203) $16.39
------
------
NET ASSET VALUE, offering and redemption price per Advisor Share
($11,593,623[div]712,812) $16.26
------
------
</TABLE>
+ Non-income producing security.
* Cost for Federal income tax purposes is $205,163,763.
See Accompanying Notes to Financial Statements.
15
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EMERGING GROWTH FUND
STATEMENT OF NET ASSETS
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK (93.2%)
BASIC INDUSTRIES
Environmental Services (0.9%)
Sanifill, Inc. + 196,000 $ 6,174,000
------------
Industrial Mfg. & Processing (0.2%)
Stratasys, Inc. + # 107,140 1,499,960
------------
Real Estate (1.0%)
NHP, Inc. + 462,000 6,583,500
------------
CAPITAL GOODS
Capital Equipment (2.1%)
Applied Power Inc. Class A 264,800 8,043,300
Roper Industries, Inc. 162,500 5,890,625
------------
13,933,925
------------
Computers (16.1%)
Auspex Systems, Inc. + 421,500 5,953,687
Cognex Corp. + 269,000 16,072,750
Continuum, Inc. + 250,500 9,863,437
Davidson & Associates, Inc. + 208,000 7,384,000
Filenet Corp. + 193,400 8,775,525
Hyperion Software Corp. + 120,800 5,949,400
Network General Corp. + 211,000 8,756,500
Platinum Technology, Inc. + 608,000 11,096,000
Shared Medical Systems Corp. 202,000 7,802,250
Synopsys, Inc. + 377,000 14,137,500
System Software Associates, Inc. 308,500 9,524,938
------------
105,315,987
------------
Electronics (9.9%)
Burr-Brown Corp. + 194,800 6,331,000
Glenayre Technologies, Inc. + 217,875 13,998,469
Idex Corp. 131,000 4,945,250
Maxim Integrated Products, Inc. + 290,600 21,722,350
Methode Electronics Inc. Class A 277,000 6,371,000
National Instruments Corp. + 330,700 6,200,625
Watkins-Johnson Co. 110,500 5,317,812
------------
64,886,506
------------
Office Equipment & Supplies (3.2%)
NuKote Holdings, Inc. Class A + 315,000 6,536,250
Viking Office Products, Inc. + 317,100 14,110,950
------------
20,647,200
------------
</TABLE>
See Accompanying Notes to Financial Statements.
16
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EMERGING GROWTH FUND
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
--------- ------------
COMMON STOCK (CONT'D)
<S> <C> <C>
CONSUMER
Business Services (10.7%)
American Management Systems, Inc. + 281,700 $ 8,134,088
Catalina Marketing Corp. + 155,000 7,827,500
Checkpoint Systems, Inc. + 252,000 7,276,500
Copart Inc. + 255,000 5,801,250
Fritz Companies, Inc. + 140,000 4,900,000
GMIS, Inc. + 225,000 2,587,500
Norrell Corp. 215,100 6,641,212
On Assignment, Inc. + 185,500 5,008,500
QuickResponse Services, Inc. + 292,200 7,305,000
Solectron Corp. + 355,700 14,316,925
------------
69,798,475
------------
Consumer Durables (1.2%)
Superior Industries International, Inc. 288,500 8,114,062
------------
Consumer Non-Durables (2.5%)
Nature's Sunshine Products, Inc. 251,500 6,224,625
Nutramax Products, Inc. + 430,100 3,655,850
Westpoint Stevens, Inc. 301,000 6,358,625
------------
16,239,100
------------
Consumer Services (2.0%)
DEVRY, Inc. + 279,400 6,216,650
ITT Educational Services, Inc. + 285,200 6,702,200
------------
12,918,850
------------
Healthcare (5.4%)
EMCare Holdings, Inc. + 286,000 6,578,000
Healthcare Compare Corp. 147,200 5,446,400
Healthsource, Inc. 132,800 7,038,400
Incontrol, Inc. + 210,000 3,675,000
Quorum Health Group, Inc. + 275,500 5,906,031
Thermotrex Corp. + 187,500 6,726,562
------------
35,370,393
------------
Lodging & Restaurants (2.3%)
Doubletree Corp. + 382,000 8,404,000
Renaissance Hotel Group NV 357,000 6,961,500
------------
15,365,500
------------
Pharmaceuticals (5.1%)
Alpharma, Inc. Class A 313,200 7,516,800
Gilead Sciences, Inc. + 482,300 9,404,850
Medeva PLC ADR 522,700 8,951,238
Ostex International, Inc. + 285,000 5,700,000
Somatix Therapy Corp. + 351,440 1,713,271
------------
33,286,159
------------
</TABLE>
See Accompanying Notes to Financial Statements.
17
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EMERGING GROWTH FUND
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
--------- ------------
COMMON STOCK (CONT'D)
<S> <C> <C>
Retail (5.0%)
Borders Group, Inc. + 522,000 $ 8,939,250
Micro Warehouse, Inc. + 141,000 6,274,500
Neostar Retail Group, Inc. + 375,600 5,727,900
PETsMART, Inc. + 345,400 11,570,900
------------
32,512,550
------------
ENERGY AND RELATED
Energy (2.8%)
Barrett Resources Corp. + 296,400 6,891,300
Brown (Tom) Inc. + 413,000 4,594,625
Texas Meridian Resources Corp. + 607,500 6,606,562
------------
18,092,487
------------
Oil Services (4.4%)
Input/Output, Inc. + 361,000 13,492,375
Nabors Industries, Inc. + 686,000 5,916,750
Petroleum Geo Services ADR 487,800 9,451,125
------------
28,860,250
------------
FINANCE
Banks & Savings & Loans (2.9%)
Banco Latinoamericano de Exportaciones, SA 150,300 6,275,025
Cullen Frost Bankers, Inc. 134,000 6,834,000
Great Financial Corp. 285,000 5,842,500
------------
18,951,525
------------
Financial Services (5.0%)
Olympic Financial Ltd. + 257,900 4,706,675
Transactions Systems Architects, Inc. Class A + 149,800 3,894,800
T. Rowe Price Associates, Inc. 121,500 6,044,625
United Companies Financial Corp. 388,600 10,977,950
Vesta Insurance Group, Inc. 175,000 7,065,625
------------
32,689,675
------------
MEDIA
Communications & Media (3.0%)
Central European Media Enterprises Ltd. Class A + 379,000 8,717,000
Harte-Hanks Communications, Inc. 161,900 4,897,475
Infinity Broadcasting Corp. Class A + 178,725 5,808,562
------------
19,423,037
------------
Publishing (1.9%)
Scholastic Corp. + 151,200 9,336,600
Wiley (John) & Sons, Inc. Class A 106,600 3,171,350
------------
12,507,950
------------
Telecommunications & Equipment (4.8%)
Allen Group, Inc. 240,400 5,889,800
International Cabletel, Inc. + 258,933 6,861,725
Mobile Telecommunications Technologies Corp. + 244,500 6,937,688
</TABLE>
See Accompanying Notes to Financial Statements.
18
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EMERGING GROWTH FUND
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
--------- ------------
COMMON STOCK (CONT'D)
<S> <C> <C>
Paging Network, Inc. + 509,800 $ 11,725,400
------------
31,414,613
------------
Transportation (0.7%)
Mark VII Inc. + 274,500 4,906,688
------------
Miscellaneous (0.1%)
Wellington Underwriting PLC ADR + 47,229 749,997
------------
TOTAL COMMON STOCK (Cost $474,817,659) 610,242,389
------------
PREFERRED STOCK (0.5%)
Pharmaceuticals (0.2%)
Somatix Therapy Corp. Series A-1 Convertible + 60,000 1,500,000
------------
Miscellaneous (0.3%)
Opal Concepts Inc. Series B + # 2,000 2,000,000
------------
TOTAL PREFERRED STOCK (Cost $3,500,000) 3,500,000
------------
WARRANTS
Indutrial Mfg. & Processing
Stratasys, Inc. 01/31/96 + # 10,714 0
Stratasys, Inc. 11/03/98 + # 21,428 0
------------
0
------------
Pharmaceuticals
Somatix Therapy Corp. 06/28/98 + 210,000 0
------------
TOTAL WARRANTS 0
------------
</TABLE>
<TABLE>
<CAPTION>
PAR
-----------
<S> <C> <C>
SHORT-TERM INVESTMENTS (6.3%)
Repurchase agreement with State Street Bank & Trust Co., dated 10/31/95
at 5.83% to be repurchased at $41,317,690 on 11/01/95. (Collateralized by
$41,670,000 U.S. Treasury Note at 6.875%, due 10/31/96, with a market value
of $42,190,875.) (Cost $41,311,000) $41,311,000 41,311,000
------------
TOTAL INVESTMENTS AT VALUE (100.0%) (Cost $519,628,659*) 655,053,389
LIABILITIES IN EXCESS OF OTHER ASSETS (290,778)
------------
NET ASSETS (100.0%) (applicable to 16,268,485 Common Shares and 5,691,991 Advisor
Shares) $654,762,611
------------
------------
NET ASSET VALUE, offering and redemption price per Common Share
($487,537,367 [div] 16,268,485) $29.97
------
------
NET ASSET VALUE, offering and redemption price per Advisor Share ($167,225,244 [div]
5,691,991) $29.38
------
------
</TABLE>
+ Non-income producing security.
# Restricted security.
* Cost For Federal income tax purposes is $519,825,282.
See Accompanying Notes to Financial Statements.
19
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- --------------
<S> <C> <C>
COMMON STOCK (90.1%)
Argentina (3.0%)
Banco de Galicia & Buenos Aires SA 365,989 $ 1,729,544
Banco de Galicia & Buenos Aires SA ADR 118,520 2,266,695
Banco Frances del Rio de la Plata SA 510,100 3,712,882
Banco Frances del Rio de la Plata SA ADR 684,800 14,980,000
Capex SA GDR + 499,000 6,050,375
Telefonica de Argentina SA ADR 791,000 16,413,250
YPF SA ADR 1,553,500 26,603,687
--------------
71,756,433
--------------
Australia (2.9%)
BTR Nylex Ltd. 5,305,519 14,423,345
Niugini Mining Ltd. 1,385,000 2,879,270
Pasminco Ltd. 7,766,600 8,575,686
Reinsurance Australia Corp., Ltd. 9,523,400 18,130,173
Woodside Petroleum Ltd. 5,175,800 24,791,227
--------------
68,799,701
--------------
Austria (3.2%)
Boehler-Uddeholm AG + 327,200 23,071,583
Maculan Holding AG Vorzuege 71,360 1,340,837
V.A. Technologie AG 456,374 52,926,291
--------------
77,338,711
--------------
Brazil (0.4%)
Panamerican Beverages, Inc. Class A 366,000 10,019,250
--------------
Denmark (0.9%)
International Service System A/S Class B 1,025,110 21,025,972
--------------
Finland (1.8%)
Metra Oy Class A 300 13,155
Metra Oy Class B 139,750 6,062,049
Metsa-Serla Class B 658,650 24,533,618
Valmet Corp. Class A 442,200 12,301,286
--------------
42,910,108
--------------
France (5.9%)
Bouygues SA 312,722 33,316,009
Cetelem 66,885 10,688,445
Fives-Lille (Compagnie De) 84,060 6,802,643
Lagardere Groupe 1,501,475 28,085,365
Scor SA 555,419 16,590,881
Total Cie Franc Des Petroles Class B 693,650 42,946,329
Total Petroles SA ADR 47,743 1,474,064
--------------
139,903,736
--------------
</TABLE>
See Accompanying Notes to Financial Statements.
20
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- --------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Germany (2.5%)
Deutsche Bank AG 694,500 $ 31,352,730
SGL Carbon AG + 432,040 28,350,128
--------------
59,702,858
--------------
Hong Kong (3.2%)
Citic Pacific Ltd. 2,127,000 6,644,124
HSBC Holdings PLC 1,976,869 28,766,267
HSBC Holdings PLC (UK) 195,074 2,901,055
Jardine Matheson Holdings Ltd. ADR 4,819,900 29,401,390
Jilin Chemical Industrial Co. Ltd. ADR + 473,800 9,772,124
--------------
77,484,960
--------------
India (2.1%)
Hindalco Industries Ltd. GDR 783,950 25,086,400
Reliance Industries Ltd. GDS 1,292,500 20,188,850
The India Fund, Inc. 655,900 5,493,162
--------------
50,768,412
--------------
Indonesia (1.6%)
P.T. Bank International Indonesia 1,887,500 6,619,155
P.T. Dynaplast Ltd. 1,709,700 1,508,337
P.T. Mulia Industrindo 2,944,000 8,700,838
P.T. Semen Gresik 3,948,500 10,276,202
P.T. Tri Polyta Indonesia ADR + 675,700 10,473,350
--------------
37,577,882
--------------
Israel (1.5%)
Ampal-American Israel Corp. Class A + 1,374,000 7,728,750
ECI Telecommunications Limited Designs 1,453,500 27,616,500
--------------
35,345,250
--------------
Japan (25.8%)
Canon Inc. 2,452,000 41,982,194
Canon Inc. ADR 98,040 8,357,910
Daimaru Inc. 368,000 2,340,280
DDI Corp. 3,675 29,807,015
East Japan Railway Co. 2,884 13,628,529
Fujitsu Ltd. 2,801,000 33,433,324
Hitachi Ltd. 4,096,250 42,080,643
Kao Corp. 500 6,066
Keyence Corp. 75,600 9,319,636
Kirin Beverage Corp. 124,000 1,880,442
Kyocera Corp. 268,000 21,972,801
Murata Mfg. Co., Ltd. 301,310 10,583,142
NEC Corp. 2,084,000 27,525,682
Nikon Corp. 2,670,000 38,139,125
Nippon Communication Systems Corp. 1,436,700 15,180,863
</TABLE>
See Accompanying Notes to Financial Statements.
21
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- --------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Nippon Telegraph & Telephone Corp. 6,339 $ 52,036,716
NTT Data Communications Systems Co. 1,807 45,258,977
Orix Corp. 521,700 18,375,110
Rohm Co. 385,000 23,391,547
Shin-Etsu Chemical Co., Ltd. 751,400 15,364,700
Sony Corp. 566,300 25,486,547
Sony Corp. ADR 113,500 5,192,625
TDK Corp. 892,000 45,991,977
Toho Co., Ltd. 130,240 18,349,046
Tokyo Electron Ltd. 835,000 36,272,380
Tsuchiya Home Co. 297,620 4,222,180
Uny Co., Ltd. 825,500 14,214,656
York-Benimaru Co., Ltd. 505,900 16,036,748
--------------
616,430,861
--------------
Malaysia (0.3%)
Westmont BHD 1,732,000 5,999,449
--------------
Mexico (0.5%)
Gruma SA + 4,094,000 12,075,000
--------------
New Zealand (5.9%)
Brierley Investments Ltd. 42,195,904 32,842,254
Fletcher Challenge Ltd. 8,846,687 23,399,452
Fletcher Forestry 15,589,223 21,490,742
Lion Nathan Ltd. 13,821,300 31,360,861
Sky City Ltd. 965,885 20,068,579
Wrightson Ltd. 14,548,459 11,707,320
--------------
140,869,208
--------------
Norway (1.8%)
Norsk Hydro AS ADR 1,096,022 43,840,880
--------------
Pakistan (0.4%)
Pakistan Telecommunications Corp. + 1,430 139,594
Pakistan Telecommunications Corp. GDR + 93,200 8,900,600
--------------
9,040,194
--------------
Singapore (1.5%)
DBS Land Ltd. 3,866,000 11,440,623
Development Bank of Singapore Ltd. 1,123,250 12,882,584
Development Bank of Singapore Ltd. ADR 79,500 3,657,000
IPC Corp., Ltd. 10,568,000 7,219,908
--------------
35,200,115
--------------
South Korea (4.8%)
Daewoo Electronics Co., Ltd. + 871,120 11,613,415
</TABLE>
See Accompanying Notes to Financial Statements.
22
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- --------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Daewoo Electronics Co., Ltd. New + 3,290 $ 41,926
Hana Bank 455,740 9,911,794
Hanil Bank 1,943,692 25,241,829
Korea Europe Fund Ltd. 1,210 5,596,250
Korea Long Term Credit Bank 251,095 8,123,256
Mando Machinery Corp. + 29,000 1,923,984
Samsung Electronics Co., Ltd. 134,710 30,171,096
Samsung Electronics Co., Ltd. GDR 28,932 1,909,512
Samsung Electronics Co., Ltd. GDR New 248 29,760
Samsung Electronics Co., Ltd. New 6,821 1,532,251
Samsung Electronics Co., Ltd. Second Series 2,470 543,329
Samsung Heavy Industries Co., Ltd. 500,703 15,248,177
--------------
111,886,579
--------------
Spain (3.5%)
Banco de Santander 144,866 6,321,771
Banco de Santander ADR 1,172,200 50,551,125
Repsol SA ADR 928,700 27,512,738
--------------
84,385,634
--------------
Sweden (2.6%)
Asea AB Series B 251,500 24,828,555
Astra AB Series B 1,066,500 38,578,405
--------------
63,406,960
--------------
Switzerland (2.4%)
BBC Brown Boveri AG 39,008 45,247,081
Danzas Holding AG 12,824 11,294,698
--------------
56,541,779
--------------
Taiwan (3.3%)
China Steel Corp. + 12,873,000 10,161,012
Evergreen Marine Corp. Ltd. 4,782,800 7,178,188
Grand Pacific Fund 2,872,000 713,078
Kwang Hua Growth Fund 6,346,000 2,198,818
Taiwan Semiconductor Mfg. Co. + 5,338,000 16,616,342
Ton Yi Industrial Corp. + 9,785,000 12,981,397
Tuntex Distinct Corp. + 15,377,242 9,744,333
Tuntex Distinct Corp. GDS + 654,510 4,090,688
Yang Ming Marine Transport Corp. 13,302,000 14,640,334
--------------
78,324,190
--------------
Thailand (1.2%)
Industrial Finance Corp. of Thailand 7,467,400 24,554,026
Thai Military Bank Ltd. 908,300 3,583,966
--------------
28,137,992
--------------
</TABLE>
See Accompanying Notes to Financial Statements.
23
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- --------------
<S> <C> <C>
COMMON STOCK (CONT'D)
United Kingdom (7.1%)
AAF Industries PLC + 847,750 $ 348,344
British Air Authority PLC 3,426,533 26,643,240
BTR PLC 1,969,931 10,460,617
Cookson Group PLC 3,138,000 14,530,735
Govett & Co., Ltd. 3,005,000 11,540,318
Grand Metropolitan PLC 3,064,000 21,209,474
Grand Metropolitan PLC ADR 123,000 3,382,500
Prudential Corp. PLC 4,063,800 25,432,821
Reckitt & Coleman PLC 2,058,429 21,893,640
Singer & Friedlander Group PLC 9,093,000 15,232,812
Takare PLC 5,657,400 18,328,958
Trio Holdings PLC 7,868,850 1,492,312
--------------
170,495,771
--------------
Zimbabwe
Delta Corp., Ltd. 530,000 835,620
--------------
TOTAL COMMON STOCK (Cost $2,058,122,790) 2,150,103,505
--------------
PREFERRED STOCK (0.7%)
Austria (0.1%)
Maculan Holdings AG Vorzuege 113,775 2,068,845
--------------
South Korea (0.5%)
Mando Machinery Corp. + 110,000 4,021,592
Samsung Electronics Co., Ltd. 48,040 5,962,586
Samsung Electronics Co., Ltd. New 9,507 1,162,237
--------------
11,146,415
--------------
United Kingdom (0.1%)
Singer & Friedlander Group PLC 8.5% Convertible 1,435,737 2,938,405
--------------
TOTAL PREFERRED STOCK (Cost $20,093,486) 16,153,665
--------------
STOCK WARRANTS (0.2%)
Australia
Niugini Mining Ltd., 12/08/95 + 346,250 184,569
--------------
Hong Kong
Jardine Strategic Holdings Ltd., 05/02/98 + 2,115,400 560,581
--------------
Israel
Ampal-American Israel Corp. Class A, 01/31/99 + 455,000 184,844
--------------
Japan
Bandai Industries, 11/04/97 + 2,936 2,862,600
--------------
</TABLE>
See Accompanying Notes to Financial Statements.
24
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- --------------
<S> <C> <C>
STOCK WARRANTS (CONT'D)
Switzerland
Danzas Holding AG, 08/02/96 + 9,050 $ 3,587
--------------
TOTAL STOCK WARRANTS (Cost $5,829,846) 3,796,181
--------------
<CAPTION>
CONTRACTS
----------
<S> <C> <C>
CALL OPTIONS (0.5%)
Japan
Topix Index, 03/08/96, (Strike price $1,251.24) + 20,426 3,622,143
Topix Index, 03/08/96, (Strike price $1,261.12) + 21,024 3,554,948
Topix Index, 03/08/96, (Strike price $1,349.00) + 9,152 943,480
Topix Index, 05/10/96, (Strike price $1,323.64) + 20,842 2,486,451
Topix Index, 06/14/96, (Strike price $1,275.00) + 11,519 1,910,541
--------------
12,517,563
--------------
Mexico
Mexican Inmex, 03/29/96, (Strike price $56.60) + 249,080 4,982
--------------
Switzerland
Danzas Holding AG, 08/22/96, (Strike price 12.50 Sfr) + 1,000 3,963
--------------
TOTAL CALL OPTIONS (Cost $10,439,121) 12,526,508
--------------
</TABLE>
<TABLE>
PAR =
-------------
<S> <C> <C>
CONVERTIBLE BONDS/NOTES (2.3%)
Argentina (0.3%)
Banco de Galicia & Buenos Aires SA 7.00%, 08/01/02 $ 7,648,000 6,156,640
--------------
Australia (0.3%)
BTR Nylex Ltd. 9.00%, 11/30/49 (A) 57,300,000 6,518,912
--------------
India (0.2%)
Reliance Industries Ltd. 3.50%, 11/03/99 $ 3,850,000 3,936,625
--------------
Japan (1.1%)
Matsushita Electric Works Ltd. 2.70%, 05/31/02 (B) 2,465,000,000 27,541,630
--------------
New Zealand
Brierley Investments Ltd. 9.00%, 06/30/98 (C) 1,314,875 936,675
--------------
Taiwan (0.4%)
Yang Ming Marine Transport Corp. 2.00%, 10/06/01 $ 8,429,000 8,997,958
--------------
TOTAL CONVERTIBLE BONDS/NOTES (Cost $53,163,859) 54,088,440
--------------
</TABLE>
See Accompanying Notes to Financial Statements.
25
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS INTERNATIONAL EQUITY FUND
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
------------- ---------------
<S> <C> <C>
SHORT-TERM INVESTMENTS (3.2%)
Repurchase agreement with State Street Bank & Trust dated 10/31/95 at 5.83%
to be repurchased at $77,068,479 on 11/01/95. (Collateralized by $50,000,000
U.S. Treasury Note 6.875%, due 10/31/96 and $27,625,000 U.S. Treasury Note
6.00%, due 8/31/97. Market value of collateral is $78,664,375.) (cost $77,056,000) $ 77,056,000 $ 77,056,000
--------------
TOTAL INVESTMENTS AT VALUE (97.0%) (Cost $2,224,705,102*) 2,313,724,299
OTHER ASSETS IN EXCESS OF LIABILITIES (3.0%) 72,219,548
--------------
NET ASSETS (100.0%) (applicable to 107,177,463 Common Shares and 16,584,820 Advisor
Shares) $2,385,943,847
--------------
--------------
NET ASSET VALUE, offering and redemption price per Common Share
($2,068,207,597[div]107,177,463) $19.30
------
------
NET ASSET VALUE, offering and redemption price per Advisor Share
($317,736,250[div]16,584,820) $19.16
------
------
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<S> <C>
ADR = American Depository Receipt
GDR = Global Depository Receipt
GDS = Global Depository Share
</TABLE>
+ Non-income producing security.
* Cost for Federal income tax purposes is $2,225,158,852.
= Unless otherwise indicated below, all bonds are denominated in U.S. Dollars
(A) Denominated in Australian Dollars.
(B) Denominated in Japanese Yen.
(C) Denominated in New Zealand Dollars.
See Accompanying Notes to Financial Statements.
26
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS JAPAN OTC FUND
SCHEDULE OF INVESTMENTS
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
COMMON STOCK (91.9%)
Agriculture (0.6%)
Kaneko Seeds Co. 100,000 $ 1,027,297
------------
Automobile (0.9%)
Aucnet Inc. 30,000 1,584,972
------------
Automotive Parts-Equipment (0.2%)
Harada Industry Co., Ltd. 16,000 328,735
------------
Broadcasting (0.7%)
Horipro Inc. 87,000 1,293,807
------------
Building Materials (0.6%)
Furusato Industries 131,000 1,095,832
------------
Clinical Examination (0.8%)
Kanto Biomedical Laboratory 100,000 1,311,026
------------
Computers (10.5%)
Daiwabo Information System Co. 50,000 1,433,324
I.O. Data Device Inc. 160,000 11,427,453
Melco Inc. 100,000 5,469,132
------------
18,329,909
------------
Construction (2.6%)
Kawasho Lease System Corp. 117,200 1,559,456
Onoken Co., Ltd. 44,000 1,003,033
Sacos Corp. 60,000 1,344,291
Yamazaki Construction Co., Ltd. 40,000 563,546
Yokogawa Construction Co., Ltd. 9,000 110,068
------------
4,580,394
------------
Electronics (13.7%)
Ado Electronic Industrial Co., Ltd. 108,000 2,430,291
Advantest Corp. 30,000 1,702,377
Apic Yamada Corp. 100,000 4,402,700
Easton Co., Ltd. 90,000 3,786,322
Katsuragawa Electric Co., Ltd. 123,000 2,033,754
New Japan Radio Co., Ltd. + 160,000 2,285,491
Satori Electric Co., Ltd. 40,000 1,858,918
USC Corp. 25,000 802,270
Yaesu Musen Co., Ltd. 58,000 618,530
Yamaichi Electronics Mfg. 135,000 4,094,511
------------
24,015,164
------------
Engineering & Construction (1.6%)
Sawako Corp. 100,000 2,788,377
------------
</TABLE>
See Accompanying Notes to Financial Statements.
27
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS JAPAN OTC FUND
SCHEDULE OF INVESTMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Foods (1.2%)
Warabeya Nichiyo Co., Ltd. 41,000 $ 613,736
Yoshinoya D&C Co., Ltd. 92 1,458,174
------------
2,071,910
------------
Food Processing (2.5%)
Ariake Japan Co., Ltd. 50,000 1,687,702
Sato Foods Industries Co. Ltd. 64,000 1,076,998
Taiyo Kagaku Co., Ltd. 130,000 1,577,145
------------
4,341,845
------------
Healthcare (2.1%)
Nichii Gakkan Co. 83,000 3,621,759
------------
Home Appliances (5.3%)
Yamada Denki Co., Ltd. 433,000 9,362,391
------------
Home Furnishings/Housewares (0.9%)
Hikari Furniture Co., Ltd. 39,000 476,959
Sekichu Co., Ltd. 105,000 1,119,753
------------
1,596,712
------------
Lodging (0.1%)
Royal Hotel 26,000 178,065
------------
Machinery (Electric) (1.3%)
Nissei ASB Machine Co., Ltd. + 113,000 1,470,404
Sato Corp. 42,000 862,929
------------
2,333,333
------------
Manufacturing (18.6%)
Disco Corp. 152,000 5,725,467
Fujimi Inc. 100,000 6,868,213
Kadoya Sesame Mills Inc. 72,000 915,762
Maki Manufacturing Co., Ltd. 50,000 860,973
Nakakita Seisakusho Co., Ltd. 60,000 299,384
Nippon Steel Semiconductor Co. + 150 5,870,267
Nitta Industrial Corp. 392,000 6,481,558
Tokyo Electron Ltd. 50,000 2,171,999
Tokyo Seimitsu Co., Ltd. 175,000 3,424,322
------------
32,617,945
------------
Pharmaceuticals (3.8%)
Fuji Pharmaceutical Co., Ltd. + 140,000 2,328,539
Sawai Pharmaceutical Co., Ltd. + 50,000 1,707,269
Seikagaku Corp. 100,000 2,573,134
------------
6,608,942
------------
</TABLE>
See Accompanying Notes to Financial Statements.
28
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS JAPAN OTC FUND
SCHEDULE OF INVESTMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Retail (18.5%)
Aoyama Trading Co., Ltd 100,000 $ 2,700,323
Circle K Japan Co., Ltd + 190,000 7,249,780
Fast Retailing Co., Ltd 60,000 2,929,263
Homac Corp. 16,000 286,469
Home Wide Corp. 226,000 2,675,472
Kuroganeya Co., Ltd. 201,000 3,048,136
Laox Co. 80,000 1,737,599
Ryohin Keikaku Co., Ltd. 110,000 7,232,169
Seven-Eleven Japan 40,000 2,669,015
Sundrug Co., Ltd. 50,000 1,917,621
------------
32,445,847
------------
Retail Merchandising (1.2%)
Jeans Mate Corp. 15,000 484,297
Kraft Inc. 44,000 774,875
Right On Co., Ltd. 48,000 915,762
------------
2,174,934
------------
Shipbuilding (1.6%)
Namura Shipbuilding 250,000 1,394,188
Sanoyas Hishino Meisho Corp. 300,000 1,467,567
------------
2,861,755
------------
Wholesale Distribution (2.6%)
Hakuto Co., Ltd. 100,000 2,582,918
Petrolub International Co. 63,000 1,090,989
Toyo Corp. 50,000 552,784
Yonkyu Co., Ltd. 9,000 233,343
------------
4,460,034
------------
TOTAL COMMON STOCK (Cost $161,928,196) 161,030,985
------------
<CAPTION>
CORPORATE BONDS (0.3%) PAR
----------
<S> <C> <C>
Switzerland
Ralse Co., Ltd. 1.00% 08/31/98 (Convertible; callable 2/29/96 @ 102 Sfr)
(Cost $416,917) 500,000 418,355
------------
UNITED STATES TREASURY OBLIGATIONS (4.6%)
U.S. Treasury Bill 4.90%, due 11/02/95
(Cost $7,998,911) $8,000,000 7,998,911
------------
SHORT-TERM INVESTMENTS (3.2%)
Repurchase agreement with State Street Bank & Trust Co. dated 10/31/95 at 5.83%
to be repurchased at $5,772,935 on 11/1/95 (Collateralized by $5,630,000 U.S.
Treasury Note 7.25% due 11/30/96 with a market value of $5,892,116)
(Cost $5,772,000) 5,772,000 5,772,000
------------
TOTAL INVESTMENTS (100.0%) (Cost $176,116,024*) $175,220,251
------------
------------
</TABLE>
+ Non-income producing security.
* Also cost for Federal income tax purposes.
See Accompanying Notes to Financial Statements.
29
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- ----------
<S> <C> <C>
COMMON STOCK (88.6%)
Argentina (6.5%)
Banco Frances del Rio de la Plata SA ADR 4,500 $ 98,438
Telefonica de Argentina SA ADR 9,200 190,900
YPF SA ADR 7,800 133,575
----------
422,913
----------
Australia (1.1%)
Novus Petroleum Ltd. + 58,700 70,179
----------
Austria (2.8%)
V.A. Technologie AG 1,610 186,714
----------
Brazil (4.7%)
Panamerican Beverages, Inc. Class A 11,200 306,600
----------
Chile (4.1%)
Compania de Telecommunicacion de Chile SA ADR 3,700 266,400
----------
China (1.7%)
Guangzhou Shipyard International 94,000 28,573
Shanghai Haixing Shipping + 802,000 82,988
----------
111,561
----------
Colombia (0.6%)
Banco Industrial Colombiano ADR 3,000 40,874
----------
Hong Kong (12.1%)
Citic Pacific Ltd. 87,800 274,261
HSBC Holdings PLC 11,360 165,304
Jardine Matheson Holdings Ltd. ADR 39,672 241,999
Jilin Chemical Industrial Co., Ltd. ADR + 5,500 113,438
----------
795,002
----------
India (4.1%)
Hindalco Industries Ltd. GDR 900 28,800
Reliance Industries Ltd. GDS 13,585 212,198
The India Fund, Inc. 3,500 29,313
----------
270,311
----------
Indonesia (10.4%)
P.T. Dynaplast Ltd. 30,500 26,908
P.T. Mulia Industrindo 47,500 140,384
P.T. Semen Cibinong 72,500 190,284
P.T. Semen Gresik 79,500 206,903
</TABLE>
See Accompanying Notes to Financial Statements.
30
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- ----------
COMMON STOCK (CONT'D)
<S> <C> <C>
P.T. Tri Polyta Indonesia ADR + 7,400 $ 114,700
----------
679,179
----------
Israel (5.6%)
Ampal-American Israel Corp. Class A + 4,200 23,625
Clal Electronics Industries Ltd. + 982 112,112
ECI Telecommunications Limited Designs 12,200 231,800
----------
367,537
----------
Japan (2.3%)
Circle K Japan Co., Ltd. + 4,000 152,627
----------
Malaysia (1.0%)
Westmont BHD 18,000 62,350
----------
Mexico (2.3%)
Gruma SA + 51,000 150,421
----------
Portugal (1.8%)
Portugal Telecommunications SA + 6,300 119,373
----------
Singapore (1.5%)
IPC Corp., Ltd. 140,000 95,646
----------
South Korea (13.5%)
Daewoo Electronics Co., Ltd. + 20,850 277,963
Daewoo Electronics Co., Ltd. (New) + 6,200 79,009
Daewoo Heavy Industries 5,240 68,145
Hana Bank 3,800 81,851
Hanil Bank 8,900 115,580
Korea Long Term Credit Bank 2,790 89,392
Mando Machinery Corp. + 2,500 170,468
Samsung Electronics Co., Ltd. Second Series 1 248
----------
882,656
----------
Taiwan (9.6%)
China Steel Corp. + 28,000 22,101
GP-Taiwan Index Fund + 180,000 139,500
Taiwan Semiconductor Mfg., Co. + 32,000 99,611
Ton Yi Industrial Corp. + 154,000 204,306
Tuntex Distinct Corp. + 20,000 12,674
Tuntex Distinct Corp. GDS + 1,080 6,750
Yang Ming Marine Transport Corp. 129,000 141,979
----------
626,921
----------
</TABLE>
See Accompanying Notes to Financial Statements.
31
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- ----------
COMMON STOCK (CONT'D)
<S> <C> <C>
Thailand (2.9%)
Industrial Finance Corp. of Thailand 57,800 $ 190,056
----------
TOTAL COMMON STOCK (Cost $5,835,052) 5,797,320
----------
PREFERRED STOCK (1.5%)
South Korea
Keyang Electronic Machinery Co. + 4,200 78,500
Samsung Electronics Co., Ltd. + 130 18,192
Samsung Electronics Co., Ltd. New + 25 3,446
----------
100,138
----------
TOTAL PREFERRED STOCK (Cost $78,848) 100,138
----------
STOCK WARRANTS (0.1%)
Hong Kong
Jardine Strategic Holdings, 05/02/98 +
(Cost $10,610) 21,000 5,565
----------
</TABLE>
<TABLE>
<CAPTION>
CONVERTIBLE BONDS/NOTES (3.9%) PAR
--------
<S> <C> <C>
Argentina (1.3%)
Banco de Galicia & Buenos Aires SA 7.00%, 08/01/02 $101,000 81,305
----------
Taiwan (2.6%)
President Enterprises 0.00%, 07/22/01 140,000 172,550
----------
TOTAL CONVERTIBLE BONDS/NOTES (Cost $241,828) 253,855
----------
SHORT-TERM INVESTMENTS (5.9%)
Repurchase agreement with State Street Bank & Trust
dated 10/31/95 at 5.83% to be repurchased at $389,063 on 11/01/95.
(Collateralized by $380,000 U.S. Treasury Note 7.25%,
due 11/30/96, with a market value of $397,692.) (Cost $389,000) 389,000 389,000
----------
TOTAL INVESTMENTS (100.0%) (Cost $6,555,338*) $6,545,878
----------
----------
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<S> <C>
ADR =American Depository Receipt
GDR =Global Depository Receipt
GDS =Global Depository Share
</TABLE>
+ Non-income producing security.
* Cost for Federal income tax purposes is $6,556,878.
See Accompanying Notes to Financial Statements.
32
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS POST-VENTURE CAPITAL FUND
SCHEDULE OF INVESTMENTS
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
-------- ----------
<S> <C> <C>
COMMON STOCK (81.2%)
CAPITAL GOODS
Computers (26.7%)
Applix, Inc. + 2,400 $ 66,600
Atria Software, Inc. + 400 14,300
Auspex Systems, Inc. + 1,100 15,537
Boca Research, Inc. + 1,100 27,775
Brock Control Systems, Inc. + 5,000 39,375
Cheyenne Software, Inc. + 1,500 31,125
Continuum, Inc. + 800 31,500
FileNet Corp. + 1,300 58,987
Hyperion Software Corp. + 1,300 64,025
Logic Works, Inc. + 3,000 45,750
Macromedia, Inc. + 500 18,500
Manugistics Group, Inc. + 3,400 58,650
McAfee Associates, Inc. + 1,200 69,900
Network General Corp. + 1,300 53,950
Parametric Technology Corp. + 500 33,437
Softkey International, Inc. + 2,200 69,300
Synopsys, Inc. + 800 30,000
System Software Associates, Inc. 2,000 61,750
Verity, Inc. + 2,000 73,500
----------
863,961
----------
Electronics (5.5%)
Asyst Technologies, Inc. + 1,300 54,600
Maxim Integrated Products, Inc. + 400 29,900
Watkins Johnson Co. 1,100 52,938
Xilinx, Inc. + 900 41,400
----------
178,838
----------
Office Equipment & Supplies (1.1%)
Viking Office Products, Inc. + 800 35,600
----------
CONSUMER
Business Services (4.9%)
Norrell Corp. 600 18,525
On Assignment, Inc. + 1,100 29,700
PMT Services, Inc. + 1,200 32,250
QuickResponse Services, Inc. + 1,200 30,000
Solectron Corp. + 1,200 48,300
----------
158,775
----------
Consumer Services (0.5%)
DEVRY, Inc. + 700 15,575
----------
</TABLE>
See Accompanying Notes to Financial Statements.
33
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS POST-VENTURE CAPITAL FUND
SCHEDULE OF INVESTMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
-------- ----------
COMMON STOCK (CONT'D)
<S> <C> <C>
Healthcare (16.9%)
American Oncology Resources, Inc. + 600 $ 21,000
Arbor Health Care Co. + 2,200 37,400
EMcare Holdings, Inc. + 2,700 62,100
Endosonics Corp. + 2,000 31,750
Enterprise Systems, Inc. + 3,500 81,813
Health Care & Retirement Corp. + 200 5,875
Health Managment System, Inc. + 1,600 51,200
Healthsource, Inc. + 1,300 68,900
Oxford Health Plans, Inc. + 800 62,600
ThermoTrex Corp. + 600 21,525
Total Renal Care Holdings, Inc. + 5,000 101,875
----------
546,038
----------
Leisure & Entertainment (1.1%)
Regal Cinemas, Inc. + 900 35,325
----------
Lodging & Restaurants (0.4%)
Doubletree Corp. + 600 13,200
----------
Pharmaceuticals (4.2%)
Cephalon, Inc. + 900 27,000
DepoTech Corp. + 2,000 29,000
Genzyme Corp. + 800 46,600
Genzyme Corp. -- Tissue Repair Division + 1,900 33,963
----------
136,563
----------
Retail (4.4%)
Borders Group, Inc. + 1,500 25,688
Micro Warehouse, Inc. + 600 26,700
Neostar Retail Group, Inc. + 1,900 28,975
Office Depot, Inc. + 1,100 31,487
PETsMART, Inc. + 900 30,150
----------
143,000
----------
ENERGY AND RELATED
Oil Services (0.9%)
Input/Output, Inc. + 800 29,900
----------
FINANCE
Financial Services (1.1%)
MS Financial Corp. + 1,100 12,375
Mutual Risk Management Ltd. 300 11,063
United Companies Financial Corp. 400 11,300
----------
34,738
----------
</TABLE>
See Accompanying Notes to Financial Statements.
34
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS POST-VENTURE CAPITAL FUND
SCHEDULE OF INVESTMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
-------- ----------
COMMON STOCK (CONT'D)
<S> <C> <C>
MEDIA
Communications & Media (1.1%)
America Online, Inc. + 300 $ 24,000
Central European Media Enterprises Ltd. Class A + 500 11,500
----------
35,500
----------
Telecommunications (12.4%)
Ascend Communications, Inc. + 200 13,000
Bay Networks, Inc. + 400 26,500
Cascade Communications Corp. + 500 35,625
Cisco Systems, Inc. + 200 15,500
DSP Communications, Inc. + 800 29,000
Gilat Satellite Networks Ltd. + 800 17,800
Paging Network, Inc. + 900 20,700
Pairgain Technologies, Inc. + 1,000 42,750
PictureTel Corp. + 400 26,400
QUALCOMM, Inc. 300 11,550
StrataCom, Inc. + 1,100 67,650
Tellabs, Inc. + 1,200 40,800
US Robotics Corp. + 600 55,500
----------
402,775
----------
TOTAL COMMON STOCK (Cost $2,465,347) 2,629,788
----------
</TABLE>
<TABLE>
<CAPTION>
PAR
--------
<S> <C> <C>
SHORT-TERM INVESTMENTS (18.8%)
Repurchase agreement with State Street Bank and Trust Co.
dated 10/31/95 at 5.83% to be repurchased at $610,099 on 11/01/95.
(Collateralized by $620,000 U.S. Treasury Note at 6.875%,
due 10/31/96, with a market value of $627,750.) (Cost $610,000) $610,000 610,000
----------
TOTAL INVESTMENTS AT VALUE (100.0%) (Cost $3,075,347*) $3,239,788
----------
----------
</TABLE>
+ Non-income producing security.
* Also cost for Federal income tax purposes.
See Accompanying Notes to Financial Statements.
35
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS JAPAN OTC FUND
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments at value (Cost $176,116,024) $175,220,251
Foreign currency (Cost $22,536,885) 22,505,366
Receivable for Fund shares sold 2,928,760
Receivable for unrealized gain on forward contracts (Note 4) 593,925
Receivable for investment securities sold 536,755
Deferred organizational costs (Note 1) 166,783
Dividends and interest receivable 88,944
Other assets 6,051
------------
Total assets 202,046,835
------------
LIABILITIES
Payable for investment securities purchased 22,476,211
Payable for Fund shares redeemed 717,610
Accrued expenses 283,532
------------
Total liabilities 23,477,353
------------
NET ASSETS applicable to 19,646,455 Common Shares outstanding and
115 Advisor Shares outstanding $178,569,482
------------
------------
NET ASSET VALUE, offering and redemption price per Common Share
($178,568,438[div]19,646,455) $9.09
-----
-----
NET ASSET VALUE, offering and redemption price per Advisor Share
($1,044[div]115) $9.08
-----
-----
</TABLE>
See Accompanying Notes to Financial Statements.
36
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EMERGING MARKETS FUND
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments at value (Cost $6,555,338) $6,545,878
Receivable for Fund shares sold 207,547
Deferred organizational costs (Note 1) 187,395
Foreign currency (Cost $47,256) 47,209
Dividends and interest receivable 7,974
Other assets 4,047
----------
Total assets 7,000,050
----------
LIABILITIES
Payable for investment securities purchased 111,286
Accrued expenses 91,932
Other liabilities 15,903
----------
Total liabilities 219,121
----------
NET ASSETS applicable to 600,795 Common Shares outstanding and
122 Advisor Shares outstanding $6,780,929
----------
----------
NET ASSET VALUE, offering and redemption price per Common Share
($6,779,551[div]600,795) $11.28
------
------
NET ASSET VALUE, offering and redemption price per Advisor Share
($1,378[div]122) $11.30
------
------
</TABLE>
See Accompanying Notes to Financial Statements.
37
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS POST-VENTURE CAPITAL FUND
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments at value (Cost $3,075,347) $ 3,239,788
Receivable for Fund shares sold 125,583
Cash 108,361
Deferred organizational costs (Note 1) 108,338
Receivable for investment securities sold 57,748
Other receivables 6,557
-----------
Total assets 3,646,375
-----------
LIABILITIES
Payable for investment securities purchased 484,782
Organizational costs payable 110,270
Accrued expenses 25,894
-----------
Total liabilities 620,946
-----------
NET ASSETS applicable to 282,937 Common Shares outstanding and
119 Advisor Shares outstanding $ 3,025,429
-----------
-----------
NET ASSET VALUE, offering and redemption price per Common Share
($3,024,158[div]282,937) $10.69
------
------
NET ASSET VALUE, offering and redemption price per Advisor Share
($1,271[div]119) $10.68
------
------
</TABLE>
See Accompanying Notes to Financial Statements.
38
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
[THIS PAGE INTENTIONALLY LEFT BLANK]
39
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
STATEMENTS OF OPERATIONS
For the Year or Period Ended October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Warburg Pincus Warburg Pincus Warburg Pincus
Capital Appreciation Emerging Growth International Equity
Fund Fund Fund
-------------------- --------------- --------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 2,107,232 $ 772,834 $ 40,091,101
Interest 684,526 2,112,707 7,110,116
Foreign taxes withheld (2,423) 0 (5,031,072)
------------ ------------- ------------
Total investment income 2,789,335 2,885,541 42,170,145
------------ ------------- ------------
EXPENSES:
Investment advisory 1,367,729 3,824,061 20,225,631
Administrative services 390,780 849,790 3,408,846
Audit 27,208 27,469 69,286
Custodian/Sub-custodian 63,554 145,277 1,753,400
Directors/Trustees 10,500 10,500 11,500
Distribution/Shareholder servicing 45,989 531,389 1,274,343
Insurance 10,104 14,770 58,340
Legal 90,851 76,677 102,549
Organizational 0 0 0
Printing 27,954 41,914 172,129
Registration 62,918 159,555 428,595
Transfer agent 92,488 149,133 1,538,272
Miscellaneous 35,776 37,625 380,319
------------ ------------- ------------
2,225,851 5,868,130 29,423,210
Less: fees waived and expenses reimbursed 0 0 0
------------ ------------- ------------
Total expenses 2,225,851 5,868,130 29,423,210
------------ ------------- ------------
Net investment income (loss) 563,484 (2,982,589) 12,746,935
------------ ------------- ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
AND FOREIGN CURRENCY RELATED ITEMS:
Net realized gain (loss) from security transactions 31,649,453 49,113,782 (34,444,203)
Net realized gain (loss) from foreign currency
related items 0 0 16,792,905
Net change in unrealized appreciation (depreciation)
from investments and foreign currency related items 12,386,702 84,670,426 (4,675,049)
------------ ------------- ------------
Net realized and unrealized gain (loss) from
investments and foreign currency related
items 44,036,155 133,784,208 (22,326,347)
------------ ------------- ------------
Net increase (decrease) in net assets
resulting from operations $ 44,599,639 $ 130,801,619 $ (9,579,412)
------------ ------------- ------------
------------ ------------- ------------
40
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<CAPTION>
Warburg Pincus Warburg Pincus Warburg Pincus
Japan OTC Emerging Markets Post-Venture Capital
Fund Fund (1) Fund (2)
-------------- ---------------- --------------------
<S> <C> <C>
$ 221,577 $ 33,788 $ 0
412,522 22,711 2,675
(33,237) (3,250) 0
---------- -------- --------
600,862 53,249 2,675
---------- -------- --------
599,720 29,641 1,756
138,679 5,217 280
25,700 16,000 9,000
60,612 45,701 5,771
11,290 14,625 1,250
119,941 5,926 351
2,761 855 0
96,359 54,987 5,000
42,449 37,432 1,932
2,579 14,765 1,000
115,649 26,664 6,000
100,690 28,656 2,833
10,620 6,070 500
---------- -------- --------
1,327,049 286,539 35,673
(652,386) (262,824) (33,354)
---------- -------- --------
674,663 23,715 2,319
---------- -------- --------
(73,801) 29,534 356
---------- -------- --------
(4,629,196) 102,219 (26,884)
7,895,010 (4,992) 0
(195,368) (9,058) 164,441
---------- -------- --------
3,070,446 88,169 137,557
---------- -------- --------
$2,996,645 $117,703 $137,913
---------- -------- --------
---------- -------- --------
</TABLE>
(1) For the period December 30, 1994 (Commencement of Operations) through
October 31, 1995.
(2) For the period September 29, 1995 (Commencement of Operations) through
October 31, 1995.
See Accompanying Notes to Financial Statements.
41
- --------------------------------------------------------------------------------
<PAGE>
<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 Year Ended October 31, For the Year Ended October 31,
1995 1994 1995 1994
--------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ 563,484 $ 384,246 $ (2,982,589) $ (1,678,646)
Net realized gain (loss) from
security transactions 31,649,453 11,173,174 49,113,782 (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 12,386,702 (9,106,613) 84,670,426 10,930,919
------------- ------------ ------------- ------------
Net increase (decrease) in net
assets resulting from
operations 44,599,639 2,450,807 130,801,619 3,530,748
------------- ------------ ------------- ------------
FROM DISTRIBUTIONS:
Dividends from net investment income:
Common Shares (563,484) (419,337) 0 0
Advisor Shares 0 (27,724) 0 0
Distributions in excess of net
investment income:
Common Shares 0 0 0 0
Distributions from capital gains:
Common Shares (10,419,627) (12,899,141) 0 (10,576,150)
Advisor Shares (575,892) (852,608) 0 (1,639,316)
------------- ------------ ------------- ------------
Net decrease from distributions (11,559,003) (14,198,810) 0 (12,215,466)
------------- ------------ ------------- ------------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 88,963,455 45,617,531 335,569,078 180,813,270
Reinvested dividends 11,246,752 13,809,167 0 12,758,387
Net asset value of shares redeemed (53,459,471) (49,851,500) (116,280,844) (71,767,717)
------------- ------------ ------------- ------------
Net increase in net assets from
capital share transactions 46,750,736 9,575,198 219,288,234 121,803,940
------------- ------------ ------------- ------------
Net increase (decrease) in net
assets 79,791,372 (2,172,805) 350,089,853 113,119,222
NET ASSETS:
Beginning of period 167,514,493 169,687,298 304,672,758 191,553,536
------------- ------------ ------------- ------------
End of period $ 247,305,865 $167,514,493 $ 654,762,611 $304,672,758
------------- ------------ ------------- ------------
------------- ------------ ------------- ------------
42
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<CAPTION>
Warburg Pincus Warburg Pincus
Japan OTC Emerging Markets
Warburg Pincus Fund Fund
Warburg Pincus --------------------------------------- -------------------
International Equity For the Period For the Period
Fund September 30, 1994 December 30, 1994
----------------------------------- For the (Commencement of (Commencement of
For the Year Ended October 31, Year Ended Operations) through Operations) through
1995 1994 October 31, 1995 October 31, 1994 October 31, 1995
--------------- ---------------- ---------------- ------------------- -------------------
<S> <C> <C> <C> <C>
$ 12,746,935 $ 1,310,933 $ (73,801) $ 5,115 $ 29,534
(34,444,203) 48,091,665 (4,629,196) 0 102,219
16,792,905 (2,772,944) 7,895,010 (294,437) (4,992)
(4,675,049) 82,484,415 (195,368) (35,099) (9,058)
--------------- ---------------- ---------------- ------------------- -------------------
(9,579,412) 129,114,069 2,996,645 (324,421) 117,703
--------------- ---------------- ---------------- ------------------- -------------------
(11,671,023) (1,764,380) 0 0 (14,321)
(629,473) (218,961) 0 0 (3)
0 (223,659) 0 0 0
(42,332,078) (1,047,367) 0 0 0
(5,756,403) (129,979) 0 0 0
--------------- ---------------- ---------------- ------------------- -------------------
(60,388,977) (3,384,346) 0 0 (14,324)
--------------- ---------------- ---------------- ------------------- -------------------
1,383,361,959 1,430,739,923 200,565,875 20,287,158 7,753,908
54,872,977 2,950,772 0 0 13,802
(715,598,203) (249,050,078) (44,871,674) (185,101) (1,191,160)
--------------- ---------------- ---------------- ------------------- -------------------
722,636,733 1,184,640,617 155,694,201 20,102,057 6,576,550
--------------- ---------------- ---------------- ------------------- -------------------
652,668,344 1,310,370,340 158,690,846 19,777,636 6,679,929
1,733,275,503 422,905,163 19,878,636 101,000 101,000
--------------- ---------------- ---------------- ------------------- -------------------
$2,385,943,847 $1,733,275,503 $178,569,482 $19,878,636 $ 6,780,929
--------------- ---------------- ---------------- ------------------- -------------------
--------------- ---------------- ---------------- ------------------- -------------------
<CAPTION>
Warburg Pincus
Post-Venture
Capital Fund
-------------------
For the Period
September 29, 1995
(Commencement of
Operations) through
October 31, 1995
-------------------
<C>
$ 356
(26,884)
0
164,441
-----------
137,913
-----------
0
0
0
0
0
-----------
0
-----------
2,792,403
0
(4,887)
-----------
2,787,516
-----------
2,925,429
100,000
-----------
$ 3,025,429
-----------
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
43
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS CAPITAL APPRECIATION FUND
FINANCIAL HIGHLIGHTS
(For an Advisor Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
April 4, 1991
For the Year Ended October 31, (Initial Issuance)
------------------------------------------ through
1995 1994 1993 1992 October 31, 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 (.08) .00 (.01) .05
Net Gain on Securities (both realized and
unrealized) 3.02 .23 2.76 1.20 .13
------ ------ ------ ------ -------
Total from Investment Operations 3.02 .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 $16.26 $14.22 $15.28 $13.28 $12.16
------ ------ ------ ------ -------
------ ------ ------ ------ -------
Total Return 23.41% 1.23% 21.64% 9.83% 2.66%*
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $11,594 $8,169 $10,437 $1,655 $443
Ratios to average daily net assets:
Operating expenses 1.62% 1.55% 1.51% 1.56% 1.63%*
Net investment income (loss) (.18%) (.24%) (.25%) (.11%) .25%*
Decrease reflected in above operating expense
ratios due to waivers/reimbursements .00% .01% .00% .01% .01%*
Portfolio Turnover Rate 146.09% 51.87% 48.26% 55.83% 39.50%
</TABLE>
* Annualized
See Accompanying Notes to Financial Statements.
TAX STATUS OF 1995 DIVIDENDS (Unaudited)
Taxable dividends paid by the Fund on per share basis were as follows:
<TABLE>
<S> <C>
Ordinary income $.02
Long-term capital gain .96
</TABLE>
Ordinary income dividends qualifying for the dividends received deduction
available to corporate shareholders was 100.00%.
Because the Fund's fiscal year is not the calendar year, amounts to be used by
calendar year taxpayers on their Federal return will be reflected on Form
1099-DIV and will be mailed in January 1996.
44
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EMERGING GROWTH FUND
FINANCIAL HIGHLIGHTS
(For an Advisor Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
April 4, 1991
For the Year Ended October 31, (Initial Issuance)
------------------------------------ through
1995 1994 1993 1992 October 31, 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 Loss (.09) (.08) (.08) (.06) .00
Net Gain (Loss) on Securities (both
realized and unrealized) 7.42 (.02) 5.77 1.62 1.82
------ ------ ------ ------ -------
Total from Investment Operations 7.33 (.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 $29.38 $22.05 $23.51 $18.19 $16.99
------ ------ ------ ------ -------
------ ------ ------ ------ -------
Total Return 33.24% (.29%) 31.67% 9.02% 23.43%*
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $167,225 $64,009 $26,029 $5,398 $275
Ratios to average daily net assets:
Operating expenses 1.76% 1.72% 1.73% 1.74% 1.74%*
Net investment loss (1.08%) (1.08%) (1.09%) (.87%) (.49%)*
Decease reflected in above operating expense ratios
due to waivers/reimbursements .00% .04% .00% .06% .42%*
Portfolio Turnover Rate 84.82% 60.38% 68.35% 63.38% 97.69%
* Annualized
</TABLE>
See Accompanying Notes to Financial Statements.
45
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
(For an Advisor Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
April 4, 1991
For the Year Ended October 31, (Initial Issuance)
-------------------------------------------- through
1995 1994 1993 1992 October 31, 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) .03 .16 (.01) .13 .00
Net Gain (Loss) on Securities and
Foreign Currency Related Items
(both realized and unrealized) (.67) 3.35 4.86 (1.32) .58
------ ------ ------ ------ ------
Total from Investment Operations (.64) 3.51 4.85 (1.19) .58
------ ------ ------ ------ ------
Less Distributions:
Dividends from Net Investment Income (.05) .00 (.01) (.12) (.06)
Distributions from Capital Gains (.53) (.04) (.13) (.15) .00
------ ------ ------ ------ ------
Total Distributions (.58) (.04) (.14) (.27) (.06)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $19.16 $20.38 $16.91 $12.20 $13.66
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total Return (3.04%) 20.77% 40.06% (8.86%) 7.85%*
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $317,736 $199,404 $44,244 $1,472 $153
Ratios to average daily net assets:
Operating expenses 1.89% 1.94% 2.00% 2.00% 2.23%*
Net investment income (loss) .20% (.29%) (.36%) .54% .30%*
Decrease reflected in above operating expense ratios
due to waivers/reimbursements .00% .00% .00% .07% .17%*
Portfolio Turnover Rate 39.24% 17.02% 22.60% 53.29% 54.95%
* Annualized
</TABLE>
See Accompanying Notes to Financial Statements.
TAX STATUS OF 1995 DIVIDENDS (Unaudited)
Taxable dividends paid by the Fund on per share basis were as follows:
<TABLE>
<S> <C>
Ordinary income $.38
Long-term capital gain .20
</TABLE>
Because the Fund's fiscal year is not the calendar year, amounts to be used by
calendar year taxpayers on their Federal return will be reflected on Form
1099-DIV and will be mailed in January 1996.
46
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS JAPAN OTC FUND
FINANCIAL HIGHLIGHTS
(For an Advisor Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Period
September 30, 1994
For the (Commencement of
Year Ended Operations) through
October 31, 1995 October 31, 1994
---------------- -------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $9.85 $10.00
----- ------
Income from Investment Operations:
Net Investment Income (Loss) (.02) .00
Net Loss on Securities and Foreign Currency Related Items (both
realized and unrealized) (.75) (.15)
----- ------
Total from Investment Operations (.77) (.15)
----- ------
Less Distributions:
Dividends from Net Investment Income .00 .00
Distributions from Capital Gains .00 .00
----- ------
Total Distributions .00 .00
----- ------
NET ASSET VALUE, END OF PERIOD $9.08 $ 9.85
----- ------
----- ------
Total Return (7.82%) (15.84%)*
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $1 $1
Ratios to average daily net assets:
Operating expenses 1.31% 1.18%*
Net investment income (loss) (.19%) .12%*
Decrease reflected in above operating expense ratios due to
waivers/reimbursements 1.83% 4.74%*
Portfolio Turnover Rate 82.98% .00%
* Annualized
</TABLE>
See Accompanying Notes to Financial Statements.
47
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EMERGING MARKETS FUND
FINANCIAL HIGHLIGHTS
(For an Advisor Share of the Fund Outstanding Throughout the Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
December 30, 1994
(Commencement of
Operations) through
October 31, 1995
---------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
-------
Income from Investment Operations:
Net Investment Income .14
Net Gain on Securities and Foreign Currency Related Items (both realized and unrealized) 1.19
-------
Total from Investment Operations 1.33
-------
Less Distributions:
Dividends from Net Investment Income (.03)
Distributions from Capital Gains .00
-------
Total Distributions (.03)
-------
NET ASSET VALUE, END OF PERIOD $ 11.30
-------
-------
Total Return 16.05%*
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $1
Ratios to average daily net assets:
Operating expenses 1.22%*
Net investment income 1.76%*
Decease reflected in above operating expense ratio due to
waivers/reimbursements 16.36%*
Portfolio Turnover Rate 69.12%*
* Annualized
</TABLE>
See Accompanying Notes to Financial Statements.
TAX STATUS OF 1995 DIVIDENDS (Unaudited)
Taxable dividends paid by the Fund on per share basis were as follows:
<TABLE>
<S> <C>
Ordinary income $.03
</TABLE>
Because the Fund's fiscal year is not the calendar year, amounts to be used by
calendar year taxpayers on their Federal return will be reflected on Form
1099-DIV and will be mailed in January 1996.
48
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS POST-VENTURE CAPITAL FUND
FINANCIAL HIGHLIGHTS
(For an Advisor Share of the Fund Outstanding Throughout the Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Period
September 29, 1995
(Commencement of
Operations) through
October 31, 1995
-------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
-------
Income from Investment Operations:
Net Investment Income .00
Net Gain on Securities .68
-------
Total from Investment Operations .68
-------
Less Distributions:
Dividends from Net Investment Income .00
Distributions from Capital Gains .00
-------
Total Distributions .00
-------
NET ASSET VALUE, END OF PERIOD $ 10.68
-------
-------
Total Return 6.80%+
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $1
Ratios to average daily net assets:
Operating expenses 2.15%*
Net investment income .09%*
Decrease reflected in above operating expense ratio due to
waivers/reimbursements 9.25%*
Portfolio Turnover Rate 16.90%
* Annualized
+ Non-annualized
</TABLE>
See Accompanying Notes to Financial Statements.
49
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS
October 31, 1995
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Warburg Pincus Equity Funds are comprised of Warburg Pincus Capital
Appreciation Fund (the 'Capital Appreciation Fund'), Warburg Pincus
International Equity Fund (the 'International Equity Fund') and Warburg Pincus
Post-Venture Capital Fund (the 'Post-Venture Capital 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'), Warburg Pincus Japan OTC Fund
(the 'Japan OTC Fund') and Warburg Pincus Emerging Markets Fund (the 'Emerging
Markets Fund', together with the Capital Appreciation Fund, the International
Equity Fund, the Post-Venture Capital Fund, the Emerging Growth Fund and the
Japan OTC 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 Emerging Markets Fund seeks growth of capital; the
Post-Venture Capital Fund seeks long-term growth of capital.
Each Fund offers two classes of shares, one class being referred to as
Common Shares and one class being referred to as Advisor Shares. Common and
Advisor Shares in each Fund represent an equal pro rata interest in such Fund,
except that they bear different expenses which reflect the difference in the
range of services provided to them. Common Shares for the Japan OTC Fund, the
Emerging Markets Fund and the Post-Venture Capital Fund bear expenses paid
pursuant to a shareholder servicing and distribution plan adopted by each Fund
at an annual rate not to exceed .25% of the average daily net asset value of
each Fund's outstanding Common Shares. Advisor Shares for each Fund bear
expenses paid pursuant to a distribution plan adopted by each Fund at an annual
rate not to exceed .75% of the average daily net asset value of each Fund's
outstanding Advisor Shares. The Common and the Advisor Shares are currently
bearing expenses of .25% and .50% of average daily net assets, respectively.
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
valued at market value, which is currently determined using the last reported
sales price. If no sales are reported, investments are generally 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 approximates 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
at the end of the period. 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
50
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
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. The Funds isolate that portion of
gains and losses on investments in debt securities which are due to changes in
the foreign exchange rate from that which are due to changes in market prices of
debt 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, principally distribution,
transfer agent and printing) 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 and
paid 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.
Certain amounts in the Financial Highlights have been reclassified to
conform with current year presentation.
No provision is made for Federal taxes as it is each Fund's intention to
continue to qualify for and elect the tax treatment applicable to regulated
investment companies under the Internal Revenue Code and make the requisite
distributions to its shareholders which will be sufficient to relieve it from
Federal income and excise taxes.
Costs incurred by the Japan OTC Fund, the Emerging Markets Fund and the
Post-Venture Capital Fund in connection with their organization have been
deferred and are being amortized over a period of five years from the date each
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. ('Warburg'), 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, Warburg receives the
following fees based on each Fund's average daily net assets:
51
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<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
Emerging Markets 1.25% of average daily net assets
Post-Venture Capital 1.25% of average daily net assets
</TABLE>
For the period or year ended October 31, 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 $ 1,367,729 $ 0 $ 1,367,729 $ 0
Emerging Growth 3,824,061 0 3,824,061 0
International Equity 20,225,631 0 20,225,631 0
Japan OTC 599,720 (599,720) 0 (25,920)
Emerging Markets 29,641 (29,641) 0 (230,338)
Post-Venture Capital 1,756 (1,756) 0 (31,458)
</TABLE>
SPARX Investment & Research, USA, Inc. ('SPARX USA') serves as
sub-investment adviser for the Japan OTC Fund. From its investment advisory fee,
Warburg 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 paid by the Japan OTC Fund to
SPARX USA for its sub-investment advisory services.
Counsellors Funds Service, Inc. ('CFSI'), a wholly owned subsidiary of
Warburg, 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 currently receives a fee calculated at an annual
rate of .10% of each Fund's average daily net assets. For the period or year
ended October 31, 1995, administrative services fees earned by CFSI were as
follows:
<TABLE>
<CAPTION>
FUND CO-ADMINISTRATION FEE
---- ------------------------------
<S> <C>
Capital Appreciation $ 195,390
Emerging Growth 424,895
International Equity 2,022,563
Japan OTC 47,978
Emerging Markets 2,372
Post-Venture Capital 140
</TABLE>
For its administrative services, PFPC currently receives a fee calculated
at an annual rate of .10% of the average daily net assets of the Capital
Appreciation Fund, the Emerging Growth Fund and the Post-Venture Capital Fund.
For the International Equity Fund, the Japan OTC Fund and the Emerging Markets
Fund, PFPC currently receives a fee calculated at an annual rate of .12% on each
Fund's first $250 million in average daily net assets, .10% on the next $250
million in average daily net assets, .08%
52
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
on the next $250 million in average daily net assets, and .05% of the average
daily net assets over $750 million.
For the period or year ended October 31, 1995, administrative service fees
earned and waived by PFPC were as follows:
<TABLE>
<CAPTION>
NET
FUND CO-ADMINISTRATION FEE WAIVER CO-ADMINISTRATION FEE
---- --------------------- -------- -------------------------
<S> <C> <C> <C>
Capital Appreciation $ 195,390 $ 0 $ 195,390
Emerging Growth 424,895 0 424,895
International Equity 1,386,283 0 1,386,283
Japan OTC 90,701 (26,746) 63,955
Emerging Markets 2,845 (2,845) 0
Post-Venture Capital 140 (140) 0
</TABLE>
Counsellors Securities Inc. ('CSI'), also a wholly owned subsidiary of
Warburg, serves as each Fund's distributor. No compensation is paid by the
Capital Appreciation Fund, the Emerging Growth Fund or the International Equity
Fund to CSI for distribution services. For its shareholder servicing and
distribution services, CSI currently receives a fee calculated at an annual rate
of .25% of the average daily net assets of the Common Shares for the Japan OTC
Fund, the Emerging Markets Fund and the Post-Venture Capital Fund pursuant to a
shareholder servicing and distribution plan adopted by each Fund. For the period
or year ended October 31, 1995, distribution fees earned by CSI were as follows:
<TABLE>
<CAPTION>
FUND DISTRIBUTION FEE
---- ------------------------------
<S> <C>
Japan OTC $119,941
Emerging Markets 5,926
Post-Venture Capital 351
</TABLE>
3. INVESTMENTS IN SECURITIES
For the period or year ended October 31, 1995, purchases and sales of
investment securities (excluding short-term investments) were as follows:
<TABLE>
<CAPTION>
FUND PURCHASES SALES
---- -------------- ------------
<S> <C> <C>
Capital Appreciation $ 299,741,274 $269,962,070
Emerging Growth 532,722,466 336,581,792
International Equity 1,457,609,458 735,613,078
Japan OTC 189,768,420 36,507,703
Emerging Markets 7,181,659 1,297,140
Post-Venture Capital 2,714,501 222,270
</TABLE>
53
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
At October 31, 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 $ 45,397,319 $ (3,203,157) $ 42,194,162
Emerging Growth 144,909,782 (9,681,675) 135,228,107
International Equity 260,125,513 (171,560,066) 88,565,447
Japan OTC 6,205,079 (7,100,852) (895,773)
Emerging Markets 341,944 (352,944) (11,000)
Post-Venture Capital 233,929 (69,488) 164,441
</TABLE>
4. FORWARD FOREIGN CURRENCY CONTRACTS
The International Equity Fund, the Japan OTC Fund, the Emerging Markets
Fund and the Post-Venture Capital 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 terms of their contracts and
from unanticipated movements in the value of a foreign currency relative to the
U.S. dollar. The Funds will enter into forward contracts primarily for hedging
purposes. 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.
54
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
At October 31, 1995, the International Equity Fund and the Japan OTC Fund had
the following open forward foreign currency contracts:
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND
- -----------------------------------------------------------------------------------------------------------
FOREIGN UNREALIZED
FORWARD CURRENCY EXPIRATION CURRENCY CONTRACT CONTRACT FOREIGN EXCHANGE
CONTRACT DATE TO BE SOLD AMOUNT VALUE GAIN (LOSS)
- ------------------- ----------- -------------- ------------ ------------ ----------------
<S> <C> <C> <C> <C> <C>
French Francs 11/15/95 260,000,000 $ 52,170,074 $ 53,253,590 $ (1,083,516)
French Francs 11/16/95 122,216,250 25,050,833 25,032,515 18,318
German Marks 11/16/95 110,000,000 78,272,317 78,263,963 8,354
German Marks 05/17/96 78,928,380 55,400,000 56,652,584 (1,252,584)
Japanese Yen 03/21/96 5,547,240,000 57,000,000 55,475,507 1,524,493
Japanese Yen 03/21/96 4,764,377,500 47,298,496 47,646,443 (347,947)
Japanese Yen 03/21/96 4,764,377,500 47,276,203 47,646,443 (370,240)
Japanese Yen 03/21/96 1,385,445,000 13,761,286 13,855,226 (93,940)
Japanese Yen 05/13/96 8,731,990,000 109,000,000 88,008,212 20,991,788
Japanese Yen 05/16/96 9,247,700,000 110,000,000 93,246,752 16,753,248
Japanese Yen 05/16/96 4,586,012,000 55,400,000 46,241,847 9,158,153
Japanese Yen 09/18/96 4,660,000,000 50,000,000 47,860,895 2,139,105
------------ ------------ ------------
$700,629,209 $653,183,977 $ 47,445,232
------------ ------------ ------------
------------ ------------ ------------
<CAPTION>
FOREIGN
CURRENCY UNREALIZED
FORWARD CURRENCY EXPIRATION TO BE CONTRACT CONTRACT FOREIGN EXCHANGE
CONTRACT DATE PURCHASED AMOUNT VALUE GAIN (LOSS)
- ------------------- ----------- -------------- ------------ ------------ ----------------
<S> <C> <C> <C> <C> <C>
German Marks 11/16/95 34,500,000 $ 25,050,828 $ 24,546,425 $ (504,403)
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
<TABLE>
<CAPTION>
JAPAN OTC FUND
- -----------------------------------------------------------------------------------------------------------
FOREIGN UNREALIZED
FORWARD CURRENCY EXPIRATION CURRENCY CONTRACT CONTRACT FOREIGN EXCHANGE
CONTRACT DATE TO BE SOLD AMOUNT VALUE GAIN (LOSS)
- ------------------- ----------- -------------- ------------ ------------ ----------------
<S> <C> <C> <C> <C> <C>
Japanese Yen 11/30/95 12,567,400,000 $124,000,000 $123,536,813 $ 463,187
Japanese Yen 11/30/95 2,027,000,000 20,000,000 19,925,293 74,707
Japanese Yen 11/30/95 1,520,250,000 15,000,000 14,943,969 56,031
------------ ------------ ------------
$159,000,000 $158,406,075 $ 593,925
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
55
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
5. EQUITY SWAP TRANSACTIONS
The International Equity Fund (the 'Fund') entered into a Taiwanese equity
swap agreement (which represents approximately .005% of the Fund's net assets at
October 31, 1995) dated August 11, 1995, where the Fund receives a quarterly
payment, representing the total return (defined as market appreciation and
dividend income) on a basket of three Taiwanese common stocks ('Common Stocks').
In return, the Fund pays quarterly the Libor rate (London Interbank Offered
Rate), plus 1.25% per annum (7.125% on October 31, 1995) on the initial stock
purchase amount ('Notional amount') of $12,000,000. The Notional amount is
marked to market on each quarterly reset date. In the event that the Common
Stocks decline in value, the Fund will be required to pay quarterly, the amount
of any depreciation in value from the notional amount. The equity swap agreement
will terminate on August 11, 1996.
During the term of the equity swap transaction, changes in the value of the
Common Stocks as compared to the Notional amount is recognized as unrealized
gain or loss. Dividend income for the Common Stocks are recorded on the
ex-dividend date. Interest expense is accrued daily. At October 31, 1995, the
Fund has recorded an unrealized gain of $502,018 and interest payable of
$192,375 on the equity swap transaction.
56
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
6. CAPITAL SHARE TRANSACTIONS
The Capital Appreciation Fund is authorized to issue three billion of full
and fractional shares of beneficial interest, $.001 par value per share, of
which one billion shares are classified as Series 2 Shares (the Advisor Shares).
The Emerging Growth Fund, the International Equity Fund, the Japan OTC Fund, the
Emerging Markets Fund and the Post-Venture Capital 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 of each Fund are designated as Series 2
Shares (the Advisor Shares).
Transactions in shares of each Fund were as follows:
<TABLE>
<CAPTION>
CAPITAL APPRECIATION FUND
Common Shares Advisor Shares
----------------------------- ---------------------------
For the Year Ended October 31,
-------------------------------------------------------------
1995 1994 1995 1994
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Shares sold 6,020,619 2,958,494 201,782 290,193
Shares issued to
shareholders on
reinvestment of
dividends 850,478 920,210 46,554 61,526
Shares redeemed (3,638,974) (3,126,497) (110,027) (460,020)
------------ ------------ ----------- -----------
Net increase
(decrease) in
shares
outstanding 3,232,123 752,207 138,309 (108,301)
------------ ------------ ----------- -----------
------------ ------------ ----------- -----------
Proceeds from sale
of shares $ 85,992,655 $ 41,570,590 $ 2,970,800 $ 4,046,941
Reinvested
dividends 10,670,876 12,945,690 575,876 863,477
Net asset value of
shares redeemed (51,907,650) (43,449,501) (1,551,821) (6,401,999)
------------ ------------ ----------- -----------
Net increase
(decrease) from
capital share
transactions $ 44,755,881 $ 11,066,779 $ 1,994,855 $(1,491,581)
------------ ------------ ----------- -----------
------------ ------------ ----------- -----------
<CAPTION>
EMERGING GROWTH FUND
Common Shares Advisor Shares
------------------------------ ----------------------------
For the Year Ended October 31,
---------------------------------------------------------------
1995 1994 1995 1994
------------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Shares sold 9,808,362 6,133,751 3,172,686 2,233,737
Shares issued to
shareholders on
reinvestment of
dividends 0 506,720 0 80,473
Shares redeemed (4,294,179) (2,859,413) (383,922) (517,898)
------------- ------------ ----------- ------------
Net increase
(decrease) in
shares
outstanding 5,514,183 3,781,058 2,788,764 1,796,312
------------- ------------ ----------- ------------
------------- ------------ ----------- ------------
Proceeds from sale
of shares $ 256,886,928 $132,922,995 $78,682,150 $ 47,890,275
Reinvested
dividends 0 11,015,146 0 1,743,241
Net asset value of
shares redeemed (106,777,032) (61,126,667) (9,503,812) (10,641,050)
------------- ------------ ----------- ------------
Net increase
(decrease) from
capital share
transactions $ 150,109,896 $ 82,811,474 $69,178,338 $ 38,992,466
------------- ------------ ----------- ------------
------------- ------------ ----------- ------------
</TABLE>
57
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
6. CAPITAL SHARE TRANSACTIONS (CONT'D)
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND EMERGING MARKETS FUND
Common Shares Advisor Shares
Common Shares Advisor Shares --------------- -----------------
-------------------------------- ---------------------------- For the Period
For the Year Ended October 31, December 30, 1994
---------------------------------------------------------------- (Commencement of Operations)
1995 1994 1995 1994 through October 31, 1995
-------------- -------------- ------------ ------------ ----------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 68,096,606 64,218,907 7,225,150 7,956,088 694,008 22
Shares issued to
shareholders on
reinvestment of
dividends 2,623,005 147,031 346,377 6,879 1,267 0
Shares redeemed (38,317,625) (11,861,720) (770,753) (795,406) (104,480) 0
-------------- -------------- ------------ ------------ ----------- -----
Net increase
(decrease) in
shares outstanding 32,401,986 52,504,218 6,800,774 7,167,561 590,795 22
-------------- -------------- ------------ ------------ ----------- -----
-------------- -------------- ------------ ------------ ----------- -----
Proceeds from sale of
shares $1,251,776,887 $1,275,306,263 $131,585,072 $155,433,660 $ 7,753,651 $257
Reinvested dividends 48,487,109 2,820,903 6,385,868 129,869 13,802 0
Net asset value of
shares redeemed (701,310,424) (233,614,600) (14,287,779) (15,435,478) (1,191,160) 0
-------------- -------------- ------------ ------------ ----------- ----
Net increase
(decrease) from
capital share
transactions $ 598,953,572 $1,044,512,566 $123,683,161 $140,128,051 $ 6,576,293 $257
-------------- -------------- ------------ ------------ ----------- ----
-------------- -------------- ------------ ------------ ----------- ----
</TABLE>
7. NET ASSETS
Net Assets at October 31, 1995, consisted of the following:
<TABLE>
<CAPTION>
CAPITAL EMERGING
APPRECIATION FUND GROWTH FUND
----------------- ------------
<S> <C> <C>
Capital contributed, net $ 173,327,827 $479,035,241
Accumulated net investment income (loss) 0 0
Accumulated net realized gain (loss) from security transactions 31,648,355 40,302,640
Net unrealized appreciation (depreciation) from investments and
foreign currency related items 42,329,683 135,424,730
------------- ------------
Net assets $ 247,305,865 $654,762,611
------------- ------------
------------- ------------
58
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<CAPTION>
JAPAN OTC FUND
Common Shares Advisor Shares
------------------------------------- -------------------------------------
For the Period For the Period
September 30, September 30,
1994 1994
(Commencement of (Commencement of
For the Operations) For the Operations)
Year Ended through Year Ended through
October 31, 1995 October 31, 1994 October 31, 1995 October 31, 1994
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C>
22,809,795 2,025,697 0 15
0 0 0 0
(5,180,432) (18,605) 0 0
------------ ------------ -- ----
17,629,363 2,007,092 0 15
------------ ------------ -- ----
------------ ------------ -- ----
$200,565,875 $ 20,287,008 $0 $150
0 0 0 0
(44,871,674) (185,101) 0 0
------------ ------------ -- ----
$155,694,201 $ 20,101,907 $0 $150
------------ ------------ -- ----
------------ ------------ -- ----
<CAPTION>
POST-VENTURE CAPITAL FUND
Common Shares Advisor Shares
------------------- --------------------
For the Period For the Period
September 29, September 29,
1995 1995
(Commencement of (Commencement of
Operations) Operations
through through
October 31, 1995 October 31, 1995
----------------- ----------------
<C> <C>
273,510 19
0 0
(473) 0
---------- ----
273,037 19
---------- ----
---------- ----
$2,792,203 $200
0 0
(4,887) 0
---------- ----
$2,787,316 $200
---------- ----
---------- ----
<CAPTION>
INTERNATIONAL EMERGING POST-VENTURE
EQUITY FUND MARKETS FUND JAPAN OTC FUND CAPITAL FUND
-------------- ------------ -------------- ------------
<S> <C> <C> <C> <C>
$2,271,007,433 $6,677,550 $175,619,527 $2,887,516
19,124,669 10,218 7,821,209 356
(40,671,086) 102,219 (4,640,787) (26,884)
136,482,831 (9,058) (230,467) 164,441
-------------- ---------- ------------ ----------
$2,385,943,847 $6,780,929 $178,569,482 $3,025,429
-------------- ---------- ------------ ----------
-------------- ---------- ------------ ----------
</TABLE>
59
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
8. CAPITAL LOSS CARRYOVER
At October 31, 1995, the International Equity Fund, the Japan OTC Fund and
the Post-Venture Capital Fund had capital loss carryovers of $40,671,086,
$4,629,196 and $26,884, respectively, expiring in 2003 to offset possible future
capital gains of each Fund.
9. OTHER FINANCIAL HIGHLIGHTS
Each Fund currently offers one other class of shares, Common Shares,
representing equal prorata interests in each of the respective Warburg Pincus
Equity Funds. The financial highlights for a Common Share of each Fund are as
follows:
<TABLE>
<CAPTION>
Capital Appreciation Fund
------------------------------------------------------
Common Shares
------------------------------------------------------
For the Year Ended October 31,
------------------------------------------------------
1995 1994 1993 1992 1991
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $14.29 $15.32 $13.30 $12.16 $ 9.78
------ ------ ------ ------ ------
Income from Investment Operations:
Net Investment Income .04 .04 .05 .04 .15
Net Gain on Securities (both
realized and unrealized) 3.08 .17 2.78 1.21 2.41
------ ------ ------ ------ ------
Total from Investment Operations 3.12 .21 2.83 1.25 2.56
------ ------ ------ ------ ------
Less Distributions:
Dividends from Net Investment Income (.04) (.05) (.05) (.06) (.18)
Distributions from Capital Gains (.98) (1.19) (.76) (.05) .00
------ ------ ------ ------ ------
Total Distributions (1.02) (1.24) (.81) (.11) (.18)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR $16.39 $14.29 $15.32 $13.30 $12.16
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total Return 24.05% 1.65% 22.19% 10.40% 26.39%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year (000s) $235,712 $159,346 $159,251 $117,900 $115,191
Ratios to average daily net assets:
Operating expenses 1.12% 1.05% 1.01% 1.06% 1.08%
Net investment income .31% .26% .30% .41% 1.27%
Decrease reflected in above operating expense
ratios due to waivers/reimbursements .00% .01% .00% .01% .00%
Portfolio Turnover Rate 146.09% 51.87% 48.26% 55.83% 39.50%
</TABLE>
60
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
TAX STATUS OF 1995 DIVIDENDS (Unaudited)
Taxable dividends paid by the Fund on per share basis were as follows:
<TABLE>
<S> <C>
Ordinary income $.06
Long-term capital gain .96
</TABLE>
Ordinary income dividends qualifying for the dividends received deduction
available to corporate shareholders was 100.00%.
Because the Fund's fiscal year is not the calendar year, amounts to be used by
calendar year taxpayers on their Federal return will be reflected on Form
1099-DIV and will be mailed in January 1996.
61
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Emerging Growth Fund
------------------------------------------------------
Common Shares
------------------------------------------------------
For the Year Ended October 31,
------------------------------------------------------
1995 1994 1993 1992 1991
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $22.38 $23.74 $18.28 $16.97 $10.83
------ ------ ------ ------ ------
Income from Investment Operations:
Net Investment Income (Loss) (.05) (.06) (.10) (.03) .05
Net Gain on Securities (both
realized and unrealized) 7.64 .06 5.93 1.71 6.16
------ ------ ------ ------ ------
Total from Investment Operations 7.59 .00 5.83 1.68 6.21
------ ------ ------ ------ ------
Less Distributions:
Dividends from Net Investment Income .00 .00 .00 (.01) (.07)
Distributions from Capital Gains .00 (1.36) (.37) (.36) .00
------ ------ ------ ------ ------
Total Distributions .00 (1.36) (.37) (.37) (.07)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR $29.97 $22.38 $23.74 $18.28 $16.97
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total Return 33.91% .16% 32.28% 9.87% 57.57%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year (000s) $487,537 $240,664 $165,525 $99,562 $42,061
Ratios to average daily net assets:
Operating expenses 1.26% 1.22% 1.23% 1.24% 1.25%
Net investment income (loss) (.58%) (.58%) (.60%) (.25%) .32%
Decrease reflected in above operating expense
ratios due to waivers/reimbursements .00% .04% .00% .08% .47%
Portfolio Turnover Rate 84.82% 60.38% 68.35% 63.35% 97.69%
</TABLE>
62
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WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
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<TABLE>
<CAPTION>
International Equity Fund
------------------------------------------------------
Common Shares
------------------------------------------------------
For the Year Ended October 31,
------------------------------------------------------
1995 1994 1993 1992 1991
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $20.51 $17.00 $12.22 $13.66 $11.81
------ ------ ------ ------ ------
Income from Investment Operations:
Net Investment Income .12 .09 .09 .15 .19
Net Gain (Loss) on Securities and
Foreign Currency Related Items (both
realized and unrealized) (.67) 3.51 4.84 (1.28) 2.03
------ ------ ------ ------ ------
Total from Investment Operations (.55) 3.60 4.93 (1.13) 2.22
------ ------ ------ ------ ------
Less Distributions:
Dividends from Net Investment Income (.13) (.04) (.02) (.16) (.33)
Distributions in Excess of
Net Investment Income .00 (.01) .00 .00 .00
Distributions from Capital Gains (.53) (.04) (.13) (.15) (.04)
------ ------ ------ ------ ------
Total Distributions (.66) (.09) (.15) (.31) (.37)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR $19.30 $20.51 $17.00 $12.22 $13.66
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total Return (2.55%) 21.22% 40.68% (8.44%) 19.42%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year (000s) $2,068,207 $1,533,872 $378,661 $101,763 $72,553
Ratios to average daily net assets:
Operating expenses 1.39% 1.44% 1.48% 1.49% 1.50%
Net investment income .69% .19% .38% .88% 1.19%
Decrease reflected in above operating expense
ratios due to waivers/reimbursements .00% .00% .00% .07% .17%
Portfolio Turnover Rate 39.24% 17.02% 22.60% 53.29% 54.95%
</TABLE>
TAX STATUS OF 1995 DIVIDENDS (Unaudited)
Taxable dividends paid by the Fund on per share basis were as follows:
<TABLE>
<S> <C>
Ordinary income $.46
Long-term capital gain .20
</TABLE>
Because the Fund's fiscal year is not the calendar year, amounts to be used by
calendar year taxpayers on their Federal return will be reflected on Form
1099-DIV and will be mailed in January 1996.
63
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<PAGE>
<PAGE>
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WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
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<TABLE>
<CAPTION>
Japan OTC Fund
---------------------------------------------------------
Common Shares
---------------------------------------------------------
For the Period
September 30, 1994
(Commencement of
For the Year Ended Operations) through
October 31, 1995 October 31, 1994
--------------------------- --------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.85 $ 10.00
--------- --------
Income from Investment Operations:
Net Investment Income .00 .00
Net Loss on Securities and Foreign Currency
Related Items (both realized and unrealized) (.76) (.15)
--------- --------
Total from Investment Operations (.76) (.15)
--------- --------
Less Distributions:
Dividends from Net Investment Income .00 .00
Distributions from Capital Gains .00 .00
--------- --------
Total Distributions .00 .00
--------- --------
NET ASSET VALUE, END OF PERIOD $ 9.09 $ 9.85
--------- --------
--------- --------
Total Return (7.72%) (15.84%)*
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $ 178,568 $ 19,878
Ratios to average daily net assets:
Operating expenses 1.41% 1.00%*
Net investment income (loss) (.15%) .49%*
Decrease reflected in above operating expense
ratios due to waivers/reimbursements 1.35% 4.96%*
Portfolio Turnover Rate 82.98% .00%
* Annualized
</TABLE>
64
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<PAGE>
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WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
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<TABLE>
<CAPTION>
Emerging Markets Fund
---------------------------
Common Shares
---------------------------
For the Period
December 30, 1994
(Commencement of
Operations) through
October 31, 1995
---------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
-------
Income from Investment Operations:
Net Investment Income .08
Net Gain on Securities and Foreign Currency Related Items (both
realized and unrealized) 1.25
-------
Total from Investment Operations 1.33
-------
Less Distributions:
Dividends from Net Investment Income (.05)
Distributions from Capital Gains .00
-------
Total Distributions (.05)
-------
NET ASSET VALUE, END OF PERIOD $ 11.28
-------
-------
Total Return 16.09%*
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $ 6,780
Ratios to average daily net assets:
Operating expenses 1.00%*
Net investment income 1.25%*
Decrease reflected in above operating expense ratio due to
waivers/reimbursements 11.08%*
Portfolio Turnover Rate 69.12%*
* Annualized
</TABLE>
TAX STATUS OF 1995 DIVIDENDS (Unaudited)
Taxable dividends paid by the Fund on per share basis were as follows:
<TABLE>
<S> <C>
Ordinary income $.05
</TABLE>
Because the Fund's fiscal year is not the calendar year, amounts to be used by
calendar year taxpayers on their Federal return will be reflected on Form
1099-DIV and will be mailed in January 1996.
65
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<PAGE>
<PAGE>
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WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
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<TABLE>
<CAPTION>
Post-Venture Capital Fund
---------------------------
Common Shares
---------------------------
For the Period
September 29, 1995
(Commencement of
Operations) through
October 31, 1995
---------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
-------
Income from Investment Operations:
Net Investment Income .00
Net Gain on Securities (both realized and unrealized) .69
-------
Total from Investment Operations .69
-------
Less Distributions:
Dividends from Net Investment Income .00
Distributions from Capital Gains .00
-------
Total Distributions .00
-------
NET ASSET VALUE, END OF PERIOD $ 10.69
-------
-------
Total Return 6.90%+
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $ 3,024
Ratios to average daily net assets:
Operating expenses 1.65%*
Net investment income .25%*
Decrease reflected in above operating expense ratio due to
waivers/reimbursements 23.76%*
Portfolio Turnover Rate 16.90%*
* Annualized
+ Non-annualized
</TABLE>
See Accompanying Notes to Financial Statements.
66
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WARBURG PINCUS EQUITY FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Boards of Directors, Trustees and Shareholders of
Warburg Pincus Equity Funds:
We have audited the accompanying statements of net assets of the Warburg Pincus
Capital Appreciation Fund, Warburg Pincus Emerging Growth Fund and Warburg
Pincus International Equity Fund and the accompanying statements of assets and
liabilities including the schedules of investments of Warburg Pincus Japan OTC
Fund, Warburg Pincus Emerging Markets Fund and Warburg Pincus Post-Venture
Capital Fund (all Funds collectively referred to as the 'Warburg Pincus Equity
Funds') as of October 31, 1995, and the related statements of operations for the
year (or period) then ended, and the statements of changes in net assets for
each of the two years (or period) and the financial highlights for each of the
three years (or period) in the period then ended. These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The financial highlights of the
Warburg Pincus Equity Funds for each of the two years in the period ended
October 31, 1992, were audited by other auditors, whose report dated December
15, 1992, expressed an unqualified opinion.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1995, by correspondence with the custodians and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the Warburg Pincus Equity Funds as of October 31, 1995, and the results of
their operations for the year (or period) then ended, and the changes in their
net assets for each of the two years (or period) and the financial highlights
for each of the three years (or period) in the period then ended, in conformity
with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
2400 Eleven Penn Center
Philadelphia, PA
December 14, 1995
67
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INVESTMENT ADVISER TRANSFER AGENT
Warburg, Pincus Counsellors, Inc. State Street Bank and Trust Company
466 Lexington Avenue 225 Franklin Street
New York, New York 10017-3147 Boston, Massachusetts 02110
DISTRIBUTOR
Counsellors Securities Inc.
466 Lexington Avenue
New York, New York 10017-3147
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<PAGE>
<PAGE>
ADEQF-2-1095 [GRAPHIC GOES HERE]
Warburg Pincus Advisor Funds
Counsellors Securities Inc., distributor
800-369-2728
[WARBURG PINCUS ADVISOR FUNDS LOGO]
STATEMENT OF DIFFERENCES
------------------------
The division sign shall be expressed as [div]
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