<PAGE>
<PAGE>
SEMIANNUAL
REPORT
April 30, 1998
WARBURG PINCUS
CAPITAL APPRECIATION FUND
-
WARBURG PINCUS
EMERGING GROWTH FUND
-
WARBURG PINCUS
POST-VENTURE CAPITAL FUND
-
WARBURG PINCUS
SMALL COMPANY VALUE FUND
-
WARBURG PINCUS
HEALTH SCIENCES FUND
-
WARBURG PINCUS
SMALL COMPANY GROWTH FUND
-
WARBURG PINCUS
STRATEGIC VALUE FUND
-
WARBURG PINCUS
GROWTH & INCOME FUND
-
WARBURG PINCUS
BALANCED FUND
More complete information about the Funds, including charges and expenses,
is provided in the Prospectus, which must precede or accompany this report
and which should be read carefully before investing. You may obtain
additional copies by calling 800-WARBURG (800-927-2874) or by writing to
Warburg Pincus Funds, P.O. Box 9030, Boston, MA 02205-9030.
[Logo]
<PAGE>
<PAGE>
From time to time, the Funds' investment adviser and co-administrators may waive
some fees and/or reimburse some expenses, without which performance would be
lower. Waivers and/or reimbursements are subject to change.
Returns are historical and include change in share price and reinvestment of
dividends and capital gains. Past performance cannot guarantee future results.
Returns and share price will fluctuate, and redemption value may be more or less
than original cost.
The views of the Funds' management are as of the date of the letters and
portfolio holdings described in this annual report are as of April 30, 1998;
these views and portfolio holdings may have changed subsequent to these dates.
Nothing in this semiannual report is a recommendation to purchase or sell
securities.
<PAGE>
<PAGE>
WARBURG PINCUS CAPITAL APPRECIATION FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998
- --------------------------------------------------------------------------------
Dear Shareholder: June 16, 1998
The objective of Warburg Pincus Capital Appreciation Fund (the 'Fund') is
long-term capital appreciation. The Fund invests primarily in a broadly
diversified portfolio of equity securities of domestic companies. The Fund
attempts to identify sectors of the market and companies within market sectors
that it believes will outperform the overall market.
Effective March 6, 1998, George U. Wyper, who left Warburg Pincus Asset
Management to start his own investment firm, no longer serves as a Co-Portfolio
Manager of the Fund. Susan L. Black, previously Co-Portfolio Manager of the
Fund, now serves as the Fund's Portfolio Manager, also effective March 6. The
Fund's investment disciplines have not changed.
MANAGER COMMENTARY
For the six months ended April 30, 1998, the Fund gained 20.03%, vs. returns
of 22.47% for the S&P 500 Index* and 18.15% for the Lipper Growth Funds Index.**
The Fund's one-year return through April 30 was 41.66%. Its five-year, 10-year
and since-inception (on August 17, 1987) average annual total returns were
22.85%, 17.52% and 15.24%, respectively.
The Fund registered a solid return for the six months, buoyed by continued
favorable sentiment toward the domestic stock market in general and by good
performances from its financial, transportation and pharmaceutical stocks in
particular. Stocks that weighed on the Fund's performance were, primarily, its
energy issues, which were hampered by declining oil prices.
We remained overweighted in the financial area during the period, reflecting
our favorable view of the longer-term prospects for financial stocks
collectively. These issues stand to benefit from several compelling trends, not
the least of which is a torrent of merger and acquisition activity within the
industry. We believe this trend will remain strong, with financial companies
continuing to rely on such activity to reduce costs and expand product lines.
Other factors behind our optimism include demographic trends, specifically a
rapidly maturing population. As baby boomers continue to age, demand for
financial products and services, already strong, should only increase, in large
- ------------
* The S&P 500 Index is an unmanaged index (with no defined investment
objective) of common stocks, includes reinvestment of dividends, and is a
registered trademark of Standard & Poor's Corporation.
** The Lipper Growth Funds Index is an equal-weighted performance index,
adjusted for capital gains distributions and income dividends, of the largest
qualifying funds in this investment objective, and is compiled by Lipper
Analytical Services, Inc.
1
<PAGE>
<PAGE>
WARBURG PINCUS CAPITAL APPRECIATION FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998 (CONT'D)
- --------------------------------------------------------------------------------
part to meet looming retirement needs. We believe the types of insurance and
asset-management companies held by the Fund stand to particularly benefit from
this trend over the longer term.
Elsewhere, we made a few noteworthy adjustments to our sector weightings
during the period. These included raising our exposure to the health-care area,
where we were underweighted at the start of the period, since we viewed such
stocks as generally expensive. We found several buying opportunities as the
period progressed, however, and selectively added medical-devices, managed-care
and hospital issues to the Fund. We also increased our weighting in the
pharmaceutical sector. Our focus here remained on large-cap stocks of companies
with relatively strong drug pipelines.
We also increased our weighting in the technology area during the period. We
added several computer stocks we deemed to represent growth at a reasonable
price, including both software and hardware names. We did maintain limited
exposure to electronics companies (e.g., semiconductor manufacturers), due to a
generally clouded earnings environment.
One area we de-emphasized during the period was the energy industry. Our
decreased weighting here reflects both profit-taking in specific issues and our
general concern that a potentially slowing economy will weigh further on energy
prices going forward. That said, at the end of the period we held several energy
stocks we deemed to be attractively priced in the oil-production and
oil-services areas.
Our sector adjustments elsewhere were relatively minor. We maintained modest
positions in a broad range of industries, including the telecommunications,
chemicals and media areas.
Looking ahead to the next several months, we expect to maintain a bias toward
less-cyclical industries, such as the financial area, at least as long as Asia's
crisis stands to have a significantly dampening impact on the U.S. economy.
Susan L. Black
Portfolio Manager
2
<PAGE>
<PAGE>
WARBURG PINCUS EMERGING GROWTH FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998
- --------------------------------------------------------------------------------
June 16, 1998
Dear Shareholder:
The objective of Warburg Pincus Emerging Growth Fund (the 'Fund') is maximum
capital appreciation. The Fund pursues its objective by investing primarily in
stocks of emerging-growth companies (defined as small- or medium-sized companies
that have passed their start-up phase, show positive earnings and are deemed to
have prospects of achieving significant profit and gains in share price in a
relatively short period of time) that represent attractive opportunities for
maximum capital appreciation.
For the six months ended April 30, 1998, the Fund had a total return of
15.13%, vs. returns of 10.21% for the Lipper Small Cap Funds Index,* 9.95% for
the Russell 2000 Growth Index,** and 22.47% for the S&P 500 Index.*** The Fund's
one-year return through April 30 was 46.96%. Its 10-year and since-inception (on
January 21, 1998) average annual total returns through April 30 were 18.19% and
18.60%, respectively.
The reporting period saw healthy gains, in general, for the types of stocks
in which the Fund invests. Supporting the group were these companies' continued
strong earnings vs. those of larger companies, and their relatively attractive
valuations. One factor that weighed on the stocks' performance, though, at least
in relative terms, was concern sparked by the Asian financial crisis, which came
to a head last October. Asia's difficulties triggered a 'flight to quality'
mentality on the part of many U.S. investors, with 'quality' here defined as
large-cap, blue-chip stocks. That bias eased somewhat but ultimately remained in
place through the reporting period, with the net result being a solid
performance for smaller-company stocks but one that lagged that of large-cap
issues.
- ------------
* The Lipper Small Cap Funds Index is an equal-weighted performance index,
adjusted for capital-gains distributions and income dividends, of the
largest qualifying funds in this investment objective, and is compiled
by Lipper Analytical Services Inc.
** The Russell 2000 Growth Index is an unmanaged index (with no defined
investment objective) of those securities in the Russell 2000 Index with a
greater-than-average growth orientation. The Russell 2000 Growth Index
includes reinvestment of dividends, and is compiled by Frank Russell
Company.
*** The S&P 500 Index is an unmanaged index (with no defined investment
objective) of common stocks, includes reinvestment of dividends, and is a
registered trademark of Standard & Poor's Corporation.
3
<PAGE>
<PAGE>
WARBURG PINCUS EMERGING GROWTH FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998 (CONT'D)
- --------------------------------------------------------------------------------
Set against this backdrop, Warburg Pincus Emerging Growth Fund had a good
showing vs. its peer group and most small-cap benchmarks for the six months,
reflecting strong gains in a number of the Fund's holdings. By sector, some of
the best performers for the Fund were its financial stocks, which benefited from
a favorable interest-rate environment, strong earnings growth and merger and
acquisition activity. Financials, including both banks and savings and loans and
diversified financial-services companies (e.g., insurers and asset-management
firms), constituted a significant portion of the portfolio through the six
months (approximately 10% of net assets at April 30, 1998), reflecting our
belief that the sector holds some very attractive investment opportunities.
Another area of strength, as well as concentration, for the Fund during the
period was business services. This category comprises a broad array of
companies, ranging from temporary-staffing concerns to data-processing
providers. What unites these businesses is their ability to provide Corporate
America (and, increasingly, overseas companies as well) the means to effectively
lower costs and increase productivity. Business services has been a long-running
theme in the Fund (these stocks represented 11.20% of net assets as of April 30,
1998), and one we expect to continue to emphasize.
A third source of strength for the Fund was the technology area. Though the
sector struggled early in the reporting period on Asia-related concerns, it
bounced back strongly in the latter part of the period, with the Fund a direct
beneficiary. Particularly strong performers here for the Fund were its
software-related stocks, which comprised a significant portion of our overall
exposure. Like business services, technology has long figured prominently in our
strategy (the Fund's combined technology exposure represented approximately 17%
of its net assets at April 30, 1998), given what we consider to be the abundance
of long-term growth opportunities.
The Fund saw gains from holdings in other sectors as well, including health
care, leisure and entertainment and retail. One area that hurt the Fund was
energy. While not a huge weighting for the Fund -- energy-related stocks
accounted for approximately 6% of net assets as of April 30, 1998 -- almost any
exposure to the sector was a liability during the period, as most of these
stocks fell on concerns over falling oil prices and additional supply/demand
worries. This weakness notwithstanding, we continue to see good opportunity in
the energy area, especially in selected oil-services companies, thus the Fund
continues to have exposure.
4
<PAGE>
<PAGE>
WARBURG PINCUS EMERGING GROWTH FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998 (CONT'D)
- --------------------------------------------------------------------------------
Looking ahead, our outlook on the prospects for emerging-growth companies
through the remainder of 1998 and beyond remains positive. These companies
continue to generate rapid earnings growth, both in absolute terms and relative
to larger, S&P 500-type companies, and their stock valuations range from
reasonable to very attractive. Set against this backdrop, we will continue our
efforts to identify those companies with the best potential for long-term
growth.
<TABLE>
<S> <C>
Elizabeth B. Dater Stephen J. Lurito
Co-Portfolio Manager Co-Portfolio Manager
</TABLE>
5
<PAGE>
<PAGE>
WARBURG PINCUS POST-VENTURE CAPITAL FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998
- --------------------------------------------------------------------------------
Dear Shareholder: June 16, 1998
The objective 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 considered to be in their post-
venture-capital stage of development.
For the six months ended April 30, 1998, the Fund had a return of 16.58%, vs.
a return of 9.95% for the Russell 2000 Growth Index.* The Fund's one-year return
through April 30 was 42.77%. Its since-inception (on September 29, 1995) average
annual total return was 32.03%.
The period was a positive, albeit volatile, one for the types of stocks
targeted by the Fund, i.e., stocks of relatively young companies within the
rapidly growing industries favored by venture capitalists (e.g., the software,
biotechnology and communications industries). These issues struggled early in
the period, largely due to an Asia-related 'flight to safety' that placed a
premium on large-cap, highly liquid stocks. Sentiment toward small-cap and
high-growth companies dramatically improved over the second half of the period,
however, spurred by growing recognition of these companies' strong earnings
gains vs. those of large companies and their stocks' relatively attractive
valuations. The Fund benefit from this improved sentiment, and from good stock
selection generally.
We made few noteworthy changes to the Fund's industry exposure during the
reporting period. We maintained a large presence in the technology area, where
venture capital continues to account for a critical share of research &
development spending aimed at discovering potentially lucrative breakthrough
products and services. Indeed, according to a recent study,** R&D spending by
venture-backed companies is growing at a rate about three times that of Fortune
500 companies. In terms of specific strategies, we emphasized domestically
oriented technology companies, given the relatively difficult pricing
environment faced by many export-dependent companies.
Elsewhere, we maintained a significant weighting in the telecommunications &
equipment sector during the period. We believe this area will continue to
benefit from an ever-expanding Internet, ongoing worldwide deregulation of the
telecommunications industry and a high
- ------------
* The Russell 2000 Growth Index is an unmanaged index (with no defined
investment objective) of those securities in the Russell 2000 Index with a
greater-than-average growth orientation. The Russell 2000 Growth Index
includes reinvestment of dividends, and is compiled by Frank Russell Company.
** Eighth Annual Economic Impact of Venture Capital Study, National Venture
Capital Association/Coopers & Lybrand L.L.P. (U.S.A.), 1998.
6
<PAGE>
<PAGE>
WARBURG PINCUS POST-VENTURE CAPITAL FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998 (CONT'D)
- --------------------------------------------------------------------------------
degree of innovation generally. Our holdings during the period included Paging
Network. The company, a recipient of venture-capital financing in its start-up
phase, went public in 1991 and currently owns and operates the most extensive
wireless communications network in the U.S.
The rest of the Fund remained invested across a wide range of sectors,
including the financial, business-services, health-care and communications &
media areas. We also maintained a position in consumer-type stocks, where our
largest area of concentration at the end of the period was the leisure &
entertainment sector. This area increasingly stands to benefit from a maturing
population's growing levels of discretionary income, a trend that has not gone
unnoticed by venture-capital investors.
Going forward, our outlook on the collective prospects for stocks of post-
venture companies (which we define as those that have received venture-capital
financing either during the early stages of the company's existence or the
development of a new product or service, or as part of a restructuring or
recapitalization -- the investment of venture-capital financing, distribution of
securities to venture-capital investors or initial public offering, whichever is
later, having been made within 10 years of the Fund's investment) remains
positive, and our efforts will continue to be devoted to identifying those with
the best long-term growth potential. We would caution investors, however, that
investing in venture-backed companies entails potential risks (e.g., that of
heightened volatility) along with the potential for significant long-term
rewards. Because of the nature of the Fund's holdings and certain strategies it
may use, an investment in the Fund should only be considered for the aggressive
portion of an investor's portfolio and may not be appropriate for all investors.
Investors should review the Prospectus carefully before purchase.
<TABLE>
<S> <C>
Elizabeth B. Dater Stephen J. Lurito
Co-Portfolio Manager Co-Portfolio Manager
</TABLE>
7
<PAGE>
<PAGE>
WARBURG PINCUS SMALL COMPANY VALUE FUND
SEMIANNUAL INVESTMENT ADVISERS' REPORT -- APRIL 30, 1998
- --------------------------------------------------------------------------------
Dear Shareholder: June 16, 1998
The objective of Warburg Pincus Small Company Value Fund (the 'Fund') is
long-term capital appreciation. The Fund invests primarily in a portfolio of
equity securities of small-capitalization companies that are believed to be
relatively undervalued. The Fund considers a 'small' company to be one that has
a market capitalization, measured at the time the Fund purchases a security of
that company, within the range of capitalizations of companies represented in
the Russell 2000 Index.* As of January 31, 1998, the Russell 2000 Index included
companies with market capitalizations between $23.7 million and $2.7 billion.
Effective March 6, 1998, George U. Wyper, who left Warburg Pincus Asset
Management to start his own investment firm, no longer serves as a Co-Portfolio
Manager of the Fund. Kyle F. Frey, previously Associate Portfolio Manager and
Research Analyst of the Fund, now serves as the Fund's Portfolio Manager, also
effective March 6. The Fund's investment disciplines have not changed.
MANAGER COMMENTARY
For the six months ended April 30, 1998, the Fund gained 5.85%, vs. a gain of
11.88% for the Russell 2000 Index. The Fund's one-year return through April 30
was 32.98%. Its since-inception (on December 29, 1995) average annual total
return was 34.76%, vs. a return of 21.58% for its benchmark.
Small-cap stocks collectively were good performers for the six months in
absolute terms, though they continued to lag their large-cap brethren. Their
underperformance of large caps is mostly attributable to the November-
through-January span, when investors voted overwhelmingly in favor of
larger-capitalization stocks against a backdrop of considerable Asia-related
market volatility. In this context, the Fund's bias toward the smaller end of
the small-cap area proved to be a particular liability (the Fund's average
market-cap, which we raised during the period, nonetheless remained
significantly below that of its benchmark throughout).
The Fund was also hampered by its limited exposure to the strong-performing
technology area, where stocks generally remained expensive by our investment
criteria. Another factor behind the Fund's underperformance was its lack of
utility stocks. These issues, comprising roughly 10% of the Fund's benchmark,
were good performers for the six months, buoyed by a favorable interest-rate
environment. In our view, small-cap utilities remained
- ------------
* The Russell 2000 Index is an unmanaged index (with no defined investment
objective) of approximately 2000 stocks, includes reinvestment of dividends,
and is compiled by Frank Russell Company.
8
<PAGE>
<PAGE>
WARBURG PINCUS SMALL COMPANY VALUE FUND
SEMIANNUAL INVESTMENT ADVISERS' REPORT -- APRIL 30, 1998 (CONT'D)
- --------------------------------------------------------------------------------
unattractive from a cash-flow perspective, thus we continued to avoid them in
favor of what we deemed to be more-attractive stocks.
The Fund's largest area of concentration during the period remained the
financial industry. We continued to find a large number of financial stocks we
deemed to be fundamentally undervalued, primarily in the insurance area, though
we found selected value in the banking sector as well. Our financial holdings
aided the Fund's return for the period, supported in part by a benign
inflationary backdrop.
Another significant weighting for the Fund was the transportation sector, one
we raised as the period progressed. We added several trucking companies that we
viewed as particularly attractive against a supportive backdrop of declining
fuel prices and a strong economy.
Elsewhere, we maintained exposure to a broad range of industries, including
the building & building materials, real-estate, retail and industrial areas. One
name we added from the last group during the period was Inland Steel Industries.
We established the position in February believing that management, spurred by
shareholder activism, would act to revive the stock, which had been a laggard
among steel stocks generally, despite Inland's significant asset base. As it
happened, Ispat International, a European steel company, agreed to acquire
Inland's steel-making division in March. This had a favorable impact on the
stock's performance, and exemplifies the type of investment opportunities we
seek. In general, we look for companies that stand to benefit from improving
business fundamentals that also have solid underlying asset values and cash
flows (to potentially limit downside risk).
Looking ahead to the balance of 1998, we believe several factors stand to
improve the relative performance of small-cap stocks. Foremost among these is
the group's valuations vs. those of large caps, which are now at historically
compelling levels, particularly in terms of price-to-book and price-to-sales
measures. This should prompt investors to diversify further into small caps to a
potentially significant degree. In this context, we will continue to seek out
underfollowed and beaten-down small-cap stocks that have what we deem to be the
best longer-term prospects.
Kyle F. Frey
Portfolio Manager
9
<PAGE>
<PAGE>
WARBURG PINCUS HEALTH SCIENCES FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998
- --------------------------------------------------------------------------------
Dear Shareholder: June 16, 1998
The objective of Warburg Pincus Health Sciences Fund (the 'Fund') is capital
appreciation. The Fund intends to invest at least 80% of its assets in equity
securities of health science companies, and under normal market conditions will
invest at least 65% of its assets in equity and debt securities of health
sciences companies. In our view, such companies can be separated into four major
categories: (1) buyers, most notably health-maintenance organizations (HMOs);
(2) providers, including doctors, group practices, hospitals, nursing homes and
retailers; (3) suppliers, including pharmaceutical, equipment and devices; and
(4) innovators, including biotechnology, gene therapy and drug-delivery systems.
For the six months ended April 30, 1998, the Fund had a total return of
24.64%, vs. returns of 13.94% for the Lipper Health/Biotechnology Funds Index*
and 22.47% for the S&P 500 Index.** The Fund's one-year return as of April 30
was 55.10%. Its since-inception (on December 31, 1996) average annual total
return was 37.16%.
We focused primarily on health-care suppliers throughout the reporting
period. The bulk of our exposure here was in large-cap pharmaceutical companies,
whose stocks rose strongly over the six months, buoyed by continued significant
profit growth and the ongoing launch of promising new drugs. Our other holdings
in the suppliers area, which included a few medical-equipment stocks, also
contributed positively to the Fund's November-through-April return.
Our second largest area of concentration during the period was providers,
where our exposure included a significant position in health-care retailers.
These stocks helped the Fund's performance for the six months thanks in large
measure to favorable sales reports with respect to both pharmaceutical and
'front end' products (e.g., non-prescription drugs and personal-health-care
items). Elsewhere in the providers category, our holdings in the nursing home,
hospital and rehabilitative areas also saw good performances.
We held an underweighting in the buyers category during the period, which
helped the Fund's return, given the group's underperformance vs. health-care
stocks broadly. We did, however, modestly raise our exposure to
- ------------
* The Lipper Health/Biotechnology Funds Index is an equal-weighted performance
index, adjusted for capital-gains distributions and income dividends, of the
largest qualifying funds in this investment objective, and is compiled by
Lipper Analytical Services Inc.
** The S&P 500 Index is an unmanaged index (with no defined investment
objective) of common stocks, includes reinvestment of dividends, and is a
registered trademark of Standard & Poor's Corporation.
10
<PAGE>
<PAGE>
WARBURG PINCUS HEALTH SCIENCES FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998 (CONT'D)
- --------------------------------------------------------------------------------
the category as the period progressed, adding several managed-care stocks we
deemed to be attractively priced.
We had a limited weighting in the innovators area throughout the period,
believing most stocks to be expensive on a risk-vs.-reward basis. That said, we
found a few issues we deemed to have good longer-term prospects, mostly
biopharmaceutical stocks of small companies strategically allied with large-cap
drug companies. Our light weighting in the innovators category proved beneficial
to the Fund's performance for the six months, as such stocks collectively lagged
the broader health-care market.
Looking ahead, we continue to see very attractive long-term investment
potential in the health-care industry. Reasons for our optimism are several.
Foremost among these is a rapidly aging population (the 40- to 60-year-old
population, for example, is projected to rise by more than 10 million by 2005),
which stands to fuel a significant increase in health-care expenditures. In
addition, we believe the continued launch of innovative products (e.g.,
treatments for currently incurable diseases) will boost health-care demand
significantly beyond the increase suggested by demographics alone. Set within
this environment, we will continue to strive to identify health-care stocks with
the best long-term prospects. We would caution investors, however, that since
the Fund focuses its investments on companies involved in the health sciences,
an investment in the Fund may involve a greater degree of risk than an
investment in other mutual funds that seek capital appreciation by investing in
a broader mix of issuers.
<TABLE>
<S> <C>
Susan L. Black Patricia F. Widner
Co-Portfolio Manager Co-Portfolio Manager
</TABLE>
11
<PAGE>
<PAGE>
WARBURG PINCUS SMALL COMPANY GROWTH FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998
- --------------------------------------------------------------------------------
Dear Shareholder: June 16, 1998
The objective of Warburg Pincus Small Company Growth Fund (the 'Fund') is
capital growth. The Fund pursues its objective by investing in equity securities
of small-sized domestic companies. The Fund considers a 'small' company to be
one that has a market capitalization, measured at the time the Fund purchases a
security of that company, within the range of capitalizations of companies
represented in the Russell 2000 Index. (As of January 31, 1998, the Russell 2000
Index included companies with the market capitalizations between $23.7 million
and $2.7 billion.)
For the six months ended April 30, 1998, the Fund had a total return of
10.17%, vs. returns of 9.96% for the Russell 2000 Growth Index* and 10.22% for
the Lipper Small Cap Funds Index.** The Fund's one-year return through April 30
was 50.96%. Its since-inception (on December 29, 1996) average annual total
return through April 30 was 25.25%.
The reporting period saw solid gains, in general, for the type of smaller-
company, growth-oriented stocks in which the Fund invests. Supporting the group
were these companies' continued strong earnings, both in absolute terms and
relative to larger companies, and the stocks' relatively attractive valuations.
One factor that weighed on the group's performance, though, at least in relative
terms, was concern stemming from the Asian financial crisis. Asia's difficulties
triggered a general 'flight to quality' among investors, which worked to the
advantage of large-cap, blue-chip stocks at the expense of smaller issues. The
net result was solid gains for smaller-company stocks, albeit gains that lagged
those of large-cap, S&P 500-type companies.
Set against this environment, Warburg Pincus Small Company Growth Fund
managed a healthy gain for the period. In terms of performance attribution, the
Fund benefited from strong showings from holdings in a number of areas,
particularly business services, technology and financial services. At the other
end of the spectrum, performance-wise, were the Fund's energy and oil-services
stocks, which were hurt by concerns related to falling oil prices and additional
supply/demand worries.
- ------------
* The Russell 2000 Growth Index is an unmanaged index (with no defined
investment objective) of those securities in the Russell 2000 Index with a
greater-than-average growth orientation. The Russell 2000 Growth Index
includes reinvestment of dividends, and is compiled by Frank Russell Company.
** The Lipper Small Cap Funds Index is an equal-weighted performance index,
adjusted for capital-gains distributions and income dividends, of the largest
qualifying funds in this investment objective, and is compiled by Lipper
Analytical Services Inc.
12
<PAGE>
<PAGE>
WARBURG PINCUS SMALL COMPANY GROWTH FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998 (CONT'D)
- --------------------------------------------------------------------------------
There were few significant changes in the Fund during the six months in terms
of its sector concentrations. The portfolio remained broadly diversified
throughout, with slight overweightings in the consumer and business-services
areas. This reflected our ability to find attractive opportunities across a
range of industries, as well as our desire to temper the Fund's volatility by
avoiding overconcentration in any one area.
Looking ahead, our outlook on the prospects for small-cap growth stocks
remains largely positive, although investors' general bias toward large-cap
issues may limit the group's relative showing in the immediate term. Still,
based on trailing and projected profits, small caps' valuations now look more
attractive vs. those of large-cap issues than they have in well over a decade.
This should, ultimately, draw increasing amounts of investor attention to the
small-cap arena in the coming months, which stands to be reflected in much-
improved relative performance. All told, we remain optimistic, and will continue
to strive to identify those companies with the best prospects for capital
growth.
<TABLE>
<S> <C>
Stephen J. Lurito
Portfolio Manager
</TABLE>
13
<PAGE>
<PAGE>
WARBURG PINCUS STRATEGIC VALUE FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998
- --------------------------------------------------------------------------------
Dear Shareholder: June 16, 1998
The objective of Warburg Pincus Strategic Value Fund (the 'Fund') is capital
appreciation. The Fund invests in companies and market sectors that are
considered to be relatively undervalued. The Fund may hold securities of
companies of any size, including securities of companies with market
capitalizations of less than $500 million.
For the six months ended April 30, 1998, the Fund had a gain of 12.95%, vs. a
return of 22.47% for the S&P 500 Index. The Fund's one-year return through April
30 was 30.95%. Its since-inception (on December 31, 1996) average annual total
return was 22.26%.
The period was a strong one for the U.S. stock market as a whole, supported
by a continued healthy economy, benign inflation and declining interest rates.
Against this favorable backdrop, most major stock indexes posted double-digit
gains. The Fund benefited from this strength, and from good showings from its
technology and health-care stocks in particular. On the negative side,
performance-wise, the Fund was hampered by its significant exposure to mid-cap
stocks (and, to a more-limited extent, small-cap issues). These lagged the
large-cap, blue-chip-type issues that once again paced the market's advance. We
continued to largely avoid such issues in favor of stocks we deemed to have
more-attractive valuations from across the market-capitalization spectrum.
In terms of industry/sector exposure, we maintained an overweighting in the
technology area, with a primary emphasis on computer stocks. We viewed a number
of these as attractively priced, selling at significant discounts to their
respective companies' underlying growth rates. Elsewhere in the technology area,
we increased our exposure to electronics stocks (e.g., semiconductor issues). We
took advantage of Asia-related weakness in the group to selectively add to our
position.
Other noteworthy industry weightings included the health-care area, where our
focus remained on pharmaceutical companies with relatively strong new-drug
pipelines. We also had a significant weighting in the telecommunications &
equipment area, emphasizing companies that stand to particularly benefit from
the long-term growth of the Internet.
The rest of the Fund was invested across a wide range of industries,
including the consumer, financial, business-services and energy areas. We were
underweighted in the last throughout the six months, due to our near-term
concerns of falling commodity prices generally. This proved beneficial to the
Fund's return, given the group's lagging performance.
Anthony G. Orphanos
Portfolio Manager
- ------------
* The S&P 500 Index is an unmanaged index (with no defined investment objective)
of common stocks, includes reinvestment of dividends, and is a registered
trademark of Standard & Poor's Corporation.
14
<PAGE>
<PAGE>
WARBURG PINCUS GROWTH & INCOME FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998
- --------------------------------------------------------------------------------
Dear Shareholder: June 16, 1998
The objective of Warburg Pincus Growth & Income Fund (the 'Fund') is
long-term growth of capital and income and a reasonable current return. The Fund
pursues its objective by investing primarily in equity securities and seeks to
achieve its income objective by investing in dividend-paying equity securities.
For the six months ended April 30, 1998, the Fund had a gain of 18.24%, vs.
gains of 22.47% for the S&P 500 Index* and 17.07% for the Lipper Growth & Income
Funds Index.** The Fund's one-year return through April 30 was 39.19%. Its
five-year and since inception (on October 6, 1988) average annual total returns
were 16.05% and 15.40%***, respectively.
The U.S. stock market as a whole had strong performance over the
November-through-April period. Asia-related earnings uncertainties
nothwithstanding, investor sentiment toward equities remained favorable through
the period, supported by a continued healthy economy and subdued inflation. The
Fund benefited from this positive sentiment, and from good performances from its
financial, telecommunications and aerospace holdings in particular. Stocks that
hampered the Fund's return included its energy and tobacco-related holdings,
which lagged the broader market during the period.
We made few noteworthy changes to the Fund in terms of sector allocation
during the period. We remained well-diversified by industry, seeing little
incentive, from a risk-vs.-reward perspective, to heavily overweight specific
areas, given continued narrow stock valuations across and within sectors. It
should be stressed, however, that sector-management strategies aside, we
continued to employ a strictly bottom-up stock-selection process, one based on a
security's risk-adjusted total-return prospects over the longer term.
Our noteworthy areas of concentration included the financial-services
industry, a weighting we increased over the course of the period. We found
several attractive buying opportunities here during the six months, mostly in
the insurance area. Elsewhere in the financial industry, we maintained a limited
exposure to banking stocks, since we viewed most as expensive. That
- ------------
* The S&P 500 Index is an unmanaged index (with no defined investment
objective) of common stocks, includes reinvestment of dividends, and is a
registered trademark of Standard & Poor's Corporation.
** The Lipper Growth & Income Funds Index is an equal-weighted index, adjusted
for capital gains and income dividends, of the largest qualifying funds in
this investment objective, and is compiled by Lipper Analytical Services,
Inc.
*** Warburg Pincus Asset Management, Inc. assumed management of the fund on
January 1, 1992.
15
<PAGE>
<PAGE>
WARBURG PINCUS GROWTH & INCOME FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998 (CONT'D)
- --------------------------------------------------------------------------------
said, we found several issues that we deemed to be attractively priced,
including First Chicago NBD, which we purchased in the wake of its announced
merger with Banc One Corp. In our view, the synergies created by the merger are
significant and should support the stock's long-term performance.
We also maintained a significant weighting in the consumer area during the
six months. This included exposure to the consumer-durables sector, where our
largest position throughout the period was Chrysler. We also continued to have a
significant weighting in the retail sector. We made a few adjustments here
during the six months, most notably establishing a position in Sears Roebuck and
reducing our position in Wal-Mart, on profit-taking.
Another noteworthy sector weighting during the period was the capital-
equipment area, where we remained focused on companies with strong cash flows
and good prospects for earnings improvements. Our largest position here at the
end of the period was ITT Industries, a designer and manufacturer of products
used in the automotive, fluid technology and defense & electronics areas.
Elsewhere of note, we maintained a position in the telecommunications area,
primarily holding stocks of regional Bell operating companies, though we found
what we deemed to be good values in the long-distance area as well.
The rest of the Fund remained invested across a broad range of industries,
including technology, where we found the best risk-adjusted growth prospects in
the computer sector; health care, where we focused primarily on managed-care
companies with good pricing flexibility and steady enrollment growth; and
energy, where we emphasized stocks of multinational oil producers during the
period.
Looking ahead to the next several months and beyond, we believe Asia-related
downward earnings revisions will continue to hamper specific issues,
necessitating continued careful stock selection. Set within this environment,
our efforts will remain focused on striving to identify stocks with the most
attractive risk-adjusted total-return potential over the longer term.
Brian S. Posner
Portfolio Manager
16
<PAGE>
<PAGE>
WARBURG PINCUS BALANCED FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998
- --------------------------------------------------------------------------------
Dear Shareholder: June 16, 1998
The objective of Warburg Pincus Balanced Fund (the 'Fund') is maximum total
return through a combination of long-term growth of capital and current income,
consistent with preservation of capital. The Fund pursues its objective by
investing in equity and fixed-income securities.
Effective May 14, 1998, the equity portion of the Fund focuses on equity
securities of large U.S. companies -- i.e., companies having market
capitalizations within the range of capitalizations of companies represented in
the S&P 500 Index* -- considered to be undervalued. (As of March 31, 1998, the
S&P 500 Index included companies with market capitalizations of between $483
million and $282 billion.) The Fund's original equity strategy used a
multi-manager, multi-sector approach with allocations to both U.S. large- and
small-capitalization stocks as well as international securities. The change in
strategy is intended to create a profile more characteristic of a traditional
balanced fund, which typically has a large capitalization orientation.
For the six months ended April 30, 1998, the Fund had a total return of
9.23%, vs. gains of 12.27% for the Lipper Balanced Funds Index** and 22.47% for
the S&P 500 Index. The Fund's one-year return through April 30 was 25.26%. Its
five-year and since-inception (on October 6, 1988) average annual total returns
were 15.33% and 13.89%,*** respectively.
A continued healthy economy, subdued inflation and declining interest rates
lent broad support to domestic financial markets during the six months. Against
this favorable backdrop, equity markets were particularly impressive, with most
indexes posting double-digit gains. The continued rally in stocks was, however,
highly volatile, in part due to an increasingly uncertain earnings environment.
We kept the bulk of the Fund invested in equities (60.30% of net assets as of
April 30, 1998) throughout the period, where we held a mix of large- and
smaller-cap issues. Though strong performers in absolute terms, the latter
trailed large-cap stocks for the six months, which hampered the Fund's return
- ------------
* The S&P 500 Index is an unmanaged index (with no defined investment
objective) of common stocks, includes reinvestment of dividends, and is a
registered trademark of Standard & Poor's Corporation.
** The Lipper Balanced Funds Index is an equal-weighted performance index,
adjusted for capital gains distributions and income dividends, of the
largest qualifying funds in this investment objective, and is compiled by
Lipper Analytical Services Inc.
*** Warburg Pincus Asset Management, Inc. assumed management of the Fund on
September 30, 1994.
17
<PAGE>
<PAGE>
WARBURG PINCUS BALANCED FUND
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1998 (CONT'D)
- --------------------------------------------------------------------------------
vs. that of its peer group, given the Fund's relatively large exposure to small
caps.
In the fixed-income area, we continued to emphasize high-quality,
intermediate-term issues, since we view the Fund's fixed-income component
primarily as a provider of income and stability rather than as a potential
source of capital appreciation. This cost the Fund in terms of total return for
the period, since the bond market's advance was paced by longer-duration and
lower-quality bonds (due, respectively, to the decline in interest rates and the
buoyant economy). Such an approach is, however, consistent with our desire to
limit both the Fund's interest-rate and credit risk.
Looking ahead to the rest of the year, there are certainly grounds for
continued optimism regarding financial markets, foremost among them the
potential for a further decline in interest rates. That said, the impact Asia's
still-unsettled situation will have on markets going forward is far from clear,
particularly in terms of the relative prospects for stocks vs. bonds. Set within
this environment, our efforts will continue to be devoted to seeking solid
returns at a relatively low level of volatility.
Brian S. Posner
Co-Portfolio Manager
Scott T. Lewis
Co-Portfolio Manager
Dale C. Christensen
Co-Portfolio Manager
18
<PAGE>
<PAGE>
WARBURG PINCUS CAPITAL APPRECIATION FUND
STATEMENT OF NET ASSETS
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- ------------
<S> <C> <C>
COMMON STOCK (99.1%)
Aerospace & Defense (3.9%)
Loral Space & Communications, Ltd. 'D' 682,000 $ 21,355,125
Raytheon Co. Class A 134,800 7,439,275
------------
28,794,400
------------
Agriculture (2.1%)
Monsanto Co. 295,400 15,619,275
------------
Banks & Savings & Loans (10.7%)
Bank of New York Co., Inc. 172,000 10,158,750
Citicorp 72,200 10,866,100
Credit Suisse Group ADR 364,400 20,042,802
Fleet Financial Group, Inc. 85,600 7,393,700
Northern Trust Corp. 166,500 12,154,500
PNC Bank Corp. 162,400 9,815,050
Washington Mutual, Inc. 125,000 8,757,812
------------
79,188,714
------------
Building & Building Materials (1.7%)
USG Corp. 'D' 250,000 12,843,750
------------
Chemicals (4.0%)
Avery-Dennison Corp. 406,300 21,279,962
Ciba Specialty Chemicals Holdings, Inc. ADR 'D' 19,730 1,193,712
Du Pont (E.I.) de Nemours & Co. 98,600 7,179,312
------------
29,652,986
------------
Communications & Media (7.0%)
Chancellor Media Corp. Class A 'D' 218,600 10,369,837
Tele-Communications, Inc. Class A 950 30,638
U.S. West Media Group 'D' 556,400 21,004,100
USA Networks, Inc. 'D' 270,000 6,631,875
Viacom, Inc. Class B 'D' 240,000 13,920,000
------------
51,956,450
------------
Computers (7.0%)
Compaq Computer Corp. 359,600 10,091,275
EMC Corp. 'D' 349,700 16,129,912
International Business Machines Corp. 70,300 8,146,012
Microsoft Corp. 'D' 112,500 10,139,062
PeopleSoft, Inc. 'D' 147,900 6,877,350
------------
51,383,611
------------
</TABLE>
See Accompanying Notes to Financial Statements.
19
<PAGE>
<PAGE>
WARBURG PINCUS CAPITAL APPRECIATION FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- ------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Conglomerates (3.6%)
CBS Corp. 'D' 418,100 $ 14,894,812
Oglebay Norton Co. 184,000 8,326,000
United Technologies Corp. 35,000 3,445,312
------------
26,666,124
------------
Consumer Non-Durables (1.8%)
Unilever NV 175,000 13,059,375
------------
Distribution (0.1%)
Premier Farnell PLC ADR 50,000 612,500
------------
Electronics (1.4%)
Intel Corp. 131,500 10,626,844
------------
Energy (2.3%)
British Petroleum Co. PLC ADR 77,100 7,285,950
EEX Corp. 'D' 1,000,100 9,688,469
------------
16,974,419
------------
Financial Services (18.3%)
American Express Corp. 70,000 7,140,000
Berkshire Hathaway, Inc. Class A 'D' 180 12,348,000
Berkshire Hathaway, Inc. Class B 'D' 3,320 7,619,400
Edwards (A.G.), Inc. 127,500 5,737,500
Financial Security Assurance Holdings, Ltd. 158,700 9,502,163
Freddie Mac 250,000 11,578,125
Household International, Inc. 54,300 7,137,056
Leucadia National Corp. 210,000 7,861,875
Liberty Financial Companies Inc. 150,000 6,009,375
Morgan Stanley, Dean Witter, & Co. 175,300 13,826,788
Nationwide Financial Services, Inc. 140,000 6,072,500
PMI Group, Inc. 87,400 7,101,250
Provident Companies, Inc. 234,900 9,175,781
ReliaStar Financial Corp. 207,100 9,448,938
Travelers Group, Inc. 177,000 10,830,188
Webster Financial Corp. 97,440 3,300,780
------------
134,689,719
------------
Food, Beverages & Tobacco (2.1%)
Keebler Foods Co. 'D' 335,300 9,556,050
Ralston Purina Group 56,900 6,031,400
------------
15,587,450
------------
</TABLE>
See Accompanying Notes to Financial Statements.
20
<PAGE>
<PAGE>
WARBURG PINCUS CAPITAL APPRECIATION FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- ------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Healthcare (5.9%)
Becton, Dickinson & Co. 223,900 $ 15,589,038
Columbia/HCA Healthcare Corp. 448,600 14,775,763
Covance, Inc . 'D' 250,000 5,359,375
Neoprobe Corp. 'D' 50,000 253,125
Wellpoint Health Networks, Inc. 'D' 102,900 7,421,663
------------
43,398,964
------------
Industrial Mfg. & Processing (1.4%)
Tyco International, Ltd. 194,000 10,573,000
------------
Leisure & Entertainment (1.1%)
Royal Caribbean Cruises, Ltd. 121,000 8,273,375
------------
Lodging & Restaurants (1.7%)
McDonald's Corp. 200,000 12,375,000
------------
Oil Services (2.0%)
Diamond Offshore Drilling, Corp. 143,700 7,274,813
Smith International, Inc. 'D' 130,000 7,637,500
------------
14,912,313
------------
Pharmaceuticals (6.3%)
Bristol-Myers Squibb Co. 113,200 11,985,050
Pfizer, Inc. 81,700 9,298,481
Schering-Plough Corp. 89,400 7,163,175
Warner Lambert Co. 96,300 18,218,756
------------
46,665,462
------------
Publishing (2.8%)
Harcourt General, Inc. 204,500 10,672,344
Wiley (John) & Sons, Inc. Class A 178,500 9,884,438
------------
20,556,782
------------
Real Estate (1.2%)
Security Capital Group, Inc. Class B 'D' (REIT) 285,000 8,621,250
------------
Retail (2.1%)
Federated Department Stores, Inc. 'D' 140,700 6,920,681
Home Depot, Inc. 118,350 8,240,119
------------
15,160,800
------------
</TABLE>
See Accompanying Notes to Financial Statements.
21
<PAGE>
<PAGE>
WARBURG PINCUS CAPITAL APPRECIATION FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- ------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Telecommunications & Equipment (4.0%)
Cisco Systems, Inc. 'D' 195,000 $ 14,283,750
Tellabs, Inc. 'D' 55,000 3,898,125
WorldCom, Inc. 'D' 256,600 10,977,669
------------
29,159,544
------------
Transportation (4.5%)
Kansas City Southern Industries, Inc. 420,400 18,996,825
US Airways Group, Inc. 'D' 200,000 14,225,000
------------
33,221,825
------------
TOTAL COMMON STOCK (Cost $553,570,781) 730,573,932
------------
PREFERRED STOCK (0.0%)
Healthcare (0.0%)
Fresenius National Medical Care, Inc. Class D 'D' 90,000 5,400
------------
TOTAL PREFERRED STOCK (Cost $18,553) 5,400
------------
SHORT TERM INVESTMENTS (0.1%)
<CAPTION>
PAR
----------
(000)
<S> <C> <C>
Repurchase agreement with Goldman, Sachs & Co. dated
04/30/98 at 5.47% to be repurchased at $825,125 on
05/01/98. (Collateralized by a pro rata amount of U.S.
Treasury Notes ranging in par values from
39,650,000-50,000,000, 5.75%-7.25%, 09/30/01-05/15/04.
Market value of collateral is $842,109.) (Cost $825,000) $825 825,000
------------
TOTAL INVESTMENTS AT VALUE (99.2%) (Cost $554,414,334*) 731,404,332
------------
OTHER ASSETS IN EXCESS OF LIABILITIES (0.8%) 6,104,836
------------
NET ASSETS (100.0%)(applicable to 33,713,159 Common Shares and 1,798,817
Advisor Shares) $737,509,168
------------
------------
NET ASSET VALUE, offering and redemption price per Common Share
($700,634,832[div]33,713,159) $20.78
======
NET ASSET VALUE, offering and redemption price per Advisor Share
($36,874,336[div]1,798,817) $20.50
======
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<C> <S>
ADR = American Depository Receipt
REIT = Real Estate Investment Trust
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-income producing security.
* Cost for federal income tax purposes is $555,479,839.
See Accompanying Notes to Financial Statements.
22
<PAGE>
<PAGE>
WARBURG PINCUS EMERGING GROWTH FUND
STATEMENT OF NET ASSETS
April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- --------------
<S> <C> <C>
COMMON STOCK (92.1%)
Aerospace & Defense (1.8%)
Gulfstream Aerospace Corp. 'D' 487,200 $ 20,431,950
Loral Space & Communications, Ltd. 'D' 687,100 21,514,819
--------------
41,946,769
--------------
Banks & Savings & Loans (3.5%)
Bank United Corp. Class A 403,100 20,860,425
City National Corp. 528,700 19,661,031
Cullen/Frost Bankers, Inc. 350,800 20,521,800
Sovereign Bancorp, Inc. 1,038,140 19,594,892
--------------
80,638,148
--------------
Building & Building Materials (0.6%)
Toll Brothers, Inc. 'D' 520,400 14,506,150
--------------
Business Services (11.2%)
Century Business Services, Inc. 400,000 7,700,000
Harte-Hanks Communications, Inc. 1,095,000 24,842,812
New York Restaurant Group, Inc. 'D' # 336,786 3,249,985
On Assignment, Inc. 'D' 733,400 23,652,150
QuickResponse Services, Inc. 'D' 481,067 22,610,149
Reynolds & Reynolds Co. Class A 957,200 22,015,600
Robert Half International, Inc. 'D' 998,800 54,060,050
Staffing Resources, Inc. 'D' ## 91,000 509,827
Sterling Commerce, Inc. 'D' 516,000 21,962,250
Stewart Enterprises, Inc. 854,000 21,990,500
SunGard Data Systems, Inc. 'D' 787,200 28,044,000
WPP Group PLC ADR 365,000 23,496,875
--------------
254,134,198
--------------
Communications & Media (3.4%)
Central European Media Enterprises, Ltd. Class A 'D' 855,753 23,907,599
JACOR Communications, Inc. 'D' 150,300 8,548,312
Network Event Theater, Inc. 'D' 761,905 3,190,477
Network Event Theater, Inc. 'D' # 888,889 4,000,000
Outdoor Systems, Inc. 'D' 1,159,025 36,799,044
--------------
76,445,432
--------------
</TABLE>
See Accompanying Notes to Financial Statements.
23
<PAGE>
<PAGE>
WARBURG PINCUS EMERGING GROWTH FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- --------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Computers (11.3%)
BMC Software, Inc. 'D' 555,200 $ 51,945,900
Cambridge Technology Partners of Massachusetts, Inc. 'D' 444,000 23,199,000
Check Point Software Technologies, Ltd. 'D' 250,000 7,343,750
Citrix Systems, Inc. 'D' 461,150 28,648,944
National Instruments Corp. 'D' 807,217 28,656,203
PeopleSoft, Inc. 'D' 1,173,700 54,577,050
Platinum Technology, Inc. 'D' 829,900 21,162,450
Transaction Systems Architects, Inc. Class A 'D' 1,011,600 42,487,200
--------------
258,020,497
--------------
Consumer Non-Durables (2.9%)
Central Garden & Pet Co. 'D' 689,900 23,629,075
Dial Corp. 425,000 10,359,375
Hughes Supply, Inc. 416,300 16,131,625
Mohawk Industries, Inc. 'D' 491,900 15,187,412
--------------
65,307,487
--------------
Consumer Services (1.9%)
DeVRY, Inc. 'D' 628,948 23,821,405
ITT Educational Services, Inc. 'D' 690,450 20,411,428
--------------
44,232,833
--------------
Electronics (6.1%)
Burr-Brown Corp. 'D' 735,397 22,383,646
Maxim Integrated Products, Inc. 'D' 1,434,300 57,909,862
Uniphase Corp. 'D' 534,200 28,980,350
Vitesse Semiconductor Corp. 'D' 503,000 29,016,812
--------------
138,290,670
--------------
Energy (1.6%)
Brown (Tom), Inc. 'D' 682,611 14,078,852
KCS Energy, Inc. 64,800 1,004,400
Ocean Energy, Inc. 'D' 868,400 21,275,800
--------------
36,359,052
--------------
Environmental Services (1.1%)
Allied Waste Industries, Inc. 'D' 912,403 25,091,082
--------------
</TABLE>
See Accompanying Notes to Financial Statements.
24
<PAGE>
<PAGE>
WARBURG PINCUS EMERGING GROWTH FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- --------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Financial Services (5.7%)
Allmerica Financial Corp. 488,290 $ 30,579,161
FINOVA Group, Inc. 76,000 4,450,750
Nationwide Financial Services, Inc. 741,700 32,171,237
Price (T. Rowe) Associates, Inc. 289,800 21,879,900
Protective Life Corp. 499,800 18,555,075
SunAmerica, Inc. 439,800 21,962,512
--------------
129,598,635
--------------
Food, Beverages & Tobacco (2.0%)
Consolidated Cigar Holdings, Inc. 'D' 678,500 9,371,781
Starbucks Corp. 391,700 18,850,562
Suiza Foods Corp. 'D' 285,000 16,886,250
--------------
45,108,593
--------------
Healthcare (5.3%)
AmeriSource Health Corp. Class A 'D' 334,300 18,219,350
Concentra Managed Care, Inc. 550,100 17,121,863
Health Management Associates, Inc. Class A 'D' 487,200 15,346,800
InControl, Inc. 'D' 598,560 3,254,670
Mid Atlantic Medical Services, Inc. 'D' 1,444,800 18,511,500
NovaCare, Inc. 'D' 1,408,400 19,629,575
Quorum Health Group, Inc. 'D' 325,400 10,453,475
Trex Medical Corp. 'D' 40,000 760,000
Universal Health Services, Inc. 'D' 292,500 16,837,031
--------------
120,134,264
--------------
Leisure & Entertainment (3.3%)
Imax Corp. 'D' 573,100 15,616,975
N2K, Inc. 'D' 108,333 2,721,867
Premier Parks, Inc. 'D' 406,400 22,606,000
Radical Entertainment Holdings, Inc. 'D' # 500,000 2,500,000
Signature Resorts, Inc. 'D' 627,800 11,221,925
Vistana, Inc. 'D' 836,000 21,109,000
--------------
75,775,767
--------------
Lodging & Restaurants (0.9%)
Extended Stay America, Inc. 'D' 710,800 9,284,825
Outback Steakhouse, Inc. 'D' 300,000 11,437,500
--------------
20,722,325
--------------
</TABLE>
See Accompanying Notes to Financial Statements.
25
<PAGE>
<PAGE>
WARBURG PINCUS EMERGING GROWTH FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- --------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Office Equipment & Supplies (2.0%)
Herman Miller, Inc. 1,208,200 $ 36,472,538
Viking Office Products, Inc. 'D' 353,000 8,538,188
--------------
45,010,726
--------------
Oil Services (4.3%)
BJ Services Co. 444,100 16,653,750
Global Industries, Ltd. 'D' 944,600 21,430,613
Petroleum Geo - Services ADR 'D' 570,069 37,482,037
Pride International, Inc. 'D' 926,800 22,532,825
--------------
98,099,225
--------------
Pharmaceuticals (5.5%)
Alkermes, Inc. 'D' 738,500 17,631,688
Barr Laboratories, Inc. 236,900 9,609,256
Biogen, Inc. 'D' 239,400 10,623,375
Forest Laboratories, Inc. 'D' 323,000 11,688,563
Gilead Sciences, Inc. 'D' 483,565 18,375,470
Incyte Pharmaceuticals, Inc. 'D' 402,300 18,103,500
PharMerica, Inc. 'D' 1,259,600 17,476,950
Watson Pharmaceuticals, Inc. 'D' 529,300 22,759,900
--------------
126,268,702
--------------
Publishing (2.0%)
Central Newspapers, Inc. 202,500 14,833,125
The Petersen Cos., Inc. Class A 'D' 654,200 17,009,200
Wiley (John) & Sons, Inc. Class A 'D' 268,300 14,857,113
--------------
46,699,438
--------------
Real Estate (2.0%)
Apartment Investment & Management Co. Class A 439,428 16,423,622
Fairfield Communities, Inc. 'D' 318,300 7,440,263
Security Capital Industrial Trust (REIT) 851,000 20,796,313
--------------
44,660,198
--------------
</TABLE>
See Accompanying Notes to Financial Statements.
26
<PAGE>
<PAGE>
WARBURG PINCUS EMERGING GROWTH FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- --------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Retail (6.7%)
Barnes & Noble, Inc. 'D' 605,300 $ 20,504,538
Borders Group, Inc. 'D' 753,700 24,212,613
Consolidated Stores Corp. 307,500 12,300,000
Family Dollar Stores, Inc. 567,550 19,296,700
Payless ShoeSource, Inc. 'D' 306,900 21,943,350
Proffitt's, Inc. 'D' 574,000 22,816,500
Staples, Inc. 'D' 1,251,200 30,889,000
--------------
151,962,701
--------------
Telecommunications & Equipment (5.5%)
Cincinnati Bell, Inc. 308,600 11,803,950
Essex International, Inc. 'D' 382,100 13,707,838
General Cable Corp. 513,200 23,253,736
Intermedia Communications, Inc. 'D' 145,300 10,604,630
McLeodUSA, Inc. 'D' 657,200 30,231,200
Nexus Telecommunication Systems, Ltd. 'D' 375,000 2,203,125
Paging Network, Inc. 'D' 1,670,800 23,495,625
Saville Systems PLC ADR 203,400 10,144,575
--------------
125,444,679
--------------
Transportation (0.9%)
Mark VII, Inc. 'D' 1,100,138 20,902,622
--------------
Utilities-Gas (0.6%)
KN Energy, Inc. 252,400 14,812,725
--------------
TOTAL COMMON STOCK (Cost $1,415,958,382) 2,100,172,918
--------------
PREFERRED STOCK (0.6%)
Computers (0.3%)
Focal, Inc. Series E 'D' 353,669 5,670,025
--------------
Consumer Services (0.1%)
Opal Concepts, Inc. Series B 'D' # 792,603 1,999,999
--------------
Healthcare (0.0%)
Women First Healthcare, Inc. 'D' # 75,000 750,000
--------------
Transportation (0.2%)
Dealer Solutions Holdings, Inc. Series A 'D' # 2,222,222 5,000,000
--------------
TOTAL PREFERRED STOCK (Cost $9,750,001) 13,420,024
--------------
</TABLE>
See Accompanying Notes to Financial Statements.
27
<PAGE>
<PAGE>
WARBURG PINCUS EMERGING GROWTH FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- --------------
<S> <C> <C>
WARRANTS (0.0%)
Industrial Mfg. & Processing
Stratasys, Inc. 11/03/98 'D' # 21,428 $ 0
--------------
Pharmaceuticals
Cell Genesys 06/28/98 'D' 80,850 0
Transportation
Dealer Solutions Holdings, Inc. 04/29/02 'D' # 431,111 0
--------------
TOTAL WARRANTS (Cost $0) 0
--------------
<CAPTION>
PAR
---
(000)
<S> <C> <C>
SHORT-TERM INVESTMENTS (5.7%)
Repurchase agreement with Goldman, Sachs & Co. dated
04/30/98 at 5.47% to be repurchased at $130,728,854 on
05/01/98. (Collateralized by a pro rata amount of U.S.
Treasury Notes ranging in par values from
$39,650,000-$50,000,000, 5.75%-7.25%, 09/30/01-05/15/04.
Market Value of collateral is 133,419,607.) (Cost
$130,709,000) $130,709 130,709,000
--------------
TOTAL INVESTMENTS AT VALUE (98.4%) (Cost $1,556,417,383*) 2,244,301,942
OTHER ASSETS IN EXCESS OF LIABILITIES (1.6%) 35,389,023
--------------
NET ASSETS (100.0%) (applicable to 43,164,678 Common Shares
and 10,427,080 Advisor Shares) $2,279,690,965
--------------
--------------
NET ASSET VALUE, offering and redemption price per Common Share
($1,848,037,944[div]43,164,678) $42.81
======
NET ASSET VALUE, offering and redemption price per Advisor Share
($431,653,021[div]10,427,080) $41.40
======
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<C> <S>
ADR = American Depository Receipt
REIT = Real Estate Investment Trust
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-income producing security.
# Restricted Security.
## Not readily marketable security.
* Cost for federal income tax purposes is $1,557,055,974.
See Accompanying Notes to Financial Statements.
28
<PAGE>
<PAGE>
WARBURG PINCUS POST-VENTURE CAPITAL FUND
STATEMENT OF NET ASSETS
April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK (93.2%)
Aerospace & Defense (2.2%)
Gulfstream Aerospace Corp. 'D' 30,700 $ 1,287,481
Loral Space & Communications, Ltd. 'D' 33,400 1,045,837
------------
2,333,318
------------
Building & Building Materials (0.7%)
Comfort Systems USA, Inc. 'D' 31,600 733,650
------------
Business Services (8.6%)
CSG Systems International, Inc. 'D' 21,500 978,250
New York Restaurant Group, Inc. 'D' # 77,720 749,998
PMT Services, Inc. 'D' 63,000 1,228,500
Protection One, Inc. 'D' 106,300 1,298,853
QuickResponse Services, Inc. 'D' 24,200 1,137,400
Robert Half International, Inc. 'D' 30,000 1,623,750
Staffing Resources, Inc. 'D' ## 4,000 22,410
Technology Solutions Co. 'D' 30,100 966,962
Wilmar Industries, Inc. 'D' 46,200 1,103,025
------------
9,109,148
------------
Communications & Media (3.7%)
Clear Channel Communications, Inc. 'D' 10,314 972,094
JACOR Communications, Inc. 'D' 15,000 853,125
Outdoor Systems, Inc. 'D' 64,650 2,052,637
------------
3,877,856
------------
Computers (17.0%)
BMC Software, Inc. 'D' 21,600 2,020,950
Brio Technology, Inc. 'D' 9,900 108,900
Business Objects SA ADR 'D' 90,000 1,698,750
Cambridge Technology Partners, Inc. 'D' 23,600 1,233,100
Citrix Systems, Inc. 'D' 21,050 1,307,731
Inso Corp. 'D' 55,000 990,000
JDA Software Group, Inc. 'D' 25,000 1,264,062
Micrografx, Inc. 'D' 75,500 877,687
Object Design, Inc. 'D' 100,000 631,250
Parametric Technology Corp. 'D' 27,700 885,534
PeopleSoft, Inc. 'D' 41,200 1,915,800
Platinum Technology, Inc. 'D' 40,400 1,030,200
Radiant Systems, Inc. 'D' 44,900 1,010,250
Tecnomatix Technologies Ltd. 'D' 14,100 357,788
Transactions Systems Architects, Inc. Class A 'D' 44,700 1,877,400
Vantive Corp. 'D' 26,200 838,400
------------
18,047,802
------------
Consumer Non-Durables (1.1%)
Central Garden & Pet Co. 'D' 33,200 1,137,100
------------
</TABLE>
See Accompanying Notes to Financial Statements.
29
<PAGE>
<PAGE>
WARBURG PINCUS POST-VENTURE CAPITAL FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Electronics (10.5%)
Avant! Corp. 'D' 62,700 $ 1,818,300
Cable Design Technologies, Inc. 'D' 37,700 1,003,763
Linear Technology Corp. 24,200 1,948,100
Maxim Integrated Products, Inc. 'D' 57,400 2,317,525
Uniphase Corp. 'D' 28,100 1,524,425
Vitesse Semiconductor Corp. 'D' 26,200 1,511,413
Xilinx, Inc. 'D' 22,700 1,038,525
------------
11,162,051
------------
Energy (2.1%)
KCS Energy, Inc. 56,600 877,300
Stone Energy Corp. 'D' 35,800 1,371,588
------------
2,248,888
------------
Environmental Services (3.2%)
AES Corp. 'D' 15,000 827,813
American Disposal Services, Inc. 'D' 33,900 1,359,178
USA Waste Services, Inc. 'D' 24,900 1,221,656
------------
3,408,647
------------
Financial Services (9.0%)
Amerin Corp. 'D' 25,000 795,313
AMVESCAP PLC ADR 18,560 1,048,640
Franklin Resources, Inc . 18,300 979,050
Life Re Corp. 18,600 1,339,200
Mid Ocean, Ltd. 18,000 1,356,750
Nationwide Financial Services, Inc. 30,000 1,301,250
Price (T. Rowe) Associates, Inc. 17,700 1,336,350
Sirrom Capital Corp. 47,600 1,422,050
------------
9,578,603
------------
Healthcare (4.0%)
Advance Paradigm, Inc. 'D' 33,100 1,319,863
Novoste Corp. 'D' 23,300 576,675
Quorum Health Group, Inc. 'D' 40,500 1,301,063
STERIS Corp. 'D' 18,000 1,058,625
------------
4,256,226
------------
Leisure & Entertainment (7.0%)
Coach USA, Inc. 'D' 33,900 1,608,131
N2K, Inc. 'D' 75,000 1,884,375
Premier Parks, Inc. 'D' 36,100 2,008,063
Signature Resorts, Inc. 'D' 48,000 858,000
Vistana, Inc. 'D' 44,200 1,116,050
------------
7,474,619
------------
Metals & Mining (1.6%)
Metals USA, Inc. 'D' 87,300 1,702,350
------------
</TABLE>
See Accompanying Notes to Financial Statements.
30
<PAGE>
<PAGE>
WARBURG PINCUS POST-VENTURE CAPITAL FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Oil Services (2.7%)
Petroleum Geo -- Services ADR 'D' 25,500 $ 1,676,625
Pride International, Inc. 'D' 49,000 1,191,313
------------
2,867,938
------------
Pharmaceuticals (3.8%)
Alkermes, Inc. 'D' 46,600 1,112,575
CV Therapeutics, Inc. 'D' 75,000 689,063
Incyte Pharmaceuticals, Inc. 'D' 24,500 1,102,500
Watson Pharmaceuticals, Inc. 'D' 25,600 1,100,800
------------
4,004,938
------------
Publishing (1.1%)
The Petersen Cos., Inc. Class A 'D' 45,000 1,170,000
------------
Real Estate (2.7%)
AMB Property Corp. 42,800 984,400
Fairfield Communities, Inc. 'D' 39,000 911,625
Trammell Crow Co. 'D' 35,000 927,500
------------
2,823,525
------------
Retail (3.3%)
Barnes & Noble, Inc. 'D' 25,800 873,975
Borders Group, Inc. 'D' 31,000 995,875
Staples, Inc. 'D' 65,700 1,621,969
------------
3,491,819
------------
Telecommunications & Equipment (8.0%)
Cisco Systems, Inc. 'D' 18,000 1,318,500
Gilat Communications, Ltd. 'D' 93,000 895,125
Intermedia Communications, Inc. 'D' 24,700 1,802,714
McLeodUSA, Inc. Class A 'D' 45,400 2,088,400
Nextel Communications, Inc. 'D' 31,400 900,788
Paging Network, Inc. 'D' 102,100 1,435,781
------------
8,441,308
------------
Transportation (0.9%)
Heartland Express, Inc. 'D' 38,200 950,225
------------
TOTAL COMMON STOCK (Cost $71,036,302) 98,825,011
------------
</TABLE>
See Accompanying Notes to Financial Statements.
31
<PAGE>
<PAGE>
WARBURG PINCUS POST-VENTURE CAPITAL FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY DATE PAR VALUE
------------- -------- -----------
(000)
<S> <C> <C> <C>
UNITED STATES TREASURY OBLIGATIONS (1.1%)
U.S. Treasury Bills (0.5%)**
U.S. Treasury Bills 5.080% 6/04/98 $ 379 $ 377,273
U.S. Treasury Bills 5.150% 6/04/98 190 189,134
-----------
566,407
-----------
U.S. Treasury Notes (0.6%)**
U.S. Treasury Notes 5.625% 11/30/98 90,000 90,114
U.S. Treasury Notes 5.875% 11/15/99 250,000 251,065
U.S. Treasury Notes 5.875% 11/30/01 260,000 261,856
-----------
603,035
-----------
TOTAL UNITED STATES TREASURY OBLIGATIONS (Cost
$1,165,190) 1,169,442
-----------
</TABLE>
<TABLE>
<CAPTION>
CAPITAL
SHARE
--------
<S> <C> <C>
PRIVATE FUND INVESTMENTS (0.8%)
Boston Ventures LP 262,123 262,123
New Enterprise Associates VII, LP 533,446 533,446
------------
TOTAL PRIVATE FUND INVESTMENTS (Cost $816,434) 795,569
------------
<CAPTION>
PAR
--------
(000)
<S> <C> <C>
SHORT-TERM INVESTMENTS (2.7%)
Repurchase agreement with Goldman, Sachs & Co.
dated 04/30/98 at 5.47% to be repurchased at
$2,836,431 on 5/01/98. (Collaterized by a pro rata
amount of U.S. Treasury Notes Ranging in par values
from $39,650,000-50,000,000, 5.750%-7.250%,
09/30/01-05/15/04. Market Value of collateral is
$2,894,812. (Cost $2,836,000) $2,836 2,836,000
------------
TOTAL INVESTMENTS AT VALUE (97.7%) (Cost $75,853,926*) 103,626,022
------------
OTHER ASSETS IN EXCESS OF LIABILITIES (2.3%) 2,404,318
------------
NET ASSETS (100.0%) (applicable to 5,162,428 Common
Shares and 2,498 Advisor Shares) $106,030,340
------------
------------
NET ASSET VALUE, offering and redemption price per
Common Share ($105,979,619[div]5,162,428) $20.53
======
NET ASSET VALUE, offering and redemption price per
Advisor Share ($50,721[div]2,497.908) $20.31
======
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<C> <S>
ADR = American Depository Receipt
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-income producing security.
# Restricted securities.
## Not readily marketable security.
** These securities have been segregated with the Fund custodian to cover open
capital commitments of $1,184,000 in private fund investments.
* Cost for federal income tax purposes is $75,966,878.
See Accompanying Notes to Financial Statements.
32
<PAGE>
<PAGE>
WARBURG PINCUS SMALL COMPANY VALUE FUND
STATEMENT OF NET ASSETS
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- -----------
<S> <C> <C>
COMMON STOCK (94.9%)
Aerospace & Defense (1.2%)
Tracor, Inc. 'D' 52,200 $ 2,052,112
-----------
Banks & Savings & Loans (6.6%)
Quaker City Bancorp, Inc. 'D' 145,037 3,281,462
Riggs National Corp. 131,800 3,797,487
Texas Regional Bancshares, Inc. 118,300 3,903,900
-----------
10,982,849
-----------
Building & Building Materials (5.0%)
Cavalier Homes, Inc. 317,800 3,813,600
Walter Industries, Inc. 'D' 220,100 4,539,562
-----------
8,353,162
-----------
Business Services (2.9%)
John H. Harland Co. 128,300 2,285,344
Tokheim Corp. 'D' 159,200 2,527,300
-----------
4,812,644
-----------
Capital Equipment (4.5%)
Allied Products Corp. 92,150 2,113,691
Avondale Industries, Inc. 'D' 118,300 3,179,312
Stewart & Stevenson Services, Inc. 97,400 2,167,150
-----------
7,460,153
-----------
Conglomerates (0.9%)
Oglebay Norton Co. 32,600 1,475,150
-----------
Consumer Durables (5.7%)
Citation Corp. 'D' 78,100 1,630,337
La-Z-Boy, Inc. 83,900 4,389,019
Triangle Pacific Corp. 'D' 78,500 3,414,750
-----------
9,434,106
-----------
Consumer Non-Durables (6.0%)
American Safety Razor Corp. 'D' 101,800 1,845,125
Home Products International, Inc. 'D' 262,600 3,545,100
Standex International Corp. 51,100 1,555,356
Zag Industries, Ltd. 'D' 219,400 3,003,037
-----------
9,948,618
-----------
Electronics (1.7%)
ADE Corp. 'D' 100,600 1,798,225
EA Industries, Inc. 'D' 236,500 960,781
-----------
2,759,006
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
33
<PAGE>
<PAGE>
WARBURG PINCUS SMALL COMPANY VALUE FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- -----------
<S> <C> <C>
COMMON STOCK (CONT'D)
Energy (3.6%)
Forest Oil Corp. 'D' 211,300 $ 3,301,563
KCS Energy, Inc. 55,500 860,250
Petsec Energy, Ltd. ADR 'D' 86,800 1,784,825
-----------
5,946,638
-----------
Engineering & Construction (1.4%)
Gradall Industries, Inc. 'D' 135,300 2,333,925
-----------
Financial Services (20.4%)
Commerce Group, Inc. 104,000 3,926,000
Delphi Financial Group Class A 'D' 54,168 3,087,576
Freedom Securities Corp. 'D' 95,000 2,107,813
HCC Insurance Holdings, Inc. 84,800 1,844,400
Life USA Holding, Inc. 107,500 1,625,938
Long Beach Financial Corp. 'D' 233,500 3,050,094
NAC Re Corp. 59,400 2,970,000
National Western Life Insurance Co. Class A 'D' 35,600 3,693,500
PICO Holdings, Inc. 'D' 411,800 2,161,950
Terra Nova (Bermuda) Holdings, Ltd. 148,485 4,547,353
White River Corp. 'D' 56,400 4,935,000
-----------
33,949,624
-----------
Food, Beverages & Tobacco (0.7%)
Pilgrim's Pride Corp. 72,200 1,227,400
-----------
Industrial Mfg. & Processing (4.2%)
Metal Management, Inc. 'D' 25,300 327,319
Roanoke Electric Steel Corp. 82,400 1,668,600
UNOVA, Inc. 'D' 217,800 5,063,850
-----------
7,059,769
-----------
Leisure & Entertainment (1.5%)
SCP Pool Corp. 'D' 109,100 2,577,488
-----------
Lodging & Restaurants (1.5%)
Ryan's Family Steak Houses, Inc. 'D' 242,800 2,428,000
-----------
Metals & Minining (4.3%)
Inland Steel Industries, Inc. 118,300 3,467,669
Universal Stainless & Alloy Products, Inc. 'D' 337,000 3,707,000
-----------
7,174,669
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
34
<PAGE>
<PAGE>
WARBURG PINCUS SMALL COMPANY VALUE FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- -----------
<S> <C> <C>
COMMON STOCK (CONT'D)
Real Estate (8.3%)
Equity Inns, Inc. (REIT) 225,600 $ 3,327,600
U.S. Restaurant Properties, Inc. (REIT) 97,600 2,696,200
Weeks Corp. (REIT) 119,100 3,751,650
Western Water Co. 'D' 354,000 3,982,500
-----------
13,757,950
-----------
Retail (6.0%)
AnnTaylor Stores Corp. 'D' 236,300 3,766,031
Filene's Basement Corp. 'D' 389,600 2,167,150
Fingerhut Companies, Inc. 134,300 3,978,638
-----------
9,911,819
-----------
Telecommunications & Equipment (1.5%)
General Cable Corp. 56,400 2,555,625
-----------
Transportation (7.1%)
Allied Holdings, Inc. 'D' 103,500 2,063,531
Landstar Systems, Inc. 'D' 112,100 3,671,275
M.S. Carriers, Inc. 'D' 75,900 2,580,600
Matlack Systems, Inc. 'D' 33,200 294,650
MTL, Inc. 'D' 46,800 1,822,275
U S Xpress Enterprises, Inc. 71,100 1,386,450
-----------
11,818,781
-----------
TOTAL COMMON STOCK (Cost $124,599,589) 158,019,488
-----------
</TABLE>
<TABLE>
<CAPTION>
PAR
---
(000)
<S> <C> <C>
CONVERTIBLE BONDS (1.1%)
Electronics (1.1%)
Ea Industries, Inc. Series A Convertible Notes
6.00%, 04/30/99 (NR,NR) +(Cost
$1,500,000) $1,500 1,822,530
-----------
SHORT-TERM INVESTMENTS (2.6%)
Repurchase Agreement with Goldman, Sachs & Co. dated
04/30/98 to be repurchased at $4,309,654.53 on
05/01/98. (Collateralized by a pro rata amount of U.S.
Treasury Notes ranging in par values from
$39,650,000-$50,000,000, 5.75%-7.25%,
09/30/01-05/15/04. Market value of collateral is
$4,398,359.) (Cost $4,309,000) 4,309 4,309,000
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
35
<PAGE>
<PAGE>
WARBURG PINCUS SMALL COMPANY VALUE FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- ------------
<S> <C> <C>
WARRANTS (0.1%)
Ea Industries, Inc. Six Month Warrants # 1 $ 110,438
------------
TOTAL INVESTMENTS AT VALUE (98.7%) (Cost $130,519,027*) 164,261,456
OTHER ASSETS IN EXCESS OF LIABILITIES 2,195,342
------------
NET ASSETS (100.0%) (Applicable to 9,396,736 Common Shares and 4,073 Advisor
Shares) $166,456,798
------------
------------
NET ASSET VALUE, offering and redemption price per Common Share
($166,385,317[div]9,396,736) $17.71
======
NET ASSET VALUE, offering and redemption price per Advisor Share
($71,481[div]4,073) $17.55
======
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<C> <S>
ADR = American Depository Receipt
REIT = Real Estate Investment Trust
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-income producing security.
# Restricted security.
* Cost for federal income tax purposes is $130,540,681.
See Accompanying Notes to Financial Statements.
36
<PAGE>
<PAGE>
WARBURG PINCUS HEALTH SCIENCES FUND
STATEMENT OF NET ASSETS
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- -----------
<S> <C> <C>
COMMON STOCK (103.3%)
Business Services (1.6%)
MedQuist, Inc. 'D' 14,650 $ 714,187
-----------
Computers (2.6%)
Medirisk, Inc. 'D' 21,000 493,500
Shared Medical Systems Corp. 9,100 663,731
-----------
1,157,231
-----------
Healthcare (48.4%)
Abbott Laboratories 23,400 1,711,125
Becton, Dickinson & Co. 18,800 1,308,950
Centocor, Inc. 'D' 3,300 139,219
Columbia/HCA Healthcare Corp. 22,000 724,625
Covance, Inc . 'D' 38,500 825,344
First Health Group Corp. 'D' 9,600 566,400
Guidant Corp. 5,500 367,812
Hanger Orthopedic Group, Inc. 'D' 59,700 1,115,644
Health Care & Retirement Corp. 'D' 20,800 847,600
Health Management Associates, Inc. Class A 'D' 36,500 1,149,750
HEALTHSOUTH Corp. 'D' 46,800 1,412,775
Hooper Holmes, Inc. 64,100 1,510,356
Humana, Inc. 'D' 22,000 594,000
Invacare Corp. 17,100 476,662
Johnson & Johnson 24,100 1,720,137
McKesson Corp. 3,400 240,337
Mid Atlantic Medical Services, Inc. 'D' 19,500 249,844
OEC Medical Systems, Inc. 'D' 29,800 676,087
PhyCor, Inc. 'D' 8,100 184,275
Sierra Health Services, Inc. 'D' 21,600 830,250
Stryker Corp. 15,400 693,000
Tenet Healthcare Corp. 'D' 19,000 711,312
Trigon Healthcare, Inc. 'D' 15,100 458,663
United Healthcare Corp. 27,400 1,924,850
Wellpoint Health Networks, Inc. 'D' 19,600 1,413,650
-----------
21,852,667
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
37
<PAGE>
<PAGE>
WARBURG PINCUS HEALTH SCIENCES FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- -----------
<S> <C> <C>
COMMON STOCK (CONT'D)
Pharmaceuticals (40.4%)
Alkermes, Inc. 'D' 8,600 $ 205,325
Alpharma, Inc. Class A 25,300 575,575
American Home Products Corp. 13,500 1,257,188
Bristol-Myers Squibb Co. 20,700 2,191,613
Cardinal Health, Inc. 9,900 952,875
COR Therapeutics, Inc. 'D' 5,000 94,375
Lilly (Eli) & Co. 28,000 1,947,750
IDEC Pharmaceuticals Corp. 'D' 4,600 165,600
Ligand Pharmaceuticals, Inc. Class B 'D' 7,000 101,500
Merck & Co., Inc. 14,000 1,687,000
Owens & Minor, Inc. Holding Co. 35,900 639,469
Pfizer, Inc. 26,000 2,959,125
Schering-Plough Corp. 28,700 2,299,588
Synaptic Pharmaceutical Corp. 'D' 14,700 183,750
Vical, Inc. 'D' 11,600 174,725
Warner-Lambert Co. 9,700 1,835,119
Zeneca Group PLC ADR 22,200 974,025
-----------
18,244,602
-----------
Retail (10.3%)
CVS Corp. 15,400 1,135,750
Rite Aid Corp. 96,900 3,112,913
Walgreen Co. 11,600 400,200
-----------
4,648,863
-----------
TOTAL COMMON STOCK (Cost $38,896,741) 46,617,550
-----------
TOTAL INVESTMENTS AT VALUE (103.3%) (Cost $38,896,741*) 46,617,550
-----------
LIABILITIES IN EXCESS OF OTHER ASSETS (3.3%) (1,468,114)
-----------
NET ASSETS (100.0%) (Applicable to 3,148,955 Common Shares) $45,149,436
-----------
-----------
NET ASSET VALUE, offering and redemption price
Per Common Share ($45,149,436 [div] 3,148,955) $14.34
======
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<C> <S>
ADR = American Depository Receipt
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-income producing security.
* Cost for federal income tax purposes is $38,900,674.
See Accompanying Notes to Financial Statements.
38
<PAGE>
<PAGE>
WARBURG PINCUS SMALL COMPANY GROWTH FUND
STATEMENT OF NET ASSETS
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- -----------
<S> <C> <C>
COMMON STOCK (96.4%)
Aerospace & Defense (1.0%)
TriStar Aerospace Co. 'D' 8,400 $ 138,600
-----------
Building & Building Materials (2.7%)
American Woodmark Corp. 5,500 166,375
D.R. Horton, Inc. 7,000 129,937
Nobility Homes, Inc. 'D' 4,600 75,900
-----------
372,212
-----------
Business Services (11.9%)
BISYS Group, Inc. 'D' 2,500 98,750
CSG Systems International, Inc. 'D' 5,000 227,500
Hypercom Corp. 'D' 7,400 96,200
Kroll-O'Gara Co. 'D' 6,100 130,006
On Assignment, Inc. 'D' 6,000 193,500
PMT Services, Inc. 'D' 9,400 183,300
Protection One, Inc. 12,000 146,625
QuickResponse Services, Inc. 'D' 2,900 136,300
Romac International, Inc. 'D' 4,500 119,250
Sitel Corp. 'D' 12,000 141,000
Tag-It Pacific, Inc. 'D' 14,400 46,800
Technology Solutions Co. 'D' 4,800 154,200
-----------
1,673,431
-----------
Communications & Media (4.7%)
Central European Media Enterprises, Ltd. Class A 'D' 5,900 164,831
Granite Broadcasting Corp. 'D' 11,700 136,012
Heftel Broadcasting Corp. 'D' 3,000 131,625
Metro Networks, Inc. 'D' 4,000 159,000
Playboy Enterprises, Inc. 'D' 3,700 64,750
-----------
656,218
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
39
<PAGE>
<PAGE>
WARBURG PINCUS SMALL COMPANY GROWTH FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- -----------
<S> <C> <C>
COMMON STOCK (CONT'D)
Computers (14.3%)
ACT Networks, Inc. 'D' 10,000 $ 150,000
Arbor Software Corp. 2,500 117,656
Business Objects SA ADR 'D' 8,000 151,000
Check Point Software Technologies, Ltd. 'D' 3,100 91,062
Citrix Systems, Inc. 'D' 3,000 186,375
DataWorks Corp. 'D' 200 4,425
JDA Software Group, Inc. 'D' 4,800 242,700
Manhattan Associates, Inc. 1,700 38,462
Micrografx, Inc. 'D' 12,500 145,312
Mobius Management Systems, Inc. 'D' 1,500 27,750
National Instruments Corp. 'D' 4,650 165,075
Object Design, Inc. 20,000 126,250
Radiant Systems, Inc. 'D' 6,100 137,250
Tecnomatix Technologie, Ltd. 'D' 5,000 126,875
Transactions Systems Architects, Inc. Class A 'D' 4,300 180,600
Vantive Corp. 3,400 108,800
-----------
1,999,592
-----------
Consumer Non-Durables (4.0%)
Central Garden & Pet Co. 'D' 4,500 154,125
dELiA*s, Inc. 'D'* 5,200 131,300
Hughes Supply, Inc. 4,000 155,000
US Home & Garden, Inc. 'D' 17,300 115,694
-----------
556,119
-----------
Consumer Services (3.5%)
Prepaid Legal Services, Inc. 'D' 4,500 170,156
Service Experts, Inc. 'D' 4,900 162,925
Youth Services International, Inc. 'D' 9,000 163,125
-----------
496,206
-----------
Electronics (7.5%)
Aavid Thermal Technologies 'D' 8,200 286,487
ATMI Inc. 'D' 500 13,937
Avant! Corp. 'D' 7,999 231,971
Burr-Brown Corp. 'D' 4,500 136,969
Cerprobe Corp. 'D' 7,700 128,012
Etec Systems, Inc. 'D' 2,300 130,525
PCD, Inc. 'D' 6,400 128,400
-----------
1,056,301
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
40
<PAGE>
<PAGE>
WARBURG PINCUS SMALL COMPANY GROWTH FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- -----------
<S> <C> <C>
COMMON STOCK (CONT'D)
Energy (2.3%)
Chieftain International, Inc. 'D' 7,500 $ 167,812
Stone Energy Corp. 'D' 4,200 160,913
-----------
328,725
-----------
Environmental Services (2.5%)
Allied Waste Industries, Inc. 'D' 4,800 132,000
American Disposal Services, Inc. 'D' 5,300 212,497
-----------
344,497
-----------
Financial Services (4.4%)
Amerin Corp. 'D' 4,300 136,794
Investors Financial Service Corp. 3,000 161,625
Life Re Corp. 2,400 172,800
Protective Life Corp. 4,000 148,500
-----------
619,719
-----------
Food, Beverages & Tobacco (2.4%)
Consolidated Cigar Holdings, Inc. 'D' 6,400 88,400
Il Fornaio America Corp. 'D' 9,000 121,500
Suiza Foods Corp. 'D' 2,200 130,350
-----------
340,250
-----------
Healthcare (6.4%)
Alternative Living Services, Inc. 3,400 119,000
ARV Assisted Living, Inc. 3,700 52,725
Core, Inc. 'D' 10,300 121,025
Horizon Health Corp. 'D' 6,000 142,500
Mentor Corp. 4,000 108,750
Minimed, Inc. 'D' 2,800 140,000
Renal Care Group, Inc. 4,000 153,000
VWR Scientific Products Corp. 1,800 59,175
-----------
896,175
-----------
Leisure & Entertainment (6.8%)
Championship Auto Racing Teams, Inc. 5,200 98,150
Coach USA, Inc. 'D' 4,800 227,700
Family Golf Centers, Inc. 'D' 3,900 164,288
Premier Parks, Inc. 'D' 3,600 200,250
Signature Resorts, Inc. 'D' 6,000 107,250
Vistana, Inc. 'D' 6,000 151,500
-----------
949,138
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
41
<PAGE>
<PAGE>
WARBURG PINCUS SMALL COMPANY GROWTH FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- -----------
<S> <C> <C>
COMMON STOCK (CONT'D)
Lodging & Restaurants (1.0%)
Bob Evans Farms, Inc. 6,800 $ 138,550
-----------
Metals & Mining (1.4%)
Metals USA, Inc. 'D' 10,000 195,000
-----------
Oil Services (1.9%)
Global Industries, Ltd. 'D' 5,800 131,588
Pride International, Inc. 'D' 5,400 131,288
-----------
262,876
-----------
Pharmaceuticals (5.4%)
Alkermes, Inc. 'D' 6,000 143,250
ChiRex, Inc. 'D' 7,300 128,206
Geltex Pharmaceuticals, Inc. 'D' 3,500 81,813
Gilead Sciences, Inc. 'D' 3,700 140,600
Owens & Minor, Inc. Holding Co. 7,800 138,938
Sepracor, Inc. 'D' 2,600 120,250
-----------
753,057
-----------
Real Estate (3.6%)
CB Commercial Real Estate Services Group, Inc. 2,000 73,375
LaSalle Partners, Inc. 'D' 4,200 144,375
Trammell Crow Co. 'D' 4,700 124,550
U.S. Restaurant Properties, Inc. (REIT) 'D' 5,700 157,463
-----------
499,763
-----------
Retail (2.9%)
Borders Group, Inc. 'D' 5,100 163,838
Family Dollar Stores, Inc. 3,400 115,600
Payless ShoeSource, Inc. 'D' 1,700 121,550
-----------
400,988
-----------
Telecommunications & Equipment (4.1%)
General Communication, Inc. 'D' 14,900 105,231
Intermedia Communications, Inc. 2,900 211,655
McLeodUSA, Inc. Class A 'D' 4,100 188,600
Teledata Communications, Ltd. 'D' 4,500 71,438
-----------
576,924
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
42
<PAGE>
<PAGE>
WARBURG PINCUS SMALL COMPANY GROWTH FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- -----------
<S> <C> <C>
COMMON STOCK (CONT'D)
Transportation (1.8%)
Greyhound Lines, Inc. 'D' 2,600 $ 13,000
Heartland Express, Inc. 'D' 5,200 129,350
Swift Transportation Co., Inc. 'D' 5,100 116,663
-----------
259,013
-----------
TOTAL COMMON STOCK (Cost $11,257,295) 13,513,354
-----------
<CAPTION>
PAR
(000)
<S> <C> <C>
SHORT-TERM INVESTMENTS (3.1%)
Repurchase agreement with Goldman, Sachs & Co. dated
04/30/98 at 5.47% to be repurchased at $427,065 on 05/01/98
(Collaterized by a pro rata amount of U. S. Treasury Notes
ranging in par values from $39,650,000-$50,000,000,
5.750%-7.250% 09/30/01-05/15/04. Market value of collateral
is $435,855.) (Cost $427,000) $427 427,000
-----------
TOTAL INVESTMENTS AT VALUE (99.5%) (Cost $11,684,295*) 13,940,354
OTHER ASSETS IN EXCESS OF LIABILITIES (.5%) 75,177
-----------
NET ASSETS (100.0%) (applicable to 1,044,470 Common Shares) $14,015,531
-----------
-----------
NET ASSET VALUE, offering and redemption price per Common Shares
($14,015,531[div]1,044,470) $13.42
======
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<C> <S>
ADR = American Depository Receipt
REIT = Real Estate Investment Trust
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-income producing security.
* Cost for federal income tax purposes is $11,718,201.
See Accompanying Notes to Financial Statements.
43
<PAGE>
<PAGE>
WARBURG PINCUS STRATEGIC VALUE FUND
SCHEDULE OF INVESTMENTS
April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
TOTAL COMMON STOCK (98.4%)
Banks & Savings & Loans (6.4%)
Bankers Trust New York Corp. 1,000 $ 129,125
First Chicago NBD Corp. 4,500 417,937
------------
547,062
------------
Business Services (5.0)
Computer Sciences Corp. 'D' 8,000 422,000
------------
Capital Equipment (3.2%)
Cummins Engine Co., Inc. 5,000 271,875
------------
Chemicals (3.4%)
Dow Chemical Co. 3,000 290,062
------------
Computers (19.2%)
Accelr8 Technology Corp. 'D' 13,000 224,250
Computer Horizons Corp. 'D' 13,000 493,187
Hewlett-Packard Co. 3,000 225,937
Keane, Inc. 'D' 8,000 402,000
Unisys Corp. 'D' 13,000 291,687
------------
1,637,061
------------
Conglomerates (2.8%)
TRW, Inc. 4,500 237,656
------------
Consumer Durables (4.0%)
General Motors Corp. 5,000 336,875
------------
Consumer Non-Durables (2.5%)
Sola International, Inc. 'D' 5,000 212,500
------------
Electronics (10.1%)
Altera Corp. 'D' 2,000 81,000
AMP, Inc. 'D' 8,500 334,156
Motorola, Inc. 3,500 194,688
Xilinx, Inc. 'D' 5,500 251,625
------------
861,469
------------
Financial Services (2.2%)
Fidelity National Financial, Inc. 5,000 184,375
------------
Food, Beverages & Tobacco (1.5%)
Philip Morris Companies, Inc. 3,500 130,594
------------
</TABLE>
See Accompanying Notes to Financial Statements.
44
<PAGE>
<PAGE>
WARBURG PINCUS STRATEGIC VALUE FUND
SCHEDULE OF INVESTMENTS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
TOTAL COMMON STOCK (CONT'D)
Healthcare (10.0%)
ALZA Corp. 'D' 13,000 $ 623,188
Centocor, Inc. 'D' 5,500 232,031
------------
855,219
------------
Leisure & Entertainment (3.1%)
Acclaim Entertainment, Inc. 'D' 35,000 266,875
------------
Oil Services (5.2%)
Cooper Cameron Corp. 'D' 2,000 132,875
Smith International, Inc. 'D' 2,000 117,500
Transocean Offshore, Inc. 3,500 195,563
------------
445,938
------------
Pharmaceuticals (5.8%)
Lilly ( Eli ) & Co. 2,500 173,906
Genzyme Corp. 'D' 5,000 154,688
Glaxo Wellcome PLC ADR 3,000 169,688
------------
498,282
------------
Retail (3.8%)
Cendant Corp. 'D' 13,000 325,000
------------
Telecommunications & Equipment (10.2%)
3Com Corp. 'D' 8,000 274,000
Ascend Communications, Inc. 'D' 3,000 130,688
Bay Networks, Inc. 'D' 10,000 234,375
Lucent Technologies, Inc. 3,000 228,375
------------
867,438
------------
TOTAL COMMON STOCK (Cost $6,976,650) 8,390,281
------------
</TABLE>
<TABLE>
<CAPTION>
PAR
---------
(000)
<S> <C> <C>
SHORT-TERM INVESTMENTS (1.6%)
Repurchase agreement with Goldman, Sachs & Co. dated
04/30/98 at 5.47% to be Repurchased at $135,021 on 05/01/98.
(Collaterized by a pro rata amount of U.S. Treasury Notes
Ranging in par values from $39,650,000-$50,000,000,
5.75%-7.25%, 09/30/01-05/15/04. Market Value of Collateral
is $137,000 (Cost $135,000). $135 135,000
------------
TOTAL INVESTMENTS AT VALUE ( 100.0% ) (Cost $7,111,650 *) $ 8,525,281
------------
------------
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<C> <S>
ADR = American Depository Receipt
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-income producing security.
* Cost for federal income tax purposes is $7,115,583.
See Accompanying Notes to Financial Statements.
45
<PAGE>
<PAGE>
WARBURG PINCUS GROWTH & INCOME FUND
STATEMENT OF NET ASSETS
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK (91.3%)
Aerospace & Defense (4.7%)
Gulfstream Aerospace Corp. 'D' 255,300 $ 10,706,644
Litton Industries, Inc. 'D' 88,300 5,298,000
Lockheed Martin Corp. 79,900 8,898,862
Raytheon Co. Class A 315,300 17,400,619
------------
42,304,125
------------
Agriculture (0.5%)
IMC Fertilizer Group, Inc. 124,300 4,474,800
------------
Banks & Savings & Loan (3.91%)
Bank of New York Co., Inc. 105,600 6,237,000
Citicorp 146,000 21,973,000
First Chicago NBD Corp. 75,200 6,984,200
------------
35,194,200
------------
Building & Building Materials (1.28%)
USG Corp. 'D' 223,500 11,482,312
------------
Business Services (0.8%)
Block (H & R), Inc. 75,500 3,397,500
Deluxe Corp. 110,300 3,695,050
------------
7,092,550
------------
Capital Equipment (4.6%)
AlliedSignal, Inc. 172,000 7,535,750
American Standard Companies 'D' 170,500 8,301,219
Caterpillar, Inc. 78,400 4,463,900
Emerson Electric Co. 99,800 6,349,775
Harnischfeger Industries, Inc. 145,500 4,110,375
ITT Industries, Inc. 295,300 10,759,994
------------
41,521,013
------------
Chemicals (2.56%)
Ferro Corp. 178,500 5,143,031
Rhone-Poulenc SA ADR Series A 187,086 9,260,757
Union Carbide Corp. 178,800 8,671,800
------------
23,075,588
------------
</TABLE>
See Accompanying Notes to Financial Statements.
46
<PAGE>
<PAGE>
WARBURG PINCUS GROWTH & INCOME FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Computers (5.85%)
Adaptec, Inc. 'D' 54,900 $ 1,300,444
Automatic Data Processing, Inc. 61,200 4,096,575
COMPAQ Computer Corp. 'D' 665,200 18,667,175
Hewlett-Packard Co. 51,500 3,878,594
International Business Machines Corp. 159,700 18,505,237
Sun Microsystems, Inc. 'D' 147,700 6,083,394
------------
52,531,419
------------
Conglomerates (3.26%)
Harsco Corp. 230,550 10,605,300
TRW, Inc. 183,200 9,675,250
United Technologies Corp. 91,300 8,987,344
------------
29,267,894
------------
Consumer Durables (5.00%)
Chrysler Corp. 572,700 23,015,381
Ford Motor Co. 222,400 10,188,700
Maytag Corp. 76,565 3,943,097
Philips Electronics NV ADR 87,400 7,866,000
------------
45,013,178
------------
Consumer Non-Durables (2.08%)
Premark International, Inc. 272,800 9,104,700
Rubbermaid, Inc. 173,700 4,972,162
Unilever NV 63,000 4,701,375
------------
18,778,237
------------
Electronics (1.28%)
Dallas Semiconductor Corp. 82,900 3,196,831
Lexmark International Group, Inc. Class A 'D' 97,800 5,660,175
National Semiconductor Corp. 'D' 119,100 2,620,200
------------
11,477,206
------------
Energy (6.32%)
British Petroleum Co. PLC ADR 283,606 26,800,767
Burlington Resources, Inc. 192,500 9,047,500
Occidental Petroleum Corp. 293,100 8,628,131
Total SA ADR 209,800 12,325,750
------------
56,802,148
------------
Environmental Services (1.29%)
USA Waste Services, Inc. 'D' 235,700 11,564,031
------------
</TABLE>
See Accompanying Notes to Financial Statements.
47
<PAGE>
<PAGE>
WARBURG PINCUS GROWTH & INCOME FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Financial (0.5%)
Associates First Capital Corp. Class A 58,287 $ 4,356,953
------------
Financial Services (11.09%)
American Express Co. 40,350 4,115,700
Berkley (W.R.) Corp. 65,100 3,035,287
Fannie Mae 159,500 9,550,062
Finova Group, Inc. 160,300 9,387,569
Freddie Mac 123,700 5,728,856
HCC Insurance Holdings, Inc. 19,500 424,125
Lehman Brothers Holding, Inc. 91,900 6,530,644
MBIA, Inc. 173,400 12,939,975
PMI Group, Inc. 297,000 24,131,250
Provident Companies, Inc. 181,200 7,078,125
Terra Nova Bermuda Holdings, Ltd. Class A 123,200 3,773,000
Travelers Group, Inc. 65,800 4,026,138
Travelers Property Casualty Corp. 109,900 4,615,800
------------
95,336,531
------------
Food, Beverages & Tobacco (5.7%)
Anheuser-Busch Companies, Inc. 317,000 14,522,562
Corn Products International, Inc. 167,900 5,981,438
Keebler Foods Co. 248,800 7,090,800
Philip Morris Companies, Inc. 233,700 8,719,931
Ralston Purina Group 47,500 5,035,000
Sara Lee Corp. 99,500 5,926,469
Swedish Match Co. ADR 115,800 4,053,000
------------
51,329,200
------------
Healthcare (5.83%)
Baxter International, Inc. 167,600 9,291,325
Foundation Health Systems, Inc. 'D' 269,700 7,804,444
Tenet Healthcare Corp. 'D' 184,350 6,901,603
Trigon Healthcare, Inc. 'D' 513,350 15,593,006
Wellpoint Health Networks, Inc. 178,400 12,867,100
------------
52,457,478
------------
Industrial Mfg. & Processing (1.62%)
Unova, Inc. 628,000 14,601,000
------------
Leisure & Entertainment (1.95%)
Polaroid Corp. 398,950 17,553,800
------------
</TABLE>
See Accompanying Notes to Financial Statements.
48
<PAGE>
<PAGE>
WARBURG PINCUS GROWTH & INCOME FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Metals & Mining (1.49%)
Alumax, Inc. 'D' 142,600 $ 7,040,875
Aluminum Company of America 82,000 6,355,000
------------
13,395,875
------------
Office Equipment & Supplies (0.47%)
Pitney Bowes, Inc. 88,800 4,262,400
------------
Oil Services (2.22%)
Noble Drilling Corp. 'D' 214,200 6,921,338
R & B Falcon Corp. 171,690 5,504,811
------------
12,426,149
------------
Pharmaceuticals (2.35%)
American Home Products Corp 63,550 5,918,094
Merck & Co., Inc. 126,250 15,213,125
------------
21,131,219
------------
Real Estate (0.92%)
Equity Residential Properties Trust 45,800 2,249,925
------------
Retail (6.47%)
Federated Department Stores 371,500 18,273,156
May Department Stores Co. 148,400 9,154,425
Neiman-Marcus Group, Inc. 'D' 120,900 4,435,519
Payless ShoeSource, Inc. 'D' 74,512 5,327,608
Proffitt's, Inc. 'D' 107,875 4,288,031
Sears, Roebuck and Co. 153,300 9,092,606
Wal-Mart Stores, Inc. 82,900 4,191,631
------------
54,762,976
------------
Telecommunications & Equipment (6.62%)
ALLTEL Corp. 81,600 3,488,400
Ameritech Corp. 193,600 8,240,100
AT&T Corp. 165,300 9,928,331
Bell Atlantic Corp. 152,620 14,279,509
BellSouth Corp. 129,300 8,299,444
SBC Communications, Inc. 216,800 8,983,650
------------
53,219,434
------------
Transportation (1.17%)
Burlington Northern Santa Fe Corp. 50,100 4,959,900
CSX Corp. 106,400 5,586,000
------------
10,545,900
------------
</TABLE>
See Accompanying Notes to Financial Statements.
49
<PAGE>
<PAGE>
WARBURG PINCUS GROWTH & INCOME FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Utilities-Electric (2.53%)
Allegheny Energy, Inc. 161,900 $ 4,958,188
American Electric Power Co., Inc. 107,800 5,147,450
DQE, Inc. 48,400 1,663,750
Entergy Corp. 122,700 3,052,163
Illinova Corp. 118,500 3,621,656
Wisconsin Energy Corp. 144,400 4,404,200
------------
22,847,407
------------
TOTAL COMMON STOCKS (Cost $661,313,941) 821,054,948
------------
<CAPTION>
PRINCIPAL AMOUNT
----------------
<S> <C> <C>
CONVERTIBLE PREFERRED STOCK (2.1%)
Telecommunications & Equipment (0.7%)
AirTouch Communications, Inc. Series B 6.00% Convertible
(Callable 08/16/99 @ $35.96) $ 142,700 6,332,313
Real Estate (0.7%)
Equity Residential Properties Series G 7.25% Convertible
(Callable 09/15/02
@ $25.91) 238,500 6,022,125
Capital Equipment (0.7%)
Ingersoll-Rand Co. 0.78% (Convertible 5/15/01), PRIDES 297,500 6,098,750
------------
TOTAL CONVERTIBLE PREFERRED STOCK (Cost $16,661,211) 18,453,188
------------
<CAPTION>
SHARES
----------------
<S> <C> <C>
FOREIGN STOCKS (0.6%)
WPP Group PLC 800,400 5,078,700
------------
TOTAL FOREIGN STOCKS (Cost $4,169,186) 5,078,700
------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS
(MOODY'S/S&P) RATE% MATURITY DATE PAR
(000)
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS (1.2%)
Oil Services (0.8%)
Diamond Offshore Drilling, Inc. (Baa2, BBB) 3.75 2/15/07 $ 5,620 7,530,800
Retail (0.4%)
Rite Aid Corp. Convertible
Notes (Callable 09/15/00 @
$102.10) (Baa2, BBB) 5.25 9/15/02 2,999 3,381,373
------------
TOTAL CORPORATE BONDS (Cost $10,385,068) 10,912,173
------------
SHORT-TERM INVESTMENTS (4.5%)
Repurchase Agreement with Goldman, Sachs & Co. dated
04/30/98 at 5.47% to be repurchased at $40,204,108 on
05/01/98. (Collateralized by a pro rata amount of U.S.
Treasury Notes ranging in par values from
$39,650,000-$50,000,000, 5.75%-7.25%, 09/30/01-05/15/04.
Market Value of Collateral is $41,027,863.) (Cost
$40,198,000) 40,198 40,198,000
------------
</TABLE>
See Accompanying Notes to Financial Statements.
50
<PAGE>
<PAGE>
WARBURG PINCUS GROWTH & INCOME FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS AT VALUE (99.6%) (Cost $732,727,405*) $895,697,009
------------
OTHER ASSETS IN EXCESS OF LIABILITIES (0.4%) 3,657,826
------------
NET ASSETS (100.0%) (applicable to 42,676,736 Common Shares and 6,053,782 Advisor
Shares) $899,354,835
------------
------------
NET ASSET VALUE, offering and redemption price per Common Share
(787,689,207[div]42,676,736) $18.46
======
NET ASSET VALUE, offering and redemption price per Advisor Share
(111,665,628[div]6,053,782) $18.45
======
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<C> <S>
ADR = American Depository Receipt
PRIDES = Preferred Redeemable Increased
Dividends Equity Securities
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-income producing security.
* Cost for federal income tax purposes is $732,822,861.
See Accompanying Notes to Financial Statements.
51
<PAGE>
<PAGE>
WARBURG PINCUS BALANCED FUND
STATEMENT OF NET ASSETS
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- -----------
<S> <C> <C>
COMMON STOCKS (50.6%)
Aerospace & Defense (1.8%)
Loral Space & Communications, Ltd. 'D' 17,100 $ 535,444
Raytheon Co. Class A 4,000 220,750
-----------
756,194
-----------
Agriculture (0.6%)
Monsanto Co. 4,400 232,650
-----------
Banks & Savings & Loans (3.2%)
Bank of New York Co., Inc. 2,900 171,281
BankBoston Corp. 1,800 194,287
Citicorp 1,000 150,500
First Chicago NBD Corp. 2,500 232,187
Fleet Financial Group, Inc. 2,400 207,300
Riggs National Corp. 2,700 77,794
Washington Mutual, Inc. 3,850 269,741
-----------
1,303,090
-----------
Building & Building Materials (0.3%)
Walter Industries, Inc. 'D' 7,000 144,375
-----------
Business Services (2.4%)
Harte-Hanks Communications, Inc. 8,800 199,650
Harland ( John H.) Co. 2,700 48,094
PMT Services, Inc. 'D' 3,000 58,500
Robert Half International, Inc. 'D' 3,000 162,375
Sterling Commerce, Inc. 'D' 2,000 85,125
SunGard Data Systems, Inc. 'D' 2,400 85,500
Tokheim Corp. 'D' 22,750 361,156
-----------
1,000,400
-----------
Chemicals (1.2%)
Avery-Dennison Corp. 5,500 288,062
Du Pont (E.I.) de Nemours & Co. 1,600 116,500
Morton International, Inc. 2,400 76,800
-----------
481,362
-----------
Communications & Media (2.3%)
Chancellor Media Corp. 'D' 3,700 175,519
Outdoor Systems, Inc. 'D' 3,000 95,250
U.S. West Media Group 'D' 9,800 369,950
Viacom, Inc. Class B 'D' 5,000 290,000
-----------
930,719
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
52
<PAGE>
<PAGE>
WARBURG PINCUS BALANCED FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- -----------
<S> <C> <C>
COMMON STOCKS (CONT'D)
Computers (4.0%)
BMC Software, Inc. 'D' 1,700 $ 159,056
Cambridge Technology Partners, Inc. 'D' 1,500 78,375
Citrix Systems, Inc. 'D' 2,400 149,100
Compaq Computer Corp. 'D' 11,900 333,944
Harbinger Corp. 'D' 1,500 54,562
International Business Machines Corp. 4,000 463,500
National Instruments Corp. 'D' 3,000 106,500
PeopleSoft, Inc. 'D' 2,700 125,550
Platinum Technology, Inc. 'D' 2,000 51,000
Sun Microsystems, Inc. 'D' 3,300 135,919
-----------
1,657,506
-----------
Conglomerates (1.9%)
CBS Corp. 8,340 297,112
Harsco Corp. 2,300 105,800
Oglebay Norton Co. 3,600 162,900
TRW, Inc. 2,000 105,625
United Technologies Corp. 1,000 98,437
-----------
769,874
-----------
Consumer Durables(0.4%)
La-Z-Boy, Inc. 2,900 151,706
-----------
Consumer Non-Durables (0.7%)
American Safety Razor Corp. 'D' 6,100 110,562
Rubbermaid, Inc. 4,000 114,500
Westpoint Stevens, Inc. 'D' 2,400 80,400
-----------
305,462
-----------
Consumer Services (0.3%)
DeVRY, Inc. 'D' 2,000 75,750
ITT Educational Services, Inc. 'D' 1,650 48,778
-----------
124,528
-----------
Electronics (1.6%)
EA Industries, Inc. 'D' 13,000 52,812
Etec Systems, Inc. 'D' 1,500 85,125
Intel Corp. 1,900 153,544
KLA-Tencor Corp. 'D' 1,600 64,500
Maxim Integrated Products, Inc. 'D' 5,200 209,950
Vitesse Semiconductor Corp. 'D' 1,500 86,531
-----------
652,462
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
53
<PAGE>
<PAGE>
WARBURG PINCUS BALANCED FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- -----------
<S> <C> <C>
COMMON STOCKS (CONT'D)
Energy (2.4%)
British Petroleum Co. PLC ADR 2,500 $ 236,250
Burlington Resources, Inc. 2,700 126,900
Chieftain International, Inc. 'D' 2,000 44,750
EEX Corp. 'D' 17,700 171,469
Forest Oil Corp. 'D' 6,400 100,000
KCS Energy, Inc. 400 6,200
Occidental Petroleum Corp. 7,500 220,781
Ocean Energy, Inc. 'D' 3,120 76,440
-----------
982,790
-----------
Environmental Services (0.5%)
Allied Waste Industries, Inc. 'D' 2,800 77,000
USA Waste Services, Inc. 'D' 2,800 137,375
-----------
214,375
-----------
Financial Services (9.1%)
Berkshire Hathaway, Inc. Class B 'D' 100 229,500
Freddie Mac 7,800 361,237
Heller Financial, Inc. 'D' 10,000 270,000
Household International, Inc. 1,400 184,012
Legg Mason, Inc. 5,466 322,494
Leucadia National Corp. 2,900 108,569
Life Re Corp. 1,000 72,000
Long Beach Financial Corp. 'D' 7,900 103,194
Merrill Lynch & Co., Inc. 2,100 184,275
Morgan Stanley, Dean Witter, & Co. 3,200 252,400
National Western Life Insurance Co. Class A 'D' 1,500 155,625
Nationwide Financial Services, Inc. 2,700 117,112
PICO Holdings, Inc. 'D' 14,200 74,550
Provident Cos., Inc. 5,400 210,937
ReliaStar Financial Corp. 4,786 218,361
SLM Holding Corp. 'D' 4,300 183,556
Terra Nova (Bermuda) Holdings, Ltd. Class A 5,550 169,969
The PMI Group, Inc. 3,200 260,000
Travelers Group, Inc. 1,800 110,137
White River Corp. 'D' 2,400 210,000
-----------
3,797,928
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
54
<PAGE>
<PAGE>
WARBURG PINCUS BALANCED FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- -----------
<S> <C> <C>
COMMON STOCKS (CONT'D)
Food, Beverages & Tobacco (0.3%)
Anheuser-Busch Co., Inc. 2,500 $ 114,531
Keebler Foods Co. 'D' 700 19,950
-----------
134,481
-----------
Healthcare (1.5%)
Becton, Dickinson & Co. 3,900 271,537
Trigon Healthcare, Inc. 'D' 7,000 212,625
Wellpoint Health Networks, Inc. 'D' 2,000 144,250
-----------
628,412
-----------
Industrial Mfg. & Processing (1.1%)
Roanoke Electric Steel Corp. 2,550 51,637
Tyco International Ltd. 300 16,350
UNOVA, Inc. 'D' 16,000 372,000
-----------
439,987
-----------
Leisure & Entertainment (1.1%)
Coach USA, Inc. 'D' 2,000 94,875
Polaroid Corp. 6,000 264,000
SCP Pool Corp. 'D' 3,500 82,687
-----------
441,562
-----------
Lodging & Restaurants (0.2%)
Promus Hotel Corp. 'D' 2,000 90,375
-----------
Metals & Mining (0.7%)
Inland Steel Industries, Inc. 5,000 146,562
Universal Stainless & Alloy Products, Inc. 'D' 11,500 126,500
-----------
273,062
-----------
Oil Services (0.7%)
Global Industries, Ltd. 'D' 4,000 90,750
Pride International, Inc. 'D' 3,000 72,937
Smith International, Inc. 'D' 2,400 141,000
-----------
304,687
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
55
<PAGE>
<PAGE>
WARBURG PINCUS BALANCED FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- -----------
<S> <C> <C>
COMMON STOCKS (CONT'D)
Pharmaceuticals (2.5%)
Bristol-Myers Squibb Co. 3,300 $ 349,388
Elan Corp. PLC ADR 'D' 1,200 74,550
Gilead Sciences, Inc. 'D' 2,000 76,000
Merck & Co., Inc. 1,300 156,650
Warner-Lambert Co. 1,500 283,781
Watson Pharmaceuticals, Inc. 2,000 86,000
-----------
1,026,369
-----------
Publishing (0.6%)
Harcourt General, Inc. 4,000 208,750
The Petersen Cos., Inc. Class A 'D' 2,500 65,000
-----------
273,750
-----------
Real Estate (1.9%)
Equity Inns, Inc. 7,600 112,100
Healthcare Realty Trust, Inc. 9,100 255,938
Security Capital Group, Inc. Class B 6,300 190,575
U.S. Restaurant Properties, Inc. 'D' REIT 3,800 104,975
Weeks Corp. 3,500 110,250
-----------
773,838
-----------
Retail (3.9%)
AnnTaylor Stores Corp. 'D' 7,100 113,156
CVS Corp. 2,800 206,500
Family Dollar Stores, Inc. 2,100 71,400
Federated Department Stores, Inc. 'D' 3,700 181,994
Filene's Basement Corp. 'D' 15,100 83,994
Fingerhut Companies, Inc. 5,200 154,050
Home Depot, Inc. 2,350 163,619
HomeUSA, Inc. 'D' 10,100 99,738
Payless ShoeSource, Inc. 'D' 1,200 85,800
Rite Aid Corp. 8,300 266,638
Sears, Roebuck and Co. 3,400 201,663
-----------
1,628,552
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
56
<PAGE>
<PAGE>
WARBURG PINCUS BALANCED FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- -----------
<S> <C> <C>
COMMON STOCKS (CONT'D)
Telecommunications & Equipment (2.4%)
AT&T Corp. 1,700 $ 102,106
BellSouth Corp. 2,000 128,375
Essex International, Inc. 'D' 1,500 53,813
General Cable Corp. 'D' 2,300 104,219
Intermedia Communications, Inc. 'D' 1,500 109,477
McLeodUSA, Inc. Class A 'D' 1,500 69,000
QUALCOMM, Inc. 'D' 1,500 84,375
SBC Communications, Inc. 2,900 120,169
WorldCom, Inc. 'D' 5,100 218,184
-----------
989,718
-----------
Transportation (0.7%)
Heartland Express, Inc. 'D' 2,250 55,969
Landstar Systems, Inc. 'D' 2,900 94,975
M.S. Carriers, Inc. 'D' 2,100 71,400
Mark VII, Inc. 'D' 3,400 64,600
-----------
286,944
-----------
Utilities -- Electric (0.3%)
American Electric Power Co., Inc. 2,500 119,375
-----------
TOTAL COMMON STOCKS (Cost $15,840,596) 20,916,533
-----------
FOREIGN STOCKS (7.9%)
Austria (0.9%)
Radex-Heraklith Industriebeteiligungs, Inc. 3,700 186,933
VA Technologie AG 1,165 167,443
-----------
354,376
-----------
Brazil (0.1%)
Companhia de Saneamento Basico do Estado De Sao Paulo 175,000 39,772
-----------
Denmark (0.3%)
International Service System AS Class B 1,400 75,696
SAS Danmark AS 3,700 65,963
-----------
141,659
-----------
France (1.3%)
Axa-UAP SA 2,150 252,237
Total SA 1,355 160,994
Rhone Poulenc SA Class A 2,350 114,849
-----------
528,080
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
57
<PAGE>
<PAGE>
WARBURG PINCUS BALANCED FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- -----------
<S> <C> <C>
FOREIGN STOCKS (CONT'D)
Germany (0.2%)
Mannesmann AG 120 $ 94,556
-----------
Hong Kong (0.2%)
First Pacific Co., Ltd. 56,700 27,266
Guangshen Railway Co., Ltd. 42,500 7,956
Guangshen Railway Co., Ltd. ADR 2,800 27,475
-----------
62,697
-----------
Israel (0.1%)
Orbotech, Ltd. 800 28,900
-----------
Italy (0.5%)
Assicurazioni Generali SPA 7,450 224,095
-----------
Japan (0.5%)
Advantest Corp. 1,100 74,094
Tokyo Electron, Ltd. 3,300 129,872
-----------
203,966
-----------
Korea (0.1%)
L.G. Electronics 2,810 33,430
-----------
Mexico (0.2%)
PanAmerican Beverages, Inc. Class A 1,900 75,763
-----------
Netherlands (1.0%)
Internationale Nederlanden Groep 2,500 162,459
Philips Electronics NV 2,650 233,456
-----------
395,915
-----------
New Zealand (0.3%)
Brierley Investments, Ltd. 225,500 130,311
-----------
Norway (0.3%)
Smedvig ASA ADR Class B 'D' 5,600 112,000
-----------
Philippines (0.1%)
Millicom International Cellular SA 1,435 56,144
-----------
Portugal (0.7%)
Portugal Telecom SA ADR 'D' 5,200 279,500
-----------
Switzerland (0.4%)
Baer Holdings Class B 34 93,844
Sulzer AG 135 96,754
-----------
190,598
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
58
<PAGE>
<PAGE>
WARBURG PINCUS BALANCED FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- -----------
<S> <C> <C>
FOREIGN STOCKS (CONT'D)
United Kingdom (0.7%)
Glaxo Wellcome PLC 3,200 $ 90,421
Pilkington PLC 49,500 103,868
Williams PLC 14,500 111,279
-----------
305,568
-----------
TOTAL FOREIGN STOCKS (Cost $26,38,191) 3,257,330
-----------
FOREIGN PREFERRED STOCKS (0.1%)
Brazil (0.1%)
Telecomunicacoes de Sao Paulo SA 203,000 69,026
-----------
TOTAL FOREIGN PREFERRED STOCKS (Cost $61,522) 69,026
-----------
PREFERRED STOCKS (1.7%)
Real Estate (1.2%)
Equity Residential Properties Series C 9.125% (Callable
9/9/06 @ $25.00) (REIT) 10,000 268,125
Ingersoll-Rand Co. 0.78% (Convertible 5/15/01), PRIDES 9,500 194,750
Security Cap Industrial Trust Series C 8.540% (Callable
11/13/26 @ $50.00) 2,000 106,920
-----------
Capital Equipment (0.5%)
MEPC International Capital Series A 9.125% (Callable
9/21/05 @ $25.00) 4,500 120,094
-----------
TOTAL PREFERRED STOCKS (Cost $689,151) 689,889
-----------
</TABLE>
<TABLE>
<CAPTION>
RATINGS
(MOODY'S/S&P) RATE% MATURITY DATE
-------------- ------ ------------- PAR
---------
(000)
<S> <C> <C> <C> <C> <C>
U.S. CORPORATE BONDS (7.8%)
Banks & Savings & Loans
(4.3%)
African Development Bank
Debentures (Yankee Bond
6.37) (Aa1, AA-) 9.300 07/01/00 $ 370 394,975
Bayerische Landesbank
Deposit Note (Callable
02/09/03) (Aaa, AAA) 6.200 02/09/06 350 347,813
Citicorp Subordinated Note (A1, A) 7.125 03/15/04 300 311,625
Countrywide Home Loan
Medium Term Note (A3, A) 6.380 10/08/02 250 250,938
Deutsche Bank Financial
Notes (Aa2, AA+) 7.500 04/25/09 200 214,750
First Union Corp.
Subordinated Debentures
(Putable 10/15/05 @ $100) (A2, A-) 6.550 10/15/05 250 255,938
-----------
1,776,039
-----------
Capital Equipment (0.6%)
Ingersoll-Rand Meduim Term
Note (Putable
11/19/2003 @ $100) (A3, A-) 6.230 11/19/03 245 246,225
-----------
Financial Services (0.6%)
Smith Barney Holdings Notes (A2, A) 6.375 10/01/04 250 250,938
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
59
<PAGE>
<PAGE>
WARBURG PINCUS BALANCED FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(MOODY'S/S&P) RATE% MATURITY DATE PAR VALUE
-------------- ------ ------------- ---------- -----------
(000)
<S> <C> <C> <C> <C> <C>
U.S. CORPORATE BONDS (CONT'D)
Industrial Mfg. & Processing
(0.6%)
Times Mirror Co. Notes
(Putable 09/15/04 @ $100) (A2, A+) 6.610 09/15/04 $ 250 $ 256,875
-----------
Leisure & Entertainment
(0.4%)
Lowe's Companies (Putable
05/15/07 @ $100) (A2, A) 7.110 05/15/37 160 169,400
-----------
Oil Services (0.5%)
Diamond Offshore Drilling,
Inc.(Callable 02/22/01 @
$102.08) (Baa2, BBB+) 3.750 02/15/07 150 201,000
-----------
Retail (0.8%)
Penney (J.C.) & Co.
Debentures (Putable
08/15/03 @ $100) (A2, A) 6.900 08/15/26 325 338,813
-----------
TOTAL U.S. CORPORATE BONDS (Cost $3,185,624) 3,239,290
-----------
U.S. TREASURY OBLIGATIONS (19.1%)
U.S. Treasury Notes (7.6%)
U.S. Treasury Notes (Aaa,AAA) 8.500 11/15/00 50 53,398
U.S. Treasury Notes (Aaa,AAA) 8.000 05/15/01 675 719,476
U.S. Treasury Notes (Aaa,AAA) 6.500 05/31/01 1,250 1,280,312
U.S. Treasury Notes (Aaa,AAA) 7.500 02/15/05 1,000 1,098,270
-----------
3,151,456
-----------
U.S. Treasury Strip Notes
(11.5%)
U.S. Treasury Strip (Aaa,AAA) 5.550 * 08/15/99 500 465,700
U.S. Treasury Strip (Aaa,AAA) 5.860 * 05/15/01 2,000 1,689,980
U.S. Treasury Strip (Aaa,AAA) 5.390 * 05/15/02 1,740 1,388,816
U.S. Treasury Strip (Aaa,AAA) 5.810 * 02/15/05 1,760 1,197,750
-----------
4,742,246
-----------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $7,817,541) 7,893,702
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
60
<PAGE>
<PAGE>
WARBURG PINCUS BALANCED FUND
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
(MOODY'S/S&P) RATE% MATURITY DATE PAR VALUE
-------------- ------ ------------- ---------- -----------
(000)
<S> <C> <C> <C> <C> <C>
MORTGAGE BACKED SECURITIES (10.3%)
Fannie Mae, Series 1998-M4,
Class B REMIC 98-M4 (Aaa,AAA) 6.424 12/25/23 $ 600 $ 600,720
Federal Home Loan Bank
(Putable 12/03/ 02 @ 100) (Aaa, NR) 5.680 12/03/02 600 603,798
GE Capital Mortgage
Services, Inc. Series
1994-7
Class A10 (Aaa, AAA) 6.000 02/25/09 483 471,922
General Motors Acceptance
Corp. Class A2 98 (Aaa,AAA) 6.700 01/08/08 500 505,903
Government National
Mortgage Association Pass
Through Pool #002217X (Aaa, AAA) 6.500 08/15/03 8 7,561
Morgan Stanley Mortgage
Trust Series 40 Class 8 (AAA) 7.000 07/20/21 600 610,413
Mortgage Capital Funding,
Inc. Series A2 9.55 AL (NR, AAA) 6.663 11/19/07 800 815,500
Nomura Asset Securities
Corp. (A,NR) 6.690 03/16/13 600 607,969
-----------
TOTAL MORTGAGE BACKED SECURITIES (Cost $4,195,768) 4,223,796
-----------
SHORT-TERM INVESTMENTS (2.3%)
Repurchase agreement with Goldman, Sachs & Co. dated
04/30/98 at 5.47% to be repurchased at $972,148 on 05/01/98.
(Collateralized by a pro rata amount of U.S. Treasury Notes ranging in
par values from $39,650,000-$50,000,000, 5.750%-7.250%,
09/03/01-05/15/04. Market value of collateral is $992,120.) (Cost
$972,000) 972 $972,000
TOTAL INVESTMENTS AT VALUE (99.8%) (Cost $35,400,393)* 41,261,556
OTHER ASSETS IN EXCESS OF LIABILITIES (0.2%) 83,721
-----------
NET ASSETS (100.0%) (applicable to 2,911,335 Common Shares and 12,837 Advisor Shares) $41,345,277
-----------
-----------
NET ASSET VALUE, offering and redemption price per Common Share
($41,164,165[div]2,911,335) $14.14
======
NET ASSET VALUE, offering and redemption price per Advisor Share ($181,112[div]12,837) $14.11
======
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<C> <S>
ADR = American Depository Receipt
GDR = Global Depository Receipt
REIT = Real Estate Investment Trust
PRIDES = Preferred Redeemable Increased Dividends Equity Securities
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-income producing security.
# Rate shown reflects yield to maturity on date of purchase.
* Cost for federal income tax purpose is $35,395,491.
See Accompanying Notes to Financial Statements.
61
<PAGE>
<PAGE>
WARBURG PINCUS STRATEGIC VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments at value (Cost $7,111,650) $8,525,281
Receivable for investment securities sold 923,859
Deferred organizational/offering costs 11,720
Receivable for fund shares sold 0
Other assets 235
----------
TOTAL ASSETS 9,464,278
----------
LIABILITIES
Payable for investment securities purchased 47,495
Accrued expenses payable 30,619
----------
TOTAL LIABILITIES 78,114
----------
NET ASSETS, applicable to 764,772 Common Shares outstanding and 15 Advisor
Shares outstanding $9,386,164
----------
----------
NET ASSET VALUE, offering and redemption price per Common Share
($9,385,977[div]764,772) $12.27
======
NET ASSET VALUE, offering and redemption price per Advisor Share
($187[div]15.307) $12.22
======
</TABLE>
See Accompanying Notes to Financial Statements.
62
<PAGE>
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
63
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
STATEMENTS OF OPERATIONS
For the Six Months Ended April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
WARBURG PINCUS WARBURG PINCUS WARBURG PINCUS
CAPITAL APPRECIATION EMERGING GROWTH POST-VENTURE CAPITAL
FUND FUND FUND
-------------------- --------------- --------------------
INVESTMENT INCOME:
Dividends $ 3,323,834 $ 5,112,576 $ 77,324
Interest 573,067 3,423,506 105,266
Foreign taxes withheld (13,857) (6,180) (1,125)
----------- --------------- ----------
Total investment income 3,883,044 8,542,262 181,465
----------- --------------- ----------
EXPENSES:
Investment advisory 2,352,714 9,138,272 645,521
Administrative services 650,165 1,770,991 103,855
Audit 12,267 16,920 6,447
Custodian/Sub-custodian 59,595 165,443 15,490
Directors/Trustees 4,959 5,333 3,720
Insurance 4,215 43,364 1,240
Interest 0 0 2,902
Legal 27,245 63,947 24,795
Offering/Organizational costs 0 0 15,010
Printing 19,052 12,397 14,876
Registration 45,042 78,360 31,241
Shareholder servicing/Distribution 88,098 1,044,459 129,248
Transfer agent 118,641 572,601 114,685
Miscellaneous 24,891 38,344 17,356
----------- --------------- ----------
3,406,884 12,950,431 1,126,386
Less: fees waived, expenses reimbursed and
transfer agent offsets (16,769) (50,312) (274,154)
----------- --------------- ----------
Total expenses 3,390,115 12,900,119 852,232
----------- --------------- ----------
Net investment income (loss) 492,929 (4,357,857) (670,767)
----------- --------------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENTS AND FOREIGN CURRENCY RELATED
ITEMS:
Net realized gain (loss) from security
transactions 38,278,100 79,578,123 7,344,525
Net realized loss from foreign currency
related items 0 0 0
Net change in unrealized appreciation
(depreciation) from investments and
foreign currency related items 86,512,606 219,168,899 8,816,424
----------- --------------- ----------
Net realized and unrealized gain (loss)
from investments and
foreign currency related items 124,790,706 298,747,022 16,160,949
----------- --------------- ----------
Net increase in net assets resulting from
operations $125,283,635 $ 294,389,165 $ 15,490,182
----------- --------------- ----------
----------- --------------- ----------
</TABLE>
- --------------------------------------------------------------------------------
See Accompanying Notes to Financial Statements.
64
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
WARBURG PINCUS WARBURG PINCUS WARBURG PINCUS WARBURG PINCUS
SMALL COMPANY VALUE HEALTH SCIENCES SMALL COMPANY GROWTH STRATEGIC
FUND FUND FUND VALUE FUND
------------------- --------------- -------------------- --------------
$ 720,818 $ 124,055 $ 9,746 $ 38,906
433,233 48,063 23,218 42,846
0 (3,454) 0 0
-------- --------------- -------- --------------
1,154,051 168,664 32,964 81,752
-------- --------------- -------- --------------
946,741 151,653 61,667 59,705
189,348 30,607 12,815 12,198
6,454 5,966 5,951 5,961
25,999 18,272 13,417 8,640
3,720 3,720 3,720 3,720
992 49 44 70
0 4,581 0 0
17,356 11,092 9,918 19,365
7,390 25,779 28,287 21,084
7,182 5,248 4,641 5,826
30,909 13,056 10,629 11,487
236,929 37,913 15,417 14,926
112,088 22,417 11,521 5,084
11,428 7,214 5,020 4,337
-------- --------------- -------- --------------
1,596,536 337,567 183,047 172,403
(5,294) (96,439) (96,713) (85,830)
-------- --------------- -------- --------------
1,591,242 241,128 86,334 86,573
-------- --------------- -------- --------------
(437,191) (72,464) (53,370) (4,821)
-------- --------------- -------- --------------
6,971,506 736,627 231,236 777,763
0 0 0 0
2,988,484 5,906,485 978,951 794,347
-------- --------------- -------- --------------
9,959,990 6,643,112 1,210,187 1,572,110
-------- --------------- -------- --------------
$ 9,522,799 $ 6,570,648 $1,156,817 $1,567,289
-------- --------------- -------- --------------
-------- --------------- -------- --------------
</TABLE>
- --------------------------------------------------------------------------------
65
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
STATEMENTS OF OPERATIONS (CONT'D)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WARBURG PINCUS WARBURG PINCUS
GROWTH & INCOME BALANCED
FUND FUND
--------------- --------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 6,087,661 $ 140,467
Interest 1,811,637 431,329
Foreign taxes withheld (20,822) (4,838)
--------------- --------------
Total investment income 7,878,476 566,958
--------------- --------------
EXPENSES:
Investment advisory 2,885,985 177,539
Administrative services 893,569 54,207
Audit 20,264 5,645
Custodian/Sub-custodian 65,166 25,506
Directors/Trustees 3,819 3,916
Insurance 20,617 992
Interest 439 0
Legal 34,860 16,213
Offering/Organizational costs 0 0
Printing 49,392 3,697
Registration 44,179 25,878
Shareholder servicing/Distribution 243,223 49,521
Transfer agent 458,253 26,938
Miscellaneous 25,470 3,053
--------------- --------------
4,745,236 393,105
Less: fees waived, expenses reimbursed and transfer agent
offsets (19,092) (126,592)
--------------- --------------
Total expenses 4,726,144 266,513
--------------- --------------
Net investment income (loss) 3,152,332 300,445
--------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS AND
FOREIGN CURRENCY RELATED ITEMS:
Net realized gain (loss) from security transactions 34,945,742 2,143,207
Net realized loss from foreign currency related items (4,660) (2,769)
Net change in unrealized appreciation (depreciation) from
investments and
foreign currency related items 90,293,984 1,165,774
--------------- --------------
Net realized and unrealized gain (loss) from investments
and
foreign currency related items 125,235,066 3,306,212
--------------- --------------
Net increase in net assets resulting from operations $ 128,387,398 $3,606,657
--------------- --------------
--------------- --------------
</TABLE>
- --------------------------------------------------------------------------------
See Accompanying Notes to Financial Statements.
66
<PAGE>
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
67
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WARBURG PINCUS WARBURG PINCUS
CAPITAL APPRECIATION EMERGING GROWTH
FUND FUND
------------------------------ -------------------------------
FOR THE FOR THE
SIX MONTHS FOR THE SIX MONTHS FOR THE
ENDED YEAR ENDED ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
-------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ 492,929 $ 2,836,298 $ (4,357,857) $ (11,348,164)
Net realized gain (loss) from security
transactions 38,278,100 111,900,128 79,578,123 121,625,395
Net realized loss from futures
contracts 0 0 0 0
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 86,512,606 25,907,351 219,168,899 204,574,943
-------------- ------------- -------------- --------------
Net increase in net assets
resulting from operations 125,283,635 140,643,777 294,389,165 314,852,174
-------------- ------------- -------------- --------------
FROM DISTRIBUTIONS:
Dividends from net investment income:
Common Shares (2,188,710) (2,397,108) 0 0
Advisor Shares 0 (7,341) 0 0
Distributions from realized gains:
Common Shares (106,773,769) (44,111,908) (92,762,031) (2,393,545)
Advisor Shares (6,058,534) (2,454,855) (25,707,966) (797,896)
Distributions in excess of capital
gains:
Common Shares 0 0 0 0
Advisor Shares 0 0 0 0
-------------- ------------- -------------- --------------
Net decrease in net assets from
distributions (115,021,013) (48,971,212) (118,469,997) (3,191,441)
-------------- ------------- -------------- --------------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 104,990,446 230,321,097 483,413,008 781,530,558
Reinvested dividends 111,165,033 45,501,901 114,956,027 3,051,789
Net asset value of shares redeemed (110,601,125) (176,950,390) (467,414,029) (590,806,401)
-------------- ------------- -------------- --------------
Net increase (decrease) in net
assets from capital share
transactions 105,554,354 98,872,608 130,955,006 193,775,946
-------------- ------------- -------------- --------------
Net increase (decrease) in net
assets 115,816,976 190,545,173 306,874,174 505,436,679
NET ASSETS:
Beginning of period 621,692,192 431,147,019 1,972,816,791 1,467,380,112
-------------- ------------- -------------- --------------
End of period $ 737,509,168 $ 621,692,192 $2,279,690,965 $1,972,816,791
-------------- ------------- -------------- --------------
-------------- ------------- -------------- --------------
Undistributed net investment income $ 381,810 $ 2,077,591 $ 0 $ 0
-------------- ------------- -------------- --------------
-------------- ------------- -------------- --------------
</TABLE>
See Accompanying Notes to Financial Statements.
68
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WARBURG PINCUS WARBURG PINCUS WARBURG PINCUS
POST-VENTURE CAPITAL SMALL COMPANY VALUE HEALTH SCIENCES
FUND FUND FUND
----------------------------------- ----------------------------------- --------------------------------------
FOR THE FOR THE FOR THE FOR THE PERIOD
SIX MONTHS FOR THE SIX MONTHS FOR THE SIX MONTHS DECEMBER 31, 1996
ENDED YEAR ENDED ENDED YEAR ENDED ENDED (COMMENCEMENT OF
APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998 OPERATIONS) THROUGH
(UNAUDITED) 1997 (UNAUDITED) 1997 (UNAUDITED) OCTOBER 31, 1997
-------------- ---------------- -------------- ---------------- -------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
$ (670,767) $ (1,728,895) $ (437,191) $ (1,097,451) $ (72,464) $ (29,767)
7,344,525 7,402,996 6,971,506 21,703,083 736,627 1,165,731
0 0 0 0 0 0
0 (3,944) 0 0 0 0
8,816,424 4,279,725 2,988,484 22,597,554 5,906,485 1,814,324
-------------- ---------------- -------------- ---------------- -------------- ----------
15,490,182 9,949,882 9,522,799 43,203,186 6,570,648 2,950,288
-------------- ---------------- -------------- ---------------- -------------- ----------
0 0 0 0 (65,740) 0
0 0 0 0 0 0
0 0 (20,763,234) (1,184,453) (1,174,850) 0
0 0 (35,215) (56) 0 0
0 0 0 0 0 0
0 0 0 0 0 0
-------------- ---------------- -------------- ---------------- -------------- ----------
0 0 (20,798,449) (1,184,509) (1,240,590) 0
-------------- ---------------- -------------- ---------------- -------------- ----------
20,705,055 67,881,239 34,997,388 258,418,030 39,169,198 23,788,806
0 0 19,972,777 1,093,316 1,167,405 0
(40,009,309) (133,272,027) (101,167,550) (161,650,157) (18,763,514) (8,592,805)
-------------- ---------------- -------------- ---------------- -------------- ----------
(19,304,254) (65,390,788) (46,197,385) 97,861,189 21,573,089 15,196,001
-------------- ---------------- -------------- ---------------- -------------- ----------
(3,814,072) (55,440,906) (57,473,035) 139,879,866 26,903,147 18,146,289
109,844,412 165,285,318 223,929,833 84,049,967 18,246,289 100,000
-------------- ---------------- -------------- ---------------- -------------- ----------
$ 106,030,340 $ 109,844,412 $ 166,456,798 $ 223,929,833 $ 45,149,436 $18,246,289
-------------- ---------------- -------------- ---------------- -------------- ----------
-------------- ---------------- -------------- ---------------- -------------- ----------
$ 0 $ 0 $ 0 $ 0 $ 0 $ 60,851
-------------- ---------------- -------------- ---------------- -------------- ----------
-------------- ---------------- -------------- ---------------- -------------- ----------
</TABLE>
69
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WARBURG PINCUS WARBURG PINCUS
SMALL COMPANY GROWTH STRATEGIC VALUE
FUND FUND
-------------------------------------- --------------------------------------
FOR THE FOR THE PERIOD FOR THE FOR THE PERIOD
SIX MONTHS DECEMBER 31, 1996 SIX MONTHS DECEMBER 31, 1996
ENDED (COMMENCEMENT OF ENDED (COMMENCEMENT OF
APRIL 30, 1998 OPERATIONS) THROUGH APRIL 30, 1998 OPERATIONS) THROUGH
(UNAUDITED) OCTOBER 31, 1997 (UNAUDITED) OCTOBER 31, 1997
-------------- ------------------- -------------- -------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income $ (53,370) $ (36,455) $ (4,821) $ 23,511
Net realized gain from security
transactions 231,236 (354,471) 777,763 621,060
Net realized gain (loss) from
foreign currency related
items 0 0 0 (33,411)
Net change in unrealized
appreciation (depreciation)
from investments and foreign
currency related items 0 0 0 0
Net realized loss from futures
contracts 978,951 1,277,108 794,347 619,284
-------------- ---------- -------------- --------
Net increase in net assets
resulting from operations 1,156,817 886,182 1,567,289 1,230,444
-------------- ---------- -------------- --------
FROM DISTRIBUTIONS:
Dividends from net investment
income:
Common Shares (62,775) 0 (146,958) 0
Advisor Shares 0 0 0 0
Distributions from realized
gains:
Common Shares 0 0 (587,833) 0
Advisor Shares 0 0 (9) 0
Distributions in excess of
capital gains:
Common Shares 0 0 0 0
Advisor Shares 0 0 0 0
-------------- ---------- -------------- --------
Net decrease in net assets
from distributions (62,775) 0 (734,800) 0
-------------- ---------- -------------- --------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 6,355,310 21,383,734 1,417,306 14,786,437
Reinvested dividends 53,995 0 687,480 0
Net asset value of shares
redeemed (5,464,688) (10,393,044) (5,659,583) (4,008,409)
-------------- ---------- -------------- --------
Net increase (decrease) in
net assets from capital
share transactions 944,617 10,990,690 (3,554,797) 10,778,028
-------------- ---------- -------------- --------
Net increase (decrease) in
net assets 2,038,659 11,876,872 (2,722,308) 12,008,472
NET ASSETS:
Beginning of period 11,976,872 100,000 12,108,472 100,000
-------------- ---------- -------------- --------
End of period $ 14,015,531 $ 11,976,872 $ 9,386,164 $12,108,472
-------------- ---------- -------------- --------
-------------- ---------- -------------- --------
Undistributed net investment
income $ 0 $ 61,322 $ 0 $ 121,045
-------------- ---------- -------------- --------
-------------- ---------- -------------- --------
</TABLE>
See Accompanying Notes to Financial Statements.
70
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WARBURG PINCUS
GROWTH & INCOME WARBURG PINCUS
FUND BALANCED FUND
------------------------------------------------------- -------------------------------------------------------
FOR THE FOR THE
SIX MONTHS FOR THE SIX MONTHS FOR THE
ENDED TWO MONTHS FOR THE ENDED TWO MONTHS FOR THE
APRIL 30, 1998 ENDED YEAR ENDED APRIL 30, 1998 ENDED YEAR ENDED
(UNAUDITED) OCTOBER 31, 1997 AUGUST 31, 1997 (UNAUDITED) OCTOBER 31, 1997 AUGUST 31, 1997
-------------- ---------------- --------------- -------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
$ 3,152,332 $ 839,400 $ 4,686,277 $ 300,445 $ 92,017 $ 621,101
34,945,742 24,005,015 88,134,951 2,143,207 1,219,920 2,259,328
0 0 0 0 0 0
(4,660) 0 0 (2,769) 590 (1,211)
90,293,984 (19,596,522) 41,534,862 1,165,774 (755,058) 4,514,953
-------------- ---------------- --------------- -------------- -------- ---------------
128,387,398 5,247,893 134,356,090 3,606,657 557,469 7,394,171
-------------- ---------------- --------------- -------------- -------- ---------------
(2,887,807) (1,281,060) (4,434,607) (345,370) (125,542) (655,603)
(240,637) (90,595) (348,996) (1,316) (385) (1,449)
(96,860,728) 0 0 (3,441,034) 0 (395,800)
(14,171,470) 0 0 (14,992) 0 (809)
0 0 0 0 0 0
0 0 0 0 0 0
-------------- ---------------- --------------- -------------- -------- ---------------
(114,160,642) (1,371,655) (4,783,603) (3,802,712) (125,927) (1,053,661)
-------------- ---------------- --------------- -------------- -------- ---------------
223,311,798 45,408,918 276,013,445 7,305,193 2,285,470 19,977,419
110,709,671 1,309,646 4,560,726 3,700,372 122,038 1,014,239
(145,026,728) (40,487,822) (531,312,507) (7,915,987) (3,462,909) (19,120,778)
-------------- ---------------- --------------- -------------- -------- ---------------
188,994,741 6,230,742 (250,738,336) 3,089,578 (1,055,401) 1,870,880
-------------- ---------------- --------------- -------------- -------- ---------------
203,221,497 10,106,980 (121,165,849) 2,893,523 (623,859) 8,211,390
696,133,338 686,026,358 807,192,207 38,451,754 39,075,613 30,864,223
-------------- ---------------- --------------- -------------- -------- ---------------
$ 899,354,835 $696,133,338 $ 686,026,358 $ 41,345,277 $ 38,451,754 $ 39,075,613
-------------- ---------------- --------------- -------------- -------- ---------------
-------------- ---------------- --------------- -------------- -------- ---------------
$ 19,228 $ 0 $ 577,858 $ 0 $ 38,284 $ 71,417
-------------- ---------------- --------------- -------------- -------- ---------------
-------------- ---------------- --------------- -------------- -------- ---------------
</TABLE>
71
<PAGE>
<PAGE>
WARBURG PINCUS CAPITAL APPRECIATION FUND
FINANCIAL HIGHLIGHTS
(For a Common Share of the Fund Outstanding Throughout Each Year)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
APRIL 30, FOR THE YEAR ENDED OCTOBER 31,
1998 ------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $21.09 $17.95 $16.39 $14.29 $15.32 $13.30
----- ------ ------ ------ ------ ------
Income from Investment
Operations:
Net Investment Income 0.01 0.11 0.08 0.04 0.04 0.05
Net Gain on Securities
(both realized and
unrealized) 3.57 4.93 3.53 3.08 0.17 2.78
----- ------ ------ ------ ------ ------
Total from Investment
Operations 3.58 5.04 3.61 3.12 0.21 2.83
----- ------ ------ ------ ------ ------
Less Distributions:
Dividends from Net
Investment Income (0.08) (0.10) (0.01) (0.04) (0.05) (0.05)
Distributions from Realized
Gains (3.81) (1.80) (2.04) (0.98) (1.19) (0.76)
----- ------ ------ ------ ------ ------
Total Distributions (3.89) (1.90) (2.05) (1.02) (1.24) (0.81)
----- ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $20.78 $21.09 $17.95 $16.39 $14.29 $15.32
----- ------ ------ ------ ------ ------
----- ------ ------ ------ ------ ------
Total Return 20.03%'D' 30.98% 24.67% 24.05% 1.65% 22.19%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period
(000s) 7$00,635 $587,091 $407,707 $235,712 $159,346 $159,251
Ratios to average daily net
assets:
Operating expenses .98%*@ 1.01%@ 1.04%@ 1.12% 1.05% 1.01%
Net investment income .17%* .54% .59% .31% .26% .30%
Decrease reflected in above
operating expense ratios
due to
waivers/reimbursements .00% .00% .00% .00% .01% .00%
Portfolio Turnover Rate 87.83%'D' 238.11% 170.69% 146.09% 51.87% 48.26%
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-annualized.
* Annualized.
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements resulted in a reduction to the
Common Shares net expense ratio by .00% for the six months ended April 30,
1998 and by .01% and .01% for the year or period ended October 31, 1997 and
1996, respectively. The Common Shares' operating expense ratio after
reflecting these arrangements were .98% for the six months ended April 30,
1998, 1.00% and 1.03% for the year or period ended October 31, 1997 and 1996
respectively.
See Accompanying Notes to Financial Statements.
72
<PAGE>
<PAGE>
WARBURG PINCUS EMERGING GROWTH FUND
FINANCIAL HIGHLIGHTS
(For a Common Share of the Fund Outstanding Throughout Each Year)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE YEAR ENDED OCTOBER 31,
APRIL 30, 1998 ------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
-------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $39.66 $32.80 $29.97 $22.38 $23.74 $18.28
----- ------ ------ ------ ------ ------
Income from Investment
Operations:
Net Investment Loss (0.02) (0.19) (0.02) (0.05) (0.06) (0.10)
Net Gain on Securities
(both realized and
unrealized) 5.56 7.12 4.60 7.64 0.06 5.93
----- ------ ------ ------ ------ ------
Total from
Investment
Operations 5.54 6.93 4.58 7.59 0.00 5.83
----- ------ ------ ------ ------ ------
Less Distributions:
Dividends from Net
Investment Income -- -- -- -- -- --
Distributions from
Realized Gains (2.39) (0.07) (1.75) -- (1.36) (0.37)
----- ------ ------ ------ ------ ------
Total Distributions (2.39) (0.07) (1.75) -- (1.36) (0.37)
----- ------ ------ ------ ------ ------
NET ASSET VALUE, END OF
PERIOD $42.81 $39.66 $32.80 $29.97 $22.38 $23.74
----- ------ ------ ------ ------ ------
----- ------ ------ ------ ------ ------
Total Return 15.13%'D' 21.18% 16.14% 33.91% .16% 32.28%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period
(000s) 1,8$48,038 $1,515,385 $1,104,684 $487,537 $240,664 $165,525
Ratios to average daily net
assets:
Operating expenses 1.18%*@ 1.22%@ 1.28%@ 1.26% 1.22% 1.23%
Net investment loss (.34%)* (.59%) (.63%) (.58%) (.58%) (.60%)
Decrease reflected in
above operating
expense ratios due to
waivers/reimbursements -- -- -- -- .04% --
Portfolio Turnover Rate 40.21%'D' 87.03% 65.77% 84.82% 60.38% 68.35%
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-annualized.
* Annualized.
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements resulted in a reduction to the
Common Shares net expense ratio by .01% for the six months ended April 30,
1998 and by .01% and .01% for the year or period ended October 31, 1997 and
1996, respectively. The Common Shares' operating expense ratio after
reflecting these arrangements were 1.17% for the six months ended April 30,
1998, 1.21% and 1.27% for the year or period ended October 31, 1997 and 1996
respectively.
See Accompanying Notes to Financial Statements.
73
<PAGE>
<PAGE>
WARBURG PINCUS POST-VENTURE CAPITAL FUND
FINANCIAL HIGHLIGHTS
(For a Common Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX SEPTEMBER 29, 1995
MONTHS ENDED FOR THE YEAR ENDED OCTOBER (COMMENCEMENT OF
APRIL 30, 31, OPERATIONS)
1998 ---------------- THROUGH
(UNAUDITED) 1997 1996 OCTOBER 31, 1995
------------ ----------- ----------- ------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $17.61 $ 16.03 $ 10.69 $10.00
----- ----- ----- -----
Income from Investment Operations:
Net Investment Loss (0.23) (0.35) (0.11) --
Net Gain on Securities and Foreign
Currency Related Items (both
realized and unrealized) 3.15 1.93 5.45 0.69
----- ----- ----- -----
Total from Investment Operations 2.92 1.58 5.34 0.69
----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $20.53 $ 17.61 $ 16.03 $10.69
----- ----- ----- -----
----- ----- ----- -----
Total Return 16.58%'D' 9.86% 49.95% 6.90%'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $105,980 $109,575 $165,081 $3,024
Ratios to average daily net assets:
Operating expenses 1.66%*@ 1.66%@ 1.66%@ 1.65%*
Net investment income (loss) (1.30%)* (1.27%) (1.13%) .25%*
Decrease reflected in above
operating expense ratios due to
waivers/reimbursements .53%* .41% .66% 23.76%*
Portfolio Turnover Rate 53.59%'D' 197.56% 168.46% 16.90%'D'
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements resulted in a reduction to the
Common Shares net expense ratio by .01% for the six months ended April 30,
1998 and by .01% and .01% for the year or period ended October 31, 1997 and
1996, respectively. The Common Shares' operating expense ratio after
reflecting these arrangements were 1.65% for the six months ended April 30,
1998, 1.65% and 1.65% for the year or period ended October 31, 1997 and 1996
respectively.
'D' Non-annualized.
* Annualized.
See Accompanying Notes to Financial Statements.
74
<PAGE>
<PAGE>
WARBURG PINCUS SMALL COMPANY VALUE FUND
FINANCIAL HIGHLIGHTS
(For a Common Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX FOR THE PERIOD
MONTHS ENDED DECEMBER 29, 1995
APRIL 30, FOR THE (COMMENCEMENT OF
1998 YEAR ENDED OPERATIONS) THROUGH
(UNAUDITED) OCTOBER 31, 1997 OCTOBER 31, 1996
------------ ---------------- -------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $18.77 $14.38 $ 10.00
----- ----- -----
Income from Investment Operations:
Net Investment Loss (0.07) (0.08) (0.02)
Net Gain on Securities (both realized
and unrealized) 0.94 4.64 4.40
----- ----- -----
Total from Investment Operations 0.87 4.56 4.38
----- ----- -----
Less Distributions:
Dividends from Net Investment Income -- -- --
Distributions from Realized Gains (1.93) (0.17) --
----- ----- -----
Total Distributions (1.93) (0.17) --
----- ----- -----
NET ASSET VALUE, END OF PERIOD $17.71 $18.77 $ 14.38
----- ----- -----
----- ----- -----
Total Return 5.85%'D' 32.05% 43.80%'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $166,385 $223,675 $84,045
Ratios to average daily net assets:
Operating expenses 1.69%*@ 1.70%@ 1.75%@*
Net investment loss (.46%)* (.63%) (.43%)*
Decrease reflected in above operating
expense ratios due to
waivers/reimbursements .00%* .03% .44%*
Portfolio Turnover Rate 34.26%'D' 105.87% 43.14%'D'
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements resulted in a reduction to the
Common Shares net expense ratio by .01% for the six months ended April 30,
1998 and by .01% and .00% for the year or period ended October 31, 1997 and
1996, respectively. The Common Shares' operating expense ratio after
reflecting these arrangements were 1.68% for the six months ended April 30,
1998, 1.69% and 1.75% for the year or period ended October 31, 1997 and 1996
respectively.
'D' Non-annualized.
* Annualized.
See Accompanying Notes to Financial Statements.
75
<PAGE>
<PAGE>
WARBURG PINCUS HEALTH SCIENCES FUND
FINANCIAL HIGHLIGHTS
(For a Common Share of the Fund Outstanding Throughout the Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX FOR THE PERIOD
MONTHS ENDED DECEMBER 31, 1996
APRIL 30, (COMMENCEMENT OF
1998 OPERATIONS) THROUGH
(UNAUDITED) OCTOBER 31, 1997
------------ -------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $12.22 $ 10.00
----- -----
Income from Investment Operations:
Net Investment Loss 0.01 (0.02)
Net Gain on Securities (both realized and unrealized) 2.83 2.24
----- -----
Total from Investment Operations 2.84 2.22
----- -----
Less Distributions:
Dividends from Net Investment Income (0.04) --
Distributions from Realized Gains (0.68) --
----- -----
Total Distributions (0.72) --
----- -----
NET ASSET VALUE, END OF PERIOD $14.34 $ 12.22
----- -----
----- -----
Total Return 24.64%'D' 22.20%'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $45,149 $18,246
Ratios to average daily net assets:
Operating expenses 1.59%@ 1.59%@*
Net investment loss (.48%)* (.24%)*
Decrease reflected in above operating expense ratio
due to
waivers/reimbursements .63%* 1.83%*
Portfolio Turnover Rate 42.29%'D' 159.57%'D'
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements had no effect on the Fund's expense
ratio.
'D' Non-annualized.
* Annualized.
See Accompanying Notes to Financial Statements.
76
<PAGE>
<PAGE>
WARBURG PINCUS SMALL COMPANY GROWTH FUND
FINANCIAL HIGHLIGHTS
(For a Common Share of the Fund Outstanding Throughout the Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX FOR THE PERIOD
MONTHS ENDED DECEMBER 31, 1996
APRIL 30, (COMMENCEMENT OF
1998 OPERATIONS) THROUGH
(UNAUDITED) OCTOBER 31, 1997
------------ -------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $12.25 $ 10.00
----- -----
Income from Investment Operations:
Net Investment Loss (0.05) (0.04)
Net Gain on Securities (both realized and unrealized) 1.28 2.29
----- -----
Total from Investment Operations 1.23 2.25
----- -----
Less Distributions:
Dividends from Net Investment Income (0.06) --
Distributions from Realized Gains -- --
----- -----
Total Distributions (0.06) --
----- -----
NET ASSET VALUE, END OF PERIOD $13.42 $ 12.25
----- -----
----- -----
Total Return 10.17%'D' 22.50%'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $14,016 $11,977
Ratios to average daily net assets:
Operating expenses 1.41@* 1.41%@*
Net investment loss (.87%)* (.53%)*
Decrease reflected in above operating expense ratio
due to waivers/reimbursements 1.56%* 3.66%*
Portfolio Turnover Rate 48.98%'D' 123.24%'D'
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements resulted in a reduction to the
Common Shares net expense ratio by .01% for the six months ended April 30,
1998 and by .01% for the year or period ended October 31, 1997. The Common
Shares' operating expense ratio after reflecting these arrangements were 1.40%
for the six months ended April 30, 1998, and 1.40% for the year or period
ended October 31, 1997.
'D' Non-annualized.
* Annualized.
See Accompanying Notes to Financial Statements.
77
<PAGE>
<PAGE>
WARBURG PINCUS STRATEGIC VALUE FUND
FINANCIAL HIGHLIGHTS
(For a Common Share of the Fund Outstanding Throughout the Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX FOR THE PERIOD
MONTHS ENDED DECEMBER 31, 1996
APRIL 30, (COMMENCEMENT OF
1998 OPERATIONS) THROUGH
(UNAUDITED) OCTOBER 31, 1997
------------ -------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.57 $ 10.00
----- -----
Income from Investment Operations:
Net Investment Income (0.04) 0.02
Net Gain on Securities (both realized and unrealized) 1.47 1.55
----- -----
Total from Investment Operations 1.43 1.57
----- -----
Less Distributions:
Dividends from Net Investment Income (0.15) --
Distributions from Realized Gains (0.58) --
----- -----
Total Distributions (0.73) --
----- -----
NET ASSET VALUE, END OF PERIOD $12.27 $ 11.57
----- -----
----- -----
Total Return 12.95%'D' 15.70%'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $9,386 $12,108
Ratios to average daily net assets:
Operating expenses 1.45%*@ 1.45%@*
Net investment income (.08%)* .26%*
Decrease reflected in above operating expense ratio
due to waivers/reimbursements 1.43%* 2.42%*
Portfolio Turnover Rate 94.74%'D' 277.99%
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements had no effect on the Fund's expense
ratio.
'D' Non-annualized.
* Annualized.
See Accompanying Notes to Financial Statements.
78
<PAGE>
<PAGE>
WARBURG PINCUS GROWTH & INCOME FUND
FINANCIAL HIGHLIGHTS
(For a Common Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
APRIL 30, FOR THE TWO FOR THE YEARS ENDED AUGUST 31,
1998 MONTHS ENDED ------------------------------------------------------------
(UNAUDITED) OCTOBER 31, 1997 1997 1996 1995 1994 1993
------------ ---------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF
PERIOD $ 18.56 $18.44 $ 14.90 $ 16.40 $ 14.56 $ 16.72 $ 11.99
------ ----- -------- -------- -------- -------- --------
Income from
Investment
Operations:
Net Investment
Income 0.08 0.02 0.14 0.11 0.22 0.08 0.05
Net Gain (Loss)
on Securities
(both
realized and
unrealized) 2.85 0.14 3.54 (0.66) 1.98 1.81 4.85
------ ----- -------- -------- -------- -------- --------
Total from
Investment
Operations 2.93 0.16 3.67 (0.55) 2.21 1.89 4.90
------ ----- -------- -------- -------- -------- --------
Less
Distributions:
Dividends from
Net
Investment
Income (0.08) (0.04) (0.13) (0.14) (0.18) (0.08) (0.09)
Distributions
from Realized
Gains (2.95) -- -- (0.81) (0.18) (3.98) (0.08)
------ ----- -------- -------- -------- -------- --------
Total
Distributions (3.03) (0.04) (0.13) (0.95) (0.37) (4.05) (0.17)
------ ----- -------- -------- -------- -------- --------
NET ASSET VALUE,
END OF PERIOD $ 18.46 $18.56 $ 18.44 $ 14.90 $ 16.40 $ 14.56 $ 16.72
------ ----- -------- -------- -------- -------- --------
------ ----- -------- -------- -------- -------- --------
Total Returns 18.24%'D' .85%'D' 24.78% (3.54%) 15.62% 14.41% 41.17%(a)
RATIOS/SUPPLEMENTAL
DATA:
Net Assets, End of
Period (000) $787,689 $608,205 $601,159 $727,627 $1,038,193 $410,658 $60,689
Ratios to average
daily net assets:
Operating
expenses 1.18%*@ 1.18%@* 1.15%@ 1.21%@ 1.22% 1.28% 1.14%
Net investment
income .87%* .75%* .80% .69% 1.64% .41% .30%
Decrease
reflected in
above
operating
expense
ratios due to
waivers/reimbursements .00% .00% .00% .00% .00% .00% .00%
Portfolio Turnover
Rate 39.48%'D' 19%'D' 148% 94% 109% 150% 344%
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements had no effect on the Fund's expense
ratio.
'D' Non-annualized.
* Annualized.
(a) Sales load not reflected in total return. The sales load was eliminated
effective July 29, 1993.
See Accompanying Notes to Financial Statements.
79
<PAGE>
<PAGE>
WARBURG PINCUS BALANCED FUND
FINANCIAL HIGHLIGHTS
(For a Common Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
APRIL 30, FOR THE TWO FOR THE YEARS ENDED AUGUST 31,
1998 MONTHS ENDED ------------------------------------------------------------
(UNAUDITED) OCTOBER 31, 1997 1997 1996 1995 1994 1993
------------ ---------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF
PERIOD $ 14.38 $14.24 $ 11.94 $ 11.12 $ 11.01 $ 11.71 $ 12.04
------ ----- -------- -------- -------- -------- --------
Income from
Investment
Operations:
Net Investment
Income 0.11 0.03 0.23 0.16 0.21 0.41 0.56
Net Gain on
Securities
and Foreign
Currency
Related Items
(both
realized and
unrealized) 1.06 0.15 2.46 0.94 1.72 0.32 1.13
------ ----- -------- -------- -------- -------- --------
Total from
Investment
Operations 1.17 0.19 2.69 1.10 1.93 0.74 1.68
------ ----- -------- -------- -------- -------- --------
Less
Distributions:
Dividends from
Net
Investment
Income (0.12) (0.05) (0.24) (0.13) (0.31) (0.46) (0.54)
Distributions
from Realized
Gains (1.29) -- (0.15) (0.15) (1.51) (0.98) (1.47)
------ ----- -------- -------- -------- -------- --------
Total
Distributions (1.41) (0.05) (0.39) (0.28) (1.82) (1.44) (2.01)
------ ----- -------- -------- -------- -------- --------
NET ASSET VALUE,
END OF PERIOD $ 14.14 $14.38 $ 14.24 $ 11.94 $ 11.12 $ 11.01 $ 11.71
------ ----- -------- -------- -------- -------- --------
------ ----- -------- -------- -------- -------- --------
Total Returns 9.23%'D' 1.30%'D' 23.03% 9.99% 21.56% 6.86%(a) 15.27%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of
Period (000) $41,164 $38,294 $38,926 $30,853 $5,342 $808 $762
Ratios to average
daily net assets:
Operating
expenses 1.35%@* 1.35%@* 1.35%@ 1.53%@ 1.53% 0% 0%
Net investment
income 1.52%* 1.38%* 1.76% 1.66% 2.30% 3.76% 4.13%
Decrease
reflected in
above
operating
expense
ratios due to
waivers/reimbursements .63%* .68%* .55% .90% 4.51% 5.46% 5.37%
Portfolio Turnover
Rate 68.89%'D' 15%'D' 120% 108% 107% 32% 30%
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements had no effect on the Fund's expense
ratio.
'D' Non-annualized.
* Annualized.
(a) Sales load not reflected in total return. The sales load was eliminated
effective August 31, 1994.
See Accompanying Notes to Financial Statements.
80
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Warburg Pincus Domestic Equity Funds (the 'Funds') are comprised of
Warburg Pincus Capital Appreciation Fund (the 'Capital Appreciation Fund'),
Warburg Pincus Post-Venture Capital Fund (the 'Post-Venture Capital Fund'),
Warburg Pincus Small Company Value Fund (the 'Small Company Value Fund'),
Warburg Pincus Health Sciences Fund (the 'Health Sciences Fund'), Warburg Pincus
Small Company Growth Fund (the 'Small Company Growth Fund'), Warburg Pincus
Strategic Value Fund (the 'Strategic Value Fund'), Warburg Pincus Growth &
Income Fund (the 'Growth & Income Fund') and the Warburg Pincus Balanced Fund
(the 'Balanced 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') which is registered under the 1940 Act as a non-diversified,
open-end management investment company.
Investment objectives for each Fund are as follows: the Capital Appreciation
Fund and and the Small Company Value Fund seek long-term capital appreciation;
the Emerging Growth Fund seeks maximum capital appreciation; the Post-Venture
Capital Fund seeks long-term growth of capital; the Health Sciences Fund and the
Strategic Value Fund seek capital appreciation; the Small Company Growth Funds
seeks capital growth; the Growth & Income Fund seeks long-term growth of capital
and income and a reasonable current return; the Balanced Fund seeks maximum
total return through a combination of long-term growth of capital and current
income consistent with preservation of capital.
Each Fund (except the Health Sciences 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 Post-Venture Capital Fund, the Small Company Value Fund, the Health
Sciences Fund, the Small Company Growth Fund, the Strategic Value Fund and the
Balanced 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. Advisor Shares are
currently bearing expenses of .50% of average daily net assets. At April 30,
1998 there were no outstanding Advisor Shares for the Health Sciences Fund or
the Small Company Growth Fund.
81
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
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 generally determined using the last reported
sales price. If no sales are reported, investments are generally valued at the
mean between the last reported bid and asked 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 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 reported in the results of
operations for the current period. The Funds do not isolate that portion of
realized 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 realized
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 a trade date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the ex-
dividend date. Income, expenses (excluding class-specific expenses, principally
distribution, shareholder servicing fees and transfer agent fees) 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, if any, are declared and paid annually
(except with respect to the Growth & Income Fund and the Balanced Fund which
dividends, if any, are paid quarterly). Distributions of net realized capital
gains, if any, are declared and paid annually for all Funds. 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.
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
82
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
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 in connection with organization and offering of shares have
been deferred and are being amortized over a period of five years and one year,
respectively, from the date each Fund commenced its operations.
The Funds, together with other funds advised by Warburg Pincus Asset
Management, Inc., the Funds' investment adviser ('Warburg') (collectively, the
'Warburg Funds'), have established committed and uncommitted lines of credit
facilities with PNC Bank, National Association ('PNC') and an uncommitted line
of credit facility with Deutsche Bank, AG ('Deutsche Bank') for temporary or
emergency purposes primarily relating to unanticipated fund share redemptions.
Effective December 31, 1997, the terms of the committed line of credit with PNC
was amended. Under the terms of the committed line of credit, the Warburg Funds
with access to the facility pay a commitment fee at a rate of .07% per annum on
the average daily balance of the line of credit, which is undisbursed and
uncanceled during the preceding quarter. In addition, the Warburg Funds will pay
interest on borrowings at the bank's base rate plus .45%. Under the terms of the
Uncommitted lines of credit, the Warburg funds will pay interest on borrowings
at the banks base rate plus .55%. Aggregate borrowings for each fund under the
committed and uncommitted lines of credit with PNC may not exceed the lowest of
(a) thirty-three and one-third percent (33 1/3%) of the assets of such fund, for
any Fund that does not invest at least sixty-five percent (65%) of its assets in
international equity or fixed income securities (an 'International Fund') and
twenty-five percent (25%) of the assets of any Fund that is an International
Fund or (b) the maximum amount permitted by such fund's investment policies and
restrictions. Aggregate borrowings for each fund under the uncommitted line of
credit facility with Deutsche Bank may not exceed thirty-three and one-third
percent (33 1/3%) of the net assets of such fund. At April 30, 1998 and during
the six months ended April 30, 1998, the following funds had borrowings under
the line of credit agreement:
<TABLE>
<CAPTION>
AVERAGE DAILY AVERAGE MAXIMUM DAILY LOAN OUTSTANDING
FUND LOAN BALANCE INTEREST RATE % LOAN OUTSTANDING AT 04/30/98
- ------------------- -------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Health Sciences $147,376 6.13 $3,878,000 $1,504,000
Post-Venture
Capital 91,967 6.18 2,659,000 0
</TABLE>
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, each Fund, along with other Warburg Funds, transfers uninvested cash
balances to a pooled cash account, which is invested in repurchase agreements
secured by U.S. government securities. Securities, pledged as collateral for
repurchase agreements, are held by the Funds' custodian bank until the
agreements mature. Each agreement requires that the
83
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
market value of the collateral be sufficient to cover payments of interest and
principal; however, in the event of default or bankruptcy by the counterparty to
the agreement, retention of the collateral may be subject to legal proceedings.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from these estimates.
The Funds have an arrangement with their transfer agent whereby interest
earned on uninvested cash balances was used to offset a portion of the transfer
agent expense. For the six months ended April 30, 1998, the Funds received
credits or reimbursements under this arrangement as follows:
<TABLE>
<CAPTION>
FUND AMOUNT
- ---------------------------------------------------------------- -------
<S> <C>
Capital Appreciation $16,769
Emerging Growth 50,312
Post-Venture Capital 2,613
Small Company Value 4,975
Health Sciences 747
Small Company Growth 311
Strategic Value 298
Growth & Income 19,092
Balanced 974
</TABLE>
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR
Warburg, which is indirectly controlled by Warburg, Pincus & Co., serves as
each Fund's investment adviser. For its advisory services, Warburg is entitled
to receive the following fees based on each Fund's average daily net assets:
<TABLE>
<CAPTION>
FUND ANNUAL RATE
- --------------------------------------------- -----------------------------------
<S> <C>
Capital Appreciation .70% of average daily net assets
Emerging Growth .90% of average daily net assets
Post-Venture Capital 1.25% of average daily net assets
Small Company Value 1.00% of average daily net assets
Health Sciences 1.00% of average daily net assets
Small Company Growth 1.00% of average daily net assets
Strategic Value 1.00% of average daily net assets
Growth & Income .75% of average daily net assets
Balanced .90% of average daily net assets
</TABLE>
For the six months ended April 30, 1998, investment advisory fees, voluntary
waivers and reimbursements were as follows:
84
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROSS NET EXPENSE
FUND ADVISORY FEE WAIVER ADVISORY FEE REIMBURSEMENT
- -------------------------------- ------------ ---------- ------------ -------------
<S> <C> <C> <C> <C>
Capital Appreciation $2,352,714 $ 0 2,352,714 $ 0
Emerging Growth 9,138,272 0 9,138,272 0
Post-Venture Capital 645,521 (271,170) 374,351 (371)
Small Company Value 946,741 (0) 946,741 (319)
Health Sciences 151,653 (75,370) 76,282 (5,157)
Small Company Growth 61,667 (41,759) 19,908 (48,474)
Strategic Value 59,705 (59,705) 0 (19,856)
Growth & Income 2,885,985 0 2,885,985 0
Balanced 177,539 (95,532) 82,007 (496)
</TABLE>
Abbott Capital Management, LLC ('Abbott') serves as sub-investment adviser
for the Post-Venture Capital Fund's assets invested in U.S. or foreign private
limited partnerships or other investment funds ('Private Fund Investments').
From its investment advisory fee, Warburg pays Abbott a quarterly fee at the
annual rate of 1.00% of the Fund's value of Private Fund Investments as of the
end of each calendar quarter. No compensation is paid by the Post-Venture
Capital Fund to Abbott 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 administrative
services, CFSI currently receives a fee calculated at an annual rate of .10% of
each Fund's average daily net assets. For the six months ended April 30, 1998,
administrative services fees earned by CFSI were as follows:
<TABLE>
<CAPTION>
FUND CO-ADMINISTRATION FEE
- ------------------------------------------------------ ---------------------
<S> <C>
Capital Appreciation $ 336,102
Emerging Growth 1,015,364
Post-Venture Capital 51,642
Small Company Value 94,674
Health Sciences 15,165
Small Company Growth 6,167
Strategic Value 5,971
Growth & Income 384,798
Balanced 19,727
</TABLE>
For administrative services, PFPC currently receives a fee calculated at an
annual rate of .10% on each Fund's first $500 million in average daily net
assets, .075% on the next $1 billion in average daily net assets and .05% of
average daily net assets in excess of $1.5 billion (for the Growth & Income Fund
and the Balanced Fund, .15% of each Fund's first $500 million of average daily
net assets, .10% of the next $1 billion and .05% of each Fund's average daily
net assets over $1.5 billion).
85
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR (CONT'D)
For the six months ended April 30, 1998, administrative service fees earned
and voluntarily waived by PFPC (including out-of-pocket) were as follows:
<TABLE>
<CAPTION>
NET
FUND CO-ADMINISTRATION FEE WAIVER CO-ADMINISTRATION FEE
- ----------------------------------- --------------------- -------- ---------------------
<S> <C> <C> <C>
Capital Appreciation $ 314,063 $ 0 $ 314,063
Emerging Growth 755,627 0 755,627
Post-Venture Capital 52,213 0 52,213
Small Company Value 94,674 0 94,674
Health Sciences 15,442 (15,165) 277
Small Company Growth 6,648 (6,167) 481
Strategic Value 6,227 (5,970) 257
Growth & Income 508,771 0 508,771
Balanced 34,480 (29,590) 4,890
</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 Growth & Income Fund
to CSI for distribution services. For its distribution services, CSI receives a
fee calculated at an annual rate of .25% of the average daily net assets of the
Common Shares of the Post-Venture Capital Fund, the Small Company Value Fund,
the Health Sciences Fund, the Small Company Growth Fund, the Strategic Value
Fund and the Balanced Fund pursuant to a shareholder servicing and distribution
plan adopted by each Fund pursuant to Rule 12b-1 under the 1940 Act. For its
shareholder servicing and distribution services, CSI receives a fee at an annual
rate of .50%, respectively, of the average daily net assets of each Funds'
Advisor Shares pursuant to distribution plan adopted by each Fund pursuant to
Rule 12b-1 under the 1940 Act. For the six months ended April 30, 1998,
shareholder servicing and distribution fees earned by CSI were as follows:
<TABLE>
<CAPTION>
SHAREHOLDER SERVICING/
FUND DISTRIBUTION FEE
- --------------------------------------- ----------------------
<S> <C>
Capital Appreciation
Advisor Shares $ 88,098
--------
--------
Emerging Growth
Advisor Shares $1,044,459
--------
--------
</TABLE>
86
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHAREHOLDER SERVICING/
FUND DISTRIBUTION FEE
- --------------------------------------- ----------------------
<S> <C>
Post-Venture Capital
Common Shares $ 128,960
Advisor Shares 288
--------
$ 129,248
--------
--------
Small Company Value
Common Shares $ 236,441
Advisor Shares 488
--------
$ 236,929
--------
--------
Health Sciences
Common Shares $ 37,913
--------
--------
Small Company Growth
Common Shares $ 15,417
--------
--------
Strategic Value
Common Shares $ 14,926
--------
--------
Growth & Income
Advisor Shares $ 243,223
--------
--------
Balanced
Common Shares $ 49,112
Advisor Shares 409
--------
$ 49,521
--------
--------
</TABLE>
3. INVESTMENTS IN SECURITIES
For the six months ended April 30, 1998, purchases and sales of investment
securities (excluding short-term investments) were as follows:
<TABLE>
<CAPTION>
FUND PURCHASES SALES
- ------------------------------------------------ ------------ ------------
<S> <C> <C>
Capital Appreciation $598,072,963 $567,190,279
Emerging Growth 797,270,596 777,088,432
Post-Venture Capital 54,626,335 76,322,802
Small Company Value 62,204,994 123,272,320
Health Sciences 36,095,402 12,463,421
Small Company Growth 7,283,478 5,802,392
Strategic Value 9,102,984 12,405,328
Growth & Income 289,864,334 282,212,546
Balanced 27,339,972 25,778,650
</TABLE>
At April 30, 1998, 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:
87
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
3. INVESTMENT IN SECURITIES (CONT'D)
<TABLE>
<CAPTION>
NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
FUND APPRECIATION DEPRECIATION (DEPRECIATION)
- --------------------------------- ------------ ------------- --------------
<S> <C> <C> <C>
Capital Appreciation $179,034,494 $ (3,110,001) $175,924,493
Emerging Growth 706,753,920 (19,651,639) 687,102,281
Post-Venture Capital 28,611,504 (931,496) 27,680,008
Small Company Value 36,415,603 (2,694,829) 33,720,774
Health Sciences 7,821,998 (105,122) 7,716,876
Small Company Growth 2,687,005 (464,853) 2,222,152
Strategic Value 1,506,445 (92,813) 1,413,632
Growth & Income 166,766,867 (3,892,719) 162,874,148
Balanced 6,303,820 (437,755) 5,866,065
</TABLE>
For the six months ended April 30, 1998, sales of the Small Company Value
Fund included $11,231,694 of investment securities delivered to shareholders in
exchange for 596,626 Common Shares resulting in a gain of $1,627,952. For the
six months ended April 30, 1998, sales of the Growth & Income Fund included
$21,327,345 of investment securities delivered to shareholders for 1,337,976
Common Shares resulting in a gain of $811,970.
4. RESTRICTED SECURITIES
Certain Funds' investments are restricted as to resale and are valued as
determined by or under the direction of each Fund's Board. The table below shows
the number of shares held, the acquisition dates, aggregate cost, fair value as
of April 30, 1998, share value of the securities and percent of net assets which
the securities comprise.
<TABLE>
<CAPTION>
PERCENTAGE
SECURITY ACQUISITION MARKET OF NET
FUND SECURITY DESCRIPTION TYPE DATE(S) COST VALUE ASSETS
- ---------------------- -------------------------------- ---------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
EMERGING GROWTH FUND
Dealer Solutions Holdings, Inc. Preferred 04/29/98 $ 5,000,000 $ 5,000,000 0.22%
Dealer Solutions Holdings, Inc. Warrants 04/29/02 0 0 0.00
Network Event Theater, Inc. Common 02/06/98 4,000,000 4,000,000 0.18
New York Restaurant Group, Inc. Common 10/30/97 3,249,985 3,249,985 0.14
Opal Concepts Inc. Series B Preferred 08/31/95 2,000,000 1,999,999 0.09
Radical Entertainment Holdings Common 10/06/97 2,500,000 2,500,000 0.11
Stratasys, Inc. Warrants 10/31/95 0 0 0.00
Women First Healthcare, Inc. Preferred 01/08/98 750,000 750,000 0.03
----------- ----------- ----
$17,499,985 $17,499,984 0.77%
----------- ----------- ----
----------- ----------- ----
POST-VENTURE CAPITAL
FUND
New York Restaurant Group, Inc. Common 10/30/97 $ 749,998 $ 749,998 0.71%
----------- ----------- ----
----------- ----------- ----
SMALL COMPANY VALUE
EA Industries, Inc. Warrants 03/31/98 $ 110,438 $ 110,438 0.07%
----------- ----------- ----
----------- ----------- ----
</TABLE>
88
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
5. FORWARD FOREIGN CURRENCY CONTRACTS
Each 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. Each
Fund will enter into forward contracts primarily for hedging purposes. 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 or an offsetting position is
entered into. At April 30, 1998, there were no open forward foreign currency
contracts.
6. FUTURES CONTRACTS
Each Fund may enter into futures contracts to the extent permitted by its
investment policies and objectives. Upon entering into a futures contract, a
Fund is required to make a deposit of an initial margin with its custodian in a
segregated account. Subsequent payments, which are dependent on the daily
fluctuations in the value of the underlying instrument, are made or received by
a Fund each day (daily variation margin) and are recorded as unrealized gains or
losses until the contracts are closed. When the contract is closed, a Fund
records a realized gain or loss equal to the difference between the proceeds
from (or cost of) the closing transactions and a Fund's basis in the contract.
Risks of enterings into futures contracts include the possibility that a change
in the value of the contract may not correlate with the changes in the value of
the underlying instruments. Second, it is possible that a lack of liquidity for
futures contracts could exist in the secondary market, resulting in an inability
to close a futures position prior to its maturity date. Third, the purchase of a
futures contract involves the risk that a Fund could lose more than the original
margin deposit required to initiate a futures transaction. At April 30, 1998,
there were no open futures contracts.
89
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
7. 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 Advisor Shares. The Emerging Growth
Fund, the Post-Venture Capital Fund, the Small Company Value Fund, the Health
Sciences Fund, the Small Company Growth Fund and the Strategic Value 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 (two
billion shares for the Growth & Income Fund and Balanced Fund) are designated as
the Advisor Shares.
Transactions in shares of each Fund were as follows:
<TABLE>
<CAPTION>
CAPITAL APPRECIATION FUND
COMMON SHARES ADVISOR SHARES
------------------------------------ ------------------------------------
FOR THE SIX FOR THE FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
-------------- ----------------- -------------- -----------------
<S> <C> <C> <C> <C>
Shares sold 5,230,293 11,782,145 127,685 606,375
Shares issued to
shareholders on
reinvestment of
dividends 5,891,863 2,594,315 343,403 149,768
Shares redeemed (5,251,246 ) (9,249,789) (334,500) (416,279)
-------------- ----------------- -------------- -----------------
Net increase
(decrease) in
shares outstanding 5,870,911 5,126,671 136,587 339,864
-------------- ----------------- -------------- -----------------
-------------- ----------------- -------------- -----------------
Proceeds from sale
of shares $ 102,518,967 $ 219,247,482 $ 2,471,479 $11,073,615
Reinvested dividends 105,110,845 43,039,712 6,054,188 2,462,189
Net asset value of
shares redeemed (103,973,027 ) (169,218,861) (6,628,098) (7,731,529)
-------------- ----------------- -------------- -----------------
Net increase
(decrease) from
capital share
transactions $ 103,656,785 $ 93,068,333 $ 1,897,569 $ 5,804,275
-------------- ----------------- -------------- -----------------
-------------- ----------------- -------------- -----------------
</TABLE>
<TABLE>
<CAPTION>
EMERGING GROWTH FUND
COMMON SHARES ADVISOR SHARES
------------------------------------ ------------------------------------
FOR THE SIX FOR THE FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
-------------- ----------------- -------------- -----------------
<S> <C> <C> <C> <C>
Shares sold 11,286,713 19,332,805 909,928 2,777,965
Shares issued to
shareholders on
reinvestment of
dividends 2,487,833 69,725 739,355 25,320
Shares redeemed (8,823,310 ) (14,870,553) (3,102,762 ) (2,261,139)
-------------- ----------------- -------------- -----------------
Net increase
(decrease) in
shares outstanding 4,951,237 4,531,977 (1,453,479 ) 542,146
-------------- ----------------- -------------- -----------------
-------------- ----------------- -------------- -----------------
Proceeds from sale
of shares $ 448,260,641 $ 685,993,625 $ 35,152,367 $ 95,536,933
Reinvested dividends 89,263,454 2,254,198 25,692,573 797,591
Net asset value of
shares redeemed (348,656,249 ) (518,210,531) (118,757,780 ) (72,595,870)
-------------- ----------------- -------------- -----------------
Net increase
(decrease) from
capital share
transactions $ 188,867,846 $ 170,037,292 $ (57,912,840 ) $ 23,738,654
-------------- ----------------- -------------- -----------------
-------------- ----------------- -------------- -----------------
</TABLE>
90
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POST-VENTURE CAPITAL FUND
COMMON SHARES ADVISOR SHARES
------------------------------------ ------------------------------------
FOR THE SIX FOR THE FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
-------------- ----------------- -------------- -----------------
<S> <C> <C> <C> <C>
1,097,440 4,136,567 1,485 3,331
0 0 0 0
(2,157,348) (8,215,079) (14,463) (675)
-------------- ----------------- ------- ------
(1,059,908) (4,078,512) (12,978) 2,656
-------------- ----------------- ------- ------
-------------- ----------------- ------- ------
$ 20,678,560 $ 67,826,803 $ 26,495 $ 54,436
0 0 0 0
(39,766,810) (133,261,256) (242,499) (10,771)
-------------- ----------------- ------- ------
$(19,088,250) $ (65,434,453) $ (216,004) $ 43,665
-------------- ----------------- ------- ------
-------------- ----------------- ------- ------
</TABLE>
<TABLE>
<CAPTION>
SMALL COMPANY VALUE FUND
COMMON SHARES ADVISOR SHARES
------------------------------------ ------------------------------------
FOR THE SIX FOR THE FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
-------------- ----------------- -------------- -----------------
<S> <C> <C> <C> <C>
2,035,143 15,162,610 7,741 502,401
1,261,331 73,225 1,980 4
(5,819,081 ) (9,160,818) (19,305) (489,074)
-------------- ----------------- ------- -----------------
(2,522,607 ) 6,075,017 (9,585) 13,331
-------------- ----------------- ------- -----------------
-------------- ----------------- ------- -----------------
$ 34,860,483 $ 250,655,885 $ 136,905 $ 7,762,145
19,941,713 1,093,260 31,064 56
(100,860,185 ) (153,324,594) (307,365) (8,325,563)
-------------- ----------------- ------- -----------------
$ (46,057,989 ) $ 98,424,551 $ (139,396) $ (563,362)
-------------- ----------------- ------- -----------------
-------------- ----------------- ------- -----------------
</TABLE>
91
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
7. CAPITAL SHARE TRANSACTIONS (CONT'D)
<TABLE>
<CAPTION>
HEALTH SCIENCES FUND SMALL COMPANY GROWTH FUND
-------------------------------- --------------------------------
COMMON SHARES COMMON SHARES
-------------------------------- --------------------------------
FOR THE PERIOD FOR THE PERIOD
FOR THE SIX DECEMBER 31, 1996 FOR THE SIX DECEMBER 31, 1996
MONTHS ENDED (COMMENCEMENT OF MONTHS ENDED (COMMENCEMENT OF
APRIL 30, OPERATIONS) APRIL 30, OPERATIONS)
1998 THROUGH OCTOBER 1998 THROUGH OCTOBER
(UNAUDITED) 31, 1997 (UNAUDITED) 31, 1997
------------- ----------------- ------------- -----------------
<S> <C> <C> <C> <C>
Shares sold 2,966,301 2,244,014 504,661 1,969,718
Shares issued to
shareholders on
reinvestment of
dividends 101,161 0 4,732 0
Shares redeemed (1,411,808) (760,713) (442,388) (1,002,254)
------------- ----------------- ------------- -----------------
Net increase
(decrease) in
shares outstanding 1,655,654 1,483,301 67,006 967,464
------------- ----------------- ------------- -----------------
------------- ----------------- ------------- -----------------
Proceeds from sale
of shares $39,169,198 $23,788,806 $ 6,355,310 $21,383,734
Reinvested dividends 1,167,405 0 53,995 0
Net asset value of
shares redeemed (18,763,514) (8,592,805) (5,464,688) (10,393,044)
------------- ----------------- ------------- -----------------
Net increase
(decrease) from
capital share
transactions $21,573,089 $15,196,001 $ 944,617 $10,990,690
------------- ----------------- ------------- -----------------
------------- ----------------- ------------- -----------------
</TABLE>
<TABLE>
<CAPTION>
STRATEGIC VALUE FUND
-------------------------------------------------------------------
COMMON SHARES ADVISOR SHARES
-------------------------------- --------------------------------
FOR THE PERIOD FOR THE PERIOD
FOR THE SIX DECEMBER 31, 1996 FOR THE SIX JANUARY 9, 1997
MONTHS ENDED (COMMENCEMENT OF MONTHS ENDED (COMMENCEMENT OF
APRIL 30, OPERATIONS) APRIL 30, OPERATIONS)
1998 THROUGH OCTOBER 1998 THROUGH OCTOBER
(UNAUDITED) 31, 1997 (UNAUDITED) 31, 1997
------------- ----------------- ------------- -----------------
<S> <C> <C> <C> <C>
Shares sold 121,316 1,389,517 0 5,938
Shares issued to
shareholders on
reinvestment of
dividends 61,879 0 1 0
Shares redeemed (464,734) (353,205) 0 (5,923)
------------- ----------------- -- ------
Net increase
(decrease) in
shares outstanding (281,539) 1,036,312 1 15
------------- ----------------- -- ------
------------- ----------------- -- ------
Proceeds from sale
of shares $ 1,417,306 $14,726,411 $ 0 $60,026
Reinvested dividends 687,474 0 6 0
Net asset value of
shares redeemed (5,659,583) (3,945,392) 0 (63,017)
------------- ----------------- -- ------
Net increase
(decrease) from
capital share
transactions $(3,554,803) $10,781,019 $ 6 $(2,991)
------------- ----------------- -- ------
------------- ----------------- -- ------
</TABLE>
92
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH & INCOME FUND
COMMON SHARES ADVISOR SHARES
------------------------------------------------- -------------------------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED MONTHS ENDED
APRIL 30, FOR THE TWO FOR THE YEAR APRIL 30, FOR THE TWO FOR THE YEAR
1998 MONTHS ENDED ENDED 1998 MONTHS ENDED ENDED
(UNAUDITED) OCTOBER 31, 1997 AUGUST 31, 1997 (UNAUDITED) OCTOBER 31, 1997 AUGUST 31, 1997
------------ ----------------- ---------------- ------------ ----------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 11,658,968 2,174,608 16,219,671 1,006,814 197,822 739,244
Shares issued to
shareholders on
reinvestment of
dividends 5,985,106 62,949 261,793 896,384 4,665 20,096
Shares redeemed (7,732,285) (2,073,583) (32,720,263) (588,809) (70,415) (1,497,975)
------------ ----------------- ---------------- ------------ -------- ----------------
Net increase
(decrease) in
shares outstanding 9,911,789 163,974 (16,238,799) 1,314,389 132,072 (738,635)
------------ ----------------- ---------------- ------------ -------- ----------------
------------ ----------------- ---------------- ------------ -------- ----------------
Proceeds from sale
of shares $205,789,602 $41,615,463 $ 263,366,857 $17,522,196 $ 3,793,455 $ 12,646,588
Reinvested dividends 96,298,490 1,219,324 4,211,791 14,411,181 90,322 348,935
Net asset value of
shares redeemed (135,216,250) (39,147,600) (508,011,387) (9,810,477) (1,340,222) (23,301,120)
------------ ----------------- ---------------- ------------ -------- ----------------
Net increase
(decrease) from
capital share
transactions $166,871,842 $ 3,687,187 $ (240,432,739) $22,122,899 $ 2,543,555 $(10,305,597)
------------ ----------------- ---------------- ------------ -------- ----------------
------------ ----------------- ---------------- ------------ -------- ----------------
</TABLE>
<TABLE>
<CAPTION>
BALANCED FUND
COMMON SHARES ADVISOR SHARES
------------------------------------------------- -------------------------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED MONTHS ENDED
APRIL 30, FOR THE TWO FOR THE YEAR APRIL 30, FOR THE TWO FOR THE YEAR
1998 MONTHS ENDED ENDED 1998 MONTHS ENDED ENDED
(UNAUDITED) OCTOBER 31, 1997 AUGUST 31, 1997 (UNAUDITED) OCTOBER 31, 1997 AUGUST 31, 1997
------------ ----------------- ---------------- ------------ ----------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 537,142 152,757 1,550,047 4,136 1,762 10,558
Shares issued to
shareholders on
reinvestment of
dividends 287,403 8,126 80,179 1,259 26 146
Shares redeemed (576,716) (231,496) (1,480,328) (3,532) (1,313) (1,184)
------------ ----------------- ---------------- ------ ------ -------
Net increase
(decrease) in
shares outstanding 247,829 (70,613) 149,898 1,863 475 9,520
------------ ----------------- ---------------- ------ ------ -------
------------ ----------------- ---------------- ------ ------ -------
Proceeds from sale
of shares $7,248,784 $ 2,259,503 $ 19,842,484 $ 56,409 $ 25,967 $134,935
Reinvested dividends 3,684,251 121,653 1,012,371 16,121 385 1,868
Net asset value of
shares redeemed (7,869,191) (3,443,737) (19,105,605) (46,796) (19,172) (15,173)
------------ ----------------- ---------------- ------ ------ -------
Net increase
(decrease) from
capital share
transactions $3,063,845 $(1,062,581) $ 1,749,250 $ 25,733 $ 7,180 $121,630
------------ ----------------- ---------------- ------ ------ -------
------------ ----------------- ---------------- ------ ------ -------
</TABLE>
93
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
8. LIABILITIES
At April 30, 1998, each Fund had the following liabilities:
<TABLE>
<CAPTION>
CAPITAL EMERGING POST-VENTURE
APPRECIATION GROWTH CAPITAL
FUND FUND FUND
------------ ----------- -------------
<S> <C> <C> <C>
Payable for
securities
purchased (at
value) $ 11,788,139 $17,053,694 $ 252,277
Investment advisory
fee payable 424,615 1,677,378 64,805
Administrative
services fees
payable 60,659 186,375 8,746
Distribution fees
payable 0 0 21,855
Fund shares redeemed
payable 0 4,011,194 0
------------ ----------- -------------
$ 12,273,413 $22,928,641 $ 347,683
------------ ----------- -------------
------------ ----------- -------------
</TABLE>
9. NET ASSETS
At April 30, 1998, capital contributions, undistributed net investment
income, and accumulated net realized gain/(loss) on security transactions have
been adjusted for current period permanent book/tax differences. The Emerging
Growth Fund, Post-Venture Capital Fund, and the Small Company Value Fund
reclassified $4,357,857, $670,767, and $437,191, respectively, from accumulated
net investment loss to capital contribution. The Strategic Value Fund, and the
Balanced Fund reclassified $11,163 and $10,726, respectively, from net
investment loss to capital contributions. The Small Strategic Value Fund
reclassified offering costs of $19,571, from accumulated net investment loss to
capital contributions. The Growth and Income Fund and the Balanced Fund
reclassified $4,660 and $2,769, respectively, from accumulated net realized
gain/loss from foreign currency related items to undistributed net investment
income/loss.
Net Assets at April 30, 1998 consisted of the following:
<TABLE>
<CAPTION>
CAPITAL EMERGING POST-VENTURE
APPRECIATION GROWTH CAPITAL
FUND FUND FUND
------------ -------------- -------------
<S> <C> <C> <C>
Capital contributed,
net $523,615,297 $1,513,099,859 $ 73,504,756
Undistributed net
investment income 381,810 0 0
Accumulated net
realized gain
(loss) from
security
transactions 36,522,062 78,706,547 4,753,490
Net unrealized
appreciation
(depreciation) from
investments and
foreign currency
related items 176,989,999 687,884,559 27,772,094
------------ -------------- -------------
Net assets $737,509,168 $2,279,690,965 $ 106,030,340
------------ -------------- -------------
------------ -------------- -------------
</TABLE>
94
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL COMPANY HEALTH SMALL COMPANY STRATEGIC
VALUE SCIENCES GROWTH VALUE GROWTH & INCOME BALANCED
FUND FUND FUND FUND FUND FUND
------------- ---------- -------------- ---------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 1,101,375 $1,504,000 $ 244,989 $ 47,495 $ 8,301,715 $1,591,343
144,656 34,980 9,945 0 552,608 13,614
14,466 3,975 1,177 832 73,681 3,415
36,149 9,248 2,942 2,079 0 8,500
0 0 0 0 0 0
------------- ---------- -------------- ---------- --------------- ----------
$ 1,296,646 $1,552,203 $ 259,053 $ 50,406 $ 8,928,004 $1,616,872
------------- ---------- -------------- ---------- --------------- ----------
------------- ---------- -------------- ---------- --------------- ----------
</TABLE>
<TABLE>
<CAPTION>
SMALL COMPANY HEALTH SMALL COMPANY STRATEGIC
VALUE SCIENCES GROWTH VALUE GROWTH & INCOME BALANCED
FUND FUND FUND FUND FUND FUND
------------- ----------- -------------- ---------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C>
$125,884,601 $36,701,119 $ 11,882,707 $7,194,963 $ 701,747,393 $33,311,265
0 0 0 0 19,228 0
6,829,768 727,508 (123,235) 777,570 34,618,610 2,170,569
33,742,429 7,720,809 2,256,059 1,413,631 162,969,604 5,863,443
------------- ----------- -------------- ---------- --------------- -----------
$166,456,798 $45,149,436 $ 14,015,531 $9,386,164 $ 899,354,835 $41,345,277
------------- ----------- -------------- ---------- --------------- -----------
------------- ----------- -------------- ---------- --------------- -----------
</TABLE>
95
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
10. CAPITAL LOSS CARRYOVER
At April 30, 1998, capital loss carryovers available to offset possible
future capital gains of each Fund were as follows:
<TABLE>
<CAPTION>
CAPITAL LOSS CARRYOVER
EXPIRING IN
----------------------- TOTAL CAPITAL
FUND 2004 2005 LOSS CARRYOVER
- -------------------- ---------- -------- --------------
<S> <C> <C> <C>
Post-Venture Capital $2,519,692 $ 0 $2,519,692
Small Company Growth 0 314,676 314,676
</TABLE>
11. YEAR 2000 COMPLIANCE
Many services provided to the Funds and their shareholders by Warburg and
certain of its affiliates (the 'Warburg Service Providers') and the Funds' other
service providers rely on the functioning of their respective computer systems.
Many computer systems cannot distinguish the year 2000 from the year 1900, with
resulting potential difficulty in performing various calculations (the 'Year
2000 Issue'). The Year 2000 Issue could potentially have an adverse impact on
the handling of security trades, the payment of interest and dividends, pricing,
account services and other Fund operations.
The Warburg Service Providers recognize the importance of the Year 2000 Issue
and are taking appropriate steps necessary in preparation for the year 2000. At
this time, there can be no assurance that these steps will be sufficient to
avoid any adverse impact on the Funds nor can there be any assurance that the
Year 2000 Issue will not have an adverse effect on the Funds' investments or on
global markets or economies, generally. In addition, it has been reported that
foreign institutions have made less progress in addressing the Year 2000 Issue
than major U.S. entities, which could adversely effect the Funds' foreign
investments.
The Warburg Service Providers anticipate that their systems and those of the
Funds' other service providers will be adapted in time for the year 2000. To
further this goal, the Warburg Service Providers have coordinated a plan to
repair, adapt or replace systems that are not year 2000 compliant, and are
seeking to obtain similar representations from the Funds' other major service
providers. The Warburg Service Providers will be monitoring the Year 2000 Issue
in an effort to ensure appropriate preparation.
96
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
12. OTHER FINANCIAL HIGHLIGHTS
Each Fund (other than the Health Sciences Fund) currently offers one other
class of shares, Advisor Shares, representing equal pro rata interests in each
of the respective Warburg Pincus Equity Funds. The financial highlights for an
Advisor Share of each Fund are as follows:
<TABLE>
<CAPTION>
CAPITAL APPRECIATION FUND
---------------------------------------------------------------
ADVISOR SHARES
---------------------------------------------------------------
FOR THE SIX
MONTHS ENDED
APRIL 30, FOR THE YEAR ENDED OCTOBER 31,
1998 -----------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------ ------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 20.82 $ 17.73 $16.26 $14.22 $15.28 $13.28
------ ------- ------ ------ ------ ------
Income from Investment Operations:
Net Investment Income (Loss) (0.03) 0.02 0.02 -- (0.08) --
Net Gain on Securities (both realized and
unrealized) 3.52 4.88 3.49 3.02 .23 2.76
------ ------- ------ ------ ------ ------
Total from Investment Operations 3.49 4.90 3.51 3.02 0.15 2.76
------ ------- ------ ------ ------ ------
Less Distributions:
Dividends from Net Investment Income -- (0.01) -- -- (0.02) --
Distributions from Realized Gains (3.81) (1.80) (2.04) (0.98) (1.19) (0.76)
------ ------- ------ ------ ------ ------
Total Distributions (3.81) (1.81) (2.04) (0.98) (1.21) (0.76)
------ ------- ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 20.50 $ 20.82 $17.73 $16.26 $14.22 $15.28
------ ------- ------ ------ ------ ------
------ ------- ------ ------ ------ ------
Total Return 19.77%'D' 30.37% 24.15% 23.41% 1.23% 21.64%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $36,874 $34,601 $23,440 $11,594 $8,169 $10,437
Ratios to average daily net assets:
Operating expenses 1.47%*@ 1.48%@ 1.54%@ 1.62% 1.55% 1.51%
Net investment income (loss) (.30%)* .08% .09% (.18%) (.24%) (.25%)
Decrease reflected in above operating
expense ratios due to
waivers/reimbursements -- -- -- -- .01% --
Portfolio Turnover Rate 87.83%'D' 238.11% 170.69% 146.09% 51.87% 48.26%
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-annualized
* Annualized
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements resulted in a reduction to the
Advisor Shares net expense ratio by .01% for the six months ended April 30,
1998 and by .00% and .01% for the year or period ended October 31, 1997 and
1996, respectively. The Advisor Shares' operating expense ratio after
reflecting these arrangements were 1.46% for the six months ended April 30,
1998, 1.48% and 1.53% for the year or period ended October 31, 1997 and 1996
respectively.
97
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
12. OTHER FINANCIAL HIGHLIGHTS (CONT'D)
<TABLE>
<CAPTION>
EMERGING GROWTH FUND
-------------------------------------------------------------------
ADVISOR SHARES
-------------------------------------------------------------------
FOR THE SIX
MONTHS ENDED
APRIL 30, FOR THE YEAR ENDED OCTOBER 31,
1998 --------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 38.50 $31.99 $29.38 $22.05 $23.51 $18.19
------ ------ ------ ------ ------ ------
Income from Investment Operations:
Net Investment Loss (0.23) (0.33) (0.09) (0.09) (0.08) (0.08)
Net Gain (Loss) on Securities (both
realized and
unrealized) 5.52 6.91 4.45 7.42 (0.02) 5.77
------ ------ ------ ------ ------ ------
Total from Investment
Operations 5.29 6.58 4.36 7.33 (0.10) 5.69
------ ------ ------ ------ ------ ------
Less Distributions:
Distributions from Realized Gains (2.39) (0.07) (1.75) -- (1.36) (0.37)
------ ------ ------ ------ ------ ------
Total Distributions (2.39) (0.07) (1.75) -- (1.36) (0.37)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 41.40 $38.50 $31.99 $29.38 $22.05 $23.51
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
Total Return 14.92%'D' 20.62% 15.69% 33.24% (.29%) 31.67%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $431,653 $457,432 $362,696 $167,225 $64,009 $26,029
Ratios to average daily net assets:
Operating expenses 1.62%*@ 1.63%@ 1.70%@ 1.76% 1.72% 1.73%
Net investment loss (.78%)* (1.01%) (1.05%) (1.08%) (1.08%) (1.09%)
Decrease reflected in above
operating expense ratios due
to waivers/reimbursements .00% .00% .00% .00% .04% .00%
Portfolio Turnover Rate 40.21%'D' 87.03% 65.77% 84.82% 60.38% 68.35%
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-annualized
* Annualized
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements resulted in a reduction to the
Advisor Shares net expense ratio by .01% for the six months ended April 30,
1998 and by .00% and .01% for the year or period ended October 31, 1997 and
1996, respectively. The Advisor Shares' operating expense ratio after
reflecting these arrangements were 1.61% for the six months ended April 30,
1998, 1.63% and 1.69% for the year or period ended October 31, 1997 and 1996
respectively.
98
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POST-VENTURE CAPITAL FUND
----------------------------------------------------------------------------------
ADVISOR SHARES
----------------------------------------------------------------------------------
FOR THE SIX
MONTHS ENDED
APRIL 30, FOR THE YEAR ENDED OCTOBER 31,
1998 ----------------------------
(UNAUDITED) 1997 1996
------------ ------------------------------ ------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $17.44 $15.93 $10.68
----- ----- -----
Income from Investment
Operations:
Net Investment Loss (1.77) (0.22) (0.05)
Net Gain on Securities and
Foreign Currency Related
Items both (realized and
unrealized) 4.64 1.73 5.30
----- ----- -----
Total from Investment
Operations 2.87 1.51 5.25
----- ----- -----
NET ASSET VALUE, END OF PERIOD $20.31 $17.44 $15.93
----- ----- -----
----- ----- -----
Total Return 16.46%'D' 9.48% 49.16%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $51 $270 $204
Ratios to average daily net
assets:
Operating expenses 1.91%@* 1.91%@ 1.90%@
Net investment income (loss) (1.60%)* (1.52%) (1.41%)
Decrease reflected in above
operating expense ratios due
to waivers/reimbursements 1.16%* .70% .75%
Portfolio Turnover Rate 53.59%'D' 197.56% 168.46%
<CAPTION>
POST-VENTURE CAPITAL FUND
-------------------------
ADVISOR 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 Loss --
Net Gain on Securities and
Foreign Currency Related
Items both (realized and
unrealized) 0.68
-----
Total from Investment
Operations 0.68
-----
NET ASSET VALUE, END OF PERIOD $10.68
-----
-----
Total Return 6.80%'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $1
Ratios to average daily net
assets:
Operating expenses 2.15%*
Net investment income (loss) .09%*
Decrease reflected in above
operating expense ratios due
to waivers/reimbursements 9.25%*
Portfolio Turnover Rate 16.90%'D'
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements resulted in a reduction to the
Advisor Shares net expense ratio by .01% for the six months ended April 30,
1998 and by .01% and .00% for the year or period ended October 31, 1997 and
1996, respectively. The Advisor Shares' operating expense ratio after
reflecting these arrangements were 1.90% for the six months ended April 30,
1998, 1.90% and 1.90% for the year or period ended October 31, 1997 and 1996
respectively.
'D' Non-annualized.
* Annualized.
99
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
12. OTHER FINANCIAL HIGHLIGHTS (CONT'D)
<TABLE>
<CAPTION>
SMALL COMPANY VALUE FUND
--------------------------------------------------------------
ADVISOR SHARES
--------------------------------------------------------------
FOR THE SIX
MONTHS ENDED DECEMBER 29, 1995
APRIL 30, FOR THE (COMMENCEMENT OF
1998 YEAR ENDED OPERATIONS) THROUGH
(UNAUDITED) OCTOBER 31, 1997 OCTOBER 31, 1996
------------ ---------------- ------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $18.65 $14.46 $10.00
----- ----- -----
Income from Investment Operations:
Net Investment Loss (0.07) (0.08) (0.02)
Net Gain on Securities (both realized
and unrealized) 0.90 4.44 4.48
----- ----- -----
Total from Investment Operations 0.83 4.36 4.46
----- ----- -----
Less Distributions:
Distributions from Realized Gains (1.93) (0.17) --
----- ----- -----
Total Distributions (1.93) (0.17) --
----- ----- -----
NET ASSET VALUE, END OF PERIOD $17.55 $18.65 $14.46
----- ----- -----
----- ----- -----
Total Return 5.65%'D' 30.47% 44.60'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $71 $255 $5
Ratios to average daily net assets:
Operating expenses 2.01%@* 1.89%@ 1.97%@*
Net investment loss (.83%)* (.78%) (.52%)*
Decrease reflected in above operating
expense ratios due to
waivers/reimbursements .33%* .00% 1.46%*
Portfolio Turnover Rate 34.26%'D' 105.87% 43.14%'D'
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements resulted in a reduction to the
Advisor Shares net expense ratio by .01% for the six months ended April 30,
1998 and by .01% and .00% for the year or period ended October 31, 1997 and
1996, respectively. The Advisor Shares' operating expense ratio after
reflecting these arrangements were 2.00% for the six months ended April 30,
1998, 1.88% and 1.97% for the year or period ended October 31, 1997 and 1996
respectively.
'D' Non-annualized.
* Annualized.
100
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STRATEGIC VALUE FUND
-------------------------------------
ADVISOR SHARES
-------------------------------------
FOR THE SIX
MONTHS ENDED JANUARY 9, 1997
APRIL 30, (COMMENCEMENT OF
1998 OPERATIONS) THROUGH
(UNAUDITED) OCTOBER 31, 1997
------------ --------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.47 $10.13
----- -----
Income from Investment Operations:
Net Investment Income (0.04) 0.02
Net Gain on Securities (both realized and unrealized) 1.37 1.32
----- -----
Total from Investment Operations 1.33 1.34
----- -----
Less Distributions:
Dividends from Net Investment Income -- --
Distributions from Capital Gains (0.58) --
----- -----
Total Distributions (0.58) --
----- -----
NET ASSET VALUE, END OF PERIOD $12.22 $11.47
----- -----
----- -----
Total Return 12.10%'D' 13.23%'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $0 $0
Ratios to average daily net assets:
Operating expenses 1.70%* 1.70%@*
Net investment loss (.45%)* 1.76%*
Decrease reflected in above operating expense ratio due
to waivers/reimbursements .00% 12.76%*
Portfolio Turnover Rate 94.74%'D' 277.99%'D'
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements resulted in a reduction to the
Advisor Shares net expense ratio by .00% for the six months ended April 30,
1998 and by .01% for the year or period ended October 31, 1997. The Advisor
Shares' operating expense ratio after reflecting these arrangements were 1.70%
for the six months ended April 30, 1998, and 1.69% for the year or period
ended October 31, 1997.
'D' Non-annualized.
* Annualized.
101
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
12. OTHER FINANCIAL HIGHLIGHTS (CONT'D)
<TABLE>
<CAPTION>
WARBURG PINCUS
GROWTH & INCOME FUND
-------------------------------------------------------------------------------------
ADVISOR SHARES
-------------------------------------------------------------------------------------
FOR THE SIX FOR THE PERIOD
MONTHS ENDED MAY 15, 1995
APRIL 30, FOR THE TWO FOR THE YEARS ENDED AUGUST 31, (COMMENCEMENT
1998 MONTHS ENDED -------------------------------- OF OPERATIONS)
(UNAUDITED) OCTOBER 31, 1997 1997 1996 TO AUGUST 31, 1995
------------ ---------------- ---------------- -------------- ------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $18.55 $18.42 $14.88 $16.38 $14.87
------------ ------ ------ ------ ------
Income From Investment
Operations:
Net Investment Income 0.05 0.01 0.07 0.08 0.02
Net Gain (Loss) on
Securities (both
realized and unrealized) 2.84 0.14 3.55 (0.69) 1.53
------------ ------ ------ ------ ------
Total from Investment
Operations 2.89 0.15 3.62 (0.61) 1.56
------------ ------ ------ ------ ------
Less Distributions:
Dividends from Net
Investment Income (0.04) (0.02) (0.08) (0.07) (0.05)
Distribution from Realized
Gains (2.95) -- -- (0.81) --
------------ ------ ------ ------ ------
Total Distributions (2.99) (0.02) (0.08) (0.89) (0.05)
------------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $18.45 $18.55 $18.42 $14.88 $16.38
------------ ------ ------ ------ ------
------------ ------ ------ ------ ------
Total Returns 18.03%'D' .81%'D' 24.37% (3.92%) 10.49%'D'
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period
(000) $111,666 $ 87,929 $ 84,867 $ 79,565 $ 56,902
Ratios to average daily net
assets:
Operating expenses 1.56%*@ 1.58%@* 1.54%@ 1.59%@ 1.92%*
Net investment income .50%* .35%* .43% .28% .43%*
Decrease reflected in above
operating expense ratios
due to
waivers/reimbursements .00% .00% .00% .00% .00%
Portfolio Turnover Rate 39.48%'D' 19%'D' 148% 94% 109%*
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements resulted in a reduction to the
Advisor Shares net expense ratio by .01% for the six months ended April 30,
1998. The Advisor Shares' operating expense ratio after reflecting these
arrangements was 1.55% for the six months ended April 30, 1998. There was no
effect to any prior period's expense ratio.
'D' Non-annualized.
* Annualized.
102
<PAGE>
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WARBURG PINCUS
BALANCED FUND
------------------------------------------------------------------
ADVISOR SHARES
------------------------------------------------------------------
FOR THE PERIOD
FOR THE SIX JULY 31, 1995
MONTHS ENDED FOR THE TWO FOR THE YEAR ENDED AUGUST 31, (COMMENCEMENT
APRIL 30, 1998 MONTHS ENDED ------------------------------- OF OPERATIONS)
(UNAUDITED) OCTOBER 31, 1997 1997 1996 TO AUGUST 31, 1995
-------------- ---------------- --------------- -------------- ------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $14.37 $14.22 $11.94 $11.13 $10.72
------ ----- ------ ------ ------
Income From Investment
Operations:
Net Investment Income 0.09 0.03 (0.02) 0.37 0.01
Net Gain on Securities and
Foreign Currency Related
Items
(both realized and
unrealized) 1.05 0.15 2.68 0.68 0.39
------ ----- ------ ------ ------
Total from Investment
Operations 1.14 0.18 2.65 1.05 0.41
------ ----- ------ ------ ------
Less Distributions:
Dividends from Net
Investment Income (0.11) (0.04) (0.22) (0.09) --
Distributions from Realized
Gains (1.29) -- (0.15) (0.15) --
------ ----- ------ ------ ------
Total Distributions (1.40) (0.04) (0.37) (0.24) --
------ ----- ------ ------ ------
NET ASSET VALUE, END OF PERIOD $14.11 $14.37 $14.22 $11.94 $11.13
------ ----- ------ ------ ------
------ ----- ------ ------ ------
Total Returns 8.96%'D' 1.30%'D' 22.66% 9.56% 3.82%'D'
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period
(000) $181 $158 $149 $12 $1
Ratios to average daily net
assets:
Operating expenses 1.61%*@ 1.60%@* 1.60%@ 1.71%@ 1.76%*
Net investment income 1.27%* 1.13%* 1.53% (4.11%) 2.00%*
Decrease reflected in above
operating expense ratios
due to
waivers/reimbursements 1.24%* 1.35%* 1.21% 203.35% 626.71%*
Portfolio Turnover Rate 68.89%'D' 15%'D' 120% 108% 107%'D'
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements resulted in a reduction to the
Advisor Shares net expense ratio by .01% for the six months ended April 30,
1998. The Advisor Shares' operating expense ratio after reflecting these
arrangements was 1.60% for the six months ended April 30, 1998. There was no
effect to any prior period's expense ratio.
'D' Non-annualized.
* Annualized.
103
<PAGE>
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
<PAGE>
[LOGO of Warburg Pincus Funds]
P.O Box 9030, Boston, MA 02205-9030
800-WARBURG (800-927-2874)
www.warburg.com
COUNSELLORS SECURITIES INC., DISTRIBUTOR WPDSF-3-0498
STATEMENT OF DIFFERENCES
------------------------
The dagger symbol shall be expressed as ........................ 'D'
The division sign shall be expressed as ........................ [div]
