<PAGE> 1
As filed with the Securities and Exchange Commission
on May 1, 1997
Registration NOS. 33-12608 and 811-5059
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No.
Post-Effective Amendment No. 21 /X/
REGISTRATION STATEMENT UNDER THE INVESTMENT /X/
COMPANY ACT OF 1940
Amendment No. 24 /X/
HIGHMARK FUNDS
(Exact Name of Registrant as Specified in Charter)
Oaks, Pennsylvania 19456
(Address of principal executive offices)
(800) 433-6884
(Registrant's telephone number, including area code)
Name and address of agent for service:
Martin E. Lybecker, Esq.
Ropes & Gray
One Franklin Square
1301 K Street, N.W., Suite 800 East
Washington, D.C. 20005
It is proposed that this filing will become effective (check appropriate box)
/X/ immediately upon filing pursuant to paragraph (b), or
/ / on [date] pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(i)
/ / on [date] pursuant to paragraph (a)(i)
/ / 75 days after filing pursuant to paragraph (a)(ii)
/ / on [date] pursuant to paragraph (a)(ii) of Rule 485
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for
post-effective amendment No. __ filed on [date].
Pursuant to Rule 24f-2(a) under the Investment Company Act of 1940, the
Registrant has registered an indefinite number or amount of its shares of
beneficial interest under the Securities Act of 1933. The Registrant filed a
Rule 24f-2 Notice with respect to the Registrant's fiscal year ended July 31,
1996 on September 27, 1996.
<PAGE> 2
HighMark Growth Fund
HighMark Income Equity Fund
HighMark Balanced Fund
HighMark Value Momentum Fund
HighMark Blue Chip Growth Fund
HighMark Emerging Growth Fund
HighMark International Equity Fund
HighMark Bond Fund
HighMark Intermediate-Term Bond Fund
HighMark Government Securities Fund
HighMark Convertible Securities Fund
HighMark California Intermediate Tax-Free Bond Fund
HighMark Diversified Money Market Fund
HighMark U.S. Government Money Market Fund
HighMark 100% U.S. Treasury Money Market Fund
HighMark California Tax-Free Money Market Fund
The information required by Items 1 through 9 for the above-referenced
investment portfolios of HighMark Funds (the "Registrant") is hereby
incorporated by reference to Part A of Post-Effective Amendment No. 20 to the
Registrant's Registration Statement on Form N-1A, filed with the Securities and
Exchange Commission on February 25, 1997. The information required by items 10
through 23 for the above-referenced investment portfolios of the Registrant is
hereby incorporated by reference to Part B of Post-Effective Amendment No. 20 to
the Registrant's Registration Statement on Form N-1A filed with the Securities
and Exchange Commission on February 25, 1997.
<PAGE> 3
HIGHMARK FUNDS
HIGHMARK EQUITY FUNDS
INCOME EQUITY FUND
VALUE MOMENTUM FUND
BLUE CHIP GROWTH FUND
GROWTH FUND
EMERGING GROWTH FUND
FIDUCIARY SHARES
- --------------------------------------------------------------------------------
SUPPLEMENT DATED MAY 1, 1997 TO THE PROSPECTUS DATED MARCH 28, 1997
FOR THE HIGHMARK EQUITY FUNDS
- --------------------------------------------------------------------------------
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THE PROSPECTUS FOR FUTURE REFERENCE
CAPITALIZED TERMS USED HEREIN HAVE THE SAME MEANING AS IN THE PROSPECTUS.
In the section entitled "FINANCIAL HIGHLIGHTS" on page 7 of the
prospectus, after the second sentence, the following sentence is inserted:
Financial highlights for the Income Equity Fund and the Growth Fund for
the period from August 1, 1996 through January 31, 1997 are unaudited.
At the end of the third paragraph, the following information is
inserted:
The third, fourth and fifth tables below set forth certain financial
information with respect to the Fiduciary Shares of the Value Momentum Fund, the
Blue Chip Growth Fund and the Emerging Growth Fund. Upon reorganizing as funds
of HighMark Funds on April 28, 1997, Stepstone Value Momentum Fund became
HighMark Value Momentum Fund, Stepstone Blue Chip Growth Fund became HighMark
Blue Chip Growth Fund, and Stepstone Emerging Growth Fund became HighMark
Emerging Growth Fund. Financial highlights through January 31, 1997 represent
the Institutional Class Shares (now Fiduciary Shares) of Stepstone Value
Momentum, Stepstone Blue Chip Growth, and Stepstone Emerging Growth Funds, and
have been derived from financial statements audited by Arthur Andersen LLP,
independent auditors for the Stepstone Funds, whose report thereon is included
in the 1997 Annual Report for the Stepstone Funds, and incorporated by reference
into the Statement of Additional Information.
<PAGE> 4
INCOME EQUITY FUND
[HIGHMARK MUTUAL FUND GROUP LOGO]
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR YEAR
FOR THE ENDED ENDED
SIX MONTHS ENDED YEAR ENDED YEAR ENDED JULY 31, JULY 31,
JANUARY 31, 1997 JULY 31, 1996 JULY 31, 1995 1994(b) 1993
---------------- ------------- ------------- ---------- ---------
FIDUCIARY FIDUCIARY FIDUCIARY FIDUCIARY FIDUCIARY
---------------- ------------- ------------- ---------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD..... $ 14.27 $ 13.00 $ 11.92 $ 12.13 $ 11.42
--------- --------- --------- --------- --------
INVESTMENT ACTIVITIES
Net investment income... 0.18 0.42 0.44 0.39 0.38
Net realized and
unrealized gains on
investments........... 2.21 1.93 1.50 0.12 0.71
--------- --------- --------- --------- --------
Total from Investment
Activities.......... 2.39 2.35 1.94 0.51 1.09
--------- --------- --------- --------- --------
DISTRIBUTIONS
From net investment
income................ (0.19) (0.42) (0.44) (0.39) (0.38)
From net realized
gains................. (1.08) (0.66) (0.42) (0.33) --
--------- --------- --------- --------- --------
Total Distributions... (1.27) (1.08) (0.86) (0.72) (0.38)
--------- --------- --------- --------- --------
NET ASSET VALUE, END OF
PERIOD.................. $ 15.39 $ 14.27 $ 13.00 $ 11.92 $ 12.13
========== ========== ========== ========= =========
Total Return (excludes
sales charges).......... 17.10% (e) 18.25% 17.26% 4.23% 9.75%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of
period (000).......... $302,987 $262,660 $221,325 $213,328 $104,840
Ratio of expenses to
average net assets.... 1.02% (d) 1.03% 1.06% 1.06% 1.15%
Ratio of net investment
income to average net
assets................ 2.45% (d) 2.95% 3.59% 3.29% 3.27%
Ratio of expenses to
average net assets*... 1.25% (d) 1.27% 1.30% 1.10% 1.21%
Ratio of net investment
income to average net
assets*............... 2.22% (d) 2.71% 3.34% 3.24% 3.22%
Portfolio turnover(f)... 23.08% 41.51% 36.64% 33.82% 29.58%
Average commission rate
paid(g)............... $ .0595 $ .0662
</TABLE>
- ---------------
(b) On June 20, 1994, the Income Equity Fund commenced offering Investor Shares
and designated existing shares as Fiduciary Shares.
(d) Annualized.
(e) Not annualized.
(f) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
(g) Represents the dollar amount of commissions paid on Portfolio transactions
divided by the total number of shares purchased and sold for which
commissions were charged and is calculated on the basis of the Portfolio as
a whole without distinguishing between the classes of shares issued.
Disclosure not required for periods prior to fiscal 1996.
* During the period, certain expenses were voluntarily reduced. If such
voluntary expense reductions had not occurred, the ratios would have been as
indicated.
<PAGE> 5
GROWTH FUND
[HIGHMARK MUTUAL FUND GROUP LOGO]
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
NOVEMBER 14,
FOR THE 1993 TO
SIX MONTHS ENDED YEAR ENDED YEAR ENDED JULY 31,
JANUARY 31, 1997 JULY 31, 1996 JULY 31, 1995 1994(a)
---------------- ------------- ------------- -----------
FIDUCIARY FIDUCIARY FIDUCIARY FIDUCIARY
---------------- ------------- ------------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................ $ 12.58 $ 11.87 $ 9.76 $ 10.00
------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income.............. 0.03 0.12 0.15 0.05
Net realized and unrealized gains
(losses) on investments.......... 2.88 1.35 2.26 (0.24)
------- ------- ------- -------
Total from Investment
Activities..................... 2.91 1.47 2.41 (0.19)
------- ------- ------- -------
DISTRIBUTIONS
From net investment income......... (0.03) (0.12) (0.15) (0.05)
From net realized gains............ (0.99) (0.64) (0.15) --
------- ------- ------- -------
Total Distributions.............. (1.02) (0.76) (0.30) (0.05)
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD...... $ 14.47 $ 12.58 $ 11.87 $ 9.76
======= ======= ======= =======
Total Return (excludes sales
charges)........................... 23.59%(e) 12.72% 25.23% (1.87)%(e)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period
(000)............................ $59,156 $41,495 $25,096 $ 15,254
Ratio of expenses to average net
assets........................... 0.97%(c) 0.93% 0.79% 0.77%(c)
Ratio of net investment income to
average net assets............... 0.41%(c) 0.98% 1.40% 0.86%(c)
Ratio of expenses to average net
assets*.......................... 1.57%(c) 1.67% 1.92% 2.61%(c)
Ratio of net investment income
(loss) to average net assets*.... (0.19)%(c) 0.23% 0.26% (0.98)%(c)
Portfolio turnover (d)............. 41.37% 78.58% 67.91% 123.26%
Average commission rate paid (f)... $ .0598 $ .0769
</TABLE>
- ---------------
(a) Period from commencement of operations. On June 20, 1994, the Growth Fund
commenced offering Investor Shares and designated existing shares as
Fiduciary Shares.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
(e) Not annualized.
(f) Represents the dollar amount of commissions paid on Portfolio transactions
divided by the total number of shares purchased and sold for which
commissions were charged and is calculated on the basis of the Portfolio as
a whole without distinguishing between the classes of shares issued.
Disclosure not required for periods prior to fiscal 1996.
* During the period, certain expenses were voluntarily reduced. If such
voluntary expense reductions had not occurred, the ratios would have been as
indicated.
<PAGE> 6
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Stepstone Funds
For a Share Outstanding Throughout the Period or Year
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES DISTRIBUTIONS
NET --------------------------- ------------------- NET NET
ASSET NET REALIZED ASSET ASSETS, RATIO
VALUE, NET AND UNREALIZED NET VALUE, END OF EXPENSES
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000) NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------------
VALUE MOMENTUM FUND
- -------------------
INSTITUTIONAL CLASS
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997 18.05 0.436 4.371 (0.438) (0.848) 21.57 27.33% 317,482 0.79%
1996 13.40 0.331 5.063 (0.337) (0.408) 18.05 40.88% 222,065 0.80%
1995 14.27 0.318 (0.817) (0.317) (0.054) 13.40 (3.48%) 150,138 0.81%
1994 12.76 0.292 1.538 (0.290) (0.030) 14.27 14.56% 140,609 0.77%
1993 11.68 0.310 1.103 (0.311) (0.022) 12.76 12.33% 92,636 0.68%
1992 (3) 10.00 0.312 1.694 (0.302) (0.024) 11.68 20.27% 51,682 0.78%
</TABLE>
<TABLE>
<CAPTION>
RATIO OF
RATIO NET INVESTMENT
OF EXPENSES RATIO OF INCOME TO
TO AVERAGE NET INVESTMENT AVERAGE
NET ASSETS INCOME NET ASSETS PORTFOLIO AVERAGE
EXCLUDING TO AVERAGE EXCLUDING TURNOVER COMMISSION
FEE WAIVERS NET ASSETS FEE WAIVERS RATE RATE (A)
- ------------------------------------------------------------------------------------------
- -------------------
VALUE MOMENTUM FUND
- -------------------
INSTITUTIONAL CLASS
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C>
1997 0.79% 2.26% 2.26% 9% 0.0590
1996 0.80% 2.07% 2.07% 20% n/a
1995 0.81% 2.36% 2.36% 6% n/a
1994 0.79% 2.19% 2.17% 5% n/a
1993 0.78% 2.59% 2.49% 3% n/a
1992 (3) 0.91% 2.88% 2.75% 5% n/a
</TABLE>
(A) Average commission rate paid per share for security purchases and sales
during the period. Presentation of the rate is only required for fiscal
years beginning after September 1, 1995.
(3) Commenced operations on February 1, 1991.
<PAGE> 7
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
Stepstone Funds
For a Share Outstanding Throughout the Period or Year
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES DISTRIBUTIONS
NET --------------------------- ------------------- NET NET
ASSET NET REALIZED ASSET ASSETS, RATIO
VALUE, NET AND UNREALIZED NET VALUE, END OF EXPENSES
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000) NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------------
- ---------------------
BLUE CHIP GROWTH FUND
- ---------------------
INSTITUTIONAL CLASS
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997 12.63 0.160 2.449 (0.162) (0.574) 14.50 21.11% 80,682 0.84%
1996 9.53 0.174 3.311 (0.180) (0.203) 12.63 36.95% 63,410 0.83%
1995 (9) 10.00 0.167 (0.479) (0.158) -- 9.53 (3.10%) 39,319 0.85%
<CAPTION>
RATIO OF
RATIO NET INVESTMENT
OF EXPENSES RATIO OF INCOME TO
TO AVERAGE NET INVESTMENT AVERAGE
NET ASSETS INCOME NET ASSETS PORTFOLIO AVERAGE
EXCLUDING TO AVERAGE EXCLUDING TURNOVER COMMISSION
FEE WAIVERS NET ASSETS FEE WAIVERS RATE RATE (A)
- ------------------------------------------------------------------------------------------
- ---------------------
BLUE CHIP GROWTH FUND
- ---------------------
INSTITUTIONAL CLASS
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C>
1997 0.84% 1.21% 1.21% 80% 0.0598
1996 0.83% 1.54% 1.54% 69% n/a
1995 (9) 0.85% 1.84% 1.84% 89% n/a
<CAPTION>
- --------------------
EMERGING GROWTH FUND
- --------------------
INSTITUTIONAL CLASS
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997 11.94 0.008 2.556 (0.009) (0.991) 13.50 21.79% 57,156 1.04%
1996 9.42 0.026 2.807 (0.033) (0.277) 11.94 30.24% 41,770 1.05%
1995 (9) 10.00 0.086 (0.535) (0.080) (0.051) 9.42 (4.48%) 23,928 1.05%
<CAPTION>
- --------------------
EMERGING GROWTH FUND
- --------------------
INSTITUTIONAL CLASS
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C>
1997 1.04% 0.06% 0.06% 134% 0.0583
1996 1.05% 0.22% 0.22% 131% n/a
1995 (9) 1.05% 1.01% 1.01% 123% n/a
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
(A) Average commission rate paid per share for security purchases and sales
during the period. Presentation of the rate is only required for fiscal
years beginning after September 1, 1995.
(9) Commenced operations on February 1, 1994.
The following information replaces the third paragraph under "GENERAL
INFORMATION -- Description of HighMark & Its Shares" on page 28 of the
prospectus:
HighMark believes that as of April 21, 1997, Union Bank of California
(475 Sansome Street, Post Office Box 45000, San Francisco, CA 94104) was the
Shareholder of record of 85.36% of the Fiduciary Shares of the Growth Fund and
74.09% of the Fiduciary Shares of the Income Equity Fund. As of April 21,
1997, the Value Momentum, Emerging Growth and Blue Chip Growth Funds had not
yet commenced operations in HighMark.
<PAGE> 8
HIGHMARK FUNDS
HIGHMARK EQUITY FUNDS
INCOME EQUITY FUND
VALUE MOMENTUM FUND
GROWTH FUND
EMERGING GROWTH FUND
RETAIL SHARES
- --------------------------------------------------------------------------------
SUPPLEMENT DATED MAY 1, 1997 TO THE PROSPECTUS DATED MARCH 28, 1997
FOR THE HIGHMARK EQUITY FUNDS
- --------------------------------------------------------------------------------
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THE PROSPECTUS FOR FUTURE REFERENCE
CAPITALIZED TERMS USED HEREIN HAVE THE SAME MEANING AS IN THE PROSPECTUS.
In the section entitled "FINANCIAL HIGHLIGHTS" on page 7 of the
prospectus, after the second sentence, the following sentence is inserted:
Financial highlights for the Income Equity Fund and the Growth Fund for
the period from August 1, 1996 through January 31, 1997 are unaudited.
At the end of the third paragraph, the following information is
inserted:
The third and fourth tables below set forth certain financial
information with respect to the Retail Shares of the Value Momentum Fund and the
Emerging Growth Fund. Upon reorganizing as funds of HighMark Funds on April 28,
1997, Stepstone Value Momentum Fund became HighMark Value Momentum Fund and
Stepstone Emerging Growth Fund became HighMark Emerging Growth Fund. Financial
highlights through January 31, 1997 represent the Investment Class Shares (now
Retail Shares) of Stepstone Value Momentum and Stepstone Emerging Growth Funds,
and have been derived from financial statements audited by Arthur Andersen LLP,
independent auditors for the Stepstone Funds, whose report thereon is included
in the 1997 Annual Report for the Stepstone Funds, and incorporated by reference
into the Statement of Additional Information.
The following sentence is added after the second paragraph on the
section entitled "How to Purchase Shares."
Investors may be charged a fee if they effect transactions in fund
shares through a broker or agent.
In the section entitled "How to Purchase Shares - Sales Charge
Waivers," Item 10 is revised as follows:
(10) Investors purchasing Shares on behalf of a qualified prototype
retirement plan (other than an IRA, SEP-IRA or Keogh) sponsored by Union Bank
of California or any other parties;
<PAGE> 9
INCOME EQUITY FUND
[HIGHMARK LOGO]
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
JUNE 20,
FOR THE 1994 TO
SIX MONTHS ENDED YEAR ENDED YEAR ENDED JULY 31,
JANUARY 31, 1997 JULY 31, 1996 JULY 31, 1995 1994(a)(b)
-------------------- ---------------- -------------- ----------
INVESTOR INVESTOR INVESTOR INVESTOR
-------- -------- -------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD..... $ 14.29 $ 13.03 $ 11.92 $11.85
-------- -------- -------- -----
INVESTMENT ACTIVITIES
Net investment income... 0.18 0.42 0.42 0.04
Net realized and
unrealized gains on
investments........... 2.22 1.92 1.55 0.08
-------- -------- -------- -----
Total from Investment
Activities.......... 2.40 2.34 1.97 0.12
-------- -------- -------- -----
DISTRIBUTIONS
From net investment
income................ (0.19) (0.42) (0.44) (0.05)
From net realized
gains................. (1.08) (0.66) (0.42) --
-------- -------- -------- -----
Total Distributions... (1.27) (1.08) (0.86) (0.05)
-------- -------- -------- -----
NET ASSET VALUE, END OF
PERIOD.................. $ 15.42 $ 14.29 $ 13.03 $11.92
========= ========= ========= ===========
Total Return (excludes
sales charges).......... 17.06% (e) 18.21% 17.52% 4.23%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of
period (000).......... $11,750 $10,143 $ 3,881 $ 24
Ratio of expenses to
average net assets.... 1.02% (d) 1.03% 1.06% 1.10%(d)
Ratio of net investment
income to average net
assets................ 2.45% (d) 2.89% 3.06% 0.93%(d)
Ratio of expenses to
average net assets*... 1.50% (d) 1.51% 1.55% 1.33%(d)
Ratio of net investment
income to average net
assets*............... 1.97% (d) 2.41% 2.57% 0.71%(d)
Portfolio turnover(f)... 23.08% 41.51% 36.64% 33.82%
Average commission rate
paid(g)............... $ .0595 $ .0662
</TABLE>
- ---------------
(a) Period from commencement of operations.
(b) On June 20, 1994, the Income Equity Fund commenced offering Investor Shares
and designated existing shares as Fiduciary Shares.
(c) Represents total return for the Fiduciary Shares for the period from August
1, 1993 to June 19, 1994, plus the total return for the Investor Shares for
the period from June 20, 1994 to July 31, 1994.
(d) Annualized.
(e) Not annualized.
(f) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
(g) Represents the dollar amount of commissions paid on Portfolio transactions
divided by the total number of shares purchased and sold for which
commissions were charged and is calculated on the basis of the Portfolio as
a whole without distinguishing between the classes of shares issued.
Disclosure not required for periods prior to fiscal 1996.
* During the period, certain expenses were voluntarily reduced. If such
voluntary expense reductions had not occurred, the ratios would have been as
indicated.
<PAGE> 10
VALUE MOMENTUM FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INVESTMENT CLASS (*)
FOR THE YEARS ENDED JANUARY 31,:
Investment Activities Distributions
Net ------------------------------ ----------------------- Net
Asset Net Realized Asset
Value, Net and Unrealized Net Value,
Beginning Investment Gain (Loss) Investment Capital End Total
of Period Income on Investments Income Gains of Period Return
<S> <C> <C> <C> <C> <C> <C> <C>
1997 18.05 0.389 4.368 (0.393) (0.848) 21.57 27.04%
1996 13.40 0.320 5.060 (0.323) (0.408) 18.05 40.77%
1995 14.27 0.321 (0.820) (0.317) (0.054) 13.40 (3.48%)
1994 12.75 0.297 1.543 (0.290) (0.030) 14.27 14.65%
1993(8) 11.52 0.246 1.257 (0.251) (0.022) 12.75 15.97%*
<CAPTION>
Ratio of
Ratio Net Investments
Net of Expenses Ratio of Income to
Assets, Ratio to Average Net Investment Average
End of Expenses Net Assets Income Net Assets Portfolio Average
of Period to Average Excluding to Average Excluding Turnover Commission
(000) Net Assets Fee Waivers Net Assets Fee Waivers Rate Rate(A)
<S> <C> <C> <C> <C> <C> <C> <C>
1997 15,963 1.04% 1.19% 2.01% 1.86% 9% 0.0590
1996 11,801 0.89% 1.20% 2.00% 1.69% 20% n/a
1995 9,777 0.81% 1.21% 2.37% 1.97% 6% n/a
1994 9,346 0.77% 1.20% 2.12% 1.69% 5% n/a
1993(8) 3,162 0.65% 1.15% 2.53% 2.03% 3% n/a
</TABLE>
* Annualized.
(8) Commenced operations on April 2, 1992.
<PAGE> 11
GROWTH FUND
[HIGHMARK LOGO]
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
JUNE 20,
FOR THE 1994 TO
SIX MONTHS ENDED YEAR ENDED YEAR ENDED JULY 31,
JANUARY 31, 1997 JULY 31, 1996 JULY 31, 1995 1994(a)
-------------------- -------------------- -------------------- --------
INVESTOR INVESTOR INVESTOR INVESTOR
-------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD................ $12.60 $11.87 $ 9.77 $ 9.74
------ ------ ------ ------
INVESTMENT ACTIVITIES
Net investment income.............. 0.03 0.11 0.15 --
Net realized and unrealized gains
(losses) on investments.......... 2.88 1.38 2.25 0.04
------ ------ ------ ------
Total from Investment
Activities..................... 2.91 1.49 2.40 0.04
------ ------ ------ ------
DISTRIBUTIONS
From net investment income......... (0.03) (0.12) (0.15) (0.01)
From net realized gains............ (0.99) (0.64) (0.15) --
------ ------ ------ ------
Total Distributions.............. (1.02) (0.76) (0.30) (0.01)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD...... $14.49 $12.60 $11.87 $ 9.77
====== ====== ====== ======
Total Return (excludes sales
charges)........................... 23.47%(e) 12.88% 25.10% (1.77)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period
(000)............................ $3,617 $2,843 $1,218 $ --
Ratio of expenses to average net
assets........................... 0.97%(c) 0.93% 0.84% --
Ratio of net investment income to
average net assets............... 0.41%(c) 0.96% 1.17% --
Ratio of expenses to average net
assets*.......................... 1.80%(c) 1.91% 2.11% --
Ratio of net investment income
(loss) to average net assets*.... (0.42)%(c) (0.02)% (0.10)% --
Portfolio turnover (d)............. 41.37% 78.58% 67.91% 123.26%
Average commission rate paid (f)... $.0598 $.0769
</TABLE>
- ---------------
(a) Period from commencement of operations. On June 20, 1994, the Growth Fund
commenced offering Investor Shares and designated existing shares as
Fiduciary Shares.
(b) Represents total return for the Fiduciary Shares from commencement of
operations to June 19, 1994, plus the total return for the Investor Shares
for the period from June 20, 1994 to July 31, 1994.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
(e) Not annualized.
(f) Represents the dollar amount of commissions paid on Portfolio transactions
divided by the total number of shares purchased and sold for which
commissions were charged and is calculated on the basis of the Portfolio as
a whole without distinguishing between the classes of shares issued.
Disclosure not required for periods prior to fiscal 1996.
* During the period, certain expenses were voluntarily reduced. If such
voluntary expense reductions had not occurred, the ratios would have been as
indicated.
<PAGE> 12
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Stepstone Funds
For a Share Outstanding Throughout the Period or Year
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES DISTRIBUTIONS
NET --------------------------- ------------------- NET NET
ASSET NET REALIZED ASSET ASSETS, RATIO
VALUE, NET AND UNREALIZED NET VALUE, END OF EXPENSES
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000) NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------------
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997 18.05 0.389 4.368 (0.393) (0.848) 21.57 27.04% 15,963 1.04%
1996 13.40 0.320 5.060 (0.323) (0.408) 18.05 40.77% 11,801 0.89%
1995 14.27 0.321 (0.820) (0.317) (0.054) 13.40 (3.48%) 9,777 0.81%
1994 12.75 0.297 1.543 (0.290) (0.030) 14.27 14.65% 9,346 0.77%
1993 (8) 11.52 0.246 1.257 (0.251) (0.022) 12.75 15.97%* 3,162 0.65%*
</TABLE>
<TABLE>
<CAPTION>
RATIO OF
RATIO NET INVESTMENT
OF EXPENSES RATIO OF INCOME TO
TO AVERAGE NET INVESTMENT AVERAGE
NET ASSETS INCOME NET ASSETS PORTFOLIO AVERAGE
EXCLUDING TO AVERAGE EXCLUDING TURNOVER COMMISSION
FEE WAIVERS NET ASSETS FEE WAIVERS RATE RATE (a)
- ------------------------------------------------------------------------------------------
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C>
1997 1.19% 2.01% 1.86% 9% 0.0590
1996 1.20% 2.00% 1.69% 20% n/a
1995 1.21% 2.37% 1.97% 6% n/a
1994 1.20% 2.12% 1.69% 5% n/a
1993 (8) 1.15%* 2.53%* 2.03%* 3% n/a
</TABLE>
(a) Average commission rate paid per share for security purchases and sales
during the period. Presentation of the rate is only required for fiscal
years beginning after September 1, 1995.
* Annualized.
(8) Commenced operations on April 2, 1992.
In the Section entitled "How To Purchase Shares" under the sub-heading Sales
Charges, the following table replaces a similar table on page 21.
<TABLE>
<CAPTION>
Sales Charge as
Sales Charge as a Appropriate Commission as
Percentage of Percentage of Net Percentage of
Amount of Purchase Offering Price Amount Invested Offering Price
- ------------------ -------------- ----------------- --------------
<S> <C> <C> <C>
0- $49,999 4.50% 4.71% 4.05%
$50,000- $99,999 4.00% 4.17% 3.60%
$100,000-$249,999 3.50% 3.63% 3.15%
$250,000-$499,999 2.50% 2.56% 2.25%
$500,000-$999,999 1.50% 1.52% 1.35%
$1,000,000 and over 0.00%* 0.00% 0.00%
</TABLE>
- ------------------
* A contingent deferred sales charge of 1.00% will be assessed against any
proceeds of any redemption of such Retail Shares prior to one year from date
of purchase.
The following information replaces the third paragraph under "GENERAL
INFORMATION -- Description of HighMark & Its Shares" on page 35 of the
prospectus:
HighMark believes that as of [April 21, 1997], there was no person who
owned of record or beneficially more than 25% of the Retail Shares of the Growth
Fund or the Income Equity Fund. As of [April 21, 1997], the Value Momentum and
Emerging Growth Funds had not yet commenced operations in HighMark.
<PAGE> 13
HIGHMARK FUNDS
HIGHMARK MONEY MARKET FUNDS
DIVERSIFIED MONEY MARKET FUND
U.S. GOVERNMENT MONEY MARKET FUND
100% U.S. TREASURY MONEY MARKET FUND
CALIFORNIA TAX-FREE MONEY MARKET FUND
FIDUCIARY SHARES
- --------------------------------------------------------------------------------
SUPPLEMENT DATED MAY 1, 1997 TO THE PROSPECTUS DATED MARCH 28, 1997
FOR THE HIGHMARK MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THE PROSPECTUS FOR FUTURE REFERENCE
CAPITALIZED TERMS USED HEREIN HAVE THE SAME MEANING AS IN THE PROSPECTUS.
The following replaces the information under "FINANCIAL HIGHLIGHTS" on
page 7 of the prospectus:
The first two tables below set forth certain financial information with
respect to the Fiduciary Shares of the U.S. Government Money Market Fund and the
100% U.S. Treasury Money Market Fund. Financial highlights for the Funds for the
period ended July 31, 1996 have been derived from financial statements audited
by Deloitte & Touche LLP, independent auditors for HighMark, whose report
thereon is included in the Statement of Additional Information. Financial
highlights for the U.S. Government Money Market Fund and the 100% U.S. Treasury
Money Market Fund for the period from August 1, 1996 through January 31, 1997
are unaudited. Prior to fiscal year ended July 31, 1996, Coopers & Lybrand
L.L.P. served as independent accountants for HighMark.
The third and fourth tables below set forth certain financial
information with respect to the Fiduciary Shares of the Diversified Money Market
Fund and the California Tax-Free Money Market Fund. Upon reorganizing as funds
of HighMark Funds on April 28, 1997, Stepstone Money Market Fund became HighMark
Diversified Money Market Fund and Stepstone California Tax-Free Money Market
Fund became HighMark California Tax-Free Money Market Fund. Financial highlights
through January 31, 1997 represent the Institutional Class Shares (now Fiduciary
Shares) of Stepstone Money Market and Stepstone California Tax-Free Money Market
Funds, and have been derived from financial statements audited by
<PAGE> 14
Arthur Andersen LLP, independent auditors for the Stepstone Funds, whose report
thereon is included in the 1997 Annual Report for the Stepstone Funds, and
incorporated by reference into the Statement of Additional Information.
U.S. GOVERNMENT MONEY MARKET FUND
[HIGHMARK LOGO]
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
FOR THE ------------------------------------------------------------------------------
SIX MONTHS ENDED
JANUARY 31, 1997 1996 1995 1994 1993
---------- --------- --------- --------- ---------
FIDUCIARY FIDUCIARY FIDUCIARY FIDUCIARY FIDUCIARY
--------- --------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF
PERIOD......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
INVESTMENT
ACTIVITIES
Net investment
income....... 0.0229 0.048 0.048 0.027 0.027
-------- -------- -------- -------- --------
DISTRIBUTIONS
From net
investment
income....... (0.0229) (0.048) (0.048) (0.027) (0.027)
-------- -------- -------- -------- --------
NET ASSET VALUE,
END OF
PERIOD......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return.... 2.32%(b) 4.88% 4.87% 2.74% 2.72%
RATIOS/SUPPLEMENTARY
DATA:
Net Assets at
end of period
(000)........ $187,459 $151,483 $159,747 $162,094 $166,182
Ratio of
expenses to
average net
assets....... 0.77%(a) 0.77% 0.78% 0.78% 0.71%
Ratio of net
investment
income to
average net
assets....... 4.56%(a) 4.76% 4.76% 2.70% 2.67%
Ratio of
expenses to
average net
assets*...... 1.01%(a) 1.00% 1.02% 0.94% 0.74%
Ratio of net
investment
income to
average net
assets*...... 4.32%(a) 4.53% 4.52% 2.54% 2.65%
</TABLE>
- ---------------
*During the period, certain expenses were voluntarily reduced. If such voluntary
expense reductions had not occurred, the ratios would have been as indicated.
(a) Annualized.
(b) Not annualized.
<PAGE> 15
100% U.S. TREASURY MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
FOR THE ------------------------------------------------------------------------------
SIX MONTHS ENDED
JANUARY 31, 1997 1996 1995 1994 1993
--------- --------- --------- --------- ---------
FIDUCIARY FIDUCIARY FIDUCIARY FIDUCIARY FIDUCIARY
--------- --------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF
PERIOD......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
INVESTMENT
ACTIVITIES
Net investment
income....... 0.0223 0.046 0.046 0.026 0.026
-------- -------- -------- -------- --------
DISTRIBUTIONS
From net
investment
income....... (0.0223) (0.046) (0.046) (0.026) (0.026)
-------- -------- -------- -------- --------
NET ASSET VALUE,
END OF
PERIOD......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return.... 2.26%(b) 4.74% 4.69% 2.68% 2.64%
RATIOS/SUPPLEMENTARY
DATA:
Net Assets at
end of period
(000)........ $182,003 $173,340 $190,604 $160,721 $191,946
Ratio of
expenses to
average net
assets....... 0.75%(a) 0.74% 0.73% 0.74% 0.67%
Ratio of net
investment
income to
average net
assets....... 4.43%(a) 4.64% 4.60% 2.63% 2.60%
Ratio of
expenses to
average net
assets*...... 0.98%(a) 0.97% 0.97% 0.90% 0.72%
Ratio of net
investment
income to
average net
assets*...... 4.20%(a) 4.41% 4.36% 2.48% 2.55%
</TABLE>
- ---------------
*During the period, certain expenses were voluntarily reduced. If such voluntary
expense reductions had not occurred, the ratios would have been as indicated.
(a) Annualized.
(b) Not annualized.
<PAGE> 16
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Stepstone Funds
For a Share Outstanding Throughout the Period or Year
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES DISTRIBUTIONS
NET -------------------------- ---------------------- NET
ASSET NET REALIZED ASSET
VALUE, NET AND UNREALIZED NET CONTRIBUTION VALUE,
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT CAPITAL OF END TOTAL
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS CAPITAL OF PERIOD RETURN
- -------------------------------------------------------------------------------------------------------------------------
- ------------------
MONEY MARKET FUND
- ------------------
INSTITUTIONAL CLASS
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1997 1.00 0.049 -- (0.049) -- -- 1.00 5.03%
1996 1.00 0.054 -- (0.054) -- -- 1.00 5.57%
1995 1.00 0.039 (0.001) (0.039) -- 0.001 1.00 3.99%
1994 1.00 0.029 -- (0.029) -- -- 1.00 2.99%
1993 1.00 0.035 -- (0.035) -- -- 1.00 3.61%
1992 (3) 1.00 0.057 -- (0.057) -- -- 1.00 5.86%
</TABLE>
<TABLE>
<CAPTION>
RATIO OF
RATIO NET INVESTMENT
NET OF EXPENSES RATIO OF INCOME TO
ASSETS, RATIO TO AVERAGE NET INVESTMENT AVERAGE
END OF EXPENSES NET ASSETS INCOME NET ASSETS
OF PERIOD TO AVERAGE EXCLUDING TO AVERAGE EXCLUDING
(000) NET ASSETS FEE WAIVERS NET ASSETS FEE WAIVERS
- -------------------------------------------------------------------------------------
- ------------------
MONEY MARKET FUND
- ------------------
INSTITUTIONAL CLASS
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C>
1997 523,571 0.49% 0.49% 4.93% 4.93%
1996 503,080 0.50% 0.50% 5.43% 5.43%
1995 536,754 0.50% 0.50% 3.93% 3.93%
1994 498,795 0.49% 0.49% 2.93% 2.93%
1993 521,664 0.46% 0.46% 3.47% 3.47%
1992 (3) 240,341 0.48% 0.51% 5.68% 5.65%
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
(3) Commenced operations on February 1, 1991
<PAGE> 17
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
Stepstone Funds
For a Share Outstanding Throughout the Period or Year
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES DISTRIBUTIONS
NET -------------------------- ---------------------- NET NET
ASSET NET REALIZED ASSET ASSETS,
VALUE, NET AND UNREALIZED NET VALUE, END
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000)
- -----------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------
CALIFORNIA TAX-FREE MONEY MARKET FUND
- -------------------------------------
INSTITUTIONAL CLASS
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1997 1.00 0.031 -- (0.031) -- 1.00 3.12% 36,207
1996 1.00 0.034 -- (0.034) -- 1.00 3.48% 42,923
1995 1.00 0.026 -- (0.026) -- 1.00 2.67% 52,050
1994 1.00 0.021 -- (0.021) -- 1.00 2.13% 52,982
1993 1.00 0.025 -- (0.025) -- 1.00 2.61% 45,521
1992 (5) 1.00 0.025 -- (0.025) -- 1.00 3.75%* 30,567
</TABLE>
<TABLE>
<CAPTION>
RATIO OF
RATIO NET INVESTMENT
OF EXPENSES RATIO OF INCOME TO
RATIO TO AVERAGE NET INVESTMENT AVERAGE
OF EXPENSES NET ASSETS INCOME NET ASSETS PORTFOLIO
TO AVERAGE EXCLUDING TO AVERAGE EXCLUDING TURNOVER
NET ASSETS FEE WAIVERS NET ASSETS FEE WAIVERS RATE
- -----------------------------------------------------------------------------------------
- -------------------------------------
CALIFORNIA TAX-FREE MONEY MARKET FUND
- -------------------------------------
INSTITUTIONAL CLASS
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C>
1997 0.27% 0.49% 3.08% 2.86% --
1996 0.28% 0.49% 3.43% 3.22% --
1995 0.29% 0.50% 2.66% 2.45% --
1994 0.30% 0.54% 2.09% 1.85% --
1993 0.30% 0.54% 2.53% 2.29% --
1992 (5) 0.30%* 0.57%* 3.82%* 3.55%* --
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
* Annualized.
(5) Commenced operations on June 10, 1991
<PAGE> 18
The following information replaces the third paragraph under "GENERAL
INFORMATION -- Description of HighMark & Its Shares" on page 35 of the
prospectus:
HighMark believes that as of April 21, 1997 Union Bank of California (475
Sansome Street, Post Office Box 45000, San Francisco, CA 94104) was the
shareholder of record of 98.84% of the Fiduciary Shares of the Diversified
Money Market Fund, 97.10% of the Fiduciary Shares of the U.S. Government Money
Market Fund, 99.23% of the Fiduciary Shares of the 100% U.S. Treasury Money
Market Fund, and substantially all of the Fiduciary Shares of the California
Tax-Free Money Market Fund.
<PAGE> 19
HIGHMARK FUNDS
HIGHMARK MONEY MARKET FUNDS
DIVERSIFIED MONEY MARKET FUND
U.S. GOVERNMENT MONEY MARKET FUND
100% U.S. TREASURY MONEY MARKET FUND
CALIFORNIA TAX-FREE MONEY MARKET FUND
RETAIL SHARES
- --------------------------------------------------------------------------------
SUPPLEMENT DATED MAY 1, 1997 TO THE PROSPECTUS DATED MARCH 28, 1997
FOR THE HIGHMARK MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THE PROSPECTUS FOR FUTURE REFERENCE
CAPITALIZED TERMS USED HEREIN HAVE THE SAME MEANING AS IN THE PROSPECTUS.
The following replaces the information under "FINANCIAL HIGHLIGHTS" on
page 7 of the prospectus:
The first two tables below set forth certain financial information with
respect to the Retail Shares of the U.S. Government Money Market Fund and the
100% U.S. Treasury Money Market Fund. Financial highlights for the Funds for the
period ended July 31, 1996 have been derived from financial statements audited
by Deloitte & Touche LLP, independent auditors for HighMark, whose report
thereon is included in the Statement of Additional Information. Financial
highlights for the U.S. Government Money Market Fund and the 100% U.S. Treasury
Money Market Fund for the period from August 1, 1996 through January 31, 1997
are unaudited. Prior to fiscal year ended July 31, 1996, Coopers & Lybrand
L.L.P. served as independent accountants for HighMark.
The third and fourth tables below set forth certain financial
information with respect to the Retail Shares of the Diversified Money Market
Fund and the California Tax-Free Money Market Fund. Upon reorganizing as funds
of HighMark Funds on April 28, 1997, Stepstone Money Market Fund became HighMark
Diversified Money Market Fund and Stepstone California Tax-Free Money Market
Fund became HighMark California Tax-Free Money Market Fund. Financial highlights
through January 31, 1997 represent the Investment Class Shares (now Retail
Shares) of Stepstone Money Market and Stepstone California Tax-Free Money Market
Funds, and have been derived from financial statements audited by Arthur
<PAGE> 20
Andersen LLP, independent auditors for the Stepstone Funds, whose report thereon
is included in the 1997 Annual Report for the Stepstone Funds, and incorporated
by reference into the Statement of Additional Information.
U.S. GOVERNMENT MONEY MARKET FUND
[HIGHMARK LOGO]
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
FOR THE ------------------------------------------------------------------------------
SIX MONTHS ENDED
JANUARY 31, 1997 1996 1995 1994 1993
-------------------- -------- -------- -------- --------
INVESTOR INVESTOR INVESTOR INVESTOR INVESTOR
-------------------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF
PERIOD......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
INVESTMENT
ACTIVITIES
Net investment
income....... 0.0229 0.048 0.048 0.027 0.027
------- ------- ------- ------- -------
DISTRIBUTIONS
From net
investment
income....... (0.0229) (0.048) (0.048) (0.027) (0.027)
------- ------- ------- ------- -------
NET ASSET VALUE,
END OF
PERIOD......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======
Total Return.... 2.31%(b) 4.86% 4.86% 2.74% 2.72%
RATIOS/SUPPLEMENTARY
DATA:
Net Assets at
end of period
(000)........ $ 38,486 $ 75,714 $ 48,474 $ 24,055 $ 37,332
Ratio of
expenses to
average net
assets....... 0.79%(a) 0.79% 0.78% 0.77% 0.71%
Ratio of net
investment
income to
average net
assets....... 4.55%(a) 4.77% 4.82% 2.63% 2.67%
Ratio of
expenses to
average net
assets*...... 1.26%(a) 1.26% 1.27% 1.17% 0.79%
Ratio of net
investment
income to
average net
assets*...... 4.08%(a) 4.30% 4.33% 2.23% 2.59%
</TABLE>
- ---------------
*During the period, certain expenses were voluntarily reduced. If such voluntary
expense reductions had not occurred, the ratios would have been as indicated.
(a) Annualized.
(b) Not annualized.
<PAGE> 21
100% U.S. TREASURY MONEY MARKET FUND
[HIGHMARK LOGO]
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
FOR THE ------------------------------------------------------------------------------
SIX MONTHS ENDED
JANUARY 31, 1997 1996 1995 1994 1993
-------------------- -------- -------- -------- ---------
INVESTOR INVESTOR INVESTOR INVESTOR INVESTOR
-------------------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF
PERIOD......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
INVESTMENT
ACTIVITIES
Net investment
income....... 0.0223 0.046 0.046 0.026 0.026
-------- -------- -------- -------- --------
DISTRIBUTIONS
From net
investment
income....... (0.0223) (0.046) (0.046) (0.026) (0.026)
-------- -------- -------- -------- --------
NET ASSET VALUE,
END OF
PERIOD......... $ 1.00 $ 1.00 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return.... 2.26%(b) 4.74% 4.69% 2.68% 2.64%
RATIOS/SUPPLEMENTARY
DATA:
Net Assets at
end of period
(000)........ $ 89,129 $100,623 $ 88,660 $ 39,157 $ 32,629
Ratio of
expenses to
average net
assets....... 0.75%(a) 0.74% 0.73% 0.74% 0.67%
Ratio of net
investment
income to
average net
assets....... 4.43%(a) 4.64% 4.68% 2.68% 2.60%
Ratio of
expenses to
average net
assets*...... 1.23%(a) 1.23% 1.22% 1.15% 0.75%
Ratio of net
investment
income to
average net
assets*...... 3.95%(a) 4.15% 4.19% 2.27% 2.52%
</TABLE>
- ---------------
*During the period, certain expenses were voluntarily reduced. If such voluntary
expense reductions had not occurred, the ratios would have been as indicated.
(a) Annualized.
(b) Not annualized.
<PAGE> 22
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Stepstone Funds
For a Share Outstanding Throughout the Period or Year
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES DISTRIBUTIONS
NET -------------------------- ---------------------- NET
ASSET NET REALIZED ASSET
VALUE, NET AND UNREALIZED NET CONTRIBUTION VALUE,
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT CAPITAL OF END TOTAL
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS CAPITAL OF PERIOD RETURN
- -------------------------------------------------------------------------------------------------------------------------
- -----------------
MONEY MARKET FUND
- -----------------
INVESTMENT CLASS
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1997 1.00 0.047 -- (0.047) -- -- 1.00 4.78%
1996 1.00 0.052 -- (0.052) -- -- 1.00 5.31%
1995 1.00 0.037 -- (0.037) -- -- 1.00 3.78%
1994 1.00 0.027 -- (0.027) -- -- 1.00 2.77%
1993 1.00 0.033 -- (0.033) -- -- 1.00 3.36%
1992 (4) 1.00 0.036 -- (0.036) -- -- 1.00 4.74%*
<CAPTION>
RATIO OF
RATIO NET INVESTMENT
NET OF EXPENSES RATIO OF INCOME TO
ASSETS, RATIO TO AVERAGE NET INVESTMENT AVERAGE
END OF EXPENSES NET ASSETS INCOME NET ASSETS
OF PERIOD TO AVERAGE EXCLUDING TO AVERAGE EXCLUDING
(000) NET ASSETS FEE WAIVERS NET ASSETS FEE WAIVERS
- -------------------------------------------------------------------------------------
- -----------------
MONEY MARKET FUND
- -----------------
INVESTMENT CLASS
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C>
1997 576,566 0.73% 0.88% 4.69% 4.54%
1996 259,608 0.75% 0.90% 5.16% 5.01%
1995 111,267 0.70% 0.90% 3.79% 3.59%
1994 86,291 0.70% 0.89% 2.71% 2.52%
1993 79,253 0.69% 0.86% 3.41% 3.24%
1992 (4) 144,086 0.67%* 0.70%* 4.95%* 4.92%*
</TABLE>
Amounts designated as " -- " are either $0 or have been rounded to $0.
* Annualized.
(4) Commenced operations on May 28, 1991.
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES DISTRIBUTIONS
NET -------------------------- ---------------------- NET NET
ASSET NET REALIZED ASSET ASSETS,
VALUE, NET AND UNREALIZED NET VALUE, END
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000)
- -----------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------
CALIFORNIA TAX-FREE MONEY MARKET FUND
- -------------------------------------
INVESTMENT CLASS(**)
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1997 1.00 0.027 -- (0.027) -- 1.00 2.78% 150,688
1996 1.00 0.031 -- (0.031) -- 1.00 3.14% 81,177
1995 1.00 0.023 -- (0.023) -- 1.00 2.33% 49,494
1994 1.00 0.018 -- (0.018) -- 1.00 1.80% 52,220
1993 1.00 0.022 -- (0.022) -- 1.00 2.27% 8,542
1992 (6) 1.00 0.021 -- (0.021) -- 1.00 3.24%* 8,246
<CAPTION>
RATIO OF
RATIO NET INVESTMENT
OF EXPENSES RATIO OF INCOME TO
RATIO TO AVERAGE NET INVESTMENT AVERAGE
OF EXPENSES NET ASSETS INCOME NET ASSETS
TO AVERAGE EXCLUDING TO AVERAGE EXCLUDING
NET ASSETS FEE WAIVERS NET ASSETS FEE WAIVERS
- -----------------------------------------------------------------------------
- -------------------------------------
CALIFORNIA TAX-FREE MONEY MARKET FUND
- -------------------------------------
INVESTMENT CLASS(**)
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C>
1997 0.60% 0.88% 2.75% 2.47%
1996 0.61% 0.88% 3.09% 2.82%
1995 0.62% 0.90% 2.33% 2.05%
1994 0.63% 0.94% 1.76% 1.45%
1993 0.63% 0.94% 2.21% 1.90%
1992 (6) 0.61%* 0.88%* 3.44%* 3.17%*
</TABLE>
Amounts designated as " -- " are either $0 or have been rounded to $0.
* Annualized.
** Total return does not reflect the sales charge.
(6) Commenced operations on June 25, 1991.
The following information replaces the third paragraph under "GENERAL
INFORMATION -- Description of HighMark & Its Shares" on page 40 of the
prospectus:
HighMark believes that as of April 21, 1997, there was no person who
owned of record or beneficially more than 25% of the Retail Shares of the
Diversified Money Market Fund, the U.S. Government Money Market Fund, the 100%
U.S. Treasury Money Market Fund, or the California Tax- Free Money Market Fund.
<PAGE> 23
HIGHMARK FUNDS
HIGHMARK FIXED INCOME FUNDS
INTERMEDIATE-TERM BOND FUND
BOND FUND
GOVERNMENT SECURITIES FUND
FIDUCIARY SHARES
- --------------------------------------------------------------------------------
SUPPLEMENT DATED MAY 1, 1997 TO THE PROSPECTUS DATED MARCH 28, 1997
FOR THE HIGHMARK FIXED INCOME FUNDS
- ------------------------------------------------------------------------------
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THE PROSPECTUS FOR FUTURE REFERENCE
CAPITALIZED TERMS USED HEREIN HAVE THE SAME MEANING AS IN THE PROSPECTUS.
In the section entitled "FINANCIAL HIGHLIGHTS" on page 7 of the
prospectus, after the third sentence, the following sentence is inserted:
Financial highlights for the Bond Fund for the period from August 1, 1996
through January 31, 1997 are unaudited.
At the end of the second paragraph, the following information is inserted:
The second and third tables below set forth certain financial information
with respect to the Fiduciary Shares of the Intermediate-Term Bond Fund and the
Government Securities Fund. Upon reorganizing as funds of HighMark Funds on
April 28, 1997, Stepstone Intermediate-Term Bond Fund became HighMark
Intermediate-Term Bond Fund and Stepstone Government Securities Fund became
HighMark Government Securities Fund. Financial highlights through January 31,
1997 represent Institutional Class Shares (now Fiduciary Shares) of Stepstone
Intermediate-Term and Stepstone Government Securities Funds, and have been
derived from financial statements audited by Arthur Andersen LLP, independent
auditors for the Stepstone Funds, whose report thereon is included in the 1997
Annual Report for the Stepstone Funds, and incorporated by reference into the
Statement of Additional Information.
The tables on pages 8 and 9 of the prospectus are replaced with the
following tables:
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Stepstone Funds
For a Share Outstanding Throughout the Period or Year
BOND FUND
[HIGHMARK LOGO]
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE YEAR
SIX MONTHS YEAR ENDED YEAR ENDED ENDED
ENDED JANUARY 31, JULY 31, JULY 31, JULY 31,
1997 1996 1995 1994(b)
----------------- --------- --------- ---------
FIDUCIARY FIDUCIARY FIDUCIARY FIDUCIARY
--------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD..................... $ 10.23 $ 10.38 $ 10.11 $ 11.13
--------- --------- --------- ---------
INVESTMENT ACTIVITIES
Net investment income................... $ 0.29 0.66 0.64 0.63
Net realized and unrealized gains
(losses) on investments............... 0.19 (0.16) 0.27 (0.97)
--------- --------- --------- ---------
Total from Investment Activities...... 0.48 0.50 0.91 (0.34)
--------- --------- --------- ---------
DISTRIBUTIONS
From net investment income.............. (0.30) (0.65) (0.64) (0.63)
From net realized gains................. -- -- -- (0.01)
In excess of net realized gains......... -- -- -- (0.04)
--------- --------- --------- ---------
Total Distributions................... 0.30 (0.65) (0.64) (0.68)
--------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD........... $ 10.41 $ 10.23 $ 10.38 $ 10.11
========== ========== ========== ==========
Total Return (excludes sales charges).... 4.74%(e) 4.81% 9.43% (3.14)%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)....... $61,925 $60,374 $59,758 $64,185
Ratio of expenses to average net
assets................................ 0.88%(d) 0.89% 0.92% 0.86%
Ratio of net investment income to
average net assets.................... 6.02%(d) 6.10% 6.35% 6.11%
Ratio of expenses to average net
assets*............................... 1.59%(d) 1.61% 1.64% 1.37%
Ratio of net investment income to
average net assets*................... 5.31%(d) 5.38% 5.62% 5.60%
Portfolio turnover(f)................... 5.73% 20.88% 36.20% 44.33%
</TABLE>
- ---------------
(b) On June 20, 1994, the Bond Fund commenced offering Investor Shares and
designated existing shares as Fiduciary Shares.
(d) Annualized.
(e) Not annualized.
(f) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
* During the period, certain expenses were voluntarily reduced. If such
voluntary expense reductions had not occurred, the ratios would have been as
indicated.
<PAGE> 24
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------
Stepstone Funds
For a Share Outstanding Throughout the Period or Year
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES DISTRIBUTIONS
NET ------------------------------ --------------------- NET NET
ASSET NET REALIZED ASSET ASSETS,
VALUE, NET AND UNREALIZED NET VALUE, END
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000)
- ----------------------------------------------------------------------------------------------------------------------------
- -------------------------------------
INTERMEDIATE-TERM BOND FUND
- -------------------------------------
INSTITUTIONAL CLASS
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1997 10.62 0.599 (0.460) (0.595) -- 10.16 1.43% 150,411
1996 9.67 0.609 0.951 (0.609) -- 10.62 16.58% 132,942
1995 10.72 0.589 (1.034) (0.590) (0.015) 9.67 (4.11%) 109,848
1994 10.57 0.598 0.352 (0.595) (0.205) 10.72 9.22% 130,308
1993 10.49 0.650 0.409 (0.636) (0.343) 10.57 10.47% 112,806
1992 (3) 10.00 0.750 0.603 (0.745) (0.118) 10.49 14.05% 76,779
<CAPTION>
RATIO OF
RATIO NET INVESTMENT
OF EXPENSES RATIO OF INCOME TO
RATIO TO AVERAGE NET INVESTMENT AVERAGE
OF EXPENSES NET ASSETS INCOME NET ASSETS PORTFOLIO
TO AVERAGE EXCLUDING TO AVERAGE EXCLUDING TURNOVER
NET ASSETS FEE WAIVERS NET ASSETS FEE WAIVERS RATE
- ------------------------------------------------------------------------------------------
- -------------------------------------
INTERMEDIATE-TERM BOND FUND
- -------------------------------------
INSTITUTIONAL CLASS
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C>
1997 0.67% 0.68% 5.93% 5.92% 106%
1996 0.68% 0.68% 5.97% 5.97% 147%
1995 0.71% 0.71% 5.89% 5.89% 95%
1994 0.69% 0.69% 5.56% 5.56% 72%
1993 0.67% 0.67% 6.16% 6.16% 88%
1992 (3) 0.72% 0.75% 7.37% 7.34% 126%
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
(3) Commenced operations on February 1, 1991.
<PAGE> 25
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES DISTRIBUTIONS
NET ------------------------------ --------------------- NET NET
ASSET NET REALIZED ASSET ASSETS,
VALUE, NET AND UNREALIZED NET VALUE, END
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000)
- ----------------------------------------------------------------------------------------------------------------------------
- -------------------------------------
GOVERNMENT SECURITIES FUND
- -------------------------------------
INSTITUTIONAL CLASS
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1997 9.94 0.524 (0.505) (0.520) -- 9.44 0.34% 51,382
1996 9.07 0.556 0.870 (0.556) -- 9.94 16.16% 46,725
1995 (9) 10.00 0.491 (0.950) (0.475) -- 9.07 (4.49%) 32,178
<CAPTION>
RATIO OF
RATIO NET INVESTMENT
OF EXPENSES RATIO OF INCOME TO
RATIO TO AVERAGE NET INVESTMENT AVERAGE
OF EXPENSES NET ASSETS INCOME NET ASSETS PORTFOLIO AVERAGE
TO AVERAGE EXCLUDING TO AVERAGE EXCLUDING TURNOVER COMMISSION
NET ASSETS FEE WAIVERS NET ASSETS FEE WAIVERS RATE RATE(A)
- ---------------------------------------------------------------------------------------------------------
- -------------------------------------
GOVERNMENT SECURITIES FUND
- -------------------------------------
INSTITUTIONAL CLASS
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C>
1997 0.74% 0.74% 5.59% 5.59% 186% n/a
1996 0.75% 0.75% 5.89% 5.89% 239% n/a
1995 (9) 0.75% 0.75% 5.46% 5.46% 184% n/a
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
(A) Average commission rate paid per share for security purchases and sales
during the period. Presentation of the rate is only required for fiscal
years beginning after September 1, 1995.
(9) Commenced operations on February 1, 1994.
<PAGE> 26
The following information replaces the third paragraph under "GENERAL
INFORMATION -- Description of HighMark & Its Shares" on page 24 of the
prospectus:
HighMark believes that as of April 21, 1997, Union Bank of California
(475 Sansome Street, Post Office Box 45000, San Francisco, CA 94104) was the
Shareholder of record of 90.40% of the Fiduciary Shares of the Bond Fund. As
of April 21, 1997, the Intermediate-Term Bond Fund and the Government
Securities Fund had not yet commenced operations in HighMark.
<PAGE> 27
HIGHMARK FUNDS
HIGHMARK FIXED INCOME FUNDS
INTERMEDIATE-TERM BOND FUND
BOND FUND
RETAIL SHARES
- --------------------------------------------------------------------------------
SUPPLEMENT DATED MAY 1, 1997 TO THE PROSPECTUS DATED MARCH 28, 1997
FOR THE HIGHMARK FIXED INCOME FUNDS
- --------------------------------------------------------------------------------
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THE PROSPECTUS FOR FUTURE REFERENCE
CAPITALIZED TERMS USED HEREIN HAVE THE SAME MEANING AS IN THE PROSPECTUS.
In the section entitled "FINANCIAL HIGHLIGHTS" on page 7 of the
prospectus, after the third sentence, the following sentence is inserted:
Financial highlights for the Bond Fund for the period from August 1, 1996
through January 31, 1997 are unaudited.
At the end of the second paragraph, the following information is inserted:
The second table below sets forth certain financial information with
respect to the Retail Shares of the Intermediate-Term Bond Fund. Upon
reorganizing as a fund of HighMark Funds on April 28, 1997, Stepstone
Intermediate-Term Bond Fund became HighMark Intermediate-Term Bond Fund.
Financial highlights through January 31, 1997 represent Investment Class Shares
(now Retail Shares) of Stepstone Intermediate-Term Bond Fund, and have been
derived from financial statements audited by Arthur Andersen LLP, independent
auditors for the Stepstone Funds, whose report thereon is included in the 1997
Annual Report for the Stepstone Funds, and incorporated by reference into the
Statement of Additional Information.
The table on page 8 of the prospectus is replaced with the following
tables:
<PAGE> 28
BOND FUND
[HIGHMARK LOGO]
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED JANUARY 31, YEAR ENDED YEAR ENDED
1997 JULY 31, 1996 JULY 31, 1995
----------------- ------------- --------------
INVESTOR INVESTOR INVESTOR
-------- -------- --------
(UNAUDITED)
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD..................... $10.15 $10.29 $10.04
-------- -------- --------
INVESTMENT ACTIVITIES
Net investment income................... $ 0.27 0.69 0.66
Net realized and unrealized gains
(losses) on investments............... 0.20 (0.18) 0.23
-------- -------- --------
Total from Investment Activities...... 0.47 0.51 0.89
-------- -------- --------
DISTRIBUTIONS
From net investment income.............. (0.30) (0.65) (0.64)
From net realized gains................. -- -- --
In excess of net realized gains......... -- -- --
-------- -------- --------
Total Distributions................... (0.30) (0.65) (0.64)
-------- -------- --------
NET ASSET VALUE, END OF PERIOD........... $10.32 $10.15 $10.29
========= ======== =========
Total Return (excludes sales charges).... 4.68%(e) 4.95% 9.29%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)....... $ 926 $1,157 $ 558
Ratio of expenses to average net
assets................................ 0.88%(d) 0.89% 0.92%
Ratio of net investment income to
average net assets.................... 6.03%(d) 6.10% 6.29%
Ratio of expenses to average net
assets*............................... 1.84%(d) 1.85% 1.89%
Ratio of net investment income to
average net assets*................... 5.07%(d) 5.14% 5.32%
Portfolio turnover(f)................... 5.73% 20.88% 36.20%
<CAPTION>
JUNE 20, YEAR
1994 TO ENDED
JULY 31, JULY 31,
1994(a)(b) 1993
----------- --------
INVESTOR INVESTOR
----------- --------
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD..................... $ 10.12 $ 11.02
----- --------
INVESTMENT ACTIVITIES
Net investment income................... 0.07 0.70
Net realized and unrealized gains
(losses) on investments............... (0.05) 0.35
----- --------
Total from Investment Activities...... 0.02 1.05
----- --------
DISTRIBUTIONS
From net investment income.............. (0.10) (0.70)
From net realized gains................. -- (0.24)
In excess of net realized gains......... -- --
----- --------
Total Distributions................... (0.10) (0.94)
----- --------
NET ASSET VALUE, END OF PERIOD........... $ 10.04 $ 11.13
=========== =========
Total Return (excludes sales charges).... (3.81)%(c) 10.07%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)....... $ 7 $33,279
Ratio of expenses to average net
assets................................ 0.99%(d) 0.93%
Ratio of net investment income to
average net assets.................... 5.77%(d) 6.41%
Ratio of expenses to average net
assets*............................... 2.96%(d) 1.55%
Ratio of net investment income to
average net assets*................... 3.80%(d) 5.79%
Portfolio turnover(f)................... 44.33% 58.81%
</TABLE>
- ---------------
(a) Period from commencement of operations.
(b) On June 20, 1994, the Bond Fund commenced offering Investor Shares and
designated existing shares as Fiduciary Shares.
(c) Represents total return for the Fiduciary shares for the period from August
1, 1993 to June 19, 1994, plus the total return for the Investor Shares for
the period from June 20, 1994 to July 31, 1994.
(d) Annualized.
(e) Not annualized.
(f) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
* During the period, certain expenses were voluntarily reduced. If such
voluntary expense reductions had not occurred, the ratios would have been as
indicated.
2
<PAGE> 29
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Stepstone Funds
For a Share Outstanding Throughout the Period or Year
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES DISTRIBUTIONS
NET ------------------------------ --------------------- NET NET
ASSET NET REALIZED ASSET ASSETS,
VALUE, NET AND UNREALIZED NET VALUE, END
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000)
- ----------------------------------------------------------------------------------------------------------------------------
- -------------------------------------
INTERMEDIATE-TERM BOND FUND
- -------------------------------------
INVESTMENT CLASS (**)
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1997 10.61 0.602 (0.462) (0.595) -- 10.16 1.54% 5,213
1996 9.67 0.609 0.940 (0.609) -- 10.61 16.48% 6,417
1995 10.72 0.589 (1.034) (0.590) (0.015) 9.67 (4.11%) 6,645
1994 10.57 0.615 0.335 (0.595) (0.205) 10.72 9.23% 9,308
1993 (11) 10.49 0.609 0.450 (0.636) (0.343) 10.57 10.59%* 2,897
<CAPTION>
RATIO OF
RATIO NET INVESTMENT
OF EXPENSES RATIO OF INCOME TO
RATIO TO AVERAGE NET INVESTMENT AVERAGE
OF EXPENSES NET ASSETS INCOME NET ASSETS PORTFOLIO
TO AVERAGE EXCLUDING TO AVERAGE EXCLUDING TURNOVER
NET ASSETS FEE WAIVERS NET ASSETS FEE WAIVERS RATE
- ------------------------------------------------------------------------------------------
- -------------------------------------
INTERMEDIATE-TERM BOND FUND
- -------------------------------------
INVESTMENT CLASS (**)
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C>
1997 0.67% 1.08% 5.91% 5.50% 106%
1996 0.68% 1.09% 5.99% 5.58% 147%
1995 0.71% 1.11% 5.87% 5.47% 95%
1994 0.69% 1.09% 5.51% 5.11% 72%
1993 (11) 0.65%* 1.05%* 6.01%* 5.61%* 88%
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
* Annualized.
** Total return does not reflect the sales charge.
(11) Commenced operations on February 3, 1992.
<PAGE> 30
In the Section entitled "How To Purchase Shares" under the sub-heading Sales
Charges, the following table replaces a similar table on page 18.
<TABLE>
<CAPTION>
Sales Charge as
Sales Charge as a Appropriate Commission as
Percentage of Percentage of Net Percentage of
Amount of Purchase Offering Price Amount Invested Offering Price
- ------------------ ------------------ ----------------- --------------
<S> <C> <C> <C>
0-$24,999 3.00% 3.09% 2.70%
$25,000-$49,999 2.50% 2.56% 2.25%
$50,000-$99,999 2.00% 2.04% 1.80%
$100,000-$249,999 1.50% 1.52% 1.35%
$250,000-$999,999 1.00% 1.01% 0.90%
$1,000,000 and Over 0.00%* 0.00% 0.00%
</TABLE>
- ------------
* A contingent deferred sales charge of 1.00% will be assessed against any
proceeds of any redemption of such Retail Shares prior to one year from date
of purchase.
The following information replaces the third paragraph under "GENERAL
INFORMATION -- Description of HighMark & Its Shares" on page 31 of the
prospectus:
HighMark believes that as of April 21, 1997, there was no person who
owned of record or beneficially more than 25% of the Retail Shares of the Bond
Fund. As of April 21, 1997, the Intermediate-Term Bond Fund had not yet
commenced operations in HighMark.
<PAGE> 31
HIGHMARK FUNDS
HIGHMARK BALANCED FUND
FIDUCIARY SHARES
- --------------------------------------------------------------------------------
SUPPLEMENT DATED MAY 1, 1997 TO THE PROSPECTUS DATED MARCH 28, 1997
FOR THE HIGHMARK BALANCED FUND
- --------------------------------------------------------------------------------
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THE PROSPECTUS FOR FUTURE REFERENCE
CAPITALIZED TERMS USED HEREIN HAVE THE SAME MEANING AS IN THE PROSPECTUS.
The following information replaces the information relating to the
HighMark Balanced Fund under "FINANCIAL HIGHLIGHTS" on page 5 of the prospectus:
The table below sets forth certain financial information with respect
to the Fiduciary Shares of the Balanced Fund. Upon reorganizing as a fund of
HighMark Funds on April 28, 1997, Stepstone Balanced Fund became HighMark
Balanced Fund. Financial highlights through January 31, 1997 represent
Institutional Class Shares (now Fiduciary Shares) of Stepstone Balanced Fund,
and have been derived from financial statements audited by Arthur Andersen LLP,
independent auditors for the Stepstone Funds, whose report thereon is included
in the 1997 Annual Report for the Stepstone Funds, and incorporated by reference
into the Statement of Additional Information.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Stepstone Funds
For a Share Outstanding Throughout the Period or Year
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES DISTRIBUTIONS
NET ----------------------------- ---------------------- NET NET
ASSET NET REALIZED ASSET ASSETS
VALUE NET AND UNREALIZED NET VALUE END
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000)
--------- ---------- -------------- ---------- ------- --------- ------ ---------
- -------------
BALANCED FUND
- -------------
INSTITUTIONAL CLASS
FOR THE YEARS ENDED JANUARY 31:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1997 13.92 0.422 1.699 (0.409) (0.595) 15.04 16.30% 307,531
1996 11.45 0.415 2.831 (0.417) (0.362) 13.92 28.93% 233,878
1995 12.21 0.390 (0.756) (0.391) (0.003) 11.45 (2.95%) 167,434
1994 11.50 0.394 0.928 (0.391) (0.221) 12.21 11.79% 152,189
1993 11.15 0.413 0.543 (0.408) (0.198) 11.50 8.86% 100,474
1992(3) 10.00 0.471 1.250 (0.465) (0.106) 11.15 17.69% 67,098
<CAPTION>
RATIO OF
RATIO NET INVESTMENT
OF EXPENSES RATIO OF INCOME TO
RATIO TO AVERAGE NET INVESTMENT AVERAGE
OF EXPENSES NET ASSETS INCOME NET ASSETS PORTFOLIO AVERAGE
TO AVERAGE EXCLUDING TO AVERAGE EXCLUDING TURNOVER COMMISSION
NET ASSETS FEE WAIVERS NET ASSETS FEE WAIVERS RATE RATE(A)
----------- ----------- -------------- -------------- --------- ----------
- -------------
BALANCED FUND
- -------------
INSTITUTIONAL CLASS
FOR THE YEARS ENDED JANUARY 31:
<S> <C> <C> <C> <C> <C> <C>
1997 0.79% 0.79% 3.48% 3.48% 27% .0604
1996 0.80% 0.80% 3.20% 3.20% 26% n/a
1995 0.80% 0.80% 3.41% 3.41% 48% n/a
1994 0.69% 0.79% 3.35% 3.25% 49% n/a
1993 0.69% 0.79% 3.72% 3.62% 68% n/a
1992(3) 0.78% 0.91% 4.44% 4.31% 56% n/a
</TABLE>
- --------------------
(A) Average commission rate paid per share for securitiy purchases and sales
during the period. Presentation of the rate is only required for fiscal years
beginning after September 1, 1995.
(3) Commenced operations on February 1, 1991.
The following information replaces the third paragraph under "GENERAL
INFORMATION -Description of HighMark & Its Shares" on page 20 of the prospectus:
HighMark believes that as of April 21, 1997 Union Bank of California
(475 Sansome Street, Post Office Box 45000, San Francisco, CA 94104) was the
Shareholder of record of 97.88% of the Fiduciary Shares of the Balanced Fund.
<PAGE> 32
HIGHMARK FUNDS
HIGHMARK BALANCED FUND
RETAIL SHARES
- --------------------------------------------------------------------------------
SUPPLEMENT DATED MAY 1, 1997 TO THE PROSPECTUS DATED MARCH 28, 1997
FOR THE HIGHMARK BALANCED FUND
- --------------------------------------------------------------------------------
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THE PROSPECTUS FOR FUTURE REFERENCE
CAPITALIZED TERMS USED HEREIN HAVE THE SAME MEANING AS IN THE PROSPECTUS.
The following information replaces the information relating to the
HighMark Balanced Fund under "FINANCIAL HIGHLIGHTS" on page 6 of the prospectus:
The table below sets forth certain financial information with respect
to the Retail Shares of the Balanced Fund. Upon reorganizing as a fund of
HighMark Funds on April 28, 1997, Stepstone Balanced Fund became HighMark
Balanced Fund. Financial highlights through January 31, 1997 represent the
Investment Class Shares (now Retail Shares) of Stepstone Balanced Fund, and have
been derived from financial statements audited by Arthur Andersen LLP,
independent auditors for the Stepstone Funds, whose report thereon is included
in the 1997 Annual Report for the Stepstone Funds, and incorporated by reference
into the Statement of Additional Information.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Stepstone Funds
For a Share Outstanding Throughout the Period or Year
<TABLE>
<CAPTION>
NET NET
ASSET NET REALIZED ASSET
VALUE, NET AND UNREALIZED NET VALUE,
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT CAPITAL END TOTAL
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN
- --------------------------------------------------------------------------------------------------------------
- -------------
BALANCED FUND
- -------------
INVESTMENT CLASS (**)
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C> <C> <C>
1997 13.91 0.464 1.706 (0.455) (0.595) 15.03 16.04%
1996 11.45 0.406 2.825 (0.406) (0.362) 13.91 28.73%
1995 12.21 0.393 (0.758) (0.392) (0.003) 11.45 (2.95%)
1994 11.50 0.397 0.925 (0.391) (0.221) 12.21 11.79%
1993(10) 11.30 0.092 0.404 (0.098) (0.198) 11.50 4.45%*
<CAPTION>
RATE OF
RATIO NET INVESTMENT
NET OF EXPENSES RATIO OF INCOME TO
ASSETS, RATIO TO AVERAGE NET INVESTMENT AVERAGE
END OF EXPENSES NET ASSETS INCOME NET ASSETS PORTFOLIO AVERAGE
OF PERIOD TO AVERAGE EXCLUDING TO AVERAGE EXCLUDING TURNOVER COMMISSION
(000) NET ASSETS FEE WAIVERS NET ASSETS FEE WAIVERS RATE RATE(A)
- --------------------------------------------------------------------------------------------------------------------------
- -------------
BALANCED FUND
- -------------
INVESTMENT CLASS (**)
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C> <C> <C>
1997 8,833 1.04% 1.19% 3.22% 3.07% 27% 0.0604
1996 8,422 0.89% 1.20% 3.12% 2.81% 26% n/a
1995 7,128 0.79% 1.19% 3.41% 3.01% 48% n/a
1994 7,292 0.69% 1.19% 3.26% 2.76% 19% n/a
1993(10) 425 0.60%* 1.10%* 3.20%* 2.70%* 68% n/a
</TABLE>
(A) Average commission rate paid per share for security purchases and sales
during the period. Presentation of the rate is only required for fiscal
years beginning after September 1, 1995.
(10) Commenced operations on November 13, 1992.
* Annualized.
** Total return does not reflect the sales charge.
In the Section entitled "How To Purchase Shares" under the sub-heading
Sales Charges, the following table replaces a similar table on page 16.
<TABLE>
<CAPTION>
SALES CHARGE AS
SALES CHARGE AS A APPROPRIATE COMMISSION AS
PERCENTAGE OF PERCENTAGE OF NET PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED OFFERING PRICE
- ------------------ ----------------- ----------------- --------------
<S> <C> <C> <C>
0-$49,999.......... 4.50% 4.71% 4.05%
$50,000-$99,999.......... 4.00% 4.17% 3.60%
$100,000-$249,999.......... 3.50% 3.63% 3.15%
$250,000-$499,999.......... 2.50% 2.56% 2.25%
$500,000-$999,999.......... 1.50% 1.52% 1.35%
$1,000,000 and Over.......... 0.00%* 0.00% 0.00%
</TABLE>
- ---------
* A contingent deferred sales charge of 1.00% will be assessed against any
proceeds of any redemption of such Retail Shares prior to one year from date
of purchase.
The following information replaces the third paragraph under "GENERAL
INFORMATION -Description of HighMark & Its Shares" on page 29 of the prospectus:
HighMark believes that as of April 21, 1997 there was no person who
owned of record or beneficially more than 25% of the Retail Shares of the
Balanced Fund.
<PAGE> 33
HIGHMARK FUNDS
HIGHMARK INTERNATIONAL EQUITY FUND
FIDUCIARY SHARES
- --------------------------------------------------------------------------------
SUPPLEMENT DATED MAY 1, 1997 TO THE PROSPECTUS DATED MARCH 28, 1997
FOR THE HIGHMARK MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THE PROSPECTUS FOR FUTURE REFERENCE
CAPITALIZED TERMS USED HEREIN HAVE THE SAME MEANING AS IN THE PROSPECTUS.
The following information is inserted into the prospectus on page 5:
FINANCIAL HIGHLIGHTS
The table below sets forth certain financial information with respect
to the Fiduciary Shares of the International Equity Fund. Upon reorganizing as a
fund of HighMark Funds on April 28, 1997, Stepstone International Equity Fund
became HighMark International Equity Fund. Financial highlights through January
31, 1997 represent the Institutional Class Shares (now Fiduciary Shares) of
Stepstone International Equity Fund, and have been derived from financial
statements audited by Arthur Andersen LLP, independent auditors for the
Stepstone Funds, whose report thereon is included in the 1997 Annual Report for
the Stepstone Funds, and incorporated by reference into the Statement of
Additional Information.
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
Stepstone Funds
For a Share Outstanding Throughout the Period or Year
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES DISTRIBUTIONS
NET --------------------------- ------------------- NET NET
ASSET NET REALIZED ASSET ASSETS, RATIO
VALUE, NET AND UNREALIZED NET VALUE, END OF EXPENSES
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000) NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------
INTERNATIONAL EQUITY FUND
- -------------------------
INSTITUTIONAL CLASS
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997 37.49 0.220 (0.965) (0.812) (1.416) 34.52 (2.14)% 46,373 1.18%
1996 (15) 33.51 0.447 4.084 (0.446) (0.105) 37.49 13.56% 44,188 1.16%
</TABLE>
<TABLE>
<CAPTION>
RATIO OF
RATIO NET INVESTMENT
OF EXPENSES RATIO OF INCOME TO
TO AVERAGE NET INVESTMENT AVERAGE
NET ASSETS INCOME NET ASSETS PORTFOLIO AVERAGE
EXCLUDING TO AVERAGE EXCLUDING TURNOVER COMMISSION
FEE WAIVERS NET ASSETS FEE WAIVERS RATE RATE (A)
- ------------------------------------------------------------------------------------------
- -------------------------
INTERNATIONAL EQUITY FUND
- -------------------------
INSTITUTIONAL CLASS
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C>
1997 1.28% 0.60% 0.50% 29% 0.0235
1996 (15) 1.36% 1.31% 1.11% 21% n/a
</TABLE>
(A) Average commission rate paid per share for security purchases and sales
during the period. Presentation of the rate is only required for fiscal
years beginning after September 1, 1995.
(15) Commenced operations on February 1, 1995.
<PAGE> 34
HIGHMARK FUNDS
HIGHMARK CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
RETAIL SHARES
- --------------------------------------------------------------------------------
SUPPLEMENT DATED MAY 1, 1997 TO THE PROSPECTUS DATED MARCH 28, 1997
FOR THE HIGHMARK CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THE PROSPECTUS FOR FUTURE REFERENCE
CAPITALIZED TERMS USED HEREIN HAVE THE SAME MEANING AS IN THE PROSPECTUS.
The following information is inserted into the prospectus on page 7:
FINANCIAL HIGHLIGHTS
The table below sets forth certain financial information with respect
to the Retail Shares of the California Intermediate Tax-Free Bond Fund. Upon
reorganizing as a fund of HighMark Funds on April 28, 1997, Stepstone
California Intermediate Tax-Free Bond Fund became HighMark California
Intermediate Tax-Free Bond Fund. Financial highlights through January 31, 1997
represent the Investment Class Shares (now Retail Shares) of Stepstone
California Intermediate Tax-Free Bond Fund, and have been derived from
financial statements audited by Arthur Andersen LLP, independent auditors for
the Stepstone Funds, whose report thereon is included in the 1997 Annual Report
for the Stepstone Funds, and incorporated by reference into the Statement of
Additional Information.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Stepstone Funds
For a Share Outstanding Throughout the Period or Year
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES DISTRIBUTIONS
NET ------------------------------ --------------------- NET NET
ASSET NET REALIZED ASSET ASSETS,
VALUE, NET AND UNREALIZED NET VALUE, END
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000)
- ----------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
- -------------------------------------------
INVESTMENT CLASS (**)
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1997 9.84 0.458 (0.112) (0.442) -- 9.74 3.62% 5,791
1996 8.94 0.470 0.918 (0.487) -- 9.84 15.84% 4,266
1995 10.03 0.439 (1.077) (0.452) -- 8.94 (6.33%) 4.882
1994 (14) 10.00 0.115 0.020 (0.105) -- 10.03 4.67%* 2,830
<CAPTION>
RATIO OF
RATIO NET INVESTMENT
OF EXPENSES RATIO OF INCOME TO
RATIO TO AVERAGE NET INVESTMENT AVERAGE
OF EXPENSES NET ASSETS INCOME NET ASSETS PORTFOLIO
TO AVERAGE EXCLUDING TO AVERAGE EXCLUDING TURNOVER
NET ASSETS FEE WAIVERS NET ASSETS FEE WAIVERS RATE
- ------------------------------------------------------------------------------------------
- -------------------------------------------
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
- -------------------------------------------
INVESTMENT CLASS (**)
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C>
1997 0.20% 1.25% 4.69% 3.64% 6%
1996 0.23% 1.12% 4.93% 4.04% 30%
1995 0.50% 1.12% 4.92% 4.30% 22%
1994 (14) 0.50%* 1.13%* 4.26%* 3.63%* 19%
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
* Annualized.
** Total return does not reflect the sales charge.
(14) Commenced operations on October 15, 1993.
In the Section entitled "How to Purchase Shares" under the sub-heading
Sales Charges, the following table replaces a similar table on page 15.
<TABLE>
<CAPTION>
Sales Charge as
Sales Charge as a Appropriate Commission as
Percentage of Percentage of Net Percentage of
Amount of Purchase Offering Price Amount Invested Offering Price
- ------------------- ----------------- ----------------- --------------
<S> <C> <C> <C>
0-$24,999 3.00% 3.09% 2.70%
$25,000-$49,999 2.50% 2.56% 2.25%
$50,000-$99,999 2.00% 2.04% 1.80%
$100,000-$249,999 1.50% 1.52% 1.35%
$250,000-$999,999 1.00% 1.01% 0.90%
$1,000,000 and over 0.00%* 0.00% 0.00%
</TABLE>
- ----------------
* A contingent deferred sales charge of 1.00% will be assessed against any
proceeds of any redemption of such Retail Shares prior to one year from
date of purchase.
<PAGE> 35
HIGHMARK FUNDS
HIGHMARK CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
FIDUCIARY SHARES
- --------------------------------------------------------------------------------
SUPPLEMENT DATED MAY 1, 1997 TO THE PROSPECTUS DATED MARCH 28, 1997
FOR THE HIGHMARK MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THE PROSPECTUS FOR FUTURE REFERENCE
CAPITALIZED TERMS USED HEREIN HAVE THE SAME MEANING AS IN THE PROSPECTUS.
The following information is inserted into the prospectus on page 5:
FINANCIAL HIGHLIGHTS
The table below sets forth certain financial information with respect to
the Fiduciary Shares of the California Intermediate Tax-Free Bond Fund. Upon
reorganizing as a fund of HighMark Funds on April 28, 1997, Stepstone California
Intermediate Tax-Free Bond Fund became HighMark California Intermediate Tax-Free
Bond Fund. Financial highlights through January 31, 1997 represent the
Institutional Class Shares (now Fiduciary Shares) of Stepstone California
Intermediate Tax-Free Bond Fund, and have been derived from financial statements
audited by Arthur Andersen LLP, independent auditors for the Stepstone Funds,
whose report thereon is included in the 1997 Annual Report for the Stepstone
Funds, and incorporated by reference into the Statement of Additional
Information.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Stepstone Funds
For a Share Outstanding Throughout the Period or Year
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES DISTRIBUTIONS
NET ------------------------------ --------------------- NET NET
ASSET NET REALIZED ASSET ASSETS,
VALUE, NET AND UNREALIZED NET VALUE, END
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000)
- ----------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
- ------------------------------------------
INSTITUTIONAL CLASS
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1997 9.85 0.430 (0.078) (0.442) -- 9.76 3.72% 7,435
1996 8.95 0.518 0.873 (0.487) -- 9.85 15.83% 4,196
1995 10.04 0.460 (1.098) (0.452) -- 8.95 (6.33%) 12,793
1994(14) 10.00 0.117 0.028 (0.105) -- 10.04 5.01%* 22,197
<CAPTION>
RATIO OF
RATIO NET INVESTMENT
OF EXPENSES RATIO OF INCOME TO
RATIO TO AVERAGE NET INVESTMENT AVERAGE
OF EXPENSES NET ASSETS INCOME NET ASSETS PORTFOLIO
TO AVERAGE EXCLUDING TO AVERAGE EXCLUDING TURNOVER
NET ASSETS FEE WAIVERS NET ASSETS FEE WAIVERS RATE
- ------------------------------------------------------------------------------------------
- ------------------------------------------
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
- ------------------------------------------
INSTITUTIONAL CLASS
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C>
1997 0.20% 0.85% 4.69% 4.04% 6%
1996 0.24% 0.71% 4.97% 4.50% 30%
1995 0.50% 0.72% 4.84% 4.62% 22%
1994(14) 0.50%* 0.73%* 4.31%* 4.08%* 19%
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
* Annualized.
(14) Commenced operations on October 15, 1993.
<PAGE> 36
HIGHMARK FUNDS
HIGHMARK CONVERTIBLE SECURITIES FUND
FIDUCIARY SHARES
- --------------------------------------------------------------------------------
SUPPLEMENT DATED MAY 1, 1997 TO THE PROSPECTUS DATED MARCH 28, 1997
FOR THE HIGHMARK MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THE PROSPECTUS FOR FUTURE REFERENCE
CAPITALIZED TERMS USED HEREIN HAVE THE SAME MEANING AS IN THE PROSPECTUS.
The following information is inserted into the prospectus on page 5:
FINANCIAL HIGHLIGHTS
The table below sets forth certain financial information with respect to
the Fiduciary Shares of the Convertible Securities Fund. Upon reorganizing as a
fund of HighMark Funds on May 1, 1997, Stepstone Convertible Securities Fund
became HighMark Convertible Securities Fund. Financial highlights through
January 31, 1997 represent the Institutional Class Shares (now Fiduciary Shares)
of Stepstone Convertible Securities Fund, and have been derived from financial
statements audited by Arthur Andersen LLP, independent auditors for the
Stepstone Funds, whose report thereon is included in the 1997 Annual Report for
the Stepstone Funds, and incorporated by reference into the Statement of
Additional Information.
For a Share Outstanding Throughout the Period or Year
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Stepstone Funds
For a Share Outstanding Throughout the Period or Year
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES DISTRIBUTIONS
NET ------------------------------ --------------------- NET NET
ASSET NET REALIZED ASSET ASSETS,
VALUE, NET AND UNREALIZED NET VALUE, END
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT CAPITAL END TOTAL OF PERIOD
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS OF PERIOD RETURN (000)
- ----------------------------------------------------------------------------------------------------------------------------
- -------------------------------------
CONVERTIBLE SECURITIES FUND
- -------------------------------------
INSTITUTIONAL CLASS
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1997 10.43 0.376 1.423 (0.378) (0.270) 11.58 17.72% 21,129
1996 9.08 0.407 1.350 (0.404) -- 10.43 19.67% 16,668
1995(9) 10.00 0.354 (0.930) (0.343) -- 9.08 (5.83%) 10,297
<CAPTION>
RATIO OF
RATIO NET INVESTMENT
OF EXPENSES RATIO OF INCOME TO
RATIO TO AVERAGE NET INVESTMENT AVERAGE
OF EXPENSES NET ASSETS INCOME NET ASSETS PORTFOLIO AVERAGE
TO AVERAGE EXCLUDING TO AVERAGE EXCLUDING TURNOVER COMMISSION
NET ASSETS FEE WAIVERS NET ASSETS FEE WAIVERS RATE RATE(A)
- ---------------------------------------------------------------------------------------------------------
- -------------------------------------
CONVERTIBLE SECURITIES FUND
- -------------------------------------
INSTITUTIONAL CLASS
FOR THE YEARS ENDED JANUARY 31,:
<S> <C> <C> <C> <C> <C> <C>
1997 0.85% 0.85% 3.47% 3.47% 89% 0.0640
1996 0.85% 0.85% 4.14% 4.14% 46% N/A
1995(9) 0.85% 0.85% 3.87% 3.87% 36% N/A
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
(A) Average commission rate paid per share for security purchases and sales
during the period. Presentation of the rate is only required for fiscal
years beginning after September 1, 1995.
(9) Commenced operations on February 1, 1994.
<PAGE> 37
HIGHMARK FUNDS
- --------------------------------------------------------------------------------
SUPPLEMENT, DATED MAY 1, 1997, TO THE
STATEMENT OF ADDITIONAL INFORMATION DATED MARCH 28, 1997
- --------------------------------------------------------------------------------
INVESTORS SHOULD RETAIN THIS SUPPLEMENT WITH THE
STATEMENT OF ADDITIONAL INFORMATION FOR FUTURE REFERENCE
CAPITALIZED TERMS USED HEREIN HAVE THE SAME MEANING AS IN THE
STATEMENT OF ADDITIONAL INFORMATION
In the section entitled "Miscellaneous," all of the information from
the seventh paragraph to the end of that section, on pages 72 through 79, is
replaced with the following:
<PAGE> 38
As of April 21, 1997, HighMark believes that the trustees and officers
of HighMark, as a group, owned less than one percent of the Shares of any Fund
of HighMark. As of April 21, 1997, HighMark believes that Union Bank of
California was the shareholder of record of 85.36% of the Fiduciary Shares of
the Growth Fund, 74.09% of the Fiduciary Shares of the Income Equity Fund,
97.91% of the Fiduciary Shares of the Balanced Fund, 88.27% of the Fiduciary
Shares of the Bond Fund, 97.10% of the Fiduciary Shares of the U.S. Government
Money Market Fund, 98.84% of the Fiduciary Shares of the Diversified Money
Market Fund, 99.23% of the Fiduciary Shares of the 100% U.S. Treasury Money
Market Fund and substantially all of the Fiduciary Shares of the California
Tax-Free Money Market Fund. As of April 21, 1997, HighMark believes that Union
Bank of California had voting power with respect to 45.5% of the Growth Fund
Fiduciary Shares, 35.9% of the Income Equity Fund Fiduciary Shares, 39% of the
Balanced Fund Fiduciary Shares, 64% of the Bond Fund Fiduciary Shares, 17% of
the Diversified Money Market Fund Fiduciary Shares, 9.5% of the 100% U.S.
Treasury Money Market Fund Fiduciary Shares, and 33% of the California Tax-Free
Money Market Fund Fiduciary Shares.
<PAGE> 39
The table below indicates each additional person known by HighMark to
own beneficially 5% or more of the Shares of the following Funds of HighMark as
of April 21, 1997:
<TABLE>
<CAPTION>
5% or More Beneficial Owners
----------------------------
Percent of
Beneficial
Name and Address Ownership
- ---------------- ---------
Growth Fund
-----------
Retail Shares
-------------
<S> <C>
National Financial Services 5.51%
Corporation for the Exclusive
Benefit of Our Customers and
IRA of John A. Dito
550 S. Hope St. 2000
Los Angeles, CA 90071
National Financial Services 5.88%
Corporation for the Exclusive
Benefit of Our Customers and
Douglas S. Querin
4228 SW Selling Court
Portland, OR 97221
National Financial Services 7.26%
Corporation for the Exclusive
Benefit of Our Customers and
IRA of John A. Dito
550 S. Hope St. 2000
Los Angeles, CA 90071
</TABLE>
<PAGE> 40
<TABLE>
<S> <C> <C>
Fiduciary Shares
----------------
Union Bank of California, N.A. 85.36%
Lane & Co Reinvest
Attn Kathleen Heilman
P. O. Box 109
San Diego, CA 92112
Income Equity Fund
------------------
Retail Shares
-------------
National Financial Services 10.19%
Corporation for the Exclusive
Benefit of Our Customers and
Richard W. Killion
c/o Killion Industries
2811 La Mirada Dr.
Vista, CA 92083
Fiduciary Shares
----------------
Union Bank of California N.A. 57.90%
Lane & Co Reinvest
Attn Kathleen Heilman
P.O. Box 109
San Diego, CA 92112
Union Bank of California N.A. 16.19%
Lane & Co Cash
Attn Fund Accounting
P.O. Box 109
San Diego, CA 92112
Balanced Fund
-------------
Retail Shares
-------------
</TABLE>
<PAGE> 41
<TABLE>
<S> <C> <C>
National Financial Services 34.60%
Corporation for the Exclusive
Benefit of Our Customers and
John F. Roach
587 Perugia Way
Los Angeles, CA 90077
National Financial Services 7.59%
Corporation for the Exclusive
Benefit of Our Customers and
Yoko Fujii, Trustee
Tadashi Yoko Fujii
1405 Lamont Ave.
Thousand Oaks, CA 91362
National Financial Services 5.71%
Corporation for the Exclusive Benefit
of Our Customers
Union Bank of California
Union Bank of California TTEE
c/o UBOC Seoul Branch 12th Floor
1 Chongro 1-KA Chongro-Ku
Korea Republic of South Korea
National Financial Services 5.55%
Corporation for the Exclusive
Benefit of Our Customers
Rose J. Arbanas
Richard E. Arbanas
JTWROS
634 Powell Street #48
San Francisco, CA 94108
Fiduciary Shares
----------------
Union Bank of California N.A. 97.88%
Lane & Co Reinvest
Attn Kathleen Heilman
P.O. Box 109
San Diego, CA 92112
</TABLE>
<PAGE> 42
<TABLE>
<S> <C> <C>
Bond Fund
---------
Retail Shares
-------------
National Financial Services 23.12%
Corporation for the Exclusive
Benefit of Our Customers and
Mildred Walsh
Stephanie McGowan
3701 E. Valley St.
Seattle, WA 98112
National Financial Services 6.30%
Corporation for the Exclusive
Benefit of Our Customers and
Union Bank of California, Cust.
IRA of Charles L. Masingill
2218 Windward Lane
Newport, CA 92660
National Financial Services 5.78%
Corporation for the Exclusive
Benefit of Our Customers and
Wallace Allred
Norma Allred
2250 N. Broadway, No. 48
Escondido, CA 92026
National Financial Services 6.18%
Corporation for the Exclusive
Benefit of Our Customers and
Union Bank of California, Cust.
IRA of James Harris
1212 Christian Valley Rd.
Auburn, CA 95602
</TABLE>
<PAGE> 43
<TABLE>
<S> <C> <C>
National Financial Services 8.03%
Corporation for the Exclusive
Benefit of Our Customers and
Union Bank of California, Cust.
Frederick V. Betts
800 Financial Center
1215 Fourth Ave.
Seattle, WA 98161
National Financial Services 5.80%
Corporation for the Exclusive
Benefit of Our Customers and
Marla J. Arata
7801 Oakmont Drive
Modesto, CA 95356
National Financial Services Corporation 5.91%
for the Exclusive Benefit of Our Customers and
C. Dan Hunter
Irene W. Hunter
9335 N.E. 30th Street
Bellevue, WA 98004
Fiduciary Shares
----------------
Union Bank of California N.A. 57.60%
Lane & Co Reinvest
Attn Kathleen Heilman
P.O. Box 109
San Diego, CA 92112
Union Bank of California N.A. 32.08%
Lane & Co CASH
Attn Fund Accounting
P.O. Box 109
San Diego, CA 92112
</TABLE>
<PAGE> 44
<TABLE>
<S> <C> <C>
Diversified Money Market Fund
-----------------------------
Retail Shares
-------------
National Financial Services 99.33%
Corporation for the Exclusive
Benefit of Our Customers
Church Street Station
P.O. Box 3908
New York, NY 10008-3908
Fiduciary Shares
----------------
Union Bank of California, NA 84.76%
Lane & Co Cash
Attn Fund Accounting
P.O. BOX 85602
San Diego, CA 92186-5602
Union Bank of California, NA 14.08%
Lane & Co Reinvest
Attn Kathleen Heilman
P.O. BOX 109
San Diego, CA 92112
U.S. Government Money Market Fund
---------------------------------
Retail Shares
-------------
National Financial Services 88.53%
Corporation for the Exclusive
Benefit of Our Customers
Church Street Station
P.O. Box 3908
New York, NY 10008-3908
City of Compton 5.54%
Sewer Bond
205 S. Willowbrook Ave.
Compton, CA 90220
Fiduciary Shares
----------------
Union Bank of California, N.A. 97.10%
Lane & Co CASH
Attn Fund Accounting
P.O. Box 85602
San Diego, CA 92186
</TABLE>
<PAGE> 45
<TABLE>
<S> <C> <C>
100% U.S. Treasury Money Market Fund
------------------------------------
Retail Shares
-------------
National Financial Services 99.93%
Corporation for the Exclusive
Benefit of Our Customers
Church Street Station
P.O. Box 3908
New York, NY 10008-3908
Fiduciary Shares
----------------
UNION BANK of California, NA 83.23%
LANE & CO CASH
ATTN FUND ACCOUNTING
P.O. BOX 85602
SAN DIEGO, CA 92186-5602
UNION BANK of California, NA 16.00%
LANE & CO REINVEST
ATTN KATHLEEN HEILMAN
P.O. BOX 109
SAN DIEGO, CA 92112
California Tax-Free Money Market Fund
-------------------------------------
Retail Shares
-------------
National Financial Services 96.97%
Corporation for the Exclusive
Benefit of Our Customers
Church Street Station
P.O. Box 3908
New York, NY 10008-3908
</TABLE>
<PAGE> 46
<TABLE>
<S> <C> <C>
Fiduciary Shares
----------------
Union Bank of California, NA 99.10%
Lane & Co Cash
Attn Fund Accounting
P.O. Box 85602
San Diego, CA 92112
</TABLE>
No person other than Union Bank of California and the beneficial owners
listed above own as of record more than 5% of the Fiduciary or Retail Shares of
a Fund.
In the section entitled "Independent Auditors' Report for HighMark
Funds," beginning on page 87 the following is inserted;
The unaudited financial statements of HighMark Funds as of and for the
six-month period ending January 31, 1997 are incorporated herein by reference
from HighMark's Semi-Annual Report dated January 31, 1997, which Semi-Annual
Report has been previously sent to shareholders of each Fund pursuant to Section
30(d) of the 1940 Act and previously filed with the Securities and Exchange
Commission. The report of Arthur Andersen LLP, independent accountants, and the
audited financial statements of the Stepstone Funds for the year ended January
31, 1997, are incorporated herein by reference from the Annual Report of the
Stepstone Funds dated January 31, 1997, which Annual Report has been previously
sent to shareholders of each Fund pursuant to Section 30(d) of the 1940 Act and
previously filed with the Securities and Exchange Commission. Copies of such
Semi-Annual Report and Annual Report may be obtained without charge by writing
the Distributor, SEI Financial Services Company, at Oaks, Pennsylvania, 19456,
or by telephoning toll free 1-800-433-6884.
<PAGE> 47
PART C. OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
Included in Part A:
-- Certain Financial Information.
Included in Part B:
-- Report of Independent Certified Public
Accountants for HighMark Funds at July 31,
1996.
-- Statements of Assets and
Liabilities for HighMark Funds at
July 31, 1996.
-- Statements of Operations for
HighMark Funds for the year ended
July 31, 1996.
-- Statements of Changes in Net Assets
for HighMark Funds for the year
ended July 31, 1996.
-- Schedules of Portfolio Investments
for HighMark Funds at July 31,
1996.
-- Notes to Financial Statements for
HighMark Funds dated July 31, 1996.
-- Financial Highlights for HighMark
Funds for the year ended July 31,
1996. All required financial
statements are included in Part B
hereof. All other financial
statements and schedules are
inapplicable.
The following financial statements have been
incorporated into the Statement of Additional
Information by reference to Highmark's Semi-Annual
Report to Shareholders, dated January 31, 1997:
-- Statements of Assets and
Liabilities for Highmark Funds at
January 31, 1997 (unaudited)
<PAGE> 48
-- Statements of Operations for
Highmark Funds for the six months
ended January 31, 1997 (unaudited)
-- Statements of Changes in Net Assets
for Highmark Funds for the six
months ended January 31, 1997
(unaudited)
-- Schedules of Portfolio Investments
for Highmark Funds at January 31,
1997 (unaudited)
-- Notes to Financial Statements for
Highmark Funds dated January 31,
1997 (unaudited)
-- Financial Highlights for Highmark
Funds for the six months ended
January 31, 1997 (unaudited)
The following financial statements have been
incorporated into the Statement of Additional
Information by reference to the Annual Report of the
Stepstone Funds, dated January 31, 1997:
-- Statement of Net Assets for
Stepstone Funds at January 31,
1997
-- Statement of Operations for
Stepstone Funds at January 31,
1997
-- Statement of Changes in Net Assets
for Stepstone Funds at January 31,
1997
-- Financial Highlights for Stepstone
Funds at January 31, 1997
-- Notes to Financial Statements
for Stepstone Funds dated
January 31, 1997
(b) Exhibits:
(1) (a) Declaration of Trust, dated
March 10, 1987, is incorporated by
reference to Exhibit (1)(a) of
Pre-Effective Amendment No. 1
(filed May 15, 1987) to
Registrant's Registration Statement
on Form N-1A.
(b) Amendment to Declaration of Trust,
dated April 13, 1987, is
incorporated by reference to
Exhibit (1)(b) of Pre-Effective
Amendment No. 1 (filed May 15,
1987) to Registrant's Registration
Statement on Form N-1A.
(c) Amendment to Declaration of Trust,
dated July 13, 1987, is
incorporated by reference to
Exhibit (1)(c) of Pre-Effective
Amendment No. 2 (filed July 24,
1987) to Registrant's Registration
Statement on Form N-1A.
(d) Amendment to Declaration of Trust,
dated July 30, 1987, is
incorporated by reference to
Exhibit (1)(d) of Pre-Effective
Amendment No. 3 (filed July 31,
1987) to Registrant's Registration
Statement on Form N-1A.
2
<PAGE> 49
(e) Amendment to Declaration of Trust,
dated October 18, 1996, is
incorporated by reference to
Exhibit (1)(e) of Post-Effective
Amendment No. 18 (filed November 8,
1996) to Registrant's Registration
Statement on Form N-1A.
(f) Amendment to Declaration of Trust,
dated December 4, 1996, is
incorporated by reference to
Exhibit (1)(f) of Post-Effective
Amendment No. 19 (filed December
13, 1997) to Registrant's
Registration Statement on Form
N-1A.
(2) (a) Amended and Restated Code of
Regulations, dated June 5, 1991, is
incorporated by reference to
Exhibit 2 of Post-Effective
Amendment No. 7 (filed September
30, 1991) to Registrant's
Registration Statement on Form
N-1A.
(b) Amendment to Amended and Restated
Code of Regulations, dated December
4, 1991, is incorporated by
reference to Exhibit 2(b) of
Post-Effective Amendment No. 8
(filed September 30, 1992) to
Registrant's Registration Statement
on Form N-1A.
(3) None.
(4) None.
(5) (a) Investment Advisory Agreement
between Registrant and Union Bank
of California, N.A., dated as of
April 1, 1996 (the "Investment
Advisory Agreement"), is
incorporated by reference to
Exhibit 5 of Post-Effective
Amendment No. 18 (filed November 8,
1996) to Registrant's Registration
Statement on Form N-1A.
(b) Form of Amended and Restated
Schedule A to the Investment
Advisory Agreement is filed
herewith.
(6) Distribution Agreement between the
Registrant and SEI Financial
Services Company is incorporated by
reference to Exhibit 6 of
Post-Effective Amendment No. 20
(filed February 25, 1997) to
Registrant's Registration Statement
on Form N-1A.
3
<PAGE> 50
(7) None.
(8) (a) Custodian Agreement between
Registrant and The Bank of
California, N.A., dated as of
December 23, 1991, as amended as of
September 15, 1992 (the "Custodian
Agreement"), is incorporated by
reference to Exhibit 8 of
Post-Effective Amendment No. 8
(filed September 30, 1992) to
Registrant's Registration Statement
on Form N-1A.
(b) Form of Amended and Restated
Schedule A to the Custodian
Agreement is filed herewith.
(9) (a) Administration Agreement
between Registrant and SEI Fund
Resources incorporated by reference
to Exhibit 9(a) of Post-Effective
Amendment No. 20 (filed February
25, 1997) to Registrant's
Registration Statement on Form
N-1A.
(b) Form of Sub-Administration
Agreement between SEI Fund
Resources and Union Bank of
California, N.A. is incorporated by
reference to Exhibit 9(e) of
Post-Effective Amendment No. 19
(filed December 13, 1996) to
Registrant's Registration Statement
on Form N-1A.
(c) Transfer Agency and Service
Agreement between the Registrant
and State Street Bank and Trust
Company is incorporated by
reference to Exhibit 9(c) of Post-
Effective Amendment No. 20 (filed
February 25, 1997) to Registrant'S
Registration Statement on Form
N-1A.
(d) Form of Shareholder Service
Provider Agreement for the
Registrant is incorporated by
reference to Exhibit 9(n) of
Post-Effective Amendment No. 19
(filed December 13, 1996) to
Registrant's Registration Statement
on Form N-1A.
(e) Form of Shareholder Service Plan
for the Registrant is incorporated
by reference to Exhibit 9(q) of
Post-Effective Amendment No. 19
(filed December 13, 1996) to
Registrant's Registration Statement
on Form N-1A.
4
<PAGE> 51
(10) Opinion and Consent of Counsel as to
legality of shares being registered is filed
herewith.
(11)(a) Consent of Deloitte & Touche LLP is filed
herewith.
(11)(b) Consent of Coopers & Lybrand L.L.P, is filed
herewith.
(11)(c) Consent of Arthur Andersen, LLP is filed
herewith.
(11)(d) Consent of Ropes & Gray, is filed herewith.
(12) None.
(13) None.
(14) None.
(15) (a) Registrant's Distribution and
Shareholder Services Plan relating to the
Money Market Funds is incorporated by
reference to Exhibit 15(a) of Post-Effective
Amendment No. 6 (filed September 27, 1990)
to Registrant's Registration Statement on
Form N-1A.
(b) Form of Servicing Agreement With Respect to
Distribution Assistance and Shareholder
Services used in connection with
Registrant's Distribution and Shareholder
Services Plan relating to the Money Market
Funds is incorporated by reference to
Exhibit 15(b) of Post-Effective Amendment
No. 6 (filed September 27, 1990) to
Registrant's Registration Statement on Form
N-1A.
(c) Form of Servicing Agreement With Respect to
Shareholder Services used in connection with
Registrant's Distribution and Shareholder
Services Plan relating to the Money Market
Funds, is incorporated by reference to
Exhibit 15(c) of Post-Effective Amendment
No. 8 (filed September 30, 1992) to
Registrant's Registration Statement on Form
N-1A.
(d) Registrant's Distribution and Shareholder
Services Plan relating to the Income Funds,
the Equity Funds and the Municipal Funds is
incorporated by reference to Exhibit
5
<PAGE> 52
15(d) of Post-Effective Amendment No. 13
(filed April 11, 1994) to the Registrant's
Registration Statement on Form N-1A.
(e) Form of amended and restated Schedule A to
the Distribution and Shareholder Services
Plan relating to the Income Funds, the
Equity Funds and the Municipal Funds is
incorporated by reference to Exhibit 15(c)
of Post-Effective Amendment No. 14 (filed
June 17, 1994) to Registrant's Registration
Statement on Form N-1A.
(16) (a) Performance Calculation Schedules
concerning: the seven-day yield and
effective yield of the Class A and Class B
Shares of the U.S. Government Obligations
Fund, the Diversified Obligations Fund, the
100% U.S. Treasury Obligations Fund, the
Tax-Free Fund, and the California Tax-Free
Fund; the seven-day tax-equivalent yield and
tax-equivalent effective yield of the Class
A and Class B Shares of the Tax-Free Fund
and the California Tax-Free Fund; and the
average annual total return of the Income
Equity Fund and Bond Fund for the one-year,
five-year, and inception-to-date periods are
incorporated by reference to Exhibit 16 of
Post-Effective Amendment No. 6 (filed
September 27, 1990) to Registrant's
Registration Statement on Form N-1A.
(b) Yield Calculation Schedules concerning the
seven-day tax-equivalent yield and
tax-equivalent effective yield (for
California and Oregon income tax purposes)
of the Class A and Class B Shares of the
100% U.S. Treasury Obligations Fund are
incorporated by reference to Exhibit 16(b)
of Post-Effective Amendment No. 7 (filed
September 30, 1991) to Registrant's
Registration Statement on Form N-1A.
(c) Performance Calculation Schedules
concerning: (i) the seven-day and thirty-
day yield and effective yield of the Class A
and Class B Shares of the U.S. Government
Money Market Fund, the Diversified Money
Market Fund, the 100% U.S. Treasury Money
Market Fund, and the California Tax-Free
Money Market Fund; (ii) the seven-day and
thirty-day tax-equivalent yield (using a
Federal income tax rate of 31%) and tax-
equivalent
6
<PAGE> 53
effective yield (using a Federal income tax
rate of 31%) of the Class A and Class B
Shares of the California Tax-Free Fund;
(iii) the seven-day and thirty-day
tax-equivalent yield (using a Federal income
tax rate of 31% and a California income tax
rate of 9.3%) and tax-equivalent effective
yield (using a Federal income tax rate of
31% and a California income tax rate of
9.3%) of the Class A and Class B Shares of
the California Tax-Free Fund; (iv) the
average annual total return of the Class A
and Class B Shares of the U.S. Government
Money Market Fund, the Diversified Money
Market Fund, the 100% U.S. Treasury Money
Market Fund, and the California Tax-Free
Money Market Fund for the one-year,
three-year and inception-to-date periods and
the aggregate total return of the Class A
and Class B Shares of each such Fund for the
year-to-date, quarterly and monthly periods;
(v) the thirty-day yield of the Bond Fund;
(vi) the average annual total return of the
Bond Fund and the Income Equity Fund for the
one-year, three-year, five-year and
inception-to-date periods and the aggregate
total return of each such Fund for the
year-to-date, quarterly and monthly periods;
and (vii) the distribution rate (excluding
and including capital gains) over a
twelve-month period for the Bond Fund and
Income Equity Fund, are incorporated by
reference to Exhibit 16(c) of Post-
Effective Amendment No. 8 (filed September
30, 1992) to Registrant's Registration
Statement on Form N-1A.
(17) Financial Data Schedules.
(18) Multiple Class Plan for HighMark Funds
adopted by the Board of Trustees on March
20, 1996 is incorporated by reference to
Exhibit 18 of Post-Effective Amendment No.
17 (filed March 29, 1996) to Registrant's
Registration Statement on Form N-1A.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
As of the effective date of this Registration Statement, there
are no persons controlled by or under common control with the
Registrant.
7
<PAGE> 54
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
As of April 21, 1997, the number of record holders of the
following series of Shares were:
<TABLE>
<CAPTION>
NUMBER OF
TITLE OF SERIES RECORD HOLDERS
- --------------- --------------
<S> <C>
U.S. Government Money Market Fund
Retail Shares 13
Fiduciary Shares 5
Diversified Money Market Fund
Retail Shares 47
Fiduciary Shares 11
100% U.S. Treasury Money Market Fund
Retail Shares 10
Fiduciary Shares 5
California Tax-Free Money Market Fund
Retail Shares 19
Fiduciary Shares 8
Income Equity Fund
Retail Shares 774
Fiduciary Shares 3,309
Bond Fund
Retail Shares 153
Fiduciary Shares 571
Income and Growth Fund
Retail Shares 73
Fiduciary Shares 87
Growth Fund
Retail Shares 332
Fiduciary Shares 657
Government Bond Fund
Retail Shares 74
Fiduciary Shares 19
Balanced Fund
Retail Shares 67
Fiduciary Shares 86
Value Momentum Fund
Retail Shares 0
Fiduciary Shares 0
Blue Chip Growth Fund
</TABLE>
8
<PAGE> 55
<TABLE>
<S> <C>
Retail Shares 0
Fiduciary Shares 0
Emerging Growth Fund
Retail Shares 0
Fiduciary Shares 0
International Equity Fund
Fiduciary Shares 0
Intermediate-Term Bond Fund
Retail Shares 0
Fiduciary Shares 0
Government Securities Fund
Retail Shares 0
Fiduciary Shares 0
Convertible Securities Fund
Fiduciary Shares 0
California Intermediate Tax-Free Bond Fund
Retail Shares 0
Fiduciary Shares 0
</TABLE>
ITEM 27. INDEMNIFICATION
Article IX, Section 9.2 of the Registrant's Declaration of
Trust, filed or incorporated by reference as Exhibit (1)
hereto, provides for the indemnification of Registrant's
trustees and officers. Indemnification of the Registrant's
principal underwriter, custodian, investment adviser,
administrator, transfer agent, and fund accountant is provided
for, respectively, in Section 6 of the Distribution Agreement,
filed or incorporated by reference as Exhibit 6(a) hereto,
Section 16 of the Custodian Agreement, filed or incorporated
by reference as Exhibit 8 hereto, Section 8 of the Investment
Advisory Agreement, filed or incorporated by reference as
Exhibit 5 hereto, Section 5 of the Administration Agreement,
filed or incorporated by reference as Exhibit 9(a) hereto,
Section 6 of the Transfer Agency and Service Agreement, filed
or incorporated by reference as Exhibit 9 (c) hereto, and
Section 7 of the Fund Accounting Agreement, filed or
incorporated by reference as Exhibit 9(e) hereto. Registrant
has obtained from a major insurance carrier a trustees and
officers' liability policy covering certain types of errors
and omissions. In no event will Registrant indemnify any of
its trustees, officers, employees or agents against any
liability to which such person would otherwise be subject by
reason of his willful misfeasance, bad faith, or gross
negligence in the performance of his duties, or by reason of
his reckless disregard of the duties involved in the conduct
of his office or under his agreement with Registrant.
Registrant will
9
<PAGE> 56
comply with Rule 484 under the Securities Act of 1933 and Release 11330
under the Investment Company Act of 1940 in connection with any
indemnification.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to trustees, officers,
and controlling persons of Registrant pursuant to the
foregoing provisions or otherwise, Registrant has been advised
that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than
the payment by Registrant of expenses incurred or paid by a
trustee, officer, or controlling person of Registrant in the
successful defense of any action, suit, or proceeding) is
asserted by such trustee, officer, or controlling person in
connection with the securities being registered, Registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR
Pacific Alliance Capital Management, a division of Union Bank
of California, N.A. (the "Advisor"), performs investment
advisory services for Registrant. Union Bank of California,
N.A. ("Union Bank of California") offers a wide range of
commercial and trust management services to its clients in
California, Oregon, and Washington and around the world. Union
Bank of California, N.A. is a subsidiary of UnionBanCal
Corporation, a publicly traded corporation, a majority of the
shares of which are owned by the Bank of Tokyo-Mitsubishi,
Limited.
To the knowledge of Registrant, none of the directors or
officers of Union Bank of California, except those set forth
below, is or has been at any time during the past two fiscal
years engaged in any other business, profession, vocation or
employment of a substantial nature, except that certain
directors and officers of The Bank of California also hold
positions with UnionBanCal Corporation, the Bank of
Tokyo-Mitsubishi and/or the Bank of Tokyo-Mitsubishi's other
subsidiaries.
Listed below are the directors and certain principal executive
officers of Union Bank of California, their principal
occupations and, for the prior two fiscal years, any other
business, profession, vocation, or employment of a substantial
nature engaged in by such directors and officers:
10
<PAGE> 57
UNION BANK OF CALIFORNIA, N.A.
<TABLE>
<CAPTION>
POSITION
WITH UNION
BANK OF PRINCIPAL TYPE OF
CALIFORNIA NAME OCCUPATION BUSINESS
- ---------- ---- ---------- --------
<S> <C> <C> <C>
Director Alexander D. Calhoun, Esquire Of Counsel Law Firm
Graham & James
One Maritime Plaza, Suite 300
San Francisco, CA 94111
Director Richard D. Farman President, Chief Operating Officer
and Director
Pacific Enterprises
555 W. Fifth Street, 29th Floor
Los Angeles, CA 90013
Director Stanley F. Farrar, Partner Law Firm
Esquire Sullivan & Cromwell
12th Floor
444 So. Flower St.
Los Angeles, CA 90071
Director and Roy A. Henderson UnionBanCal Corporation Banking
Vice Chairman Union Bank of California
400 California Street
San Francisco, CA 94145
Director Herman E. Gallegos Independent Management Consultant Independent Management
95 Kings Road Consultant
Brisbane, CA 94005
Director Jack L. Hancock EVP (retired)
Pacific Bell
Vice Chairman Richard C. Hartnack UnionBanCal Corporation Banking
Union Bank of California, NA
445 S. Figueroa Street, 38th Floor
Los Angeles, CA 90071
Director Hon. Harry W. Low (retired) Judicial Arbitration & Mediation
Services, Inc.
2 Embarcadero, Suite 1100
San Francisco, CA 94111
Director Dr. Mary S. Metz Dean, University Extension Education
University of California
2223 Fulton Street
Berkeley, CA 94720
</TABLE>
11
<PAGE> 58
<TABLE>
<CAPTION>
POSITION
WITH UNION
BANK OF PRINCIPAL TYPE OF
CALIFORNIA NAME OCCUPATION BUSINESS
- ---------- ---- ---------- --------
<S> <C> <C> <C>
Director Raymond E. Miles Professor, Haas School Education
of Business
University of California
350 Barrows Hall
Berkeley, CA 94720
Vice Chairman of the Takahiro Moriguchi UnionBanCal Corporation Banking
Board and Chief Union Bank of California, NA
Financial Officer 350 California Street, 12th Floor
San Francisco, CA 94104-1476
Director Shin Nakahara Chief Executive Officer Banking
North American Headquarters
The Bank of Tokyo-Mitsubishi, Ltd.
1251 Avenue of the Americas, 14th Floor
New York, NY 10020
Director J. Fernando Niebla Chairman & CEO Computer Software
Infotec Commercial Systems and Hardware
3100 S. Harbor Blvd.
Suite 260
Santa Ana, CA 94704
Director, Minoru Noda UnionBanCal Corporation Banking
Vice-Chairman and Union Bank of California
Chief Credit Officer 400 California Street
San Francisco, CA 94145
Deputy Chairman of Hiroo Nozawa UnionBanCal Corporation Banking
the Board and Union Bank of California
Chief Operating 400 California Street
Officer San Francisco, CA 94145
Director Sidney R. Peterson Retired Chairman and Chief
Executive Officer
Getty Oil Company
Director Carl W. Robertson, Managing Director Real Estate and
Esquire Warland Investments Investment
Company Management
Suite 300 Company
1299 Ocean Avenue
Santa Monica, CA 90401
Director Charles R. Scott Chairman and Corporate
Chief Executive Officer Investor
Leadership Centers USA
365 King Road, N.W.
Atlanta, GA 30342
</TABLE>
12
<PAGE> 59
<TABLE>
<CAPTION>
POSITION
WITH UNION
BANK OF PRINCIPAL TYPE OF
CALIFORNIA NAME OCCUPATION BUSINESS
- ---------- ---- ---------- --------
<S> <C> <C> <C>
Director Paul W. Steere, Partner Law Firm
Esquire Bogle & Gates
Two Union Square
601 Union Street
Seattle, WA 98101-2322
Director Henry T. Swigert Chairman of the Board Equipment
ESCO Corporation Manufacturing
2141 NW 25th Avenue
Portland, OR 97210
Director Yuji Taniguchi General Manager Banking
The Bank of Tokyo-Mitsubishi, Ltd.
Los Angeles Branch
777 S. Figueroa Street, Suite 600
Los Angeles, CA 90017
Director Tsuneo Wakai Chairman Banking
The Bank of Tokyo-Mitsubishi, Ltd.
7-1, Marunouchi 2-chome
Chiyoda-ku
Tokyo 100, Japan
Vice Chairman of the Robert M. Walker UnionBanCal Corporation Banking
Board Union Bank of California, NA
350 California Street, 12th Floor
San Francisco, CA 94104-1476
Director Dr. Blenda J. Wilson President Education
California State University
Northridge
18111 Nordhoff Street
Northridge, CA 91330
Chairman of the Tamotsu Yamaguchi UnionBanCal Corporation Banking
Board Union Bank of California, NA
445 S. Figueroa Street
Los Angeles, CA 90071
Director Shota Yasuda General Manager Banking
North American Planning Division
The Bank of Tokyo-Mitsubishi, Ltd.
1251 Avenue of the Americas, 14th Floor
New York, NY 10020
</TABLE>
13
<PAGE> 60
<TABLE>
<CAPTION>
POSITION
WITH UNION
BANK OF PRINCIPAL TYPE OF
CALIFORNIA NAME OCCUPATION BUSINESS
- ---------- ---- ---------- --------
<S> <C> <C> <C>
Director, President Kanetaka Yoshida UnionBanCal Corporation Banking
and Chief Executive Union Bank of California, NA
Officer 350 California Street, 12th Floor
San Francisco, CA 94104-1476
Director Kenji Yoshizawa Deputy President Banking
The Bank of Tokyo-Mitsubishi, Ltd.
7-1, Marunouchi 2-chome
Chiyoda-ku
Tokyo 100, Japan
Executive Peter R. Butcher c/o Union Bank of California Banking
Vice President 400 California Street
and Chief San Francisco, CA
Credit Officer 94145
Executive David W. Ehlers c/o Union Bank of California Banking
Vice President 400 California Street
and Chief San Francisco, CA
Financial Officer 94145
Executive Michael Spilsbury c/o Union Bank of California Banking
Vice President 400 California Street
San Francisco, CA 94145
Executive Magan C. Patel c/o Union Bank of California Banking
Vice President 400 California Street
San Francisco, CA 94145
Executive Vice Charles Pedersen c/o Union Bank of California Banking
President 400 California Street
San Francisco, CA 94145
Executive Vice Philip Wexler c/o Union Bank of California Banking
President 400 California Street
San Francisco, CA 94145
Executive Vice Don Brunell c/o Union Bank of California Banking
President 400 California Street
San Francisco, CA 94145
</TABLE>
14
<PAGE> 61
ITEM 29. PRINCIPAL UNDERWRITER
Furnish the name of each investment company (other than the
Registrant) for which each principal underwriter currently
distributing securities of the Registrant also acts as a
principal underwriter, distributor or investment advisor.
Registrant's distributor, SEI Financial Services Company
("SFS"), acts as distributor for:
SEI Daily Income Trust July 15, 1982
SEI Liquid Asset Trust November 29, 1982
SEI Tax Exempt Trust December 3, 1982
SEI Index Funds July 10, 1985
SEI Institutional Managed Trust January 22, 1987
SEI International Trust August 10, 1988
Stepstone Funds January 30, 1991
The Pillar Funds February 28, 1992
CUFUND May 1, 1992
STI Classic Funds May 29, 1992
CoreFunds, Inc. October 30, 1992
First American Funds, Inc. November 1, 1992
First American Investment Funds, Inc. November 1, 1992
The Arbor Fund January 28, 1993
1784 Funds (R) June 1, 1993
The PBHG Funds, Inc. July 16, 1993
Marquis Funds (R) August 17, 1993
Morgan Grenfell Investment Trust January 3, 1994
The Achievement Funds Trust December 27, 1994
Bishop Street Funds January 27, 1995
CrestFunds, Inc. March 1, 1995
STI Classic Variable Trust August 18, 1995
ARK Funds November 1, 1995
Monitor Funds January 11, 1996
PMB Funds, Inc. March 1, 1996
SEI Asset Allocation Trust April 1, 1996
Turner Funds April 30, 1996
SEI Institutional Investment Trust June 14, 1996
First American Strategy Funds, Inc. October 1, 1996
Armada Funds March 8, 1997
15
<PAGE> 62
SFS provides numerous financial services to investment
managers, pension plan sponsors, and bank trust departments.
These services include portfolio evaluation, performance
measurement and consulting services ("Funds Evaluation") and
automated execution, clearing and settlement of securities
transactions ("MarketLink").
Furnish the information required by the following table with
respect to each director, officer or partner of each principal
underwriter named in the answer to Item 21 of Part B. Unless
otherwise noted, the principal business address of each
director or officer is Oaks, PA 19456.
16
<PAGE> 63
<TABLE>
<CAPTION>
Position and Office Positions and Offices
Name With Underwriter With Registrant
- ---- ------------------- ---------------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman & Chief --
Executive Officer
Henry H. Greer Director, President & Chief --
Operating Officer
Carmen V. Romeo Director, Executive Vice --
President and Treasurer
Gilbert L. Beehover Executive Vice President --
Richard B. Lieb Executive Vice President, --
President-Investment Services
Division
Leo J. Dolan, Jr. Senior Vice President --
Carl A. Guarino Senior Vice President --
Jerome Hickey Senior Vice President --
Larry Hutchison Senior Vice President --
Steven Kramer Senior Vice President --
David G. Lee Senior Vice President President and Chief
Executive Officer
William Madden Senior Vice President --
Jack May Senior Vice President --
A. Keith McDowell Senior Vice President --
Dennis J. McGonigle Senior Vice President --
Hartland J. McKeown Senior Vice President --
Barbara J. Moore Senior Vice President --
James V. Morris Senior Vice President --
Steven Onofrio Senior Vice President --
Kevin P. Robins Senior Vice President, Vice President,
General Counsel and Secretary
Secretary
Robert Wagner Senior Vice President --
Patrick K. Walsh Senior Vice President --
Kenneth Zimmer Senior Vice President --
Robert Aller Vice President --
Marc H. Cahn Vice President and Assistant Vice President,
Secretary Secretary
Gordon W. Carpenter Vice President --
Todd Cipperman Vice President and Assistant Vice President,
Secretary Assistant Secretary
Robert Crudup Vice President and Managing --
Director
Ed Daly Vice President --
Jeff Drennen Vice President --
Mick Duncan Vice President and Team Leader --
Vic Galef Vice President and Managing --
Director
Kathy Heilig Vice President --
Michael Kantor Vice President --
Samuel King Vice President --
Kim Kirk Vice President & Managing
Director --
</TABLE>
17
<PAGE> 64
<TABLE>
<CAPTION>
Position and Office Positions and Offices
Name With Underwriter With Registrant
- ---- ------------------- ---------------------
<S> <C> <C>
Donald N. Korytowski Vice President --
John Krzeminski Vice President & Managing --
Director
Robert S. Ludwig Vice President and Team Leader --
Vicki Malloy Vice President and Team Leader --
Carolyn McLaurie Vice President & Managing --
Director
W. Kelso Morrill Vice President --
Barbara A. Nugent Vice President & Assistant Secretary Vice President,
Assistant Secretary
Sandra K. Orlow Vice President & Assistant Secretary Vice President,
Assistant Secretary
Donald Pepin Vice President & Managing Director --
Larry Pokora Vice President --
Kim Rainey Vice President --
Paul Sachs Vice President --
Mark Samuels Vice President & Managing Director --
Steve Smith Vice President --
Daniel Spaventa Vice President --
Kathryn L. Stanton Vice President & Assistant Secretary Vice President,
Assistant Secretary
Wayne M. Withrow Vice President & Managing Director --
William Zawaski Vice President --
James Dougherty Director of Brokerage Services --
</TABLE>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
(1) Union Bank of California, N.A., 400 California
Street, San Francisco, CA 94104 (records relating to
the Advisor's functions as investment adviser and
Union Bank of California's functions as custodian and
sub-transfer agent).
(2) SEI Fund Resources, Oaks, Pennsylvania 19456 (records
relating to its functions as administrator and
distributor).
(3) SEI Financial Services Company, Oaks, Pennsylvania
19456 (records relating to its function as
distributor).
(4) State Street Bank and Trust Company, 225 Franklin
Street, Boston, Massachusetts 02110 (records relating
to its functions as transfer agent).
(5) Ropes & Gray, One Franklin Square, 1301 K Street,
N.W., Suite 800 East, Washington, DC 20005 (the
Registrant's Declaration of Trust, Code of
Regulations and Minute Books).
18
<PAGE> 65
ITEM 31. MANAGEMENT SERVICES
None.
ITEM 32. UNDERTAKINGS
Registrant hereby undertakes to call a meeting of the
shareholders for the purpose of voting upon the question of
removal of one or more trustees when requested to do so by the
holders of at least 10% of the outstanding shares of
Registrant and to comply with the provisions of Section 16(c)
of the Investment Company Act of 1940 relating to shareholder
communication.
Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without
charge.
19
<PAGE> 66
NOTICE
A copy of the Amended and Restated Agreement and Declaration of Trust
of HighMark Funds is on file with the Secretary of State of The Commonwealth of
Massachusetts and notice is hereby given that this instrument is executed on
behalf of the Registrant by an officer of the Registrant as an officer and not
individually and that the obligations of or arising out of this instrument are
not binding upon any of the trustees or shareholders individually but are
binding only upon the assets and property of the Registrant.
20
<PAGE> 67
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Amendment No. 21 to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 21 to this Registration Statement to be
signed on its behalf by the undersigned, thereto duly authorized, in the City of
Washington, D.C., on the first day of May, 1997.
HighMark Funds
By: /S/ David G. Lee
----------------
David G. Lee
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 20 has been signed below by the following persons
in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Capacity Date
- --------- -------- ----
<S> <C> <C>
/s/ David G. Lee President and May 1, 1997
- ------------------------------ Chief Executive Officer
David G. Lee
/s/ Robert DellaCroce Comptroller and Chief May 1, 1997
- ------------------------------ Financial Officer
Robert DellaCroce
/s/ Thomas L. Braje Trustee May 1, 1997
- ------------------------------
Thomas L. Braje
/s/ David A. Goldfarb Trustee May 1, 1997
- ------------------------------
David A. Goldfarb
/s/ Joseph C. Jaeger Trustee May 1, 1997
- ------------------------------
Joseph C. Jaeger
/s/ Frederick J. Long Trustee May 1, 1997
- ------------------------------
Frederick J. Long
</TABLE>
*By:/s/ Martin E. Lybecker
--------------------------
Martin E. Lybecker
Attorney-In-Fact
21
<PAGE> 68
POWER OF ATTORNEY
The undersigned, each being an Officer of HighMark Funds (the "Funds"),
does hereby constitute and appoint Martin E. Lybecker, Alan G. Priest and
Francoise M. Haan, each individually, his true and lawful attorneys and agents,
with power of substitution or resubstitution, to do any and all acts and things
and to execute any and all instruments that said attorneys and agents, each
individually, may deem necessary or advisable or which may be required to enable
the Funds to comply with the Investment Company Act of 1940, as amended, and the
Securities Act of 1933, as amended ("Acts"), and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, and
in connection with the filing and effectiveness of any registration statement or
statement of the Funds pursuant to said Acts and any and all amendments thereto
(including post-effective amendments), including specifically, but without
limiting the generality of the foregoing, the power and authority to sign in the
name and on behalf of the undersigned as an officer of the Funds any and all
such amendments filed with the Securities and Exchange Commission under said
Acts, any Notification of Registration under the Investment Company Act of 1940
and any other instruments or documents related thereto, and the undersigned does
hereby ratify and confirm all that said attorneys and agents, or either of them,
shall do or cause to be done by virtue thereof.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- --------- -------- ----
<S> <C> <C>
/s/ DAVID G. LEE President and Chief Executive Officer April 23, 1997
- -------------------------
David G. Lee
/s/ ROBERT DELLACROCE Controller and Chief Financial Officer April 23, 1997
- -------------------------
Robert DellaCroce
/s/ MARC H. CAHN Vice President and Secretary April 23, 1997
- -------------------------
Marc H. Cahn
</TABLE>
1
<PAGE> 1
Dated: As of March 28, 1997
Amended and Restated
Schedule A
to the
Investment Advisory Agreement
between HighMark Funds and
Union Bank of California, N.A.
<TABLE>
<CAPTION>
Name of Fund Compensation*
- ------------ ------------
<S> <C>
Balanced Fund Annual rate of sixty one-hundredths of one percent (.60%) of the Balanced Fund's average daily net
assets.
Growth Fund Annual rate of sixty one-hundredths of one percent (.60%) of the Growth Fund's average daily net
assets.
Income Equity Fund Annual rate of sixty one-hundredths of one percent (.60%) of the Income Equity Fund's average
daily net assets.
Value Momentum Fund Annual rate of sixty one-hundredths of one percent (.60%) of the Value Momentum Fund's average
daily net assets.
Blue Chip Growth Fund Annual rate of sixty one-hundredths of one percent (.60%) of the Blue Chip Growth Fund's average
daily net assets.
Emerging Growth Fund Annual rate of eighty one-hundredths of one percent (.80%) of the Emerging Growth Fund's average
daily net assets.
International Equity Fund Annual rate of ninety five one-hundredths of one percent (.95%) of the International Equity Fund's
average daily net assets.
Bond Fund Annual rate of fifty one-hundredths of one percent (.50%) of the Bond Fund's average daily net
assets.
</TABLE>
<PAGE> 2
<TABLE>
<S> <C>
Intermediate-Term Bond Fund Annual rate of fifty one-hundredths of one percent (.50%) of the Intermediate-Term Bond Fund's
average daily net assets.
Government Securities Fund Annual rate of fifty one-hundredths of one percent (.50%) of the Government Securities Fund
average daily net assets.
Convertible Securities Fund Annual rate of sixty one-hundredths of one percent (.60%) of the Convertible Securities Fund's
average daily net assets.
California Intermediate Annual rate of fifty one-hundredths of one percent (.50%) of the California Intermediate Tax-Free
Tax-Free Bond Fund Bond Fund's average daily net assets.
Diversified Money Market Fund Annual rate of thirty one-hundredths of one percent (.30%) of the Diversified Money Market Fund's
average daily net assets.
U.S. Government Money Annual rate of thirty one-hundredths of one percent (.30%) of the U.S. Government Money Market
Market Fund Fund's average daily net assets.
100% U.S. Treasury Annual rate of thirty one-hundredths of one percent (.30%) of the 100% U.S. Treasury Money Market
Money Market Fund Fund's average daily net assets.
California Tax-Free Money Annual rate of thirty one-hundredths of one percent (.30%) of the California Tax-Free Money Market
Market Fund Fund's average daily net assets.
</TABLE>
* All fees are computed daily and paid monthly
<PAGE> 3
HIGHMARK FUNDS
By: /s/ [SIG]
------------------------------------
Title: Vice President
----------------------------------
UNION BANK OF CALIFORNIA, N.A.
By: /s/ [SIG]
-------------------------------------
Title: SUP
----------------------------------
<PAGE> 1
Exhibit 10
Opinion and Consent of Counsel
as to legality of shares being registered
<PAGE> 2
[ROPES & GRAY LETTERHEAD]
WRITER'S DIRECT DIAL NUMBER: (202) 626-3913
May 1, 1997
HighMark Funds
Oaks, Pennsylvania 19456
Gentlemen:
You have registered under the Securities Act of 1933, as amended (the
"1933 Act") an indefinite number of shares of beneficial interest ("Shares") of
the Monitor Funds ("Trust"), as permitted by Rule 24f-2 under the Investment
Company Act of 1940, as amended (the "1940 Act"). You propose to file a
post-effective amendment on Form N-1A (the "Post-Effective Amendment") to your
Registration Statement as required by Section 10(a)(3) of the 1933 Act and the
Rules thereunder and Section 8(b) of the 1940 Act and the rules thereunder.
The purpose of this filing is to provide financial and shareholder information
for certain Funds of the Trust ("series").
We have examined your Agreement and Declaration of Trust on file in
the office of the Secretary of The Commonwealth of Massachusetts and the Clerk
of the City of Boston. We have also examined a copy of your Bylaws and such
other documents, receipts and records as we have deemed necessary for the
purpose of this opinion.
Based upon the foregoing, we are of the opinion that the issue and
sale of the authorized but unissued shares of the Series have been duly
authorized under Massachusetts law. Upon the original issue and sale of your
authorized but unissued shares of the Series and upon receipt of the authorized
consideration therefor in an amount not less than the net asset value of the
shares of the Series established and in force at the time of their sale (plus
any applicable sales charge), the shares of the Series issued will be validly
issued, fully paid and non-assessable.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Agreement and
<PAGE> 3
ROPES & GRAY
HighMark Funds
May 1, 1997
Page 2
Declaration of Trust provides for indemnification out of the property of a
particular series of Shares for all loss and expenses of any shareholder of
that series held personally liable solely by reason of his being or having been
a shareholder. Thus, the risk of shareholder liability is limited to
circumstances in which that series of Shares itself would be unable to meet its
obligations.
We understand that this opinion is to be used in connection with the
filing of the Post-Effective Amendment. We consent to the filing of this
opinion with and as part of your Post-Effective Amendment.
Sincerely,
/s/ ROPES & GRAY
Ropes & Gray
<PAGE> 1
Exhibit 11(a)
INDEPENDENT AUDITOR'S CONSENT
We consent to the use in this Post-Effective Amendment No. 21 to Registration
Statement under the Securities Act of 1933, filed under Registration Statement
No. 33-12608 of our report dated September 13, 1996, relating to The HighMark
Group, including Diversified Money Market Fund, U.S. Government Money Market
Fund, 100% U.S. Treasury Money Market Fund, California Tax-Free Money Market
Fund, Bonus Fund, Income Equity Fund, Balanced Fund and Growth Fund, included
in the Statement of Additional Information and to the reference to us under the
caption "Auditors", both of which are incorporated by reference in such
Registration Statement.
DELOITTE & TOUCHE LLP
Dayton, Ohio
April 25, 1997
<PAGE> 1
Exhibit 11(b)
Consent of Coopers & Lybrand L.L.P.
<PAGE> 2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the reference to our Firm under the caption "Financial
Highlights" in the Prospectuses for Retail Shares and in the Prospectuses for
Fiduciary Shares of the Divisified Money Market Fund, U.S. Government
Obligations Money Market Fund, 100% U.S. Treasury Obligations Money Market
Fund, California Tax-Free Money Market Fund, Bond Fund, Income Equity Fund,
Balanced Fund, and Growth Fund incorporated by reference in this Post-Effective
Amendment No. 21 to the Registration Statement on Form N-1A of The Highmark
Group (File No. 33-12608).
/s/ COOPERS & LYBRAND L.L.P.
____________________________
COOPERS & LYBRAND L.L.P.
Columbus, Ohio
April 30, 1997
<PAGE> 1
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated March 15, 1997, on the January 31, 1997 financial
statements of the Stepstone Funds, incorporated by reference in the
Post-Effective Amendment No. 21 to the Registration Statement on Form N-1A of
the Highmark Funds (File Nos. 33-12608 and 811-5059), and to all references to
our firm included in or made part of Post-Effective Amendment No. 21 to the
Registration Statement File No. 33-12608 and 811-5059.
/s/ ARTHUR ANDERSEN LLP
Philadelphia
April 30, 1997
<PAGE> 1
EXHIBIT 11(d)
CONSENT OF COUNSEL
We hereby consent to the use of our name and the references to our firm
under the caption "Legal Counsel" included in or made a part of Post-Effective
Amendment No. 21 to the Registration Statement (Nos. 33-12608 and 811-5059) of
HighMark Funds on Form N-1A under the Securities Act of 1933, as amended.
/s/ ROPES & GRAY
----------------
Ropes & Gray
Washington, D.C.
[May 1, 1997]
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<PERIOD-END> JAN-31-1996
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<SENIOR-LONG-TERM-DEBT> 0
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<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 271112
<SHARES-COMMON-STOCK> 89127
<SHARES-COMMON-PRIOR> 100626
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 20
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 271132
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 7374
<OTHER-INCOME> 0
<EXPENSES-NET> (1065)
<NET-INVESTMENT-INCOME> 6309
<REALIZED-GAINS-CURRENT> 15
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 6324
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2484)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 219547
<NUMBER-OF-SHARES-REDEEMED> (233464)
<SHARES-REINVESTED> 2418
<NET-CHANGE-IN-ASSETS> (2831)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 5
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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