highmark
semi-annual
REPORT
January 31, 2000
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445 South Figueroa Street, Suite 306
Los Angeles, CA 90071
WWW.HIGHMARKFUNDS.COM
- --------------------------------------------------------------------------------
To learn more about HighMark please call:
INVESTMENT PROFESSIONAL SUPPORT DESK
1.800.455.5609
or
INVESTOR SERVICES DESK
1.800.433.6884
or visit us at
WWW.HIGHMARKFUNDS.COM
84808 (01/00)
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TABLE OF CONTENTS
letter to shareholders and
message from the investment adviser ............................... 2
management's discussion and analysis .............................. 4
statements of net assets / schedule of investments ................ 22
statement of assets and liabilities ............................... 73
statements of operations .......................................... 74
statements of changes in net assets ............................... 78
financial highlights .............................................. 82
notes to financial statements ..................................... 90
fund information .................................................. 100
This report and the financial statements
contained herein are submitted for the
general information of HighMarkSM Funds'
shareholders. This report is not
authorized for distribution to
prospective investors unless preceded or
accompanied by an effective prospectus.
Shares of HighMark Funds are not
deposits or obligations of, or
guaranteed by Union Bank of California,
N.A., or any of its subsidiaries or
affiliates. Such shares are also not
federally insured by the Federal Deposit
Insurance Corporation, the Federal
Reserve Board, or any other agency.
Investments in shares of mutual funds
involve risks, including the possible
loss of principal. SEI Investments
Distribution Co., serves as Distributor
for HighMark Funds and is not affiliated
with the Adviser, HighMark Capital
Management, Inc. or with Union Bank of
California, N.A.
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GREG KNOPF [PHOTO OMITTED]
LETTER TO SHAREHOLDERS
MY FELLOW SHAREHOLDERS:
We are pleased to provide your HighMark Funds Semi-Annual Report for the
six-months ended January 31, 2000. During the period the popular market averages
once again reached new highs, with many growth stocks, especially those in the
technology sector, continuing to far outpace most value-oriented securities.
This divergence was reflected in the performance of the large capitalization
HighMark Equity Funds. While the HighMark Growth Fund once again outperformed
the S&P 500 for the one- and three-year periods ending January 31, the Value
Momentum and Income Equity Funds lagged.* As this divergence could continue, we
suggest that you review your current asset allocation strategy. Make sure that
it continues to be adequately diversified across all asset classes and not
overly weighted toward growth stocks, as many have had a significant price
advance. This may help to protect your portfolio in the event of a market
correction that can sometimes follow such rapid price increases.
TWO HIGHMARK FUNDS THAT SHINED
We are extremely pleased to report that our HighMark California Intermediate
Tax-Free Bond Fund was ranked #1 by Lipper in its category for the five-year
period ending December 31, 1999.** In addition, the HighMark Small Cap Value
Fund, which invests in companies with market capitalizations under $2 billion,
was ranked in the top ten percent of all such funds as measured by Lipper for
the year ended January 31, 2000.*** We invite you to take a closer look at these
top-performing funds, as they may make attractive additions to your portfolio.
For additional information, please consult your financial adviser, or contact
HighMark Funds directly at 1-800-433-6884.
INTERNATIONAL EQUITY FUND NOW AVAILABLE TO RETAIL INVESTORS
The popular HighMark International Equity Fund, previously available only to
institutional and retirement plan investors, is now available in retail share
classes as well. The Fund, which is sub-advised by AXA Investment Managers GS
Ltd., offers investors the opportunity to participate in the long-term growth
potential of developed markets outside the United States. Many investment
professionals recommend investing up to 10% of your portfolio's assets in
international markets. To request a prospectus, please call 1-800-433-6884.
The financial markets have started the year with significant volatility. It is
more important than ever to understand the funds you own and the types of
securities they invest in. Please take a few moments to read your fund manager's
comments contained in this report. It will help you become a more informed
investor.
From all of us at HighMark Funds, we wish you much success in the year 2000 and
thank you for your investment in HighMark Funds.
Sincerely,
/s/ signature omitted
Greg Knopf
Managing Director, Mutual Funds
HighMark Capital Management, Inc.
February 2000
*For the one- and three-year periods ended January 31, 2000, the HighMark
Growth Fund (Fiduciary Shares) produced a total return of 12.72% and 24.30%,
respectively. The S&P 500 Composite Index returned 10.35% and 22.88%,
respectively, during the same time periods.
**For the one- and five-year periods ended December 31, 1999, Lipper Analytical
Services ranked the HighMark California Intermediate Tax-Free Bond 5th out of
27 funds and 1st out of 19 funds, respectively, in the California
Intermediate Municipal Debt Funds Average.
***For the one-year period ended January 31, 2000, Lipper Analytical Services
ranked the HighMark Small Cap Value Fund 31st out of 326 funds in the Small
Cap Value Funds Classification.
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MESSAGE FROM
THE INVESTMENT ADVISER
[PHOTO OMITTED]
LUKE MAZUR
MY FELLOW SHAREHOLDERS:
The six-month period ended January 31, 2000 was a period of clear winners and
losers for stocks and bonds. Many companies related to technology and
telecommunications saw their stock prices rise dramatically, as investors
narrowed their preferences to the "new economy" stocks. Meanwhile, the rising
interest rate environment created difficulties for interest-sensitive stocks
such as financial services and traditional manufacturing, while the bear market
for bonds continued.
THE ECONOMY: EYE-POPPING PERFORMANCE
The U.S. economy enters the new millennium on a solid growth trajectory, with
real Gross Domestic Product increasing at a rate of nearly 6% in the second half
of 1999. At the same time, inflation remained moderate at about 2.5%; although
Asia's recovery, the historically low 4% U.S. unemployment rate and the
long-term wealth effect from rising home prices and booming stock portfolios are
putting upward pressure on prices. Federal Reserve Board Chairman Alan Greenspan
has indicated that he considers a non-inflationary growth rate to be 3%, which
the economy has exceeded every year since 1996. In an effort to slow it down,
the Fed has raised short-term rates four times since June 1999.
STOCKS: NARROW EUPHORIA
In recent years, stocks with attractive earnings prospects have beaten value
stocks, as investors are willing to pay a premium for companies that can
generate superior growth. During the six-month period ended January 31, 2000,
investors again clamored for growth, but they were very specific in their
preferences for technology and telecommunications. This narrow focus made it
difficult for diversified and moderate-risk portfolios to outperform their
peers, many of whom have eagerly jumped on this high-risk bandwagon. Meanwhile,
corporate profits have advanced briskly across the board, making the sectors
that have not participated in the rally appear increasingly attractive.
BONDS: FIGHTING INTEREST RATE HEADWINDS
Interest rates rose steadily during the six-month period, causing U.S. Treasury
bonds, which trade inversely to changes in interest rates, to post sharp
negative returns. In contrast, corporate bonds, which also respond favorably to
improving economies, outperformed Treasury securities. Although interest rates
may continue to rise in 2000 as the Fed tries to slow the economy, the federal
budget surplus is a positive for bonds as the government retires debt, thus
reducing supply.
With Treasury securities approaching 7% and corporate bond yields near 8%, we
believe that the bond market currently offers reasonable value. Meanwhile, the
stock market continues to favor technology stocks, a "mania" that could continue
for some time. The Fed will probably continue to raise interest rates in an
effort to deflate that mania and rein in the economy. Given the interest rate
environment and investor preferences for technology, our objective is to
maximize performance in the stock and bond markets without taking unacceptable
risks.
Sincerely,
/s/ signature omitted
Luke Mazur
Managing Director, Chief Investment Officer
HighMark Capital Management, Inc.
February 2000
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GROWTH FUND
PORTFOLIO AT A GLANCE
NUMBER OF HOLDINGS 113
PORTFOLIO TURNOVER 28%
INCEPTION DATE
FIDUCIARY 11/18/93
RETAIL CLASS A 6/20/94
RETAIL CLASS B 2/2/98
RETAIL CLASS C 11/30/99
NET ASSETS (000)
FIDUCIARY $758,327
RETAIL CLASS A $ 40,271
RETAIL CLASS B $ 17,922
RETAIL CLASS C $ 60
EXPENSE RATIOS:
FIDUCIARY 0.92%
RETAIL CLASS A 1.17%
RETAIL CLASS B 1.82%
RETAIL CLASS C 1.82%
PERFORMANCE
For the six months ended January 31, 2000, the HighMark Growth Fund returned
11.19% (Fiduciary Shares). In comparison, the Lipper Growth Funds Average rose
14.40% and the Standard & Poor's 500 Composite Stock Index was up 5.59%. During
the same period, the Standard & Poor's 500/BARRA Growth Index rose 11.39%.
FACTORS AFFECTING PERFORMANCE
The Fund benefited from holdings in companies related to the Internet and
wireless communications. For example, JDS Uniphase, which performed extremely
well during the period, is the leading provider of "bandwidth," the means by
which individuals and businesses connect to the Internet. National
Semiconductor, which was up sharply, is a major provider of semiconductor chips
to cellular telephone manufacturers. Yahoo! produced an excellent return, partly
because it is an increasingly profitable Internet company, a rarity, and also
because it was added to the S&P 500 Index. The Fund's Lipper peers had much
higher exposures to technology, which accounted for stronger performance but
also higher risk.
Beyond technology, the purchase of Starbucks has been rewarding because we
bought it when the company was out of favor on Wall Street. In mid-1999, there
were concerns about growth in its core business and about its Internet activity
unrelated to coffee. The company has since reported strong same-store revenues,
boosting the stock price. The Fund also benefited from not being invested
significantly in a number of industries that did very poorly such as defense,
tobacco and waste management. However, the Fund's performance was hampered by
its holdings in Coca-Cola and Gillette, two traditional growth stocks that have
yet to benefit from the rebound in global economies.
CURRENT STRATEGY & OUTLOOK
We continue to search for companies with earnings growth in excess of 15% that
are selling at reasonable prices. In a rising interest rate climate in which the
economy is ultimately slowing, investors will seek companies that can grow
regardless of the environment. Because of the strong impact that the Internet is
having on the economy, technology still offers among the strongest growth
prospects. However, we intend for the Fund to remain a diversified growth
portfolio, not a technology-only fund.
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HIGHMARK GROWTH FUND
INVESTMENT OBJECTIVE
THE HIGHMARK GROWTH FUND SEEKS LONG-TERM CAPITAL APPRECIATION THROUGH
INVESTMENTS IN EQUITY SECURITIES. THE PRODUCTION OF CURRENT INCOME IS AN
INCIDENTAL OBJECTIVE.
[PHOTO OMITTED]
TEAM LEADER
CRAIG BRAEMER
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE HIGHMARK
GROWTH FUND* VERSUS THE S&P 500 COMPOSITE INDEX, THE LIPPER GROWTH FUNDS
AVERAGE, AND THE S&P 500/BARRA GROWTH INDEX.
[Graphic Omitted]
Plot points are as follows:
<TABLE>
<CAPTION>
Growth Growth Growth Growth S&P Lipper S&P
Fund Synthetic Synthetic Synthetic 500 Growth Barra
Fiduciary Retail Retail Retail Composite Funds Growth
Shares Class A Shares Class B Shares Class C Shares Index Average Index
<S> <C> <C> <C> <C> <C> <C> <C>
11/93 10,000 9,450 10,000 10,000 10,000 10,000 10,000
7/94 9,650 9,129 9,650 9,650 10,100 9,973 9,933
7/95 12,085 11,420 12,085 12,085 12,733 12,522 12,985
7/96 13,622 12,891 13,622 13,622 14,841 13,775 15,277
7/97 20,234 19,142 20,234 20,234 22,574 19,826 23,908
7/98 24,805 23,403 24,698 24,805 26,926 22,546 29,864
7/99 29,082 27,363 28,714 29,082 32,374 26,809 37,094
1/00 32,336 30,387 31,775 32,287 34,183 30,670 41,319
</TABLE>
* Fiduciary, Synthetic Retail Class A, Synthetic Retail Class B or Synthetic
Retail Class C Shares.
<TABLE>
<CAPTION>
Annualized Annualized Annualized
Six Month One Year 3 Year 5 Year Inception to
Return Return Return Return Date
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Fiduciary Shares 11.19% 12.72% 24.30% 26.51% 21.14%
Retail Class A Shares 11.05% 12.46% 24.05% 26.37% 23.96%
Retail Class A Shares
with load* 4.93% 6.30% 21.74% 24.96% 22.71%
Retail Class B Shares 10.66% 11.71% 23.58%++ 26.07%++ 21.26%
Retail Class B Shares
with load** 5.66% 6.71% 22.92%++ 25.91%++ 19.59%
Retail Class C Shares 11.02%++ 12.55%++ 24.24%++ 26.47%++ 3.37%+
Retail Class C Shares
with load*** 10.02%++ 11.55%++ 24.24%++ 26.47%++ 2.43%+
</TABLE>
+Cumulative Inception to Date.
++The performance presented links the performance of Fiduciary Shares from its
inception on November 18, 1993 with the performance of Class B Shares on
February 2, 1998 or Class C Shares on November 30, 1999. Fiduciary Share
performance has been adjusted for the maximum sales charge applicable to
Class B or Class C Shares, but does not reflect the higher Rule 12b-1 fees
and expenses applicable to these Classes. With those adjustments, performance
would be lower than that shown.
*Reflects 5.50% sales charge. **Reflects maximum CDSC of 5.00%. ***Reflects
maximum CDSC of 1.00%.
Past performance is not predictive of future results.
TOP TEN HOLDINGS
% OF
PORTFOLIO
GENERAL ELECTRIC 3.8
MICROSOFT 3.8
INTEL 3.7
CISCO SYSTEMS 3.5
ACE INA HOLDINGS(1) 3.1
IMS HEALTH 2.5
TEXAS INSTRUMENTS 2.3
LUCENT TECHNOLOGIES 2.3
IBM 2.1
CORNING 2.0
TOP FIVE SECTORS
SECTOR % OF
PORTFOLIO
TECHNOLOGY 36.1
CONSUMER STAPLES 17.0
CONSUMER CYCLICALS 15.0
CAPITAL GOODS 9.9
HEALTHCARE 8.4
(1) THIS SECURITY PURCHASED WITH CASH COLLATERAL HELD FROM SECURITIES LENDING.
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VALUE
MOMENTUM
FUND
PORTFOLIO AT A GLANCE
NUMBER OF HOLDINGS 109
PORTFOLIO TURNOVER 2%
INCEPTION DATE
FIDUCIARY 2/1/91
CLASS I 9/30/99
RETAIL CLASS A 4/2/92
RETAIL CLASS B 2/2/98
RETAIL CLASS C 11/30/99
NET ASSETS (000)
FIDUCIARY $674,329
CLASS I $114,490
RETAIL CLASS A $ 40,048
RETAIL CLASS B $ 6,990
RETAIL CLASS C $ 81
EXPENSE RATIOS:
FIDUCIARY 0.88%
CLASS I 0.82%
RETAIL CLASS A 1.13%
RETAIL CLASS B 1.82%
RETAIL CLASS C 1.82%
PERFORMANCE
For the six months ended January 31, 2000, the HighMark Value Momentum Fund
returned 0.69% (Fiduciary Shares). In comparison, the Lipper Multi-Cap Value
Funds Classification posted a return of -4.96% during the period while the
unmanaged Standard & Poor's 500 Composite Stock Index rose 5.59%.
FACTORS AFFECTING PERFORMANCE
The Fund outperformed its peer group because of a larger-than-average weighting
in technology, primarily in companies such as Applied Materials, Hewlett
Packard, IBM and Intel that have moved out of the value category but still show
sufficient momentum to keep them in the portfolio. However, compared to the S&P
500 Index, the Fund is significantly underweighted in technology. Indeed, most
investment sectors outside of technology posted low single-digit returns or
negative results.
There were a few exceptions, such as the biotechnology area where Amgen was a
successful stock during the period. It was purchased about two years ago when
there were questions about the pricing power of its flagship drug, Epogen, which
enhances red blood cell growth. Those questions have been resolved in the
company's favor. In the meantime, Amgen has released a number of other new drugs
that have proven successful.
In publishing, McGraw-Hill continues to generate double-digit earnings growth,
powered by its Standard & Poor's subsidiary and Business Week magazine
advertising revenue. McGraw-Hill is no longer the value stock it was when we
originally purchased it, but we continue to hold for its earnings momentum.
CURRENT STRATEGY & OUTLOOK
We continue to search for moderately valued companies with strong growth rates,
and occasionally we find technology companies that sell at reasonable prices.
For example, American Power Conversion, which makes surge protectors and other
products designed to protect computers, is benefiting from the growth in
computer usage in emerging markets. Comdisco, which provides a variety of
technology services to its clients, has created quite an investment portfolio by
leasing computers to new companies in exchange for stock options.
While there is no shortage of companies outside of technology with solid
earnings growth and modest valuations, there still seems to be a dearth of
interest in these companies. We are mindful of that fact, but believe that our
patience with non-technology shares will eventually be rewarded.
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HIGHMARK VALUE MOMENTUM FUND
INVESTMENT OBJECTIVE
THE HIGHMARK VALUE MOMENTUM FUND SEEKS LONG-TERM CAPITAL GROWTH WITH A SECONDARY
OBJECTIVE OF INCOME.
[PHOTO OMITTED]
TEAM LEADER
RICHARD EARNEST
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE HIGHMARK VALUE
MOMENTUM FUND* VERSUS THE S&P 500 COMPOSITE INDEX AND THE LIPPER MULTI-CAP VALUE
FUNDS CLASSIFICATION.
[Graphic Omitted]
Plot points are as follows:
<TABLE>
<CAPTION>
Value Momentum Value Momentum Value Momentum Value Momentum Value Momentum S&P Lipper
Fund Synthetic Synthetic Synthetic Synthetic 500 Multi-Cap
Fiduciary Class I Retail Class A Retail Class B Retail Class C Composite Value
Shares Shares Shares Shares Shares Index Classification
<S> <C> <C> <C> <C> <C> <C> <C>
2/91 10,000 10,000 9,450 10,000 10000 10,000 10,000
7/91 10,637 10,637 10,052 10,637 10,637 10,694 10,633
7/92 11,869 11,869 11,216 11,869 11,869 12,065 12,028
7/93 13,344 13,344 12,611 13,344 13,344 13,116 13,631
7/94 13,914 13,914 13,150 13,914 13,914 13,788 14,446
7/95 17,450 17,450 16,491 17,450 17,450 17,383 17,440
7/96 20,383 20,383 19,226 20,383 20,383 20,260 19,626
7/97 30,065 30,065 28,289 30,065 30,065 30,817 28,292
7/98 32,837 32,837 30,823 32,689 32,837 36,759 30,587
7/99 37,132 37,132 34,765 36,576 37,132 44,195 33,942
1/00 37,388 37,399 34,964 36,657 37,340 46,666 32,259
</TABLE>
*Fiduciary, Synthetic Class I, Synthetic Retail Class A, Synthetic
Retail Class B or Synthetic Retail Class C Shares.
<TABLE>
<CAPTION>
Annualized Annualized Annualized
Six Month One Year 3 Year 5 Year Inception to
Return Return Return Return Date
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Fiduciary Shares 0.69% 8.35% 13.97% 21.57% 16.54%
Class I 0.72%++ 8.39%++ 13.99%++ 21.58%++ 6.65%+
Retail Class A Shares 0.57% 8.10% 13.69% 21.32% 16.43%
Retail Class A Shares
with load* -4.96% 2.14% 11.56% 19.95% 15.59%
Retail Class B Shares 0.22% 7.28% 13.23%++ 21.10%++ 6.96%
Retail Class B Shares
with load** -4.53% 2.28% 12.44%++ 20.91%++ 5.07%
Retail Class C Shares 0.56%++ 8.21%++ 13.93%++ 21.54%++ 0.09%+
Retail Class C Shares
with load*** -0.39%++ 7.21%++ 13.93%++ 21.54%++ -0.86%+
</TABLE>
+Cumulative Inception to Date.
++The performance presented links the performance of Fiduciary Shares from its
inception on February 1, 1991 with the performance of Class I Shares on
September 30, 1999, Class B Shares on February 2, 1998 or Class C Shares on
November 30, 1999. Fiduciary Share performance has been adjusted for the
maximum sales charge applicable to Class B or Class C Shares, but does not
reflect the higher Rule 12b-1 fees and expenses applicable to these Classes.
With those adjustments, performance would be lower than that shown.
*Reflects 5.50% sales charge. ** Reflects maximum CDSC of 5.00%. *** Reflects
maximum CDSC of 1.00%.
Past performance is not predictive of future results.
Performance presented from February 1, 1991, (commencement of operations of
Fiduciary Shares) and April 2, 1992, (commencement of operations of Retail
Shares) to April 25, 1997 reflects the performance of the Stepstone Value
Momentum Fund.
TOP TEN HOLDINGS
% OF
PORTFOLIO
AMGEN 3.3
CTS 3.1
CISCO SYSTEMS 3.1
INTEL 3.0
ACE INA HOLDING(1) 3.0
GENERAL ELECTRIC 2.7
EXXON MOBIL 2.3
COMDISCO 2.2
MORGAN STANLEY DEAN WITTER 2.1
CITIGROUP 2.1
TOP FIVE SECTORS
SECTOR % OF
PORTFOLIO
TECHNOLOGY 18.0
FINANCIAL 17.8
CAPITAL GOODS 12.0
HEALTHCARE 11.6
CONSUMER CYCLICALS 10.8
(1) THIS SECURITY PURCHASED WITH CASH COLLATERAL HELD FROM SECURITIES LENDING.
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INCOME
EQUITY
FUND
PORTFOLIO AT A GLANCE
NUMBER OF HOLDINGS 127
PORTFOLIO TURNOVER 43%
INCEPTION DATE
FIDUCIARY 2/9/84
RETAIL CLASS A 6/20/94
RETAIL CLASS B 2/2/98
RETAIL CLASS C 11/30/99
NET ASSETS (000)
FIDUCIARY $467,357
RETAIL CLASS A $ 18,258
RETAIL CLASS B $ 4,408
RETAIL CLASS C $ 1
EXPENSE RATIOS:
FIDUCIARY 0.88%
RETAIL CLASS A 1.13%
RETAIL CLASS B 1.78%
RETAIL CLASS C 1.78%
PERFORMANCE
For the six months ended January 31, 2000, the HighMark Income Equity Fund
returned -8.40% (Fiduciary Shares). In comparison, the Lipper Equity Income
Funds Average posted a return of -5.47% during the period while the Standard &
Poor's 500 Composite Stock Index rose 5.59%.
FACTORS AFFECTING PERFORMANCE
The Fund's relative underperformance was due to its emphasis on high
dividend-yielding stocks, making few technology stocks eligible for purchase.
During the six-month period, only 28 industries out of 110 tracked by Standard &
Poor's Corporation showed positive results. Among the worst performers in the
portfolio were regional banks such as Bank One, tobacco companies such as Philip
Morris and consumer products companies such as Mattel. Other poor performers
included insurance, retailers, chemicals and paper/forest products.
We did purchase some technology and telecommunications stocks in 1998, when
stock prices were much lower due to the Asian economic crisis. Those stocks were
among the top performers during the six-month period ending January 31, 2000.
For example, Motorola, a major participant in the booming wireless
communications industry, rose 44%, and was one of the Fund's biggest winners.
Because technology companies tend not to pay dividends, one successful strategy
for including them in the portfolio has been to acquire dividend-paying
companies with strong technology subsidiaries. For example, General Motors
shares rose 33%, largely due to its ownership in Hughes Electronics, a leader in
satellite technology. Enron, the Houston-based natural gas company, benefited
from rising energy prices, as well as its activities in broadband
telecommunications.
The boom in technology transactions, including mergers and acquisitions, initial
public offerings, venture capital and other financings, drove the stock price of
Morgan Stanley Dean Witter up 40%. Citigroup, which includes Salomon Smith
Barney, was up 28% for the same reason, as well as Citicorp's lending exposure
to improving global economies.
CURRENT STRATEGY & OUTLOOK
Reflecting current investor preferences, a large percentage of companies in
mundane industries with double-digit earnings growth are selling at very low
price/earnings multiples, while many technology companies with no earnings are
selling at astronomical prices. At some point, investor sentiment will shift at
least somewhat to the stocks offering compelling value. In the meantime, we are
de-emphasizing dividend yield, a strategy which will allow the portfolio to own
a broader selection of stocks.
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HIGHMARK INCOME EQUITY FUND
INVESTMENT OBJECTIVE
THE HIGHMARK INCOME EQUITY FUND SEEKS TOTAL RETURN ON INVESTMENT, WITH DIVIDEND
INCOME AS AN IMPORTANT COMPONENT OF THAT RETURN. A SECONDARY GOAL IS TO MAINTAIN
A LOW LEVEL OF PRICE VOLATILITY.
[PHOTO OMITTED]
TEAM LEADER
MICHAEL MCBURNEY
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
IN THE HIGHMARK INCOME EQUITY FUND* VERSUS THE S&P 500 COMPOSITE INDEX AND THE
LIPPER EQUITY INCOME FUNDS AVERAGE.
[Graphic Omitted]
Plot Points are as follows:
<TABLE>
<CAPTION>
Income Income Equity Income Equity Income Equity S&P Lipper
Equity Synthetic Synthetic Synthetic 500 Equity
Fiduciary Retail Class A Retail Class B Class C Composite Income Funds
Shares Shares Shares Shares Index Average
<S> <C> <C> <C> <C> <C> <C>
7/90 9,910 9,365 9,910 9,910 10,648 9,993
7/91 11,160 10,546 11,160 11,160 12,003 10,994
7/92 12,949 12,236 12,949 12,949 13,542 12,582
7/93 14,211 13,429 14,211 14,211 14,722 14,146
7/94 14,812 13,997 14,812 14,812 15,477 14,784
7/95 17,369 16,450 17,369 17,369 19,512 17,269
7/96 20,540 19,445 20,540 20,540 22,741 19,790
7/97 28,783 27,218 28,783 28,783 34,592 27,748
7/98 31,889 30,076 31,751 31,889 41,261 30,772
7/99 36,427 34,268 35,958 36,427 49,608 34,403
1/00 33,367 31,359 32,772 33,330 52,381 32,522
</TABLE>
* Fiduciary, Synthetic Retail Class A, Synthetic Retail
Class B or Synthetic Retail Class C Shares.
<TABLE>
<CAPTION>
Annualized Annualized Annualized Annualized
Six Month One Year 3 Year 5 Year 10 Year Inception to
Return Return Return Return Date Date
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Fiduciary Shares -8.40% -2.84% 11.53% 16.90% 13.17% 14.64%
Retail Class A Shares -8.49% -3.06% 11.27% 16.74% 13.11%++ 15.64%
Retail Class A Shares
with load* -13.54% -8.37% 9.19% 15.42% 12.47%++ 14.48%
Retail Class B Shares -8.86% -3.74% 10.86%++ 16.48%++ 12.97%++ 4.84%
Retail Class B Shares
with load** -12.40% -7.47% 10.19%++ 16.27%++ 12.97%++ 3.41%
Retail Class C Shares -8.50%++ -2.95%++ 11.49%++ 16.88%++ 13.16%++ -2.35%+
Retail Class C Shares
with load*** -9.21%++ -3.69%++ 11.49%++ 16.88%++ 13.16%++ -3.12%+
</TABLE>
+Cumulative Inception to Date.
++The performance presented links the performance of Fiduciary Shares from its
inception on February 9, 1984 with the performance of Class A Shares on June
20, 1994, Class B Shares on February 2, 1998 or Class C Shares on November
30, 1999. Fiduciary Share performance has been adjusted for the maximum sales
charge applicable to Class A, Class B or Class C Shares, but does not reflect
the higher Rule 12b-1 fees and expenses applicable to these Classes. With
those adjustments, preformance would be lower than that shown.
*Reflects 5.50% sales charge. **Reflects maximum CDSC of 5.00%. ***Reflects
maximum CDSC of 1.00%.
Past performance is not predictive of future results.
TOP TEN HOLDINGS
% OF
PORTFOLIO
EXXON MOBIL 5.0
GOLDMAN SACHS GROUP(1),
6.183%, 10/16/00 3.1
CITIGROUP 2.9
AT&T 2.4
HEWLETT PACKARD 2.3
MOTOROLA 2.2
AMEX CENTURION(1),
5.700%, 04/24/00 2.0
BEAR STEARNS(1), 6.093%, 01/08/01 2.0
GTE 1.9
MORGAN STANLEY DEAN WITTER 1.9
TOP FIVE SECTORS
SECTOR % OF
PORTFOLIO
FINANCIAL 25.3
ENERGY 11.9
TECHNOLOGY 10.2
BASIC MATERIALS 8.3
UTILITIES 8.2
(1) THIS SECURITY PURCHASED WITH CASH COLLATERAL HELD FROM SECURITIES LENDING.
9
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<PAGE>
[HighMark Logo Omitted]
BALANCED
FUND
PORTFOLIO AT A GLANCE
NUMBER OF HOLDINGS 205
PORTFOLIO TURNOVER 13%
INCEPTION DATE
FIDUCIARY 2/1/91
RETAIL CLASS A 11/13/92
RETAIL CLASS B 2/2/98
RETAIL CLASS C 11/30/99
NET ASSETS (000)
FIDUCIARY $412,289
RETAIL CLASS A $ 10,630
RETAIL CLASS B $ 4,040
RETAIL CLASS C $ 1
EXPENSE RATIOS:
FIDUCIARY 0.92%
RETAIL CLASS A 1.17%
RETAIL CLASS B 1.82%
RETAIL CLASS C 1.82%
PERFORMANCE
For the six months ended January 31, 2000, the HighMark Balanced Fund produced a
return of -0.34% (Fiduciary Shares). In comparison, the Lipper Balanced Funds
Average, a measure of the Fund's peer group, rose 2.09% during the period.
Meanwhile, the Standard & Poor's 500 Composite Stock Index was up 5.59% and the
Lehman Brothers Aggregate Bond Index reflected a return of 0.65%.
FACTORS AFFECTING PERFORMANCE
The Fund's bond portfolio was heavily weighted towards corporates, which offer
as much as 1.5 percentage points more in yield than U.S. Treasury securities.
However, the portfolio's duration was longer than the Lehman Brothers Aggregate
Bond Index, which was a negative in a rising interest rate environment, since a
longer duration translates into greater price declines. In addition, the Fund's
limited investment in U.S. Treasury bonds was a disadvantage when the U.S.
government announced that the budget surplus would cause it to retire debt,
which in turn caused Treasury bond prices to rise.
During the six-month period, the Balanced Fund continued to allocate about 63%
of total assets to equities, with 35% in bonds and the balance in cash. The
equity allocation is relatively high compared to our peer group, and was a
positive factor in the Fund's performance.
Although the major stock market averages advanced strongly, the gains were very
narrow, with the biggest winners in technology and telecommunications. While the
portfolio was underweighted in these areas, it did benefit from its holdings in
IBM, Intel and Motorola.
The Fund's equity position included a large weighting in real estate investment
trusts, which generated high yields but poor price performance. Investors simply
did not want REITs, which were selling at 75% to 85% of the value of the
underlying real estate.
CURRENT STRATEGY & OUTLOOK
Although valuations are stretched, we believe that a combination of strong
earnings in the U.S. and an improving global environment will be a positive
backdrop for stocks. In fixed income, we will continue to hold a high percentage
of high-quality corporate bonds so that we can realize their yields which are in
excess of 8%. We believe that these yields are very attractive in an environment
of 2-3% inflation.
10
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<PAGE>
HIGHMARK BALANCED FUND
INVESTMENT OBJECTIVE
THE HIGHMARK BALANCED FUND SEEKS CAPITAL APPRECIATION AND INCOME, WITH A
SECONDARY INVESTMENT OBJECTIVE OF CONSERVATION OF CAPITAL.
[PHOTO OMITTED]
TEAM LEADER
CARL COLOMBO
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
IN THE HIGHMARK BALANCED FUND* VERSUS THE LEHMAN BROTHERS AGGREGATE BOND INDEX,
THE S&P 500 COMPOSITE INDEX AND THE LIPPER BALANCED FUNDS AVERAGE.
[Graphic Omitted]
Plot points are as follows:
<TABLE>
<CAPTION>
Balanced Balanced Balanced Balanced Lehman Brothers S&P Lipper
Fund Synthetic Synthetic Synthetic Aggregate 500 Balanced
Fiduciary Retail Class A Retail Class B Retail Class C Bond Composite Funds
Shares Shares Shares Shares Index Index Average
<S> <C> <C> <C> <C> <C> <C> <C>
2/91 10,000 9,450 10,000 10,000 10,000 10,000 10,000
7/91 10,437 9,863 10,437 10,437 10,374 10,694 10,562
7/92 11,603 10,965 11,603 11,603 11,907 12,065 11,939
7/93 12,812 12,097 12,812 12,812 13,119 13,116 13,206
7/94 13,186 12,451 13,186 13,186 13,131 13,788 13,527
7/95 15,705 14,829 15,705 15,705 14,459 17,383 15,773
7/96 17,423 16,419 17,423 17,423 15,258 20,260 17,328
7/97 22,732 21,358 22,732 22,732 16,903 30,817 22,529
7/98 24,394 22,879 24,321 24,394 18,232 36,759 24,771
7/99 26,823 25,084 26,488 26,823 18,684 44,195 27,184
1/00 26,732 24,966 26,295 26,711 18,805 46,666 27,752
</TABLE>
* Fiduciary, Synthetic Retail Class A, Synthetic Retail
Class B or Synthetic Retail Class C Shares.
<TABLE>
<CAPTION>
Annualized Annualized Annualized
Six Month One Year 3 Year 5 Year Inception to
Return Return Return Return Date
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Fiduciary Shares -0.34% 3.41% 10.06% 14.86% 12.02%
Retail Class A Shares -0.47% 3.16% 9.79% 14.60% 11.82%
Retail Class A Shares
with load* -5.94% -2.53% 7.75% 13.31% 10.95%
Retail Class B Shares -0.73% 2.53% 9.45%++ 14.48%++ 5.09%
Retail Class B Shares
with load** -5.23% -2.09% 8.61%++ 14.24%++ 3.29%
Retail Class C Shares -0.42%++ 3.33%++ 10.03%++ 14.84%++ -0.81%+
Retail Class C Shares
with load*** -1.32%++ 2.41%++ 10.03%++ 14.84%++ -1.71%+
</TABLE>
+Cumulative Inception to Date.
++The performance presented links the performance of Fiduciary Shares from its
inception on February 1, 1991 with the performance of Class B Shares on
February 2, 1998 or Class C Shares on November 30, 1999. Fiduciary Share
performance has been adjusted for the maximum sales charge applicable to
Class B or Class C Shares, but does not reflect the higher Rule 12b-1 fees
and expenses applicable to these Classes. With those adjustments, performance
would be lower than that shown.
*Reflects 5.50% sales charge. **Reflects maximum CDSC of 5.00%. ***Reflects
maximum CDSC of 1.00%.
Past performance is not predictive of future results. Performance presented
from February 1, 1991 (commencement of operations of Fiduciary Shares) and
November 13, 1992 (commencement of operations of Retail Shares) to April 25,
1997 reflects the performance of the Stepstone Balanced Fund.
TOP TEN HOLDINGS
% OF
PORTFOLIO
GENERAL ELECTRIC 2.2
MICROSOFT 2.2
INTEL 1.5
CISCO SYSTEMS 1.4
IBM 1.2
BELL ATLANTIC 1.2
APPLIED MATERIALS 1.1
AMEX CENTURION, 5.700%, 04/19/00(1) 1.1
FNMA, 6.500%, 08/15/04 1.1
SAP AG ADR 1.1
TOP FIVE SECTORS
SECTOR % OF
PORTFOLIO
CORPORATE BONDS 16.8
CHEMICALS & DRUGS 8.1
GNMA MORTGAGES 5.4
FINANCIAL 5.3
CONSUMER PRODUCTS 5.1
(1) THIS SECURITY PURCHASED WITH CASH COLLATERAL HELD FROM SECURITIES LENDING.
11
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<PAGE>
[HighMark Logo Omitted]
SMALL
CAP VALUE
FUND
PORTFOLIO AT A GLANCE
NUMBER OF HOLDINGS 118
PORTFOLIO TURNOVER 25%
INCEPTION DATE
FIDUCIARY 9/17/98
RETAIL CLASS A 9/17/98
RETAIL CLASS B 9/17/98
RETAIL CLASS C 11/30/99
NET ASSETS (000)
FIDUCIARY $114,766
RETAIL CLASS A $ 3,420
RETAIL CLASS B $ 3,595
RETAIL CLASS C $ 14
EXPENSE RATIOS:
FIDUCIARY 1.43%
RETAIL CLASS A 1.68%
RETAIL CLASS B 2.33%
RETAIL CLASS C 2.33%
PERFORMANCE
For the six months ended January 31, 2000, the HighMark Small Cap Value Fund
returned 8.39% (Fiduciary Shares). In comparison, the Lipper Small Cap Funds
Average posted a return of 19.49% while the Standard & Poor's 600 Small Cap
BARRA Value Index returned -8.43%. During the same period, the FT/S&P World Ex
U.S. Medium/Small Cap Index rose 1.15%.
FACTORS AFFECTING PERFORMANCE
During the period, we used a company's private market value as a justification
for investing in a number of technology companies that significantly benefited
shareholders. Even if they had high price/earnings ratios, we invested in
companies where the private market value was substantially higher than the stock
price. As of January 31, 2000, 25% of the Fund was invested in technology.
For instance, Ibis Technology, a semiconductor equipment company and the Fund's
largest holding, has developed a technology to allow semiconductors to use less
electricity and run faster. We expect all cellular telephones and laptop
computers to have chips that are based on this technology. At the time of
purchase at $11, the company had no earnings because of heavy research and
development expenditures. We believed that the stock's private market value was
about $35. At January 31, 2000, the stock was selling at $70 1/2.
The Fund also benefited from its international holdings, particularly in Asia
where economies appear to be recovering. As of January 31, 2000, 24% of the
portfolio was invested overseas.
CURRENT STRATEGY & OUTLOOK
Our current strategy is to continue to employ the value-momentum process, which
has three valuation metrics: a Five-Year Price Projection using conservative
assumptions that incorporates a margin of safety, a Downside Risk Assessment
with a focus on capital preservation, and Private Market Value or intrinsic
value, which allows us to put a value on the intangible assets.
During the first five quarters of this Fund's existence, the overall small cap
market has been strong. Near-term, we expect this to continue as the major small
cap indexes still have lower P/E multiples than the S&P 500 and small cap
companies, in aggregate, are expected to show more than twice the earnings
growth of the companies in the large cap index.
12
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<PAGE>
HIGHMARK SMALL CAP VALUE FUND
INVESTMENT OBJECTIVE
THE HIGHMARK SMALL CAP VALUE FUND SEEKS TO PROVIDE LONG TERM CAPITAL
APPRECIATION THROUGH INVESTMENTS IN EQUITY SECURITIES.
[PHOTO OMITTED]
PORTFOLIO MANAGER
ELIZABETH PEARCE
HIGHMARK CAPITAL MANAGEMENT, INC.
SUB-ADVISER OF THE INTERNATIONAL PORTION: BRANDES INVESTMENT PARTNERS, LP
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
IN THE HIGHMARK SMALL CAP VALUE FUND VERSUS THE S&P 600/BARRA VALUE INDEX, THE
LIPPER SMALL CAP FUNDS AVERAGE, AND THE FT/S&PWORLD EX U.S. MEDIUM/SMALL CAP
INDEX.
[Graphic Omitted]
Plot points are as follows:
<TABLE>
<CAPTION>
Small Small Small Small S&P Lipper FT/S&P
Cap Value Cap Value Cap Value Cap Value 600 Small Cap World Ex
Fiduciary Retail Class A Retail Class B Retail Class C Barra Funds US Medium
Shares Shares Shares Index Value Index Average Small Cap Index
<S> <C> <C> <C> <C> <C> <C> <C>
9/30/98 10,000 9,450 10,000 10,000 10,000 10,000 10,000
7/99 12,479 11,778 12,398 12,479 12,076 12,859 12,730
1/00 13,526 12,740 12,986 13,517 11,058 15,365 12,877
</TABLE>
* Fiduciary, Retail Class A, Retail Class B, or Synthetic Retail Class C Shares.
<TABLE>
<CAPTION>
Six Month One Year Annualized
Return Return Inception to Date
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fiduciary Shares 8.39% 25.25% 25.16%
Retail Class A Shares 8.17% 24.82% 24.75%
Retail Class A Shares
with load* 2.21% 17.97% 19.73%
Retail Class B Shares 7.97% 24.34% 24.13%
Retail Class B Shares
with load** 2.97% 19.34% 21.43%
Retail Class C Shares 8.32%++ 25.18%++ 7.89%+
Retail Class C Shares
with load*** 7.32%++ 24.18%++ 6.89%+
</TABLE>
+Cumulative Inception to Date
++The performance presented links the performance of Fiduciary Shares from its
inception on September 17, 1998 with the performance of Class C Shares on
November 30, 1999. Fiduciary Share performance has been adjusted for the
maximum sales charge applicable to Class C Shares, but does not reflect the
higher Rule 12b-1 fees and expenses applicable to this Class. With those
adjustments, performance would be lower than that shown.
*Reflects 5.50% sales charge. **Reflects maximum CDSC of 5.00%. ***Reflects
maximum CDSC of 1.00%.
Past performance is not predictive of future results.
TOP TEN HOLDINGS
% OF
PORTFOLIO
IBIS TECHNOLOGY 5.5
CYPRESS SEMICONDUCTOR 3.0
BROOKS AUTOMATION 2.5
ADVANCED FIBRE COMMUNICATION 2.2
ADACLABORATORIES 1.9
ADTRAN 1.9
COPART 1.7
CTS 1.7
FREMONT GENERAL 1.7
PROGRESS SOFTWARE 1.7
TOP FIVE SECTORS
SECTOR % OF
PORTFOLIO
TECHNOLOGY 24.2
FOREIGN 23.7
FINANCIAL 12.0
CONSUMER CYCLICALS 11.3
CAPITAL GOODS 10.6
13
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<PAGE>
[HighMark Logo Omitted]
INTERNATIONAL
EQUITY
FUND
PORTFOLIO AT A GLANCE
NUMBER OF HOLDINGS 144
PORTFOLIO TURNOVER 30%
INCEPTION DATE
FIDUCIARY 2/1/95
RETAIL CLASS A 11/30/99
RETAIL CLASS B 11/30/99
RETAIL CLASS C 11/30/99
NET ASSETS (000)
FIDUCIARY $114,271
RETAIL CLASS A $ 61
RETAIL CLASS B $ 352
RETAIL CLASS C $ 1
EXPENSE RATIOS:
FIDUCIARY 1.40%
RETAIL CLASS A 1.71%
RETAIL CLASS B 2.36%
RETAIL CLASS C 2.36%
PERFORMANCE
For the six months ended January 31, 2000, the HighMark International Equity
Fund returned 12.52% (Fiduciary Shares). In comparison, the Lipper International
Funds Average posted a gain of 20.47% during the period while the Morgan Stanley
Capital International EAFE Index, a benchmark made up of companies in 20
nations, reflected a return of 11.06%.
The Fund's sub-adviser is AXA Investment Managers GS Ltd., a unit of the AXA
Group, one of the world's largest money management firms.
FACTORS AFFECTING PERFORMANCE
A shifting portfolio emphasis from Europe to Japan in the summer of 1999 had
a major positive impact on performance, as the Japanese stock market
outperformed the European and U.S. markets. In Japan, the economy began to
recover as the government eased monetary policy and corporations restructured
operations to become more efficient. As Japan began to improve, so did other
parts of Asia including Hong Kong, Korea, Singapore and Taiwan. Technology and
telecommunications led the stock market recoveries, and the portfolio's holdings
in Nippon Telegraph & Telephone and China Telecom benefited accordingly.
Although the portfolio's Japanese allocation remained at about 25% during the
six-month period, its holdings in Asia excluding Japan rose from about 3% to
nearly 10% by January 31, 2000.
Meanwhile, Europe's market was hampered by a declining euro, which reflected
Europe's relatively weak economic growth compared with Asia. U.S. investors
shifted assets away from Europe and towards Asia when those markets began to
boom, placing further downward pressure on the euro. Meanwhile, the investment
climate has become very dynamic in Europe, as evidenced by a German proposal to
slash corporate tax rates as well as the recent merger of two telecommunications
giants, Germany-based Mannesmann and U.K.-based Vodafone, the largest such
transaction ever.
CURRENT STRATEGY & OUTLOOK
Although Asia (excluding Japan) has produced a very strong recovery, it has also
produced a type of euphoria in which many small companies are going public,
requiring keen selectivity on our part. Although Japan's recovery has slowed
recently, its economy continues to improve due to significant government
spending and very low interest rates. Meanwhile, Europe is gathering substantial
economic momentum due to corporate restructuring, tax reform and increasing
demand for stocks on the part of individual investors.
14
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<PAGE>
HIGHMARK INTERNATIONAL EQUITY FUND
INVESTMENT OBJECTIVE
THE HIGHMARK INTERNATIONAL EQUITY FUND SEEKS TO PROVIDE LONG-TERM CAPITAL
APPRECIATION BY INVESTING PRIMARILY IN A DIVERSIFIED PORTFOLIO OF EQUITY
SECURITIES OF NON-U.S. ISSUERS.
[PHOTO OMITTED]
PORTFOLIO MANAGER
ROBERT DE GUIGNE
AXA INVESTMENT MANAGERS GS LTD.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE HIGHMARK
INTERNATIONAL EQUITY FUND* VERSUS THE MORGAN STANLEY CAPITAL INTERNATIONAL EAFE
INDEX AND THE LIPPER INTERNATIONAL FUNDS AVERAGE.
[Graphic Omitted]
Plot points are as follows:
<TABLE>
<CAPTION>
International International International International Morgan Stanley Lipper
Equity Equity Equity Equity Capital International
Fiduciary Retail Class A Retail Class B Retail Class C International Funds
Shares Shares Shares Shares EAFE Index Average
<S> <C> <C> <C> <C> <C> <C>
2/95 10,000 9,450 10,000 10,000 10,000 10,000
7/95 11,143 10,530 11,143 11,143 11,368 11,349
7/96 11,650 11,009 11,650 11,650 11,770 12,020
7/97 12,585 11,893 12,585 12,585 13,902 14,988
7/98 12,482 11,795 12,482 12,482 14,663 16,033
7/99 13,218 12,491 13,218 13,218 16,085 17,006
1/00 14,873 14,050 14,853 14,852 17,864 20,487
</TABLE>
* Fiduciary, Synthetic Retail Class A, Synthetic Retail Class B or
Synthetic Retail Class C Shares.
<TABLE>
<CAPTION>
Annualized Annualized
Six Month One Year 3 Year Inception to
Return Return Return Date
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fiduciary Shares 12.52% 18.42% 9.82% 8.04%
Retail Class A Shares 12.48%++ 18.38%++ 9.81%++ 0.54%+
Retail Class A Shares
with load* 6.30%++ 11.86%++ 7.76%++ -4.98%+
Retail Class B Shares 12.37%++ 18.26%++ 9.77%++ 0.44%+
Retail Class B Shares
with load** 7.37%++ 13.26%++ 8.94%++ -4.53%+
Retail Class C Shares 12.36%++ 18.24%++ 9.77%++ 0.42%+
Retail Class C Shares
with load*** 11.36%++ 17.24%++ 9.77%++ -0.57%+
</TABLE>
+Cumulative Inception to Date
++The performance presented links the performance of Fiduciary Shares from its
inception on February 1, 1995 with the performance of Class A Shares, Class B
Shares, or Class C Shares on November 30, 1999. Fiduciary Share performance
has been adjusted for the maximum sales charge applicable to Class A,
Class B or Class C Shares, but does not reflect the higher Rule 12b-1 fees
and expenses applicable to these Classes. With those adjustments, performance
would be lower than that shown.
*Reflects 5.50% sales charge. ** Reflects maximum CDSC of 5.00%. *** Reflects
maximum CDSC of 1.00%.
Past performance is not predictive of future results. Performance presented
from February 1, 1995 (commencement of operations of Fiduciary Shares) to
April 25, 1997 reflects the performance of the Stepstone International
Equity Fund.
TOP TEN HOLDINGS
% OF
PORTFOLIO
NIPPON TELEGRAPH & TELEPHONE 2.7
SONY 2.2
ROHM COMPANY 2.1
MANNESMANN 1.9
NTTMOBILE 1.9
TOKYO ELECTRONICS 1.9
TAKEDA CHEMICAL 1.8
TOYOTA MOTOR 1.7
NTTDATA 1.7
FUJITSU 1.6
TOP FIVE COUNTRIES
SECTOR % OF
PORTFOLIO
JAPAN 25.9
UNITED KINGDOM 15.8
FRANCE 10.5
GERMANY 8.6
SWITZERLAND 4.8
15
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<PAGE>
[HighMark Logo Omitted]
CALIFORNIA
INTERMEDIATE
TAX-FREE BOND
FUND
PORTFOLIO AT A GLANCE
NUMBER OF HOLDINGS 141
PORTFOLIO TURNOVER 5%
INCEPTION DATE
FIDUCIARY 10/15/93
RETAIL CLASS A 10/15/93
RETAIL CLASS B 11/30/99
NET ASSETS (000)
FIDUCIARY $140,891
RETAIL CLASS A $ 23,807
RETAIL CLASS B $ 136
EXPENSE RATIOS:
FIDUCIARY 0.44%
RETAIL CLASS A 0.44%
RETAIL CLASS B 1.44%
PERFORMANCE
For the six months ended January 31, 2000, the HighMark California Intermediate
Tax-Free Bond Fund returned 0.01% (Fiduciary Shares). In comparison, the Lipper
California Intermediate Municipal Debt Funds Average posted a -0.75% return,
while the unmanaged Lehman Brothers 7-Year Municipal Bond Index reflected a
return of -0.20%.
FACTORS AFFECTING PERFORMANCE
In 1999, Federal Reserve Board Chairman Alan Greenspan fought inflation by
raising short-term interest rates three times in an attempt to slow the economy.
The Fed might have even been more aggressive but concerns over Y2K caused it to
maintain more liquidity. In January 2000, with Y2K a non-event, the Fed turned
its sights on further interest rate increases to ward off inflation.
The rising interest-rate environment was very negative for bonds, including
municipal issues, which slightly underperformed Treasury securities during the
six-month period. Because the federal budget reached a surplus level for the
fiscal year ending September 30, 1999, and was projected to remain in surplus
for the next few years, the U.S. Treasury began retiring bonds, causing Treasury
bond prices to rise and yields to decline. The yield on seven-year municipal
bonds as a percentage of U.S. Treasury securities rose from 73% during the
summer of 1999 to 76% at January 31, 2000. The yield on the 30-year muni bond
followed a similar trend, rising from 86% of 30-year Treasury bonds to 93% by
January 31, 2000.
Since our outlook was for an increasing interest rate environment, the Fund
outperformed its benchmark by maintaining a shorter-than-average duration with
higher-than-average coupons, which tend to perform better in a bear market. In
addition, we de-emphasized poorly performing sectors such as heathcare and
resource recovery. The Fund continued to maintain its strong credit quality,
with more than 75% of the securities in the portfolio rated AAA, and with all
securities in the Fund being investment-grade quality.
CURRENT STRATEGY & OUTLOOK
We continue to remain cautious in our outlook on interest rates, as the Federal
Reserve appears likely to continue its tightening posture to combat the threat
of future inflation. Due to this outlook, we are maintaining a portfolio with
higher coupons and a shorter-than-average duration to protect against a rising
interest-rate environment.
16
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<PAGE>
HIGHMARK CALIFORNIA INTERMEDIATE
TAX-FREE BOND FUND INVESTMENT OBJECTIVE
THE HIGHMARK CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND SEEKS TO PROVIDE HIGH
CURRENT INCOME THAT IS EXEMPT FROM FEDERAL AND STATE OF CALIFORNIA INCOME TAXES.
[PHOTO OMITTED]
TEAM LEADER
ROBERT BIGELOW
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE HIGHMARK
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND* VERSUS THE LEHMAN BROTHERS 7-YEAR
MUNICIPAL BOND INDEX AND THE LIPPER CALIFORNIA INTERMEDIATE MUNICIPAL DEBT FUNDS
AVERAGE.
[Graphic Omitted]
Plot points are as follows:
<TABLE>
<CAPTION>
California California California
Intermediate Intermediate Intermediate Lehman Lipper California
Tax-Free Tax-free Tax-Free Brothers Intermediate
Bond Fund Bond Fund Bond Fund Synthetic 7-Year Municipal
Fiduciary Retail Class A Retail Class B Municipal Debt Funds
Shares Shares Shares Bond Index Average
<S> <C> <C> <C> <C> <C>
10/93 10,000 9,575 10,000 10,000 10,000
7/94 9,702 9,280 9,702 9,953 9,905
7/95 10,407 9,956 10,407 10,760 10,519
7/96 11,102 10,610 11,102 11,307 11,142
7/97 12,079 11,546 12,079 12,284 12,070
7/98 12,652 12,084 12,652 12,930 12,611
7/99 13,100 12,513 13,100 13,355 12,946
1/00 13,102 12,514 13,077 13,329 12,849
</TABLE>
* Fiduciary, Retail Class A or Synthetic Retail Class B Shares.
<TABLE>
<CAPTION>
Annualized Annualized Annualized
Six Month One Year 3 Year 5 Year Inception to
Return Return Return Return Date
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Fiduciary Shares 0.01% -1.38% 4.38% 6.44% 4.24%
Retail Class A Shares 0.01% -1.39% 4.36% 6.41% 4.19%
Retail Class A Shares
with load* -4.23% -5.61% 2.87% 5.48% 3.48%
Retail Class B Shares -0.18%++ -1.57%++ 4.32%++ 6.40%++ -0.44%+
Retail Class B Shares
with load** -5.06%++ -6.29%++ 3.39%++ 6.09%++ -5.38%+
</TABLE>
+Cumulative Inception to Date
++The performance presented links the performance of Fiduciary Shares from its
inception on October 15, 1993 with the performance of Class B Shares on
November 30, 1999. Fiduciary Share performance has been adjusted for the
maximum sales charge applicable to Class B, but does not reflect the higher
Rule 12b-1 fees and expenses applicable to this Class. With those
adjustments, performance would be lower than that shown.
*Reflects 4.25% sales charge. ** Reflects maximum CDSC of 5.00%.
Past performance is not predictive of future results. Performance presented
from October 15, 1993 (commencement of operations of Fiduciary and Retail
Shares) to April 25, 1997 reflects the performance of the Stepstone
California Intermediate Tax-Free Bond Fund.
TOP TEN HOLDINGS
% OF
PORTFOLIO
SAN DIEGO COUNTY REGIONAL
TRANSPORTATION COMMISSION
6.000%, 04/01/06 2.0
LOS ANGELES COUNTY PUBLIC
WORKS FINANCING AUTHORITY,
5.500%, 10/01/08 1.9
SAN DIEGO PUBLIC FACILITY
FINANCING AUTHORITY,
6.000%, 05/15/06 1.8
NORTHERN CALIFORNIA POWER AGENCY,
6.400%, 08/01/07 1.6
CONTRA COSTA WATER DISTRICT
5.700%, 10/01/06 1.6
SAN DIEGO COUNTY WATER
AUTHORITY, 6.400%, 05/01/08 1.5
ORANGE COUNTY TRANSPORTATION
AUTHORITY, 5.500%, 02/15/08 1.5
SAN FRANCISCO BAY AREA RAPID
TRANSPORTATION DISTRICT,
5.500%, 07/01/05 1.4
CONTRA COSTA MERRITHEW
MEMORIAL HOSPITAL PROJECT,
5.500%, 11/01/12 1.3
SAN BERNARDINO COUNTY
TRANSPORTATION AUTHORITY,
6.250%, 03/01/10 1.3
TOP FIVE SECTORS
SECTOR % OF
PORTFOLIO
REVENUE BONDS 63.7
PARTICIPATION NOTES 16.9
GENERAL OBLIGATIONS 16.6
PRE-REFUNDED SECURITIES 2.5
CASH EQUIVALENTS/ MONEY MARKETS 0.3
17
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<PAGE>
[HighMark Logo Omitted]
BOND &
INTERMEDIATE-TERM BOND
FUNDS
PORTFOLIO AT A GLANCE
BOND FUND
NUMBER OF HOLDINGS 111
PORTFOLIO TURNOVER 15%
INCEPTION DATE
FIDUCIARY 2/15/84
RETAIL CLASS A 6/20/94
NET ASSETS (000)
FIDUCIARY $319,646
RETAIL CLASS A $ 2,817
EXPENSE RATIOS:
FIDUCIARY 0.75%
RETAIL CLASS A 0.75%
INTERMEDIATE-TERM BOND FUND
NUMBER OF HOLDINGS 81
PORTFOLIO TURNOVER 15%
INCEPTION DATE
FIDUCIARY 2/1/91
RETAIL CLASS A 2/3/92
NET ASSETS (000)
FIDUCIARY $241,665
RETAIL CLASS A $ 4,833
EXPENSE RATIOS:
FIDUCIARY 0.75%
RETAIL CLASS A 0.75%
PERFORMANCE
For the six months ended January 31, 2000, the HighMark Bond Fund returned 0.47%
(Fiduciary Shares). In comparison, the Lipper Corporate A-Rated Debt Funds
Average produced a -0.07% return, while the unmanaged Lehman Brothers Aggregate
Bond Index reflected a return of 0.65%.
For the same period, the HighMark Intermediate-Term Bond Fund returned 0.28%
(Fiduciary Shares). In comparison, the Lipper Intermediate Investment-Grade Debt
Average reflected a 0.26% return, while the unmanaged Lehman Brothers
Intermediate Government/Corporate Bond Index rose 0.69%.
FACTORS AFFECTING PERFORMANCE
The overall environment was negative for bonds, as interest rates moved up
steadily during the period. The global financial crisis of 1997-1998 came and
went much faster than most investors expected, prompting interest rates to
return to levels last seen in early 1997.
Corporate bonds and mortgage-backed securities, which together comprised 83% and
90% of the Bond and Intermediate-Term Bond portfolios on January 31, 2000,
respectively, outperformed U.S. Treasury securities. Corporate bonds benefited
from improvements in credit quality brought about by the surging economy, while
mortgages benefited because homeowners are less likely to prepay in a rising
interest rate environment.
The U.S. government is gradually reducing the supply of 30-year bonds by holding
fewer auctions and buying back outstanding issues. As a result, the 30-year bond
yield has actually been lower than intermediate-term government bonds.
Although the Federal Reserve Board has raised short-term rates four times since
last June, the economy continues to grow well beyond 3%, the rate considered
non-inflationary. Remarkably, inflation has stayed modest due to productivity
gains in the economy. In calendar 1999, the Consumer Price Index rose 2.7%, but
excluding rising oil prices, it rose just 1.9%, the lowest since the mid-1960s.
CURRENT STRATEGY & OUTLOOK
Although both Funds continue to emphasize high-quality corporate bonds, our
current strategy is to augment this portfolio with lower-rated investment-grade
credits to generate extra yield. We believe that we can add value in this
manner, rather than trying to predict the direction of interest rates. As a
result, we remain duration-neutral, which means that the Funds will have the
same sensitivity to interest-rate changes as the indexes.
18
1.800.433.6884
<PAGE>
HIGHMARK BOND FUND
INVESTMENT OBJECTIVE
THE HIGHMARK BOND FUND SEEKS TOTAL RETURN THROUGH INVESTMENTS IN FIXED-INCOME
SECURITIES.
[PHOTO OMITTED]
TEAM LEADER
JACK MONTGOMERY
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
IN THE HIGHMARK BOND FUND* VERSUS THE LEHMAN BROTHERS AGGREGATE
BOND INDEX AND THE LIPPER CORPORATE A-RATED DEBT FUNDS
AVERAGE.
[Graphic Omitted]
Plot points are as follows:
<TABLE>
<CAPTION>
Bond Bond Lehman Brothers Lipper Corporate
Fund Synthetic Retail Aggregate A-Rated
Fiduciary Class A Shares Bond Index Debt Funds Average
<S> <C> <C> <C> <C>
7/89 10,000 9,575 10,000 10,000
7/90 10,552 10,104 10,706 10,531
7/91 11,500 11,011 11,852 11,553
7/92 13,160 12,601 13,603 13,436
7/93 14,484 13,868 14,988 14,926
7/94 14,029 13,340 15,001 14,767
7/95 15,352 14,579 16,518 16,188
7/96 16,091 15,301 17,432 16,957
7/97 17,795 16,935 19,311 18,810
7/98 19,113 18,200 20,829 20,133
7/99 19,419 18,477 21,345 20,266
1/00 19,510 18,564 21,484 20,191
</TABLE>
* Fiduciary or Synthetic Retail Class A Shares.
<TABLE>
<CAPTION>
Annualized Annualized Annualized Annualized
Six Month One Year 3 Year 5 Year 10 Year Inception to
Return Return Return Return Return Date
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Fiduciary Shares 0.47% -2.66% 5.00% 6.75% 6.86% 8.58%
Retail Class A Shares 0.47% -2.59% 5.04% 6.79% 6.80%+ 6.10%
Retail Class A Shares
with load* -3.82% -6.77% 3.53% 5.87% 6.33%+ 5.28%
</TABLE>
+The performance presented links the performance of Fiduciary Shares from its
inception on February 15, 1984 with the performance of Class A Shares on
June 20, 1994. Fiduciary Share performance has been adjusted for the maximum
sales charge applicable to Class A Shares, but does not reflect the higher
Rule 12b-1 fees and expenses applicable to this Class. With those
adjustments, performance would be lower than that shown.
*Reflects 4.25% sales charge.
Past performance is not predictive of future results.
TOP TEN HOLDINGS
% OF
PORTFOLIO
FNMA, 6.000%, 12/01/28 7.8
U.S. TREASURY BOND,
8.125%, 08/15/19 3.9
FNMA, 6.500%, 01/01/29 3.5
U.S. TREASURY BOND,
7.250%, 05/15/16 2.8
AMEXCENTURION,
5.700%, 04/24/00 2.0
BEAR STEARNS(1),
6.093%, 01/08/01 2.0
GREEN TREE FINANCIAL,
6.800%, 01/15/27 1.9
FNMA, 7.500%, 12/01/26 1.9
FNMA, 6.000%, 07/01/28 1.8
SAFEWAY, 5.750%, 11/15/00 1.6
TOP FIVE SECTORS
SECTOR % OF
PORTFOLIO
CORPORATE BONDS 42.6
U.S. TREASURY / AGENCY 41.5
CASH/SHORT TERM 8.1
MORTGAGE BACKED SECURITIES 6.5
INTERNATIONAL U.S. $ 1.3
(1) THIS SECURITY PURCHASED WITH CASH COLLATERAL HELD FROM SECURITIES LENDING.
19
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<PAGE>
HIGHMARK INTERMEDIATE-TERM BOND FUND
INVESTMENT OBJECTIVE
THE HIGHMARK INTERMEDIATE-TERM BOND FUND SEEKS TOTAL RETURN THROUGH INVESTMENTS
IN FIXED-INCOME SECURITIES.
[PHOTO OMITTED]
TEAM LEADER
JACK MONTGOMERY
HIGHMARK CAPITAL MANAGEMENT, INC.
TOP TEN HOLDINGS
% OF
PORTFOLIO
DUPONT (E.I.) DE NEMOURS,
6.500%, 09/01/02 2.7
CABLE AND WIRELESS
COMMUNICATIONS
6.625%, 03/06/05 2.7
U.S. TREASURY NOTE,
7.250%, 05/15/04 2.4
FORD MOTOR CREDIT,
8.200%, 02/15/02 2.4
J.C. PENNY MASTER CREDIT CARD
TRUST, 9.625%, 06/15/00 2.4
WALT DISNEY,
5.620%, 12/01/08 2.2
RAYTHEON, 6.750%, 08/15/07 2.2
LOCKHEED MARTIN,
7.450%, 06/15/04 2.1
OLD DOMINION ELECTRIC,
7.480%, 12/01/13 2.1
TRAVELERS PROPERTY CASUALTY
6.750%, 04/15/01 2.0
SECTOR
DIVERSIFICATION
SECTOR % OF
PORTFOLIO
CORPORATE BONDS 68.9
U.S. TREASURY / AGENCY 18.2
MORTGAGE BACKED SECURITIES 8.2
CASH/SHORT TERM 4.7
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE HIGHMARK
INTERMEDIATE-TERM BOND FUND* VERSUS THE LEHMAN BROTHERS INTERMEDIATE
GOVERNMENT/CORPORATE BOND INDEX AND THE LIPPER INTERMEDIATE INVESTMENT-GRADE
DEBT AVERAGE.
[Graphic Omitted]
Plot points are as follows:
<TABLE>
<CAPTION>
Intermediate-Term Intermediate-Term Lehman Brothers Lipper Intermediate
Bond Synthetic Intermediate Government/ Investment-Grade
Fiduciary Retail Class A Corporate Bond Debt Average
<S> <C> <C> <C> <C>
2/91 10,000 9,575 10,000 10,000
7/91 10,427 9,984 10,362 10,411
7/92 12,030 11,508 11,826 12,004
7/93 13,131 12,561 12,843 13,232
7/94 13,071 12,491 12,964 13,192
7/95 14,169 13,541 14,106 14,410
7/96 14,799 14,145 14,853 15,099
7/97 16,146 15,434 16,201 16,652
7/98 17,174 16,419 17,292 17,800
7/99 17,621 16,845 17,936 18,056
1/00 17,670 16,909 18,059 18,103
</TABLE>
* Fiduciary or Synthetic Retail Class A Shares.
<TABLE>
<CAPTION>
Annualized Annualized Annualized
Six Month One Year 3 Year 5 Year Inception to
Return Return Return Return Date
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Fiduciary Shares 0.28% -1.41% 4.59% 6.23% 6.65%
Retail Class A Shares 0.38% -1.31% 4.59% 6.24% 5.78%
Retail Class A Shares
with load* -3.85% -5.47% 3.09% 5.32% 5.20%
</TABLE>
*Reflects 4.25% sales charge.
Past performance is not predictive of future results. Performance presented
from February 1, 1991 (commencement of operations of Fiduciary Shares) and
February 3, 1992 (commencement of operations of the Retail Shares) to
April 25, 1997 reflects the performance of the Stepstone Intermediate-Term
Bond Fund.
20
1.800.433.6884
<PAGE>
[HighMark Logo Omitted]
MONEY MARKET
FUNDS
HIGHMARK TAXABLE MONEY MARKET FUNDS*
PERFORMANCE
The HighMark Taxable Money Market Funds (Fiduciary Shares) produced the
following one-month effective yields as of January 31, 2000: 100% U.S. Treasury
Money Market Fund, 4.88%; U.S. Government Money Market Fund, 5.19%; and
Diversified Money Market Fund, 5.46%.**
FACTORS AFFECTING PERFORMANCE
The U.S. Government and Diversified Money Market Funds benefited from our
decision to begin shortening their weighted average maturities in August 1999 in
anticipation of a rising interest rate environment and to prepare for liquidity
needs relating to Y2K. The 100% U.S. Treasury Money Market Fund outperformed for
the period as a result of increased holdings of treasury bills rather than
notes, due to improvement in relative value of bills vs. notes. Concurrently,
the U.S. Treasury and government agencies increased supply in an attempt to
provide liquidity and orderly markets for Y2K, thereby further increasing
volatility as year-end approached.
CURRENT STRATEGY & OUTLOOK
The focus is on the Federal Open Market Committee (FOMC) following four interest
rate increases since last June. The FOMC is expected to raise interest rates two
more times in the near future. As a result, our goal is to maintain short to
neutral maturity in anticipation of a volatile interest rate environment.
HIGHMARK CALIFORNIA TAX-FREE MONEY MARKET FUND*
PERFORMANCE
The Fund's one-month effective yield as of January 31, 2000 was 2.61% (Fiduciary
Shares).*** Using a combined federal and California state income tax rate of
41.95%, the one-month effective yield is equivalent to a 4.50% taxable yield.
FACTORS AFFECTING PERFORMANCE
During the six-month period, municipal note yields increased as the Federal
Reserve Board raised short-term interest rates. However, yields increased less
than taxable securities partly because municipal issuance and supply declined
during the period. We extended maturities periodically as yields increased, but
the California Tax-Free Money Market Fund maintained a high degree of liquidity
to accommodate potential share redemptions due to Y2K concerns.
CURRENT STRATEGY & OUTLOOK
With Y2K fears put to rest, the Fed will return its focus to slowing the U.S.
economy to a sustainable level. The consensus is that the Fed will continue to
raise rates in the first half of 2000. Anticipating higher yields, the
California Tax-Free Money Market Fund will look for additional opportunities to
increase its weighted average maturity.
*An investment in the HighMark Money Market Funds is neither insured nor
guaranteed by the U.S. government. Although these Funds seek to maintain a
stable net asset value of $1.00, there can be no assurance that they will
be able to do so. Some or all of the income you receive for the California
Tax-Free Money Market Fund may be subject to certain state and local taxes,
and in some cases, to the federal alternative minimum tax.
**For the Retail Class A Shares of the HighMark 100% U.S. Treasury, U.S.
Government and Diversified Money Market Funds, the one-month effective
yield as of January 31, 2000 was 4.62%, 4.93% and 5.20%, respectively. The
one-month effective yield for the U.S. Government Money Market Fund's
Retail Class B Shares was 4.15% for the same period. For the Class S Shares
of the HighMark 100% U.S. Treasury, U.S. Government and Diversified Money
Market Funds, the one-month effective yield as of January 31, 2000 was
4.31%, 4.62% and 4.89%, respectively.
***The one-month effective yield as of January 31, 2000 for the California
Tax-Free Money Market Fund's Retail Class A Shares and Class S Shares was
2.35% and 2.05%, respectively.
21
WWW.HIGHMARKFUNDS.COM
<PAGE>
[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
GROWTH FUND
- -----------------------------------------------------------
Description Shares Value (000)
- -----------------------------------------------------------
COMMON STOCKS -- 98.0%
- -----------------------------------------------------------
AIR TRANSPORTATION -- 0.3%
Southwest Airlines 176,872 $ 2,819
--------
APPAREL/TEXTILES -- 0.5%
Nike, Cl B(A) 86,052 3,915
--------
BANKS -- 1.0%
Fifth Third Bancorp 27,600 1,832
Northern Trust 67,220 4,058
Wells Fargo 54,100 2,164
--------
8,054
--------
BROADCASTING, NEWSPAPERS & ADVERTISING -- 8.0%
Clear Channel Communications* (A) 49,300 4,258
Comcast, Cl A 312,300 14,366
Gannett 63,570 4,418
Hispanic Broadcasting* 79,000 8,211
Infinity Broadcasting, Cl A* 74,360 2,417
Interpublic Group (A) 136,980 6,301
Meredith 129,600 4,536
New York Times, Cl A 31,365 1,433
Time Warner (A) 110,000 8,793
TMP Worldwide* 17,100 2,396
Univision Communications* (A) 76,200 8,163
--------
65,292
--------
CHEMICALS -- 0.8%
Avery Dennison 49,100 3,327
PPG Industries 56,400 3,106
--------
6,433
--------
COMMUNICATIONS EQUIPMENT -- 11.7%
Cisco Systems* 261,610 28,646
Corning 103,600 15,980
Jds Uniphase* 56,400 11,502
Lucent Technologies 332,592 18,376
Nokia, ADR 76,640 14,025
Nortel Networks 23,300 2,228
Qualcomm* 16,500 2,095
Sawtek* 36,700 2,321
--------
95,173
--------
COMPUTERS & SERVICES -- 2.1%
Computer Sciences* (A) 98,150 9,018
Electronic Data Systems 126,700 8,568
--------
17,586
--------
- -----------------------------------------------------------
Description Shares Value (000)
- -----------------------------------------------------------
COMMON STOCKS (CONTINUED)
- -----------------------------------------------------------
COMPUTERS & SOFTWARE SERVICES -- 11.4%
America Online* (A) 146,080 $ 8,317
Computer Associates
International (A) 120,100 8,249
EMC* 77,240 8,226
IBM 155,280 17,420
Oracle Systems* (A) 149,600 7,473
Microsoft* 315,820 30,911
Sun Microsystems* 84,200 6,615
Yahoo!* 20,300 6,538
--------
93,749
--------
DIVERSIFIED OPERATIONS -- 4.8%
General Electric 231,720 30,906
Tyco International 198,700 8,494
--------
39,400
--------
DRUGS -- 8.0%
American Home Products 114,610 5,394
Amgen* 47,184 3,005
Bristol-Myers Squibb 154,220 10,179
Eli Lilly 134,174 8,973
Genentech* (A) 15,000 2,108
Johnson & Johnson 113,460 9,765
Merck 59,410 4,682
Pfizer 160,290 5,831
Schering Plough 157,510 6,930
Warner Lambert 88,700 8,421
--------
65,288
--------
ENTERTAINMENT -- 1.3%
Pixar* (A) 111,900 3,993
Walt Disney 175,294 6,365
--------
10,358
--------
FINANCIAL SERVICES -- 1.9%
American Express 26,665 4,395
Citigroup 151,452 8,699
Merrill Lynch 25,160 2,183
--------
15,277
--------
FOOD, BEVERAGE & TOBACCO -- 5.1%
Anheuser Busch 130,400 8,802
Bestfoods 39,600 1,723
Coca-Cola 231,146 13,276
Pepsi Bottling Group 230,320 4,765
The accompanying notes are an integral part of the financial statements.
22
1.800.433.6884
<PAGE>
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
GROWTH FUND (CONTINUED)
- -----------------------------------------------------------
Description Shares Value (000)
- -----------------------------------------------------------
COMMON STOCKS (CONTINUED)
- -----------------------------------------------------------
FOOD, BEVERAGE & TOBACCO -- (CONTINUED)
PepsiCo 191,170 $ 6,524
Tootsie Roll Industries 23,815 750
Wrigley, Wm. Jr. 73,590 5,740
--------
41,580
--------
HOUSEHOLD PRODUCTS -- 1.4%
Clorox(A) 51,900 2,478
Gillette 75,634 2,846
Proctor & Gamble 61,250 6,179
--------
11,503
--------
INSURANCE -- 3.7%
American International Group 153,005 15,932
Berkshire Hathaway, Cl B* 7,212 11,871
Marsh & McLennan 25,575 2,404
--------
30,207
--------
LEISURE -- 1.8%
Carnival, Cl A 89,930 4,052
Harley-Davidson 151,020 10,600
--------
14,652
--------
MACHINERY -- 1.0%
Danaher 91,780 3,958
Emerson Electric 57,300 3,155
Illinois Tool Works 23,610 1,381
--------
8,494
--------
MEDICAL PRODUCTS & SERVICES -- 3.8%
IMS HEALTH 914,160 20,511
Medtronic 55,860 2,556
Pe Biosystems Group 55,560 8,320
--------
31,387
--------
MISCELLANEOUS BUSINESS SERVICES -- 1.7%
Automatic Data Processing 68,630 3,256
Cendant* 121,500 2,453
Cintas (A) 97,700 4,577
Fiserv* 42,168 1,431
Paychex (A) 53,220 2,345
--------
14,062
--------
- -----------------------------------------------------------
Description Shares Value (000)
- -----------------------------------------------------------
COMMON STOCKS (CONTINUED)
- -----------------------------------------------------------
PAPER & PAPER PRODUCTS -- 0.4%
Smurfit-Stone Container* 144,300 $ 2,859
--------
PETROLEUM & FUEL PRODUCTS -- 1.8%
Halliburton 236,900 8,528
Enron 86,700 5,847
--------
14,375
--------
PRINTING & PUBLISHING -- 0.8%
McGraw-Hill 111,800 6,268
--------
PROFESSIONAL SERVICES -- 0.8%
Devry* (A) 373,530 6,887
--------
RETAIL -- 8.6%
Bed Bath & Beyond* (A) 106,420 2,893
Costco Wholesale* (A) 197,190 9,650
CVS 116,600 4,074
Gap (A) 52,500 2,346
Home Depot 210,141 11,899
Kohl's* 109,790 7,699
McDonald's 103,156 3,836
Nordstrom (A) 168,200 3,700
Safeway* 258,540 9,873
Starbucks* 313,100 10,019
Target 63,170 4,173
--------
70,162
--------
SEMI-CONDUCTORS/INSTRUMENTS -- 10.4%
Applied Materials* (A) 87,190 11,967
Intel 309,036 30,575
National Semiconductor* 247,960 13,018
Texas Instruments 174,700 18,846
Xilinx* 221,720 10,144
--------
84,550
--------
SOFTWARE SERVICES -- 0.1%
Healtheon* 17,200 1,118
--------
SPECIALTY MACHINERY -- 1.5%
Solectron* 168,520 12,239
--------
STEEL & STEEL WORKS -- 0.4%
Alcoa 29,400 2,049
Reynolds Metals 13,000 868
--------
2,917
--------
The accompanying notes are an integral part of the financial statements.
23
WWW.HIGHMARKFUNDS.COM
<PAGE>
[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
GROWTH FUND (CONTINUED)
- -----------------------------------------------------------
Description Shares/Par (000) Value (000)
- -----------------------------------------------------------
COMMON STOCKS (CONTINUED)
- -----------------------------------------------------------
TELEPHONES & TELECOMMUNICATION -- 2.9%
Level 3 Communications* (A) 52,500 $ 6,192
Nextel Communications, Cl A* (A) 23,900 2,542
Qwest Communications
International* (A) 100,300 3,949
Vodafone Group PLC, ADR (A) 190,775 10,683
--------
23,366
--------
TOTAL COMMON STOCKS
(Cost $553,700) 799,970
--------
- -----------------------------------------------------------
COMMERCIAL PAPER -- 4.3%
- -----------------------------------------------------------
Ace Ina Holdings (B)
5.920%, 02/01/00 $25,000 24,996
Federal Signal (B)
5.756%, 02/01/00 10,000 9,989
--------
TOTAL COMMERCIAL PAPER
(Cost $34,985) 34,985
--------
- -----------------------------------------------------------
CORPORATE BONDS -- 4.9%
- -----------------------------------------------------------
Bear Stearns, MTN (B) (C)
6.093%, 01/08/01 10,000 10,000
First Union National Bank (B) (C)
6.163%, 10/27/00 10,000 10,000
Goldman Sachs Group, MTN (B) (C)
6.183%, 10/16/00 10,000 10,000
Merrill Lynch & Co., MTN (B) (C)
6.083%, 02/28/00 10,000 10,000
--------
TOTAL CORPORATE BONDS
(Cost $40,000) 40,000
--------
- -----------------------------------------------------------
CASH EQUIVALENT -- 1.2%
- -----------------------------------------------------------
Scudder Institutional
Money Fund (B) 10,000 10,000
--------
TOTAL CASH EQUIVALENT
(Cost $10,000) 10,000
--------
- -----------------------------------------------------------
Description Par (000) Value (000)
- -----------------------------------------------------------
REPURCHASE AGREEMENTS -- 4.3%
- -----------------------------------------------------------
Deutsche Bank Securities, Inc.
5.650%, dated 01/31/00,
matures 02/01/00, repurchase
price $4,570,700 (collater-
alized by U.S. Treasury Note,
par value $4,599,000, 5.625%,
04/30/00; market value
$4,661,868) $ 4,570 $ 4,570
HSBC Securities, Inc. (B) (C)
5.910%, dated 01/31/00, matures
02/01/00, repurchase price
$20,689,051 (collateralized by
various U.S. Government
obligations, par value
$27,397,185, 0.000%-0.001%,
05/15/01-09/15/14;
market value $21,099,925) 20,686 20,686
Lehman Brothers, Inc. (B) (C)
5.893%, dated 01/31/00, matures
02/01/00, repurchase price
$9,687,634 (collateralized by
various corporate obligations,
par value $10,717,640,
0.000%-0.001%,
10/25/23-11/28/31;
market value $10,170,276) 9,686 9,686
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $34,942) 34,942
--------
TOTAL INVESTMENTS -- 112.7%
(Cost $673,627) 919,897
--------
PAYABLE UPON RETURN OF SECURITIES
LOANED -- (14.1%) (115,357)
--------
OTHER ASSETS AND LIABILITIES, NET -- 1.4% 12,040
--------
The accompanying notes are an integral part of the financial statements.
24
1.800.433.6884
<PAGE>
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
GROWTH FUND (CONCLUDED)
- ------------------------------------------------------------
Description Value (000)
- ------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------
Fund Shares of Fiduciary Class (unlimited
authorization -- no par value) based on
40,705,300 outstanding shares of
beneficial interest $485,702
Fund Shares of Retail Class A (unlimited
authorization -- no par value) based on
2,169,986 outstanding shares of
beneficial interest 36,332
Fund Shares of Retail Class B (unlimited
authorization -- no par value) based on
980,835 outstanding shares of beneficial
interest 17,365
Fund Shares of Retail Class C (unlimited
authorization-- no par value) based on
3,296 outstanding shares
of beneficial interest 63
Distribution in excess of net investment
income (848)
Accumulated net realized gain on investments 31,696
Net unrealized appreciation on investments 246,270
--------
TOTAL NET ASSETS-- 100.0% $816,580
========
- ----------------------------------------------------------
Description Value
- ----------------------------------------------------------
NET ASSETS: (CONTINUED)
- ----------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- FIDUCIARY CLASS $18.63
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- RETAIL CLASS A $18.56
========
MAXIMUM OFFERING PRICE PER SHARE --
RETAIL CLASS A ($18.56 / 94.5%) $19.64
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- RETAIL CLASS B $18.27
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- RETAIL CLASS C $18.27
========
- ----------------------------------------------------------
* NON-INCOME PRODUCING SECURITY
(A) THIS SECURITY OR A PARTIAL POSITION OF THIS SECURITY
IS ON LOAN AT JANUARY 31, 2000 (SEE FOOTNOTE 2). THE
TOTAL VALUE OF SECURITIES ON LOAN AT JANUARY 31, 2000
WAS $111,651,569.
(B) THIS SECURITY PURCHASED WITH CASH COLLATERAL HELD FROM
SECURITIES LENDING.
(C) FLOATING RATE SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
CL -- CLASS
MTN -- MEDIUM TERM NOTE
The accompanying notes are an integral part of the financial statements.
25
WWW.HIGHMARKFUNDS.COM
<PAGE>
[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
VALUE MOMENTUM FUND
- ----------------------------------------------------------
Description Shares Value (000)
- ----------------------------------------------------------
COMMON STOCKS -- 97.5%
- ----------------------------------------------------------
AIRCRAFT -- 0.5%
United Technologies 86,490 $ 4,579
--------
AUTOMOTIVE -- 1.6%
Arvin Industries 126,800 2,940
Ford Motor 101,000 5,025
TRW 115,300 5,052
--------
13,017
--------
BANKS -- 3.1%
Bank of America 161,847 7,839
Bank United, Cl A 160,000 4,150
Chase Manhattan Bank 110,000 8,848
J.P. Morgan 40,400 4,962
--------
25,799
--------
BUILDING -- 0.9%
Fleetwood Enterprises (A) 147,800 2,411
Masco 240,000 4,785
--------
7,196
--------
CHEMICALS -- 2.9%
Avery Dennison 211,000 14,295
Cabot 246,000 5,904
Du Pont (E.I.) de Nemours 66,879 3,946
--------
24,145
--------
COMMUNICATIONS EQUIPMENT -- 3.8%
CTS 375,000 26,320
Lucent Technologies 100,516 5,554
--------
31,874
--------
COMPUTERS & SERVICES -- 8.6%
American Power Conversion* 298,000 8,223
Cisco Systems* (A) 236,200 25,864
Compaq Computer (A) 49,000 1,341
Equifax (A) 185,000 3,977
Hewlett Packard 144,000 15,588
IBM 153,000 17,165
--------
72,158
--------
DIVERSIFIED OPERATIONS -- 3.0%
General Electric 168,600 22,487
Textron 50,000 2,984
--------
25,471
--------
- -----------------------------------------------------------
Description Shares Value (000)
- -----------------------------------------------------------
COMMON STOCKS (CONTINUED)
- -----------------------------------------------------------
DRUGS -- 9.2%
American Home Products 167,000 $ 7,859
Amgen* 430,800 27,437
Bristol Myers Squibb 170,000 11,220
Merck 185,000 14,580
Monsanto 100,000 3,531
SmithKline Beecham, ADR (A) 70,000 4,270
Watson Pharmaceuticals* (A) 191,500 7,720
--------
76,617
--------
ELECTRICAL UTILITIES -- 0.7%
Sempra Energy 312,544 5,802
--------
FINANCIAL SERVICES -- 5.8%
Associates First Capital 82,940 1,659
Bear Stearns 128,445 5,298
Fannie Mae 200,300 12,005
Morgan Stanley, Dean Witter,
Discover 270,000 17,887
Providian Financial 99,300 8,378
Waddell & Reed Financial, Cl B 104,714 2,925
--------
48,152
--------
FOOD, BEVERAGE & TOBACCO -- 2.5%
IBP 120,000 1,800
Philip Morris Companies 209,000 4,376
Sara Lee 334,000 6,158
Universal (A) 155,000 3,168
Universal Foods 315,000 5,788
--------
21,290
--------
GAS/NATURAL GAS -- 3.4%
Coastal 280,000 10,325
Oneok 150,000 3,919
Questar 473,000 7,243
Williams Companies 170,000 6,587
--------
28,074
--------
HOUSEHOLD FURNITURE & FIXTURES -- 0.8%
Leggett & Platt (A) 376,000 6,768
--------
INSURANCE -- 5.4%
Allstate 146,952 3,407
Citigroup 306,751 17,619
Marsh & McLennan 156,950 14,753
The accompanying notes are an integral part of the financial statements.
26
1.800.433.6884
<PAGE>
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
VALUE MOMENTUM FUND (CONTINUED)
- -----------------------------------------------------------
Description Shares Value (000)
- -----------------------------------------------------------
COMMON STOCKS (CONTINUED)
- -----------------------------------------------------------
DRUGS -- (CONTINUED)
Torchmark 213,000 $ 5,365
UnumProvident 150,088 4,015
--------
45,159
--------
LEASING & RENTING -- 4.0%
Comdisco 549,503 18,340
GATX 176,000 5,060
Rollins Truck Leasing 700,000 6,869
Xtra 70,000 3,071
--------
33,340
--------
LEISURE PRODUCTS -- 0.8%
Hasbro 367,500 5,512
Mattel 118,350 1,235
--------
6,747
--------
MACHINERY -- 1.6%
Caterpillar 60,000 2,546
Parker-Hannifin 250,000 10,812
--------
13,358
--------
MEASURING DEVICES -- 0.7%
Tektronix 155,000 6,287
--------
MEDICAL PRODUCTS & SERVICES -- 4.3%
Baxter International 206,000 13,158
Becton, Dickinson (A) 92,900 2,433
Mallinckrodt 130,000 3,746
Pe Biosystems Group (A) 86,000 12,879
Tenet Healthcare* (A) 165,000 3,754
--------
35,970
--------
MISCELLANEOUS BUSINESS SERVICES-- 1.7%
Cendant* 352,479 7,116
Manpower (A) 128,100 4,572
Wallace Computer Services 240,000 2,625
--------
14,313
--------
OFFICE FURNITURE & FIXTURES -- 0.6%
Hon Industries 240,000 4,620
--------
- -----------------------------------------------------------
Description Shares Value (000)
- -----------------------------------------------------------
COMMON STOCKS (CONTINUED)
- -----------------------------------------------------------
PAPER & PAPER PRODUCTS -- 3.0%
Kimberly-Clark 199,920 $ 12,383
Weyerhaeuser 116,800 6,701
Willamette Industries 145,500 5,966
--------
25,050
--------
PETROLEUM & FUEL PRODUCTS -- 4.9%
Chevron 88,000 7,354
Exxon Mobil 232,864 19,444
Halliburton 216,500 7,794
Royal Dutch Petroleum, ADR 110,000 6,057
--------
40,649
--------
PETROLEUM REFINING -- 0.5%
Conoco 195,776 4,613
--------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES -- 0.5%
Xerox 217,400 4,538
--------
PRINTING & PUBLISHING -- 1.7%
Houghton Mifflin 118,700 4,882
McGraw-Hill 170,000 9,531
--------
14,413
--------
PROFESSIONAL SERVICES -- 0.4%
ServiceMaster (A) 210,000 3,006
--------
RAILROADS -- 1.2%
Burlington Northern Santa Fe 158,000 3,802
Florida East Coast Railway 150,000 5,963
--------
9,765
--------
REAL ESTATE -- 3.4%
BRE Properties, Cl A 268,262 5,902
CBL & Associates Properties 260,000 5,476
First Industrial Realty Trust 120,000 3,225
JP Realty 130,000 2,291
Kimco Realty 125,000 4,406
Post Properties 195,000 7,483
--------
28,783
--------
The accompanying notes are an integral part of the financial statements.
27
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<PAGE>
[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
VALUE MOMENTUM FUND (CONTINUED)
- ------------------------------------------------------------
Description Shares/Par (000) Value (000)
- ------------------------------------------------------------
COMMON STOCKS (CONTINUED)
- -----------------------------------------------------------
RETAIL -- 3.5%
Federated Department Stores* (A) 246,700 $ 10,269
Kroger* 120,000 2,085
Target 258,000 17,044
---------
29,398
---------
SEMI-CONDUCTORS/INSTRUMENTS -- 4.6%
Applied Materials* (A) 80,000 10,980
Avnet 50,000 2,684
Intel 250,500 24,784
---------
38,448
---------
STEEL & STEEL WORKS -- 1.3%
Alcoa 109,000 7,596
Engelhard 226,000 3,602
---------
11,198
---------
TELEPHONES & TELECOMMUNICATION-- 6.6%
AT&T 185,400 9,780
Bell Atlantic 193,000 11,954
Centurytel 243,750 9,323
GTE 134,800 9,883
SBC Communications 228,034 9,834
Sprint 65,000 4,205
---------
54,979
---------
TOTAL COMMON STOCKS
(Cost $432,766) 815,576
---------
- -----------------------------------------------------------
COMMERCIAL PAPER -- 4.2%
- -----------------------------------------------------------
Ace Ina Holdings (B)
5.921%, 02/01/00 $ 25,000 24,996
Federal Signal (B)
5.756%, 02/01/00 10,000 9,989
---------
TOTAL COMMERCIAL PAPER
(Cost $34,985) 34,985
---------
- -----------------------------------------------------------
Description Par (000) Value (000)
- -----------------------------------------------------------
CORPORATE BONDS -- 3.6%
- -----------------------------------------------------------
AMEX Centurion (B)
5.700%, 04/24/00 $ 5,000 $ 5,000
First Union National Bank (B) (C)
6.163%, 10/27/00 10,000 10,000
Goldman Sachs Group, MTN (B) (C)
6.183%, 10/16/00 15,000 15,000
---------
TOTAL CORPORATE BONDS
(Cost $30,000) 30,000
---------
- -----------------------------------------------------------
REPURCHASE AGREEMENTS -- 1.7%
- -----------------------------------------------------------
Deutsche Bank Securities, Inc.
5.650%, dated 01/31/00,
matures 02/01/00, repurchase
price $13,276,069 (collater-
alized by U.S. Treasury Bond,
par value $11,015,000, 10.750%,
08/15/05; market value
$13,540,059) 13,274 13,274
Lehman Brothers, Inc. (B) (C)
5.893%, dated 01/31/00,
matures 02/01/00, repurchase
price $635,603 (collateralized
by various corporate obligations,
par value $703,181, 0.000%-0.001%,
10/25/23-11/28/31;
market value $667,269) 635 635
---------
TOTAL REPURCHASE AGREEMENTS
(Cost $13,909) 13,909
---------
TOTAL INVESTMENTS -- 107.0%
(Cost $511,660) 894,470
---------
PAYABLE UPON RETURN OF SECURITIES
LOANED-- (7.8%) (65,620)
---------
OTHER ASSETS AND LIABILITIES, NET-- 0.8% 7,088
---------
The accompanying notes are an integral part of the financial statements.
28
1.800.433.6884
<PAGE>
[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
VALUE MOMENTUM FUND (CONCLUDED)
- ----------------------------------------------------------
Description Value (000)
- ----------------------------------------------------------
NET ASSETS:
- ----------------------------------------------------------
Fund Shares of Fiduciary Class (unlimited
authorization -- no par value) based on
23,948,600 outstanding shares of
beneficial interest $306,705
Fund Shares of Class I (unlimited
authorization -- no par value) based on
4,065,421 outstanding shares of beneficial
interest 112,777
Fund Shares of Retail Class A (unlimited
authorization -- no par value) based on
1,422,506 outstanding shares of beneficial
interest 28,220
Fund Shares of Retail Class B (unlimited
authorization -- no par value) based on
249,325 outstanding shares of beneficial
interest 7,065
Fund Shares of Retail Class C (unlimited
authorization-- no par value) based on
2,877 outstanding shares
of beneficial interest 83
Undistributed net investment income 312
Accumulated net realized loss on investments (2,034)
Net unrealized appreciation on investments 382,810
--------
TOTAL NET ASSETS-- 100.0% $835,938
========
- ----------------------------------------------------------
Description Value
- ----------------------------------------------------------
NET ASSETS: (CONTINUED)
- ----------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- FIDUCIARY CLASS $28.16
=======
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS I $28.16
=======
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- RETAIL CLASS A $28.15
=======
MAXIMUM OFFERING PRICE PER SHARE --
RETAIL CLASS A ($28.15 / 94.5%) $29.79
=======
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- RETAIL CLASS B $28.04
=======
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- RETAIL CLASS C $28.04
=======
- ---------------------------------------------------------
* NON-INCOME PRODUCING SECURITY
(A) THIS SECURITY OR A PARTIAL POSITION OF THIS SECURITY IS
ON LOAN AT JANUARY 31, 2000 (SEE FOOTNOTE 2). THE TOTAL
VALUE OF SECURITIES ON LOAN AT JANUARY 31, 2000 WAS
$63,494,744.
(B) THIS SECURITY PURCHASED WITH CASH COLLATERAL HELD FROM
SECURITIES LENDING.
(C) FLOATING RATE SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
CL -- CLASS
MTN -- MEDIUM TERM NOTE
The accompanying notes are an integral part of the financial statements.
29
WWW.HIGHMARKFUNDS.COM
<PAGE>
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
INCOME EQUITY FUND
- ----------------------------------------------------------
Description Shares Value (000)
- ----------------------------------------------------------
COMMON STOCKS -- 97.0%
- ----------------------------------------------------------
AEROSPACE & DEFENSE -- 2.1%
B.F. Goodrich 126,400 $ 3,160
Boeing 109,875 4,869
Raytheon Company, Cl B 96,000 2,190
--------
10,219
--------
AUTOMOTIVE -- 1.9%
Dana 35,325 830
Ford Motor 80,250 3,992
General Motors 57,800 4,649
--------
9,471
--------
BANKS -- 8.6%
Bank of America 139,975 6,780
Bank of New York 24,700 1,003
Bank One 131,973 3,934
Chase Manhattan Bank 70,825 5,697
First Union 138,175 4,638
Fleet Boston Financial 184,250 5,792
SunTrust Banks 17,825 1,062
U.S. Bancorp 110,625 2,455
Washington Mutual 175,000 4,441
Wells Fargo 152,625 6,105
--------
41,907
--------
BUILDING & CONSTRUCTION -- 1.4%
Fluor 119,375 4,768
Kaufman & Broad Home 23,325 506
Masco 83,600 1,667
--------
6,941
--------
CHEMICALS -- 3.5%
Dow Chemical 28,425 3,312
Du Pont (E. I.) de Nemours 85,455 5,042
Engelhard 196,775 3,136
International Flavors &
Fragrances 26,875 959
PPG Industries 33,075 1,821
Rohm & Haas 69,100 2,919
--------
17,189
--------
COMMUNICATIONS EQUIPMENT -- 2.2%
Motorola (A) 79,700 10,899
--------
- ----------------------------------------------------------
Description Shares Value (000)
- ----------------------------------------------------------
COMMON STOCKS (CONTINUED)
- ----------------------------------------------------------
COMPUTERS & SERVICES -- 6.7%
Automatic Data Processing 32,850 $ 1,558
Compaq Computer (A) 180,400 4,938
Diebold 133,850 2,970
Electronic Data Systems 60,900 4,118
Hewlett Packard (A) 103,100 11,161
IBM 52,850 5,929
Shared Medical Systems (A) 43,025 1,904
--------
32,578
--------
HEALTHCARE-- 3.8%
Abbott Labs 28,050 915
Baxter International 80,250 5,126
Mallinckrodt 88,375 2,546
Merck 65,950 5,198
Pharmacia & Upjohn (A) 98,450 4,627
--------
18,412
--------
ELECTRICAL EQUIPMENT -- 1.9%
Emerson Electric 48,325 2,661
General Electric 31,350 4,181
W.W. Grainger (A) 53,025 2,542
--------
9,384
--------
ELECTRICAL UTILITIES -- 5.0%
Constellation Energy Group 175,750 5,294
Duke Energy (A) 56,275 3,250
Edison International (A) 91,925 2,666
PG&E 43,650 958
Southern 172,350 4,416
TECO Energy (A) 49,375 969
Texas Utilities 192,400 6,806
--------
24,359
--------
ENTERTAINMENT -- 2.3%
Brunswick 230,950 4,374
Walt Disney 196,500 7,135
--------
11,509
--------
FINANCIAL SERVICES -- 8.7%
Citigroup 244,285 14,031
Fannie Mae 119,425 7,158
Household International 127,650 4,500
The accompanying notes are an integral part of the financial statements.
30
1.800.433.6884
<PAGE>
[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
INCOME EQUITY FUND (CONTINUED)
- ----------------------------------------------------------
Description Shares Value (000)
- ----------------------------------------------------------
COMMON STOCKS (CONTINUED)
- ----------------------------------------------------------
FINANCIAL SERVICES -- (CONTINUED)
Merrill Lynch (A) 90,275 $ 7,831
Morgan Stanley, Dean Witter 136,350 9,033
--------
42,553
--------
FOOD, BEVERAGE & TOBACCO -- 2.3%
Archer-Daniels-Midland 183,825 2,160
Campbell Soup 56,475 1,775
ConAgra 41,400 885
Hershey Foods 40,400 1,717
PepsiCo 89,175 3,043
Philip Morris 79,275 1,660
--------
11,240
--------
GAS/NATURAL GAS -- 3.3%
El Paso Energy 96,175 3,102
Enron 126,475 8,529
Sempra Energy 175,075 3,250
Williams Companies 25,875 1,003
--------
15,884
--------
HOUSEHOLD PRODUCTS -- 2.9%
Clorox 41,700 1,991
Kimberly-Clark 82,025 5,080
Newell Rubbermaid 136,475 4,094
Stanley Works 17,800 447
Whirlpool 47,875 2,789
--------
14,401
--------
INSURANCE -- 6.1%
Aetna (A) 42,650 2,271
American General 90,100 5,536
Jefferson Pilot 42,887 2,520
Lincoln National 98,075 3,623
Marsh & McLennan 60,512 5,688
MBIA (A) 72,600 3,635
St. Paul Companies 223,975 6,761
--------
30,034
--------
LEISURE PRODUCTS -- 0.3%
Mattel 141,525 1,477
--------
- ----------------------------------------------------------
Description Shares Value (000)
- ----------------------------------------------------------
COMMON STOCKS (CONTINUED)
- ----------------------------------------------------------
MANUFACTURING -- 1.7%
Cummins Engine 39,825 $ 1,523
Eaton 14,025 1,002
Minnesota Mining & Manufacturing 35,575 3,331
National Service Industries 83,675 2,081
Pall 31,300 577
--------
8,514
--------
METALS -- 3.0%
Alcan Aluminum, ADR 78,375 3,062
Alcoa 71,525 4,984
Barrick Gold 103,775 1,699
Worthington Industries 348,300 5,029
--------
14,774
--------
PAPER & PAPER PRODUCTS -- 1.3%
Weyerhaeuser 64,100 3,678
Willamette Industries 67,475 2,767
--------
6,445
--------
PERSONAL CARE -- 0.2%
Avon Products 31,550 1,004
--------
PETROLEUM & FUEL PRODUCTS -- 12.0%
Ashland 73,050 2,379
Baker Hughes 116,550 2,870
BP Amoco PLC-Spons, ADR (A) 77,872 4,186
Chevron 70,775 5,914
Conoco, CIB 149,955 3,533
Exxon Mobil 292,973 24,463
Halliburton 75,365 2,713
Royal Dutch Petroleum, ADR 126,875 6,986
Texaco 104,550 5,528
--------
58,572
--------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES -- 1.0%
Eastman Kodak 28,900 1,788
Polaroid 133,600 3,173
--------
4,961
--------
The accompanying notes are an integral part of the financial statements.
31
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<PAGE>
[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
INCOME EQUITY FUND (CONTINUED)
- ----------------------------------------------------------
Description Shares Value (000)
- ----------------------------------------------------------
COMMON STOCKS (CONTINUED)
- ----------------------------------------------------------
PRINTING & PUBLISHING -- 1.7%
Deluxe 39,475 $ 1,056
Harcourt General 93,800 3,752
Knight-Ridder 35,250 1,879
McGraw-Hill 24,055 1,349
--------
8,036
--------
REAL ESTATE -- 2.4%
Apartment Investment &
Management (A) 66,100 2,504
Kimco Realty 92,725 3,269
Post Properties (A) 54,397 2,087
Simon Property Group 160,175 3,954
--------
11,814
--------
RETAIL -- 2.3%
Albertson's 59,875 1,834
May Department Stores 108,837 3,388
McDonald's 26,950 1,002
Rite Aid (A) 273,150 1,929
Sears Roebuck & Company 84,525 2,615
Staples* 21,675 516
--------
11,284
--------
RUBBER & PLASTIC -- 0.4%
Tupperware 112,150 1,829
--------
TELEPHONES & TELECOMMUNICATION -- 7.3%
Alltel (A) 57,025 3,806
AT&T 225,187 11,879
GTE 125,200 9,179
MCI WorldCom* 22,400 1,029
SBC Communications 66,275 2,858
U.S. West 106,529 7,084
--------
35,835
--------
TRANSPORTATION -- 0.3%
Ryder System (A) 75,225 1,660
--------
WHOLESALE -- 0.4%
Supervalu 115,275 2,075
--------
TOTAL COMMON STOCKS
(Cost $456,038) 475,260
--------
- ----------------------------------------------------------
Description Par (000) Value (000)
- ----------------------------------------------------------
CORPORATE BONDS -- 7.1%
- ----------------------------------------------------------
Amex Centurion (B) (C)
5.700%, 04/24/00 $10,000 $ 10,000
Bear Stearns, MTN (B) (C)
6.093%, 01/08/01 10,000 10,000
Goldman Sachs Group, MTN (B) (C)
6.183%, 10/16/00 15,000 15,000
---------
TOTAL CORPORATE BONDS
(Cost $35,000) 35,000
---------
- ----------------------------------------------------------
REPURCHASE AGREEMENTS -- 4.0%
- ----------------------------------------------------------
JP Morgan Securities, Inc.
5.670%, dated 01/31/00, matures
02/01/00, repurchase price
$14,391,431 (collateralized by
various U.S. Treasury Notes,
par value $14,563,000,
5.000%-7.000%,
02/28/01-07/15/06:
market value $14,677,137) 14,389 14,389
HSBC Securities, Inc. (B) (C)
5.910%, dated 01/31/00, matures
02/01/00, repurchase price
$5,107,768 (collateralized by
various U.S. Government obligations,
par value $6,763,890, 0.000%-0.001%,
05/15/01-09/15/14; market
value $5,209,206) 5,107 5,107
---------
TOTAL REPURCHASE AGREEMENTS
(Cost $19,496) 19,496
---------
TOTAL INVESTMENTS -- 108.1%
(Cost $510,534) 529,756
---------
PAYABLE UPON RETURN OF SECURITIES
LOANED -- (8.2%) (40,107)
---------
OTHER ASSETS AND LIABILITIES, NET -- 0.1% 375
---------
The accompanying notes are an integral part of the financial statements.
32
1.800.433.6884
<PAGE>
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
INCOME EQUITY FUND (CONCLUDED)
- ----------------------------------------------------------
Description Value (000)
- ----------------------------------------------------------
NET ASSETS:
- ----------------------------------------------------------
Fund Shares of Fiduciary Class (unlimited
authorization-- no par value) based on
37,027,395 outstanding shares
of beneficial interest $ 436,091
Fund Shares of Retail Class A (unlimited
authorization -- no par value) based on
1,443,685 outstanding shares of
beneficial interest 21,361
Fund Shares of Retail Class B (unlimited
authorization -- no par value) based on
350,785 outstanding shares of beneficial
interest 5,886
Fund Shares of Retail Class C (unlimited
authorization-- no par value) based on
85 outstanding shares
of beneficial interest 1
Undistributed net investment income 17
Accumulated net realized gain on investments 7,446
Net unrealized appreciation on investments 19,222
---------
TOTAL NET ASSETS -- 100.0% $ 490,024
=========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- FIDUCIARY CLASS $12.62
=========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- RETAIL CLASS A $12.65
=========
MAXIMUM OFFERING PRICE PER SHARE --
RETAIL CLASS A ($12.65 / 94.5%) $13.39
=========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- RETAIL CLASS B $12.57
=========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- RETAIL CLASS C $12.57
=========
- ----------------------------------------------------------
* NON-INCOME PRODUCING SECURITY
(A) THIS SECURITY OR A PARTIAL POSITION OF THIS SECURITY IS
ON LOAN AT JANUARY 31, 2000 (SEE FOOTNOTE 2). THE TOTAL
VALUE OF SECURITIES ON LOAN AT JANUARY 31, 2000 WAS
$38,681,242.
(B) THIS SECURITY PURCHASED WITH CASH COLLATERAL HELD FROM
SECURITIES LENDING.
(C) FLOATING RATE SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
CL -- CLASS
MTN -- MEDIUM TERM NOTE
The accompanying notes are an integral part of the financial statements.
33
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<PAGE>
[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
BALANCED FUND
- ------------------------------------------------------------
Description Shares Value (000)
- ------------------------------------------------------------
COMMON STOCKS -- 63.1%
- ------------------------------------------------------------
AIR TRANSPORTATION -- 0.3%
Klm Royal Dutch Air - NY Reg 58,457 $ 1,334
--------
AUTOMOTIVE -- 0.2%
Ford Motor 14,115 702
--------
BANKS -- 3.0%
Bank of New York 89,200 3,624
Chase Manhattan Bank 28,400 2,284
Fleet Boston Financial 94,752 2,979
Washington Mutual 69,700 1,769
Wells Fargo 50,600 2,024
--------
12,680
--------
BEAUTY PRODUCTS -- 1.8%
Colgate-Palmolive 47,950 2,841
Gillette 45,000 1,693
Proctor & Gamble 33,050 3,334
--------
7,868
--------
CHEMICALS -- 1.9%
Avery Dennison 40,000 2,710
Du Pont (E. I.) de Nemours 22,526 1,329
Hercules 82,360 1,410
Monsanto 54,975 1,941
PPG Industries 11,675 643
--------
8,033
--------
COMMUNICATIONS EQUIPMENT -- 2.0%
Lucent Technologies 70,850 3,914
Motorola 17,340 2,371
Nortel Networks 22,310 2,133
--------
8,418
--------
COMPUTERS & SERVICES -- 1.6%
Cisco Systems* (A) 59,200 6,482
Dell Computer* 14,985 576
--------
7,058
--------
COMPUTERS & SOFTWARE SERVICES-- 8.7%
America Online* (A) 35,865 2,042
Computer Associates
International (A) 40,332 2,770
Computer Sciences* (A) 25,250 2,320
Electronic Data Systems 32,330 2,186
Hewlett Packard 36,000 3,897
IBM 50,000 5,609
- ------------------------------------------------------------
Description Shares Value (000)
- ------------------------------------------------------------
COMMON STOCKS (CONTINUED)
- ------------------------------------------------------------
COMPUTERS & SOFTWARE SERVICES-- (CONTINUED)
Microsoft* 100,710 $ 9,857
Oracle Systems* (A) 41,920 2,094
Sap AG, ADR (A) 73,695 4,804
Sun Microsystems* 18,100 1,422
--------
37,001
--------
DIVERSIFIED OPERATIONS -- 2.7%
Berkshire Hathaway, Cl B* 1,035 1,704
General Electric 75,030 10,007
--------
11,711
--------
DRUGS -- 5.4%
American Home Products 50,840 2,393
Amgen* 38,815 2,472
Bristol-Myers Squibb 49,110 3,241
Eli Lilly 23,150 1,548
Johnson & Johnson 16,215 1,395
Merck 46,185 3,640
Pfizer 79,800 2,903
Schering Plough 63,100 2,776
Warner Lambert 30,410 2,887
--------
23,255
--------
ELECTRICAL UTILITIES -- 0.7%
FirstEnergy 50,700 1,153
Scottish Power Plc, Adr 72,648 2,011
--------
3,164
--------
ENTERTAINMENT -- 1.4%
Carnival, Cl A 33,700 1,519
Walt Disney 122,130 4,435
--------
5,954
--------
FINANCIAL SERVICES -- 3.0%
American Express 23,925 3,943
Citigroup 80,325 4,614
Fannie Mae 69,700 4,178
--------
12,735
--------
FOOD, BEVERAGE & TOBACCO -- 1.6%
Bestfoods 31,800 1,383
Coca-Cola 50,000 2,872
PepsiCo 70,700 2,413
--------
6,668
--------
The accompanying notes are an integral part of the financial statements.
34
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<PAGE>
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
BALANCED FUND (CONTINUED)
- ------------------------------------------------------------
Description Shares Value (000)
- ------------------------------------------------------------
COMMON STOCKS (CONTINUED)
- ------------------------------------------------------------
GAS/NATURAL GAS -- 1.0%
Coastal 50,000 $ 1,844
Williams Companies 61,900 2,399
--------
4,243
--------
HOTELS & LODGING -- 0.4%
Hilton Hotels 189,700 1,601
--------
INSURANCE -- 2.3%
AFLAC 55,000 2,389
AXA Financial (A) 82,700 2,693
Hartford Financial Services Group 55,200 2,104
Marsh & McLennan 29,305 2,755
--------
9,941
--------
MACHINERY -- 2.9%
Applied Materials* (A) 37,800 5,188
Honeywell International 46,500 2,232
Ingersoll Rand 57,150 2,690
Parker-Hannifin 52,500 2,271
--------
12,381
--------
MEDICAL PRODUCTS & SERVICES -- 2.3%
Baxter International 46,500 2,970
IMS HEALTH 63,900 1,434
Medtronic 42,200 1,931
Pe Biosystems Group (A) 23,800 3,564
--------
9,899
--------
PAPER & PAPER PRODUCTS -- 0.9%
Kimberly-Clark 39,950 2,474
Weyerhaeuser 25,300 1,452
--------
3,926
--------
PETROLEUM & FUEL PRODUCTS -- 1.7%
Halliburton 71,500 2,574
Conoco, Cl B 47,418 1,117
Phillips Petroleum 41,300 1,688
Union Pacific Resources Group 154,704 1,702
--------
7,081
--------
PETROLEUM REFINING -- 3.3%
Chevron 35,300 2,950
Exxon Mobil 42,739 3,569
Royal Dutch Petroleum, ADR 47,200 2,599
Ultramar Diamond Shamrock 79,200 1,732
- ------------------------------------------------------------
Description Shares Value (000)
- ------------------------------------------------------------
COMMON STOCKS (CONTINUED)
- ------------------------------------------------------------
PETROLEUM REFINING -- (CONTINUED)
Unocal 60,000 $ 1,717
USX-Marathon Group 62,000 1,593
--------
14,160
--------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES -- 0.3%
Xerox 59,450 1,241
--------
PRINTING & PUBLISHING -- 1.6%
McGraw-Hill 28,300 1,587
Time Warner (A) 22,600 1,807
Viacom, Cl B* 37,015 2,050
Washington Post, Cl B 2,765 1,521
--------
6,965
--------
RAILROADS -- 0.4%
Burlington Northern Santa Fe 75,300 1,812
--------
REAL ESTATE -- 2.8%
BRE Properties, Cl A 78,670 1,731
CBL & Associates Properties 90,425 1,905
First Industrial Realty Trust 80,785 2,171
JP Realty 92,795 1,636
Kimco Realty 56,125 1,978
Post Properties (A) 64,155 2,462
--------
11,883
--------
RETAIL -- 3.5%
Albertson's 62,370 1,910
Costco Wholesale* (A) 62,700 3,068
Federated Department Stores* (A) 52,000 2,164
Home Depot 12,110 686
McDonald's 70,710 2,630
Nordstrom (A) 64,575 1,421
Safeway* 38,800 1,482
Target 23,270 1,537
--------
14,898
--------
SEMI-CONDUCTORS/INSTRUMENTS -- 1.6%
Intel 67,900 6,718
--------
STEEL & STEEL WORKS -- 0.2%
Alcoa 9,490 661
--------
The accompanying notes are an integral part of the financial statements.
35
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<PAGE>
[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
BALANCED FUND (CONTINUED)
- -------------------------------------------------------------
Description Shares/Par (000) Value (000)
- -------------------------------------------------------------
COMMON STOCKS (CONTINUED)
- -------------------------------------------------------------
TELEPHONES & TELECOMMUNICATION -- 3.6%
AT&T 69,525 $ 3,667
Bell Atlantic 84,800 5,252
MCI WorldCom* 65,780 3,022
Qwest Communications
International* (A) 16,195 638
SBC Communications 64,000 2,760
--------
15,339
--------
TOTAL COMMON STOCKS
(Cost $175,937) 269,330
--------
- -------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED BONDS -- 13.6%
- -------------------------------------------------------------
FHLMC
5.750%, 03/15/09 $2,000 1,790
6.000%, 02/01/28 2,694 2,426
FNMA
7.500%, 08/01/01 704 702
6.250%, 11/15/02 1,000 980
6.500%, 08/15/04 5,000 4,868
6.850%, 09/12/05 1,400 1,345
6.375%, 06/15/09 2,000 1,871
6.500%, 05/01/14 2,347 2,241
6.500%, 03/01/24 262 244
8.000%, 08/01/24 295 295
8.000%, 05/01/25 866 864
7.000%, 09/01/25 1,021 973
8.000%, 07/01/26 342 341
7.000%, 09/01/26 776 751
7.500%, 09/01/26 550 536
7.000%, 12/01/26 1,017 969
7.500%, 03/01/27 402 392
6.500%, 10/01/27 1,176 1,091
6.500%, 12/01/27 2,126 1,972
7.000%, 12/01/27 1,889 1,800
6.000%, 03/01/28 3,549 3,193
6.000%, 05/01/28 912 820
6.500%, 05/01/29 2,820 2,618
GNMA
6.500%, 09/15/08 1,890 1,804
6.000%, 11/15/08 1,367 1,273
6.500%, 06/15/23 193 178
6.500%, 02/15/24 83 77
7.500%, 05/15/24 239 233
- -------------------------------------------------------------
Description Par (000) Value (000)
- -------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED BONDS (CONTINUED)
- -------------------------------------------------------------
GNMA -- (continued)
7.500%, 09/15/25 $ 503 $ 494
7.000%, 02/15/26 670 637
6.500%, 04/15/26 714 659
7.000%, 08/15/26 1,945 1,850
7.500%, 09/15/26 1,821 1,775
7.500%, 01/15/27 1,271 1,249
7.000%, 10/15/27 1,363 1,297
6.500%, 05/15/28 894 826
6.000%, 12/15/28 2,365 2,113
6.500%, 01/15/29 2,848 2,630
6.000%, 02/15/29 2,446 2,186
7.000%, 03/15/29 2,451 2,331
6.000%, 04/15/29 3,854 3,445
-------
TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-BACKED BONDS
(Cost $61,335) 58,139
-------
- -------------------------------------------------------------
CORPORATE OBLIGATIONS -- 21.5%
- -------------------------------------------------------------
Airtouch Communications
6.650%, 05/01/08 2,000 1,857
Allied-Signal
6.200%, 02/01/08 4,000 3,555
American General
6.250%, 12/18/02 2,000 1,937
6.750%, 06/15/05 2,000 1,910
Associates Corporation, N.A.
7.875%, 09/30/01 2,000 2,017
6.950%, 11/01/18 3,000 2,704
AT&T
7.500%, 06/01/06 2,000 2,002
Avco Financial Services
7.375%, 08/15/01 2,000 2,002
Bankers Trust NY
7.500%, 11/15/15 2,000 1,905
Bell Atlantic
6.500%, 04/15/28 3,000 2,535
8.000%, 10/15/29 175 178
Caterpillar Tractor
6.000%, 05/01/07 605 547
Chemical Banking
6.700%, 08/15/08 1,500 1,397
The accompanying notes are an integral part of the financial statements.
36
1.800.433.6884
<PAGE>
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
BALANCED FUND (CONTINUED)
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
CORPORATE OBLIGATIONS (CONTINUED)
- ------------------------------------------------------------
Chesapeake & Potomac
Telephone of Maryland
6.000%, 05/01/03 $1,500 $ 1,432
Citicorp
6.750%, 08/15/05 450 429
Dow Chemical
6.850%, 08/15/13 2,000 1,810
Du Pont (E.I.) de Nemours
6.750%, 09/01/07 3,000 2,865
Duke Energy
7.875%, 08/15/04 1,000 990
Fannie Mae MTN
6.375%, 06/29/05 2,000 1,897
First Bank System
6.875%, 09/15/07 500 471
First Chicago
6.125%, 02/15/06 1,000 919
First National Bank of Boston
8.000%, 09/15/04 2,000 2,010
Ford Motor
6.500%, 08/01/18 2,000 1,747
Ford Motor Credit
6.125%, 01/09/06 3,250 2,998
General Mills
5.400%, 12/08/08 2,500 2,147
General Motors Acceptance
5.750%, 11/10/03 2,600 2,450
6.125%, 01/22/08 3,000 2,715
Golden West Financial
6.700%, 07/01/02 150 147
GTE
6.840%, 04/15/18 3,000 2,752
Hydro Quebec
8.050%, 07/07/24 150 157
IBM
5.370%, 09/22/03 2,500 2,341
8.375%, 11/01/19 200 217
JC Penney
6.000%, 05/01/06 2,250 1,946
JCI
6.300%, 02/01/08 2,000 1,810
John Deere Capital
7.014%, 10/15/02 1,500 1,481
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
CORPORATE OBLIGATIONS (CONTINUED)
- ------------------------------------------------------------
Joseph E. Seagram & Sons
7.000%, 04/15/08 $1,500 $ 1,414
Lehman Brothers Holding
8.500%, 05/01/07 2,000 2,040
Litton Industries
6.750%, 04/15/18 2,500 2,159
Lockheed Martin
7.700%, 06/15/08 2,000 1,910
Lucent Technologies
6.450%, 03/15/29 500 434
Monsanto Company
5.875%, 12/01/08 2,500 2,191
New England Telephone & Telegraph
7.875%, 11/15/29 250 252
Pepsi Bottling Holdings (D)
5.375%, 02/17/04 3,000 2,775
Phillips Petroleum
6.650%, 07/15/18 1,000 886
Province of British Columbia
7.000%, 01/15/03 1,500 1,485
Ralston-Ralston Purina
7.750%, 10/01/15 2,000 1,933
Raytheon
6.550%, 03/15/10 2,000 1,760
Royal Bank of Scotland
6.375%, 02/01/11 2,500 2,200
Sears Roebuck Acceptance
6.900%, 08/01/03 2,000 1,945
US West Capital Funding
6.375%, 07/15/08 2,000 1,803
Wal-Mart Stores
6.375%, 03/01/03 450 439
6.550%, 08/10/04 2,000 1,945
5.875%, 10/15/05 2,000 1,848
Worldcom
6.125%, 08/15/01 2,000 1,970
--------
TOTAL CORPORATE OBLIGATIONS
(Cost $98,232) 91,666
--------
The accompanying notes are an integral part of the financial statements.
37
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<PAGE>
[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
BALANCED FUND (CONTINUED)
- --------------------------------------------------------------
Description Shares/Par (000) Value (000)
- --------------------------------------------------------------
ASSET BACKED SECURITIES -- 0.2%
- --------------------------------------------------------------
Citibank Credit Card Master Trust
1997-3 Cl A
6.839%, 02/10/04 $ 100 $ 99
Contimortgage Home Equity Loan
Trust, Ser 1995-3, Cl A4
7.440%, 09/15/12 115 115
Equity Capital Home Equity Loan
Trust, Ser 1996-3, Cl A6
7.400%, 12/15/19 450 434
Green Tree Financial, Ser 1995-9,
Cl A5
6.800%, 01/15/27 350 346
-------
TOTAL ASSET BACKED SECURITIES
(Cost $1,015) 994
-------
- --------------------------------------------------------------
CORPORATE BONDS -- 1.2%
- --------------------------------------------------------------
Amex Centurion (B) (C)
5.700%, 04/19/00 5,000 5,000
-------
TOTAL CORPORATE BONDS
(Cost $5,000) 5,000
-------
- --------------------------------------------------------------
CASH EQUIVALENT -- 2.3%
- --------------------------------------------------------------
Scudder Institutional Money
Fund (B) 10,000 10,000
-------
TOTAL CASH EQUIVALENT
(Cost $10,000) 10,000
-------
- --------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------
REPURCHASE AGREEMENTS -- 5.0%
- --------------------------------------------------------------
Deutsche Bank Securities, Inc.
5.650%, dated 01/31/00, matures
02/01/00, repurchase price
$1,641,364 (collateralized by
U.S. Treasury Note,
par value $1,652,000, 5.625%,
04/30/00; market value
$1,674,583) $ 1,641 $ 1,641
HSBC Securities Inc. (B) (C)
5.910%, dated 01/31/00, matures
02/01/00, repurchase price
$19,772,748 (collateralized
by various U.S. Government
obligations, par value
$26,183,784, 0.000%-0.001%,
05/15/01-09/15/14;
market value $20,165,425) 19,770 19,770
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $21,411) 21,411
--------
TOTAL INVESTMENTS -- 106.9%
(Cost $372,930) 456,540
--------
PAYABLE UPON RETURN OF SECURITIES
LOANED -- (8.1%) (34,770)
--------
OTHER ASSETS AND LIABILITIES, NET -- 1.2% 5,190
--------
- --------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------
Fund Shares of Fiduciary Class
(unlimited authorization --
no par value) based on 26,574,700
outstanding shares of beneficial
interest 323,502
Fund Shares of Retail Class A (unlimited
authorization -- no par value)
based on 685,661 outstanding shares of
beneficial interest 8,464
Fund Shares of Retail Class B (unlimited
authorization -- no par value)
based on 260,879 outstanding shares of
beneficial interest 4,382
Fund Shares of Retail Class C (unlimited
authorization -- no par value) based on
72 outstanding shares of beneficial interest 1
Undistributed net investment income 245
Accumulated net realized gain on investments 6,756
Net unrealized appreciation on investments 83,610
--------
TOTAL NET ASSETS -- 100.0% $426,960
========
The accompanying notes are an integral part of the financial statements.
38
1.800.433.6884
<PAGE>
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
BALANCED FUND (CONCLUDED)
- -----------------------------------------------------------
Description Value
- -----------------------------------------------------------
NET ASSETS: (CONTINUED)
- -----------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- FIDUCIARY CLASS $15.51
=======
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- RETAIL CLASS A $15.50
=======
MAXIMUM OFFERING PRICE PER SHARE --
RETAIL CLASS A ($15.50 / 94.5%) $16.40
=======
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- RETAIL CLASS B $15.49
=======
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- RETAIL CLASS C $15.49
=======
- ----------------------------------------------------------
* NON-INCOME PRODUCING SECURITY
(A) THIS SECURITY OR A PARTIAL POSITION OF THIS SECURITY
IS ON LOAN AT JANUARY 31, 2000 (SEE FOOTNOTE 2). THE
TOTAL VALUE OF SECURITIES ON LOAN AT JANUARY 31, 2000
WAS $33,794,271.
(B) THIS SECURITY PURCHASED WITH CASH COLLATERAL HELD FROM
SECURITIES LENDING.
(C) FLOATING RATE SECURITY
(D) SECURITIES SOLD WITHIN THE TERMS OF A PRIVATE PLACEMENT
MEMORANDUM, EXEMPT FROM REGISTRATION UNDER SECTION
3A-4, 4(2) OR 144A OF THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY BE SOLD ONLY TO DEALERS IN THAT PROGRAM
OR OTHER "ACCREDITED INVESTORS". ADR-- AMERICAN
DEPOSITORY RECEIPT
CL -- CLASS
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE
CORPORATION GNMA -- GOVERNMENT NATIONAL MORTGAGE CORPORATION
MTN -- MEDIUM TERM NOTE
SER -- SERIES
The accompanying notes are an integral part of the financial statements.
39
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<PAGE>
[HighMark Logo Omitted]
SCHEDULE OF INVESTMENTS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
SMALL CAP VALUE FUND
- -------------------------------------------------------------
Description Shares Value (000)
- -------------------------------------------------------------
COMMON STOCKS -- 61.4%
- ------------------------------------------------------------
ADVERTISING/MARKETING -- 2.2%
Direct Focus* 50,000 $ 1,269
Snyder Communications* (A) 70,000 1,400
--------
2,669
--------
AIRCRAFT -- 1.0%
Heico, Cl A 70,000 1,199
--------
APPAREL/TEXTILES -- 0.7%
Delta Woodside Industries* 53,400 80
Kellwood 40,000 705
--------
785
--------
AUTOMOTIVE -- 2.3%
Copart* 104,000 1,768
Dollar Thrifty Automotive* 53,200 1,054
--------
2,822
--------
BANKS -- 1.6%
Bank United, Cl A 35,000 908
Eldorado Bancshares* 130,000 1,089
--------
1,997
--------
BUILDING & CONSTRUCTION -- 1.2%
Granite Construction 70,000 1,396
--------
COMMUNICATIONS EQUIPMENT -- 6.0%
Adtran* 30,000 1,942
Advanced Fibre Communication* 60,000 2,209
Antec* 36,800 1,440
CTS 25,000 1,755
--------
7,346
--------
CHEMICALS -- 1.0%
Isolyser Company* 300,000 1,163
--------
COMPUTER PROGRAMING & SOFTWARE -- 2.1%
Progress Software* 80,000 1,730
Reynolds & Reynolds, Cl A 38,000 841
--------
2,571
--------
COMPUTERS & SERVICES -- 0.6%
In Focus Systems* 30,000 744
--------
DRUGS -- 1.9%
Cambrex 30,000 1,125
Dura Pharmaceuticals* 80,000 1,240
--------
2,365
--------
- -------------------------------------------------------------
Description Shares Value (000)
- -------------------------------------------------------------
COMMON STOCKS (CONTINUED)
- -------------------------------------------------------------
ENTERTAINMENT -- 0.8%
World Wrestling Federation
Entertainment* (A) 66,000 $ 1,019
--------
FINANCIAL SERVICES -- 2.5%
American Capital Strategies 50,000 1,294
Liberty Financial Companies 55,500 1,159
Medallion Financial 35,000 604
--------
3,057
--------
FOOD -- 0.9%
J & J Snack Foods* 57,000 1,090
--------
GAS/NATURAL GAS -- 0.8%
Unit Corporation* (A) 125,000 938
--------
INDUSTRIAL -- 4.4%
Insituform Technologies, Cl B* 48,000 1,242
Pentair 45,000 1,508
Quanta Services* 35,000 1,146
Quixote 60,000 810
Teleflex 20,000 635
--------
5,341
--------
INSURANCE -- 1.4%
Fremont General 224,800 1,742
--------
MACHINERY -- 1.9%
Applied Power, Cl A 29,500 822
Aptar Group 26,500 583
Jore Corporation* 95,820 916
--------
2,321
--------
MEDICAL PRODUCTS & SERVICES -- 3.0%
Adac Laboratories* 150,000 1,969
Organogenesis* (A) 89,115 796
Summit Technology* 37,000 481
VISX* 12,000 341
--------
3,587
--------
NATURAL GAS -- 1.4%
Equitable Resources 50,000 1,725
--------
PAPER MILLS -- 0.4%
PH Glatfelter* 40,000 493
--------
PETROLEUM & FUEL PRODUCTS -- 1.2%
Evergreen Resources* 65,000 1,448
--------
The accompanying notes are an integral part of the financial statements.
40
1.800.433.6884
<PAGE>
SCHEDULE OF INVESTMENTS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
SMALL CAP VALUE FUND (CONTINUED)
- -------------------------------------------------------------
Description Shares Value (000)
- -------------------------------------------------------------
COMMON STOCKS (CONTINUED)
- -------------------------------------------------------------
PETROLEUM REFINING -- 1.0%
Pennzoil-Quaker State 110,020 $ 1,258
--------
REAL ESTATE -- 3.2%
Bluegreen Corporation* 122,500 459
First Industrial Realty Trust 30,000 806
Kennedy-Wilson* 80,000 675
Leucadia National 45,000 956
Reckson Associates Realty 49,500 978
--------
3,874
--------
RETAIL -- 3.9%
Brookstone* 65,000 1,105
Casey's General Stores 53,000 547
Cash America International 160,000 1,590
Lithia Motors, Cl A* 30,000 413
Sonic Automotive* 60,000 461
Venator Group* 110,000 660
--------
4,776
--------
SEMI-CONDUCTORS/INSTRUMENTS -- 13.7%
3DFX Interactive* 72,500 616
Brooks Automation* 50,370 2,569
Cypress Semiconductor* (A) 90,000 3,015
Ibis Technology* 84,000 5,649
MMC Networks* (A) 31,000 868
Neomagic* 145,000 1,332
S3 Incorporated* 64,000 928
Speedfam-Ipec* 110,000 1,657
--------
16,634
--------
TRUCKING -- 0.3%
Landstar System* 8,500 401
--------
TOTAL COMMON STOCKS
(Cost $58,060) 74,761
--------
- -------------------------------------------------------------
FOREIGN COMMON STOCKS -- 19.8%
- -------------------------------------------------------------
ARGENTINA -- 0.1%
Nobleza Piccardo 62,720 127
--------
AUSTRALIA -- 0.4%
Pacific Dunlop, ADR 78,570 422
Reinsurance Australia* 487,889 56
--------
478
--------
- -------------------------------------------------------------
Description Shares Value (000)
- -------------------------------------------------------------
FOREIGN COMMON STOCKS (CONTINUED)
- -------------------------------------------------------------
AUSTRIA -- 1.7%
Bau Holding 22,420 $ 870
BBAG Oesterreichische
Brau-Beteiligungs* 12,690 481
Bohler Uddeholm, ADR* 54,610 767
--------
2,118
--------
BRAZIL -- 1.2%
Centrais Eletricas, ADR 6,060 245
Centrais Geradoras do Sul, ADR* 71,690 400
Copene Petroquimica, ADR 46,620 801
--------
1,446
--------
CANADA -- 1.1%
Hudson's Bay 49,950 512
Manitoba Telecom Services 50,370 800
--------
1,312
--------
CAYMAN ISLANDS -- 0.3%
Anangel American Shipholdings,
ADR* 75,200 395
--------
CHILE -- 0.4%
Quinenco ADR* 39,683 548
--------
CHINA -- 0.5%
Beijing Petrochemical, ADR* 33,060 211
Shandong Huaneng Power, ADR 80,500 387
--------
598
--------
ESTONIA -- 0.2%
AS Eesti Telekom, GDR* 14,020 298
--------
GERMANY -- 0.8%
Dyckerhoff 15,850 484
KSB Vorzug* 4,711 457
--------
941
--------
HONG KONG -- 3.0%
First Pacific, ADR 209,110 719
Guoco 214,000 554
Harbour Ring International 1,200,000 88
Mandarin Oriental International 98,660 646
Oriental Press* 1,642,000 464
Sing Tao 2,156,000 554
South China Morning, ADR 148,390 648
--------
3,673
--------
The accompanying notes are an integral part of the financial statements.
41
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<PAGE>
[HighMark Logo Omitted]
SCHEDULE OF INVESTMENTS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
SMALL CAP VALUE FUND (CONCLUDED)
- -------------------------------------------------------------
Description Shares Value (000)
- -------------------------------------------------------------
FOREIGN COMMON STOCKS (CONTINUED)
- -------------------------------------------------------------
IRELAND -- 0.5%
Greencore Group 226,750 $ 608
--------
ITALY -- 0.3%
Ansaldo Trasporti* 324,170 381
--------
JAPAN -- 3.6%
Akita Bank 54,000 214
Bank of Iwate 14,800 502
Chofu Seisakusho 43,000 565
Daicel Chemical 88,000 312
Fuji Oil 78,000 514
Higo Bank 132,000 495
Osaka Steel 102,800 413
Takisha 72,000 503
Yamanashi Chuo Bank 54,000 206
Yokogawa Bridge 212,000 612
--------
4,336
--------
NETHERLANDS -- 1.3%
Ahrend* 32,750 416
Hollandsche Beton Groep* 50,392 513
Hunter Douglas* 19,640 467
Internatio-Muller* 15,350 267
--------
1,663
--------
PHILIPPINES -- 0.5%
JG Summit Holding 3,863,000 353
RFM 2,767,567 239
--------
592
--------
SINGAPORE -- 0.4%
Time Publishing 224,000 453
--------
SPAIN -- 0.3%
Construcciones y Auxiliar
Ferrocariles* 19,260 371
--------
SWITZERLAND -- 1.1%
Barry Callebaut 1,510 223
Daetwyler* 496 692
Edipresse* 721 370
--------
1,285
--------
- --------------------------------------------------------------
Description Shares/Par (000) Value (000)
- --------------------------------------------------------------
FOREIGN COMMON STOCKS (CONTINUED)
- --------------------------------------------------------------
UNITED KINGDOM -- 2.1%
Coats Viyella, ADR 207,350 $ 434
Elementis 299,225 396
Hazlewood Foods 376,220 495
Heywood Williams 179,460 698
Somerfield* 158,080 183
United Biscuits* 75,360 324
--------
2,530
--------
TOTAL FOREIGN COMMON STOCKS
(Cost $22,473) 24,153
--------
- --------------------------------------------------------------
REPURCHASE AGREEMENTS -- 8.8%
- --------------------------------------------------------------
Deutsche Bank Securities, Inc.,
5.650%, dated 01/31/00, matures
02/01/00, repurchase price
$3,115,155 (collateralized by
U.S. Treasury Note, par value
$3,125,000, 5.625%, 04/30/00,
market value $3,167,719) $3,105 3,105
Lehman Brothers, Inc. (B) (C)
5.893%, dated 01/31/00, matures
02/01/00, repurchase price
$7,573,039 (collateralized by
various corporate obligations,
par value $8,378,218,
0.000%-0.001%, 10/25/23-11/28/31;
market value $7,950,331) 7,572 7,572
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $10,677) 10,677
--------
TOTAL INVESTMENTS -- 90%
(Cost $91,210) 109,591
--------
- ----------------------------------------------------------
*NON-INCOME PRODUCING SECURITY
(A) THIS SECURITY OR A PARTIAL POSITION OF THIS SECURITY IS
ON LOAN AT JANUARY 31, 2000. (SEE FOOTNOTE 2). THE
TOTAL VALUE OF SECURITIES ON LOAN AT JANUARY 31, 2000
WAS $7,233,831.
(B) THIS SECURITY PURCHASED WITH CASH COLLATERAL HELD FROM
SECURITIES LENDING.
(C) FLOATING RATE SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
CL -- CLASS
GDR -- GLOBAL DEPOSITORY RECEIPT
The accompanying notes are an integral part of the financial statements.
42
1.800.433.6884
<PAGE>
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
INTERNATIONAL EQUITY FUND
- -------------------------------------------------------------
Description Shares Value (000)
- -------------------------------------------------------------
FOREIGN COMMON STOCKS -- 97.1%
- -------------------------------------------------------------
AUSTRALIA -- 3.0%
Brambles Industries 8,800 $ 208
Broken Hill Proprietary 28,000 334
Cable and Wireless Optus* 65,000 232
Commonwealth Bank of Australia 23,500 390
Fosters Brewing Group 120,000 308
National Australia Bank (A) 15,000 208
News Corporation 32,000 376
Pasminco Limited* 232,000 216
Rio Tinto 22,000 390
Southcorp Holdings 57,000 200
Telstra 72,200 358
Westfield Holdings 33,000 187
-------
3,407
-------
BELGIUM -- 0.6%
Fortis, Cl B* 23,797 665
-------
DENMARK -- 0.7%
ISS International Service System,
Cl B* 3,800 271
Tele Danmark, Cl B* 6,562 465
-------
736
-------
FINLAND -- 1.4%
Nokia Oyj, Cl A* 8,824 1,587
-------
FRANCE -- 11.4%
Accor* 16,000 652
Air Liquide* (A) 4,399 671
Alcatel Alsthom 4,070 806
Aventis* (A) 15,477 812
Cap Gemini* 1,870 394
Carrefour Supermarche* 3,754 593
Groupe Danone* 2,680 572
Hachette Filipacchi Media* 5,520 381
Lafarge 6,300 553
Louis Vuitton-Moet Hennessy 1,600 638
Peugeot* 4,050 848
Pinault-Printemps-Redoute* 3,400 673
Rhodia* (A) 20,730 440
Stmicroelectronics, ADR* 7,778 1,310
Television Francaise* 1,273 674
Total, Ser B (A) 11,042 1,363
Vivendi* (A) 16,088 1,639
-------
13,019
-------
- -------------------------------------------------------------
Description Shares Value (000)
- -------------------------------------------------------------
FOREIGN COMMON STOCKS (CONTINUED)
- -------------------------------------------------------------
GERMANY -- 9.3%
Allianz 3,806 $ 1,244
BASF* 23,120 984
Bayerische Vereinsbank* 11,300 671
Deutsche Bank* 12,186 910
Deutsche Telekom* 24,090 1,599
Dresdner Bank* 16,072 769
Lufthansa* 21,860 455
Mannesmann* 7,697 2,072
SAP* 1,210 920
Veba* (A) 25,317 1,056
-------
10,680
-------
HONG KONG -- 3.0%
Cable & Wireless 189,000 459
Cheung Kong Holdings 51,000 644
China Telecom (Hong Kong)* 60,000 371
Citic Pacific Limited 28,000 119
Hang Seng Bank 19,800 193
HSBC Holdings 22,600 268
Hutchison Whampoa 60,000 864
Johnson Electric Holdings 36,000 231
Sun Hung Kai Properties 35,000 325
-------
3,474
-------
IRELAND -- 0.4%
Bank of Ireland 80,100 514
-------
ITALY -- 6.2%
Autogrill (A) 58,648 592
Banca Di Roma* (A) 330,000 355
Banca Nazionale Lavoro* 165,000 527
ENI* 125,136 588
Italcementi* 65,228 685
Mediolanium* 89,591 999
Saipem* 230,000 779
San Paolo-IMI* (A) 90,454 1,072
Seat-Pagine Gialle* 450,000 775
Telecom Italia Mobile* 189,044 747
-------
7,119
-------
JAPAN -- 28.0%
Asahi Bank 175,000 978
Bridgestone 25,000 527
Canon 18,000 736
Fujitsu (A) 49,000 1,811
Fujitsu Support & Service 3,000 1,212
Hitachi 47,000 666
The accompanying notes are an integral part of the financial statements.
43
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<PAGE>
[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
INTERNATIONAL EQUITY FUND (CONTINUED)
- -------------------------------------------------------------
Description Shares Value (000)
- -------------------------------------------------------------
FOREIGN COMMON STOCKS (CONTINUED)
- -------------------------------------------------------------
JAPAN -- (CONTINUED)
Honda Motor 19,000 $ 607
Ito-Yokado 6,000 546
Japan Tobacco 70 579
Kao 38,000 1,037
Kirin Brewery 54,000 666
Minebea* (A) 58,000 802
Mitsubishi Chemical* (A) 123,000 492
Mitsukoshi* (A) 200,000 743
Nintendo* 2,200 405
Nippon Express (A) 100,000 702
Nippon Paper Industries (A) 107,000 737
Nippon Telegraph & Telephone 199 3,002
NTT Data 100 1,872
NTT Mobile Communication Network* 63 2,135
Osaka Gas (A) 148,000 365
Rohm Company 7,000 2,307
Sony 9,800 2,460
Takeda Chemical 36,000 1,944
Tokio Marine & Fire
Insurance* (A) 56,000 580
Tokyo Electronics 15,000 2,082
Toyota Motor 42,000 1,834
World Company 3,000 335
--------
32,162
--------
NETHERLANDS -- 3.3%
Heineken 12,310 634
ING Groep 26,374 1,320
Philips Electronics 8,330 1,216
VNU 12,500 658
--------
3,828
--------
PORTUGAL -- 1.2%
Banco Pinto & Sotto Mayor* 24,563 573
Portugal Telecom* 64,955 769
--------
1,342
--------
SINGAPORE -- 1.2%
City Developments* 19,000 95
DBS Group Holdings 21,119 283
Natsteel Electronics* 11,500 56
Overseas Chinese Banking 20,150 172
Overseas Union Bank 25,982 134
Singapore International
Airlines-F 15,000 157
Singapore Press Holdings 7,038 138
Singapore Telecommunications 100,000 166
St. Assembly Test Services* 25,000 115
Venture Manufacturing 3,000 41
--------
1,357
--------
- -------------------------------------------------------------
Description Shares Value (000)
- -------------------------------------------------------------
FOREIGN COMMON STOCKS (CONCLUDED)
- -------------------------------------------------------------
SPAIN -- 2.8%
Banco Santander Central Hispano 64,780 $ 633
Endesa 30,510 560
Grupo Dragados 103,854 823
Telefonica de Espana* 48,813 1,227
--------
3,243
--------
SWEDEN -- 2.3%
Electrolux, Ser B* 34,489 730
Ericsson, Cl B* 20,330 1,427
Nordbanken Holding AB* 91,270 505
--------
2,662
--------
SWITZERLAND -- 5.2%
Nestle SA, Reg* 755 1,234
Novartis, Reg* 860 1,054
Roche Holdings* 80 860
Schindler Holding* 420 652
UBS AG, Reg* 4,678 1,087
Zurich Allied, Reg* 2,421 1,121
--------
6,008
--------
UNITED KINGDOM -- 17.1%
AstraZeneca Group 26,054 956
Bank of Scotland 49,970 500
Barclays 23,741 573
BP Amoco 193,444 1,700
British Aerospace 132,380 710
British Telecom 72,995 1,393
Cable & Wireless 36,505 741
Carlton Communications 50,710 483
CGU 30,000 397
Glaxo Wellcome 55,451 1,420
Hanson 112,000 811
HSBC Holdings 69,330 810
Invensys 296,600 1,466
Kingfisher 89,430 684
Marconi 57,000 834
National Westminster Bank 25,944 498
Prudential 48,560 896
Reed International 154,000 1,240
Shell Transportation & Trading 150,899 1,086
SmithKline Beecham 38,681 462
Tesco 244,703 645
Vodafone Group 231,293 1,264
--------
19,569
--------
TOTAL FOREIGN COMMON STOCKS
(Cost $88,760) $111,372
--------
The accompanying notes are an integral part of the financial statements.
44
1.800.433.6884
<PAGE>
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
INTERNATIONAL EQUITY FUND (CONCLUDED)
- --------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------
COMMERCIAL PAPER -- 2.2%
- --------------------------------------------------------------
Centerior Fuel (B)
5.731%, 02/01/00 $2,500 $ 2,495
--------
TOTAL COMMERCIAL PAPER
(Cost $2,495) 2,495
--------
- --------------------------------------------------------------
CORPORATE BONDS -- 2.2%
- --------------------------------------------------------------
Merrill Lynch & Co., MTN (B) (C)
6.083%, 02/28/00 2,500 2,500
--------
TOTAL CORPORATE BONDS
(Cost $2,500) 2,500
--------
- --------------------------------------------------------------
CASH EQUIVALENTS -- 1.4%
- --------------------------------------------------------------
SEI Daily Income Money Market 600 600
SEI Prime Obligation 1,000 1,000
--------
TOTAL CASH EQUIVALENTS
(Cost $1,600) 1,600
--------
- --------------------------------------------------------------
REPURCHASE AGREEMENT -- 5.4%
- --------------------------------------------------------------
HSBC Securities, Inc. (B) (C)
5.910%, dated 01/31/00, matures
02/01/00, repurchase price
$6,246,549 (collateralized by
various U.S. Government
obligations, par value $8,271,905,
0.000%-0.001%, 05/15/01-09/15/14;
market value $6,370,603) $6,246 6,246
--------
TOTAL REPURCHASE AGREEMENT
(Cost $6,246) 6,246
--------
TOTAL INVESTMENTS -- 108.3%
(Cost $101,601) 124,213
--------
PAYABLE UPON RETURN OF SECURITIES
LOANED -- (9.8%) (11,241)
--------
OTHER ASSETS AND LIABILITIES, NET-- 1.5% 1,713
--------
- --------------------------------------------------------------
Description Value (000)
- --------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------
Fund Shares of Fiduciary Class (unlimited
authorization-- no par value) based on
2,599,603 outstanding shares
of beneficial interest $ 86,941
Fund Shares Retail Class A (unlimited
authorization-- no par value) based on
12,977 outstanding shares
of beneficial interest 570
Fund Shares Retail Class B (unlimited
authorization -- no par value) based on
8,270 outstanding shares of beneficial
interest 372
Fund Shares Retail Class C (unlimited
authorization -- no par value) based on
26 outstanding shares of beneficial interest 1
Distribution in excess of net investment income (287)
Accumulated net realized gain on investments 4,491
Net unrealized depreciation on forward foreign
currency contracts, foreign currency and
translation of other assets and liabilities
in foreign currency (15)
Net unrealized appreciation on investments 22,612
--------
TOTAL NET ASSETS -- 100.0% $114,685
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- FIDUCIARY CLASS $43.76
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- RETAIL CLASS A $43.75
========
MAXIMUM OFFERING PRICE PER SHARE --
RETAIL CLASS A ($43.75 / 94.5%) $46.30
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- RETAIL CLASS B $43.72
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- RETAIL CLASS C $43.72
========
- ----------------------------------------------------------
* NON-INCOME PRODUCING SECURITY
(A) THIS SECURITY OR A PARTIAL POSITION OF THIS SECURITY IS
ON LOAN AT JANUARY 31, 2000. (SEE FOOTNOTE 2). THE TOTAL
VALUE OF SECURITIES ON LOAN AT JANUARY 31, 2000 WAS
$10,536,534.
(B) THIS SECURITY PURCHASED WITH CASH COLLATERAL HELD FROM
SECURITIES LENDING.
(C) FLOATING RATE SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
CL -- CLASS
F -- FOREIGN
MTN -- MEDIUM TERM NOTE
REG -- REGISTERED
SER -- SERIES
The accompanying notes are an integral part of the financial statements.
45
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<PAGE>
[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS -- 98.4%
- ------------------------------------------------------------
Alameda County, Santa Rita Jail
Project, COP, MBIA Insured
5.250%, 12/01/04 $ 500 $ 514
Anaheim Public Financing Authority,
Electric Utility Projects, RB,
MBIA Insured,
Callable 04/01/03 @ 102,
5.500%, 10/01/10 1,750 1,774
Anaheim, Water, RB,
Callable 03/03/00 @ 100
5.750%, 04/01/04 250 250
Atascadero, School District,
Measure B
Capital Projects, Ser A, COP, MBIA
Insured, Callable 08/01/06 @ 102
5.200%, 08/01/08 1,000 1,016
Bakersfield, Convention Center
Expansion
Project, COP, MBIA Insured
5.300%, 04/01/06 500 513
Berkeley, School District, Ser D, GO,
FGIC Insured
8.250%, 08/01/04 295 337
8.250%, 08/01/05 345 402
Calleguas, Municipal Water District,
Systems Improvement Project,
COP, AMBAC Insured,
Pre-refunded 07/01/01 @ 102
6.250%, 07/01/05 1,000 1,046
Central Coast, Water Authority,
Ser A, RB, AMBAC Insured,
Callable 10/01/06 @ 102
5.000%, 10/01/07 2,000 2,017
Coachella Valley, Water District
Improvement, Flood Control
Project, COP, AMBAC Insured
4.500%, 10/01/06 1,045 1,025
Coast Community College,
Coastline Community College
Center Project, COP,
MBIA Insured,
Callable 02/01/06 @102
5.200%, 02/01/08 500 507
5.500%, 02/01/11 640 650
- -----------------------------------------------------------
Description Par (000) Value (000)
- -----------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
- -----------------------------------------------------------
Contra Costa, Merrithew Memorial
Hospital Project, COP, MBIA
Insured, Callable 11/01/07 @ 102
5.200%, 11/01/09 $ 2,000 $ 2,012
5.500%, 11/01/12 2,160 2,173
Contra Costa, Transportation
Authority, Sales Tax,
Ser A, RB, FGIC Insured
5.500%, 03/01/03 1,220 1,255
6.000%, 03/01/09 1,000 1,067
Contra Costa, Transportation
Authority, Sales Tax,
Ser A, RB, ETM, FGIC Insured
6.875%, 03/01/07 500 534
Contra Costa, Transportation
Authority,
Sales Tax, Ser A, RB, FGIC
Insured, Callable 03/01/05 @ 100
5.300%, 03/01/06 600 613
Contra Costa Water District,
Ser G, RB, MBIA Insured,
Callable 10/01/04 @ 102
5.700%, 10/01/06 2,500 2,634
Cupertino, Ser A, COP,
Callable 01/01/03 @ 102
5.500%, 01/01/05 500 515
Desert Sands, School District, COP,
FSA Insured,
Callable 03/01/05 @ 102,
5.400%, 03/01/08 660 676
5.500%, 03/01/09 565 579
Downey, Civic Center Project, COP,
MBIA Insured
5.300%, 02/01/06 600 616
East Bay, Municipal Utility District,
Wastewater Treatment System,
RB, FGIC Insured
6.000%, 06/01/06 750 799
East Bay, Regal Park District, Ser C,
GO, FGIC Insured
6.500%, 09/01/01 685 708
Eastern Municipal Water District,
Water Treatment Plant, COP,
FGIC Insured
5.000%, 07/01/04 1,000 1,016
The accompanying notes are an integral part of the financial statements.
46
1.800.433.6884
<PAGE>
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
- ------------------------------------------------------------
Eastern Municipal Water District,
COP, Pre-refunded 11/01/02 @100
6.900%, 11/01/03 $1,755 $ 1,865
Educational Facilities Authority,
Pooled College & University
Project, Ser C, RB, MBIA Insured
5.000%, 03/01/05 560 568
5.000%, 03/01/06 655 662
Escondido, High School District,
GO, ETM, MBIA Insured
5.200%, 11/01/06 1,000 1,024
5.600%, 11/01/09 1,000 1,038
Gilroy, School District, COP,
FSA Insured,
Callable 09/01/04 @ 102
5.750%, 09/01/05 1,235 1,298
Glendale, School District,
Ser A, GO, FGIC Insured
5.500%, 09/01/05 600 623
Glendale, School District,
Ser B, GO, FSA Insured,
Callable 09/01/08 @ 101
4.625%, 09/01/09 670 647
Hawthorne, School District,
Ser A, GO, FGIC Insured
4.650%, 11/01/06 1,000 995
Health Facilities Finance
Authority, Catholic Health Care
West, Ser A, RB, AMBAC Insured,
Callable 07/01/05 @ 102
5.750%, 07/01/07 925 972
Hollister, Community Devolopment
Project, TA, AMBAC Insured,
Callable 10/01/07 @102
5.000%, 10/01/08 740 739
Industry, GO, FGIC Insured,
Callable 07/01/05 @100.625
5.500%, 07/01/10 670 683
Joshua Basin, Desert Financing
Authority, RB, AMBAC Insured
4.800%, 05/01/08 445 442
4.900%, 05/01/09 465 461
Las Virgenes, School District,
GO, Ser A, MBIA Insured
5.000%, 11/01/05 1,000 1,011
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
- ------------------------------------------------------------
Los Angeles, GO, FGIC Insured,
Pre-refunded 09/01/03 @ 101
5.400%, 09/01/06 $ 300 $ 311
Los Angeles, GO, Ser A, FGIC
Insured, Pre-refunded
09/01/03 @101
5.800%, 09/01/09 1,000 1,049
Los Angeles, GO, Ser A, MBIA Insured
5.500%, 09/01/04 700 725
Los Angeles, School District, Ser A,
GO, FGIC Insured
6.000%, 07/01/07 1,300 1,391
6.000%, 07/01/10 750 800
6.000%, 07/01/11 1,110 1,181
Los Angeles, County Public Works
Financing Authority, Regional
Park & Open Space District,
Ser A, RB 6.000%, 10/01/03 900 945
5.250%, 10/01/05 1,700 1,747
Los Angeles, County Public Works
Financing Authority, Regional
Park & Open Space District,
Ser A, RB,
Callable 10/01/07 @ 101
5.500%, 10/01/08 3,000 3,113
Los Angeles, Department of Airports,
Ser A, RB, FGIC Insured,
Callable 05/15/05 @ 101
5.500%, 05/15/08 1,000 1,031
Los Angeles, Department of Airports,
Ser A, RB, FGIC Insured
6.000%, 05/15/05 1,000 1,060
Los Angeles, Department of Airports,
Ser B, RB, FGIC Insured
6.500%, 05/15/04 1,840 1,971
Los Angeles, Department of
Water & Power, RB, Cross-Over
Refunded 04/01/01 @102
6.750%, 04/01/06 1,460 1,522
Los Angeles, Wastewater Systems,
Ser B, RB, FGIC Insured
5.250%, 06/01/07 1,000 1,023
Merced County, Construction &
Equipment Project, CSAC Lease,
COP, FSA Insured,
Callable 10/01/02 @ 101
6.000%, 10/01/05 610 636
The accompanying notes are an integral part of the financial statements.
47
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<PAGE>
[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
- ------------------------------------------------------------
Merced County, Construction &
Equipment Project, CSAC Lease,
ETM. COP, FSA Insured
6.000%, 10/01/05 $ 640 $ 670
Metropolitan Water District
of Southern California,
Waterworks, RB,
Callable 07/01/02 @ 102
5.400%, 07/01/04 1,000 1,031
Metropolitan Water District
of Southern California,
Waterworks, Ser B, RB,
MBIA Insured, Callable
07/01/06 @ 102
5.250%, 07/01/07 1,820 1,863
Metropolitan Water
District of Southern
California, Waterworks,
Ser C, RB,
Callable 01/01/07 @102
6.000%, 07/01/07 1,900 2,033
Milpitas Redevelopment Agency,
Redevelopment Project Area # 1,
TA, RB, MBIA Insured
4.600%, 01/15/06 1,040 1,032
Modesto, Community Center
Refinancing Project, COP,
AMBAC Insured,
Pre-refunded 11/01/01 @ 102
6.500%, 11/01/07 1,000 1,055
Mojave Water Agency,
Supplemental Water
Entitlement, COP, MBIA Insured,
Callable 09/01/07 @ 102
5.100%, 09/01/08 500 504
Mountain View, Los Altos High School
District, Ser B, GO,
Callable 05/01/07 @ 102
5.250%, 05/01/08 500 509
5.350%, 05/01/09 755 770
5.650%, 05/01/12 585 597
Mountain View, Shoreline Regal Park
Community, Ser A, TA, RB,
MBIA Insured,
Callable 08/01/06 @102
5.400%, 08/01/08 700 721
5.600%, 08/01/10 500 515
Northern California Power Agency,
Multiple Capital Facilities,
Ser A, RB, MBIA
Insured, Pre-refunded
08/01/02 @ 102
6.400%, 08/01/07 2,500 2,652
Oak Park, School District, GO,
MBIA Insured
5.250%, 05/01/08 1,015 1,035
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
- ------------------------------------------------------------
Orange County, Municipal Water District,
Allen-McColloch Pipeline, COP,
MBIA Insured
5.500%, 07/01/05 $2,000 $ 2,075
Orange County, Transportation
Authority, Sales Tax, 2nd Ser
A-Measure M, RB, MBIA Insured
5.500%, 02/15/08 2,300 2,381
Orange County, Transportation
Authority, Sales Tax,
Measure M, RB
6.000%, 02/15/07 1,865 1,989
Orange County, Transportation
Authority, Sales Tax, Measure M,
RB, FGIC Insured
5.800%, 02/15/05 1,000 1,049
6.000%, 02/15/07 1,345 1,434
Orange County, Water District,
Ser A, RB, COP, MBIA Insured,
Callable 08/15/07 @101
4.875%, 08/15/10 2,000 1,943
Port Oakland, Ser D, RB,
MBIA Insured
6.500%, 11/01/03 500 533
Redding, Electric System, Ser A,
RB, COP, MBIA Insured
6.150%, 07/01/02 1,000 1,040
Redwood City, Elementary School
District, GO, FGIC Insured
5.500%, 08/01/10 1,140 1,170
5.500%, 08/01/14 500 496
Riverside, Water, RB,
Callable 04/01/00 @100.75
5.750%, 04/01/03 250 253
Sacramento, Municipal Utility
District, Electric, Ser C, RB,
ETM, FGIC Insured
5.750%, 11/15/08 570 580
Sacramento, Municipal Utility District,
Electric, Ser C, RB, FGIC Insured,
Callable 11/15/02 @ 102
5.750%, 11/15/08 380 394
Sacramento, Sanitation District
Financing Authority, GO
5.000%, 08/01/03 1,000 1,016
5.000%, 08/01/04 870 884
Sacramento, County,
Sanitation District, RB
5.500%, 12/01/03 1,000 1,035
The accompanying notes are an integral part of the financial statements.
48
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<PAGE>
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
- ------------------------------------------------------------
San Bernardino, County Transportation
Authority, Sales Tax, Ser A, RB,
ETM, FGIC Insured
6.000%, 03/01/06 $1,000 $ 1,045
San Bernardino, County
Transportation Authority,
Sales Tax, Ser A, RB,
MBIA Insured
6.000%, 03/01/06 1,735 1,843
6.250%, 03/01/10 2,000 2,168
San Bernardino, County
Transportation
Authority, Sales Tax, Ser A, RB,
FSA Insured
5.250%, 03/01/07 2,000 2,045
San Bernardino, Municipal Water
Department, RB, COP, FGIC Insured
4.500%, 02/01/09 875 827
San Diego County, Regional
Transportation Commission,
Sales Tax, Second Ser A, RB
FGIC Insured
5.250%, 04/01/06 2,100 2,150
San Diego County, Regional
Transportation Commission,
Sales Tax, Ser A, RB
AMBAC Insured
6.000%, 04/01/06 3,000 3,191
San Diego County, Water Authority,
Ser A, RB, COP
5.000%, 05/01/04 2,445 2,482
San Diego County, Water Authority,
Ser A, RB, COP, Pre-refunded
05/01/01 @ 102
6.400%, 05/01/08 2,000 2,093
San Diego County, Regional
Transportation Commission,
Sales Tax, Ser A, RB AMBAC
Insured, Callable 04/01/06 @ 102
5.000%, 04/01/08 1,995 2,000
San Diego-MTDB, Lease Revenue, RB,
Callable 09/01/04 @ 102,
5.500%, 09/01/07 450 463
San Diego, Water Utility System,
COP, RB, FGIC Insured
4.400%, 08/01/08 1,000 950
San Diego, Public Facility
Financing Authority,
Sewer, RB, FGIC Insured
6.000%, 05/15/06 2,800 2,982
6.000%, 05/15/07 2,000 2,138
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
- ------------------------------------------------------------
San Francisco, City & County Airport,
Community International Airport, 2nd
Ser, RB, MBIA Insured
Callable 05/01/08 @ 101
4.250%, 05/01/09 $1,000 $ 923
San Francisco, Bay Area Rapid
Transit, Sales Tax, RB,
FGIC Insured
5.500%, 07/01/05 2,200 2,283
San Francisco, Bay Area Rapid
Transit, Sales Tax, RB,
FGIC Insured, Pre-Refunded
07/01/01 @ 102
6.500%, 07/01/07 2,000 2,100
San Francisco, New Public Housing
Authority, RB, Callable
08/01/00 @102
5.000%, 08/01/03 350 355
San Joaquin County, Capital
Facilities Project, COP,
MBIA Insured
4.625%, 11/15/05 1,035 1,034
4.800%, 11/15/07 1,000 999
San Jose, Redevelopment Agency,
Merged Area Redevelopment
Project, TA, MBIA Insured
6.000%, 08/01/06 1,000 1,066
6.000%, 08/01/07 1,625 1,739
6.000%, 08/01/08 2,000 2,143
6.000%, 08/01/09 1,500 1,605
San Jose, Redevelopment Agency,
Merged Area Redevelopment
Project, TA, AMBAC Insured,
Callable 08/01/08 @102
5.000%, 08/01/09 1,500 1,493
San Jose, School District,
Ser B, GO, MBIA Insured,
Callable 08/01/08 @ 102
4.000%, 08/01/09 800 722
San Juan, School District, GO,
FSA Insured
5.250%, 08/01/08 500 509
San Mateo, County Transportation
District, Sales Tax, Ser A, RB,
MBIA Insured
5.250%, 06/01/16 2,000 1,873
Santa Anna, Community Redevelopment
Agency, Mainplace Project,
Ser E, TA, ETM
6.400%, 12/15/10 740 747
The accompanying notes are an integral part of the financial statements.
49
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<PAGE>
[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
- ------------------------------------------------------------
Santa Barbara County, Transportation
Authority, Sales Tax, RB,
FGIC Insured,
Callable 4/01/04 @ 101
5.000%, 04/01/07 $1,000 $ 1,006
Santa Clara, Financing Authority
Lease, Ser A, RB, AMBAC Insured
4.600%, 11/15/06 1,350 1,338
Santa Clara, Electric, Ser A, RB,
MBIA Insured, Pre-refunded
07/01/01 @ 102
6.000%, 07/01/05 1,000 1,044
Santa Cruz County, Public
Financing Authority,
Ser A, TA, RB, MBIA Insured,
Callable 09/01/03 @ 102
5.100%, 09/01/05 500 510
Saratoga School District, Ser A,
GO, FGIC Insured,
Pre-refunded 09/01/07 @ 102
4.800%, 09/01/08 825 830
South Orange County, Public Financing
Authority, Foothill Area, Ser C, RB,
FGIC Insured
7.500%, 08/15/07 1,000 1,158
Southern California, Public Power
Authority, Ser B, RB,
AMBAC Insured,
Callable 07/01/02 @ 102
5.900%, 07/01/04 1,000 1,048
State, GO
7.000%, 08/01/02 1,500 1,588
6.000%, 10/01/05 1,300 1,380
6.500%, 09/01/06 1,000 1,094
6.250%, 04/01/08 1,000 1,077
5.000%, 10/01/08 1,000 1,002
State Department of Water, Central
Valley Project, Ser J-2, RB
6.000%, 12/01/06 1,400 1,498
State Department of Water, Central
Valley Project, Ser Q, RB
6.000%, 12/01/07 1,500 1,609
State Public Works Board,
Various University of California
Projects, Ser A, RB, Pre-refunded
12/01/02 @ 102
6.600%, 12/01/22 800 859
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
- ------------------------------------------------------------
State Public Works Board,
Various University of California
Projects, Ser A, RB, AMBAC
Insured, Callable 12/01/07 @ 102
5.100%, 12/01/10 $1,000 $ 995
State Public Works Board,
Department of Corrections-Del
Norte, Ser C, RB
4.750%, 12/01/05 500 499
Tulare County, Capital Improvement
Project, Ser A, COP, MBIA Insured
5.250%, 02/15/05 1,000 1,025
5.375%, 02/15/06 500 515
Turlock, Irrigation District, RB,
Ser A, MBIA Insured
6.000%, 01/01/07 1,000 1,065
6.000%, 01/01/08 625 666
University of California,
Multiple Purpose Projects, Ser B,
RB, MBIA Insured,
Callable 09/01/03 @ 102
4.800%, 09/01/07 1,500 1,498
University of California,
UCLA Center, COP,
RB, Callable 11/01/03 @ 102
5.000%, 11/01/04 1,000 1,015
Upland, Community Redevelopment
Agency, Merge Redevelopment
Project, TA, RB,
AMBAC Insured, Callable
09/01/08 @ 102
4.200%, 09/01/09 860 789
West Basin, Municipal Water District,
Ser A, COP, AMBAC Insured,
Callable 08/01/07 @ 101
5.000%, 08/01/08 425 426
West Hollywood, COP, MBIA Insured,
Callable 02/01/08 @ 102
4.550%, 02/01/09 665 640
--------
TOTAL CALIFORNIA MUNICIPAL BONDS
(Cost $161,436) 162,182
--------
The accompanying notes are an integral part of the financial statements.
50
1.800.433.6884
<PAGE>
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONCLUDED)
- ------------------------------------------------------------
Description Shares/Par (000) Value (000)
- ------------------------------------------------------------
CASH EQUIVALENT -- 0.4%
- ------------------------------------------------------------
Provident California Tax Free
Money Market $608 $ 608
--------
TOTAL CASH EQUIVALENT
(Cost $608) 608
--------
TOTAL INVESTMENTS -- 98.8%
(Cost $162,044) 162,790
--------
OTHER ASSETS AND LIABILITIES, NET-- 1.2% 2,044
--------
- ------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------
Fund Shares of Fiduciary Class (unlimited
authorization-- no par value) based on
14,460,650 outstanding shares
of beneficial interest $ 139,766
Fund Shares of Retail Class A (unlimited
authorization -- no par value) based on
2,451,032 outstanding shares of
beneficial interest 24,239
Fund Shares of Retail Class B (unlimited
authorization -- no par value) based on
13,971 outstanding shares of beneficial
interest 136
Undistributed net investment income 149
Accumulated net realized loss on investments (202)
Net unrealized appreciation on investments 746
--------
TOTAL NET ASSETS-- 100.0% $164,834
========
- ------------------------------------------------------------
Description Value
- ------------------------------------------------------------
NET ASSETS: (CONTINUE)
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- FIDUCIARY CLASS $9.74
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- RETAIL CLASS A $9.71
========
MAXIMUM OFFERING PRICE PER SHARE --
RETAIL CLASS A ($9.71 / 95.75%) $10.14
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- RETAIL CLASS B $9.73
========
- --------------------------------------------------------------------------------
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
COP -- CERTIFICATES OF PARTICIPATION
CSAC -- CALIFORNIA STATE ASSOCIATION OF COUNTIES
ETM -- ESCROWED TO MATURITY
FGIC -- FINANCIAL GUARANTY INSURANCE CORPORATION
FSA -- FINANCIAL SECURITY ASSURANCE
GO -- GENERAL OBLIGATION
MBIA -- MUNICIPAL BOND INVESTORS ASSURANCE
RB -- REVENUE BOND
SER -- SERIES
TA -- TAX ALLOCATIION
The accompanying notes are an integral part of the financial statements.
51
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<PAGE>
[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
BOND FUND
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 12.1%
- ------------------------------------------------------------
U.S. Treasury Bond (A)
10.375%, 11/15/12 $ 3,000 $ 3,623
7.250%, 05/15/16 9,850 10,344
8.125%, 08/15/19 12,500 14,386
8.750%, 08/15/20 4,860 5,953
7.250%, 08/15/22 1,500 1,602
7.125%, 02/15/23 2,800 2,950
--------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $39,187) 38,858
--------
- ------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 35.1%
- ------------------------------------------------------------
FHLMC
7.000%, 02/20/18 490 489
6.250%, 01/15/24 2,000 1,814
FNMA
6.200%, 09/25/02 2,000 1,961
6.500%, 08/15/04 (A) 6,000 5,842
6.850%, 09/12/05 2,000 1,922
6.700%, 11/10/05 1,000 955
6.500%, 03/25/13 1,500 1,438
6.500%, 03/01/24 945 877
8.000%, 08/01/24 71 71
8.000%, 09/01/24 21 21
8.000%, 10/01/24 93 93
8.500%, 05/01/25 410 417
6.500%, 01/01/26 709 658
6.500%, 05/01/26 629 584
8.000%, 07/01/26 683 681
7.500%, 12/01/26 7,537 7,353
6.000%, 12/01/27 1,754 1,578
6.500%, 01/01/28 890 825
6.500%, 02/01/28 1,337 1,240
6.500%, 03/01/28 1,650 1,531
6.500%, 04/01/28 4,551 4,222
6.000%, 07/01/28 7,743 6,985
6.000%, 08/01/28 970 875
6.000%, 10/01/28 4,765 4,294
6.000%, 12/01/28 31,721 28,538
6.500%, 01/01/29 13,811 12,814
6.500%, 07/01/29 6,415 5,952
GNMA
8.000%, 04/15/17 233 233
8.000%, 05/15/17 90 90
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (CONTINUED)
- ------------------------------------------------------------
GNMA (continued)
6.500%, 06/15/23 $1,808 $ 1,669
6.500%, 12/15/23 1,009 932
6.500%, 01/15/24 416 384
7.000%, 01/15/24 527 502
7.500%, 01/15/24 719 719
6.500%, 02/15/24 671 619
7.500%, 02/15/24 769 749
7.000%, 04/15/24 1,077 1,024
7.500%, 09/15/25 468 456
6.500%, 10/15/25 759 701
6.500%, 04/15/26 1,580 1,460
8.000%, 11/15/26 4,407 4,395
7.500%, 02/15/27 577 562
7.500%, 06/15/27 330 321
7.500%, 07/15/27 950 926
7.500%, 08/15/27 761 743
6.000%, 09/15/28 2,979 2,662
--------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $120,412) 113,177
--------
- ------------------------------------------------------------
SUPRA-NATIONAL -- 1.5%
- ------------------------------------------------------------
Asian Development Bank
5.750%, 05/19/03 5,000 4,781
--------
TOTAL SUPRA-NATIONAL
(Cost $4,970) 4,781
--------
- ------------------------------------------------------------
CORPORATE OBLIGATIONS -- 40.6%
- ------------------------------------------------------------
AEROSPACE & DEFENSE -- 1.1%
Lockheed Martin
7.700%, 06/15/08 1,500 1,432
Raytheon
6.150%, 11/01/08 2,500 2,172
--------
3,604
--------
AUTOMOTIVE -- 3.8%
Ford Motor Credit
6.500%, 02/28/02 6,500 6,394
7.750%, 11/15/02 1,000 1,009
General Motors Acceptance, MTN
5.350%, 12/07/01 5,000 4,831
--------
12,234
--------
The accompanying notes are an integral part of the financial statements.
52
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<PAGE>
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
BOND FUND (CONTINUED)
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
CORPORATE OBLIGATIONS (CONTINUED)
- ------------------------------------------------------------
BANKS -- 3.5%
BankBoston, N.A.
8.375%, 12/15/02 $1,250 $ 1,270
Golden West Financial (A)
6.700%, 07/01/02 4,500 4,404
Mercantile Bancorp
7.050%, 06/15/04 1,500 1,453
U.S. Bancorp
6.875%, 09/15/07 4,500 4,241
--------
11,368
--------
BEAUTY PRODUCTS -- 0.2%
Procter & Gamble
8.500%, 08/10/09 500 533
--------
BROADCASTING, NEWSPAPERS &
ADVERTISING -- 1.4%
Continental Cablevision
9.500%, 08/01/13 4,000 4,370
--------
COMPUTERS & SERVICES -- 1.4%
IBM
6.500%, 01/15/28 5,000 4,387
--------
ELECTRICAL UTILITIES -- 3.2%
Cleveland Electric
7.670%, 07/01/04 5,900 5,789
Nevada Power
6.200%, 04/15/04 5,000 4,662
--------
10,451
--------
ENTERTAINMENT -- 0.5%
Walt Disney
6.375%, 03/30/01 1,500 1,489
--------
FINANCIAL SERVICES -- 4.0%
American General Finance
5.370%, 12/10/01 2,000 1,933
Associates Corporation, N.A.
6.500%, 07/15/02 1,000 980
6.000%, 04/15/03 5,000 4,788
Merrill Lynch, MTN
6.330%, 08/25/00 3,000 2,993
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
CORPORATE OBLIGATIONS (CONTINUED)
- ------------------------------------------------------------
Morgan Stanley Dean Witter
6.125%, 10/01/03 $1,300 $ 1,243
Salomon Brothers
7.300%, 05/15/02 1,000 998
--------
12,935
--------
FOOD, BEVERAGE & TOBACCO -- 2.0%
J Seagram & Sons
6.400%, 12/15/03 6,000 5,723
Philip Morris
7.750%, 01/15/27 1,000 890
-----
6,613
-----
FOREIGN GOVERNMENTS -- 0.4%
Hydro Quebec
8.050%, 07/07/24 1,125 1,178
-----
GAS/NATURAL GAS -- 1.3%
KN Energy
7.250%, 03/01/28 4,600 4,180
-----
INSURANCE -- 3.1%
Conseco
9.000%, 10/15/06 4,000 4,010
Travelers Property Casualty
6.750%, 04/15/01 6,000 5,978
--------
9,988
--------
MACHINERY -- 0.9%
Caterpillar Tractor
6.000%, 05/01/07 3,360 3,037
--------
METALS & MINING -- 0.4%
Potash
7.125%, 06/15/07 1,500 1,406
--------
PETROLEUM REFINING -- 0.6%
Phillips Petroleum
7.125%, 03/15/28 2,000 1,790
--------
PRINTING & PUBLISHING -- 2.7%
E.W. Scripps
6.375%, 10/15/02 4,000 3,875
Time Warner
7.480%, 01/15/08 5,000 4,881
--------
8,756
--------
The accompanying notes are an integral part of the financial statements.
53
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<PAGE>
[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
BOND FUND (CONTINUED)
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
CORPORATE OBLIGATIONS (CONTINUED)
- ------------------------------------------------------------
REPAIR SERVICES -- 1.2%
Hertz
6.625%, 05/15/08 $4,000 $ 3,720
--------
RETAIL -- 6.0%
JC Penney
6.000%, 05/01/06 1,230 1,064
Kmart
8.375%, 12/01/04 5,000 4,831
Safeway
5.750%, 11/15/00 7,000 6,948
Sears Finance
7.000%, 06/15/07 1,500 1,412
Staples
7.125%, 08/15/07 2,500 2,359
Wal-Mart Stores
6.375%, 03/01/03 2,850 2,779
--------
19,393
--------
TELEPHONES & TELECOMMUNICATION -- 2.9%
Bell Atlantic
8.000%, 10/15/29 2,980 3,025
Cable and Wireless Communications
6.625%, 03/06/05 4,500 4,388
New England Telephone & Telegraph
7.875%, 11/15/29 1,000 1,006
Worldcom
6.400%, 08/15/05 1,000 948
--------
9,367
--------
TOTAL CORPORATE OBLIGATIONS
(Cost $136,573) 130,799
--------
- ------------------------------------------------------------
ASSET BACKED SECURITIES -- 6.8%
- ------------------------------------------------------------
American Express Master Trust 1998-1
5.900%, 04/15/04 4,000 3,851
Chase Manhattan Auto Grantor Trust
6.610%, 09/15/02 201 201
Citibank Credit Card Master
Trust 1997-3 Cl A
6.839%, 02/10/04 2,700 2,682
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
ASSET BACKED SECURITIES (CONTINUED)
- ------------------------------------------------------------
Citibank Credit Card Master
Trust 1998-3 Cl A
5.800%, 02/07/05 $ 2,000 $ 1,919
Contimortgage Home Equity Loan
Trust 1995-2 Cl A4
8.050%, 07/15/12 308 301
Contimortgage Home Equity Loan
Trust, 1995-3 Cl A4
7.440%, 09/15/12 574 573
EQCC Home Equity Loan
Trust 1995-2 Cl A4
7.800%, 12/15/10 1,089 1,088
EQCC Home Equity Loan
Trust 1996-3 Cl A6
7.400%, 12/15/19 2,500 2,410
Green Tree Financial 1995-9 Cl A
6.800%, 01/15/27 7,500 7,417
J.C. Penney Master Credit Card Trust
9.625%, 06/15/00 1,500 1,513
--------
TOTAL ASSET BACKED SECURITIES
(Cost $22,539) 21,955
--------
- ------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS -- 0.5%
- ------------------------------------------------------------
GE Capital Mortgage Service
1994-1 Cl A6
6.500%, 01/25/24 1,399 1,382
Residential Funding Mortgage
1992-S36 Cl A4
6.750%, 11/25/07 433 412
--------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $1,670) 1,794
--------
- ------------------------------------------------------------
CORPORATE BONDS -- 7.7%
- ------------------------------------------------------------
Amex Centurion (B) (C)
5.700%, 04/24/00 10,000 10,000
Bear Stearns, MTN (B) (C)
6.093%, 01/08/01 10,000 10,000
First Union National Bank (B) (C)
6.163%, 11/01/00 5,000 5,000
--------
TOTAL CORPORATE BONDS
(Cost $25,000) 25,000
--------
The accompanying notes are an integral part of the financial statements.
54
1.800.433.6884
<PAGE>
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
BOND FUND (CONCLUDED)
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
REPURCHASE AGREEMENTS -- 9.2%
- ------------------------------------------------------------
Deutsche Bank Securities, Inc.
5.650%, dated 01/31/00,
matures 02/01/00, repurchase price
$6,487,167 (collateralized by
U.S. Treasury Bond, par value
$5,761,000, 11.625%, 11/15/02;
market value $6,616,516) $ 6,486 $ 6,486
HSBC Securities, Inc. (B) (C)
5.910%, dated 01/31/00, matures
02/01/00, repurchase price
$23,196,195 (collateralized by
various U.S. Government
obligations, par value $30,717,235,
0.000%-0.001%, 05/15/01-09/15/14;
market value $23,656,859) 23,192 23,192
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $29,678) 29,678
--------
TOTAL INVESTMENTS -- 113.5%
(Cost $380,029) 366,042
--------
PAYABLE UPON RETURN OF SECURITIES
LOANED -- (14.9%) (48,192)
--------
OTHER ASSETS AND LIABILITIES, NET -- 1.4% 4,613
--------
- ------------------------------------------------------------
Description Value (000)
- ------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------
Fund Shares of Fiduciary Class (unlimited
authorization-- no par value) based on
31,555,937 outstanding shares
of beneficial interest $ 335,343
Fund Shares of Retail Class A (unlimited
authorization -- no par value) based on
280,598 outstanding shares of
beneficial interest 2,997
Undistributed net investment income 397
Accumulated net realized loss on investments (2,287)
Net unrealized depreciation on investments (13,987)
--------
TOTAL NET ASSETS-- 100.0% $322,463
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- FIDUCIARY CLASS $10.13
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- RETAIL CLASS A $10.04
========
MAXIMUM OFFERING PRICE PER SHARE --
RETAIL CLASS A ($10.04 / 95.75%) $10.49
========
- --------------------------------------------------------------------------------
(A) THIS SECURITY OR A PARTIAL POSITION OF THIS SECURITY IS ON LOAN AT
JANUARY 31, 2000 (SEE FOOTNOTE 2). THE TOTAL VALUE OF SECURITIES ON LOAN AT
JANUARY 31, 2000 WAS $47,582,139.
(B) THIS SECURITY PURCHASED WITH CASH COLLATERAL HELD FROM SECURITIES LENDING.
(C) FLOATING RATE SECURITY
CL -- CLASS
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE CORPORATION
GNMA -- GOVERNMENT NATIONAL MORTGAGE CORPORATION
MTN -- MEDIUM TERM NOTE
The accompanying notes are an integral part of the financial statements.
55
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<PAGE>
[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
INTERMEDIATE-TERM BOND FUND
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 3.3%
- ------------------------------------------------------------
U.S. Treasury Notes
7.250%, 05/15/04 (A) $6,000 $ 6,108
5.875%, 11/15/05 2,000 1,917
--------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $8,578) 8,025
--------
- ------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 15.3%
- ------------------------------------------------------------
FHLMC
7.000%, 09/01/01 2,707 2,677
FNMA
6.200%, 09/25/02 1,000 980
6.500%, 08/15/04 (A) 3,000 2,921
6.850%, 09/12/05 2,000 1,922
6.700%, 11/10/05 3,750 3,581
6.500%, 12/01/07 1,102 1,052
6.000%, 05/01/09 605 565
6.375%, 06/15/09 3,500 3,274
6.000%, 09/01/10 1,183 1,105
6.000%, 05/01/11 1,821 1,699
6.000%, 01/01/12 1,439 1,344
6.000%, 03/01/13 2,512 2,345
6.500%, 07/01/29 1,974 1,831
GNMA
8.000%, 11/15/26 3,526 3,516
6.000%, 07/15/28 1,984 1,773
6.000%, 08/15/28 984 879
6.000%, 09/15/28 1,987 1,775
6.500%, 07/15/29 4,741 4,378
--------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $39,623) 37,617
--------
- ------------------------------------------------------------
CORPORATE OBLIGATIONS -- 70.0%
- ------------------------------------------------------------
AEROSPACE & DEFENSE -- 4.8%
Lockheed Martin
7.450%, 06/15/04 5,500 5,328
McDonnell Douglas
6.875%, 11/01/06 1,000 947
Raytheon
6.750%, 08/15/07 6,000 5,497
--------
11,772
--------
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
AUTO RENTAL & LEASING -- 1.7%
Hertz
6.625%, 05/15/08 $4,500 $ 4,185
--------
AUTOMOTIVE -- 8.0%
Ford Motor Credit
8.200%, 02/15/02 6,000 6,097
6.500%, 02/28/02 4,500 4,427
General Motors
8.950%, 07/02/09 4,451 4,436
General Motors Acceptance
5.350%, 12/07/01 5,000 4,831
--------
19,791
--------
BANKS -- 11.3%
Bank of Boston
8.375%, 12/15/02 2,500 2,541
Bankers Trust
7.250%, 01/15/03 3,500 3,443
Banponce
6.750%, 12/15/05 2,000 1,905
Citicorp
6.750%, 08/15/05 4,075 3,887
Fleet Financial
7.125%, 04/15/06 5,000 4,825
Golden West Financial
6.700%, 07/01/02 1,000 979
HSBC Americas
6.625%, 03/01/09 4,000 3,670
Mellon Bank N.A.
7.000%, 03/15/06 1,500 1,436
Mercantile Bancorp
7.050%, 06/15/04 2,500 2,422
U.S. Bancorp
6.875%, 09/15/07 3,000 2,827
--------
27,935
--------
BROADCASTING, NEWSPAPERS &
ADVERTISING -- 1.6%
TCI Communications
6.875%, 02/15/06 4,000 3,855
--------
CHEMICALS -- 2.8%
Du Pont (E.I.) de Nemours
6.500%, 09/01/02 7,000 6,860
--------
ELECTRICAL UTILITIES -- 8.2%
Arkansas Electric Cooperative
7.330%, 06/30/08 2,125 2,088
The accompanying notes are an integral part of the financial statements.
56
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<PAGE>
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
INTERMEDIATE-TERM BOND FUND (CONTINUED)
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
CORPORATE OBLIGATIONS (CONTINUED)
- ------------------------------------------------------------
Baltimore Gas & Electric
5.780%, 10/01/08 $4,000 $ 3,450
Nevada Power
6.200%, 04/15/04 4,000 3,730
Oklahoma Gas & Electric
6.650%, 07/15/27 2,500 2,344
Old Dominion Electric
7.480%, 12/01/13 5,550 5,328
Pacific Gas & Electric
8.750%, 01/01/01 3,280 3,321
--------
20,261
--------
ENTERTAINMENT -- 3.1%
Walt Disney
6.375%, 03/30/01 2,000 1,985
5.620%, 12/01/08 6,455 5,567
--------
7,552
--------
FINANCIAL SERVICES -- 8.8%
Associates Corporation, N.A.
6.000%, 04/15/03 2,000 1,915
Avco Financial Services
7.375%, 08/15/01 3,500 3,504
Commercial Credit
6.200%, 11/15/01 2,000 1,962
General Electric Capital Services
6.500%, 11/01/06 2,000 1,897
Lehman Brothers Holdings
8.750%, 05/15/02 4,000 4,090
Merrill Lynch, MTN
6.330%, 08/25/00 1,500 1,496
Morgan Stanley Dean Witter
6.125%, 10/01/03 3,000 2,869
Salomon
7.300%, 05/15/02 4,000 3,990
--------
21,723
--------
FOOD, BEVERAGE & TOBACCO -- 3.5%
Grand Metro Investment
8.625%, 08/15/01 1,000 1,017
J Seagram & Sons
6.400%, 12/15/03 5,000 4,769
Safeway
5.750%, 11/15/00 3,000 2,977
--------
8,763
--------
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
CORPORATE OBLIGATIONS (CONTINUED)
- ------------------------------------------------------------
FOREIGN GOVERNMENTS -- 2.4%
Province of Manitoba
6.125%, 01/19/04 $4,000 $ 3,820
Province of Ontario
7.375%, 01/27/03 2,000 2,003
--------
5,823
--------
INSURANCE -- 3.0%
American General Finance
5.370%, 12/10/01 2,500 2,416
Travelers Property Casualty
6.750%, 04/15/01 5,000 4,981
--------
7,397
--------
MACHINERY -- 1.1%
Caterpillar Tractor
6.000%, 05/01/07 1,000 904
Tyco International
6.500%, 11/01/01 1,800 1,766
--------
2,670
--------
PRINTING & PUBLISHING -- 0.5%
Time Warner
7.480%, 01/15/08 1,300 1,269
--------
RETAIL--4.7%
Kmart
8.375%, 12/01/04 4,000 3,865
Sears Finance
7.000%, 06/15/07 5,000 4,706
Wal-Mart
6.375%, 03/01/03 3,000 2,925
--------
11,496
--------
TELEPHONES & TELECOMMUNICATION -- 4.5%
Cable and Wireless Communications
6.625%, 03/06/05 7,000 6,825
New England Telephone & Telegraph
6.250%, 03/15/03 500 483
Qwest Communications
7.500%, 11/01/08 4,000 3,850
--------
11,158
--------
TOTAL CORPORATE OBLIGATIONS
(Cost $179,209) 172,510
--------
The accompanying notes are an integral part of the financial statements.
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<PAGE>
[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
INTERMEDIATE-TERM BOND FUND (CONTINUED)
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
ASSET BACKED SECURITIES -- 8.0%
- ------------------------------------------------------------
Chase Manhattan Auto Grantor Trust
6.610%, 09/15/02 $1,203 $ 1,204
Citibank Credit Card Master
Trust 1997-3 Cl A
6.839%, 02/10/04 3,000 2,980
Citibank Credit Card Master
Trust 1998-3 Cl A
5.800%, 02/07/05 3,400 3,261
Contimortgage Home Equity Loan
Trust, Ser 1995-3 Cl A4,
7.440%, 09/15/12 1,786 1,781
EQCC 1996-3 Cl A6
7.400%, 12/15/19 2,500 2,410
Green Tree Financial
6.750%, 06/15/25 1,223 1,195
J.C. Penney Master Credit Card Trust
9.625%, 06/15/00 6,000 6,053
J.C. Penney Master Credit Card
Trust Ser B Cl A
8.950%, 10/15/01 194 201
Residential Funding Mortgage
1992-S36 Cl A4
6.750%, 11/25/07 699 665
--------
TOTAL ASSET BACKED SECURITIES
(Cost $19,987) 19,750
--------
- ------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS -- 0.3%
- ------------------------------------------------------------
Sears Credit Account Master Master Trust
1992-S36 Cl A4
7.000%, 01/15/04 729 731
--------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $729) 731
--------
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
REPURCHASE AGREEMENTS -- 4.7%
- ------------------------------------------------------------
Deutsche Bank Securities, Inc.
5.650%, dated 01/31/00, matures
02/01/00, repurchase price
$1,243,759 (collateralized by
various U.S. Treasury Notes,
par value $1,265,000, 5.625%-6.000%,
04/30/00-07/31/02; market value
$1,268,898) $1,244 $ 1,244
Lehman Brothers, Inc. (B) (C)
5.893%, dated 01/31/00, matures
02/01/00, repurchase price
$10,487,967 (collateralized by
various corporate obligations,
par value $11,603,066, 0.000%-
0.001%, 10/25/23-11/28/31;
market value $11,010,481) 10,486 10,486
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $11,730) 11,730
--------
TOTAL INVESTMENTS -- 101.6%
(Cost $259,856) 250,363
--------
PAYABLE UPON RETURN OF SECURITIES
LOANED -- (4.3%) (10,486)
--------
OTHER ASSETS AND LIABILITIES, NET-- 2.7% 6,621
--------
- ------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------
Fund Shares of Fiduciary Class (unlimited
authorization-- no par value) based on
24,828,483 outstanding shares
of beneficial interest $ 253,089
Fund Shares of Retail Class A (unlimited
authorization -- no par value) based on
496,713 outstanding shares of
beneficial interest 5,704
Undistributed net investment income 185
Accumulated net realized loss on investments (2,987)
Net unrealized depreciation on investments (9,493)
--------
TOTAL NET ASSETS -- 100.0% $246,498
========
The accompanying notes are an integral part of the financial statements.
58
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<PAGE>
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
INTERMEDIATE-TERM BOND FUND (CONCLUDED)
- ------------------------------------------------------------
Description Value
- ------------------------------------------------------------
NET ASSETS: (CONTINUED)
- ------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- FIDUCIARY CLASS $9.73
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- RETAIL CLASS A $9.73
========
MAXIMUM OFFERING PRICE PER SHARE --
RETAIL CLASS A ($9.73 / 95.75%) $10.16
========
- --------------------------------------------------------------------------------
(A) THIS SECURITY OR A PARTIAL POSITION OF THIS SECURITY IS ON LOAN AT
JANUARY 31, 2000 (SEE FOOTNOTE 2). THE TOTAL VALUE OF SECURITIES ON
LOAN AT JANUARY 31, 2000 WAS $10,269,489.
(B) THIS SECURITY PURCHASED WITH CASH COLLATERAL HELD FROM SECURITIES LENDING.
(C) FLOATING RATE SECURITY
CL -- CLASS
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE CORPORATION
GNMA -- GOVERNMENT NATIONAL MORTGAGE CORPORATION
MTN -- MEDIUM TERM NOTE
SER -- SERIES
The accompanying notes are an integral part of the financial statements.
59
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<PAGE>
[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
100% U.S. TREASURY MONEY MARKET FUND
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
TREASURY BILLS* -- 77.0%
- ------------------------------------------------------------
U.S. Treasury Bills
5.291%, 02/03/00 $103,105 $ 103,075
5.017%, 02/10/00 69,349 69,263
5.032%, 02/17/00 84,063 83,880
5.176%, 02/24/00 3,786 3,774
5.013%, 03/02/00 156,599 155,956
5.080%, 03/09/00 84,036 83,605
5.224%, 03/16/00 38,982 38,736
5.243%, 03/23/00 17,848 17,718
5.232%, 03/30/00 80,000 79,333
5.310%, 04/06/00 8,475 8,395
5.391%, 05/04/00 60,000 59,182
5.399%, 05/11/00 37,981 37,424
5.391%, 05/18/00 19,427 19,122
5.471%, 05/25/00 100,000 98,308
5.494%, 06/08/00 50,000 49,047
5.748%, 06/22/00 25,000 24,446
5.589%, 06/29/00 30,000 29,325
----------
TOTAL TREASURY BILLS*
(Cost $960,589) 960,589
----------
- ------------------------------------------------------------
TREASURY NOTES -- 22.9%
- ------------------------------------------------------------
U.S. Treasury Notes
5.875%, 02/15/00 86,105 86,121
5.500%, 02/29/00 89,600 89,612
5.500%, 03/31/00 110,000 110,012
----------
TOTAL TREASURY NOTES
(Cost $285,745) 285,745
----------
TOTAL INVESTMENTS -- 99.9%
(Cost $1,246,334) 1,246,334
----------
OTHER ASSETS AND LIABILITIES, NET-- 0.1% 1,342
----------
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------
Fund Shares of Fiduciary Class
(unlimited authorization -- no par value)
based on 217,250,509 outstanding shares
of beneficial interest $ 217,250
Fund Shares of Retail Class A
(unlimited authorization -- no par value)
base on 408,268,158 outstanding shares
of beneficial interest 408,268
Fund Shares of Class S (unlimited
authorization -- no par value) base on
622,151,974 outstanding shares
of beneficial interest 622,152
Undistributed net investment income 63
Accumulated net realized loss on investments (57)
----------
TOTAL NET ASSETS-- 100.0% $1,247,676
==========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- FIDUCIARY CLASS $1.00
==========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- RETAIL CLASS A $1.00
==========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS S $1.00
==========
- --------------------------------------------------------------------------------
* REPRESENTS THE YIELD TO MATURITY AT DATE OF PURCHASE.
The accompanying notes are an integral part of the financial statements.
60
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<PAGE>
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
U.S. GOVERNMENT MONEY MARKET FUND
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - DISCOUNTED* -- 43.8%
- ------------------------------------------------------------
FHLB
5.940%, 06/12/00 $ 5,896 $ 5,771
FHLMC
5.581%, 02/11/00 11,871 11,853
5.603%, 02/11/00 10,000 9,985
5.513%, 02/15/00 10,000 9,979
5.751%, 03/07/00 9,930 9,876
5.845%, 03/09/00 15,000 14,911
5.658%, 03/14/00 10,000 9,935
5.844%, 04/13/00 20,000 19,771
5.788%, 04/20/00 10,000 9,875
5.893%, 04/27/00 10,000 9,861
FNMA
5.524%, 02/02/00 10,000 9,998
5.658%, 02/09/00 10,000 9,988
5.608%, 02/17/00 20,000 19,951
5.794%, 04/13/00 25,000 24,715
5.812%, 04/25/00 15,000 14,799
5.835%, 04/27/00 10,000 9,863
SLMA
NEBHELP LOC SLMA
5.618%, 02/11/00 20,000 19,969
--------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS - DISCOUNTED*
(Cost $221,100) 221,100
--------
- ------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 42.7%
- ------------------------------------------------------------
FFCB (A)
6.009%, 04/12/00 50,000 49,996
5.575%, 12/01/00 20,000 19,989
6.100%, 02/01/01 15,000 15,000
FHLB
4.790%, 02/04/00 15,000 15,000
4.910%, 02/09/00 16,120 16,119
5.125%, 03/08/00 10,000 9,994
5.040%, 03/29/00 20,000 19,979
FHLB (A)
5.999%, 03/24/00 20,000 20,000
5.844%, 10/04/00 10,000 9,995
FNMA
5.120%, 05/12/00 10,000 9,977
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (CONTINUED)
- ------------------------------------------------------------
SLMA
6.199%, 02/14/00 (A) $15,000 $ 15,000
5.900%, 12/01/00 15,000 14,988
---------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $216,037) 216,037
---------
- ------------------------------------------------------------
REPURCHASE AGREEMENTS -- 16.4%
- ------------------------------------------------------------
Barclays Capital, Inc.
5.630%, dated 01/31/00, matures
02/01/00, repurchase price
$10,228,660 (collateralized by
U.S. Treasury Bill, par value
$10,691,000, 0.000%, 07/06/00;
market value $10,431,765) 10,227 10,227
Deutsche Bank Securities, Inc.
5.650%, dated 01/31/00, matures
02/01/00, repurchase price
$17,373,561 (collateralized by
U.S. Treasury Note, par value
$18,484,000, 5.250%, 05/15/04;
market value $17,718,869) 17,371 17,371
JP Morgan Securities, Inc.
5.670%, dated 01/31/00, matures
02/01/00, repurchase price
$27,890,734 (collateralized by
U.S. Treasury Note, par value
$28,754,000, 4.625%, 12/31/00;
market value $28,444,920) 27,886 27,886
Warburg, Dillon, Read, LLC 5.650%,
dated 01/31/00, matures 02/01/00,
repurchase price $27,312,340
(collateralized by various
U.S. Treasury STRIPS, par value
$92,625,000, 0.000%,
11/15/15-11/15/19;
market value $27,854,248) 27,308 27,308
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $82,792) 82,792
--------
TOTAL INVESTMENTS -- 102.9%
(Cost $519,929) 519,929
--------
OTHER ASSETS AND LIABILITIES, NET-- (2.9%) (14,644)
--------
The accompanying notes are an integral part of the financial statements.
61
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<PAGE>
[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
U.S. GOVERNMENT MONEY MARKET FUND (CONCLUDED)
- ------------------------------------------------------------
Description Value (000)
- ------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------
Fund Shares of Fiduciary Class
(unlimited authorization -- no par value)
based on 341,745,919 outstanding
shares of beneficial interest $341,746
Fund Shares of Retail Class A (unlimited
authorization -- no par value)
based on 43,775,073 outstanding
shares of beneficial interest 43,776
Fund Shares of Retail Class B (unlimited
authorization-- no par value) based on
307,053 outstanding shares
of beneficial interest 307
Fund Shares of Class S (unlimited
authorization -- no par value) based on
119,565,875 outstanding shares of
beneficial interest 119,566
Undistributed net investment income 3
Accumulated net realized loss on investments (113)
--------
TOTAL NET ASSETS--100.0% $505,285
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- FIDUCIARY CLASS $1.00
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- RETAIL CLASS A $1.00
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- RETAIL CLASS B $1.00
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS S $1.00
========
- --------------------------------------------------------------------------------
* REPRESENTS THE YIELD TO MATURITY AT DATE OF PURCHASE.
(A) ADJUSTABLE RATE SECURITY. THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON JANUARY 31, 2000.
FFCB -- FEDERAL FARM CREDIT BANK
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE CORPORATION
LOC -- LETTER OF CREDIT
SLMA -- STUDENT LOAN MARKETING ASSOCIATION
The accompanying notes are an integral part of the financial statements.
62
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<PAGE>
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
DIVERSIFIED MONEY MARKET FUND
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
CERTIFICATES OF DEPOSIT - DOMESTIC -- 2.7%
- ------------------------------------------------------------
First Tennessee Bank N.A.
5.850%, 02/29/00 $50,000 $ 50,000
Southtrust Bank N.A.
6.000%, 05/18/00 50,000 50,000
--------
TOTAL CERTIFICATES OF DEPOSIT -- DOMESTIC
(Cost $100,000) 100,000
--------
- ------------------------------------------------------------
CERTIFICATES OF DEPOSIT - YANKEE -- 9.6%
- ------------------------------------------------------------
Australia and New Zealand Bank,
New York
6.000%, 04/03/00 50,000 50,000
5.980%, 06/02/00 50,000 50,000
Bank Austria A.G., New York
5.195%, 02/29/00 30,000 30,000
Bayerische Hypo-Und Vereinsbank,
New York (A)
5.734%, 04/25/00 25,000 24,997
Deutsche Bank, New York
5.800%, 03/30/00 50,000 50,000
Societe Generale, New York
5.900%, 04/04/00 50,000 50,001
Toronto Dominion Bank, New York
5.720%, 02/10/00 50,000 50,000
Westdeutsche Landesbank
Girozentrale, New York
6.000%, 03/01/00 50,000 50,000
--------
TOTAL CERTIFICATES OF DEPOSIT -- YANKEE
(Cost $354,998) 354,998
--------
- ------------------------------------------------------------
EURODOLLAR CERTIFICATES OF DEPOSIT -- 9.2%
- ------------------------------------------------------------
Barclays Bank PLC, London
5.850%, 03/31/00 50,000 50,001
5.560%, 06/09/00 20,000 19,962
ING Bank, London
6.050%, 02/07/00 75,000 75,003
5.925%, 02/14/00 50,000 50,000
6.000%, 05/31/00 20,000 19,999
KBC Bank, London
5.860%, 03/31/00 50,000 50,001
Societe Generale, London
5.990%, 02/01/00 50,000 50,000
Toronto Dominion Bank, London
5.630%, 06/26/00 25,000 24,947
--------
TOTAL EURODOLLAR CERTIFICATES OF DEPOSIT
(Cost $339,913) 339,913
--------
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
BANK NOTES -- 8.2%
- ------------------------------------------------------------
American Express Centurion Bank (A)
5.783%, 05/05/00 $30,000 $ 30,000
Bank of America N.A.
6.030%, 02/22/00 10,778 10,779
Comerica Bank (A)
5.831%, 09/11/00 50,000 50,020
First Union Bank N.A. (A)
5.810%, 03/10/00 50,000 50,000
6.140%, 08/29/00 50,000 50,000
Keybank N.A.
5.125%, 03/24/00 25,000 24,997
6.030%, 04/13/00 (A) 40,000 39,994
National City Bank of Cleveland
6.525%, 01/24/01 50,000 49,984
---------
TOTAL BANK NOTES
(Cost $305,774) 305,774
---------
- ------------------------------------------------------------
COMMERCIAL PAPER -- 34.7%
- ------------------------------------------------------------
ABS - CREDIT CARD -- 3.5%
Montauk Funding Corp. (B)
5.715%, 02/04/00 50,000 49,976
5.747%, 02/11/00 30,000 29,953
5.961%, 04/17/00 50,000 49,380
---------
129,309
---------
ABS - DIVERSIFIED FINANCIAL ASSETS -- 2.6%
Bavaria Universal Funding (B)
5.704%, 02/01/00 50,000 50,000
5.989%, 04/20/00 24,000 23,689
Beta Finance Inc. (B)
5.749%, 02/28/00 21,000 20,910
---------
94,599
---------
ABS - TRADE RECEIVABLES -- 14.3%
Asset Securitization Cooperative
Corp. (A) (B)
6.160%, 03/17/00 50,000 50,000
Ciesco L.P.
5.876%, 02/01/00 50,000 50,000
Concord Minutemen Capital Co.,
Ser. B (B)
5.951%, 02/01/00 17,428 17,428
6.319%, 02/18/00 50,000 49,852
Crown Point Capital Co.,
Ser. A (B)
5.901%, 02/01/00 50,000 50,000
5.951%, 02/01/00 42,505 42,505
The accompanying notes are an integral part of the financial statements.
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<PAGE>
[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
DIVERSIFIED MONEY MARKET FUND (CONTINUED)
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
COMMERCIAL PAPER (CONTINUED)
- ------------------------------------------------------------
CXC, Inc. (B)
5.936%, 02/10/00 $50,000 $ 49,928
5.751%, 05/15/00 30,000 29,502
Edison Asset Secur Corp., LLC (B)
6.081%, 02/22/00 58,576 58,372
5.988%, 03/07/00 16,203 16,111
International Securitization
Corp. (B)
6.027%, 02/08/00 40,000 39,954
5.755%, 02/15/00 22,000 21,951
5.758%, 02/22/00 44,575 44,426
6.087%, 02/24/00 11,995 11,949
--------
531,978
--------
BANKS -- 2.7%
Bavaria Trr Corp. (B)
5.989%, 02/28/00 25,000 24,889
5.965%, 05/19/00 27,000 26,531
Nationwide Building Society
5.988%, 02/28/00 50,000 49,779
--------
101,199
--------
DIVERSIFIED OPERATIONS -- 4.0%
CIT Group, Inc.
5.811%, 02/01/00 50,000 50,000
5.954%, 02/11/00 50,000 49,918
General Electric Capital Corp.
6.099%, 02/08/00 50,000 49,942
--------
149,860
--------
FINANCIAL SERVICES -- 5.8%
Associated First Capital Corp.
5.841%, 02/01/00 50,000 50,000
Bear Stearns Co.
6.135%, 07/21/00 50,000 48,587
Goldman Sachs Group, LP
6.000%, 02/07/00 25,000 25,000
5.900%, 03/28/00 50,000 50,000
5.928%, 04/28/00 40,000 39,436
--------
213,023
--------
- ------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------
COMMERCIAL PAPER (CONTINUED)
- ------------------------------------------------------------
INDUSTRIAL GOODS & SERVICES -- 1.8%
Akzo Nobel Inc.
5.832%, 02/01/00 $44,000 $ 44,000
6.218%, 02/24/00 23,000 22,910
---------
66,910
---------
TOTAL COMMERCIAL PAPER
(Cost $1,286,878) 1,286,878
----------
- ------------------------------------------------------------
CORPORATE OBLIGATIONS (MEDIUM TERM NOTES) -- 14.8%
- ------------------------------------------------------------
Bear Stearns Co. (A)
5.864%, 01/25/01 50,000 50,000
Daimler Chrysler N.A.
Holdings Corp. (A)
5.688%, 07/06/00 50,000 49,974
Gannett Co.
5.850%, 05/01/00 9,515 9,511
General Electric Capital Corp.
Ser. A (A)
5.980%, 04/13/00 25,000 25,000
General Motors Acceptance Corp.
8.375%, 02/03/00 59,500 59,510
7.875%, 03/16/00 25,000 25,080
Goldman Sachs Group LP (A) (B)
6.140%, 07/17/00 25,000 25,013
Household Finance Corp. (A)
5.920%, 09/14/00 50,000 49,980
IBM Credit Corp.
5.150%, 04/14/00 25,000 24,998
Liberty Lighthouse
U.S. Capital (A) (B)
6.030%, 04/10/00 50,000 50,000
5.820%, 02/20/01 70,000 70,000
Merrill Lynch & Co. Inc.
Ser. B (A)
5.858%, 02/04/00 50,000 50,000
6.110%, 04/17/00 10,000 10,003
Morgan Stanley,
Dean Witter & Co. Ser. C (A)
6.190%, 01/26/01 10,000 10,016
Sigma Finance, Inc. (A) (B)
5.834%, 02/22/00 40,000 40,000
---------
TOTAL CORPORATE OBLIGATIONS
(Medium Term Notes) (Cost $549,085) 549,085
---------
The accompanying notes are an integral part of the financial statements.
64
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<PAGE>
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
DIVERSIFIED MONEY MARKET FUND (CONTINUED)
- ------------------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------------------
U.S. TREASURY BILL* -- 1.3%
- ------------------------------------------------------------------------
U.S. Treasury Bill
5.442%, 05/25/00 $50,000 $ 49,159
---------
TOTAL U.S. TREASURY BILL*
(Cost $49,159) 49,159
---------
- ------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 3.6%
- ------------------------------------------------------------------------
FFCB
4.800%, 02/01/00 15,000 15,000
FHLB
5.125%, 03/08/00 40,000 39,977
5.999%, 03/24/00 (A) 30,000 30,000
SLMA (A)
6.219%, 03/16/00 50,000 50,000
---------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $134,977) 134,977
---------
- ------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - DISCOUNTED -- 2.7%
- ------------------------------------------------------------------------
FHLMC
5.528%, 02/25/00 50,000 49,817
FHLB
5.206%, 02/28/00 50,000 49,812
---------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS - DISCOUNTED
(Cost $99,629) 99,629
---------
- ------------------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 13.1%
- ------------------------------------------------------------------------
Barclays Capital, Inc.
5.630%, dated 01/31/00, matures
02/01/00, repurchase price $115,605,174
(collateralized by various U.S. Treasury
Obligations, par value $116,975,000,
0.000-7.250%, 06/15/00-5/15/2016;
market value $117,899,592) $115,587 $ 115,587
Deutsche Bank Securities, Inc.
5.650%, dated 01/31/00, matures
02/01/00, repurchase price $55,721,261
(collateralized by various U.S. Treasury
Obligations, par value $44,904,000,
5.625-11.625%, 04/30/00-02/15/16;
market value $56,826,949) 55,713 55,713
J.P. Morgan Securities, Inc.
5.670%, dated 01/31/00, matures 02/01/00,
repurchase price $144,757,887 (collateralized
by various U.S. Treasury Obligations,
par value $144,744,000, 0.000-11.125%,
02/15/00-11/15/27; market value
$147,629,813) 144,735 144,735
Lehman Brothers, Inc.
5.630%, dated 01/31/00, matures
02/01/00, repurchase price $47,654,331
(collateralized by various U.S. Treasury
STRIPS, par value $97,048,000, 0.000%,
02/15/08-02/15/14; market value
$48,602,245) 47,647 47,647
Warburg, Dillon, Read, LLC.
5.650%, dated 01/31/00, matures
02/01/00, repurchase price $123,356,442
(collateralized by various U.S. Treasury
STRIPS, par value $383,957,000,
0.000%, 08/15/10-11/15/27;
market value $125,804,798) 123,337 123,337
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $487,019) 487,019
----------
TOTAL INVESTMENTS -- 99.9%
(Cost $3,707,432) 3,707,432
----------
OTHER ASSETS AND LIABILITIES, NET-- 0.1% 4,558
----------
The accompanying notes are an integral part of the financial statements.
65
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<PAGE>
[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
DIVERSIFIED MONEY MARKET FUND (CONCLUDED)
- ------------------------------------------------------------------------
Description Value (000)
- ------------------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------------------
Fund Shares of Fiduciary Class (unlimited
authorization -- no par value)
based on 1,786,929,956 outstanding
shares of beneficial interest $1,786,930
Fund Shares of Retail Class A (unlimited
authorization -- no par value)
based on 602,952,299 outstanding
shares of beneficial interest 602,952
Fund Shares of Class S (unlimited
authorization -- no par value) based on
1,323,945,459 outstanding shares of
beneficial interest 1,323,945
Undistributed net investment income 3
Accumulated net realized loss on investments (1,840)
----------
TOTAL NET ASSETS -- 100.0% $3,711,990
==========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- FIDUCIARY CLASS $1.00
==========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- RETAIL CLASS A $1.00
==========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS S $1.00
==========
- --------------------------------------------------------------------------------
* REPRESENTS THE YIELD TO MATURITY AT DATE OF PURCHASE.
(A) ADJUSTABLE RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET
ASSETS IS THE RATE IN EFFECT ON JANUARY 31, 2000.
(B) SECURITIES SOLD WITHIN THE TERMS OF A PRIVATE PLACEMENT MEMORANDUM,
EXEMPT FROM REGISTRATION UNDER SECTION 3A-4, 4(2) OR 144A OF THE
SECURITIES ACT OF 1933 AS AMENDED, AND MAY BE SOLD
ONLY TO THE DEALERS IN THAT PROGRAM OR OTHER "ACCREDITED INVESTORS".
FFCB -- FEDERAL FARM CREDIT BANK
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
SLMA -- STUDENT LOAN MARKETING ASSOCIATION
SER -- SERIES
STRIPS -- SEPARATELY TRADED REGISTERED INTEREST AND PRINCIPAL SECURITIES
The accompanying notes are an integral part of the financial statements.
66
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<PAGE>
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
CALIFORNIA TAX-FREE MONEY MARKET FUND
- ------------------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS--96.3%
- ------------------------------------------------------------------------
ABAG, Finance Authority For Nonprofit
Corporations, American Baptist Homes
West Project, Ser C, VRDN (A) (B) (C)
2.850%, 10/01/27 $4,585 $ 4,585
Alameda County, Industial Developement
Authority, Bat Properties Project,
VRDN, RB, AMT (A) (B) (C)
2.800%, 03/01/28 1,700 1,700
Alameda County, Industrial Development
Authority, Dicon Fiberoptics Inc Project,
VRDN, RB, AMT, (A) (B) (C)
2.800%, 05/01/03 3,875 3,875
Alameda County, Industrial Development
Authority, Edward L Shimmon Inc Project,
VRDN, RB, AMT (A) (B) (C)
2.800%, 11/01/26 4,000 4,000
Alameda County, Industrial Development
Authority, Meskimen Family Trail Project,
VRDN, RB, AMT, (A) (B) (C)
2.800%, 04/01/28 1,100 1,100
Alternative Energy Source Finance Authority,
GE Capital Corporation-Arroyo Energy
Project, VRDN, RB, AMT (A) (B)
2.450%, 12/01/20 1,100 1,100
Anaheim, Housing Authority, Bel Page Project,
VRDN, RB, AMT (A) (B) (C)
2.450%, 08/01/20 6,000 6,000
Anaheim, Multi Family Housing, Park Vista
Apartments, VRDN, RB, AMT (A) (B) (C)
2.450%, 12/15/23 7,000 7,000
Anaheim, Public Improvement Corporation,
1995 Police Facilities Refinancing Project,
COP, VRDN, AMBAC Insured (A) (B) (C)
2.300%, 08/01/08 2,800 2,800
Azusa, Multi-Family Housing, Pacific Glenn
Apartments Project, RB
2.700%, 07/15/15 3,800 3,800
Camarillo, Multi-Family Housing, Heritage
Park Apartments, VRDN, RB, AMT (A) (B) (C)
2.450%, 07/15/19 1,800 1,800
Dublin, Housing Finance Authority,
Multi-Family, VRDN, RB (A) (B) (C)
2.450%, 06/01/28 2,500 2,500
- ------------------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
- ------------------------------------------------------------------------
Education Facilities Authority, Foundation
For Educational Achievement,
VRDN, RB (A) (B) (C)
2.700%, 07/01/26 $ 1,000 $ 1,000
East Bay, Waste Water, TECP (C)
3.650%, 02/15/00 1,000 1,000
East Bay, Waste Water, RB, FGIC Insured
6.000%, 06/01/00 3,000 3,025
Education Facilities Authority,
Carnegie Institute, TECP
2.650%, 02/03/00 5,000 5,000
3.650%, 02/04/00 1,000 1,000
Escondido, Community Development,
VRDN, RB, AMT (A) (B) (C)
2.550%, 10/12/16 2,800 2,800
Fontana, Split Tax, Community Facilities
District No. 2, Ser A, RB, MBIA Insured
4.000%, 09/01/00 1,020 1,022
Fresno City, TRAN, GO
4.000%, 06/30/00 5,000 5,013
Golden Empire Schools Financing Authority,
Kern High School District, Ser B,
VRDN, RB (A) (B) (C)
2.350%, 12/01/24 8,400 8,400
Health Facilities Finance Authority,
Pooled Loan Program, Ser A,
VRDN, RB (A) (B) (C)
2.400%, 09/01/20 3,010 3,010
Health Facilities Finance Authority,
Pooled Loan Program, Ser B, VRDN,
RB, FGIC Insured (A) (B)
2.400%, 10/01/10 6,075 6,075
Health Facilities Finance Authority,
Santa Barbara Cottage, Ser B,
VRDN, RB (A) (B) (C)
2.450%, 09/01/05 3,100 3,100
Irvine Ranch, Water District, Consolidated
Bonds, VRDN, RB (A) (B) (C)
2.800%, 10/01/00 900 900
Irvine Ranch, Water District, Consolidated
Refunding Ser B, VRDN, RB (A) (B)
2.800%, 08/01/09 7,400 7,400
The accompanying notes are an integral part of the financial statements.
67
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<PAGE>
[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
CALIFORNIA TAX-FREE MONEY MARKET FUND (CONTINUED)
- ------------------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
- ------------------------------------------------------------------------
Irvine Ranch Water District, Consolidated
Refunding Ser 1995 B,
VRDN, RB (A) (B) (C)
2.800%, 10/01/10 $ 1,000 $ 1,000
Irvine, Improvement Bond Act 1915,
Assessment District No 94,
VRDN, RB (A) (B) (C)
2.800%, 09/02/22 600 600
Irvine, Public Facilities & Infrastructure
Authority, Capital Improvement
Project-Lease, VRDN, RB (A) (B) (C)
2.450%, 11/01/10 3,060 3,060
La Mirada, Redevelopment Agency,
Industrial Commercial Development,
Ser B, TA, Pre-funded 8/15/00 @102
6.750%, 08/15/11 1,915 1,986
Livermore, Portola Meadows Apartments
Project, VRDN, RB, AMT (A) (B) (C)
2.550%, 05/01/19 5,100 5,100
Los Angeles County, California Pension
Obligation, Ser A, VRDN, RB,
AMBAC Insured (A) (B) (C)
2.300%, 06/30/07 7,400 7,400
Los Angeles County, GO, TRAN
4.000%, 06/30/00 6,100 6,116
Los Angeles County, Metropolitan
Transportation Authority, Ser A, VRDN,
RB, MBIA Insured (A) (B)
2.450%, 07/01/20 10,000 10,000
Los Angeles County, Pension Obligation,
Ser B, VRDN, RB, AMBAC Insured (A) (B)
2.300%, 06/30/07 2,000 2,000
Los Angeles County, Pension Obligation,
Ser C, VRDN, RB, AMBAC Insured (A) (B)
2.300%, 06/30/07 10,400 10,400
Los Angeles, Community Redevelopment
Agency, Baldwin Hills Public Park,
VRDN, COP (A) (B) (C)
2.450%, 12/01/14 1,000 1,000
Los Angeles, Multi-Family Housing,
Meadowridge Apartments,
VRDN, RB (A) (B) (C)
2.750%, 09/01/18 4,600 4,600
Los Angeles, Multi-Family Housing,
Oakwood Apartments, VRDN, RB (A) (B)
2.550%, 10/20/23 2,000 2,000
- ------------------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
- ------------------------------------------------------------------------
Los Angeles, Multi-Family Housing, Ser K,
VRDN, RB (A) (B) (C)
2.600%, 07/01/10 $21,200 $21,200
Los Angeles, School District, Belmont
Learning Complex Project, Ser A,
VRDN, RB (A) (B) (C)
2.600%, 12/01/17 10,000 10,000
Los Angeles, Transportation, TECP (C)
3.600%, 02/04/00 5,000 5,000
3.550%, 04/07/00 5,000 5,000
3.600%, 04/07/00 3,500 3,500
Los Angeles, City Waste Water, TECP (C)
3.300%, 06/06/00 5,000 5,000
Los Angeles, Waste Water System, Ser A,
RB, Pre-refunded 02/01/00 @102
7.000%, 02/01/20 2,905 2,963
Los Angeles, Waste Water System, Ser B,
RB, Pre-refunded 06/01/00 @102
7.000%, 06/01/10 1,325 1,366
Los Angeles, Waste Water System, Ser D,
RB, Pre-refunded 12/01/00 @102
6.700%, 12/01/21 6,555 6,837
Los Angeles, Water and Power, TECP (C)
3.400%, 04/06/00 3,000 3,000
3.650%, 02/09/00 1,000 1,000
3.100%, 03/16/00 2,000 2,000
Modesto Irrigation District, TECP
3.300%, 03/07/00 5,500 5,500
Modesto, Multi-Family Housing,
Live Oak Project, VRDN, RB, AMT (A) (B) (C)
2.450%, 09/01/24 7,175 7,175
Mt. Diablo, School District, Community
Facility, RB, Pre-refunded 08/01/00 @ 102
7.050%, 08/01/20 5,000 5,183
Northern California, Transmission
Authority, TECP (C)
2.450%, 02/03/00 5,800 5,800
Oakland, Alameda County Unified School
Disrict, TRAN, GO
4.000%, 11/17/00 6,000 6,015
Oakland, TRAN, GO
4.250%, 09/29/00 1,810 1,815
Ontario, Industrial Development Authority,
Winsford Partners Project, Ser A,
VRDN, RB, AMT (A) (B) (C)
2.650%, 09/01/08 1,700 1,700
The accompanying notes are an integral part of the financial statements.
68
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<PAGE>
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED
CALIFORNIA TAX-FREE MONEY MARKET FUND (CONTINUED)
- ------------------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
- ------------------------------------------------------------------------
Orange County, Apartment Development
Authority, Pointe Niguel Project,
VRDN, RB, (A) (B) (C)
2.350%, 12/01/21 $ 5,000 $ 5,000
Orange County, Apartment Development
Authority, Wood Canyon Villas,
VRDN, RB, AMT (A) (B) (C)
2.550%, 12/01/21 6,900 6,900
Orange County, Split Financing Authority,
Teeter Plan, Ser B, VRDN, RB,
AMBAC Insured (A) (B)
2.450%, 11/01/14 1,000 1,000
Orange County, Split Financing Authority,
Teeter Plan, Ser C, VRDN, RB,
AMBAC Insured (A) (B)
3.498%, 11/01/14 1,800 1,800
Orange County, Transportation
Authority, TECP (C)
3.200%, 02/11/00 5,000 5,000
Oxnard, Housing Authority, Seawind Apartment
Projects, Ser A, VRDN, RB, AMT
(A) (B) (C)
3.150%, 12/01/20 2,725 2,725
Paramount, Multi-Family Housing,
Century Place Apartments, Project A ,
VRDN, RB, AMT, (A) (B)
2.600%, 09/15/29 3,000 3,000
Pasadena, Electric, RB, MBIA Insured
4.750%, 08/01/00 1,540 1,550
Pollution Control Finance Authority,
Burney Forest, VRDN, RB,
AMT (A) (B) (C)
3.050%, 09/01/20 14,700 14,700
Pollution Control Finance Authority,
Chevron Project, VRDN, RB (A) (B)
3.100%, 05/15/02 2,585 2,585
Pollution Control Finance Authority,
Chevron USA Project, Ser B,
VRDN, RB (A) (B)
3.100%, 06/15/05 3,100 3,100
Pollution Control Finance Authority,
Delano Project 1989,
VRDN, RB, AMT (A) (B) (C)
2.950%, 08/01/19 2,900 2,900
- ------------------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
- ------------------------------------------------------------------------
Pollution Control Finance Authority,
Delano Project 1990, VRDN, RB,
AMT (A) (B) (C)
2.950%, 08/01/19 $ 1,475 $ 1,475
Pollution Control Finance Authority,
Delano Project 1991,
VRDN, RB, AMT (A) (B) (C)
2.950%, 08/01/19 200 200
Pollution Control Finance Authority,
Exxon Project, VRDN, RB (A) (B)
2.800%, 12/01/12 7,000 7,000
Pollution Control Finance Authority,
Pacific Gas and Electric, VRDN, RB
(A) (B) (C)
2.850%, 11/01/26 8,000 8,000
Pollution Control Finance Authority,
Pacific Gas and Electric,
VRDN, RB (A) (B) (C)
2.900%, 11/01/26 700 700
Pollution Control Financing Authority,
Pacific Gas and Electric,
VRDN, RB (A) (B) (C)
2.850%, 11/01/26 5,755 5,755
Pollution Control Finance Authority,
Shell Oil, Ser A, VRDN, RB (A) (B)
2.700%, 11/01/00 6,850 6,850
2.700%, 10/01/08 1,000 1,000
Pollution Control Finance Authority,
Shell Oil, Project A, VRDN RB (A) (B)
2.700%, 10/01/07 1,500 1,500
2.700%, 10/01/11 7,500 7,500
Pollution Control Finance Authority,
Shell Oil, VRDN, RB (A) (B)
2.700%, 10/01/06 500 500
2.700%, 10/01/09 500 500
Pollution Control Finance Authority,
Southern California Edison, Ser A,
VRDN, RB (A) (B)
2.900%, 02/28/08 4,100 4,100
The accompanying notes are an integral part of the financial statements.
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<PAGE>
[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
CALIFORNIA TAX-FREE MONEY MARKET FUND (CONTINUED)
- ------------------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
- ------------------------------------------------------------------------
Rancho Cucamonga, Redevelopment
Agency, Rancho Redevelopment
Project, TA, FSA Insured
4.250%, 09/01/00 $ 940 $ 944
Riverside County, 1997 Lease Project,
COP, MBIA Insured
4.750%, 11/01/00 3,015 3,039
Riverside County, Public Facilities, COP,
Ser 1985 A, VRDN, RB (A) (B) (C)
2.550%, 12/01/15 21,200 21,200
Riverside County, TECP (C)
3.200%, 02/17/00 700 700
Sacramento, Municipal Utility District,
TECP (C)
3.400%, 02/25/00 5,000 5,000
3.450%, 04/11/00 1,000 1,000
Sacramento, Redevelopement Agency,
Merged Downtown, TA,
Pre-refunded 11/01/00 @102 (B)
6.500%, 11/01/13 3,985 4,140
San Bernardino, Medical Center Financing
Project, COP, MBIA Insured (A) (B)
2.450%, 08/01/26 7,000 7,000
San Diego County, COP, AMBAC Insured
4.000%, 05/01/00 2,345 2,351
San Diego, Multi-Family Housing, Issue A,
VRDN, RB (A) (B) (C)
2.450%, 02/01/09 1,000 1,000
San Diego School District, Phase XIII
Capital Project, Ser A, COP
5.000%, 07/01/00 1,000 1,006
San Diego, School District, Ser A, TRAN, GO
4.250%, 09/29/00 6,000 6,021
San Diego, TRAN, GO
4.250%, 09/29/00 4,000 4,019
San Francisco, Airport, TECP (C)
3.550%, 03/07/00 8,210 8,210
San Francisco, BART, TECP (C)
3.400%, 02/18/00 4,000 4,000
3.400%, 03/08/00 4,400 4,400
3.550%, 03/08/00 8,100 8,100
3.450%, 04/11/00 1,000 1,000
- ------------------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
- ------------------------------------------------------------------------
San Francisco, City & County Water, TECP (C)
3.500%, 02/09/00 $ 2,000 $ 2,000
3.500%, 02/09/00 3,000 3,000
San Joaquin County, TRAN
4.250%, 01/01/01 1,000 1,003
San Jose, Multi Family Housing, Somerset
Park, VRDN, RB, AMT (A) (B) (C)
2.550%, 11/01/17 1,700 1,700
San Jose, Multi-Family Housing,
VRDN, RB, AMT (A) (B) (C)
2.450%, 05/01/19 2,000 2,000
San Jose, Multi-Family Housing,
VRDN, RB, FGIC Insured (A) (B)
2.450%, 11/01/07 8,700 8,700
San Jose, School District, COP, MBIA Insured
4.250%, 06/01/00 1,735 1,739
San Leandro, Multi Family Housing, Haas
Avenue Apartment, Issue B (A) (B) (C)
2.450%, 10/01/07 1,600 1,600
San Mateo County, Transportation District,
RB, FSA Insured
4.250%, 06/01/00 2,300 2,307
San Mateo County, Transportation District,
Ser A, RB, MBIA Insured
4.000%, 06/01/00 2,000 2,004
School Cash Reserve Program Authority,
Ser A, RB, AMBAC Insured
4.000%, 07/03/00 7,500 7,527
School Facility Financing, Capital
Improvement Projects VRDN, COP,
RB (A) (B) (C)
2.600%, 07/01/22 9,200 9,200
School Facility Financing, Capital
Improvement Projects VRDN, COP,
RB (A) (B) (C)
2.400%, 07/01/24 6,000 6,000
School Facility Financing, Ser B, VRDN,
COP (A) (B) (C)
2.600%, 07/01/24 2,700 2,700
South Orange County, Public Financing
Authority, Special assessment,
RB, FSA Insured
3.700%, 09/02/00 505 505
The accompanying notes are an integral part of the financial statements.
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STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
CALIFORNIA TAX-FREE MONEY MARKET FUND (CONTINUED)
- ------------------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
- ------------------------------------------------------------------------
Southern California, Metropolitan
Water District, Ser B, RB (B)
3.650%, 06/01/00 $2,500 $ 2,500
Southern California, Metropolitan
Water District, TECP (C)
3.600%, 02/07/00 6,000 6,000
Southern California Public Power Authority,
Sub-Palo Verde Project, Ser A,
RB, FSA Insured (A) (B)
5.000%, 07/01/00 3,300 3,322
State Department of Water, Central Valley
Project, Ser H, RB,
Pre-refunded 06/01/00 @101.5
6.900%, 12/01/25 8,200 8,415
State of California, TECP
3.000%, 02/04/00 10,000 10,000
3.600%, 02/10/00 5,000 5,000
3.600%, 03/09/00 4,800 4,800
State of California, GO
9.000%, 04/01/00 10,600 10,703
Statewide Community Development
Authority, Karcher Properties Project,
VRDN, RB, AMT (A) (B) (C)
2.550%, 12/01/19 2,000 2,000
Statewide Communities Development
Authority, Northern California Retirement
Facilities Project, VRDN, RB (A) (B) (C)
2.900%, 06/01/26 6,500 6,500
Statewide Community Development
Authority, Whispering Winds Apartments,
VRDN, RB (A) (B) (C)
2.450%, 12/01/22 7,300 7,300
Transportation Finance Authority, VRDN,
RB, FSA Insured (A) (B)
2.500%, 10/01/27 20,200 20,200
Turlock Irrigation District, Transmission
Projects, COP, Ser A, VRDN (A) (B) (C)
2.450%, 01/01/26 3,850 3,850
University of California, Multi-Purpose
Projects, Ser F, RB, FGIC Insured
7.000%, 09/01/00 3,590 3,664
- ------------------------------------------------------------------------
Description Par (000) Value (000)
- ------------------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
- ------------------------------------------------------------------------
University of California Regents, TECP
3.000%, 02/07/00 $ 4,000 $ 4,000
3.000%, 02/23/00 5,000 5,000
3.500%, 02/24/00 5,000 5,000
3.500%, 02/11/00 5,000 5,000
3.250%, 03/06/00 4,500 4,500
West Basin Municipal Water District,
Phase II Recycled Water Project,
Ser B, COP, VRDN (A) (B) (C)
2.250%, 08/01/27 2,200 2,200
West Basin Municipal Water District,
Phase II Recycled Water Project,
Ser C, COP, VRDN (A) (B) (C)
2.250%, 08/01/27 2,000 2,000
West Basin Municipal Water District,
Phase III Recycled Water Project,
Ser A, COP (A) (B) (C)
2.250%, 08/01/29 1,500 1,500
West Basin Municipal Water District,
Phase III Recycled Water Project,
Ser B, VRDN, COP (A) (B) (C)
2.750%, 08/01/29 2,000 2,000
--------
TOTAL CALIFORNIA MUNICIPAL BONDS
(Cost $600,230) 600,230
--------
- ------------------------------------------------------------------------
PUERTO RICO--3.0%
- ------------------------------------------------------------------------
Puerto Rico, Municipal Finance Agency,
Ser A, RB, FSA Insured
5.500%, 07/01/00 1,770 1,783
Puerto Rico, Commonwealth Government
Development, VRDN, RB,
MBIA Insured (A) (B)
2.500%, 12/01/15 4,100 4,100
Puerto Rico, Commonwealth Highway &
Transportation, RB, Series A,
AMBAC Insured (A) (B)
2.850%, 07/01/28 12,760 12,760
--------
TOTAL PUERTO RICO
(Cost $18,643) 18,643
--------
The accompanying notes are an integral part of the financial statements.
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[HighMark Logo Omitted]
STATEMENT OF NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
CALIFORNIA TAX-FREE MONEY MARKET FUND (CONCLUDED)
- ------------------------------------------------------------------------
Description Shares Value (000)
- ------------------------------------------------------------------------
CASH EQUIVALENTS--0.3%
- ------------------------------------------------------------------------
Goldman Sachs Tax Free Money Market 71 $ 71
Provident California Tax Free Money Market 1,657 1,657
--------
TOTAL CASH EQUIVALENTS
(Cost $1,728) 1,728
--------
TOTAL INVESTMENTS -- 99.6%
(Cost $620,601) 620,601
--------
OTHER ASSETS AND LIABILITIES, NET -- 0.4% 2,693
--------
- ------------------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------------------
Fund Shares of Fiduciary Class (unlimited
authorization -- no par value)
based on 248,522,564 outstanding shares
of beneficial interest 248,522
Fund Shares of Retail Class A (unlimited
authorization -- no par value)
based on 287,426,802 outstanding shares
of beneficial interest 287,427
Fund Shares of Class S (unlimited
authorization -- no par value) based on
87,417,338 outstanding shares of beneficial interest 87,417
Distribution in excess of net investment income (7)
Accumulated net realized loss on investments (65)
--------
TOTAL NET ASSETS -- 100.0% $623,294
========
- ------------------------------------------------------------------------
Description Value
- ------------------------------------------------------------------------
NET ASSETS: (CONTINUED)
- ------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- FIDUCIARY CLASS $1.00
=========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- RETAIL CLASS A $1.00
=========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS S $1.00
=========
- --------------------------------------------------------------------------------
(A) FLOATING RATE SECURITY - THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON JANUARY 31, 2000.
(B) PUT AND DEMAND FEATURE - THE DATE REPORTED IS THE LESSER OF THE MATURITY
OR THE PUT DATE.
(C) SECURITIES ARE HELD IN CONJUNCTION WITH A LETTER OF CREDIT BY ONE OR MORE
MAJOR COMMERCIAL BANKS OR FINANCIAL INSTITUTIONS.
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE CORPORATION
AMT -- ALTERNATIVE MINIMUM TAX
COP -- CERTIFICATE OF PARTICIPATION
FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY
FSA -- FINANCIAL SECURITY ASSURANCE
GO -- GENERAL OBLIGATION
MBIA -- MUNICIPAL BOND INVESTORS ASSURANCE
RB -- REVENUE BOND
SER -- SERIES
TA -- TAX ALLOCATION
TECP -- TAX EXEMPT COMMERCIAL PAPER
TRAN -- TAX AND REVENUE ANTICIPATION NOTE
VRDN -- VARIABLE RATE DEMAND NOTE
The accompanying notes are an integral part of the financial statements.
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<PAGE>
STATEMENT OF ASSETS AND LIABILITIES (000)
AS OF JANUARY 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SMALL CAP VALUE
FUND
---------------
ASSETS:
<S> <C>
Investment Securities (Cost $91,210) .......................................................... $109,591
Income/Dividend Receivable .................................................................... 67
Investment Securities Sold .................................................................... 371
Capital Shares Sold Receivable ................................................................ 22,417
Other Receivables ............................................................................. 2
--------
TOTAL ASSETS ............................................................................. 132,448
--------
LIABILITIES:
Investment Securities Purchased ............................................................... 2,827
Payable Upon Return of Securities Loaned ...................................................... 7,572
Capital Shares Purchased Payable .............................................................. 19
Accrued Expenses Payable ...................................................................... 213
Other Liabilities ............................................................................. 22
--------
TOTAL LIABILITIES ........................................................................ 10,653
--------
TOTAL NET ASSETS ................................................................. 121,795
========
NET ASSETS:
Fund Shares of Fiduciary Class (unlimited authorization -- no par value)
based on 8,992,640 of outstanding shares of beneficial interest ........................... 96,323
Fund Shares of Retail Class A (unlimited authorization -- no par value)
based on 388,018 of outstanding shares of beneficial interest ............................. 4,691
Fund Shares of Retail Class B (unlimited authorization -- no par value)
based on 237,034 outstanding shares of beneficial interest ................................ 2,870
Fund Shares of Retail Class C (unlimited authorization -- no par value)
based on 899 outstanding shares of beneficial interest .................................... 11
Distribution in excess of net investment income ............................................... (1,706)
Accumulated net realized gain on investments .................................................. 1,227
Net unrealized appreciation on investments .................................................... 18,381
Net unrealized depreciation on forward foreign currency contracts, foreign
currencies and translations of other assets and liabilities denominated in
foreign currencies ........................................................................ (2)
--------
TOTAL NET ASSETS ................................................................. $121,795
========
Net Asset Value, Offering and Redemption Price Per Share -- Fiduciary Class ....................... $ 12.67
--------
Net Asset Value, Offering and Redemption Price Per Share -- Retail Class A .................... $ 12.61
--------
Maximum Offering Price Per Share -- Retail Class A ($12.61 / 94.5%) ........................... $ 13.34
--------
Net Asset Value, Offering and Redemption Price Per Share -- Retail Class B .................... $ 12.56
--------
Net Asset Value, Offering and Redemption Price Per Share -- Retail Class C .................... $ 12.53
--------
</TABLE>
The accompanying notes are an integral part of the financial statements.
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<PAGE>
[HighMark Logo Omitted]
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS (000)
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------
VALUE
GROWTH MOMENTUM
FUND FUND
---------- ----------
<S> <C> <C>
Interest Income ............................................................... $ 690 $ 470
Dividend Income ............................................................... 2,216 7,245
Less: Foreign Taxes withheld, net of reclaims ................................. (2) (22)
-------- -------
Total Investment Income ............................................ 2,904 7,693
-------- -------
Expenses:
Administrative Fees ........................................................ 794 848
Administration Fees Waived ................................................. (79) (85)
Investment Adviser Fees .................................................... 2,383 2,542
Investment Adviser Fees Waived ............................................. -- --
Shareholder Servicing Fees Fiduciary ....................................... 938 910
Shareholder Servicing Fees Retail Class A .................................. 38 47
Shareholder Servicing Fees Retail Class B .................................. 17 9
Shareholder Servicing Fees Waived .......................................... (586) (717)
Custodian Fees ............................................................. 40 42
Professional Fees .......................................................... 20 31
Registration Fees .......................................................... 35 20
Transfer Agency Fees ....................................................... 28 34
Distribution Fees Retail Class A ........................................... 38 46
Distribution Fees Retail Class B ........................................... 52 26
Distribution Fees Retail Class C ........................................... -- --
Distribution Fees Waived ................................................... -- --
Insurance Fees ............................................................. 2 4
Trustees Fees .............................................................. 7 11
Printing Fees .............................................................. 26 35
Miscellaneous Fees ......................................................... 8 2
-------- -------
Total Expenses ..................................................... 3,761 3,805
Reduction of Expenses (1) .......................................... (9) (10)
-------- -------
Total Net Expenses ................................................. 3,752 3,795
-------- -------
Net Investment Income (Loss) ............................................... (848) 3,898
-------- -------
Net Realized Gain on Investments .............................................. 45,408 11,828
-------- -------
Net Realized Gain on Option Contracts ......................................... -- 305
-------- -------
Net Realized Loss on Foreign Currency Transactions ............................ -- --
-------- -------
Change in Unrealized Appreciation (Depreciation) on Investments ............... 38,859 (12,312)
-------- -------
Change in Unrealized Depreciation on Foreign Currency ......................... -- --
-------- -------
Net Realized and Unrealized Gain (Loss) on Investments ........................ 84,267 (179)
-------- -------
Increase (Decrease) in Net Assets Resulting from Operations ................... $ 83,419 $ 3,719
======== =======
</TABLE>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
(1) SEE NOTE 3.
The accompanying notes are an integral part of the financial statements.
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<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
INCOME SMALL CAP INTERNATIONAL
EQUITY BALANCED VALUE EQUITY
FUND FUND FUND FUND
---------- --------- ---------- -------------
<S> <C> <C> <C>
$ 335 $ 5,787 $ 134 $ 37
7,245 3,120 732 754
(39) (209) (22) (25)
--------- -------- ------ -------
7,541 8,698 844 766
--------- -------- ------ -------
593 454 90 115
(397) (46) (9) (12)
1,780 1,361 451 544
(10) -- -- --
709 548 108 48
26 14 2 --
6 5 3 --
(441) (337) (66) (28)
30 23 32 107
50 16 2 6
75 10 7 8
41 19 16 1
26 14 2 --
18 15 8 --
-- -- -- --
-- -- -- --
7 2 -- --
11 6 1 --
80 18 3 4
52 -- 8 8
--------- -------- ------ -------
2,656 2,122 658 801
(7) (5) (1) (1)
--------- -------- ------ -------
2,649 2,117 657 800
--------- -------- ------ -------
4,892 6,581 187 (34)
--------- -------- ------ -------
13,722 9,597 966 4,482
--------- -------- ------ -------
-- -- -- --
--------- -------- ------ -------
-- -- (2) (46)
--------- -------- ------ -------
(70,591) (17,565) 6,758 9,214
--------- -------- ------ -------
-- -- (2) (17)
--------- -------- ------ -------
(56,869) (7,968) 7,720 13,633
--------- -------- ------ -------
$ (51,977) $ (1,387) $7,907 $13,599
========= ======== ====== =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
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[HighMark Logo Omitted]
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS (000)
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
- -----------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA
INTERMEDIATE
TAX-FREE BOND
BOND FUND FUND
------------- ------
<S> <C> <C>
Interest Income .................................................................. $ 4,085 $ 11,061
Dividend Income .................................................................. -- --
------- --------
Total Investment Income ............................................... 4,085 11,061
------- --------
Expenses:
Administrative Fees ........................................................... 167 332
Administration Fees Waived .................................................... (16) (33)
Investment Adviser Fees ....................................................... 419 830
Investment Adviser Fees Waived ................................................ (252) --
Shareholder Servicing Fees Fiduciary .......................................... 185 412
Shareholder Servicing Fees Retail Class A ..................................... 25 3
Shareholder Servicing Fees Retail Class B ..................................... -- --
Shareholder Servicing Fees Waived ............................................. (210) (398)
Custodian Fees ................................................................ 8 17
Professional Fees ............................................................. 11 17
Registration Fees ............................................................. 9 21
Transfer Agent Fees ........................................................... 9 18
Distribution Fees Retail Class A .............................................. 25 3
Distribution Fees Retail Class B .............................................. -- --
Distribution Fees Class S ..................................................... -- --
Distribution Fees Waived ...................................................... (25) (3)
Insurance Fees ................................................................ 1 2
Trustees Fees ................................................................. 4 6
Printing Fees ................................................................. 9 15
Miscellaneous Fees ............................................................ 1 4
------- --------
Total Expenses ........................................................ 370 1,246
Reduction of Expenses (1) ............................................. (2) (4)
------- --------
Total Net Expenses .................................................... 368 1,242
------- --------
Net Investment Income ......................................................... 3,717 9,819
------- --------
Net Realized Gain (Loss) on Investments .......................................... 63 (918)
------- --------
Change in Unrealized Depreciation on Investments ................................. (3,656) (7,348)
------- --------
Net Realized and Unrealized Gain (Loss) on Investments ........................... (3,593) (8,266)
------- --------
Increase in Net Assets Resulting from Operations ................................. $ 124 $ 1,553
======= ========
</TABLE>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
(1) SEE NOTE 3.
The accompanying notes are an integral part of the financial statements.
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<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
100%
INTERMEDIATE- U.S.TREASURY U.S. GOVERNMENT DIVERSIFIED CALIFORNIA TAX-FREE
TERM BOND MONEY MARKET MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND FUND FUND
------------ ------------- --------------- ------------ ------------------
<S> <C> <C> <C> <C>
$8,685 $30,476 $13,684 $ 91,429 $10,674
-- -- -- -- --
------ ------- ------- -------- -------
8,685 30,476 13,684 91,429 10,674
------ ------- ------- -------- -------
260 1,211 512 3,320 687
(26) (121) (52) (332) (69)
649 1,816 768 4,980 1,030
-- (303) -- -- (526)
318 291 437 1,962 365
6 671 104 1,225 421
-- -- -- -- --
(285) (961) (541) (3,187) (786)
13 61 26 166 34
10 29 16 118 30
8 33 20 105 41
11 86 19 112 38
6 670 104 1,225 421
-- -- 1 -- --
-- 1,215 217 2,117 160
(6) -- -- -- --
1 5 1 22 2
3 10 7 45 17
8 32 18 106 35
-- 1 2 28 13
------ ------- ------- -------- -------
976 4,746 1,659 12,012 1,913
(3) (16) (6) (43) (8)
------ ------- ------- -------- -------
973 4,730 1,653 11,969 1,905
------ ------- ------- -------- -------
7,712 25,746 12,031 79,460 8,769
------ ------- ------- -------- -------
(413) (5) 4 57 --
------ ------- ------- -------- -------
(6,368) -- -- -- --
------ ------- ------- -------- -------
(6,781) (5) 4 57 --
------ ------- ------- -------- -------
$ 931 $25,741 $12,035 $ 79,517 $ 8,769
====== ======= ======= ======== =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
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[HighMark Logo Omitted]
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS (000)
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED) AND FOR THE YEAR ENDED JULY 31, 1999
GROWTH VALUE MOMENTUM
FUND FUND
----------------------- -----------------------
08/01/99 08/01/98 08/01/99 08/01/98
TO 01/31/00 TO 07/31/99 TO 01/31/00 TO 07/31/99
----------------------- -----------------------
Investment Activities From Operations:
<S> <C> <C> <C> <C>
Net Investment Income (Loss) ............................................. $ (848) $ (1,030) $ 3,898 $ 9,788
Net Realized Gain on Investments ......................................... 45,408 67,282 11,828 37,461
Net Realized Gain on Option Contracts .................................... -- -- 305 71
Net Realized Gain (Loss) on Foreign Currency Transactions ................ -- -- -- --
Change in Unrealized Appreciation (Depreciation) on Investments .......... 38,859 59,868 (12,312) 55,738
Change in Unrealized Appreciation (Depreciation) on Foreign Currency ..... -- -- -- --
-------- -------- -------- --------
Net Increase (Decrease) in Net Assets Resulting From Operations ............ 83,419 126,120 3,719 103,058
-------- -------- -------- --------
Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ....................................................... -- -- (3,412) (9,557)
Class I Shares ......................................................... -- -- (353) --
Retail Class A Shares .................................................. -- -- (130) (316)
Retail Class B Shares .................................................. -- -- (6) (19)
Retail Class C Shares .................................................. -- -- -- --
Capital Gains:
Fiduciary Shares ....................................................... (67,702) (38,687) (32,731) (26,011)
Class I Shares ......................................................... -- -- (5,746) --
Retail Class A Shares .................................................. (3,095) (1,136) (1,827) (1,101)
Retail Class B Shares .................................................. (1,382) (309) (353) (182)
Retail Class C Shares .................................................. (2) -- (1) --
-------- -------- -------- --------
Total Distributions .................................................. (72,181) (40,132) (44,559) (37,186)
-------- -------- -------- --------
Change in Net Assets ....................................................... 11,238 85,988 (40,840) 65,872
-------- -------- -------- --------
Fiduciary Shares:
Proceeds from the reorganization of the Blue Chip Growth Fund .......... -- 134,130 -- --
Proceeds from Shares Issued ............................................ 82,069 152,940 80,096 167,107
Reinvestment of Distributions .......................................... 66,007 37,499 33,328 30,723
Cost of Shares Redeemed ................................................ (139,177) (169,282) (241,531) (280,911)
-------- -------- -------- --------
Total Fiduciary Share Transactions ................................... 8,899 155,287 (128,107) (83,081)
-------- -------- -------- --------
Class I Shares:
Proceeds from Shares Issued ............................................ -- -- 114,119 --
Reinvestment of Distributions .......................................... -- -- 6,099 --
Cost of Shares Redeemed ................................................ -- -- (7,441) --
-------- -------- -------- --------
Total Class I Share Transactions ..................................... -- -- 112,777 --
-------- -------- -------- --------
Retail Class A Shares:
Proceeds from Shares Issued ............................................ 177,571 87,981 87,214 64,059
Reinvestment of Distributions .......................................... 2,863 1,057 1,745 1,320
Cost of Shares Redeemed ................................................ (165,095) (82,900) (84,059) (66,804)
-------- -------- -------- --------
Total Retail Class A Share Transactions .............................. 15,339 6,138 4,900 (1,425)
-------- -------- -------- --------
Retail Class B Shares:
Proceeds from Shares Issued ............................................ 6,464 9,353 1,488 2,059
Reinvestment of Distributions .......................................... 1,356 303 349 195
Cost of Shares Redeemed ................................................ (1,017) (1,012) (1,029) (1,457)
-------- -------- -------- --------
Total Retail Class B Share Transactions .............................. 6,803 8,644 808 797
-------- -------- -------- --------
Retail Class C Shares:
Proceeds from Shares Issued ............................................ 61 -- 87 --
Reinvestment of Distributions .......................................... 2 -- 1 --
Cost of Shares Redeemed ................................................ -- -- (5) --
-------- -------- -------- --------
Total Retail Class C Share Transactions .............................. 63 -- 83 --
-------- -------- -------- --------
Net Increase (Decrease) in Net Assets From Share Transactions .............. 31,104 170,069 (9,539) (83,709)
-------- -------- -------- --------
Total Increase (Decrease) in Net Assets .............................. 42,342 256,057 (50,379) (17,837)
-------- -------- -------- --------
Net Assets:
Beginning of Period ...................................................... 774,238 518,181 886,317 904,154
-------- -------- -------- --------
End of Period ............................................................ $816,580 $774,238 $835,938 $886,317
======== ======== ======== ========
</TABLE>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
(1) COMMENCEMENT OF OPERATIONS.
The accompanying notes are an integral part of the financial statements.
78
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<PAGE>
<TABLE>
<CAPTION>
INCOME EQUITY BALANCED SMALL CAP VALUE INTERNATIONAL EQUITY
FUND FUND FUND FUND
- ------------------------------ ---------------------------- ---------------------------- --------------------------
08/01/99 08/01/98 08/01/99 08/01/98 08/01/99 09/17/98 (1) 08/01/99 08/01/98
TO 01/31/00 TO 07/31/99 TO 01/31/00 TO 07/31/99 TO 01/31/00 TO 07/31/99 TO 01/31/00 TO 07/31/99
- ------------------------------ ---------------------------- ---------------------------- --------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 4,892 $ 9,364 $ 6,581 $ 11,879 $ 187 $ 173 $ (34) $ 404
13,722 125,499 9,597 35,906 966 4,967 4,482 7,856
-- -- -- 19 -- -- -- --
-- -- -- -- (2) (63) (46) 130
(70,591) (47,639) (17,565) (4,521) 6,758 11,622 9,214 (1,586)
-- -- -- -- (2) 1 (17) 15
-------- -------- -------- -------- -------- -------- -------- --------
(51,977) 87,224 (1,387) 43,283 7,907 16,700 13,599 6,819
-------- -------- -------- -------- -------- -------- -------- --------
(4,768) (9,191) (6,471) (11,557) (1,845) (26) (722) (343)
-- -- -- -- -- -- -- --
(147) (261) (150) (259) (86) -- -- --
(21) (19) (41) (40) (44) -- (1) --
-- -- -- -- -- -- -- --
(114,343) (77,000) (35,061) (17,872) (4,436) -- (783) --
-- -- -- -- -- -- -- --
(4,308) (2,647) (890) (439) (146) -- -- --
(1,052) (298) (333) (73) (124) -- (1) --
-- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- --------
(124,639) (89,416) (42,946) (30,240) (6,681) (26) (1,507) (343)
-------- -------- -------- -------- -------- -------- -------- --------
(176,616) (2,192) (44,333) 13,043 1,226 16,674 12,092 6,476
-------- -------- -------- -------- -------- -------- -------- --------
-- -- -- -- -- -- -- --
64,932 59,638 28,751 70,832 30,345 72,571 12,104 27,052
110,665 77,041 40,516 28,648 4,577 -- 930 103
(168,293) (176,019) (65,542) (109,494) (2,532) (8,638) (19,921) (17,064)
-------- -------- -------- -------- -------- -------- -------- --------
7,304 (39,340) 3,725 (10,014) 32,390 63,933 (6,887) 10,091
-------- -------- -------- -------- -------- -------- -------- --------
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- --------
-- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- --------
2,406 9,523 829 2,676 24,873 843 569 --
4,272 2,622 1,022 674 230 -- 1 --
(4,429) (12,704) (1,371) (3,057) (21,222) (33) -- --
-------- -------- -------- -------- -------- -------- -------- --------
2,249 (559) 480 293 3,881 810 570 --
-------- -------- -------- -------- -------- -------- -------- --------
1,085 2,874 912 2,867 1,892 1,011 371 --
1,053 307 362 105 166 -- 2 --
(763) (517) (428) (432) (118) (81) (1) --
-------- -------- -------- -------- -------- -------- -------- --------
1,375 2,664 846 2,540 1,940 930 372 --
-------- -------- -------- -------- -------- -------- -------- --------
1 -- 1 -- 11 -- 1 --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- --------
1 -- 1 -- 11 -- 1 --
-------- -------- -------- -------- -------- -------- -------- --------
10,929 (37,235) 5,052 (7,181) 38,222 65,673 (5,944) 10,091
-------- -------- -------- -------- -------- -------- -------- --------
(165,687) (39,427) (39,281) 5,862 39,448 82,347 6,148 16,567
-------- -------- -------- -------- -------- -------- -------- --------
655,711 695,138 466,241 460,379 82,347 -- 108,537 91,970
-------- -------- -------- -------- -------- -------- -------- --------
$490,024 $655,711 $426,960 $466,241 $121,795 $ 82,347 $114,685 $108,537
======== ======== ======== ======== ======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
79
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<PAGE>
[HighMark Logo Omitted]
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS (000)
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED) AND FOR THE YEAR ENDED JULY 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA INTERMEDIATE
TAX-FREE BOND BOND
FUND FUND
------------------------ -----------------------
08/01/99 08/01/98 08/01/99 08/01/98
TO 01/31/00 TO 07/31/99 TO 01/31/00 TO 07/31/99
------------------------ -----------------------
Investment Activities From Operations:
<S> <C> <C> <C> <C>
Net Investment Income .................................................... $ 3,717 $ 7,307 $ 9,819 $ 16,166
Net Realized Gain (Loss) on Investments .................................. 63 736 (918) 2,681
Change in Unrealized Depreciation on Investments ......................... (3,656) (2,207) (7,348) (14,801)
-------- -------- -------- --------
Net Increase in Net Assets Resulting From Operations ..................... 124 5,836 1,553 4,046
-------- -------- -------- --------
Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares ....................................................... (3,271) (6,586) (9,783) (15,821)
Retail Class A Shares .................................................. (461) (702) (83) (146)
Retail Class B Shares .................................................. (1) -- -- --
Class S Shares ......................................................... -- -- -- --
Capital Gains:
Fiduciary Shares ....................................................... -- -- -- --
Retail Class A Shares .................................................. -- -- -- --
Retail Class B Shares .................................................. -- -- -- --
Class S Shares ......................................................... -- -- -- --
-------- -------- -------- --------
Total Distributions .................................................. (3,733) (7,288) (9,866) (15,967)
-------- -------- -------- --------
Change in Net Assets ....................................................... (3,609) (1,452) (8,313) (11,921)
-------- -------- -------- --------
Share Transactions:
Fiduciary Shares:
Proceeds from the reorganization of the Government Securities Fund ..... -- -- -- 113,026
Proceeds from Shares Issued ............................................ 9,553 21,402 37,411 78,647
Reinvestment of Distributions .......................................... 228 400 6,192 8,719
Cost of Shares Redeemed ................................................ (15,095) (28,326) (50,619) (59,820)
-------- -------- -------- --------
Total Fiduciary Share Transactions ................................... (5,314) (6,524) (7,016) 140,572
-------- -------- -------- --------
Retail Class A Shares:
Proceeds from Shares Issued ............................................ 13,507 9,687 951 2,585
Reinvestment of Distributions .......................................... 347 479 61 102
Cost of Shares Redeemed ................................................ (7,357) (5,053) (758) (1,837)
-------- -------- -------- --------
Total Retail Class A Share Transactions .............................. 6,497 5,113 254 850
-------- -------- -------- --------
Retail Class B Shares:
Proceeds from Shares Issued ............................................ 224 -- -- --
Reinvestment of Distributions .......................................... -- -- -- --
Cost of Shares Redeemed ................................................ (88) -- -- --
-------- -------- -------- --------
Total Retail Class B Share Transactions .............................. 136 -- -- --
-------- -------- -------- --------
Class S Shares:
Proceeds from Shares Issued ............................................ -- -- -- --
Reinvestment of Distributions .......................................... -- -- -- --
Cost of Shares Redeemed ................................................ -- -- -- --
-------- -------- -------- --------
Total Class S Share Transactions ..................................... -- -- -- --
-------- -------- -------- --------
Net Increase (Decrease) in Net Assets From Share Transactions .............. 1,319 (1,411) (6,762) 141,422
-------- -------- -------- --------
Total Increase (Decrease) in Net Assets .............................. (2,290) (2,863) (15,075) 129,501
-------- -------- -------- --------
Net Assets:
Beginning of Period ...................................................... 167,124 169,987 337,538 208,037
-------- -------- -------- --------
End of Period ............................................................ $164,834 $167,124 $322,463 $337,538
======== ======== ======== ========
</TABLE>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
The accompanying notes are an integral part of the financial statements.
80
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<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INTERMEDIATE- 100% U.S. TREASURY U.S. GOVERNMENT DIVERSIFIED CALIFORNIA TAX-FREE
TERM BOND MONEY MARKET MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND FUND FUND
- ------------------------- ----------------------- ------------------------ ------------------------ ------------------------
08/01/99 08/01/98 08/01/99 08/01/98 08/01/99 08/01/98 08/01/99 08/01/98 08/01/99 08/01/98
TO 01/31/00 TO 07/31/99 TO 01/31/00 TO 07/31/99 TO 01/31/00 TO 07/31/99 TO 01/31/00 TO 07/31/99 TO 01/31/00 TO 07/31/99
- ------------------------- ----------------------- ------------------------ ------------------------ -----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 7,712 $ 15,211 $ 25,746 $ 47,560 $ 12,031 $ 20,468 $ 79,460 $ 118,642 $ 8,769 $ 14,976
(413) 693 (5) (39) 4 34 57 (477) -- 1
(6,368) (9,244) -- -- -- -- -- -- -- --
- -------- -------- ---------- ---------- --------- ---------- ---------- ---------- -------- --------
931 6,660 25,741 47,521 12,035 20,502 79,517 118,165 8,769 14,977
- -------- -------- ---------- ---------- --------- ---------- ---------- ---------- -------- --------
(7,603) (14,860) (5,296) (10,806) (8,422) (14,467) (39,187) (57,819) (3,968) (6,516)
(156) (303) (11,175) (36,749) (1,841) (5,995) (22,289) (60,823) (4,125) (8,468)
-- -- -- -- (5) (3) -- -- -- --
-- -- (9,280) -- (1,763) -- (17,981) -- (675) --
-- -- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- -- --
- -------- -------- ---------- ---------- --------- ---------- ---------- ---------- -------- --------
(7,759) (15,163) (25,751) (47,555) (12,031) (20,465) (79,457) (118,642) (8,768) (14,984)
- -------- -------- ---------- ---------- --------- ---------- ---------- ---------- -------- --------
(6,828) (8,503) (10) (34) 4 37 60 (477) 1 (7)
- -------- -------- ---------- ---------- --------- ---------- ---------- ---------- -------- --------
-- -- -- -- -- -- -- -- -- --
21,379 63,567 497,257 756,800 810,799 2,136,746 1,978,183 2,543,551 415,690 446,341
2,461 5,130 503 563 242 358 6,185 11,220 5 10
(33,262) (52,096) (544,028) (721,529) (820,567) (2,069,085) (1,523,552) (2,410,010) (402,910) (452,148)
- -------- -------- ---------- ---------- --------- ---------- ---------- ---------- -------- --------
(9,422) 16,601 (46,268) 35,834 (9,526) 68,019 460,816 144,761 12,785 (5,797)
- -------- -------- ---------- ---------- --------- ---------- ---------- ---------- -------- --------
1,325 2,217 405,637 1,656,137 65,524 490,708 1,088,520 2,638,461 233,338 565,071
153 295 13,205 36,234 2,295 5,809 25,458 59,674 4,218 8,412
(1,096) (2,884) (987,572) (1,442,459) (195,000) (447,628) (2,153,267) (2,180,382) (322,853) (506,038)
- -------- -------- ---------- ---------- --------- ---------- ---------- ---------- -------- --------
382 (372) (568,730) 249,912 (127,181) 48,889 (1,039,289) 517,753 (85,297) 67,445
- -------- -------- ---------- ---------- --------- ---------- ---------- ---------- -------- --------
-- -- -- -- 222 235 -- -- -- --
-- -- -- -- 5 2 -- -- -- --
-- -- -- -- (137) (20) -- -- -- --
- -------- -------- ---------- ---------- --------- ---------- ---------- ---------- -------- --------
-- -- -- -- 90 217 -- -- -- --
- -------- -------- ---------- ---------- --------- ---------- ---------- ---------- -------- --------
-- -- 1,088,195 -- 334,528 -- 1,974,962 -- 223,551 --
-- -- 6,953 -- 1,296 -- 13,213 -- 518 --
-- -- (472,996) -- (216,258) -- (664,230) -- (136,652) --
- -------- -------- ---------- ---------- --------- ---------- ---------- ---------- -------- --------
-- -- 622,152 -- 119,566 -- 1,323,945 -- 87,417 --
- -------- -------- ---------- ---------- --------- ---------- ---------- ---------- -------- --------
(9,040) 16,229 7,154 285,746 (17,051) 117,125 745,472 662,514 14,905 61,648
- -------- -------- ---------- ---------- --------- ---------- ---------- ---------- -------- --------
(15,868) 7,726 7,144 285,712 (17,047) 117,162 745,532 662,037 14,906 61,641
- -------- -------- ---------- ---------- --------- ---------- ---------- ---------- -------- --------
262,366 254,640 1,240,532 954,820 522,332 405,170 2,966,458 2,304,421 608,388 546,747
- -------- -------- ---------- ---------- --------- ---------- ---------- ---------- -------- --------
$246,498 $262,366 $1,247,676 $1,240,532 $ 505,285 $ 522,332 $3,711,990 $2,966,458 $623,294 $608,388
======== ======== ========== ========== ========= ========== ========== ========== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
81
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<PAGE>
[HighMark Logo Omitted]
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------------------------------------------------------------
- -----------
GROWTH FUND
- -----------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
2000 $18.39 (0.018) 2.058 -- (1.800) $18.63 11.19%
FOR THE YEARS ENDED JULY 31,:
1999 $16.92 (0.018) 2.759 -- (1.271) $18.39 17.24%
1998 17.36 0.017 3.108 (0.033) (3.532) 16.92 22.59%
1997 12.58 0.057 5.773 (0.053) (0.996) 17.36 48.54%
1996 11.87 0.120 1.350 (0.120) (0.640) 12.58 12.72%
1995 9.76 0.150 2.260 (0.150) (0.150) 11.87 25.23%
RETAIL CLASS A SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $18.35 (0.003) 2.012 -- (1.800) $18.56 11.05%
FOR THE YEARS ENDED JULY 31,:
1999 $16.93 (0.055) 2.746 -- (1.271) $18.35 16.92%
1998 17.39 (0.018) 3.100 (0.015) (3.532) 16.93 22.26%
1997 12.60 0.049 5.784 (0.048) (0.996) 17.39 48.49%
1996 11.87 0.110 1.380 (0.120) (0.640) 12.60 12.88%
1995 9.77 0.150 2.250 (0.150) (0.150) 11.87 25.10%
RETAIL CLASS B SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $18.15 (0.039) 1.958 -- (1.800) $18.27 10.66%
FOR THE YEAR ENDED JULY 31,:
1999 $16.85 (0.103) 2.674 -- (1.271) $18.15 16.26%
FOR THE PERIOD ENDED JULY 31,:
1998 (1) $14.76 (0.035) 2.125 -- -- $16.85 28.71%*
RETAIL CLASS C SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (2) $19.43 0.003 0.637 -- (1.800) $18.27 3.37%
</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 PORTFOLIO
OF PERIOD TO AVERAGE EXCLUDING TO AVERAGE EXCLUDING TURNOVER
(000) NET ASSETS FEE WAIVERS NET ASSETS FEE WAIVERS RATE
- ---------------------------------------------------------------------------------------------------------------------------
- -----------
GROWTH FUND
- -----------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
2000 $758,327 0.92%* 1.09%* (0.19)%* (0.36)% *28%
FOR THE YEARS ENDED JULY 31,:
1999 $738,548 0.90% 1.09% (0.14)% (0.33)% 52%
1998 499,060 0.91% 1.08% 0.08% (0.09)% 67%
1997 297,879 0.92% 1.24% 0.39% 0.07% 118%
1996 41,495 0.93% 1.67% 0.98% 0.23% 79%
1995 25,096 0.79% 1.92% 1.40% 0.26% 68%
RETAIL CLASS A SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $ 40,271 1.17%* 1.34%* (0.44)%* (0.61)%* 28%
FOR THE YEARS ENDED JULY 31,:
1999 $ 24,579 1.14% 1.34% (0.38)% (0.58)% 52%
1998 17,173 1.16% 1.34% (0.17)% (0.35)% 67%
1997 7,816 1.04% 1.49% 0.28% (0.18)% 118%
1996 2,843 0.93% 1.91% 0.96% (0.02)% 79%
1995 1,218 0.84% 2.11% 1.17% (0.10)% 68%
RETAIL CLASS B SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $17,922 1.82%* 1.84%* (1.11)%* (1.13)% *28%
FOR THE YEAR ENDED JULY 31,:
1999 $11,111 1.79% 1.84% (1.04)% (1.09)% 52%
FOR THE PERIOD ENDED JULY 31,:
1998 (1) $ 1,948 1.81%* 1.84%* (0.94)%* (0.97)%* 67%
RETAIL CLASS C SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (2) $ 60 1.82%* 1.84%* (1.39)%* (1.41)%* 28%
</TABLE>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* ANNUALIZED.
** TOTAL RETURN DOES NOT REFLECT THE SALES CHARGE.
(1) COMMENCED OPERATIONS ON FEBRUARY 2, 1998.
(2) COMMENCED OPERATIONS ON NOVEMBER 30, 1999.
The accompanying notes are an integral part of the financial statements.
82
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<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------------------------------------------------------------
- -------------------
VALUE MOMENTUM FUND
- -------------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
2000 $29.56 0.138 0.060 (0.135) (1.463) $28.16 0.69%
FOR THE YEARS ENDED JULY 31,:
1999 $27.31 0.315 3.117 (0.318) (0.866) $29.56 13.08%
1998 25.48 0.332 2.003 (0.341) (0.164) 27.31 9.22%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $21.57 0.132 3.955 (0.176) -- $25.48 19.06%
FOR THE YEARS ENDED JANUARY 31,:
1997 $18.05 0.436 4.371 (0.438) (0.848) $21.57 27.33%
1996 13.40 0.331 5.063 (0.337) (0.408) 18.05 40.88%
1995 14.27 0.318 (0.817) (0.317) (0.054) 13.40 (3.48)%
CLASS I SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (2) $27.86 0.085 1.766 (0.088) (1.463) $28.16 (5.00)%
RETAIL CLASS A SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $29.55 0.102 0.063 (0.102) (1.463) $28.15 0.57%
FOR THE YEARS ENDED JULY 31,:
1999 $27.31 0.245 3.119 (0.255) (0.866) $29.55 12.79%
1998 25.48 0.262 2.007 (0.275) (0.164) 27.31 8.96%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $21.57 0.106 3.953 (0.147) -- $25.48 18.90%
FOR THE YEARS ENDED JANUARY 31,:
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)%
RETAIL CLASS B SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $29.46 0.006 0.059 (0.023) (1.463) $28.04 0.22%
FOR THE YEARS ENDED JULY 31,:
1999 $27.28 0.024 3.113 (0.088) (0.866) $29.46 11.89%
FOR THE PERIOD ENDED JULY 31,:
1998 (1) $26.82 0.046 0.479 (0.064) -- $27.28 3.94%*
RETAIL CLASS C SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (3) $29.50 0.027 0.001 (0.025) (1.463) $28.04 0.09%
</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 PORTFOLIO
OF PERIOD TO AVERAGE EXCLUDING TO AVERAGE EXCLUDING TURNOVER
(000) NET ASSETS FEE WAIVERS NET ASSETS FEE WAIVERS RATE
- ---------------------------------------------------------------------------------------------------------------------------
- -------------------
VALUE MOMENTUM FUND
- -------------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
2000 $674,329 0.88%* 1.09%* 0.95%* 0.74%* 2%
FOR THE YEARS ENDED JULY 31,:
1999 $843,316 0.81% 1.09% 1.15% 0.87% 9%
1998 863,627 0.81% 1.08% 1.25% 0.98% 7%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $463,434 0.78%* 0.94%* 1.65%* 1.49%* 1%
FOR THE YEARS ENDED JANUARY 31,:
1997 $317,482 0.79% 0.79% 2.26% 2.26% 9%
1996 222,065 0.80% 0.80% 2.07% 2.07% 20%
1995 150,138 0.81% 0.81% 2.36% 2.36% 6%
CLASS I SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (2) $114,490 0.82%* 0.84%* 0.83%* 0.81%* 2%
RETAIL CLASS A SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $ 40,048 1.13%* 1.34%* 0.69%* 0.48%* 2%
FOR THE YEARS ENDED JULY 31,:
1999 $ 36,495 1.06% 1.34% 0.90% 0.62% 9%
1998 35,325 1.06% 1.33% 0.99% 0.72% 7%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $ 20,750 1.03%* 1.25%* 1.40%* 1.17%* 1%
FOR THE YEARS ENDED JANUARY 31,:
1997 $ 15,963 1.04% 1.19% 2.01% 1.86% 9%
1996 11,801 0.89% 1.20% 2.00% 1.69% 20%
1995 9,777 0.81% 1.21% 2.37% 1.97% 6%
RETAIL CLASS B SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $ 6,990 1.82%* 1.84%* (0.01)%* (0.03)%* 2%
FOR THE YEARS ENDED JULY 31,:
1999 $ 6,506 1.81% 1.84% 0.14% 0.11% 9%
FOR THE PERIOD ENDED JULY 31,:
1998 (1) $ 5,202 1.81%* 1.84%* 0.15%* 0.13%* 7%
RETAIL CLASS C SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (3) $ 81 1.82%* 1.84%* (0.04)%* (0.06)%* 2%
</TABLE>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* ANNUALIZED
** TOTAL RETURN DOES NOT REFLECT THE SALES CHARGE.
(1) COMMENCED OPERATIONS ON FEBRUARY 2, 1998.
(2) COMMENCED OPERATIONS ON SEPTEMBER 30, 1999.
(3) COMMENCED OPERATIONS ON NOVEMBER 30, 1999.
The accompanying notes are an integral part of the financial statements.
83
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<PAGE>
[HighMark Logo Omitted]
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------
INCOME EQUITY FUND
- ------------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
2000 $17.78 0.132 (1.594) (0.133) (3.565) $12.62 (8.40)%
FOR THE YEARS ENDED JULY 31,:
1999 $17.92 0.247 2.072 (0.249) (2.206) $17.78 14.23%
1998 18.21 0.305 1.486 (0.302) (1.776) 17.92 10.79%
1997 14.27 0.372 5.019 (0.368) (1.083) 18.21 40.13%
1996 13.00 0.420 1.930 (0.420) (0.660) 14.27 18.25%
1995 11.92 0.440 1.500 (0.440) (0.420) 13.00 17.26%
RETAIL CLASS A SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $17.81 0.111 (1.593) (0.113) (3.565) $12.65 (8.49)%
FOR THE YEARS ENDED JULY 31,:
1999 $17.95 0.189 2.087 (0.208) (2.206) $17.81 13.94%
1998 18.24 0.262 1.486 (0.258) (1.776) 17.95 10.50%
1997 14.29 0.363 5.028 (0.358) (1.083) 18.24 39.97%
1996 13.03 0.420 1.920 (0.420) (0.660) 14.29 18.21%
1995 11.92 0.420 1.550 (0.440) (0.420) 13.03 17.52%
RETAIL CLASS B SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $17.74 0.055 (1.591) (0.069) (3.565) $12.57 (8.86)%
FOR THE YEAR ENDED JULY 31,:
1999 $17.90 0.089 2.071 (0.115) (2.206) $17.74 13.25%
FOR THE PERIOD ENDED JULY 31,:
1998 (1) $16.88 0.057 1.034 (0.072) -- $17.90 13.10%*
RETAIL CLASS C SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (2) $16.51 0.018 (0.375) (0.018) (3.565) $12.57 (2.35)%
- -------------
BALANCED FUND
- -------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $17.21 0.245 (0.299) (0.248) (1.398) $15.51 (0.34)%
FOR THE YEARS ENDED JULY 31,:
1999 $16.73 0.428 1.172 (0.436) (0.684) $17.21 9.96%
1998 16.46 0.446 0.724 (0.458) (0.442) 16.73 7.31%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $15.04 0.228 1.712 (0.228) (0.290) $16.46 13.35%
FOR THE YEARS ENDED JANUARY 31,:
1997 $13.92 0.422 1.699 (0.409) (0.595) $15.04 16.30%
1996 11.45 0.415 2.831 (0.417) (0.362) 13.92 28.93%
1995 12.21 0.390 (0.756) (0.391) (0.003) 11.45 (2.95)%
</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 PORTFOLIO
OF PERIOD TO AVERAGE EXCLUDING TO AVERAGE EXCLUDING TURNOVER
(000) NET ASSETS FEE WAIVERS NET ASSETS FEE WAIVERS RATE
- ---------------------------------------------------------------------------------------------------------------------------
- ------------------
INCOME EQUITY FUND
- ------------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
2000 $467,357 0.88%* 1.17%* 1.67%* 1.38%* 43%
FOR THE YEARS ENDED JULY 31,:
1999 $628,839 0.88% 1.09% 1.43% 1.22% 71%
1998 670,298 0.92% 1.09% 1.63% 1.45% 69%
1997 352,725 0.99% 1.21% 2.39% 2.17% 46%
1996 262,660 1.03% 1.27% 2.95% 2.71% 42%
1995 221,325 1.06% 1.30% 3.59% 3.34% 37%
RETAIL CLASS A SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $ 18,258 1.13%* 1.42%* 1.40%* 1.11%* 43%
FOR THE YEARS ENDED JULY 31,:
1999 $ 22,329 1.13% 1.34% 1.17% 0.96% 71%
1998 23,024 1.17% 1.34% 1.39% 1.22% 69%
1997 14,152 1.06% 1.46% 2.32% 1.92% 46%
1996 10,143 1.03% 1.51% 2.89% 2.41% 42%
1995 3,881 1.06% 1.55% 3.06% 2.57% 37%
RETAIL CLASS B SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $ 4,408 1.78%* 1.92%* 0.73%* 0.59%* 43%
FOR THE YEAR ENDED JULY 31,:
1999 $ 4,543 1.78% 1.84% 0.50% 0.44% 71%
FOR THE PERIOD ENDED JULY 31,:
1998 (1) $ 1,816 1.82%* 1.85%* 0.38%* 0.36%* 69%
RETAIL CLASS C SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (2) $ 1 1.78%* 1.92%* 0.48%* 0.34%* 43%
- -------------
BALANCED FUND
- -------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $412,289 0.92%* 1.09%* 2.91%* 2.74%* 13%
FOR THE YEARS ENDED JULY 31,:
1999 $451,411 0.92% 1.09% 2.60% 2.43% 34%
1998 448,783 0.91% 1.08% 2.67% 2.50% 22%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $400,442 0.83%* 0.98%* 2.99%* 2.85%* 10%
FOR THE YEARS ENDED JANUARY 31,:
1997 $307,531 0.79% 0.79% 3.48% 3.48% 27%
1996 233,878 0.80% 0.80% 3.20% 3.20% 26%
1995 167,434 0.80% 0.80% 3.41% 3.41% 48%
</TABLE>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* ANNUALIZED
** TOTAL RETURN DOES NOT REFLECT THE SALES CHARGE.
(1) COMMENCED OPERATIONS ON FEBRUARY 2, 1998.
(2) COMMENCED OPERATIONS ON NOVEMBER 30, 1999.
The accompanying notes are an integral part of the financial statements.
84
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<PAGE>
[HighMark Logo Omitted]
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------------------------------------------------------------
- -------------------------
BALANCED FUND (CONTINUED)
- -------------------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
2000 $17.20 0.224 (0.300) (0.226) (1.398) $15.50 (0.47)%
FOR THE YEARS ENDED JULY 31,:
1999 $16.73 0.383 1.167 (0.396) (0.684) $17.20 9.64%
1998 16.45 0.402 0.736 (0.416) (0.442) 16.73 7.12%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $15.03 0.209 1.712 (0.209) (0.290) $16.45 13.22%
FOR THE YEARS ENDED JANUARY 31,:
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)%
RETAIL CLASS B SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $17.18 0.168 (0.288) (0.173) (1.398) $15.49 (0.73)%
FOR THE YEAR ENDED JULY 31,:
1999 $16.73 0.278 1.161 (0.301) (0.684) $17.18 8.91%
FOR THE PERIOD ENDED JULY 31,:
1998 (1) $16.55 0.155 0.197 (0.175) -- $16.73 4.32%*
RETAIL CLASS C SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (2) $17.07 0.051 (0.182) (0.051) (1.398) $15.49 (0.81)%
- --------------------
SMALL CAP VALUE FUND
- --------------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $12.55 (0.184) 0.945 (0.004) (0.637) $12.67 8.39%
FOR THE PERIOD ENDED JULY 31,:
1999 (3) $10.00 0.018 2.536 (0.004) -- $12.55 25.54%
RETAIL CLASS A SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $12.52 0.039 0.940 (0.252) (0.637) $12.61 8.17%
FOR THE PERIOD ENDED JULY 31,:
1999 (3) $10.00 (0.003) 2.526 (0.003) -- $12.52 25.24%
RETAIL CLASS B SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $12.46 0.033 0.918 (0.214) (0.637) $12.56 7.97%
FOR THE PERIOD ENDED JULY 31,:
1999 (3) $10.00 (0.041) 2.501 -- -- $12.46 24.60%
RETAIL CLASS C SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (2) $12.48 0.332 0.609 (0.254) (0.637) $12.53 7.89%
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 PORTFOLIO
OF PERIOD TO AVERAGE EXCLUDING TO AVERAGE EXCLUDING TURNOVER
(000) NET ASSETS FEE WAIVERS NET ASSETS FEE WAIVERS RATE
- ---------------------------------------------------------------------------------------------------------------------------
- -------------------------
BALANCED FUND (CONTINUED)
- -------------------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
2000 $ 10,630 1.17%* 1.34%* 2.66%* 2.49%* 13%
FOR THE YEARS ENDED JULY 31,:
1999 $ 11,236 1.17% 1.34% 2.35% 2.18% 34%
1998 10,629 1.16% 1.33% 2.42% 2.24% 22%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $ 9,214 1.07%* 1.30%* 2.75%* 2.53%* 10%
FOR THE YEARS ENDED JANUARY 31,:
1997 $ 8,833 1.04% 1.19% 3.22% 3.07% 27%
1996 8,422 0.89% 1.20% 3.12% 2.81% 26%
1995 7,128 0.79% 1.19% 3.41% 3.01% 48%
RETAIL CLASS B SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $ 4,040 1.82%* 1.84%* 2.01%* 1.99%* 13%
FOR THE YEAR ENDED JULY 31,:
1999 $ 3,594 1.82% 1.84% 1.68% 1.66% 34%
FOR THE PERIOD ENDED JULY 31,:
1998 (1) $ 967 1.80%* 1.83%* 1.77%* 1.74%* 22%
RETAIL CLASS C SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (2) $ 1 1.82%* 1.84%* 1.76%* 1.74%* 13%
- --------------------
SMALL CAP VALUE FUND
- --------------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $114,766 1.43%* 1.60%* 0.45%* 0.28%*2 5%
FOR THE PERIOD ENDED JULY 31,:
1999 (3) $ 80,423 1.54% 1.71% 0.28% 0.11% 74%
RETAIL CLASS A SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $ 3,420 1.68%* 1.85%* 0.13%* (0.04)%* 25%
FOR THE PERIOD ENDED JULY 31,:
1999 (3) $ 912 1.77% 1.94% (0.11)% (0.28)% 74%
RETAIL CLASS B SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $ 3,595 2.33%* 2.37%* (0.47)%* (0.51)%* 25%
FOR THE PERIOD ENDED JULY 31,:
1999 (3) $ 1,012 2.39% 2.42% (1.40)% (1.43)% 74%
RETAIL CLASS C SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (2) $ 14 2.33%* 2.35%* (1.25)%* (1.27)%* 25%
</TABLE>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* ANNUALIZED
** TOTAL RETURN DOES NOT REFLECT THE SALES CHARGE.
(1) COMMENCED OPERATIONS ON FEBRUARY 2, 1998.
(2) COMMENCED OPERATIONS ON NOVEMBER 30, 1999.
(3) COMMENCED OPERATIONS ON SEPTEMBER 17, 1998.
The accompanying notes are an integral part of the financial statements.
85
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<PAGE>
[HighMark Logo Omitted]
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------------------------------------------------------------
- -------------------------
INTERNATIONAL EQUITY FUND
- -------------------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
2000 $39.38 (0.018) 4.971 (0.276) (0.297) $43.76 12.52%
FOR THE YEARS ENDED JULY 31,:
1999 $37.32 0.210 1.982 (0.132) -- $39.38 5.90%
1998 38.69 0.767 (1.178) (0.592) (0.367) 37.32 (0.82)%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $34.52 0.212 3.958 -- -- $38.69 12.08%
FOR THE YEARS ENDED JANUARY 31,:
1997 $37.49 0.220 (0.965) (0.812) (1.416) $34.52 (2.14)%
1996 (1) 33.51 0.447 4.084 (0.446) (0.105) 37.49 13.56%
RETAIL CLASS A SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (2) $44.06 0.259 (0.001) (0.271) (0.297) $43.75 0.54%
RETAIL CLASS B SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (2) $44.06 0.102 0.111 (0.256) (0.297) $43.72 0.44%
RETAIL CLASS C SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (2) $44.06 (0.083) 0.289 (0.249) (0.297) $43.72 0.42%
- ------------------------------------------
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
- ------------------------------------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $ 9.96 0.221 (0.220) (0.221) -- $ 9.74 0.01%
FOR THE YEARS ENDED JULY 31,:
1999 $10.04 0.438 (0.086) (0.436) -- $ 9.96 3.54%
1998 10.01 0.457 0.008 (0.435) -- 10.04 4.75%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $ 9.76 0.206 0.256 (0.215) -- $10.01 4.84%
FOR THE YEARS ENDED JANUARY 31,:
1997 $ 9.85 0.430 (0.078) (0.442) -- $ 9.76 3.72%
1996 8.95 0.518 0.873 (0.487) -- 9.85 15.83%
1995 10.04 0.460 (1.098) (0.452) -- 8.95 (6.33)%
RETAIL CLASS A SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $ 9.93 0.209 (0.209) (0.221) -- $ 9.71 0.01%
FOR THE YEARS ENDED JULY 31,:
1999 $10.01 0.429 (0.078) (0.436) -- $ 9.93 3.55%
1998 9.99 0.423 0.032 (0.435) -- 10.01 4.66%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $ 9.74 0.222 0.240 (0.215) -- $ 9.99 4.85%
FOR THE YEARS ENDED JANUARY 31,:
1997 $ 9.84 0.458 (0.112) (0.442) -- $ 9.74 3.62%
1996 8.94 0.470 0.918 (0.487) -- 9.84 15.84%
1995 10.03 0.439 (1.077) (0.452) -- 8.94 (6.33)%
RETAIL CLASS B SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (2) $ 9.84 0.067 (0.110) (0.067) -- $ 9.73 (0.44)%
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 PORTFOLIO
OF PERIOD TO AVERAGE EXCLUDING TO AVERAGE EXCLUDING TURNOVER
(000) NET ASSETS FEE WAIVERS NET ASSETS FEE WAIVERS RATE
- ---------------------------------------------------------------------------------------------------------------------------
- -------------------------
INTERNATIONAL EQUITY FUND
- -------------------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
2000 $114,271 1.40%* 1.45%* (0.06)%* (0.11)%* 30%
FOR THE YEARS ENDED JULY 31,:
1999 $108,537 1.36% 1.63% 0.42% 0.15% 87%
1998 91,970 1.34% 1.61% 0.71% 0.44% 72%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $ 52,467 1.22%* 1.41%* 1.16%* 0.97%* 18%
FOR THE YEARS ENDED JANUARY 31,:
1997 $ 46,373 1.18% 1.28% 0.60% 0.50% 29%
1996 (1) 44,188 1.16% 1.36% 1.31% 1.11% 21%
RETAIL CLASS A SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (2) $ 61 1.71%* 1.88%* (0.40)%* (0.57)%* 30%
RETAIL CLASS B SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (2) $ 352 2.36%* 2.38%* (1.16)%* (1.18)%* 30%
RETAIL CLASS C SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (2) $ 1 2.36%* 2.38%* (0.85)%* (0.87)%* 30%
- -------------------------------------------
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
- ------------------------------------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $140,891 0.44%* 1.02%* 4.44%* 3.86%* 5%
FOR THE YEARS ENDED JULY 31,:
1999 $149,365 0.45% 1.02% 4.29% 3.72% 11%
1998 157,062 0.42% 1.04% 4.46% 3.84% 23%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $ 11,292 0.21%* 0.91%* 4.56%* 3.85%* 5%
FOR THE YEARS ENDED JANUARY 31,:
1997 $ 7,435 0.20% 0.85% 4.69% 4.04% 6%
1996 4,196 0.24% 0.71% 4.97% 4.50% 30%
1995 12,793 0.50% 0.72% 4.84% 4.62% 22%
RETAIL CLASS A SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $ 23,807 0.44%* 1.27%* 4.45%* 3.62%* 5%
FOR THE YEARS ENDED JULY 31,:
1999 $ 17,759 0.45% 1.27% 4.30% 3.48% 11%
1998 12,925 0.31% 1.29% 4.37% 3.39% 23%
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $ 23,807 0.44%* 1.27%* 4.45%* 3.62%* 5%
FOR THE YEARS ENDED JULY 31,:
1999 $ 17,759 0.45% 1.27% 4.30% 3.48% 11%
1998 12,925 0.31% 1.29% 4.37% 3.39% 23%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $ 11,214 0.21%* 1.22%* 4.55%* 3.54%* 5%
FOR THE YEARS ENDED JANUARY 31,:
1997 $ 5,791 0.20% 1.25% 4.69% 3.64% 6%
1996 4,266 0.23% 1.12% 4.93% 4.04% 30%
1995 4,882 0.50% 1.12% 4.92% 4.30% 22%
RETAIL CLASS B SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (2) $ 136 1.44%* 1.77%* 3.67%* 3.34%* 5%
</TABLE>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* ANNUALIZED.
** TOTAL RETURN DOES NOT REFLECT THE SALES CHARGE.
(1) COMMENCED OPERATIONS ON FEBRUARY 1, 1995.
(2) COMMENCED OPERATIONS ON NOVEMBER 30, 1999.
The accompanying notes are an integral part of the financial statements.
86
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<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------------------------------------------------------------
- -------------------------
BOND FUND
- -------------------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
2000 $10.39 0.309 (0.259) (0.310) -- $10.13 0.47%
FOR THE YEARS ENDED JULY 31,:
1999 $10.81 0.605 (0.426) (0.600) -- $10.39 1.60%
1998 10.67 0.615 0.150 (0.627) -- 10.81 7.41%
1997 10.23 0.628 0.421 (0.609) -- 10.67 10.59%
1996 10.38 0.660 (0.160) (0.650) -- 10.23 4.81%
1995 10.11 0.640 0.270 (0.640) -- 10.38 9.43%
RETAIL CLASS A SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $10.30 0.302 (0.252) (0.310) -- $10.04 0.47%
FOR THE YEARS ENDED JULY 31,:
1999 $10.73 0.610 (0.440) (0.600) -- $10.30 1.52%
1998 10.59 0.605 0.162 (0.627) -- 10.73 7.47%
1997 10.15 0.642 0.403 (0.609) -- 10.59 10.68%
1996 10.29 0.690 (0.180) (0.650) -- 10.15 4.95%
1995 10.04 0.660 0.230 (0.640) -- 10.29 9.29%
- ---------------------------
INTERMEDIATE-TERM BOND FUND
- ---------------------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $10.00 0.298 (0.268) (0.300) -- $ 9.73 0.28%
FOR THE YEARS ENDED JULY 31,:
1999 $10.32 0.591 (0.319) (0.590) -- $10.00 2.60%
1998 10.30 0.613 0.021 (0.616) -- 10.32 6.37%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $10.16 0.309 0.138 (0.310) -- $10.30 4.54%
FOR THE YEARS ENDED JANUARY 31,:
1997 $10.62 0.599 (0.460) (0.595) -- $10.16 1.43%
1996 9.67 0.609 0.951 (0.609) -- 10.62 16.58%
1995 10.72 0.589 (1.034) (0.590) (0.015) 9.67 (4.11)%
RETAIL CLASS A SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $ 9.99 0.294 (0.254) (0.300) -- $ 9.73 0.38%
FOR THE YEARS ENDED JULY 31,:
1999 $10.31 0.598 (0.325) (0.590) -- $ 9.99 2.60%
1998 10.29 0.609 0.031 (0.616) -- 10.31 6.38%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $10.16 0.309 0.128 (0.310) -- $10.29 4.44%
FOR THE YEARS ENDED JANUARY 31,:
1997 $10.61 0.602 (0.462) (0.595) -- $10.16 1.54%
1996 9.67 0.609 0.940 (0.609) -- 10.61 16.48%
1995 10.72 0.589 (1.034) (0.590) (0.015) 9.67 (4.11)%
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 PORTFOLIO
OF PERIOD TO AVERAGE EXCLUDING TO AVERAGE EXCLUDING TURNOVER
(000) NET ASSETS FEE WAIVERS NET ASSETS FEE WAIVERS RATE
- ---------------------------------------------------------------------------------------------------------------------------
- ---------
BOND FUND
- ---------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
2000 $319,646 0.75%* 1.01%* 5.91%* 5.65%* 15%
FOR THE YEARS ENDED JULY 31,:
1999 $334,900 0.75% 1.01% 5.69% 5.43% 39%
1998 206,125 0.75% 1.02% 5.86% 5.60% 16%
1997 71,571 0.85% 1.42% 6.11% 5.54% 14%
1996 160,374 0.89% 1.61% 6.10% 5.38% 21%
1995 59,758 0.92% 1.64% 6.35% 5.62% 36%
RETAIL CLASS A SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $ 2,817 0.75%* 1.26%* 5.92%* 5.41%* 15%
FOR THE YEARS ENDED JULY 31,:
1999 $ 2,638 0.75% 1.26% 5.67% 5.16% 39%
1998 1,912 0.75% 1.26% 5.85% 5.33% 16%
1997 606 0.85% 1.68% 6.10% 5.27% 14%
1996 1,157 0.89% 1.85% 6.10% 5.14% 21%
1995 558 0.92% 1.89% 6.29% 5.32% 36%
- ---------------------------
INTERMEDIATE-TERM BOND FUND
- ---------------------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $241,665 0.75%* 0.99%* 5.94%* 5.70%* 15%
FOR THE YEARS ENDED JULY 31,:
1999 $257,775 0.75% 0.99% 5.73% 5.49% 19%
1998 249,520 0.75% 0.99% 5.86% 5.61% 51%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $152,676 0.69%* 0.82%* 6.17%* 6.04%* 58%
FOR THE YEARS ENDED JANUARY 31,:
1997 $150,411 0.67% 0.68% 5.93% 5.92% 106%
1996 132,942 0.68% 0.68% 5.97% 5.97% 147%
1995 109,848 0.71% 0.71% 5.89% 5.89% 95%
RETAIL CLASS A SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $ 4,833 0.75%* 1.24%* 5.95%* 5.46%* 15%
FOR THE YEARS ENDED JULY 31,:
1999 $ 4,591 0.75% 1.24% 5.72% 5.23% 19%
1998 5,120 0.75% 1.24% 5.83% 5.34% 51%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $ 5,124 0.69%* 1.14%* 6.17%* 5.71%* 58%
FOR THE YEARS ENDED JANUARY 31,:
1997 $ 5,213 0.67% 1.08% 5.91% 5.50% 106%
1996 6,417 0.68% 1.09% 5.99% 5.58% 147%
1995 6,645 0.71% 1.11% 5.87% 5.47% 95%
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* ANNUALIZED.
** TOTAL RETURN DOES NOT REFLECT THE SALES CHARGE.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
87
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<PAGE>
[HighMark Logo Omitted]
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------
100% U.S. TREASURY MONEY MARKET FUND
- ------------------------------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
2000 $1.00 0.023 -- (0.023) -- $1.00 2.32%
FOR THE YEARS ENDED JULY 31,:
1999 $1.00 0.043 -- (0.043) -- $1.00 4.43%
1998 1.00 0.049 -- (0.049) -- 1.00 5.02%
1997 1.00 0.046 -- (0.046) -- 1.00 4.65%
1996 1.00 0.046 -- (0.046) -- 1.00 4.74%
1995 1.00 0.046 -- (0.046) -- 1.00 4.69%
RETAIL CLASS A SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $1.00 0.022 -- (0.022) -- $1.00 2.20%
FOR THE YEARS ENDED JULY 31,:
1999 $1.00 0.041 -- (0.041) -- $1.00 4.17%
1998 1.00 0.047 -- (0.047) -- 1.00 4.75%
1997 1.00 0.045 -- (0.045) -- 1.00 4.58%
1996 1.00 0.046 -- (0.046) -- 1.00 4.74%
1995 1.00 0.046 -- (0.046) -- 1.00 4.69%
CLASS S SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (2) $1.00 0.014 -- (0.014) -- $1.00 1.39%
- ---------------------------------
U.S. GOVERNMENT MONEY MARKET FUND
- ---------------------------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $1.00 0.024 -- (0.024) -- $1.00 2.46%
FOR THE YEARS ENDED JULY 31,:
1999 $1.00 0.046 -- (0.046) -- $1.00 4.64%
1998 1.00 0.050 -- (0.050) -- 1.00 5.16%
1997 1.00 0.047 -- (0.047) -- 1.00 4.78%
1996 1.00 0.048 -- (0.048) -- 1.00 4.88%
1995 1.00 0.048 -- (0.048) -- 1.00 4.87%
RETAIL CLASS A SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $1.00 0.023 -- (0.023) -- $1.00 2.33%
FOR THE YEARS ENDED JULY 31,:
1999 $1.00 0.043 -- (0.043) -- $1.00 4.39%
1998 1.00 0.048 -- (0.048) -- 1.00 4.90%
1997 1.00 0.046 -- (0.046) -- 1.00 4.70%
1996 1.00 0.048 -- (0.048) -- 1.00 4.86%
1995 1.00 0.048 -- (0.048) -- 1.00 4.86%
RETAIL CLASS B SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $1.00 0.019 -- (0.019) -- $1.00 1.95%
FOR THE YEAR ENDED JULY 31,:
1999 $1.00 0.036 -- (0.036) -- $1.00 3.62%
FOR THE PERIOD ENDED JULY 31,:
1998 (1) $1.00 0.021 -- (0.021) -- $1.00 4.25%*
CLASS S SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (2) $1.00 0.015 -- (0.015) -- $1.00 1.48%
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
- ----------------------------------------------------------------------------------------------------
- ------------------------------------
100% U.S. TREASURY MONEY MARKET FUND
- ------------------------------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
<S> <C> <C> <C> <C> <C>
2000 $217,268 0.47%* 0.79%* 4.53%* 4.21%*
FOR THE YEARS ENDED JULY 31,:
1999 $263,561 0.47% 0.79% 4.35% 4.03%
1998 227,733 0.46% 0.78% 4.91% 4.59%
1997 243,464 0.64% 0.92% 4.61% 4.33%
1996 173,340 0.74% 0.97% 4.64% 4.41%
1995 190,604 0.73% 0.97% 4.60% 4.36%
RETAIL CLASS A SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $408,276 0.72%* 1.04%* 4.17%* 3.85%*
FOR THE YEARS ENDED JULY 31,:
1999 $976,971 0.72% 1.04% 4.07% 3.75%
1998 727,087 0.71% 1.03% 4.65% 4.33%
1997 558,972 0.72% 1.10% 4.55% 4.17%
1996 100,623 0.74% 1.23% 4.64% 4.15%
1995 88,660 0.73% 1.22% 4.68% 4.19%
CLASS S SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (2) $622,132 1.02%* 1.09%* 2.50%* 2.43%*
- ---------------------------------
U.S. GOVERNMENT MONEY MARKET FUND
- ---------------------------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $341,632 0.52%* 0.79%* 4.83%* 4.56%*
FOR THE YEARS ENDED JULY 31,:
1999 $351,140 0.52% 0.79% 4.52% 4.25%
1998 283,096 0.51% 0.79% 5.05% 4.77%
1997 252,995 0.70% 0.95% 4.69% 4.44%
1996 151,483 0.77% 1.00% 4.76% 4.53%
1995 159,747 0.78% 1.02% 4.76% 4.52%
RETAIL CLASS A SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $ 43,779 0.77%* 1.04%* 4.38%* 4.11%*
FOR THE YEARS ENDED JULY 31,:
1999 $170,974 0.77% 1.04% 4.28% 4.01%
1998 122,074 0.76% 1.04% 4.80% 4.52%
1997 42,797 0.78% 1.22% 4.60% 4.16%
1996 75,714 0.79% 1.26% 4.77% 4.30%
1995 48,474 0.78% 1.27% 4.82% 4.33%
RETAIL CLASS B SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $ 307 1.52%* 1.54%* 3.86%* 3.84%*
FOR THE YEAR ENDED JULY 31,:
1999 $ 218 1.52% 1.54% 3.46% 3.44%
FOR THE PERIOD ENDED JULY 31,:
1998 (1) $ -- 1.26%* 1.54%* 4.30%* 4.02%*
CLASS S SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (2) $119,567 1.07%* 1.09%* 4.46%* 4.44%*
The accompanying notes are an integral part of the financial statements.
</TABLE>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* ANNUALIZED.
(1) COMMENCED OPERATIONS ON FEBRUARY 2, 1998.
(2) COMMENCED OPERATIONS ON SEPTEMBER 30, 1999.
88
1.800.433.6884
<PAGE>
[HighMark Logo Omitted]
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT ACTIVITIES DISTRIBUTIONS
----------------------------- --------------------
NET NET
ASSET NET REALIZED ASSET
VALUE, NET AND UNREALIZED NET CONTRIBUTIONS VALUE,
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT CAPITAL OF END TOTAL
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS CAPITAL OF PERIOD RETURN
- ------------------------------------------------------------------------------------------------------------------------------------
- -----------------------------
DIVERSIFIED MONEY MARKET FUND
- -----------------------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2000 $1.00 0.025 -- (0.025) -- -- $1.00 2.53%
FOR THE YEARS ENDED JULY 31,:
1999 $1.00 0.047 -- (0.047) -- -- $1.00 4.78%
1998 1.00 0.051 -- (0.051) -- -- 1.00 5.27%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $1.00 0.025 -- (0.025) -- -- $1.00 5.11%*
FOR THE YEARS ENDED JANUARY 31,:
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%
RETAIL CLASS A SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $1.00 0.024 -- (0.024) -- -- $1.00 2.41%
FOR THE YEARS ENDED JULY 31,:
1999 $1.00 0.044 -- (0.044) -- -- $1.00 4.52%
1998 1.00 0.049 -- (0.049) -- -- 1.00 5.01%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $1.00 0.024 -- (0.024) -- -- $1.00 4.86%*
FOR THE YEARS ENDED JANUARY 31,:
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%
CLASS S SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (1) $1.00 0.015 -- (0.015) -- -- $1.00 1.55%
- -------------------------------------
CALIFORNIA TAX-FREE MONEY MARKET FUND
- -------------------------------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $1.00 0.014 -- (0.014) -- -- $1.00 1.38%
FOR THE YEARS ENDED JULY 31,:
1999 $1.00 0.026 -- (0.026) -- -- $1.00 2.59%
1998 1.00 0.031 -- (0.031) -- -- 1.00 3.14%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $1.00 0.016 -- (0.016) -- -- $1.00 3.28%*
FOR THE YEARS ENDED JANUARY 31,:
1997 $1.00 0.031 -- (0.031) -- -- $1.00 3.12%
1996 1.00 0.034 -- (0.034) -- -- 1.00 3.48%
1995 1.00 0.026 -- (0.026) -- -- 1.00 2.67%
RETAIL CLASS A SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $1.00 0.013 -- (0.013) -- -- $1.00 1.26%
FOR THE YEARS ENDED JULY 31,:
1999 $1.00 0.023 -- (0.023) -- -- $1.00 2.34%
1998 1.00 0.028 -- (0.028) -- -- 1.00 2.89%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $1.00 0.015 -- (0.015) -- -- $1.00 2.99%*
FOR THE YEARS ENDED JANUARY 31,:
1997 $1.00 0.027 -- (0.027) -- -- $1.00 2.78%
1996 1.00 0.031 -- (0.031) -- -- 1.00 3.14%
1995 1.00 0.023 -- (0.023) -- -- 1.00 2.33%
CLASS S SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (1) $1.00 0.008 -- (0.008) -- -- $1.00 0.77%
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
- ----------------------------------------------------------------------------------------------------
- -----------------------------
DIVERSIFIED MONEY MARKET FUND
- -----------------------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
<S> <C> <C> <C> <C> <C>
2000 $1,785,498 0.52%* 0.79%* 4.99%* 4.72%*
FOR THE YEARS ENDED JULY 31,:
1999 $1,324,659 0.52% 0.79% 4.68% 4.41%
1998 1,180,141 0.50% 0.77% 5.15% 4.88%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 971,858 0.48%* 0.64%* 5.07%* 4.90%*
FOR THE YEARS ENDED JANUARY 31,:
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%
RETAIL CLASS A SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $ 602,540 0.77%* 1.04%* 4.55%* 4.28%*
FOR THE YEARS ENDED JULY 31,:
1999 $1,641,799 0.77% 1.04% 4.42% 4.15%
1998 1,124,280 0.75% 1.02% 4.90% 4.63%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $ 799,657 0.72%* 0.95%* 4.82%* 4.59%*
FOR THE YEARS ENDED JANUARY 31,:
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%
CLASS S SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (1) $1,323,952 1.07%* 1.09%* 4.67%* 4.65%*
- -------------------------------------
CALIFORNIA TAX-FREE MONEY MARKET FUND
- -------------------------------------
FIDUCIARY SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $ 248,476 0.38%* 0.79%* 2.72%* 2.31%*
FOR THE YEARS ENDED JULY 31,:
1999 $ 235,687 0.33% 0.79% 2.55% 2.09%
1998 241,487 0.31% 0.78% 3.07% 2.60%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $ 159,297 0.28%* 0.69%* 3.36%* 2.96%*
FOR THE YEARS ENDED JANUARY 31,:
1997 $ 36,207 0.27% 0.49% 3.08% 2.86%
1996 42,923 0.28% 0.49% 3.43% 3.22%
1995 52,050 0.29% 0.50% 2.66% 2.45%
RETAIL CLASS A SHARES
FOR THE SIX MONTH PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 $ 287,402 0.63%* 1.04%* 2.45%* 2.04%*
FOR THE YEARS ENDED JULY 31,:
1999 $ 372,701 0.58% 1.04% 2.30% 1.84%
1998 305,260 0.56% 1.03% 2.84% 2.37%
FOR THE SIX MONTH PERIOD ENDED JULY 31,:
1997 $ 217,229 0.55%* 0.97%* 3.02%* 2.59%*
FOR THE YEARS ENDED JANUARY 31,:
1997 $ 150,688 0.60% 0.88% 2.75% 2.47%
1996 81,177 0.61% 0.88% 3.09% 2.82%
1995 49,494 0.62% 0.90% 2.33% 2.05%
CLASS S SHARES
FOR THE PERIOD ENDED JANUARY 31,: (UNAUDITED)
2000 (1) $ 87,416 0.93%* 1.09%* 2.32%* 2.16%*
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
*ANNUALIZED.
(1) COMMENCED OPERATIONS ON SEPTEMBER 30, 1999.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
89
WWW.HIGHMARKFUNDS.COM
<PAGE>
[HighMark Logo Omitted]
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000 (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION
HighMark Funds ("HighMark" or "the Funds") was organized as a Massachusetts
business trust under a Declaration of Trust dated March 10, 1987. Prior to
December 4, 1996, HighMark was known as The HighMark Group.
The Funds are registered under the Investment Company Act of 1940, as amended,
as a diversified open-end investment company with thirteen funds: the Growth
Fund, the Value Momentum Fund, the Income Equity Fund, the Balanced Fund, the
Small Cap Value Fund, the International Equity Fund, the California Intermediate
Tax-Free Bond Fund, the Bond Fund, the Intermediate-Term Bond Fund,
(collectively the "Non-Money Market Funds") and the 100% U.S. Treasury Money
Market Fund, the U.S. Government Money Market Fund, the Diversified Money Market
Fund and the California Tax-Free Money Market Fund (collectively the "Money
Market Funds"). HighMark is registered to offer six classes of shares, Class A,
Class B and Class C shares (collectively called the "Retail Shares"), Fiduciary
Shares, Class I Shares and Class S Shares. The Funds' prospectuses provide a
description of each Fund's investment objectives, policies and strategies.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Funds.
THE BASIS OF PRESENTATION OF STATEMENTS - The HighMark Funds acquired the
Stepstone Funds in a series of tax-free business combinations in April 1997.
While each Fund now exists legally as a HighMark Fund, a number of the surviving
funds have kept the past performance of the Stepstone Funds. In accordance with
generally accepted accounting principles, the financial highlights presented
reflect prior periods beginning on the first day of the accounting survivor's
fiscal year (August 1, 1996 and February 1, 1997, respectively).
SECURITY VALUATION - Investment securities held by the Money Market Funds
are stated at amortized cost, which approximates market value. Under this
valuation method, purchase discounts and premiums are accreted and amortized
ratably to maturity and are included in interest income.
Investments in equity securities held by the Non-Money Market Funds that are
traded on a national securities exchange (or reported on the NASDAQ national
market system) are stated at the last quoted sales price if readily available
for such equity securities on each business day; other equity securities traded
in the over-the-counter market and listed equity securities for which no sale
was reported on that date are stated at the last quoted bid price. Option
contracts are valued at the last quoted bid price as quoted on the primary
exchange or board of trade on which such option contracts are traded. Debt
obligations exceeding sixty days to maturity for which market quotations are
readily available are valued at the most recently quoted bid price. Debt
obligations with sixty days or less remaining until maturity may be valued at
their amortized cost. Restricted securities for which quotations are not readily
available are valued at fair value using methods determined in good faith under
general Trustee supervision.
FOREIGN CURRENCY TRANSLATION - The books and records of the International
Equity Fund and the Small Cap Value Fund are maintained in U.S. dollars. Foreign
currency amounts are translated into U.S. dollars on the following basis: (I)
market value of investment securities, other assets and liabilities at the
current rate of exchange; and (II) purchases and sales of investment securities,
income and expenses at the relevant rates of exchange prevailing on the
respective dates of such transactions.
The International Equity Fund and the Small Cap Value Fund do not isolate the
portion of gains and losses on investments in securities that is due to changes
in the foreign exchange rates from that which is due to changes in market prices
of such securities.
The International Equity Fund and the Small Cap Value Fund report gains and
losses on foreign currency related transactions as realized and unrealized gains
and losses for financial reporting purposes, whereas such gains and losses are
treated as ordinary income or loss for U.S. Federal income tax purposes.
FEDERAL INCOME TAXES - It is each Fund's intention to continue to qualify
as a regulated investment company for Federal income tax purposes and distribute
all of its taxable income and net capital gains. Accordingly, no provision for
Federal income taxes is required.
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<PAGE>
- --------------------------------------------------------------------------------
The International Equity Fund and the Small Cap Value Fund may be subject to
taxes imposed by countries in which they invest with respect to their
investments in issuers existing or operating in such countries. Such taxes are
generally based on either income earned or repatriated. The International Equity
Fund and the Small Cap Value Fund accrues such taxes when the related income is
earned.
THE NET ASSET VALUE PER SHARE - The net asset value per share is calculated
each business day for each Class. It is computed by dividing the assets of each
Class, less its liabilities, by the number of outstanding shares of each Class.
DISCOUNTS AND PREMIUMS - Discounts and premiums, except for the Bond Fund,
are accreted or amortized over the life of each security and are recorded as
interest income for each of the Funds using a method that approximates the
effective interest method. The Bond Fund follows the same basis for financial
reporting and federal income tax purposes and does not amortize premiums or
accrete discounts, with the applicable portion of market discount recognized as
ordinary income upon disposition or maturity.
CLASSES - Class specific expenses are borne by that class. Income, non-class
specific expenses and realized/unrealized gains and losses are allocated to the
respective classes on the basis of the relative daily net assets.
USES OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS - The
preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
which affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of income and expenses during the
reporting period. Actual results could differ from estimates.
REPURCHASE AGREEMENTS - Securities pledged as collateral for Repurchase
Agreements are held by the custodian bank until the respective agreements
mature. Provisions of repurchase agreements and procedures adopted by the
Adviser ensure that the market value of the collateral is sufficient in the
event of default by the counterparty. If the counterparty defaults and the value
of the collateral declines or if the counterparty enters an insolvency
proceeding, realization of the collateral by the Fund may be delayed or limited.
OPTIONS TRANSACTIONS - In order to produce incremental earnings, protect
gains, and facilitate buying and selling of securities for investment purposes,
certain of the Funds, as described in their prospectuses, may participate in
options transactions including writing call options. A risk in writing a call
option is that the Fund gives up the opportunity of profit if the market price
of the underlying security increases.
The Fund realizes a gain upon the expiration of a written call option. When a
written call option is closed prior to expiration by being exercised, the
proceeds on the sale are increased by the amount of original premium received.
Also, certain Funds may purchase call or put options with respect to securities
that are permitted investments. The risk in purchasing options is limited to the
premium paid.
The Fund recognizes a gain when the underlying securities' market price rises
(in case of a purchased call) or falls (in case of a purchased put) to the
extent sufficient to cover the option premium and transaction costs.
SECURITY TRANSACTIONS AND INVESTMENT INCOME - Security transactions are
accounted for on the date the security is purchased or sold (trade date). Costs
used in determining realized gains and losses on the sale of investment
securities are those of the specific securities sold adjusted for the accretion
and amortization of purchase discounts and premiums, if any, during the
respective holding periods. Interest income is recorded on the accrual basis;
dividend income is recorded on the ex-dividend date.
DISTRIBUTIONS TO SHAREHOLDERS - Distributions from net investment income
for the Money Market Funds are declared daily and paid monthly. Each of the
Non-Money Market Funds except the International Equity and the Small Cap Value
Funds declare and make distributions from net investment income monthly. The
International Equity and the Small Cap Value Funds declare and make
distributions from net investment income periodically. Any net realized capital
gains will be distributed at least annually for all Funds.
SECURITY LENDING - Certain of the Funds lend their securities to approved
brokers to earn additional income and receive cash and/or securities as
collateral to secure the loans. Collateral is maintained at not less than 102%
of the value
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<PAGE>
[HighMark Logo Omitted]
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JANUARY 31, 2000 (UNAUDITED)
- --------------------------------------------------------------------------------
of loaned securities. Although the risk of lending is mitigated by the
collateral, the Fund could experience a delay in recovering its securities and a
possible loss of income or value if the borrower fails to return them.
RECLASSIFICATION OF COMPONENTS OF NET ASSETS - In accordance with Statement
of Position 93-2, "Determination, Disclosure, and Financial Statement
Presentation of Income, Capital Gain, and Return of Capital Distribution by
Investment Companies", differences attributable to the classification of capital
gains and net investment income for tax distribution purposes, as of July 31,
1999, have been reclassified between accumulated net realized gains/losses and
undistributed net income, as appropriate. These reclassifications had no effect
on net asset value.
3. TRANSACTIONS WITH AFFILIATES
Effective February 15, 1997, SEI Investments Mutual Funds Services (the
"Administrator"), a Delaware business trust, became the Administrator for the
Funds. SEI Investments Management Corporation, a wholly-owned subsidiary of SEI
Investments Company, is the owner of all beneficial interest in the
Administrator. The Funds and the Administrator are parties to an Administration
Agreement (the "Agreement") dated February 15, 1997, under which the
Administrator provides the Fund with management and administrative services for
an annual fee of 0.20% of the average daily net assets of the Funds. the
Administrator may voluntarily waive its fee, subject to termination at any time
by the Administrator, to the extent necessary to limit the total operating
expenses of a Fund. During the period August 1, 1999 to January 31, 2000 the
Administrator voluntarily agreed to waive a portion of its fee for all Funds.
Pursuant to a separate agreement with the Administrator, HighMark Capital
Management, Inc. performs sub-administration services on behalf of each fund,
for which it receives a fee paid by the Administrator at the annual rate of up
to 0.07% of the average daily net assets of the Funds. For the period from
August 1, 1999 to January 31, 2000, HighMark Capital Management, Inc. received
sub-administration fees from the Funds in the amount of $2,153,000.
State Street Bank and Trust Company serves as the transfer agent, dividend
disbursing agent and shareholder servicing agent for HighMark. The Administrator
has agreed to absorb certain transfer agency related expenses on behalf of the
Fund.
SEI Investments Distribution Co. (the "Distributor") and the Funds are parties
to a distribution agreement dated February 15, 1997. No compensation is paid to
the Distributor for services rendered to the Fiduciary Shares under this
agreement. The Funds have adopted 12b-1 Plans (the "Plans") with respect to
Class A, Class B, Class C and Class S Shares that allow each Fund to pay
distribution and service fees. The distributor, as compensation for its services
under the Plans, receives a distribution fee, computed daily and payable
monthly, of 0.25% of the average daily net assets attributable to each Fund's
Class A Shares, 0.75% of the average daily net assets attributable to each
Fund's Class B Shares, 1.00% of the average daily net assets attributable to
each Fund's Class C Shares and 0.55% of the average daily net assets
attributable to each Fund's Class S Shares, which may be used by the Distributor
to provide compensation for sales support and distribution activities. The
California Intermediate Tax-Free Bond, Bond and Intermediate-Term Bond Funds are
currently waiving all Class A distribution fees.
The Funds have also adopted Shareholder Service Plans permitting payment of
compensation to service providers, that may include Union Bank of California,
N.A., Bank of Tokyo-Mitsubishi Trust Company, or their respective affiliates,
that have agreed to provide certain shareholder support services for their
customers who own Retail A, Retail B or Fiduciary Shares. In consideration for
such services, a service provider is entitled to receive compensation at the
annual rate of up to 0.25% of each Fund's average daily net assets. The service
provider may waive such fees at any time. Any such waiver is voluntary and may
be terminated at any time. For the period from August 1, 1999 to January 31,
2000, Union Bank of California, N.A. received shareholder servicing fees from
the Funds in the amount of approximately $1,310,000.
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<PAGE>
- --------------------------------------------------------------------------------
A contingent deferred sales charge (CDSC) is imposed on certain redemptions of
Retail B shares. The CDSC varies depending on the number of years from the time
of payment for the purchase of Retail B shares until the redemption of such
shares.
YEARS SINCE CONTINGENT DEFERRED
PURCHASE MADE SALES CHARGE
-------------------------------------------------------------
First 5%
Second 4%
Third 3%
Fourth 3%
Fifth 2%
Sixth 1%
Seventh and Following None
A contingent deferred sales charge (CDSC) of 1% is imposed on certain
redemptions of Retail C shares.
Union Bank of California, N.A. acts as custodian ("the Custodian") for the
Funds. Fees of the Custodian are being paid on the basis of net assets of the
Funds.
Certain officers of the Funds are also officers and/or Directors of the
Administrator. The Funds pay each unaffiliated Trustee an annual fee for
attendance at quarterly and interim meetings. Compensation of officers is paid
by the Administrator.
4. INVESTMENT ADVISORY AGREEMENT
The Funds and HighMark Capital Management, Inc. (the "Adviser") a subsidiary
of UnionBanCal Corporation, are parties to an Advisory Agreement. For its
services, the Adviser is entitled to receive a fee, that is calculated daily
and paid monthly, at an annual rate of 0.30% of the average daily net assets of
the 100% U.S. Treasury Money Market Fund, the U.S. Government Money Market Fund,
the Diversified Money Market Fund, and the California Tax-Free Money Market
Fund, 0.60% of the Growth Fund, the Income Equity Fund, the Value Momentum Fund,
and the Balanced Fund, 0.50% of the Intermediate-Term Bond Fund, the Bond Fund,
and the California Intermediate Tax-Free Bond Fund, 0.95% of the International
Equity Fund and 1.00% of the Small Cap Value Fund. For the six months ended
January 31, 2000 the Adviser voluntarily waived a portion of its fee in certain
funds in order to limit the operating expenses of the Funds.
On January 1, 1998 the Adviser and AXA Asset Management Partenaires ("AXA")
entered into an investment sub-advisory agreement for the International Equity
Fund. On October 1, 1999, AXA Asset Managers GS Ltd. succeeded AXA as
sub-adviser. AXA is entitled to a fee of 0.50% of the average daily net assets
of the Fund.
On August 26, 1998 the Adviser and Brandes Investment Partners, LP ("Brandes")
entered into an investment sub-advisory agreement for the Small Cap Value Fund.
Brandes is entitled to a fee of 0.50% of the average market value of the assets
of the Small Cap Value Fund allocated to Brandes.
5. INVESTMENT TRANSACTIONS
The purchases and sales (including maturities) of investment securities other
than short-term securities were as follows:
INVESTMENT
SECURITIES
----------------------
PURCHASES SALES
(000'S) (000'S)
----------- ---------
Growth .............................. $219,139 $267,327
Value Momentum ...................... 15,346 76,656
Income Equity ....................... 247,059 361,742
Balanced ............................ 56,440 81,659
Small Cap Value ..................... 37,008 21,706
International Equity ................ 33,128 35,746
California Intermediate
Tax-Free Bond ...................... 8,864 7,858
Bond ................................ 46,446 50,487
Intermediate-Term Bond .............. 37,203 45,878
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<PAGE>
[HighMark Logo Omitted]
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JANUARY 31, 2000 (UNAUDITED)
- --------------------------------------------------------------------------------
Cost for financial statement purposes differs from cost for Federal income tax
purposes primarily due to the deferral of certain losses under Federal income
tax regulations. The aggregate gross unrealized appreciation and depreciation at
January 31, 2000 for each portfolio was as follows:
APPRECIATION DEPRECIATION TOTAL
(000'S) (000'S) (000'S)
------------ ------------ --------
Growth ................ $271,668 $(25,398) $246,270
Value Momentum ........ 420,674 (37,864) 382,810
Income Equity ......... 60,403 (41,181) 19,222
Balanced .............. 106,852 (23,242) 83,610
Small Cap Value ....... 24,999 (6,618) 18,381
International Equity .. 28,063 (5,451) 22,612
California Intermediate
Tax-Free Bond ....... 2,372 (1,626) 746
Bond .................. 1,348 (15,335) (13,987)
Intermediate-Term Bond 168 (9,661) (9,493)
The Funds have capital loss carryforwards at July 31, 1999, to the extent
provided in the regulations for federal income tax as follows:
<TABLE>
<CAPTION>
EXPIRES EXPIRES EXPIRES EXPIRES EXPIRES EXPIRES EXPIRES
2001 2002 2003 2004 2005 2006 2007
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Cal. Int. Tax-Free Bond. -- -- -- 254,972 10,099 -- --
Bond .................. -- 137,375 -- 800,387 430,407 -- --
Int.-Term Bond ........ -- -- 610,202 -- 1,963,907 -- --
U.S. Government
Money Market ........ 115,159 -- -- -- -- -- --
Diversified
Money Market ........ 300,452 29,246 1,078,029 13,202 -- -- 476,441
Cal. Tax-Free
Money Market ........ -- 24,049 24,115 -- -- 15,746 --
</TABLE>
The Small Cap Value Funds had a post 10/31 loss deferral of $5,616 that can be
used to offset future capital gains.
6. CONCENTRATION OF CREDIT RISK
The California Intermediate Tax-Free Bond Fund and the California Tax-Free Money
Market Fund invest in debt securities in the State of California. The ability of
the issuers of the securities held by the Funds to meet their obligations may be
affected by economic and political developments in that state.
The International Equity Fund and the Small Cap Value Fund invest in securities
of foreign issuers in various countries. These investments may involve certain
considerations and risks not typically associated with investments in the United
States as a result of, among other factors, the possibility of future political
and economic developments, lack of liquidity, low market capitalizations,
foreign currency fluctuations, and the level of governmental supervision and
regulation of securities markets in the respective countries.
7. OPTION CONTRACTS
Transactions in covered call options during the six month period ended January
31, 2000 are summarized as follows:
VALUE MOMENTUM
----------------------
NUMBER OF
WRITTEN OPTION TRANSACTION CONTRACTS PREMIUM
--------------------------- --------- -------
Option written and outstanding at
beginning of period .................. 810 $ 47,235
Call option written during period .... 2,200 475,862
Call option exercised during period .. (345) (75,229)
Call option expired during period .... (2,180) (394,683)
Call option closed during period ..... (485) (53,185)
======== =========
Option written and outstanding at
end of period ........................ -- $ --
======== =========
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<PAGE>
- --------------------------------------------------------------------------------
8. LINE OF CREDIT
Each Fund may borrow, an amount up to its prospectus defined limitations, from
an $81 million committed line of credit available to the HighMark Funds.
Borrowings from the line of credit will bear interest at the Federal Funds Rate
plus 0.625%. As of January 31, 2000, no Fund had an outstanding borrowing.
Listed below are the Funds which had outstanding balances during the period
ended January 31, 2000.
MAXIMUM AVERAGE DAILY WEIGHTED
AMOUNT OUTSTANDING AVERAGE
BORROWED BALANCE RATE
----------- ----------- --------------
Income Equity ........... $14,000,000 $12,500,000 6.58%
Small Cap Value ......... 600,000 600,000 5.83%
International Equity .... 2,400,000 1,916,667 6.05%
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<PAGE>
[HighMark Logo Omitted]
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JANUARY 31, 2000 (UNAUDITED)
- --------------------------------------------------------------------------------
9. SHARES ISSUED AND REDEEMED (000):
For the six months ended January 31, 2000 (unaudited) and the year ended July
31, 1999 Transactions in Fund Shares were as follows:
<TABLE>
<CAPTION>
GROWTH VALUE MOMENTUM
FUND FUND
------------------------ ----------------------
08/01/99 08/01/98 08/01/99 08/01/98
TO 01/31/00 TO 07/31/99 TO 01/31/00 TO 07/31/99
------------------------ -----------------------
Shares Issued and Redeemed:
Fiduciary Shares:
<S> <C> <C> <C> <C>
Issued from the reorganization of the Blue Chip Growth Fund ............. -- 7,569 -- --
Issued .................................................................. 4,363 10,481 2,764 6,116
Issued in Lieu of Cash Distributions .................................... 3,578 2,322 1,182 1,153
Redeemed ................................................................ (7,399) (9,701) (8,525) (10,360)
------ ------ ------ -------
Total Fiduciary Share Transactions .................................... 542 10,671 (4,579) (3,091)
------ ------ ------ -------
Class I Shares:
Issued .................................................................. -- -- 4,107 --
Issued in Lieu of Cash Distributions .................................... -- -- 216 --
Redeemed ................................................................ -- -- (258) --
------ ------ ------ -------
Total Class I Share Transactions ...................................... -- -- 4,065 --
------ ------ ------ -------
Retail Class A Shares:
Issued .................................................................. 9,461 4,787 3,017 2,188
Issued in Lieu of Cash Distributions .................................... 156 65 62 49
Redeemed ................................................................ (8,787) (4,527) (2,891) (2,296)
------ ------ ------ -------
Total Retail A Share Transactions ..................................... 830 325 188 (59)
------ ------ ------ -------
Retail Class B Shares:
Issued .................................................................. 349 535 52 75
Issued in Lieu of Cash Distributions .................................... 75 19 12 7
Redeemed ................................................................ (55) (57) (36) (52)
------ ------ ------ -------
Total Retail B Share Transactions ..................................... 369 497 28 30
------ ------ ------ -------
Retail Class C Shares:
Issued .................................................................. 3 -- 3 --
Issued in Lieu of Cash Distributions .................................... -- -- -- --
Redeemed ................................................................ -- -- -- --
------ ------ ------ -------
Total Retail Class C Share Transactions ............................... 3 -- 3 --
------ ------ ------ -------
Net Increase (Decrease) in Share Transactions ........................... 1,744 11,493 (295) (3,120)
====== ====== ====== =======
</TABLE>
<TABLE>
<CAPTION>
CALIFORNIA INTERMEDIATE
TAX-FREE BOND BOND
FUND FUND
----------------------------------------------------
08/01/99 08/01/98 08/01/99 08/01/98
TO 01/31/00 TO 07/31/99 TO 01/31/00 TO 07/31/99
----------------------------------------------------
Shares Issued and Redeemed:
Fiduciary Shares:
<S> <C> <C> <C> <C>
Issued from the reorganization of the Government Securities Fund ........ -- -- -- 10,341
Issued .................................................................. 971 2,101 3,637 7,534
Issued in Lieu of Cash Distributions .................................... 23 39 600 813
Redeemed ................................................................ (1,535) (2,774) (4,906) (5,524)
------ ------ ------ -------
Total Fiduciary Share Transactions .................................... (541) (634) (669) 13,164
------ ------ ------ -------
Retail A Shares:
Issued .................................................................. 1,381 952 93 238
Issued in Lieu of Cash Distributions .................................... 36 47 6 10
Redeemed ................................................................ (755) (501) (74) (170)
------ ------ ------ -------
Total Retail A Share Transactions ..................................... 662 498 25 78
------ ------ ------ -------
Retail B Shares:
Issued .................................................................. 23 -- -- --
Issued in Lieu of Cash Distributions .................................... -- -- -- --
Redeemed ................................................................ (9) -- -- --
------ ------ ------ -------
Total Retail B Share Transactions ..................................... 14 -- -- --
------ ------ ------ -------
Class S Shares:
Issued .................................................................. -- -- -- --
Issued in Lieu of Cash Distributions .................................... -- -- -- --
Redeemed ................................................................ -- -- -- --
------ ------ ------ -------
Total Class S Share Transactions ...................................... -- -- -- --
------ ------ ------ -------
Net Increase (Decrease) in Share Transactions ........................... 135 (136) (644) 13,242
====== ====== ====== =======
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
INCOME EQUITY BALANCED SMALL CAP VALUE INTERNATIONAL EQUITY
FUND FUND FUND FUND
- ----------------------- ----------------------- ----------------------- -----------------------
08/01/99 08/01/98 08/01/99 08/01/98 08/01/99 09/17/98 08/01/99 08/01/98
TO 01/31/00 TO 07/31/99 TO 01/31/00 TO 07/31/99 TO 01/31/00 TO 07/31/99 TO 01/31/00 TO 07/31/99
- ----------------------- ----------------------- ----------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C>
-- -- -- -- -- -- -- --
4,333 3,476 1,729 4,210 2,408 7,104 283 747
8,645 4,694 2,569 1,728 375 -- 21 3
(11,311) (10,215) (3,956) (6,523) (201) (693) (460) (458)
------- ------- ------ ------ ------ ----- ---- ----
1,667 (2,045) 342 (585) 2,582 6,411 (156) 292
------- ------- ------ ------- ------ ----- ---- ----
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
------- ------- ------ ------ ------ ----- ---- ----
-- -- -- -- -- -- -- --
------- ------- ------ ------ ------ ----- ---- ----
150 557 50 160 2,003 74 13 --
333 159 65 41 19 -- -- --
(293) (745) (82) (183) (1,705) (3) -- --
------- ------- ------ ------ ------ ----- ---- ----
190 (29) 33 18 317 71 13 --
------- ------- ------ ------ ------ ----- ---- ----
66 165 55 170 153 88 8 --
83 19 23 6 13 -- -- --
(54) (29) (26) (25) (9) (8) -- --
------- ------- ------ ------ ------ ----- ---- ----
95 155 52 151 157 80 8 --
------- ------- ------ ------ ------ ----- ---- ----
-- -- -- -- 1 -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
------- ------- ------ ------ ------ ----- ---- ----
-- -- -- -- 1 -- -- --
------- ------- ------ ------ ------ ----- ---- ----
1,952 (1,919) 427 (416) 3,057 6,562 (135) 292
======= ======== ====== ====== ====== ===== ===== ====
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE- 100% U.S. TREASURY DIVERSIFIED CALIFORNIA TAX-FREE
TERM BOND MONEY MARKET U.S. GOVERNMENT MONEY MARKET MONEY MARKET
FUND FUND MONEY MARKET FUND FUND FUND
- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
08/01/99 08/01/98 08/01/99 08/01/98 08/01/99 08/01/98 08/01/99 08/01/98 08/01/99 08/01/98
TO 01/31/00 TO 07/31/99 TO 01/31/00 TO 07/31/99 TO 01/31/00 TO 07/31/99 TO 01/31/00 TO 07/31/99 TO 01/31/00 TO 07/31/99
- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-- -- -- -- -- -- -- -- -- --
2,154 6,129 497,257 756,800 810,799 2,136,746 1,978,183 2,543,551 415,690 446,341
248 498 503 563 242 358 6,185 11,220 5 10
(3,357) (5,033) (544,028) (721,529) (820,567) (2,069,085) (1,523,552) (2,410,010) (402,910) (452,148)
- -------- ------- -------- -------- -------- ---------- ---------- ---------- -------- --------
(955) 1,594 (46,268) 35,834 (9,526) 68,019 460,816 144,761 12,785 (5,797)
- -------- ------- -------- -------- -------- ---------- ---------- ---------- -------- --------
133 213 405,637 1,656,137 65,524 490,708 1,088,520 2,638,461 233,338 565,071
16 29 13,205 36,234 2,295 5,809 25,458 59,674 4,218 8,412
(111) (279) (987,572) (1,442,459) (195,000) (447,628) (2,153,267) (2,180,382) (322,853) (506,038)
- -------- ------- -------- --------- -------- ---------- ---------- ---------- -------- --------
38 (37) (568,730) 249,912 (127,181) 48,889 (1,039,289) 517,753 (85,297) 67,445
- -------- ------- -------- --------- -------- ---------- ---------- ---------- -------- --------
-- -- -- -- 222 235 -- -- -- --
-- -- -- -- 5 2 -- -- -- --
-- -- -- -- (137) (20) -- -- -- --
- -------- ------- -------- --------- -------- ---------- ---------- ---------- -------- --------
-- -- -- -- 90 217 -- -- -- --
- -------- ------- -------- --------- -------- ---------- ---------- ---------- -------- --------
-- -- 1,088,195 -- 334,528 -- 1,974,962 -- 223,551 --
-- -- 6,953 -- 1,296 -- 13,213 -- 518 --
-- -- (472,996) -- (216,258) -- (664,230) -- (136,652) --
- -------- ------- --------- --------- -------- ---------- ---------- ---------- -------- --------
-- -- 622,152 -- 119,566 -- 1,323,945 -- 87,417 --
- -------- ------- --------- --------- -------- ---------- ---------- ---------- -------- --------
(917) 1,557 7,154 285,746 (17,051) 117,125 745,472 662,514 14,905 61,648
======== ======= ========= ========= ======== ========== ========== ========== ======== ========
</TABLE>
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<PAGE>
[HighMark Logo Omitted]
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
JANUARY 31, 2000 (UNAUDITED)
- --------------------------------------------------------------------------------
10. FUND MERGER
On January 11, 1999, the assets of the HighMark Blue Chip Growth and Government
Securities Funds were reorganized into the HighMark Growth and Bond Funds,
respectively. Under the Plan of Reorganization, 8,729,227 Fiduciary Class shares
of the HighMark Blue Chip Growth Fund were exchanged for 7,569,480 Fiduciary
Class shares of the HighMark Growth Fund and 11,336,718 Fiduciary Class shares
of the HighMark Government Securities Fund were exchanged for 10,341,234
Fiduciary Class shares of the HighMark Bond Fund in a tax free exchange. Upon
the business combinations of such Funds on January 11, 1999, the value of the
HighMark Growth Fund's net assets combined with those of the HighMark Blue Chip
Growth Fund was $714,792,687 and the value of the HighMark Bond Fund's net
assets combined with those of the HighMark Government Securities Fund before
open of business was $332,036,956.
11. SHAREHOLDER VOTING RESULTS (UNAUDITED)
At a shareholder meeting held on October 29, 1999, the shareholders of the
HighMark Emerging Growth Fund voted to approve the liquidation of the Fund's
assets. The results of the voting were as follows:
<TABLE>
<CAPTION>
EMERGING GROWTH FUND
- --------------------
<S> <C> <C> <C>
FOR 3,096,408 96.51% of shares voted 62.92% of shares outstanding
AGAINST 26,060 0.81% of shares voted 0.53% of shares outstanding
ABSTAIN 85,896 2.68% of shares voted 1.75% of shares outstanding
</TABLE>
At a shareholder meeting held on October 29, 1999 the shareholders of the
HighMark Balanced Fund, HighMark Growth Fund, HighMark Income Equity Fund,
HighMark Bond Fund, HighMark 100% U.S. Treasury Money Market Fund, HighMark
California Tax-Free Money Market Fund, HighMark Diversified Money Market Fund,
and HighMark U.S. Government Money Market Fund were asked to vote on the
following proposals: (1) to consider the amendment of the Income Equity Fund's
investment objective; (2) to consider the amendment of the Bond Fund's
investment objective; (3) to consider the amendment of the Balanced Fund, Income
Equity Fund, Growth Fund, Bond Fund, 100% U.S. Treasury Money Market Fund,
California Tax-Free Money Market Fund, Diversified Money Market Fund and U.S.
Government Money Market Fund's fundamental investment restriction(s) regarding
investment in shares of other investment companies; and (4) to consider
eliminating the 100% U.S. Treasury Money Market Fund, California Tax-Free Money
Market Fund, Diversified Money Market Fund and U.S. Government Money Market
Fund's fundamental investment restriction regarding investment in securities
issued by "unseasoned issuers". The results of each proposal were as follows:
PROPOSAL 1. TO CONSIDER THE AMENDMENT OF THE INCOME EQUITY FUND'S INVESTMENT
OBJECTIVE.
<TABLE>
<CAPTION>
INCOME EQUITY FUND
- ------------------
<S> <C> <C> <C>
FOR 25,697,319 98.69% of shares voted 70.49% of shares outstanding
AGAINST 168,440 0.65% of shares voted 0.46% of shares outstanding
ABSTAIN 173,357 0.67% of shares voted 0.48% of shares outstanding
</TABLE>
PROPOSAL 2. TO CONSIDER THE AMENDMENT OF THE BOND FUND'S INVESTMENT OBJECTIVE.
<TABLE>
<CAPTION>
BOND FUND
- ---------
<S> <C> <C> <C>
FOR 16,307,612 99.71% of shares voted 50.72% of shares outstanding
AGAINST 15,422 0.09% of shares voted 0.05% of shares outstanding
ABSTAIN 31,508 0.19% of shares voted 0.10% of shares outstanding
</TABLE>
PROPOSAL 3. TO CONSIDER THE AMENDMENT OF THE BALANCED FUND, INCOME EQUITY FUND,
GROWTH FUND, BOND FUND, 100% U.S. TREASURY MONEY MARKET FUND, CALIFORNIA
TAX-FREE MONEY MARKET FUND, DIVERSIFIED MONEY MARKET FUND AND U.S. GOVERNMENT
MONEY MARKET FUND'S FUNDAMENTAL INVESTMENT RESTRICTION(S) REGARDING INVESTMENT
IN SHARES OF OTHER INVESTMENT COMPANIES.
<TABLE>
<CAPTION>
BALANCED FUND
- -------------
<S> <C> <C> <C>
FOR 16,112,916 98.45% of shares voted 59.79% of shares outstanding
AGAINST 102,498 0.63% of shares voted 0.38% of shares outstanding
ABSTAIN 151,194 0.92% of shares voted 0.56% of shares outstanding
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
INCOME EQUITY FUND
- ------------------
<S> <C> <C> <C>
FOR: 25,638,907 98.46% of shares voted 70.33% of shares outstanding
AGAINST: 200,947 0.77% of shares voted 0.55% of shares outstanding
ABSTAIN: 199,262 0.77% of shares voted 0.55% of shares outstanding
</TABLE>
<TABLE>
<CAPTION>
GROWTH FUND
- -----------
<S> <C> <C> <C>
FOR: 22,844,097 99.24% of shares voted 53.56% of shares outstanding
AGAINST: 87,058 0.38% of shares voted 0.20% of shares outstanding
ABSTAIN: 86,793 0.38% of shares voted 0.20% of shares outstanding
</TABLE>
<TABLE>
<CAPTION>
BOND FUND
- ---------
<S> <C> <C> <C>
FOR: 16,303,650 99.69% of shares voted 50.27% of shares outstanding
AGAINST: 11,966 0.07% of shares voted 0.04% of shares outstanding
ABSTAIN: 38,926 0.24% of shares voted 0.12% of shares outstanding
</TABLE>
<TABLE>
<CAPTION>
100% U.S. TREASURY MONEY MARKET FUND
- ------------------------------------
<S> <C> <C> <C>
FOR: 579,048,101 81.98% of shares voted 45.92% of shares outstanding
AGAINST: 43,476,530 6.16% of shares voted 3.45% of shares outstanding
ABSTAIN: 83,824,058 11.87% of shares voted 6.65% of shares outstanding
</TABLE>
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE MONEY MARKET FUND
- -------------------------------------
<S> <C> <C> <C>
FOR: 328,389,932 95.69% of shares voted 48.11% of shares outstanding
AGAINST: 10,609,165 3.09% of shares voted 1.55% of shares outstanding
ABSTAIN: 4,171,560 1.22% of shares voted 0.61% of shares outstanding
</TABLE>
<TABLE>
<CAPTION>
DIVERSIFIED MONEY MARKET FUND
- -----------------------------
<S> <C> <C> <C>
FOR: 1,458,046,773 91.00% of shares voted 47.96% of shares outstanding
AGAINST: 77,180,144 4.82% of shares voted 2.54% of shares outstanding
ABSTAIN: 66,497,033 4.18% of shares voted 2.20% of shares outstanding
</TABLE>
<TABLE>
<CAPTION>
U.S. GOVERNMENT MONEY MARKET FUND
- ---------------------------------
<S> <C> <C> <C>
FOR: 313,628,537 94.87% of shares voted 60.75% of shares outstanding
AGAINST: 15,379,401 4.65% of shares voted 2.98% of shares outstanding
ABSTAIN: 1,596,862 0.48% of shares voted 0.31% of shares outstanding
</TABLE>
PROPOSAL 4. TO CONSIDER ELIMINATING THE 100% U.S. TREASURY MONEY MARKET FUND,
CALIFORNIA TAX-FREE MONEY MARKET FUND, DIVERSIFIED MONEY MARKET FUND AND U.S.
GOVERNMENT MONEY MARKET FUND'S FUNDAMENTAL INVESTMENT RESTRICTION REGARDING
INVESTMENT IN SECURITIES ISSUED BY "UNSEASONED ISSUERS".
<TABLE>
<CAPTION>
100% U.S. TREASURY MONEY MARKET FUND
- ------------------------------------
<S> <C> <C> <C>
FOR: 549,800,487 77.84% of shares voted 43.60% of shares outstanding
AGAINST: 71,080,778 10.06% of shares voted 5.64% of shares outstanding
ABSTAIN: 85,467,424 12.10% of shares voted 6.78% of shares outstanding
</TABLE>
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE MONEY MARKET FUND
- -------------------------------------
<S> <C> <C> <C>
FOR: 312,617,007 91.10% of shares voted 45.80% of shares outstanding
AGAINST: 24,390,294 7.11% of shares voted 3.57% of shares outstanding
ABSTAIN: 6,163,356 1.80% of shares voted 0.90% of shares outstanding
</TABLE>
<TABLE>
<CAPTION>
DIVERSIFIED MONEY MARKET FUND
- -----------------------------
<S> <C> <C> <C>
FOR: 1,410,192,914 88.02% of shares voted 46.39% of shares outstanding
AGAINST: 130,116,047 8.12% of shares voted 4.28% of shares outstanding
ABSTAIN: 61,864,989 3.86% of shares voted 2.04% of shares outstanding
</TABLE>
<TABLE>
<CAPTION>
U.S. GOVERNMENT MONEY MARKET FUND
- ---------------------------------
<S> <C> <C> <C>
FOR: 280,615,041 84.88% of shares voted 54.36% of shares outstanding
AGAINST: 17,590,763 5.32% of shares voted 3.41% of shares outstanding
ABSTAIN: 32,398,996 9.80% of shares voted 6.28% of shares outstanding
</TABLE>
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<PAGE>
[HighMark Logo Omitted]
HIGHMARK FUND INFORMATION
- --------------------------------------------------------------------------------
FIDUCIARY SHARES INFORMATION
FUND CUSIP TICKER FUND #
GROWTH 431114818 HMGRX 492
VALUE MOMENTUM 431114677 HMVMX 871
INCOME EQUITY 431114206 HMIEX 490
BALANCED 431114792 HMBAX 491
SMALL CAP VALUE 431112101 HMSCX 148
INTERNATIONAL EQUITY 431114594 HMIQX 876
CA INTERMEDIATE TAX-FREE BOND 431114644 HMITX 847
BOND 431114305 HMBDX 489
INTERMEDIATE-TERM BOND 431114560 HMIBX 845
100% U.S. TREASURY MONEY MARKET 431114503 HMTXX 486
U.S. GOVERNMENT MONEY MARKET 431114701 HMGXX 485
DIVERSIFIED MONEY MARKET 431114883 HMDXX 484
CA TAX-FREE MONEY MARKET 431114842 HMCXX 487
- --------------------------------------------------------------------------------
CLASS I SHARES INFORMATION
VALUE MOMENTUM 431112804 HMVIX 1731
- --------------------------------------------------------------------------------
RETAIL SHARES INFORMATION
GROWTH
RETAIL CLASS A 431114768 HMRGX 481
RETAIL CLASS B 431114511 HMGBX 455
RETAIL CLASS C 431112879 N/A 1755
VALUE MOMENTUM
RETAIL CLASS A 431114628 HMVLX 870
RETAIL CLASS B 431114529 N/A 456
RETAIL CLASS C 431112812 N/A 1753
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<PAGE>
- --------------------------------------------------------------------------------
RETAIL SHARES INFORMATION (CONTINUED)
FUND CUSIP TICKER FUND #
INCOME EQUITY
RETAIL CLASS A 431114784 HMERX 479
RETAIL CLASS B 431114537 N/A 457
RETAIL CLASS C 431112861 N/A 1754
BALANCED
RETAIL CLASS A 431114776 HMBRX 480
RETAIL CLASS B 431114545 N/A 452
RETAIL CLASS C 431112887 N/A 1760
SMALL CAP VALUE
RETAIL CLASS A 431112200 N/A 41
RETAIL CLASS B 431112309 N/A 123
RETAIL CLASS C 431112820 N/A 1756
INTERNATIONAL EQUITY
RETAIL CLASS A 431112853 N/A 1759
RETAIL CLASS B 431112846 N/A 1758
RETAIL CLASS C 431112838 N/A 1757
CA INTERMEDIATE TAX-FREEBOND
RETAIL CLASS A 431114578 HMCIX 846
RETAIL CLASS B 431112796 N/A 1761
BOND
RETAIL CLASS A 431114743 HMRBX 478
INTERMEDIATE-TERM BOND
RETAIL CLASS A 431114586 HMBTX 874
100% U.S. TREASURY MONEY MARKET
RETAIL CLASS A 431114404 HMRXX 475
RETAIL CLASS S 431112606 HUSXX 1730
U.S. GOVERNMENT MONEY MARKET
RETAIL CLASS A 431114602 HMUXX 474
RETAIL CLASS B 431114495 N/A 450
RETAIL CLASS S 431112507 HGSXX 1729
DIVERSIFIED MONEY MARKET
RETAIL CLASS A 431114800 HMVXX 473
RETAIL CLASS S 431112408 HDSXX 1728
CA TAX-FREE MONEY MARKET
RETAIL CLASS A 431114859 HMAXX 476
RETAIL CLASS S 431112705 HCSXX 1727
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<PAGE>
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NOTES
- --------------------------------------------------------------------------------
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<PAGE>
[HighMark Logo Omitted]
SERVICE PROVIDERS &
BOARD OF TRUSTEES
- --------------------------------------------------------------------------------
INVESTMENT ADVISER
HighMark Capital Management, Inc.
475 Sansome Street
San Francisco, CA 94104
SUB-ADVISER (International Equity Fund)
AXA Investment Managers GS Ltd.
60 Greenchurch Street
London, England
SUB-ADVISER (International portion of the
Small Cap Value Fund)
Brandes Investment Partners, LP
12750 High Bluff Drive
San Diego, CA 90730
CUSTODIAN
Union Bank of California, N.A.
475 Sansome Street
San Francisco, CA 94104
ADMINISTRATOR & DISTRIBUTOR
SEI Investments Mutual Funds Services
SEI Investments Distribution Co.
1 Freedom Valley Drive
Oaks, PA 19456
LEGAL COUNSEL
Ropes & Gray
1301 K Street, N.W., Suite 800 East
Washington, D.C. 20005
AUDITORS
Deloitte & Touche LLP
50 Fremont Street
San Francisco, CA 94105-2230
BOARD OF TRUSTEES
Thomas L. Braje, Chairman
Robert M. Whitler, Vice Chairman
David A. Goldfarb
Joseph C. Jaeger
Frederick J. Long
Michael L. Noel
104
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<PAGE>
THANK YOU FOR
YOUR INVESTMENT
[HighMark Logo Omitted]
[BOUNDING BOX]
Mutual Funds:
[bullet] are not FDIC insured
[bullet] have no bank guarantee
[bullet] may lose value
<PAGE>
