<PAGE>
As filed with the Securities and Exchange Commission on February 29, 1996
Registration No. 33-36528
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 21 [X]
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 23 [X]
(Check appropriate box or boxes)
PIMCO Funds: Equity Advisors Series
(formerly PIMCO Advisors Institutional Funds)
(Exact Name of Registrant as Specified in Charter)
840 Newport Center Drive, Newport Beach, CA 92660
(Address of Principal Executive Offices) (Zip code)
Registrant's Telephone Number: (714) 640-3593
Sharon A. Cheever
Vice President and Investment Counsel
of Pacific Mutual Life Insurance Company
700 Newport Center Drive
Newport Beach, CA 92660
(Name and Address of Agent for Service)
Copies to:
Jeffrey S. Puretz
Dechert Price & Rhoads
1500 K Street, N.W.
Suite 500
Washington, D.C. 20005
[X] It is proposed that this filing will become effective on February 29, 1996
pursuant to paragraph (b) of Rule 485.
<PAGE>
The Registrant has registered an indefinite number of shares under the
Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company Act
of 1940 and filed its Notice pursuant to Rule 24f-2 for the fiscal year ended
October 31, 1995 on November 15, 1995 and amended such Notice on December 7,
1995. The Registrant intends to file its Notice pursuant to Rule 24f-2 for the
fiscal year ending June 30, 1996 on or before August 29, 1996.
<PAGE>
PIMCO FUNDS: EQUITY ADVISORS SERIES
CROSS-REFERENCE SHEET
Required by Rule 404 Under the Securities Act of 1933
Prospectus for the Institutional Class and Administrative
Class of NFJ Equity Income, NFJ Diversified Low P/E,
NFJ Small Cap Value, Cadence Capital Appreciation,
Cadence Mid Cap Growth, Cadence Micro Cap Growth,
Cadence Small Cap Growth, Columbus Circle Investors Core Equity,
Columbus Circle Investors Mid Cap Equity, Parametric
Enhanced Equity, Blairlogie Emerging Markets, Blairlogie
International Active, and Balanced Funds
Part A
<TABLE>
<CAPTION>
Item Heading
<S> <C> <C>
1. Cover Page Cover Page
2. Synopsis Prospectus Summary;
Expense Information
3. Condensed Financial Financial Highlights
Information
4. General Description of Investment Objectives and
Registrant Policies; Investment
Restrictions;
Characteristics and Risks
of Securities and
Investment Techniques
5. Management of the Fund Management of the Trust
6. Capital Stock and Other Other Information; Net
Securities Asset Value; Portfolio
Transactions; Dividends,
Distributions and Taxes
7. Purchase of Securities Purchase of Shares;
Being Offered Purchase of Shares
(Defined Contribution
Plan Participants)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
8. Redemption or Repurchase Redemption of Shares
9. Legal Proceedings Not Applicable
</TABLE>
<PAGE>
PIMCO FUNDS: EQUITY ADVISORS SERIES
CROSS-REFERENCE SHEET
Required by Rule 404 Under the Securities Act of 1933
Prospectus for the Institutional Class and
Administrative Class of Cadence Capital Appreciation,
Cadence Mid Cap Growth, Cadence Micro Cap Growth,
and Cadence Small Cap Growth Funds
Part A
<TABLE>
<CAPTION>
Item Heading
<S> <C> <C>
1. Cover Page Cover Page
2. Synopsis Prospectus Summary;
Expense Information
3. Condensed Financial Financial Highlights
Information
4. General Description of Investment Objectives and
Registrant Policies; Investment
Restrictions;
Characteristics and Risks
of Securities and
Investment Techniques
5. Management of the Fund Management of the Trust
6. Capital Stock and Other Other Information; Net
Securities Asset Value; Portfolio
Transactions; Dividends,
Distributions and Taxes
7. Purchase of Securities Purchase of Shares
Being Offered
8. Redemption or Repurchase Redemption of Shares
9. Legal Proceedings Not Applicable
</TABLE>
<PAGE>
PIMCO FUNDS: EQUITY ADVISORS SERIES
CROSS-REFERENCE SHEET
Required by Rule 404 Under the Securities Act of 1933
Statement of Additional Information for the
NFJ Equity Income, NFJ Diversified Low P/E, NFJ Small Cap Value,
Cadence Capital Appreciation, Cadence Mid Cap Growth, Cadence
Micro Cap Growth, Cadence Small Cap Growth, Columbus Circle
Investors Core Equity, Columbus Circle Investors Mid Cap
Equity, Parametric Enhanced Equity, Blairlogie Emerging
Markets, Blairlogie International Active and Balanced Funds
Part B
<TABLE>
<CAPTION>
Item Heading
<S> <C> <C>
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and Management of the Trust
History
13. Investment Objectives and Risk Factors and
Policies Investment Techniques;
Investment Restrictions
14. Management of the Management of the Trust
Registrant
15. Control Persons and Holders of Securities
Principal Holders of
Securities
16. Investment Advisory and Management of the Trust
Other Services
17. Brokerage Allocation Brokerage and Research
Services
18. Capital Stock and Other Voting Rights
Securities
19. Purchase, Redemption and Purchases and Redemptions
Pricing
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
20. Tax Status Taxation
21. Underwriters Distribution of Fund
Shares
22. Calculation of Performance Other Information
Data
23. Financial Statements Financial Statements
</TABLE>
<PAGE>
[LOGO of PIMCO]
PIMCO FUNDS:
Equity Advisors Series
NFJ Equity Income Fund
NFJ Diversified Low P/E Fund
NFJ Small Cap Value Fund
Cadence Capital Appreciation Fund
Cadence Mid Cap Growth Fund
Cadence Micro Cap Growth Fund
Cadence Small Cap Growth Fund
Columbus Circle Investors Core Equity Fund
Columbus Circle Investors Mid Cap Equity Fund
Parametric Enhanced Equity Fund
Blairlogie Emerging Markets Fund
Blairlogie International Active Fund
Balanced Fund
PROSPECTUS
- --------------------------------------------------------------------------------
March 1, 1996
<PAGE>
PIMCO FUNDS
PROSPECTUS
March 1, 1996
PIMCO Funds: Equity Advisors Series (the "Trust"), formerly PIMCO Advisors
Institutional Funds, is a no-load, open-end management investment company
("mutual fund") which currently offers thirteen separate investment portfolios
(the "Funds"). Each Fund has its own investment objective and policies. The
Trust is designed to provide access to the professional investment management
services offered by PIMCO Advisors L.P. ("PIMCO Advisors") and its investment
management affiliates.
The Funds described in this Prospectus are as follows:
<TABLE>
<S> <C>
NFJ Equity Income Fund Columbus Circle Investors Core Equity Fund
NFJ Diversified Low P/E Fund Columbus Circle Investors Mid Cap Equity Fund
NFJ Small Cap Value Fund Parametric Enhanced Equity Fund
Cadence Capital Appreciation
Fund Blairlogie Emerging Markets Fund
Cadence Mid Cap Growth Fund Blairlogie International Active Fund
Cadence Micro Cap Growth Fund Balanced Fund
Cadence Small Cap Growth
Fund*
</TABLE>
*Not currently available for investment.
Information about the investment objective of each Fund, along with a
detailed description of the types of securities in which each Fund may invest,
and of investment policies and restrictions applicable to each Fund, are set
forth in this Prospectus. There can be no assurance that the investment
objective of any Fund will be achieved. Because the market value of the Funds'
investments will change, the investment returns and net asset value per share
of each Fund also will vary.
Each Fund offers two classes of shares: the "Institutional Class" and the
"Administrative Class." Shares of the Institutional Class are offered
primarily for direct investment by investors such as pension and profit
sharing plans, employee benefit trusts, endowments, foundations, corporations,
other institutions, and high net worth individuals. They also are offered
through certain financial intermediaries that charge their customers
transaction or other fees with respect to the customers' investment in the
Funds. Shares of the Administrative Class are offered primarily through
brokers, retirement plan administrators, and other financial intermediaries.
Administrative Class shares indirectly pay service fees to such entities for
services they provide to shareholders of that class. Shares of each class of
the Funds are offered for sale at the relevant next determined net asset value
for that class with no sales charge.
This Prospectus sets forth concisely the information a prospective investor
should know before investing in the Funds. It should be read and retained for
ready reference to information about the Funds. A Statement of Additional
Information, dated March 1, 1996, as supplemented from time to time,
containing additional and more detailed information about the Funds, has been
filed with the Securities and Exchange Commission and is hereby incorporated
by reference into this Prospectus. It is available without charge and may be
obtained by writing or calling:
PIMCO Funds
840 Newport Center Drive, Suite 360
Newport Beach, CA 92660
Telephone:(800) 927-4648 (Current Shareholders)
(800) 800-0952 (New Accounts)
SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY FINANCIAL INSTITUTION, AND THE SHARES ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD, OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary...................................................... 3
Expense Information..................................................... 6
Financial Highlights.................................................... 8
Investment Objectives and Policies...................................... 12
Investment Restrictions................................................. 18
Characteristics and Risks of Securities and Investment Techniques....... 20
Management of the Trust................................................. 27
Purchase of Shares...................................................... 32
Redemption of Shares.................................................... 34
Portfolio Transactions.................................................. 35
Net Asset Value......................................................... 36
Dividends, Distributions and Taxes...................................... 37
Other Information....................................................... 37
Appendix A--Management Discussion and Analysis.......................... A-1
</TABLE>
<PAGE>
PIMCO FUNDS
PROSPECTUS SUMMARY
PIMCO Funds: Equity Advisors Series (the "Trust") is a no-load, open-end
management investment company ("mutual fund"), organized as a Massachusetts
business trust on August 24, 1990. The Trust currently offers thirteen separate
investment portfolios (the "Funds").
COMPARISON OF FUNDS
The following chart provides general information about each of the Funds. It
is qualified in its entirety by the more complete descriptions of the Funds
appearing elsewhere in this Prospectus.
<TABLE>
<CAPTION>
FUND INVESTMENT OBJECTIVE AND PRIMARY INVESTMENTS
- ------------------------------------------------------------------------------
<C> <S>
NFJ Equity Income Seeks current income as a primary investment objective,
and long-term growth of capital as a secondary objective;
invests primarily in common stocks with below-average
price to earnings ratios and higher dividend yields
relative to their industry groups.
- ------------------------------------------------------------------------------
NFJ Diversified Low Seeks long-term growth of capital and income; invests
P/E primarily in common stocks with below-average price to
earnings ratios relative to their industry groups.
- ------------------------------------------------------------------------------
NFJ Small Cap Value Seeks long-term growth of capital and income; invests
primarily in common stocks of companies with market
capitalizations between $50 million and $1 billion and
below-average price to earnings ratios relative to their
industry groups.
- ------------------------------------------------------------------------------
Cadence Capital Seeks growth of capital; invests primarily in common
Appreciation stocks of companies with market capitalizations of at
least $100 million that have improving fundamentals and
whose stock is reasonably valued by the market.
- ------------------------------------------------------------------------------
Cadence Mid Cap Seeks growth of capital; invests primarily in common
Growth stocks of companies with market capitalizations in excess
of $500 million that have improving fundamentals and
whose stock is reasonably valued by the market.
- ------------------------------------------------------------------------------
Cadence Micro Cap Seeks long-term growth of capital; invests primarily in
Growth common stocks of companies with market capitalizations of
less than $100 million that have improving fundamentals
and whose stock is reasonably valued by the market.
- ------------------------------------------------------------------------------
Cadence Small Cap Seeks growth of capital; invests primarily in common
Growth stocks of companies with market capitalizations between
$50 million and $500 million that have improving
fundamentals and whose stock is reasonably valued by the
market.
- ------------------------------------------------------------------------------
Columbus Circle Seeks long-term growth of capital, with income as a
Investors Core secondary objective; invests primarily in common stocks
Equity of companies with market capitalizations in excess of $3
billion.
- ------------------------------------------------------------------------------
Columbus Circle Seeks long-term growth of capital; invests primarily in
Investors Mid Cap common stocks of companies with market capitalizations
Equity between $800 million to $3 billion.
- ------------------------------------------------------------------------------
Parametric Enhanced Seeks to provide a total return which equals or exceeds
Equity total return performance of the Standard & Poor's 500
Composite Stock Price Index; invests in common stocks
represented in that Index.
- ------------------------------------------------------------------------------
Blairlogie Emerging Seeks long-term growth of capital; invests primarily in
Markets common stocks of companies located in emerging market
countries.
- ------------------------------------------------------------------------------
Blairlogie Seeks long-term growth of capital; invests primarily in a
International diversified portfolio of international equity securities.
Active
- ------------------------------------------------------------------------------
Balanced Seeks total return; invests in common stocks, fixed
income securities and money market instruments.
- ------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
INVESTMENT RISKS AND CONSIDERATIONS
The following are some of the primary risks relevant to an investment in the
Funds and to the securities in which the Funds invest. Investors should read
the Prospectus carefully for a more complete discussion of the risks relating
to an investment in the Funds. The value of all securities and other
instruments held by the Funds vary from time to time in response to a wide
variety of market factors. Consequently, the net asset value per share of each
Fund will vary. The net asset value per share of any Fund may be less at the
time of redemption than it was at the time of investment. It is the policy of
all of the Funds except the Balanced Fund (the "Equity Funds"), all of which
invest primarily in common stock, to be as fully invested as practicable in
such securities at all times. This policy precludes any of the Equity Funds
from investing in debt securities as a defensive investment posture (although
the Equity Funds may invest in such securities to provide for payment of
expenses and to meet redemption requests). Accordingly, investors in these
Funds bear the risk of general declines in stock prices, and bear any risk that
an Equity Fund's exposure to such declines cannot be lessened by investment in
debt securities. For further information, see "Investment Objectives and
Policies--Equity Funds."
Certain Funds may invest in securities of foreign issuers, which may be
subject to additional risk factors, including foreign currency and political
risks, not applicable to securities of U.S. issuers. Certain of the Funds'
investment techniques may involve a form of borrowing, which may tend to
exaggerate the effect on net asset value of any increase or decrease in the
market value of a Fund's portfolio and may require liquidation of portfolio
positions when it is not advantageous to do so.
Certain Funds may use derivative instruments, consisting of futures, options,
options on futures, and swap agreements, for hedging purposes or as part of
their investment strategies. Use of these instruments may involve certain costs
and risks, including the risk that a Fund could not close out a position when
it would be most advantageous to do so, the risk of an imperfect correlation
between the value of the securities being hedged and the value of the
particular derivative instrument, and the risk that unexpected changes in
interest rates may adversely affect the value of a Fund's investments in
particular derivative instruments.
INVESTMENT ADVISER AND PORTFOLIO MANAGERS
PIMCO Advisors L.P. ("PIMCO Advisors" or "Adviser") serves as investment
adviser to the Trust. Subject to the supervision of the Board of Trustees of
the Trust, the Adviser supervises the investment program for the Funds in
accordance with each Fund's investment objective, policies, and restrictions.
For all of the Funds, the Adviser has engaged its affiliates to serve as
Portfolio Managers. Under the supervision of PIMCO Advisors, the Portfolio
Managers make determinations with respect to the purchase and sale of portfolio
securities, and they place, in the names of the Funds, orders for execution of
the Funds' transactions. Pacific Investment Management Company ("PIMCO")
manages the portion of the assets of the Balanced Fund allocated for investment
in fixed income securities. Parametric Portfolio Associates ("Parametric")
manages the Parametric Enhanced Equity Fund and the portion of the assets of
the Balanced Fund allocated for investment in common stock. NFJ Investment
Group ("NFJ") manages the NFJ Equity Income Fund, the NFJ Diversified Low P/E
Fund, and the NFJ Small Cap Value Fund. Cadence Capital Management ("Cadence")
manages the Cadence Capital Appreciation Fund, the Cadence Mid Cap Growth Fund,
Cadence Micro Cap Growth Fund, and the Cadence Small Cap Growth Fund. Columbus
Circle Investors ("Columbus Circle") manages the Columbus Circle Investors Core
Equity Fund and the Columbus Circle Investors Mid Cap Equity Fund. Blairlogie
Capital Management ("Blairlogie") manages the Blairlogie Emerging Markets Fund
and the Blairlogie International Active Fund. PIMCO, Parametric, NFJ, Cadence,
Columbus Circle, and Blairlogie are each subsidiary partnerships of PIMCO
Advisors. For the Balanced Fund, PIMCO Advisors determines the allocation of
the Fund's assets among various asset classes and manages the portion of the
assets allocated for investment in money market instruments.
For its services, the Adviser receives fees based on the average daily net
assets of each Fund. The Portfolio Managers are compensated by the Adviser out
of its fees (not by the Trust). See "Management of the Trust."
4
<PAGE>
PIMCO FUNDS
PURCHASE OF SHARES
Each Fund offers two classes of shares: the "Institutional Class" and the
"Administrative Class." Shares of the Institutional Class are offered primarily
for direct investment by institutional investors and high net worth
individuals. They are also offered through certain financial intermediaries
that charge their customers transaction or other fees with respect to the
customers' investment in the Funds. Shares of the Administrative Class are
offered primarily through brokers, retirement plan administrators and other
financial intermediaries. Administrative Class shares indirectly pay service
fees to such entities for services they provide to shareholders of that class.
Shares of each class of the Funds are offered at the relevant next determined
net asset value with no sales charge. The minimum initial investment for shares
of either class is $200,000. The Cadence Micro Cap Growth Fund limits the
purchase of shares (contributed capital) by any one investor to $10,000,000,
exclusive of shares purchased through reinvestment of dividends and
distributions. Additionally, the Trust has determined to limit the aggregate
contributed capital by all investors in the Cadence Micro Cap Growth Fund to
$100,000,000. Therefore, when the aggregate contributed capital in the Fund
reaches such amount, the Fund will no longer be available for additional
investment, until such time as an existing investor redeems a dollar amount
sufficient to allow a new investment into the Fund. In addition, shares of the
Cadence Small Cap Growth Fund are not offered as of the date of this
Prospectus; however, additional investment in the Fund may be available in the
event that an existing shareholder redeems a sufficient dollar amount. These
limitations may be changed or eliminated at any time at the discretion of the
Trust's Board of Trustees. See "Purchase of Shares."
REDEMPTIONS AND EXCHANGES
Shares of each class of each Fund may be redeemed without cost at the
relevant net asset value per share of the class of that Fund next determined
after receipt of the redemption request. The redemption price may be more or
less than the purchase price.
Shares of a class of any Fund may be exchanged for shares of the same class
of any other Fund of the Trust offered generally to the public on the basis of
relative net asset values, or for shares of the same class of a series of the
PIMCO Funds: Pacific Investment Management Series, an affiliated no-load mutual
fund family composed primarily of fixed income portfolios managed by PIMCO. See
"Redemption of Shares."
DIVIDENDS AND DISTRIBUTIONS
Each Fund will distribute dividends from net investment income at least
quarterly (except for the Columbus Circle Investors Core Equity Fund, which
will distribute semi-annually, and the Columbus Circle Mid Cap Equity,
Blairlogie Emerging Markets, and Blairlogie International Active Funds, which
will distribute annually), and any net realized capital gains at least
annually. All dividends and distributions will be reinvested automatically at
net asset value in additional shares of the same class of the same Fund, unless
cash payment is requested. Dividends from net investment income with respect to
Administrative Class shares will be lower than those paid with respect to
Institutional Class shares, reflecting the payment of service fees by that
class. See "Dividends, Distributions and Taxes."
5
<PAGE>
EXPENSE INFORMATION
SHAREHOLDER TRANSACTION EXPENSES (EACH CLASS):
<TABLE>
<S> <C>
Sales Load Imposed on Purchases.......................................... None
Sales Load Imposed on Reinvested Dividends............................... None
Redemption Fee........................................................... None
Exchange Fee............................................................. None
</TABLE>
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS):
<TABLE>
<CAPTION>
ADVISORY ADMINISTRATIVE TOTAL
INSTITUTIONAL CLASS SHARES FEE FEE EXPENSES*
------------------------------------------- -------- -------------- ---------
<S> <C> <C> <C>
NFJ Equity Income Fund..................... 0.45% 0.25% 0.70%
NFJ Diversified Low P/E Fund............... 0.45 0.25 0.70
NFJ Small Cap Value Fund................... 0.60 0.25 0.85
Cadence Capital Appreciation Fund.......... 0.45 0.25 0.70
Cadence Mid Cap Growth Fund................ 0.45 0.25 0.70
Cadence Micro Cap Growth Fund.............. 1.25 0.25 1.50
Cadence Small Cap Growth Fund.............. 1.00 0.25 1.25
Columbus Circle Investors Core Equity Fund. 0.57 0.25 0.82
Columbus Circle Investors Mid Cap Equity
Fund...................................... 0.63 0.25 0.88
Parametric Enhanced Equity Fund............ 0.45 0.25 0.70
Blairlogie Emerging Markets Fund........... 0.85 0.50 1.35
Blairlogie International Active Fund....... 0.60 0.50 1.10
Balanced Fund.............................. 0.45 0.25 0.70
</TABLE>
<TABLE>
<CAPTION>
ADVISORY ADMINISTRATIVE SERVICE TOTAL
ADMINISTRATIVE CLASS SHARES FEE FEE FEE EXPENSES*
----------------------------------- -------- -------------- ------- ---------
<S> <C> <C> <C> <C>
NFJ Equity Income Fund............. 0.45% 0.25% 0.25% 0.95%
NFJ Diversified Low P/E Fund....... 0.45 0.25 0.25 0.95
NFJ Small Cap Value Fund........... 0.60 0.25 0.25 1.10
Cadence Capital Appreciation Fund.. 0.45 0.25 0.25 0.95
Cadence Mid Cap Growth Fund........ 0.45 0.25 0.25 0.95
Cadence Micro Cap Growth Fund...... 1.25 0.25 0.25 1.75
Cadence Small Cap Growth Fund...... 1.00 0.25 0.25 1.50
Columbus Circle Investors Core Eq-
uity Fund......................... 0.57 0.25 0.25 1.07
Columbus Circle Investors Mid Cap
Equity Fund....................... 0.63 0.25 0.25 1.13
Parametric Enhanced Equity Fund.... 0.45 0.25 0.25 0.95
Blairlogie Emerging Markets Fund... 0.85 0.50 0.25 1.60
Blairlogie International Active
Fund.............................. 0.60 0.50 0.25 1.35
Balanced Fund...................... 0.45 0.25 0.25 0.95
</TABLE>
*PIMCO, the Funds' Administrator, has undertaken until at least June 30, 1996
to limit the operating expenses that are borne by each Fund so that the Fund's
total expenses, exclusive of interest or gains, brokerage fees or other
transactional expenses, taxes paid by the Fund, interest on borrowing, and
extraordinary expenses, do not exceed on an annual basis the total expenses
shown.
For a more detailed discussion of the Funds' fees and expenses, see "Fund
Administrator," "Advisory and Administrative Fees," and "Service Fees" under
the caption "Management of the Trust."
6
<PAGE>
PIMCO FUNDS
EXAMPLE OF FUND EXPENSES:
An investor would pay the following expenses on a $1,000 investment assuming
(1) a hypothetical 5% annual return and (2) redemption at the end of each time
period:
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------------------------------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
NFJ Equity Income Fund...................... $ 7 $22 $39 $ 87
NFJ Diversified Low P/E Fund................ $ 7 $22 $39 $ 87
NFJ Small Cap Value Fund.................... $ 9 $27 $47 $105
Cadence Capital Appreciation Fund........... $ 7 $22 $39 $ 87
Cadence Mid Cap Growth Fund................. $ 7 $22 $39 $ 87
Cadence Micro Cap Growth Fund............... $15 $47 $82 $179
Cadence Small Cap Growth Fund............... $13 $40 $69 $151
Columbus Circle Investors Core Equity Fund.. $ 8 $26 $46 $101
Columbus Circle Investors Mid Cap Equity
Fund....................................... $ 9 $28 $49 $108
Parametric Enhanced Equity Fund............. $ 7 $22 $39 $ 87
Blairlogie Emerging Markets Fund............ $14 $43 $74 $162
Blairlogie International Active Fund........ $11 $35 $61 $134
Balanced Fund............................... $ 7 $22 $39 $ 87
<CAPTION>
ADMINISTRATIVE CLASS SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------------------------------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
NFJ Equity Income Fund...................... $10 $30 $53 $117
NFJ Diversified Low P/E Fund................ $10 $30 $53 $117
NFJ Small Cap Value Fund.................... $11 $35 $61 $134
Cadence Capital Appreciation Fund........... $10 $30 $53 $117
Cadence Mid Cap Growth Fund................. $10 $30 $53 $117
Cadence Micro Cap Growth Fund............... $18 $55 $95 $206
Cadence Small Cap Growth Fund............... $15 $47 $82 $179
Columbus Circle Investors Core Equity Fund.. $11 $34 $59 $131
Columbus Circle Investors Mid Cap Equity
Fund....................................... $12 $36 $62 $137
Parametric Enhanced Equity Fund............. $10 $30 $53 $117
Blairlogie Emerging Markets Fund............ $16 $50 $87 $190
Blairlogie International Active Fund........ $14 $43 $74 $163
Balanced Fund............................... $10 $30 $53 $117
</TABLE>
The above tables are provided to assist investors in understanding the
various expenses which may be borne directly or indirectly in connection with
an investment in the Funds. This example should not be considered a
representation of past or future expenses or performance. Actual expenses may
be higher or lower than those shown.
7
<PAGE>
FINANCIAL HIGHLIGHTS
The following information regarding selected per share data and ratios for
shares of each Fund are part of the Trust's financial statements which are
included in the Trust's Annual Report dated October 31, 1995 and incorporated
by reference in the Statement of Additional Information. The Trust's financial
statements and selected per share data and ratios as of October 31, 1995
appearing under the heading "Financial Highlights" have been examined by
Deloitte & Touche LLP, independent accountants, whose opinion thereon is also
included in the Annual Report, which may be obtained without charge.
Information is presented for each Fund, and class thereof, of the Trust which
had investment operations during the reporting periods. Additional performance
information about the Funds is contained in Appendix A to this Prospectus and
in the Annual Report.
Selected data for a share outstanding throughout each period:
<TABLE>
<CAPTION>
NET ASSET NET NET REALIZED TOTAL INCOME DIVIDENDS DISTRIBUTIONS
YEAR OR VALUE INVESTMENT AND UNREALIZED (LOSS) FROM FROM NET FROM NET DISTRIBUTIONS
PERIOD BEGINNING INCOME GAIN (LOSS) ON INVESTMENT INVESTMENT REALIZED FROM
ENDED OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME CAPITAL GAINS EQUALIZATION
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NFJ EQUITY INCOME FUND
Institutional Class
10/31/95 $11.75 $0.46 $ 1.67 $ 2.13 $(0.46) $(0.33) $ 0.00
10/31/94 11.95 0.42 (0.16) 0.26 (0.42) (0.04) 0.00
10/31/93 10.92 0.40 1.40 1.80 (0.40) (0.37) 0.00
10/31/92 10.77 0.45 0.93 1.38 (0.43) (0.57) (0.23)
10/31/91(a) 10.00 0.24 0.92 1.16 (0.24) (0.15) 0.00
Administrative Class
4/30/95(b) 11.12 0.39 2.35 2.74 (0.40) (0.33) 0.00
NFJ DIVERSIFIED LOW P/E FUND
Institutional Class
10/31/95 $11.55 $0.30 $ 2.18 $ 2.48 $(0.30) $(1.20) $ 0.00
10/31/94 11.92 0.30 (0.28) 0.02 (0.29) (0.10) 0.00
10/31/93 10.05 0.28 2.36 2.64 (0.28) (0.49) 0.00
10/31/92(c) 10.00 0.24 0.23 0.47 (0.24) (0.18) 0.00
NFJ SMALL CAP VALUE FUND
Institutional Class
10/31/95 $12.07 $0.28 $ 1.92 $ 2.20 $(0.28) $(0.89) $ 0.00
10/31/94 12.81 0.29 (0.65) (0.36) (0.29) (0.09) 0.00
10/31/93 10.98 0.24 2.33 2.57 (0.24) (0.50) 0.00
10/31/92 10.09 0.22 1.17 1.39 (0.22) (0.24) (0.04)
10/31/91(d) 10.00 0.02 0.10 0.12 (0.03) 0.00 0.00
CADENCE CAPITAL APPRECIATION FUND
Institutional Class
10/31/95 $13.34 $0.18 $ 3.60 $ 3.78 $(0.18) $ 0.00 $ 0.00
10/31/94 13.50 0.14 (0.12) 0.02 (0.14) (0.04) 0.00
10/31/93 11.27 0.11 2.73 2.84 (0.11) (0.50) 0.00
10/31/92 11.02 0.14 1.05 1.19 (0.14) (0.72) (0.08)
10/31/91(a) 10.00 0.09 1.02 1.11 (0.09) 0.00 0.00
CADENCE MID CAP GROWTH FUND
Institutional Class
10/31/95 $13.97 $0.07 $ 4.19 $ 4.26 $(0.07) $ 0.00 $ 0.00
10/31/94 13.97 0.06 0.01 0.07 (0.06) (0.01) 0.00
10/31/93 11.29 0.07 2.70 2.77 (0.07) (0.02) 0.00
10/31/92 10.28 0.10 1.03 1.13 (0.10) 0.00 (0.02)
10/31/91(e) 10.00 0.02 0.27 0.29 (0.01) 0.00 0.00
Administrative Class
10/31/95(b) 13.31 0.03 4.85 4.88 (0.02) 0.00 0.00
</TABLE>
- --------
(a) From commencement of operations, March 8, 1991.
(b) From commencement of operations, November 30, 1994.
(c) From commencement of operations, December 30, 1991.
(d) From commencement of operations, October 1, 1991.
(e) From commencement of operations, August 26, 1991.
* Annualized.
8
<PAGE>
PIMCO FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share outstanding throughout each period:
<TABLE>
<CAPTION>
RATIO OF NET
NET ASSET NET ASSETS RATIO OF INVESTMENT
DISTRIBUTIONS VALUE END EXPENSES TO INCOME TO PORTFOLIO AVERAGE
FROM RETURN TOTAL END TOTAL OF PERIOD AVERAGE AVERAGE TURNOVER COMMISSION
OF CAPITAL DISTRIBUTIONS OF PERIOD RETURN (000'S) NET ASSETS NET ASSETS RATE RATE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0.00 $(0.79) $13.09 19.36% $118,015 0.70% 3.83% 46.49% $0.06
0.00 (0.46) 11.75 2.25 92,365 0.70 3.77 35.56
0.00 (0.77) 11.95 16.65 67,854 0.70 3.55 38.60
0.00 (1.23) 10.92 12.89 30,506 0.70 3.83 46.74
0.00 (0.39) 10.77 11.81 15,628 0.74* 4.18* 61.51
0.00 (0.73) 13.13 25.69 140 0.95* 3.43* 43.27 N/A
$ 0.00 $(1.50) $12.53 24.98% $ 14,443 0.70% 2.50% 71.02% $0.06
0.00 (0.39) 11.55 0.15 15,442 0.70 2.34 43.70
0.00 (0.77) 11.92 26.35 22,930 0.70 2.43 28.19
0.00 (0.42) 10.05 4.68 18,083 0.70* 2.57* 72.77
$ 0.00 $(1.17) $13.10 19.88% $ 35,093 0.85% 2.25% 49.57% $0.04
0.00 (0.38) 12.07 (2.89) 31,236 0.85 2.23 48.12
0.00 (0.74) 12.81 23.60 46,523 0.85 2.05 41.80
0.00 (0.50) 10.98 13.75 18,261 0.85 2.16 26.77
0.00 (0.03) 10.09 1.19 5,060 1.09* 3.06* 0.00
$ 0.00 $(0.18) $16.94 28.47% $236,220 0.70% 1.22% 82.69% $0.05
0.00 (0.18) 13.34 0.15 165,441 0.70 1.17 76.75
0.00 (0.61) 13.50 25.30 84,990 0.70 0.94 81.15
0.00 (0.94) 11.27 10.75 36,334 0.70 1.13 134.17
0.00 (0.09) 11.02 11.19 18,813 0.75* 1.55* 40.54
$ 0.00 $(0.07) $18.16 30.54% $189,320 0.70% 0.43% 78.29% $0.04
0.00 (0.07) 13.97 0.58 121,791 0.70 0.45 60.85
0.00 (0.09) 13.97 24.57 67,625 0.70 0.56 97.87
0.00 (0.12) 11.29 10.91 21,213 0.70 0.87 65.92
0.00 (0.01) 10.28 2.98 2,748 0.82* 0.92* 13.41
0.00 (0.02) 18.17 36.64 892 0.94* 0.23* 71.73 N/A
</TABLE>
9
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share outstanding throughout each period:
<TABLE>
<CAPTION>
NET ASSET NET NET REALIZED TOTAL INCOME DIVIDENDS DISTRIBUTIONS
YEAR OR VALUE INVESTMENT AND UNREALIZED (LOSS) FROM FROM NET FROM NET DISTRIBUTIONS
PERIOD BEGINNING INCOME GAIN (LOSS) ON INVESTMENT INVESTMENT REALIZED FROM
ENDED OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME CAPITAL GAINS EQUALIZATION
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CADENCE MICRO CAP
GROWTH FUND
Institutional Class
10/31/95 $11.87 $(0.04) $ 3.55 $ 3.51 $ 0.00 $ 0.00 $ 0.00
10/31/94 11.06 (0.03) 0.84 0.81 0.00 0.00 0.00
10/31/93(f) 10.00 0.00 1.07 1.07 0.00 0.00 0.00
CADENCE SMALL CAP
GROWTH FUND
Institutional Class
10/31/95 $19.38 $(0.05) $ 3.12 $ 3.07 $ 0.00 $(1.43) $ 0.00
10/31/94 19.15 (0.02) 0.89 0.87 0.00 (0.64) 0.00
10/31/93 15.80 (0.06) 6.19 6.13 0.00 (2.78) 0.00
10/31/92 14.87 0.01 1.50 1.51 (0.01) (0.57) 0.00
10/31/91(g) 10.00 0.02 5.03 5.05 (0.02) (0.16) 0.00
Administrative Class
10/31/95(h) 21.90 (0.02) (0.87) (0.89) 0.00 0.00 0.00
COLUMBUS CIRCLE INVESTORS
CORE EQUITY FUND
Institutional Class
10/31/95(i) $10.00 $ 0.07 $ 2.71 $ 2.78 $(0.06) $ 0.00 $ 0.00
Administrative Class
10/31/95(j) 11.45 0.02 1.28 1.30 (0.02) 0.00 0.00
COLUMBUS CIRCLE INVESTORS
MID CAP EQUITY FUND
Institutional Class
10/31/95(i) $10.00 $ 0.02 $ 2.92 $ 2.94 $(0.02) $ 0.00 $ 0.00
PARAMETRIC ENHANCED
EQUITY FUND
Institutional Class
10/31/95 $11.99 $ 0.25 $ 2.62 $ 2.87 $(0.25) $(0.17) $ 0.00
10/31/94 12.08 0.25 (0.04) 0.21 (0.25) (0.05) 0.00
10/31/93 11.76 0.23 0.74 0.97 (0.23) (0.42) 0.00
10/31/92 10.80 0.16 1.06 1.22 (0.16) (0.04) (0.06)
10/31/91(k) 10.00 0.16 0.80 0.96 (0.16) 0.00 0.00
BLAIRLOGIE EMERGING
MARKETS FUND
Institutional Class
10/31/95 $16.53 $ 0.07 $(4.55) $(4.48) $(0.06) $(0.72) $ 0.00
10/31/94 12.27 (0.01) 4.45 4.44 0.00 (0.18) 0.00
10/31/93(l) 10.00 0.03 2.52 2.55 (0.02) (0.26) 0.00
Administrative Class
10/31/95 16.95 0.00 (4.95) (4.95) (0.05) (0.71) 0.00
BLAIRLOGIE INTERNATIONAL
ACTIVE FUND
Institutional Class
10/31/95 $11.86 $ 0.10 $ 0.30 $ 0.40 $(0.09) $(0.43) $ 0.00
10/31/94 10.69 0.09 1.15 1.24 (0.03) (0.04) 0.00
10/31/93(m) 10.00 0.05 0.69 0.74 (0.04) (0.01) 0.00
Administrative Class
10/31/95(b) 11.21 0.02 1.01 1.03 (0.08) (0.43) 0.00
BALANCED FUND
Institutional Class
10/31/95 $10.35 $ 0.44 $ 1.54 $ 1.98 $(0.44) $ 0.00 $ 0.00
10/31/94 10.84 0.34 (0.34) 0.00 (0.34) (0.15) 0.00
10/31/93 10.42 0.35 0.68 1.03 (0.35) (0.26) 0.00
10/31/92(n) 10.00 0.12 0.52 0.64 (0.12) (0.10) 0.00
</TABLE>
- --------
(f) From commencement of operations, June 25, 1993.
(g) From commencement of operations, January 7, 1991.
(h) From commencement of operations, September 27, 1995.
(i) From commencement of operations, December 28, 1994.
(j) From commencement of operations, May 31, 1995.
(k) From commencement of operations, February 11, 1991.
(l) From commencement of operations, June 1, 1993.
(m) From commencement of operations, June 8, 1993.
(n) From commencement of operations, June 25, 1992.
* Annualized.
10
<PAGE>
PIMCO FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share outstanding throughout each period:
<TABLE>
<CAPTION>
RATIO OF NET
NET ASSET NET ASSETS RATIO OF INVESTMENT
DISTRIBUTIONS VALUE END EXPENSES TO INCOME TO PORTFOLIO AVERAGE
FROM RETURN TOTAL END TOTAL OF PERIOD AVERAGE AVERAGE TURNOVER COMMISSION
OF CAPITAL DISTRIBUTIONS OF PERIOD RETURN (000'S) NET ASSETS NET ASSETS RATE RATE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0.00 $ 0.00 $15.38 29.54% $ 69,775 1.50% (0.37)% 86.68% $0.03
0.00 0.00 11.87 7.31 32,605 1.50 (0.25) 58.81
(0.01) (0.01) 11.06 10.81 10,827 1.50* (0.02)* 15.98
$ 0.00 $ (1.43) $21.02 17.39% $ 73,977 1.25% (0.27)% 85.61% $0.02
0.00 (0.64) 19.38 4.62 50,425 1.25 (0.33) 65.53
0.00 (2.78) 19.15 38.80 43,308 1.25 (0.35) 62.15
0.00 (0.58) 15.80 10.20 33,734 1.25 0.09 66.05
0.00 (0.18) 14.87 50.68 33,168 1.29* 0.11* 47.84
0.00 0.00 21.01 (5.34) 544 1.60* (0.82)* 8.80 N/A
$ 0.00 $ (0.06) $12.72 27.86% $ 7,791 0.82%* 0.79%* 122.88% $0.03
0.00 (0.02) 12.73 11.34 24,645 1.06* 0.34* 57.96 N/A
$ 0.00 $ (0.02) $12.92 29.34% $ 8,357 0.88%* 0.24%* 131.58% $0.04
$ 0.00 $ (0.42) $14.44 24.46% $ 73,999 0.70% 1.91% 20.59% $0.05
0.00 (0.30) 11.99 1.83 65,915 0.70 2.20 43.58
0.00 (0.65) 12.08 8.20 46,724 0.70 1.89 15.02
0.00 (0.26) 11.76 11.46 36,515 0.70 1.81 16.85
0.00 (0.16) 10.80 9.59 4,451 0.73* 2.14* 0.15
$ 0.00 $ (0.78) $11.27 (27.70)% $ 73,539 1.35% 0.57 % 118.18% $0.03
0.00 (0.18) 16.53 36.31 79,620 1.35 (0.06) 79.04
0.00 (0.28) 12.27 25.55 14,625 1.34* 0.64* 36.51
0.00 (0.76) 11.24 (27.96) 830 1.62 0.02 118.18 N/A
$ 0.00 $ (0.52) $11.74 3.83% $ 63,607 1.10% 1.10% 63.12% $0.03
0.00 (0.07) 11.86 11.68 22,569 1.10 1.12 88.55
0.00 (0.05) 10.69 7.39 8,299 1.10* 0.91* 19.61
0.00 (0.51) 11.73 9.61 675 1.34* 0.50* 58.07 N/A
$ 0.00 $ (0.44) $11.89 19.47% $ 72,638 0.70% 3.73% 43.10% $0.04
0.00 (0.49) 10.35 0.08 130,694 0.70 3.25 46.72
0.00 (0.61) 10.84 10.06 126,410 0.70 3.10 19.32
0.00 (0.22) 10.42 6.40 99,198 0.70* 3.36* 38.51
</TABLE>
11
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The investment objective and general investment policies of each Fund are
described below. There can be no assurance that the investment objective of
any Fund will be achieved. Because the market value of each Fund's investments
will change, the net asset value per share of each Fund also will vary.
NFJ Equity Income Fund seeks current income as a primary investment
objective, and long-term growth of capital as a secondary objective. In
pursuing these objectives, the Fund invests primarily in common stocks
characterized by having below-average price to earnings ("P/E") ratios and
higher dividend yields relative to their industry groups. In selecting
securities, the Portfolio Manager classifies a universe of approximately 2,000
stocks by industry, each of which has a minimum market capitalization of $200
million at the time of investment. The universe is then screened to find the
lowest P/E ratios in each industry, subject to application of quality and
price momentum screens. From this group, approximately 25 stocks with the
highest yields are chosen for the Fund. The universe is then rescreened to
find the highest yielding stock in each industry, subject to application of
quality and price momentum screens. From this group, approximately 25 stocks
with the lowest P/E ratios are added to the Fund. Although quarterly
rebalancing is a general rule, replacements are made whenever an alternative
stock within the same industry has a significantly lower P/E ratio or higher
dividend yield than the current Fund holding. For information on other
investment policies, see "Investment Objectives and Policies--Equity Funds."
See "Characteristics and Risks of Securities and Investment Techniques" in the
Prospectus and "Investment Objectives and Policies" in the Statement of
Additional Information for more details on investment practices.
NFJ Diversified Low P/E Fund seeks long-term growth of capital and income.
In pursuing this objective, the Fund invests primarily in common stocks
characterized by having below-average P/E ratios relative to their industry
group. In selecting securities, the Portfolio Manager classifies a universe of
approximately 2,000 stocks by industry, each of which has a minimum market
capitalization of $200 million at the time of investment. The universe is then
screened to find the stocks with the lowest P/E ratios in each industry,
subject to application of quality and price momentum screens. The stocks in
each industry with the lowest P/E ratios that pass the quality and price
momentum screens are then selected for the Fund. The Fund usually invests in
approximately 50 stocks. Although quarterly rebalancing is a general rule,
replacements are made whenever an alternative stock within the same industry
has a significantly lower P/E ratio than the current Fund holdings. For
information on other investment policies, see "Investment Objectives and
Policies--Equity Funds." See "Characteristics and Risks of Securities and
Investment Techniques" in the Prospectus and "Investment Objectives and
Policies" in the Statement of Additional Information for more details on
investment practices.
NFJ Small Cap Value Fund seeks long-term growth of capital and income. In
pursuing this objective, the Fund invests primarily in common stocks from
companies with market capitalizations between $50 million and $1 billion at
the time of investment. In selecting securities, the Portfolio Manager divides
a universe of up to approximately 2,000 stocks into quartiles based upon P/E
ratio. The lowest quartile in P/E ratio is screened for market capitalizations
between $50 million and $1 billion, subject to application of quality and
price momentum screens. Approximately 100 stocks with the lowest P/E ratios
are combined in the Fund, subject to limits on the weighting for any one
industry. Although quarterly rebalancing is a general rule, replacements are
made whenever a holding achieves a higher P/E ratio than the Standard & Poor's
500 Composite Stock Price Index ("S&P 500") P/E ratio or its industry average
P/E ratio, or when an alternative stock within the same industry has a
significantly lower P/E ratio than the current Fund holding. For information
on other investment policies, see "Investment Objectives and Policies--Equity
Funds." See "Characteristics and Risks of Securities and Investment
Techniques" in the Prospectus and "Investment Objectives and Policies" in the
Statement of Additional Information for more details on investment practices.
Cadence Capital Appreciation Fund seeks growth of capital. In pursuing this
objective, the Fund invests primarily in common stocks of companies that have
improving fundamentals (such as growth of earnings and dividends) and whose
stock is reasonably valued by the market. Stocks for the Fund are chosen from
companies with market capitalizations of at least $100 million at the time of
investment. The Fund usually invests in approximately 60 to 100 common stocks
selected from a universe of the approximately 1,000 largest market
capitalization stocks. Each issue is screened and ranked using five distinct
computerized models, including: (i) a dividend growth screen, (ii) an equity
growth screen, (iii) an earnings growth screen, (iv) an earnings momentum
12
<PAGE>
PIMCO FUNDS
screen, and (v) an earnings surprise screen. The Portfolio Manager believes
that the models identify the stocks in the universe exhibiting growth
characteristics with reasonable valuations. Stocks are replaced when they
score worse-than-median screen ranks, have negative earnings surprises, or
show poor relative price performance. The universe is rescreened frequently to
obtain a favorable composition of growth and value characteristics for the
entire Fund. For information on other investment policies, see "Investment
Objectives and Policies--Equity Funds." See "Characteristics and Risks of
Securities and Investment Techniques" in the Prospectus and "Investment
Objectives and Policies" in the Statement of Additional Information for more
details on investment practices.
Cadence Mid Cap Growth Fund seeks growth of capital. In pursuing this
objective, the Fund invests primarily in common stocks of middle
capitalization companies that have improving fundamentals (such as growth of
earnings and dividends) and whose stock is reasonably valued by the market.
Stocks for the Fund are selected from a universe of companies with market
capitalizations in excess of $500 million at the time of investment, excluding
the 200 companies with the highest market capitalization. The Fund usually
invests in approximately 60 to 100 common stocks. Each issue is screened and
ranked using five distinct computerized models, including: (i) a dividend
growth screen, (ii) an equity growth screen, (iii) an earnings growth screen,
(iv) an earnings momentum screen, and (v) an earnings surprise screen. The
Portfolio Manager believes that the models identify the stocks in the universe
exhibiting growth characteristics with reasonable valuations. Stocks are
replaced when they score worse-than-median screen ranks, have negative
earnings surprises, or show poor relative price performance. The universe is
rescreened frequently to obtain a favorable composition of growth and value
characteristics for the entire Fund. For information on other investment
policies, see "Investment Objectives and Policies--Equity Funds." See
"Characteristics and Risks of Securities and Investment Techniques" in the
Prospectus and "Investment Objectives and Policies" in the Statement of
Additional Information for more details on investment practices.
Cadence Micro Cap Growth Fund seeks long-term growth of capital. In pursuing
this objective, the Fund invests primarily in common stocks of companies that
have improving fundamentals (such as growth of earnings and dividends) and
whose stock is reasonably valued by the market. The Fund usually invests in
approximately 60 to 100 common stocks selected from a universe of stocks with
publicly available market capitalizations of less than $100 million at the
time of investment. Each issue is screened and ranked using five distinct
computerized models, including: (i) a dividend growth screen, (ii) an equity
growth screen, (iii) an earnings growth screen, (iv) an earnings momentum
screen, and (v) an earnings surprise screen. The Portfolio Manager believes
that the models identify the stocks in the universe exhibiting growth
characteristics with reasonable valuations. Stocks are replaced when they
score worse-than-median screen ranks, have negative earnings surprises, or
show poor relative price performance. The universe is rescreened frequently to
obtain a favorable composition of growth and value characteristics for the
entire Fund. For information on other investment policies, see "Investment
Objectives and Policies--Equity Funds." See "Characteristics and Risks of
Securities and Investment Techniques" in the Prospectus and "Investment
Objectives and Policies" in the Statement of Additional Information for more
details on investment practices.
Cadence Small Cap Growth Fund seeks growth of capital. In pursuing this
objective, the Fund invests primarily in common stocks of companies that have
improving fundamentals (such as growth of earnings and dividends) and whose
stock is reasonably valued by the market. The Fund usually invests in
approximately 60 to 100 common stocks selected from a universe of stocks with
market capitalizations of $50 million to $500 million at the time of
investment. Each issue is screened and ranked using five distinct computerized
models, including: (i) a dividend growth screen, (ii) an equity growth screen,
(iii) an earnings growth screen, (iv) an earnings momentum screen, and (v) an
earnings surprise screen. The Portfolio Manager believes that the models
identify the stocks in the universe exhibiting growth characteristics with
reasonable valuations. Stocks are replaced when they score worse-than-median
screen ranks, have negative earnings surprises, or show poor relative price
performance. The universe is rescreened frequently to obtain a favorable
composition of growth and value characteristics for the entire Fund. For
information on other investment policies, see "Investment Objectives and
Policies--Equity Funds." See "Characteristics and Risks of Securities and
Investment Techniques" in the Prospectus and "Investment Objectives and
Policies" in the Statement of Additional Information for more details on
investment practices.
13
<PAGE>
Columbus Circle Investors Core Equity Fund seeks long-term growth of
capital, with income as a secondary objective. In pursuing these objectives,
the Fund attempts to exceed the total return performance of the S&P 500 over a
reasonable measurement period. The Fund usually invests in approximately 40 to
50 common stocks from companies with market capitalizations in excess of $3
billion at the time of investment. In selecting securities, the Portfolio
Manager uses an investment discipline called "Positive Momentum & Positive
Surprise." It is based on the premise that companies performing better than
expected will have rising securities prices, while companies producing less
than expected results will not. Through thorough analysis of company
fundamentals in the context of the prevailing economic environment, the
companies selected for purchase remain in the Fund only if they continue to
achieve or exceed expectations, and are sold when business or earnings results
are disappointing. Stock selection may include a significant portion of middle
capitalization companies combined with the large capitalization stocks.
The Fund may invest a portion of its assets in securities of foreign issuers
traded in foreign securities markets, which will not exceed 15% of the Fund's
net assets at the time of investment. Investing in the securities of foreign
issuers involves special risks and considerations not typically associated
with investing in U.S. companies. The Fund may also purchase and write call
and put options on securities, securities indexes and on foreign currencies;
enter into futures contracts and use options on futures contracts; and engage
in forward foreign currency contracts. For information on other investment
policies, see "Investment Objectives and Policies--Equity Funds." See
"Characteristics and Risks of Securities and Investment Techniques" in the
Prospectus and "Investment Objectives and Policies" in the Statement of
Additional Information for more details on investment practices.
Columbus Circle Investors Mid Cap Equity Fund seeks long-term growth of
capital. In pursuing this objective, the Fund usually invests in approximately
40 to 60 common stocks from companies with market capitalizations of $800
million to $3 billion at the time of investment. In selecting securities, the
Portfolio Manager uses an investment discipline called "Positive Momentum &
Positive Surprise." It is based on the premise that companies performing
better than expected will have rising securities prices, while companies
producing less than expected results will not. Through thorough analysis of
company fundamentals in the context of the prevailing economic environment,
the companies selected for purchase remain in the Fund only if they continue
to achieve or exceed expectations, and are sold when business or earnings
results are disappointing. Stock selection may include companies that have
grown rapidly from small capitalization status.
The Fund may invest a portion of its assets in securities of foreign issuers
traded in foreign securities markets, which will not exceed 15% of the Fund's
net assets at the time of investment. Investing in the securities of foreign
issuers involves special risks and considerations not typically associated
with investing in U.S. companies. The Fund may also purchase and write call
and put options on securities, securities indexes and on foreign currencies;
enter into futures contracts and use options on futures contracts; and engage
in forward foreign currency contracts. For information on other investment
policies, see "Investment Objectives and Policies--Equity Funds." See
"Characteristics and Risks of Securities and Investment Techniques" in the
Prospectus and "Investment Objectives and Policies" in the Statement of
Additional Information for more details on investment practices.
Parametric Enhanced Equity Fund seeks to provide a total return which equals
or exceeds the total return performance of an index that represents the
performance of a reasonably broad spectrum of common stocks that are publicly
traded in the United States. In pursuing this objective, the Fund attempts to
equal or exceed the total return performance of the S&P 500. The Portfolio
Manager uses quantitative techniques to construct a portfolio that consists of
some, but not all, of the common stocks that are represented in the S&P 500.
The Fund may invest in common stock of foreign issuers if included in the
index. The Fund is designed to simultaneously meet all of the following
criteria: (i) higher returns than the S&P 500 in both up and down markets,
(ii) no greater volatility than the S&P 500, and (iii) consistent performance
on a period-to-period basis. A computer optimization model analyzes the return
pattern of thousands of portfolios that could be constructed from the
securities in the S&P 500. The Portfolio Manager's optimization process
reweights or eliminates stocks that have not historically improved the
performance or lowered the volatility of the Fund. The Fund is rebalanced
quarterly. The Trust reserves the right to change the index whose total return
the Fund will attempt to equal or exceed without shareholder approval,
although it is not anticipated that such a change would be made in the
ordinary course of the Fund's operations.
14
<PAGE>
PIMCO FUNDS
The Fund may engage in the purchase and writing of options on securities
indexes, and may also invest in stock index futures contracts and options
thereon. For information on other investment policies, see "Investment
Objectives and Policies--Equity Funds." See "Characteristics and Risks of
Securities and Investment Techniques" in the Prospectus and "Investment
Objectives and Policies" in the Statement of Additional Information for more
details on investment practices.
Blairlogie Emerging Markets Fund seeks long-term growth of capital. In
pursuing this objective, the Fund invests primarily in common stocks of
companies located in countries identified as "emerging market" countries. The
Morgan Stanley Capital International Emerging Markets Free Index ("MSCI Free
Index") and the International Finance Corporation Emerging Markets Index ("IFC
Index") are used as the bases for choosing the countries in which the Fund
invests. However, the Fund is not limited to the countries and weightings of
these indexes. The Portfolio Manager applies two levels of screening in
selecting investments for the Fund. First, an active country selection model
analyzes world markets and assigns a relative value ranking, or "favorability
weighting," to each country in the relevant country universe to determine
markets which are relatively undervalued. Second, at the stock selection
level, quality analysis and value analysis are applied to each security,
assessing variables such as balance sheet strength and earnings growth
(quality factors) and performance relative to the industry, price to earnings
ratios, and price to book ratios (value factors). This two-level screening
method identifies undervalued securities for purchase as well as provides a
sell discipline for fully valued securities. In selecting securities, the
Portfolio Manager considers, to the extent practicable and on the basis of
information available to it for research, a company's environmental business
practices.
For purposes of implementing its investment objective, the Fund invests
primarily in some or all of the following emerging market countries.
Argentina Greece Jordan Poland Thailand
Brazil Hong Kong Malaysia Portugal Turkey
Chile Hungary Mexico South Africa Venezuela
China India Pakistan South Korea Zimbabwe
Colombia Indonesia Peru Sri Lanka
Czech Israel Philippines Taiwan
Republic
For purposes of allocating the Fund's investments, a company is considered
to be located in the country in which it is domiciled, in which it is
primarily traded, from which it derives a significant portion of its revenues,
or in which a significant portion of its goods or services are produced.
Most of the foreign securities in which the Fund invests will be denominated
in foreign currencies. The Fund may engage in foreign currency transactions to
protect itself against fluctuations in currency exchange rates in relation to
the U.S. dollar or to the weighting of a particular foreign currency on the
MSCI Free Index or the IFC Index. Such foreign currency transactions may
include forward foreign currency contracts, currency exchange transactions on
a spot (i.e., cash) basis, put and call options on foreign currencies, and
foreign exchange futures contracts. The Fund may invest in stock index futures
contracts, foreign exchange futures contracts, and options thereon, and may
sell (write) call and put options. The Fund may also engage in equity index
swap transactions.
Investing in the securities of foreign issuers involves special risks and
considerations not typically associated with investing in U.S. companies.
Investment in emerging market countries presents risks in greater degree than,
and in addition to, those presented by investment in foreign issuers in
general. A number of emerging market countries restrict, to varying degrees,
foreign investment in stocks. Repatriation of investment income, capital, and
the proceeds of sales by foreign investors may require governmental
registration and/or approval in some emerging market countries. A number of
the currencies of developing countries have experienced significant declines
against the U.S. dollar in recent years, and devaluation may occur subsequent
to investments in these currencies by the Fund. Inflation and rapid
fluctuations in inflation rates have had, and may continue to have, negative
effects on the economies and securities markets of certain emerging market
countries. Many of the emerging securities markets are relatively small, have
low trading volumes, suffer periods of relative
15
<PAGE>
illiquidity, and are characterized by significant price volatility. There is a
risk in emerging market countries that a future economic or political crisis
could lead to price controls, forced mergers of companies, expropriation or
confiscatory taxation, seizure, nationalization, or creation of government
monopolies, any of which may have a detrimental effect on the Fund's
investment.
For information on other investment policies, see "Investment Objectives and
Policies--Equity Funds." See "Characteristics and Risks of Securities and
Investment Techniques" in the Prospectus and "Investment Objectives and
Policies" in the Statement of Additional Information for more details on
investment practices.
Blairlogie International Active Fund seeks long-term growth of capital. In
pursuing this objective, the Fund invests primarily in a diversified portfolio
of international equity securities. The Morgan Stanley Capital International
EAFE (Europe, Australasia, Far East) Index ("EAFE Index") is used as a basis
for choosing the countries in which the Fund invests, however, the Fund is not
limited to the countries and weightings of the EAFE Index. The Portfolio
Manager applies two levels of screening in selecting investments for the Fund.
First, an active country selection model analyzes world markets and assigns a
relative value ranking, or "favorability weighting," to each country in the
relevant country universe to determine markets which are relatively
undervalued. Second, at the stock selection level, quality analysis and value
analysis are applied to each security, assessing variables such as balance
sheet strength and earnings growth (quality factors) and performance relative
to the industry, price to earnings ratios and price to book ratios (value
factors). This two-level screening method identifies undervalued securities
for purchase as well as provides a sell discipline for fully valued
securities. In selecting securities, the Portfolio Manager considers, to the
extent practicable and on the basis of information available to it for
research, a company's environmental business practices.
For purposes of allocating the Fund's investments, a company is considered
to be located in the country in which it is domiciled, in which it is
primarily traded, from which it derives a significant portion of its revenues,
or in which a significant portion of its goods or services are produced.
Most of the foreign securities in which the Fund invests will be denominated
in foreign currencies. The Fund may engage in foreign currency transactions to
protect itself against fluctuations in currency exchange rates in relation to
the U.S. dollar or to the weighting of a particular foreign currency on the
EAFE Index. Such foreign currency transactions may include forward foreign
currency contracts, currency exchange transactions on a spot (i.e., cash)
basis, put and call options on foreign currencies, and foreign exchange
futures contracts. The Fund may invest in stock index futures contracts,
foreign exchange futures contracts, and options thereon, and may sell (write)
call and put options. The Fund also may engage in equity index swap
transactions.
Investing in the securities of foreign issuers involves special risks and
considerations not typically associated with investing in U.S. companies. For
information on other investment policies, see "Investment Objectives and
Policies--Equity Funds." See "Characteristics and Risks of Securities and
Investment Techniques" in the Prospectus and "Investment Objectives and
Policies" in the Statement of Additional Information for more details on
investment practices.
Balanced Fund seeks total return consistent with prudent investment
management. The Fund attempts to achieve this objective through a management
policy of investing in the following asset classes: common stock, fixed income
securities, and money market instruments. The proportion of the Fund's total
assets allocated among common stocks, fixed income securities, and money
market instruments will vary from time to time and will be determined by the
Adviser. In determining the allocation of the Fund's assets among the three
asset classes, the Adviser will employ asset allocation principles which take
into account certain economic factors, market conditions, and the expected
relative total return and risk of the various asset classes. Under normal
circumstances, it is anticipated that the Fund will generally maintain a
balance among the types of securities in which it invests. Thus, normally the
Fund will maintain 40% to 65% of its assets in common stock, at least 25% of
its assets in fixed income securities, and less than 10% of its assets in
money market instruments. However, in no event would the Fund invest in any
common stock if, at the time of investment, more than 80% of the Fund's assets
would be invested in common stock; in no event would the Fund invest in a
fixed income security (other than a short term instrument) if, at the time of
investment, more than 80% of the Fund's assets would be invested in fixed
income securities; nor would the Fund invest in a money market instrument if,
at the time of investment, more than 60% of its assets would be invested in
money market instruments.
16
<PAGE>
PIMCO FUNDS
In managing the Fund, the Adviser uses a specialist approach and has engaged
two of the Trust's Portfolio Managers to manage certain portions of the Fund's
assets. The portion of the assets of the Fund allocated by the Adviser for
investment in common stock (the "Common Stock Segment") will be managed in
accordance with the investment policies of the Parametric Enhanced Equity Fund
by the same Portfolio Manager, Parametric. The portion of the assets of the
Fund allocated by the Adviser for investment in fixed income debt securities
(the "Fixed Income Securities Segment") will be managed by PIMCO. PIMCO
Advisors will manage directly the assets of the Fund allocated for investment
in money market instruments (the "Money Market Segment"). Because of the
Fund's flexible investment policy, portfolio turnover may be greater than for
a fund that does not allocate assets among various types of securities.
The Fund invests in fixed income securities of varying maturities. Portfolio
holdings will be concentrated in areas of the bond market (based on quality,
sector, coupon or maturity) which the Portfolio Manager believes to be
relatively undervalued. Corporate fixed income securities in which the Fund
may invest will, at the time of investment, be rated Baa or better by Moody's
Investors Service, Inc. ("Moody's"), BBB or better by Standard & Poor's
Corporation ("S&P") or, if not rated by Moody's or S&P, will be of comparable
quality as determined by the Portfolio Manager. Investments in corporate debt
securities that are rated Baa by Moody's or BBB by S&P have certain
"speculative characteristics." Such securities may be subject to greater
market fluctuations, less liquidity and greater risk of loss of income or
principal, including a greater possibility of default or bankruptcy of the
issuer of such securities, than more highly rated debt securities. In the
event that an existing holding is downgraded to below investment grade, the
Fund may nonetheless retain the security.
The Fund may engage in the purchase and writing of put and call options on
debt securities and securities indexes and may also purchase or sell interest
rate futures contracts, stock index futures contracts, and options thereon.
See "Characteristics and Risks of Securities and Investment Techniques" in the
Prospectus and "Investment Objectives and Policies" in the Statement of
Additional Information for more details on investment practices.
EQUITY FUNDS
The NFJ Equity Income, NFJ Diversified Low P/E, NFJ Small Cap Value, Cadence
Capital Appreciation, Cadence Mid Cap Growth, Cadence Micro Cap Growth,
Cadence Small Cap Growth, Columbus Circle Investors Core Equity, Columbus
Circle Investors Mid Cap Equity, Parametric Enhanced Equity, Blairlogie
Emerging Markets, and Blairlogie International Active Funds will each invest
primarily (normally at least 65% of its assets) in common stock. Each Equity
Fund may maintain a portion of its assets, which will usually not exceed 10%,
in U.S. Government securities, high-quality debt securities (whose maturity or
remaining maturity will not exceed five years), money market obligations, and
in cash to provide for payment of the Fund's expenses and to meet redemption
requests. The Equity Funds that invest primarily in securities of foreign
issuers may invest in debt securities and money market obligations issued by
U.S. and foreign issuers and that are either U.S. dollar-denominated or
denominated in foreign currency.
Any of the Equity Funds may temporarily not be invested primarily in equity
securities after the commencement of operations or after receipt of
significant new monies. Any of the Equity Funds may temporarily not contain
the number of stocks in which the Fund normally invests if the Fund does not
have sufficient assets to be fully invested, or pending the Portfolio
Manager's ability to prudently invest new monies. It is the policy of all of
the Equity Funds to be as fully invested in common stock as practicable at all
times. This policy precludes the Equity Funds from investing in debt
securities as a defensive investment posture (although the Funds may invest in
such securities to provide for payment of expenses and to meet redemption
requests). Accordingly, investors in these Funds bear the risk of general
declines in stock prices and the risk that a Fund's exposure to such declines
cannot be lessened by investment in debt securities.
The Equity Funds may also invest in convertible securities, preferred stock,
warrants subject to certain limitations, and American Depository Receipts
("ADRs"). The Columbus Circle Investors Core Equity, Columbus Circle Investors
Mid Cap Equity, Blairlogie Emerging Markets, and Blairlogie International
Active Funds may also invest in European Depository Receipts ("EDRs") or
Global Depository Receipts ("GDRs"). For more information on these investment
practices, see "Characteristics and Risks of Securities and Investment
Techniques" in the Prospectus and "Investment Objectives and Policies" in the
Statement of Additional Information.
17
<PAGE>
DURATION
Under normal circumstances, the Fixed Income Securities Segment of the
Balanced Fund will maintain an average portfolio duration of three to six
years. Duration is a measure of the expected life of a fixed income security
that was developed as a more precise alternative to the concept of "term to
maturity." Traditionally, a fixed income security's "term to maturity" has
been used as proxy for the sensitivity of the security's price to changes in
interest rates (which is the "interest rate risk" or "volatility" of the
security). However, "term to maturity" measures only the time until a fixed
income security provides its final payment, taking no account of the pattern
of the security's payments prior to maturity. In contrast, duration
incorporates a bond's yield, coupon interest payments, final maturity and call
features into one measure of the average life of a fixed income security on a
present value basis. Duration is one of the fundamental tools used by the
Portfolio Manager in security selection for the Fixed Income Securities
Segment of the Balanced Fund.
INVESTMENT RESTRICTIONS
Each Fund's investment objective, as set forth under "Investment Objectives
and Policies," and the investment restrictions set forth below are fundamental
policies of the Fund and may not be changed with respect to a Fund without
shareholder approval by vote of a majority of the outstanding shares of that
Fund. Under these restrictions, a Fund may not:
(1) invest in a security if, as a result of such investment, more than
25% of its total assets (taken at market value at the time of such
investment) would be invested in the securities of issuers in any
particular industry, except that this restriction does not apply to
securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities (or repurchase agreements with respect thereto);
(2) with respect to 75% of its assets, invest in a security if, as a
result of such investment, more than 5% of its total assets (taken at
market value at the time of such investment) would be invested in the
securities of any one issuer, except that this restriction does not apply
to securities issued or guaranteed by the U.S. Government or its agencies
or instrumentalities;
(3) with respect to 75% of its assets, invest in a security if, as a
result of such investment, it would hold more than 10% (taken at the time
of such investment) of the outstanding voting securities of any one issuer,
except that this restriction does not apply to securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities;
(4) purchase or sell real estate, although it may purchase securities
secured by real estate or interests therein, or securities issued by
companies in the real estate industry or which invest in real estate or
interests therein;
(5) purchase or sell commodities or commodities contracts (which, for the
purpose of this restriction, shall not include foreign currency or forward
foreign currency contracts), except that any Fund may engage in interest
rate futures contracts, stock index futures contracts, futures contracts
based on other financial instruments or one or more groups of instruments,
and on options on such futures contracts;
(6) purchase securities on margin, except for use of short-term credit
necessary for clearance of purchases and sales of portfolio securities, but
it may make margin deposits in connection with transactions in options,
futures, and options on futures, and except that effecting short sales will
be deemed not to constitute a margin purchase for purposes of this
restriction;
(7) borrow money, or pledge, mortgage or hypothecate its assets, except
that a Fund may (i) borrow from banks or enter into reverse repurchase
agreements, or employ similar investment techniques, and pledge its assets
in connection therewith, but only if immediately after each borrowing and
continuing thereafter, there is asset coverage of 300% and (ii) enter into
reverse repurchase agreements and transactions in options, futures, options
on futures, and forward foreign currency contracts as described in this
Prospectus and in the Statement of Additional Information (the deposit of
assets in escrow in connection with the writing of covered put and call
options and the purchase of securities on a when-issued or delayed delivery
basis, and collateral arrangements with respect to initial or variation
margin deposits for futures contracts, options on futures contracts, and
forward foreign currency contracts will not be deemed to be pledges of a
Fund's assets);
18
<PAGE>
PIMCO FUNDS
(8) issue senior securities, except insofar as a Fund may be deemed to
have issued a senior security by reason of borrowing money in accordance
with the Fund's borrowing policies, and except for purposes of this
investment restriction, collateral, escrow, or margin or other deposits
with respect to the making of short sales, the purchase or sale of futures
contracts or related options, purchase or sale of forward foreign currency
contracts, and the writing of options on securities are not deemed to be an
issuance of a senior security;
(9) lend any funds or other assets, except that a Fund may, consistent
with its investment objective and policies: (a) invest in debt obligations,
including bonds, debentures, or other debt securities, bankers' acceptances
and commercial paper, even though the purchase of such obligations may be
deemed to be the making of loans, (b) enter into repurchase agreements and
reverse repurchase agreements, and (c) lend its portfolio securities in an
amount not to exceed one-third of the value of its total assets, provided
such loans are made in accordance with applicable guidelines established by
the Securities and Exchange Commission ("SEC") and the Trustees of the
Trust; or
(10) act as an underwriter of securities of other issuers, except to the
extent that in connection with the disposition of portfolio securities, it
may be deemed to be an underwriter under the federal securities laws.
Each Fund is also subject to the following non-fundamental restrictions and
policies (which may be changed without shareholder approval) relating to the
investment of its assets and activities. Unless otherwise indicated, a Fund
may not:
(A) invest for the purpose of exercising control or management;
(B) invest in securities of another open-end investment company;
(C)(a) for the NFJ Equity Income, NFJ Diversified Low P/E, NFJ Small Cap
Value, Cadence Capital Appreciation, Cadence Mid Cap Growth, Cadence Small
Cap Growth, Parametric Enhanced Equity, and Balanced Funds: invest more
than 10% of the net assets of a Fund (taken at market value at the time of
the investment) in "illiquid securities," illiquid securities being defined
to include repurchase agreements maturing in more than seven days, certain
loan participation interests, fixed time deposits which are not subject to
prepayment or provide withdrawal penalties upon prepayment (other than
overnight deposits), or other securities which legally or in the Adviser's
or Portfolio Manager's opinion may be deemed illiquid (other than
securities issued pursuant to Rule 144A under the Securities Act of 1933
and certain commercial paper that the Adviser or Portfolio Manager has
determined to be liquid under procedures approved by the Board of
Trustees); nor invest more than 5% of the net assets of a Fund in
securities that are illiquid because they are subject to legal or
contractual restrictions on resale;
(b) for the Columbus Circle Investors Core Equity, Columbus Circle
Investors Mid Cap Equity, Cadence Micro Cap Growth, Blairlogie Emerging
Markets, and Blairlogie International Active Funds: invest more than 15% of
the net assets of a Fund (taken at market value at the time of the
investment) in securities that are illiquid because they are subject to
legal or contractual restrictions on resale, in repurchase agreements
maturing in more than seven days, or other securities which are illiquid;
(D) purchase any security if, as a result, the Fund will then have more
than 5% of its total assets invested in securities of companies (including
predecessor companies) that have been in continuous operation for less than
three years;
(E) purchase or retain securities of any issuer if, to the knowledge of
the Fund, any of the Fund's officers or Trustees, or any officer or
Director of PIMCO Advisors or the Portfolio Manager of the Fund,
individually owns more than one-half of 1% of the outstanding securities of
the issuer and together own beneficially more than 5% of such issuer's
securities;
(F) purchase securities for the Fund from, or sell portfolio securities
to, any of the officers and Directors or Trustees of the Trust or the
Adviser;
(G) invest in a security if, with respect to 100% of the total assets,
the Fund would own more than 10% (taken at the time of such investment) of
the outstanding voting securities of any one issuer, except that this
restriction does not apply to securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities;
19
<PAGE>
(H) invest more than 5% of the assets of a Fund (taken at market value at
the time of investment) in any combination of interest only, principal
only, or inverse floating rate securities;
(I) borrow money (excluding reverse repurchase agreements which are
subject to the Fund's fundamental borrowing restriction), except for
temporary administrative purposes;
(J) sell securities or property short, except short sales against the
box;
(K) purchase, write, or sell puts, calls, straddles, spreads, or
combinations thereof, except that this restriction does not apply to puts
that are a feature of floating rate securities or to puts that are a
feature of other corporate debt securities, and except that any Fund may
engage in options on securities, options on securities indexes, options on
foreign currencies, options on futures contracts, and options on other
financial instruments or one or more groups of instruments;
(L) invest in warrants (other than warrants acquired by the Fund as part
of a unit or attached to securities at the time of purchase) if, as a
result, the investment in warrants (valued to the lower of cost or market)
would exceed 5% of the value of the Fund's net assets, of which not more
than 2% of the Fund's net assets may be invested in warrants not listed on
a recognized U.S. or foreign stock exchange;
(M) invest in securities sold in foreign over-the-counter markets unless
the foreign dealers effecting such transactions have a minimum net worth of
$20 million; or
(N) invest in oil, gas or other mineral exploration or development
programs (including oil, gas, or other mineral leases), except that a Fund
may invest in the securities of companies that invest in or sponsor those
programs.
For purposes of fundamental investment restriction (5), swap agreements are
not deemed to be commodities contracts. Unless otherwise indicated, all
limitations applicable to Fund investments apply only at the time a
transaction is entered into. Any subsequent change in a rating assigned by any
rating service to a security (or, if unrated, deemed to be of comparable
quality), or change in the percentage of Fund assets invested in certain
securities or other instruments resulting from market fluctuations or other
changes in a Fund's total assets will not require a Fund to dispose of an
investment until the Adviser or Portfolio Manager determines that it is
practicable to sell or close out the investment without undue market or tax
consequences to the Fund. In the event that ratings services assign different
ratings to the same security, the Adviser or Portfolio Manager will determine
which rating it believes best reflects the security's quality and risk at that
time, which may be the higher of the several assigned ratings.
CHARACTERISTICS AND RISKS OF SECURITIES
AND INVESTMENT TECHNIQUES
The different types of securities and investment techniques used by the
individual Funds all have attendant risks of varying degrees. For example,
with respect to common stock, there can be no assurance of capital
appreciation, and there is a risk of market decline. With respect to debt
securities, including money market instruments, there is the risk that the
issuer of a security may not be able to meet its obligation to make scheduled
interest or principal payments. In addition, the value of debt securities
generally rises and falls inversely with interest rates, and the longer the
maturity of the debt security, the more volatile it may be in terms of changes
in value. Because each Fund seeks a different investment objective and has
different investment policies, each is subject to varying degrees of
financial, market, and credit risks. Therefore, investors should carefully
consider the investment objective, investment policies, and potential risks of
any Fund or Funds before investing.
The following describes potential risks associated with different types of
investment techniques that may be used by the individual Funds. For more
detailed information on these investment techniques, as well as information on
the types of securities in which some or all of the Funds may invest, see the
Statement of Additional Information.
20
<PAGE>
PIMCO FUNDS
LOW CAPITALIZATION STOCKS
The NFJ Equity Income, NFJ Diversified Low P/E, NFJ Small Cap Value, Cadence
Mid Cap Growth, Cadence Micro Cap Growth, Cadence Small Cap Growth, Blairlogie
Emerging Markets, and Blairlogie International Active Funds may invest in
common stock of companies with market capitalization that is low compared to
other publicly traded companies. Under normal market conditions, NFJ Small Cap
Value Fund will invest in companies with market capitalizations of $1 billion
or less, Cadence Small Cap Growth Fund will invest in companies with market
capitalizations of $500 million or less, and Cadence Micro Cap Growth Fund
will invest in companies with market capitalizations of $100 million or less.
Investments in larger companies present certain advantages in that such
companies generally have greater financial resources, more extensive research
and development, manufacturing, marketing and service capabilities, and more
stability and greater depth of management and technical personnel. Investments
in smaller, less seasoned companies may present greater opportunities for
growth but also may involve greater risks than customarily are associated with
more established companies. The securities of smaller companies may be subject
to more abrupt or erratic market movements than larger, more established
companies. These companies may have limited product lines, markets or
financial resources, or they may be dependent upon a limited management group.
Their securities may be traded only in the over-the-counter market or on a
regional securities exchange. As a result, the disposition of securities to
meet redemptions may require a Fund to sell these securities at a
disadvantageous time, or at disadvantageous prices, or to make many small
sales over a lengthy period of time.
REPURCHASE AGREEMENTS
For the purposes of maintaining liquidity and achieving income, each Fund
may enter into repurchase agreements, which entail the purchase of a portfolio
eligible security from a bank or broker-dealer that agrees to repurchase the
security at the Fund's cost plus interest within a specified time (normally
one day). If the party agreeing to repurchase should default, as a result of
bankruptcy or otherwise, the Fund will seek to sell the securities which it
holds, which action could involve procedural costs or delays in addition to a
loss on the securities if their value should fall below their repurchase
price. Those Funds whose investment objectives do not include the earning of
income will invest in repurchase agreements only as a cash management
technique with respect to that portion of the portfolio maintained in cash.
Each Fund will limit its investment in repurchase agreements maturing in more
than seven days consistent with the Fund's policy on investment in illiquid
securities.
REVERSE REPURCHASE AGREEMENTS AND OTHER BORROWINGS
A reverse repurchase agreement is a form of leverage that involves the sale
of a security by a Fund and its agreement to repurchase the instrument at a
specified time and price. The Fund will maintain a segregated account
consisting of liquid assets, such as cash, U.S. Government securities or high
grade debt obligations, maturing not later than the expiration of the reverse
repurchase agreement, to cover its obligations under reverse repurchase
agreements.
Reverse repurchase agreements will be subject to the Funds' limitations on
borrowings, which will restrict the aggregate of such transactions (plus any
other borrowings) to 33 1/3% of a Fund's total assets. Apart from transactions
involving reverse repurchase agreements, a Fund will not borrow money, except
for temporary administrative purposes.
LOANS OF PORTFOLIO SECURITIES
For the purpose of achieving income, the Funds may lend their portfolio
securities, provided: (i) the loan is secured continuously by collateral
consisting of U.S. Government securities, cash or cash equivalents (negotiable
certificates of deposit, bankers' acceptances or letters of credit) maintained
on a daily mark-to-market basis in an amount at least equal to the current
market value of the securities loaned; (ii) the Fund may at any time call the
loan and obtain the return of the securities loaned; (iii) the Fund will
receive any interest or dividends paid on the loaned securities; and (iv) the
aggregate market value of securities loaned will not at any time exceed 33
1/3% of the total assets of the Fund.
21
<PAGE>
FOREIGN SECURITIES
The Blairlogie Emerging Markets and Blairlogie International Active Funds
may invest directly in foreign equity securities; U.S. dollar- or foreign
currency-denominated foreign corporate debt securities; foreign preferred
securities; certificates of deposit, fixed time deposits and bankers'
acceptances issued by foreign banks; obligations of foreign governments or
their subdivisions, agencies and instrumentalities, international agencies and
supranational entities; and securities represented by EDRs, ADRs, or GDRs.
ADRs are dollar-denominated receipts issued generally by domestic banks and
representing the deposit with the bank of a security of a foreign issuer, and
are publicly traded on exchanges or over-the-counter in the United States.
EDRs are receipts similar to ADRs and are issued and traded in Europe. GDRs
may be offered privately in the United States and also trade in public or
private markets in other countries. The Columbus Circle Investors Core Equity
and Columbus Circle Investors Mid Cap Equity Funds each may invest up to 15%
of their respective net assets in securities which are traded principally in
securities markets outside the United States (Eurodollar certificates of
deposit are excluded for purposes of these limitations). In addition, the
Funds may invest up to 35% of their respective assets in ADRs, EDRs, and GDRs,
reduced by such amount that may be reserved for investments in high quality
debt securities, money market obligations, and cash or other permissible
investments. The NFJ Equity Income, NFJ Diversified Low P/E, NFJ Small Cap
Value, Cadence Capital Appreciation, Cadence Mid Cap Growth, Cadence Micro Cap
Growth, Cadence Small Cap Growth, Parametric Enhanced Equity, and Balanced
Funds may also invest in ADRs. The Parametric Enhanced Equity Fund may invest
in common stock of foreign issuers if included in the index from which stocks
are selected.
Investing in the securities of issuers in any foreign country involves
special risks and considerations not typically associated with investing in
U.S. companies. Shareholders should consider carefully the substantial risks
involved in investing in securities issued by companies and governments of
foreign nations. These risks include: differences in accounting, auditing and
financial reporting standards; generally higher commission rates on foreign
portfolio transactions; the possibility of nationalization, expropriation or
confiscatory taxation; adverse changes in investment or exchange control
regulations (which may include suspension of the ability to transfer currency
from a country); and political instability which could affect U.S. investments
in foreign countries. Additionally, foreign securities and dividends and
interest payable on those securities may be subject to foreign taxes,
including taxes withheld from payments on those securities. Foreign securities
often trade with less frequency and volume than domestic securities and
therefore may exhibit greater price volatility. Additional costs associated
with an investment in foreign securities may include higher custodial fees
than apply to domestic custodial arrangements and transaction costs of foreign
currency conversions. Changes in foreign exchange rates also will affect the
value of securities denominated or quoted in currencies other than the U.S.
dollar.
The Blairlogie Emerging Markets Fund may invest in the securities of issuers
based in countries with developing economies. Investing in developing
countries involves certain risks not typically associated with investing in
U.S. securities, and imposes risks greater than, or in addition to, risks of
investing in foreign, developed countries. These risks include: greater risk
of nationalization or expropriation of assets or confiscatory taxation;
currency devaluations and other currency exchange rate fluctuations; greater
social, economic and political uncertainty and instability (including the risk
of war); more substantial government involvement in the economy; higher rates
of inflation; less government supervision and regulation of the securities
markets and participants in those markets; controls on foreign investment and
limitations on repatriation of invested capital and on the Fund's ability to
exchange local currencies for U.S. dollars; unavailability of currency hedging
techniques in certain developing countries; the fact that companies in
developing countries may be smaller, less seasoned and newly organized
companies; the difference in, or lack of, auditing and financial reporting
standards, which may result in unavailability of material information about
issuers; the risk that it may be more difficult to obtain and/or enforce a
judgment in a court outside the United States; and greater price volatility,
substantially less liquidity and significantly smaller market capitalization
of securities markets.
FOREIGN CURRENCY TRANSACTIONS
Foreign currency exchange rates may fluctuate significantly over short
periods of time. They generally are determined by the forces of supply and
demand in the foreign exchange markets and the relative merits of investments
in different countries, actual or perceived changes in interest rates and
other complex factors, as seen
22
<PAGE>
PIMCO FUNDS
from an international perspective. Currency exchange rates also can be
affected unpredictably by intervention (or the failure to intervene) by U.S.
or foreign governments or central banks, by currency controls or political
developments in the U.S. or abroad. Currencies in which the Funds' assets are
denominated may be devalued against the U.S. dollar, resulting in a loss to
the Funds.
The Columbus Circle Investors Core Equity, Columbus Circle Investors Mid Cap
Equity, Blairlogie Emerging Markets, and Blairlogie International Active Funds
may, in addition to buying and selling foreign currency futures contracts and
options on foreign currencies and foreign currency futures, enter into forward
foreign currency exchange contracts to reduce the risks of adverse changes in
foreign exchange rates. A forward foreign currency exchange contract involves
an obligation to purchase or sell a specific currency at a future date, which
may be any fixed number of days from the date of the contract agreed upon by
the parties, at a price set at the time of the contract. By entering into a
forward foreign currency contract, the Fund "locks in" the exchange rate
between the currency it will deliver and the currency it will receive for the
duration of the contract. As a result, a Fund reduces its exposure to changes
in the value of the currency it will deliver and increases its exposure to
changes in the value of the currency it will exchange into. The effect on the
value of a Fund is similar to selling securities denominated in one currency
and purchasing securities denominated in another. Contracts to sell foreign
currency would limit any potential gain which might be realized by a Fund if
the value of the hedged currency increases. A Fund may enter into these
contracts for the purpose of hedging against foreign exchange risk arising
from the Fund's investment or anticipated investment in securities denominated
in foreign currencies. A Fund also may enter into these contracts for purposes
of increasing exposure to a foreign currency or to shift exposure to foreign
currency fluctuations from one country to another. A Fund may use one currency
(or a basket of currencies) to hedge against adverse changes in the value of
another currency (or a basket of currencies) when exchange rates between the
two currencies are positively correlated. A Fund will segregate liquid assets,
such as cash or high grade debt obligations, in a segregated account to cover
forward currency contracts entered into for non-hedging purposes.
DERIVATIVE INSTRUMENTS
Certain Funds may purchase and write call and put options on securities,
securities indexes and foreign currencies, and enter into futures contracts
and use options on futures contracts as further described below. In pursuit of
their investment objectives, the Columbus Circle Investors Core Equity,
Columbus Circle Investors Mid Cap Equity, Blairlogie Emerging Markets,
Blairlogie International Active, and Balanced Funds may engage in the purchase
and writing of call and put options on securities; each of these Funds, along
with the Parametric Enhanced Equity Fund, may engage in the purchase and
writing of options on securities indexes. The Columbus Circle Investors Core
Equity, Columbus Circle Investors Mid Cap Equity, Blairlogie Emerging Markets,
and Blairlogie International Active Funds may engage in the purchase and
writing of call and put options on foreign currencies. The Blairlogie Emerging
Markets and Blairlogie International Active Funds also may enter into swap
agreements with respect to securities indexes. The Funds may use these
techniques to hedge against changes in interest rates, foreign currency
exchange rates or securities prices; to increase exposure to a foreign
currency; to shift exposure to foreign currency fluctuations from one country
to another; or as part of their overall investment strategies. Each Fund will
maintain segregated accounts consisting of liquid assets, such as cash, U.S.
Government securities, or other high grade debt obligations (or, as permitted
by applicable regulation, enter into certain offsetting positions) to cover
its obligations under options, futures, and swaps to avoid leveraging of the
Fund.
The Funds consider derivative instruments to consist of securities or other
instruments whose value is derived from or related to the value of some other
instrument or asset, and not to include those securities whose payment of
principal and/or interest depend upon cash flows from underlying assets, such
as mortgage or asset-backed securities. The value of some derivative
instruments in which the Funds invest may be particularly sensitive to changes
in prevailing interest rates, and, like the other investments of the Funds,
the ability of a Fund to successfully utilize these instruments may depend in
part upon the ability of the Portfolio Manager to forecast interest rates and
other economic factors correctly. If the Portfolio Manager incorrectly
forecasts such factors and has taken positions in derivative instruments
contrary to prevailing market trends, the Funds could be exposed to the risk
of loss.
23
<PAGE>
The Funds might not employ any of the strategies described below, and no
assurance can be given that any strategy used will succeed. If the Portfolio
Manager incorrectly forecasts interest rates, market values or other economic
factors in utilizing a derivatives strategy for a Fund, the Fund might have
been in a better position if it had not entered into the transaction at all.
The use of these strategies involves certain special risks, including a
possible imperfect correlation, or even no correlation, between price
movements of derivative instruments and price movements of related
investments. While some strategies involving derivative instruments can reduce
the risk of loss, they can also reduce the opportunity for gain or even result
in losses by offsetting favorable price movements in related investments, or
due to the possible inability of a Fund to purchase or sell a portfolio
security at a time that otherwise would be favorable for it to do so, or the
possible need for a Fund to sell a portfolio security at a disadvantageous
time, because the Fund is required to maintain asset coverage or offsetting
positions in connection with transactions in derivative instruments, and the
possible inability of a Fund to close out or to liquidate its derivatives
positions.
Options on Securities, Securities Indexes, and Currencies Certain Funds may
purchase put options on securities. One purpose of purchasing put options is
to protect holdings in an underlying or related security against a substantial
decline in market value. These Funds may also purchase call options on
securities. One purpose of purchasing call options is to protect against
substantial increases in prices of securities the Fund intends to purchase
pending its ability to invest in such securities in an orderly manner. A Fund
may sell put or call options it has previously purchased, which could result
in a net gain or loss depending on whether the amount realized on the sale is
more or less than the premium and other transaction costs paid on the put or
call option which is sold. A Fund may write a call or put option only if the
option is "covered" by the Fund holding a position in the underlying
securities or by other means which would permit immediate satisfaction of the
Fund's obligation as writer of the option. Prior to exercise or expiration, an
option may be closed out by an offsetting purchase or sale of an option of the
same series.
The purchase and writing of options involves certain risks. During the
option period, the covered call writer has, in return for the premium on the
option, given up the opportunity to profit from a price increase in the
underlying securities above the exercise price, but, as long as its obligation
as a writer continues, has retained the risk of loss should the price of the
underlying security decline. The writer of an option has no control over the
time when it may be required to fulfill its obligation as a writer of the
option. Once an option writer has received an exercise notice, it cannot
effect a closing purchase transaction in order to terminate its obligation
under the option and must deliver the underlying securities at the exercise
price. If a put or call option purchased by the Fund is not sold when it has
remaining value, and if the market price of the underlying security remains
equal to or greater than the exercise price (in the case of a put), or remains
less than or equal to the exercise price (in the case of a call), the Fund
will lose its entire investment in the option. Also, where a put or call
option on a particular security is purchased to hedge against price movements
in a related security, the price of the put or call option may move more or
less than the price of the related security. There can be no assurance that a
liquid market will exist when a Fund seeks to close out an option position.
Furthermore, if trading restrictions or suspensions are imposed on the options
markets, a Fund may be unable to close out a position.
The Columbus Circle Investors Core Equity, Columbus Circle Investors Mid Cap
Equity, Blairlogie Emerging Markets, and Blairlogie International Active
Funds may buy or sell put and call options on foreign currencies as a hedge
against changes in the value of the U.S. dollar (or another currency) in
relation to a foreign currency in which a Fund's securities may be
denominated. Currency options traded on U.S. or other exchanges may be subject
to position limits which may limit the ability of a Fund to reduce foreign
currency risk using such options. Over-the-counter options differ from traded
options in that they are two-party contracts with price and other terms
negotiated between buyer and seller and generally do not have as much market
liquidity as exchange-traded options. The Funds may be required to treat as
illiquid over-the-counter options purchased and securities being used to cover
certain written over-the-counter options.
Swap Agreements The Blairlogie Emerging Markets and Blairlogie
International Active Funds may enter into equity index swap agreements for
purposes of gaining exposure to the stocks making up an index of securities in
a foreign market without actually purchasing those stocks. Swap agreements are
two-party contracts entered into primarily by institutional investors for
periods ranging from a few weeks to more than one year. In a standard swap
transaction, two parties agree to exchange the returns (or differentials in
rates of return) earned
24
<PAGE>
PIMCO FUNDS
or realized on particular predetermined investments or instruments, which may
be adjusted for an interest factor. The gross returns to be exchanged or
"swapped" between the parties are generally calculated with respect to a
"notional amount," i.e., the return on or increase in value of a particular
dollar amount invested at a particular interest rate, or in a "basket" of
securities representing a particular index.
Most swap agreements entered into by the Funds would calculate the
obligations of the parties to the agreement on a "net basis." Consequently, a
Fund's current obligations (or rights) under a swap agreement will generally
be equal only to the net amount to be paid or received under the agreement
based on the relative values of the positions held by each party to the
agreement (the "net amount"). A Fund's current obligations under a swap
agreement will be accrued daily (offset against amounts owed to the Fund), and
any accrued but unpaid net amounts owed to a swap counterparty will be covered
by the maintenance of a segregated account consisting of liquid assets such as
cash, U.S. Government securities, or high grade debt obligations, to avoid any
potential leveraging of the Fund's portfolio. Obligations under swap
agreements so covered will not be construed to be "senior securities" for
purposes of the Funds' investment restriction concerning senior securities. A
Fund will not enter into a swap agreement with any single party if the net
amount owed or to be received under existing contracts with that party would
exceed 5% of the Fund's assets.
Whether a Fund's use of swap agreements will be successful in furthering its
investment objective will depend on the Portfolio Manager's ability to predict
correctly whether certain types of investments are likely to produce greater
returns than other investments. Because they are two-party contracts and
because they may have terms of greater than seven days, swap agreements may be
considered to be illiquid investments. Moreover, a Fund bears the risk of loss
of the amount expected to be received under a swap agreement in the event of
the default or bankruptcy of a swap agreement counterparty. The Funds will
enter into swap agreements only with counterparties that meet certain
standards for creditworthiness (generally, such counterparties would have to
be eligible counterparties under the terms of the Funds' repurchase agreement
guidelines). Certain restrictions imposed on the Funds by the Internal Revenue
Code may limit the Funds' ability to use swap agreements. The swaps market is
a relatively new market and is largely unregulated. It is possible that
developments in the swaps market, including potential government regulation,
could adversely affect a Fund's ability to terminate existing swap agreements
or to realize amounts to be received under such agreements.
Futures Contracts and Options on Futures Contracts The Balanced Fund may
invest in interest rate futures contracts and options thereon. The Columbus
Circle Investors Core Equity, Columbus Circle Investors Mid Cap Equity,
Parametric Enhanced Equity, Blairlogie Emerging Markets, Blairlogie
International Active, and Balanced Funds may invest in stock index futures
contracts and options thereon. The Columbus Circle Investors Core Equity,
Columbus Circle Investors Mid Cap Equity, Blairlogie Emerging Markets, and
Blairlogie International Active Funds may invest in foreign exchange futures
contracts and options thereon ("futures options") that are traded on a U.S. or
foreign exchange or board of trade, or similar entity, or quoted on an
automated quotation system. These Funds may engage in such futures
transactions as an adjunct to their securities activities.
There are several risks associated with the use of futures and futures
options for hedging purposes. There can be no guarantee that there will be a
correlation between price movements in the hedging vehicle and in the
portfolio securities being hedged. An incorrect correlation could result in a
loss on both the hedged securities in a Fund and the hedging vehicle so that
the portfolio return might have been greater had hedging not been attempted.
There can be no assurance that a liquid market will exist at a time when a
Fund seeks to close out a futures contract or a futures option position. Most
futures exchanges and boards of trade limit the amount of fluctuation
permitted in futures contract prices during a single day; once the daily limit
has been reached on a particular contract, no trades may be made that day at a
price beyond that limit. In addition, certain of these instruments are
relatively new and without a significant trading history. As a result, there
is no assurance that an active secondary market will develop or continue to
exist. Lack of a liquid market for any reason may prevent a Fund from
liquidating an unfavorable position, and the Fund would remain obligated to
meet margin requirements until the position is closed.
The Funds will only enter into futures contracts or futures options which
are standardized and traded on a U.S. or foreign exchange or board of trade,
or similar entity, or quoted on an automated quotation system. Each Fund will
use financial futures contracts and related options only for "bona fide
hedging" purposes, as such
25
<PAGE>
term is defined in applicable regulations of the Commodity Futures Trading
Commission ("CFTC"), or, with respect to positions in financial futures and
related options that do not qualify as "bona fide hedging" positions, will
enter such positions only to the extent that aggregate initial margin deposits
plus premiums paid by it for open futures option positions, less the amount by
which any such positions are "in-the-money," would not exceed 5% of the Fund's
net assets.
MORTGAGE-RELATED AND ASSET-BACKED SECURITIES
The Balanced Fund may invest in mortgage-related securities, and in other
asset-backed securities (unrelated to mortgage loans) that are offered to
investors in the future. The value of some mortgage-related or asset-backed
securities in which the Fund invests may be particularly sensitive to changes
in prevailing interest rates, and, like the other investments of the Funds,
the ability of the Fund to successfully utilize these instruments may depend
in part upon the ability of the Portfolio Manager to forecast interest rates
and other economic factors correctly.
Mortgage Pass-Through Securities are securities representing interests in
"pools" of mortgage loans secured by residential or commercial real property
in which payments of both interest and principal on the securities are
generally made monthly, in effect "passing through" monthly payments made by
the individual borrowers on the mortgage loans which underlie the securities
(net of fees paid to the issuer or guarantor of the securities). Early
repayment of principal on some mortgage-related securities (arising from
prepayments of principal due to sale of the underlying property, refinancing,
or foreclosure, net of fees and costs which may be incurred) may expose the
Fund to a lower rate of return upon reinvestment of principal. Also, if a
security subject to prepayment has been purchased at a premium, the value of
the premium would be lost in the event of prepayment. Like other fixed income
securities, when interest rates rise, the value of a mortgage-related security
generally will decline; however, when interest rates are declining, the value
of mortgage-related securities with prepayment features may not increase as
much as other fixed income securities.
Payment of principal and interest on some mortgage pass-through securities
(but not the market value of the securities themselves) may be guaranteed by
the full faith and credit of the U.S. Government (in the case of securities
guaranteed by the Government National Mortgage Association ("GNMA")); or
guaranteed by agencies or instrumentalities of the U.S. Government (in the
case of securities guaranteed by the Federal National Mortgage Association
("FNMA") or the Federal Home Loan Mortgage Corporation ("FHLMC"), which are
supported only by the discretionary authority of the U.S. Government to
purchase the agency's obligations). Mortgage-related securities created by
non-governmental issuers (such as commercial banks, savings and loan
institutions, private mortgage insurance companies, mortgage bankers and other
secondary market issuers) may be supported by various forms of insurance or
guarantees, including individual loan, title, pool and hazard insurance and
letters of credit, which may be issued by governmental entities, private
insurers or the mortgage poolers.
Collateralized Mortgage Obligations ("CMOs") are hybrid mortgage-related
instruments. Similar to a bond, interest and pre-paid principal on a CMO are
paid, in most cases, semi-annually. CMOs may be collateralized by whole
mortgage loans but are more typically collateralized by portfolios of mortgage
pass-through securities guaranteed by GNMA, FHLMC, or FNMA. CMOs are
structured into multiple classes, with each class bearing a different stated
maturity. Monthly payments of principal, including prepayments, are first
returned to investors holding the shortest maturity class; investors holding
the longer maturity classes receive principal only after the first class has
been retired. CMOs that are issued or guaranteed by the U.S. Government or by
any of its agencies or instrumentalities will be considered U.S. Government
securities by the Fund, while other CMOs, even if collateralized by U.S.
Government securities, will have the same status as other privately issued
securities for purposes of applying the Fund's diversification tests.
Commercial Mortgage-Backed Securities include securities that reflect an
interest in, and are secured by, mortgage loans on commercial real property.
The market for commercial mortgage-backed securities developed more recently
and in terms of total outstanding principal amount of issues is relatively
small compared to the market for residential single-family mortgage-backed
securities. Many of the risks of investing in commercial mortgage-backed
securities reflect the risks of investing in the real estate securing the
underlying mortgage loans.
26
<PAGE>
PIMCO FUNDS
These risks reflect the effects of local and other economic conditions on real
estate markets, the ability of tenants to make loan payments, and the ability
of a property to attract and retain tenants. Commercial mortgage-backed
securities may be less liquid and exhibit greater price volatility than other
types of mortgage- or asset-backed securities.
Mortgage-Related Securities include securities other than those described
above that directly or indirectly represent a participation in, or are secured
by and payable from, mortgage loans on real property, such as CMO residuals or
stripped mortgage-backed securities ("SMBS"), and may be structured in classes
with rights to receive varying proportions of principal and interest.
A common type of SMBS will have one class receiving some of the interest and
most of the principal from the mortgage assets, while the other class will
receive most of the interest and the remainder of the principal. In the most
extreme case, one class will receive all of the interest (the "IO" class),
while the other class will receive all of the principal (the principal-only,
or "PO" class). The yield to maturity on an IO class is extremely sensitive to
the rate of principal payments (including prepayments) on the related
underlying mortgage assets, and a rapid rate of principal payments may have a
material adverse effect on the Fund's yield to maturity from these securities.
The Fund has adopted a policy under which it will not invest more than 5% of
its net assets in any combination of IO, PO, or inverse floater securities.
For a discussion of the characteristics of some of these instruments, see the
Statement of Additional Information.
ILLIQUID SECURITIES
The NFJ Equity Income, NFJ Diversified Low P/E, NFJ Small Cap Value, Cadence
Capital Appreciation, Cadence Mid Cap Growth, Cadence Small Cap Growth,
Parametric Enhanced Equity, and Balanced Funds may invest in securities that
are illiquid, but will not acquire such securities if they would compose more
than 10% of the value of a Fund's net assets (taken at market value at the
time of investment), and will not invest in securities that are illiquid
because they are subject to legal or contractual restrictions on resale if
such securities would compose more than 5% of the value of the Fund's net
assets (taken at market value at the time of investment). The Columbus Circle
Investors Core Equity, Columbus Circle Investors Mid Cap Equity, Cadence Micro
Cap Growth, Blairlogie Emerging Markets, and Blairlogie International Active
Funds may invest in securities that are illiquid so long as no more than 15%
of the net assets of the Fund (taken at market value at the time of
investment), would be invested in such securities.
The term "illiquid securities" for this purpose means securities that cannot
be disposed of within seven days in the ordinary course of business at
approximately the amount at which a Fund has valued the securities. Illiquid
securities are considered to include, among other things, written over-the-
counter options, securities or other liquid assets being used as cover for
such options, repurchase agreements with maturities in excess of seven days,
certain loan participation interests, fixed time deposits which are not
subject to prepayment or provide for withdrawal penalties upon prepayment
(other than overnight deposits), securities that are subject to legal or
contractual restrictions on resale (such as privately placed debt securities),
and other securities whose disposition is restricted under the federal
securities laws (other than securities issued pursuant to Rule 144A under the
Securities Act of 1933 and certain commercial paper that the Adviser or a
Portfolio Manager has determined to be liquid under procedures approved by the
Board of Trustees).
MANAGEMENT OF THE TRUST
The business affairs of the Trust are managed under the direction of the
Board of Trustees. The Trustees are William D. Cvengros, Richard L. Nelson,
Lyman W. Porter, and Alan Richards. Additional information about the Trustees
and the Trust's executive officers may be found in the Statement of Additional
Information under the heading "Management--Trustees and Officers."
27
<PAGE>
INVESTMENT ADVISER
PIMCO Advisors serves as Investment Adviser to the Funds pursuant to an
investment advisory agreement with the Trust. PIMCO Advisors is a Delaware
limited partnership organized in 1987. PIMCO Advisors provides investment
management and advisory services to private accounts of institutional and
individual clients and to mutual funds. Total assets under management by PIMCO
Advisors and its subsidiary partnerships at December 31, 1995 were
approximately $95.2 billion. A portion of the units of the limited partner
interest in PIMCO Advisors is traded publicly on the New York Stock Exchange.
The general partner of PIMCO Advisors is PIMCO Partners, G.P. Pacific Mutual
Life Insurance Company and its affiliates hold a substantial interest in PIMCO
Advisors through direct or indirect ownership of units of PIMCO Advisors, and
indirectly hold a majority interest in PIMCO Partners, G.P., with the
remainder held indirectly by a group composed of the Managing Directors of
PIMCO. PIMCO Advisors is governed by an Operating Board and Equity Board,
which exercise substantially all of the governance powers of the general
partner and serve as the functional equivalent of a board of directors. PIMCO
Advisors' address is 800 Newport Center Drive, Newport Beach, California
92660. PIMCO Advisors is registered as an investment adviser with the SEC.
PIMCO Advisors currently has six subsidiary partnerships: PIMCO, Parametric,
Cadence, NFJ, Blairlogie, and Columbus Circle.
Under the investment advisory agreement, PIMCO Advisors, subject to the
supervision of the Board of Trustees, is responsible for providing advice and
guidance with respect to the Funds and for managing, either directly or
through others selected by the Adviser, the investment of the Funds. PIMCO
Advisors also furnishes to the Board of Trustees periodic reports on the
investment performance of each Fund.
PORTFOLIO MANAGERS
Pursuant to portfolio management agreements, PIMCO Advisors employs its
affiliates as Portfolio Managers for all of the Funds. PIMCO Advisors
compensates these Portfolio Managers from its advisory fee (not from the
Trust). Under these agreements, a Portfolio Manager has full investment
discretion and makes all determinations with respect to the investment of a
Fund's assets, or, for the Balanced Fund, with respect to the portion of the
Fund's assets allocated to the Portfolio Manager for investment, and makes all
determinations respecting the purchase and sale of a Fund's securities and
other investments.
PIMCO manages the Fixed Income Securities Segment of the Balanced Fund.
PIMCO is an investment management firm organized as a general partnership.
PIMCO has two partners: PIMCO Advisors as the supervisory partner, and PIMCO
Management, Inc. as the managing partner. Pacific Investment Management
Company, the predecessor investment adviser to PIMCO, commenced operations in
1971. PIMCO had approximately $76.4 billion of assets under management as of
December 31, 1995. PIMCO's address is 840 Newport Center Drive, Suite 360,
Newport Beach, California 92660. PIMCO is registered as an investment adviser
with the SEC and as a commodity trading adviser with the CFTC.
William H. Gross is responsible for the day-to-day management of the Fixed
Income Securities Segment of the Balanced Fund. Mr. Gross is a founder and
Managing Director of PIMCO and has been associated with PIMCO or its
predecessor for 24 years. He has extensive investment experience in both
credit research and fixed income portfolio management. He received his
bachelor's degree from Duke University and his MBA from UCLA Graduate School
of Business. Mr. Gross is a Chartered Financial Analyst and a member of The
Los Angeles Society of Financial Analysts.
Parametric manages the Parametric Enhanced Equity Fund and the Common Stock
Segment of the Balanced Fund. Parametric is an investment management firm
organized as a general partnership. Parametric has two partners: PIMCO
Advisors as the supervisory partner, and Parametric Management, Inc. as the
managing partner. Parametric Portfolio Associates, Inc., the predecessor
investment adviser to Parametric, commenced operations in 1987. Accounts
managed by Parametric had combined assets as of December 31, 1995 of
approximately $1.6 billion. Parametric's address is 7310 Columbia Center, 701
Fifth Avenue, Seattle, Washington 98104-7090. Parametric is registered as an
investment adviser with the SEC and as a commodity trading adviser with the
CFTC.
28
<PAGE>
PIMCO FUNDS
Mark England-Markun and Linda Mauzy are primarily responsible for the day-
to-day management of the Parametric Enhanced Equity Fund and the Common Stock
Segment of the Balanced Fund. Mr. England-Markun is a Managing Director, Chief
Executive Officer, and founding partner of Parametric and has been associated
with Parametric or its predecessor since its inception in 1987. He also
directs research and product development for Parametric. Mr. England-Markun
graduated with a bachelor's degree in Mathematics and Economics, and a
master's degree in Economics and Statistics from the University of Minnesota,
and received his MBA from the University of California at Berkeley. Ms. Mauzy
is the Senior Investment Manager of Parametric and has been with Parametric
since 1989. She previously served as portfolio manager at GW Capital, and as
senior investment analyst at Composite Research & Management. Ms. Mauzy
graduated from the California State University with a bachelor's degree in
Chemistry, and from the University of California with a master's degree in
Economics. She is a Chartered Financial Analyst.
NFJ manages the NFJ Equity Income Fund, the NFJ Diversified Low P/E Fund,
and the NFJ Small Cap Value Fund. NFJ is an investment management firm
organized as a general partnership. NFJ has two partners: PIMCO Advisors as
the supervisory partner, and NFJ Management, Inc. as the managing partner. NFJ
Investment Group, Inc., the predecessor investment adviser to NFJ, commenced
operations in 1989. Accounts managed by NFJ had combined assets as of December
31, 1995 of approximately $1.5 billion. NFJ's address is 2121 San Jacinto,
Suite 1440, Dallas, Texas 75201. NFJ is registered as an investment adviser
with the SEC.
Chris Najork is responsible for the day-to-day management of the NFJ Equity
Income Fund and the NFJ Diversified Low P/E Fund. Mr. Najork is a Managing
Director and a founding partner of NFJ and has 27 years' experience
encompassing equity research and portfolio management. He received his
bachelor's degree and MBA from Southern Methodist University. Mr. Najork is a
Chartered Financial Analyst. Mr. Najork and Paul A. Magnuson are primarily
responsible for the day-to-day management of the NFJ Small Cap Value Fund. Mr.
Magnuson, a research analyst at NFJ, has 11 years' experience in equity
research and portfolio management. He received his bachelor's degree in
Finance from the University of Nebraska-Lincoln.
Cadence manages the Cadence Capital Appreciation Fund, the Cadence Mid Cap
Growth Fund, the Cadence Micro Cap Growth Fund, and the Cadence Small Cap
Growth Fund (the "Cadence Funds"). Cadence is an investment management firm
organized as a general partnership. Cadence has two partners: PIMCO Advisors
as the supervisory partner, and Cadence Capital Management, Inc. as the
managing partner. Cadence Capital Management Corporation, the predecessor
investment adviser to Cadence, commenced operations in 1988. Accounts managed
by Cadence had combined assets as of December 31, 1995 of approximately $2.4
billion. Cadence's address is Exchange Place, 53 State Street, Boston,
Massachusetts 02109. Cadence is registered as an investment adviser with the
SEC.
David B. Breed and William B. Bannick are primarily responsible for the day-
to-day management of the Cadence Funds. Mr. Breed is a Managing Director,
Chief Executive Officer, and founding partner of Cadence and has 23 years'
investment management experience. He has been the driving force in developing
the firm's growth-oriented stock screening and selection process and has been
with Cadence or its predecessor since its inception. Mr. Breed graduated from
the University of Massachusetts and received his MBA from the Wharton School
of Business. He is a Chartered Financial Analyst. Mr. Bannick is a Managing
Director and Executive Vice President of Cadence and has 11 years' investment
management experience. He had previously served as Executive Vice President of
George D. Bjurman & Associates and as Supervising Portfolio Manager of Trinity
Investment Management Corporation. Mr. Bannick joined Cadence's predecessor in
1992. He graduated from the University of Massachusetts and received his MBA
from Boston University. Mr. Bannick is a Chartered Financial Analyst.
Columbus Circle manages the Columbus Circle Investors Core Equity Fund and
the Columbus Circle Investors Mid Cap Equity Fund (the "Columbus Circle
Funds"). Columbus Circle is an investment management firm organized as a
general partnership. Columbus Circle has two partners: PIMCO Advisors as the
supervisory partner, and Columbus Circle Investors Management, Inc. as the
managing partner. Columbus Circle Investors Division of Thomson Advisory Group
L.P. ("TAG"), the predecessor investment adviser to Columbus Circle, commenced
operations in 1975 as a division of Gulf + Western Industries (now Paramount
Communications). In 1985, the business was acquired by Thomson McKinnon Asset
Management, and in 1990, Irwin S. Smith and
29
<PAGE>
Donald A. Chiboucas, Chairman and Managing Director, and President and
Managing Director, respectively, of Columbus Circle, participated in a
management led purchase of the controlling interest in TAG, of which Columbus
Circle was a division. Accounts managed by Columbus Circle had combined assets
as of December 31, 1995 of approximately $12.7 billion. Columbus Circle's
address is Metro Center, One Station Place, 8th Floor, Stamford, Connecticut
06902. Columbus Circle is registered as an investment adviser with the SEC.
The investment decisions made by Columbus Circle with respect to the
Columbus Circle Funds are made by a committee rather than by a single person
acting as portfolio manager. No person is primarily responsible for making
recommendations to that committee.
Blairlogie manages the Blairlogie Emerging Markets Fund and the Blairlogie
International Active Fund (the "Blairlogie Funds"). Blairlogie is a Scottish
investment management firm, organized as a United Kingdom limited partnership
with two general partners and one limited partner. The general partners are
PIMCO Advisors, which serves as the supervisory partner, and Blairlogie
Holdings Limited, a wholly owned corporate subsidiary of PIMCO Advisors, which
serves as the managing partner. The limited partner is Blairlogie Partners
L.P., a limited partnership, the general partner of which is Pacific Financial
Asset Management Corporation, and the limited partners of which are the
principal executive officers of Blairlogie Capital Management Ltd. Blairlogie
Partners L.P. has agreed with PIMCO Advisors that PIMCO Advisors will acquire
one-fifth of its 25% interest annually, beginning December 31, 1997.
Blairlogie Capital Management Ltd., the predecessor investment adviser to
Blairlogie, commenced operations in 1992. Accounts managed by Blairlogie had
combined assets as of December 31, 1995 of approximately $0.6 billion.
Blairlogie's address is 4th Floor, 125 Princes Street, Edinburgh EH2 4AD,
Scotland. Blairlogie is registered as an investment adviser with the SEC in
the United States and with the Investment Management Regulatory Organisation
("IMRO") in the United Kingdom.
James Smith is primarily responsible for the day-to-day management of the
Blairlogie Funds. Mr. Smith is a Managing Director and Chief Investment
Officer of Blairlogie and is responsible for managing an investment team of
seven professionals who, in turn, specialize in selection of stocks within
Europe, Asia, the Americas and in currency and derivatives. He previously
served as a senior portfolio manager at Murray Johnstone in Glasgow, Scotland,
responsible for international investment management for North American
clients, and at Schroder Investment Management in London. Mr. Smith received
his bachelor's degree in Economics from London University and his MBA from
Edinburgh University. He is an Associate of the Institute of Investment
Management and Research.
PIMCO Advisors determines the allocation of the Balanced Fund's assets among
various asset classes and manages the Money Market Segment of that Fund.
Registration as an investment adviser with the SEC does not involve
supervision by the SEC over investment advice, and registration with the CFTC
as a commodity trading adviser does not involve supervision by the CFTC over
commodities trading. The portfolio management agreements are not exclusive,
and PIMCO, Parametric, NFJ, Cadence, Columbus Circle, and Blairlogie may
provide, and currently are providing, investment management services to other
clients, including other investment companies.
FUND ADMINISTRATOR
PIMCO serves as administrator to the Funds pursuant to an administration
agreement. PIMCO provides administrative services to the Funds, which include
clerical help and accounting, bookkeeping, internal audit services, and
certain other services required by the Funds, preparation of reports to the
Funds' shareholders and regulatory filings. In addition, PIMCO, at its own
expense, arranges for the provision of legal, audit, custody, transfer agency
and other services for the Funds, and is responsible for the costs of
registration of the Trust's shares and the printing of prospectuses and
shareholder reports for current shareholders.
The Trust is responsible for the following expenses: (i) salaries and other
compensation of any of the Trust's executive officers and employees who are
not officers, directors, stockholders, or employees of PIMCO Advisors, PIMCO,
or their subsidiaries or affiliates; (ii) taxes and governmental fees; (iii)
brokerage fees and commissions
30
<PAGE>
PIMCO FUNDS
and other portfolio transaction expenses; (iv) the costs of borrowing money,
including interest expenses; (v) fees and expenses of the Trustees who are not
"interested persons" of the Adviser, PIMCO, Portfolio Managers, or the Trust,
and any counsel retained exclusively for their benefit; (vi) extraordinary
expenses, including costs of litigation and indemnification expenses; (vii)
expenses which are capitalized in accordance with generally accepted
accounting principles; and (viii) any expenses allocated or allocable to a
specific class of shares, which include service fees payable with respect to
the Administrative Class shares and may include certain other expenses as
permitted by the Trust's Multiple Class Plan adopted pursuant to Rule 18f-3
under the Investment Company Act of 1940 (the "1940 Act") and subject to
review and approval by the Trustees.
PIMCO has undertaken until at least June 30, 1996 to limit the operating
expenses that are borne by each Fund so that the Fund's total expenses,
exclusive of items (ii), (iii), (iv) and (vi) above, do not exceed on an
annual basis the advisory, administrative and service fees charged to each
Fund. For more information, see "Expense Information."
ADVISORY AND ADMINISTRATIVE FEES
The Funds feature fixed advisory and administrative fees. For providing
investment advisory services to the Funds, PIMCO Advisors receives monthly
fees from each Fund at an annual rate based on the average daily net assets of
the Fund as follows:
<TABLE>
<CAPTION>
ADVISORY
FUND FEE RATE
---- --------
<S> <C>
NJF Equity Income, NFJ Diversified Low P/E, Cadence Capital Appreci-
ation, Cadence Mid Cap Growth, Parametric Enhanced Equity,
and Balanced Funds................................................. .45%
Columbus Circle Investors Core Equity Fund.......................... .57%
NFJ Small Cap Value and Blairlogie International Active Funds....... .60%
Columbus Circle Investors Mid Cap Equity Fund....................... .63%
Blairlogie Emerging Markets Fund.................................... .85%
Cadence Small Cap Growth Fund....................................... 1.00%
Cadence Micro Cap Growth Fund....................................... 1.25%
</TABLE>
For providing administrative services to the Funds as described above, PIMCO
receives monthly fees from each Fund at an annual rate based on the average
daily net assets of the Fund as follows:
<TABLE>
<CAPTION>
ADMINISTRATIVE
FUND FEE RATE
---- --------------
<S> <C>
Blairlogie International Active and Blairlogie Emerging
Markets Funds................................................ .50%
All Other Funds............................................... .25%
</TABLE>
Both the investment advisory and administration agreements for the Funds may
be terminated by the Trustees, or by PIMCO Advisors or PIMCO (as the case may
be), on 60 days' written notice. Following their initial two-year terms, the
agreements will continue from year to year if approved by the Trustees.
Pursuant to the portfolio management agreements between the Adviser and each
of the Portfolio Managers, PIMCO Advisors (not the Trust) pays each Portfolio
Manager a fee based on a percentage of the average daily net assets of a Fund
as follows: PIMCO--.25% for the Fixed Income Securities Segment of the
Balanced Fund; Parametric--.45% for the Common Stock Segment of the Balanced
Fund and .45% for the Parametric Enhanced Equity Fund; NFJ--.45% for the NFJ
Equity Income Fund, .45% for the NFJ Diversified Low P/E Fund, and .60% for
the NFJ Small Cap Value Fund; Cadence--.45% for the Cadence Capital
Appreciation Fund, .45% for the Cadence Mid Cap Growth Fund, 1.00% for the
Cadence Small Cap Growth Fund, and 1.25% for the Cadence Micro Cap Growth
Fund; Columbus Circle--.57% for the Columbus Circle Investors Core Equity Fund
and .63% for the Columbus Circle Investors Mid Cap Equity Fund; and
Blairlogie--.60% for the Blairlogie International Active Fund and .85% for the
Blairlogie Emerging Markets Fund.
31
<PAGE>
SERVICE FEES
The Trust has adopted an Administrative Services Plan (the "Plan") with
respect to the Administrative Class shares of each Fund. Under the terms of
the Plan, PIMCO is permitted to reimburse, in an amount up to 0.25% on an
annual basis of the average daily net assets of the Administrative Class,
financial intermediaries that provide services in connection with the
administration of plans or programs that use Fund shares as their funding
medium. Fees paid pursuant to the Plan may be paid for shareholder service and
the maintenance of accounts, and therefore may constitute "service fees" for
purposes of applicable rules of the National Association of Securities
Dealers, Inc. The Plan has been adopted in accordance with the requirements of
Rule 12b-1 under the 1940 Act and will be administered in accordance with the
provisions of that rule, except that shareholders will not have the voting
rights set forth in Rule 12b-1 with respect to the Plan. For more complete
disclosure regarding the Plan and its terms, see the Statement of Additional
Information.
Institutional Class shares of the Trust may also be offered through certain
brokers and financial intermediaries ("service agents") that have established
a shareholder servicing relationship with the Trust on behalf of their
customers. The Trust pays no compensation to such entities. Service agents may
impose additional or different conditions on the purchase or redemption of
Trust shares by their customers and may charge their customers transaction or
other account fees on the purchase and redemption of Trust shares. Each
service agent is responsible for transmitting to its customers a schedule of
any such fees and information regarding any additional or different conditions
regarding purchases and redemptions. Shareholders who are customers of service
agents should consult their service agent for information regarding these fees
and conditions.
DISTRIBUTOR
Shares of the Trust are distributed through PIMCO Advisors Distribution
Company (the "Distributor"), an indirect wholly owned subsidiary of PIMCO
Advisors. The Distributor is a broker-dealer registered with the SEC.
PURCHASE OF SHARES
Each Fund offers its shares in two classes: the "Institutional Class" and
the "Administrative Class." Shares of the Institutional Class are offered
primarily for direct investment by institutional investors and high net worth
individuals. They also are offered through certain financial intermediaries
that charge their customers transaction or other fees with respect to their
customers' investment in the Funds. Shares of the Administrative Class are
offered primarily through broker-dealers, retirement plan administrators and
other financial intermediaries. Administrative Class shares indirectly pay
service fees to such entities for services they provide to shareholders of
that class.
Shares of either class of the Funds may be purchased at the relevant net
asset value of that class without a sales charge. The minimum initial
investment for shares of either class is $200,000.
INITIAL INVESTMENT
An account may be opened by completing and signing a Client Registration
Application and mailing it to PIMCO Funds at the following address: 840
Newport Center Drive, Suite 360, Newport Beach, California 92660.
Except as provided below, purchases of shares can only be made by wiring
federal funds to Investors Fiduciary Trust Company (the "Transfer Agent").
Before wiring federal funds, the investor must first telephone the Trust at
(800) 927-4648 to receive instructions for wire transfer, and the following
information will be requested: name of authorized person; shareholder name;
shareholder account number; name of Fund and share class; amount being wired;
and wiring bank name.
Shares may be purchased without first wiring federal funds if the proceeds
of the investment are derived from an advisory account maintained by the
investor with PIMCO Advisors or one of its affiliates; from surrender or other
payment from an annuity, insurance, or other contract held by Pacific Mutual;
or from an investment by broker-dealers, institutional clients or other
financial intermediaries which have established a shareholder servicing
relationship with the Trust on behalf of their customers.
All purchase orders are effected at the relevant net asset value for that
class next determined after receipt of the purchase order. A purchase order,
together with payment in proper form, received by the Transfer Agent
32
<PAGE>
PIMCO FUNDS
prior to the close of business (4:00 p.m., Eastern time) on a day the Trust is
open for business will be effected at that day's net asset value; an order
received after the close of business will be effected at the net asset value
determined on the next business day. The Trust is "open for business" on each
day the New York Stock Exchange is open for trading, which excludes the
following holidays: New Year's Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Purchase
orders will be accepted only on days on which the Trust is open for business.
ADDITIONAL INVESTMENTS
Additional investments may be made at any time at the relevant net asset
value for that class by calling the Trust and wiring federal funds to the
Transfer Agent as outlined above.
OTHER PURCHASE INFORMATION
Purchases of a Fund's shares will be made in full and fractional shares. In
the interest of economy and convenience, certificates for shares will not be
issued.
The Trust and the Distributor each reserves the right, in its sole
discretion, to suspend the offering of shares of the Funds or to reject any
purchase order, in whole or in part, when, in the judgment of management, such
suspension or rejection is in the best interests of the Trust; to waive the
minimum initial investment for certain investors; and to redeem shares if
information provided in the Client Registration Application should prove to be
incorrect in any manner judged by the Trust to be material (e.g., in a manner
such as to render the shareholder ineligible to purchase shares of the Trust).
Shares of the Trust are not qualified or registered for sale in all states.
Prospective investors should inquire as to whether shares of a particular Fund
are available for offer and sale in their state of residence. Shares of the
Trust may not be offered or sold in any state unless registered or qualified
in that jurisdiction or unless an exemption from registration or qualification
is available.
Investors may, subject to the approval of the Trust, purchase shares of a
Fund with liquid securities that are eligible for purchase by the Fund
(consistent with such Fund's investment policies and restrictions) and that
have a value that is readily ascertainable in accordance with the Trust's
valuation policies. These transactions will be effected only if the Portfolio
Manager intends to retain the security in the Fund as an investment. Assets so
purchased by a Fund will be valued in generally the same manner as they would
be valued for purposes of pricing the Fund's shares, if such assets were
included in the Fund's assets at the time of purchase. The Trust reserves the
right to amend or terminate this practice at any time.
CONTRIBUTED CAPITAL LIMITATIONS
The Cadence Micro Cap Growth Fund limits the purchase of shares (contributed
capital) by any one investor to $10,000,000, exclusive of shares purchased
through reinvestment of dividends and distributions. Additionally, the Trust
has determined to limit the aggregate contributed capital by all investors in
the Fund to $100,000,000. Therefore, when the aggregate contributed capital in
the Fund reaches such amount, the Fund will no longer be available for
additional investment, until such time as an existing investor redeems a
dollar amount sufficient to allow a new investment into the Fund. In addition,
shares of the Cadence Small Cap Growth Fund are not offered as of the date of
this Prospectus; however, additional investment in the Fund may be available
in the event that an existing shareholder redeems a sufficient dollar amount.
These limitations may be changed or eliminated at any time at the discretion
of the Trust's Board of Trustees.
RETIREMENT PLANS
The Funds are available as an investment option for participants in
retirement and savings plans, including Keogh plans, 401(k) plans, 403(b)
plans, and Individual Retirement Accounts. The administrator of a plan or
employee benefits office can provide participants or employees with detailed
information on how to participate
33
<PAGE>
in the plan and how to elect a Fund as an investment option. Participants in a
retirement or savings plan may be permitted to elect different investment
options, alter the amounts contributed to the plan, or change how
contributions are allocated among investment options in accordance with the
plan's specific provisions. The plan administrator or employee benefits office
should be consulted for details. For questions about participant accounts,
participants should contact their employee benefits office, the plan
administrator, or the organization that provides recordkeeping services for
the plan. Investors who purchase shares through retirement plans should be
aware that plan administrators may aggregate purchase and redemption orders
for participants in the plan. Therefore, there may be a delay between the time
the investor places his order with the plan administrator, and the time the
order is forwarded to the Transfer Agent for execution.
REDEMPTION OF SHARES
REDEMPTIONS BY MAIL
Shares may be redeemed by submitting a written request to PIMCO Funds, 840
Newport Center Drive, Suite 360, Newport Beach, California 92660, stating the
Fund from which the shares are to be redeemed, the class of shares, the number
or dollar amount of the shares to be redeemed and the account number. The
request must be signed exactly as the names of the registered owners appear on
the Trust's account records, and the request must be signed by the minimum
number of persons designated on the Client Registration Application that are
required to effect a redemption.
REDEMPTIONS BY TELEPHONE OR OTHER WIRE COMMUNICATION
If an election is made on the Client Registration Application (or
subsequently in writing), redemptions of shares may be requested by calling
the Trust at (800) 927-4648, by sending a facsimile to (714) 760-4456, or by
other means of wire communication. Investors should state the Fund and class
from which the shares are to be redeemed, the number or dollar amount of the
shares to be redeemed and the account number. Redemption requests of an amount
of $10,000,000 or more may be initiated by telephone, but must be confirmed in
writing by an authorized party prior to processing.
In electing a telephone redemption, the investor authorizes PIMCO and the
Transfer Agent to act on telephone instructions from any person representing
himself to be the investor, and reasonably believed by PIMCO and the Transfer
Agent to be genuine. Neither the Trust nor its Transfer Agent will be liable
for any loss, cost or expense for acting on instructions (whether in writing
or by telephone) believed by the party receiving such instructions to be
genuine and in accordance with the procedures described in this Prospectus.
Shareholders should realize that by electing the telephone or wire redemption
option, they may be giving up a measure of security that they might have if
they were to redeem their shares in writing. Furthermore, interruptions in
telephone service may mean that a shareholder will be unable to effect a
redemption by telephone when desired. The Transfer Agent provides written
confirmation of transactions initiated by telephone as a procedure designed to
confirm that telephone instructions are genuine (written confirmation is also
provided for redemption requests received in writing). All redemptions,
whether initiated by letter or telephone, will be processed in a timely
manner, and proceeds will be forwarded by wire in accordance with the
redemption policies of the Trust detailed below. See "Redemption of Shares--
Other Redemption Information."
Shareholders may decline telephone exchange or redemption privileges after
an account is opened by instructing the Transfer Agent in writing at least
seven business days prior to the date the instruction is to be effective.
Shareholders may experience delays in exercising telephone redemption
privileges during periods of abnormal market activity. During periods of
volatile economic or market conditions, shareholders may wish to consider
transmitting redemption orders by telegram, facsimile or overnight courier.
Defined contribution plan participants may request redemptions by contacting
the employee benefits office, the plan administrator or the organization that
provides recordkeeping services for the plan.
34
<PAGE>
PIMCO FUNDS
OTHER REDEMPTION INFORMATION
Payment of the redemption price will ordinarily be wired to the investor's
bank three business days after the tender request, but may take up to seven
business days. Redemption proceeds will be sent by wire only to the bank name
designated on the Client Registration Application. The Trust may suspend the
right of redemption or postpone the payment date at times when the New York
Stock Exchange is closed, or during certain other periods as permitted under
the federal securities laws.
For shareholder protection, a request to change information contained in an
account registration (for example, a request to change the bank designated to
receive wire redemption proceeds) must be received in writing, signed by the
minimum number of persons designated on the Client Registration Application
that are required to effect a redemption, and accompanied by a signature
guarantee from any eligible guarantor institution, as determined in accordance
with the Trust's procedures. Shareholders should inquire as to whether a
particular institution is an eligible guarantor institution. A signature
guarantee cannot be provided by a notary public. In addition, corporations,
trusts and other institutional organizations are required to furnish evidence
of the authority of the persons designated on the Client Registration
Application to effect transactions for the organization.
Due to the relatively high cost of maintaining small accounts, the Trust
reserves the right to redeem shares in any account for their then-current
value (which will be promptly paid to the investor) if at any time, due to
redemption by the investor, the shares in the account do not have a value of
at least $100,000. A shareholder will receive advance notice of a mandatory
redemption and will be given at least 30 days to bring the value of its
account up to at least $100,000.
The Trust agrees to redeem shares of each Fund solely in cash up to the
lesser of $250,000 or 1% of the Fund's net assets during any 90-day period for
any one shareholder. In consideration of the best interests of the remaining
shareholders, the Trust reserves the right to pay any redemption proceeds
exceeding this amount in whole or in part by a distribution in kind of
securities held by a Fund in lieu of cash. It is highly unlikely that shares
would ever be redeemed in kind. If shares are redeemed in kind, however, the
redeeming shareholder should expect to incur transaction costs upon the
disposition of the securities received in the distribution.
EXCHANGE PRIVILEGE
Shares of a Fund may be exchanged for shares of the same class of any other
Fund based on the respective net asset values of the shares involved. An
exchange may be made by following the redemption procedure described above
under "Redemptions by Mail" or, if the telephone redemption option has been
elected, by calling the Trust at (800) 927-4648. Shares of a Fund may also be
exchanged for shares of the same class of a series of the PIMCO Funds: Pacific
Investment Management Series, an affiliated no-load mutual fund family
composed primarily of fixed income portfolios managed by PIMCO. Shareholders
interested in such an exchange may request a prospectus for these funds by
contacting the PIMCO Funds at the same address and telephone number as the
Trust.
Exchanges may be made only with respect to Funds or PIMCO Funds series
registered in the state of residence of the investor or where an exemption
from registration is available. An exchange order is treated the same as a
redemption followed by a purchase and may result in a capital gain or loss for
tax purposes, and special rules may apply in computing tax basis when
determining gain or loss. See "Taxation" in the Statement of Additional
Information.
PORTFOLIO TRANSACTIONS
Pursuant to the portfolio management agreements, a Portfolio Manager places
orders for the purchase and sale of portfolio investments for the Funds'
accounts with brokers or dealers selected by it in its discretion. In
effecting purchases and sales of portfolio securities for the account of the
Funds, the Portfolio Manager will seek the best price and execution of the
Funds' orders. In doing so, a Fund may pay higher commission rates than the
lowest available when the Portfolio Manager believes it is reasonable to do so
in light of the value of the
35
<PAGE>
brokerage and research services provided by the broker effecting the
transaction. The Portfolio Manager also may consider sales of shares of the
Trust as a factor in the selection of broker-dealers to execute portfolio
transactions for the Trust.
The Portfolio Managers manage the Funds without regard generally to
restrictions on portfolio turnover, except those imposed on its ability to
engage in short-term trading by provisions of the federal tax laws. The use of
futures contracts and other derivative instruments with relatively short
maturities may tend to exaggerate the portfolio turnover rate for some of the
Funds. The use of futures contracts may involve the payment of commissions to
futures commission merchants. The higher the rate of portfolio turnover of a
Fund, the higher the transaction costs borne by the Fund generally will be.
Some securities considered for investment by the Funds may also be
appropriate for other clients served by the Portfolio Manager. If a purchase
or sale of securities consistent with the investment policies of a Fund and
one or more of these clients served by the Portfolio Manager is considered at
or about the same time, transactions in such securities will be allocated
among the Fund and clients in a manner deemed fair and reasonable by the
Portfolio Manager.
NET ASSET VALUE
The net asset value per share of each class of each Fund is determined as of
the close of trading on the New York Stock Exchange (currently 4:00 p.m.,
Eastern time) by dividing the total market value of a Fund's portfolio
investments and other assets attributable to that class, less any liabilities,
by the number of total outstanding shares of that class. The net asset values
of the Institutional Class and Administrative Class of a Fund may diverge due
to the effect of rounding at the time net asset value is calculated. Net asset
value will not be determined on days on which the New York Stock Exchange is
closed.
Portfolio securities and other assets for which market quotations are
readily available are stated at market value. Market value is determined on
the basis of last reported sales prices, or if no sales are reported, as is
the case for most securities traded over-the-counter, at the mean between
representative bid and asked quotations obtained from a quotation reporting
system or from established market makers. Fixed income securities, including
those to be purchased under firm commitment agreements (other than obligations
having a maturity of 60 days or less), are normally valued on the basis of
quotations obtained from brokers and dealers or pricing services, which take
into account appropriate factors such as institutional-sized trading in
similar groups of securities, yield, quality, coupon rate, maturity, type of
issue, trading characteristics, and other market data.
Quotations of foreign securities in foreign currency are converted to U.S.
dollar equivalents using foreign exchange quotations received from independent
dealers. The calculation of the net asset value of the Blairlogie Emerging
Markets and Blairlogie International Active Funds may not take place
contemporaneously with the determination of the prices of certain portfolio
securities of foreign issuers used in such calculation. Further, under the
Trust's procedures, the prices of foreign securities are determined using
information derived from pricing services and other sources. Prices derived
under these procedures will be used in determining daily net asset value.
Information that becomes known to the Trust or its agents after the time that
net asset value is calculated on any business day may be assessed in
determining net asset value per share after the time of receipt of the
information, but will not be used to retroactively adjust the price of the
security so determined earlier or on a prior day. Events affecting the values
of portfolio securities that occur between the time their prices are
determined and 4:00 p.m., Eastern time, may not be reflected in the
calculation of net asset value. If events materially affecting the value of
such securities occur during such period, then these securities may be valued
at fair value as determined by the management and approved in good faith by
the Board of Trustees.
Short-term investments having a maturity of 60 days or less are valued at
amortized cost, when the Board of Trustees determines that amortized cost is
their fair value. Certain fixed income securities for which daily market
quotations are not readily available may be valued, pursuant to guidelines
established by the Board of Trustees, with reference to fixed income
securities whose prices are more readily obtainable and whose durations are
comparable to the securities being valued. Subject to the foregoing, other
securities for which market quotations are not readily available are valued at
fair value as determined in good faith by the Board of Trustees.
36
<PAGE>
PIMCO FUNDS
DIVIDENDS, DISTRIBUTIONS AND TAXES
Shares begin earning dividends on the effective date of purchase, provided
notification deadlines are met. See "Purchase of Shares." Net investment
income from interest and dividends, if any, will be declared and paid
quarterly to shareholders of record by the NFJ Equity Income, NFJ Diversified
Low P/E, NFJ Small Cap Value, Cadence Capital Appreciation, Cadence Mid Cap
Growth, Cadence Micro Cap Growth, Cadence Small Cap Growth, Parametric
Enhanced Equity, and Balanced Funds. Net Investment income from interest and
dividends, if any, will be declared and paid semi-annually to shareholders of
record by the Columbus Circle Investors Core Equity Fund. The Columbus Circle
Investors Mid Cap Equity, Blairlogie Emerging Markets, and Blairlogie
International Active Funds will distribute all net investment income, if any,
in dividend payments made at least annually. Any net realized capital gains
from the sale of portfolio securities will be distributed no less frequently
than once yearly. Net realized short-term capital gains may be paid more
frequently. Dividend and capital gain distributions of a Fund will be
reinvested in additional shares of that Fund unless the shareholder elects to
have them paid in cash. Dividends from net investment income with respect to
Administrative Class shares will be lower than those paid with respect to
Institutional Class shares, reflecting the payment of service fees by that
class.
Each Fund intends to qualify as a regulated investment company annually and
to elect to be treated as a regulated investment company under the Internal
Revenue Code of 1986, as amended. As such, a Fund generally will not pay
federal income tax on the income and gains it pays as dividends to its
shareholders. In order to avoid a 4% federal excise tax, each Fund intends to
distribute each year substantially all of its net income and gains.
Distributions received by tax-exempt shareholders will not be subject to
federal income tax to the extent permitted under applicable tax law. To the
extent that a shareholder is not exempt from tax on Fund distributions, such
shareholder will be subject to tax on dividends received from a Fund,
regardless of whether received in cash or reinvested in additional shares.
Shareholders must treat dividends, other than capital gain dividends or
dividends that represent a return of capital to shareholders, as ordinary
income. Dividends designated by a Fund as capital gain dividends are taxable
to shareholders as long-term capital gain except as provided by an applicable
tax exemption. Any distributions that are not from a Fund's net investment
income or net capital gain may be characterized as a return of capital to
shareholders or, in some cases, as capital gain. Certain dividends declared in
October, November or December of a calendar year are taxable to shareholders
(who otherwise are subject to tax on dividends) as though received on December
31 of that year if paid to shareholders during January of the following
calendar year. Each Fund will advise shareholders annually of the amount and
nature of the dividends paid to them.
The preceding discussion relates only to federal income tax; the
consequences under other tax laws may differ. For additional information
relating to the tax aspects of investing in a Fund, see the Statement of
Additional Information.
OTHER INFORMATION
CAPITALIZATION
The Trust was organized as a Massachusetts business trust on August 24,
1990. The Board of Trustees may establish additional portfolios in the future.
The capitalization of the Trust consists solely of an unlimited number of
shares of beneficial interest with a par value of $0.001 each. When issued,
shares of the Trust are fully paid, non-assessable and freely transferable.
Under Massachusetts law, shareholders could, under certain circumstances, be
held personally liable for the obligations of the Trust. However, the Amended
and Restated Agreement and Declaration of Trust (the "Declaration of Trust")
disclaims liability of the shareholders, Trustees or officers of the Trust for
acts or obligations of the Trust, which are binding only on the assets and
property of the Trust, and requires that notice of the disclaimer be given in
each contract or obligation entered into or executed by the Trust or the
Trustees. The Declaration of Trust provides for indemnification out of Trust
property for all loss and expense of any shareholder held personally liable
for the obligations of the Trust. The risk of a shareholder incurring
financial loss on account of shareholder liability is limited to circumstances
in which the Trust itself would be unable to meet its obligations, and thus
should be considered remote.
37
<PAGE>
VOTING
Shareholders have the right to vote on the election of Trustees and on any
and all matters on which the law or the Declaration of Trust states they may
be entitled to vote. The Trust is not required to hold regular annual meetings
of Trust shareholders and does not intend to do so. Shareholders of a class of
shares have separate voting rights with respect to matters that only affect
that class. See "Other Information--Voting Rights" in the Statement of
Additional Information.
The Declaration of Trust provides that the holders of not less than two-
thirds of the outstanding shares of the Trust may remove a person serving as
Trustee either by declaration in writing or at a meeting called for such
purpose. The Trustees are required to call a meeting for the purpose of
considering the removal of a person serving as Trustee if requested in writing
to do so by the holders of not less than 10% of the outstanding shares of the
Trust.
Shares entitle their holders to one vote per share (with proportionate
voting for fractional shares). As of February 6, 1996, The Northern Trust
Company as Trustee for Great Lakes Chemical Master Retirement Trust (Chicago,
Illinois) owned a controlling interest (as that term is defined in the 1940
Act) of the NFJ Diversified Low P/E Fund; Pacific Mutual Life Insurance
Company (Newport Beach, California) owned a controlling interest of the
Columbus Circle Investors Mid Cap Equity Fund; The Bank of New York as Trustee
for Melville Corporation (Rye, New York) owned a controlling interest of the
Columbus Circle Investors Core Equity Fund; Charles Schwab & Company, Inc.
(San Francisco, California) owned a controlling interest of the Blairlogie
Emerging Markets Fund; and Pacific Financial Asset Management Corporation
(Newport Beach, California) owned a controlling interest of the Blairlogie
International Active Fund. As used in this Prospectus, the phrase "vote of a
majority of the outstanding shares" of a Fund (or the Trust) means the vote of
the lesser of: (1) 67% of the shares of the Fund (or the Trust) present at a
meeting, if the holders of more than 50% of the outstanding shares are present
in person or by proxy; or (2) more than 50% of the outstanding shares of the
Fund (or the Trust).
PERFORMANCE INFORMATION
The Trust may, from time to time, include the yield and total return for
each class of shares of its Funds in advertisements or reports to shareholders
or prospective investors. Quotations of yield for a Fund or class will be
based on the investment income per share (as defined by the SEC) during a
particular 30-day (or one-month) period (including dividends and interest),
less expenses accrued during the period ("net investment income"), and will be
computed by dividing net investment income by the maximum public offering
price per share on the last day of the period. Quotations of average annual
total return for a Fund or class will be expressed in terms of the average
annual compounded rate of return of a hypothetical investment in the Fund or
class over periods of one, five and ten years (up to the life of the Fund),
reflect the deduction of a proportional share of Fund or class expenses (on an
annual basis), and assume that all dividends and distributions are reinvested
when paid.
The Trust also may provide current distribution information to its
shareholders in shareholder reports or other shareholder communications, or in
certain types of sales literature provided to prospective investors. Current
distribution information for a particular class of a Fund will be based on
distributions for a specified period (i.e., total dividends from net
investment income), divided by the relevant class net asset value per share on
the last day of the period and annualized. The rate of current distributions
does not reflect deductions for unrealized losses from transactions in
derivative instruments such as options and futures, which may reduce total
return. Current distribution rates differ from standardized yield rates in
that they represent what a class of a Fund has declared and paid to
shareholders as of the end of a specified period rather than the Fund's actual
net investment income for that period.
Performance information for the Trust may also be compared to: (i) the S&P
500, the Dow Jones Industrial Average, the EAFE Index, the MSCI Free Index,
the IFC Index, the Russell 1000 Value Index, the Russell 1000 Growth Index,
the Standard & Poor's Mid Cap Index, the Russell 2000 Index, the Lehman
Brothers Aggregate Bond Index, or other unmanaged indexes that measure
performance of a pertinent group of securities; (ii) other groups of mutual
funds tracked by Lipper Analytical Services ("Lipper"), a widely used
independent research firm which ranks mutual funds by overall performance,
investment objectives, and assets, or tracked by other
38
<PAGE>
PIMCO FUNDS
services, companies, publications, or persons who rank mutual funds on overall
performance or other criteria; and (iii) the Consumer Price Index (measure for
inflation) to assess the real rate of return from an investment in the Funds.
Unmanaged indexes (i.e., other than Lipper) generally do not reflect
deductions for administrative and management costs and expenses. The Adviser
and any of the Portfolio Managers may also report to shareholders or to the
public in advertisements concerning the performance of the Adviser and the
Portfolio Manager as advisers to clients other than the Trust, and on the
comparative performance or standing of the Adviser or the Portfolio Managers
in relation to other money managers. Such comparative information may be
compiled or provided by independent ratings services or by news organizations.
Any performance information, whether related to the Funds, the Adviser or the
Portfolio Managers, should be considered in light of the Fund's investment
objectives and policies, characteristics and quality of the Funds, and the
market conditions during the time period indicated, and should not be
considered to be representative of what may be achieved in the future. For a
description of the methods used to determine yield and total return for the
Funds, see the Statement of Additional Information.
Investment results of the Funds will fluctuate over time, and any
representation of the Funds' total return or yield for any prior period should
not be considered as a representation of what an investor's total return or
yield may be in any future period. The Trust's Annual Report contains
additional performance information for the Funds and is available upon
request, without charge, by calling (800) 927-4648 (Current Shareholders), or
(800) 800-0952 (New Accounts).
39
<PAGE>
(This page left blank intentionally)
40
<PAGE>
PIMCO FUNDS
APPENDIX A
MANAGEMENT DISCUSSION AND ANALYSIS
Below is a discussion of performance for each Fund (including the PIMCO
Managed Bond and Income Fund which was reorganized as a series of the PIMCO
Funds: Pacific Investment Management Series as of November 1, 1995) for the
twelve-month period ended October 31, 1995. For a complete review of the
general markets during this period, as well as the performance history for
each of the Funds, please see the Trust's Annual Report dated October 31,
1995.
PIMCO Managed Bond and Income Fund The change in the direction of interest
rates during the twelve-month period ended October 31 resulted in an excellent
16.0% return for the Fund. With an above-benchmark duration later in the
period to take advantage of declining rates, the Fund outperformed the Lehman
Brothers Aggregate Bond Index's 15.6% return. Over the longer term, the Fund
continues to add value, with a three-year annualized return of 8.4%, compared
to the benchmark's 7.6% gain.
NFJ Equity Income Fund The Fund gained 19.4% during the twelve months ended
October 31, which did not match the S&P 500's exceptional 26.4% gain during
the period. The underperformance was due to difficulties early in the period
when investors stampeded away from more cyclical value stocks as the economy
showed signs of weakness. Additionally, the market's emphasis on lower quality
stocks over much of the year impeded the performance of the higher quality
issues held in the Fund.
NFJ Diversified Low P/E Fund The Fund captured much of the S&P 500's strong
gain during the twelve months ended October 31, posting a 25.0% advance,
compared to the benchmark's 26.4% return. The Fund's underweighting in
Technology--the period's best performing sector--held back performance, as did
the market's overall preference for growth stocks over value during the year.
Over the longer term, the Fund has added value, with a three-year annualized
return of 16.6%, compared to the benchmark's 14.7% gain.
NFJ Small Cap Value Fund Despite the market's emphasis on large cap stocks
during the twelve-month period ended October 31, the Fund had a strong year,
gaining 19.9% and outperforming the Russell 2000 Index by 155 basis points.
This favorable performance was attributed largely to excellent stock
selection, particularly in Technology, Health Care, and Financial Services
during the first quarter of 1995.
Cadence Capital Appreciation Fund The Fund surged ahead with the fast
growing equity market during the twelve months ended October 31. With a
heavier-than-Index weighting throughout the period in the market-leading
Technology sector--bolstered by strong stock selection in this sector--the
Fund's outstanding 28.5% return outperformed the S&P 500's 26.4% gain. Also
contributing to relative performance were an overweighting in Financial
Services, a strong performer, and an underweighting in consumer-related
issues, which performed poorly during the year.
Cadence Mid Cap Growth Fund Despite the dominance of large cap stocks, the
year ended October 31 was an excellent one for the Fund, which posted a 30.5%
increase. The Fund raced ahead of the S&P Mid Cap Index's 21.2% return, and
surpassed even the large cap S&P 500's 26.4% gain during the twelve months.
This stand-out performance was the result of overweightings in Technology and
in Financial Services, a sector which surged in the latter half of the period
as interest rates declined.
Cadence Micro Cap Growth Fund With a 29.5% gain, the Fund outperformed the
Russell 2000 Index's 18.3% for the twelve months ended October 31. The wide
margin was the result of outstanding issue selection in Capital Goods,
Technology, Financial Services, and Health Care--the Fund's largest sectors
during the latter half of the period--as well as the Fund's sizable
overweighting in Capital Goods.
Cadence Small Cap Growth Fund A slowing economy fueled a market preference
for growth stocks--both large and small--during the twelve months ended
October 31. The Fund posted a 17.4% advance during the period, short of the
18.3% gain for the Russell 2000 Index. The Fund's heavy overweighting in
Technology, which deteriorated sharply near the end of the period, was the
chief cause of the underperformance. Despite the small setback, the Fund has
outperformed the benchmark over the three- and four-year periods.
A-1
<PAGE>
Columbus Circle Investors Core Equity Fund During the first full ten months
since the Fund commenced operations, the Healthcare and Technology sectors
dominated the market, and the Fund benefitted from significant overweightings
in these sectors. Despite this, the Fund's performance of 27.8% for the ten
months ended October 31 was slightly behind the S&P 500's return of 29.3%
during the period. The primary drag on performance was the Fund's lack of
participation in the Utilities sector, which was a strong performer during
this period. The normally low-growth Utilities sector is rarely, if ever, an
area of interest for the Fund.
Columbus Circle Investors Mid Cap Equity Fund In its first ten months ended
October 31, the Fund's return of 29.3% eclipsed the S&P Mid Cap Index's return
of 25.8% during the period. The Fund's more than two-times-market weight in
the Technology sector was the largest contributor to performance. As the
Technology sector weakened in the third quarter of 1995, the Fund pruned some
holdings, but remained overweighted in this high-growth sector.
Parametric Enhanced Equity Fund The S&P 500's exceptional 26.4% return
outdistanced the Fund's still-impressive 24.5% gain for the twelve months
ended October 31. With large capitalization stocks leading the market's way,
the Fund's below-Index weight in these issues--to reduce concentration and
improve diversification--hampered performance. The Fund had above-Index
positions in the S&P 500's best performing sectors--Technology and Health
Care--although issue selection depressed returns slightly.
Blairlogie Emerging Markets Fund The twelve-month period ended October 31
was a disappointing one for emerging markets. The -27.7% return for the Fund
underperformed the MSCI Emerging Markets Free Index's -19.4% due to
disappointing results from December 1994 through March 1995. During this
period, the peso crisis severely penalized the Fund's overweighting in Latin
America as Mexico's economic woes sent shock waves throughout the region.
Additionally, the Fund's orientation toward liquid, large cap stocks hurt
performance in local indexes as foreigners, who typically hold such issues,
sold out indiscriminately, depressing prices. Finally, the Fund's low cash
balance was a negative in a time of sharp downturns in many emerging markets.
Blairlogie International Active Fund During the twelve months ended October
31, the Fund gained 3.8%, outperforming the EAFE Index's 0.40% loss. The
primary reason was currency management, especially the Portfolio Manager's
decision to hedge part of the Fund's Japanese yen exposure back into U.S.
dollars around the middle of 1995. Country selection was boosted mainly by
remaining below-Index in Japan for most of the period, and then reinvesting
around July following a sharp decline in the Tokyo index. Stock selection was
positive in most regions during the period. Due to their size in terms of
market capitalization, Japan and the U.K. provided the largest relative gains
on a weighted basis.
Balanced Fund Riding the strong stock and bond markets, the Fund advanced
19.5% during the twelve months ended October 31. The Common Stock Segment's
25.6% return modestly underperformed the S&P 500's 26.4% gain, which was
concentrated in relatively few of the largest cap issues. The Fixed Income
Securities Segment outperformed the Lehman Brothers Aggregate Bond Index by a
16.3% to 15.7% margin on the strength of a strategy designed to capitalize on
the declining interest rate environment in the second half of the period. The
Fund's conservative allocation tilt toward fixed income securities held back
performance during a period when the stock market was unexpectedly strong.
A-2
<PAGE>
[LOGO of PIMCO]
PIMCO FUNDS:
Equity Advisors Series
INVESTMENT ADVISER
PIMCO Advisors L.P.
800 Newport Center Drive
Newport Beach, CA 92660
ADMINISTRATOR
Pacific Investment Management Company
840 Newport Center Drive, Suite 360
Newport Beach, CA 92660
CUSTODIAN AND TRANSFER AGENT
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, MO 64105
ACCOUNTANTS
Price Waterhouse LLP
1055 Broadway
Kansas City, MO 64105
COUNSEL
Dechert Price & Rhoads
1500 K Street, N.W., Suite 500
Washington, DC 20005
PROSPECTUS
- --------------------------------------------------------------------------------
March 1, 1996
<PAGE>
[LOGO of PIMCO]
PIMCO FUNDS:
Equity Advisors Series
Cadence Capital Appreciation Fund
Cadence Mid Cap Growth Fund
Cadence Micro Cap Growth Fund
Cadence Small Cap Growth Fund
PROSPECTUS
- --------------------------------------------------------------------------------
March 1, 1996
<PAGE>
PIMCO FUNDS
PROSPECTUS
March 1, 1996
PIMCO Funds: Equity Advisors Series (the "Trust"), formerly PIMCO Advisors
Institutional Funds, is a no-load, open-end management investment company
("mutual fund") which currently offers thirteen separate investment
portfolios, four of which, the Cadence Capital Appreciation Fund, the Cadence
Mid Cap Growth Fund, the Cadence Micro Cap Growth Fund, and the Cadence Small
Cap Growth Fund (the "Funds") are described in this Prospectus. The Cadence
Small Cap Growth Fund is not currently available for investment. PIMCO
Advisors L.P. ("PIMCO Advisors" or "Adviser") serves as investment adviser to
the Trust.
Information about the investment objective of each Fund, along with a
detailed description of the types of securities in which each Fund may invest,
and of investment policies and restrictions applicable to each Fund, are set
forth in this Prospectus. There can be no assurance that the investment
objective of any Fund will be achieved. Because the market value of the Funds'
investments will change, the investment returns and net asset value per share
of each Fund also will vary.
Each Fund offers two classes of shares: the "Institutional Class" and the
"Administrative Class." Shares of the Institutional Class are offered
primarily for direct investment by investors such as pension and profit
sharing plans, employee benefit trusts, endowments, foundations, corporations,
other institutions, and high net worth individuals. They also are offered
through certain financial intermediaries that charge their customers
transaction or other fees with respect to the customers' investment in the
Funds. Shares of the Administrative Class are offered primarily through
brokers, retirement plan administrators, and other financial intermediaries.
Administrative Class shares indirectly pay service fees to such entities for
services they provide to shareholders of that class. Shares of each class of
the Funds are offered for sale at the relevant next determined net asset value
for that class with no sales charge.
This Prospectus sets forth concisely the information a prospective investor
should know before investing in the Funds. It should be read and retained for
ready reference to information about the Funds. A Statement of Additional
Information, dated March 1, 1996, as supplemented from time to time,
containing additional and more detailed information about the Funds, has been
filed with the Securities and Exchange Commission and is hereby incorporated
by reference into this Prospectus. It is available without charge and may be
obtained by writing or calling:
PIMCO Funds
840 Newport Center Drive, Suite 360
Newport Beach, CA 92660
Telephone:(800) 927-4648 (Current Shareholders)
(800) 800-0952 (New Accounts)
SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY FINANCIAL INSTITUTION, AND THE SHARES ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD, OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary...................................................... 3
Expense Information..................................................... 5
Financial Highlights.................................................... 6
Investment Objectives and Policies...................................... 8
Investment Restrictions................................................. 9
Characteristics and Risks of Securities and Investment Techniques....... 12
Management of the Trust................................................. 13
Purchase of Shares...................................................... 16
Redemption of Shares.................................................... 18
Portfolio Transactions.................................................. 19
Net Asset Value......................................................... 20
Dividends, Distributions and Taxes...................................... 20
Other Information....................................................... 21
Appendix A--Management Discussion and Analysis.......................... A-1
</TABLE>
<PAGE>
PIMCO FUNDS
PROSPECTUS SUMMARY
PIMCO Funds: Equity Advisors Series (the "Trust") is a no-load, open-end
management investment company ("mutual fund"), organized as a Massachusetts
business trust on August 24, 1990. The Trust currently offers thirteen separate
investment portfolios, four of which are described in this Prospectus.
COMPARISON OF FUNDS
The following chart provides general information about each of the Funds. It
is qualified in its entirety by the more complete descriptions of the Funds
appearing elsewhere in this Prospectus.
<TABLE>
<CAPTION>
FUND INVESTMENT OBJECTIVE AND PRIMARY INVESTMENTS
- ------------------------------------------------------------------------------
<C> <S>
Cadence Capital Seeks growth of capital; invests primarily in common
Appreciation stocks of companies with market capitalizations of at
least $100 million that have improving fundamentals and
whose stock is reasonably valued by the market.
- ------------------------------------------------------------------------------
Cadence Mid Cap Seeks growth of capital; invests primarily in common
Growth stocks of companies with market capitalizations in excess
of $500 million that have improving fundamentals and
whose stock is reasonably valued by the market.
- ------------------------------------------------------------------------------
Cadence Micro Cap Seeks long-term growth of capital; invests primarily in
Growth common stocks of companies with market capitalizations of
less than $100 million that have improving fundamentals
and whose stock is reasonably valued by the market.
- ------------------------------------------------------------------------------
Cadence Small Cap Seeks growth of capital; invests primarily in common
Growth stocks of companies with market capitalizations between
$50 million and $500 million that have improving
fundamentals and whose stock is reasonably valued by the
market.
- ------------------------------------------------------------------------------
</TABLE>
INVESTMENT RISKS AND CONSIDERATIONS
The following are some of the primary risks relevant to an investment in the
Funds and to the securities in which the Funds invest. Investors should read
the Prospectus carefully for a more complete discussion of the risks relating
to an investment in the Funds. The value of all securities and other
instruments held by the Funds vary from time to time in response to a wide
variety of market factors. Consequently, the net asset value per share of each
Fund will vary. The net asset value per share of any Fund may be less at the
time of redemption than it was at the time of investment. It is the policy of
all of the Funds to be as fully invested as practicable in common stock at all
times. This policy precludes any of the Funds from investing in debt securities
as a defensive investment posture (although the Funds may invest in such
securities to provide for payment of expenses and to meet redemption requests).
Accordingly, investors in these Funds bear the risk of general declines in
stock prices, and bear any risk that a Fund's exposure to such declines cannot
be lessened by investment in debt securities. For further information, see
"Investment Objectives and Policies--General."
Certain of the Funds' investment techniques may involve a form of borrowing,
which may tend to exaggerate the effect on net asset value of any increase or
decrease in the market value of a Fund's portfolio and may require liquidation
of portfolio positions when it is not advantageous to do so.
INVESTMENT ADVISER AND PORTFOLIO MANAGERS
PIMCO Advisors L.P. ("PIMCO Advisors" or "Adviser") serves as investment
adviser to the Trust. Subject to the supervision of the Board of Trustees of
the Trust, the Adviser supervises the investment program for the Funds in
accordance with each Fund's investment objective, policies, and restrictions.
For all of the Funds, the Adviser has engaged its affiliate, Cadence Capital
Management ("Cadence" or "Portfolio Manager"), to serve as Portfolio Manager.
Under the supervision of PIMCO Advisors, the Portfolio Manager makes
determinations with respect to the purchase and sale of portfolio securities
and places, in the names of the Funds, orders for execution of the Funds'
transactions.
For its services, the Adviser receives fees based on the average daily net
assets of each Fund. The Portfolio Manager is compensated by the Adviser out of
the Adviser's fees (not by the Trust). See "Management of the Trust."
3
<PAGE>
PURCHASE OF SHARES
Each Fund offers two classes of shares: the "Institutional Class" and the
"Administrative Class." Shares of the Institutional Class are offered primarily
for direct investment by institutional investors and high net worth
individuals. They are also offered through certain financial intermediaries
that charge their customers transaction or other fees with respect to the
customers' investment in the Funds. Shares of the Administrative Class are
offered primarily through brokers, retirement plan administrators and other
financial intermediaries. Administrative Class shares indirectly pay service
fees to such entities for services they provide to shareholders of that class.
Shares of each class of the Funds are offered at the relevant next determined
net asset value with no sales charge. The minimum initial investment for shares
of either class is $200,000. The Cadence Micro Cap Growth Fund limits the
purchase of shares (contributed capital) by any one investor to $10,000,000,
exclusive of shares purchased through reinvestment of dividends and
distributions. Additionally, the Trust has determined to limit the aggregate
contributed capital by all investors in the Cadence Micro Cap Growth Fund to
$100,000,000. Therefore, when the aggregate contributed capital in the Fund
reaches such amount, the Fund will no longer be available for additional
investment, until such time as an existing investor redeems a dollar amount
sufficient to allow a new investment into the Fund. In addition, shares of the
Cadence Small Cap Growth Fund are not offered as of the date of this
Prospectus; however, additional investment in the Fund may be available in the
event that an existing shareholder redeems a sufficient dollar amount. These
limitations may be changed or eliminated at any time at the discretion of the
Trust's Board of Trustees. See "Purchase of Shares."
REDEMPTIONS AND EXCHANGES
Shares of each class of each Fund may be redeemed without cost at the
relevant net asset value per share of the class of that Fund next determined
after receipt of the redemption request. The redemption price may be more or
less than the purchase price.
Shares of a class of any Fund may be exchanged for shares of the same class
of any other Fund of the Trust offered generally to the public on the basis of
relative net asset values, or for shares of the same class of a series of the
PIMCO Funds: Pacific Investment Management Series, an affiliated no-load mutual
fund family composed primarily of fixed income portfolios managed by PIMCO. See
"Redemption of Shares."
DIVIDENDS AND DISTRIBUTIONS
Each Fund will distribute dividends from net investment income at least
quarterly, and any net realized capital gains at least annually. All dividends
and distributions will be reinvested automatically at net asset value in
additional shares of the same class of the same Fund, unless cash payment is
requested. Dividends from net investment income with respect to Administrative
Class shares will be lower than those paid with respect to Institutional Class
shares, reflecting the payment of service fees by that class. See "Dividends,
Distributions and Taxes."
4
<PAGE>
EXPENSE INFORMATION
PIMCO FUNDS
SHAREHOLDER TRANSACTION EXPENSES (EACH CLASS):
<TABLE>
<S> <C>
Sales Load Imposed on Purchases.......................................... None
Sales Load Imposed on Reinvested Dividends............................... None
Redemption Fee........................................................... None
Exchange Fee............................................................. None
</TABLE>
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS):
<TABLE>
<CAPTION>
ADVISORY ADMINISTRATIVE TOTAL
INSTITUTIONAL CLASS SHARES FEE FEE EXPENSES*
-------------------------------------------- -------- -------------- ---------
<S> <C> <C> <C>
Cadence Capital Appreciation Fund........... 0.45 0.25 0.70
Cadence Mid Cap Growth Fund................. 0.45 0.25 0.70
Cadence Micro Cap Growth Fund............... 1.25 0.25 1.50
Cadence Small Cap Growth Fund............... 1.00 0.25 1.25
</TABLE>
<TABLE>
<CAPTION>
ADVISORY ADMINISTRATIVE SERVICE TOTAL
ADMINISTRATIVE CLASS SHARES FEE FEE FEE EXPENSES*
------------------------------------ -------- -------------- ------- ---------
<S> <C> <C> <C> <C>
Cadence Capital Appreciation Fund... 0.45 0.25 0.25 0.95
Cadence Mid Cap Growth Fund......... 0.45 0.25 0.25 0.95
Cadence Micro Cap Growth Fund....... 1.25 0.25 0.25 1.75
Cadence Small Cap Growth Fund....... 1.00 0.25 0.25 1.50
</TABLE>
*Pacific Investment Management Company ("PIMCO"), the Funds' Administrator,
has undertaken until at least June 30, 1996 to limit the operating expenses
that are borne by each Fund so that the Fund's total expenses, exclusive of
interest or gains, brokerage fees or other transactional expenses, taxes paid
by the Fund, interest on borrowing, and extraordinary expenses, do not exceed
on an annual basis the total expenses shown.
For a more detailed discussion of the Funds' fees and expenses, see "Fund
Administrator," "Advisory and Administrative Fees," and "Service Fees" under
the caption "Management of the Trust."
EXAMPLE OF FUND EXPENSES:
An investor would pay the following expenses on a $1,000 investment assuming
(1) a hypothetical 5% annual return and (2) redemption at the end of each time
period:
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------------------------------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
Cadence Capital Appreciation Fund............ $ 7 $22 $39 $ 87
Cadence Mid Cap Growth Fund.................. $ 7 $22 $39 $ 87
Cadence Micro Cap Growth Fund................ $15 $47 $82 $179
Cadence Small Cap Growth Fund................ $13 $40 $69 $151
<CAPTION>
ADMINISTRATIVE CLASS SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------------------------------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
Cadence Capital Appreciation Fund............ $10 $30 $53 $117
Cadence Mid Cap Growth Fund.................. $10 $30 $53 $117
Cadence Micro Cap Growth Fund................ $18 $55 $95 $206
Cadence Small Cap Growth Fund................ $15 $47 $82 $179
</TABLE>
The above tables are provided to assist investors in understanding the
various expenses which may be borne directly or indirectly in connection with
an investment in the Funds. This example should not be considered a
representation of past or future expenses or performance. Actual expenses may
be higher or lower than those shown.
5
<PAGE>
FINANCIAL HIGHLIGHTS
The following information regarding selected per share data and ratios for
shares of each Fund are part of the Trust's financial statements which are
included in the Trust's Annual Report dated October 31, 1995 and incorporated
by reference in the Statement of Additional Information. The Trust's financial
statements and selected per share data and ratios as of October 31, 1995
appearing under the heading "Financial Highlights" have been examined by
Deloitte & Touche LLP, independent accountants, whose opinion thereon is also
included in the Annual Report, which may be obtained without charge.
Information is presented for each Fund, and class thereof, which had investment
operations during the reporting periods. Additional performance information
about the Funds is contained in Appendix A to this Prospectus and in the Annual
Report.
Selected data for a share outstanding throughout each period:
<TABLE>
<CAPTION>
NET ASSET NET NET REALIZED TOTAL INCOME DIVIDENDS DISTRIBUTIONS
YEAR OR VALUE INVESTMENT AND UNREALIZED (LOSS) FROM FROM NET FROM NET DISTRIBUTIONS
PERIOD BEGINNING INCOME GAIN (LOSS) ON INVESTMENT INVESTMENT REALIZED FROM
ENDED OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME CAPITAL GAINS EQUALIZATION
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CADENCE CAPITAL APPRECIATION FUND
Institutional Class
10/31/95 $13.34 $ 0.18 $ 3.60 $ 3.78 $(0.18) $ 0.00 $ 0.00
10/31/94 13.50 0.14 (0.12) 0.02 (0.14) (0.04) 0.00
10/31/93 11.27 0.11 2.73 2.84 (0.11) (0.50) 0.00
10/31/92 11.02 0.14 1.05 1.19 (0.14) (0.72) (0.08)
10/31/91(a) 10.00 0.09 1.02 1.11 (0.09) 0.00 0.00
CADENCE MID CAP GROWTH FUND
Institutional Class
10/31/95 $13.97 $ 0.07 $ 4.19 $ 4.26 $(0.07) $ 0.00 $ 0.00
10/31/94 13.97 0.06 0.01 0.07 (0.06) (0.01) 0.00
10/31/93 11.29 0.07 2.70 2.77 (0.07) (0.02) 0.00
10/31/92 10.28 0.10 1.03 1.13 (0.10) 0.00 (0.02)
10/31/91(b) 10.00 0.02 0.27 0.29 (0.01) 0.00 0.00
Administrative Class
10/31/95(c) 13.31 0.03 4.85 4.88 (0.02) 0.00 0.00
CADENCE MICRO CAP
GROWTH FUND
Institutional Class
10/31/95 $11.87 $ (0.04) $ 3.55 $ 3.51 $ 0.00 $ 0.00 $ 0.00
10/31/94 11.06 (0.03) 0.84 0.81 0.00 0.00 0.00
10/31/93(d) 10.00 0.00 1.07 1.07 0.00 0.00 0.00
CADENCE SMALL CAP
GROWTH FUND
Institutional Class
10/31/95 $19.38 $ (0.05) $ 3.12 $ 3.07 $ 0.00 $(1.43) $ 0.00
10/31/94 19.15 (0.02) 0.89 0.87 0.00 (0.64) 0.00
10/31/93 15.80 (0.06) 6.19 6.13 0.00 (2.78) 0.00
10/31/92 14.87 0.01 1.50 1.51 (0.01) (0.57) 0.00
10/31/91(e) 10.00 0.02 5.03 5.05 (0.02) (0.16) 0.00
Administrative Class
10/31/95(f) 21.90 (0.02) (0.87) (0.89) 0.00 0.00 0.00
</TABLE>
- --------
(a) From commencement of operations, March 8, 1991.
(b) From commencement of operations, August 26, 1991.
(c) From commencement of operations, November 30, 1994.
(d) From commencement of operations, June 25, 1993.
(e) From commencement of operations, January 7, 1991.
(f) From commencement of operations, September 27, 1995.
* Annualized.
6
<PAGE>
PIMCO FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share outstanding throughout each period:
<TABLE>
<CAPTION>
RATIO OF NET
NET ASSET NET ASSETS RATIO OF INVESTMENT
DISTRIBUTIONS VALUE END EXPENSES TO INCOME TO PORTFOLIO AVERAGE
FROM RETURN TOTAL END TOTAL OF PERIOD AVERAGE AVERAGE TURNOVER COMMISSION
OF CAPITAL DISTRIBUTIONS OF PERIOD RETURN (000'S) NET ASSETS NET ASSETS RATE RATE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0.00 $ (0.18) $16.94 28.47% $236,220 0.70% 1.22% 82.69% $0.05
0.00 (0.18) 13.34 0.15 165,441 0.70 1.17 76.75
0.00 (0.61) 13.50 25.30 84,990 0.70 0.94 81.15
0.00 (0.94) 11.27 10.75 36,334 0.70 1.13 134.17
0.00 (0.09) 11.02 11.19 18,813 0.75* 1.55* 40.54
$ 0.00 $ (0.07) $18.16 30.54% $189,320 0.70% 0.43% 78.29% $0.04
0.00 (0.07) 13.97 0.58 121,791 0.70 0.45 60.85
0.00 (0.09) 13.97 24.57 67,625 0.70 0.56 97.87
0.00 (0.12) 11.29 10.91 21,213 0.70 0.87 65.92
0.00 (0.01) 10.28 2.98 2,748 0.82* 0.92* 13.41
0.00 (0.02) 18.17 36.64 892 0.94* 0.23* 71.73 N/A
$ 0.00 $ 0.00 $15.38 29.54% $ 69,775 1.50% (0.37)% 86.68% $0.03
0.00 0.00 11.87 7.31 32,605 1.50 (0.25) 58.81
(0.01) (0.01) 11.06 10.81 10,827 1.50* (0.02)* 15.98
$ 0.00 $ (1.43) $21.02 17.39% $ 73,977 1.25% (0.27)% 85.61% $0.02
0.00 (0.64) 19.38 4.62 50,425 1.25 (0.33) 65.53
0.00 (2.78) 19.15 38.80 43,308 1.25 (0.35) 62.15
0.00 (0.58) 15.80 10.20 33,734 1.25 0.09 66.05
0.00 (0.18) 14.87 50.68 33,168 1.29* 0.11 * 47.84
0.00 0.00 21.01 (5.34) 544 1.60* (0.82)* 8.80 N/A
</TABLE>
7
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The investment objective and general investment policies of each Fund are
described below. There can be no assurance that the investment objective of
any Fund will be achieved. Because the market value of each Fund's investments
will change, the net asset value per share of each Fund also will vary.
Specific portfolio securities eligible for purchase by the Funds, investment
techniques that may be used by the Funds, and the risks associated with these
securities and techniques are described more fully under "Characteristics and
Risks of Securities and Investment Techniques" in the Prospectus and
"Investment Objectives and Policies" in the Statement of Additional
Information.
Cadence Capital Appreciation Fund seeks growth of capital. In pursuing this
objective, the Fund invests primarily in common stocks of companies that have
improving fundamentals (such as growth of earnings and dividends) and whose
stock is reasonably valued by the market. Stocks for the Fund are chosen from
companies with market capitalizations of at least $100 million at the time of
investment. The Fund usually invests in approximately 60 to 100 common stocks
selected from a universe of the approximately 1,000 largest market
capitalization stocks. Each issue is screened and ranked using five distinct
computerized models, including: (i) a dividend growth screen, (ii) an equity
growth screen, (iii) an earnings growth screen, (iv) an earnings momentum
screen, and (v) an earnings surprise screen. The Portfolio Manager believes
that the models identify the stocks in the universe exhibiting growth
characteristics with reasonable valuations. Stocks are replaced when they
score worse-than-median screen ranks, have negative earnings surprises, or
show poor relative price performance. The universe is rescreened frequently to
obtain a favorable composition of growth and value characteristics for the
entire Fund. For information on other investment policies, see "Investment
Objectives and Policies--General."
Cadence Mid Cap Growth Fund seeks growth of capital. In pursuing this
objective, the Fund invests primarily in common stocks of middle
capitalization companies that have improving fundamentals (such as growth of
earnings and dividends) and whose stock is reasonably valued by the market.
Stocks for the Fund are selected from a universe of companies with market
capitalizations in excess of $500 million at the time of investment, excluding
the 200 companies with the highest market capitalization. The Fund usually
invests in approximately 60 to 100 common stocks. Each issue is screened and
ranked using five distinct computerized models, including: (i) a dividend
growth screen, (ii) an equity growth screen, (iii) an earnings growth screen,
(iv) an earnings momentum screen, and (v) an earnings surprise screen. The
Portfolio Manager believes that the models identify the stocks in the universe
exhibiting growth characteristics with reasonable valuations. Stocks are
replaced when they score worse-than-median screen ranks, have negative
earnings surprises, or show poor relative price performance. The universe is
rescreened frequently to obtain a favorable composition of growth and value
characteristics for the entire Fund. For information on other investment
policies, see "Investment Objectives and Policies--General."
Cadence Micro Cap Growth Fund seeks long-term growth of capital. In pursuing
this objective, the Fund invests primarily in common stocks of companies that
have improving fundamentals (such as growth of earnings and dividends) and
whose stock is reasonably valued by the market. The Fund usually invests in
approximately 60 to 100 common stocks selected from a universe of stocks with
publicly available market capitalizations of less than $100 million at the
time of investment. Each issue is screened and ranked using five distinct
computerized models, including: (i) a dividend growth screen, (ii) an equity
growth screen, (iii) an earnings growth screen, (iv) an earnings momentum
screen, and (v) an earnings surprise screen. The Portfolio Manager believes
that the models identify the stocks in the universe exhibiting growth
characteristics with reasonable valuations. Stocks are replaced when they
score worse-than-median screen ranks, have negative earnings surprises, or
show poor relative price performance. The universe is rescreened frequently to
obtain a favorable composition of growth and value characteristics for the
entire Fund. For information on other investment policies, see "Investment
Objectives and Policies--General."
Cadence Small Cap Growth Fund seeks growth of capital. In pursuing this
objective, the Fund invests primarily in common stocks of companies that have
improving fundamentals (such as growth of earnings and dividends) and whose
stock is reasonably valued by the market. The Fund usually invests in
approximately 60 to 100 common stocks selected from a universe of stocks with
market capitalizations of $50 million to $500 million at the time of
investment. Each issue is screened and ranked using five distinct computerized
models, including:
8
<PAGE>
PIMCO FUNDS
(i) a dividend growth screen, (ii) an equity growth screen, (iii) an earnings
growth screen, (iv) an earnings momentum screen, and (v) an earnings surprise
screen. The Portfolio Manager believes that the models identify the stocks in
the universe exhibiting growth characteristics with reasonable valuations.
Stocks are replaced when they score worse-than-median screen ranks, have
negative earnings surprises, or show poor relative price performance. The
universe is rescreened frequently to obtain a favorable composition of growth
and value characteristics for the entire Fund. For information on other
investment policies, see "Investment Objectives and Policies--General."
GENERAL
The Funds will each invest primarily (normally at least 65% of its assets)
in common stock. Each Fund may maintain a portion of its assets, which will
usually not exceed 10%, in U.S. Government securities, high-quality debt
securities (whose maturity or remaining maturity will not exceed five years),
money market obligations, and in cash to provide for payment of the Fund's
expenses and to meet redemption requests.
Any of the Funds may temporarily not be invested primarily in equity
securities after the commencement of operations or after receipt of
significant new monies. Any of the Funds may temporarily not contain the
number of stocks in which the Fund normally invests if the Fund does not have
sufficient assets to be fully invested, or pending the Portfolio Manager's
ability to prudently invest new monies. It is the policy of all of the Funds
to be as fully invested in common stock as practicable at all times. This
policy precludes the Funds from investing in debt securities as a defensive
investment posture (although the Funds may invest in such securities to
provide for payment of expenses and to meet redemption requests). Accordingly,
investors in the Funds bear the risk of general declines in stock prices and
the risk that a Fund's exposure to such declines cannot be lessened by
investment in debt securities.
The Funds may also invest in convertible securities, preferred stock,
warrants subject to certain limitations, and American Depository Receipts
("ADRs"). ADRs are dollar-denominated receipts issued generally by domestic
banks and representing the deposit with the bank of a security of a foreign
issuer, and are publicly traded on exchanges or over-the-counter in the United
States. For more information on these investment practices, see
"Characteristics and Risks of Securities and Investment Techniques" in the
Prospectus and "Investment Objectives and Policies" in the Statement of
Additional Information.
INVESTMENT RESTRICTIONS
Each Fund's investment objective, as set forth under "Investment Objectives
and Policies," and the investment restrictions set forth below are fundamental
policies of the Fund and may not be changed with respect to a Fund without
shareholder approval by vote of a majority of the outstanding shares of that
Fund. Under these restrictions, a Fund may not:
(1) invest in a security if, as a result of such investment, more than
25% of its total assets (taken at market value at the time of such
investment) would be invested in the securities of issuers in any
particular industry, except that this restriction does not apply to
securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities (or repurchase agreements with respect thereto);
(2) with respect to 75% of its assets, invest in a security if, as a
result of such investment, more than 5% of its total assets (taken at
market value at the time of such investment) would be invested in the
securities of any one issuer, except that this restriction does not apply
to securities issued or guaranteed by the U.S. Government or its agencies
or instrumentalities;
(3) with respect to 75% of its assets, invest in a security if, as a
result of such investment, it would hold more than 10% (taken at the time
of such investment) of the outstanding voting securities of any one issuer,
except that this restriction does not apply to securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities;
(4) purchase or sell real estate, although it may purchase securities
secured by real estate or interests therein, or securities issued by
companies in the real estate industry or which invest in real estate or
interests therein;
9
<PAGE>
(5) purchase or sell commodities or commodities contracts (which, for the
purpose of this restriction, shall not include foreign currency or forward
foreign currency contracts), except that any Fund may engage in interest
rate futures contracts, stock index futures contracts, futures contracts
based on other financial instruments or one or more groups of instruments,
and on options on such futures contracts;
(6) purchase securities on margin, except for use of short-term credit
necessary for clearance of purchases and sales of portfolio securities, but
it may make margin deposits in connection with transactions in options,
futures, and options on futures, and except that effecting short sales will
be deemed not to constitute a margin purchase for purposes of this
restriction;
(7) borrow money, or pledge, mortgage or hypothecate its assets, except
that a Fund may (i) borrow from banks or enter into reverse repurchase
agreements, or employ similar investment techniques, and pledge its assets
in connection therewith, but only if immediately after each borrowing and
continuing thereafter, there is asset coverage of 300% and (ii) enter into
reverse repurchase agreements and transactions in options, futures, options
on futures, and forward foreign currency contracts as described in this
Prospectus and in the Statement of Additional Information (the deposit of
assets in escrow in connection with the writing of covered put and call
options and the purchase of securities on a when-issued or delayed delivery
basis, and collateral arrangements with respect to initial or variation
margin deposits for futures contracts, options on futures contracts, and
forward foreign currency contracts will not be deemed to be pledges of a
Fund's assets);
(8) issue senior securities, except insofar as a Fund may be deemed to
have issued a senior security by reason of borrowing money in accordance
with the Fund's borrowing policies, and except for purposes of this
investment restriction, collateral, escrow, or margin or other deposits
with respect to the making of short sales, the purchase or sale of futures
contracts or related options, purchase or sale of forward foreign currency
contracts, and the writing of options on securities are not deemed to be an
issuance of a senior security;
(9) lend any funds or other assets, except that a Fund may, consistent
with its investment objective and policies: (a) invest in debt obligations,
including bonds, debentures, or other debt securities, bankers' acceptances
and commercial paper, even though the purchase of such obligations may be
deemed to be the making of loans, (b) enter into repurchase agreements and
reverse repurchase agreements, and (c) lend its portfolio securities in an
amount not to exceed one-third of the value of its total assets, provided
such loans are made in accordance with applicable guidelines established by
the Securities and Exchange Commission ("SEC") and the Trustees of the
Trust; or
(10) act as an underwriter of securities of other issuers, except to the
extent that in connection with the disposition of portfolio securities, it
may be deemed to be an underwriter under the federal securities laws.
Each Fund is also subject to the following non-fundamental restrictions and
policies (which may be changed without shareholder approval) relating to the
investment of its assets and activities. Unless otherwise indicated, a Fund
may not:
(A) invest for the purpose of exercising control or management;
(B) invest in securities of another open-end investment company;
(C)(a) for the Cadence Capital Appreciation, Cadence Mid Cap Growth, and
Cadence Small Cap Growth Funds: invest more than 10% of the net assets of a
Fund (taken at market value at the time of the investment) in "illiquid
securities," illiquid securities being defined to include repurchase
agreements maturing in more than seven days, certain loan participation
interests, fixed time deposits which are not subject to prepayment or
provide withdrawal penalties upon prepayment (other than overnight
deposits), or other securities which legally or in the Adviser's or
Portfolio Manager's opinion may be deemed illiquid (other than securities
issued pursuant to Rule 144A under the Securities Act of 1933 and certain
commercial paper that the Adviser or Portfolio Manager has determined to be
liquid under procedures approved by the Board of Trustees); nor invest more
than 5% of the net assets of a Fund in securities that are illiquid because
they are subject to legal or contractual restrictions on resale;
10
<PAGE>
PIMCO FUNDS
(b) for the Cadence Micro Cap Growth Fund: invest more than 15% of the
net assets of the Fund (taken at market value at the time of the
investment) in securities that are illiquid because they are subject to
legal or contractual restrictions on resale, in repurchase agreements
maturing in more than seven days, or other securities which are illiquid;
(D) purchase any security if, as a result, the Fund will then have more
than 5% of its total assets invested in securities of companies (including
predecessor companies) that have been in continuous operation for less than
three years;
(E) purchase or retain securities of any issuer if, to the knowledge of
the Fund, any of the Fund's officers or Trustees, or any officer or
Director of PIMCO Advisors or the Portfolio Manager, individually owns more
than one-half of 1% of the outstanding securities of the issuer and
together own beneficially more than 5% of such issuer's securities;
(F) purchase securities for the Fund from, or sell portfolio securities
to, any of the officers and Directors or Trustees of the Trust or the
Adviser;
(G) invest in a security if, with respect to 100% of the total assets,
the Fund would own more than 10% (taken at the time of such investment) of
the outstanding voting securities of any one issuer, except that this
restriction does not apply to securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities;
(H) invest more than 5% of the assets of a Fund (taken at market value at
the time of investment) in any combination of interest only, principal
only, or inverse floating rate securities;
(I) borrow money (excluding reverse repurchase agreements which are
subject to the Fund's fundamental borrowing restriction), except for
temporary administrative purposes;
(J) sell securities or property short, except short sales against the
box;
(K) purchase, write, or sell puts, calls, straddles, spreads, or
combinations thereof, except that this restriction does not apply to puts
that are a feature of floating rate securities or to puts that are a
feature of other corporate debt securities, and except that any Fund may
engage in options on securities, options on securities indexes, options on
foreign currencies, options on futures contracts, and options on other
financial instruments or one or more groups of instruments;
(L) invest in warrants (other than warrants acquired by the Fund as part
of a unit or attached to securities at the time of purchase) if, as a
result, the investment in warrants (valued to the lower of cost or market)
would exceed 5% of the value of the Fund's net assets, of which not more
than 2% of the Fund's net assets may be invested in warrants not listed on
a recognized U.S. or foreign stock exchange;
(M) invest in securities sold in foreign over-the-counter markets unless
the foreign dealers effecting such transactions have a minimum net worth of
$20 million; or
(N) invest in oil, gas or other mineral exploration or development
programs (including oil, gas, or other mineral leases), except that a Fund
may invest in the securities of companies that invest in or sponsor those
programs.
Unless otherwise indicated, all limitations applicable to Fund investments
apply only at the time a transaction is entered into. Any subsequent change in
a rating assigned by any rating service to a security (or, if unrated, deemed
to be of comparable quality), or change in the percentage of Fund assets
invested in certain securities or other instruments resulting from market
fluctuations or other changes in a Fund's total assets will not require a Fund
to dispose of an investment until the Adviser or Portfolio Manager determines
that it is practicable to sell or close out the investment without undue
market or tax consequences to the Fund. In the event that ratings services
assign different ratings to the same security, the Adviser or Portfolio
Manager will determine which rating it believes best reflects the security's
quality and risk at that time, which may be the higher of the several assigned
ratings.
11
<PAGE>
CHARACTERISTICS AND RISKS OF SECURITIES
AND INVESTMENT TECHNIQUES
The different types of securities and investment techniques used by the
individual Funds all have attendant risks of varying degrees. For example,
with respect to common stock, there can be no assurance of capital
appreciation, and there is a risk of market decline. With respect to debt
securities, including money market instruments, there is the risk that the
issuer of a security may not be able to meet its obligation to make scheduled
interest or principal payments. In addition, the value of debt securities
generally rises and falls inversely with interest rates, and the longer the
maturity of the debt security, the more volatile it may be in terms of changes
in value. Because each Fund seeks a different investment objective and has
different investment policies, each is subject to varying degrees of
financial, market, and credit risks. Therefore, investors should carefully
consider the investment objective, investment policies, and potential risks of
any Fund or Funds before investing.
The following describes potential risks associated with different types of
investment techniques that may be used by the individual Funds. For more
detailed information on these investment techniques, as well as information on
the types of securities in which some or all of the Funds may invest, see the
Statement of Additional Information.
LOW CAPITALIZATION STOCKS
The Cadence Mid Cap Growth, Cadence Micro Cap Growth, and Cadence Small Cap
Growth Funds may invest in common stock of companies with market
capitalization that is low compared to other publicly traded companies. Under
normal market conditions, Cadence Small Cap Growth Fund will invest in
companies with market capitalizations of $500 million or less, and Cadence
Micro Cap Growth Fund will invest in companies with market capitalizations of
$100 million or less. Investments in larger companies present certain
advantages in that such companies generally have greater financial resources,
more extensive research and development, manufacturing, marketing and service
capabilities, and more stability and greater depth of management and technical
personnel. Investments in smaller, less seasoned companies may present greater
opportunities for growth but also may involve greater risks than customarily
are associated with more established companies. The securities of smaller
companies may be subject to more abrupt or erratic market movements than
larger, more established companies. These companies may have limited product
lines, markets or financial resources, or they may be dependent upon a limited
management group. Their securities may be traded only in the over-the-counter
market or on a regional securities exchange. As a result, the disposition of
securities to meet redemptions may require a Fund to sell these securities at
a disadvantageous time, or at disadvantageous prices, or to make many small
sales over a lengthy period of time.
REPURCHASE AGREEMENTS
For the purposes of maintaining liquidity and achieving income, each Fund
may enter into repurchase agreements, which entail the purchase of a portfolio
eligible security from a bank or broker-dealer that agrees to repurchase the
security at the Fund's cost plus interest within a specified time (normally
one day). If the party agreeing to repurchase should default, as a result of
bankruptcy or otherwise, the Fund will seek to sell the securities which it
holds, which action could involve procedural costs or delays in addition to a
loss on the securities if their value should fall below their repurchase
price. Those Funds whose investment objectives do not include the earning of
income will invest in repurchase agreements only as a cash management
technique with respect to that portion of the portfolio maintained in cash.
Each Fund will limit its investment in repurchase agreements maturing in more
than seven days consistent with the Fund's policy on investment in illiquid
securities.
REVERSE REPURCHASE AGREEMENTS AND OTHER BORROWINGS
A reverse repurchase agreement is a form of leverage that involves the sale
of a security by a Fund and its agreement to repurchase the instrument at a
specified time and price. The Fund will maintain a segregated account
consisting of liquid assets, such as cash, U.S. Government securities or high
grade debt obligations, maturing not later than the expiration of the reverse
repurchase agreement, to cover its obligations under reverse repurchase
agreements.
12
<PAGE>
PIMCO FUNDS
Reverse repurchase agreements will be subject to the Funds' limitations on
borrowings, which will restrict the aggregate of such transactions (plus any
other borrowings) to 33 1/3% of a Fund's total assets. Apart from transactions
involving reverse repurchase agreements, a Fund will not borrow money, except
for temporary administrative purposes.
LOANS OF PORTFOLIO SECURITIES
For the purpose of achieving income, the Funds may lend their portfolio
securities, provided: (i) the loan is secured continuously by collateral
consisting of U.S. Government securities, cash or cash equivalents (negotiable
certificates of deposit, bankers' acceptances or letters of credit) maintained
on a daily mark-to-market basis in an amount at least equal to the current
market value of the securities loaned; (ii) the Fund may at any time call the
loan and obtain the return of the securities loaned; (iii) the Fund will
receive any interest or dividends paid on the loaned securities; and (iv) the
aggregate market value of securities loaned will not at any time exceed 33
1/3% of the total assets of the Fund.
ILLIQUID SECURITIES
The Cadence Capital Appreciation, Cadence Mid Cap Growth, and Cadence Small
Cap Growth Funds may invest in securities that are illiquid, but will not
acquire such securities if they would compose more than 10% of the value of a
Fund's net assets (taken at market value at the time of investment), and will
not invest in securities that are illiquid because they are subject to legal
or contractual restrictions on resale if such securities would compose more
than 5% of the value of the Fund's net assets (taken at market value at the
time of investment). The Cadence Micro Cap Growth Fund may invest in
securities that are illiquid so long as no more than 15% of the net assets of
the Fund (taken at market value at the time of investment), would be invested
in such securities.
The term "illiquid securities" for this purpose means securities that cannot
be disposed of within seven days in the ordinary course of business at
approximately the amount at which a Fund has valued the securities. Illiquid
securities are considered to include, among other things, written over-the-
counter options, securities or other liquid assets being used as cover for
such options, repurchase agreements with maturities in excess of seven days,
certain loan participation interests, fixed time deposits which are not
subject to prepayment or provide for withdrawal penalties upon prepayment
(other than overnight deposits), securities that are subject to legal or
contractual restrictions on resale (such as privately placed debt securities),
and other securities whose disposition is restricted under the federal
securities laws (other than securities issued pursuant to Rule 144A under the
Securities Act of 1933 and certain commercial paper that the Adviser or the
Portfolio Manager has determined to be liquid under procedures approved by the
Board of Trustees).
MANAGEMENT OF THE TRUST
The business affairs of the Trust are managed under the direction of the
Board of Trustees. The Trustees are William D. Cvengros, Richard L. Nelson,
Lyman W. Porter, and Alan Richards. Additional information about the Trustees
and the Trust's executive officers may be found in the Statement of Additional
Information under the heading "Management--Trustees and Officers."
13
<PAGE>
INVESTMENT ADVISER
PIMCO Advisors serves as Investment Adviser to the Funds pursuant to an
investment advisory agreement with the Trust. PIMCO Advisors is a Delaware
limited partnership organized in 1987. PIMCO Advisors provides investment
management and advisory services to private accounts of institutional and
individual clients and to mutual funds. Total assets under management by PIMCO
Advisors and its subsidiary partnerships at December 31, 1995 were
approximately $95.2 billion. A portion of the units of the limited partner
interest in PIMCO Advisors is traded publicly on the New York Stock Exchange.
The general partner of PIMCO Advisors is PIMCO Partners, G.P. Pacific Mutual
Life Insurance Company ("Pacific Mutual") and its affiliates hold a
substantial interest in PIMCO Advisors through direct or indirect ownership of
units of PIMCO Advisors, and indirectly hold a majority interest in PIMCO
Partners, G.P., with the remainder held indirectly by a group composed of the
Managing Directors of PIMCO. PIMCO Advisors is governed by an Operating Board
and Equity Board, which exercise substantially all of the governance powers of
the general partner and serve as the functional equivalent of a board of
directors. PIMCO Advisors' address is 800 Newport Center Drive, Newport Beach,
California 92660. PIMCO Advisors is registered as an investment adviser with
the SEC. PIMCO Advisors currently has six subsidiary partnerships: PIMCO,
Parametric Portfolio Associates, Cadence, NFJ Investment Group, Blairlogie
Capital Management, and Columbus Circle Investors.
Under the investment advisory agreement, PIMCO Advisors, subject to the
supervision of the Board of Trustees, is responsible for providing advice and
guidance with respect to the Funds and for managing, either directly or
through others selected by the Adviser, the investment of the Funds. PIMCO
Advisors also furnishes to the Board of Trustees periodic reports on the
investment performance of each Fund.
PORTFOLIO MANAGER
Pursuant to a portfolio management agreement, PIMCO Advisors employs its
affiliate, Cadence, as Portfolio Manager for all of the Funds. PIMCO Advisors
compensates the Portfolio Manager from its advisory fee (not from the Trust).
Under this agreement, the Portfolio Manager has full investment discretion and
makes all determinations with respect to the investment of a Fund's assets,
and makes all determinations respecting the purchase and sale of a Fund's
securities and other investments.
Cadence is an investment management firm organized as a general partnership.
Cadence has two partners: PIMCO Advisors as the supervisory partner, and
Cadence Capital Management, Inc. as the managing partner. Cadence Capital
Management Corporation, the predecessor investment adviser to Cadence,
commenced operations in 1988. Accounts managed by Cadence had combined assets
as of December 31, 1995 of approximately $2.4 billion. Cadence's address is
Exchange Place, 53 State Street, Boston, Massachusetts 02109. Cadence is
registered as an investment adviser with the SEC.
David B. Breed and William B. Bannick are primarily responsible for the day-
to-day management of the Funds. Mr. Breed is a Managing Director, Chief
Executive Officer, and founding partner of Cadence and has 23 years'
investment management experience. He has been the driving force in developing
the firm's growth-oriented stock screening and selection process and has been
with Cadence or its predecessor since its inception. Mr. Breed graduated from
the University of Massachusetts and received his MBA from the Wharton School
of Business. He is a Chartered Financial Analyst. Mr. Bannick is a Managing
Director and Executive Vice President of Cadence and has 11 years' investment
management experience. He had previously served as Executive Vice President of
George D. Bjurman & Associates and as Supervising Portfolio Manager of Trinity
Investment Management Corporation. Mr. Bannick joined Cadence's predecessor in
1992. He graduated from the University of Massachusetts and received his MBA
from Boston University. Mr. Bannick is a Chartered Financial Analyst.
Registration as an investment adviser with the SEC does not involve
supervision by the SEC over investment advice. The portfolio management
agreement is not exclusive, and Cadence may provide, and currently is
providing, investment management services to other clients, including other
investment companies.
14
<PAGE>
PIMCO FUNDS
FUND ADMINISTRATOR
PIMCO serves as administrator to the Funds pursuant to an administration
agreement. PIMCO provides administrative services to the Funds, which include
clerical help and accounting, bookkeeping, internal audit services, and
certain other services required by the Funds, preparation of reports to the
Funds' shareholders and regulatory filings. In addition, PIMCO, at its own
expense, arranges for the provision of legal, audit, custody, transfer agency
and other services for the Funds, and is responsible for the costs of
registration of the Trust's shares and the printing of prospectuses and
shareholder reports for current shareholders.
The Trust is responsible for the following expenses: (i) salaries and other
compensation of any of the Trust's executive officers and employees who are
not officers, directors, stockholders, or employees of PIMCO Advisors, PIMCO,
or their subsidiaries or affiliates; (ii) taxes and governmental fees; (iii)
brokerage fees and commissions and other portfolio transaction expenses; (iv)
the costs of borrowing money, including interest expenses; (v) fees and
expenses of the Trustees who are not "interested persons" of the Adviser,
PIMCO, the Portfolio Managers of the Trust's investment portfolios, or the
Trust, and any counsel retained exclusively for their benefit; (vi)
extraordinary expenses, including costs of litigation and indemnification
expenses; (vii) expenses which are capitalized in accordance with generally
accepted accounting principles; and (viii) any expenses allocated or allocable
to a specific class of shares, which include service fees payable with respect
to the Administrative Class shares and may include certain other expenses as
permitted by the Trust's Multiple Class Plan adopted pursuant to Rule 18f-3
under the Investment Company Act of 1940 (the "1940 Act") and subject to
review and approval by the Trustees.
PIMCO has undertaken until at least June 30, 1996 to limit the operating
expenses that are borne by each Fund so that the Fund's total expenses,
exclusive of items (ii), (iii), (iv) and (vi) above, do not exceed on an
annual basis the advisory, administrative, and service fees charged to each
Fund. For more information, see "Expense Information."
ADVISORY AND ADMINISTRATIVE FEES
The Funds feature fixed advisory and administrative fees. For providing
investment advisory services to the Funds, PIMCO Advisors receives monthly
fees from each Fund at an annual rate based on the average daily net assets of
the Fund as follows:
<TABLE>
<CAPTION>
ADVISORY
FUND FEE RATE
---- --------------
<S> <C>
Cadence Capital Appreciation and Cadence Mid Cap Growth Funds
............................................................. .45%
Cadence Small Cap Growth Fund................................. 1.00%
Cadence Micro Cap Growth Fund................................. 1.25%
For providing administrative services to the Funds as described above, PIMCO
receives monthly fees from each Fund at an annual rate based on the average
daily net assets of the Fund as follows:
<CAPTION>
ADMINISTRATIVE
FUND FEE RATE
---- --------------
<S> <C>
All Funds..................................................... .25%
</TABLE>
Both the investment advisory and administration agreements for the Funds may
be terminated by the Trustees, or by PIMCO Advisors or PIMCO (as the case may
be), on 60 days' written notice. Following their initial two-year terms, the
agreements will continue from year to year if approved by the Trustees.
Pursuant to the portfolio management agreement between the Adviser and the
Portfolio Manager, PIMCO Advisors (not the Trust) pays Cadence a fee based on
a percentage of the average daily net assets of a Fund as follows: .45% for
the Cadence Capital Appreciation Fund, .45% for the Cadence Mid Cap Growth
Fund, 1.00% for the Cadence Small Cap Growth Fund, and 1.25% for the Cadence
Micro Cap Growth Fund.
15
<PAGE>
SERVICE FEES
The Trust has adopted an Administrative Services Plan (the "Plan") with
respect to the Administrative Class shares of each Fund. Under the terms of
the Plan, PIMCO is permitted to reimburse, in an amount up to 0.25% on an
annual basis of the average daily net assets of the Administrative Class,
financial intermediaries that provide services in connection with the
administration of plans or programs that use Fund shares as their funding
medium. Fees paid pursuant to the Plan may be paid for shareholder service and
the maintenance of accounts, and therefore may constitute "service fees" for
purposes of applicable rules of the National Association of Securities
Dealers, Inc. The Plan has been adopted in accordance with the requirements of
Rule 12b-1 under the 1940 Act and will be administered in accordance with the
provisions of that rule, except that shareholders will not have the voting
rights set forth in Rule 12b-1 with respect to the Plan. For more complete
disclosure regarding the Plan and its terms, see the Statement of Additional
Information.
Institutional Class shares of the Trust may also be offered through certain
brokers and financial intermediaries ("service agents") that have established
a shareholder servicing relationship with the Trust on behalf of their
customers. The Trust pays no compensation to such entities. Service agents may
impose additional or different conditions on the purchase or redemption of
Trust shares by their customers and may charge their customers transaction or
other account fees on the purchase and redemption of Trust shares. Each
service agent is responsible for transmitting to its customers a schedule of
any such fees and information regarding any additional or different conditions
regarding purchases and redemptions. Shareholders who are customers of service
agents should consult their service agent for information regarding these fees
and conditions.
DISTRIBUTOR
Shares of the Trust are distributed through PIMCO Advisors Distribution
Company (the "Distributor"), an indirect wholly owned subsidiary of PIMCO
Advisors. The Distributor is a broker-dealer registered with the SEC.
PURCHASE OF SHARES
Each Fund offers its shares in two classes: the "Institutional Class" and
the "Administrative Class." Shares of the Institutional Class are offered
primarily for direct investment by institutional investors and high net worth
individuals. They also are offered through certain financial intermediaries
that charge their customers transaction or other fees with respect to their
customers' investment in the Funds. Shares of the Administrative Class are
offered primarily through broker-dealers, retirement plan administrators and
other financial intermediaries. Administrative Class shares indirectly pay
service fees to such entities for services they provide to shareholders of
that class.
Shares of either class of the Funds may be purchased at the relevant net
asset value of that class without a sales charge. The minimum initial
investment for shares of either class is $200,000.
INITIAL INVESTMENT
An account may be opened by completing and signing a Client Registration
Application and mailing it to PIMCO Funds at the following address: 840
Newport Center Drive, Suite 360, Newport Beach, California 92660.
Except as provided below, purchases of shares can only be made by wiring
federal funds to Investors Fiduciary Trust Company (the "Transfer Agent").
Before wiring federal funds, the investor must first telephone the Trust at
(800) 927-4648 to receive instructions for wire transfer, and the following
information will be requested: name of authorized person; shareholder name;
shareholder account number; name of Fund and share class; amount being wired;
and wiring bank name.
Shares may be purchased without first wiring federal funds if the proceeds
of the investment are derived from an advisory account maintained by the
investor with PIMCO Advisors or one of its affiliates; from surrender or other
payment from an annuity, insurance, or other contract held by Pacific Mutual;
or from an investment by broker-dealers, institutional clients or other
financial intermediaries which have established a shareholder servicing
relationship with the Trust on behalf of their customers.
All purchase orders are effected at the relevant net asset value for that
class next determined after receipt of the purchase order. A purchase order,
together with payment in proper form, received by the Transfer Agent
16
<PAGE>
PIMCO FUNDS
prior to the close of business (4:00 p.m., Eastern time) on a day the Trust is
open for business will be effected at that day's net asset value; an order
received after the close of business will be effected at the net asset value
determined on the next business day. The Trust is "open for business" on each
day the New York Stock Exchange is open for trading, which excludes the
following holidays: New Year's Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Purchase
orders will be accepted only on days on which the Trust is open for business.
ADDITIONAL INVESTMENTS
Additional investments may be made at any time at the relevant net asset
value for that class by calling the Trust and wiring federal funds to the
Transfer Agent as outlined above.
OTHER PURCHASE INFORMATION
Purchases of a Fund's shares will be made in full and fractional shares. In
the interest of economy and convenience, certificates for shares will not be
issued.
The Trust and the Distributor each reserves the right, in its sole
discretion, to suspend the offering of shares of the Funds or to reject any
purchase order, in whole or in part, when, in the judgment of management, such
suspension or rejection is in the best interests of the Trust; to waive the
minimum initial investment for certain investors; and to redeem shares if
information provided in the Client Registration Application should prove to be
incorrect in any manner judged by the Trust to be material (e.g., in a manner
such as to render the shareholder ineligible to purchase shares of the Trust).
Shares of the Trust are not qualified or registered for sale in all states.
Prospective investors should inquire as to whether shares of a particular Fund
are available for offer and sale in their state of residence. Shares of the
Trust may not be offered or sold in any state unless registered or qualified
in that jurisdiction or unless an exemption from registration or qualification
is available.
Investors may, subject to the approval of the Trust, purchase shares of a
Fund with liquid securities that are eligible for purchase by the Fund
(consistent with such Fund's investment policies and restrictions) and that
have a value that is readily ascertainable in accordance with the Trust's
valuation policies. These transactions will be effected only if the Portfolio
Manager intends to retain the security in the Fund as an investment. Assets so
purchased by a Fund will be valued in generally the same manner as they would
be valued for purposes of pricing the Fund's shares, if such assets were
included in the Fund's assets at the time of purchase. The Trust reserves the
right to amend or terminate this practice at any time.
CONTRIBUTED CAPITAL LIMITATIONS
The Cadence Micro Cap Growth Fund limits the purchase of shares (contributed
capital) by any one investor to $10,000,000, exclusive of shares purchased
through reinvestment of dividends and distributions. Additionally, the Trust
has determined to limit the aggregate contributed capital by all investors in
the Fund to $100,000,000. Therefore, when the aggregate contributed capital in
the Fund reaches such amount, the Fund will no longer be available for
additional investment, until such time as an existing investor redeems a
dollar amount sufficient to allow a new investment into the Fund. In addition,
shares of the Cadence Small Cap Growth Fund are not offered as of the date of
this Prospectus; however, additional investment in the Fund may be available
in the event that an existing shareholder redeems a sufficient dollar amount.
These limitations may be changed or eliminated at any time at the discretion
of the Trust's Board of Trustees.
RETIREMENT PLANS
The Funds are available as an investment option for participants in
retirement and savings plans, including Keogh plans, 401(k) plans, 403(b)
plans, and Individual Retirement Accounts. The administrator of a plan or
employee benefits office can provide participants or employees with detailed
information on how to participate
17
<PAGE>
in the plan and how to elect a Fund as an investment option. Participants in a
retirement or savings plan may be permitted to elect different investment
options, alter the amounts contributed to the plan, or change how
contributions are allocated among investment options in accordance with the
plan's specific provisions. The plan administrator or employee benefits office
should be consulted for details. For questions about participant accounts,
participants should contact their employee benefits office, the plan
administrator, or the organization that provides recordkeeping services for
the plan. Investors who purchase shares through retirement plans should be
aware that plan administrators may aggregate purchase and redemption orders
for participants in the plan. Therefore, there may be a delay between the time
the investor places his order with the plan administrator, and the time the
order is forwarded to the Transfer Agent for execution.
REDEMPTION OF SHARES
REDEMPTIONS BY MAIL
Shares may be redeemed by submitting a written request to PIMCO Funds, 840
Newport Center Drive, Suite 360, Newport Beach, California 92660, stating the
Fund from which the shares are to be redeemed, the class of shares, the number
or dollar amount of the shares to be redeemed and the account number. The
request must be signed exactly as the names of the registered owners appear on
the Trust's account records, and the request must be signed by the minimum
number of persons designated on the Client Registration Application that are
required to effect a redemption.
REDEMPTIONS BY TELEPHONE OR OTHER WIRE COMMUNICATION
If an election is made on the Client Registration Application (or
subsequently in writing), redemptions of shares may be requested by calling
the Trust at (800) 927-4648, by sending a facsimile to (714) 760-4456, or by
other means of wire communication. Investors should state the Fund and class
from which the shares are to be redeemed, the number or dollar amount of the
shares to be redeemed and the account number. Redemption requests of an amount
of $10,000,000 or more may be initiated by telephone, but must be confirmed in
writing by an authorized party prior to processing.
In electing a telephone redemption, the investor authorizes PIMCO and the
Transfer Agent to act on telephone instructions from any person representing
himself to be the investor, and reasonably believed by PIMCO and the Transfer
Agent to be genuine. Neither the Trust nor its Transfer Agent will be liable
for any loss, cost or expense for acting on instructions (whether in writing
or by telephone) believed by the party receiving such instructions to be
genuine and in accordance with the procedures described in this Prospectus.
Shareholders should realize that by electing the telephone or wire redemption
option, they may be giving up a measure of security that they might have if
they were to redeem their shares in writing. Furthermore, interruptions in
telephone service may mean that a shareholder will be unable to effect a
redemption by telephone when desired. The Transfer Agent provides written
confirmation of transactions initiated by telephone as a procedure designed to
confirm that telephone instructions are genuine (written confirmation is also
provided for redemption requests received in writing). All redemptions,
whether initiated by letter or telephone, will be processed in a timely
manner, and proceeds will be forwarded by wire in accordance with the
redemption policies of the Trust detailed below. See "Redemption of Shares--
Other Redemption Information."
Shareholders may decline telephone exchange or redemption privileges after
an account is opened by instructing the Transfer Agent in writing at least
seven business days prior to the date the instruction is to be effective.
Shareholders may experience delays in exercising telephone redemption
privileges during periods of abnormal market activity. During periods of
volatile economic or market conditions, shareholders may wish to consider
transmitting redemption orders by telegram, facsimile or overnight courier.
Defined contribution plan participants may request redemptions by contacting
the employee benefits office, the plan administrator or the organization that
provides recordkeeping services for the plan.
18
<PAGE>
PIMCO FUNDS
OTHER REDEMPTION INFORMATION
Payment of the redemption price will ordinarily be wired to the investor's
bank three business days after the tender request, but may take up to seven
business days. Redemption proceeds will be sent by wire only to the bank name
designated on the Client Registration Application. The Trust may suspend the
right of redemption or postpone the payment date at times when the New York
Stock Exchange is closed, or during certain other periods as permitted under
the federal securities laws.
For shareholder protection, a request to change information contained in an
account registration (for example, a request to change the bank designated to
receive wire redemption proceeds) must be received in writing, signed by the
minimum number of persons designated on the Client Registration Application
that are required to effect a redemption, and accompanied by a signature
guarantee from any eligible guarantor institution, as determined in accordance
with the Trust's procedures. Shareholders should inquire as to whether a
particular institution is an eligible guarantor institution. A signature
guarantee cannot be provided by a notary public. In addition, corporations,
trusts and other institutional organizations are required to furnish evidence
of the authority of the persons designated on the Client Registration
Application to effect transactions for the organization.
Due to the relatively high cost of maintaining small accounts, the Trust
reserves the right to redeem shares in any account for their then-current
value (which will be promptly paid to the investor) if at any time, due to
redemption by the investor, the shares in the account do not have a value of
at least $100,000. A shareholder will receive advance notice of a mandatory
redemption and will be given at least 30 days to bring the value of its
account up to at least $100,000.
The Trust agrees to redeem shares of each Fund solely in cash up to the
lesser of $250,000 or 1% of the Fund's net assets during any 90-day period for
any one shareholder. In consideration of the best interests of the remaining
shareholders, the Trust reserves the right to pay any redemption proceeds
exceeding this amount in whole or in part by a distribution in kind of
securities held by a Fund in lieu of cash. It is highly unlikely that shares
would ever be redeemed in kind. If shares are redeemed in kind, however, the
redeeming shareholder should expect to incur transaction costs upon the
disposition of the securities received in the distribution.
EXCHANGE PRIVILEGE
Shares of a Fund may be exchanged for shares of the same class of any other
Fund or other investment portfolio of the Trust based on the respective net
asset values of the shares involved. Shareholders interested in an exchange
for shares of another portfolio of the Trust may request a prospectus for such
portfolio by contacting the Trust at the address and telephone number listed
above. An exchange may be made by following the redemption procedure described
above under "Redemptions by Mail" or, if the telephone redemption option has
been elected, by calling the Trust at (800) 927-4648. Shares of a Fund may
also be exchanged for shares of the same class of a series of the PIMCO Funds:
Pacific Investment Management Series, an affiliated no-load mutual fund family
composed primarily of fixed income portfolios managed by PIMCO. Shareholders
interested in such an exchange may request a prospectus for these funds by
contacting the PIMCO Funds at the same address and telephone number as the
Trust.
Exchanges may be made only with respect to Funds, other portfolios of the
Trust, or PIMCO Funds series registered in the state of residence of the
investor or where an exemption from registration is available. An exchange
order is treated the same as a redemption followed by a purchase and may
result in a capital gain or loss for tax purposes, and special rules may apply
in computing tax basis when determining gain or loss. See "Taxation" in the
Statement of Additional Information.
PORTFOLIO TRANSACTIONS
Pursuant to the portfolio management agreement, the Portfolio Manager places
orders for the purchase and sale of portfolio investments for the Funds'
accounts with brokers or dealers selected by it in its discretion. In
effecting purchases and sales of portfolio securities for the account of the
Funds, the Portfolio Manager will seek the best price and execution of the
Funds' orders. In doing so, a Fund may pay higher commission rates than the
lowest available when the Portfolio Manager believes it is reasonable to do so
in light of the value of the
19
<PAGE>
brokerage and research services provided by the broker effecting the
transaction. The Portfolio Manager also may consider sales of shares of the
Trust as a factor in the selection of broker-dealers to execute portfolio
transactions for the Trust.
The Portfolio Manager manages the Funds without regard generally to
restrictions on portfolio turnover, except those imposed on its ability to
engage in short-term trading by provisions of the federal tax laws. The higher
the rate of portfolio turnover of a Fund, the higher the transaction costs
borne by the Fund generally will be.
Some securities considered for investment by the Funds may also be
appropriate for other clients served by the Portfolio Manager. If a purchase
or sale of securities consistent with the investment policies of a Fund and
one or more of these clients served by the Portfolio Manager is considered at
or about the same time, transactions in such securities will be allocated
among the Fund and clients in a manner deemed fair and reasonable by the
Portfolio Manager.
NET ASSET VALUE
The net asset value per share of each class of each Fund is determined as of
the close of trading on the New York Stock Exchange (currently 4:00 p.m.,
Eastern time) by dividing the total market value of a Fund's portfolio
investments and other assets attributable to that class, less any liabilities,
by the number of total outstanding shares of that class. The net asset values
of the Institutional Class and Administrative Class of a Fund may diverge due
to the effect of rounding at the time net asset value is calculated. Net asset
value will not be determined on days on which the New York Stock Exchange is
closed.
Portfolio securities and other assets for which market quotations are
readily available are stated at market value. Market value is determined on
the basis of last reported sales prices, or if no sales are reported, as is
the case for most securities traded over-the-counter, at the mean between
representative bid and asked quotations obtained from a quotation reporting
system or from established market makers. Fixed income securities, including
those to be purchased under firm commitment agreements (other than obligations
having a maturity of 60 days or less), are normally valued on the basis of
quotations obtained from brokers and dealers or pricing services, which take
into account appropriate factors such as institutional-sized trading in
similar groups of securities, yield, quality, coupon rate, maturity, type of
issue, trading characteristics, and other market data.
Short-term investments having a maturity of 60 days or less are valued at
amortized cost, when the Board of Trustees determines that amortized cost is
their fair value. Certain fixed income securities for which daily market
quotations are not readily available may be valued, pursuant to guidelines
established by the Board of Trustees, with reference to fixed income
securities whose prices are more readily obtainable and whose durations are
comparable to the securities being valued. Subject to the foregoing, other
securities for which market quotations are not readily available are valued at
fair value as determined in good faith by the Board of Trustees.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Shares begin earning dividends on the effective date of purchase, provided
notification deadlines are met. See "Purchase of Shares." Net investment
income from interest and dividends, if any, will be declared and paid
quarterly to shareholders of record by the Funds. Any net realized capital
gains from the sale of portfolio securities will be distributed no less
frequently than once yearly. Net realized short-term capital gains may be paid
more frequently. Dividend and capital gain distributions of a Fund will be
reinvested in additional shares of that Fund unless the shareholder elects to
have them paid in cash. Dividends from net investment income with respect to
Administrative Class shares will be lower than those paid with respect to
Institutional Class shares, reflecting the payment of service fees by that
class.
Each Fund intends to qualify as a regulated investment company annually and
to elect to be treated as a regulated investment company under the Internal
Revenue Code of 1986, as amended. As such, a Fund generally will not pay
federal income tax on the income and gains it pays as dividends to its
shareholders. In order to avoid a 4% federal excise tax, each Fund intends to
distribute each year substantially all of its net income and gains.
20
<PAGE>
PIMCO FUNDS
Distributions received by tax-exempt shareholders will not be subject to
federal income tax to the extent permitted under applicable tax law. To the
extent that a shareholder is not exempt from tax on Fund distributions, such
shareholder will be subject to tax on dividends received from a Fund,
regardless of whether received in cash or reinvested in additional shares.
Shareholders must treat dividends, other than capital gain dividends or
dividends that represent a return of capital to shareholders, as ordinary
income. Dividends designated by a Fund as capital gain dividends are taxable
to shareholders as long-term capital gain except as provided by an applicable
tax exemption. Any distributions that are not from a Fund's net investment
income or net capital gain may be characterized as a return of capital to
shareholders or, in some cases, as capital gain. Certain dividends declared in
October, November or December of a calendar year are taxable to shareholders
(who otherwise are subject to tax on dividends) as though received on December
31 of that year if paid to shareholders during January of the following
calendar year. Each Fund will advise shareholders annually of the amount and
nature of the dividends paid to them.
The preceding discussion relates only to federal income tax; the
consequences under other tax laws may differ. For additional information
relating to the tax aspects of investing in a Fund, see the Statement of
Additional Information.
OTHER INFORMATION
CAPITALIZATION
The Trust was organized as a Massachusetts business trust on August 24,
1990. The Board of Trustees may establish additional portfolios in the future.
The capitalization of the Trust consists solely of an unlimited number of
shares of beneficial interest with a par value of $0.001 each. When issued,
shares of the Trust are fully paid, non-assessable and freely transferable.
Under Massachusetts law, shareholders could, under certain circumstances, be
held personally liable for the obligations of the Trust. However, the Amended
and Restated Agreement and Declaration of Trust (the "Declaration of Trust")
disclaims liability of the shareholders, Trustees or officers of the Trust for
acts or obligations of the Trust, which are binding only on the assets and
property of the Trust, and requires that notice of the disclaimer be given in
each contract or obligation entered into or executed by the Trust or the
Trustees. The Declaration of Trust provides for indemnification out of Trust
property for all loss and expense of any shareholder held personally liable
for the obligations of the Trust. The risk of a shareholder incurring
financial loss on account of shareholder liability is limited to circumstances
in which the Trust itself would be unable to meet its obligations, and thus
should be considered remote.
VOTING
Shareholders have the right to vote on the election of Trustees and on any
and all matters on which the law or the Declaration of Trust states they may
be entitled to vote. The Trust is not required to hold regular annual meetings
of Trust shareholders and does not intend to do so. Shareholders of a class of
shares have separate voting rights with respect to matters that only affect
that class. See "Other Information--Voting Rights" in the Statement of
Additional Information.
The Declaration of Trust provides that the holders of not less than two-
thirds of the outstanding shares of the Trust may remove a person serving as
Trustee either by declaration in writing or at a meeting called for such
purpose. The Trustees are required to call a meeting for the purpose of
considering the removal of a person serving as Trustee if requested in writing
to do so by the holders of not less than 10% of the outstanding shares of the
Trust.
Shares entitle their holders to one vote per share (with proportionate
voting for fractional shares). As used in this Prospectus, the phrase "vote of
a majority of the outstanding shares" of a Fund (or the Trust) means the vote
of the lesser of: (1) 67% of the shares of the Fund (or the Trust) present at
a meeting, if the holders of more than 50% of the outstanding shares are
present in person or by proxy; or (2) more than 50% of the outstanding shares
of the Fund (or the Trust).
21
<PAGE>
PERFORMANCE INFORMATION
The Trust may, from time to time, include the yield and total return for
each class of shares of the Funds in advertisements or reports to shareholders
or prospective investors. Quotations of yield for a Fund or class will be
based on the investment income per share (as defined by the SEC) during a
particular 30-day (or one-month) period (including dividends and interest),
less expenses accrued during the period ("net investment income"), and will be
computed by dividing net investment income by the maximum public offering
price per share on the last day of the period. Quotations of average annual
total return for a Fund or class will be expressed in terms of the average
annual compounded rate of return of a hypothetical investment in the Fund or
class over periods of one, five and ten years (up to the life of the Fund),
reflect the deduction of a proportional share of Fund or class expenses (on an
annual basis), and assume that all dividends and distributions are reinvested
when paid.
The Trust also may provide current distribution information to its
shareholders in shareholder reports or other shareholder communications, or in
certain types of sales literature provided to prospective investors. Current
distribution information for a particular class of a Fund will be based on
distributions for a specified period (i.e., total dividends from net
investment income), divided by the relevant class net asset value per share on
the last day of the period and annualized. The rate of current distributions
does not reflect deductions for unrealized losses from transactions in
derivative instruments such as options and futures, which may reduce total
return. Current distribution rates differ from standardized yield rates in
that they represent what a class of a Fund has declared and paid to
shareholders as of the end of a specified period rather than the Fund's actual
net investment income for that period.
Performance information for the Trust may also be compared to: (i) the
Standard & Poor's 500 Composite Stock Price Index ("S&P 500"), the Dow Jones
Industrial Average, the Morgan Stanley Capital International EAFE (Europe,
Australasia, Far East) Index, the Morgan Stanley Capital International
Emerging Markets Free Index, the International Finance Corporation Emerging
Markets Index, the Russell 1000 Value Index, the Russell 1000 Growth Index,
the Standard & Poor's Mid Cap Index, the Russell 2000 Index, the Lehman
Brothers Aggregate Bond Index, or other unmanaged indexes that measure
performance of a pertinent group of securities; (ii) other groups of mutual
funds tracked by Lipper Analytical Services ("Lipper"), a widely used
independent research firm which ranks mutual funds by overall performance,
investment objectives, and assets, or tracked by other services, companies,
publications, or persons who rank mutual funds on overall performance or other
criteria; and (iii) the Consumer Price Index (measure for inflation) to assess
the real rate of return from an investment in the Funds. Unmanaged indexes
(i.e., other than Lipper) generally do not reflect deductions for
administrative and management costs and expenses. The Adviser and the
Portfolio Manager may also report to shareholders or to the public in
advertisements concerning the performance of the Adviser and the Portfolio
Manager as advisers to clients other than the Trust, and on the comparative
performance or standing of the Adviser or the Portfolio Manager in relation to
other money managers. Such comparative information may be compiled or provided
by independent ratings services or by news organizations. Any performance
information, whether related to the Funds, the Adviser or the Portfolio
Manager, should be considered in light of the Funds' investment objectives and
policies, characteristics and quality of the Funds, and the market conditions
during the time period indicated, and should not be considered to be
representative of what may be achieved in the future. For a description of the
methods used to determine yield and total return for the Funds, see the
Statement of Additional Information.
Investment results of the Funds will fluctuate over time, and any
representation of the Funds' total return or yield for any prior period should
not be considered as a representation of what an investor's total return or
yield may be in any future period. The Trust's Annual Report contains
additional performance information for the Funds and is available upon
request, without charge, by calling (800) 927-4648 (Current Shareholders), or
(800) 800-0952 (New Accounts).
22
<PAGE>
PIMCO FUNDS
APPENDIX A
MANAGEMENT DISCUSSION AND ANALYSIS
Below is a discussion of performance for each Fund for the twelve-month
period ended October 31, 1995. For a complete review of the general markets
during this period, as well as the performance history for each of the Funds,
please see the Trust's Annual Report dated October 31, 1995.
Cadence Capital Appreciation Fund The Fund surged ahead with the fast
growing equity market during the twelve months ended October 31. With a
heavier-than-Index weighting throughout the period in the market-leading
Technology sector--bolstered by strong stock selection in this sector--the
Fund's outstanding 28.5% return outperformed the S&P 500's 26.4% gain. Also
contributing to relative performance were an overweighting in Financial
Services, a strong performer, and an underweighting in consumer-related
issues, which performed poorly during the year.
Cadence Mid Cap Growth Fund Despite the dominance of large cap stocks, the
year ended October 31 was an excellent one for the Fund, which posted a 30.5%
increase. The Fund raced ahead of the S&P Mid Cap Index's 21.2% return, and
surpassed even the large cap S&P 500's 26.4% gain during the twelve months.
This stand-out performance was the result of overweightings in Technology and
in Financial Services, a sector which surged in the latter half of the period
as interest rates declined.
Cadence Micro Cap Growth Fund With a 29.5% gain, the Fund outperformed the
Russell 2000 Index's 18.3% for the twelve months ended October 31. The wide
margin was the result of outstanding issue selection in Capital Goods,
Technology, Financial Services, and Health Care--the Fund's largest sectors
during the latter half of the period--as well as the Fund's sizable
overweighting in Capital Goods.
Cadence Small Cap Growth Fund A slowing economy fueled a market preference
for growth stocks--both large and small--during the twelve months ended
October 31. The Fund posted a 17.4% advance during the period, short of the
18.3% gain for the Russell 2000 Index. The Fund's heavy overweighting in
Technology, which deteriorated sharply near the end of the period, was the
chief cause of the underperformance. Despite the small setback, the Fund has
outperformed the benchmark over the three- and four-year periods.
A-1
<PAGE>
[LOGO of PIMCO]
PIMCO FUNDS:
Equity Advisors Series
INVESTMENT ADVISER
PIMCO Advisors L.P.
800 Newport Center Drive
Newport Beach, CA 92660
ADMINISTRATOR
Pacific Investment Management Company
840 Newport Center Drive, Suite 360
Newport Beach, CA 92660
CUSTODIAN AND TRANSFER AGENT
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, MO 64105
ACCOUNTANTS
Price Waterhouse LLP
1055 Broadway
Kansas City, MO 64105
COUNSEL
Dechert Price & Rhoads
1500 K Street, N.W., Suite 500
Washington, DC 20005
PROSPECTUS
- --------------------------------------------------------------------------------
March 1, 1996
<PAGE>
PIMCO FUNDS:
EQUITY ADVISORS SERIES
STATEMENT OF ADDITIONAL INFORMATION
PIMCO Funds: Equity Advisor Series (the "Trust"), formerly PIMCO Advisors
Institutional Funds, is a no-load, open-end management investment company
("mutual fund") currently offering thirteen separate investment portfolios (the
"Funds"): the NFJ EQUITY INCOME FUND, the NFJ DIVERSIFIED LOW P/E FUND, the NFJ
SMALL CAP VALUE FUND, the CADENCE CAPITAL APPRECIATION FUND, the CADENCE MID CAP
GROWTH FUND, the CADENCE MICRO CAP GROWTH FUND, the CADENCE SMALL CAP GROWTH
FUND, the COLUMBUS CIRCLE INVESTORS CORE EQUITY FUND, the COLUMBUS CIRCLE
INVESTORS MID CAP EQUITY FUND, the PARAMETRIC ENHANCED EQUITY FUND, the
BLAIRLOGIE EMERGING MARKETS FUND, the BLAIRLOGIE INTERNATIONAL ACTIVE FUND, and
the BALANCED FUND.
The Trust's investment adviser is PIMCO Advisors L.P. ("PIMCO Advisors" or
the "Adviser"), 800 Newport Center Drive, Newport Beach, California 92660.
This Statement of Additional Information is not a Prospectus, and should be
used in conjunction with the Prospectus for the Trust dated March 1, 1996. A
copy of the Prospectus may be obtained free of charge from the Trust at the
address and telephone number listed below.
PIMCO Funds
840 Newport Center Drive
Suite 360
Newport Beach, California 92660
Telephone: (800) 927-4648
March 1, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
INVESTMENT OBJECTIVES AND POLICIES................................. 2
U.S. Government Securities.................................... 2
Borrowing..................................................... 2
Preferred Stocks.............................................. 3
Corporate Debt Securities..................................... 3
Variable and Floating Rate Securities......................... 4
Mortgage-Related and Asset-Backed Securities.................. 4
Foreign Securities............................................ 8
Bank Obligations.............................................. 10
Commercial Paper.............................................. 11
Derivative Instruments........................................ 11
Delayed Delivery Transactions................................. 17
Warrants to Purchase Securities............................... 18
Illiquid Securities........................................... 18
INVESTMENT RESTRICTIONS............................................ 19
MANAGEMENT OF THE TRUST............................................ 22
Trustees and Officers......................................... 22
Compensation Table............................................ 24
Investment Adviser............................................ 24
Portfolio Management Agreements............................... 26
Fund Administrator............................................ 29
Expense Limitations........................................... 31
Distribution of Trust Shares.................................. 31
Service Fees.................................................. 32
Purchases and Redemptions..................................... 33
PORTFOLIO TRANSACTIONS AND BROKERAGE............................... 33
Investment Decisions.......................................... 33
Brokerage and Research Services............................... 34
Portfolio Turnover............................................ 36
NET ASSET VALUE.................................................... 36
TAXATION........................................................... 37
Distributions................................................. 38
Sales of Shares............................................... 38
Backup Withholding............................................ 38
Options, Futures and Forward Contracts, and Swap Agreements... 38
Passive Foreign Investment Companies.......................... 39
Foreign Currency Transactions................................. 40
Foreign Taxation.............................................. 40
Original Issue Discount....................................... 41
Other Taxation................................................ 42
</TABLE>
<PAGE>
<TABLE>
<S> <C>
OTHER INFORMATION............................................ 42
Capitalization............................................ 42
Performance Information................................... 43
Voting Rights............................................. 45
Code of Ethics............................................ 53
Custodian, Transfer Agent and Dividend Disbursing Agent... 53
Independent Accountants................................... 53
Counsel................................................... 54
Registration Statement.................................... 54
Financial Statements...................................... 54
</TABLE>
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and general investment policies of each Fund are
described in the Prospectus. Additional information concerning the
characteristics of certain of the Funds' investments are set forth below.
U.S. GOVERNMENT SECURITIES
U.S. Government securities are obligations of, or guaranteed by, the U.S.
Government, its agencies or instrumentalities. The U.S. Government does not
guarantee the net asset value of the Funds' shares. Some U.S. Government
securities, such as Treasury bills, notes and bonds, and securities guaranteed
by the Government National Mortgage Association ("GNMA"), are supported by the
full faith and credit of the United States; others, such as those of the Federal
Home Loan Banks, are supported by the right of the issuer to borrow from the
U.S. Treasury; others, such as those of the Federal National Mortgage
Association ("FNMA"), are supported by the discretionary authority of the U.S.
Government to purchase the agency's obligations; and still others, such as those
of the Student Loan Marketing Association, are supported only by the credit of
the instrumentality. U.S. Government securities include securities that have no
coupons, or have been stripped of their unmatured interest coupons, individual
interest coupons from such securities that trade separately, and evidences of
receipt of such securities. Such securities may pay no cash income, and are
purchased at a deep discount from their value at maturity. Because interest on
zero coupon securities is not distributed on a current basis but is, in effect,
compounded, zero coupon securities tend to be subject to greater market risk
than interest-paying securities of similar maturities. Custodial receipts
issued in connection with so-called trademark zero coupon securities, such as
CATs and TIGRs, are not issued by the U.S. Treasury, and are therefore not U.S.
Government securities, although the underlying bond represented by such receipt
is a debt obligation of the U.S. Treasury. Other zero coupon Treasury
securities (STRIPs and CUBEs) are direct obligations of the U.S. Government.
BORROWING
A Fund may borrow for temporary administrative purposes. This borrowing may
be unsecured. Provisions of the Investment Company Act of 1940 ("1940 Act")
require a Fund to maintain continuous asset coverage (that is, total assets
including borrowings, less liabilities exclusive of borrowings) of 300% of the
amount borrowed, with an exception for borrowings not in excess of 5% of the
Fund's total assets made for temporary administrative purposes. Any borrowings
for temporary administrative purposes in excess of 5% of the Fund's total assets
must maintain continuous asset coverage. If the 300% asset coverage should
decline as a result of market fluctuations or other reasons, a Fund may be
required to sell some of its portfolio holdings within three days to reduce the
debt and restore the 300% asset coverage, even though it may be disadvantageous
from an investment standpoint to sell securities at that time. Borrowing will
tend to exaggerate the effect on net asset value of any increase or decrease in
the market value of a Fund's portfolio. Money borrowed will be subject to
interest costs which may or may not be recovered by appreciation of the
securities purchased. A Fund also may be required to maintain minimum average
balances in connection with such borrowing or to pay a commitment or other fee
to maintain a line of credit; either of these requirements would increase the
cost of borrowing over the stated interest rate.
In addition to borrowing for temporary purposes, a Fund may enter into
reverse repurchase agreements. A reverse repurchase agreement involves the sale
of a portfolio-eligible security by a Fund, coupled with its agreement to
repurchase the instrument at a specified time and price. The Fund will maintain
a segregated account with its custodian consisting of liquid assets, such as
cash, U.S. Government securities or high quality debt securities equal (on a
daily mark-to-market basis) to its obligations under reverse repurchase
agreements with broker-dealers (but not banks). However, reverse
2
<PAGE>
repurchase agreements involve the risk that the market value of securities
retained by the Fund may decline below the repurchase price of the securities
sold by the Fund which it is obligated to repurchase. Reverse repurchase
agreements will be subject to the Funds' limitations on borrowings, which will
restrict the aggregate of such transactions (plus any other borrowings) to
33 1/3% of a Fund's total assets.
PREFERRED STOCKS
All Funds may invest in preferred stocks. Preferred stock is a form of
equity ownership in a publicly held corporation. The dividend on a preferred
stock is a fixed payment. In these securities, the firm is not legally bound to
pay the dividend. Certain classes of preferred stock are convertible, meaning
the preferred stock is convertible into shares of common stock of the issuing
company. By holding convertible preferred stock, a Fund can receive a steady
stream of dividends and still have the option to convert it to common stock.
CORPORATE DEBT SECURITIES
All Funds may invest in corporate debt securities. The NFJ Equity Income,
NFJ Diversified Low P/E, NFJ Small Cap Value, Cadence Capital Appreciation,
Cadence Mid Cap Growth, Cadence Micro Cap Growth, Cadence Small Cap Growth,
Columbus Circle Investors Core Equity, Columbus Circle Investors Mid Cap Equity,
Parametric Enhanced Equity, Blairlogie Emerging Markets, and Blairlogie
International Active Funds' investments in corporate debt securities are limited
to short term corporate debt securities. The investment return of corporate debt
securities reflects interest earnings and changes in the market value of the
security. The market value of a corporate debt obligation may also be expected
to rise and fall inversely with interest rates generally. There also exists the
risk that the issuers of the securities may not be able to meet their
obligations on interest or principal payments at the time called for by an
instrument.
A Fund's investments in U.S. dollar or foreign currency-denominated
corporate debt securities of domestic or foreign issuers are limited to
corporate debt securities (corporate bonds, debentures, notes and other similar
corporate debt instruments, including convertible securities) which meet the
minimum ratings criteria set forth for the Fund, or, if unrated, are deemed to
be comparable in quality to corporate debt securities in which the Fund may
invest. The rate of return or return of principal on some debt obligations may
be linked or indexed to the level of exchange rates between the U.S. dollar and
a foreign currency or currencies.
Among the corporate bonds in which the Funds may invest are convertible
securities. A convertible security is a bond, debenture, note, or other
security that entitles the holder to acquire common stock or other equity
securities of the same or a different issuer. A convertible security generally
entitles the holder to receive interest paid or accrued until the convertible
security matures or is redeemed, converted or exchanged. Before conversion,
convertible securities have characteristics similar to nonconvertible debt
securities. Convertible securities rank senior to common stock in a
corporation's capital structure and, therefore, generally entail less risk than
the corporation's common stock, although the extent to which such risk is
reduced depends in large measure upon the degree to which the convertible
security sells above its value as a fixed income security.
A convertible security may be subject to redemption at the option of the
issuer at a predetermined price. If a convertible security held by a Fund is
called for redemption, the Fund would be required to permit the issuer to redeem
the security and convert it to underlying common stock, or would sell the
convertible security to a third party. A Fund generally would invest in
convertible securities for their favorable price characteristics and total
return potential and would normally not exercise an option to convert.
3
<PAGE>
Securities rated Baa and BBB are the lowest which are considered
"investment grade" obligations. Moody's Investors Services, Inc. ("Moody's")
describes securities rated Baa as "medium-grade" obligations; they are "neither
highly protected nor poorly secured...[i]nterest payments and principal security
appear adequate for the present but certain protective elements may be lacking
or may be characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have speculative
characteristics as well." Standard & Poor's Corporation ("S&P") describes
securities rated BBB as "regarded as having an adequate capacity to pay interest
and repay principal...[w]hereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity than in higher rated categories."
VARIABLE AND FLOATING RATE SECURITIES
Variable and floating rate securities provide for a periodic adjustment in
the interest rate paid on the obligations. The terms of such obligations must
provide that interest rates are adjusted periodically based upon an interest
rate adjustment index as provided in the respective obligations. The adjustment
intervals may be regular, and range from daily up to annually, or may be event
based, such as based on a change in the prime rate.
The Balanced Fund may invest in floating rate debt instruments
("floaters"). The interest rate on a floater is a variable rate which is tied
to another interest rate, such as a money-market index or Treasury bill rate.
The interest rate on a floater resets periodically, typically every six months.
While, because of the interest rate reset feature, floaters provide the Fund
with a certain degree of protection against rises in interest rates, the Fund
will participate in any declines in interest rates as well.
The Balanced Fund may also invest in inverse floating rate debt instruments
("inverse floaters"). The interest rate on an inverse floater resets in the
opposite direction from the market rate of interest to which the inverse floater
is indexed. An inverse floating rate security may exhibit greater price
volatility than a fixed rate obligation of similar credit quality. The Trust
has adopted a policy under which the Balanced Fund will invest no more than 5%
of its net assets in any combination of inverse floater, interest only ("IO"),
or principal only ("PO") securities. See "Mortgage-Related and Asset-Backed
Securities" for a discussion of IOs and POs.
MORTGAGE-RELATED AND ASSET-BACKED SECURITIES
Mortgage-related securities are interests in pools of residential or
commercial mortgage loans, including mortgage loans made by savings and loan
institutions, mortgage bankers, commercial banks and others. Pools of mortgage
loans are assembled as securities for sale to investors by various governmental,
government-related and private organizations, see "Mortgage Pass-Through
Securities." The Balanced Fund may also invest in debt securities which are
secured with collateral consisting of mortgage-related securities, see
"Collateralized Mortgage Obligations," and in other types of mortgage-related
securities.
MORTGAGE PASS-THROUGH SECURITIES. Interests in pools of mortgage-related
securities differ from other forms of debt securities, which normally provide
for periodic payment of interest in fixed amounts with principal payments at
maturity or specified call dates. Instead, these securities provide a monthly
payment which consists of both interest and principal payments. In effect,
these payments are a "pass-through" of the monthly payments made by the
individual borrowers on their residential or commercial mortgage loans, net of
any fees paid to the issuer or guarantor of such securities. Additional
payments are caused by repayments of principal resulting from the sale of the
underlying property, refinancing or foreclosure, net of fees or costs which may
be incurred. Some mortgage-related securities (such as securities issued by the
GNMA) are described as "modified pass-through." These securities entitle the
holder to receive all interest and principal payments owed on the mortgage pool,
net of certain fees, at the scheduled payment dates regardless of whether or not
the mortgagor actually makes the payment.
4
<PAGE>
The principal governmental guarantor of mortgage-related securities is the
GNMA. GNMA is a wholly owned U.S. Government corporation within the Department
of Housing and Urban Development. GNMA is authorized to guarantee, with the full
faith and credit of the U.S. Government, the timely payment of principal and
interest on securities issued by institutions approved by GNMA (such as savings
and loan institutions, commercial banks and mortgage bankers) and backed by
pools of mortgages insured by the Federal Housing Administration (the "FHA"), or
guaranteed by the Department of Veterans Affairs (the "VA").
Government-related guarantors (i.e., not backed by the full faith and
credit of the United States Government) include the FNMA and the Federal Home
Loan Mortgage Corporation ("FHLMC"). FNMA is a government-sponsored corporation
owned entirely by private stockholders. It is subject to general regulation by
the Secretary of Housing and Urban Development. FNMA purchases conventional
(i.e., not insured or guaranteed by any government agency) residential mortgages
from a list of approved seller/servicers which include state and federally
chartered savings and loan associations, mutual savings banks, commercial banks,
and credit unions and mortgage bankers. Pass-through securities issued by FNMA
are guaranteed as to timely payment of principal and interest by FNMA but are
not backed by the full faith and credit of the United States Government.
FHLMC was created by Congress in 1970 for the purpose of increasing the
availability of mortgage credit for residential housing. It is a government-
sponsored corporation formerly owned by the twelve Federal Home Loan Banks and
now owned entirely by private stockholders. FHLMC issues Participation
Certificates ("Pcs") which represent interests in conventional mortgages from
FHLMC's national portfolio. FHLMC guarantees the timely payment of interest and
ultimate collection of principal, but Pcs are not backed by the full faith and
credit of the United States Government.
Commercial banks, savings and loan institutions, private mortgage insurance
companies, mortgage bankers and other secondary market issuers also create pass-
through pools of conventional residential mortgage loans. Such issuers may, in
addition, be the originators and/or servicers of the underlying mortgage loans
as well as the guarantors of the mortgage-related securities. Pools created by
such non-governmental issuers generally offer a higher rate of interest than
government and government-related pools because there are no direct or indirect
government or agency guarantees of payments in the former pools. However,
timely payment of interest and principal of these pools may be supported by
various forms of insurance or guarantees, including individual loan, title, pool
and hazard insurance and letters of credit. The insurance and guarantees are
issued by governmental entities, private insurers and the mortgage poolers.
Such insurance and guarantees, and the creditworthiness of the issuers thereof,
will be considered in determining whether a mortgage-related security meets the
Trust's investment quality standards. There can be no assurance that the
private insurers or guarantors can meet their obligations under the insurance
policies or guarantee arrangements. The Balanced Fund may buy mortgage-related
securities without insurance or guarantees if, through an examination of the
loan experience and practices of the originator/servicers and poolers, the
Portfolio Manager determines that the securities meet the Trust's quality
standards. Although the market for such securities is becoming increasingly
liquid, securities issued by certain private organizations may not be readily
marketable. The Balanced Fund will not purchase mortgage-related securities or
any other assets which in the Portfolio Manager's opinion are illiquid if, as a
result, more than 10% of the value of the Fund's total assets will be illiquid.
Mortgage-related securities that are issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, are not subject to the Balanced
Fund's industry concentration restrictions, see "Investment Restrictions," by
virtue of the exclusion from that test available to all U.S. Government
securities. In the case of privately issued mortgage-related securities, the
Balanced Fund takes the position that mortgage-related securities do not
represent interests in any particular "industry" or group of industries. The
assets underlying such securities may be represented by a portfolio of first
lien residential mortgages (including both whole mortgage loans and mortgage
participation interests) or portfolios of mortgage pass-through securities
issued or guaranteed by GNMA, FNMA or FHLMC. Mortgage loans underlying a
mortgage-related security may in turn be insured or guaranteed by the FHA or the
VA. In
5
<PAGE>
the case of private issue mortgage-related securities whose underlying
assets are neither U.S. Government securities nor U.S. Government-insured
mortgages, to the extent that real properties securing such assets may be
located in the same geographical region, the security may be subject to a
greater risk of default than other comparable securities in the event of adverse
economic, political or business developments that may affect such region and,
ultimately, the ability of residential homeowners to make payments of principal
and interest on the underlying mortgages.
COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOS"). A CMO is a hybrid between a
mortgage-backed bond and a mortgage pass-through security. Similar to a bond,
interest and prepaid principal is paid, in most cases, semi-annually. CMOs may
be collateralized by whole mortgage loans, but are more typically collateralized
by portfolios of mortgage pass-through securities guaranteed by GNMA, FHLMC, or
FNMA, and their income streams.
CMOs are structured into multiple classes, each bearing a different stated
maturity. Actual maturity and average life will depend upon the prepayment
experience of the collateral. CMOs provide for a modified form of call
protection through a de facto breakdown of the underlying pool of mortgages
--------
according to how quickly the loans are repaid. Monthly payment of principal
received from the pool of underlying mortgages, including prepayments, is first
returned to investors holding the shortest maturity class. Investors holding
the longer maturity classes receive principal only after the first class has
been retired. An investor is partially guarded against a sooner than desired
return of principal because of the sequential payments.
In a typical CMO transaction, a corporation ("issuer") issues multiple
series (e.g., A, B, C, Z) of CMO bonds ("Bonds"). Proceeds of the Bond offering
are used to purchase mortgages or mortgage pass-through certificates
("Collateral"). The Collateral is pledged to a third party trustee as security
for the Bonds. Principal and interest payments from the Collateral are used to
pay principal on the Bonds in the order A, B, C, Z. The Series A, B, and C
Bonds all bear current interest. Interest on the Series Z Bond is accrued and
added to principal and a like amount is paid as principal on the Series A, B, or
C Bond currently being paid off. When the Series A, B, and C Bonds are paid in
full, interest and principal on the Series Z Bond begins to be paid currently.
With some CMOs, the issuer serves as a conduit to allow loan originators
(primarily builders or savings and loan associations) to borrow against their
loan portfolios.
FHLMC COLLATERALIZED MORTGAGE OBLIGATIONS. FHLMC CMOs are debt obligations
of FHLMC issued in multiple classes having different maturity dates which are
secured by the pledge of a pool of conventional mortgage loans purchased by
FHLMC. Unlike FHLMC Pcs, payments of principal and interest on the CMOs are
made semi-annually, as opposed to monthly. The amount of principal payable on
each semi-annual payment date is determined in accordance with FHLMC's mandatory
sinking fund schedule, which in turn, is equal to approximately 100% of FHA
prepayment experience applied to the mortgage collateral pool. All sinking fund
payments in the CMOs are allocated to the retirement of the individual classes
of bonds in the order of their stated maturities. Payment of principal on the
mortgage loans in the collateral pool in excess of the amount of FHLMC's minimum
sinking fund obligation for any payment date are paid to the holders of the CMOs
as additional sinking fund payments. Because of the "pass-through" nature of
all principal payments received on the collateral pool in excess of FHLMC's
minimum sinking fund requirement, the rate at which principal of the CMOs is
actually repaid is likely to be such that each class of bonds will be retired in
advance of its scheduled maturity date.
If collection of principal (including prepayments) on the mortgage loans
during any semi-annual payment period is not sufficient to meet FHLMC's minimum
sinking fund obligation on the next sinking fund payment date, FHLMC agrees to
make up the deficiency from its general funds.
Criteria for the mortgage loans in the pool backing the FHLMC CMOs are
identical to those of FHLMC Pcs. FHLMC has the right to substitute collateral
in the event of delinquencies and/or defaults.
6
<PAGE>
COMMERCIAL MORTGAGE-BACKED SECURITIES include securities that reflect an
interest in, and are secured by, mortgage loans on commercial real property.
The market for commercial mortgage-backed securities developed more recently and
in terms of total outstanding principal amount of issues is relatively small
compared to the market for residential single-family mortgage-backed securities.
Many of the risks of investing in commercial mortgage-backed securities reflect
the risks of investing in the real estate securing the underlying mortgage
loans. These risks reflect the effects of local and other economic conditions
on real estate markets, the ability of tenants to make loan payments, and the
ability of a property to attract and retain tenants. Commercial mortgage-backed
securities may be less liquid and exhibit greater price volatility than other
types of mortgage- or asset-backed securities.
OTHER MORTGAGE-RELATED SECURITIES. Other mortgage-related securities
include securities other than those described above that directly or indirectly
represent a participation in, or are secured by and payable from, mortgage loans
on real property, including CMO residuals or stripped mortgage-backed
securities. Other mortgage-related securities may be equity or debt securities
issued by agencies or instrumentalities of the U.S. Government or by private
originators of, or investors in, mortgage loans, including savings and loan
associations, homebuilders, mortgage banks, commercial banks, investment banks,
partnerships, trusts and special purpose entities of the foregoing.
CMO Residuals. CMO residuals are mortgage securities issued by agencies or
instrumentalities of the U.S. Government or by private originators of, or
investors in, mortgage loans, including savings and loan associations,
homebuilders, mortgage banks, commercial banks, investment banks and special
purpose entities of the foregoing.
The cash flow generated by the mortgage assets underlying a series of CMOs
is applied first to make required payments of principal and interest on the CMOs
and second to pay the related administrative expenses of the issuer. The
residual in a CMO structure generally represents the interest in any excess cash
flow remaining after making the foregoing payments. Each payment of such excess
cash flow to a holder of the related CMO residual represents income and/or a
return of capital. The amount of residual cash flow resulting from a CMO will
depend on, among other things, the characteristics of the mortgage assets, the
coupon rate of each class of CMO, prevailing interest rates, the amount of
administrative expenses and the prepayment experience on the mortgage assets.
In particular, the yield to maturity on CMO residuals is extremely sensitive to
prepayments on the related underlying mortgage assets, in the same manner as an
IO class of stripped mortgage-backed securities. See "Other Mortgage-Related
Securities--Stripped Mortgage-Backed Securities." In addition, if a series of a
CMO includes a class that bears interest at an adjustable rate, the yield to
maturity on the related CMO residual will also be extremely sensitive to changes
in the level of the index upon which interest rate adjustments are based. As
described below with respect to stripped mortgage-backed securities, in certain
circumstances the Balanced Fund may fail to recoup fully its initial investment
in a CMO residual.
CMO residuals are generally purchased and sold by institutional investors
through several investment banking firms acting as brokers or dealers. The CMO
residual market has only very recently developed and CMO residuals currently may
not have the liquidity of other more established securities trading in other
markets. Transactions in CMO residuals are generally completed only after
careful review of the characteristics of the securities in question. In
addition, CMO residuals may, or pursuant to an exemption therefrom, may not have
been registered under the Securities Act of 1933, as amended (the "1933 Act").
CMO residuals, whether or not registered under the 1933 Act, may be subject to
certain restrictions on transferability, and may be deemed "illiquid" and
subject to the Balanced Fund's limitations on investment in illiquid securities.
Stripped Mortgage-Backed Securities. Stripped mortgage-backed securities
("SMBS") are derivative multi-class mortgage securities. SMBS may be issued by
agencies or instrumentalities of the U.S. Government, or by private originators
of, or investors in, mortgage loans, including savings and loan associations,
mortgage banks, commercial banks, investment banks and special purpose entities
of the foregoing.
7
<PAGE>
SMBS are usually structured with two classes that receive different
proportions of the interest and principal distributions on a pool of mortgage
assets. A common type of SMBS will have one class receiving some of the
interest and most of the principal from the mortgage assets, while the other
class will receive most of the interest and the remainder of the principal. In
the most extreme case, one class will receive all of the interest (the IO
class), while the other class will receive all of the principal (the "PO"
class). The yield to maturity on an IO class is extremely sensitive to the rate
of principal payments (including prepayments) on the related underlying mortgage
assets, and a rapid rate of principal payments may have a material adverse
effect on the Balanced Fund's yield to maturity from these securities. If the
underlying mortgage assets experience greater than anticipated prepayments of
principal, the Balanced Fund may fail to fully recoup its initial investment in
these securities even if the security is in one of the highest rating
categories.
Although SMBS are purchased and sold by institutional investors through
several investment banking firms acting as brokers or dealers, these securities
were only recently developed. As a result, established trading markets have not
yet developed and, accordingly, these securities may be deemed "illiquid" and
subject to the Balanced Fund's limitations on investment in illiquid securities.
OTHER ASSET-BACKED SECURITIES. Similarly, the Adviser and Portfolio
Managers expect that other asset-backed securities (unrelated to mortgage loans)
will be offered to investors in the future. Several types of asset-backed
securities have already been offered to investors, including Certificates for
Automobile Receivables/SM/ ("CARS/SM"/). CARS/SM/ represent undivided
fractional interests in a trust ("trust") whose assets consist of a pool of
motor vehicle retail installment sales contracts and security interests in the
vehicles securing the contracts. Payments of principal and interest on CARS/SM/
are passed through monthly to certificate holders, and are guaranteed up to
certain amounts and for a certain time period by a letter of credit issued by a
financial institution unaffiliated with the trustee or originator of the trust.
An investor's return on CARS/SM/ may be affected by early prepayment of
principal on the underlying vehicle sales contracts. If the letter of credit is
exhausted, the trust may be prevented from realizing the full amount due on a
sales contract because of state law requirements and restrictions relating to
foreclosure sales of vehicles and the obtaining of deficiency judgments
following such sales or because of depreciation, damage or loss of a vehicle,
the application of federal and state bankruptcy and insolvency laws, or other
factors. As a result, certificate holders may experience delays in payments or
losses if the letter of credit is exhausted.
Consistent with a Fund's investment objectives and policies, the Adviser
and Portfolio Manager also may invest in other types of asset-backed securities.
FOREIGN SECURITIES
The Blairlogie Emerging Markets and Blairlogie International Active Funds
may invest in U.S. dollar or foreign currency-denominated corporate debt
securities of foreign issuers; preferred securities of foreign issuers; certain
foreign bank obligations; and U.S. dollar- or foreign currency-denominated
obligations of foreign governments or their subdivisions, agencies and
instrumentalities, international agencies and supranational entities. The
Blairlogie Emerging Markets and Blairlogie International Active Funds may also
invest in common stocks issued by foreign companies or in securities represented
by American Depository Receipts ("ADRs"), European Depository Receipts ("EDRs),
or Global Depository Receipts ("GDRs"). ADRs are dollar-denominated receipts
issued generally by domestic banks and represent the deposit with the bank of a
security of a foreign issuer. EDRs are foreign currency-denominated receipts
similar to ADRs and are issued and traded in Europe, and are publicly traded on
exchanges or over-the-counter in the United States. GDRs may be offered
privately in the United States and also trade in public or private markets in
other countries. ADRs, EDRs and GDRs may be issued as sponsored or unsponsored
programs. In sponsored programs, an issuer has made arrangements to have its
securities trade in the form of ADRs, EDRs or GDRs. In unsponsored programs,
the issuer may not be directly involved in the creation of the program.
Although regulatory requirements with respect to sponsored and unsponsored
programs are generally similar, in some cases it may be easier to obtain
8
<PAGE>
financial information from an issuer that has participated in the creation of a
sponsored program. The Columbus Circle Investors Core Equity and Columbus
Circle Investors Mid Cap Equity Funds each may invest up to 15% of their
respective net assets in securities which are traded principally in securities
markets outside the United States (Eurodollar certificates of deposit are
excluded for purposes of these limitations). In addition, the Funds may invest
up to 35% of their respective assets in ADRs, EDRs, and GDRs, reduced by such
amount that may be reserved for investments in high quality debt securities,
money market obligations, and cash or other permissible investments. The NFJ
Equity Income, NFJ Diversified Low P/E, NFJ Small Cap Value, Cadence Capital
Appreciation, Cadence Mid Cap Growth, Cadence Micro Cap Growth, Cadence Small
Cap Growth, and Parametric Enhanced Equity Funds may also invest in ADRs. The
Parametric Enhanced Equity Fund may invest in common stock of foreign issuers if
it is included in the index from which stocks are selected.
Investing in the securities of foreign issuers involves special risks and
considerations not typically associated with investing in U.S. companies. These
include: differences in accounting, auditing and financial reporting standards,
generally higher commission rates on foreign portfolio transactions, the
possibility of expropriation or confiscatory taxation, adverse changes in
investment or exchange control regulations (which may include suspension of the
ability to transfer currency from a country), political instability which can
affect U.S. investments in foreign countries and potential restrictions on the
flow of international capital. In addition, foreign securities and dividends
and interest payable on those securities may be subject to foreign taxes,
including taxes withheld from payments on those securities. Foreign securities
often trade with less frequency and volume than domestic securities and
therefore may exhibit greater price volatility. Changes in foreign exchange
rates will affect the value of those securities which are denominated or quoted
in currencies other than the U.S. dollar.
The Blairlogie Emerging Markets Fund may invest in the securities of
issuers based in developing countries. Investing in developing countries
involves certain risks not typically associated with investing in U.S.
securities, and imposes risks greater than, or in addition to, risks of
investing in foreign, developed countries. These risks include: greater risks
of nationalization or expropriation of assets or confiscatory taxation; currency
devaluations and other currency exchange rate fluctuations; greater social,
economic and political uncertainty and instability (including the risk of war);
more substantial government involvement in the economy; higher rates of
inflation; less government supervision and regulation of the securities markets
and participants in those markets; controls on foreign investment and
limitations on repatriation of invested capital and on the Fund's ability to
exchange local currencies for U.S. dollars; unavailability of currency hedging
techniques in certain developing countries; the fact that companies in
developing countries may be smaller, less seasoned and newly organized
companies; the difference in, or lack of, auditing and financial reporting
standards, which may result in unavailability of material information about
issuers; the risk that it may be more difficult to obtain and/or enforce a
judgment in a court outside the United States; and greater price volatility,
substantially less liquidity and significantly smaller market capitalization of
securities markets.
The Columbus Circle Investors Core Equity, Columbus Circle Investors Mid
Cap Equity, Blairlogie Emerging Markets, and Blairlogie International Active
Funds may also purchase and sell foreign currency options and foreign currency
futures contracts and related options (see "Derivative Instruments"), and enter
into forward foreign currency exchange contracts in order to protect against
uncertainty in the level of future foreign exchange rates in the purchase and
sale of securities. The Funds may also use foreign currency options and foreign
currency forward contracts to increase exposure to a foreign currency or to
shift exposure to foreign currency fluctuations from one country to another.
A forward foreign currency contract involves an obligation to purchase or
sell a specific currency at a future date, which may be any fixed number of days
from the date of the contract agreed upon by the parties, at a price set at the
time of the contract. These contracts may be bought or sold to protect a Fund
against a possible loss resulting from an adverse change in the relationship
between foreign currencies and the U.S. dollar or to increase exposure to a
particular foreign currency. Open positions in forward contracts used for non-
hedging purposes will be covered by the segregation with the Trust's custodian
of
9
<PAGE>
liquid assets, such as cash, U.S. Government securities and high quality
short-term investments and are marked to market daily. Although forward
contracts are intended to minimize the risk of loss due to a decline in the
value of the hedged currencies, at the same time, they tend to limit any
potential gain which might result should the value of such currencies increase.
BANK OBLIGATIONS
Bank obligations in which the Funds invest include certificates of deposit,
bankers' acceptances, and fixed time deposits. Each Fund may also hold funds on
deposit with its sub-custodian bank in an interest-bearing account for temporary
purposes.
Certificates of deposit are negotiable certificates issued against funds
deposited in a commercial bank for a definite period of time and earning a
specified return. Bankers' acceptances are negotiable drafts or bills of
exchange, normally drawn by an importer or exporter to pay for specific
merchandise, which are "accepted" by a bank, meaning, in effect, that the bank
unconditionally agrees to pay the face value of the instrument on maturity.
Fixed time deposits are bank obligations payable at a stated maturity date and
bearing interest at a fixed rate. Fixed time deposits may be withdrawn on
demand by the investor, but may be subject to early withdrawal penalties which
vary depending upon market conditions and the remaining maturity of the
obligation. There are no contractual restrictions on the right to transfer a
beneficial interest in a fixed time deposit to a third party, although there is
no market for such deposits. A Fund will not invest in fixed time deposits which
(1) are not subject to prepayment or (2) provide for withdrawal penalties upon
prepayment (other than overnight deposits) if, in the aggregate, more than 10%
(in the case of the NFJ Equity Income, NFJ Diversified Low P/E, NJF Small Cap
Value, Cadence Capital Appreciation, Cadence Mid Cap Growth, Cadence Small Cap
Growth, Parametric Enhanced Equity and Balanced Funds), or 15% (in the case of
the Columbus Circle Investors Core Equity, Columbus Circle Investors Mid Cap
Equity, Cadence Micro Cap Growth, Blairlogie Emerging Markets, and Blairlogie
International Active Funds) of its net assets would be invested in such
deposits, repurchase agreements maturing in more than seven days and other
illiquid assets.
Each Fund limits its investments in United States bank obligations to
obligations of United States banks (including foreign branches) which have more
than $1 billion in total assets at the time of investment and are members of the
Federal Reserve System or are examined by the Comptroller of the Currency or
whose deposits are insured by the Federal Deposit Insurance Corporation. A Fund
also may invest in certificates of deposit of savings and loan associations
(federally or state chartered and federally insured) having total assets in
excess of $1 billion.
The Columbus Circle Investors Core Equity, Columbus Circle Investors Mid
Cap Equity, Blairlogie Emerging Markets, and Blairlogie International Active
Funds limit their investments in foreign bank obligations to United States
dollar or foreign currency-denominated obligations of foreign banks (including
United States branches of foreign banks) which at the time of investment (i)
have more than $10 billion, or the equivalent in other currencies, in total
assets; (ii) in terms of assets are among the 75 largest foreign banks in the
world; (iii) have branches or agencies (limited purpose offices which do not
offer all banking services) in the United States; and (iv) in the opinion of the
Portfolio Managers, are of an investment quality comparable to obligations of
United States banks in which the Funds may invest. Subject to the Trust's
limitation on concentration of no more than 25% of its assets in the securities
of issuers in a particular industry, there is no limitation on the amount of a
Fund's assets which may be invested in obligations of foreign banks which meet
the conditions set forth herein.
10
<PAGE>
Obligations of foreign banks involve somewhat different investment risks
than those affecting obligations of United States banks, including the
possibilities that their liquidity could be impaired because of future political
and economic developments, that their obligations may be less marketable than
comparable obligations of United States banks, that a foreign jurisdiction might
impose withholding taxes on interest income payable on those obligations, that
foreign deposits may be seized or nationalized, that foreign governmental
restrictions such as exchange controls may be adopted which might adversely
affect the payment of principal and interest on those obligations and that the
selection of those obligations may be more difficult because there may be less
publicly available information concerning foreign banks or the accounting,
auditing and financial reporting standards, practices and requirements
applicable to foreign banks may differ from those applicable to United States
banks. Foreign banks are not generally subject to examination by any U.S.
Government agency or instrumentality.
COMMERCIAL PAPER
All Funds may invest in commercial paper. Commercial paper represents
short-term unsecured promissory notes issued in bearer form by banks or bank
holding companies, corporations and finance companies. The commercial paper
purchased by the Funds consists of U.S. dollar-denominated obligations of
domestic issuers, or, additionally for the Columbus Circle Investors Core
Equity, Columbus Circle Investors Mid Cap Equity, Blairlogie Emerging Markets,
and Blairlogie International Active Funds, foreign currency-denominated
obligations of domestic or foreign issuers which, at the time of investment, are
(i) rated "P-1" or "P-2" by Moody's or "A-1" or "A-2" or better by S&P, (ii)
issued or guaranteed as to principal and interest by issuers or guarantors
having an existing debt security rating of "A" or better by Moody's or "A" or
better by S&P, or (iii) securities which, if not rated, are, in the opinion of
the Portfolio Manager, of an investment quality comparable to rated commercial
paper in which the Fund may invest. The rate of return on commercial paper may
be linked or indexed to the level of exchange rates between the U.S. dollar and
a foreign currency or currencies.
DERIVATIVE INSTRUMENTS
Certain Funds may purchase and sell (write) both call options and put
options on securities, securities indexes and foreign currencies, and enter into
futures contracts as further described below. In pursuit of their investment
objectives, the Columbus Circle Investors Core Equity, Columbus Circle Investors
Mid Cap Equity, Blairlogie Emerging Markets, Blairlogie International Active,
and Balanced Funds may engage in the purchase and writing of call and put
options on securities; and may also purchase and sell foreign currency options
for purposes of increasing exposure to a foreign currency or to shift exposure
to foreign currency fluctuations from one country to another. These Funds,
along with the Parametric Enhanced Equity Fund, may engage in the purchase and
writing of options on securities indexes. If other types of financial
instruments, including other types of options, futures contracts, or futures
options are traded in the future, a Fund may also use those instruments,
provided that the Trustees determine that their use is consistent with the
Fund's investment objective, and provided that their use is consistent with
restrictions applicable to options and futures contracts currently eligible for
use by the Trust (i.e., that written call or put options will be "covered" or
"secured," and that futures and futures options will be used only for hedging
purposes).
OPTIONS ON SECURITIES AND INDEXES. A Fund may, as specified for the Fund
in the Prospectus, purchase and sell both put and call options on fixed income
or other securities or indexes in standardized contracts traded on foreign or
domestic securities exchanges, boards of trade, or similar entities, or quoted
on National Association of Securities Dealers Automated Quotations ("NASDAQ") or
on a regulated foreign over-the-counter market, and agreements, sometimes called
cash puts, which may accompany the purchase of a new issue of bonds from a
dealer.
An option on a security (or index) is a contract that gives the holder of
the option, in return for a premium, the right to buy from (in the case of a
call) or sell to (in the case of a put) the writer of the option the security
underlying the option (or the cash value of the index) at a specified exercise
price at
11
<PAGE>
any time during the term of the option. The writer of an option on a
security has the obligation upon exercise of the option to deliver the
underlying security upon payment of the exercise price or to pay the exercise
price upon delivery of the underlying security. Upon exercise, the writer of an
option on an index is obligated to pay the difference between the cash value of
the index and the exercise price multiplied by the specified multiplier for the
index option. (An index is designed to reflect specified facets of a particular
financial or securities market, a specific group of financial instruments or
securities, or certain economic indicators.)
A Fund will write call options and put options only if they are "covered."
In the case of a call option on a security, the option is "covered" if the Fund
owns the security underlying the call or has an absolute and immediate right to
acquire that security without additional cash consideration (or, if additional
cash consideration is required, cash or other liquid assets such as U.S.
Government securities or high grade debt obligations in such amount are placed
in a segregated account by its custodian) upon conversion or exchange of other
securities held by the Fund. For a call option on an index, the option is
covered if the Fund maintains with its custodian liquid assets such as cash,
U.S. Government securities or high grade debt obligations in an amount equal to
the contract value of the index. A call option is also covered if the Fund
holds a call on the same security or index as the call written where the
exercise price of the call held is (i) equal to or less than the exercise price
of the call written, or (ii) greater than the exercise price of the call
written, provided the difference is maintained by the Fund in liquid assets such
as cash, U.S. Government securities or high grade debt obligations in a
segregated account with its custodian. A put option on a security or an index
is "covered" if the Fund maintains liquid assets such as cash, U.S. Government
securities or high grade debt obligations equal to the exercise price in a
segregated account with its custodian. A put option is also covered if the Fund
holds a put on the same security or index as the put written where the exercise
price of the put held is (i) equal to or greater than the exercise price of the
put written, or (ii) less than the exercise price of the put written, provided
the difference is maintained by the Fund in cash or cash equivalents in a
segregated account with its custodian.
If an option written by a Fund expires, the Fund realizes a capital gain
equal to the premium received at the time the option was written. If an option
purchased by a Fund expires unexercised, the Fund realizes a capital loss equal
to the premium paid. Prior to the earlier of exercise or expiration, an option
may be closed out by an offsetting purchase or sale of an option of the same
series (type, exchange, underlying security or index, exercise price, and
expiration). There can be no assurance, however, that a closing purchase or
sale transaction can be effected when the Fund desires.
A Fund will realize a capital gain from a closing purchase transaction if
the cost of the closing option is less than the premium received from writing
the option, or, if it is more, the Fund will realize a capital loss. If the
premium received from a closing sale transaction is more than the premium paid
to purchase the option, the Fund will realize a capital gain or, if it is less,
the Fund will realize a capital loss. The principal factors affecting the market
value of a put or a call option include supply and demand, interest rates, the
current market price of the underlying security or index in relation to the
exercise price of the option, the volatility of the underlying security or
index, and the time remaining until the expiration date.
The premium paid for a put or call option purchased by a Fund is an asset
of the Fund. The premium received for an option written by a Fund is recorded
as a deferred credit. The value of an option purchased or written is marked to
market daily and is valued at the closing price on the exchange on which it is
traded or, if not traded on an exchange or no closing price is available, at the
mean between the last bid and asked prices.
12
<PAGE>
RISKS ASSOCIATED WITH OPTIONS ON SECURITIES AND INDEXES. There are several
risks associated with transactions in options on securities and on indexes. For
example, there are significant differences between the securities and options
markets that could result in an imperfect correlation between these markets,
causing a given transaction not to achieve its objectives. A decision as to
whether, when and how to use options involves the exercise of skill and
judgment, and even a well-conceived transaction may be unsuccessful to some
degree because of market behavior or unexpected events.
There can be no assurance that a liquid market will exist when a Fund seeks
to close out an option position. If a Fund were unable to close out an option
that it had purchased on a security, it would have to exercise the option in
order to realize any profit or the option may expire worthless. If a Fund were
unable to close out a covered call option that it had written on a security, it
would not be able to sell the underlying security unless the option expired
without exercise. As the writer of a covered call option, a Fund forgoes,
during the option's life, the opportunity to profit from increases in the market
value of the security covering the call option above the sum of the premium and
the exercise price of the call.
If trading were suspended in an option purchased by a Fund, the Fund would
not be able to close out the option. If restrictions on exercise were imposed,
the Fund might be unable to exercise an option it has purchased. Except to the
extent that a call option on an index written by the Fund is covered by an
option on the same index purchased by the Fund, movements in the index may
result in a loss to the Fund; however, such losses may be mitigated by changes
in the value of the Fund's securities during the period the option was
outstanding.
FOREIGN CURRENCY OPTIONS. The Columbus Circle Investors Core Equity,
Columbus Circle Investors Mid Cap Equity, Blairlogie Emerging Markets, and
Blairlogie International Active Funds may buy or sell put and call options on
foreign currencies either on exchanges or in the over-the-counter market. A put
option on a foreign currency gives the purchaser of the option the right to sell
a foreign currency at the exercise price until the option expires. A call
option on a foreign currency gives the purchaser of the option the right to
purchase the currency at the exercise price until the option expires. Currency
options traded on U.S. or other exchanges may be subject to position limits
which may limit the ability of a Fund to reduce foreign currency risk using such
options. Over-the-counter options differ from traded options in that they are
two-party contracts with price and other terms negotiated between buyer and
seller, and generally do not have as much market liquidity as exchange-traded
options.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. A Fund may use
interest rate, foreign currency or index futures contracts, as specified for
that Fund in the Prospectus. An interest rate, foreign currency or index
futures contract provides for the future sale by one party and purchase by
another party of a specified quantity of a financial instrument, foreign
currency or the cash value of an index at a specified price and time. A futures
contract on an index is an agreement pursuant to which two parties agree to take
or make delivery of an amount of cash equal to the difference between the value
of the index at the close of the last trading day of the contract and the price
at which the index contract was originally written. Although the value of an
index might be a function of the value of certain specified securities, no
physical delivery of these securities is made. A public market exists in
futures contracts covering a number of indexes as well as financial instruments
and foreign currencies, including: the S&P 500; the S&P Midcap 400; the Nikkei
225; the NYSE composite; U.S. Treasury bonds; U.S. Treasury notes; GNMA
Certificates; three-month U.S. Treasury bills; 90-day commercial paper; bank
certificates of deposit; Eurodollar certificates of deposit; the Australian
dollar; the Canadian dollar; the British pound; the German mark; the Japanese
yen; the French franc; the Swiss franc; the Mexican peso; and certain
multinational currencies, such as the European Currency Unit ("ECU"). It is
expected that other futures contracts will be developed and traded in the
future.
13
<PAGE>
Certain Funds may purchase and write call and put futures options. Futures
options possess many of the same characteristics as options on securities and
indexes (discussed above). A futures option gives the holder the right, in
return for the premium paid, to assume a long position (call) or short position
(put) in a futures contract at a specified exercise price at any time during the
period of the option. Upon exercise of a call option, the holder acquires a
long position in the futures contract and the writer is assigned the opposite
short position. In the case of a put option, the opposite is true.
To comply with applicable rules of the Commodity Futures Trading Commission
("CFTC") under which the Trust and the Funds avoid being deemed a "commodity
pool" or a "commodity pool operator," each Fund intends generally to limit its
use of futures contracts and futures options to "bona fide hedging"
transactions, as such term is defined in applicable regulations, interpretations
and practice. For example, a Fund might use futures contracts to hedge against
anticipated changes in interest rates that might adversely affect either the
value of the Fund's securities or the price of the securities which the Fund
intends to purchase. A Fund's hedging activities may include sales of futures
contracts as an offset against the effect of expected increases in interest
rates, and purchases of futures contracts as an offset against the effect of
expected declines in interest rates. Although other techniques could be used to
reduce that Fund's exposure to interest rate fluctuations, the Fund may be able
to hedge its exposure more effectively and perhaps at a lower cost by using
futures contracts and futures options.
A Fund will only enter into futures contracts and futures options which are
standardized and traded on a U.S. or foreign exchange, board of trade, or
similar entity, or in the case of futures options, for which an established
over-the-counter market exists.
When a purchase or sale of a futures contract is made by a Fund, the Fund
is required to deposit with its custodian (or broker, if legally permitted) a
specified amount of liquid assets, such as cash, U.S. Government securities or
high grade debt obligations ("initial margin"). The margin required for a
futures contract is set by the exchange on which the contract is traded and may
be modified during the term of the contract. Margin requirements on foreign
exchanges may be different than U.S. exchanges. The initial margin is in the
nature of a performance bond or good faith deposit on the futures contract which
is returned to the Fund upon termination of the contract, assuming all
contractual obligations have been satisfied. Each Fund expects to earn interest
income on its initial margin deposits. A futures contract held by a Fund is
valued daily at the official settlement price of the exchange on which it is
traded. Each day the Fund pays or receives cash, called "variation margin,"
equal to the daily change in value of the futures contract. This process is
known as "marking to market." Variation margin does not represent a borrowing
or loan by a Fund but is instead a settlement between the Fund and the broker of
the amount one would owe the other if the futures contract expired. In
computing daily net asset value, each Fund will mark to market its open futures
positions.
A Fund is also required to deposit and maintain margin with respect to put
and call options on futures contracts written by it. Such margin deposits will
vary depending on the nature of the underlying futures contract (and the related
initial margin requirements), the current market value of the option, and other
futures positions held by the Fund.
Although some futures contracts call for making or taking delivery of the
underlying securities, generally these obligations are closed out prior to
delivery by offsetting purchases or sales of matching futures contracts (same
exchange, underlying security or index, and delivery month). If an offsetting
purchase price is less than the original sale price, the Fund realizes a capital
gain, or if it is more, the Fund realizes a capital loss. Conversely, if an
offsetting sale price is more than the original purchase price, the Fund
realizes a capital gain, or if it is less, the Fund realizes a capital loss.
The transaction costs must also be included in these calculations.
14
<PAGE>
LIMITATIONS ON USE OF FUTURES AND FUTURES OPTIONS. In general, the Funds
intend to enter into positions in futures contracts and related options only for
"bona fide hedging" purposes. With respect to positions in futures and related
options that do not constitute bona fide hedging positions, a Fund will not
enter into a futures contract or futures option contract if, immediately
thereafter, the aggregate initial margin deposits relating to such positions
plus premiums paid by it for open futures option positions, less the amount by
which any such options are "in-the-money," would exceed 5% of the Fund's net
assets. A call option is "in-the-money" if the value of the futures contract
that is the subject of the option exceeds the exercise price. A put option is
"in-the-money" if the exercise price exceeds the value of the futures contract
that is the subject of the option.
When purchasing a futures contract, a Fund will maintain with its custodian
(and mark-to-market on a daily basis) liquid assets, such as cash, U.S.
Government securities, or other highly liquid debt securities that, when added
to the amounts deposited with a futures commission merchant as margin, are equal
to the market value of the futures contract. Alternatively, the Fund may
"cover" its position by purchasing a put option on the same futures contract
with a strike price as high or higher than the price of the contract held by the
Fund.
When selling a futures contract, a Fund will maintain with its custodian
(and mark-to-market on a daily basis) liquid assets, such as cash, U.S.
Government securities or high grade debt obligations that are equal to the
market value of the instruments underlying the contract. Alternatively, the
Fund may "cover" its position by owning the instruments underlying the contract
(or, in the case of an index futures contract, a portfolio with a volatility
substantially similar to that of the index on which the futures contract is
based), or by holding a call option permitting the Fund to purchase the same
futures contract at a price no higher than the price of the contract written by
the Fund (or at a higher price if the difference is maintained in liquid assets
with the Trust's custodian).
When selling a call option on a futures contract, a Fund will maintain with
its custodian (and mark-to-market on a daily basis) liquid assets, such as cash,
U.S. Government securities, or other highly liquid debt securities that, when
added to the amounts deposited with a futures commission merchant as margin,
equal the total market value of the futures contract underlying the call option.
Alternatively, the Fund may cover its position by entering into a long position
in the same futures contract at a price no higher than the strike price of the
call option, by owning the instruments underlying the futures contract, or by
holding a separate call option permitting the Fund to purchase the same futures
contract at a price not higher than the strike price of the call option sold by
the Fund.
When selling a put option on a futures contract, a Fund will maintain with
its custodian (and mark-to-market on a daily basis) cash, U.S. Government
securities, or other highly liquid debt securities that equal the purchase price
of the futures contract, less any margin on deposit. Alternatively, the Fund
may cover the position either by entering into a short position in the same
futures contract, or by owning a separate put option permitting it to sell the
same futures contract so long as the strike price of the purchased put option is
the same or higher than the strike price of the put option sold by the Fund.
The requirements for qualification as a regulated investment company also
may limit the extent to which a Fund may enter into futures, futures options or
forward contracts. See "Taxation".
RISKS ASSOCIATED WITH FUTURES AND FUTURES OPTIONS. There are several risks
associated with the use of futures contracts and futures options as hedging
techniques. A purchase or sale of a futures contract may result in losses in
excess of the amount invested in the futures contract. There can be no
guarantee that there will be a correlation between price movements in the
hedging vehicle and in the Fund securities being hedged. In addition, there are
significant differences between the securities and futures markets that could
result in an imperfect correlation between the markets, causing a given hedge
not to achieve its objectives. The degree of imperfection of correlation
depends on circumstances such as variations in speculative market demand for
futures and futures options on securities, including technical influences in
futures trading and futures options, and differences between the financial
instruments being
15
<PAGE>
hedged and the instruments underlying the standard contracts available for
trading in such respects as interest rate levels, maturities, and
creditworthiness of issuers. A decision as to whether, when and how to hedge
involves the exercise of skill and judgment, and even a well-conceived hedge may
be unsuccessful to some degree because of market behavior or unexpected interest
rate trends.
Futures exchanges may limit the amount of fluctuation permitted in certain
futures contract prices during a single trading day. The daily limit
establishes the maximum amount that the price of a futures contract may vary
either up or down from the previous day's settlement price at the end of the
current trading session. Once the daily limit has been reached in a futures
contract subject to the limit, no more trades may be made on that day at a price
beyond that limit. The daily limit governs only price movements during a
particular trading day and therefore does not limit potential losses because the
limit may work to prevent the liquidation of unfavorable positions. For
example, futures prices have occasionally moved to the daily limit for several
consecutive trading days with little or no trading, thereby preventing prompt
liquidation of positions and subjecting some holders of futures contracts to
substantial losses.
There can be no assurance that a liquid market will exist at a time when a
Fund seeks to close out a futures or a futures option position, and that Fund
would remain obligated to meet margin requirements until the position is closed.
In addition, many of the contracts discussed above are relatively new
instruments without a significant trading history. As a result, there can be no
assurance that an active secondary market will develop or continue to exist.
ADDITIONAL RISKS OF OPTIONS ON SECURITIES, FUTURES CONTRACTS, OPTIONS ON
FUTURES CONTRACTS, AND FORWARD CURRENCY EXCHANGE CONTRACTS AND OPTIONS THEREON.
Options on securities, futures contracts, options on futures contracts, and
options on currencies may be traded on foreign exchanges. Such transactions may
not be regulated as effectively as similar transactions in the United States;
may not involve a clearing mechanism and related guarantees, and are subject to
the risk of governmental actions affecting trading in, or the prices of, foreign
securities. The value of such positions also could be adversely affected by (i)
other complex foreign political, legal and economic factors, (ii) lesser
availability than in the United States of data on which to make trading
decisions, (iii) delays in the Trust's ability to act upon economic events
occurring in foreign markets during non-business hours in the United States,
(iv) the imposition of different exercise and settlement terms and procedures
and margin requirements than in the United States, and (v) lesser trading
volume.
SWAP AGREEMENTS. The Blairlogie Emerging Markets and Blairlogie
International Active Funds may enter into equity index swap agreements for
purposes of attempting to gain exposure to the stocks making up an index of
securities in a foreign market without actually purchasing those stocks. Swap
agreements are two party contracts entered into primarily by institutional
investors for periods ranging from a few weeks to more than one year. In a
standard "swap" transaction, two parties agree to exchange the returns (or
differentials in rates of return) earned or realized on particular predetermined
investments or instruments. The gross returns to be exchanged or "swapped"
between the parties are calculated with respect to a "notional amount," i.e.,
the return on or increase in value of a particular dollar amount invested in a
"basket" of securities representing a particular index.
Most swap agreements entered into by the Funds would calculate the
obligations of the parties to the agreement on a "net basis." Consequently, a
Fund's current obligations (or rights) under a swap agreement will generally be
equal only to the net amount to be paid or received under the agreement based on
the relative values of the positions held by each party to the agreement (the
"net amount"). A Fund's current obligations under a swap agreement will be
accrued daily (offset against any amounts owing to the Fund) and any accrued but
unpaid net amounts owed to a swap counterparty will be covered by the
maintenance of a segregated account consisting of liquid assets such as cash,
U.S. Government securities, or high grade debt obligations, to avoid any
potential leveraging of the Fund's portfolio. Obligations under swap agreements
so covered will not be construed to be "senior securities" for purposes of the
Funds' investment restriction concerning senior securities. A Fund will not
enter into a swap agreement with any single party if the net amount owed or to
be received under existing contracts with that party would exceed 5% of the
Fund's assets.
16
<PAGE>
Whether a Fund's use of swap agreements will be successful in furthering
its investment objective will depend on the Portfolio Manager's ability to
predict correctly whether certain types of investments are likely to produce
greater returns than other investments. Because they are two party contracts and
because they may have terms of greater than seven days, swap agreements may be
considered to be illiquid. Moreover, a Fund bears the risk of loss of the amount
expected to be received under a swap agreement in the event of the default or
bankruptcy of a swap agreement counterparty. The Funds will enter into swap
agreements only with counterparties that meet certain standards of
creditworthiness (generally, such counterparties would have to be eligible
counterparties under the terms of the Funds' repurchase agreement guidelines).
Certain restrictions imposed on the Funds by the Internal Revenue Code may limit
the Funds' ability to use swap agreements. The swaps market is a relatively new
market and is largely unregulated. It is possible that developments in the swaps
market, including potential government regulation, could adversely affect a
Fund's ability to terminate existing swap agreements or to realize amounts to be
received under such agreements.
Certain swap agreements are exempt from most provisions of the Commodity
Exchange Act ("CEA") and, therefore, are not regulated as futures or commodity
option transactions under the CEA, pursuant to regulations approved by the CFTC
effective February 22, 1993. To qualify for this exemption, a swap agreement
must be entered into by "eligible participants," which includes the following,
provided the participants' total assets exceed established levels: a bank or
trust company, savings association or credit union, insurance company,
investment company subject to regulation under the 1940 Act, commodity pool,
corporation, partnership, proprietorship, organization, trust or other entity,
employee benefit plan, governmental entity, broker-dealer, futures commission
merchant, natural person, or regulated foreign person. To be eligible, natural
persons and most other entities must have total assets exceeding $10 million;
commodity pools and employee benefit plans must have assets exceeding $5
million. In addition, an eligible swap transaction must meet three conditions.
First, the swap agreement may not be part of a fungible class of agreements that
are standardized as to their material economic terms. Second, the
creditworthiness of parties with actual or potential obligations under the swap
agreement must be a material consideration in entering into or determining the
terms of the swap agreement, including pricing, cost or credit enhancement
terms. Third, swap agreements may not be entered into and traded on or through
a multilateral transaction execution facility.
This exemption is not exclusive, and participants may continue to rely on
existing exclusions for swaps, such as the Policy Statement issued in July 1989
which recognized a safe harbor for swap transactions from regulation as futures
or commodity option transactions under the CEA or its regulations. The Policy
Statement applies to swap transactions settled in cash that (1) have
individually tailored terms, (2) lack exchange-style offset and the use of a
clearing organization or margin system, (3) are undertaken in conjunction with a
line of business, and (4) are not marketed to the public.
DELAYED DELIVERY TRANSACTIONS
A Fund may purchase or sell securities on a when-issued or delayed delivery
basis. These transactions involve a commitment by the Fund to purchase or sell
securities for a predetermined price or yield, with payment and delivery taking
place more than seven days in the future, or after a period longer than the
customary settlement period for that type of security. When delayed delivery
purchases are outstanding, the Fund will set aside and maintain until the
settlement date in a segregated account, liquid assets, such as cash, U.S.
Government securities or high grade debt obligations in an amount sufficient to
meet the purchase price. Typically, no income accrues on securities purchased
on a delayed delivery basis prior to the time delivery of the securities is
made, although a Fund may earn income on securities it has deposited in a
segregated account. When purchasing a security on a delayed delivery basis, the
Fund assumes the rights and risks of ownership of the security, including the
risk of price and yield fluctuations, and takes such fluctuations into account
when determining its net asset value. Because the Fund is not required to pay
for the security until the delivery date, these risks are in addition to the
risks associated with the Fund's other investments. If the Fund remains
substantially fully invested at a time when delayed delivery purchases are
outstanding, the delayed delivery purchases may result in a form of leverage,
17
<PAGE>
although a Fund will not enter into such a transaction for the purpose of
investment leverage. When the Fund has sold a security on a delayed delivery
basis, the Fund does not participate in future gains or losses with respect to
the security. If the other party to a delayed delivery transaction fails to
deliver or pay for the securities, the Fund could miss a favorable price or
yield opportunity or could suffer a loss. A Fund may dispose of or renegotiate
a delayed delivery transaction after it is entered into, and may sell when-
issued securities before they are delivered, which may result in a capital gain
or loss. There is no percentage limitation on the extent to which the Funds may
purchase or sell securities on a delayed delivery basis.
WARRANTS TO PURCHASE SECURITIES
All Funds may invest in warrants to purchase equity or fixed income
securities. Bonds with warrants attached to purchase equity securities have
many characteristics of convertible bonds and their prices may, to some degree,
reflect the performance of the underlying stock. Bonds also may be issued with
warrants attached to purchase additional fixed income securities at the same
coupon rate. A decline in interest rates would permit a Fund to buy additional
bonds at the favorable rate or to sell the warrants at a profit. If interest
rates rise, the warrants would generally expire with no value.
A Fund will not invest more than 5% of its net assets, valued at the lower
of cost or market, in warrants to purchase securities. Included within that
amount, but not to exceed 2% of the Fund's net assets, may be warrants that are
not listed on the New York or American Stock Exchanges. Warrants acquired in
units or attached to securities will be deemed to be without value for purposes
of this restriction.
ILLIQUID SECURITIES
The NFJ Equity Income, NFJ Diversified Low P/E, NFJ Small Cap Value,
Cadence Capital Appreciation, Cadence Mid Cap Growth, Cadence Small Cap Growth,
Parametric Enhanced Equity, and Balanced Funds may invest in securities that are
illiquid, but will not acquire such securities if they would compose more than
10% of the value of a Fund's net assets (taken at market value at the time of
investment), and will not invest in securities that are illiquid because they
are subject to legal or contractual restrictions on resale if such securities
would compose more than 5% of the value of the Fund's net assets (taken at
market value at the time of investment). The Columbus Circle Investors Core
Equity, Columbus Circle Investors Mid Cap Equity, Cadence Micro Cap Growth,
Blairlogie Emerging Markets, and Blairlogie International Active Funds may
invest in securities that are illiquid so long as no more than 15% of the net
assets of the Fund (taken at market value at the time of investment), would be
invested in such securities.
The term "illiquid securities" for this purpose means securities that
cannot be disposed of within seven days in the ordinary course of business at
approximately the amount at which a Fund has valued the securities. Illiquid
securities are considered to include, among other things, written over-the-
counter options, securities or other liquid assets being used as cover for such
options, repurchase agreements with maturities in excess of seven days, certain
loan participation interests, fixed time deposits which are not subject to
prepayment or provide for withdrawal penalties upon prepayment (other than
overnight deposits), securities that are subject to legal or contractual
restrictions on resale (such as privately placed debt securities), and other
securities whose disposition is restricted under the federal securities laws
(other than securities issued pursuant to Rule 144A under the 1933 Act and
certain commercial paper that the Adviser or a Portfolio Manager has determined
to be liquid under procedures approved by the Board of Trustees).
18
<PAGE>
INVESTMENT RESTRICTIONS
Each Fund's investment objective as set forth in the Prospectus under
"Investment Objectives and Policies," together with the investment restrictions
set forth below, are fundamental policies of the Fund and may not be changed
with respect to a Fund without shareholder approval by vote of a majority of the
outstanding shares of that Fund. Under these restrictions, a Fund may not:
(1) invest in a security if, as a result of such investment, more than
25% of its total assets (taken at market value at the time of such
investment) would be invested in the securities of issuers in any particular
industry, except that this restriction does not apply to securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities (or
repurchase agreements with respect thereto);
(2) with respect to 75% of its assets, invest in a security if, as a
result of such investment, more than 5% of its total assets (taken at market
value at the time of such investment) would be invested in the securities of
any one issuer, except that this restriction does not apply to securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities;
(3) with respect to 75% of its assets, invest in a security if, as a
result of such investment, it would hold more than 10% (taken at the time of
such investment) of the outstanding voting securities of any one issuer,
except that this restriction does not apply to securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities;
(4) purchase or sell real estate, although it may purchase securities
secured by real estate or interests therein, or securities issued by
companies in the real estate industry or which invest in real estate or
interests therein;
(5) purchase or sell commodities or commodities contracts (which, for
the purpose of this restriction, shall not include foreign currency or
forward foreign currency contracts), except that any Fund may engage in
interest rate futures contracts, stock index futures contracts, futures
contracts based on other financial instruments or one or more groups of
instruments, and on options on such futures contracts;
(6) purchase securities on margin, except for use of short-term credit
necessary for clearance of purchases and sales of portfolio securities, but
it may make margin deposits in connection with transactions in options,
futures, and options on futures, and except that effecting short sales will
be deemed not to constitute a margin purchase for purposes of this
restriction;
(7) borrow money, or pledge, mortgage or hypothecate its assets, except
that a Fund may (i) borrow from banks or enter into reverse repurchase
agreements, or employ similar investment techniques, and pledge its assets in
connection therewith, but only if immediately after each borrowing and
continuing thereafter, there is asset coverage of 300% and (ii) enter into
reverse repurchase agreements and transactions in options, futures, options
on futures, and forward foreign currency contracts as described in the
Prospectus and in this Statement of Additional Information (the deposit of
assets in escrow in connection with the writing of covered put and call
options and the purchase of securities on a when-issued or delayed delivery
basis and collateral arrangements with respect to initial or variation margin
deposits for futures contracts, options on futures contracts, and forward
foreign currency contracts will not be deemed to be pledges of a Fund's
assets);
19
<PAGE>
(8) issue senior securities, except insofar as a Fund may be deemed to
have issued a senior security by reason of borrowing money in accordance with
the Fund's borrowing policies, and except for purposes of this investment
restriction, collateral, escrow, or margin or other deposits with respect to
the making of short sales, the purchase or sale of futures contracts or
related options, purchase or sale of forward foreign currency contracts, and
the writing of options on securities are not deemed to be an issuance of a
senior security;
(9) lend any funds or other assets, except that a Fund may, consistent
with its investment objective and policies: (a) invest in debt obligations,
including bonds, debentures, or other debt securities, bankers' acceptances
and commercial paper, even though the purchase of such obligations may be
deemed to be the making of loans, (b) enter into repurchase agreements and
reverse repurchase agreements, and (c) lend its portfolio securities in an
amount not to exceed one-third of the value of its total assets, provided
such loans are made in accordance with applicable guidelines established by
the Securities and Exchange Commission ("SEC") and the Trustees of the Trust;
or
(10) act as an underwriter of securities of other issuers, except to the
extent that in connection with the disposition of portfolio securities, it
may be deemed to be an underwriter under the federal securities laws.
Each Fund is also subject to the following non-fundamental restrictions
and policies (which may be changed without shareholder approval) relating to
the investment of its assets and activities. Unless otherwise indicated, a
Fund may not:
(A) invest for the purpose of exercising control or management;
(B) invest in securities of another open-end investment company;
(C) (a) for the NFJ Equity Income, NFJ Diversified Low P/E, NFJ Small
Cap Value, Cadence Capital Appreciation, Cadence Mid Cap Growth, Cadence
Small Cap Growth, Parametric Enhanced Equity, and Balanced Funds: invest
more than 10% of the net assets of a Fund (taken at market value at the time
of the investment) in "illiquid securities," illiquid securities being
defined to include repurchase agreements maturing in more than seven days,
certain loan participation interests, fixed time deposits which are not
subject to prepayment or provide withdrawal penalities upon prepayment (other
than overnight deposits), or other securities which legally or in the
Adviser's or Portfolio Manager's opinion may be deemed illiquid (other than
securities issued pursuant to Rule 144A under the 1933 Act and certain
commercial paper that the Adviser or Portfolio Manager has determined to be
liquid under procedures approved by the Board of Trustees); nor invest more
than 5% of the net assets of a Fund in securities that are illiquid because
they are subject to legal or contractual restrictions on resale;
(b) for the Columbus Circle Investors Core Equity, Columbus Circle
Investors Mid Cap Equity, Cadence Micro Cap Growth, Blairlogie Emerging
Markets, and Blairlogie International Active Funds: invest more than 15% of
the net assets of a Fund (taken at market value at the time of the
investment) in securities that are illiquid because they are subject to legal
or contractual restrictions on resale, in repurchase agreements maturing in
more than seven days, or other securities which are illiquid;
(D) purchase any security if, as a result, the Fund will then have more
than 5% of its total assets invested in securities of companies (including
predecessor companies) that have been in continuous operation for less than
three years;
20
<PAGE>
(E) purchase or retain securities of any issuer if, to the knowledge of
the Fund, any of the Fund's officers or Trustees, or any officer or Director
of PIMCO Advisors or the Portfolio Manager of the Fund, individually owns
more than one-half of 1% of the outstanding securities of the issuer and
together own beneficially more than 5% of such issuer's securities;
(F) purchase securities for the Fund from, or sell portfolio securities
to, any of the officers and Directors or Trustees of the Trust or the
Adviser;
(G) invest in a security if, with respect to 100% of the total assets,
the Fund would own more than 10% (taken at the time of such investment) of
the outstanding voting securities of any one issuer, except that this
restriction does not apply to securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities;
(H) invest more than 5% of the assets of a Fund (taken at market value
at the time of investment) in any combination of interest only, principal
only, or inverse floating rate securities;
(I) borrow money (excluding reverse repurchase agreements which are
subject to the Fund's fundamental borrowing restriction), except for
temporary administrative purposes;
(J) sell securities or property short, except short sales against the
box;
(K) purchase, write, or sell puts, calls, straddles, spreads, or
combinations thereof, except that this restriction does not apply to puts
that are a feature of floating rate securities or to puts that are a feature
of other corporate debt securities, and except that any Fund may engage in
options on securities, options on securities indexes, options on foreign
currencies, options on futures contracts, and options on other financial
instruments or one or more groups of instruments;
(L) invest in warrants (other than warrants acquired by the Fund as
part of a unit or attached to securities at the time of purchase) if as a
result, the investment in warrants (valued to the lower of cost or market)
would exceed 5% of the value of the Fund's net assets, of which not more than
2% of the Fund's net assets may be invested in warrants not listed on a
recognized U.S. or foreign stock exchange;
(M) invest in securities sold in foreign over-the-counter markets
unless the foreign dealers effecting such transactions have a minimum net
worth of $20 million; or
(N) invest in oil, gas or other mineral exploration or development
programs (including oil, gas, or other mineral leases), except that a Fund
may invest in the securities of companies that invest in or sponsor those
programs.
For purposes of fundamental investment restriction (5), swap agreements are
not deemed to be commodities contracts. Unless otherwise indicated, all
limitations applicable to Fund investments apply only at the time a transaction
is entered into. Any subsequent change in a rating assigned by any rating
service to a security (or, if unrated, deemed to be of comparable quality), or
change in the percentage of Fund assets invested in certain securities or other
instruments resulting from market fluctuations or other changes in a Fund's
total assets will not require a Fund to dispose of an investment until the
Adviser or Portfolio Manager determines that it is practicable to sell or close
out the investment without undue market or tax consequences to the Fund. In the
event that ratings services assign different ratings to the same security, the
Adviser or Portfolio Manager will determine which rating it believes best
reflects the security's quality and risk at that time, which may be the higher
of the several assigned ratings.
Under the 1940 Act, a "senior security" does not include any promissory
note or evidence of indebtedness where such loan is for temporary purposes only
and in an amount not exceeding 5% of the value of the total assets of the
issuer at the time the loan is made. A loan is presumed to be for temporary
purposes if it is repaid within sixty days and is not extended or renewed.
Nothwithstanding the provisions of fundamental investment restrictions (7) and
(8) above, a Fund may borrow money for temporary administrative purposes. To the
extent that borrowings for temporary administrative purposes exceed 5% of the
total assets of a Fund, such excess shall be subject to the 300% asset coverage
requirement of fundamental investment restriction (7).
21
<PAGE>
MANAGEMENT OF THE TRUST
TRUSTEES AND OFFICERS
The Trustees and Executive Officers of the Trust, their business address
and principal occupations during the past five years are as follows (unless
otherwise indicated, the address of all persons below is 840 Newport Center
Drive, Suite 360, Newport Beach, California 92660):
<TABLE>
<CAPTION>
NAME, ADDRESS POSITION WITH PRINCIPAL OCCUPATION(S)
AND AGE THE TRUST DURING THE PAST FIVE YEARS
- --------------------------------------------------------------------------------
<S> <C> <C>
William D. Cvengros* Chairman of the Chief Executive Officer
800 Newport Center Drive Board, President President, and member of
Newport Beach, CA 92660 and Trustee the Operating Board,
Age 47 Operating Committee,
and Equity Board,
PIMCO Advisors; formerly
Director, Furon Company;
formerly Director,
President, and Chief
Executive Officer, Pacific
Financial Asset Management
Corporation ("PFAMCo");
formerly Chairman of the
Board and Director,
Pacific Investment
Management Company
("PIMCO"), Parametric
Portfolio Associates,
Inc., and Cadence Capital
Management Corporation;
formerly Director,
Blairlogie Capital
Management Limited and
PFAMCo U.K. Limited;
formerly Director, Vice
Chairman, and Chief
Executive Officer, Pacific
Mutual Life Insurance
Company; formerly
Director, President, and
Chief Executive Officer,
PMRealty Advisors, Inc.;
formerly Director, Mutual
Service Corporation,
Pacific Equities Network
and Pacific Corinthian
Life Insurance Company.
Richard L. Nelson Trustee President, Nelson
8 Cherry Hills Lane Financial Consultants;
Newport Beach, CA 92660 retired Partner with Ernst
Age 66 & Young.
Lyman W. Porter Trustee Professor of Management at
2639 Bamboo Street the University of
Newport Beach, CA 92660 California, Irvine.
Age 65
Alan Richards Trustee Consultant; formerly
P.O. Box 675760 President, Chief Executive
15401 Pimlico Corte Officer and Director, E.F.
Rancho Santa Fe, CA Hutton Insurance Group
92067 Inc.; Chairman of the
Age 65 Board, Chief Executive
Officer and President,
E.F. Hutton Life Insurance
Company; Director, E.F.
Hutton & Company, Inc.
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
NAME, ADDRESS POSITION WITH PRINCIPAL OCCUPATION(S)
AND AGE THE TRUST DURING THE PAST FIVE YEARS
- ---------------------------------------------------------------------------------
<S> <C> <C>
Michele Mitchell Sr. Vice President Sr. Vice President, PIMCO
800 Newport Center Drive Advisors Institutional
Newport Beach, CA 92660 Services; Vice President,
PIMCO Advisors; formerly
Age 50 Sr. Vice President, PFAMCo.
Sharon A. Cheever Vice President and Vice President and
700 Newport Center Drive General Counsel Investment Counsel,
Newport Beach, CA 92660 Pacific Mutual Life
Age 40 Insurance Company
("Pacific Mutual");
formerly Assistant Vice
President and Associate
Counsel of Pacific Mutual.
Teresa A. Wagner Vice President Vice President and Manager
Age 33 of Fund Administration,
PIMCO; Vice President,
PIMCO Funds and PIMCO
Commercial Mortgage
Securities Trust, Inc;
formerly Vice President,
PIMCO Advisors
Institutional Services;
formerly Finance Director,
PFAMCo.
R. Wesley Burns Vice President Vice President, PIMCO;
Age 36 President, PIMCO Funds and
PIMCO Commercial Morgtage
Securities Trust, Inc.
John P. Hardaway Vice President Vice President and Manager
Age 38 of Fund Operations, PIMCO;
Treasurer, PIMCO Funds and
PIMCO Commercial Mortgage
Securities Trust, Inc.
Jeffrey M. Sargent Vice President Vice President and
Age 33 Manager of Fund
Shareholder Servicing,
PIMCO; Vice President,
PIMCO Funds and
PIMCO Commercial Mortgage
Securities Trust, Inc.
R. Mark Brandenberger Treasurer Project Lead, PIMCO;
Age 29 formerly Finance Manager,
PIMCO Advisors
Institutional Services;
formerly Financial
Analyst, PFAMCo; prior to
July, 1993, Senior
Accountant, Deloitte &
Touche.
Garlin G. Flynn Secretary Sr. Fund Administrator,
Age 49 PIMCO; Secretary, PIMCO
Funds and PIMCO Commercial
Mortgage Securities Trust,
Inc.; formerly Senior
Mutual Fund Analyst, PIMCO
Advisors Institutional
Services; formerly Senior
Mutual Fund Analyst,
PFAMCo.
</TABLE>
* Mr. Cvengros is an "interested person" of the Trust (as that term is defined
in the 1940 Act) because of his affiliations with PIMCO Advisors.
23
<PAGE>
COMPENSATION TABLE
The following table sets forth information regarding compensation received
by the Trustees for the fiscal year ended October 31, 1995:
<TABLE>
<CAPTION>
PENSION OR TOTAL
RETIREMENT COMPENSATION
BENEFITS ESTIMATED FROM TRUST
ACCRUED ANNUAL AND FUND
AGGREGATE AS PART BENEFITS COMPLEX
COMPENSATION OF TRUST UPON PAID TO
NAME AND POSITION FROM TRUST/1/ EXPENSES RETIREMENT TRUSTEES
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
William D. Cvengros 0 0 0 0
Chairman, President
and Trustee
Richard L. Nelson $15,500 0 0 $15,500
Trustee
Lyman W. Porter $14,500 0 0 $14,500
Trustee
Alan Richards $15,250 0 0 $15,250
Trustee
</TABLE>
/1/ Trustees other than those affiliated with the Adviser, a Portfolio Manager,
or Pacific Mutual, receive an annual retainer of $10,000, plus $1,000 for
each Board of Trustees meeting attended, and $1,000 for each Audit,
Nominating or Policy Committee meeting attended, plus reimbursement of
related expenses. The Chairmen of the Audit and Policy Committees receive
an additional annual retainer of $1,000.
INVESTMENT ADVISER
PIMCO Advisors serves as investment adviser to the Funds pursuant to an
investment advisory agreement ("Advisory Agreement") between PIMCO Advisors and
the Trust. A majority interest of PIMCO Advisors is held by PIMCO Partners,
G.P., a general partnership between PIMCO, a California corporation and indirect
wholly owned subsidiary of Pacific Mutual, and PIMCO Partners, LLC ("PIMCO
Partners"), a limited liability company controlled by the PIMCO Managing
Directors. William H. Gross, a Managing Director of PIMCO, holds approximately
41.9% of the ownership interests in PIMCO Partners (representing an indirect
economic interest in approximately 15.6% of the partnership units of PIMCO
Advisors owned by PIMCO Partners, G.P., or approximately 12.5% of the
outstanding partnership units of PIMCO Advisors). PIMCO Advisors had
approximately $95.2 billion of assets under management as of December 31,
1995.
PIMCO Advisors, subject to the supervision of the Board of Trustees, is
responsible for providing advice and guidance with respect to the Funds and for
managing, either directly or through others selected by the Adviser, the
investment of the Funds. PIMCO Advisors also furnishes to the Board of Trustees
periodic reports on the investment performance of each Fund. For all of the
Funds, PIMCO Advisors has engaged its affiliates to serve as Portfolio Managers.
24
<PAGE>
Under the terms of the Advisory Agreement, PIMCO Advisors is obligated to
manage the Funds in accordance with applicable laws and regulations. The
investment advisory services of PIMCO Advisors to the Trust are not exclusive
under the terms of the Advisory Agreement. PIMCO Advisors is free to, and does,
render investment advisory services to others. The current Advisory Agreement
was approved by the Board of Trustees, including a majority of the Trustees who
are not "interested persons" of the Trust (as defined in the 1940 Act)
("Independent Trustees") and who have no direct or indirect financial interest
in the Advisory Agreement or a party thereto, at a meeting held on August 12,
1994, and was last approved by shareholders of the NFJ Equity Income, NFJ
Diversified Low P/E, NFJ Small Cap Value, Cadence Capital Appreciation, Cadence
Mid Cap Growth, Cadence Micro Cap Growth, Cadence Small Cap Growth, Parametric
Enhanced Equity, Blairlogie Emerging Markets, Blairlogie International Active,
and Balanced Funds at a meeting of shareholders on October 26, 1994, and by the
sole shareholder of the Columbus Circle Investors Core Equity and Columbus
Circle Investors Mid Cap Equity Funds at a meeting on December 28, 1994.
The Advisory Agreement will continue in effect until November 15, 1996, and
thereafter on a yearly basis, provided such continuance is approved annually (i)
by the holders of a majority of the outstanding voting securities of the Trust
or by the Board of Trustees and (ii) by a majority of the Independent Trustees.
The Advisory Agreement may be terminated without penalty by vote of the Trustees
or the shareholders of the Trust, or by the Adviser, on 60 days' written notice
by either party to the contract and will terminate automatically if assigned.
PIMCO Advisors succeeded to the investment advisory and other businesses of
PFAMCo, the Trust's former investment adviser and administrator, as a result of
the consolidation of the investment advisory and other businesses of PFAMCo and
its subsidiaries with Thomson Advisory Group L.P. ("TAG"), the former name for
PIMCO Advisors, which closed on November 15, 1994 (the "Consolidation"). Prior
to the Consolidation, and since the inception of each of the Funds, PFAMCo had
served as investment adviser to the Funds, pursuant to an advisory agreement,
last approved by the Trustees on October 29, 1993, and last approved by
shareholders of the then-operational Funds on April 30, 1992 (the "Prior
Advisory Agreement"). The terms and conditions of the Advisory Agreement are
identical in all material respects to the Prior Advisory Agreement, with the
exception of the identity of the service provider and its effective date and
termination date.
The Adviser currently receives a monthly investment advisory fee from each
Fund at an annual rate based on average daily net assets of the Funds as
follows:
<TABLE>
<CAPTION>
ADVISORY
FUND FEE RATE
- ---- --------
<S> <C>
NJF Equity Income, NFJ Diversified Low P/E, Cadence Capital Appreciation,
Cadence Mid Cap Growth, Parametric Enhanced Equity, and Balanced Funds
.45% Columbus Circle Investors Core Equity Fund.............................. .57%
NFJ Small Cap Value and Blairlogie International Active Funds................ .60%
Columbus Circle Investors Mid Cap Equity Fund................................ .63%
Blairlogie Emerging Markets Fund............................................. .85%
Cadence Small Cap Growth Fund................................................ 1.00%
Cadence Micro Cap Growth Fund................................................ 1.25%
</TABLE>
25
<PAGE>
For the fiscal years ended October 31, 1995, 1994, and 1993, the
aggregate amount of the advisory fees paid by each operational Fund was as
follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
FUND 10/31/95 10/31/94 10/31/93
- ---- ---------- ---------- ----------
<S> <C> <C> <C>
NFJ Equity Income Fund $ 445,739 $ 368,971 $ 226,729
NFJ Diversified Low P/E Fund 60,686 85,078 93,761
NFJ Small Cap Value Fund 203,158 214,936 177,018
Cadence Capital Appreciation Fund 881,358 595,724 261,697
Cadence Mid Cap Growth Fund 650,017 453,846 223,366
Cadence Micro Cap Growth Fund 609,540 251,431 31,207
Cadence Small Cap Growth Fund 594,905 456,981 402,219
Columbus Circle Investors Core Equity 73,930 N/A N/A
Fund*
Columbus Circle Investors Mid Cap Equity
Fund* 26,276 N/A N/A
Parametric Enhanced Equity Fund 319,036 267,252 190,730
Blairlogie Emerging Markets Fund 638,097 319,725 41,319
Blairlogie International Active Fund 282,055 84,712 18,020
Balanced Fund 417,190 597,672 505,311
</TABLE>
*These Funds had not commenced operations as of the indicated date.
PORTFOLIO MANAGEMENT AGREEMENTS
PIMCO Advisors employs certain of its affiliates as Portfolio Managers
for all of the Funds to provide investment advisory services to the Funds under
portfolio management agreements. PIMCO Advisors currently has six subsidiary
partnerships called PIMCO, Parametric Portfolio Associates ("Parametric"),
Cadence Capital Management ("Cadence"), NFJ Investment Group ("NFJ"), Columbus
Circle Investors ("Columbus Circle"), and Blairlogie Capital Management
("Blairlogie").
Pursuant to a portfolio management agreement between the Adviser and
PIMCO, PIMCO is the Portfolio Manager and provides investment advice and makes
and implements investment decisions with respect to the portion of the assets of
the Balanced Fund allocated by the Adviser for investment in fixed income
securities. For the services provided, PIMCO Advisors (not the Trust) pays PIMCO
a fee at an annual rate of .25% of the average daily net assets of the portion
of the Balanced Fund allocated to PIMCO for investment in fixed income
securities.
PIMCO is an investment management firm organized as a general
partnership. PIMCO is the successor investment adviser to Pacific Investment
Management Company, a wholly owned subsidiary of PFAMCo. PIMCO has two partners:
PIMCO Advisors as the supervisory partner, and PIMCO Management, Inc. as the
managing partner. Pacific Investment Management Company, the predecessor
investment adviser to PIMCO, commenced operations in 1971. PIMCO is located at
840 Newport Center Drive, Suite 360, Newport Beach, California 92660. PIMCO also
provides investment advisory services to the PIMCO Funds, Harbor Fund, various
funds advised by Frank Russell Investment Management Company, Total Return Bond
Portfolio and Intermediate Term Bond Portfolio of Prudential Securities Target
Portfolio Trust, PIMCO Commercial Mortgage Securities Trust, Inc., Total Return
Bond and Limited Maturity Bond Portfolios of American Skandia Trust, Total
Return Fund of Fremont Mutual Fund, Inc., Managed Bond and Government Securities
Series of Pacific Select Fund, and the PaineWebber Short-Term U.S. Government
Income Fund, a series of PaineWebber Managed Investments Trust, all of which are
open-end management investment companies, as well as to managed accounts
consisting of proceeds from pension and profit sharing plans. PIMCO had
approximately $76.4 billion of assets under management as of December 31,
1995.
26
<PAGE>
Pursuant to a portfolio management agreement between the Adviser and
Parametric, Parametric is the Portfolio Manager and provides investment advisory
services to the Parametric Enhanced Equity Fund and the portion of the Balanced
Fund allocated by the Adviser for investment in common stock. For the services
provided, PIMCO Advisors (not the Trust) pays Parametric a fee at an annual rate
based on a percentage of the average daily net assets of each of the Funds as
follows: .45% for the Parametric Enhanced Equity Fund and .45% for the portion
of the Balanced Fund allocated to Parametric for investment in common stock.
Parametric is an investment management firm organized as a general
partnership. Parametric is the successor investment adviser to Parametric
Portfolio Associates, Inc., a wholly owned corporate subsidiary of PFAMCo.
Parametric has two partners: PIMCO Advisors as the supervisory partner, and
Parametric Management, Inc. as the managing partner. Parametric Portfolio
Associates, Inc., the predecessor investment adviser to Parametric, commenced
operations in 1987. Parametric is located at 7310 Columbia Center, 701 Fifth
Avenue, Seattle, Washington 98104-7090. Parametric provides investment
management services to a limited number of large accounts, such as employee
benefit plans, college endowment funds and foundations. Accounts managed by
Parametric had combined assets, as of December 31, 1995, of approximately $1.6
billion.
Pursuant to a portfolio management agreement between the Adviser and
Cadence, Cadence is the Portfolio Manager and provides investment advisory
services to the Cadence Capital Appreciation Fund, the Cadence Mid Cap Growth
Fund, the Cadence Micro Cap Growth Fund, and the Cadence Small Cap Growth Fund.
For the services provided, PIMCO Advisors (not the Trust) pays Cadence a fee at
an annual rate based on a percentage of the average daily net assets of each of
the Funds as follows: .45% for the Cadence Capital Appreciation Fund and the
Cadence Mid Cap Growth Fund, 1.00% for the Cadence Small Cap Growth Fund, and
1.25% for the Cadence Micro Cap Growth Fund.
Cadence is an investment management firm organized as a general
partnership. Cadence is the successor investment adviser to Cadence Capital
Management Corporation, a wholly owned subsidiary of PFAMCo. Cadence has two
partners: PIMCO Advisors as the supervisory partner, and Cadence Capital
Management, Inc. as the managing partner. Cadence Capital Management
Corporation, the predecessor investment adviser to Cadence, commenced operations
in 1988. Cadence is located at Exchange Place, 53 State Street, Boston,
Massachusetts 02109. Cadence provides investment management services to a
limited number of large accounts, such as employee benefit plans, college
endowment funds and foundations. Accounts managed by Cadence had combined
assets, as of December 31, 1995, of approximately $2.4 billion.
Pursuant to a portfolio management agreement between the Adviser and
NFJ, NFJ is the Portfolio Manager and provides investment advisory services to
the NFJ Equity Income Fund, the NFJ Diversified Low P/E Fund, and the NFJ Small
Cap Value Fund. For the services provided, PIMCO Advisors (not the Trust) pays
NFJ a fee at an annual rate based on a percentage of the average daily net
assets of each of the Funds as follows: .45% for the NFJ Equity Income Fund and
the NFJ Diversified Low P/E Fund, and .60% for the NFJ Small Cap Value Fund.
NFJ is an investment management firm organized as a general
partnership. NFJ is the successor investment adviser to NFJ Investment Group,
Inc., a wholly owned subsidiary of PFAMCo. NFJ has two partners: PIMCO Advisors
as the supervisory partner, and NFJ Management, Inc. as the managing partner.
NFJ Investment Group, Inc., the predecessor investment adviser to NFJ, commenced
operations in 1989. NFJ is located at 2121 San Jacinto, Suite 1440, Dallas,
Texas 75201. NFJ provides investment management services to a limited number of
large accounts, such as employee benefit plans, college endowment funds and
foundations. Accounts managed by NFJ had combined assets, as of December 31,
1995, of approximately $1.5 billion.
27
<PAGE>
Pursuant to a portfolio management agreement between the Adviser and
Columbus Circle, Columbus Circle is the Portfolio Manager and provides
investment advisory services to the Columbus Circle Investors Core Equity Fund
and Columbus Circle Investors Mid Cap Equity Fund. For the services provided,
PIMCO Advisors (not the Trust) pays Columbus Circle a fee at an annual rate
based on a percentage of the average daily net assets of each of the Funds as
follows: .57% for the Columbus Circle Investors Core Equity Fund and .63% for
the Columbus Circle Investors Mid Cap Equity Fund.
Columbus Circle is an investment management firm organized as a
general partnership. Columbus Circle is the successor investment adviser to the
Columbus Circle Investors Division of TAG. Columbus Circle has two partners:
PIMCO Advisors as the supervisory partner, and Columbus Circle Investors
Management, Inc. as the managing partner. Columbus Circle Investors Division of
TAG, the predecessor investment adviser to Columbus Circle, commenced operations
in 1975. Columbus Circle is located at Metro Center, One Station Place, 8th
Floor, Stamford, Connecticut 06902. Columbus Circle manages discretionary
accounts for institutions, such as corporate, government and union pension and
profit-sharing plans, foundations and educational institutions, as well as
several funds in the PIMCO Advisors Funds and the Cash Accumulation Trust.
Accounts managed by Columbus Circle had combined assets, as of December 31,
1995, of $12.7 billion.
Pursuant to a portfolio management agreement between the Adviser and
Blairlogie, Blairlogie is the Portfolio Manager and provides investment advisory
services to the Blairlogie Emerging Markets Fund and the Blairlogie
International Active Fund. For the services provided, PIMCO Advisors (not the
Trust) pays Blairlogie a fee at an annual rate based on a percentage of the
average daily net assets of each of the Funds as follows: .85% for the
Blairlogie Emerging Markets Fund and .60% for the Blairlogie International
Active Fund.
Blairlogie is a Scottish investment management firm, organized as a
limited partnership. Blairlogie is the successor investment adviser to
Blairlogie Capital Management Ltd., an indirect subsidiary of PFAMCo. Blairlogie
is organized as a United Kingdom limited partnership with two general partners
and one limited partner. The general partners are PIMCO Advisors, which serves
as the supervisory partner, and Blairlogie Holdings Limited, a wholly owned
corporate subsidiary of PIMCO Advisors, which serves as the managing partner.
The limited partner is Blairlogie Partners L.P., a limited partnership, the
general partner of which is PFAMCo, and the limited partners of which are the
principal executive officers of Blairlogie Capital Management Ltd. Blairlogie
Partners L.P. has agreed with PIMCO Advisors that PIMCO Advisors will acquire
one-fifth of its 25% interest annually, beginning December 31, 1997. Blairlogie
Capital Management Ltd., the predecessor investment adviser to Blairlogie,
commenced operations in 1992. Blairlogie is located at 4th Floor, 125 Princes
Street, Edinburgh EH2 4AD, Scotland. Blairlogie provides investment management
services to a limited number of large accounts, such as employee benefit plans,
college endowment funds and foundations. Accounts managed by Blairlogie had
combined assets, as of December 31, 1995, of approximately $0.6 billion.
PIMCO Advisors determines the allocation of the Balanced Fund's assets
among the various asset classes, and manages the portion of that Fund's assets
allocated for investment in money market instruments.
28
<PAGE>
For the fiscal years ended October 31, 1995, 1994, and 1993, the
amount of net portfolio management fees accrued by PIMCO Advisors or its
predecessor to the Portfolio Managers or their predecessors for each operational
Fund was as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
FUND 10/31/95 10/31/94 10/31/93
- ---- ---------- ---------- ----------
<S> <C> <C> <C>
NFJ Equity Income Fund $ 445,739 $ 368,971 $ 226,729
NFJ Diversified Low P/E Fund 60,686 85,078 93,761
NFJ Small Cap Value Fund 203,158 214,936 177,018
Cadence Capital Appreciation Fund 881,358 595,724 261,697
Cadence Mid Cap Growth Fund 650,017 453,846 223,366
Cadence Micro Cap Growth Fund 609,540 251,431 14,778
Cadence Small Cap Growth Fund 594,905 456,981 402,219
Columbus Circle Investors Core Equity 62,906 N/A N/A
Fund*
Columbus Circle Investors Mid Cap Equity
Fund* 13,832 N/A N/A
Parametric Enhanced Equity Fund 319,036 267,252 190,730
Blairlogie Emerging Markets Fund 550,590 195,258 2,880
Blairlogie International Active Fund 241,135 34,947 468
Balanced Fund 332,255 481,304 399,046
</TABLE>
*These funds had not commenced operations as of the indicated date.
FUND ADMINISTRATOR
PIMCO serves as administrator to the Funds pursuant to an
administration agreement (the "Administration Agreement") between PIMCO and the
Trust. PIMCO provides the Funds with certain administrative and shareholder
services necessary for Fund operations and is responsible for the supervision of
other Fund service providers. The administrative services provided by PIMCO
include, but are not limited to: (1) shareholder servicing functions, including
preparation of shareholder reports and communications, (2) regulatory
compliance, such as reports and filings with the SEC and state securities
commissions, and (3) general supervision of the operations of the Funds,
including coordination of the services performed by the Funds' transfer agent,
custodian, legal counsel, independent accountants, and others. PIMCO (or an
affiliate of PIMCO) also furnishes the Funds with office space and facilities
required for conducting the business of the Funds, and pays the compensation of
those officers, employees and Trustees of the Trust affiliated with PIMCO. In
addition, PIMCO, at its own expense, arranges for the provision of legal, audit,
custody, transfer agency and other services for the Funds, and is responsible
for the costs of registration of the Trust's shares and the printing of
prospectuses and shareholder reports for current shareholders. PIMCO has
contractually agreed to provide these services, and to bear these expenses, at
the following rates (each expressed as a percentage of the Fund's average daily
net assets on an annual basis):
<TABLE>
<CAPTION>
ADMINISTRATIVE
FUND FEE RATE
- ---- --------------
<S> <C>
Blairlogie Emerging Markets and Blairlogie International Active Funds.... 0.50%
All Other Funds.......................................................... 0.25%
</TABLE>
Except for the expenses paid by PIMCO, the Trust bears all costs of
its operations. The Funds are responsible for: (i) salaries and other
compensation of any of the Trust's executive officers and employees who are not
officers, directors, stockholders, or employees of PIMCO Advisors, PIMCO, or
their subsidiaries or affiliates; (ii) taxes and governmental fees; (iii)
brokerage fees and commissions and other portfolio transaction expenses; (iv)
costs of borrowing money, including interest expenses; (v) fees and expenses of
the Trustees who are not "interested persons" of the Adviser, PIMCO, the
29
<PAGE>
Portfolio Managers, or the Trust, and any counsel retained exclusively for their
benefit; (vi) extraordinary expenses, including costs of litigation and
indemnification expenses; (vii) expenses which are capitalized in accordance
with generally accepted accounting principals; and (viii) any expenses allocated
or allocable to a specific class of shares ("Class-specific expenses").
Class-specific expenses include service fees payable with respect to
the Administrative Class shares and may include certain other expenses as
permitted by the Trust's multiple class plan ("Multiple Class Plan") adopted
pursuant to Rule 18f-3 under the 1940 Act and subject to review and approval by
the Trustees. It is not presently anticipated that any expenses other than
service fees will be allocated on a class-specific basis.
The Administration Agreement for the Funds may be terminated by the
Trustees or PIMCO at any time on 60 days' written notice. Following its initial
two-year term, the contract would continue from year to year if approved by the
Trustees.
The Administration Agreement is subject to annual approval by the
Board, including a majority of the Trust's Independent Trustees. The current
Administration Agreement was approved by the Board of Trustees, including all of
the Independent Trustees at a meeting held on August 11, 1995. In approving the
Administration Agreement, the Trustees determined that: (1) the Administration
Agreement is in the best interests of the Funds and their shareholders; (2) the
services to be performed under the Administration Agreement are services
required for the operation of the Funds; (3) PIMCO is able to provide, or to
procure, services for the Funds which are at least equal in nature and quality
to services that could be provided by others; and (4) the fees to be charged
pursuant to the Administration Agreement are fair and reasonable in light of the
usual and customary charges made by others for services of the same nature and
quality.
A previous administration agreement ("Prior Agreement") between the
Trust and PFAMCo was initially approved by the Trustees at a meeting held on
November 16, 1990 (and thereafter by the then-sole shareholder of the Funds).
The Prior Agreement was last approved by the Board of Trustees on October 28,
1994. In connection with the Consolidation, PIMCO Advisors assumed the duties of
PFAMCo as administrator to the Funds. The terms and conditions of the
Administration Agreement are substantially identical in all material respects to
those of the Prior Agreement and addenda thereto, with the primary exception of
the identity of the service provider and its effective date and termination
date.
30
<PAGE>
For the fiscal years ended October 31, 1995, 1994, and 1993, the
aggregate amount of the administration fees paid by each operational Fund was as
follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
FUND 10/31/95 10/31/94 10/31/93
- ---- --------- ---------- ---------
<S> <C> <C> <C>
NFJ Equity Income Fund $ 247,633 $ 204,984 $ 125,961
NFJ Diversified Low P/E Fund 33,714 47,265 52,089
NFJ Small Cap Value Fund 84,649 89,556 73,757
Cadence Capital Appreciation Fund 489,643 330,958 145,387
Cadence Mid Cap Growth Fund 361,121 252,137 124,092
Cadence Micro Cap Growth Fund 121,908 50,286 6,241
Cadence Small Cap Growth Fund 148,726 114,245 100,555
Columbus Circle Investors Core Equity 32,425 N/A N/A
Fund*
Columbus Circle Investors Mid Cap Equity
Fund* 10,427 N/A N/A
Parametric Enhanced Equity Fund 177,243 148,474 105,960
Blairlogie Emerging Markets Fund 375,351 188,073 24,305
Blairlogie International Active Fund 235,046 70,593 15,016
Balanced Fund 231,772 332,040 280,729
</TABLE>
*These Funds had not commenced operations as of the indicated date.
EXPENSE LIMITATIONS
Certain of the states in which the shares of the Trust are qualified
for sale impose limitations on the expenses of the Trust. If, in any fiscal
year, the total expenses of the Trust (excluding taxes, interest, brokerage
commissions and other portfolio transaction expenses, other expenditures which
are capitalized in accordance with generally accepted accounting principles and
extraordinary expenses, but including the advisory and administrative fees)
exceed the expense limitations applicable to the Trust imposed by the securities
regulations of any state, PIMCO will reimburse the Trust for the excess.
PIMCO has undertaken, until at least June 30, 1996, to limit the
operating expenses that are borne by each Fund so that the Fund's expenses,
exclusive of interest or gains, brokerage fees or other transactional expenses,
taxes paid by the Fund, interest on borrowing, and extraordinary expenses, do
not exceed on an annual basis the following amounts (expressed as a percentage
of average daily net assets):
<TABLE>
<CAPTION>
INSTITUTIONAL ADMINISTRATIVE
FUND CLASS SHARES CLASS SHARES
- ---- ------------- --------------
<S> <C> <C>
NFJ Equity Income Fund 0.70% 0.95%
NFJ Diversified Low P/E Fund 0.70% 0.95%
NFJ Small Cap Value Fund 0.85% 1.10%
Cadence Capital Appreciation Fund 0.70% 0.95%
Cadence Mid Cap Growth Fund 0.70% 0.95%
Cadence Micro Cap Growth Fund 1.50% 1.75%
Cadence Small Cap Growth Fund 1.25% 1.50%
Columbus Circle Investors Core Equity
Fund* 0.82% 1.07%
Columbus Circle Investors Mid Cap Equity
Fund* 0.88% 1.13%
Parametric Enhanced Equity Fund 0.70% 0.95%
Blairlogie Emerging Markets Fund 1.35% 1.60%
Blairlogie International Active Fund 1.10% 1.35%
Balanced Fund 0.70% 0.95%
</TABLE>
Fees foregone for payments made by PIMCO with respect to a Fund
pursuant to the expense limitation are contingent liabilities of the Fund which
are subject to potential reimbursement to be made without causing the covered
expenses of the Fund to exceed the amount as may be imposed by any state expense
limit to which the Trust is subject, and provided such reimbursement is made
within four years of the recognition of the contingent liability of the Fund.
If a reimbursement appears probable, it will be accounted for as an expense of
the Fund regardless of the time period over which the reimbursement may actually
be paid by the Fund.
DISTRIBUTION OF TRUST SHARES
Each Fund offers two classes of shares: the "Institutional Class" and
the "Administrative Class." Shares of the Institutional Class are offered
primarily for direct investment by institutional investors and high net worth
individuals. They also are offered through certain financial intermediaries
that charge their customers transaction or other fees with respect to the
customer's investment in the Funds. Shares of the Administrative Class are
offered primarily through brokers, retirement plan administrators and other
financial intermediaries. Administrative Class shares indirectly pay service
fees to such entities for services they provide to shareholders of that class.
31
<PAGE>
Under the Trust's Multiple Class Plan, shares of each class of a Fund
represent an equal pro rata interest in such Fund and, generally, have identical
voting, dividend, liquidation, and other rights, preferences, powers,
restrictions, limitations, qualifications and terms and conditions, except that:
(a) each class has a different designation; (b) each class of shares bears any
class-specific expenses allocated to it; and (c) each class has separate voting
rights on any matter submitted to shareholders in which the interests of one
class differ from the interests of any other class.
PIMCO Advisors Distribution Company ("PADCO" or the "Distributor")
serves as the Trust's Distributor pursuant to a distribution agreement
("Distribution Agreement") dated November 15, 1994, which is subject to annual
approval by the Board. The Distributor is a wholly owned subsidiary of PIMCO
Advisors. The Distribution Agreement is terminable with respect to a Fund
without penalty, at any time, by vote of a majority of the Independent Trustees,
by the Trust upon 60 days' notice to the Distributor, by vote of the holders of
a majority of the shares of that Fund, or by the Distributor upon 60 days'
notice to the Trust. The Distributor is not obligated to sell any specific
amount of Trust shares.
SERVICE FEES
The Trust has adopted an Administrative Services Plan, (the "Plan")
with respect to the Administrative Class shares of each Fund. Under the terms
of the Plan, PIMCO is permitted to reimburse, out of the Administrative Class
assets of each Fund, in an amount up to 0.25% on an annual basis of the average
daily net assets of that class, financial intermediaries that provide services
in connection with the administration of shareholder accounts or of plans or
programs that use Fund shares as their funding medium. Under the terms of the
Plan, the services may include, but are not limited to, the following functions:
receiving, aggregating and processing shareholder orders; furnishing sub-
accounting; providing and maintaining elective shareholder services such as
check writing and wire transfer services; providing and maintaining pre-
authorized investment plans; communicating periodically with shareholders;
acting as the sole shareholder of record and nominee for shareholders;
maintaining accounting records for shareholders; answering questions and
handling correspondence from shareholders about their accounts; and performing
similar account administrative services.
The Plan provides that it may not be amended to materially increase
the costs under the Plan without the approval by vote of a majority of both (i)
the Trustees of the Trust and (ii) the Independent Trustees who have no direct
or indirect financial interest in the operation of the Plan or any agreements
related to it (the "Plan Trustees"), cast in person at a meeting called for the
purpose of voting on the Plan and any related amendments.
The Plan provides that it may not take effect until approved by vote
of a majority of both (i) the Trustees of the Trust and (ii) the Plan Trustees.
The Plan was approved by the Trustees, including the Plan Trustees, at a meeting
held on March 4, 1994.
The Plan provides that it shall continue in effect so long as such
continuance is specifically approved at least annually by the Trustees and the
Plan Trustees. The Plan provides that PIMCO shall provide to the Trustees, and
the Board shall review at least quarterly, a written report of the amounts so
expended and the purposes for which such expenditures were made.
32
<PAGE>
PURCHASES AND REDEMPTIONS
Purchases and redemptions are discussed in the Prospectus under the
headings "Purchase of Shares," "Redemption of Shares," and "Net Asset Value,"
and that information is incorporated herein by reference.
Certain managed account clients of the Adviser may purchase shares of
the Trust. To avoid the imposition of duplicative fees, the Adviser may be
required to make adjustments in the management fees charged separately by the
Adviser to these clients to offset the generally higher level of management fees
and expenses resulting from a client's investment in the Trust.
Certain clients of the Adviser whose assets would be eligible for
purchase by one or more of the Funds may purchase shares of the Trust with such
assets. Assets so purchased by a Fund will be valued in accordance with
procedures adopted by the Board of Trustees.
Shares of the Funds are not qualified or registered for sale in all
states. Prospective investors should inquire as to whether shares of a
particular Fund are available for offer and sale in their state of domicile or
residence. Shares of a Fund may not be offered or sold in any state unless
registered or qualified in that jurisdiction, unless an exemption from
registration or qualification is available.
The Trust reserves the right to suspend or postpone redemptions during
any period when: (a) trading on the New York Stock Exchange is restricted, as
determined by the SEC, or that Exchange is closed for other than customary
weekend and holiday closings; (b) the SEC has by order permitted such
suspension; or (c) an emergency, as determined by the SEC, exists, making
disposal of portfolio securities or valuation of net assets of the Fund not
reasonably practicable.
Due to the relatively high cost of maintaining smaller accounts, the
Trust reserves the right to redeem shares in any account for their then-current
value (which will be promptly paid to the investor) if at any time, due to
shareholder redemption, the shares in the account do not have a value of at
least $100,000. An investor will be notified that the value of his account is
less than the minimum and allowed at least 30 days to bring the value of the
account up to at least $100,000 before the redemption is processed. The Trust's
Amended and Restated Agreement and Declaration of Trust ("Declaration of Trust")
also authorizes the Trust to redeem shares under certain other circumstances as
may be specified by the Board of Trustees.
PORTFOLIO TRANSACTIONS AND BROKERAGE
INVESTMENT DECISIONS
Investment decisions for the Trust and for the other investment
advisory clients of the Adviser and Portfolio Managers are made with a view to
achieving their respective investment objectives. Investment decisions are the
product of many factors in addition to basic suitability for the particular
client involved (including the Trust). Thus, a particular security may be
bought or sold for certain clients even though it could have been bought or sold
for other clients at the same time. Likewise, a particular security may be
bought for one or more clients when one or more clients are selling the
security. In some instances, one client may sell a particular security to
another client. It also sometimes happens that two or more clients
simultaneously purchase or sell the same security, in which event each day's
transactions in such security are, insofar as possible, averaged as to price and
allocated between such clients in a manner which in the Adviser's or the
Portfolio Manager's opinion is equitable to each and in accordance with the
amount being purchased or sold by each. There may be circumstances when
purchases or sales of portfolio securities for one or more clients will have an
adverse effect on other clients.
33
<PAGE>
BROKERAGE AND RESEARCH SERVICES
There is generally no stated commission in the case of fixed income
securities, which are traded in the over-the-counter markets, but the price paid
by the Trust usually includes an undisclosed dealer commission or mark-up. In
underwritten offerings, the price paid by the Trust includes a disclosed, fixed
commission or discount retained by the underwriter or dealer. Transactions on
U.S. stock exchanges and other agency transactions involve the payment by the
Trust of negotiated brokerage commissions. Such commissions vary among
different brokers. Also, a particular broker may charge different commissions
according to such factors as the difficulty and size of the transaction.
Transactions in foreign securities generally involve the payment of fixed
brokerage commissions, which are generally higher than those in the United
States.
Each Portfolio Manager places all orders for the purchase and sale of
portfolio securities, options and futures contracts for the Trust and buys and
sells such securities, options and futures for the Trust through a substantial
number of brokers and dealers. In so doing, a Portfolio Manager uses its best
efforts to obtain for the Trust the most favorable price and execution
available, except to the extent it may be permitted to pay higher brokerage
commissions as described below. In seeking the most favorable price and
execution, the Portfolio Manager, having in mind the Trust's best interests,
considers all factors it deems relevant, including, by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience and financial stability of
the broker-dealer involved and the quality of service rendered by the broker-
dealer in other transactions. The Trust reserves the right to direct portfolio
brokerage to affiliated persons of the Adviser or any Portfolio Manager.
For the fiscal years ended October 31, 1995, 1994, and 1993, the
amount of brokerage commissions paid by each operational Fund was as
follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
FUND 10/31/95 10/31/94 10/31/93
- ---- ---------- ---------- ----------
<S> <C> <C> <C>
NFJ Equity Income Fund $ 170,712 $ 172,646 $ 128,921
NFJ Diversified Low P/E Fund 39,801 39,671 23,481
NFJ Small Cap Value Fund 74,739 115,477 107,687
Cadence Capital Appreciation Fund 411,595 368,018 168,553
Cadence Mid Cap Growth Fund 332,045 258,765 186,462
Cadence Micro Cap Growth Fund 202,678 118,750 43,428
Cadence Small Cap Growth Fund 111,918 87,362 88,876
Columbus Circle Investors Core Equity 40,203 N/A N/A
Fund*
Columbus Circle Investors Mid Cap 20,084 N/A N/A
Equity Fund*
Parametric Enhanced Equity Fund 47,226 106,389 32,362
Blairlogie Emerging Markets Fund 1,061,823 618,574 96,534
Blairlogie International Active Fund 302,313 150,878 41,564
Balanced Fund 95,606 108,394 62,296
</TABLE>
*These Funds had not commenced operations as of the indicated date.
All or substantially all of the broker-dealers through which brokerage
transactions were executed for all of the Funds provided research services to
the pertinent Portfolio Manager or its predecessor.
34
<PAGE>
It has for many years been a common practice in the investment
advisory business for advisers of investment companies and other institutional
investors to receive research services from broker-dealers which execute
portfolio transactions for the clients of such advisers. Consistent with this
practice, the Adviser or Portfolio Manager receives research services from many
broker-dealers with which the Adviser or Portfolio Manager places the Trust's
portfolio transactions. These services, which in some cases may also be
purchased for cash, include such matters as general economic and security market
reviews, industry and company reviews, evaluations of securities and
recommendations as to the purchase and sale of securities. Some of these
services are of value to the Adviser or Portfolio Manager in advising various of
its clients (including the Trust), although not all of these services are
necessarily useful and of value in managing the Trust. The management fee paid
by the Trust is not reduced because the Adviser or Portfolio Manager and its
affiliates receive such services.
As permitted by Section 28(e) of the Securities Exchange Act of 1934,
the Adviser or Portfolio Manager may cause the Trust to pay a broker-dealer
which provides "brokerage and research services" (as defined in the Act) to the
Adviser or Portfolio Manager an amount of disclosed commission for effecting a
securities transaction for the Trust in excess of the commission which another
broker-dealer would have charged for effecting that transaction.
Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc. and subject to seeking the most favorable price and
execution available and such other policies as the Trustees may determine, the
Adviser or Portfolio Manager may also consider sales of shares of the Trust as a
factor in the selection of broker-dealers to execute portfolio transactions for
the Trust.
A Portfolio Manager may place orders for the purchase and sale of
exchange-listed portfolio securities with a broker-dealer that is an affiliate
of the Portfolio Manager where, in the judgment of the Portfolio Manager, such
firm will be able to obtain a price and execution at least as favorable as other
qualified broker-dealers.
35
<PAGE>
Pursuant to rules of the SEC, a broker-dealer that is an affiliate of
the Adviser or a Portfolio Manager may receive and retain compensation for
effecting portfolio transactions for a Fund on a national securities exchange of
which the broker-dealer is a member if the transaction is "executed" on the
floor of the exchange by another broker which is not an "associated person" of
the affiliated broker-dealer, and if there is in effect a written contract
between the Portfolio Manager and the Trust expressly permitting the affiliated
broker-dealer to receive and retain such compensation. The portfolio management
agreements provide that each Portfolio Manager is authorized to allocate the
orders placed by it on behalf of the Fund to its affiliate that is registered as
a broker or dealer with the SEC.
SEC rules further require that commissions paid to such an affiliated
broker-dealer or Portfolio Manager by a Fund on exchange transactions not exceed
"usual and customary brokerage commissions." The rules define "usual and
customary" commissions to include amounts which are "reasonable and fair
compared to the commission, fee or other remuneration received or to be received
by other brokers in connection with comparable transactions involving similar
securities being purchased or sold on a securities exchange during a comparable
period of time."
PORTFOLIO TURNOVER
The Adviser and Portfolio Managers manage the Funds without regard
generally to restrictions on portfolio turnover, except those imposed on its
ability to engage in short-term trading by provisions of the federal tax laws,
see "Taxation." The use of futures contracts and other derivative instruments
with relatively short maturities may tend to exaggerate the portfolio turnover
rate for some of the Funds. Trading in fixed income securities does not
generally involve the payment of brokerage commissions, but does involve
indirect transaction costs. The use of futures contracts may involve the
payment of commissions to futures commission merchants. The higher the rate of
portfolio turnover of a Fund, the higher these transaction costs borne by the
Fund generally will be.
The portfolio turnover rate of a Fund is calculated by dividing (a)
the lesser of purchases or sales of portfolio securities for the particular
fiscal year by (b) the monthly average of the value of the portfolio securities
owned by the Fund during the particular fiscal year. In calculating the rate of
portfolio turnover, there is excluded from both (a) and (b) all securities,
including options, whose maturities or expiration dates at the time of
acquisition were one year or less. It is anticipated that the annual rate of
portfolio turnover will not exceed 100% for the NFJ Equity Income, NFJ
Diversified Low P/E, NFJ Small Cap Value, Cadence Capital Appreciation, Cadence
Mid Cap Growth, Cadence Micro Cap Growth, Cadence Small Cap Growth, Columbus
Circle Investors Core Equity, Columbus Circle Investors Mid Cap Equity, and
Parametric Enhanced Equity Funds, and 150% for the Blairlogie Emerging Markets,
Blairlogie International Active and Balanced Funds.
NET ASSET VALUE
As indicated under "Net Asset Value" in the Prospectus, the Trust's
net asset value per share for the purpose of pricing purchase and redemption
orders is determined at 4:00 p.m. (Eastern time) on each day the New York Stock
Exchange is open for trading. Net asset value will not be determined on the
following holidays: New Year's Day, President's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
With respect to the Columbus Circle Investors Core Equity, Columbus
Circle Investors Mid Cap Equity, Blairlogie Emerging Markets, and Blairlogie
International Active Funds, the value of portfolio securities that are traded on
stock exchanges outside the United States is based upon the price on the
exchange as of the close of business of the exchange immediately preceding the
time of valuation. Securities traded in over-the-counter markets in European and
Pacific Basin countries are normally completed well before 4:00 P.M. (Eastern
time). In addition, European and Pacific Basin securities trading may not take
place on all business days in New York. Furthermore, trading takes place in
Japanese markets on certain Saturdays and in various foreign markets on days
which are not business days in New York and on which net asset value of these
Funds is not calculated. The calculation of the net asset value of the
Blairlogie Emerging Markets and Blairlogie International Active Funds may not
take place contemporaneously with the determination of the prices of portfolio
securities used in such calculation. Events affecting the values of portfolio
securities that occur between the time their prices are determined and 4:00 P.M.
(Eastern time), and at other times may not be reflected in the calculation of
net asset value of these Funds. If events materially affecting the value of such
securities occur during such period, then these securities will be valued at
fair value as determined by the management and approved in good faith by the
Board of Trustees.
36
<PAGE>
TAXATION
While the Adviser anticipates that many shareholders of the Trust will
be tax-exempt institutions, the following discussion may be of general interest
to these shareholders, as well as for those shareholders of the Trust who do not
have tax-exempt status. The following discussion is general in nature and
should not be regarded as an exhaustive presentation of all possible tax
ramifications. All shareholders should consult a qualified tax adviser
regarding their investment in a Fund.
Each Fund intends to qualify annually and elect to be treated as a
regulated investment company under the Internal Revenue Code of 1986, as amended
(the "Code"). To qualify as a regulated investment company, each Fund generally
must, among other things, (a) derive in each taxable year at least 90% of its
gross income from dividends, interest, payments with respect to securities
loans, and gains from the sale or other disposition of stock, securities or
foreign currencies, or other income derived with respect to its business of
investing in such stock, securities or currencies ("Qualifying Income Test");
(b) derive in each taxable year less than 30% of its gross income from the sale
or other disposition of certain assets held less than three months, namely (1)
stocks or securities, (2) options, futures, or forward contracts (other than
those on foreign currencies), and (3) foreign currencies (or options, futures,
and forward contracts on foreign currencies) not directly related to the Fund's
principal business of investing in stock or securities; (c) diversify its
holdings so that, at the end of each quarter of the taxable year, (i) at least
50% of the market value of the Fund's assets is represented by cash, U.S.
Government securities, the securities of other regulated investment companies
and other securities, with such other securities of any one issuer limited for
the purposes of this calculation to an amount not greater than 5% of the value
of the Fund's total assets and 10% of the outstanding voting securities of such
issuer, and (ii) not more than 25% of the value of its total assets is invested
in the securities of any one issuer (other than U.S. Government securities or
the securities of other regulated investment companies); and (d) distribute at
least 90% of its investment company taxable income (which includes dividends,
interest and net short-term capital gains in excess of any net long-term capital
losses) each taxable year. The Treasury Department is authorized to promulgate
regulations under which gains from foreign currencies (and options, futures, and
forward contracts on foreign currency) would constitute qualifying income for
purposes of the Qualifying Income Test only if such gains are directly relating
to investing in securities. To date, such regulations have not been issued.
As a regulated investment company, a Fund generally will not be
subject to U.S. federal income tax on its investment company taxable income and
net capital gains (any net long-term capital gains in excess of the sum of net
short-term capital losses and capital loss carryovers from prior years)
designated by the Fund as capital gain dividends, if any, that it distributes to
shareholders on a timely basis. Each Fund intends to distribute to its
shareholders, at least annually, substantially all of its investment company
taxable income and any net capital gains. In addition, amounts not distributed
by a Fund on a timely basis in accordance with a calendar year distribution
requirement are subject to a nondeductible 4% excise tax. To avoid the tax, a
Fund must distribute during each calendar year an amount equal to the sum of (1)
at least 98% of its ordinary income (not taking into account any capital gains
or losses) for the calendar year, (2) at least 98% of its capital gains in
excess of its capital losses (and adjusted for certain ordinary losses) for the
twelve month period ending on October 31 of the calendar year, and (3) all
ordinary income and capital gains for previous years that were not distributed
during such years. A distribution will be treated as paid on December 31 of the
calendar year if it is declared by a Fund in October, November or December of
that year to shareholders of record on a date in such a month and paid by the
Fund during January of the following year. Such distributions will be taxable
to shareholders (other than those not subject to federal income tax) in the
calendar year in which the distributions are declared, rather than the calendar
year in which the distributions are received. To avoid application of the
excise tax, each Fund intends to make its distributions in accordance with the
calendar year distribution requirement.
37
<PAGE>
DISTRIBUTIONS
Dividends paid out of a Fund's investment company taxable income will
be taxable to a U.S. shareholder as ordinary income. Distributions received by
tax-exempt shareholders will not be subject to federal income tax to the extent
permitted under the applicable tax exemption.
A portion of the dividends paid by Funds that invest in stock of U.S.
corporations may qualify for the deduction for dividends received by
corporations. Dividends paid by the other Funds generally are not expected to
qualify for the deduction for dividends received by corporations. Distributions
of net capital gains, if any, designated as capital gain dividends, are taxable
as long-term capital gains, regardless of how long the shareholder has held a
Fund's shares and are not eligible for the dividends received deduction. Any
distributions that are not from a Fund's investment company taxable income or
net realized capital gains may be characterized as a return of capital to
shareholders or, in some cases, as capital gain. The tax treatment of dividends
and distributions will be the same whether a shareholder reinvests them in
additional shares or elects to receive them in cash.
SALES OF SHARES
Upon the disposition of shares of a Fund (whether by redemption, sale
or exchange), a shareholder will realize a gain or loss. Such gain or loss will
be capital gain or loss if the shares are capital assets in the shareholder's
hands, and will be long-term or short-term generally depending upon the
shareholder's holding period for the shares. Any loss realized on a disposition
will be disallowed to the extent the shares disposed of are replaced within a
period of 61 days beginning 30 days before and ending 30 days after the shares
are disposed of. In such a case, the basis of the shares acquired will be
adjusted to reflect the disallowed loss. Any loss realized by a shareholder on
a disposition of shares held by the shareholder for six months or less will be
treated as a long-term capital loss to the extent of any distributions of
capital gain dividends received by the shareholder with respect to such shares.
BACKUP WITHHOLDING
A Fund may be required to withhold 31% of all taxable distributions
payable to shareholders who fail to provide the Fund with their correct taxpayer
identification number or to make required certifications, or who have been
notified by the Internal Revenue Service that they are subject to backup
withholding. Corporate shareholders and certain other shareholders specified in
the Code generally are exempt from such backup withholding. Backup withholding
is not an additional tax. Any amounts withheld may be credited against the
shareholder's U.S. federal tax liability.
OPTIONS, FUTURES AND FORWARD CONTRACTS, AND SWAP AGREEMENTS
Some of the options, futures contracts, forward contracts, and swap
agreements used by the Funds may be "section 1256 contracts." Any gains or
losses on section 1256 contracts are generally considered 60% long-term and 40%
short-term capital gains or losses ("60/40") although certain foreign currency
gains and losses from such contracts may be treated as ordinary in character.
Also, section 1256 contracts held by a Fund at the end of each taxable year
(and, for purposes of the 4% excise tax, on certain other dates as prescribed
under the Code) are "marked to market" with the result that unrealized gains or
losses are treated as though they were realized and the resulting gain or loss
is treated as ordinary or 60/40 gain or loss.
38
<PAGE>
Generally, the hedging transactions and certain other transactions in
options, futures and forward contracts undertaken by a Fund, may result in
"straddles" for U.S. federal income tax purposes. In some cases, the straddle
rules also could apply in connection with swap agreements. The straddle rules
may affect the character of gains (or losses) realized by a Fund. In addition,
losses realized by a Fund on positions that are part of a straddle may be
deferred under the straddle rules, rather than being taken into account in
calculating the taxable income for the taxable year in which such losses are
realized. Because only a few regulations implementing the straddle rules have
been promulgated, the tax consequences of transactions in options, futures,
forward contracts, and swap agreements to a Fund are not entirely clear. The
transactions may increase the amount of short-term capital gain realized by a
Fund which is taxed as ordinary income when distributed to shareholders.
A Fund may make one or more of the elections available under the Code
which are applicable to straddles. If a Fund makes any of the elections, the
amount, character and timing of the recognition of gains or losses from the
affected straddle positions will be determined under rules that vary according
to the election(s) made. The rules applicable under certain of the elections
operate to accelerate the recognition of gains or losses from the affected
straddle positions.
Because application of the straddle rules may affect the character of
gains or losses, defer losses and/or accelerate the recognition of gains or
losses from the affected straddle positions, the amount which must be
distributed to shareholders, and which will be taxed to shareholders as ordinary
income or long-term capital gain, may be increased or decreased substantially as
compared to a fund that did not engage in such hedging transactions.
Rules governing the tax aspects of swap agreements are in a developing
stage and are not entirely clear in certain respects. Accordingly, while the
Blairlogie Emerging Markets and Blairlogie International Active Funds intend to
account for such transactions in a manner they deem to be appropriate, the
Internal Revenue Service might not accept such treatment. If it did not, the
status of a Fund as a regulated investment company might be affected. The Funds
intend to monitor developments in this area. Certain requirements that must be
met under the Code in order for a Fund to qualify as a regulated investment
company may limit the extent to which a Fund will be able to engage in swap
agreements.
The 30% limit on gains from the disposition of certain options,
futures, forward contracts, and swap agreements held less than three months and
the qualifying income and diversification requirements applicable to a Fund's
assets may limit the extent to which a Fund will be able to engage in
transactions in options, futures contracts, forward contracts, and swap
agreements.
PASSIVE FOREIGN INVESTMENT COMPANIES
Certain Funds may invest in the stock of foreign corporations which
may be classified under the Code as passive foreign investment companies
("PFICs"). In general, a foreign corporation is classified as a PFIC for a
taxable year if at least one-half of its assets constitute investment-type
assets or 75% or more of its gross income is investment-type income. If a Fund
receives a so-called "excess distribution" with respect to PFIC stock, the Fund
itself may be subject to tax on a portion of the excess distribution, whether or
not the corresponding income is distributed by the Fund to stockholders.
In general, under the PFIC rules, an excess distribution is treated as
having been realized ratably over the period during which the Fund held the PFIC
stock. A Fund itself will be subject to tax on the portion, if any, of an
excess distribution that is so allocated to prior taxable years and an interest
factor will be added to the tax, as if the tax had been payable in such prior
taxable years. Certain distributions from a PFIC as well as gain from the sale
of PFIC stock are treated as excess distributions. Excess distributions are
characterized as ordinary income even though, absent application of the PFIC
rules, certain excess distributions might have been classified as capital gain.
39
<PAGE>
A Fund may be eligible to elect alternative tax treatment with respect
to PFIC stock. Under an election that currently is available in some
circumstances, a Fund generally would be required to include in its gross income
its share of the earnings of a PFIC on a current basis, regardless of whether
distributions are received from the PFIC in a given year. If this election were
made, the special rules, discussed above, relating to the taxation of excess
distributions, would not apply. In addition, another election may be available
that would involve marking to market a Fund's PFIC shares at the end of each
taxable year (and on certain other dates prescribed in the Code), with the
result that unrealized gains are treated as though they were realized. If this
election were made, tax at the Fund level under the PFIC rules would generally
be eliminated, but the Fund could, in limited circumstances, incur nondeductible
interest charges. A Fund's intention to qualify annually as a regulated
investment company may limit its elections with respect to PFIC shares.
Because the application of the PFIC rules may affect, among other
things, the character of gains, the amount of gain or loss and the timing of the
recognition of income with respect to PFIC shares, as well as subject a Fund
itself to tax on certain income from PFIC shares, the amount that must be
distributed to shareholders, and which will be taxed to shareholders as ordinary
income or long-term capital gain, may be increased or decreased substantially as
compared to a fund that did not invest in PFIC shares.
FOREIGN CURRENCY TRANSACTIONS
Under the Code, gains or losses attributable to fluctuations in
exchange rates which occur between the time a Fund accrues income or other
receivables or accrues expenses or other liabilities denominated in a foreign
currency and the time the Fund actually collects such receivables or pays such
liabilities generally are treated as ordinary income or loss. Similarly, on
disposition of debt securities denominated in a foreign currency and on
disposition of certain other instruments, gains or losses attributable to
fluctuations in the value of the foreign currency between the date of
acquisition of the security or contract and the date of disposition also are
treated as ordinary gain or loss. These gains and losses, referred to under the
Code as "section 988" gains or losses, may increase or decrease the amount of a
Fund's investment company taxable income to be distributed to its shareholders
as ordinary income.
FOREIGN TAXATION
Income received by the Funds from sources within foreign countries may
be subject to withholding and other taxes imposed by such countries. Tax
conventions between certain countries and the U.S. may reduce or eliminate such
taxes. In addition, the Adviser and each Portfolio Manager intends to manage
the Funds with the intention of minimizing foreign taxation in cases where it is
deemed prudent to do so. If more than 50% of the value of a Fund's total assets
at the close of its taxable year consists of securities of foreign corporations,
such Fund will be eligible to elect to "pass-through" to the Fund's shareholders
the amount of foreign income and similar taxes paid by the Fund. If this
election is made, a shareholder generally subject to tax will be required to
include in gross income (in addition to taxable dividends actually received) his
pro rata share of the foreign taxes paid by the Fund, and may be entitled either
to deduct (as an itemized deduction) his or her pro rata share of foreign taxes
in computing his taxable income or to use it (subject to limitations) as a
foreign tax credit against his or her U.S. federal income tax liability. No
deduction for foreign taxes may be claimed by a shareholder who does not itemize
deductions. Each shareholder will be notified within 60 days after the close of
the Fund's taxable year whether the foreign taxes paid by the Fund will "pass-
through" for that year.
40
<PAGE>
Generally, a credit for foreign taxes is subject to the limitation
that it may not exceed the shareholder's U.S. tax attributable to his or her
total foreign source taxable income. For this purpose, if the pass-through
election is made, the source of the electing Fund's income will flow through to
shareholders of the Trust. With respect to such Funds, gains from the sale of
securities will be treated as derived from U.S. sources and certain currency
fluctuation gains, including fluctuation gains from foreign currency-denominated
debt securities, receivables and payables will be treated as ordinary income
derived from U.S. sources. The limitation on the foreign tax credit is applied
separately to foreign source passive income, and to certain other types of
income. Shareholders may be unable to claim a credit for the full amount of
their proportionate share of the foreign taxes paid by the Fund. The foreign tax
credit can be used to offset only 90% of the revised alternative minimum tax
imposed on corporations and individuals and foreign taxes generally are not
deductible in computing alternative minimum taxable income.
ORIGINAL ISSUE DISCOUNT
Some of the debt securities (with a fixed maturity date of more than
one year from the date of issuance) that may be acquired by a Fund may be
treated as debt securities that are issued originally at a discount. Generally,
the amount of the original issue discount ("OID") is treated as interest income
and is included in income over the term of the debt security, even though
payment of that amount is not received until a later time, usually when the debt
security matures. A portion of the OID includable in income with respect to
certain high-yield corporate debt securities may be treated as a dividend for
Federal income tax purposes.
Some of the debt securities (with a fixed maturity date of more than
one year from the date of issuance) that may be acquired by a Fund in the
secondary market may be treated as having market discount. Generally, any gain
recognized on the disposition of, and any partial payment of principal on, a
debt security having market discount is treated as ordinary income to the extent
the gain, or principal payment, does not exceed the "accrued market discount" on
such debt security. Market discount generally accrues in equal daily
installments. A Fund may make one or more of the elections applicable to debt
securities having market discount, which could affect the character and timing
of recognition of income.
Some debt securities (with a fixed maturity date of one year or less
from the date of issuance) that may be acquired by a Fund may be treated as
having acquisition discount, or OID in the case of certain types of debt
securities. Generally, the Fund will be required to include the acquisition
discount, or OID, in income over the term of the debt security, even though
payment of that amount is not received until a later time, usually when the debt
security matures. The Fund may make one or more of the elections applicable to
debt securities having acquisition discount, or OID, which could affect the
character and timing of recognition of income.
A Fund generally will be required to distribute dividends to
shareholders representing discount on debt securities that is currently
includable in income, even though cash representing such income may not have
been received by the Fund. Cash to pay such dividends may be obtained from
sales proceeds of securities held by the Fund.
41
<PAGE>
OTHER TAXATION
Pursuant to Treasury Department regulations, certain expenses of
nonpublicly offered regulated investment companies, including advisory fees, are
not deductible by those regulated investment companies for purposes of
calculating the income of certain shareholders, generally including individuals
and entities that compute their taxable income in the same manner as an
individual (thus, for example, a qualified pension plan is not subject to this
rule). The shareholder's pro rata portion of such expenses will be treated as
income to the shareholder and will be deductible by the shareholder, subject to
the 2% "floor" on miscellaneous itemized deductions and other limitations on
itemized deductions set forth in the Code. A regulated investment company
generally will be classified as nonpublicly offered unless it either has 500
shareholders at all times during a taxable year or continuously offers shares
pursuant to a public offering. However, because of a lack of guidance in this
area, there can be no assurance that the Internal Revenue Service will agree
with this treatment with respect to the Cadence Micro Cap Growth and Cadence
Small Cap Growth Funds, both of which have limitations on contributed capital.
If these Funds are regarded as nonpublicly offered regulated investment
companies, shareholders of these Funds that are subject to this rule could be
subject to income tax adjustments.
Distributions also may be subject to additional state, local and
foreign taxes, depending on each shareholder's particular situation. Under the
laws of various states, distributions of investment company taxable income
generally are taxable to shareholders even though all or a substantial portion
of such distributions may be derived from interest on certain federal
obligations which, if the interest were received directly by a resident of such
state, would be exempt from such state's income tax ("qualifying federal
obligations"). However, some states may exempt all or a portion of such
distributions from income tax to the extent the shareholder is able to establish
that the distribution is derived from qualifying federal obligations. Moreover,
for state income tax purposes, interest on some federal obligations generally is
not exempt from taxation, whether received directly by a shareholder or through
distributions of investment company taxable income (for example, interest on
FNMA Certificates and GNMA Certificates). Each Fund will provide information
annually to shareholders indicating the amount and percentage of a Fund's
dividend distribution which is attributable to interest on federal obligations,
and will indicate to the extent possible from what types of federal obligations
such dividends are derived. Shareholders are advised to consult their own tax
advisers with respect to the particular tax consequences to them of an
investment in a Fund.
OTHER INFORMATION
CAPITALIZATION
The Trust is a Massachusetts business trust established under an
Agreement and Declaration of Trust dated August 24, 1990. The capitalization of
the Trust consists solely of an unlimited number of shares of beneficial
interest with a par value of $0.001 each. The Board of Trustees may establish
additional series (with different investment objectives and fundamental
policies) at any time in the future. Establishment and offering of additional
series will not alter the rights of the Trust's shareholders. When issued,
shares are fully paid, non-assessable, redeemable and freely transferable.
Shares do not have preemptive rights or subscription rights. In liquidation of
a Fund, each shareholder is entitled to receive his pro rata share of the net
assets of that Fund.
42
<PAGE>
PERFORMANCE INFORMATION
The Trust may, from time to time, include the yield and total return
for each class of shares of all of the Funds, computed in accordance with SEC-
prescribed formulas, in advertisements or reports to shareholders or prospective
investors. The Funds also may compute current distribution rates and use this
information in their prospectuses and statement of additional information, in
reports to current shareholders, or in certain types of sales literature
provided to prospective investors.
Quotations of yield for the Funds will be based on all investment
income per share (as defined by the SEC) during a particular 30-day (or one
month) period (including dividends and interest), less expenses accrued during
the period ("net investment income"), and are computed by dividing net
investment income by the maximum offering price per share on the last day of the
period, according to the following formula:
YIELD = 2[( a-b + 1)/6/-1]
---
cd
where a = dividends and interest earned during the period,
b = expenses accrued for the period (net of reimbursements),
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends, and
d = the maximum offering price per share on the last day of the
period.
Quotations of average annual total return for a Fund or class will be
expressed in terms of the average annual compounded rate of return of a
hypothetical investment in the Fund or class over periods of one, five, and ten
years (up to the life of the Fund), calculated pursuant to the following
formula: P (1 + T)/n/ = ERV (where P = a hypothetical initial payment of
$1,000, T = the average annual total return, n = the number of years, and ERV =
the ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the period). All total return figures reflect the deduction of a
proportional share of Fund or class expenses on an annual basis, and assume that
all dividend and distributions are reinvested when paid. Quotations of total
return may also be shown for other periods. Funds also may, with respect to
certain periods of less than one year, provide total return information for that
period that is unannualized. Any such information would be accomplished by
standardized total return information.
43
<PAGE>
For the period ended October 31, 1995, the total return of the Funds
was as follows:
<TABLE>
<CAPTION>
TOTAL RETURN FOR PERIOD
FUND ENDED OCTOBER 31, 1995
- ---- -----------------------------
SINCE INCEPTION
1 YEAR (ANNUALIZED)
---------- ----------------
<S> <C> <C>
NFJ Equity Income Fund 19.36% 13.43%/1/
NFJ Equity Income Fund (Administrative) N/A 25.69%/2/
NFJ Diversified Low P/E Fund 24.98% 14.08%/3/
NFJ Small Cap Value Fund 19.88% 13.15%/4/
Cadence Capital Appreciation Fund 28.47% 15.88%/1/
Cadence Mid Cap Growth Fund 30.54% 16.11%/5/
Cadence Mid Cap Growth Fund (Administrative) N/A 36.64%/2/
Cadence Micro Cap Growth Fund 29.54% 20.17%/6/
Cadence Small Cap Growth Fund 17.39% 24.11%/7/
Cadence Small Cap Growth Fund (Administrative) N/A -5.34%/8/
Columbus Circle Investors Core Equity Fund N/A 27.86%/9/
Columbus Circle Investors Core Equity Fund (Administrative) N/A 11.34%/10/
Columbus Circle Investors Mid Cap Equity Fund N/A 29.34%/9/
Parametric Enhanced Equity Fund 26.46% 11.55%/11/
Blairlogie Emerging Markets Fund -27.70% 9.21%/12/
Blairlogie Emerging Markets Fund (Administrative) -27.96% -29.06%/13/
Blairlogie International Active Fund 3.83% 9.59%/14/
Blairlogie International Active Fund (Administrative) N/A 9.61%/2/
Balanced Fund 19.47% 10.57%/15/
</TABLE>
___________________
1 From 03/08/91 (commencement of operations)
2 From 11/30/94 (commencement of operations)
3 From 12/30/91 (commencement of operations)
4 From 10/01/91 (commencement of operations)
5 From 08/26/91 (commencement of operations)
6 From 06/25/93 (commencement of operations)
7 From 01/07/91 (commencement of operations)
8 From 09/27/95 (commencement of operations)
9 From 12/28/94 (commencement of operations)
10 From 05/31/95 (commencement of operations)
11 From 02/11/91 (commencement of operations)
12 From 06/01/93 (commencement of operations)
13 From 10/20/94 (commencement of operations)
14 From 06/08/93 (commencement of operations)
15 From 06/25/92 (commencement of operations)
Performance information for a Fund may also be compared to: (i) the
Standard & Poor's 500 Composite Stock Price Index, the Dow Jones Industrial
Average, the Morgan Stanley Capital International EAFE (Europe, Australasia, Far
East) Index, the Morgan Stanley Capital International Emerging Markets Free
Index, the International Finance Corporation Emerging Markets Index, or other
unmanaged indexes that measure performance of a pertinent group of securities;
(ii) other groups of mutual funds tracked by Lipper Analytical Services
("Lipper"), a widely used independent research firm which ranks mutual funds by
overall performance, investment objectives, and assets, or tracked by other
services, companies, publications, or persons who rank mutual funds on overall
performance or other criteria; and (iii) the Consumer Price Index (measure for
inflation) to assess the real rate of return from an
44
<PAGE>
investment in the Funds. Unmanaged indexes (i.e., other than Lipper) generally
do not reflect deductions for administrative and management costs or expenses.
The Adviser and any of the Portfolio Managers may also report to shareholders or
to the public in advertisements concerning the performance of the Adviser and
the Portfolio Managers as advisers to clients other than the Trust, and on the
comparative performance or standing of the Adviser or the Portfolio Managers in
relation to other money managers. Such comparative information may be compiled
or provided by independent ratings services or by news organizations. Any
performance information, whether related to the Funds, the Adviser or the
Portfolio Managers, should be considered in light of the Funds' investment
objectives and policies, characteristics and quality of the Funds, and the
market conditions during the time period indicated, and should not be considered
to be representative of what may be achieved in the future.
VOTING RIGHTS
Under the Trust's Declaration of Trust, the Trust is not required to
hold annual meetings of Trust shareholders to elect Trustees or for other
purposes. It is not anticipated that the Trust will hold shareholders' meetings
unless required by law or the Declaration of Trust. In this regard, the Trust
will be required to hold a meeting to elect Trustees to fill any existing
vacancies on the Board if, at any time, fewer than a majority of the Trustees
have been elected by the shareholders of the Trust. In addition, the
Declaration of Trust provides that the holders of not less than two-thirds of
the outstanding shares of the Trust may remove a person serving as Trustee
either by declaration in writing or at a meeting called for such purpose. The
Trustees are required to call a meeting for the purpose of considering the
removal of a person serving as Trustee if requested in writing to do so by the
holders of not less than 10% of the outstanding shares of the Trust. In the
event that such a request was made, the Trust has represented that it would
assist with any necessary shareholder communications. Shareholders of a class
of shares have different voting rights with respect to matters that affect only
that class.
The Trust's shares do not have cumulative voting rights, so that the
holder of more than 50% of the outstanding shares may elect the entire Board of
Trustees, in which case the holders of the remaining shares would not be able to
elect any Trustees.
As of February 6, 1996, the following persons owned of record or
beneficially 5% or more of the shares of the following Funds:
<TABLE>
<CAPTION>
SHARES PERCENTAGE OF
BENEFICIALLY OUTSTANDING
OWNED SHARES OWNED
------------- -------------
<S> <C> <C>
NFJ EQUITY INCOME FUND
Pacific Mutual Life Insurance
Company
700 Newport Center Drive
Newport Beach, California 92660 2,152,156.920 19.31%
</TABLE>
45
<PAGE>
<TABLE>
<CAPTION>
SHARES PERCENTAGE OF
BENEFICIALLY OUTSTANDING
OWNED SHARES
------------ -------------
<S> <C> <C>
Santa Barbara Foundation
15 East Carrillo Street
Santa Barbara, California 93101-2780 787,412.509 7.07%
NBD Bank NA as Trustee for
AM Castle & Company Employee Pension
P.O. Box 77975
Detroit, Michigan 48277-0975 713,332.163 6.40%
UC San Diego Foundation
9500 Gilman Drive
Mail Code 0940
La Jolla, California 92093-5003 702,710.214 6.31%
NFJ DIVERSIFIED LOW P/E FUND
The Northern Trust Company as
Trustee for Great Lakes Chemical
Master Retirement Trust
P.O. Box 2200
West Lafayette, Indiana 47906 926,178.280 64.86%*
Pacific Mutual Life Insurance Company
700 Newport Center Drive
Newport Beach, California 92660 306,463.436 21.46%
NFJ SMALL CAP VALUE FUND
Pacific Mutual Life Insurance Company
700 Newport Center Drive
Newport Beach, California 92660 806,283.184 24.74%
First Union National Bank
401 South Tyron Street, FRB-3
Mail Code: CMG-2-1151
Charlotte, North Carolina 28202-1911 418,528.047 12.84%
Sheet Metal Workers' Local Unions
and Councils Pension Fund
601 N. Fairfax Street, Suite 500
Alexandria, Virginia 22314-2054 297,574.047 9.13%
Victoria Bank and Trust Company,
Structural Metals, Inc. Pension Plan
One O'Connor Plaza, 6th Floor
Victoria, Texas 77901-65497 225,969.488 6.93%
</TABLE>
46
<PAGE>
<TABLE>
<CAPTION>
SHARES PERCENTAGE OF
BENEFICIALLY OUTSTANDING
OWNED SHARES
------------ -------------
<S> <C> <C>
CADENCE CAPITAL APPRECIATION FUND
Bank of New York as Trustee for
Coopers & Lybrand Retirement Trust
One Wall Street
New York, New York 10286-0001 3,098,884.810 18.61%
Donaldson Lufkin & Jenrette**
Pershing Division
P.O. Box 2052
Jersey City, New Jersey 07303-2052 2,133,619.943 12.82%
Pacific Mutual Life Insurance Company
700 Newport Center Drive
Newport Beach, California 92660 1,226,538.139 7.37%
Mac & Co
Mutual Funds Operations
P.O. Box 3198
Pittsburgh, Pennsylvania 15230-3198 1,019,908.337 6.13%
CADENCE MID CAP GROWTH FUND
First Trust NA as Trustee for
Dayton Hudson Corporation
Supplemental Retirement Savings and
Employee Stock Ownership Plan
P.O. Box 64010
St. Paul, Minnesota 55164-0100 1,539,798.457 14.91%
First Bank National Association,
Custodian for St. Paul Foundation
P.O. Box 64482
St. Paul, Minnesota 55164-0482 1,237,819.876 11.99%
Berklee College of Music, Inc.
1140 Boylston Street
Boston, Massachusetts 02215-3693 633,860.567 6.14%
Nadoit & Company
c/o Bessemer Trust Company
100 Woodbridge Center Drive
Woodbridge, New Jersey 07095 578,006.246 5.60%
Staff Retirement Plan of the
International Telecommunications
Satellite Organization
3400 International Drive, N.W.
Washington, D.C. 20008-3006 532,403.922 5.16%
</TABLE>
47
<PAGE>
<TABLE>
<CAPTION>
SHARES PERCENTAGE OF
BENEFICIALLY OUTSTANDING
OWNED SHARES
------------ -------------
<S> <C> <C>
CADENCE MICRO CAP GROWTH FUND
Charles Schwab & Co., Inc.**
101 Montgomery Street
San Francisco, California 94104-4122 957,881.016 19.28%
Bost & Co
Mutual Fund Operations
P.O. Box 3198
Pittsburgh, Pennsylvania 15230 854,664.929 17.21%
University of Southern California
Treasurer's Office
University Park, BKS 402
Los Angeles, California 90089-2541 715,315.509 14.40%
Collins Group Trust
770 Broadway, Tenth Floor
New York, New York 10003-9522 549,698.822 11.07%
The Northern Trust Company as Trustee for
Toyota Directed Retirement Trust
P.O. Box 92956
Chicago, Illinois 60690 385,554.673 7.76%
Pacific Mutual Life Insurance Company
700 Newport Center Drive
Newport Beach, California 92660-6397 361,010.830 7.27%
Collins Group Trust IX
770 Broadway, Tenth Floor
New York, New York 10003-9598 284,213.840 5.72%
CADENCE SMALL CAP GROWTH FUND
Bost & Co
Mutual Fund Operations
P.O. Box 3198
Pittsburgh, Pennsylvania 15230 909,025.339 23.95%
Pacific Mutual Life Insurance Company
700 Newport Center Drive
Newport Beach, California 92660 700,398.915 18.46%
The Trustee of the KN Energy Inc.,
Retirement Plan and Trust Agreement
for Non Bargain Employees
P.O. Box 281304
Lakewood, Colorado 80228-8304 634,101.490 16.71%
</TABLE>
48
<PAGE>
<TABLE>
<CAPTION>
SHARES PERCENTAGE OF
BENEFICIALLY OUTSTANDING
OWNED SHARES
------------ -------------
<S> <C> <C>
The Trustee of the KN Energy Inc.,
Retirement Plan and Trust Agreement
for Bargain Employees
P.O. Box 281304
Lakewood, Colorado 80228-8304 382,550.285 10.08%
The Jewish Federation of
Metropolitan Chicago
One South Franklin Street
Room 625
Chicago, Illinois 60606-4609 378,516.955 9.97%
COLUMBUS CIRCLE INVESTORS CORE EQUITY FUND
The Bank of New York as
Trustee for Melville Corporation
One Theall Road
Rye, New York 10580-1404 1,887,208.209 65.96%*
Pacific Mutual Life Insurance Company
700 Newport Center Drive
Newport Beach, California 92660 428,426.396 14.97%
The Bank of New York as Trustee for
Marshalls Association 401(k) Trust
One Wall Street
MT/MC 12th Floor
New York, New York 10286-0001 289,416.532 10.12%
COLUMBUS CIRCLE INVESTORS MID CAP EQUITY FUND
Pacific Mutual Life Insurance Company
700 Newport Center Drive
Newport Beach, California 92660 439,316.239 68.24%*
Pacific Mutual Charitable Foundation
700 Newport Center Drive
Newport Beach, California 92660 67,389.127 10.47%
John W. Barnum
5175 Tilden Street, N.W.
Washington, D.C. 20016-1961 51,522.858 8.00%
Union Bank as Trustee for
Pacific Corinthian Life Insurance
Company Pension Plan
P.O. Box 109
San Diego, California 92112-4103 46,268.550 7.19%
</TABLE>
49
<PAGE>
<TABLE>
<CAPTION>
SHARES PERCENTAGE OF
BENEFICIALLY OUTSTANDING
OWNED SHARES
------------ -------------
<S> <C> <C>
PARAMETRIC ENHANCED EQUITY FUND
Pacific Mutual Life Insurance Company
700 Newport Center Drive
Newport Beach, California 92660 1,562,110.092 21.96%
First Interstate Bank of CA,
Custodian S.F. Bay Area
Rapid Transit District Deferred
Compensation Plan
P.O. Box 9800
Calabasas, California 91372-0800 829,982.592 11.67%
FTC & Co**
P.O. Box 173736
Denver, Colorado 80217-3736 820,600.602 11.54%
First Interstate Bank of CA as Trustee for
S.F. Bay Area Rapid
Transit Pension
P.O. Box 9800
Calabasas, California 91372-0800 774,372.890 10.88%
Glass, Molders, Pottery, Plastics
& Allied Workers Int'l Union
608 East Baltimore Pike
P.O. Box 607
Media, Pennsylvania 19063 515,632.783 7.25%
First Trust NA as Trustee for
Robinson Companies Inc.
Profit Sharing Plan & Trust
P.O. Box 64010
St. Paul, Minnesota 55164-0010 499,816.583 7.02%
Pacific Mutual Life Insurance Company
FBO Hoag Memorial Hospital Presbyterian
700 Newport Center Drive
Newport Beach, California 92660 442,841.408 6.22%
BLAIRLOGIE EMERGING MARKETS FUND
Charles Schwab & Co., Inc.***
101 Montgomery Street
San Francisco, California 94104-4122 2,057,849.509 30.12%*
Pacific Mutual Life Insurance Company
700 Newport Center Drive
Newport Beach, California 92660 1,445,619.263 21.16%
</TABLE>
50
<PAGE>
<TABLE>
<CAPTION>
SHARES PERCENTAGE OF
BENEFICIALLY OUTSTANDING
OWNED SHARES
------------ -------------
<S> <C> <C>
Donaldson Lufkin & Jenrette**
Pershing Division
P.O. Box 2052
Jersey City, New Jersey 07303-2052 996,668.837 14.59%
Hatado-Limited Partnership
1616 Travis Circle South
Irving, Texas 75038-6247 429,352.500 6.28%
BLAIRLOGIE INTERNATIONAL ACTIVE FUND
Pacific Financial Asset
Management Corporation
700 Newport Center Drive
Newport Beach, California 92660 1,719,954.416 28.01%*
Pacific Mutual Life Insurance Company
700 Newport Center Drive
Newport Beach, California 92660 962,792.481 15.68%
Charles Schwab & Co., Inc.**
101 Montgomery Street
San Francisco, California 94104-4122 847,361.771 13.80%
First Interstate Bank as Trustee for
Cadence Design System Inc.
P.O. Box 9800
Calabasas, California 91372-0800 476,924.211 7.77%
BALANCED FUND
Pacific Mutual Life Insurance Company
FBO Hoag Memorial Hospital Presbyterian
700 Newport Center Drive
Newport Beach, California 92660 1,347,899.535 19.73%
Pacific Mutual Life Insurance Company
FBO California Race Track Association
700 Newport Center Drive
Newport Beach, California 92660 985,015.345 14.42%
Pacific Mutual Life Insurance Company
700 Newport Center Drive
Newport Beach, California 92660 977,988.020 14.32%
Key Trust Company
FBO Multicare P&G
P.O. Box 94871
Cleveland, Ohio 44101-4871 753,415.274 11.03%
</TABLE>
51
<PAGE>
<TABLE>
<CAPTION>
SHARES PERCENTAGE OF
BENEFICIALLY OUTSTANDING
OWNED SHARES
------------ -------------
<S> <C> <C>
Trustees of the Redlands Community
Hospital Retirement Plan
350 Terracina Blvd.
Redlands, California 92373-4850 613,592.575 8.98%
Pacific Mutual Life Insurance Company
FBO Telephone Employees' Credit Union
700 Newport Center Drive
Newport Beach, California 92660 609,471.283 8.92%
Pacific Mutual Life Insurance Company
FBO Dominguez Water Corporation Pension Fund
700 Newport Center Drive
Newport Beach, California 92660 424,453.264 6.21%
</TABLE>
* Entity owned 25% or more of the outstanding shares of beneficial interest of
the Fund, and therefore may be presumed to "control" the Fund, as that term
is defined in the 1940 Act.
** Shares are held only as nominee.
As of February 6, 1996, the Trustees and Officers of the Trust, as a group,
owned .063%, .12%, .30%, .20%, .055%, .011%, .011%, .044%, and .018% of the
outstanding shares of the NFJ Equity Income, NFJ Diversified Low P/E, Blairlogie
International Active, Blairlogie Emerging Markets, Cadence Micro Cap Growth,
Cadence Mid Cap Growth, Cadence Capital Appreciation, NFJ Small Cap Value, and
Columbus Circle Investors Mid Cap Equity Funds, respectively.
52
<PAGE>
CODE OF ETHICS
The Trust, PIMCO Advisors, and the Portfolio Managers have each adopted a
Code of Ethics governing personal trading activities of all Trustees and
officers of the Trust, and Directors, officers and employees of PIMCO Advisors
and each Portfolio Manager who, in connection with their regular functions, play
a role in the recommendation of any purchase or sale of a security by the Trust
or obtain information pertaining to such purchase or sale or who have the power
to influence the management or policies of the Trust, PIMCO Advisors, or the
Portfolio Managers. Such persons are required to preclear certain security
transactions with a compliance officer or his designee and to report certain
transactions on a regular basis. PIMCO Advisors has developed procedures for
administration of the Codes of Ethics.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Investors Fiduciary Trust Company ("IFTC") serves as custodian, transfer
agent and dividend disbursing agent for assets of all Funds. Pursuant to a sub-
custody agreement between IFTC and The Chase Manhattan Bank, N.A. ("Chase"),
Chase serves as subcustodian of the Trust for the custody of the foreign
securities acquired by the Columbus Circle Investors Core Equity, Columbus
Circle Investors Mid Cap Equity, Blairlogie Emerging Markets, and Blairlogie
International Active Funds. Under the agreement, Chase may hold the foreign
securities at its principal office at One Chase Manhattan Plaza, New York, New
York, 10081, and at Chase's branches, and subject to approval by the Board of
Trustees, at a foreign branch of a qualified U.S. bank, an eligible foreign
subcustodian, or an eligible foreign securities depository.
Pursuant to rules or other exemptions under the 1940 Act, the Trust may
maintain foreign securities and cash in the custody of certain eligible foreign
banks and securities depositories. Selection of these foreign custodial
institutions is made by the Board of Trustees following a consideration of a
number of factors, including (but not limited to) the reliability and financial
stability of the institution; the ability of the institution to perform capably
custodial services for the Trust; the reputation of the institution in its
national market; the political and economic stability of the country in which
the institution is located; and further risks of potential nationalization or
expropriation of Trust assets. The Board of Trustees reviews annually the
continuance of foreign custodial arrangements for the Trust. No assurance can
be given that the Trustees' appraisal of the risks in connection with foreign
custodial arrangements will always be correct or that expropriation,
nationalization, freezes, or confiscation of assets that would impact assets of
the Funds will not occur, and shareholders bear the risk of losses arising from
these or other events.
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP, 1055 Broadway, Kansas City, Missouri 64105, serves as
the independent public accountants for the Funds. Price Waterhouse LLP provides
audit services, accounting assistance, and consultation in connection with SEC
filings.
53
<PAGE>
COUNSEL
Dechert Price & Rhoads, 1500 K Street, N.W., Washington, D.C. 20005, passes
upon certain legal matters in connection with the shares offered by the Trust,
and also acts as counsel to the Trust.
REGISTRATION STATEMENT
This Statement of Additional Information and the Prospectus do not contain
all of the information included in the Trust's registration statement filed with
the SEC under the 1933 Act with respect to the securities offered hereby,
certain portions of which have been omitted pursuant to the rules and
regulations of the SEC. The registration statement, including the exhibits
filed therewith, may be examined at the offices of the SEC in Washington, D.C.
Statements contained herein and in the Prospectus as to the contents of any
contract or other documents referred to are not necessarily complete, and, in
each instance, reference is made to the copy of such contract or other documents
filed as an exhibit to the registration statement, each such statement being
qualified in all respects by such reference.
FINANCIAL STATEMENTS
Financial statements for the Trust as of October 31, 1995, for its fiscal
year then ended, including notes thereto, and the report of Deloitte & Touche
LLP (the Funds' independent public accountants prior to November 1, 1995)
thereon dated December 15, 1995, are incorporated by reference from the Trust's
1995 Annual Report.
54
<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) Financial Statements
(1) Part A
Financial Highlights
(2) Part B
Financial statements dated as of October 31, 1995 are
incorporated by reference in the Statement of Additional
Information from the Funds' Annual Report dated as of
October 31, 1995 and include the following:
Statements of Assets and Liabilities
Statements of Operations
Statements of Changes in Net Assets
Financial Highlights
Schedule of Investments
Notes to Financial Statements
(b) Exhibits (the number of each exhibit relates to the exhibit
designation in Form N-1A):
(1)(a) Agreement and Declaration of Trust(1)
(b) Amendment to Agreement and Declaration of Trust dated
October 24, 1990(2)
(c) Amendment to Agreement and Declaration of Trust dated
November 16, 1990(3)
(d) Amendment to Agreement and Declaration of Trust dated
November 29, 1990(4)
(e) Amendment to Agreement and Declaration of Trust dated
December 14, 1990(4)
(f) Form of Amendment to Agreement and Declaration of Trust
dated February 1, 1991(4)
(g) Amendment to Agreement and Declaration of Trust dated May 9,
1991(5)
II-1
<PAGE>
(h) Amendment to Agreement and Declaration Trust dated August 6,
1992(6)
(i) Amendment to Agreement and Declaration of Trust dated
February 26, 1993(7)
(j) Amended and Restated Agreement and Declaration of Trust
dated May 7, 1993(8)
(k) Amendment to Amended and Restated Agreement and Declaration
of Trust dated July 15, 1993(9)
(l) Amendment to Amended and Restated Agreement and Declaration
of Trust dated October 29, 1993(10)
(m) Amendment to Amended and Restated Agreement and Declaration
of Trust dated March 4, 1994(11)
(n) Amendment to Amended and Restated Agreement and Declaration
of Trust dated August 12, 1994(12)
(o) Amendment to Amended and Restated Agreement and Declaration
of Trust dated November 7, 1994(13)
(p) Form of Amended and Restated Agreement and Declaration of
Trust as of November 28, 1995(16)
(q) Form of Amended and Restated Agreement and Declaration of
Trust as of February 2, 1996
(2)(a) By-Laws(1)
(3) Not Applicable
(4)(a) Specimen of Security(4)
(b) Form of Specimen of Security for Mid Cap Growth Portfolio(5)
(c) Form of Specimen of Security for Emerging Markets
Portfolio(6)
(d) Form of Specimen of Security for International Diversified
Portfolio(7)
(e) Form of Specimen of Security for Micro Cap Growth
Portfolio(7)
II-2
<PAGE>
(f) Forms of Specimen of Security for Variable Portfolios(9)
(g) Form of Specimen of Security for Utility Stock Portfolio(10)
(h) Forms of Specimen of Security for Core Equity, Mid Cap
Equity, and Small Cap Equity Funds (collectively, "Columbus
Circle Funds")(12)
(5)(a) Form of Investment Advisory Agreement(12)
(b) (i) Form of Portfolio Management Agreement with
Pacific Mutual Life Insurance Company(12)
(ii) Form of Portfolio Management Agreement with
Pacific Investment Management Company(12)
(iii) Form of Portfolio Management Agreement with NFJ
Investment Group(12)
(iv) Form of Portfolio Management Agreement with
Cadence Capital Management(12)
(v) Form of Portfolio Management Agreement with
Parametric Portfolio Associates(12)
(vi) Form of Portfolio Management Agreement with
Blairlogie Capital Management(12)
(vii) Form of Portfolio Management Agreement with
Columbus Circle Investors(12)
(c) (i) Form of Administration Agreement(15)
(ii) Form of Sub-Administration Agreement(15)
(6) Form of Distribution Agreement(12)
(7) Not Applicable
II-3
<PAGE>
(8) (i) Form of Custody Agreement(3)
(ii) Form of Addendum to Custody Agreement for
Strategic Allocation Portfolio(4)
(iii) Form of Addendum to Custody Agreement for Mid Cap
Growth Portfolio(5)
(iv) Form of Addendum to Custody Agreement for Emerging
Markets Portfolio, International Active Portfolio,
and Micro Cap Growth Portfolio(7)
(v) Form of Addendum to Custody Agreement for Variable
Portfolios(9)
(vi) Form of Addendum to Custody Agreement for Utility
Stock Portfolio(10)
(vii) Form of Addendum to Custody Agreement for Columbus
Circle Funds(12)
(viii) Form of Assignment of Custody Agreement(15)
(9) (a) (i) Form of Agency Agreement(3)
(ii) Form of Addendum to Agency Agreement for Strategic
Allocation Portfolio(4)
(iii) Form of Addendum to Agency Agreement for Mid Cap
Growth Portfolio(5)
(iv) Form of Addendum to Agency Agreement for Emerging
Markets Portfolio, International Active Portfolio,
and Micro Cap Growth Portfolio(7)
(v) Form of Addendum to Agency Agreement for Variable
Portfolios(9)
II-4
<PAGE>
(vi) Form of Addendum to Agency Agreement for Utility
Stock Portfolio(10)
(vii) Form of Addendum to Agency Agreement for Columbus
Circle Funds(12)
(viii) Form of Assignment of Agency Agreement(15)
(b) Form of Service Plan for Institutional Services Shares(11)
(10) Opinion and Consent of Counsel(2)
(11) Consent of Independent Accountants
(12) Annual Report dated October 31, 1995
(13) Initial Capital Agreement(2)
(14) Not Applicable
(15) Not Applicable
(16) Schedule of Computation of Performance(13)
(17) Financial Data Schedule
(18) Form of Multiple Class Plan Pursuant to Rule 18f-3(15)
__________________
1 Included in the Registrant's initial Registration Statement on Form N-1A
(File No. 33-36528), as filed on August 24, 1990.
2 Included in Pre-Effective Amendment No. 1 to the Registration Statement on
Form N-1A (File No. 33-36528), as filed on November 2, 1990.
3 Included in Pre-Effective Amendment No. 2 to the Registration Statement on
Form N-1A (File No. 33-36528), as filed on November 30, 1990.
II-5
<PAGE>
4 Included in Post-Effective Amendment No. 1 to the Registration Statement on
Form N-1A (File No. 33-36528), as filed on February 5, 1991.
5 Included in Post-Effective Amendment No. 2 to the Registration Statement on
Form N-1A (File No. 33-36528), as filed on June 18, 1991.
6 Included in Post-Effective Amendment No. 4 to the Registration Statement on
Form N-1A (File No. 33-36528), as filed on October 30, 1992.
7 Included in Post-Effective Amendment No. 6 to the Registration Statement on
Form N-1A (File No. 33-36528), as filed on April 2, 1993.
8 Included in Post-Effective Amendment No. 8 to the Registration Statement on
Form N-1A (File No. 33-36528), as filed on July 9, 1993.
9 Included in Post-Effective Amendment No. 9 to the Registration Statement on
Form N-1A (File No. 33-36528), as filed on August 11, 1993.
10 Included in Post-Effective Amendment No. 10 to the Registration Statement
on Form N-1A (File No. 33-36528), as filed on November 4, 1993.
11 Included in Post-Effective Amendment No. 13 to the Registration Statement
on Form N-1A (File No. 33-36528), as filed on April 12, 1994.
12 Included in Post-Effective Amendment No. 15 to the Registration Statement
on Form N-1A (File No. 33-36528), as filed on October 14, 1994.
13 Included in Post-Effective Amendment No. 16 to the Registration Statement
on Form N-1A (File No. 33-36528), as filed on December 28, 1994.
14 Included in Post-Effective Amendment No. 17 to the Registration Statement
on Form N-1A (File No. 33-36528), as filed on June 28, 1995.
15 Included in Post-Effective Amendment No. 19 to the Registration Statement
on Form N-1A (File No. 33-36528), as filed on October 31, 1995.
16 Included in Post-Effective Amendment No. 20 to the Registration Statement
on Form N-1A (File No. 33-36528), as filed on December 29, 1995.
II-6
<PAGE>
Item 25. Persons Controlled by or Under Common Control with Registrant.
As of February 6, 1996, Pacific Mutual Life Insurance Company owned 68%
of the outstanding shares of the Columbus Circle Investors Mid Cap Equity Fund
and 25% of the NFJ Small Cap Value Fund; The Northern Trust Company as Trustee
for Great Lakes Chemical Master Retirement Trust owned 65% of the outstanding
shares of the NFJ Diversified Low P/E Fund; Pacific Financial Asset Management
Corporation owned 28% of the outstanding shares of the Blairlogie International
Active Fund; Charles Schwab & Company owned 30% of the outstanding shares of the
Blairlogie Emerging Markets Fund; and The Bank of New York as Trustee for
Melville Corporation owned 66% of the outstanding shares of the Columbus Circle
Investors Core Equity Fund.
Item 26. Number of Holders of Securities.
As of February 6, 1996, the number of shareholders of each operational
Fund was as follows:
<TABLE>
<CAPTION>
Number of
Fund (Institutional Class) Record Holders
<S> <C>
NFJ Equity Income Fund 232
NFJ Diversified Low P/E Fund 33
NFJ Small Cap Value Fund 171
Cadence Capital Appreciation Fund 219
Cadence Mid Cap Growth Fund 231
Cadence Micro Cap Growth Fund 72
Cadence Small Cap Growth Fund 50
Columbus Circle Investors Core Equity Fund 119
Columbus Circle Investors Mid Cap Equity Fund 119
Parametric Enhanced Equity Fund 149
Blairlogie Emerging Markets Fund 208
Blairlogie International Active Fund 151
Balanced Fund 26
<CAPTION>
Number of
Fund (Administrative Class) Record Holders
<S> <C>
NFJ Equity Income Fund 8
Cadence Mid Cap Growth Fund 9
Columbus Circle Investors Core Equity Fund 4
Blairlogie Emerging Markets Fund 5
Blairlogie International Active Fund 7
NFJ Small Cap Value Fund 1
Cadence Small Cap Growth Fund 1
</TABLE>
II-7
<PAGE>
Item 27. Indemnification.
Reference is made to Article 5, Section 5.4 of the Registrant's
Agreement and Declaration of Trust, which is incorporated by reference herein.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant by the Registrant pursuant to the Fund's Articles of
Incorporation, its By-Laws or otherwise, the Registrant is aware that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Act and, therefore, is unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by directors,
officers or controlling persons or the Registrant in connection with the
successful defense of any act, suit or proceeding) is asserted by such
directors, officers or controlling persons in connection with shares being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issues.
Item 28. Business and Other Connections of Current Investment Adviser.
Unless otherwise stated, the principal business address of each
organization listed is 800 Newport Center Drive, Newport Beach, CA 92660.
PIMCO Advisors L.P.
<TABLE>
<CAPTION>
Position
Name with Adviser Other Affiliations
<S> <C> <C>
Walter E. Auch, Sr. Member of Equity Management
Board Consultant; Former
Director, Thomson
Advisory Group L.P.
David B. Breed Member of Director, Managing
Operating Board Director and Chief
Executive Officer,
Cadence Capital
Management, Inc.;
Managing Director
and Chief
Executive
</TABLE>
II-8
<PAGE>
<TABLE>
<S> <C> <C>
Officer, Cadence
Capital Management.
Donald A. Chiboucas Member of Director and
Operating Board President, Columbus
Circle Investors
Management, Inc.;
Managing Director
and President,
Columbus Circle
Investors.
William D. Cvengros Chief Executive None.
Officer and
President, Member
of Operating
Board, Operating
Committee, and
Equity Board
Walter B. Gerken Member of Equity Director, Mullin
Board Consulting Inc.;
Director,
Executive Services
Corps. of Southern
California.
William H. Gross Member of Director and
Operating Board Managing Director,
and Equity Board PIMCO Management,
Inc.; Managing
Director, Pacific
Investment
Management Company;
</TABLE>
II-9
<PAGE>
<TABLE>
<S> <C> <C>
Senior Vice
President, PIMCO
Funds; Director
and Vice President,
StocksPLUS
Management, Inc.
Brent R. Harris Member of Director and
Operating Board Managing Director,
PIMCO Management,
Inc.; Managing
Director, Pacific
Investment
Management Company;
Chairman of the
Board and Trustee,
PIMCO Funds.
Donald R. Kurtz Member of Equity Former Vice President
Board of Internal Asset
Management, General
Motors Investment
Management Corp.;
Former Director,
Thomson Advisory
Group L.P.
Dean S. Meiling Member of Director and
Operating Board Managing Director,
PIMCO Management,
Inc.; Managing
Director, Pacific
Investment
Management Company;
Director, StocksPLUS
Management, Inc.;
</TABLE>
II-10
<PAGE>
<TABLE>
<S> <C> <C>
Vice President,
PIMCO Funds.
Donald K. Miller Member of Equity Former Director and
Board Vice Chairman,
Thomson Advisory
Group L.P.
James F. Muzzy Member of Director and
Operating Board Managing Director,
PIMCO Management,
Inc.; Managing
Director, Pacific
Investment
Management Company;
Vice President,
PIMCO Funds;
Director and Vice
President,
StocksPLUS
Management, Inc.
</TABLE>
II-11
<PAGE>
<TABLE>
<S> <C> <C>
Daniel S. Pickett Member of Managing Director,
Operating Board Columbus Circle
Investors; Director,
Columbus Circle
Investors
Management, Inc.
William F. Podlich, Member of Director and
III Operating Board Managing Director,
and Equity Board PIMCO Management,
Inc.; Managing
Director, Pacific
Investment
Management Company.
William C. Powers Member of Director and
Operating Board Managing Director,
PIMCO Management,
Inc.; Managing
Director, Pacific
Investment
Management Company.
Glenn S. Schafer Member of Equity President and
Board Director, Pacific
Mutual Life
Insurance Company
(See Pacific Mutual).
</TABLE>
II-12
<PAGE>
<TABLE>
<S> <C> <C>
Irwin F. Smith Member of Chairman and
Operating Board, Managing Director,
Operating Columbus Circle
Committee, and Investors; Director
Equity Board and Chairman, Columbus
Circle Investors
Management, Inc.
Thomas C. Sutton Member of Equity Chairman, Chief
Board Executive Officer
and Director,
Pacific Mutual Life
Insurance Company
(See Pacific Mutual).
William S. Member of Director, Managing
Thompson, Jr. Operating Board, Director and Chief
Operating Executive Officer,
Committee, and PIMCO Management,
Equity Board Inc.; Chief
Executive Officer
and Managing
Director, Pacific
Investment
Management Company.
</TABLE>
Cadence Capital Management
Exchange Place, 53 State Street,
Boston, Massachusetts 02109
<TABLE>
<CAPTION>
Position
Name with Adviser Other Affiliations
<S> <C> <C>
William B. Bannick Managing Director Director and
and Executive Managing Director,
Vice President Cadence Capital
Management, Inc.
David B. Breed Managing Director Director, Managing
and Chief Director and Chief
Executive Officer Executive Officer,
Cadence Capital
Management, Inc.
</TABLE>
II-13
<PAGE>
NFJ Investment Group
2121 San Jacinto, Suite 1850,
Dallas, Texas 75201
<TABLE>
<CAPTION>
Position
Name with Adviser Other Affiliations
<S> <C> <C>
Benno J. Fischer Managing Director Director and
and Chief Financial Managing Director,
Officer NFJ Management, Inc.
John L. Johnson Managing Director Director and
Managing Director,
NFJ Management, Inc.
Jack C. Najork Managing Director Director, Managing
Director and
Chairman, NFJ
Management, Inc.
Parametric Portfolio Associates
7310 Columbia Center, 701 Fifth Avenue,
Seattle, Washington 98104-7090
<CAPTION>
Position
Name with Adviser Other Affiliations
<S> <C> <C>
William E. Managing Director Director and
Cornelius, Jr. Managing Director,
Parametric
Management, Inc.
Mark W. England- Managing Director Director, Managing
Markun Director and Chief
Executive Officer,
Parametric
Management, Inc.
</TABLE>
II-14
<PAGE>
Pacific Mutual Life Insurance Company
700 Newport Center Drive
Newport Beach, California 92660
<TABLE>
<CAPTION>
Position
Name with Adviser Other Affiliations
<S> <C> <C>
Harry G. Bubb Director and None.
Chairman Emeritus
Edward R. Byrd Vice President Chief Financial Officer
and Controller and Treasurer, Pacific
Equities Network; Vice
President, Pacific
Financial Asset
Management Corp.,
Parametric Portfolio
Associates, Inc.,
Cadence Capital
Management Corp., NFJ
Investment Group, Inc.,
and Pacific Investment
Management Company; Vice
President, Assistant
Treasurer and Controller,
Thomson Advisory Group,
Inc.; Controller,
PIMCO Partners, G.P.;
Chief Financial Officer,
Pacific Corinthian
Life Insurance Company.
David R. Carmichael Senior Vice Director and General
President and Counsel, Pacific
General Counsel Corinthian Life
Insurance Company;
Director, PM Group Life
Insurance Company;
Director,
Association
of California Life
Insurance Companies.
Richard M. Ferry Director Chairman and
Director, Korn/Ferry
International;
Director, Avery
Dennison
Corporation;
Director, ConAm
Management;
Director, Dole
Food Co.; Director,
First Business
Bank; Director,
Northwestern
Restaurants, Inc.;
Director, Mullin
Consulting, Inc.
</TABLE>
II-15
<PAGE>
<TABLE>
<S> <C> <C>
Donald E. Guinn Director Chairman Emeritus
and Director,
Pacific Telesis
Group; Director,
The Dial Corporation;
Director, Bank of
America NT&SA;
Director, BankAmerica
Corporation.
Ignacio E. Lozano, Director Chairman, La Opinion;
Jr. Director, BankAmerica
Corporation;
Director, Bank of
America NT&SA;
Director, Pacific
Enterprises;
Director, The Walt
Disney Company.
Charles A. Lynch Director Chairman and Director,
Fresh Choice Inc.;
Director, Nordstrom,
Inc.; Director, Mid-
Peninsula Bank;
Director,
Greyhound Lines,
Inc.; Director,
PST Vans, Inc.;
Director, SRI
International, Inc.
Allen W. Mathies, Director President and Emeritus
Jr., MD Director, Huntington
Memorial Hospital.
</TABLE>
II-16
<PAGE>
<TABLE>
<S> <C> <C>
Audrey L. Milfs Vice President Secretary, PM Group
and Secretary Life Insurance Company,
Pacific Equities
Network, Mutual Service
Corporation, United
Planners' Group, Inc.,
Pacific Financial Asset
Management Corp.,
Parametric Portfolio
Associates, Inc.,
Cadence Capital
Management Corp., NFJ
Investment Group, Inc.,
Pacific Investment
Management Company,
PMRealty Advisors, Inc.,
Pacific Mutual Realty
Finance, Inc., Pacific
Corinthian Life
Insurance Company, and
Pacific Select; Assistant
Secretary, Thomson
Advisory Group, Inc.
Charles D. Miller Director Director, Chairman
of the Board and
Chief Executive
Officer, Avery
Dennison
Corporation; Director,
Great Western
Financial
Corporation;
Director,
Nationwide Health
Properties, Inc.;
Director, Edison
International (formerly
Southern California
Edison Company);
Director, Davidson
& Associates.
</TABLE>
II-17
<PAGE>
<TABLE>
<S> <C> <C>
Donn B. Miller Director Director, President and
Chief Executive Officer,
Pearson-Sibert Oil Co.
of Texas; Director,
Automobile Club of
Southern California;
Director, The
Irvine Company.
J. Fernando Niebla Director Director, Chairman and
Chief Executive Officer,
Infotec Development,
Inc.; Director, Bank
of California.
Richard M. Rosenberg Director Chairman and
Director, BankAmerica
Corporation;
Director, Airborne
Express Corporation;
Director, Northrop
Grumman Corporation;
Director, Potlatch
Corporation; Director,
Pacific Telesis Group.
Thomas C. Sutton Chairman, Chief Chairman, Director and
Executive Officer Chief Executive Officer,
and Director Cadence Capital
Management Corporation,
NFJ Investment Group,
Inc., Pacific Financial
Asset Management
Corporation, and
Pacific Investment
Management Company;
Chairman, Trustee
and President, Pacific
Select Fund; Director
and Chairman, Parametric
Portfolio Associates,
Inc.; Director, Pacific
Equities Network, PMRealty
Advisors, Inc., and
Mutual Services
Corporation.
Glenn S. Schafer President and Chairman and
Director Director, Mutual
Service Corporation;
Director, United
Planner's Group, Inc.;
Director, PM
Group Life Insurance
Company; Chairman,
Chief Executive Officer
and Director, Pacific
Corinthian Life
Insurance Company;
Director, Pacific
Equities Network;
Director, Pacific
Mutual Realty
Finance, Inc.; President
and Director,
Pacific Financial Asset
Management Corporation,
Parametric Portfolio
Associates, Inc.,
Cadence Capital Management
Corporation, NFJ
Investment Group, Inc.,
Pacific Investment
Management Company,
and PMRealty Advisors,
Inc.
Khanh T. Tran Vice President Treasurer, PM Group
and Treasurer Life Insurance Company,
Pacific Financial Asset
Management Corp.,
Parametric Portfolio
Associates, Inc.,
Cadence Capital
Management Corp., NFJ
Investment Group, Pacific
Investment Management
Company, PMRealty
Advisors, and Pacific
Mutual Realty Finance,
Inc.; Treasurer and
Chief Financial Officer,
Thomson Advisory Group,
Inc.; Vice President and
Treasurer, PIMCO Partners,
G.P.; Treasurer and
Assistant Secretary,
Pacific Corinthian Life
Insurance Company.
</TABLE>
II-18
<PAGE>
<TABLE>
<S> <C> <C>
James R. Ukropina Director Partner, O'Melveney &
Meyers; Director,
Lockheed Martin
Corporation.
Raymond L. Watson Director Vice Chairman and
Director, The Irvine
Company;
Director, The Walt
Disney Company;
Director, The
Mitchell Energy and
Development Company;
Director, The
Tejon Ranch.
Susan Westerberg Director Dean, U.C.L.A.
Prager School of Law.
</TABLE>
Pacific Investment Management Company
840 Newport Center Drive,
Newport Beach, California 92660
<TABLE>
<CAPTION>
Position
Name with Adviser Other Affiliations
<S> <C> <C>
William S. Chief Executive See PIMCO Advisors, L.P.
Thompson, Jr. Officer and
Managing Director
David H. Edington Managing Director Director, PIMCO
Management, Inc.
William H. Gross Managing Director See PIMCO Advisors, L.P.
Dean S. Meiling Managing Director See PIMCO Advisors, L.P.
James F. Muzzy Managing Director See PIMCO Advisors, L.P.
William F. Podlich, Managing Director See PIMCO Advisors, L.P.
III
William C. Powers Managing Director See PIMCO Advisors, L.P.
John L. Hague Managing Director Director and Managing
Director, PIMCO
Management, Inc.
Brent R. Harris Managing Director See PIMCO Advisors, L.P.
Frank B. Managing Director Director and Managing
Rabinovitch Director, PIMCO
Management, Inc.
</TABLE>
II-19
<PAGE>
Columbus Circle Investors
Metro Center
One Station Place, 8th Floor
Stamford, Connecticut 06902
<TABLE>
<CAPTION>
Position
Name with Adviser Other Affiliations
<S> <C> <C>
Irwin F. Smith Chairman and Director and
Managing Director Chairman, Columbus
Circle Investors
Management, Inc.
Donald A. Chiboucas President and Director and
Managing Director President, Columbus
Circle Investors
Management, Inc.
Robert W. Fehrmann Managing Director Director, Columbus
Circle Investors
Management, Inc.
Louis P. Celentano Managing Director Director and Vice
President, Columbus
Circle Investors
Management, Inc.
Amy M. Hogan Managing Director Director, Columbus
Circle Investors
Management, Inc.
Daniel S. Pickett Managing Director Director, Columbus
Circle Investors
Management, Inc.
</TABLE>
Blairlogie Capital Management
4th Floor, 125 Princes Street
Edinburgh EH2 4AD, Scotland
<TABLE>
<CAPTION>
<S> <C> <C>
Position
Name with Adviser Other Affiliations
Gavin R. Dobson Chief Executive Director, Blairlogie
Officer and Holdings Limited
Managing Director (U.K.)
James G.S. Smith Chief Investment Director, Blairlogie
Officer and Holdings Limited
Managing Director (U.K.)
</TABLE>
II-20
<PAGE>
<TABLE>
<S> <C> <C>
John R.W. Stevens Chief Financial Director, Blairlogie
Officer and Holdings Limited
Managing Director (U.K.)
</TABLE>
Item 29. Principal Underwriters.
(a) PIMCO Advisors Distribution Company. PIMCO Advisors Distribution
Company (the "Distributor") serves as Distributor of shares of the
Fund. The Distributor is a wholly-owned subsidiary of PIMCO Advisors
L.P., the Investment Adviser and Administrator of the Registrant.
(b)
<TABLE>
<CAPTION>
Positions and Positions
Name and Principal Offices with and Offices
Business Address* Underwriter with Registrant
<S> <C> <C>
Robert A. Prindiville Chairman None
John O. Leasure President and None
Chief Executive
Officer
Newton B. Schott, Jr. Senior Vice None
President and
Secretary
Andrew J. Meyers Executive Vice None
President
Samuel C. Newman Senior Vice None
President,
Compliance,
Assistant
Secretary
Brian F. Trumbore Senior Vice None
President
Matthew M. Russell Vice President None
Edward W. Janeczek Vice President None
Lesley Cotten Vice President None
Jeffrey L. Booth Vice President None
Paul R. Moody Regional Vice None
President
</TABLE>
II-21
<PAGE>
<TABLE>
<S> <C> <C>
William E. Lynch Regional Vice None
President
William H. Thomas, Jr. Regional Vice None
President
Paul H. Troyer Regional Vice None
President
Thomas A. Conway Assistant Vice None
President and
Assistant
Controller
Jaishree B. Kemraj Assistant Vice None
President and
Assistant
Controller
</TABLE>
____________________
* Principal business address for all individuals listed is One Station Place,
Stamford, Connecticut 06902.
(c) Not Applicable.
Item 30. Location of Accounts and Records.
The account books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and
the Rules thereunder will be maintained at the offices of the Fund's Transfer
Agent and Custodian, Investors Fiduciary Trust Company, 21 West 10th Street,
Kansas City, Missouri 64105.
Item 31. Management Services.
Not Applicable
Item 32. Undertakings.
(a) Not Applicable.
(b) Not Applicable.
(c) Registrant, if requested to do so by the holders of at least 10% of
the Registrant's outstanding shares, will
II-22
<PAGE>
call a meeting of shareholders for the purpose of voting upon the
question of removal of a trustee or trustees, and will assist
communications among shareholders as set forth within Section 16(c) of
the 1940 Act; and
(d) Registrant undertakes to furnish each person to whom a prospectus is
delivered with a copy of the Registrant's latest report to
shareholders, upon request and without charge.
II-23
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Post-Effective Amendment No. 21 to
the Registration Statement pursuant to Rule 485(b) under the Securities Act of
1933 and has duly caused this Post-Effective Amendment No. 21 to the
Registration Statement of PIMCO Funds: Equity Advisors Series to be signed on
its behalf by the undersigned, thereunto duly authorized in the City of Newport
Beach in the State of California on the 29th day of February, 1996.
PIMCO Funds: Equity Advisors Series
By: /s/ William D. Cvengros
-------------------------------------------
William D. Cvengros, Chairman of the Board,
President, and Trustee
II-24
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 21 to the Registration Statement of PIMCO Funds:
Equity Advisors Series has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<S> <C> <C>
Signature Title Date
________________________ 2/29/96
Robert M. Brandenberger* Treasurer (Principal
Financial and
Accounting Officer
________________________ 2/29/96
Richard L. Nelson* Trustee
________________________ 2/29/96
Lyman W. Porter* Trustee
________________________ 2/29/96
Alan Richards* Trustee
</TABLE>
*By: /s/ William D. Cvengros
_____________________________________________
William D. Cvengros
Chairman of the Board, President, and Trustee
as Attorney-in-Fact
Powers of Attorney for Messrs. Brandenberger, Nelson, Porter, Richards and
Cvengros, and a certificate included pursuant to Rule 483(b) under the
Securities Act of 1933, were filed as exhibits to Post-Effective Amendment No.
19 and are incorporated herein by reference.
II-25
<PAGE>
EXHIBIT LIST
<TABLE>
<CAPTION>
Exhibit No. Exhibit Name
<S> <C>
1(q) Form of Amended and
Restated Agreement and
Declaration of Trust as
of February 2, 1996
11 Consent of Independent
Accountants
12 Annual Report dated
October 31, 1995
17 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000867297
<NAME> PIMCO FUNDS:EQUITY ADVISORS SERIES
<SERIES>
<NUMBER> 011
<NAME>MONEY MARKET FUND
</SERIES>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 7,664
<INVESTMENTS-AT-VALUE> 7,664
<RECEIVABLES> 99
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 7,763
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 12
<TOTAL-LIABILITIES> 12
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 7,751
<SHARES-COMMON-STOCK> 7,741
<SHARES-COMMON-PRIOR> 7,453
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 7,751
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 576
<OTHER-INCOME> 0
<EXPENSES-NET> 40
<NET-INVESTMENT-INCOME> 536
<REALIZED-GAINS-CURRENT> 536
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> (536)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (517)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 22,820
<NUMBER-OF-SHARES-REDEEMED> (23,025)
<SHARES-REINVESTED> 493
<NET-CHANGE-IN-ASSETS> 22,677
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 14
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 40
<AVERAGE-NET-ASSETS> 9,344
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.06
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.06)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000867297
<NAME> PIMCO FUNDS: EQUITY ADVISORS SERIES
<SERIES>
<NUMBER> 012
<NAME> MONEY MARKET FUND-ADMINISTRATION CLASS
</SERIES>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 7,664
<INVESTMENTS-AT-VALUE> 7,664
<RECEIVABLES> 99
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 7,763
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 12
<TOTAL-LIABILITIES> 12
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 7,751
<SHARES-COMMON-STOCK> 10
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 7,751
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 576
<OTHER-INCOME> 0
<EXPENSES-NET> 1
<NET-INVESTMENT-INCOME> 536
<REALIZED-GAINS-CURRENT> 536
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 536
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (19)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,799
<NUMBER-OF-SHARES-REDEEMED> (1,809)
<SHARES-REINVESTED> 19
<NET-CHANGE-IN-ASSETS> 22,677
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 14
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1
<AVERAGE-NET-ASSETS> 423
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.05)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.68
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000867297
<NAME> PIMCO FUNDS: EQUITY ADVISORS SERIES
<SERIES>
<NUMBER> 021
<NAME> PIMCO MANAGED BOND & INCOME FUND
</SERIES>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 435,924
<INVESTMENTS-AT-VALUE> 440,848
<RECEIVABLES> 5,202
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 3
<TOTAL-ASSETS> 446,053
<PAYABLE-FOR-SECURITIES> 3
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 796
<TOTAL-LIABILITIES> 799
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 433,992
<SHARES-COMMON-STOCK> 43,909
<SHARES-COMMON-PRIOR> 38,104
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (5)
<ACCUMULATED-NET-GAINS> 1,664
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 9,603
<NET-ASSETS> 445,254
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 28,155
<OTHER-INCOME> 0
<EXPENSES-NET> 2,044
<NET-INVESTMENT-INCOME> 26,111
<REALIZED-GAINS-CURRENT> 14,545
<APPREC-INCREASE-CURRENT> 19,381
<NET-CHANGE-FROM-OPS> 60,037
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (26,008)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10,242
<NUMBER-OF-SHARES-REDEEMED> (7,537)
<SHARES-REINVESTED> 2,500
<NET-CHANGE-IN-ASSETS> 53,433
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (12,881)
<OVERDIST-NET-GAINS-PRIOR> (9,778)
<GROSS-ADVISORY-FEES> 1,009
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,044
<AVERAGE-NET-ASSETS> 402,100
<PER-SHARE-NAV-BEGIN> 9.39
<PER-SHARE-NII> 0.69
<PER-SHARE-GAIN-APPREC> 0.76
<PER-SHARE-DIVIDEND> (0.63)
<PER-SHARE-DISTRIBUTIONS> (0.63)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.21
<EXPENSE-RATIO> 0.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000867297
<NAME> PIMCO FUNDS: EQUITY ADVISORS SERIES
<SERIES>
<NUMBER> 022
<NAME> PIMCO MANAGED BOND & INCOME FUND-ADMINISTRATIVE CLASS
</SERIES>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 435,924
<INVESTMENTS-AT-VALUE> 440,848
<RECEIVABLES> 5,202
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 3
<TOTAL-ASSETS> 446,053
<PAYABLE-FOR-SECURITIES> 3
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 796
<TOTAL-LIABILITIES> 799
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 433,992
<SHARES-COMMON-STOCK> 309
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (5)
<ACCUMULATED-NET-GAINS> 1,664
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 9,603
<NET-ASSETS> 445,254
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 28,155
<OTHER-INCOME> 0
<EXPENSES-NET> 5
<NET-INVESTMENT-INCOME> 26,111
<REALIZED-GAINS-CURRENT> 14,545
<APPREC-INCREASE-CURRENT> 19,381
<NET-CHANGE-FROM-OPS> 60,037
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (108)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 306
<NUMBER-OF-SHARES-REDEEMED> (7)
<SHARES-REINVESTED> 10
<NET-CHANGE-IN-ASSETS> 53,433
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (12,881)
<OVERDIST-NET-GAINS-PRIOR> (9,778)
<GROSS-ADVISORY-FEES> 1,009
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5
<AVERAGE-NET-ASSETS> 1,886
<PER-SHARE-NAV-BEGIN> 9.34
<PER-SHARE-NII> 0.56
<PER-SHARE-GAIN-APPREC> 0.88
<PER-SHARE-DIVIDEND> (0.56)
<PER-SHARE-DISTRIBUTIONS> (0.56)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.22
<EXPENSE-RATIO> 0.76
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000867297
<NAME> PIMCO FUNDS: EQUITY ADVISORS SERIES
<SERIES>
<NUMBER> 031
<NAME> NFJ EQUITY INCOME FUND
</SERIES>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 103,095
<INVESTMENTS-AT-VALUE> 113,865
<RECEIVABLES> 6,620
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 98
<TOTAL-ASSETS> 120,583
<PAYABLE-FOR-SECURITIES> 2,178
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 250
<TOTAL-LIABILITIES> 2,428
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 102,788
<SHARES-COMMON-STOCK> 9,013
<SHARES-COMMON-PRIOR> 7,862
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,607
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10,770
<NET-ASSETS> 118,155
<DIVIDEND-INCOME> 4,162
<INTEREST-INCOME> 335
<OTHER-INCOME> 0
<EXPENSES-NET> 697
<NET-INVESTMENT-INCOME> 3,800
<REALIZED-GAINS-CURRENT> 4,643
<APPREC-INCREASE-CURRENT> 9,476
<NET-CHANGE-FROM-OPS> 17,919
<EQUALIZATION> 62
<DISTRIBUTIONS-OF-INCOME> (3,822)
<DISTRIBUTIONS-OF-GAINS> (2,558)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,186
<NUMBER-OF-SHARES-REDEEMED> (1,547)
<SHARES-REINVESTED> 513
<NET-CHANGE-IN-ASSETS> 14,197
<ACCUMULATED-NII-PRIOR> 26
<ACCUMULATED-GAINS-PRIOR> 2,525
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (1,889)
<GROSS-ADVISORY-FEES> 446
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 697
<AVERAGE-NET-ASSETS> 98,981
<PER-SHARE-NAV-BEGIN> 11.75
<PER-SHARE-NII> .46
<PER-SHARE-GAIN-APPREC> 1.67
<PER-SHARE-DIVIDEND> (0.46)
<PER-SHARE-DISTRIBUTIONS> (0.79)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 13.09
<EXPENSE-RATIO> 0.70
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000867297
<NAME> PIMCO FUNDS: EQUITY ADVISORS SERIES
<SERIES>
<NUMBER> 032
<NAME> NFJ EQUITY INCOME FUND-ADMINSTRATIVE CLASS
</SERIES>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 103,095
<INVESTMENTS-AT-VALUE> 113,865
<RECEIVABLES> 6,620
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 98
<TOTAL-ASSETS> 120,583
<PAYABLE-FOR-SECURITIES> 2,178
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 250
<TOTAL-LIABILITIES> 2,428
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 102,788
<SHARES-COMMON-STOCK> 11
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,607
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10,770
<NET-ASSETS> 118,155
<DIVIDEND-INCOME> 4,162
<INTEREST-INCOME> 335
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 3,800
<REALIZED-GAINS-CURRENT> 4,643
<APPREC-INCREASE-CURRENT> 9,476
<NET-CHANGE-FROM-OPS> 17,919
<EQUALIZATION> 62
<DISTRIBUTIONS-OF-INCOME> (4)
<DISTRIBUTIONS-OF-GAINS> (4)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 11
<NUMBER-OF-SHARES-REDEEMED> (1)
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 14,197
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 446
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 132
<PER-SHARE-NAV-BEGIN> 11.12
<PER-SHARE-NII> .39
<PER-SHARE-GAIN-APPREC> 2.35
<PER-SHARE-DIVIDEND> (0.40)
<PER-SHARE-DISTRIBUTIONS> (0.73)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 13.13
<EXPENSE-RATIO> 0.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000867297
<NAME> PIMCO FUNDS: EQUITY ADVISORS SERIES
<SERIES>
<NUMBER> 041
<NAME> NFJ DIVERSIFIED LOW P/E FUND
</SERIES>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 12,359
<INVESTMENTS-AT-VALUE> 14,437
<RECEIVABLES> 105
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 14,452
<PAYABLE-FOR-SECURITIES> 90
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9
<TOTAL-LIABILITIES> 99
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 10,335
<SHARES-COMMON-STOCK> 1,153
<SHARES-COMMON-PRIOR> 1,337
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,030
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,078
<NET-ASSETS> 14,443
<DIVIDEND-INCOME> 405
<INTEREST-INCOME> 28
<OTHER-INCOME> 0
<EXPENSES-NET> 96
<NET-INVESTMENT-INCOME> 337
<REALIZED-GAINS-CURRENT> 2,035
<APPREC-INCREASE-CURRENT> 484
<NET-CHANGE-FROM-OPS> 2,856
<EQUALIZATION> (4)
<DISTRIBUTIONS-OF-INCOME> (342)
<DISTRIBUTIONS-OF-GAINS> (1,375)
<DISTRIBUTIONS-OTHER> 115
<NUMBER-OF-SHARES-SOLD> 10
<NUMBER-OF-SHARES-REDEEMED> (365)
<SHARES-REINVESTED> 1,715
<NET-CHANGE-IN-ASSETS> (2,134)
<ACCUMULATED-NII-PRIOR> 5
<ACCUMULATED-GAINS-PRIOR> 1,370
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 61
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 96
<AVERAGE-NET-ASSETS> 13,483
<PER-SHARE-NAV-BEGIN> 11.55
<PER-SHARE-NII> 0.30
<PER-SHARE-GAIN-APPREC> 2.18
<PER-SHARE-DIVIDEND> (0.30)
<PER-SHARE-DISTRIBUTIONS> (1.50)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 12.53
<EXPENSE-RATIO> 0.70
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000867297
<NAME> PIMCO FUNDS: EQUITY ADVISORS SERIES
<SERIES>
<NUMBER> 051
<NAME> PARAMETRIC ENHANCED EQUITY FUND
</SERIES>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 59,381
<INVESTMENTS-AT-VALUE> 73,955
<RECEIVABLES> 84
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 11
<TOTAL-ASSETS> 74,050
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 51
<TOTAL-LIABILITIES> 51
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 57,256
<SHARES-COMMON-STOCK> 5,126
<SHARES-COMMON-PRIOR> 5,496
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,169
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,574
<NET-ASSETS> 73,999
<DIVIDEND-INCOME> 1,817
<INTEREST-INCOME> 39
<OTHER-INCOME> 0
<EXPENSES-NET> 499
<NET-INVESTMENT-INCOME> 1,357
<REALIZED-GAINS-CURRENT> 2,417
<APPREC-INCREASE-CURRENT> 12,008
<NET-CHANGE-FROM-OPS> 15,782
<EQUALIZATION> (27)
<DISTRIBUTIONS-OF-INCOME> (1,356)
<DISTRIBUTIONS-OF-GAINS> (939)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 872
<NUMBER-OF-SHARES-REDEEMED> (1,427)
<SHARES-REINVESTED> 185
<NET-CHANGE-IN-ASSETS> 8,084
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 690
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 319
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 499
<AVERAGE-NET-ASSETS> 70,919
<PER-SHARE-NAV-BEGIN> 11.99
<PER-SHARE-NII> 0.25
<PER-SHARE-GAIN-APPREC> 2.62
<PER-SHARE-DIVIDEND> (0.25)
<PER-SHARE-DISTRIBUTIONS> (0.42)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 14.44
<EXPENSE-RATIO> 0.70
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000867297
<NAME> PIMCO FUNDS: EQUITY ADVISORS SERIES
<SERIES>
<NUMBER> 061
<NAME> CADENCE CAPITAL APPRECIATION FUND
</SERIES>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 189,607
<INVESTMENTS-AT-VALUE> 234,120
<RECEIVABLES> 2,011
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 3,335
<TOTAL-ASSETS> 239,466
<PAYABLE-FOR-SECURITIES> 3,017
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 229
<TOTAL-LIABILITIES> 3,246
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 176,220
<SHARES-COMMON-STOCK> 13,946
<SHARES-COMMON-PRIOR> 12,404
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 15,487
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 44,513
<NET-ASSETS> 236,220
<DIVIDEND-INCOME> 2,967
<INTEREST-INCOME> 794
<OTHER-INCOME> 0
<EXPENSES-NET> 1,378
<NET-INVESTMENT-INCOME> 2,383
<REALIZED-GAINS-CURRENT> 16,227
<APPREC-INCREASE-CURRENT> 31,810
<NET-CHANGE-FROM-OPS> 50,420
<EQUALIZATION> 65
<DISTRIBUTIONS-OF-INCOME> (2,383)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,256
<NUMBER-OF-SHARES-REDEEMED> (1,858)
<SHARES-REINVESTED> 143
<NET-CHANGE-IN-ASSETS> 22,677
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (740)
<GROSS-ADVISORY-FEES> 881
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,378
<AVERAGE-NET-ASSETS> 196,050
<PER-SHARE-NAV-BEGIN> 13.34
<PER-SHARE-NII> 0.18
<PER-SHARE-GAIN-APPREC> 3.60
<PER-SHARE-DIVIDEND> (0.18)
<PER-SHARE-DISTRIBUTIONS> (0.18)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 16.94
<EXPENSE-RATIO> 0.70
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000867297
<NAME> PIMCO FUNDS: EQUITY ADVISORS SERIES
<SERIES>
<NUMBER> 071
<NAME> NFJ SMALL CAP VALUE FUND
</SERIES>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 32,572
<INVESTMENTS-AT-VALUE> 35,037
<RECEIVABLES> 118
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 6
<TOTAL-ASSETS> 35,161
<PAYABLE-FOR-SECURITIES> 32
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 36
<TOTAL-LIABILITIES> 68
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 30,422
<SHARES-COMMON-STOCK> 2,679
<SHARES-COMMON-PRIOR> 2,588
<ACCUMULATED-NII-CURRENT> 1
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,205
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,465
<NET-ASSETS> 35,093
<DIVIDEND-INCOME> 964
<INTEREST-INCOME> 88
<OTHER-INCOME> 0
<EXPENSES-NET> 289
<NET-INVESTMENT-INCOME> 763
<REALIZED-GAINS-CURRENT> 2,349
<APPREC-INCREASE-CURRENT> 3,100
<NET-CHANGE-FROM-OPS> 6,212
<EQUALIZATION> (10)
<DISTRIBUTIONS-OF-INCOME> (761)
<DISTRIBUTIONS-OF-GAINS> (2,473)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 367
<NUMBER-OF-SHARES-REDEEMED> (559)
<SHARES-REINVESTED> 283
<NET-CHANGE-IN-ASSETS> 3,857
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 2,329
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 203
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 289
<AVERAGE-NET-ASSETS> 33,870
<PER-SHARE-NAV-BEGIN> 12.07
<PER-SHARE-NII> 0.28
<PER-SHARE-GAIN-APPREC> 1.92
<PER-SHARE-DIVIDEND> (0.28)
<PER-SHARE-DISTRIBUTIONS> (1.17)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 13.10
<EXPENSE-RATIO> 0.85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000867297
<NAME> PIMCO FUNDS: EQUITY ADVISORS SERIES
<SERIES>
<NUMBER> 081
<NAME> CADENCE SMALL CAP GROWTH FUND
</SERIES>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 60,337
<INVESTMENTS-AT-VALUE> 76,655
<RECEIVABLES> 671
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 77,326
<PAYABLE-FOR-SECURITIES> 485
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,320
<TOTAL-LIABILITIES> 2,805
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 52,510
<SHARES-COMMON-STOCK> 3,519
<SHARES-COMMON-PRIOR> 2,602
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 5,693
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 16,318
<NET-ASSETS> 74,521
<DIVIDEND-INCOME> 339
<INTEREST-INCOME> 246
<OTHER-INCOME> 0
<EXPENSES-NET> 746
<NET-INVESTMENT-INCOME> (161)
<REALIZED-GAINS-CURRENT> 5,706
<APPREC-INCREASE-CURRENT> 4,873
<NET-CHANGE-FROM-OPS> 10,418
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (3,708)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 887
<NUMBER-OF-SHARES-REDEEMED> (168)
<SHARES-REINVESTED> 199
<NET-CHANGE-IN-ASSETS> 24,096
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 3,696
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 595
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 746
<AVERAGE-NET-ASSETS> 59,510
<PER-SHARE-NAV-BEGIN> 19.38
<PER-SHARE-NII> (0.05)
<PER-SHARE-GAIN-APPREC> 3.12
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 21.02
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000867297
<NAME> PIMCO FUNDS: EQUITY ADVISORS SERIES
<SERIES>
<NUMBER>082
<NAME>CADENCE SMALL CAP GROWTH FUND-ADMINISTRATIVE CLASS
</SERIES>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 60,337
<INVESTMENTS-AT-VALUE> 76,655
<RECEIVABLES> 671
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 77,326
<PAYABLE-FOR-SECURITIES> 485
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,320
<TOTAL-LIABILITIES> 2,805
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 52,510
<SHARES-COMMON-STOCK> 26
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 5,693
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 16,318
<NET-ASSETS> 74,521
<DIVIDEND-INCOME> 339
<INTEREST-INCOME> 246
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> (161)
<REALIZED-GAINS-CURRENT> 5,706
<APPREC-INCREASE-CURRENT> 4,873
<NET-CHANGE-FROM-OPS> 10,418
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 26
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 24,096
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 3,696
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 595
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 531
<PER-SHARE-NAV-BEGIN> 21.90
<PER-SHARE-NII> (0.02)
<PER-SHARE-GAIN-APPREC> (0.87)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 21.01
<EXPENSE-RATIO> 1.60
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000867297
<NAME> PIMCO FUNDS:EQUITY ADVISORS SERIES
<SERIES>
<NUMBER>101
<NAME>BALANCED FUND
</SERIES>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 70,943
<INVESTMENTS-AT-VALUE> 78,180
<RECEIVABLES> 2,063
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 8
<TOTAL-ASSETS> 80,251
<PAYABLE-FOR-SECURITIES> 7,560
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 53
<TOTAL-LIABILITIES> 7,613
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 59,329
<SHARES-COMMON-STOCK> 6,109
<SHARES-COMMON-PRIOR> 12,629
<ACCUMULATED-NII-CURRENT> 59,329
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 5,787
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 7,522
<NET-ASSETS> 72,638
<DIVIDEND-INCOME> 1,365
<INTEREST-INCOME> 2,736
<OTHER-INCOME> 0
<EXPENSES-NET> 652
<NET-INVESTMENT-INCOME> 3,449
<REALIZED-GAINS-CURRENT> 11,549
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 14,998
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (3,451)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,847
<NUMBER-OF-SHARES-REDEEMED> 8,679
<SHARES-REINVESTED> 311
<NET-CHANGE-IN-ASSETS> 58,056
<ACCUMULATED-NII-PRIOR> 2
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 1,364
<GROSS-ADVISORY-FEES> 417
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 652
<AVERAGE-NET-ASSETS> 92,551
<PER-SHARE-NAV-BEGIN> 10.35
<PER-SHARE-NII> 0.44
<PER-SHARE-GAIN-APPREC> 1.54
<PER-SHARE-DIVIDEND> (0.44)
<PER-SHARE-DISTRIBUTIONS> (0.44)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.89
<EXPENSE-RATIO> 0.70
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000867297
<NAME> PIMCO FUNDS: EQUITY ADVISORS SERIES
<SERIES>
<NUMBER>111
<NAME>CADENCE MID CAP GROWTH FUND
</SERIES>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 145,235
<INVESTMENTS-AT-VALUE> 185,595
<RECEIVABLES> 3,447
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 194
<TOTAL-ASSETS> 193,236
<PAYABLE-FOR-SECURITIES> 2,888
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 136
<TOTAL-LIABILITIES> 3,024
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 141,596
<SHARES-COMMON-STOCK> 10,423
<SHARES-COMMON-PRIOR> 8,717
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,256
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 44,360
<NET-ASSETS> 190,212
<DIVIDEND-INCOME> 1,139
<INTEREST-INCOME> 494
<OTHER-INCOME> 0
<EXPENSES-NET> 1,018
<NET-INVESTMENT-INCOME> 615
<REALIZED-GAINS-CURRENT> 6,630
<APPREC-INCREASE-CURRENT> 31,560
<NET-CHANGE-FROM-OPS> 38,805
<EQUALIZATION> 46
<DISTRIBUTIONS-OF-INCOME> (615)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,440
<NUMBER-OF-SHARES-REDEEMED> (1,769)
<SHARES-REINVESTED> 35
<NET-CHANGE-IN-ASSETS> 68,421
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (2,374)
<GROSS-ADVISORY-FEES> 650
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,018
<AVERAGE-NET-ASSETS> 144,293
<PER-SHARE-NAV-BEGIN> 13.97
<PER-SHARE-NII> 0.07
<PER-SHARE-GAIN-APPREC> 4.19
<PER-SHARE-DIVIDEND> (0.07)
<PER-SHARE-DISTRIBUTIONS> (0.07)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 18.16
<EXPENSE-RATIO> 0.70
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000867297
<NAME> PIMCO FUNDS: EQUITY ADVISORS SERIES
<SERIES>
<NUMBER>112
<NAME>CADENCE MID CAP GROWTH FUND-ADMINISTRATIVE CLASS
</SERIES>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 145,235
<INVESTMENTS-AT-VALUE> 185,595
<RECEIVABLES> 3,447
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 194
<TOTAL-ASSETS> 193,236
<PAYABLE-FOR-SECURITIES> 2,888
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 136
<TOTAL-LIABILITIES> 3,024
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 141,596
<SHARES-COMMON-STOCK> 49
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,256
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 44,360
<NET-ASSETS> 190,212
<DIVIDEND-INCOME> 1,139
<INTEREST-INCOME> 494
<OTHER-INCOME> 0
<EXPENSES-NET> 1
<NET-INVESTMENT-INCOME> 615
<REALIZED-GAINS-CURRENT> 6,630
<APPREC-INCREASE-CURRENT> 31,560
<NET-CHANGE-FROM-OPS> 38,805
<EQUALIZATION> 46
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 99
<NUMBER-OF-SHARES-REDEEMED> (50)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 68,421
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (2,374)
<GROSS-ADVISORY-FEES> 650
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1
<AVERAGE-NET-ASSETS> 376
<PER-SHARE-NAV-BEGIN> 13.31
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> 4.85
<PER-SHARE-DIVIDEND> (0.02)
<PER-SHARE-DISTRIBUTIONS> (0.02)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 18.17
<EXPENSE-RATIO> 0.94
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000867297
<NAME> PIMCO FUNDS: EQUITY ADVISORS SERIES
<SERIES>
<NUMBER> 121
<NAME> BLAIRLOGIE EMERGING MARKETS FUND
</SERIES>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 72,304
<INVESTMENTS-AT-VALUE> 71,334
<RECEIVABLES> 2,784
<ASSETS-OTHER> 250
<OTHER-ITEMS-ASSETS> 1,708
<TOTAL-ASSETS> 76,076
<PAYABLE-FOR-SECURITIES> 1,473
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 234
<TOTAL-LIABILITIES> 1,707
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 90,442
<SHARES-COMMON-STOCK> 6,525
<SHARES-COMMON-PRIOR> 4,818
<ACCUMULATED-NII-CURRENT> 10
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (15,113)
<ACCUM-APPREC-OR-DEPREC> (970)
<NET-ASSETS> 74,365
<DIVIDEND-INCOME> 1,342
<INTEREST-INCOME> 103
<OTHER-INCOME> 0
<EXPENSES-NET> 1,080
<NET-INVESTMENT-INCOME> (15,110)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> (23,375)
<NET-CHANGE-FROM-OPS> (22,947)
<EQUALIZATION> 4
<DISTRIBUTIONS-OF-INCOME> (414)
<DISTRIBUTIONS-OF-GAINS> (3,784)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,234
<NUMBER-OF-SHARES-REDEEMED> (3,774)
<SHARES-REINVESTED> 248
<NET-CHANGE-IN-ASSETS> (5,249)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 3,780
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 638
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,080
<AVERAGE-NET-ASSETS> 74,613
<PER-SHARE-NAV-BEGIN> 16.53
<PER-SHARE-NII> 0.07
<PER-SHARE-GAIN-APPREC> (4.55)
<PER-SHARE-DIVIDEND> (0.06)
<PER-SHARE-DISTRIBUTIONS> (0.78)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.27
<EXPENSE-RATIO> 1.35
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000867297
<NAME> PIMCO: EQUITY ADVISORS SERIES
<SERIES>
<NUMBER>122
<NAME>BLAIRLOGIE EMERGING MARKETS FUND-ADMINISTRATIVE CLASS
</SERIES>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 72,304
<INVESTMENTS-AT-VALUE> 71,334
<RECEIVABLES> 2,784
<ASSETS-OTHER> 250
<OTHER-ITEMS-ASSETS> 1,708
<TOTAL-ASSETS> 76,076
<PAYABLE-FOR-SECURITIES> 1,473
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 234
<TOTAL-LIABILITIES> 1,707
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 90,442
<SHARES-COMMON-STOCK> 74
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 10
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (15,113)
<ACCUM-APPREC-OR-DEPREC> (970)
<NET-ASSETS> 74,369
<DIVIDEND-INCOME> 1,342
<INTEREST-INCOME> 103
<OTHER-INCOME> 0
<EXPENSES-NET> 1
<NET-INVESTMENT-INCOME> (15,110)
<REALIZED-GAINS-CURRENT> (8,265)
<APPREC-INCREASE-CURRENT> (23,375)
<NET-CHANGE-FROM-OPS> (22,947)
<EQUALIZATION> 4
<DISTRIBUTIONS-OF-INCOME> (3)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 130
<NUMBER-OF-SHARES-REDEEMED> (57)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (5,249)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 3,780
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 638
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1
<AVERAGE-NET-ASSETS> 482
<PER-SHARE-NAV-BEGIN> 16.95
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> (4.95)
<PER-SHARE-DIVIDEND> (0.05)
<PER-SHARE-DISTRIBUTIONS> (0.76)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.24
<EXPENSE-RATIO> 1.62
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000867297
<NAME> PIMCO FUNDS: EQUITY ADVISERS SERIES
<SERIES>
<NUMBER>131
<NAME>BLAIRLOGIE INTERNATIONAL ACTIVE FUND
</SERIES>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 57,455
<INVESTMENTS-AT-VALUE> 58,609
<RECEIVABLES> 1,024
<ASSETS-OTHER> 5,094
<OTHER-ITEMS-ASSETS> 1,080
<TOTAL-ASSETS> 65,807
<PAYABLE-FOR-SECURITIES> 1,267
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 258
<TOTAL-LIABILITIES> 1,525
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 59,735
<SHARES-COMMON-STOCK> 5,418
<SHARES-COMMON-PRIOR> 1,903
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (13)
<ACCUMULATED-NET-GAINS> 3,510
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,050
<NET-ASSETS> 64,282
<DIVIDEND-INCOME> 858
<INTEREST-INCOME> 177
<OTHER-INCOME> 0
<EXPENSES-NET> 520
<NET-INVESTMENT-INCOME> 515
<REALIZED-GAINS-CURRENT> 3,435
<APPREC-INCREASE-CURRENT> (73)
<NET-CHANGE-FROM-OPS> 3,950
<EQUALIZATION> 142
<DISTRIBUTIONS-OF-INCOME> (504)
<DISTRIBUTIONS-OF-GAINS> (844)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,157
<NUMBER-OF-SHARES-REDEEMED> (747)
<SHARES-REINVESTED> 104
<NET-CHANGE-IN-ASSETS> 41,713
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 850
<OVERDISTRIB-NII-PRIOR> (21)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 282
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 520
<AVERAGE-NET-ASSETS> 46,826
<PER-SHARE-NAV-BEGIN> 11.86
<PER-SHARE-NII> 0.10
<PER-SHARE-GAIN-APPREC> 0.30
<PER-SHARE-DIVIDEND> (0.09)
<PER-SHARE-DISTRIBUTIONS> (0.52)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.74
<EXPENSE-RATIO> 1.10
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000867297
<NAME> PIMCO EQUITY ADVISORS SERIES FUNDS:
<SERIES>
<NUMBER> 132
<NAME>BLAIRLOGIE INTERNATIONAL ACTIVE FUND - ADMINISTRATIVE CLASS
</SERIES>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 57,455
<INVESTMENTS-AT-VALUE> 58,609
<RECEIVABLES> 1,024
<ASSETS-OTHER> 5,094
<OTHER-ITEMS-ASSETS> 1,080
<TOTAL-ASSETS> 65,807
<PAYABLE-FOR-SECURITIES> 1,267
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 258
<TOTAL-LIABILITIES> 1,525
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 59,735
<SHARES-COMMON-STOCK> 58
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (13)
<ACCUMULATED-NET-GAINS> 3,510
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,050
<NET-ASSETS> 64,282
<DIVIDEND-INCOME> 858
<INTEREST-INCOME> 177
<OTHER-INCOME> 0
<EXPENSES-NET> 2
<NET-INVESTMENT-INCOME> 515
<REALIZED-GAINS-CURRENT> 3506
<APPREC-INCREASE-CURRENT> (73)
<NET-CHANGE-FROM-OPS> 3,950
<EQUALIZATION> 142
<DISTRIBUTIONS-OF-INCOME> (5)
<DISTRIBUTIONS-OF-GAINS> (2)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 83
<NUMBER-OF-SHARES-REDEEMED> (26)
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 41,713
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 850
<OVERDISTRIB-NII-PRIOR> (21)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 282
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2
<AVERAGE-NET-ASSETS> 325
<PER-SHARE-NAV-BEGIN> 11.21
<PER-SHARE-NII> 0.02
<PER-SHARE-GAIN-APPREC> 1.01
<PER-SHARE-DIVIDEND> (0.08)
<PER-SHARE-DISTRIBUTIONS> (0.51)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.73
<EXPENSE-RATIO> 1.34
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000867297
<NAME> PIMCO FUNDS: EQUITY ADVISORS SERIES
<SERIES>
<NUMBER>141
<NAME>CADENCE MICRO CAP GROWTH FUND
</SERIES>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 56,167
<INVESTMENTS-AT-VALUE> 70,392
<RECEIVABLES> 133
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 90
<TOTAL-ASSETS> 70,615
<PAYABLE-FOR-SECURITIES> 647
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 193
<TOTAL-LIABILITIES> 840
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 54,024
<SHARES-COMMON-STOCK> 4,536
<SHARES-COMMON-PRIOR> 2,746
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,526
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,225
<NET-ASSETS> 69,775
<DIVIDEND-INCOME> 308
<INTEREST-INCOME> 243
<OTHER-INCOME> 0
<EXPENSES-NET> 733
<NET-INVESTMENT-INCOME> (182)
<REALIZED-GAINS-CURRENT> 2,911
<APPREC-INCREASE-CURRENT> 10,798
<NET-CHANGE-FROM-OPS> 13,527
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,996
<NUMBER-OF-SHARES-REDEEMED> (206)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 23,643
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (1,384)
<GROSS-ADVISORY-FEES> 609
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 733
<AVERAGE-NET-ASSETS> 48,865
<PER-SHARE-NAV-BEGIN> 11.87
<PER-SHARE-NII> (0.04)
<PER-SHARE-GAIN-APPREC> 3.55
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 15.38
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000867297
<NAME> PIMCO FUNDS: EQUITY ADVISOR SERIES
<SERIES>
<NUMBER>161
<NAME>COLUMBUS CIRCLE INVESTORS CORE EQUITY FUND
</SERIES>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 29,322
<INVESTMENTS-AT-VALUE> 31,761
<RECEIVABLES> 459
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 539
<TOTAL-ASSETS> 32,759
<PAYABLE-FOR-SECURITIES> 278
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 45
<TOTAL-LIABILITIES> 323
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 29,240
<SHARES-COMMON-STOCK> 613
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 756
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,440
<NET-ASSETS> 32,436
<DIVIDEND-INCOME> 121
<INTEREST-INCOME> 71
<OTHER-INCOME> 0
<EXPENSES-NET> 130
<NET-INVESTMENT-INCOME> 62
<REALIZED-GAINS-CURRENT> 756
<APPREC-INCREASE-CURRENT> 2,440
<NET-CHANGE-FROM-OPS> 3,258
<EQUALIZATION> 80
<DISTRIBUTIONS-OF-INCOME> (27)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 636
<NUMBER-OF-SHARES-REDEEMED> (25)
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 32,436
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 74
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 130
<AVERAGE-NET-ASSETS> 4,738
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.07
<PER-SHARE-GAIN-APPREC> 2.71
<PER-SHARE-DIVIDEND> (0.06)
<PER-SHARE-DISTRIBUTIONS> (0.06)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 12.72
<EXPENSE-RATIO> 0.82
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000867297
<NAME> PIMCO FUNDS: EQUITY ADVISORS SERIES
<SERIES>
<NUMBER>162
<NAME>COLUMBUS CIRCLE INVESTORS CORE EQUITY FUND - ADMINISTRATIVE CLASS
</SERIES>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 29,322
<INVESTMENTS-AT-VALUE> 31,761
<RECEIVABLES> 459
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 539
<TOTAL-ASSETS> 32,759
<PAYABLE-FOR-SECURITIES> 278
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 45
<TOTAL-LIABILITIES> 323
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 29,240
<SHARES-COMMON-STOCK> 1,937
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 756
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,440
<NET-ASSETS> 32,436
<DIVIDEND-INCOME> 121
<INTEREST-INCOME> 71
<OTHER-INCOME> 0
<EXPENSES-NET> 22
<NET-INVESTMENT-INCOME> 62
<REALIZED-GAINS-CURRENT> 756
<APPREC-INCREASE-CURRENT> 2,440
<NET-CHANGE-FROM-OPS> 3,258
<EQUALIZATION> 80
<DISTRIBUTIONS-OF-INCOME> (35)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,012
<NUMBER-OF-SHARES-REDEEMED> (78)
<SHARES-REINVESTED> 3
<NET-CHANGE-IN-ASSETS> 32,436
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 74
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 22
<AVERAGE-NET-ASSETS> 21,619
<PER-SHARE-NAV-BEGIN> 11.45
<PER-SHARE-NII> 0.02
<PER-SHARE-GAIN-APPREC> 1.28
<PER-SHARE-DIVIDEND> (0.02)
<PER-SHARE-DISTRIBUTIONS> (0.20)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 12.73
<EXPENSE-RATIO> 0.89
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000867297
<NAME> PIMCO FUNDS: EQUITY ADVISORS SERIES
<SERIES>
<NUMBER> 171
<NAME> COLUMBUS CIRCLE INVESTORS MID CAP EQUITY FUND
</SERIES>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 7,245
<INVESTMENTS-AT-VALUE> 8,298
<RECEIVABLES> 186
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 99
<TOTAL-ASSETS> 8,583
<PAYABLE-FOR-SECURITIES> 211
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 15
<TOTAL-LIABILITIES> 226
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 7,061
<SHARES-COMMON-STOCK> 647
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 243
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,053
<NET-ASSETS> 8,357
<DIVIDEND-INCOME> 19
<INTEREST-INCOME> 28
<OTHER-INCOME> 0
<EXPENSES-NET> 37
<NET-INVESTMENT-INCOME> 243
<REALIZED-GAINS-CURRENT> 1,053
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 1,306
<EQUALIZATION> 13
<DISTRIBUTIONS-OF-INCOME> (10)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 671
<NUMBER-OF-SHARES-REDEEMED> (24)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 8,357
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 26
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 37
<AVERAGE-NET-ASSETS> 4,970
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.02
<PER-SHARE-GAIN-APPREC> 2.92
<PER-SHARE-DIVIDEND> (0.02)
<PER-SHARE-DISTRIBUTIONS> (0.02)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 12.92
<EXPENSE-RATIO> 0.88
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
EX-99.B1
PIMCO FUNDS: EQUITY ADVISORS SERIES
AMENDED AND RESTATED
AGREEMENT AND
DECLARATION OF TRUST
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I
The Trust.................................... 5
Section 1.1 Name......................................... 5
Section 1.2 Definitions.................................. 6
ARTICLE II
Trustees..................................... 7
Section 2.1 Management of the Trust...................... 7
Section 2.2 Election of Trustees......................... 7
Section 2.3 Term of Office of Trustees................... 8
Section 2.4 Termination of Service and Appointment of
Trustees..................................... 8
Section 2.5 Temporary Absence of Trustee................. 9
Section 2.6 Number of Trustees........................... 9
Section 2.7 Effect of Death, Resignation, etc. of a
Trustee...................................... 9
Section 2.8 No Accounting................................ 9
Section 2.9 Ownership of the Trust....................... 9
ARTICLE III
Powers of Trustees........................... 9
Section 3.1 General...................................... 9
Section 3.2 Investments.................................. 10
Section 3.3 Legal Title.................................. 11
Section 3.4 Issuance and Repurchase of Securities........ 11
Section 3.5 Borrow Money................................. 11
Section 3.6 Officers; Delegation; Committees............. 11
Section 3.7 Collection and Payment...................... 12
Section 3.8 Expenses.................................... 12
Section 3.9 Manner of Acting; By-laws................... 12
Section 3.10 Voting Trusts.............................. 12
Section 3.11 Miscellaneous Powers....................... 13
Section 3.12 Further Powers............................. 13
ARTICLE IV
Advisory, Administrative, Management
and Distribution Arrangements............... 14
Section 4.1 Advisory and Management Arrangements........ 14
Section 4.2 Distribution Arrangements................... 14
Section 4.3 Parties to Contract......................... 15
Section 4.4 Provisions and Amendments................... 15
</TABLE>
2
<PAGE>
ARTICLE V
<TABLE>
<S> <C>
Limitations of Liability of Shareholders,
Trustees and Others......................... 15
Section 5.1 Trustees, Shareholders, etc. Not
Personally Liable; Notice................... 15
Section 5.2 Trustee's Good Faith Action; Expert
Advice; No Bond or Surety................... 16
Section 5.3 Indemnification of Shareholders............. 16
Section 5.4 Indemnification of Trustees, Officers,
etc......................................... 17
Section 5.5 Compromise Payment.......................... 18
Section 5.6 Indemnification Not Exclusive, etc.......... 18
Section 5.7 Liability of Third Persons Dealing with
Trustees.................................... 19
ARTICLE VI
Shares of Beneficial Interest............... 19
Section 6.1 Beneficial Interest......................... 19
Section 6.2 Series Designation.......................... 19
Section 6.2.1 Class Designation......................... 22
Section 6.3 Rights of Shareholders...................... 23
Section 6.4 Trust Only.................................. 23
Section 6.5 Issuance of Shares.......................... 23
Section 6.6 Register of Shares.......................... 24
Section 6.7 Transfer Agent and Registrar................ 24
Section 6.8 Transfer of Shares.......................... 24
Section 6.9 Notice...................................... 25
ARTICLE VII
Redemption.................................. 25
Section 7.2 Redemptions of Accounts of Less than a
Minimum Dollar Amount....................... 26
ARTICLE VIII
Determination of Net Asset Value, Net Income
and Distributions........................... 26
Section 8.1 Net Asset Value............................. 26
Section 8.2 Distributions to Shareholders............... 27
Section 8.3 Power to Modify Foregoing Procedures........ 27
ARTICLE IX
Shareholders................................ 27
Section 9.1 Voting Powers............................... 27
Section 9.2 Meetings.................................... 28
Section 9.3 Quorum and Required Vote.................... 28
Section 9.4 Record Date for Meetings.................... 28
Section 9.5 Proxies..................................... 29
Section 9.6 Additional Provisions....................... 29
Section 9.7 Reports..................................... 29
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
Section 9.8 Shareholder Action by Written Consent....... 29
ARTICLE X
Duration; Termination of Trust; Amendment; Mergers; Etc.. 30
Section 10.1 Duration................................... 30
Section 10.2 Termination................................ 30
Section 10.3 Reorganization............................. 31
Section 10.4 Amendment Procedure........................ 32
Section 10.5 Incorporation.............................. 32
ARTICLE XI
Miscellaneous.............................. 33
Section 11.1 Filing..................................... 33
Section 11.2 Resident Agent............................. 33
Section 11.3 Governing Law.............................. 33
Section 11.4 Counterparts............................... 34
Section 11.5 Reliance by Third Parties.................. 34
Section 11.6 Provisions in Conflict with Law or
Regulations................................ 34
</TABLE>
4
<PAGE>
AMENDED AND RESTATED
AGREEMENT AND
DECLARATION OF TRUST
OF
PIMCO FUNDS: EQUITY ADVISORS SERIES
THE AGREEMENT AND DECLARATION OF TRUST of PFAMCo Funds made the 24th day of
August, 1990 by the then trustees (and all other persons who since that time
have been duly elected or appointed as trustees in accordance with the
provisions of this Agreement and Declaration of Trust and are then in office,
being hereinafter called the "Trustees") and by the holders of shares of
beneficial interest issued and to be issued hereunder hereinafter provided, and
amended on October 24, 1990, November 16, 1990, November 29, 1990, December 14,
1990, February 1, 1991, May 9, 1991, August 6, 1992, and February 26, 1993, is
hereby amended and restated on May 7, 1993 by the Trustees, as authorized by the
majority of shares of beneficial interest issued hereunder and entitled to vote.
W I T N E S S E T H
WHEREAS, the Trustees desire to form a trust fund under the laws of the
Commonwealth of Massachusetts for the investment and reinvestment of funds
contributed thereto; and
WHEREAS, it is proposed that the beneficial interest in the trust assets be
divided into transferable shares of beneficial interest, which may, at the
discretion of the Trustees, be divided into separate series and classes as
hereinafter provided;
NOW, THEREFORE, the Trustees hereby declare that they will hold in trust
all money and property contributed to the trust fund to manage and dispose of
the same for the benefit of the holders from time to time of the shares of
beneficial interest issued hereunder and subject to the provisions hereof, to
wit:
ARTICLE I
The Trust
Section 1.1 Name. The name of the trust created hereby (the "Trust"),
which term shall be deemed to include any series of the Trust when the context
requires, shall be "PIMCO Funds: Equity Advisors Series", and so far as may be
practicable the Trustees shall conduct the activities of the Trust, execute all
documents and sue or be sued under that name, which name (and the word "Trust"
wherever hereinafter used) shall refer to the Trustees as Trustees, and not
individually, and shall not refer to the officers, agents, employees or
shareholders of the Trust or any Series thereof. Each Series of the Trust which
shall be established and designated by the Trustees pursuant to Section 6.2
shall conduct its activities under such name as the Trustees
5
<PAGE>
shall determine and set forth in the instrument establishing such Series.
Should the Trustees determine that the use of the name of the Trust or any
Series is not advisable, they may select such other name for the Trust or such
Series as they deem proper and the Trust or such Series may conduct its
activities under such other name. Any name change shall be effective upon the
execution by a majority of the then Trustees of an instrument setting forth the
new name. Any such instrument shall have the status of an amendment to this
Agreement and Declaration of Trust.
Section 1.2 Definitions. As used in this Agreement and Declaration of
Trust, the following terms shall have the following meanings:
The "1940 Act" refers to the Investment Company Act of 1940 and the
regulations promulgated thereunder, as amended from time to time.
The terms "Affiliated Person", "Assignment", "Commission", "Interested
Person", "Majority Shareholder Vote" (the 67% or 50% requirement of the third
sentence of Section 2(a)(42) of the 1940 Act, whichever may be applicable) and
"Principal Underwriter" shall have the meanings given them in the 1940 Act.
"Commission" shall mean the U.S. Securities and Exchange Commission.
"Class" shall mean any class of Shares that may be established and
designated pursuant to Section 6.21.
"Declaration" or "Declaration of Trust" shall mean this Agreement and
Declaration of Trust as amended from time to time. References in this
Declaration to "Declaration", "hereof", "herein" and "hereunder" shall be deemed
to refer to the Declaration rather than the article or section in which such
words appear.
"Fundamental Policies" shall mean the investment objective for each
Series and the investment restrictions set forth in the registration statement
for the Trust on Form N-1A and designated as fundamental policies therein.
"Person" shall mean and include individuals, corporations,
partnerships, trusts, associations, joint ventures and other entities, whether
or not legal entities, and governments and agencies and political subdivisions
thereof.
"Prospectus" shall mean the currently effective prospectus of any
Series of the Trust under the Securities Act of 1933, as amended.
"Series" shall mean any separate Series that may be established and
designated pursuant to Section 6.2.
6
<PAGE>
"Shareholders" shall mean as of any particular time all holders of
record of outstanding Shares at such time.
"Shares" shall mean the equal proportionate transferable units of
interest into which the beneficial interest in any Series of the Trust shall be
divided from time to time and includes fractions of Shares as well as whole
Shares. All references to Shares shall be deemed to be Shares of any or all
Series as the context may require.
"Statement of Additional Information" shall mean the currently
effective Statement of Additional Information of any Series of the Trust under
the Trust's registration statement filed pursuant to the Securities Act of 1933,
as amended.
"Trustees" shall mean the signatories to this Declaration, so long as
they shall continue in office in accordance with the terms hereof, and all other
persons who at the time in question have been duly elected or appointed and have
qualified as Trustees in accordance with the provisions hereof and are then in
office, and each such person is herein referred to as the "Trustee", and
reference in this Declaration to a Trustee or Trustees shall refer to such
person or persons in their capacity as Trustees hereunder.
"Trust Property" shall mean as of any particular time any and all
property, real or personal, tangible or intangible, which at such time is owned
or held by or for the account of the Trust, any Series thereof or the Trustees.
ARTICLE II
Trustees
Section 2.1 Management of the Trust. The business and affairs of the
Trust shall be managed by the Trustees, and they shall have all powers necessary
and desirable to carry out that responsibility. The Trustees named herein (or
their successors appointed hereunder) shall serve until the election of Trustees
at the first meeting of Shareholders of the Trust.
Section 2.2 Election of Trustees. Except for the Trustees named herein
and those Trustees designated by such Trustees prior to the issuance of Shares,
or appointed to fill vacancies pursuant to Section 2.4 hereof, the Shareholders
of the Trust shall elect Trustees at Shareholder meetings called for that
purpose. The Trustees need not be elected annually or at regular intervals.
Except as provided in Section 9.2, the Trustees shall not be required to call a
meeting of Shareholders for the purpose of electing Trustees, provided, however,
that in the event that at any time, other than the time preceding the first
meeting of Shareholders for the purpose of electing Trustees, less than a
majority of the Trustees holding office at that time were elected by the
Shareholders, a meeting of the Shareholders for the
7
<PAGE>
purpose of electing Trustees shall be held promptly and in any event within 60
days (unless the Commission shall by order extend such period). No election of
a Trustee shall become effective, however, until the person elected shall have
accepted such election and agreed in writing to be bound by the terms of this
Declaration. If re-elected, a Trustee may succeed himself. Trustees need not
own shares.
Section 2.3 Term of Office of Trustees. A Trustee duly appointed or
elected hereunder shall hold office until the occurrence of any of the
following: (a) the Trustee may resign his trust by written instrument signed by
him and delivered to the other Trustees, which shall take effect upon such
delivery or upon such later date as is specified therein; (b) the Trustee may be
removed at any time by written instrument signed by at least two-thirds of the
number of Trustees prior to such removal, specifying the date when such removal
shall become effective; (c) the Trustee who requests in writing to be retired or
who has become mentally or physically incapacitated may be retired by written
instrument signed by a majority of the other Trustees, specifying the date of
his retirement; and (d) the Trustee may be removed at any meeting of
Shareholders of the Trust by a vote of two-thirds of the outstanding Shares or
by a written declaration executed, without a meeting, by the holders of not less
than two-thirds of the outstanding Shares. A meeting for the purpose of
considering the removal of a person serving as Trustee shall be called by the
Trustees if requested in writing to do so by the holders (which for purposes of
this provision and only this provision shall be the persons having a voting
interest in the shares of the Trust) of not less than 10% of the outstanding
shares of the Trust.
Section 2.4 Termination of Service and Appointment of Trustees. In case
of the death, resignation, retirement, removal or mental or physical incapacity
of any of the Trustees, or in case a vacancy shall, by reason of an increase in
number, or for any other reason, exist, the remaining Trustees may (but need not
unless required by the 1940 Act, so long as there are at least two remaining
Trustees) fill such vacancy by appointing for the remaining term of the
predecessor Trustee such other person as they in their discretion shall see fit.
Such appointment shall be effective upon the signing of a written instrument by
a majority of the Trustees in office and the written acceptance of this
Declaration by the appointee. An appointment of a Trustee may be made by the
Trustees then in office in anticipation of a vacancy to occur by reason of
retirement, resignation or increase in number of Trustees effective at a later
date, provided that said appointment shall become effective only at or after the
effective date of said retirement, resignation or increase in number of Trustees
and the written acceptance of this Declaration by the appointee. As soon as any
Trustee so appointed shall have accepted this Trust, the trust estate shall vest
in the new Trustee or Trustees, together with the continuing Trustees, without
any further act or conveyance, and he shall be deemed a
8
<PAGE>
Trustee hereunder. Any appointment authorized by this Section 2.4 is subject to
the provisions of Section 16(a) of the 1940 Act.
Section 2.5 Temporary Absence of Trustee. Any Trustee may, by power of
attorney, delegate his power for a period not exceeding six months at any one
time to any other Trustee or Trustees, provided that in no case shall less than
two of the Trustees personally exercise the power hereunder except as herein
otherwise expressly provided.
Section 2.6 Number of Trustees. The number of Trustees serving hereunder
at any time shall be determined by the Trustees themselves, but once Shares have
been issued shall not be less than two (2) or more than fifteen (15).
Section 2.7 Effect of Death, Resignation, etc. of a Trustee. The death,
resignation, retirement, removal, or mental or physical incapacity of the
Trustees, or any one of them, shall not operate to annul or terminate the Trust
or any Series hereunder or to revoke or terminate any existing agency or
contract created pursuant to the terms of this Declaration, and until such
vacancy is filled, the Trustees in office, regardless of their number, shall
have all of the powers granted to the Trustees and shall discharge all the
duties imposed upon them by this Declaration.
Section 2.8 No Accounting. Except to the extent required by the 1940 Act
or under circumstances which would justify his removal for cause, no person
ceasing to be a Trustee as a result of his death, resignation, retirement,
removal or incapacity (nor the estate of any such person) shall be required to
make an accounting to the shareholders or remaining Trustees upon such
cessation.
Section 2.9 Ownership of the Trust. The assets of the Trust shall be held
separate and apart from any assets now or hereafter held in any capacity other
than as Trustee hereunder by the Trustees or by any successor Trustees. All of
the assets of the Trust shall at all times be considered as vested in the
Trustees. No Shareholder shall be deemed to have a severable ownership in any
individual asset of the Trust or any right of partition or possession thereof,
but each Shareholder shall have a proportionate undivided beneficial interest in
the Trust.
ARTICLE III
Powers of Trustees
Section 3.1 General. The Trustees in all instances shall act as
principals, and are and shall be free from the control of the Shareholders. The
Trustees shall have full power and authority to do any and all acts and to make
and execute any and all contracts and instruments that they may consider
necessary or
9
<PAGE>
appropriate in connection with the management of the Trust. The Trustees shall
not be bound or limited by present or future laws or customs with regard to
investment by trustees or fiduciaries, but shall have full authority and
absolute power and control over the Trust Property and business of the Trust to
the same extent as if the Trustees were the sole owners of the Trust Property
and business in their own right, including such authority, power and control to
do all acts and things as they, in their uncontrolled discretion, shall deem
proper to accomplish the purposes of this Trust. The enumeration of any
specific power herein shall not be construed as limiting the aforesaid powers.
Section 3.2 Investments. The Trustees shall have power, subject to the
Fundamental Policies, to:
(a) conduct, operate and carry on the business of an investment
company;
(b) subscribe for, invest in, reinvest in, purchase or otherwise
acquire, hold, pledge, sell, assign, transfer, lend, exchange,
mortgage, hypothecate, lease, distribute or otherwise deal in or
dispose of common stocks, preferred stocks, bonds, debentures,
warrants and rights to purchase securities, mortgage related
securities such as mortgage-backed securities and collateralized
mortgage obligations, options on securities, futures contracts
and options on futures contracts, covered spread options, gold
bullion and coins and other precious metals (silver and platinum)
bullion and future contracts with respect to such commodities,
certificates of beneficial interest, negotiable or non-negotiable
instruments, bank obligations, evidences of indebtedness,
privately placed debt securities, certificates of deposit or
indebtedness, commercial paper, repurchase agreements, reverse
repurchase agreements, firm commitment agreements and "when-
issued" securities and other securities, including, without
limitation, those issued, guaranteed, or sponsored by any state,
territory or possession of the United States and the District of
Columbia and their political subdivisions, agencies and
instrumentalities, or by the United States Government or its
agencies or instrumentalities, or international
instrumentalities, or by any bank, savings institution,
corporation or other business entity organized under the laws of
the United States and, to the extent provided in the Prospectus
and not prohibited by the Fundamental Policies of the Trust,
foreign securities of issuers or governments organized under
foreign laws, foreign currency transactions and options on
foreign currency transactions, and
10
<PAGE>
other assets; and to exercise any and all rights, powers and
privileges of ownership or interest in respect of any and all
such investments of every kind and description, with power to
designate one or more persons, firms, associations or
corporations to exercise any of said rights, powers and
privileges in respect of any of said instruments; and the
Trustees shall be deemed to have the foregoing powers with
respect to any additional securities or other assets in which any
Series of the Trust may invest should the investment policies set
forth in the Prospectus or the Fundamental Policies be amended.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust or any Series.
Section 3.3 Legal Title. Legal title to all the Trust Property shall be
vested in the Trustees as joint tenants except that the Trustees shall have
power to cause legal title to any Trust Property to be held by or in the name of
one or more of the Trustees, or in the name of the Trust or any Series thereof,
or in the name of any other Person as nominee, on such terms as the Trustees may
determine, provided that the interest of the Trust or any Series thereof is
appropriately protected.
Section 3.4 Issuance and Repurchase of Securities. The Trustees shall
have the power to issue, sell, repurchase, redeem, retire, cancel, acquire,
hold, resell, reissue, dispose of, transfer, and otherwise deal in, Shares,
including shares in fractional denominations, and, subject to the more detailed
provisions set forth in Articles VII and VIII, to apply to any such repurchase,
redemption, retirement, cancellation or acquisition of Shares any funds or
property of the applicable Series of the Trust whether capital or surplus or
otherwise, to the full extent now or hereafter permitted by the laws of the
Commonwealth of Massachusetts governing business corporations.
Section 3.5 Borrow Money. Subject to the Fundamental Policies, the
Trustees shall have power to borrow money or otherwise obtain credit and to
secure the same by mortgaging, pledging or otherwise subjecting as security the
assets of the Trust or any Series thereof, including the lending of portfolio
securities, and to endorse, guarantee or undertake the performance of any
obligation, contract or engagement of any other person, form, association or
corporation.
Section 3.6 Officers; Delegation; Committees. The Trustees may, as they
consider appropriate, elect and remove officers and appoint and terminate agents
and consultants and hire and terminate employees, any one or more of the
foregoing of whom may be a Trustee and may provide for the compensation of all
of the foregoing. The Trustees shall have power, consistent with their
11
<PAGE>
continuing exclusive authority over the management of the Trust and the Trust
Property, to delegate from time to time to such of their number or to officers,
employees or agents of the Trust the doing of such things and the execution of
such instruments either in the name of the Trust or the names of the Trustees or
otherwise as the Trustees may deem expedient. The Trustees may appoint from
their number and terminate any one or more committees consisting of two or more
Trustees, including without implied limitation an Executive Committee which may,
when the Trustees are not in session and subject to the 1940 Act, exercise some
or all of the powers and authority of the Trustees as the Trustees may
determine.
Section 3.7 Collection and Payment. The Trustees shall have power to
collect all property due to the Trust or any Series thereof; to pay all claims,
including taxes, against the Trust Property; to prosecute, defend, compromise,
arbitrate or abandon any claims relating to the Trust Property; to foreclose any
security interest securing any obligations, by virtue of which any property is
owed to the Trust or any Series thereof; and to enter into releases, agreements
and other instruments.
Section 3.8 Expenses. The Trustees shall have power to incur and pay any
expenses which in the opinion of the Trustees are necessary or incidental to
carry out any of the purposes of the Trust or any Series or Class, and to pay
reasonable compensation from the funds of the Trust to themselves as Trustees.
The Trustees shall fix the compensation of all officers, employees and Trustees.
The Trustees may pay themselves such compensation for special services,
including legal, underwriting, syndicating and brokerage services, as they in
good faith may deem reasonable and reimbursement for expenses reasonably
incurred by themselves on behalf of the Trust.
Section 3.9 Manner of Acting; By-laws. Except as otherwise provided
herein or in the By-laws or required by the 1940 Act, any action to be taken by
the Trustees may be taken by a majority of the Trustees present at a meeting of
the Trustees (a quorum being present), including any meeting held by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, or by written consents
of a majority of Trustees then in office (or such larger or different number as
may be required by the 1940 Act or other applicable law). The Trustees may
adopt and from time to time amend or repeal the By-laws for the conduct of the
business of the Trust.
Section 3.10 Voting Trusts. The Trustees shall have power and authority
for and on behalf of the Trust to join with other holders of any securities or
debt instruments in acting through a committee, depositary, voting trustee or
otherwise, and in that connection to deposit any security or debt instrument
with, or transfer any security or debt instrument to, any such committee,
depositary or trustee, and to delegate to them such power and
12
<PAGE>
authority with relation to any security or debt instrument (whether or not so
deposited or transferred) as the Trustees shall deem proper, and to agree to
pay, and to pay, such portion of the expenses and compensation of such
committee, depositary or trustee as the Trustees shall deem proper.
Section 3.11 Miscellaneous Powers. The Trustees shall have the power to:
(a) employ or contract with such Persons as the Trustees may deem desirable for
the transaction of the business of the Trust or any Series or Class thereof; (b)
enter into joint ventures, partnership and any other combinations or
associations; (c) purchase, and pay for out of Trust Property, insurance as they
deem necessary or appropriate for the conduct of the business, including without
limitation, policies insuring the Shareholders, Trustees, officers, employees,
agents, investment advisers, distributors, selected dealers or independent
contractors of the Trust or any Series or Class thereof against all claims
arising by reason of holding any such position or by reason of any action taken
or omitted by any such Person in such capacity, whether or not constituting
negligence, or whether or not the Trust would have the power to indemnify such
Person against such liability; (d) establish pension, profit-sharing, share
purchase, and other retirement, incentive and benefit plans for any Trustees,
officers, employees and agents of the Trust; (e) make donations, irrespective of
benefit to the Trust, for charitable, religious, educational, scientific, civic
or similar purposes; (f) to the extent permitted by law, indemnify any Person
with whom the Trust or any Series or Class thereof has dealings, including any
adviser, administrator, manager, distributor and selected dealers with respect
to any Series, to such extent as the Trustees shall determine; (g) guarantee
indebtedness or contractual obligations of others; (h) determine and change the
fiscal year of the Trust and the method in which its accounts shall be kept; and
(i) adopt a seal for the Trust, provided that the absence of such seal shall not
impair the validity of any instrument executed on behalf of the Trust.
Section 3.12 Further Powers. The Trustees shall have power to conduct the
business of the Trust or any Series or Class thereof, carry on its operations
and maintain offices both within and without the Commonwealth of Massachusetts,
in any and all states of the United States of America, in the District of
Columbia, and in any and all commonwealths, territories, dependencies, colonies,
possessions, agencies or instrumentalities of the United States of America and
of foreign governments, and to do all such other things and execute all such
instruments as they deem necessary, proper or desirable in order to promote the
interests of the Trust or any Series or Class thereof although such things are
not herein specifically mentioned. Any determination as to what is in the
interests of the Trust or any Series or Class thereof made by the Trustees in
good faith shall be conclusive. In construing the provisions of this
Declaration, the presumption shall be in favor of a grant of power to the
Trustees. The Trustees will not be required to obtain any court
13
<PAGE>
order to deal with the Trust Property. No Trustee shall be required to give any
bond or other security for the performance of any of his duties hereunder.
ARTICLE IV
Advisory, Administrative, Management
and Distribution Arrangements
Section 4.1 Advisory and Management Arrangements. Subject to a Majority
Shareholder Vote, if required by law, of the applicable Series, the Trustees may
in their discretion from time to time enter into advisory, administrative or
management contracts whereby the other party to such contract shall undertake to
furnish to the Trustees such advisory, administrative and management services,
with respect to a Series as the Trustees shall from time to time consider
desirable and all upon such terms and conditions as the Trustees may in their
discretion determine. Subject to a Majority Shareholder Vote if required by
law, the investment adviser may engage one or more firms to serve as Portfolio
Manager to a Series pursuant to a sub-investment advisory contract in which the
Portfolio Manager makes all determinations with respect to the purchase and sale
of portfolio securities and places, in the names of the Series all orders for
execution of the Series' portfolio transactions upon such terms and conditions
and for such compensation as the Trustees may in their discretion approve. A
Portfolio Manager may, in turn, engage its own sub-adviser in managing a
particular Series. Notwithstanding any provisions of this Declaration, the
Trustees may authorize any adviser, portfolio manager, administrator or manager
(subject to such general or specific instructions as the Trustees may from time
to time adopt) to effect purchases, sales, loans or exchanges of portfolio
securities of any Series of the Trust on behalf of the Trustees or may authorize
any officer, employee or Trustee to effect such purchases, sales, loans or
exchanges pursuant to recommendations of any such adviser, portfolio manager,
administrator or manager (and all without further action by the Trustees). Any
such purchases, sales, loans or exchanges shall be deemed to have been
authorized by all of the Trustees.
Section 4.2 Distribution Arrangements. The Trustees may in their
discretion from time to time enter into a contract, providing for the sale of
the Shares of the Trust or any Series or Class of the Trust, whereby the Trust
may either agree to sell the Shares to the other party to the contract or
appoint such other party as its sales agent for such Shares. In either case,
the contract shall be on such terms and conditions as the Trustees may in their
discretion determine to be not inconsistent with the provisions of this Article
IV or the By-laws; and such contract may also provide for the repurchase or sale
of Shares by such other party as principal or as agent of the Trust and may
provide that such other party may enter into selected dealer agreements with
registered securities dealers to further the
14
<PAGE>
purpose of the distribution or repurchase of the Shares. The Trustees may adopt
a Distribution Plan pursuant to Rule 12b-1 of the 1940 Act and may authorize the
Trust to make payments from its assets pursuant to such Plan.
Section 4.3 Parties to Contract. Any contract of the character described
in Sections 4.1 and 4.2 of this Article IV hereof may be entered into with any
corporation, firm, trust or association, although one or more of the Trustees or
officers of the Trust may be an officer, director, Trustee, shareholder or
member of such other party to the contract, and no such contract shall be
invalidated or rendered voidable by reason of the existence of any such
relationship, nor shall any person holding such relationship be liable merely by
reason of such relationship for any loss or expense to the Trust under or by
reason of said contract or accountable for any profit realized directly or
indirectly therefrom, provided that the contract when entered into was
reasonable and fair and not inconsistent with the provisions of this Article IV
or the By-laws. The same person (including a firm, corporation, trust or
association) may be the other party to contracts entered into pursuant to
Sections 4.1 and 4.2 above, and any individual may be financially interested or
otherwise affiliated with persons who are parties to any or all of the contracts
mentioned in this Section 4.3.
Section 4.4 Provisions and Amendments. Any contract under which the other
party agrees to serve as investment adviser or principal underwriter for the
Fund or any Series or Class thereof, which is entered into pursuant to Sections
4.1 and 4.2 of this Article IV shall be consistent with and subject to the
requirements of Section 15 of the 1940 Act with respect to its continuance in
effect, its termination, and the method of authorization and approval of such
contract or renewal thereof, and no amendment to any contract entered into
pursuant to Section 4.1 shall be effective unless consented to by a Majority
Shareholder Vote of the applicable Series if required by law.
ARTICLE V
Limitations of Liability of Shareholders, Trustees and Others
Section 5.1 Trustees, Shareholders, etc. Not Personally Liable; Notice.
All persons extending credit to, contracting with or having any claim against
the Trust shall look only to the assets of the Series with which such person
dealt for payment under such credit, contract or claim; and neither the
Shareholders of any Series nor the Trustees, nor any of the Trust's officers,
employees or agents, whether past, present or future, nor any other Series shall
be personally liable therefor. Every note, bond, contract, instrument,
certificate or undertaking and every other act or thing whatsoever executed or
done by or on behalf of the Trust, any Series or Class, or the Trustees or any
of them in connection with the Trust shall be conclusively deemed to have been
executed or done only by or for the Trust (or the
15
<PAGE>
Series or Class) or the Trustees and not personally. Nothing in this
Declaration shall protect any Trustee or officer against any liability to the
Trust or the Shareholders to which such Trustee or officer would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of the office of
Trustee or of such officer.
Every note, bond, contract, instrument, certificate, share or undertaking
made or issued by the Trustees or by any officers or officer shall give notice
that this Declaration is on file with the Secretary of The Commonwealth of
Massachusetts and shall recite to the effect that the same was executed or made
by or on behalf of the Trust or by them as Trustees or Trustee or as officers or
officer and not individually, and that the obligations of such bond, contract,
instrument, certificate, share or undertaking are not binding upon any of them
or the Shareholders individually but are binding only upon the assets and
property of the Trust, or the particular Series in question, as the case may be,
but the omission thereof shall not operate to bind any Trustees or Trustee or
officers or officer or Shareholders or Shareholder individually.
Section 5.2 Trustee's Good Faith Action; Expert Advice; No Bond or Surety.
The exercise by the Trustees of their powers and discretion hereunder shall be
binding upon everyone interested. A Trustee shall be liable for his own willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee, and for nothing else, and
shall not be liable for errors of judgment or mistakes of fact or law. Subject
to the foregoing, (a) the Trustees shall not be responsible or liable in any
event for any neglect or wrongdoing of any officer, agent, employee, consultant,
adviser, administrator, distributor or principal underwriter, custodian or
transfer, dividend disbursing, Shareholder servicing or accounting agent of the
Trust, nor shall any Trustee be responsible for the act or omission of any other
Trustee; (b) the Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Declaration and their duties as
Trustees, and shall be under no liability for any act or omission in accordance
with such advice or for failing to follow such advice; and (c) in discharging
their duties, the Trustees, when acting in good faith, shall be entitled to rely
upon the books of account of the Trust and upon written reports made to the
Trustees by any officer appointed by them, any independent public accountant,
and (with respect to the subject matter of the contract involved) any officer,
partner or responsible employee of any adviser, administrator, manager,
distributor, selected dealer, appraiser or other expert, consultant or agent.
The Trustees as such shall not be required to give any bond or surety or any
other security for the performance of their duties.
Section 5.3 Indemnification of Shareholders. In case any Shareholder (or
former Shareholder) of any Series of the Trust
16
<PAGE>
shall be charged or held to be personally liable for any obligation or liability
of the Trust solely by reason of being or having been a Shareholder and not
because of such Shareholder's acts or omissions or for some other reason, said
Series (upon proper and timely request by the Shareholder) shall assume the
defense against such charge and satisfy any judgment thereon, and the
Shareholder or former Shareholder (or his heirs, executors, administrators or
other legal representatives or in the case of a corporation or other entity, its
corporate or other general successor) shall be entitled out of the assets of
said Series' estate to be held harmless from and indemnified against all loss
and expense arising from such liability.
Section 5.4 Indemnification of Trustees, Officers, etc. The Trust shall
indemnify (from the assets of the Trust or Series in question) each of its
Trustees and officers (including persons who serve at the Trust's request as
directors, officers or trustees of another organization in which the Trust has
any interest as a shareholder, creditor or otherwise) [hereinafter referred to
as a "Covered Person"] against all liabilities, including but not limited to
amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and expenses, including reasonable accountants' and counsel fees,
incurred by any Covered Person in connection with the defense or disposition of
any action, suit or other proceeding, whether civil or criminal, before any
court or administrative or legislative body, in which such Covered Person may be
or may have been involved as a party or otherwise or with which such person may
be or may have been threatened, while in office or thereafter, by reason of
being or having been such a Trustee or officer, director or trustee, except with
respect to any matter as to which it has been determined that such Covered
Person (i) did not act in good faith in the reasonable belief that such Covered
Person's action was in or not opposed to the best interests of the Trust or (ii)
had acted with willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of such Covered Person's office
(either and both of the conduct described in (i) and (ii) being referred to
hereafter as "Disabling Conduct"). A determination that the Covered Person is
entitled to indemnification may be made by (i) a final decision on the merits by
a court or other body before whom the proceeding was brought that the person to
be indemnified was not liable by reason of Disabling Conduct, (ii) dismissal of
a court action or an administrative proceeding against a Covered Person for
insufficiency of evidence of Disabling Conduct, or (iii) a reasonable
determination, based upon a review of the facts, that the indemnitee was not
liable by reason of Disabling Conduct by (a) a vote of a majority of a quorum of
Trustees who are neither "interested persons" of the Trust as defined in section
2(a)(19) of the 1940 Act nor parties to the proceeding, or (b) an independent
legal counsel in a written opinion. Expenses, including accountants' and
counsel fees so incurred by any such Covered Person (but excluding amounts paid
in satisfaction of judgments, in compromise or as fines or penalties), may be
paid from time to time by
17
<PAGE>
the Series in question in advance of the final disposition of any such action,
suit or proceeding, provided that the Covered Person shall have undertaken to
repay the amounts so paid to the Series in question if it is ultimately
determined that indemnification of such expenses is not authorized under this
Article V and (i) the Covered Person shall have provided security for such
undertaking, (ii) the Trust shall be insured against losses arising by reason of
any lawful advances, or (iii) a majority of a quorum of the disinterested
Trustees who are not a party to the proceeding, or an independent legal counsel
in a written opinion, shall have determined, based on a review of readily
available facts (as opposed to a full trial-type inquiry), that there is reason
to believe that the Covered Person ultimately will be found entitled to
indemnification.
Section 5.5 Compromise Payment. As to any matter disposed of by a
compromise payment by any such Covered Person referred to in Section 5.4,
pursuant to a consent decree or otherwise, no such indemnification either for
said payment or for any other expenses shall be provided unless such
indemnification shall be approved (a) by a majority of the disinterested
Trustees who are not parties to the proceeding or (b) by an independent legal
counsel in a written opinion. Approval by the Trustees pursuant to clause (a)
or by independent legal counsel pursuant to clause (b) shall not prevent the
recovery from any Covered Person of any amount paid to such Covered Person in
accordance with any of such clauses as indemnification if such Covered Person is
subsequently adjudicated by a court of competent jurisdiction not to have acted
in good faith in the reasonable belief that such Covered Person's action was in
or not opposed to the best interests of the Trust or to have been liable to the
Trust or its Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of such
Covered Person's office.
Section 5.6 Indemnification Not Exclusive, etc. The right of
indemnification provided by this Article V shall not be exclusive of or affect
any other rights to which any such Covered Person may be entitled. As used in
this Article V, "Covered Person" shall include such person's heirs, executors
and administrators; "interested Covered Person" is one against whom the action,
suit or other proceeding in question or another action, suit or other proceeding
on the same or similar grounds is then or has been pending or threatened, and a
"disinterested" person is a person against whom none of such actions, suits or
other proceedings or another action, suit or other proceeding on the same or
similar grounds is then or has been pending or threatened. Nothing contained in
this Article shall affect any rights to indemnification to which personnel of
the Trust, other than Trustees and officers, and other persons may be entitled
by contract or otherwise under law, nor the power of the Trust to purchase and
maintain liability insurance on behalf of any such person.
18
<PAGE>
Section 5.7 Liability of Third Persons Dealing with Trustees. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.
ARTICLE VI
Shares of Beneficial Interest
Section 6.1 Beneficial Interest. The interest of the beneficiaries
hereunder shall be divided into transferable shares of beneficial interest which
may be divided into one or more separate and distinct series, or classes
thereof, as the Trustees from time to time create and establish. Each share
shall have a par value of $.001. The number of such shares of beneficial
interest authorized hereunder is unlimited. All Shares issued hereunder
including, without limitation, Shares issued in connection with a dividend in
Shares or a split of Shares, shall be fully paid and nonassessable.
Section 6.2 Series Designation. The Trustees, in their discretion from
time to time, may authorize the division of Shares into additional Series, each
additional Series relating to a separate portfolio of investments. The
following Series are hereby established and designated:
Utility Stock Fund
NFJ Equity Income Fund
NFJ Diversified Low P/E Fund
NFJ Small Cap Value Fund
Cadence Capital Appreciation Fund
Cadence Mid Cap Growth Fund
Cadence Micro Cap Growth Fund
Cadence Small Cap Growth Fund
Columbus Circle Investors Core Equity Fund
Columbus Circle Investors Mid Cap Equity Fund
Columbus Circle Investors Small Cap Equity Fund
Parametric Enhanced Equity Fund
Parametric International Equity Fund
Blairlogie Emerging Markets Fund
Blairlogie International Active Fund
Balanced Fund
Money Market Variable Fund
Managed Bond and Income Variable Fund
Equity Income Variable Fund
Diversified Low P/E Variable Fund
Capital Appreciation Variable Fund
Small Cap Value Variable Fund
Mid Cap Growth Variable Fund
Enhanced Equity Variable Fund
International Equity Variable Fund
Emerging Markets Variable Fund
19
<PAGE>
International Active Variable Fund
These Series shall be the only Series until additional Series are established
and designated by the Trustees. Different Series may be established and
designated and variations in the relative rights and preferences as between the
different Series shall be fixed and determined by the Trustees; provided that
all Shares shall be identical except that there may be variations between
different Series as to investment policies, securities portfolios, purchase
price, determination of net asset value, the price, terms and manner of
redemption, special and relative rights as to dividends and on liquidation,
conversion rights, and conditions under which the several Series shall have
separate voting rights. All references to Shares in this Declaration shall be
deemed to be shares of any or all Series as the context may require.
The following provisions shall be applicable to all Series:
(a) The number of Shares of each Series that may be issued shall be
unlimited. The Trustees may classify or reclassify any unissued
Shares or any Shares previously issued and required of any Series
into one or more Series that may be established and designated
from time to time. The Trustees may hold as treasury Shares (of
the same or some other Series), reissue for such consideration
and on such terms as they may determine, or cancel any Shares of
any Series reacquired by the Trust at their discretion from time
to time.
(b) The power of the Trustees to invest and reinvest the Trust
Property of each Series that has been or that may be established
shall be governed by Section 3.2 of this Declaration.
(c) All consideration received by the Trust for the issue or sale of
Shares of a particular Series, together with all assets in which
such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation of such assets,
and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall irrevocably
belong to that Series for all purposes, subject only to the
rights of creditors, and shall be so recorded upon the books of
account of the Trust. In the event that there are any assets,
income, earnings, profits and proceeds thereof, funds or payments
which are not readily identifiable as belonging to any particular
Series, the Trustees shall allocate them among any one or more of
the Series established and designated from time to
20
<PAGE>
time in such manner and on such basis as they, in their sole
discretion, deem fair and equitable. Each such allocation by the
Trustees shall be conclusive and binding upon the Shareholders of
all Series for all purposes.
(d) The assets belonging to each particular Series shall be charged
with the liabilities of the Trust in respect of that Series and
all expenses, costs, charges and reserves attributable to that
Series, and any general liabilities, expenses, costs, charges or
reserves of the Trust which are not readily identifiable as
belonging to any particular Series shall be allocated and charged
by the Trustees to and among any one or more of the Series
established and designated from time to time in such manner and
on such basis as the Trustees in their sole discretion deem fair
and equitable. Each allocation of liabilities, expenses, costs,
charges and reserves by the Trustees shall be conclusive and
binding upon the holders of all Series for all purposes. The
Trustees shall have full discretion, to the extent not
inconsistent with the 1940 Act, to determine which items shall be
treated as income and which items as capital; and each such
determination and allocation shall be conclusive and binding upon
the Shareholders.
(e) The power of the Trustees to pay dividends and make distributions
with respect to any one or more Series shall be governed by
Section 9.2 of this Trust. Dividends and distributions on Shares
of a particular Series may be paid with such frequency as the
Trustees may determine, which may be daily or otherwise, pursuant
to a standing resolution or resolutions adopted only once or with
such frequency as the Trustees may determine, to the holders of
Shares of that Series, from such of the income and capital gains,
accrued liabilities belonging to that Series. All dividends and
distributions on Shares of a particular Series shall be
distributed pro rata to the holders of that Series in proportion
to the number of Shares of that Series held by such holders at
the date and time of record established for the payment of such
dividends or distributions.
The establishment and designation of any additional Series of Shares shall
be effective upon the execution by a majority of the then Trustees of any
instrument setting forth the establishment and designation of such Series. Such
instrument shall also set forth any rights and preferences of such Series which
are in addition to the rights and preferences of Shares set forth in this
Declaration. The Trustees may by an instrument executed by
21
<PAGE>
a majority of their number abolish a Series and the establishment and
designation thereof. Each instrument referred to in this paragraph shall have
the status of an amendment to this Declaration.
Section 6.2.1 Class Designation. The Trustees, in their discretion, may
authorize the division of the Shares of the Trust or the Shares of any Series,
into two or more Classes, and the different Classes shall be established and
designated, and the variations in the relative rights and preferences as between
the different Classes shall be fixed and determined, by the Trustees; provided,
that all Shares of the Trust or of any Series shall be identical to all other
Shares of the Trust or the same Series, as the case may be, except that there
may be variations between different Classes as to allocation of expenses, right
of redemption, special and relative rights as to dividends, and on liquidation,
conversion rights, and conditions under which the several Classes shall have
separate voting rights. All references to Shares in this Declaration shall be
deemed to be Shares of any or all Classes as the context may require.
If the Trustees shall divide the Shares of the Trust or any Series into two
or more Classes, the following provisions shall be applicable:
(a) All provisions herein relating to the Trust, or any Series of the
Trust, shall apply equally to each Class of Shares of the Trust
or of any Series of the Trust, except as the context requires
otherwise.
(b) The number of Shares of each Class that may be issued shall be
unlimited. The Trustees may classify or reclassify any unissued
Shares of the Trust or any Series or any Shares previously issued
and reacquired of any Class of the Trust or of any Series into
one or more Classes that may be established and designated from
time to time. The Trustees may hold as treasury Shares (of the
same or some other Class), reissue for such consideration and on
such terms as they may determine, or cancel any Shares of any
Class reacquired by the Trust at their discretion from time to
time.
(c) Liabilities, expenses, costs, charges and reserves related to the
distribution of, and other identified expenses that should
properly be allocated to, the Shares of a particular Class may be
charged to and borne solely by such Class, and the bearing of
expenses solely by a Class of Shares may be appropriately
reflected (in a manner determined by the Trustees) and cause
differences in the net asset value attributable to, and the
dividend, redemption and liquidation rights of, the
22
<PAGE>
Shares of different Classes. Each allocation of liabilities,
expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the Shareholders of all classes for
all purposes.
The establishment and designation of any Class of Shares shall be effective
upon the execution of a majority of the then Trustees of an instrument setting
forth such establishment and designation and the relative rights and preferences
of such Class, or as otherwise provided in such instrument. The Trustees may,
by an instrument executed by a majority of their number, abolish any Class and
the establishment and designation thereof. Each instrument referred to in this
paragraph shall have the status of an amendment to this Declaration.
Section 6.3 Rights of Shareholders. The ownership of the Trust Property
of every description and the right to conduct any business hereinbefore
described are vested exclusively in the Trustees, and the Shareholders shall
have no interest therein other than the beneficial interest conferred by their
Shares with respect to a particular Series or Class, and they shall have no
right to call for any partition or division of any property, profits, rights or
interests of the Trust nor can they be called upon to share or assume any losses
of the Trust, or suffer an assessment of any kind by virtue of their ownership
of Shares. The Shares shall be personal property giving only the rights in this
Declaration specifically set forth. The Shares shall not entitle the holder to
preference, preemptive, appraisal, conversion or exchange rights (except for
rights to exchange Shares of one Series for Shares of another Series or Class or
rights to convert shares of one Class for shares of another Class as set forth
in the Prospectus).
Section 6.4 Trust Only. It is the intention of the Trustees to create
only the relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to
create a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a trust.
Nothing in this Declaration shall be construed to make the Shareholders, either
by themselves or with the Trustees, partners or members of a joint stock
association.
Section 6.5 Issuance of Shares. The Trustees, in their discretion, may
from time to time without a vote of the Shareholders issue Shares with respect
to any Series that may have been established pursuant to Section 6.2.1 or any
Class that may have been established pursuant to Section 6.2.1, in addition to
the then issued and outstanding Shares and Shares held in the treasury, to such
party or parties and for such amount not less than the then current net asset
value of said Shares and type of consideration, including cash or property, at
such time or times and on such terms as the Trustee may deem best, and may in
such
23
<PAGE>
manner acquire other assets (including the acquisition of assets subject to, and
in connection with the assumption of, liabilities) and businesses. In
connection with any issuance of Shares, the Trustees may issue fractional
Shares. The Trustees may from time to time divide or combine the Shares of any
Series or Class into a greater or lesser number without thereby changing the
proportionate beneficial interests in such Series or Class of the Trust.
Contributions to the Trust may be accepted for, and Shares shall be redeemed as,
whole Shares and/or 1/1,000ths of a Share or multiples thereof.
Section 6.6 Register of Shares. A register shall be kept at the Trust or
the offices of any transfer agent duly appointed by the Trustees under the
direction of the Trustees which shall contain the names and addresses of the
Shareholders and the number of Shares (with respect to each Series and Class
that may have been established) held by them respectively and a record of all
transfers thereof. Separate registers shall be established and maintained for
each Series and Class of the Trust. Each such register shall be conclusive as
to who are the holders of the Shares of the applicable Series and Class and who
shall be entitled to receive dividends or distributions or otherwise to exercise
or enjoy the rights of Shareholders. No Shareholder shall be entitled to
receive payment of any dividend or distribution, nor to have notice given to him
as herein provided, until he has given his address to a transfer agent or such
other officer or agent of the Trustees as shall keep the register for entry
thereon. The Trust shall not be required to issue certificates for the Shares;
however, the Trustees, in their discretion, may authorize the issuance of share
certificates and promulgate appropriate rules and regulations as to their use.
Section 6.7 Transfer Agent and Registrar. The Trustees, or an agent of
the Trust selected by the Trustees, shall have power to employ a transfer agent
or transfer agents, and a registrar or registrars, with respect to the Shares of
the various Series and Classes. The transfer agent may keep the applicable
register and record therein the original issues and transfers, if any, of the
said Shares of the applicable Series and Classes. Any such transfer agent and
registrar shall perform the duties usually performed by transfer agents and
registrars of certificates of stock in a corporation, except as modified by the
Trustees.
Section 6.8 Transfer of Shares. Except as otherwise provided by the
Trustees, Shares shall be transferable on the records of the Trust only by the
record holder thereof or by his agent thereto duly authorized in writing, upon
delivery to the Trustees or a transfer agent of the Trust of a duly executed
instrument of transfer, together with such evidence of the genuineness of each
such execution and authorization and of other matters as may reasonably be
required. Upon such delivery, the transfer shall be recorded on the applicable
register of the Trust. Until such record is made, the Shareholder of record
shall be deemed to be the holder of such Shares for all purposes
24
<PAGE>
hereof and neither the Trustees nor any transfer agent or registrar nor any
officer, employee or agent of the Trust shall be affected by any notice of the
proposed transfer.
Any person becoming entitled to any Shares in consequence of the death,
bankruptcy or incompetence of any Shareholder, or otherwise by operation of law,
shall be recorded on the applicable register of Shares as the holder of such
Shares upon production of the proper evidence thereof to the Trustees or a
transfer agent of the Trust, but until such record is made, the Shareholder of
record shall be deemed to be the holder of such Shares for all purposes hereof
and neither the Trustees nor any transfer agent or registrar nor any officer or
agent of the Trust shall be affected by any notice of such death, bankruptcy or
incompetence, or other operation of law.
Section 6.9 Notice. Any and all notices to which any Shareholder
hereunder may be entitled and any and all communications shall be deemed duly
served or given if mailed, postage prepaid, addressed to any Shareholder of
record at his last known address as recorded on the applicable register of the
Trust.
ARTICLE VII
Redemption
Section 7.1 Redemptions. All outstanding Shares of any Series and Class
of the Trust may be redeemed at the option of the holders thereof, upon and
subject to the terms and conditions provided in this Article VII. The Trust
shall, upon application of any Shareholder or pursuant to authorization from any
Shareholder of a particular Series or Class, redeem or repurchase from such
Shareholder outstanding Shares of such Series or Class for the following amount:
with respect to the Shares of any Series, the then current net asset value of
such Shares.
For purposes of paragraph (b): (A) if a redemption request identifies
Shares to be redeemed by indicating the manner and date of their acquisition,
then the Trust shall redeem the Shares so identified; (B) if a redemption
request does not contain such identification of the Shares to be redeemed, then
to the extent of the number of Shares which are the subject thereof, such
redemption request shall be deemed to request the redemption of Shares held by
the Shareholder in the following order: first, Shares purchased at least one
year before receipt of such redemption request; second, Shares acquired upon
reinvestment of dividends or distributions; and third, Shares purchased less
than one year before receipt of such redemption request; and (C) the Trustees
may implement such procedures, including procedures related to the transfer of
Shares, and take such actions as are necessary for the Trust to effect
redemptions in a manner consistent with this paragraph (b).
25
<PAGE>
Notwithstanding the provisions of Section 10.4 of this Declaration, the
Trustees may amend this Declaration to modify or delete the provisions contained
in paragraph (b) of this Section 7.1 by an instrument in writing signed by a
majority of the then Trustees (or by an officer of the Trust pursuant to the
vote of a majority of such Trustees) without obtaining shareholder approval.
If so authorized by the Trustees, the Trust may, at any time and from time
to time, charge fees or deferred sales charges for effecting such redemption, at
such rates as the Trustees may establish, as and to the extent permitted under
the 1940 Act, and may, at any time and from time to time, pursuant to such Act,
suspend such right of redemption. The procedures for effecting redemption shall
be as set forth in the Prospectus with respect to the applicable Series or Class
from time to time.
The Trust may repurchase Shares directly, through the Distributor or
another agent designated for the purpose by agreement with the owner thereof at
a price not exceeding the net asset value per share as determined as of the time
when the contract purchase is made or the net asset value as of any time which
may be later determined pursuant to Section 8.1 hereof, provided payment is not
made for the Shares prior to the time as of which such net asset value is
determined.
Section 7.2 Redemptions of Accounts of Less than a Minimum Dollar Amount.
The Trustees shall have the power to redeem shares at a redemption price
determined in accordance with Section 7.1 if at any time the total investment in
such account does not have a minimum dollar value determined from time to time
by the Trustees in their sole discretion; provided, however, that the Trustees
may exercise such power with respect to Shares of any Series or Class only to
the extent the Prospectus or Statement of Additional Information describes such
power with respect to such Series or Class. In the event the Trustees determine
to exercise their power to redeem Shares provided in this Section 7.2,
Shareholders shall be notified that the value of their account is less than the
then effective minimum dollar amount and allowed at least 30 days to make an
additional investment before redemption is processed.
ARTICLE VIII
Determination of Net Asset Value, Net Income and Distributions
Section 8.1 Net Asset Value. The net asset value of each outstanding
Share of each Series and Class of the Trust shall be determined with respect to
each Series and Class at such time or times on such days as the Trustees may
determine, in accordance with the 1940 Act. The method of determination of net
asset value shall be determined by the Trustees and shall be as set forth in the
Prospectus or Statement of Additional Information with respect to the applicable
Series or Class. The power and
26
<PAGE>
duty to make the daily calculations for any Series or Class may be delegated by
the Trustees, or an agent of the Trust selected by the Trustees, to the adviser,
administrator, manager, custodian, transfer agent or such other person as the
Trustees or an agent of the Trust selected by the Trustees may determine. The
Trustees may suspend the daily determination of net asset value to the extent
permitted by the 1940 Act.
Section 8.2 Distributions to Shareholders. Except at such times when the
Trustees deem proper, the Trustees will not distribute to Shareholders net
investment income and realized capital gains, but will retain and reinvest such
net profits. The Trustees may make distributions to Shareholders to the extent
the distribution and the circumstances in which it may be made are determined by
the Trustees to be in the best interests of the Series or Class. The Trustees
may retain and not reinvest from the net profits such amount as they may deem
necessary to pay the debts or expenses of the Trust or to meet obligations of
the Trust, or as they may deem desirable to use in the conduct of its affairs or
to retain for future requirements or extensions of the business.
Section 8.3 Power to Modify Foregoing Procedures. Notwithstanding any of
the foregoing provisions of this Article VIII, the Trustees may prescribe, in
their absolute discretion, such other bases and times for determining the per
share net asset value of the Trust's Shares or net income, or the declaration
and payment of dividends and distributions as they may deem necessary or
desirable to enable the Trust to comply with any provision of the 1940 Act, or
any securities association registered under the Securities Exchange Act of 1934,
or any order of exemption issued by said Commission, all as in effect now or
hereafter amended or modified.
ARTICLE IX
Shareholders
Section 9.1 Voting Powers. The Shareholders shall have the power to vote
(i) for the election of Trustees as provided in Article II, Section 2.2; (ii)
for the removal of Trustees as provided in Article II, Section 2.3(d); (iii)
with respect to any investment adviser as provided in Article IV, Section 4.1;
(iv) with respect to the merger, consolidation and sale of assets of the Trust
as provided in Article X, Section 10.3; (v) with respect to the amendment of
this Declaration as provided in Article X, Section 10.4; (vi) to the same extent
as the Shareholders of a Massachusetts business corporation as to whether or not
a court action, proceeding or claim should be brought or maintained derivatively
or as a class action on behalf of the Trust or the Shareholders (provided,
however, that a shareholder of a particular Series or Class shall not be
entitled to a derivative or class action on behalf of any other Series or Class
(or shareholders of any other Series or Class) of the Trust); and
27
<PAGE>
(vii) with respect to such additional matters relating to the Trust as may be
required by law, by this Declaration, or the By-laws of the Trust or any
regulation of the Trust, by the Commission or any State, or as the Trustees may
consider desirable. Any matter affecting a particular Series or Class,
including without limitation, matters affecting the investment advisory
arrangements or investment policies or restrictions of a Series or Class, if
required by law, shall not be deemed to have been effectively acted upon unless
approved by the required vote of the Shareholders of such Series or Class if
required by law. Unless otherwise required by law, each whole Share shall be
entitled to one vote as to any matter on which it is entitled to vote, and each
fractional Share shall be entitled to a proportionate fractional vote. There
shall be no cumulative voting in the election of Trustees. Until Shares are
issued, the Trustees may exercise all rights of Shareholders and may take any
action to be taken by Shareholders which is required or permitted by law, this
Declaration or any By-laws of the Trust.
Section 9.2 Meetings. Shareholder meetings shall be held as specified in
the By-laws and in Section 2.2 hereof at the principal office of the Trust or at
such other place as the Trustees may designate. No annual or regular meetings
of shareholders are required. Meetings of the Shareholders may be called by the
Trustees and shall be held at such times, on such day and at such hour as the
Trustees may from time to time determine, for the purposes specified in Section
2.2 and for such other purposes as may be specified by the Trustees.
Section 9.3 Quorum and Required Vote. Except as otherwise provided by
law, the holders of thirty percent of the outstanding Shares of each Series
present in person or by proxy shall constitute a quorum for the transaction of
any business at any meeting of Shareholders. If a quorum, as above defined,
shall not be present for the purpose of any vote that may properly come before
the meeting, the Shareholders present in person or by proxy and entitled to vote
at such meeting on such matter holding a majority of the Shares present entitled
to vote on such matter may by vote adjourn the meeting from time to time to be
held at the same place without further notice than by announcement to be given
at the meeting until a quorum, as above defined, entitled to vote on such matter
shall be present, whereupon any such matter may be voted upon at the meeting as
though held when originally convened. Subject to any applicable requirement of
law, this Declaration or the By-laws, a plurality of the votes cast shall elect
a Trustee and all other matters shall be decided by a majority of the votes cast
entitled to vote thereon.
Section 9.4 Record Date for Meetings. For the purpose of determining the
Shareholders who are entitled to notice of and to vote at any meeting, or to
participate in any distribution, or for the purpose of any other action, the
Trustees may from time to time close the transfer books for such period, not
exceeding 30 days, as the Trustees may determine; or without closing the
28
<PAGE>
transfer books the Trustees may fix a date not more than 180 days prior to the
date of any meeting of Shareholders or declaration of dividends or other action
as a record date for the determination of the persons to be treated as
Shareholders of record for such purposes, except for dividend payments which
shall be governed by Section 8.2 hereof.
Section 9.5 Proxies. Any vote by a Shareholder of the Trust may be made
in person or by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Trustees or their designee
prior to the time the vote is taken. Pursuant to a resolution of a majority of
the Trustees, proxies may be solicited in the name of one or more Trustees or
one or more officers of the Trust. Only Shareholders of record shall be
entitled to vote. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to its exercise,
and the burden of proving invalidity shall rest on the challenger. A proxy with
respect to shares held in the name of two or more persons shall be valid if
executed by any one of them unless at or prior to exercise of the proxy the
Trust receives a specific written notice to the contrary from any one of them.
Section 9.6 Additional Provisions. The By-laws may include further
provisions for Shareholders' votes, meetings and related matters.
Section 9.7 Reports. The Trustees shall cause to be prepared with respect
to each Series at least annually a report of operations containing a balance
sheet and statement of income and undistributed income of the applicable Series
of the Trust prepared in conformity with generally accepted accounting
principles and an opinion of an independent public accountant on such financial
statements. It is contemplated that separate reports may be prepared for the
various Series or Classes. Copies of such reports shall be mailed to all
Shareholders of record of the applicable Series within the time required by the
1940 Act. The Trustees shall, in addition, furnish to the Shareholders at least
semi-annually, interim reports containing an unaudited balance sheet of the
Series as of the end of such period and an unaudited statement of income and
surplus for the period from the beginning of the current fiscal year to the end
of such period.
Section 9.8 Shareholder Action by Written Consent. Any action which may
be taken by Shareholders may be taken without a meeting if a majority of
Shareholders of each Series or Class entitled to vote on the matter (or such
larger proportion thereof as shall be required by any express provision of this
Declaration) consent to the action in writing and the written consents are filed
with the records of the meetings of Shareholders. Such consent shall be treated
for all purposes as a vote taken at a meeting of Shareholders.
29
<PAGE>
ARTICLE X
Duration; Termination of Trust; Amendment; Mergers; Etc.
Section 10.1 Duration. Subject to the provisions of Sections 11.2
and 11.3 hereof, this Trust shall continue without limitation of time.
Section 10.2 Termination.
(a) The Trust, or any Series thereof, may be terminated by the
affirmative vote of a majority of the Trustees, or by the
affirmative vote of a majority of the Shares of the Trust or
Series outstanding and entitled to vote, at any meeting of
shareholders. Upon the termination of the Trust or any Series:
(i) the Trust or such Series shall carry on no business except
for the purpose of winding up its affairs;
(ii) the Trustees shall proceed to wind up the affairs of the
Trust or such Series and all of the powers of the Trustees
under this Declaration shall continue until the affairs of
the Trust or such Series shall have been wound up, including
the power to fulfill or discharge the contracts of the Trust
or such Series, collect its assets, sell, convey, assign,
exchange, transfer or otherwise dispose of all or any part
of the remaining Trust Property to one or more persons at
public or private sale for consideration which may consist
in whole or in part of cash, securities or other property of
any kind, discharge or pay its liabilities, and do all other
acts appropriate to liquidate its business; provided that
any sale, conveyance, assignment, exchange, transfer or
other disposition of all or substantially all the Trust
Property shall require approval of the principal terms of
the transaction and the nature and amount of the
consideration by vote or consent of the holders of a
majority of the Shares entitled to vote; and
(iii) after payment or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities
and refunding agreements as they deem necessary for their
protection, the Trustees may distribute the remaining Trust
Property of any Series, in cash or in kind or partly each,
among the
30
<PAGE>
Shareholders of such Series according to their respective
rights.
(b) After termination of the Trust or any Series and distribution to
the Shareholders as herein provided, a majority of the Trustees
shall execute and lodge among the records of the Trust an
instrument in writing setting forth the fact of such termination.
Upon termination of the Trust, the Trustees shall thereupon be
discharged from all further liabilities and duties hereunder, and
the rights and interests of all Shareholders shall thereupon
cease. Upon termination of any Series, the Trustees thereunder
shall be discharged from any further liabilities and duties with
respect to such Series, and the rights and interests of all
Shareholders of such Series shall thereupon cease.
Section 10.3 Reorganization. The Trustees may sell, convey, merge and
transfer the assets of the Trust, or the assets belonging to any one or more
Series, to another trust, partnership, association or corporation organized
under the laws of any state of the United States, or to the Trust to be held as
assets belonging to another Series of the Trust, in exchange for cash, shares or
other securities (including, in the case of a transfer to another Series of the
Trust, Shares of such other Series) with such transfer either (1) being made
subject to, or with the assumption by the transferee of, the liabilities
belonging to each Series the assets of which are so transferred, or (2) not
being made subject to, or not with the assumption of, such liabilities;
provided, however, that no assets belonging to any particular Series shall be so
transferred unless the terms of such transfer shall have first been approved at
a meeting called for the purpose by a Majority Shareholder Vote of that Series.
Following such transfer, the Trustees shall distribute such cash, shares or
other securities (giving due effect to the assets and liabilities belonging to
and any other differences among the various Series the assets belonging to which
have so been transferred) among the Shareholders of the Series the assets
belonging to which have been so transferred; and if all of the assets of the
Trust have been so transferred, the Trust shall be terminated.
The Trust, or any one or more Series, may, either as the successor,
survivor, or non-survivor, (1) consolidate with one or more other trusts,
partnerships, associations or corporations organized under the laws of the
Commonwealth of Massachusetts or any other state of the United States, to form a
new consolidated trust, partnership, association or corporation under the laws
of which any one of the constituent entities is organized, or (2) merge into one
or more other trusts, partnerships, associations or corporations organized under
the laws of the Commonwealth of Massachusetts or any other state of the United
States, or have one or more such trusts, partnerships, associations or
31
<PAGE>
corporations merged into it, any such consolidation or merger to be upon such
terms and conditions as
are specified in an agreement and plan of reorganization entered into by the
Trust, or one or more Series as the case may be, in connection therewith. The
terms "merge" or "merger" as used herein shall also include the purchase or
acquisition of any assets of any other trust, partnership, association or
corporation which is an investment company organized under the laws of the
Commonwealth of Massachusetts or any other state of the United States. Any such
consolidation or merger shall require the approval of a Majority Shareholder
Vote of each Series affected thereby.
Shareholders shall have no right to demand payment for their shares or to
any other rights of dissenting shareholders in the event the Trust or any Series
participates in any transaction which would give rise to appraisal or
dissenters' rights by a shareholder of a corporation organized under Chapter
156B of the General Laws of the Commonwealth of Massachusetts.
Section 10.4 Amendment Procedure. All rights granted to the Shareholders
under this Declaration are granted subject to the reservation of the right to
amend this Declaration as herein provided, except that no amendment shall repeal
the limitations on personal liability of any Shareholder or Trustee or repeal
the prohibition of assessment upon the Shareholders without the express consent
of each Shareholder or Trustee involved. Subject to the foregoing, the
provisions of this Declaration (whether or not related to the rights of
Shareholders) may be amended at any time, so long as such amendment does not
adversely affect the rights of any Shareholder with respect to which such
amendment is or purports to be applicable and so long as such amendment is not
in contravention of applicable law, including the 1940 Act, by an instrument in
writing signed by a majority of the then Trustees (or by an officer of the Trust
pursuant to the vote of a majority of such Trustees). Any amendment to this
Declaration that adversely affects the rights of Shareholders may be adopted at
any time by an instrument in writing signed by a majority of the then Trustees
(or by an officer of the Trust pursuant to a vote of a majority of such
Trustees) when authorized to do so by the vote of a majority of the Shares
entitled to vote. Subject to the foregoing, any such amendment shall be
effective as provided in the instrument containing the terms of such amendment
or, if there is no provision therein with respect to effectiveness, upon the
execution of such instrument and of a certificate (which may be a part of such
instrument) executed by a Trustee or officer of the Trust to the effect that
such amendment has been duly adopted.
Section 10.5 Incorporation. With the approval of the holders of a
majority of the Shares, the Trustees may cause to be organized or assist in
organizing a corporation or corporations under the laws of any jurisdiction or
any other trust, partnership, association or other organization to take over all
of the
32
<PAGE>
Trust Property or to carry on any business in which the Trust shall directly or
indirectly have any interest, and to sell, convey and transfer the Trust
Property to any such corporation, trust, association or organization in exchange
for the shares or securities thereof or otherwise, and to lend money to,
subscribe for the Shares or securities of, and enter into any contracts with any
such corporation, trust, partnership, association or organization, or any
corporation, trust, partnership,
association or organization in which the Trust holds or is about to acquire
shares or any other interest. The Trustees may also cause a merger or
consolidation between the Trust or any successor thereto and any such
corporation, trust, partnership, association or other organization if and to the
extent permitted by law, as provided under the law then in effect. Nothing
contained herein shall be construed as requiring approval of Shareholders for
the Trustees to organize or assist in organizing one or more corporations,
trusts, partnerships, associations or other organizations and selling, conveying
or transferring a portion of the Trust Property to such organizations or
entities.
ARTICLE XI
Miscellaneous
Section 11.1 Filing. This Declaration and any amendment hereto shall be
filed in the office of the Secretary of the Commonwealth of Massachusetts and in
such other places as may be required under the laws of Massachusetts and also
may be filed or recorded in such other places as the Trustees deem appropriate.
Each amendment so filed shall be accompanied by a certificate signed and
acknowledged by a Trustee or officer stating that such action was duly taken in
a manner provided herein, and unless such amendment or such certificate sets
forth some later time for the effectiveness of such amendment, such amendment
shall be effective upon its filing. A restated Declaration, containing the
original Declaration and all amendments theretofore made, may be executed from
time to time by a majority of the Trustees and shall, upon filing with the
Secretary of the Commonwealth of Massachusetts, be conclusive evidence of all
amendments contained therein and may thereafter be referred to in lieu of the
original Declaration and the various amendments thereto.
Section 11.2 Resident Agent. The Trust shall maintain a resident agent in
the Commonwealth of Massachusetts, which agent shall initially be CT Corporation
System, 2 Oliver Street, Boston, Massachusetts 02109. The Trustees may
designate a successor resident agent, provided, however, that such appointment
shall not become effective until written notice thereof is delivered to the
office of the Secretary of the Commonwealth of Massachusetts.
Section 11.3 Governing Law. This Declaration is executed by the Trustees
and delivered in the Commonwealth of Massachusetts and with reference to the
laws thereof, and the rights of
33
<PAGE>
all parties and the validity and construction of every provision hereof shall be
subject to and construed according to the laws of said Commonwealth.
Section 11.4 Counterparts. This Declaration may be simultaneously
executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts, together, shall constitute one and the same
instrument, which shall be sufficiently evidenced by any such original
counterpart.
Section 11.5 Reliance by Third Parties. Any certificate executed by an
individual who, according to the records of the Trust or of any recording office
in which this Declaration may be recorded, appears to be a Trustee hereunder,
certifying to: (a) the number or identity of Trustees or Shareholders; (b) the
name of the Trust or any Series thereof; (c) the due authorization of the
execution of any instrument or writing; (d) the form of any vote passed at a
meeting of Trustees or Shareholders; (e) the fact that the number of Trustees or
Shareholders present at any meeting or executing any written instrument
satisfies the requirements of this Declaration; (f) the form of any By-laws
adopted by or the identity of any officers elected by the Trustees; (g) the
existence of any fact or facts which in any manner relate to the affairs of the
Trust or any Series or Class; or (h) the establishment of any Series or Class,
shall be conclusive evidence as to the matters so certified in favor of any
person dealing with the Trustees and their successors.
Section 11.6 Provisions in Conflict with Law or Regulations.
(a) The provisions of this Declaration are severable, and if the
Trustees shall determine, with the advice of counsel, that any of
such provisions is in conflict with the 1940 Act, the regulated
investment company provisions of the Internal Revenue Code or
with other applicable laws and regulations, the conflicting
provision shall be deemed never to have constituted a part of
this Declaration; provided, however, that such determination
shall not affect any of the remaining provisions of this
Declaration or render invalid or improper any action taken or
omitted prior to such determination.
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provision in
any other jurisdiction or any other provision of this Declaration
in any jurisdiction.
34
<PAGE>
Section 11.7 Principal Place of Business.
As of the date of this Declaration, the principal place of business of
the Trust is 700 Newport Center Drive, Newport Beach, California 92660. The
principal place of business may be changed by resolution of a majority of the
Trustees.
IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the ____day of _________, 1993.
________________________________
Thomas C. Sutton
Trustee
________________________________
William D. Cvengros
Trustee
________________________________
Richard L. Nelson
Trustee
________________________________
Lyman W. Porter
Trustee
________________________________
Alan Richards
Trustee
35
<PAGE>
PRESIDENT'S CERTIFICATE
The undersigned, being the duly appointed, qualified and active President
of PIMCO Advisors Institutional Funds (the "Trust"), formerly PFAMCo Fund,
hereby certifies that the Funds' Agreement and Declaration of Trust dated August
24, 1990 and subsequently amended on October 24, 1990, November, 16, 1990,
November 29, 1990, December 14, 1990, February 1, 1991, May 9, 1991, August 6,
1992, and February 26, 1993 (the "Declaration of Trust") has been duly amended
and restated in accordance with the provisions of Section 10.4 of the
Declaration of Trust.
Date: _________________, 1993
_________________________
Thomas C. Sutton
President
36
<PAGE>
WRITTEN INSTRUMENT AMENDING THE
AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
OF PIMCO FUNDS: EQUITY ADVISORS SERIES
The undersigned, being a majority of the Trustees of PIMCO Advisors
Institutional Funds, a Massachusetts business trust, (the "Trust") acting
pursuant to Section 6.2.1 of the Amended and Restated Agreement and Declaration
of Trust, dated May 7, 1993, and subsequently amended on July 15, 1993 and
October 29, 1993, (the "Declaration of Trust"), hereby amend the Declaration of
Trust by dividing the Shares of each Series into three Classes designated as
"Institutional Class," "Benefit Plan Class," and "Administrative Class," by
designating all previously issued and outstanding Shares as Institutional Class
Shares, and by assigning the following relative rights and preferences to each
Class:
Each Class of a Series shall be identical to each other Class of that
Series except as follows:
(a) Each Class shall bear the expenses, costs, charges, and liabilities
relating to any agreements or arrangements entered into by or on
behalf of the Trust pursuant to which an organization or other person
agrees to provide services with respect to that Class but not with
respect to any other Class or Classes of the Trust, as well as any
other expenses, costs, charges, and liabilities directly attributable
to a Class which the Trustees determine should be borne solely by that
Class; and
(b) A Class shall not bear the expenses, costs, charges, and liabilities
relating to any agreements or arrangements entered into by or on
behalf of the Trust pursuant to which an organization or other person
agrees to provide services with respect to any other Class or Classes
of the Trust, nor any other expenses, costs, charges, or liabilities
directly attributable to shares of any other Class or Classes of the
Trust which the Trustees determine should be borne exclusively by such
other Class or Classes; and
(c) The dividends and distributions with respect to each Class of a Series
shall be in such amount as may be declared from time to time by or
under the direction of the Trustees, and such dividends and
distributions may vary from dividends and distributions with respect
to other Classes of that Series to reflect differing allocations of
the expenses, costs, charges, or liabilities of the Trust among the
holders of the Classes of Shares of that Series and to equalize the
net asset value per Share of its Classes, to such extent and for such
purposes as the Trustees may deem appropriate.
37
<PAGE>
(d) The Shareholders of each Class of each Series shall have (i) exclusive
voting rights with respect to matters on which the Shareholders of the Class
shall be entitled to exclusive voting rights under applicable federal or state
law and on any matters affecting only that Class and (ii) no voting rights with
respect to matters on which the Shareholders of another Class of that Series or
another Series shall be entitled to exclusive voting rights under applicable
federal or state law or on any matters affecting only another Class or Classes.
IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the __ day of March, 1994.
____________________________
Thomas C. Sutton
Trustee
____________________________
William D. Cvengros
Trustee
____________________________
Richard L. Nelson
Trustee
____________________________
Lyman W. Porter
Trustee
____________________________
Alan Richards
Trustee
38
<PAGE>
PRESIDENT'S CERTIFICATE
The undersigned, being the duly appointed, qualified and active
President of PIMCO Advisors Institutional Funds (the "Trust"), hereby certifies
that Section 6.2.1 of the Trust's Amended and Restated Agreement and Declaration
of Trust dated May 7, 1993 and subsequently amended on July 15, 1993 and October
29, 1993 (the "Declaration of Trust") has been duly amended in accordance with
the provisions of Section 10.4 of the Declaration of Trust.
Date: March __, 1994
_____________________________
Thomas C. Sutton
President
39
<PAGE>
[LETTERHEAD of DELOITTE & TOUCHE LLP]
CONSENT OF INDEPENDENT AUDITORS
PIMCO Funds: Equity Advisors Series (formerly PIMCO Advisors Institutional
Funds):
We hereby consent to the use in this Post-Effective Amendment No. 21 under the
Securities Act of 1933 and Amendment No. 23 under the Investment Company Act of
1940 to Registration Statement No. 33-36528 on Form N-1A of our report dated
December 15, 1995, related to PIMCO Funds: Equity Advisors Series appearing in
the financial statements which are incorporated by reference; to the references
to us under the heading "Financial Highlights" appearing in each of the
prospectuses of PIMCO Funds: Equity Advisors Series and respective portfolios
listed below:
PIMCO Funds: Equity Advisors Series - NFJ Equity Income Fund
PIMCO Funds: Equity Advisors Series - NFJ Diversified Low P/E Fund
PIMCO Funds: Equity Advisors Series - NFJ Small Cap Value Fund
PIMCO Funds: Equity Advisors Series - Cadence Capital Appreciation Fund
PIMCO Funds: Equity Advisors Series - Cadence Mid Cap Growth Fund
PIMCO Funds: Equity Advisors Series - Cadence Micro Cap Growth Fund
PIMCO Funds: Equity Advisors Series - Cadence Small Cap Growth Fund
PIMCO Funds: Equity Advisors Series - Columbus Circle Investors Core Equity
Fund
PIMCO Funds: Equity Advisors Series - Columbus Circle Investors Mid Cap
Equity Fund
PIMCO Funds: Equity Advisors Series - Parametric Enhanced Equity Fund
PIMCO Funds: Equity Advisors Series - Blairlogie Emerging Markets Fund
PIMCO Funds: Equity Advisors Series - Blairlogie International Active Fund
PIMCO Funds: Equity Advisors Series - Balanced Fund;
and to the references to us under the heading "Financial Statements" in the
Statement of Additional Information for PIMCO Funds: Equity Advisors Series,
which are a part of such Registration Statement.
/s/ Deloitte & Touche LLP
- -------------------------
February 23, 1996
<PAGE>
EX-99.B12
[ART APPEARS HERE]
PIMCO ADVISORS
INSTITUTIONAL FUNDS
ANNUAL REPORT
OCTOBER 31, 1995
PIMCO
<PAGE>
CONTENTS
Chairman's Message 1
Management Discussion and Analysis 2
Investment Performance 4
Statements of Assets and Liabilities 10
Statements of Operations 12
Statements of Changes in Net Assets 14
Financial Highlights 20
Schedules of Investments
Money Market Fund 26
PIMCO Managed Bond and Income Fund 27
NFJ Equity Income Fund 30
NFJ Diversified Low P/E Fund 31
NFJ Small Cap Value Fund 32
Cadence Capital Appreciation Fund 34
Cadence Mid Cap Growth Fund 35
Cadence Micro Cap Growth Fund 37
Cadence Small Cap Growth Fund 38
Columbus Circle Investors
Core Equity Fund 39
Columbus Circle Investors
Mid Cap Equity Fund 40
Parametric Enhanced Equity Fund 41
Blairlogie Emergency Markets Fund 44
Blairlogie International Active Fund 46
Balanced Fund 49
Notes to Financial Statements 53
Independent Auditors' Report 62
Federal Income Tax Information 63
<PAGE>
CHAIRMAN'S MESSAGE
Dear Shareholder:
We are pleased to present the Annual Report for the PIMCO
Advisors Institutional Funds for the fiscal year ended
October 31, 1995.
During this period, our Funds enjoyed a favorable investment
climate, with both the stock and bond markets experiencing
exceptional gains. The performance of all PIMCO Advisors
Institutional Funds during this period appears on the
following pages.
Along with the strong results for the twelve months, we are
pleased to announce enhanced services to our investors. As of
November 1, PIMCO Advisors Institutional Funds and the sister
fund family, PIMCO Funds, offer shareholders full exchange
privileges among all our institutional fixed income and
equity funds.
This new service is made possible by the consolidation of
operations and shareholder services between the two fund
families. The combination represents a significant step
toward streamlining operations and enhancing services to our
shareholders. It is important to note that the investment
objectives of the Funds, the portfolio managers, and your
account contact will not change.
We thank you for the continued opportunity to serve your
investment needs.
Sincerely,
/s/ William D. Cvengros
William D. Cvengros
Chairman of the Board
December 15, 1995
1
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS
During the twelve months ended October 31, 1995, the broad
bond market, as measured by the Lehman Brothers Aggregate
Bond Index, posted a total return of 15.6%, the beneficiary
of declining interest rates and low inflation. Stocks also
climbed higher, buoyed by strong corporate earnings, with the
S&P 500 Index finishing 26.4% ahead of where it began the
period.
Stocks were led during the twelve months by large
capitalization issues, which outdistanced their small cap
brethren by a 26.4% to 18.3% margin. This sizable preference
by the market for large cap stocks was principally the result
of a declining dollar over much of the period. With the
dollar weaker, large, multinational US corporations saw their
earnings improve through higher exports and overseas sales
that translated into more dollars at home. The following bar
chart depicts the return of the S&P 500 Index less that of
the Russell 2000 Index.
-------------------------------------------------------------
Large Cap Stocks Relative to
Small Cap Stocks Through October 31, 1995
-------------------------------------------------------------
[BAR CHART APPEARS HERE]
The bar chart depicts the relative out performance of
the Standard & Poor's 500 Index (comprised of large
capitalization issues) compared to the Russell 2000 Index
(comprised of small capitalization issues). The Standard &
Poor's 500 Index out performed the Russell 2000 Index seven
of the twelve months during the fiscal year ended October 31,
1995.
-------------------------------------------------------------
Growth stocks were favored during the fiscal year as
investors shied away from economically-sensitive stocks
toward more stable growth names as the economy showed signs
of slowing. Overall, growth stocks outperformed value issues
by a 29.2% to 24.7% margin. The following bar chart depicts
the return of the Russell 1000 Growth Index less that of the
Russell 1000 Value Index.
-------------------------------------------------------------
Growth Stocks Relative to
Value Stocks Through October 31, 1995
-------------------------------------------------------------
[BAR CHART APPEARS HERE]
The bar chart depicts the relative out performance of
the Russell 1000 Growth Index compared to the Russell 1000
Value Index. The Russell 1000 Growth Index out performed the
Russell 1000 Value Index eight of the twelve months during
the fiscal year ended October 31, 1995.
-------------------------------------------------------------
2
<PAGE>
Contrasting economic climates set the tone for the
outperformance of US stocks over many of the international
markets. European Economic Union markets were embattled by
tight monetary controls in Germany and fiscal austerity in
France while Japan experienced weakening exports and a
potential banking crisis of a magnitude not seen for decades.
Meanwhile, the US, which is further along in its economic
recovery, experienced the enviable combination of declining
interest rates and strong growth of corporate earnings. The
following bar chart depicts the return of the S&P 500 Index
less that of the EAFE Index.
-------------------------------------------------------------
Domestic Stocks Relative to Foreign Stocks
Through October 31, 1995
-------------------------------------------------------------
[BAR CHART APPEARS HERE]
The bar chart depicts the relative out performance of
the Standard & Poor's 500 Index (comprised of large
capitalization issues) compared to the Morgan Stanley Capital
EAFE Index (comprised of stock markets in Europe, Australasia
and the Far East). The Standard & Poor's 500 Index out
performed the EAFE Index nine of the twelve months during the
fiscal year ended October 31, 1995 .
-------------------------------------------------------------
Source: Frank Russell Company
Investment Outlook
PIMCO Advisor Institutional Funds anticipates continued
moderate economic growth and low inflation in the year ahead.
This environment should be beneficial for both domestic
stocks and bonds. The long-term reasons for investing
internationally remain intact. While international investing
involves special risks due to changes in currency rates,
political instability and foreign taxation, PIMCO Advisors
International Funds feels the opportunities in both developed
and emerging markets are compelling.
3
<PAGE>
INVESTMENT PERFORMANCE
Performance Graphs and Tables
The following is a summary of the performance of the PIMCO
Advisors Institutional Funds' Institutional Class comparing
their returns with a representative market index. The total
return for each Fund is net of fees and includes reinvestment
of dividends, income, and capital gains, if any. Please
remember that indexes, in general, have no trading costs or
deductions for management and other expenses.
The performance data quoted represents past performance.
Investment return and principal value will fluctuate so that
the Fund shares, when redeemed, may be worth more or less
than their original cost.
-------------------------------------------------------------
Money Market Fund Through October 31, 1995
-------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Money Salomon
Market 3 Mo. T-Bill
<S> <C> <C>
3/01/91 $200,000 $200,000
10/31/91 $207,562 $207,665
10/31/92 $215,549 $215,695
10/31/93 $221,654 $222,345
10/31/94 $229,477 $230,873
10/31/95 $242,496 $244,066
</TABLE>
-------------------------------------------------------------
The line graph above assumes the investment of $200,000 on
3/1/91, the Fund's Institutional Class inception date,
compared with the Salomon 3 Month T-Bills Index, an unmanaged
index of three-month Treasury bills.
<TABLE>
<CAPTION>
Annualized Returns Ended 10/31/95
- -------------------------------------------------------------
Since
Inception
1 Yr. 3 Yrs. 4 Yrs. (3/1/91)
- -------------------------------------------------------------
<S> <C> <C> <C> <C>
Money Market
Fund (%) 5.67 4.01 3.97 4.21
- -------------------------------------------------------------
Salomon 3 Mo.
T-Bills (%) 5.73 4.21 4.12 n/a
- -------------------------------------------------------------
<CAPTION>
Cumulative Returns Ended 10/31/95
- -------------------------------------------------------------
Since
Inception
1 Yr. 3 Yrs. 4 Yrs. (1/24/95)
- -------------------------------------------------------------
<S> <C> <C> <C> <C>
Money Market Fund
Admin. Class (%) n/a n/a n/a 4.21
- -------------------------------------------------------------
Salomon 3 Mo.
T-Bills (%) n/a n/a n/a n/a
- -------------------------------------------------------------
</TABLE>
-------------------------------------------------------------
PIMCO Managed Bond and Income Fund Through October 31, 1995
-------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
PIMCO Lehman Bros
Managed Bond Aggregate Bond
and Index Index
<S> <C> <C>
1/01/92 $200,000 $200,000
10/31/92 $214,746 $211,405
10/31/93 $244,362 $236,499
10/31/94 $235,617 $227,807
10/31/95 $273,223 $258,869
</TABLE>
-------------------------------------------------------------
The line graph above assumes the investment of $200,000 on
1/1/92, the first full month following the Fund's
Institutional Class inception on 12/30/91, compared with the
Lehman Brothers Aggregate Bond Index, an unmanaged bond
market index.
<TABLE>
<CAPTION>
Annualized Returns Ended 10/31/95
- --------------------------------------------------------------
Since
Inception
1 Yr. 2 Yrs. 3 Yrs. (12/30/91)
- --------------------------------------------------------------
<S> <C> <C> <C> <C>
Managed Bond and
Income Fund (%) 15.96 5.74 8.36 8.51
- --------------------------------------------------------------
Lehman Bros.
Aggregate 15.65 5.55 7.61 n/a
Bond Index (%)
- --------------------------------------------------------------
<CAPTION>
Cumulative Returns Ended 10/31/95
- --------------------------------------------------------------
Since
Inception
1 Yr. 2 Yrs. 3 Yrs. (11/30/94)
- --------------------------------------------------------------
<S> <C> <C> <C> <C>
Managed Bond and
Income Fund n/a n/a n/a 15.92
Admin. Class (%)
- --------------------------------------------------------------
Lehman Bros.
Aggregate n/a n/a n/a n/a
Bond Index (%)
- --------------------------------------------------------------
</TABLE>
4
<PAGE>
-------------------------------------------------------------
NFJ Equity Income Fund Through October 31, 1995
-------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
NFJ S&P
Equity 500
Income Index
<S> <C> <C>
4/01/91 $200,000 $200,000
10/31/91 $222,929 $213,127
10/31/92 $251,660 $234,351
10/31/93 $293,571 $269,268
10/31/94 $300,183 $279,820
10/31/95 $358,285 $353,730
</TABLE>
-------------------------------------------------------------
The line graph above assumes the investment of $200,000 on
4/1/91, the first full month following the Fund's
Institutional Class inception on 3/8/91, compared with the
S&P 500 Index, an unmanaged market index.
<TABLE>
<CAPTION>
Annualized Returns Ended 10/31/95
- -------------------------------------------------------------
Since
Inception
1 Yr. 3 Yrs. 4 Yrs. (3/8/91)
- -------------------------------------------------------------
<S> <C> <C> <C> <C>
NFJ Equity
Income Fund (%) 19.36 12.50 12.59 13.43
- -------------------------------------------------------------
S&P 500
Index (%) 26.41 14.72 13.50 n/a
- -------------------------------------------------------------
<CAPTION>
Cumulative Returns Ended 10/31/95
- --------------------------------------------------------------
Since
Inception
1 Yr. 3 Yrs. 4 Yrs. (11/30/94)
- --------------------------------------------------------------
<S> <C> <C> <C> <C>
NFJ Equity
Income Fund n/a n/a n/a 25.69
Admin. Class (%)
- --------------------------------------------------------------
S&P 500
Index (%) n/a n/a n/a n/a
- --------------------------------------------------------------
</TABLE>
-------------------------------------------------------------
NFJ Diversified Low P/E Fund Through October 31, 1995
-------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
NFJ S&P
Diversified 500
Low P/E Index
<S> <C> <C>
1/01/92 $200,000 $200,000
10/31/92 $207,957 $205,646
10/31/93 $263,113 $236,286
10/31/94 $263,516 $245,546
10/31/95 $329,351 $310,402
</TABLE>
-------------------------------------------------------------
The line graph above assumes the investment of $200,000 on
1/1/92, the first full month following the Fund's
Institutional Class inception on 12/30/91, compared with the
S&P 500 Index, an unmanaged market index.
<TABLE>
<CAPTION>
Annualized Returns Ended 10/31/95
- --------------------------------------------------------------
Since
Inception
1 Yr. 2 Yrs. 3 Yrs. (12/30/91)
- --------------------------------------------------------------
<S> <C> <C> <C> <C>
NFJ Diversified
Low P/E Fund (%) 24.98 11.88 16.56 14.08
- --------------------------------------------------------------
S&P 500
Index (%) 26.41 14.62 14.72 n/a
- --------------------------------------------------------------
</TABLE>
-------------------------------------------------------------
NFJ Small Cap Value Fund Through October 31, 1995
-------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
NFJ Russell
Small Cap 2000
Value Index
<S> <C> <C>
10/1/91 $200,000 $200,000
10/31/91 $202,376 $205,280
10/31/92 $230,194 $224,752
10/31/93 $284,528 $297,555
10/31/94 $276,313 $296,643
10/31/95 $331,240 $351,006
</TABLE>
-------------------------------------------------------------
The line graph above assumes the investment of $200,000 on
10/1/91, the Fund's Institutional Class inception date,
compared with the Russell 2000 Index, an unmanaged market
index.
<TABLE>
<CAPTION>
Annualized Returns Ended 10/31/95
- --------------------------------------------------------------
Since
Inception
1 Yr. 3 Yrs. 4 Yrs. (10/1/91)
- --------------------------------------------------------------
<S> <C> <C> <C> <C>
NFJ Small Cap
Value Fund (%) 19.88 12.90 13.11 13.15
- --------------------------------------------------------------
Russell 2000
Index (%) 18.33 16.02 14.35 n/a
- --------------------------------------------------------------
</TABLE>
5
<PAGE>
INVESTMENT PERFORMANCE (Cont.)
-------------------------------------------------------------
Cadence Capital Appreciation Fund Through October 31, 1995
-------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Cadence S&P
Capital 500
Appreciation Index
<S> <C> <C>
4/01/91 $200,000 $200,000
10/31/91 $217,393 $213,127
10/31/92 $240,759 $234,351
10/31/93 $301,676 $269,268
10/31/94 $302,124 $279,820
10/31/95 $388,139 $353,730
</TABLE>
-------------------------------------------------------------
The line graph above assumes the investment of $200,000 on
4/1/91, the first full month following the Fund's
Institutional Class inception on 3/8/91, compared with the
S&P 500 Index, an unmanaged market index.
<TABLE>
<CAPTION>
Annualized Returns Ended 10/31/95
- -------------------------------------------------------------
Since
Inception
1 Yr. 3 Yrs. 4 Yrs. (3/8/91)
- -------------------------------------------------------------
<S> <C> <C> <C> <C>
Cadence Capital
Appreciation 28.47 17.26 15.59 15.88
Fund (%)
- -------------------------------------------------------------
S&P 500
Index (%) 26.41 14.72 13.50 n/a
- -------------------------------------------------------------
</TABLE>
-------------------------------------------------------------
Cadence Mid Cap Growth Fund Through October 31, 1995
-------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Cadence S&P
MidCap MidCap
Growth Index
<S> <C> <C>
9/01/91 $200,000 $200,000
10/31/91 $206,372 $207,154
10/31/92 $228,890 $229,546
10/31/93 $285,123 $279,003
10/31/94 $286,774 $285,646
10/31/95 $374,345 $346,262
</TABLE>
-------------------------------------------------------------
The line graph above assumes the investment of $200,000 on
9/1/91, the first full month following the Fund's
Institutional Class inception on 8/26/91, compared with the
S&P MidCap Index, an unmanaged market index.
<TABLE>
<CAPTION>
Annualized Returns Ended 10/31/95
- --------------------------------------------------------------
Since
Inception
1 Yr. 3 Yrs. 4 Yrs. (8/26/91)
- --------------------------------------------------------------
<S> <C> <C> <C> <C>
Cadence Mid Cap
Growth Fund (%) 30.54 17.82 16.05 16.11
- --------------------------------------------------------------
S&P MidCap
Index (%) 21.21 14.68 13.70 n/a
- --------------------------------------------------------------
<CAPTION>
Cumulative Returns Ended 10/31/95
- --------------------------------------------------------------
Since
Inception
1 Yr. 3 Yrs. 4 Yrs. (11/30/94)
- --------------------------------------------------------------
<S> <C> <C> <C> <C>
Cadence Mid Cap
Growth Fund n/a n/a n/a 36.64
Admin. Class (%)
- --------------------------------------------------------------
S&P MidCap
Index (%) n/a n/a n/a n/a
- --------------------------------------------------------------
</TABLE>
-------------------------------------------------------------
Cadence Micro Cap Growth Fund Through October 31, 1995
-------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Cadence Russell
Micro Cap 2000
Growth Index
<S> <C> <C>
7/01/93 $200,000 $200,000
10/31/93 $221,879 $223,095
10/31/94 $238,086 $222,412
10/31/95 $308,401 $263,171
</TABLE>
-------------------------------------------------------------
The line graph above assumes the investment of $200,000 on
7/1/93, the first full month following the Fund's
Institutional Class inception on 6/25/93, compared with the
Russell 2000 Index, an unmanaged market index.
<TABLE>
<CAPTION>
Annualized Returns Ended 10/31/95
- -------------------------------------------------------------
Since
Inception
1 Yr. 2 Yrs. 3 Yrs. (6/25/93)
- -------------------------------------------------------------
<S> <C> <C> <C> <C>
Cadence Micro Cap
Growth Fund (%) 29.54 17.90 n/a 20.17
- -------------------------------------------------------------
Russell 2000
Index (%) 18.33 8.61 n/a n/a
- -------------------------------------------------------------
</TABLE>
6
<PAGE>
-------------------------------------------------------------
Cadence Small Cap Growth Fund Through October 31, 1995
-------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Cadence Russell
Small Cap 2000
Growth Index
<S> <C> <C>
2/01/91 $200,000 $200,000
10/31/91 $263,145 $260,144
10/31/92 $289,983 $284,820
10/31/93 $402,485 $377,080
10/31/94 $421,081 $375,925
10/31/95 $494,314 $444,817
</TABLE>
-------------------------------------------------------------
The line graph above assumes the investment of $200,000 on
2/1/91, the first full month following the Fund's
Institutional Class inception on 1/7/91, compared with the
Russell 2000 Index, an unmanaged market index.
<TABLE>
<CAPTION>
Annualized Returns Ended 10/31/95
- -------------------------------------------------------------
Since
Inception
1 Yr. 3 Yrs. 4 Yrs. (1/7/91)
- -------------------------------------------------------------
<S> <C> <C> <C> <C>
Cadence Small Cap
Growth Fund (%) 17.39 19.46 17.07 24.11
- -------------------------------------------------------------
Russell 2000
Index (%) 18.33 16.02 14.35 n/a
- -------------------------------------------------------------
<CAPTION>
Cumulative Returns Ended 10/31/95
- -------------------------------------------------------------
Since
Inception
1 Yr. 3 Yrs. 4 Yrs. (9/27/95)
- -------------------------------------------------------------
<S> <C> <C> <C> <C>
Cadence Small
Cap Growth Fund n/a n/a n/a (5.34)
Admin. Class (%)
- -------------------------------------------------------------
Russell 2000
Index (%) n/a n/a n/a n/a
- -------------------------------------------------------------
</TABLE>
-------------------------------------------------------------
Columbus Circle Investors Core Equity Fund
Through October 31, 1995
-------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
CCI
Core S&P 500
Equity Index
<S> <C> <C>
1/01/95 $200,000 $200,000
10/31/95 $255,530 $258,657
</TABLE>
-------------------------------------------------------------
The line graph above assumes the investment of $200,000 on
1/1/95, the first full month following the Fund's
Institutional Class inception on 12/28/94, compared with the
S&P 500 Index, an unmanaged market index.
<TABLE>
<CAPTION>
Cumulative Returns Ended 10/31/95
- --------------------------------------------------------------
Since
Inception
1 Yr. 2 Yrs. 3 Yrs. (12/28/94)
- --------------------------------------------------------------
<S> <C> <C> <C> <C>
Columbus Circle
Investors Core n/a n/a n/a 27.86
Equity Fund (%)
- --------------------------------------------------------------
S&P 500
Index (%) n/a n/a n/a n/a
- --------------------------------------------------------------
<CAPTION>
Cumulative Returns Ended 10/31/95
- --------------------------------------------------------------
Since
Inception
1 Yr. 2 Yrs. 3 Yrs. (5/31/95)
- --------------------------------------------------------------
<S> <C> <C> <C> <C>
Columbus Circle
Investors Core
Equity Fund n/a n/a n/a 11.34
Admin. Class (%)
- --------------------------------------------------------------
S&P 500
Index (%) n/a n/a n/a n/a
- --------------------------------------------------------------
</TABLE>
-------------------------------------------------------------
Columbus Circle Investors Mid Cap Equity Fund
Through October 31, 1995
-------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
CCI S&P
Mid Cap Mid Cap
Equity Index
<S> <C> <C>
1/01/95 $200,000 $200,000
10/31/95 $258,597 $251,577
</TABLE>
-------------------------------------------------------------
The line graph above assumes the investment of $200,000 on
1/1/95, the first full month following the Fund's
Institutional Class inception on 12/28/94, compared with the
S&P MidCap Index, an unmanaged market index.
<TABLE>
<CAPTION>
Cumulative Returns Ended 10/31/95
- --------------------------------------------------------------
Since
Inception
1 Yr. 2 Yrs. 3 Yrs. (12/28/94)
- --------------------------------------------------------------
<S> <C> <C> <C> <C>
Columbus Circle
Investors Mid Cap n/a n/a n/a 29.34
Equity Fund (%)
- --------------------------------------------------------------
S&P MidCap
Index (%) n/a n/a n/a n/a
- --------------------------------------------------------------
</TABLE>
7
<PAGE>
INVESTMENT PERFORMANCE (Cont.)
-------------------------------------------------------------
Parametric Enhanced Equity Fund Through October 31, 1995
-------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Parametric S&P
Enhanced 500
Equity Index
<S> <C> <C>
3/01/91 $200,000 $200,000
10/31/91 $218,442 $218,179
10/31/92 $243,478 $239,905
10/31/93 $263,442 $275,650
10/31/94 $268,252 $286,452
10/31/95 $333,870 $362,114
</TABLE>
-------------------------------------------------------------
The line graph above assumes the investment of $200,000 on
3/1/91, the first full month following the Fund's
Institutional Class inception on 2/11/91, compared with the
S&P 500 Index, an unmanaged market index.
<TABLE>
<CAPTION>
Annualized Returns Ended 10/31/95
- -------------------------------------------------------------
Since
Inception
1 Yr. 3 Yrs. 4 Yrs. (2/11/91)
- -------------------------------------------------------------
<S> <C> <C> <C> <C>
Parametric
Enhanced Equity
Fund (%) 24.46 11.10 11.19 11.55
- -------------------------------------------------------------
S&P 500
Index (%) 26.41 14.72 13.50 n/a
- -------------------------------------------------------------
</TABLE>
-------------------------------------------------------------
Blairlogie Emerging Markets Fund Through October 31, 1995
-------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Blairlogie
Emerging MSCI IFC
Markets Index Index
<S> <C> <C> <C>
6/01/93 $200,000 $200,000 $200,000
10/31/93 $251,097 $258,920 $258,973
10/31/94 $342,254 $334,954 $329,994
10/31/95 $247,465 $269,911 $252,373
</TABLE>
-------------------------------------------------------------
The line graph above assumes the investment of $200,000 on
6/1/93, the Fund's Institutional Class inception date,
compared with the Morgan Stanley Capital International (MSCI)
Emerging Markets Free Index and the International Finance
Corporation Investable (IFCI) Index, both unmanaged market
indexes of emerging markets stocks.
<TABLE>
<CAPTION>
Annualized Returns Ended 10/31/95
- --------------------------------------------------------------
Since
Inception
1 Yr. 2 Yrs. 3 Yrs. (6/1/93)
- --------------------------------------------------------------
<S> <C> <C> <C> <C>
Blairlogie
Emerging Markets (27.70) (0.73) n/a 9.21
Fund (%)
- --------------------------------------------------------------
MSCI Emerging
Markets Free (19.42) 2.10 n/a n/a
Index (%)
- --------------------------------------------------------------
IFCI Composite
Index (%) (23.52) (1.28) n/a n/a
- --------------------------------------------------------------
<CAPTION>
Annualized Returns Ended 10/31/95
- ---------------------------------------------------------------
Since
Inception
1 Yr. 2 Yrs. 3 Yrs. (10/20/94)
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
Blairlogie Emerging
Markets Fund (27.96) n/a n/a (29.06)
Admin. Class (%)
- ---------------------------------------------------------------
MSCI Emerging
Markets Free (19.42) n/a n/a n/a
Index (%)
- ---------------------------------------------------------------
IFCI Composite
Index (%) (23.52) n/a n/a n/a
- ---------------------------------------------------------------
</TABLE>
8
<PAGE>
-------------------------------------------------------------
Blairlogie International Active Fund Through October 31, 1995
-------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Blairlogie
International EAFE
Active Index
<S> <C> <C>
7/01/93 $200,000 $200,000
10/31/93 $222,035 $219,768
10/31/94 $247,979 $242,105
10/31/95 $259,487 $241,164
</TABLE>
-------------------------------------------------------------
The line graph above assumes the investment of $200,000 on
7/1/93, the first full month following the Fund's
Institutional Class inception on 6/8/93, compared with the
Morgan Stanley Capital International EAFE Index (Europe,
Australasia, Far East), an unmanaged market index of over
1,000 stocks.
<TABLE>
<CAPTION>
Annualized Returns Ended 10/31/95
- ---------------------------------------------------------------
Since
Inception
1 Yr. 2 Yrs. 3 Yrs. (6/8/93)
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
Blairlogie
International 3.83 7.69 n/a 9.59
Active Fund (%)
- ---------------------------------------------------------------
EAFE Index (%) (0.40) 4.70 n/a n/a
- ---------------------------------------------------------------
<CAPTION>
Cumulative Returns Ended 10/31/95
- ---------------------------------------------------------------
Since
Inception
1 Yr. 2 Yrs. 3 Yrs. (11/30/94)
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
Blairlogie
International
Active Fund n/a n/a n/a 9.61
Admin. Class (%)
- ---------------------------------------------------------------
EAFE Index (%) n/a n/a n/a n/a
- ---------------------------------------------------------------
</TABLE>
-------------------------------------------------------------
Balanced Fund Through October 31, 1995
-------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Lehman Bros S&P
Aggregate Bond 500
Balanced Index Index
<S> <C> <C> <C>
7/01/92 $200,000 $200,000 $200,000
10/31/92 $211,214 $205,820 $206,964
10/31/93 $232,468 $230,251 $237,800
10/31/94 $232,651 $221,789 $247,120
10/31/95 $277,946 $252,030 $312,392
</TABLE>
-------------------------------------------------------------
The line graph above assumes the investment of $200,000 on
7/1/92, the first full month following the Fund's
Institutional Class inception on 6/25/92, compared with the
Lehman Brothers Aggregate Bond Index and the S&P 500 Index,
unmanaged bond and stock market indexes.
<TABLE>
<CAPTION>
Annualized Returns Ended 10/31/95
- -------------------------------------------------------------
Since
Inception
1 Yr. 2 Yrs 3 Yrs. (6/25/92)
- -------------------------------------------------------------
<S> <C> <C> <C> <C>
Balanced
Fund (%) 19.47 9.35 9.58 10.57
- -------------------------------------------------------------
S&P 500
Index (%) 26.41 14.62 14.72 n/a
- -------------------------------------------------------------
Lehman Bros.
Aggregate Bond 15.65 5.55 7.61 n/a
Index (%)
- -------------------------------------------------------------
</TABLE>
9
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
October 31, 1995
<TABLE>
<CAPTION>
------------ ----------- ----------- ------------ ------------- ------------
Amounts in thousands, except per share amounts PIMCO Cadence
Managed NFJ Capital
Money Market Bond and NFJ Equity Diversified NFJ Small Cap Appreciation
Fund Income Fund Income Fund Low P/E Fund Value Fund Fund
------------ ----------- ----------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at value $ 7,664 $ 440,848 $ 113,865 $ 14,437 $ 35,037 $ 234,120
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Foreign currency investments, at value 0 0 0 0 0 0
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Cash 0 3 98 0 6 3,335
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Receivable for investments and
foreign currency sold 0 626 737 80 49 1,758
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Receivable for Fund shares sold 57 0 5,565 3 7 139
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Variation margin receivable 0 327 0 0 0 0
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Interest and dividends receivable 42 4,249 318 22 62 114
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
7,763 446,053 120,583 14,542 35,161 239,466
============================================== =========== ========== ========== =========== ============ ===========
Liabilities:
Payable for investments and
foreign currency purchased 0 3 2,178 90 32 3,017
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Written options outstanding 0 16 0 0 0 0
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Payable for Fund shares redeemed 9 474 3 0 6 3
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Dividends payable 0 106 176 0 3 78
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Accrued investment adviser's fee 1 89 43 5 18 90
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Accrued administrator's fee 2 89 24 3 8 50
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Accrued distribution fee 0 1 0 0 0 0
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Accrued trustees' fee 0 15 4 1 1 8
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Accrued reorganization expense 0 6 0 0 0 0
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Other liabilities 0 0 0 0 0 0
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
12 799 2,428 99 68 3,246
============================================== =========== ========== ========== =========== ============ ===========
Net Assets $ 7,751 $ 445,254 $ 118,155 $ 14,443 $ 35,093 $ 236,220
============================================== =========== ========== ========== =========== ============ ===========
Net Assets Consist of:
Paid in capital $ 7,751 $ 433,992 $ 102,778 $ 10,335 $ 30,422 $ 176,220
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Undistributed (overdistributed)
net investment income 0 (5) 0 0 1 0
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Accumulated undistributed
net realized gain (loss) 0 1,664 4,607 2,030 2,205 15,487
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Net unrealized appreciation (depreciation) 0 9,603 10,770 2,078 2,465 44,513
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
$ 7,751 $ 445,254 $ 118,155 $ 14,443 $ 35,093 $ 236,220
============================================== =========== ========== ========== =========== ============ ===========
Shares Issued and Outstanding
Institutional class 7,741 43,309 9,013 1,153 2,679 13,946
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Administrative class 10 309 11 0 0 0
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Net Asset Value, Offering and Redemption Price
Per Share (Net Assets Per Share Outstanding)
Institutional class $ 1.00 $ 10.21 $ 13.09 $ 12.53 $ 13.10 $ 16.94
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Administrative class 1.00 10.22 13.13 - - -
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Cost of Investments Owned 7,664 435,924 103,095 12,359 32,572 189,607
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Cost of Foreign Currency Held 0 0 0 0 0 0
============================================== =========== ========== ========== =========== ============ ===========
</TABLE>
See Notes to Financial Statements
10
<PAGE>
<TABLE>
<CAPTION>
- ------------ --------------- ------------- ----------------- ------------------ ------------- ------------- -------------- ---------
Columbus Columbus
Cadence Mid Cadence Micro Cadence Small Circle Investors Circle Investors Parametric Blairlogie Blairlogie
Cap Growth Cap Growth Cap Growth Core Equity Mid Cap Equity Enhanced Emerging International Balanced
Fund Fund Fund Fund Fund Equity Fund Markets Fund Active Fund Fund
- ------------ --------------- ------------- ----------------- ------------------ ------------- ------------- -------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 189,595 $ 70,392 $ 76,655 $ 31,761 $ 8,298 $ 73,955 $ 71,334 $ 58,609 $ 78,180
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
0 0 0 0 0 0 250 5,094 0
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
194 90 0 539 99 11 1,708 1,080 8
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
3,274 66 658 305 185 0 2,477 830 1,670
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
104 36 0 136 0 0 96 25 1
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
0 0 0 0 0 0 0 6 22
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
69 31 13 18 1 84 211 163 370
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
193,236 70,615 77,326 32,759 8,583 74,050 76,076 65,807 80,251
============ ============ ============ ============ ============ ============ ============ ========= =========
2,888 647 485 278 211 0 1,473 1,267 7,560
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
0 0 0 1 0 0 0 0 0
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
2 104 2,159 3 3 4 27 4 0
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
16 0 0 13 7 0 115 191 0
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
72 73 65 15 4 29 56 33 32
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
40 14 16 7 1 16 33 28 18
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
0 0 0 5 0 0 0 0 0
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
6 2 2 1 0 2 3 2 3
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
0 0 0 0 0 0 0 0 0
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
0 0 78 0 0 0 0 0 0
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
3,024 840 2,805 323 226 51 1,707 1,525 7,613
============ ============ ============ ============ ============ ============ ============ ========= =========
$ 190,212 $ 69,775 $ 74,521 $ 32,436 $ 8,357 $ 73,999 $ 74,369 $ 64,282 $ 72,638
============ ============ ============ ============ ============ ============ ============ ========= =========
$ 141,596 $ 54,024 $ 52,510 $ 29,240 $ 7,061 $ 57,256 $ 90,442 $ 59,735 $ 59,329
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
0 0 0 0 0 0 10 (13) 0
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
4,256 1,526 5,693 756 243 2,169 (15,113) 3,510 5,787
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
44,360 14,225 16,318 2,440 1,053 14,574 (970) 1,050 7,522
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
$ 190,212 $ 69,775 $ 74,521 $ 32,436 $ 8,357 $ 73,999 $ 74,369 $ 64,282 $ 72,638
============ ============ ============ ============ ============ ============ ============ ========= =========
10,423 4,536 3,519 613 647 5,126 6,525 5,418 6,109
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
49 0 26 1,937 0 0 74 58 0
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
$ 18.16 $ 15.38 $ 21.02 $ 12.72 $ 12.92 $ 14.44 $ 11.27 $ 11.74 $ 11.89
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
18.17 - 21.01 12.73 -- -- 11.24 11.73 -
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
145,235 56,167 60,337 29,322 7,245 59,381 72,304 57,455 70,943
============ ============ ============ ============ ============ ============ ============ ========= =========
0 0 0 0 0 0 250 5,116 0
============ ============ ============ ============ ============ ============ ============ ========= =========
</TABLE>
11
<PAGE>
STATEMENTS OF OPERATIONS
For the year or period ended October 31, 1995
<TABLE>
<CAPTION>
------------ ----------- ----------- ------------ ------------- ------------
$ in thousands PIMCO Cadence
Managed NFJ Capital
Money Market Bond and NFJ Equity Diversified NFJ Small Cap Appreciation
Fund Income Fund Income Fund Low P/E Fund Value Fund Fund
------------ ----------- ----------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 0 $ 0 $ 4,162 $ 405 $ 964 $ 2,967
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Interest 576 28,155 335 28 88 794
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Total income 576 28,155 4,497 433 1,052 3,761
============================================== =========== ========== ========== =========== ============ ===========
Expenses:
Investment advisory fees 14 1,009 446 61 203 881
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Administration fees 24 1,009 247 34 85 490
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Distribution fees - Administrative Class 1 5 0 0 0 0
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Trustees' fees 1 15 4 1 1 7
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Miscellaneous 0 6 0 0 0 0
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Total expenses 40 2,044 697 96 289 1,378
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Net Investment Income (Loss) 536 26,111 3,800 337 763 2,383
============================================== =========== ========== ========== =========== ============ ===========
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments 0 (2,228) 4,643 2,035 2,349 16,227
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Net realized gain on futures
contracts and written options 0 16,773 0 0 0 0
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Net realized gain on foreign
currency transactions 0 0 0 0 0 0
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Net change in unrealized appreciation
(depreciation) on investments 0 11,126 9,476 484 3,100 31,810
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Net change in unrealized appreciation
(depreciation) on futures contracts and
written options 0 8,255 0 0 0 0
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Net change in unrealized depreciation
on translation of assets and liabilities
denominated in foreign currencies 0 0 0 0 0 0
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Net Gain (Loss) 0 33,926 14,119 2,519 5,449 48,037
- ---------------------------------------------- ----------- ---------- ---------- ----------- ------------ -----------
Net Increase (Decrease) in Assets Resulting
from Operations $ 536 $ 60,037 $ 17,919 $ 2,856 $ 6,212 $ 50,420
============================================== =========== ========== ========== =========== ============ ===========
</TABLE>
(a) From commencement of operations on December 28, 1994.
See Notes to Financial Statements
12
<PAGE>
<TABLE>
<CAPTION>
- ------------ --------------- ------------- ----------------- ------------------ ------------- ------------- -------------- ---------
Columbus Columbus
Cadence Mid Cadence Micro Cadence Small Circle Investors Circle Investors Parametric Blairlogie Blairlogie
Cap Growth Cap Growth Cap Growth Core Equity Mid Cap Equity Enhanced Emerging International Balanced
Fund Fund Fund Fund (a) Fund (a) Equity Fund Markets Fund Active Fund Fund
- ------------ --------------- ------------- ----------------- ------------------ ------------- ------------- -------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 1,139 $ 308 $ 339 $ 121 $ 19 $ 1,817 $ 1,342 $ 858 $ 1,365
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
494 243 246 71 28 39 103 177 2,736
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
1,633 551 585 192 47 1,856 1,445 1,035 4,101
============ ============ ============ ============ ============ ============ ============ ========= =========
650 609 595 74 26 319 638 282 417
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
361 122 149 33 11 177 375 235 232
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
1 0 0 22 0 0 1 2 0
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
6 2 2 1 0 3 3 1 3
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
0 0 0 0 0 0 0 0 0
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
1,018 733 746 130 37 499 1,017 520 652
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
615 (182) (161) 62 10 1,357 428 515 3,449
============ ============ ============ ============ ============ ============ ============ ========= =========
6,630 2,911 5,706 740 238 2,417 (15,214) 1,012 6,372
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
0 0 0 16 5 0 0 174 779
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
0 0 0 0 0 0 104 2,320 0
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
31,560 10,798 4,873 2,439 1,053 12,008 (8,263) 63 3,440
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
0 0 0 1 0 0 0 (61) 958
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
0 0 0 0 0 0 (2) (73) 0
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
38,190 13,709 10,579 3,196 1,296 14,425 (23,375) 3,435 11,549
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------- ---------
$ 38,805 $ 13,527 $ 10,418 $ 3,258 $ 1,306 $ 15,782 $ (22,947) $ 3,950 $ 14,998
============ ============ ============ ============ ============ ============ ============ ========= =========
</TABLE>
13
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
-------------------------------------- --------------------------------------
$ in thousands Money Market Fund PIMCO Managed Bond and Income Fund
-------------------------------------- --------------------------------------
Increase (Decrease) in Net Assets from:
Year Ended Year Ended
October 31, 1995 October 31, 1994 October 31, 1995 October 31, 1994
<S> <C> <C> <C> <C>
Operations
Net investment income $ 536 $ 232 $ 26,111 $ 18,938
- ------------------------------------------------- -------------------------------------- --------------------------------------
Net realized gain (loss) 0 0 14,545 (13,171)
- ------------------------------------------------- -------------------------------------- --------------------------------------
Net change in unrealized appreciation
(depreciation) on investments 0 0 11,126 (15,278)
- ------------------------------------------------- -------------------------------------- --------------------------------------
Net change in unrealized appreciation
(depreciation) on futures contracts and
written options 0 0 8,255 (3,286)
- ------------------------------------------------- -------------------------------------- --------------------------------------
Net increase (decrease) resulting from operations 536 232 60,037 (12,797)
================================================= ====================================== ======================================
Net equalization credits (debits) 0 0 0 0
================================================= ====================================== ======================================
Distributions to Shareholders
From net investment income
Institutional class (517) (232) (25,586) (18,938)
- ------------------------------------------------- -------------------------------------- --------------------------------------
Administrative class (19) 0 (106) 0
- ------------------------------------------------- -------------------------------------- --------------------------------------
From net realized capital gains
Institutional class 0 0 (422) (1,934)
- ------------------------------------------------- -------------------------------------- --------------------------------------
Administrative class 0 0 (2) 0
- ------------------------------------------------- -------------------------------------- --------------------------------------
Tax basis return of capital
Institutional class 0 0 0 (2,228)
- ------------------------------------------------- -------------------------------------- --------------------------------------
Administrative class 0 0 0 0
- ------------------------------------------------- -------------------------------------- --------------------------------------
Total distributions (536) (232) (26,116) (23,100)
================================================= ====================================== ======================================
Fund Share Transactions
Receipts for shares sold
Institutional class 22,820 20,109 100,602 45,109
- ------------------------------------------------- -------------------------------------- --------------------------------------
Administrative class 1,799 0 2,972 0
- ------------------------------------------------- -------------------------------------- --------------------------------------
Issued as reinvestment of distributions
Institutional class 493 226 24,511 22,389
- ------------------------------------------------- -------------------------------------- --------------------------------------
Administrative class 19 0 108 0
- ------------------------------------------------- -------------------------------------- --------------------------------------
Cost of shares redeemed
Institutional class (23,025) (18,717) (74,687) (44,961)
- ------------------------------------------------- -------------------------------------- --------------------------------------
Administrative class (1,809) 0 (73) 0
- ------------------------------------------------- -------------------------------------- --------------------------------------
Net increase (decrease) resulting from
Fund share transactions 297 1,618 53,433 22,537
- ------------------------------------------------- -------------------------------------- --------------------------------------
Total Increase (Decrease) in Net Assets 297 1,618 87,354 (13,360)
================================================= ====================================== ======================================
Net Assets
Beginning of period 7,454 5,836 357,900 371,260
- ------------------------------------------------- -------------------------------------- --------------------------------------
End of period * $ 7,751 $ 7,454 $ 445,254 $ 357,900
- ------------------------------------------------- -------------------------------------- --------------------------------------
*Including net undistributed
(overdistributed) investment income of: $ 0 $ 0 $ (5) $ 0
- ------------------------------------------------- -------------------------------------- --------------------------------------
</TABLE>
See Notes to Financial Statements
14
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------- -------------------------------------- --------------------------------------
NFJ Equity Income Fund NFJ Diversified Low P/E Fund NFJ Small Cap Value Fund
- -------------------------------------- -------------------------------------- --------------------------------------
Year Ended Year Ended Year Ended
October 31, 1995 October 31, 1994 October 31, 1995 October 31, 1994 October 31, 1995 October 31, 1994
<S> <C> <C> <C> <C> <C>
$ 3,800 $ 3,091 $ 337 $ 443 $ 763 $ 796
- -------------------------------------- -------------------------------------- --------------------------------------
4,643 2,553 2,035 1,370 2,349 2,329
- -------------------------------------- -------------------------------------- --------------------------------------
9,476 (3,086) 484 (1,865) 3,100 (4,045)
- -------------------------------------- -------------------------------------- --------------------------------------
0 0 0 0 0 0
- -------------------------------------- -------------------------------------- --------------------------------------
17,919 2,558 2,856 (52) 6,212 (920)
====================================== ====================================== ======================================
62 210 (4) (20) (10) (60)
====================================== ====================================== ======================================
(3,822) (3,065) (342) (438) (761) (796)
- -------------------------------------- -------------------------------------- --------------------------------------
(4) 0 0 0 0 0
- -------------------------------------- -------------------------------------- --------------------------------------
(2,558) (285) (1,375) (166) (2,473) (271)
- -------------------------------------- -------------------------------------- --------------------------------------
(4) 0 0 0 0 0
- -------------------------------------- -------------------------------------- --------------------------------------
0 0 0 0 0 0
- -------------------------------------- -------------------------------------- --------------------------------------
0 0 0 0 0 0
- -------------------------------------- -------------------------------------- --------------------------------------
(6,388) (3,350) (1,717) (604) (3,234) (1,067)
====================================== ====================================== ======================================
25,992 40,831 115 1,361 4,351 11,609
- -------------------------------------- -------------------------------------- --------------------------------------
120 0 0 0 0 0
- -------------------------------------- -------------------------------------- --------------------------------------
5,859 3,042 1,715 601 3,218 1,036
- -------------------------------------- -------------------------------------- --------------------------------------
8 0 0 0 0 0
- -------------------------------------- -------------------------------------- --------------------------------------
(17,770) (18,780) (3,964) (8,774) (6,680) (25,885)
- -------------------------------------- -------------------------------------- --------------------------------------
(12) 0 0 0 0 0
- -------------------------------------- -------------------------------------- --------------------------------------
14,197 25,093 (2,134) (6,812) 889 (13,240)
- -------------------------------------- -------------------------------------- --------------------------------------
25,790 24,511 (999) (7,488) 3,857 (15,287)
====================================== ====================================== ======================================
92,365 67,854 15,442 22,930 31,236 46,523
- -------------------------------------- -------------------------------------- --------------------------------------
$ 118,155 $ 92,365 $ 14,443 $ 15,442 $ 35,093 $ 31,236
- -------------------------------------- -------------------------------------- --------------------------------------
$ 0 $ 26 $ 0 $ 5 $ 1 $ 0
- -------------------------------------- -------------------------------------- --------------------------------------
</TABLE>
15
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
-------------------------------------- --------------------------------------
$ in thousands Cadence Capital Appreciation Fund Cadence Mid Cap Growth Fund
-------------------------------------- --------------------------------------
Increase in Net Assets from:
Year Ended Year Ended
October 31, 1995 October 31, 1994 October 31, 1995 October 31, 1994
<S> <C> <C> <C> <C>
Operations
Net investment income (loss) $ 2,383 $ 1,549 $ 615 $ 450
- ---------------------------------------------- -------------------------------------- --------------------------------------
Net realized gain (loss) 16,227 (730) 6,630 (2,373)
- ---------------------------------------------- -------------------------------------- --------------------------------------
Net change in unrealized appreciation
(depreciation) on investments 31,810 772 31,560 2,911
- ---------------------------------------------- -------------------------------------- --------------------------------------
Net change in unrealized appreciation
on futures contracts and written options 0 0 0 0
- ---------------------------------------------- -------------------------------------- --------------------------------------
Net increase resulting from operations 50,420 1,591 38,805 988
============================================== ====================================== ======================================
Net equalization credits 65 253 46 60
============================================== ====================================== ======================================
Distributions to Shareholders
From net investment income
Institutional class (2,383) (1,552) (615) (450)
- ---------------------------------------------- -------------------------------------- --------------------------------------
Administrative class 0 0 0 0
- ---------------------------------------------- -------------------------------------- --------------------------------------
From net realized capital gains
Institutional class 0 (394) 0 (72)
- ---------------------------------------------- -------------------------------------- --------------------------------------
Administrative class 0 0 0 0
- ---------------------------------------------- -------------------------------------- --------------------------------------
Tax basis return of capital
Institutional class 0 (5) 0 (4)
- ---------------------------------------------- -------------------------------------- --------------------------------------
Administrative class 0 0 0 0
- ---------------------------------------------- -------------------------------------- --------------------------------------
Total distributions (2,383) (1,951) (615) (526)
============================================== ====================================== ======================================
Fund Share Transactions
Receipts for shares sold
Institutional class 47,862 94,234 56,121 74,414
- ---------------------------------------------- -------------------------------------- --------------------------------------
Administrative class 0 0 1,745 0
- ---------------------------------------------- -------------------------------------- --------------------------------------
Issued as reinvestment of distributions
Institutional class 2,167 1,883 563 503
- ---------------------------------------------- -------------------------------------- --------------------------------------
Administrative class 0 0 0 0
- ---------------------------------------------- -------------------------------------- --------------------------------------
Cost of shares redeemed
Institutional class (27,352) (15,559) (27,331) (21,273)
- ---------------------------------------------- -------------------------------------- --------------------------------------
Administrative class 0 0 (913) 0
- ---------------------------------------------- -------------------------------------- --------------------------------------
Net increase resulting from
Fund share transactions 22,677 80,558 30,185 53,644
- ---------------------------------------------- -------------------------------------- --------------------------------------
Total Increase in Net Assets 70,779 80,451 68,421 54,166
============================================== ====================================== ======================================
Net Assets
Beginning of period 165,441 84,990 121,791 67,625
- ---------------------------------------------- -------------------------------------- --------------------------------------
End of period * $ 236,220 $ 165,441 $ 190,212 $ 121,791
- ---------------------------------------------- -------------------------------------- --------------------------------------
*Including net undistributed
(overdistributed) investment income of: $ 0 $ 0 $ 0 $ 0
- ---------------------------------------------- -------------------------------------- --------------------------------------
</TABLE>
See Notes to Financial Statements
16
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------- -------------------------------------- --------------------------------------
Cadence Micro Cap Growth Fund Cadence Small Cap Growth Fund Columbus Circle Investors
Core Equity Fund
- -------------------------------------- -------------------------------------- --------------------------------------
Period from
Year Ended Year Ended December 28, 1994 to
October 31, 1995 October 31, 1994 October 31, 1995 October 31, 1994 October 31, 1995
<S> <C> <C> <C> <C>
$ (182) $ (50) $ (161) $ (150) $ 62
- -------------------------------------- -------------------------------------- --------------------------------------
2,911 (1,218) 5,706 3,696 756
- -------------------------------------- -------------------------------------- --------------------------------------
10,798 2,444 4,873 (1,467) 2,439
- -------------------------------------- -------------------------------------- --------------------------------------
0 0 0 0 1
- -------------------------------------- -------------------------------------- --------------------------------------
13,527 1,176 10,418 2,079 3,258
====================================== ====================================== ======================================
0 0 0 0 80
====================================== ====================================== ======================================
0 0 0 0 (27)
- -------------------------------------- -------------------------------------- --------------------------------------
0 0 0 0 (35)
- -------------------------------------- -------------------------------------- --------------------------------------
0 0 (3,708) (1,453) 0
- -------------------------------------- -------------------------------------- --------------------------------------
0 0 0 0 0
- -------------------------------------- -------------------------------------- --------------------------------------
0 0 0 0 0
- -------------------------------------- -------------------------------------- --------------------------------------
0 0 0 0 0
- -------------------------------------- -------------------------------------- --------------------------------------
0 0 (3,708) (1,453) (62)
====================================== ====================================== ======================================
26,532 20,799 16,717 8,392 7,025
- -------------------------------------- -------------------------------------- --------------------------------------
0 0 574 0 23,345
- -------------------------------------- -------------------------------------- --------------------------------------
0 0 3,456 1,424 8
- -------------------------------------- -------------------------------------- --------------------------------------
0 0 0 0 35
- -------------------------------------- -------------------------------------- --------------------------------------
(2,889) (197) (3,361) (3,325) (293)
- -------------------------------------- -------------------------------------- --------------------------------------
0 0 0 0 (960)
- -------------------------------------- -------------------------------------- --------------------------------------
23,643 20,602 17,386 6,491 29,160
- -------------------------------------- -------------------------------------- --------------------------------------
37,170 21,778 24,096 7,117 32,436
====================================== ====================================== ======================================
32,605 10,827 50,425 43,308 0
- -------------------------------------- -------------------------------------- --------------------------------------
$ 69,775 $ 32,605 $ 74,521 $ 50,425 $ 32,436
- -------------------------------------- -------------------------------------- --------------------------------------
$ 0 $ 0 $ 0 $ 0 $ 0
- -------------------------------------- -------------------------------------- --------------------------------------
</TABLE>
17
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
------------------------- --------------------------------------
$ in thousands Columbus Circle Investors Parametric Enhanced Equity Fund
Mid Cap Equity Fund
------------------------- --------------------------------------
Period from
Increase (Decrease) in Net Assets from: December 28, 1994 to Year Ended
October 31, 1995 October 31, 1995 October 31, 1994
<S> <C> <C> <C>
Operations
Net investment income (loss) $ 10 $ 1,357 $ 1,308
- ------------------------------------------------- ------------------------- --------------------------------------
Net realized gain (loss) 243 2,417 731
- ------------------------------------------------- ------------------------- --------------------------------------
Net change in unrealized appreciation
(depreciation) on investments 1,053 12,008 (495)
- ------------------------------------------------- ------------------------- --------------------------------------
Net change in unrealized appreciation
(depreciation) on futures contracts and
written options 0 0 0
- ------------------------------------------------- ------------------------- --------------------------------------
Net change in unrealized depreciation on
translation of assets and liabilities
denominated in foreign currencies 0 0 0
- ------------------------------------------------- ------------------------- --------------------------------------
Net increase (decrease) resulting from operations 1,306 15,782 1,544
================================================= ========================= ======================================
Net equalization credits (debits) 13 (27) 90
================================================= ========================= ======================================
Distributions to Shareholders
From net investment income
Institutional class (10) (1,356) (1,308)
- ------------------------------------------------- ------------------------- --------------------------------------
Administrative class 0 0 0
- ------------------------------------------------- ------------------------- --------------------------------------
From net realized capital gains
Institutional class 0 (939) (242)
- ------------------------------------------------- ------------------------- --------------------------------------
Administrative class 0 0 0
- ------------------------------------------------- ------------------------- --------------------------------------
Total distributions (10) (2,295) (1,550)
================================================= ========================= ======================================
Fund Share Transactions
Receipts for shares sold
Institutional class 7,334 11,181 31,773
- ------------------------------------------------- ------------------------- --------------------------------------
Administrative class 0 0 0
- ------------------------------------------------- ------------------------- --------------------------------------
Issued as reinvestment of distributions
Institutional class 3 2,282 1,544
- ------------------------------------------------- ------------------------- --------------------------------------
Administrative class 0 0 0
- ------------------------------------------------- ------------------------- --------------------------------------
Cost of shares redeemed
Institutional class (289) (18,839) (14,210)
- ------------------------------------------------- ------------------------- --------------------------------------
Administrative class 0 0 0
- ------------------------------------------------- ------------------------- --------------------------------------
Net increase (decrease) resulting from
Fund share transactions 7,048 (5,374) 19,107
- ------------------------------------------------- ------------------------- --------------------------------------
Total Increase (Decrease) in Net Assets 8,357 8,084 19,191
================================================= ========================= ======================================
Net Assets
Beginning of period 0 65,915 46,724
- ------------------------------------------------- ------------------------- --------------------------------------
End of period * $ 8,357 $ 73,999 $ 65,915
- ------------------------------------------------- ------------------------- --------------------------------------
*Including net undistributed
(overdistributed) investment income of: $ 0 $ 0 $ 0
- ------------------------------------------------- ------------------------- --------------------------------------
</TABLE>
See Notes to Financial Statements
18
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------- -------------------------------------- --------------------------------------
Blairlogie Emerging Markets Fund Blairlogie International Active Fund Balanced Fund
- -------------------------------------- -------------------------------------- --------------------------------------
Year Ended Year Ended Year Ended
October 31, 1995 October 31, 1994 October 31, 1995 October 31, 1994 October 31, 1995 October 31, 1994
<S> <C> <C> <C> <C> <C>
$ 428 $ (22) $ 515 $ 159 $ 3,449 $ 4,311
- -------------------------------------- -------------------------------------- --------------------------------------
(15,110) 3,745 3,506 695 7,151 (1,199)
- -------------------------------------- -------------------------------------- --------------------------------------
(8,263) 5,133 63 566 3,440 (2,198)
- -------------------------------------- -------------------------------------- --------------------------------------
0 0 (61) 27 958 (800)
- -------------------------------------- -------------------------------------- --------------------------------------
(2) 0 (73) 34 0 0
- -------------------------------------- -------------------------------------- --------------------------------------
(22,947) 8,856 3,950 1,481 14,998 114
====================================== ====================================== ======================================
4 73 142 56 0 0
====================================== ====================================== ======================================
(414) (2) (504) (55) (3,451) (4,310)
- -------------------------------------- -------------------------------------- --------------------------------------
(3) 0 (5) 0 0 0
- -------------------------------------- -------------------------------------- --------------------------------------
(3,784) (244) (844) (35) 0 (1,852)
- -------------------------------------- -------------------------------------- --------------------------------------
0 0 (2) 0 0 0
- -------------------------------------- -------------------------------------- --------------------------------------
(4,201) (246) (1,355) (90) (3,451) (6,162)
====================================== ====================================== ======================================
64,126 74,920 45,600 13,806 20,019 32,514
- -------------------------------------- -------------------------------------- --------------------------------------
1,512 0 947 0 0 0
- -------------------------------------- -------------------------------------- --------------------------------------
3,577 245 1,148 89 3,421 6,162
- -------------------------------------- -------------------------------------- --------------------------------------
4 0 7 0 0 0
- -------------------------------------- -------------------------------------- --------------------------------------
(46,658) (18,853) (8,424) (1,072) (93,043) (28,344)
- -------------------------------------- -------------------------------------- --------------------------------------
(668) 0 (302) 0 0 0
- -------------------------------------- -------------------------------------- --------------------------------------
21,893 56,312 38,976 12,823 (69,603) 10,332
- -------------------------------------- -------------------------------------- --------------------------------------
(5,251) 64,995 41,713 14,270 (58,056) 4,284
====================================== ====================================== ======================================
79,620 14,625 22,569 8,299 130,694 126,410
- -------------------------------------- -------------------------------------- --------------------------------------
$ 74,369 $ 79,620 $ 64,282 $ 22,569 $ 72,638 $ 130,694
- -------------------------------------- -------------------------------------- --------------------------------------
$ 10 $ 0 $ (13) $ (21) $ 0 $ 2
- -------------------------------------- -------------------------------------- --------------------------------------
</TABLE>
19
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
------------ ---------- -------------- ------------ ---------- ------------- -------------
Selected Per Share Data for Net Asset Net Realized/ Total Income Dividends Distributions
the Year or Period Ended: Value Net Unrealized from from Net from Net Distributions
Beginning of Investment Gain (Loss) on Investment Investment Realized from
Period Income Investments Operations Income Capital Gains Equalization
------------ ---------- -------------- ------------ ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Money Market Fund
Institutional Class
10/31/95 $ 1.00 $ 0.06 $ 0.00 $ 0.06 $ (0.06) $ 0.00 $ 0.00
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
10/31/94 1.00 0.03 0.00 0.03 (0.03) 0.00 0.00
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
10/31/93 1.00 0.03 0.00 0.03 (0.03) 0.00 0.00
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
10/31/92 1.00 0.04 0.00 0.04 (0.04) 0.00 0.00
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
03/01/91 - 10/31/91 1.00 0.04 0.00 0.04 (0.04) 0.00 0.00
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
Administrative Class
01/24/95 - 10/31/95 1.00 0.05 0.00 0.05 (0.05) 0.00 0.00
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
PIMCO Managed Bond and
Income Fund
Institutional Class
10/31/95 $ 9.39 $ 0.69 $ 0.76 $ 1.45 $ (0.62) $ (0.01) $ 0.00
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
10/31/94 10.38 0.51 (0.88) (0.37) (0.51) (0.05) 0.00
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
10/31/93 9.99 0.61 0.74 1.35 (0.61) (0.35) 0.00
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
12/30/91 - 10/31/92 10.00 0.49 0.23 0.72 (0.49) (0.24) 0.00
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
Administrative Class
11/30/94 - 10/31/95 9.34 0.56 0.88 1.44 (0.55) (0.01) 0.00
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
NFJ Equity Income Fund
Institutional Class
10/31/95 $ 11.75 $ 0.46 $ 1.67 $ 2.13 $ (0.46) $ (0.33) $ 0.00
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
10/31/94 11.95 0.42 (0.16) 0.26 (0.42) (0.04) 0.00
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
10/31/93 10.92 0.40 1.40 1.80 (0.40) (0.37) 0.00
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
10/31/92 10.77 0.45 0.93 1.38 (0.43) (0.57) (0.23)
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
03/08/91 - 10/31/91 10.00 0.24 0.92 1.16 (0.24) (0.15) 0.00
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
Administrative Class
11/30/94 - 10/31/95 11.12 0.39 2.35 2.74 (0.40) (0.33) 0.00
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
NFJ Diversified Low P/E Fund
10/31/95 $ 11.55 $ 0.30 $ 2.18 $ 2.48 $ (0.30) $ (1.20) $ 0.00
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
10/31/94 11.92 0.30 (0.28) 0.02 (0.29) (0.10) 0.00
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
10/31/93 10.05 0.28 2.36 2.64 (0.28) (0.49) 0.00
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
12/30/91 - 10/31/92 10.00 0.24 0.23 0.47 (0.24) (0.18) 0.00
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
NFJ Small Cap Value Fund
Institutional Class
10/31/95 $ 12.07 $ 0.28 $ 1.92 $ 2.20 $ (0.28) $ (0.89) $ 0.00
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
10/31/94 12.81 0.29 (0.65) (0.36) (0.29) (0.09) 0.00
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
10/31/93 10.98 0.24 2.33 2.57 (0.24) (0.50) 0.00
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
10/31/92 10.09 0.22 1.17 1.39 (0.22) (0.24) (0.04)
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
10/01/91 - 10/31/91 10.00 0.02 0.10 0.12 (0.03) 0.00 0.00
- ---------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
</TABLE>
* Annualized
See Notes to Financial Statements
20
<PAGE>
<TABLE>
<CAPTION>
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
Ratio of Net
Ratio of Investment
Tax Basis Net Asset Net Assets Expenses to Income to Portfolio Average
Return of Total Value End of End of Period Average Net Average Net Turnover Commission
Capital Distributions Period Total Return (000's) Assets Assets Rate Rate
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0.00 $ (0.06) $ 1.00 5.67% $ 7,741 0.40% 5.53% N/A N/A
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
0.00 (0.03) 1.00 3.53 7,454 0.40 3.52 N/A
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.03) 1.00 2.83 5,836 0.40 2.78 N/A
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.04) 1.00 3.85 7,817 0.40 4.02 N/A
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.04) 1.00 3.78 45,406 0.53* 5.20 N/A
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.05) 1.00 4.21 10 0.68* 5.94* N/A N/A
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
$ 0.00 $ (0.63) $ 10.21 15.96% $ 442,091 0.50% 6.47% 41.05% N/A
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
(0.06) (0.62) 9.39 (3.58) 357,900 0.50 5.22 99.46
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.96) 10.38 13.79 371,260 0.50 5.38 49.71
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.73) 9.99 7.52 287,113 0.50* 5.83* 133.61
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.56) 10.22 15.92 3,163 0.76* 6.22* 40.91 N/A
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
$ 0.00 $ (0.79) $ 13.09 19.36% $ 118,015 0.70% 3.83% 46.49% $0.06
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
0.00 (0.46) 11.75 2.25 92,365 0.70 3.77 35.56
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.77) 11.95 16.65 67,854 0.70 3.55 38.60
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (1.23) 10.92 12.89 30,506 0.70 3.83 46.74
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.39) 10.77 11.81 15,628 0.74* 4.18* 61.51
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.73) 13.13 25.69 140 0.95* 3.43* 43.27 N/A
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
$ 0.00 $ (1.50) $ 12.53 24.98% $ 14,443 0.70% 2.50% 71.02% $0.06
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
0.00 (0.39) 11.55 0.15 15,442 0.70 2.34 43.70
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.77) 11.92 26.35 22,930 0.70 2.43 28.19
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.42) 10.05 4.68 18,083 0.70* 2.57* 72.77
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
$ 0.00 $ (1.17) $ 13.10 19.88% $ 35,093 0.85% 2.25% 49.57% $0.04
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
0.00 (0.38) 12.07 (2.89) 31,236 0.85 2.23 48.12
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.74) 12.81 23.60 46,523 0.85 2.05 41.80
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.50) 10.98 13.75 18,261 0.85 2.16 26.77
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.03) 10.09 1.19 5,060 1.09* 3.06* 0.00
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
</TABLE>
21
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
------------ ------------- -------------- ------------ ---------- ------------- -------------
Selected Per Share Data for Net Asset Net Realized/ Total Income Dividends Distributions
the Year or Period Ended: Value Net Unrealized from from Net from Net Distributions
Beginning of Investment Gain (Loss) on Investment Investment Realized from
Period Income (Loss) Investments Operations Income Capital Gains Equalization
------------ ------------- -------------- ------------ ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Cadence Capital Appreciation Fund
Institutional Class
10/31/95 $ 13.34 $ 0.18 $ 3.60 $ 3.78 $ (0.18) $ 0.00 $ 0.00
- ----------------------------- ------------ ------------- -------------- ------------ ---------- ------------- -------------
10/31/94 13.50 0.14 (0.12) 0.02 (0.14) (0.04) 0.00
- ----------------------------- ------------ ------------- -------------- ------------ ---------- ------------- -------------
10/31/93 11.27 0.11 2.73 2.84 (0.11) (0.50) 0.00
- ----------------------------- ------------ ------------- -------------- ------------ ---------- ------------- -------------
10/31/92 11.02 0.14 1.05 1.19 (0.14) (0.72) (0.08)
- ----------------------------- ------------ ------------- -------------- ------------ ---------- ------------- -------------
03/08/91 - 10/31/91 10.00 0.09 1.02 1.11 (0.09) 0.00 0.00
- ----------------------------- ------------ ------------- -------------- ------------ ---------- ------------- -------------
Cadence Mid Cap Growth Fund
Institutional Class
10/31/95 $ 13.97 $ 0.07 $ 4.19 $ 4.26 $ (0.07) $ 0.00 $ 0.00
- ----------------------------- ------------ ------------- -------------- ------------ ---------- ------------- -------------
10/31/94 13.97 0.06 0.01 0.07 (0.06) (0.01) 0.00
- ----------------------------- ------------ ------------- -------------- ------------ ---------- ------------- -------------
10/31/93 11.29 0.07 2.70 2.77 (0.07) (0.02) 0.00
- ----------------------------- ------------ ------------- -------------- ------------ ---------- ------------- -------------
10/31/92 10.28 0.10 1.03 1.13 (0.10) 0.00 (0.02)
- ----------------------------- ------------ ------------- -------------- ------------ ---------- ------------- -------------
08/26/91 - 10/31/91 10.00 0.02 0.27 0.29 (0.01) 0.00 0.00
- ----------------------------- ------------ ------------- -------------- ------------ ---------- ------------- -------------
Administrative Class
11/30/94 - 10/31/95 13.31 0.03 4.85 4.88 (0.02) 0.00 0.00
- ----------------------------- ------------ ------------- -------------- ------------ ---------- ------------- -------------
Cadence Micro Cap Growth Fund
Institutional Class
10/31/95 $ 11.87 $ (0.04) $ 3.55 $ 3.51 $ 0.00 $ 0.00 $ 0.00
- ----------------------------- ------------ ------------- -------------- ------------ ---------- ------------- -------------
10/31/94 11.06 (0.03) 0.84 0.81 0.00 0.00 0.00
- ----------------------------- ------------ ------------- -------------- ------------ ---------- ------------- -------------
06/25/93 - 10/31/93 10.00 0.00 1.07 1.07 0.00 0.00 0.00
- ----------------------------- ------------ ------------- -------------- ------------ ---------- ------------- -------------
Cadence Small Cap Growth Fund
Institutional Class
10/31/95 $ 19.38 $ (0.05) $ 3.12 $ 3.07 $ 0.00 $ (1.43) $ 0.00
- ----------------------------- ------------ ------------- -------------- ------------ ---------- ------------- -------------
10/31/94 19.15 (0.02) 0.89 0.87 0.00 (0.64) 0.00
- ----------------------------- ------------ ------------- -------------- ------------ ---------- ------------- -------------
10/31/93 15.80 (0.06) 6.19 6.13 0.00 (2.78) 0.00
- ----------------------------- ------------ ------------- -------------- ------------ ---------- ------------- -------------
10/31/92 14.87 0.01 1.50 1.51 (0.01) (0.57) 0.00
- ----------------------------- ------------ ------------- -------------- ------------ ---------- ------------- -------------
01/07/91 - 10/31/91 10.00 0.02 5.03 5.05 (0.02) (0.16) 0.00
- ----------------------------- ------------ ------------- -------------- ------------ ---------- ------------- -------------
Administrative Class
09/27/95 - 10/31/95 21.90 (0.02) (0.87) (0.89) 0.00 0.00 0.00
- ----------------------------- ------------ ------------- -------------- ------------ ---------- ------------- -------------
Columbus Circle Investors
Core Equity Fund
Institutional Class
12/28/94 - 10/31/95 $ 10.00 $ 0.07 $ 2.71 $ 2.78 $ (0.06) $ 0.00 $ 0.00
- ----------------------------- ------------ ------------- -------------- ------------ ---------- ------------- -------------
Administrative Class
05/31/95 - 10/31/95 11.45 0.02 1.28 1.30 (0.02) 0.00 0.00
- ----------------------------- ------------ ------------- -------------- ------------ ---------- ------------- -------------
</TABLE>
* Annualized
See Notes to Financial Statements
22
<PAGE>
<TABLE>
<CAPTION>
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
Ratio of Net
Ratio of Investment
Tax Basis Net Asset Net Assets Expenses to Income to Portfolio Average
Return of Total Value End of End of Period Average Net Average Net Turnover Commission
Capital Distributions Period Total Return (000's) Assets Assets Rate Rate
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0.00 $ (0.18) $ 16.94 28.47% $ 236,220 0.70% 1.22% 82.69% $0.05
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
0.00 (0.18) 13.34 0.15 165,441 0.70 1.17 76.75
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.61) 13.50 25.30 84,990 0.70 0.94 81.15
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.94) 11.27 10.75 36,334 0.70 1.13 134.17
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.09) 11.02 11.19 18,813 0.75* 1.55* 40.54
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
$ 0.00 $ (0.07) $ 18.16 30.54% $ 189,320 0.70% 0.43% 78.29% $0.04
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
0.00 (0.07) 13.97 0.58 121,791 0.70 0.45 60.85
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.09) 13.97 24.57 67,625 0.70 0.56 97.87
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.12) 11.29 10.91 21,213 0.70 0.87 65.92
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.01) 10.28 2.98 2,748 0.82* 0.92* 13.41
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.02) 18.17 36.64 892 0.94* 0.23* 71.73 N/A
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
$ 0.00 $ 0.00 $ 15.38 29.54% $ 69,775 1.50% (0.37%) 86.68% $0.03
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
0.00 0.00 11.87 7.31 32,605 1.50 (0.25) 58.81
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
(0.01) (0.01) 11.06 10.81 10,827 1.50* (0.02)* 15.98
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
$ 0.00 $ (1.43) $ 21.02 17.39% $ 73,977 1.25% (0.27%) 85.61% $0.02
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
0.00 (0.64) 19.38 4.62 50,425 1.25 (0.33) 65.53
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (2.78) 19.15 38.80 43,308 1.25 (0.35) 62.15
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.58) 15.80 10.20 33,734 1.25 0.09 66.05
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.18) 14.87 50.68 33,168 1.29* 0.11* 47.84
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 0.00 21.01 (5.34) 544 1.60* (0.82)* 8.80 N/A
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
$ 0.00 $ (0.06) $ 12.72 27.86% $ 7,791 0.82%* 0.79%* 122.88% $0.03
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
0.00 (0.02) 12.73 11.34 24,645 1.06* 0.34* 57.96 N/A
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
</TABLE>
23
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
------------ ---------- -------------- ------------ ---------- ------------- -------------
Selected Per Share Data for Net Asset Net Realized/ Total Income Dividends Distributions
the Year or Period Ended: Value Net Unrealized from from Net from Net Distributions
Beginning of Investment Gain (Loss) on Investment Investment Realized from
Period Income Investments Operations Income Capital Gains Equalization
------------ ---------- -------------- ------------ ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Columbus Circle Investors
Mid Cap Equity Fund
Institutional Class
12/28/94 - 10/31/95 $ 10.00 $ 0.02 $ 2.92 $ 2.94 $ (0.02) $ 0.00 $ 0.00
- --------------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
Parametric Enhanced Equity Fund
Institutional Class
10/31/95 $ 11.99 $ 0.25 $ 2.62 $ 2.87 $ (0.25) $ (0.17) $ 0.00
- --------------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
10/31/94 12.08 0.25 (0.04) 0.21 (0.25) (0.05) 0.00
- --------------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
10/31/93 11.76 0.23 0.74 0.97 (0.23) (0.42) 0.00
- --------------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
10/31/92 10.80 0.16 1.06 1.22 (0.16) (0.04) (0.06)
- --------------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
02/11/91 - 10/31/91 10.00 0.16 0.80 0.96 (0.16) 0.00 0.00
- --------------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
Blairlogie Emerging Markets Fund
Institutional Class
10/31/95 $ 16.53 $ 0.07 $ (4.55) $ (4.48) $ (0.06) $ (0.72) $ 0.00
- --------------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
10/31/94 12.27 (0.01) 4.45 4.44 0.00 (0.18) 0.00
- --------------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
06/08/93 - 10/31/93 10.00 0.03 2.52 2.55 (0.02) (0.26) 0.00
- --------------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
Administrative Class
10/31/95 16.95 0.00 (4.95) (4.95) (0.05) (0.71) 0.00
- --------------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
Blairlogie International Active Fund
Institutional Class
10/31/95 $ 11.86 $ 0.10 $ 0.30 $ 0.40 $ (0.09) $ (0.43) $ 0.00
- --------------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
10/31/94 10.69 0.09 1.15 1.24 (0.03) (0.04) 0.00
- --------------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
06/08/93 - 10/31/93 10.00 0.05 0.69 0.74 (0.04) (0.01) 0.00
- --------------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
Administrative Class
11/30/94 - 10/31/95 11.21 0.02 1.01 1.03 (0.08) (0.43) 0.00
- --------------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
Balanced Fund
Institutional Class
10/31/95 $ 10.35 $ 0.44 $ 1.54 $ 1.98 $ (0.44) $ 0.00 $ 0.00
- --------------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
10/31/94 10.84 0.34 (0.34) 0.00 (0.34) (0.15) 0.00
- --------------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
10/31/93 10.42 0.35 0.68 1.03 (0.35) (0.26) 0.00
- --------------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
06/25/92 - 10/31/92 10.00 0.12 0.52 0.64 (0.12) (0.10) 0.00
- --------------------------------- ------------ ---------- -------------- ------------ ---------- ------------- -------------
</TABLE>
* Annualized
See Notes to Financial Statements
24
<PAGE>
<TABLE>
<CAPTION>
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
Ratio of Net
Ratio of Investment
Tax Basis Net Asset Net Assets Expenses to Income to Portfolio Average
Return of Total Value End of End of Period Average Net Average Net Turnover Commission
Capital Distributions Period Total Return (000's) Assets Assets Rate Rate
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0.00 $ (0.02) $ 12.92 29.34% $ 8,357 0.88%* 0.24%* 131.58% $0.04
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
$ 0.00 $ (0.42) $ 14.44 24.46% $ 73,999 0.70% 1.91% 20.59% $0.05
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
0.00 (0.30) 11.99 1.83 65,915 0.70 2.20 43.58
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.65) 12.08 8.20 46,724 0.70 1.89 15.02
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.26) 11.76 11.46 36,515 0.70 1.81 16.85
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.16) 10.80 9.59 4,451 0.73* 2.14* 0.15
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
$ 0.00 $ (0.78) $ 11.27 (27.70%) $ 73,539 1.35% 0.57% 118.18% $0.03
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
0.00 (0.18) 16.53 36.31 79,620 1.35 (0.06) 79.04
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.28) 12.27 25.55 14,625 1.34* 0.64* 36.51
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.76) 11.24 (27.96) 830 1.62 0.02 118.18 N/A
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
$ 0.00 $ (0.52) $ 11.74 3.83% $ 63,607 1.10% 1.10% 63.12% $0.03
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
0.00 (0.07) 11.86 11.68 22,569 1.10 1.12 88.55
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.05) 10.69 7.39 8,299 1.10* 0.91* 19.61
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.51) 11.73 9.61 675 1.34* 0.50* 58.07 N/A
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
$ 0.00 $ (0.44) $ 11.89 19.47% $ 72,638 0.70% 3.73% 43.10% $0.04
- --------- ------------- ------------ ------------ ------------- ----------- ----------- --------- ----------
0.00 (0.49) 10.35 0.08 130,694 0.70 3.25 46.72
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.61) 10.84 10.06 126,410 0.70 3.10 19.32
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
0.00 (0.22) 10.42 6.40 99,198 0.70* 3.36* 38.51
- --------- ------------- ------------ ------------ ------------- ----------- ----------- ---------
</TABLE>
25
<PAGE>
SCHEDULE OF INVESTMENTS
[PIE CHART APPEARS HERE] Short-Term Instruments 98.9%
Money Market Fund
October 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
(000's) (000's)
- --------------------------------------------------------------------------------
Short-Term Instruments - 98.9%
- --------------------------------------------------------------------------------
<S> <C> <C>
Discount Notes - 93.5%
American Greetings Co.
5.740% due 11/08/95 $ 250 $ 250
Avnet, Inc.
5.730% due 12/08/95 300 298
Commercial Credit Co.
9.875% due 12/01/95 350 351
Electronic Data Systems Corp.
5.670% due 11/28/95 250 249
Federal Home Loan Bank Corp.
5.600% due 11/09/95 500 499
Federal Home Loan Mortgage Corp.
5.655% due 11/13/95 250 250
Ford Motor Credit Co.
5.700% due 11/10/95 250 250
G. E. Capital Corp.
5.770% due 11/27/95 160 159
Georgia Power
4.750% due 03/01/96 250 249
Great-West Life & Annuity
5.720% due 12/08/95 250 249
GTE Northwest, Inc.
5.730% due 11/09/95 200 200
Heinz Co.
5.750% due 11/13/95 250 250
Hercules, Inc.
5.730% due 11/15/95 250 249
IBM Credit Corp.
5.750% due 11/10/95 300 300
Kimberly Clark
5.720% due 11/30/95 250 249
McCormick & Co., Inc.
5.710% due 11/21/95 300 299
MidAmerica Energy Co.
5.730% due 11/21/95 250 249
New England Power Co.
5.740% due 11/27/95 250 249
PHH Corp.
5.730% due 11/29/95 250 249
Raytheon Corp.
5.720% due 11/20/95 250 249
Shell Oil Co.
7.700% due 02/01/96 250 251
Sonoco Products Co.
5.760% due 11/14/95 250 249
Stanley Works
5.720% due 11/27/95 300 299
Temple Inland, Inc.
5.750% due 11/02/95 250 249
Toys-R-Us, Inc.
5.680% due 12/01/95 250 249
Waste Management
6.250% due 12/15/95 300 300
Weyerhaeuser Co.
9.250% due 11/15/95 300 300
---------
Total Short-Term Notes 7,244
=========
<CAPTION>
Principal
Amount Value
(000's) (000's)
- --------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreement - 5.4%
State Street Bank $ 420 $ 420
4.500% due 11/01/95
(Dated 10/31/95. Collateralized by
U.S. Treasury Bond 11.250% due 02/15/15
valued at $430,876. Repurchase
proceeds are $420,053.)
Total Investments - 98.9% $ 7,664
(Cost $7,664)
Other Assets and Liabilities (Net) - 1.1% 87
---------
Net Assets - 100.0% $ 7,751
=========
</TABLE>
See Notes to Financial Statements
26
<PAGE>
SCHEDULE OF INVESTMENTS
Corporate Bonds and Notes 30.8%
Other 2.4%
[PIE CHART APPEARS HERE]
Short-Term Instruments 20.6%
Mortgage-Backed Securities 45.2%
PIMCO Managed Bond and Income Fund
October 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
(000's) (000's)
- --------------------------------------------------------------------------------
Corporate Bonds and Notes - 30.8%
- --------------------------------------------------------------------------------
<S> <C> <C>
Banking and Finance - 6.5%
Citicorp
5.950% due 01/30/98 (d) (e) $ 5,000 $ 5,003
6.000% due 05/29/98 (d) (e) 5,000 4,944
First Interstate Bancorp
6.188% due 06/25/97 250 251
General Motors Acceptance Corp.
6.750% due 04/25/97 10,000 10,099
7.900% due 05/01/97 500 513
Great Western Financial
8.625% due 12/01/98 3,000 3,176
Home Savings of America
10.500% due 06/12/97 4,500 4,561
Lehman Brothers Holdings
8.875% due 11/01/98 500 533
----------
29,080
Industrials - 16.9%
AMR Corp.
7.750% due 12/01/97 10,000 10,204
9.430% due 05/10/01 1,000 1,117
8.900% due 02/26/07 (e) 6,450 6,949
Columbia Health Care
5.996% due 07/28/97 15,000 15,013
Hewlett Packard Co.
5.680% due 01/05/96 5,000 4,947
5.670% due 01/09/96 3,800 3,757
Occidental Petroleum
11.750% due 03/15/11 10,000 10,674
Time Warner, Inc.
6.835% due 08/15/00 (e) 5,575 5,603
7.975% due 08/15/04 3,345 3,437
8.110% due 08/15/06 6,690 6,869
8.180% due 08/15/07 6,690 6,858
----------
75,428
Utilities - 7.4%
Commonwealth Edison
8.000% due 10/15/03 7,550 7,715
CTC Mansfield Funding
11.125% due 09/30/16 2,500 2,534
Illinois Power Co.
5.850% due 10/01/96 1,000 998
Long Island Lighting Co.
8.750% due 05/01/96 8,000 8,088
9.000% due 11/01/22 (e) 7,250 7,286
Ohio Edison
8.500% due 05/01/96 3,000 3,035
Wisconsin Electric Power
5.700% due 12/08/95 3,100 3,082
----------
32,738
----------
Total Corporate Bonds and Notes 137,246
(Cost $133,857) ==========
<CAPTION>
- --------------------------------------------------------------------------------
U.S. Treasury Obligations - 2.3%
- --------------------------------------------------------------------------------
<S> <C> <C>
U.S. Treasury Note
6.500% due 04/30/97 10,000 10,131
----------
Total U.S. Treasury Obligations 10,131
(Cost $10,125) ==========
<CAPTION>
- --------------------------------------------------------------------------------
U.S. Government Agencies - 0.1%
- --------------------------------------------------------------------------------
<S> <C> <C>
Federal Home Loan Bank
5.630% due 11/13/95 (d) 600 599
----------
Total U.S. Government Agencies 599
(Cost $599) ==========
<CAPTION>
Principal
Amount Value
(000's) (000's)
- --------------------------------------------------------------------------------
Mortgage-Backed Securities - 45.2%
- --------------------------------------------------------------------------------
<S> <C> <C>
Federal Home Loan Mortgage Corporation - 1.6%
9.000% due 12/15/20 $ 4,627 $ 4,853
10.500% due 04/01/01 190 198
8.500% due 12/01/01 10 10
7.250% due 03/01/06 547 548
8.250% due 03/01/08 244 251
8.250% due 05/01/08 76 78
9.500% due 02/01/11 204 216
15.500% due 06/01/11 4 4
10.000% due 06/01/11 39 42
11.875% due 06/15/13 (e) 413 455
8.800% due 12/01/15 (e) 339 365
----------
7,020
Federal Housing Authority - 0.2%
8.829% due 05/01/19 (e) 652 678
7.430% due 10/01/19 391 400
----------
1,078
Federal National Mortgage Association - 11.5%
4.500% due 07/01/96 (e) 14 14
9.000% due 12/01/01 2,180 2,289
8.500% due 12/01/01 147 152
8.500% due 07/01/03 1,214 1,258
8.500% due 10/01/04 1,311 1,362
8.500% due 11/01/04 1,030 1,070
8.500% due 01/01/05 158 164
8.500% due 01/01/05 2,444 2,540
8.000% due 10/01/05 760 778
8.500% due 01/01/07 1,090 1,133
8.500% due 08/01/07 95 98
7.750% due 10/01/07 631 641
7.000% due 08/01/09 621 624
11.000% due 09/01/10 (e) 366 412
13.750% due 10/01/10 52 61
13.750% due 11/01/11 7 9
14.750% due 10/01/12 55 65
13.750% due 10/01/12 71 82
14.750% due 11/01/12 6 7
13.750% due 01/01/13 12 14
14.500% due 03/01/13 13 16
13.750% due 09/01/13 24 29
13.750% due 11/01/13 10 12
13.750% due 12/01/14 2 3
8.029% due 07/01/20 (d) 2,251 2,351
6.542% due 02/01/23 (d) 3,084 3,152
7.454% due 02/01/23 (d) 7,446 7,461
5.484% due 12/01/23 (d) 4,031 4,072
5.912% due 01/01/24 (d) 7,104 7,221
6.574% due 04/01/24 (d) 5,464 5,565
6.056% due 10/01/24 (d) 4,204 4,284
7.769% due 04/01/29 (d) 4,127 4,257
----------
51,196
Government National Mortgage Association - 4.2%
7.500% due 03/15/24 460 467
12.000% due 10/15/12 16 18
12.000% due 01/15/13 10 12
12.000% due 09/15/13 3 4
12.000% due 09/15/13 3 4
12.000% due 02/15/14 22 26
12.000% due 03/15/14 11 13
12.000% due 04/15/14 5 6
12.000% due 12/15/14 2 2
12.000% due 04/15/15 2 3
12.000% due 04/15/15 7 8
12.000% due 06/15/15 1 1
</TABLE>
27
<PAGE>
SCHEDULE OF INVESTMENTS (Cont.)
PIMCO Managed Bond and Income Fund
October 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
(000's) (000's)
- --------------------------------------------------------------------------------
<S> <C> <C>
12.000% due 06/15/15 $ 17 $ 20
12.000% due 10/15/15 1 1
7.375% due 06/20/23 (d) (e) 8,274 8,424
7.000% due 09/20/24 (d) (e) 4,661 4,764
7.000% due 01/20/25 (d) (e) 4,709 4,804
----------
18,577
Collateralized Mortgage Obligations - 27.7%
AFC
6.592% due 10/25/26 (d) (e) 8,182 8,243
American Southwest Financial
8.450% due 09/01/17 246 245
Bank of America
9.000% due 03/01/08 (e) 124 129
Capstead
8.900% due 12/25/21 (e) 1,068 1,101
Chase Mortgage Financial
8.000% due 06/25/24 (e) 957 967
Citicorp Mortgage
9.500% due 07/25/04 49 51
9.500% due 10/25/04 220 230
CMC Securities Corp.
9.000% due 04/25/10 16,253 16,711
10.000% due 04/20/20 8,885 9,673
Countrywide
7.913% due 11/25/24 (d) (e) 10,388 10,661
7.408% due 11/25/24 (d) (e) 12,226 12,536
Dime Savings
7.140% due 11/25/18 (d) (e) 222 209
Donaldson, Lufkin & Jenrette
11.000% due 08/01/19 557 616
FNMA
7.000% due 04/25/15 367 370
8.500% due 03/25/17 1,580 1,601
9.000% due 09/25/18 2,240 2,309
9.250% due 07/25/19 9,091 9,566
GMC
9.300% due 07/20/19 1,000 1,086
Norwest
12.375% due 01/01/14 622 682
Residential Funding
10.000% due 10/01/19 (e) 56 57
Resolution Trust Corp.
8.835% due 12/25/23 (e) 1,313 1,348
Ryland Acceptance Corp.
7.878% due 09/25/23 (d) 10,352 10,507
8.000% due 09/25/22 (e) 9,553 9,601
Saxon Mortgage
8.169% due 09/25/22 (d) (e) 7,259 7,409
8.130% due 01/25/23 (d) (e) 10,317 10,472
Sears
8.250% due 09/25/31 (e) 341 343
Sears Mortgage
8.712% due 05/25/32 (d) (e) 5,208 5,223
Security Pacific
8.500% due 03/01/17 (e) 131 130
U.S. Home Equity
8.500% due 04/15/21 68 69
Western Federal Savings & Loan
6.979% due 03/25/19 (d) (e) 1,016 1,006
----------
123,151
----------
Total Mortgage-Backed Securities 201,022
(Cost $199,587) ==========
<CAPTION>
Principal
Amount Value
(000's) (000's)
- --------------------------------------------------------------------------------
Purchased CME Put Option - 0.0%
- --------------------------------------------------------------------------------
<S> <C> <C>
December Futures 150 2
Strike @ 95.00 Exp. 11/95 ----------
Total Purchased CME Put Option 2
(Cost $3) ==========
<CAPTION>
- --------------------------------------------------------------------------------
Short-Term Instruments - 20.6%
- --------------------------------------------------------------------------------
<S> <C> <C>
Discount Notes - 16.9%
Abbott Laboratories
5.710% due 11/14/95 3,000 2,994
Armstrong World
8.5% due 02/08/96 400 402
Associates Corp. of North America
5.680% due 11/27/95 5,500 5,477
AT&T Corp.
5.710% due 11/03/95 5,000 4,998
5.640% due 11/21/95 2,200 2,193
5.700% due 01/09/96 10,000 9,887
5.700% due 01/12/96 1,000 988
Discover Credit Corp.
8.920% due 03/15/96 (e) 11,000 11,209
9.000% due 04/15/96 (e) 5,250 5,316
Eli Lilly & Co.
6.080% due 01/09/96 4,500 4,449
Emerson Electric Co.
5.750% due 11/17/95 500 499
G. E. Capital Corp.
5.720% due 11/20/95 3,000 2,991
5.720% due 11/30/95 8,700 8,660
5.700% due 01/19/96 2,500 2,468
Motorola, Inc.
5.710% due 11/17/95 800 798
Norfolk Southern Corp.
5.680% due 01/12/96 300 296
Pitney Bowes Credit, Inc.
5.690% due 11/20/95 2,000 1,994
United Parcel Service
5.710% due 11/15/95 3,600 3,592
U.S. West Communications
5.700% due 11/30/95 4,700 4,678
Wal-Mart Stores
5.720% due 11/09/95 1,400 1,398
----------
75,287
Repurchase Agreement - 2.9%
State Street Bank 12,860 12,860
4.500% due 11/01/95
(Dated 10/31/95. Collateralized by
U.S. Treasury Bond 11.250% due 02/15/15
valued at $13,122,123. Repurchase
proceeds are $12,861,608.)
U.S. Treasury Bills - 0.8%
6.560% due 11/16/95 (b) 620 618
5.340% due 11/30/95 (b) 780 777
5.270% due 02/08/96 (b) 615 606
6.310% due 02/08/96 (b) 1,695 1,670
5.265% due 02/15/96 (b) 30 30
----------
3,701
----------
Total Short-Term Instruments 91,848
(Cost $91,753 ) ==========
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
Value
(000's)
- --------------------------------------------------------------------------------
<S> <C>
Total Investments (a) - 99.0% $ 440,848
(Cost $435,924)
Written Options (c) - 0.0% (16)
(Premiums $169)
Other Assets and Liabilities (Net) - 1.0% 4,422
----------
Net Assets - 100.0% $ 445,254
==========
Notes to Schedule of Investments ($ in thousands):
(a) At October 31, 1995, the net unrealized appreciation
(depreciation) of investments based on cost for
federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for
all investments in which there was an excess
of value over tax cost. $ 6,410
Aggregate gross unrealized depreciation for
all investments in which there was an excess
of tax cost over value. (1,486)
----------
Unrealized appreciation-net $ 4,924
==========
(b) Securities with an aggregate market value of
$3,701 have been segregated with the custodian
to cover margin requirements for the following open
future contracts at October 31, 1995:
<CAPTION>
Unrealized
Type Contracts Appreciation
- --------------------------------------------------------------------------------
<S> <C> <C>
U.S. Treasury 5 Year Note (12/95) 567 $ 229
U.S. Treasury 10 Year Note (12/95) 1,432 2,150
U.S. Treasury 30 Year Note (12/95) 624 2,146
----------
$ 4,525
==========
(c) Premiums received on Written Put Options:
<CAPTION>
Premium Market
Type Par Received Value
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
CBOT U.S. Treasury Bond Futures
Strike @ 112.00 Exp. (11/95) $ 500,000 $ 169 $ 16
(d) Variable rate security. The rate listed is as of October 31, 1995.
(e) Security valued under procedures established by the Board of Trustees.
</TABLE>
See Notes to Financial Statements
29
<PAGE>
SCHEDULE OF INVESTMENTS
NFJ Equity Income Fund
October 31, 1995
15.1% Consumer Discretionary
17.5% Utilities
10.5% Other
6.9% Health Care
13.8% Financial & Business Services [PIE CHART APPEARS HERE]
9.8% Short-Term Instruments
8.9% Materials & Processing
7.0% Energy
6.9% Consumer Staples
<TABLE>
<CAPTION>
Value
Shares (000's)
- --------------------------------------------------------------------------------
Common Stocks - 86.6%
- --------------------------------------------------------------------------------
<S> <C> <C>
Capital Goods - 5.2%
Briggs & Stratton Co. 48,100 $ 1,944
Deere & Co. 24,200 2,163
GATX Corp. 41,900 1,990
----------
6,097
Consumer Discretionary - 15.1%
Brunswick Corp. 113,600 2,215
Chrysler Corp. 37,880 1,956
Ford Motor Co. 67,000 1,926
Harland John H Co. 95,600 1,984
K Mart Corp. 239,500 1,965
Maytag Corp. 108,900 2,069
Melville Corp. 112,300 3,594
Springs Industries, Inc. 49,900 2,139
----------
17,848
Consumer Staples - 6.9%
American Brands, Inc. 47,800 2,049
Anheuser Busch 31,100 2,053
Philip Morris Co., Inc. 23,600 1,994
Supervalu, Inc. 67,900 2,088
----------
8,184
Energy - 7.0%
Atlantic Richfield 18,800 2,007
Texaco, Inc. 29,800 2,030
Ultramar Corp. 174,600 4,256
----------
8,293
Financial & Business Services - 13.8%
Aetna Life & Casulty Co. 31,200 2,196
Bankers Trust N.Y. Corp. 30,900 1,970
Bear Stearns 91,917 1,827
Chase Manhattan Corp. 35,200 2,006
Meditrust 58,700 1,981
Mellon Bank Corp. 38,300 1,920
PNC Bank Corp. 82,400 2,163
Provident Life Accident "B" 84,700 2,266
----------
16,329
Health Care - 6.9%
American Home Products 22,200 1,967
Baxter International, Inc. 51,800 2,001
Bristol Myers Squibb 26,300 2,005
Upjohn Co. 43,100 2,187
----------
8,160
Materials & Processing - 8.9%
Fed Paper Board, Inc. 54,300 2,281
Olin Corp. 31,100 1,990
Phelps Dodge Corp. 67,700 4,290
PHH Corp. 43,500 1,903
----------
10,464
Technology - 5.3%
Harris Corp. 37,400 2,174
Northrop Grumman Corp. 70,400 4,030
----------
6,204
Utilities - 17.5%
Comsat Corp. 97,900 $ 1,946
Detroit Edison Co. 61,700 2,082
NICOR Inc. 75,400 2,026
Pacific Gas & Electric 69,100 2,030
Pacific Telesis 138,900 4,219
Peoples Energy Corp. 74,000 2,128
Southern New England Telecom 57,400 2,074
Texas Utilities Co. 58,000 2,132
Washington Water Power 119,000 2,053
----------
20,690
----------
Total Common Stocks 102,269
==========
(Cost $91,499)
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Short-Term Instruments - 9.8%
- --------------------------------------------------------------------------------
Principal
Amount
(000's)
<S> <C> <C>
Repurchase Agreement - 9.8%
State Street Bank $ 11,596 11,596
4.500% due 11/01/95
(Dated 10/31/95. Collateralized by
U.S. Treasury Bond 11.250%
due 02/15/15 valued at $11,829,496.
Repurchase proceeds are $11,597,450.)
----------
Total Short-Term Instruments 11,596
==========
(Cost $11,596)
Total Investments (a) - 96.4% $ 113,865
(Cost $103,095)
Other Assets and Liabilities (Net) - 3.6% 4,290
----------
Net Assets - 100.0% $ 118,155
==========
Notes to Schedule of Investments ($ in thousands):
(a) At October 31, 1995, the net unrealized appreciation
(depreciation) of investments based on cost for
federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for
all investments in which there was an excess
of value over tax cost. $ 14,267
Aggregate gross unrealized depreciation for
all investments in which there was an excess
of tax cost over value. (3,497)
----------
Unrealized appreciation-net $ 10,770
==========
</TABLE>
See Notes to Financial Statements
30
<PAGE>
SCHEDULE OF INVESTMENTS
NFJ Diversified Low P/E Fund
October 31, 1995
14.1% Financial & Business Services
14.2% Consumer Discretionary
6.5% Other
6.6% Materials & Processing
11.3% Consumer Staples [PIE CHART APPEARS HERE]
10.9% Technology
10.3% Energy
10.0% Utilities
8.4% Short-Term Instruments
7.7% Health Care
<TABLE>
<CAPTION>
Value
Shares (000's)
- --------------------------------------------------------------------------------
Common Stocks - 91.6%
- --------------------------------------------------------------------------------
<S> <C> <C>
Capital Goods - 3.8%
Briggs & Stratton Co. 6,500 $ 262
Deere & Co. 3,200 286
----------
548
Consumer Discretionary - 14.2%
Brunswick Corp. 6,700 131
Chrysler Corp. 4,105 212
Goodyear Tire & Rubber 6,900 262
Maytag Corp. 14,600 277
Melville Corp. 7,400 237
Omnicom Group 2,100 134
Premark International, Inc. 6,000 278
Reebok International Limited 3,800 129
Sears Roebuck 7,600 258
Xerox Corp. 1,000 130
----------
2,048
Consumer Staples - 11.3%
Anheuser Busch 6,200 409
IBP, Inc. 4,700 281
Philip Morris Co., Inc. 3,100 262
Supervalu, Inc. 13,300 409
Unilever NV 2,100 276
----------
1,637
Energy - 10.3%
Atlantic Richfield 3,700 395
Repsol 8,700 258
Texaco, Inc. 6,000 409
Ultramar Corp. 17,200 419
----------
1,481
Financial & Business Services - 14.1%
Bear Stearns Cos 6,700 133
Chase Manhattan Corp. 6,300 359
Loews Corp. 1,800 264
Mellon Bank Corp. 5,000 251
PHH Corp. 8,100 354
Provident Life Accident "B" 14,000 375
Standard Federal Bank 8,400 298
----------
2,034
Health Care - 7.7%
American Home Products 4,400 390
Beckman Instruments 4,000 133
Tenet Healthcare Corp. (b) 9,300 166
Upjohn Co. 8,400 426
----------
1,115
Materials & Processing - 6.6%
Lennar Corp. 5,750 132
Phelps Dodge Corp. 4,500 285
Union Carbide Corp. 3,800 144
Wellman, Inc. 5,500 129
Willamette Industries 4,500 261
----------
951
Technology - 10.9%
Advanced Micro Devices (b) 4,900 117
Harris Corp. 4,800 279
Northrop Grumman Corp. 6,400 366
Raytheon Co. 6,800 297
Seagate Technology (b) 6,000 269
Sterling Software, Inc. (b) 5,400 249
----------
1,577
Transportation - 2.7%
AMR Corp. (b) 1,900 125
Conrail, Inc. 3,900 268
----------
393
Utilities - 10.0%
Comsat Corp. 12,200 242
Detroit Edison Co. 8,300 280
NICOR, Inc. 9,000 242
Pacific Gas & Electric 13,500 397
Pacific Telesis 9,300 282
----------
1,443
----------
Total Common Stocks 13,227
==========
(Cost $11,149)
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Short-Term Instruments - 8.4%
- --------------------------------------------------------------------------------
Principal
Amount
(000's)
<S> <C> <C>
Repurchase Agreement - 8.4%
State Street Bank $ 1,210 1,210
4.500% due 11/01/95
(Dated 10/31/95. Collateralized by
U.S. Treasury Bond 11.250% due 02/15/15
valued at $1,245,622. Repurchase
proceeds are $1,216,152.)
----------
Total Short-Term Instruments 1,210
==========
(Cost $1,210)
Total Investments (a) - 100.0% $ 14,437
(Cost $12,359)
Other Assets and Liabilities (Net) - 0.0% (6)
----------
Net Assets - 100.0% $ 14,443
==========
Notes to Schedule of Investments ($ in thousands):
(a) At October 31, 1995, the net unrealized appreciation
(depreciation) of investments based on cost for
federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for
all investments in which there was an excess
of value over tax cost. $ 2,323
Aggregate gross unrealized depreciation for
all investments in which there was an excess
of tax cost over value. (245)
----------
Unrealized appreciation-net $ 2,078
==========
(b) Non-income producing security.
</TABLE>
See Notes to Financial Statements
31
<PAGE>
SCHEDULE OF INVESTMENTS
NFJ Small Cap Value Fund
October 31, 1995
16.6% Materials & Processing
22.2% Financial & Business Services
5.0% Other
3.0% Health Care
3.9% Short-Term Instruments
14.3% Consumer Discretionary [PIE CHART APPEARS HERE]
10.3% Capital Goods
8.3% Consumer Staples
6.8% Utilities
5.2% Technology
4.2% Energy
<TABLE>
<CAPTION>
Value
Shares (000's)
- --------------------------------------------------------------------------------
Common Stocks - 95.9%
- --------------------------------------------------------------------------------
<S> <C> <C>
Capital Goods - 10.3%
AGCO Corp. 6,650 $ 298
Barnes Group, Inc. 8,900 334
Blount Inc. "A" 6,300 273
Brenco, Inc. 29,000 337
Kysor Industrial Corp. 15,700 367
Oshkosh Truck Corp. "B" 23,400 333
Regal Beloit 19,200 346
Scotsman Industries, Inc. 21,600 351
Smith (A.O.) Corp. 15,500 321
Tecumseh Products Co. "A" 6,200 291
Webb Corp. 18,000 374
----------
3,625
Consumer Discretionary - 14.3%
Blair Corp. 12,100 357
Borg Warner Automotive 12,100 357
Ennis Business Forms, Inc. 24,200 345
Fedders USA, Inc. 57,500 338
Garan, Inc. 12,900 237
Guilford Mills, Inc. 15,400 341
Haggar Corp. 13,400 221
Handleman 28,300 219
Outboard Marine Corp. 17,800 369
Oxford Industries, Inc. 15,100 245
Ross Stores, Inc. 21,600 339
Shopko Stores, Inc. 30,200 325
Standard Products Co. 7,100 110
Strawbridge & Clothier "A" 14,000 266
Sturm Ruger & Co., Inc. 12,000 324
Toro Co. 11,200 323
Windmere Corp. 50,500 316
----------
5,032
Consumer Services - 2.0%
Bowne & Co., Inc. 19,200 357
Merrill Corp. 20,800 333
----------
690
Consumer Staples - 8.3%
Bindley Western Industries, Inc. 20,000 312
Dimon, Inc. 22,800 333
Fay's, Inc. 36,000 288
International Multifoods 15,700 322
Marsh Supermarkets, Inc. "B" 30,300 364
Morningstar Group, Inc. (b) 38,000 295
Nash Finch Co. 16,700 298
Super Foods Services, Inc. 29,500 395
Thorn Apple Valley, Inc. 16,500 285
----------
2,892
Energy - 4.2%
Diamond Shamrock R & M, Inc. 12,400 319
KCS Energy, Inc. 20,800 237
Offshore Logistics, Inc. (b) 24,800 307
Swift Energy Co. (b) 32,700 290
Tosco Corp. 9,100 314
----------
1,467
Financial & Business Services 22.2%
American Bankers Insurance Group 11,400 409
American Health Properties 15,300 315
Boston Bancorp 9,000 331
Capstead Mortgage Corp. 10,000 328
Charter One Financial, Inc. 13,500 383
Collective Bancorp, Inc. 14,800 350
Comdisco, Inc. 10,300 314
Eaton Vance Corp. 10,700 391
First Commerce Corp. 12,900 400
First Finance Corp. 20,600 440
Fremont General 14,300 415
Glimcher Realty Trust 17,300 311
Hibernia Corp. "A" 37,500 370
Inter-Regional Financial Group 9,100 319
Jefferies Group, Inc. 9,400 369
Mcgrath Rentcorp 18,000 315
Morgan Keegan, Inc. 28,350 308
Orion Capital Corp. 7,800 320
Pioneer Financial Services, Inc. 22,400 314
Raymond James Financial Corp. 18,200 391
U S Facilities 18,000 340
Zions Bancorp 5,400 374
----------
7,807
Health Care - 3.0%
Adac Laboratories 31,400 373
Allied Healthcare Products 18,900 359
Bergen Brunswig "A" 15,015 312
----------
1,044
Materials & Processing - 16.6%
Amcast Industrial Corp. 19,000 323
American President 13,600 330
Butler Manufacturing Co. 13,050 385
Caraustar Industries, Inc. 16,800 315
Chesapeake Corp. 11,200 343
Cleveland Cliffs, Inc. 8,800 329
Commercial Metals 13,100 337
Continental Homes 16,900 346
Gencorp 27,300 287
Kaman Corp. 25,700 276
Nacco Industries, Inc. 5,600 321
Quanex Corp. 17,700 350
Standard Motor Products 20,400 337
Texas Industries, Inc. 7,400 389
Varlen Corp. 16,280 435
Vigoro Group 8,700 377
Wellman, Inc. 14,300 336
----------
5,816
Technology - 5.2%
Macneal-Schwendler Corp. 22,800 348
Mts Systems Corp. 13,700 387
Pioneer Standard Electronics 25,000 347
Thiokol Corp. 9,400 325
Wyle Labs 10,200 435
----------
1,842
Transportation - 3.0%
Coachman Industries 26,100 441
Sea Containers Limited "A" 17,100 312
Winnebago Industries 37,000 296
----------
1,049
Utilities - 6.8%
Central Hudson Gas & Electric 10,700 328
Commonwealth Energy System 7,900 335
Eastern Utilities Associates 13,100 308
Energen Corp. 15,800 357
Orange & Rockland Utilities 10,800 379
Southern California Water Co. 18,400 347
United Illuminating 9,000 342
----------
2,396
----------
Total Common Stocks 33,660
==========
(Cost $31,195)
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000's) (000's)
<S> <C> <C>
- --------------------------------------------------------------------------------
Short-Term Instruments - 3.9%
- --------------------------------------------------------------------------------
Repurchase Agreement - 3.9%
State Street Bank $ 1,377 $ 1,377
4.500% due 11/01/95
(Dated 10/31/95. Collateralized by
U.S. Treasury Bond 11.250% due 02/15/15
valued at $1,410,139. Repurchase
proceeds are $1,377,172.)
----------
Total Short-Term Instruments 1,377
==========
(Cost $1,377)
Total Investments (a) - 99.8% $ 35,037
(Cost $32,572)
Other Assets and Liabilities (Net) - 0.2% 56
----------
Net Assets - 100.0% $ 35,093
==========
Notes to Schedule of Investments ($ in thousands):
(a) At October 31, 1995, the net unrealized appreciation
(depreciation) of investments based on cost for
federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for
all investments in which there was an excess
of value over tax cost. $ 4,520
Aggregate gross unrealized depreciation for
all investments in which there was an excess
of tax cost over value. (2,055)
----------
Unrealized appreciation-net $ 2,465
==========
(b) Non-income producing security.
</TABLE>
See Notes to Financial Statements
33
<PAGE>
SCHEDULE OF INVESTMENTS
Cadence Capital Appreciation Fund
October 31, 1995
22.2% Technology
24.3% Financial & Business Services
3.7% Energy
5.5% Consumer Services
7.2% Materials & Processing [PIE CHART APPEARS HERE]
10.4% Health Care
9.9% Short-Term Instruments
8.3% Capital Goods
7.6% Consumer Goods
<TABLE>
<CAPTION>
Value
Shares (000's)
- --------------------------------------------------------------------------------
Common Stocks - 89.2%
- --------------------------------------------------------------------------------
<S> <C> <C>
Capital Goods - 8.3%
Allied Signal, Inc. 65,400 $ 2,780
Case Corp. 77,300 2,947
Johnson Controls, Inc. 45,800 2,668
PPG Industries, Inc. 64,100 2,724
Rockwell International Corp. 64,900 2,888
Sundstrand Corp. 43,100 2,640
United Technologies 34,300 3,044
----------
19,691
Consumer Goods - 7.6%
Consolidated Papers, Inc. 39,400 2,256
HBO & Co. 39,100 2,766
Kroger Co. (b) 92,200 3,077
Leggett & Platt, Inc. 130,800 3,139
Nike, Inc. 65,200 3,700
Xerox Corp. 23,700 3,075
----------
18,013
Consumer Services - 5.5%
IBP, Inc. 70,000 4,191
La Quinta Motor Inns 76,700 1,998
Mattel, Inc. 123,676 3,556
Philip Morris Co, Inc. 39,900 3,372
----------
13,117
Energy - 3.7%
British Petroleum - ADR 31,600 2,789
Imperial Oil Limited 80,100 2,924
Royal Dutch Petrol Guilder 23,900 2,937
----------
8,650
Financial & Business Services - 24.3%
Advanta Corp. 79,700 2,849
Bank of Boston Corp. 67,500 3,004
Bank of New York 77,200 3,242
Bankamerica Corp 42,100 2,421
Chemical Banking Corp. 57,800 3,287
Citicorp 51,900 3,367
Dean Witter Discover & Co. 59,400 2,955
Equitable of Iowa Co. 87,200 3,052
First Chicago Corp. 32,700 2,220
First Interstate Bank 27,200 3,509
First Tennessee National Corp. 58,800 3,146
Fleet Financial Group, Inc. 80,100 3,104
Midlantic Corp. 55,900 2,963
Norwest Corp. 98,200 2,897
Southtrust Corp. 115,600 2,904
St Paul Cos, Inc. 59,200 3,004
TIG Holdings, Inc. 127,900 3,245
Transamerica Corp. 44,200 2,995
Travelers Group, Inc. 62,100 3,136
----------
57,300
Health Care - 10.4%
Abbott Laboratories 78,800 3,132
American Home Products 38,000 3,368
Boston Scientific Corp. (b) 93,300 3,930
Foundation Health Corp. (b) 81,600 3,458
Guidant Corp. 125,600 4,019
Medtronic, Inc. 49,600 2,864
Schering-Plough 70,300 3,770
----------
24,541
Materials & Processing - 7.2%
Eastman Chemical Co. 44,400 2,642
Georgia-Pacific Corp. 31,200 2,574
International Paper 68,800 2,546
Textron, Inc. 41,900 2,881
Scott Paper 62,700 3,339
Union Carbide Corp. 78,700 2,981
----------
16,963
Technology - 22.2%
Adaptec, Inc. (b) 85,500 3,805
Alliance Semiconductor Corp. (b) 76,950 2,366
Applied Materials (b) 56,000 2,807
Arrow Electronics, Inc. (b) 53,200 2,700
Cabletron Systems, Inc. (b) 50,100 3,939
Computer Assoc International, Inc. 82,300 4,527
Dell Computer Corp., Inc. (b) 69,500 3,240
DSC Communications (b) 52,500 1,943
Gateway 2000, Inc. (b) 94,600 3,157
Hewlett Packard Co. 47,700 4,418
Loral Corp. 143,700 4,257
Oracle Systems Corp. (b) 65,950 2,877
Seagate Technology (b) 56,900 2,546
Teradyne, Inc. (b) 73,000 2,436
Texas Instruments, Inc. 52,900 3,610
Xilinx, Inc. (b) 83,400 3,836
----------
52,464
----------
Total Common Stocks 210,739
==========
(Cost $166,226)
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Short-Term Instruments - 9.9%
- --------------------------------------------------------------------------------
Principal
Amount
(000's)
<S> <C> <C>
Repurchase Agreement - 9.9%
State Street Bank $ 23,381 23,381
4.500% due 11/01/95
(Dated 10/31/95. Collateralized by
U.S. Treasury Bond 11.250% due 02/15/15
valued at $23,854,844. Repurchase
proceeds are $23,383,923.)
----------
Total Short-Term Instruments 23,381
==========
(Cost $23,381)
Total Investments (a) - 99.1% $ 234,120
(Cost $189,607)
Other Assets and Liabilities (Net) - 0.9% 2,100
----------
Net Assets - 100.0% $ 236,220
==========
Notes to Schedule of Investments ($ in thousands):
(a) At October 31, 1995, the net unrealized appreciation
(depreciation) of investments based on cost for
federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for
all investments in which there was an excess
of value over tax cost. $ 48,054
Aggregate gross unrealized depreciation for
all investments in which there was an excess
of tax cost over value. (3,541)
----------
Unrealized appreciation-net $ 44,513
==========
(b) Non-income producing security.
</TABLE>
See Notes to Financial Statements
34
<PAGE>
SCHEDULE OF INVESTMENTS
Cadence Mid Cap Growth Fund
October 31, 1995
26.0% Financial & Business Services
29.2% Technology
0.9% Energy
1.4% Utilities
4.4% Consumer Staples
10.7% Consumer Discretionary [PIE CHART APPEARS HERE]
9.4% Health Care
7.0% Short-Term Instruments
5.7% Capital Goods
5.0% Materials & Processing
<TABLE>
<CAPTION>
Value
Shares (000's)
- --------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks - 92.7%
Capital Goods - 5.7%
AGCO Corp. 52,300 $ 2,340
Belden, Inc. 69,900 1,686
GATX Corp. 35,000 1,663
Mark IV Industries, Inc. 79,929 1,559
Northrop Grumman Corp. 31,400 1,798
York International Corp. 39,500 1,728
----------
10,774
Consumer Discretionary - 10.7%
American Greetings "A" 70,800 2,230
Consolidated Papers, Inc. 1,900 109
Cytec Industries, Inc. (b) 11,700 640
First Brands Corp. 56,100 2,566
General Nutrition Cos., Inc. (b) 122,000 3,035
Harman International 56,170 2,591
HBO & Co. 33,600 2,377
Leggett & Platt, Inc. 100,200 2,405
Manpower, Inc. 71,800 1,948
Mattel, Inc. 86,851 2,497
----------
20,398
Consumer Staples - 4.4%
Canandaigua Wine Co. "A" (b) 44,400 2,131
IBP, Inc. 64,200 3,844
Kroger Co. (b) 70,700 2,360
----------
8,335
Energy - 0.9%
Stolt-Nielsen SA (b) 60,900 1,827
----------
Financial & Business Services 26.0%
Advanta Corp. "A" 53,200 2,061
Allmerica Financial Corp. (b) 84,400 2,120
American Re Corp. 45,900 1,756
Bank of Boston Corp. 49,400 2,198
Baybanks, Inc. 24,900 2,017
Citizens Corp. 106,800 1,936
Comdisco, Inc. 62,000 1,891
Crestar Financial Corp. 43,200 2,462
Cullen/Frost Bankers, Inc. 37,100 1,892
Finova Group, Inc. 55,600 2,516
First Usa, Inc. 51,200 2,355
Green Tree Financial Corp. 97,200 2,588
MGIC Investment Corp. 42,000 2,389
Mid Ocean Limited 56,000 1,981
Mutual Risk Management Limited 64,600 2,382
Nac Re Corp. 38,600 1,356
Paul Revere Corp 46,100 925
Protective Life Corp. 64,200 1,830
Signet Bank Corp. 84,600 2,009
Southern National Corp. 91,600 2,359
Summit Bancorp 70,000 1,986
SunAmerica, Inc. 39,300 2,446
The Money Store 52,650 2,106
Union Planters Corp. 60,700 1,859
----------
49,420
Health Care - 9.4%
Boston Scientific Corp. (b) 82,200 3,463
Guidant Corp. 88,500 2,832
Health Management Associates "A" (b) 93,900 2,019
Medtronic, Inc. 39,500 2,281
Ornda Healthcorp (b) 110,100 1,941
Sybron Corp. (b) 70,900 3,013
Watson Pharmaceutical, Inc. (b) 50,600 2,264
----------
17,813
Materials & Processing - 5.0%
Bowater, Inc. 50,300 2,226
Cabot Corp. 54,100 2,570
Domtar, Inc. (b) 48,700 444
Illinois Central Corp. 59,200 2,264
Praxair, Inc. 70,900 1,914
----------
9,418
Technology - 29.2%
Applied Materials (b) 44,000 2,206
Cabletron Systems, Inc. (b) 41,700 3,279
Cadence Designs Systems, Inc. (b) 91,200 2,941
Ceridian Corp. (b) 77,200 3,358
Computer Associates International, Inc. 59,000 3,245
Credence Systemsco (b) 63,500 2,373
Cypress Semiconductor Corp. (b) 52,600 1,868
DSC Communications (b) 54,800 2,028
Harris Corp. 34,900 2,029
Integrated Device Tech, Inc. (b) 5,500 105
KLA Instruments Corp. (b) 62,600 2,676
Lam Research Corp. (b) 45,600 2,776
Loral Corp. 105,400 3,122
McDonnell Douglas 33,400 2,730
National Semiconductor (b) 74,600 1,818
Netmanage, Inc. (b) 87,600 1,785
Oracle Systems Corp. (b) 63,600 2,775
Parametric Technology Corp. (b) 41,000 2,742
Read-Rite Corp. (b) 65,500 2,284
S3, Inc. (b) 156,800 2,685
Softkey International (b) 22,500 709
Sun Microsystem, Inc. (b) 43,500 3,393
Teradyne, Inc. (b) 76,800 2,563
----------
55,490
Utilities - 1.4%
Frontier Corp. 100,100 2,703
----------
Total Common Stocks 176,178
==========
(Cost $131,818)
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Short-Term Instruments - 7.0%
- --------------------------------------------------------------------------------
Principal
Amount
(000's)
<S> <C> <C>
Repurchase Agreement - 7.0%
State Street Bank $ 13,417 13,417
4.500% due 11/01/95
(Dated 10/31/95. Collateralized by
U.S. Treasury Bond 11.250% due
02/15/15 valued at $13,686,178.
Repurchase proceeds are $13,418,677.)
----------
Total Short-Term Instruments 13,417
==========
(Cost $13,417)
Total Investments (a) - 99.7% $ 189,595
(Cost $145,235)
Other Assets and Liabilities (Net) - 0.3% 617
----------
Net Assets - 100.0% $ 190,212
==========
</TABLE>
35
<PAGE>
SCHEDULE OF INVESTMENTS (Cont.)
Cadence Mid Cap Growth Fund
October 31, 1995
<TABLE>
<S> <C>
Notes to Schedule of Investments ($ in thousands):
(a) At October 31, 1995, the net unrealized appreciation
(depreciation) of investments based on cost for
federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for
all investments in which there was an excess
of value over tax cost. $ 46,656
Aggregate gross unrealized depreciation for
all investments in which there was an excess
of tax cost over value. (2,296)
----------
Unrealized appreciation-net $ 44,360
==========
(b) Non-income producing security.
</TABLE>
See Notes to Financial Statements
36
<PAGE>
SCHEDULE OF INVESTMENTS
Cadence Micro Cap Growth Fund
October 31, 1995
20.1% Financial & Business Services
29.5% Technology
1.2% Energy
3.5% Consumer Services
4.0% Consumer Staples
13.4% Capital Goods
9.8% Health Care
8.2% Short-Term Instruments
6.3% Consumer Discretionary
4.8% Materials & Processing
<TABLE>
<CAPTION>
Value
Shares (000's)
- --------------------------------------------------------------------------------
Common Stocks - 92.6%
- --------------------------------------------------------------------------------
<S> <C> <C>
Capital Goods - 13.4%
Helix Technology 28,500 $ 1,069
Hughes Supply, Inc. 50,400 1,216
Interpool, Inc. (b) 71,900 1,150
NCI Building Systems, Inc. (b) 62,750 1,459
Shelter Components Corp. 98,750 1,506
Tech-Sym Corp. (b) 47,800 1,416
Watsco, Inc. "A" 92,750 1,542
----------
9,358
Consumer Discretionary - 6.3%
Culp, Inc. 107,550 1,049
Custom Chrome, Inc. (b) 54,500 1,369
Holophane Corp. (b) 40,100 1,083
Varsity Spirit Corp. 59,075 871
----------
4,372
Consumer Services - 3.5%
Aaron Rents, Inc. "B" 41,500 747
Penn National Gaming, Inc. (b) 37,500 638
Reeds Jewelers, Inc. (b) 37,400 393
Urban Outfitters, Inc. (b) 31,700 689
----------
2,467
Consumer Staples - 4.0%
Alpine Lace Brands, Inc. (b) 128,700 1,418
Morningstar Group, Inc. (b) 102,400 793
Rocky Mountain Chocolate Factory (b) 38,000 570
----------
2,781
Energy - 1.2%
ICO, Inc. 177,200 842
----------
Financial & Business Services - 20.1%
Aames Financial Corp. 51,600 1,290
Bank of New Hampshire Corp. 33,900 1,220
Carolina First Corp. 33,545 495
Charter Bancshares, Inc. 39,480 721
Chittenden Corp. 60,944 1,661
Community First Bankshares 75,400 1,527
Graphic Industries 112,700 1,099
Pioneer Financial Services, Inc. 94,200 1,319
Provident Bankshares Corp. 45,790 1,396
Right Management Consultants (b) 55,600 1,730
Vermont Financial Services Corp. 48,500 1,540
----------
13,998
Health Care - 9.8%
Conmed Corp. (b) 51,900 1,817
Corvel Corp. (b) 44,500 1,424
Inphynet Medical Management (b) 45,500 819
Rotech Medical Corp. (b) 32,100 730
Sterling Healthcare Group (b) 60,900 837
Vitalink Pharmacy Service (b) 61,200 1,102
Watson Pharmaceutical, Inc. (b) 2,000 89
----------
6,818
Materials & Processing - 4.8%
Castle (A.M.) & Co. 77,000 1,877
Roanoke Electric Steel Corp. 96,550 1,472
----------
3,349
Technology - 29.5%
Altron, Inc. (b) 58,550 1,683
Aseco Corp. (b) 74,900 1,367
Bel Fuse, Inc. (b) 78,300 881
Compucom Systems, Inc. (b) 144,500 975
Credence Systems Co. (b) 44,050 1,646
Electro Scientific Industries (b) 42,500 1,317
Emulex Corp. (b) 31,600 514
Gelman Sciences, Inc. (b) 77,650 1,660
Ikos Systems, Inc. (b) 119,800 1,408
International Remote Imaging Systems (b) 6,800 48
Microcom, Inc. (b) 88,700 1,940
Microdyne Corp. (b) 49,400 1,371
TCSI Corp. (b) 77,500 1,162
Tencor Instruments (b) 26,200 1,117
Tylan General, Inc. 49,600 794
United Video Satellite (b) 43,500 1,120
Xylogics, Inc. (b) 23,300 1,611
----------
20,614
----------
Total Common Stocks 64,599
(Cost $50,374) ==========
<CAPTION>
- --------------------------------------------------------------------------------
Short-Term Instruments - 8.3%
- --------------------------------------------------------------------------------
Principal
Amount
(000's)
<S> <C> <C>
Repurchase Agreement - 8.3%
State Street Bank $ 5,793 5,793
4.500% due 11/01/95
(Dated 10/31/95. Collateralized by
U.S. Treasury Bond 11.250% due 02/15/15
valued at $5,914,748. Repurchase
proceeds are $5,793,724.)
----------
Total Short-Term Instruments 5,793
(Cost $5,793) ==========
Total Investments (a) - 100.9% $ 70,392
(Cost $56,167)
Other Assets and Liabilities (Net) - (0.9)% (617)
----------
Net Assets - 100.0% $ 69,775
==========
Notes to Schedule of Investments ($ in thousands):
(a) At October 31, 1995, the net unrealized appreciation
(depreciation) of investments based on cost for
federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for
all investments in which there was an excess
of value over tax cost. $ 15,458
Aggregate gross unrealized depreciation for
all investments in which there was an excess
of tax cost over value. (1,233)
----------
Unrealized appreciation-net $ 44,225
==========
(b) Non-income producing security.
</TABLE>
See Notes to Financial Statements
37
<PAGE>
SCHEDULE OF INVESTMENTS
Cadence Small Cap Growth Fund
October 31, 1995
26.7% Financial & Business Services
1.1% Consumer Services
5.4% Materials & Processing
9.0% Health Care
25.6% Technology
14.3% Capital Goods
11.8% Short-Term Instruments
9.0% Consumer Discretionary
<TABLE>
<CAPTION>
Value
Shares (000's)
- --------------------------------------------------------------------------------
Common Stocks - 91.1%
- --------------------------------------------------------------------------------
<S> <C> <C>
Capital Goods - 14.3%
AGCO Corp. 28,100 $ 1,257
Blount, Inc. "A" 21,500 932
Helix Technology 21,700 814
IDEX Corp. 28,150 1,063
Methode Electronics "A" 47,200 1,085
Roper Industries, Inc. 29,400 1,066
Smith (A.O.) Corp. 27,800 577
Standex International Corp. 34,100 1,117
United Waste Systems, Inc. (b) 33,500 1,323
Watkins-Johnson Co. 29,500 1,420
----------
10,654
Consumer Discretionary - 9.0%
Anthony Industries, Inc. 45,800 853
First Alert, Inc. (b) 55,500 860
Lo-Jack Corp. (b) 61,900 960
Rex Stores Co. (b) 54,700 930
St. John Knits, Inc. 26,600 1,274
Toro Co. 30,100 869
United Television, Inc. (b) 11,500 980
----------
6,726
Consumer Services - 1.1%
Gilat Satellite Networks Limited (b) 36,100 803
----------
Financial & Business Services - 26.7%
Allied Group, Inc. 28,400 923
American Travellers Co. (b) 49,200 1,101
Associated Banc-Corp. 24,350 919
Capital Re Corp. 39,000 1,102
Centura Banks, Inc. 23,800 803
City National Corp. 39,200 519
Colonial Bancgroup, Inc. 11,200 323
Devon Group, Inc. (b) 17,800 694
Executive Risk, Inc. 38,800 853
First Midwest Bancorp, Inc. 10,700 300
Green Tree Financial Corp. 53,900 1,435
Harleysville Group, Inc. 15,400 424
HCC Insurance Holdings, Inc. (b) 29,700 1,032
MMI Companies, Inc. 33,900 759
National Re Corp. 25,000 841
Penncorp Financial Group, Inc. 42,000 1,003
Protective Life Corp. 41,900 1,194
PXRE Corp. 32,200 821
Reinsurance Group of America 22,200 763
Selective Insurance Group 23,100 860
The Money Store 19,800 792
Trenwick Group, Inc. 13,900 695
UST Corp. 57,900 789
Vesta Insurance Group, Inc. 23,100 933
----------
19,878
Health Care - 9.0%
Conmed Corp. (b) 13,300 466
Inphynet Medical Management (b) 43,300 779
Orthodontic Centers of America, Inc. (b) 26,600 851
Physician Reliance Network (b) 23,600 785
Rotech Medical Corp. (b) 33,900 771
Universal Health Services, Inc. (b) 27,800 1,043
Vital Signs, Inc. 39,900 728
Watson Pharmaceutical, Inc. (b) 28,800 1,285
----------
6,708
Materials & Processing - 5.4%
Amcol International Corp. 49,600 837
Intertape Polymer Group, Inc. 27,300 792
Medusa Corp. 29,700 742
Mueller Industries, Inc. (b) 33,600 790
Titan Wheel International, Inc. 59,375 861
----------
4,022
Technology - 25.6%
Altron, Inc. (b) 29,400 845
Atmel Corp. (b) 35,100 1,097
Brightpoint, Inc. (b) 43,300 823
Cypress Semiconductor Corp. (b) 20,300 717
Esterline Technologies (b) 19,500 451
Frame Technology Corp. (b) 32,200 906
FSI International, Inc. (b) 31,000 736
Global Village Communication (b) 18,500 319
Hutchinson Technology (b) 14,200 898
KLA Instruments Corp. (b) 32,800 1,402
Kulicke & Soffa Industries (b) 32,300 1,131
Lattice Semiconductor Corp. (b) 26,600 1,044
LSI Logic Corp. (b) 24,000 1,131
LTX Corp. (b) 21,800 269
Network Equipment Tech, Inc. (b) 38,300 1,250
Rational Software Corp. (b) 46,400 725
Sanmina Corp. (b) 28,200 1,523
Sierra Semiconductor Corp. (b) 45,900 820
Silicon Valley Group, Inc. (b) 31,500 1,020
Tencor Instruments (b) 24,500 1,044
Wyle Labs 22,100 942
----------
19,093
----------
Total Common Stocks 67,884
(Cost $51,566) ==========
<CAPTION>
- --------------------------------------------------------------------------------
Short-Term Instruments - 11.8%
- --------------------------------------------------------------------------------
Principal
Amount
(000's)
<S> <C> <C>
Repurchase Agreement - 11.8%
State Street Bank $ 8,771 8,771
4.500% due 11/01/95
(Dated 10/31/95. Collateralized by
U.S. Treasury Note 11.250%
due 02/15/15 valued at $8,946,546.
Repurchase proceeds are $8,772,096.)
----------
Total Short-Term Instruments 8,771
(Cost $8,771) ==========
Total Investments (a) - 102.9% $ 76,655
(Cost $60,337)
Other Assets and Liabilities (Net) - (2.9)% (2,134)
----------
Net Assets - 100.0% $ 74,521
==========
Notes to Schedule of Investments ($ in thousands):
(a) At October 31, 1995, the net unrealized appreciation
(depreciation) of investments based on cost for
federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for
all investments in which there was an excess
of value over tax cost. $ 17,359
Aggregate gross unrealized depreciation for
all investments in which there was an excess
of tax cost over value. (1,041)
----------
Unrealized appreciation-net $ 16,318
==========
(b) Non-income producing security.
</TABLE>
See Notes to Financial Statements
38
<PAGE>
SCHEDULE OF INVESTMENTS
Columbus Circle Investors Core Equity Fund
October 31, 1995
14.7% Short-Term Instruments
16.7% Health Care
21.7% Technology
4.0% Other
3.6% Energy
12.9% Consumer Discretionary
9.8% Financial & Business Staples
7.9% Consumer Staples
6.6% Utilities
<TABLE>
<CAPTION>
Value
Shares (000's)
- --------------------------------------------------------------------------------
Common Stocks - 83.2%
- --------------------------------------------------------------------------------
<S> <C> <C>
Capital Goods - 1.4%
Deere & Co. 5,200 $ 465
----------
465
Consumer Discretionary - 12.9%
Capital Cities ABC 4,100 486
Disney (Walt) Productions 8,900 513
Federated Department Stores, Inc. (b) 15,500 393
General Motors `H' 6,200 260
Kroger Co. (b) 8,900 297
Liberty Media Group `A' (b) 11,300 278
Mirage Resorts (b) 13,400 439
Office Depot, Inc. 15,400 441
Price Costco 19,200 327
Viacom, Inc. `B' (b) 14,800 740
----------
4,174
Consumer Staples - 7.9%
Black & Decker Corp. 18,100 613
Kimberly Clark Corp. 13,600 988
Pepsico 20,300 961
----------
2,562
Energy - 3.6%
Amoco Corp. 9,600 613
British Petroleum - ADR 3,369 297
Schlumberger Limited 4,200 262
----------
1,172
Financial & Business Services - 9.8%
American Express 14,400 585
American International Group, Inc. 7,450 629
Bank of New York 9,200 386
Chemical Banking Corp. 10,000 569
Cigna Corp. 4,600 456
Green Tree Financial Corp. 20,200 538
----------
3,163
Health Care - 16.7%
Amgen, Inc. (b) 8,800 422
Boston Scientific Corp. (b) 13,600 573
Columbia HCA Healthcare Corp. 18,680 917
Johnson & Johnson 10,400 848
Medtronic, Inc. 16,000 924
Merck & Co, Inc. 15,600 897
Smithkline Beecham - ADR 9,500 493
Upjohn Co. 6,800 345
----------
5,419
Materials & Processing - 2.6%
Champion International Corp. 8,000 428
Georgia-Pacific Corp. 5,000 413
----------
841
Technology - 21.7%
Applied Materials (b) 9,200 461
Atmel Corp. (b) 14,500 453
Broderbund Software, Inc. (b) 5,600 389
Cisco Systems (b) 11,600 899
Computer Associates International, Inc. 12,650 696
Ericsson (LM) - ADR 27,400 585
First Data Corp. 7,200 476
General Motors `E' 12,300 580
Informix Corp. (b) 10,000 291
KLA Instruments Corp. (b) 9,800 419
LSI Logic Corp. (b) 7,400 349
Microsoft Corp. (b) 7,700 770
Nokia Corp. - ADR 4,400 245
Oracle Systems Corp. (b) 10,050 438
----------
7,051
Utilities - 6.6%
A T & T Corp. 7,100 454
Airtouch Communications, Inc. (b) 14,100 402
MCI Communications Corp. 24,430 748
Vodafone Group 13,100 535
----------
2,139
----------
Total Common Stocks 26,986
(Cost $24,547) ==========
<CAPTION>
- --------------------------------------------------------------------------------
Short-Term Instruments - 14.7%
- --------------------------------------------------------------------------------
Principal
Amount
(000's)
<S> <C> <C>
Repurchase Agreement - 14.7%
State Street Bank $ 4,775 $ 4,775
4.500% due 11/01/95
(Dated 10/31/95. Collateralized by
U.S. Treasury Note 6.500% due
04/30/97 valued at $4,870,673.
Repurchase proceeds are $4,775,597.)
----------
Total Short-Term Instruments 4,775
(Cost $4,775) ==========
Total Investments (a) - 97.9% $ 31,761
(Cost $29,322)
Written Option (c) - 0.0% (1)
(Premiums $2)
Other Assets and Liabilities (Net) - 2.1% 676
----------
Net Assets - 100.0% $ 32,436
==========
Notes to Schedule of Investments ($ in thousands):
(a) At October 31, 1995, the net unrealized appreciation
(depreciation) of investments based on cost for
federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for
all investments in which there was an excess
of value over tax cost. $ 2,896
Aggregate gross unrealized depreciation for
all investments in which there was an excess
of tax cost over value. (457)
----------
Unrealized appreciation-net $ 2,439
==========
(b) Non-income producing security.
(c) Premium received on Written Call Option:
<CAPTION>
Premium Market
Type Shares Received Value
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Amgen, Inc.
Strike @ 50.00 Exp. 11/95 800 $ 2 $ 1
</TABLE>
See Notes to Financial Statements
39
<PAGE>
SCHEDULE OF INVESTMENTS
Columbus Circle Investors Mid Cap Equity Fund
October 31, 1995
18.6% Consumer Discretionary
19.4% Technology
22.6% Consumer Services
1.9% Other
10.0% Financial & Business Services
8.6% Short-Term Instruments
8.5% Health Care
8.0% Materials & Processing
1.7% Capital Goods
<TABLE>
<CAPTION>
Value
Shares (000's)
<S> <C> <C>
- --------------------------------------------------------------------------------
Common Stocks - 90.7%
- --------------------------------------------------------------------------------
Capital Goods - 1.7%
Case Corp. 3,800 $ 145
----------
Consumer Discretionary - 18.6%
Baby Superstore 1,700 80
Boston Chicken (b) 11,700 396
CompUSA, Inc. (b) 1,000 38
Diebold, Inc. 5,400 286
Gucci, Inc. 3,500 105
Harley Davidson, Inc. 9,400 251
Liz Claiborne, Inc. 3,300 94
Officemax, Inc. (b) 8,350 207
Premisys Communications 200 18
Warnaco Group, Inc. "A" 3,500 81
----------
1,556
Consumer Services - 22.6%
Clear Channel Communications 1,500 123
DST Systems 1,100 23
Fiserv, Inc. (b) 5,200 134
Gartner Group, Inc. (b) 4,000 175
General Nutrition Cos, Inc. (b) 11,400 284
Gtech Holdings Corp. 3,400 83
HFS, Inc. (b) 6,100 374
Hollywood Entertainment 1,400 37
Paging Network, Inc. 5,400 124
Peoplesoft, Inc. 2,000 172
Petsmart, Inc. (b) 3,900 131
Scholastic Corp. 1,600 99
Starbucks Corp. 3,200 125
----------
1,884
Energy - 1.0%
Ucar International, Inc. 2,900 83
----------
Financial & Business Services - 10.0%
American Re Corp. 2,900 111
Countrywide Credit Industries, Inc. 8,300 184
Mid Ocean Limited 2,700 96
PMI Group, Inc. 3,300 158
Prudential Reinsurance Holdings 10,900 222
Symantec Corp. (b) 2,700 65
----------
836
Health Care - 8.5%
Guidant Corp. 11,400 365
Healthsouth Corp. (b) 4,000 104
Lincare Holdings, Inc. (b) 4,900 122
Mylan Laboratories 6,150 117
----------
708
Materials & Processing - 8.0%
Bowater, Inc. 3,600 159
James River Corp. 7,100 228
Millipore Corp. 1,800 64
Potash Corp. of Saskatchewan 2,200 153
Praxair, Inc. 2,400 65
----------
669
Technology - 19.4%
AVX Corp. 5,000 156
Broderbund Software, Inc. (b) 1,400 97
Dell Computer Corp., Inc. (b) 4,600 214
KLA Instruments Corp. (b) 4,400 188
Madge Networks NV (b) 900 38
Memc Electronics 2,700 87
Millicom International Cellular (b) 2,800 93
Qualcomm, Inc. (b) 5,100 196
Tellabs, Inc. 4,500 153
Teradyne, Inc. (b) 6,300 210
Vishay Intertechnology, Inc. 5,370 188
----------
1,620
Utilities - 0.9%
MFS Communications Co., Inc. (b) 1,900 77
----------
Total Common Stocks 7,578
==========
(Cost $6,525)
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Short-Term Instruments - 8.6%
- --------------------------------------------------------------------------------
Principal
Amount
(000's)
<S> <C> <C>
Repurchase Agreement - 8.6%
State Street Bank $ 720 720
4.500% due 11/01/95
(Dated 10/31/95. Collateralized by
U.S. Treasury Bond 11.250% due 02/15/15
valued at $738,441. Repurchase
proceeds are $720,090.)
----------
Total Short-Term Instruments 720
==========
(Cost $720)
Total Investments (a) - 99.3% $ 8,298
(Cost $7,245)
Other Assets and Liabilities (Net) - 0.7% 59
----------
Net Assets - 100.0% $ 8,357
==========
Notes to Schedule of Investments ($ in thousands):
(a) At October 31, 1995, the net unrealized appreciation
(depreciation) of investments based on cost for
federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for
all investments in which there was an excess
of value over tax cost. $ 1,220
Aggregate gross unrealized depreciation for
all investments in which there was an excess
of tax cost over value. (167)
----------
Unrealized appreciation-net $ 1,053
==========
(b) Non-income producing security.
</TABLE>
See Notes to Financial Statements
40
<PAGE>
SCHEDULE OF INVESTMENTS
Parametric Enhanced Equity Fund
October 31, 1995
15.1% Utilities
15.9% Consumer Discretionary
16.3% Financial & Business Services
3.4% Capital Goods
0.7% Other
14.6% Technology
12.0% Consumer Staples
11.5% Health Care
6.9% Energy
3.5% Materials & Processing
<TABLE>
<CAPTION>
Value
Shares (000's)
- --------------------------------------------------------------------------------
Common Stocks - 99.8%
- --------------------------------------------------------------------------------
<S> <C> <C>
Capital Goods - 3.4%
Allied Signal, Inc. 10,492 $ 446
Caterpillar, Inc. 1,800 101
Cummins Engine, Inc. 3,700 130
Emerson Electric Co. 2,600 185
General Electric 3,600 228
Grainger (W.W.), Inc. 6,000 375
Illinois Tool Works 4,600 267
Ingersoll Rand Co. 6,400 227
Northrop Grumman Corp. 6,400 366
Paccar, Inc. 30 1
Potlatch Corp. 4,700 198
----------
2,524
Consumer Discretionary - 15.9%
Albertson's, Inc. 17,837 593
Briggs & Stratton Co. 6,400 258
Cooper Tire & Rubber Corp. 13,600 314
Crown Cork & Seal (b) 9,600 335
Dana Corp. 12,100 310
Dial Corp. 11,800 287
Dillard Department Stores 5,200 141
Echlin, Inc. 13,000 465
Fleming Cos., Inc. 3,293 75
Fluor Corp. 5,677 321
FMC Corp. 3,400 243
Genuine Parts Co. 3,900 155
Giant Foods, Inc. 4,300 138
Gillette Co. 3,700 179
Harland John H Co. 63 1
Home Depot, Inc. 14,900 555
International Flavors & Fragrances 4,600 222
Kroger Co. (b) 13,700 457
Limited, Inc. 14,300 263
Liz Claiborne, Inc. 8,600 244
Lowes Co. 4,000 108
McDonalds Corp. 6,800 279
Minnesota Mining & Manufacturing Co. 6,000 341
Nike, Inc. 12,800 726
Premark International, Inc. 1,800 83
Procter & Gamble Co. 10,248 830
Ralston-Purina Group 1 0
Reebok International Limited 8,300 282
Seagrams Limited 7,700 277
SPX Corp. 3,800 59
Stride Rite Corp. 7,900 89
Toys R Us (b) 8,300 182
Unilever N V 2,500 328
UST, Inc. 14,500 435
VF Corp. 3,200 153
Wal-Mart Stores, Inc. 25,600 554
Walgreen Co. 7,323 209
Walt Disney Productions 14,100 813
Wendys International, Inc. 5,800 115
Winn Dixie Stores 5,700 371
----------
11,790
Consumer Staples - 12.0%
American Brands, Inc. 5,400 231
Amern Stores Co. 5,600 167
Anheuser Busch 9,000 594
Archer-Daniel Midland 6,634 107
Campbell Soup Co. 10,000 524
CBS, Inc. 4,400 355
Coca-Cola Co. 16,000 1,150
Colgate Palmolive 700 48
Conagra 13,675 528
CPC International, Inc. 5,300 352
CUC International, Inc. (b) 2,150 75
General Mills, Inc. 2,300 132
H.J. Heinz Co. 1,900 89
Harrah's Entertainment, Inc. (b) 11,100 276
Kellog Co. 4,254 307
Kimberly Clark Corp. 7,500 544
King World Productions 8,500 296
Mattel, Inc. 21,600 621
Pepsico 17,400 918
Philip Morris Co, Inc. 10,700 904
Quaker Oats Co. 3,665 125
Sara Lee Corp. 9,500 279
Sysco Corp. 5,400 164
Wrigley William Jr Co. 2,600 121
----------
8,907
Energy - 6.9%
Amoco Corp. 8,400 537
Atlantic Richfield 2,200 235
Chevron Corp. 9,900 463
Exxon Corp. 14,300 1,092
Mobil Corp. 6,661 671
Phillips Petroleum Co. 12,400 400
Royal Dutch Petrol Guilder 7,300 897
Schlumberger Limited 3,100 193
Texaco, Inc. 7,668 522
Unocal Corp. 3,429 90
----------
5,100
Financial & Business Services - 16.3%
American International Group, Inc. 7,137 602
Banc One Corp. 14,080 475
Bank of Boston Corp. 3,500 155
Bankamerica Corp. 12,700 730
Bankers Trust NY Corp. 3,384 216
Barnett Banks of Florida 5,600 309
Chase Manhattan Corp. 1,800 103
Chemical Banking Corp. 12,111 689
Chubb Corp. 4,500 404
Cigna Corp. 1,300 129
Citicorp 13,983 907
Federal National Mortgage Association 9,600 1,007
First Fidelity 6,300 412
First Union Corp. 8,100 402
Fleet Financial Group, Inc. 11,900 461
General Re Corp. 2,400 348
Golden West Financial Corp. 9,200 461
H & R Block 7,100 293
Jefferson Pilot Corp. 5,100 337
Merrill Lynch Co. 1,700 94
Morgan J.P. and Co., Inc. 4,158 321
Nations Bank Corp. 7,966 524
NBD Bancorp 7,650 291
Norwest Corp. 19,270 568
Safeco Corp. 4,100 263
St Paul Cos., Inc. 6,200 315
Suntrust Banks, Inc. 8,600 555
Wachovia Corp. 4,400 194
Wells Fargo & Co. 2,261 475
----------
12,040
Health Care - 11.5%
Abbott Laboratories 17,700 703
American Home Products 4,100 363
Amgen, Inc. (b) 4,300 206
Becton Dickinson 4,100 267
Beverly Enterprises 8,400 99
</TABLE>
41
<PAGE>
SCHEDULE OF INVESTMENTS (Cont.)
Parametric Enhanced Equity Fund
October 31, 1995
<TABLE>
<CAPTION>
Value
Shares (000's)
- --------------------------------------------------------------------------------
<S> <C> <C>
Bristol Myers Squibb 5,200 $ 396
Johnson & Johnson 11,800 962
Lilly Eli & Co. 2,400 232
Manor Care, Inc. 3,900 128
Medtronic, Inc. 18,000 1,040
Merck & Co, Inc. 15,100 868
Pfizer, Inc. 13,400 769
Schering-Plough 13,000 697
Shared Medical Systems Corp. 2,800 108
St Jude Medical Enterprise, Inc. 8,700 463
United Healthcare Corp. 8,500 452
U.S. Health Care Systems, Inc. 7,400 285
Warner Lambert Co. 5,700 485
----------
8,523
Materials & Processing - 3.5%
Barrick Gold Corp. 3,500 81
duPont (E.I.) deNemours 6,400 399
Engelhard Corp. 3,450 86
First Mississippi 1,700 35
First Mississippi Gold, Inc. (b) 1,204 22
Great Lakes Chemical 4,300 289
Hercules, Inc. 2,300 123
International Paper 7,946 294
Louisiana Pacific Corp. 9,400 224
Morton International 8,400 256
NUCOR Corp. 6,300 303
Pall Corp. 6,255 152
Union Carbide Corp. 5,200 197
Worthington Industries, Inc. 9,400 156
----------
2,617
Technology - 14.6%
Advanced Micro Devices 19,200 459
Andrew Corp. (b) 9,650 408
Applied Materials (b) 4,600 231
Autodesk, Inc. 5,400 184
Automatic Data Processing 6,700 479
Cabletron Systems, Inc. (b) 2,200 173
Compaq Computer Corp. (b) 13,600 758
Computer Associates International, Inc. 3,350 184
DSC Communications (b) 10,900 403
General Dynamics Corp. 6,600 365
Honeywell, Inc. 2,400 101
Intel Corp. 17,000 1,188
IBM Corp. 3,600 350
Loral Corp. 20,200 598
McDonnell Douglas 10,300 842
Micron Technlogy, Inc. 4,500 318
Microsoft Corp. (b) 10,600 1,060
Motorola 7,580 497
National Semiconductor (b) 3,300 80
Northern Telecom Limited 2,300 83
Novell, Inc. (b) 16,700 276
Oracle Systems Corp. (b) 17,350 757
Raytheon Co. 11,600 506
Service Corp. International 3,700 148
Tektronix 2,700 160
Texas Instruments, Inc. 1,500 102
WMX Technologies 4,323 122
----------
10,832
Transportation - 0.6%
Consolidated Freightways, Inc. 4,200 98
Norfolk Southern 2,500 193
Southwest Airlines 6,800 136
----------
427
Utilities - 15.1%
American Electric Power, Inc. 6,161 235
Ameritech 9,233 499
Baltimore Gas & Electric 8,184 219
Bell Atlantic Corp. 4,341 276
Bell South 5,235 401
Carolina Power and Lighting 9,664 316
Central & South West 10,500 281
Coastal Corp. 12,900 418
Consolidated Edison Co. 8,200 249
Consolidated Natural Gas 5,071 193
Detroit Edison Co. 11,700 395
Dominion Resources, Inc. 6,050 240
Duke Power Co. 8,151 365
Enron Corp. 15,300 526
Entergy Corp. 6,900 197
FPL Group, Inc. 5,732 240
GTE Corp. 13,477 556
Houston Industry, Inc. 5,847 271
MCI Communications Corp. 14,000 349
Nicor, Inc. 8,281 223
Northern States Power Co. 3,200 151
Nynex Corp. 3,506 165
Ohio Edison Co. 9,631 220
ONEOK, Inc. 7,300 178
Pacific Gas & Electric 8,400 247
Pacific Telesis 9,262 281
Pacificorp (Oregon) 46 1
Peco Energy Co. 14,291 418
Peoples Energy Corp. 7,100 204
Public Service Enterprise 6,735 198
SBC Communications 15,309 855
Sonat, Inc. 6,600 190
Southern Co. 16,360 391
Sprint Corp. 10,682 411
U S West Communications Group 7,332 349
Unicom Corp. 3,000 98
Union Electric Co. 5,800 226
Williams Cos. 2,600 100
----------
11,132
----------
Total Common Stocks $ 73,892
==========
(Cost $59,318)
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Short-Term Instruments - 0.1%
- --------------------------------------------------------------------------------
Principal
Amount
(000's)
<S> <C> <C>
Repurchase Agreement - 0.1%
State Street Bank $ 63 63
5.875% due 11/01/95
(Dated 10/31/95. Collateralized by
U.S. Treasury Bill 0.000% due 05/31/96
valued at $63,728. Repurchase
proceeds are $63,008.)
----------
Total Short-Term Instruments 63
==========
(Cost $63)
Total Investments (a) - 99.9% $ 73,955
(Cost $59,381)
Other Assets and Liabilities (Net) - 0.1% 44
----------
Net Assets - 100.0% $ 73,999
==========
</TABLE>
42
<PAGE>
<TABLE>
<S> <C>
Notes to Schedule of Investments ($ in thousands):
(a) At October 31, 1995, the net unrealized appreciation
(depreciation) of investments based on cost for
federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for
all investments in which there was an excess
of value over tax cost. $ 15,937
Aggregate gross unrealized depreciation for
all investments in which there was an excess
of tax cost over value. (1,363)
----------
Unrealized appreciation-net $ 14,574
==========
(b) Non-income producing security.
</TABLE>
See Notes to Financial Statements
43
<PAGE>
SCHEDULE OF INVESTMENTS
Blairlogie Emerging Markets Fund
October 31, 1995
16.5% Malaysia
19.4% Other
4.1% Indonesia
4.2% South Korea
4.6% Thailand
13.3% Brazil [PIE CHART APPEARS HERE]
9.2% South Africa
7.4% India
7.1% Chile
5.1% Israel
5.0% Mexico
<TABLE>
<CAPTION>
Value
Shares (000's)
- --------------------------------------------------------------------------------
Common Stocks - 95.9%
- --------------------------------------------------------------------------------
<S> <C> <C>
Argentina - 2.9%
Astra Cia Argentina 83,000 $ 123
Baesa Embotellador - ADS 4,800 110
Banco Frances Del Rio 15,100 110
Banco Galicia 32,300 152
Central Puerto SA 46,100 140
Compania Naviera Perez Co - ADR 25,023 219
Inversiones y Representaciones - GDR (b) 5,000 105
Molinos Rio De La Plata 18,550 116
Telefonica De Argentina - ADR 24,700 513
YPF Sociedad Anonima - ADR 32,100 550
----------
2,138
Brazil (d) - 13.3%
Aracruz Celulose SA PNB 229,622 432
Banco Bradesco 138,860 1,271
Brasmotor SA 2,177 509
Centrais Eletrobras 5,126 1,461
Cia Energetica Minas Ger 23,030 493
Cia Paulista De Forca E 12,592 621
Cia Vale Do Rio Doce 9,967 1,607
Lojas Americanas SA 20,934 501
Paranapanema SA Mineraca 36,456 419
Petrol Brasileiros 5,602 484
Telecomunicacoes Brasileiras - ADR 39,900 1,608
Usinas Siderurgicas Mina 527,194 493
----------
9,899
Chile - 7.1%
Compania De Telefonos Chile - ADR 16,884 1,216
Empresa Nacional De Electric - ADR 37,700 810
Enersis - ADR 21,400 538
Madeco SA - ADR 57,000 1,418
Sociedad Quimica y Minera Chile 29,750 1,290
----------
5,272
Colombia - 2.6%
Carulla - ADR 34,560 272
Cementos Diamante SA - ADR (c) 40,300 705
Banco Industries Colombiano - ADR 71,700 977
----------
1,954
India - 7.4%
Bajai Auto - GDR 15,570 419
East India Hotels - GDR (b) 24,260 437
Grasim Industries 23,000 512
Gujarat Narmada VA - GDR (b) 2,360 18
Gujarat Narmada VA - GDR (b) 42,500 324
Hindalco Industries 19,620 625
Indian Rayon & Inds - GDR (c) 39,050 478
Jardine Fleming India Fund 66,890 594
Larsen & Tourbro Limited - (c) 36,780 666
Oryx (India) Fund Limited (b) 5,030 277
Oryx (India) Shares Fund (b) 10,800 116
Reliance Industries - GDS (c) 38,320 604
South Indian Viscose Warrants (b) 11,260 1
Tata Engineering & Loco Co. - GDR 20,140 422
----------
5,493
Indonesia - 4.1%
Astra International 395,900 793
Bank International Indonesia 190,500 667
Indah Kiat Paper Pulp 244,736 240
Indo Foods Sukses Makmur 87,000 402
P.T. Semen Gresik 220,500 573
United Tractors 186,500 369
----------
3,044
<CAPTION>
Value
Shares (000's)
- --------------------------------------------------------------------------------
<S> <C> <C>
Israel - 5.1%
Africa Israel Investments (b) 420 $ 509
Bank Hapoalim Bm 252,300 390
Bezek 143,450 386
Blue Square Chain Stores (b) 70,000 448
Koor Industries 6,390 551
Orbotech (b) 29,800 386
Osem Investment 91,136 576
Teva Pharmaceutical - ADR 14,700 577
----------
3,823
Malaysia - 16.5%
Arab Malaysian Finance Rights 208,000 139
DCB Holdings Berhad 549,000 1,556
Genting Berhad 75,500 651
Land & General Holdings 375,000 871
Leader Universal Holdings 194,333 524
Malaysian Banking Berhad 167,000 1,348
RJ Reynolds Berhad 386,000 790
Road Builder (M) Holdings Berhad 219,400 678
Sungei Way Holdings Berhad 161,000 542
Technology Resources Industries (b) 429,000 1,089
Telekom Malaysia 271,000 1,942
UMW Holdings Berhad 404,866 964
United Engineers 191,000 1,188
----------
12,282
Mexico - 5.0%
Cemex SA - ADS (b)(c) 50,000 152
Cifra SA "B" 288,980 312
Grupo Financiero Banamex 314,000 458
Grupo Mexico SA (b) 36,260 152
Grupo Televisa - GDS 10,810 185
Kimberly Clark "A" 34,700 457
Telefonos De Mexico - ADR 52,750 1,451
Tubos De Acero De Mexico (b) 77,500 534
----------
3,701
Pakistan (d) - 0.5%
Dewan Salman Fibre (b) 3,700 8
Dewan Salman Rights (b) 10,263 0
Dg Kahn Cement (b) 194,100 213
Fauji Fertilizer Co 37,400 60
Pakistan State Oil 6,700 71
----------
352
Peru (d) - 2.3%
Credicorp 22,162 351
Compaina Peruana De Telefonos "B" 471,138 870
Minsur Sa 68,000 465
----------
1,686
Poland - 1.8%
Argos Holdings (b) 23,000 239
Bank Rozwoju Eksportu (b) 20,000 311
Debica (b) 23,000 318
Elektrim 85,331 285
Polifarb (b) 56,000 207
----------
1,360
Portugal - 0.8%
Cimpor Cimentos 6,010 98
Investec (b) 4,900 91
Jeronimo Martins 1,990 106
Portugal Telecom 7,500 142
Sonae Investmentos 5,750 132
----------
569
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
Value
Shares (000's)
- --------------------------------------------------------------------------------
<S> <C> <C>
South Africa - 9.2%
Barlow Limited 67,480 $ 869
De Beers Centenary 31,630 874
Gencor 216,810 761
Liberty Life Association of Africa 15,500 403
Murray Roberts Holdings 120,330 841
Nedcor 57,600 821
Nedcor Warrants (b) 14,400 48
Rembrandt Group 86,440 788
Smith C.G. Limited 97,830 637
South African Breweries 25,000 821
----------
6,863
South Korea - 4.2%
Cho Hung Bank 33,306 440
Korea Electric Power 22,600 931
Korea Kumho Petrochemica 37,600 484
Pohang Iron & Steel - ADR 4,900 126
Pohang Iron & Steel Co (b) 580 51
Samsung Co - GDS (c) 15,850 182
Samsung Co (c) 1,172 13
Samsung Heavy Industries (b) 29,500 898
Ssangyong Oil Refining 185,000 195
----------
3,125
Sri Lanka - 1.4%
Aitken Spence & Co. 75,900 296
Development Finance Corp. of Ceylon 38,933 230
Hatton National Bank (b) 21,700 212
Keells (John) Holdings 56,700 189
Lanka Walltiles 106,800 113
----------
1,040
Thailand - 4.6%
Advanced Information Service 67,500 1,073
Bangkok Bank Public Co 113,900 1,177
Krung Thai Bank Public Co Limited 117,200 467
Thai Farmers Bank Public 85,700 708
----------
3,425
Turkey - 4.1%
Adana Cimento 766,000 164
Adana Cimento Bonus Issue (b) 306,400 66
Adana Cimento Rights Issue (b) 766,000 149
Akaltekstil 2,070,000 266
Akbank 992,000 261
Arcelik 2,073,000 343
Bagfas Bandirma Gubre 836,000 407
Brisa Bridgestone Sabanc 959,000 290
Erciyas Biracilik 465,000 295
Migros Turk Tas 426,000 490
Netas Telekomunik 1,015,000 351
----------
3,082
Venezuela - 2.7%
Corimon C.A.C.A. - ADR 85,030 362
Mavesa SA - ADR 140,700 692
Sider Venez - ADS 340,000 977
----------
2,031
----------
Total Common Stocks 71,139
==========
(Cost $72,087)
<CAPTION>
Principal
Amount Value
(000's) (000's)
- --------------------------------------------------------------------------------
Corporate Bonds and Notes - 0.3%
- --------------------------------------------------------------------------------
<S> <C> <C>
South Korea - 0.3%
Ssangyong Oil Refining
3.750% due 12/31/08 $ 185 $ 195
----------
Total Corporate Bonds and Notes 195
(Cost $217) ----------
Total Investments (a) - 95.9% $ 71,334
(Cost $72,304)
Foreign Currencies - 0.3%
Thai Bat 250
----------
Total Foreign Currency Investments 250
(Cost $250)
Other Assets and Liabilities (Net) - 3.8% 2,785
----------
Net Assets - 100.0% $ 74,369
==========
Notes to Schedule of Investments ($ in thousands):
(a) At October 31, 1995, the net unrealized appreciation
(depreciation) of investments based on cost for
federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for
all investments in which there was an excess
of value over tax cost. $ 6,258
Aggregate gross unrealized depreciation for
all investments in which there was an excess
of tax cost over value. (7,228)
----------
Unrealized depreciation-net $ (970)
==========
</TABLE>
(b) Non-income producing security.
(c) Restriced security. Purchased in a private placement
transaction; resale to public may require registration.
(d) Foreign forward currency contracts outstanding at
October 31, 1995:
<TABLE>
<CAPTION>
Principal
Amount Unrealized
Covered Expiration Appreciation
Type By Contract Month (Depreciation)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sell BRR 27 11/95 0
Sell BRR 16 11/95 0
Sell PEI 204 11/95 0
Sell PKR 3 11/95 0
Sell PKR 5 11/95 0
Sell PKR 3 11/95 0
-----------
</TABLE>
0
===========
(e) Principal amount denoted in indicated currency:
BRR - Brazilian Real Cruzeiro
PEI - Peruvian Inti
PKR - Pakistani Rupee
See Notes to Financial Statements
45
<PAGE>
SCHEDULE OF INVESTMENTS
Blairlogie International Active Fund
October 31, 1995
34.9% Japan
3.8% Netherlands
3.0% Malaysia
5.1% Germany
10.1% Other
2.3% Switzerland [PIE CHART APPEARS HERE]
13.3% United Kingdom
8.1% France
2.4% Singapore
5.4% Hong Kong
2.8% Spain
<TABLE>
<CAPTION>
Value
Shares (000's)
- --------------------------------------------------------------------------------
Common Stocks - 91.2%
- --------------------------------------------------------------------------------
<S> <C> <C>
Australia - 0.7%
Amcor Limited "A" 12,600 $ 94
Broken Hill Proprietary 6,722 91
Comalco Limited 19,200 97
Western Mining Corp. 14,600 94
Westpac Banking Corp. 25,800 106
----------
482
Austria - 0.9%
Creditanstalt Bankverein 2,300 115
Flughafen Wien Ag 2,900 186
Mayr Melnhof Karton Ag 2,300 134
Oesterreichische 2,000 122
----------
557
Belgium - 1.4%
Electrabel Npv 1,250 280
Fortis Ag 1,400 152
Generale De Banque Npv 604 195
Gib Holding Limited 3,637 142
Glaverbel 1,090 124
----------
893
Finland - 1.4%
Enso-Gutzeit Oy 17,800 140
Finnair Oy 25,700 186
Nokia Corp. 1,400 82
Rauma 3,800 83
Valmet 6,200 172
Werner Soderstrom Osakey "B" 2,700 242
----------
905
France (d) - 8.1%
Alcatel Alsthom 4,800 411
Axa 7,785 433
Carrefour 745 438
Club Mediterrane (b) 3,890 305
Club Mediterrane Rights (b) 3,890 0
Credit Local De France 6,145 487
Danone 2,070 331
Eaux (Cie Generale) 3,492 325
Lafarge Coppee Sa 5,504 365
Peugeot 2,650 346
Roussel-Uclaf 2,670 438
Saloman Sa 730 422
Schneider Sa 11,490 444
Total Co. 7,070 437
----------
5,182
Germany (d) - 5.1%
Allianz Ag Holdings 146 268
Bayer Ag 937 247
Bayerische Motoren Werke 239 128
Commerzbank Ag 1,760 407
Karstadt Ag 674 292
Mannesmann Ag 1,313 431
Merck Kgaa 5,000 209
Muenchener Rueckvers Ag 70 145
Muenchener Rueckvers Warrants (b) 3 0
Siemens Ag 820 428
Veba Ag 9,930 407
Volkswagen Ag 940 296
----------
3,258
<CAPTION>
Value
Shares (000's)
- --------------------------------------------------------------------------------
<S> <C> <C>
Hong Kong - 5.4%
Cheung Kong Holdings 67,000 $ 378
Hang Seng Bank 61,600 516
Hong Kong Telecommunications 95,600 167
Hutchison Whampoa 105,000 579
Sun Hung Kai Properties 97,816 781
Swire Pacific "A" 67,900 509
Wharf Holdings 116,000 392
Wing Hang Bank Limited 52,500 169
----------
3,491
Ireland - 1.5%
Allied Irish Banks 32,000 162
Bank of Ireland 33,000 220
CRH 37,000 244
Kerry Group "A" 21,800 168
Smurfit (Jefferson) 66,600 178
----------
972
Italy (d) - 2.1%
Benetton 13,000 135
Credito Italiano 226,000 257
Fiat Spa 32,000 104
Rinascente (La) 23,000 136
Sasib RNC (b) 47,000 117
SME 66,000 145
Telecom Italia Spa 203,000 309
Unichem Spa (b) 20,000 126
----------
1,329
Japan (d) - 34.9%
Daiwa Securities Co Limited 135,000 1,586
Fujisawa Pharmaceutical 123,000 1,199
Hitachi Limited 119,000 1,223
Matsushita Electric Work 117,000 1,157
Mazda Motor Corp. (b) 207,000 651
Mitsubishi Chemical Corp. 303,000 1,377
Mitsui Engineering 624,000 1,369
Mitsui Fudosan (b) 115,000 1,317
Nippon Telegraph & Telegraph (b) 168 1,383
NKK Corp (b) 635,000 1,536
Obayashi Corp. 169,000 1,259
Sony Corp. 18,000 811
Sumitomo Bank 75,000 1,329
Sumitomo Metal Mining 190,000 1,501
Sumitomo Trust & Banking 107,000 1,236
Takashimaya Corp. 104,000 1,446
Tokyo Steel Manufacturing 60,000 1,116
Tokyu Corp. 151,000 962
----------
22,458
Malaysia - 3.0%
DCB Holdings Berhad 76,000 218
Land & General Holdings 51,702 120
Malayan Banking Berhad 29,000 234
Resorts World Berhad 35,971 178
RJ Reynolds Berhad 109,000 223
Road Builder (M) Holdings Berhad 80,412 249
Sungei Way Holding Berhad 68,000 229
Technology Resources Industries (b) 101,000 257
Telekom Malaysia 551 4
United Engineers Berhad 35,000 220
----------
1,932
</TABLE>
46
<PAGE>
<TABLE>
<CAPTION>
Value
Shares (000's)
- --------------------------------------------------------------------------------
<S> <C> <C>
Netherlands - 3.8%
ABN-Amro Holdings Nv 5,690 $ 239
Ahold Koninklijke 8,841 335
Akzo Noble Nv 2,238 255
Amev Nv Cva 5,222 328
Elsevier Nv 24,561 317
Kon Ptt Nederland 8,320 292
Philips Electronics 5,909 228
Polygram Nv 4,283 267
Ver Ned Uitgevers 1,500 210
----------
2,471
Norway - 2.1%
Den Norske Bank 132,700 364
Elkem As 10,200 110
Hafslund Nycomed As 5,440 152
Kvaerner As "A" 3,895 164
Orkla As 6,200 302
Saga Petroleum 17,950 225
----------
1,317
Singapore - 2.4%
Cerebos Pacific 16,300 101
City Developments 50,828 315
Courts (Singapore) 140,000 220
DBS Land 70,000 207
Overseas Union Bank 50,000 311
Singapore Airlines 13,550 126
United Overseas Bank 26,791 235
----------
1,515
Spain - 2.8%
Argentaria Corp. 5,480 194
Aumar Autop Del Mare Nos 20,100 231
Banco Popular Espanol 2,316 368
Endesa 6,854 341
Iberdrola Sa 27,000 204
Repsol Sa 5,756 172
Telefonica De Esp 23,120 291
----------
1,801
Switzerland (d) - 2.3%
Allusuisse Lonza Holdings 190 145
BBC Brown Boveri Ag 175 203
Ciba Geigy Ag 215 186
Nestle SA Registared 110 115
Roche Holding Ag-Genusss 40 290
Schw Bankgesellsch 275 298
Sig Schweiz, Industrie 55 119
Winterthur Schweiz 175 115
----------
1,471
United Kingdom - 13.3%
Abbey National Plc 62,400 529
Baa 82,140 640
Boots Co. 46,200 409
British Petroleum 76,150 561
British Telecomm 73,770 440
BTR 98,832 526
Guinness 58,700 471
HSBC Holdings Plc 33,300 496
Lloyds Bank 38,500 475
Pilkington 171,000 512
RTZ Corp. 32,630 452
Seeboard 67,000 550
Smithkline Beecham 68,120 712
<CAPTION>
Value
Shares (000's)
- --------------------------------------------------------------------------------
<S> <C> <C>
Tesco 123,000 $ 584
Wolseley Plc 85,000 527
Zeneca Group 37,060 691
----------
8,575
Total Investments (a) - 91.2% $ 58,609
(Cost $57,455)
Foreign Currencies - 7.9%
Australian Dollar (c) 491
British Pound (c) 1,879
Finnish Markka 167
French Franc 63
German Mark (c) 597
Hong Kong Dollar (c) 247
Japanese Yen (c) 1,650
----------
Total Foreign Currency Investments 5,094
(Cost $5,116)
Other Assets and Liabilities (Net) - 0.9% 579
----------
Net Assets - 100.0% $ 64,282
==========
Notes to Schedule of Investments ($ in thousands):
(a) At October 31, 1995, the net unrealized appreciation
(depreciation) of investments based on cost for
federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for
all investments in which there was an excess
of value over tax cost. $ 4,060
Aggregate gross unrealized depreciation for
all investments in which there was an excess
of tax cost over value. (2,928)
----------
Unrealized appreciation-net $ 1,132
==========
</TABLE>
(b) Non-income producing security.
(c) Currencies with an aggregate market value of
$239 have been segregated with the custodian
to cover margin requirements for the following
open stock index futures contracts at October 31, 1995:
<TABLE>
<CAPTION>
Unrealized
Appreciation/
Type Contracts (Depreciation)
- --------------------------------------------------------------------------------
<S> <C> <C>
Australian Index (12/95) 12 $ (16)
DTB DAX (12/95) 5 (21)
Hang Seng Index (11/95) 3 (2)
LIFFE FT-SE 100 (12/95) 7 (15)
Osaka 300 (12/95) 28 2
--------------
$ (52)
==============
</TABLE>
47
<PAGE>
SCHEDULE OF INVESTMENTS (Cont.)
Blairlogie International Active Fund
October 31, 1995
<TABLE>
<CAPTION>
(d) Foreign forward currency contracts outstanding at October 31, 1995:
Principal
Amount Unrealized
Covered Expiration Appreciation
Type By Contract Month (Depreciation)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Buy CHF 2,349 11/95 $ 29
Sell CHF 1,156 11/95 2
Sell DEM 1,500 11/95 (17)
Sell FRF 10,000 11/95 (30)
Buy FRF 5,000 11/95 3
Buy ITL 1,632,600 11/95 (1)
Buy JPY 100,130 11/95 (16)
----------------
$ (30)
================
(e) Principal amount denoted in indicated currency:
CHF - Swiss Franc
DEM - German Mark
FRF - French Franc
ITL - Italian Lira
JPY - Japanese Yen
</TABLE>
See Notes to Financial Statements
48
<PAGE>
SCHEDULE OF INVESTMENTS
Balanced Fund
October 31, 1995
Corporate Bonds and Notes 8.3%
[PIE CHART APPEARS HERE] Mortgage-Backed Securities 36.2%
Common Stocks 52.8%
Short-Term Instruments 10.3%
<TABLE>
<CAPTION>
Value
Shares (000's)
- --------------------------------------------------------------------------------
Common Stocks - 52.8%
- --------------------------------------------------------------------------------
<S> <C> <C>
Capital Goods - 1.8%
Allied Signal, Inc. 5,668 $ 241
Caterpillar, Inc. 1,100 62
Cummins Engine, Inc. 1,800 63
Emerson Electric Co. 1,400 100
General Electric 1,900 120
Grainger (W.W.), Inc. 3,000 187
Illinois Tool Works 2,300 134
Ingersoll Rand Co. 3,300 117
Northrop Grumman Corp. 3,300 189
Potlatch Corp. 2,300 97
----------
1,310
Consumer Discretionary - 6.9%
Albertson's, Inc. 9,154 304
Briggs & Stratton Co. 3,300 133
Crown Cork & Seal (d) 5,200 181
Dana Corp. 6,100 156
Dial Corp. 6,300 154
Dillard Department Stores 2,800 76
Echlin, Inc. 6,600 236
Fluor Corp. 2,877 163
FMC Corp. 1,800 129
Giant Foods, Inc. 2,300 74
Gillette Co. 1,900 92
Harland John H Co. 21 0
Home Depot, Inc. 7,533 281
Internatlonal Flavors & Fragrances 2,300 111
King World Productions (d) 4,300 150
Limited, Inc. 7,400 136
Liz Claiborne, Inc. 4,600 131
Lowes Co. 2,000 54
Minnesota Mining & Manufacturing Co. 3,200 182
Nike, Inc. 6,400 363
Premark International, Inc. 1,100 51
Procter & Gamble Co. 5,500 446
Reebok International Limited 4,300 146
SPX Corp. 2,200 34
Stride Rite Corp. 4,100 46
Toys R Us, Inc. (d) 4,600 101
Unilever N. V. 1,300 170
UST, Inc. 7,400 222
VF Corp. 1,700 81
Wal-Mart Stores, Inc. 13,200 285
Walgreen Co. 3,891 111
Winn Dixie Stores 2,900 189
----------
4,988
Consumer Services - 0.9%
CBS, Inc. 2,300 186
CUC International, Inc. (d) 1,050 36
Harrah's Entertainment, Inc. (d) 5,900 146
Mattel, Inc. 11,062 318
----------
686
Consumer Staples - 7.0%
American Brands, Inc. 2,700 116
Amern Stores Co. 3,000 90
Anheuser Busch 5,100 337
Archer-Daniel Midland 3,454 56
Campbell Soup Co. 5,000 262
Coca-Cola Co. 8,200 589
Colgate Palmolive 400 28
Conagra 7,000 270
Cooper Tire & Rubber Corp. 7,000 162
CPC International, Inc. 2,800 186
Fleming Cos, Inc. 1,823 41
</TABLE>
<TABLE>
<CAPTION>
Value
Shares (000's)
- --------------------------------------------------------------------------------
<S> <C> <C>
General Mills, Inc. 1,300 $ 75
Genuine Parts Co. 2,100 83
H.J. Heinz Co 1,100 51
Kellog Co. 2,339 169
Kimberly Clark Corp. 3,900 283
Kroger Co. (d) 7,100 237
McDonalds Corp. 3,500 144
Pepsico 8,900 469
Philip Morris Co, Inc. 5,400 456
Quaker Oats Co. 1,846 63
Sara Lee Corp. 5,100 150
Seagrams Limited 4,200 151
Sysco Corp. 2,000 61
Walt Disney Productions 7,200 415
Wendys International, Inc. 3,100 61
Wrigley, William Jr. Co. 1,400 65
----------
5,070
Energy - 3.6%
Amoco Corp. 4,400 281
Atlantic Richfield 1,200 128
Chevron Corp. 5,000 234
Exxon Corp. 7,300 558
Mobil Corp. 3,444 347
Phillips Petroleum Co. 6,400 206
Royal Dutch Petrol Guilder 3,900 479
Schlumberger Limited 1,600 100
Texaco, Inc. 3,946 269
Unocal Corp. 1,732 45
----------
2,647
Financial & Business Services - 8.7%
Amer International Group, Inc. 3,575 301
Banc One Corp. 7,545 255
Bank of Boston Corp. 1,900 85
Bankamerica Corp. 6,600 380
Bankers Trust N.Y. Corp. 1,688 108
Barnett Banks of Florida 3,000 166
Chase Manhattan Corp. 1,100 63
Chemical Banking Corp. 6,232 354
Chubb Corp. 2,300 207
Cigna Corp. 700 69
Citicorp 7,110 461
Federal National Mortgage Association 4,900 514
First Fidelity 3,200 209
First Union Corp. 4,300 213
Fleet Financial Group, Inc. 6,100 236
General Re Corp. 1,500 217
Golden West Financial Corp. 4,700 236
H & R Block 3,600 149
Jefferson Pilot Corp. 2,700 178
Merrill Lynch Co. 1,000 56
Morgan, J.P. and Co., Inc. 2,094 161
Nations Bank Corp. 4,070 268
NBD Bancorp. 4,200 160
Norwest Corp. 9,687 286
Safeco Corp. 2,200 141
St Paul Cos., Inc. 3,100 157
Suntrust Banks, Inc. 4,500 290
Wachovia Corp. 2,300 101
Wells Fargo & Co. 1,053 221
WMX Technologies 2,223 63
----------
6,305
</TABLE>
49
<PAGE>
SCHEDULE OF INVESTMENTS (Cont.)
Balanced Fund
October 31, 1995
<TABLE>
Value
Shares (000's)
- --------------------------------------------------------------------------------
<S> <C> <C>
Health Care - 6.1%
Abbott Laboratories 9,100 $ 362
American Home Products 2,200 195
Amgen, Inc. (d) 2,200 106
Becton Dickinson 2,100 137
Beverly Enterprises 4,300 51
Bristol Myers Squibb 2,600 198
Johnson & Johnson 6,200 505
Lilly Eli & Co. 1,400 135
Manor Care, Inc. 2,200 72
Medtronic, Inc. 9,200 531
Merck & Co, Inc. 8,000 460
Pfizer, Inc. 7,000 402
Schering-Plough 6,700 359
Shared Medical Systems Corp. 1,500 58
St Jude Medical Enterprise, Inc. 4,400 234
United Healthcare Corp. 4,500 239
U.S. Health Care Systems, Inc. 3,800 146
Warner Lambert Co. 2,900 247
----------
4,437
Materials & Processing - 1.9%
Barrick Gold Corp. 2,000 46
duPont (E.I.) deNemours 3,300 206
Engelhard Corp. 1,850 46
First Mississippi 1,000 21
First Mississippi Gold, Inc. (d) 708 13
Great Lakes Chemical 2,300 155
Hercules, Inc. 1,300 69
International Paper 4,275 158
Louisiana Pacific Corp. 4,900 117
Morton International 4,700 143
NUCOR Corp. 3,200 154
Pall Corp. 3,220 79
Union Carbide Corp. 2,700 102
Worthington Industries, Inc. 4,950 82
----------
1,391
Technology - 7.5%
Advanced Micro Devices 10,000 239
Andrew Corp. (d) 4,850 205
Applied Materials (d) 2,400 120
Autodesk, Inc. 2,700 92
Automatic Data Processing 3,500 250
Cabletron Systems, Inc. (d) 1,200 94
Compaq Computer Corp. (d) 7,000 390
Computer Associates International, Inc. 1,850 102
DSC Communications (d) 5,600 207
General Dynamics Corp. 3,400 188
Honeywell, Inc. 1,300 55
Intel Corp. 8,700 608
IBM Machines Corp. 1,800 175
Loral Corp. 10,400 308
McDonnell Douglas 5,400 441
Micron Technlogy, Inc. 2,300 163
Microsoft Corp. (d) 5,500 550
Motorola 3,966 260
National Semiconductor (d) 1,600 39
Northern Telecommunications Limited 1,200 43
Novell, Inc. (d) 8,700 144
Oracle Systems Corp. (d) 6,600 288
Raytheon Co. 6,300 275
Service Corp. International 1,200 48
Tektronix 1,600 95
Texas Instruments, Inc. 500 34
----------
5,413
Transportation - 0.3%
Consolidated Freightways, Inc. 2,100 49
Norfolk Southern 1,400 108
Southwest Airlines 3,600 72
----------
229
Utilities - 8.0%
Ameritech 4,717 254
American Electric Power, Inc. 3,149 120
Baltimore Gas & Electric 4,190 112
Bell Atlantic Corp. 2,326 148
Bell South 2,777 212
Carolina Power and Lighting 4,892 160
Central & South West 5,200 139
Coastal Corp. 6,600 214
Consolidated Edison Co. 4,300 131
Consolidated Natural Gas 2,795 106
Detroit Edison Co. 6,000 203
Dominion Resources, Inc. 3,300 131
Duke Power Co. 4,333 194
Enron Corp. 7,900 272
Entergy Corp. 3,900 111
FPL Group, Inc. 2,897 121
GTE Corp. 6,985 288
Houston Industry, Inc. 3,009 140
MCI Comm Corp. 7,200 180
Nicor, Inc. 4,345 117
Northern States Power Co. 1,800 85
Nynex Corp. 1,971 93
Ohio Edison Co. 4,867 111
ONEOK, Inc. 3,900 95
Pacific Gas & Electric 4,400 129
Pacific Telesis 4,895 149
Pacificorp (Oregon) 33 1
Peco Energy Co. 7,294 213
Peoples Energy Corp. 3,800 109
Public Service Enterprises 3,408 100
SBC Communications 7,983 446
Sonat, Inc. 3,500 101
Southern Co. 8,530 204
Sprint Corp. 5,752 221
U.S. West Communications Group 4,006 191
Unicom Corp. 1,600 52
Union Electric Co. 3,200 125
Williams Cos. 1,400 54
----------
5,832
----------
Total Common Stocks 38,308
(Cost $31,347) ==========
</TABLE>
50
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000's) (000's)
- --------------------------------------------------------------------------------
Corporate Bonds and Notes - 8.3%
- --------------------------------------------------------------------------------
<S> <C> <C>
Banking and Finance - 1.4%
National Rural Utility Coop.
5.720% due 11/13/95 (c) $ 1,000 $ 998
----------
Industrials - 2.7%
AMR Corp.
10.000% due 02/01/01 400 453
9.430% due 05/10/01 (c) 1,000 1,117
Minnesota Mining & Manufacturing
5.820% due 11/15/95 (c) 400 399
----------
1,969
Utilities - 4.2%
Cleveland Electric
9.375% due 03/01/17 1,000 945
Long Island Lighting Co.
9.000% due 11/01/22 (e) 2,000 2,010
Ohio Power
8.300% due 04/01/97 127 130
----------
3,085
----------
Total Corporate Bonds and Notes 6,052
==========
(Cost $5,984)
<CAPTION>
- --------------------------------------------------------------------------------
Mortgage-Backed Securities - 36.2%
- --------------------------------------------------------------------------------
<S> <C> <C>
Federal Home Loan Mortgage Corp. - 1.6%
8.500% due 03/01/23 996 1,038
10.150% due 04/15/06 108 110
----------
1,148
Federal Housing Authority - 0.8%
6.930% due 07/01/14 (c) (e) 615 615
----------
Federal Home Loan Bank Corp - 0.8%
5.630% due 11/13/95 (c) 600 599
----------
Federal National Mortgage Association - 4.4%
8.500% due 07/01/02 759 784
8.500% due 09/01/02 64 66
8.500% due 01/01/07 462 480
8.500% due 01/01/08 (e) 505 529
5.484% due 12/01/23 (c) 1,344 1,357
----------
3,216
Government National Mortgage Association - 16.1%
10.750% due 09/15/00 88 93
10.750% due 10/15/00 132 139
8.000% due 09/15/06 91 94
9.500% due 09/15/09 23 24
9.500% due 10/15/09 177 190
16.000% due 10/15/11 99 117
16.000% due 10/15/11 46 55
16.000% due 11/15/11 20 24
16.000% due 12/15/11 6 7
16.000% due 12/15/11 13 16
16.000% due 12/15/11 27 32
16.000% due 12/15/11 6 7
16.000% due 12/15/11 8 10
16.000% due 12/15/11 18 22
16.000% due 12/15/11 4 5
16.000% due 12/15/11 3 4
16.000% due 12/15/11 50 60
16.000% due 01/15/12 14 16
16.000% due 01/15/12 9 11
16.000% due 01/15/12 2 2
16.000% due 03/15/12 82 98
16.000% due 04/15/12 66 80
14.000% due 08/15/12 (e) 32 37
14.000% due 09/15/12 (e) 23 26
13.250% due 10/20/14 81 93
7.500% due 05/15/17 20 20
7.375% due 04/20/23 2,448 2,502
7.250% due 08/24/24 (c) 1,079 1,101
6.500% due 09/20/24 1,921 1,943
6.500% due 12/19/25 5,000 4,859
----------
11,687
Collateralized Mortgage Obligations - 12.5%
Bear Stearns
9.000% due 01/25/21 (e) 50 51
Capstead
8.900% due 12/25/21 (e) 427 441
Countrywide
7.408% due 11/25/24 (c) (e) 1,630 1,671
7.913% due 11/25/24 (c) (e) 1,598 1,640
FNMA
9.500% due 06/25/18 781 829
Home Savings
6.075% due 05/25/27 (c) (e) 1,320 1,286
PNC
7.500% due 06/25/10 1,563 1,568
Resolution Trust Corp.
8.835% due 12/25/23 (c) (e) 1,536 1,577
----------
9,063
----------
Total Mortgage-Backed Securities 26,328
(Cost $26,120) ==========
<CAPTION>
- --------------------------------------------------------------------------------
Short-Term Instruments - 10.3%
- --------------------------------------------------------------------------------
<S> <C> <C>
Discount Notes - 7.5%
AT&T Corp.
5.640% due 11/22/95 800 797
Associates Corp. of North America
5.680% due 11/27/95 1,000 996
5.700% due 11/28/95 400 398
Hewlett Packard Co.
5.670% due 01/09/96 1,000 989
Motorola, Inc.
5.720% due 11/08/95 500 499
Toys-R-Us, Inc.
5.690% due 11/15/95 600 599
U.S. West Communications
5.700% due 11/14/95 800 798
Wal-Mart Stores
5.720% due 11/09/95 400 399
----------
5,475
</TABLE>
51
<PAGE>
SCHEDULE OF INVESTMENTS (Cont.)
Balanced Fund
October 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
(000's) (000's)
- --------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreement - 2.5%
State Street Bank $ 1,778 $ 1,778
4.500% due 11/01/95
(Dated 10/31/95. Collateralized by
U.S. Treasury Bond 11.250% due 02/15/15
valued at $1,829,124. Repurchase
proceeds are $1,789,223.)
U.S. Treasury Bill (b) - 0.3%
5.340% due 11/30/95 240 239
----------
Total Short-Term Instruments 7,492
(Cost $7,492) ==========
Total Investments (a) - 107.6% $ 78,180
(Cost $70,943)
Other Assets and Liabilities (Net) - (7.6%) (5,542)
----------
Net Assets - 100.0% $ 72,638
==========
Notes to Schedule of Investments ($ in thousands):
(a) At October 31, 1995, the net unrealized appreciation
(depreciation) of investments based on cost for
federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for
all investments in which there was an excess
of value over tax cost. $ 8,119
Aggregate gross unrealized depreciation for
all investments in which there was an excess
of tax cost over value. (882)
----------
Unrealized appreciation-net $ 7,237
==========
(b) Securities with an aggregate market value of $239
have been segregated with the custodian to cover
margin requirements for the following open future
contracts at October 31, 1995:
</TABLE>
<TABLE>
<CAPTION>
Unrealized
Type Contracts Appreciation
- --------------------------------------------------------------------------------
<S> <C> <C>
U.S. Treasury 5 Year Note (12/95) 18 $ 15
U.S. Treasury 10 Year Note (12/95) 135 167
U.S. Treasury 30 Year Note (12/95) 30 103
----------
$ 285
==========
</TABLE>
(c) Variable rate security. The rate listed is as of October 31, 1995.
(d) Non-income producing security.
(e)Security valued under procedures established by the Board of Trustees.
See Notes to Financial Statements
52
<PAGE>
NOTES TO FINANCIAL STATEMENTS
October 31, 1995
1. Significant Accounting Policies
PIMCO Advisors Institutional Funds (the "Trust") was
established as a Massachusetts business trust on August 24,
1990. The Trust is registered under the Investment Company
Act of 1940, as amended, as a no-load, open-end management
investment company. The Trust currently consists of fifteen
separate investment funds (the "Funds"): the Money Market
Fund; the PIMCO Managed Bond and Income Fund; the NFJ Equity
Income Fund; the NFJ Diversified Low P/E Fund; the NFJ Small
Cap Value Fund; the Cadence Capital Appreciation Fund; the
Cadence Mid Cap Growth Fund; the Cadence Micro Cap Growth
Fund; the Cadence Small Cap Growth Fund; the Columbus Circle
Investors Core Equity Fund; the Columbus Circle Investors Mid
Cap Equity Fund; the Parametric Enhanced Equity Fund; the
Blairlogie Emerging Markets Fund; the Blairlogie
International Active Fund; and the Balanced Fund (See
Note 6).
Effective October 31, 1995, two series of the Trust, the
Utility Stock Fund and Parametric International Equity Fund,
were closed. The annual reports for these two Funds are
provided separately.
Multi-class Operations. The Trust is authorized to offer two
classes of shares, the Institutional Class and the
Administrative Class. A comprehensive discussion of the terms
under which shares of either class are offered is contained
in the prospectus for the Trust. Both classes of shares have
identical voting, dividend, liquidation and other rights and
the same terms and conditions, except for class specific
expenses and exclusive rights to vote on matters affecting
only individual classes.
Income, non-class specific expenses, and realized and
unrealized capital gains and losses are allocated to each
class of shares based upon net assets at the close of
business on the preceding day.
The Blairlogie Emerging Markets Fund commenced Administrative
Class operations on October 20, 1994. (Included in receipts
for shares sold in the statement of changes in net assets
for the year ended October 31, 1994, is $9,945 for the
Administrative Class. All other information related to the
Administrative Class for the year ended October 31, 1994 is
insignificant). The PIMCO Managed Bond and Income, NFJ Equity
Income, Cadence Mid Cap Growth, and Blairlogie International
Active Funds commenced Administrative Class operations on
November 30, 1994. The Money Market Fund, the Columbus
Circle Investors Core Equity Fund and the Cadence Small Cap
Growth Fund commenced Administrative Class operations on
January 24, 1995, May 31, 1995 and September 27, 1995,
respectively. None of the other Funds had commenced multi-
class operations as of October 31, 1995.
Security Valuation. The Money Market Fund's securities are
valued at amortized cost, which approximates market value,
and the Fund intends to maintain a net asset value of $1.00
per share. All the other Funds are valued as follows:
Portfolio securities for which market quotations are readily
available are stated at market value. Market value is
determined on the basis of last reported sales prices, or if
no sales are reported, the mean between representative bid
and asked quotations obtained from a quotation reporting
system or from established market makers. Short-term
investments having a maturity of 60 days or less are valued
at amortized cost, unless the amortized cost does not
approximate market value. Subject to the foregoing,
securities for which market quotations are not readily
available are valued at fair value as determined in good
faith under the direction of the Trust's Board of Trustees
(such valuation methods were used for approximately 29% and
13% of the PIMCO Managed Bond and Income and Balanced Funds,
respectively).
53
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Cont.)
October 31, 1995
Foreign Currency Translation. Securities and other assets and
liabilities denominated in foreign currencies are translated
into U.S. dollars using the foreign exchange quotation in
effect at 2:30 P.M. Eastern time. The cost of foreign
securities is translated at the exchange rate in effect when
the investment is acquired. Income and expenses are
translated at the rate of exchange in effect at the time of
each transaction.
The Trust isolates that portion of the results of operations
resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in
market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss on
foreign currency transactions. Reported net realized foreign
exchange gains or losses arise from sales of portfolio
securities, sales and maturities of short-term securities,
sales of foreign currencies, currency gains or losses
realized between the trade and settlement dates on securities
transactions, the difference between the amounts of
dividends, interest, and foreign withholding taxes recorded
on the Trust's books, and the U.S. dollar equivalent of the
amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in the value of
assets and liabilities including investments in securities at
fiscal year end, resulting from changes in the exchange rate.
Dividends and Distributions to Shareholders. Dividends from
net investment income are declared daily and paid monthly to
shareholders of record by the Money Market and the PIMCO
Managed Bond and Income Funds. Dividends are declared and
paid quarterly to shareholders of record by the NFJ Equity
Income, NFJ Diversified Low P/E, NFJ Small Cap Value,
Cadence Capital Appreciation, Cadence Mid Cap Growth, Cadence
Micro Cap Growth, Cadence Small Cap Growth, Parametric
Enhanced Equity, and the Balanced Funds. Dividends are
declared and paid semi-annually to shareholders of record by
the Columbus Circle Investors Core Equity Fund. The Columbus
Circle Investors Mid Cap Equity, Blairlogie Emerging Markets,
and Blairlogie International Active Funds distribute all of
their net investment income at least annually. Distributions
on any net realized capital gains are declared and paid at
least annually. Dividends and distributions to shareholders
are recorded on the ex-dividend date.
Income dividends and capital gain distributions are
determined in accordance with income tax regulations which
may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments
for foreign currency transactions, net operating losses,
deferral of wash sales, futures, and options. Permanent book
and tax differences relating to shareholder distributions
will result in reclassifications to paid in capital.
Two of the Funds had a tax operating loss during the year
ended October 31, 1995 which resulted in a permanent
difference between book income and tax-basis income: Cadence
Small Cap Growth Fund - $161,325, and Cadence Micro Cap
Growth Fund - $181,906. This difference was reclassed from
undistributed net investment income (loss) to paid in capital
on the statements of assets and liabilities.
For the year ended October 31, 1995, the Blairlogie Emerging
Markets Fund realized a capital loss of $15,213,940 for
Federal income tax purposes. This capital loss is available
to offset future realized capital gains through October 31,
2003. The Fund will resume capital gain distributions in the
future to the extent gains are realized in excess of
available carryforwards.
54
<PAGE>
Foreign Taxes on Dividends. Dividend income in the statements
of operations is shown net of foreign taxes withheld on
dividends from foreign securities. Foreign taxes withheld
were as follows: NFJ Diversified Low P/E Fund -$1,586; NFJ
Small Cap Value Fund - $284; Cadence Capital Appreciation
Fund - $48,551; Cadence Mid Cap Growth Fund - $3,701; Columbus
Circle Investors Core Equity Fund - $613; Columbus Circle
Investors Mid Cap Equity Fund - $595; Parametric Enhanced
Equity Fund - $5,015; Blairlogie Emerging Markets Fund -
$174,575; Blairlogie International Active Fund - $103,138;
Balanced Fund - $3,174.
Federal Income Taxes. The Trust's policy is to comply with
the requirements of the Internal Revenue Code that are
applicable to regulated investment companies and to
distribute substantially all of its taxable income to its
shareholders. Accordingly, no Federal income tax provision is
required.
Securities Transactions and Investment Income. Securities
transactions are recorded as of the trade date. Securities
purchased or sold on a when-issued or delayed-delivery basis
may be settled a month or more after the trade date. Realized
gains and losses from securities sold are recorded on the
identified cost basis. Dividend income is recorded on the ex-
dividend date. Interest income is recorded on the accrual
basis and includes the accretion of discounts and
amortization of premiums.
Equalization. All of the Funds, except the Money Market and
the PIMCO Managed Bond and Income Funds, follow the
accounting practice known as equalization, by which a portion
of the proceeds from sales and costs of repurchases of Fund
shares, equivalent on a per share basis to the amount of
distributable investment income on the date of the
transaction, is credited or charged to undistributed income.
As a result, undistributed investment income per share is
unaffected by sales or redemptions of Fund shares.
2. Derivative Financial Instruments
Interest Rate and Stock Index Futures Contracts. The PIMCO
Managed Bond and Income and Balanced Funds invested in
interest rate futures contracts, and the Blairlogie
International Active Fund invested in stock index futures
contracts during the year ended October 31, 1995. An interest
rate futures contract is an agreement between two parties to
buy and sell a specified quantity of a financial instrument
at a specified price at a future date. A stock index futures
contract is an agreement between two parties to take or make
delivery of an amount of cash equal to the difference between
the value of the index at the close of the last trading day
of the contract and the price at which the index contract was
originally written. Initial margin deposits are made upon
entering into futures contracts and can be either cash or
securities. During the period the futures contract is open,
changes in the value of the contract are recognized as
unrealized gains or losses by "marking-to-market" on a daily
basis to reflect the market value of the contract at the end
of each day's trading. Variation margin receivables or
payables represent the difference between the unrealized
appreciation (depreciation) on the open contracts and the
cash deposits made on the margin accounts. When the contract
is closed, a Fund records a realized gain or loss equal to
the difference between the proceeds from the closing
transaction and a Fund's cost of the contract. Interest rate
futures
55
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Cont.)
October 31, 1995
contracts are used as non-leveraged substitutes for the
underlying physical securities. Stock index futures are
entered into for the purposes of hedging exposure in certain
foreign markets. These investments involve, to varying
degrees, elements of market risk and risks in excess of the
amount recognized in the Statements of Assets and
Liabilities. The face or contract amounts reflect the extent
of the involvement the Funds have in the particular classes
of instruments. Risks associated with the use of the stock
index futures contracts include an imperfect correlation
between the movement in the index and the movement in the
market values of the securities held in that market. Risks
may also arise if there is an illiquid secondary market for
the instruments, or the inability of counterparties to
perform.
Transactions in Written Call and Put Options. The Columbus
Circle Investors Core Equity and Columbus Circle Investors
Mid Cap Equity Funds wrote options on securities during the
year ended October 31, 1995. The PIMCO Managed Bond and
Income Fund wrote options on interest rate futures contracts
during the year ended October 31, 1995. When a Fund writes
(sells) an option, an amount equal to the premium received is
recorded as an asset with an equal liability which is marked-
to-market based on the option's quoted daily settlement
price. Fluctuations in the value of such an instrument is
recorded as unrealized appreciation (depreciation) until
terminated, at which time realized gains and losses are
recognized. The purposes of using options on futures
contracts include hedging exposure to rising interest rates
while retaining capital gain potential from falling rates and
capitalizing on anticipated changes in market volatility.
These investments involve, to varying degrees, elements of
market risk and risks in excess of the amount recognized in
the Statements of Assets and Liabilities. Risks may include
an imperfect correlation between the changes in the market
values of the securities held by a Fund and the prices of
futures options, an illiquid secondary market for the
instruments, or the inability of counterparties to perform.
Transactions in written call and put options were as follows
($ in thousands):
<TABLE>
<CAPTION>
Columbus Circle Investors
PIMCO Managed ----------------------------------------------------------
Bond and Income Fund Core Equity Fund Mid Cap Equity Fund
------------------------- ------------------------- -------------------------
Number of Number of Number of
Premium Contracts Premium Contracts Premium Contracts
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at 10/31/94 $ 0 0 $ 0 0 $ 0 0
Sales 626 1,350 44 171 9 52
Closing Buys (269) (450) (37) (145) (3) (18)
Expirations (52) (200) (4) (15) (4) (28)
Exercised (136) (200) (1) (3) (2) (6)
--------------------------------------------------------------------------------------------
Balance at 10/31/95 $ 169 500 $ 2 8 $ 0 0
============================================================================================
</TABLE>
The net short-term gain relating to those purchase
transactions was $309,175 for PIMCO Managed Bond and Income
Fund, $15,956 for Columbus Circle Investors Core Equity Fund,
and $5,176 for Columbus Circle Investors Mid Cap Equity Fund.
56
<PAGE>
Forward Foreign Currency Contracts. The Blairlogie Emerging
Markets and the Blairlogie International Active Funds
invested in forward foreign currency contracts during the
year ended October 31, 1995. These contracts may be used for
the purpose of hedging against foreign exchange risk arising
from a Fund's investment in foreign securities. These
contracts are "marked-to-market" daily at the applicable
translation rates and any resulting unrealized gains or
losses are recorded in a Fund's financial statements. A Fund
records realized gains or losses at the time the forward
contract is closed. A forward contract is extinguished
through a closing transaction or upon delivery of the
currency. These investments involve, to varying degrees,
elements of market risk and risks in excess of the amount
recognized in the statements of assets and liabilities. Risks
may also arise upon entering into these contracts from the
potential inability of counterparties to meet the terms of
their contracts and from unanticipated movements in the value
of a foreign currency relative to the U.S. dollar.
3. Fees, Expenses, and Related Party Transactions
Investment Advisory Fee. PIMCO Advisors L.P. ("PIMCO
Advisors") serves as investment advisor to the Trust,
pursuant to an Investment Advisory Agreement. PIMCO Advisors
receives from the Trust a fee based on an annual percentage
of the average daily net assets of each Fund as follows: for
the Money Market Fund - .15%; for the PIMCO Managed Bond and
Income Fund - .25%; for the NFJ Equity Income, NFJ
Diversified Low P/E, Cadence Capital Appreciation, Cadence
Mid Cap Growth, Parametric Enhanced Equity and Balanced
Funds - .45%; for the Columbus Circle Investors Core Equity
Fund - .57%; for the NFJ Small Cap Value and Blairlogie
International Active Funds - .60%; for the Columbus Circle
Investors Mid Cap Equity Fund - .63%; for the Blairlogie
Emerging Markets Funds - .85%; for the Cadence Small Cap
Growth Fund - 1.00%; and for the Cadence Micro Cap Growth
Fund - 1.25%. The fee is accrued daily and paid monthly.
Administration Fee. Prior to August 16, 1995, PIMCO Advisors
served as the administrator to the Trust, pursuant to an
Administration Agreement. Effective August 16, 1995, Pacific
Investment Management Company ("PIMCO") became administrator
to the Trust, pursuant to a new Administration Agreement. As
under the previous Administration Agreement, PIMCO
administers all of the operations of the Trust and its Funds
and procures on behalf of the Trust, at PIMCO's expense,
certain services including custodial, administrative,
transfer agency, portfolio accounting, dividend disbursing,
auditing, and ordinary legal services.
The Trust will bear any extraordinary expenses (such as
litigation and indemnification expenses), brokerage fees or
other transactional expenses for securities or other assets,
taxes (if any) paid by a Fund, interest on borrowing, and
fees and expenses of the independent trustees.
Under the new Administration Agreement, PIMCO receives from
the Trust an administrative fee at the annual rate of .25% of
the average daily net assets of each of the Funds other than
the Blairlogie Emerging Markets and Blairlogie International
Active Funds for which the fee is at the annual rate of .50%
of the average daily net assets of the portfolio. The fee is
accrued daily and paid monthly. Under a Class Addendum to the
Administration Agreement which provides for the issuance of
Administrative Class shares, the Administrative Class pays
PIMCO Advisors an additional fee ("Service fee") at an annual
rate of .25% of the average daily net assets of each Fund, in
addition to the fee paid under the Administration Agreement.
57
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Cont.)
October 31, 1995
Expense Limitation. PIMCO Advisors has undertaken to
reimburse the Trust for its operating expenses, exclusive of
class service fees, brokerage fees or other transactional
expenses, taxes paid by a Fund, interest on borrowing and
extraordinary expenses, in excess of the sum of advisory and
administration fees as a percentage of daily net assets of
each Fund (consolidating both classes of shares), through
October 31, 1995. No reimbursements were due as of
October 31, 1995.
The Trust has incurred $6,225,568 in investment advisory fees
to PIMCO Advisors for the year ended October 31, 1995. As of
October 31, 1995, $626,661 remains payable.
The Trust has incurred $3,582,905 in administration fees to
the Administrator for the year ended October 31, 1995. As of
October 31, 1995, $349,113 remains payable.
The Trust has incurred $51,122 in Trustees fees, advanced by
the PIMCO Advisors on behalf of the Trust, for the year ended
October 31, 1995. These expenses are allocated to the Funds
of the Trust according to their respective daily average net
assets. As of October 31, 1995, the entire balance remains
payable.
Pursuant to the Portfolio Management Agreements, which became
effective November 15, 1994, PIMCO Advisors employs six of
its subpartnerships as Fund managers for fourteen of the
Funds. Pacific Mutual Life Insurance Company was employed as
manager for the Money Market Fund.
Related Party Transactions. PIMCO Advisors Distribution
Company ("PADCO"), an indirect wholly-owned subsidiary of
PIMCO Advisors, serves as the distributor of the Trust's
shares. Pursuant to a Distribution Agreement, all expenses
relating to the distribution of Trust shares will be paid by
PIMCO Advisors, the administrator or PADCO out of past
profits and resources which may include fees received by
PIMCO Advisors or the administrator.
Certain officers of PIMCO Advisors are also officers of the
Trust.
58
<PAGE>
4. Purchases and Sales of Securities
Purchases and sales of securities (excluding short-term
investments) for the year ended October 31, 1995 were as
follows ($ in thousands):
<TABLE>
<CAPTION>
U.S. Government/Agency All Other
-----------------------------------------------------------------
Purchases Sales Purchases Sales
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PIMCO Managed Bond
and Income Fund $ 140,276 $ 95,587 $ 33,722 $ 29,261
NFJ Equity Income Fund 42,988 44,911
NFJ Diversified Low P/E Fund 9,162 13,210
NFJ Small Cap Value Fund 15,842 16,526
Cadence Capital Appreciation Fund 157,376 148,563
Cadence Mid Cap Growth Fund 128,789 106,054
Cadence Micro Cap Growth Fund 59,567 38,439
Cadence Small Cap Growth Fund 56,963 47,282
Columbus Circle Investors
Core Equity Fund 28,479 15,002
Columbus Circle Investors
Mid Cap Equity Fund 11,666 5,378
Parametric Enhanced Equity Fund 14,334 17,397
Blairlogie Emerging Markets Fund 102,126 83,129
Blairlogie International Active Fund 59,144 26,706
Balanced Fund 26,683 15,146 8,298 70,439
</TABLE>
No activity is shown for the Money Market Fund since it trades exclusively in
short-term debt securities.
59
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Cont.)
October 31, 1995
5. Shares of Beneficial Interest
The Trust may issue an unlimited number of shares of
beneficial interest with a $.0001 par value. Changes in
shares of beneficial interest were as follows (shares in
thousands):
<TABLE>
<CAPTION>
PIMCO
PIMCO Managed NFJ
Year or Money Managed Bond and NFJ Equity
Period Ended Money Market Bond and Income Equity Income
October 31, 1995 Market Admin. (a) Income Admin. (b) Income Admin. (b)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 22,820 1,799 10,242 306 2,186 11
Issued as reinvestment
of dividends 493 19 2,500 10 513 1
Shares redeemed (23,025) (1,808) (7,537) (7) (1,547) (1)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase 288 10 5,205 309 1,152 11
================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
NFJ Cadence
Year or Diversified NFJ Cadence Cadence Mid Cap Cadence
Period Ended Low Small Cap Capital Mid Cap Growth Micro Cap
October 31, 1995 P/E Value Appreciation Growth Admin. (b) Growth
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 10 367 3,256 3,440 99 1,996
Issued as reinvestment
of dividends 171 283 143 35 0 0
Shares redeemed (365) (559) (1,858) 1,769 (50) (206)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) (184) 91 1,541 5,244 49 1,790
================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Columbus
Columbus Circle Columbus
Cadence Circle Investors Circle
Year or Cadence Small Cap Investors Core Investors Parametric
Period Ended Small Cap Growth Core Equity Mid Cap Enhanced
October 31, 1995 Growth Admin. (c) Equity (d) Admin. (e) Equity (d) Equity
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 887 26 636 2,012 671 872
Issued as reinvestment
of dividends 199 0 1 3 0 185
Shares redeemed (168) 0 (25) (78) (24) (1,427)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) 918 26 612 1,937 647 (370)
================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Blairlogie Blairlogie
Year or Blairlogie Emerging Blairlogie International
Period Ended Emerging Markets International Active
October 31, 1995 Markets Admin. Active Admin. (b) Balanced
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Shares sold 5,234 130 4,157 83 1,847
Issued as reinvestment
of dividends 248 0 104 1 311
Shares redeemed (3,774) (57) (747) (26) (8,679)
- -------------------------------------------------------------------------------------------------------------------
Net increase (decrease) 1,708 73 3,514 58 (6,521)
===================================================================================================================
</TABLE>
(a) From commencement of operations, January 24, 1995.
(b) From commencement of operations, November 30, 1994.
(c) From commencement of operations, September 27, 1995.
(d) From commencement of operations, December 28, 1994.
(e) From commencement of operations, May 31, 1995.
60
<PAGE>
<TABLE>
<CAPTION>
PIMCO NFJ
Managed NFJ Diversified NFJ Cadence
Year Ended Money Bond and Equity Low Small Cap Capital
October 31, 1994 Market Income Income P/E Value Appreciation
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 20,109 4,599 3,548 119 920 7,143
Issued as reinvestment
of dividends 226 2,286 263 52 83 141
Shares redeemed (18,717) (4,553) (1,627) (757) (2,046) (1,174)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) 1,618 2,332 2,184 (586) (1,043) 6,110
================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Blairlogie
Year or Cadence Cadence Cadence Parametric Blairlogie Emerging
Period Ended Mid Cap Micro Cap Small Cap Enhanced Emerging Markets
October 31, 1994 Growth Growth Growth Equity Markets Admin. (a)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 5,393 1,785 444 2,696 4,769 1
Issued as reinvestment
of dividends 36 0 76 131 16 0
Shares redeemed (1,554) (18) (179) (1,199) (1,160) 0
- --------------------------------------------------------------------------------------------------------------------------------
Net increase 3,875 1,767 341 1,628 3,625 1
================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Blairlogie
Year Ended International
October 31, 1994 Active Balanced
- ---------------------------------------------------------------------
<S> <C> <C>
Shares sold 1,211 3,099
Issued as reinvestment
of dividends 8 591
Shares redeemed (93) (2,726)
- ---------------------------------------------------------------------
Net increase 1,126 964
=====================================================================
</TABLE>
(a) From commencement of operations, October 20, 1994.
6. Reorganization
PIMCO Advisors Institutional Funds entered into an Agreement
and Plan of Reorganization with PIMCO Funds, another
registered open-end investment company. Pursuant to the
Reorganization Agreement, two of the Trust's series, the
Money Market Fund and PIMCO Managed Bond and Income Fund,
transferred all of their respective assets, subject to any
liabilities, to the PIMCO Funds on November 1, 1995. Included
in the statements of assets and liabilities are accrued
reorganization expenses of $45 and $6,006 for the Money
Market Fund and Managed Bond and Income Fund, respectively.
7. Change in Fiscal Year
Effective November 1, 1995, The Trust's fiscal year end
changed from October 31 to June 30.
61
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Trustees and Shareholders of the PIMCO Advisors
Institutional Funds
We have audited the accompanying statements of assets and
liabilities, including the schedules of investments, of the
PIMCO Advisors Institutional Funds (comprised respectively of
the Money Market Fund, PIMCO Managed Bond and Income Fund,
NFJ Equity Income Fund, NFJ Diversified Low P/E Fund, NFJ
Small Cap Value Fund, Cadence Capital Appreciation Fund,
Cadence Mid Cap Growth Fund, Cadence Micro Cap Growth Fund,
Cadence Small Cap Growth Fund, Columbus Circle Investors Core
Equity Fund, Columbus Circle Investors Mid Cap Equity Fund,
Parametric Enhanced Equity Fund, Blairlogie Emerging Markets
Fund, Blairlogie International Active Fund and Balanced
Fund), "the Trust", as of October 31, 1995; the related
statements of operations for the indicated periods then
ended; the statements of changes in net assets for the
indicated periods ended October 31, 1995 and 1994; and
financial highlights tables for the periods ended 1995, 1994,
1993, 1992, 1991. These financial statements and financial
highlights tables are the responsibility of the Trust's
management. Our responsibility is to express an opinion on
these financial statements and financial highlights tables
based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about
whether the financial statements and financial highlights
tables are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of October 31,
1995 by correspondence with the custodians and brokers; where
replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and financial
highlights tables present fairly, in all material respects,
the financial position of each of the respective Funds
constituting the Trust as of October 31, 1995, the results of
their operations, the changes in their net assets, and the
financial highlights tables for the respective stated
periods, in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Costa Mesa, California
December 15, 1995
62
<PAGE>
FEDERAL INCOME TAX INFORMATION
As required by the Internal Revenue Code regulations
shareholders must be notified within 60 days of the Trust's
fiscal year end (October 31, 1995) as to the tax status of
capital gain dividends, the dividend received deduction for
corporations, and the foreign tax credit.
Dividend Distributions. The following table provides rates
for the dividends distributed from net investment income, as
well as short-term and long-term capital gains. Distributions
from net investment income and short-term capital gains are
taxed as ordinary income. All rates are shown as per share
amounts.
<TABLE>
<CAPTION>
Net
Investment Short-Term Long-Term
Income Capital Gain Capital Gain
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Money Market Fund .0552
PIMCO Managed Bond and Income Fund .6315
NFJ Equity Income Fund .4641 .0901 .2399
NFJ Diversified Low P/E Fund .2997 1.2041
NFJ Small Cap Value Fund .2786 .3338 .5570
Cadence Capital Appreciation Fund .1782
Cadence Mid Cap Growth Fund .0657
Cadence Micro Cap Growth Fund
Cadence Small Cap Growth Fund 1.4318
Columbus Circle Investors Core Equity Fund .0619
Columbus Circle Investors Mid Cap Equity Fund .0152
Parametric Enhanced Equity Fund .2504 .0187 .1474
Blairlogie Emerging Markets Fund .0638 .1298 .1298
Blairlogie International Active Fund .0935 .3434 .0906
Balanced Fund .4365
</TABLE>
Dividend Received Deduction. Corporate shareholders are
generally entitled to take the dividend received deduction on
the portion of the Fund's dividend distribution that
qualifies under tax law. The percentage of each Fund's fiscal
1995 net investment income dividends that qualify for the
corporate dividend received deduction are as follows: NFJ
Equity Income Fund - 69.50%; NFJ Diversified Low P/E Fund -
72.49%; NFJ Small Cap Value Fund - 47.44%; Cadence Capital
Appreciation Fund - 36.85%; Cadence Mid Cap Growth Fund -
100%; Columbus Circle Investors Core Equity Fund - 14.32%;
Columbus Circle Investors Mid Cap Equity Fund - 7.20%;
Parametric Enhanced Equity Fund -100%; Blairlogie Emerging
Markets Fund - 100%; Balanced Fund - 31.56%.
63
<PAGE>
FEDERAL INCOME TAX INFORMATION (Cont.)
Foreign Taxed Paid. Blairlogie Emerging Markets and
Blairlogie International Active Funds have elected to pass
through foreign taxes paid by each Fund to its shareholders
in the amount designated below on a per share basis.
Accordingly, shareholders who report their gross income
dividends in a federal income tax return will be entitled to
deduct such foreign taxes, or claim a foreign credit in
computing their U.S. income tax liability, when applicable.
It is generally more advantageous to claim a credit rather
than to take a deduction. The following table allocates the
dividends and distributions paid by their sources.
<TABLE>
<CAPTION>
Blairlogie Blairlogie
Emerging Markets Fund International Active Fund
-----------------------------------------------------------
Gross Foreign Gross Foreign
Dividends Tax Dividends Tax
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Argentina .0207
Australia .0042
Austria .0012 .0010 .0001
Belgium .0047 .0007
Brazil .0770 .0106
Chile .0256 .0007
Columbia .0089
Finland .0036
France .0245
Germany .0103 .0010
Greece .0004
Hong Kong .0154
Hungary .0004
India .0041 .0004
Indonesia .0080 .0010
Ireland .0027
Israel .0057 .0011
Italy .0037 .0006
Japan .0242 .0031
Jordan .0023
Luxenberg .0013 .0001
Malaysia .0199 .0055 .0015 .0005
Mexico .0156
Netherlands .0125 .0018
Norway .0060 .0009
Pakistan .0014 .0002
Peru .0031
Portugal .0031 .0006
Singapore .0032 .0007
South Africa .0164 .0014
South Korea .0059 .0010
Spain .0155 .0021
Sri Lanka .0017 .0003
Switzerland .0043 .0006
Thailand .0132 .0013
Turkey .0134
United Kingdom .0036 .0004 .0382 .0068
Venezuela .0021
- -----------------------------------------------------------------------------------------------
Total .2550 .0246 .1755 .0189
===============================================================================================
</TABLE>
Shareholders are advised to consult their own tax adviser
with respect to the tax consequences of their investment in
the Trust. However, income received by tax-exempt recipients
need not be reported as taxable income. In January 1996, you
will be advised on IRS form 1099 DIV as to the federal tax
status of the dividends and distributions received by you in
calendar year 1995.
64
<PAGE>
Trustees and Officers
William D. Cvengros, Chairman, President & Trustee
Richard L. Nelson, Trustee
Lyman W. Porter, Trustee
Alan Richards, Trustee
Teresa A. Wagner, Secretary
R. Mark Brandenberger, Treasurer
Investment Advisor
PIMCO Advisors L.P.
840 Newport Center Drive, Suite 360
Newport Beach, California 92660
Administrator
Pacific Investment Management Company
840 Newport Center Drive, Suite 360
Newport Beach, California 92660
Transfer Agent and Custodian
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105
Counsel
Dechert Price & Rhoads
1500 K Street N.W.
Washington, D.C. 20005
Independent Accountants
Deloitte & Touche LLP
695 Town Center Drive, Suite 1200
Costa Mesa, California 92626
<PAGE>
PIMCO ADVISORS
INSTITUTIONAL FUNDS
840 Newport Center Drive, Suite 360
Newport Beach, CA 92660
(800) 927-4648
This report is submitted for the general information of the shareholders of the
PIMCO Advisors Institutional Funds. It is not authorized for distribution to
prospective investors unless accompanied or preceded by an effective Prospectus
for the PIMCO Advisors Institutional Funds, which contains information covering
its investment policies as well as other pertinent information.
[ART WORK APPEARS HERE]
