<PAGE>
PIMCO Funds Annual Report
[ART WORK APPEARS HERE]
There's more to diversification than just stocks and bonds. A portfolio that
covers the spectrum of investment sectors and styles can provide maximum
diversification protection. Story on page 4.
June 30, 1997
Multi-Manager Series
Equity Income
Renaissance
Value
Capital Appreciation
Growth
Mid Cap Growth
Target
Small Cap Value
Opportunity
International Developed
International
Emerging Markets
Innovation
Precious Metals
Balanced
Tax Exempt
Inside this report:
- --------------------------------------------------------------------------------
Page 2 Letter From PIMCO Funds' President
Where We've Been and What's Ahead
- --------------------------------------------------------------------------------
Page 4 Today's Investor
Does Your Portfolio Cover the Spectrum?
- --------------------------------------------------------------------------------
Page 6 Fund Spotlight
PIMCO Opportunity Fund
- --------------------------------------------------------------------------------
Page 7 In The News
Recent News on PIMCO Funds
- --------------------------------------------------------------------------------
Page 9 Overview: Comprehensive Fund Family
- --------------------------------------------------------------------------------
Page 10 PIMCO Funds Financial Information
P I M C O
FUNDS
<PAGE>
President's
Letter
Dear Fellow Shareholder:
Both the stock and bond markets continue to surprise many financial experts by
posting strong results. For the one-year period ended June 30, 1997, the stock
market, as measured by the Standard & Poor's 500 Index of stocks, rose 34.7%.
The overall bond market, as measured by the Lehman Aggregate Bond Index, posted
an 8.2% return.
Volatility Continues While the financial markets posted gains over the last
year, it was anything but a smooth ride. Stock and bond prices often fluctuated
broadly, as investors focused on the latest news regarding economic growth,
inflation, interest rates and corporate earnings.
Earlier in the year it appeared the financial markets' good fortunes could be
coming to an end. Market gyrations peaked from mid-March to early May 1997, as
both stocks and bonds experienced sharp losses, followed immediately by strong
gains. As such, investors who resisted the urge to react to short-term events
were rewarded for their patience. In fact, practically every sector of the stock
and bond markets posted gains during the second quarter of 1997.
Looking Ahead As I write this letter, there are positive signs for continued
market strength. These include the balanced budget accord, potential tax cuts,
slow but steady economic growth and few signs of increased inflation. Yet,
concerns do exist. The bull market in stocks is nearing an unprecedented seventh
year. Federal Reserve Chairman Alan Greenspan has expressed concerns regarding
soaring stock prices.
No matter what the next short-term move in the market is, it is important for
investors to maintain a longer-term perspective with regard to their financial
holdings. More than ever, we urge shareholders to have realistic expectations
for investment performance, especially in the stock market. The article on page
four provides a number of strategies to consider with your financial advisor
given the current market conditions.
A Stronger Fund Family One final note--in January, 1997, the PIMCO Advisors
Funds consolidated with the institutional PIMCO Funds family. We are now one of
the largest fund families in the U.S., with over $27 billion in assets under
management, and we offer twenty-six mutual funds to help meet your financial
needs.
With the consolidation, we have two separate prospectuses and shareholder
reports for the retail classes of the PIMCO Funds family, one for primarily all
of the stock funds (PIMCO Funds: Multi-Manager Series), and the second for
primarily all of the bond funds (PIMCO Funds: Pacific Investment Management
Series). Shareholders of the Multi-Manager Series will receive reports for
fiscal periods ending June 30 and December 31. Shareholders of the Pacific
Investment Management Series will receive reports for fiscal periods ending
March 31 and September 30.
We appreciate the trust you have placed in us, and we will continue to work hard
to help you meet your financial objectives in the future.
Sincerely,
/s/ Stephen J. Treadway
Stephen J. Treadway
President
July 10, 1997
- ----
2
- ----
<PAGE>
Market
Review
The Stock Market
The Bull Market Rolls On
Stocks fought off a near-correction earlier in the year to continue their record
pace.
[LINE GRAPH APPEARS HERE]
657.44
646.19
638.73
635.9
662.49
662.1
665.21
667.03
651.99
655.68
680.54
687.02
686.19
701.46
700.66
710.82
700.92
703.77
730.82
737.62
748.73
757.02
739.6
728.64
748.87
756.79
748.03
759.5
776.17
770.52
786.16
789.56
808.48
801.77
790.82
804.97
793.17
784.1
773.88
757.9
737.65
766.34
765.37
812.97
824.78
829.75
847.03
848.28
858.01
893.27
898.7
887.3
As 1997 began, investors flocked to large-capitalization stocks, and the S&P 500
Index surged ahead nearly 9% by the middle of February. While the large-cap gain
was impressive, most other sectors of the stock market did not fare as well-most
notably small-cap and many technology stocks.
But, in mid-March, it appeared the bull market would finally come to a
close. Stock prices fell, as signs of strong economic growth led to fears of
rising inflation and interest rates. These increases typically hurt stock
prices, as they can ultimately take a toll on corporate profits. While all
sectors of the stock market fell, small-cap, mid-cap and technology issues felt
the brunt of the decline.
Then, just as investors were bracing themselves for further adversity,
the stock market displayed amazing resiliency. By the end of June 1997 virtually
every sector of the stock market had rebounded--in many cases dramatically so.
Year-to-date through June 30, 1997, the S&P 500 Index was up nearly 21%. And
small-cap stocks, which had posted negative returns during the first three
months of the year, surged ahead 16% during the second quarter. International
stocks have also turned in strong results, led by emerging market stocks, which
have posted a 16% return during the first half of the year.
Looking ahead, we are cautiously optimistic about the prospects for the
stock market. The optimism lies in the fact that the current environment is
positive, and corporate profits are healthy. However, if inflation and interest
rates move upwards, we could see an acceleration in market volatility. Given
this scenario, it's important for investors to maintain a long-term outlook and
ensure that their portfolios are adequately diversified.
The Bond Market
A Reversal of Fortune?
Interest rates fell after surging earlier in the year--benefiting bond
investors.
[LINE GRAPH APPEARS HERE]
7.194
7.032
6.976
7.01
6.745
6.692
6.77
6.957
7.12
7.112
6.95
7.045
6.91
6.743
6.847
6.803
6.817
6.681
6.508
6.459
6.438
6.352
6.513
6.574
6.608
6.564
6.734
6.848
6.825
6.893
6.792
6.706
6.527
6.645
6.805
6.816
6.944
6.971
7.09
7.126
7.169
7.056
7.145
6.877
6.893
6.9
6.989
6.908
6.776
6.726
6.663
6.744
Over the last year the bond market has seen its share of ups and downs.
Investors have spent a great deal of time and energy attempting to determine the
direction of the economy and inflation. As a result, short-term news often led
to heightened interest rate volatility.
This calendar year initially looked a lot like the start of 1996, as it
began with a promising outlook for the economy and interest rates. However, in a
repeat performance, the bond market retreated when it appeared that economic
growth was accelerating. Interest rates moved steadily upward from late February
through April, 1997, as a result of stronger-than-expected economic growth.
In an attempt to cool off the economy and make a preemptive strike
against inflation, the Federal Reserve Board raised interest rates 1/4 of a
percentage point in March. This caused long-term interest rates to surge above
7.1% by the end of the first quarter. Since that time, there have been
increasing signs of slower economic growth, as evidenced by the Federal
Reserve's decision not to raise interest rates again in early July. As a result,
the bond market has rallied sharply.
Through the first half of 1997, the best performing sectors of the bond
market were also last year's winners-high yield and currency-hedged foreign
bonds-in particular emerging market bonds. Mortgage-backed bonds have also fared
well, as yields remained in a limited range, lowering the potential of mortgage
prepayments.
Despite this year's volatility, we feel the prospects for the bond market
are bright. With an economic slowdown and stagnant inflation, the gradual
decline in interest rates should continue. By the end of the year or in early
1998 we feel the yield on long-term Treasury bonds could fall as low as 6%.
----
3
----
<PAGE>
Today's
Investor
Does Your Stock Portfolio Cover the Spectrum?
Protect Your Profits Through Proper Diversification
[ARTWORK APPEARS HERE]
As the current bull market in stocks nears an unprecedented seventh year, it
seems that the party will never end. And the market's run makes it tempting to
concentrate your assets on today's hottest performers. But, like death and
taxes, stock market corrections are inevitable. To help protect profits you
should first make sure your portfolio is adequately allocated between stocks and
bonds. Second, take steps to diversify your stock portfolio among various
sectors and styles.
The Importance of Diversification
You may think you have a diversified stock portfolio if you own one or two
mutual funds. However, a portfolio that consists of only a few similar funds
could feel the brunt of the decline during a correction. That's because many
funds are sector- and style-specific, meaning that they only invest in
particular industries or types of companies, and adhere to a particular
investment style. Therefore, there could be considerable overlapping among your
stock fund investments.
A truly diversified stock portfolio should contain investments covering a
variety of sectors and styles. This kind of asset allocation will offer more
diversification protection, as sectors and styles often fare differently in
various market conditions.
Just how important is diversification and asset allocation in determining
investment performance? A groundbreaking study showed that diversification and
prudent asset allocation accounts for over 90 percent of portfolio return.
A Wide Array of Sectors
When it comes to diversifying your portfolio, there are thousands of
funds-specializing in every conceivable sector. Some funds invest only in stocks
of certain-sized companies, such as large-caps (stocks of larger-capitalized
companies), mid-caps or small-caps. There are also mutual funds that invest in
the stocks of foreign countries. "International developed" funds invest in those
foreign countries with more developed, or mature, stock markets, such as Japan,
Germany and the U.K. "Emerging market" funds invest in countries that have not
reached their full economic potential, such as Hungary, Poland and China.
Investment Style
Another factor to consider when choosing a fund is its investment style--the
process guiding a fund manager's stock selections. No single investment style
consistently outperforms another, so diversifying your funds according to style
is another way to protect your portfolio.
Style diversification in a portfolio is important for a couple of
reasons. First, the differences in returns between styles can be great when one
style is in favor over another. And second, combining styles within a portfolio
reduces the dominance of any one style, potentially lowering a portfolio's
overall volatility.
Three basic investment styles are value, growth and blended. Value funds
invest in companies whose stock price appears undervalued based on their assets
or business prospects, compared to other firms in the market. Growth funds
invest in companies that are expected to have above-average increases in
revenues and earnings. Blended funds use a combined growth and value approach.
No Investment Category Consistently Outperforms
Different types of investments seldom perform in lockstep with each other. For
example, foreign markets may perform well when the U.S. market is weak.
In 1994, the international emerging market was up
Importance of Asset Allocation/1/
Impact of various investment decisions on portfolio return.
[PIE CHART APPEARS HERE]
<TABLE>
<S> <C>
Market timing 1.8%
Other 2.1%
Security selection 4.6%
Asset allocation 91.5%
</TABLE>
A Look at Potential Risk and Reward by Sector/2/
Risks and Rewards of Various Sectors Can Be Dramatic
Less Risk/Reward Greater Risk/Reward
[LEFT TO RIGHT SHADED BAR APPEARS HERE]
- ----
4
- ----
<PAGE>
71.3%, while the U.S. large-cap growth market was up only 2.9%. Then, in 1995,
the U.S. large-cap growth market rose 37.2%, while the international emerging
market fell 6.9%.
Investment Performance for Stock Styles and Sectors Varies Dramatically From
Year-to-Year/3/
<TABLE>
<CAPTION>
International International
Large-Cap Large-Cap Small-Cap Small-Cap Developed Emerging
Growth Value Growth Value Market Market
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1996 23.1% 21.6% 11.3% 21.4% 6.1% 3.9%
- --------------------------------------------------------------------------------
1995 37.2% 38.4% 31.0% 25.8% 11.2% -6.9%
- --------------------------------------------------------------------------------
1994 2.7% -2.0% -2.4% -1.3% 7.8% -8.7%
- --------------------------------------------------------------------------------
1993 2.9% 18.1% 13.4% 23.8% 32.6% 71.3%
- --------------------------------------------------------------------------------
1992 5.0% 13.8% 7.8% 29.1% -12.2% 9.1%
- --------------------------------------------------------------------------------
1991 41.2% 24.6% 51.2% 41.7% 12.1% 56.0%
- --------------------------------------------------------------------------------
1990 -0.3% -8.1% -17.4% -21.8% -23.5% -13.8%
- --------------------------------------------------------------------------------
</TABLE>
To further illustrate the performance differences that can occur between sectors
or styles, look at the these graphs. Each chart shows the relative performance
of one sector or style compared to another.
Longer-term Sector and Style Trends are Difficult to Predict/4/
Performance of one investment category relative to another, with zero (0)
representing identical performance (1980-1996)
Large-Cap Stocks Relative to Small-Cap Stocks
-19.84
-15.22
-12.19
-41.63
-42.53
-43.14
-30.45
-16.79
-2.74
4.94
4.53
6.68
4.32
8.79
7.49
11.94
14.31
17.25
15.32
12.73
15.24
8.12
8.68
-0.73
0.4
-10.66
-21.81
-18.54
-34.98
-45.77
-39.94
-31.9
-26.06
-4.57
-0.59
2.39
12.03
19.16
18.1
17.89
23.76
23.75
25.86
21.07
22.48
18.23
22.9
22.1
14.47
9.18
9.65
9.91
12.69
14.94
5.17
7.76
9.07
6.25
2.35
1.21
6.18
9.15
7.32
0.18
0.06
1
11.65
17.74
11.73
12.1
15.09
14.89
19.49
12.71
11.26
17.94
17.16
18.89
17.41
11.83
12.45
23.05
17.06
15.72
15.88
16.68
9.19
6.3
8.36
3.98
2.91
2.24
3.71
-8.38
-3.49
-3.56
-2.98
-1.02
7.96
9.96
4.46
10.26
14.25
13.44
9.32
7.56
6.13
11.3
11.03
11.8
10.24
9.85
11.98
7.68
7.33
12.61
16.94
18.87
16.76
14.25
7.65
6.46
3.64
4.83
3.19
6.83
2.66
-7.56
-19.49
-33
-24.17
-20.62
-26.36
-19.16
-7.93
0.54
1.92
5.01
5.75
9.4
11.22
10.29
3.49
-0.1
9.36
15.94
12.21
3.32
-0.93
-6.87
-9.28
-13.42
-16.21
-12.81
-1.99
-3.39
-2.12
-12.7
-9.31
-9.2
-1.4
0.45
3.87
1.67
2.78
4.84
1.99
3.73
7.47
9.54
8.3
8.69
7.42
0.22
-7.64
-4.64
1.52
5.75
5.71
6.41
5.92
2.1
0.62
-9.23
-16.21
-0.52
13.48
9.34
7.66
10.67
16.23
11.74
Growth Stocks Relative to Value Stocks
15.15
3.39
2.55
4.41
1.4
3.96
-2.19
-3.66
-6.15
-10.79
-9.77
-14.19
-12.53
-6.85
-8.53
-9.41
-5.2
-7.03
-4.06
-4.04
-5.03
-1.49
-5.13
0.59
0.42
-1.6
4.39
6.5
1.33
3.7
9.12
1.18
-0.33
-2.08
-7.18
-12.77
-12.33
-17.73
-20.18
-18.01
-15.27
-14.08
-14.72
-12.16
-10.24
-13.78
-9.89
-11.15
-11.06
-1.7
-0.03
-2.37
-5.68
-6.06
-9.4
-8.78
-9.01
-4.63
-6.74
-0.75
1.35
-2.05
-1.24
2.6
9.57
10.42
11.74
7.22
2.82
-1.99
-0.15
-3.75
-4.61
-1.19
4.24
1.24
-2.66
-2.52
-3.84
0.39
7.67
11.74
4.05
1.83
4.82
-3.91
-7.51
-7.77
-8.47
-10.84
-10.08
-11.76
-13.17
-11.77
-11.18
-10.39
-11.9
-4.46
-6.11
-4.53
-0.91
2.03
0.56
6.9
8.54
7.74
10.11
13.24
10.73
6.97
6.03
9.27
9.52
11.57
15.76
11.12
9.82
7.58
7.68
6.52
7.83
11.59
15.65
15.12
10.98
9.09
4.52
6.09
9.92
9.74
7.38
10.16
16.55
11.6
6.84
2.35
-0.23
-0.74
-2.33
-2.91
-2.35
-1.52
0.15
-1.81
-8.8
-10.55
-13.61
-13.88
-12.39
-11.29
-12.92
-16.24
-18.89
-19.39
-17.86
-16.54
-15.23
-12.64
-4.91
-4.76
-3.51
-4.6
-1.88
1.41
3.63
6.53
4.64
3.99
4.66
5.14
3.99
6.43
7.09
6.01
10.12
10.62
5.54
4.54
4.58
2.21
-1.14
0.45
1.55
-1.5
2.67
6.36
3.19
-0.36
0.83
3.45
-1.7
-0.02
1.48
Beware of Style Drift
So far, diversifying your assets among various sectors and styles may seem
fairly straightforward. But sometimes a fund manager abandons a fund's stated
sector or style to chase the latest hot trend in an attempt to enhance
performance. This is known as "style drift," and it can ruin your plans for
maintaining a diversified portfolio.
For example, let's say you decide to invest in a large-cap growth fund to
diversify your portfolio of small-cap holdings. If the manager of your
"large-cap" fund begins buying smaller-cap stocks to boost short-term returns,
this overlaps with other funds you own. The end result--a lower level of
diversification protection.
Some fund managers are better than others when it comes to sticking with one
chosen style and sector. "Institutional" investment managers, in particular,
follow stringent investment guidelines. This is because the majority of their
clients are large corporations that undertake a rigorous, ongoing, portfolio
monitoring process to ensure that their managers stay true to a particular
sector and style.
Checking Your Portfolio Diversification
How can you be sure that your investment portfolio is adequately diversified?
Using a chart like the one below, you can work with your financial advisor to
list the mutual funds that you currently hold in your portfolio.
Get Started Today
Many potential benefits can result from a well-planned, diversified investment
portfolio. By starting now, you can help protect your portfolio when the market
enters a correction. Your financial advisor can review your stock portfolio and
the level of its diversification protection, and recommend a course of action to
help keep your investment plan on track.
STOCK FUND ALLOCATION
[ARTWORK DEPICTING SAMPLE CHART APPEARS HERE]
- --------------------------------------------------------------------------------
/1/ Past performance is no guarantee of future results. These results are not
for an actual portfolio but instead reflect the results of a 1991 study by
Gary P. Brinson, Brian D. Singer and Gilbert L. Beebower. Source: Ibbotson
Associates.
/2/ Past performance is no guarantee of future results. The spectrum above is
not based on any statistical risk and reward data, but is instead a
graphic depiction of the sectors' relative potential risk and reward when
compared to each other.
/3/ Large-Cap Growth and Small-Cap Growth are represented by the Russell 1000
Growth Index and Russell 2000 Growth Index, respectively. Large-Cap Value
and Small-Cap Value are represented by the Russell 1000 Value Index and
Russell 2000 Value Index, respectively. International Developed Market and
International Emerging Market stocks are represented by the MSCI EAFE
Index and MSCI Emerging Market Index, respectively. Past performance is no
guarantee of future results and it is not possible to invest in an
unmanaged index. Returns are not indicative of the performance of any
PIMCO Fund.
/4/ Past performance is no guarantee of future results. "Large-Cap Stocks" are
based on the return of the S&P 500 Index. "Small-Cap Stocks" are based on
the return of the Russell 2000 Index. "Growth Stocks" are based on the
return of the Russell 1000 Growth Index. "Value Stocks" are based on the
return of the Russell 1000 Value Index. It is not possible to invest in an
unmanaged index. Source: Ibbotson Associates.
-
5
-
<PAGE>
Fund Spotlight PIMCO Opportunity Fund
[PICTURE OF DONALD CHIBOUCAS APPEARS HERE]
Donald Chiboucas
[PICTURE OF MARC FELMAN APPEARS HERE]
Marc Felman
Since its inception through June 30, 1997, the PIMCO Opportunity Fund has posted
an 18% return, compared to a 13% return for both the Lipper Capital Appreciation
Fund Average and the Russell 2000 Index. Of course, past performance is no
guarantee of future results, and results during other periods vary. For example,
over the shorter term periods, the Fund, like many small-capitalization
(small-cap) stocks, has experienced periods of volatility. We spoke with
portfolio managers Donald Chiboucas and Marc Felman for an update on the Fund.
<TABLE>
<CAPTION>
Average annual total return (PERIODS ENDED 6/30/97)
1 Year 3 Years 5 Years 10 Years Inception (2/24/84)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Opportunity Fund (Class C) -11.1% 19.8% 19.5% 17.1% 18.0%
- --------------------------------------------------------------------------------------------------------
</TABLE>
Q: Historically, small-cap stocks have been the performance leaders, but
recently, many of them have been out of favor. Why?
A: The economic conditions of the last few years have been ideal for businesses
of all sizes. That lowered the premium for small companies doing well due to
their unique niche success dynamics. As large-cap companies did well, the major
stock market indices, which are most influenced by the price action of their
large-cap components, tended to outperform. This fostered a transfer of capital
into large-cap stocks. Small cap companies have continued to do well
fundamentally, but their results have been relatively ignored by the stock
market.
Q: How has the Opportunity Fund performed during this period?
A: The Fund faltered last fall when "Momentum" style investment managers began
selling small-cap holdings because of their weak prices. Our investment process
relates strictly to companies' business fundamentals, so we continued to hold
our small cap stocks.
"Momentum" selling eventually subsides when stock prices decline so much
that "Value" style investment managers begin to purchase the depressed
securities. That process appears to have started, and the prices of our
small-cap holdings now appear to be back in sync with their fundamental business
progress.
Q: How have you attempted to limit downside risk for the Fund?
A: As the price of small-cap stocks fell, we tried to reduce the Fund's risk
profile by raising cash, writing options, and adding relatively less volatile
securities. Because we believe the liquidation of small-cap securities by
"Momentum" style investment managers is over, we have returned the portfolio to
its more normally aggressive strategy.
Q: How has the Fund performed after previous short-term downturns?
A: While past performance is no guarantee of future results, the Fund has proven
its value by repeatedly bouncing back very strongly after volatile stretches.
Over the long term, this has helped the Fund post strong results.
Q: What is your outlook for the small-cap market going forward?
A: During the second quarter, the Fund was up 16.4%, and we're very optimistic
about the future of small-caps, especially relative to the rest of the market.
The trend toward large-cap stocks has pushed their valuations to lofty levels,
which makes them especially vulnerable to disappointing news events. We believe
small-cap stocks are now relatively more attractive than large-cap stocks,
although it may take a less benign economic environment to trigger a change in
investor preferences.
Q: Where do you think the best opportunities in the small-cap market exist
today?
A: More than half of the stocks we've recently added to the Fund are those of
technology companies. Led by telecommunications, computers, and the software to
run them, technology remains the most fertile area for positively surprising
business trends. Due to depressed valuations in technology stocks, we can
purchase attractive companies at valuations less than their historical norms.
Q: What type of investor do you think the Opportunity Fund is most appropriate
for?
A: This Fund is not for the faint of heart. It's geared toward aggressive
investors that can withstand short-term dips in the stock market in exchange for
long-term potential rewards.
The views of Mr. Chiboucas and Mr. Felman are not indicative of any past or
future performance of the Opportunity Fund. For complete performance data of the
Fund, turn to page X.
- -
6
- -
<PAGE>
In The News
Recent News on PIMCO Funds
The PIMCO Funds and their institutional portfolio managers are regularly
featured in the press. Here is a sample of some recent articles.
[ ] Bill Gross, manager of the PIMCO Total Return and Low Duration Funds,
continues to be sought out by the press. During the last three months ended June
30, 1997, his views appeared in The Wall Street Journal, Investor's Business
Daily, Money, Barron's, The New York Times and Bloomberg Personal magazine. In
summary, Mr. Gross believes the Federal Reserve Board's next move will be to
lower interest rates, leading to an ongoing rally in the bond market.
[ ] In a review of the PIMCO High Yield Fund, Morningstar said, "investors who
want high yield exposure but are unwilling to take on too much credit risk will
be hard pressed to find a better option." (12/96)
[ ] Ben Fischer of the PIMCO Small Cap Value Fund was interviewed in the April
issue of High Net Worth. Mr. Fischer explained his strict style discipline and
his "secrets" for identifying undervalued small-cap issues.
[ ] In the May 1997 issue of Money magazine, the PIMCO StocksPLUS Fund was
featured in an article highlighting "Super Index Funds." The article explained
how the Fund seeks to provide a return in excess of the S&P 500 Index by
investing in stock futures, backed by a portfolio of short-term, investment
grade bonds.
[ ] Morningstar praised the high-tech PIMCO Innovation Fund in February. In its
Fund review, Morningstar said that, "in a little more than two years management
has invested in enough upside surprises to produce fine returns."
[ ] Morningstar also complemented the PIMCO Total Return Fund in its April
review of the Fund by saying, "This is one of the few large bond funds that
really deserves to be as big as it is."
Morningstar Inc., an independent organization, provides investors with
information regarding a wide range of investment products. One service offered
by Morningstar is assigning star ratings to the mutual funds they track. Their
highest rating is five-stars, and the lowest rating is one-star. Following are
the PIMCO Fund family's five- and four-star rated Funds as of June 30, 1997.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
STOCK FUNDS Overall 3 Year 5 Year 10 Year
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
StocksPLUS Fund ***** 5 - -
Equity Income Fund **** 4 4 -
Renaissance Fund **** 4 4 -
Value Fund **** 4 4 -
Capital Appreciation Fund **** 4 4 -
Mid Cap Growth Fund **** 4 4 -
Small Cap Value Fund **** 3 4 -
- ------------------------------------------------------------------------------------------------------------------------
BOND FUNDS Overall 3 Year 5 Year 10 Year
- ------------------------------------------------------------------------------------------------------------------------
Foreign Bond Fund ***** 5 - -
High Yield Fund ***** 5 - -
Total Return Fund ***** 4 4 5
Low Duration Fund ***** 4 4 5
Short-Term Fund **** 5 4 -
</TABLE>
The above chart is based on June 30, 1997 Morningstar ratings. Overall rating is
a weighted average of a fund's 3-, 5- and 10-year ratings (when applicable).
During the 3-, 5- and 10-year periods, there were 1,997, 1,134 and 618 domestic
equity funds and 1,248, 677 and 283 taxable bond funds rated, respectively.
Morningstar ratings reflect historical risk-adjusted performance and are subject
to monthly changes. Therefore, past ratings are not a guarantee of future
results. The ratings are calculated from a fund's average annual total return
with appropriate sales charge adjustment and a risk factor that reflects fund
performance relative to three-month Treasury bill returns. With the exception of
the Renaissance Fund, ratings are based on institutional class shares. Class A,
B and C shares, which were initially offered on 1/17/97, have not yet been rated
by Morningstar. 5-star ratings are limited to the top 10% of funds in an
investment category, the next 22.5% earn 4 stars, the next 35% earn 3 stars, the
next 22.5% earn 2 stars and the next 10% earn 1 star.
--
7
--
<PAGE>
- --------
Investor
Services
- --------
24-Hour Automated
Telephone System
Have you ever needed to learn the price of your PIMCO Fund at the end of the
trading day? Or wanted a quick overview of the financial markets? With PIMCO
Funds' Automated Telephone Information System, these facts and more are
available 24 hours a day!
This system provides a wide variety of financial information, including:
[_] the latest day's fund prices
[_] fund dividend information
[_] account balances and details on recent transactions (for shareholders
who receive account statements directly from PIMCO Funds)
[_] stock and bond market closing prices
[_] timely reviews of the financial markets.
The system is easy to use--simply dial 1-800-223-2413 from your touch-tone
phone.
- --------------------------------------------------------------------------------
MAIN MENU
- --------------------------------------------------------------------------------
[1] for information about the PIMCO Funds
(i.e., current prices, recent distributions)
[2] for information about your account
(i.e., account value, recent transactions)
[3] to make an account transaction with a customer
service representative (during business hours)
[4] to create or change a Personal Identification
Number (PIN)
[5] for an update on the financial markets
Once you're connected, you'll be asked to select from these options
- --------------------------------------------------------------------------------
HELP IN GETTING AROUND
- --------------------------------------------------------------------------------
[*] [1] to go to other items on the main menu
[*] [2] to fast-forward in the selection you're
listening to
[*] [3] to delete your entry
[*] [4] to listen to more options
[*] [5] to return to the beginning of your selection
from the main menu
[*] [6] to return to the main menu
[*] [7] to repeat the most recent information
[*] [8] to return to the shareholder
identification process
[*] [9] to repeat information for the last account
number entered
[*] [0] to speak with a customer service
representative during regular business hours
For help in moving about the system, For help in you can use these options
We believe you'll find this service to be a convenient way to learn more about
your Funds and the financial markets in general. To receive a free brochure that
contains more information on the system and details on the other shareholder
services available from PIMCO Funds, call us today at 1-800-227-7337.
The PIMCO Funds Family
The PIMCO Funds are managed by PIMCO Advisors L.P.--a publicly traded company
that specializes in the investment management business. Currently, PIMCO
Advisors has $119 billion in assets under management, including $27 billion in
mutual funds. Under the PIMCO Advisors L.P. umbrella are six institutional
investment management firms--each with a specific investment discipline or
style. As primarily "institutional" managers, these firms manage assets for
large corporations, pensions and endowments. In fact, they collectively manage
assets for 35 of the 100 largest corporations in the United States.
In the past, their high minimum account balances (up to $75 million in some
cases) kept these managers' expertise out of reach for most investors. However,
as managers of the PIMCO Funds, their expertise is now available to all
investors. To learn more about a fund manager, call us at 1-800-227-7337 to
receive a free brochure.
The PIMCO Funds family consists of core stock and bond funds, as well as
more focused funds that allow investors to round out and customize their
portfolio. Together, the PIMCO Funds offer the breadth and quality that will
satisfy virtually every investor's needs.
Specialized Stock Fund Managers
We believe that different types of stock funds require specialized expertise. To
ensure that you get the highest quality management for whichever PIMCO Stock
Fund you choose, we have carefully matched each Fund with a PIMCO Funds firm
that specializes in that discipline.
Premier Bond Fund Managers
The PIMCO Bond Funds are primarily managed by PIMCO Funds' Pacific Investment
Management Company--one of the most respected names in institutional bond
management. Pacific Investment Management actively manages these funds with an
emphasis on total return potential--income and price change--rather than yield
alone. Overall, they avoid investment fads in favor of a long-term, conservative
approach that includes aggressively seeking opportunities in all sectors of the
fixed income market.
- -
8
- -
<PAGE>
<TABLE>
<CAPTION>
Stock Funds Objective Primary Portfolio Composition PIMCO Advisors Manager
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Equity Income Current income and long-term Stocks of companies with below-average P/Es NFJ Investment Group
growth and above-average dividends
- ------------------------------------------------------------------------------------------------------------------------------------
Renaissance Long-term growth of capital Income-producing stocks and convertible Columbus Circle Investors
and income securities
- ------------------------------------------------------------------------------------------------------------------------------------
Stocks PLUS Total return exceeding the S&P 500 stock index futures backed by a Pacific Investment
S&P 500 Index portfolio of short-term, fixed-income Management Company
securities
- ------------------------------------------------------------------------------------------------------------------------------------
Value Long-term growth of capital Stocks of companies with below-average P/Es NFJ Investment Group
and income
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Appreciation Growth of capital Stocks of larger-capitalized companies the Cadence Capital Management
manager believes are reasonably priced
- ------------------------------------------------------------------------------------------------------------------------------------
Growth Long-term growth of capital Stocks of larger-capitalized companies Columbus Circle Investors
- ------------------------------------------------------------------------------------------------------------------------------------
Mid Cap Growth Growth of capital Stocks of medium-capitalized companies the Cadence Capital Management
manager believes are reasonably priced
- ------------------------------------------------------------------------------------------------------------------------------------
Target Capital appreciation Stocks of medium-capitalized companies Columbus Circle Investors
- ------------------------------------------------------------------------------------------------------------------------------------
Small Cap Value Growth of capital and income Stocks of smaller-capitalized companies NFJ Investment Group
with below-average P/Es
- ------------------------------------------------------------------------------------------------------------------------------------
Opportunity Capital appreciation Stocks of smaller-capitalized companies Columbus Circle Investors
- ------------------------------------------------------------------------------------------------------------------------------------
International Developed Long-term growth of capital Stocks of non-U.S. companies in developed Blairlogie Capital Management
markets
- ------------------------------------------------------------------------------------------------------------------------------------
International Capital appreciation Stocks of non-U.S. companies in developed Blairlogie Capital Management
and emerging markets
- ------------------------------------------------------------------------------------------------------------------------------------
Emerging Markets Long-term growth of capital Stocks of non-U.S. companies in emerging Blairlogie Capital Management
markets
- ------------------------------------------------------------------------------------------------------------------------------------
Innovation Capital appreciation Stocks of technology-related companies Columbus Circle Investors
- ------------------------------------------------------------------------------------------------------------------------------------
Precious Metals Capital appreciation Stocks of precious metals-related companies Van Eck Associates*
Stock & Bond Funds Objective Primary Portfolio Composition PIMCO Advisors Manager
- -----------------------------------------------------------------------------------------------------------------------------------
Balanced Maximum total return Stocks, bonds and money market instruments Cadence/NFJ/Pacific
Bond Funds Objective Primary Portfolio Composition PIMCO Advisors Manager
- -----------------------------------------------------------------------------------------------------------------------------------
Long-Term U.S. Maximum total return Long-term U.S. government bonds Pacific Investment
Government (8+ year duration) Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Exempt High current income exempt Investment grade municipal bonds Columbus Circle Investors
from federal taxes, (3-10 year duration)
preservation of capital
- ------------------------------------------------------------------------------------------------------------------------------------
Emerging Markets Maximum total return Emerging market bonds Pacific Investment
Bond (0-8 year duration) Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
Foreign Bond Maximum total return Investment grade foreign bonds Pacific Investment
(3-6 year duration) Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
Global Bond II Maximum total return Investment grade U.S. and foreign bonds Pacific Investment
(3-6 year duration) Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
High Yield Maximum total return High-yield bonds (3-6 year duration) Pacific Investment
Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return Maximum total return Intermediate-term, investment grade bonds Pacific Investment
(3-6 year duration) Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
Real Return Bond Maximum total return Inflation-adjusted government bonds Pacific Investment
Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
Low Duration Maximum total return Shorter-term, investment grade bonds Pacific Investment
(1-3 year duration) Management Company
- ------------------------------------------------------------------------------------------------------------------------------------
Short-Term Maximum current income Money market securities and short-term Pacific Investment
consistent with preservation bonds (up to 1 year duration) Management Company
of capital and daily liquidity
- ------------------------------------------------------------------------------------------------------------------------------------
Money Market Maximum current income Short-term money market instrument Pacific Investment
consistent with preservation (duration less than 1 year) Management Company
of capital and daily liquidity
</TABLE>
* Van Eck Associates serves as a sub-advisor to the Fund and is unaffiliated
with PIMCO Advisors L.P.
---
9
---
<PAGE>
PIMCO Funds Financial Information
We are pleased to present an in-depth review of the PIMCO Multi-Manager Series
Funds as of June 30, 1997. In order to help analyze, compare and contrast the
Funds, the report is broken down into a number of sections. Listed below is a
table of contents and descriptions of the various sections.
Pages 11-27 Fund Summary
A summary of a Fund's performance record and portfolio composition, and a review
from the Fund's investment manager
Pages 28-53 Schedule of Investments
The schedule of investments includes a listing of securities in the Fund's
portfolio as of June 30, 1997, including the number of shares or principal
amount and value as of that date.
<TABLE>
<CAPTION>
Schedule of
Stock Funds Fund Summary Investments
<S> <C> <C>
Equity Income Fund Page 11 Page 28
Renaissance Fund Page 12 Page 29
Value Fund Page 13 Page 31
Capital Appreciation Fund Page 14 Page 32
Growth Fund Page 15 Page 33
Mid Cap Growth Fund Page 16 Page 35
Target Fund Page 17 Page 37
Small Cap Value Fund Page 18 Page 38
Opportunity Fund Page 19 Page 40
International Developed Fund Page 20 Page 41
International Fund Page 21 Page 43
Emerging Markets Fund Page 22 Page 46
Innovation Fund Page 23 Page 48
Precious Metals Fund Page 24 Page 49
<CAPTION>
Stock & Bond Funds
<S> <C> <C>
Balanced Fund Page 25 Page 50
<CAPTION>
Bond Funds
<S> <C> <C>
Tax Exempt Fund Page 26 Page 52
</TABLE>
Page 54-65 Financial Highlights
This chart shows a per share breakdown of the factors that affect a Fund's NAV
for the current and past reporting periods. In addition to showing total return,
the chart reports distributions, asset size, expense ratios and portfolio
turnover rate.
Page 66-67 Statement of Assets and Liabilities
A "balance sheet" of a Fund as of the last day of the fiscal period. It includes
the Fund's Class level NAVs per share by dividing the Fund's Class level net
assets (assets minus liabilities) by the number of Class level shares
outstanding.
Page 68-69 Statement of Operations
This statement lists a Fund's income, expenses, and gains and losses on
securities and currency transactions, and from appreciation or depreciation from
portfolio holdings.
Page 70-73 Statement of Changes in Net Assets
This reports the increase or decrease in a Fund's net assets during the
reporting period. Changes in net assets are due to a variety of factors,
including investment operations, dividends, distributions and capital share
transactions.
Page 74-82 Notes to Financial Statements
A description of the significant accounting policies of the funds, and more
detailed information about the schedules and tables that appear in the report.
- ----
10
- ----
<PAGE>
PIMCO Equity Income Fund
June 30, 1997
OBJECTIVE:
Current income as a primary objective; long-term growth of capital and current
income.
PORTFOLIO:
Primarily common stocks with below-average price-to-earnings ratios and higher
dividend yields relative to their industry groups.
TOTAL NET ASSETS:
$140 million
NUMBER OF SECURITIES IN THE PORTFOLIO
45 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
NFJ Investment Group
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 6/30/97
<TABLE>
<CAPTION>
A Shares B Shares C Shares Lipper
(INCEP. 3/8/91) (INCEP. 3/8/91) (INCEP. 3/8/91) S&P 500 Equity Inc.
Adjusted Adjusted Adjusted Index Fund Avg.
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 27.4% 20.4% 27.1% 22.1% 26.0% 34.7% 26.7%
3 years 23.6% 21.3% 23.5% 22.8% 23.5% 28.9% 21.6%
5 years 16.7% 15.4% 16.6% 16.4% 16.6% 19.8% 16.1%
Inception 16.8% 15.8% 16.7% -- 16.7% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
EQUITY INCOME EQUITY INCOME EQUITY INCOME S&P 500
CLASS A B C
- --------- ------------- ------------- ------------- ---------
<S> <C> <C> <C> <C>
03/31/91 9,450.00 10,000.00 10,000.00 10,000.00
04/30/91 9,515.46 10,069.27 10,069.27 10,024.00
05/31/91 10,054.07 10,639.23 10,639.23 10,457.04
06/30/91 9,704.45 10,269.26 10,269.26 9,978.10
07/31/91 10,247.43 10,843.85 10,483.85 10,443.08
08/31/91 10,400.10 11,005.39 11,005.39 10,690.59
09/30/91 10,457.34 11,065.97 11,065.97 10,512.05
10/31/91 10,531.03 11,143.95 11,143.95 10,652.91
11/30/91 10,110.57 10,699.02 10,699.02 10,223.60
12/31/91 11,001.19 11,641.48 11,641.48 11,393.18
01/31/92 11,274.19 11,930.35 11,930.35 11,181.27
02/29/92 11,560.48 12,233.31 12,233.31 11,326.62
03/31/92 11,372.91 12,034.82 12,034.82 11,105.76
04/30/92 11,577.39 12,251.21 12,251.21 11,432.26
05/31/92 11,597.32 12,272.30 12,272.30 11,488.28
06/30/92 11,607.28 12,282.84 12,282.84 11,317.34
07/31/92 12,127.19 12,833.01 12,833.01 11,779.65
08/31/92 11,775.24 12,460.57 12,460.57 11,538.52
09/30/92 11,875.80 12,566.98 12,566.98 11,674.10
10/31/92 11,891.30 12,583.39 12,583.39 11,714.37
11/30/92 12,250.66 12,963.66 12,963.66 12,113.25
12/31/92 12,623.25 13,357.94 13,357.94 12,261.88
01/31/93 12,688.29 13,426.76 13,426.76 12,364.39
02/28/93 12,951.94 13,705.75 13,705.75 12,532.91
03/31/93 13,248.55 14,019.63 14,019.63 12,797.36
04/30/93 12,989.42 13,745.42 13,745.42 12,488.05
05/31/93 13,089.08 13,850.88 13,850.88 12,822.10
06/30/93 13,321.63 14,096.96 14,096.96 12,859.67
07/31/93 13,300.30 14,074.39 14,074.39 12,807.97
08/31/93 13,769.33 14,570.72 14,570.72 13,293.91
09/30/93 13,758.16 14,558.90 14,558.90 13,191.94
10/31/93 13,869.74 14,676.98 14,676.98 13,464.89
11/30/93 13,730.47 14,529.59 14,529.59 13,336.57
12/31/93 13,691.84 14,488.72 14,488.72 13,497.81
01/31/94 14,146.82 14,970.19 14,970.19 13,956.73
02/28/94 13,841.33 14,646.91 14,646.91 13,577.95
03/31/94 13,289.09 14,062.52 14,062.52 12,985.95
04/30/94 13,393.45 14,172.96 14,172.96 13,152.43
05/31/94 13,476.34 14,260.68 14,260.68 13,368.26
06/30/94 13,286.87 14,060.18 14,060.18 13,040.60
07/31/94 13,724.72 14,523.51 14,523.51 13,468.85
08/31/94 14,287.11 15,118.63 15,118.63 14,021.08
09/30/94 14,023.86 14,840.07 14,840.07 13,678.26
10/31/94 14,190.31 15,016.20 15,016.20 13,985.61
11/30/94 13,429.46 14,211.07 14,211.07 13,476.26
12/31/94 13,472.14 14,265.24 14,256.24 13,676.11
01/31/95 13,911.77 14,721.45 14,721.45 14,030.73
02/28/95 14,364.59 15,200.62 15,200.62 14,577.51
03/31/95 14,779.68 15,639.87 15,639.87 15,007.69
04/30/95 15,163.20 16,045.71 16,045.71 15,449.67
05/31/95 15,721.97 16,637.01 16,637.01 16,067.19
06/30/95 15,772.77 16,690.76 16,690.76 16,440.43
07/31/95 16,325.36 17,275.52 17,275.52 16,985.60
08/31/95 16,556.02 17,519.60 17,519.60 17,028.23
09/30/95 16,991.71 17,980.64 17,980.64 17,746.82
10/31/95 16,925.87 17,910.97 17,910.97 17,683.46
11/30/95 17,507.73 18,526.70 18,526.70 18,459.77
12/31/95 17,980.55 19,027.03 19,027.03 18,815.30
01/31/96 18,250.32 19,312.51 19,312.51 19,455.78
02/29/96 18,493.12 19,569.44 19,569.44 19,636.13
03/31/96 18,863.24 19,961.10 19,961.10 19,825.23
04/30/96 19,338.90 20,464.44 20,464.44 20,117.45
05/31/96 19,651.47 20,795.21 20,795.21 20,636.28
06/30/96 19,693.78 20,839.98 20,839.98 20,714.90
07/31/96 18,788.63 19,882.15 19,882.15 19,799.72
08/31/96 19,433.21 20,564.24 20,564.24 20,217.30
09/30/96 20,103.42 21,273.47 21,273.47 21,355.13
10/31/96 20,560.01 21,756.62 21,756.62 21,944.10
11/30/96 22,109.62 23,396.42 23,396.42 23,602.85
12/31/96 21,841.74 23,112.96 23,112.96 23,135.28
01/31/97 22,324.45 23,623.75 23,623.75 24,580.77
02/28/97 22,951.76 24,271.04 24,271.04 24,773.49
03/31/97 22,182.88 23,448.26 23,443.40 23,755.54
04/30/97 22,992.55 24,271.29 24,282.67 25,173.75
05/31/97 24,418.09 25,761.55 25,773.63 26,706.33
06/30/97 25,094.47 26,480.29 26,474.67 27,902.77
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. All
returns represent the blended performance of the Fund's retail class shares (for
the period from 1/20/97) and the prior performance of the Fund's institutional
class shares (for the period from 3/8/91). Retail class shares have higher
expenses than institutional class shares. Therefore, total return of retail
class shares would have been lower had they been in existence since the Fund's
inception. Past performance is not an indication of future results. See page 27
for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Top 10 Stocks % of Total Investments
- --------------------------------------------------------------------------------
<S> <C>
RJR Nabisco Holdings Corp. 3.8%
Tobacco/food products manufacturer
- --------------------------------------------------------------------------------
Maytag Corp. 3.7%
Major home appliances manufacturer
- --------------------------------------------------------------------------------
Southern New England
Telecommunications Corp. 3.6%
Telecommunications
- --------------------------------------------------------------------------------
SUPERVALU, Inc. 3.6%
Food wholesaler
- --------------------------------------------------------------------------------
USX-U.S. Steel Group, Inc. 2.2%
Integrated steel producer
- --------------------------------------------------------------------------------
Nynex Corp. 2.2%
Telephone services: New York & New England
- --------------------------------------------------------------------------------
Lincoln National Corp. 2.1%
Multi-line insurance holding company
- --------------------------------------------------------------------------------
Meditrust 2.1%
Real Estate Investment Trust:
health care facilities
- --------------------------------------------------------------------------------
Ultramar Diamond Shamrock 2.0%
Petroleum products
- --------------------------------------------------------------------------------
CIGNA Corp. 2.0%
Multi-line insurance holding company
- --------------------------------------------------------------------------------
Top Ten Total 27.3%
- --------------------------------------------------------------------------------
<CAPTION>
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
<S> <C>
Consumer Discretionary 22.6%
- --------------------------------------------------------------------------------
Utilities 19.3%
- --------------------------------------------------------------------------------
Financial and Business Services 15.6%
- --------------------------------------------------------------------------------
Materials and Processing 9.7%
- --------------------------------------------------------------------------------
Energy 9.5%
- --------------------------------------------------------------------------------
<CAPTION>
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 96%
- --------------------------------------------------------------------------------
Cash Equivalents 4%
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The Equity Income Fund's performance for the past 12 months was strong, with
returns similar to those of mutual funds with the same objective (measured by
the Lipper Equity Income Fund Average). Specifically, for the year ended June
30, 1997, the Fund's shares increased 27.4%, 27.1% and 26.0% for its Class A, B
and C shares, respectively.
Over the past year, the Fund's manager maintained the portfolio's exposure to
the utilities sector. The managers' stock selection in this sector helped the
Equity Income Fund, as it posted strong results during the last quarter. Many
utility companies streamlined their operations, thereby decreasing operating
expenses. With the positive environment in the bond market, the dividends
offered by utility companies become more attractive relative to other
investments. These factors have recently helped boost the stock prices in the
Fund's utility holdings.
Another success story for the Fund in recent months was its steel industry
holdings. The Fund's position in USX-U.S. Steel, the nation's largest steel
producer, benefited from very strong financial results. This was due to the
growing economy, which provided a positive operating environment for the firm.
As a result, the firm was able to raise prices and widen profit margins. U.S.
Steel is a prime example of the type of stock the Fund's manager seeks, as the
company has one of the lowest price-to-earnings ratios in its sector, and its
nearly 3% dividend yield is one of the highest in the steel industry.
For most of its fiscal year, the Fund also benefited from the energy sector's
strong performance. However, a recent decline in oil prices detracted from the
Fund's performance, as it was overweighted in this sector. An agreement between
Saudi Arabia and Iran that attempts to force other members of OPEC to curtail
crude oil production and raise world oil prices appears to have also hindered
this sector's performance.
Given the lofty level of the stock market, the manager currently believes
there are compelling reasons to invest in undervalued stocks. The Fund will
continue to focus on these securities and stocks that offer above--average
yields.
----
See page 28 for financial details. 11
----
<PAGE>
PIMCO Renaissance Fund
June 30, 1997
OBJECTIVE:
Long-term growth of capital and current income.
PORTFOLIO:
Primarily income-producing stocks and convertible securities of companies with
small, medium, and large market capitalizations.
TOTAL NET ASSETS:
$384 million
NUMBER OF SECURITIES IN THE PORTFOLIO
50 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Columbus Circle Investors
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------------------------------
Average Annual Total Return For periods ended 6/30/97
A Shares B Shares C Shares Lipper
(INCEP. 2/1/91) (INCEP. 5/22/95) (INCEP. 4/18/88) S&P 500 Equity Inc.
Adjusted Adjusted Adjusted Index Fund Avg.
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 33.1% 25.8% 32.2% 27.2% 31.2% 34.7% 26.7%
3 years 24.8% 22.4% -- -- 23.8% 28.9% 21.6%
5 years 18.6% 17.3% -- -- 17.8% 19.8% 16.1%
Inception 19.3% 18.3% 30.3% 29.3% 12.9% -- --
</TABLE>
[LINE CHART OF CHANGE IN VALUE APPEARS HERE]
<TABLE>
<CAPTION>
Renaissance
-----------------------
<S> <C> <C>
C S&P 500
Value Date
03/31/88 10,000.00 10,000.00
06/30/88 10,230.00 10,547.78
09/30/88 10,190.28 10,583.60
12/31/88 10,571.93 10,909.62
03/31/89 10,914.85 11,682.74
06/30/89 11,585.87 12,712.07
09/30/89 12,009.93 14,071.33
12/31/89 11,753.31 14,360.48
03/31/90 11,446.82 13,928.48
06/30/90 11,716.28 14,802.63
09/30/90 9,846.87 12,770.92
12/31/90 9,936.00 13,914.06
03/31/91 11,106.84 15,931.82
06/30/91 11,376.74 15,893.76
09/30/91 12,451.48 16,741.82
12/31/91 13,239.15 18,143.92
03/31/92 13,448.79 17,686.35
06/30/92 13,428.69 18,021.95
09/30/92 13,678.81 18,590.40
12/31/92 14,268.49 19,524.27
03/31/93 14,889.15 20,376.33
06/30/93 15,395.40 20,474.00
09/30/93 17,011.69 21,001.27
12/31/93 17,298.24 21,488.50
03/31/94 16,609.37 20,704.00
06/30/94 16,016.00 20,791.00
09/30/94 17,132.00 21,807.00
12/31/94 16,424.66 21,804.00
03/31/95 17,261.04 23,927.00
06/30/95 18,031.81 26,212.03
09/30/95 19,726.71 28,295.88
12/31/95 20,959.00 29,999.30
03/31/96 22,100.00 31,610.26
06/30/96 23,011.00 33,029.56
09/30/96 23,971.00 34,050.17
12/31/96 26,070.86 36,889.96
03/31/97 26,151.68 37,878.61
06/30/97 30,409.17 44,492.21
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. The
line graph above reflects the performance of the Class C shares since
inception. Past performance is not an indication of future results. See page 27
for Footnotes, which include additional details.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
<S> <C>
- --------------------------------------------------------------------------------
Dean Foods 3.4%
Milk & dairy: food items
- --------------------------------------------------------------------------------
McKesson Corp. 3.3%
Distributor drugs, toiletries/home products
- --------------------------------------------------------------------------------
BankAmerica Corp. 2.9%
Commercial banking-California
- --------------------------------------------------------------------------------
Nokia Corp. - ADR 2.7%
Telecommunications systems & equipment
- --------------------------------------------------------------------------------
Philips Electronics - N.V. 2.5%
World-wide manufacturing operation
- --------------------------------------------------------------------------------
AVX Corp. 2.4%
Passive electronic components manufacturer
- --------------------------------------------------------------------------------
Pier 1 Imports, Inc. 2.4%
Import specialty stores
- --------------------------------------------------------------------------------
Morningstar Group, Inc. 2.3%
Food products manufacturer
- --------------------------------------------------------------------------------
USX Marathon Group 2.3%
Oil & gas exploration
- --------------------------------------------------------------------------------
First Union Corp. 2.1%
Commercial banking
- --------------------------------------------------------------------------------
Top Ten Total 26.3%
- --------------------------------------------------------------------------------
<CAPTION>
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
<S> <C>
Financial and Business Services 18.8%
- --------------------------------------------------------------------------------
Consumer Discretionary 12.0%
- --------------------------------------------------------------------------------
Consumer Staples 7.7%
- --------------------------------------------------------------------------------
Technology 7.4%
- --------------------------------------------------------------------------------
Materials and Processing 7.2%
- --------------------------------------------------------------------------------
<CAPTION>
Portfolio Composition
- --------------------------------------------------------------------------------
<S> <C>
Common Stocks 80%
- --------------------------------------------------------------------------------
Convertible Preferred Stocks 8%
- --------------------------------------------------------------------------------
Cash Equivalents 5%
- --------------------------------------------------------------------------------
Corporate Bonds & Notes 4%
- --------------------------------------------------------------------------------
Convertible Bonds & Notes 3%
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The Renaissance Fund's performance for the past 12 months was solid, with
returns similar to those of mutual funds with the same objective (measured by
the Lipper Equity Income Fund Average). One-year results did, however, slightly
lag behind the Standard & Poor's 500 Index (an unmanaged index of common
stocks). Specifically, for the year ended June 30, 1997, the Fund's shares
increased in value by 33.1%, 32.2% and 31.2% for its Class A, B and C shares,
respectively.
Over the past year, the Fund's manager decreased its exposure to the basic
materials industry in favor of the consumer staples and finance sectors. The
Fund's increased holdings in consumer staples boosted overall performance, as
the sector benefited from industry consolidations. This sector was the top
performer for the Fund in recent months.
Another example of acquisition activity that helped the Fund's performance
was Dean Foods Co.'s purchase of Marie's salad dressing business from Campbell
Soup Co. Dean Foods is a leader in the processing and distribution of dairy,
vegetable and specialty food products. Marie's products, which include the
number one refrigerated salad dressing, vegetable dips, salsas and fruit glazes,
complement many of Dean Foods' brands, especially its Bird's Eye frozen
vegetable line. The purchase offers Dean Foods an opportunity to expand and
strengthen its position in the specialty foods market, making the security a
strong holding going forward as well.
Acquisitions were also critical in the Fund's finance holdings. For example,
the Renaissance Fund saw a strong contribution from BankAmerica Corp., which
announced that it will buy investment bank Robertson, Stephens & Co.
BankAmerica, the third-largest U.S. bank, is following a trend to enter more
profitable businesses and increase shareholder returns. The acquisition also
marks another step by BankAmerica into equity underwriting, a field that the
Fund's manager believes should continue to support strong results.
The Fund's energy holdings provided mixed returns over the past year, most
recently hurting the portfolio's performance. After being driven by increased
demand and rising prices, the Fund's stocks in this sector declined as falling
prices made increased profitability more difficult to attain.
With the increased emphasis investors are placing on a stock's underlying
value and price, the manager believes the Renaissance Fund should be
well-positioned as the year progresses.
See page 29 for financial details.
- --
12
- --
<PAGE>
PIMCO Value Fund
June 30, 1997
OBJECTIVE:
Long-term growth of capital and current income.
PORTFOLIO:
Primarily stocks the manager believes are undervalued and/or offer above-average
dividend yields.
TOTAL NET ASSETS:
$180 million
NUMBER OF SECURITIES IN THE PORTFOLIO
60 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
NFJ Investment Group
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
PERFORMANCE*
- -----------------------------------------------------------------------------------------------------
Average Annual Total Return For periods ended 6/30/97
A Shares B Shares C Shares Lipper Gr.
(INCEP. 12/30/91) (INCEP. 12/30/91) (INCEP. 12/30/91) S&P 500 & Income
Adjusted Adjusted Adjusted Index Fund Avg.
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 26.1% 19.2% 25.7% 20.7% 24.7% 34.7% 28.1%
3 years 24.9% 22.6% 24.8% 24.2% 24.8% 28.9% 23.5%
5 years 19.0% 17.6% 18.9% 18.7% 18.9% 19.8% 17.3%
Inception 17.5% 16.3% 17.5% 17.4% 17.5% -- --
</TABLE>
[LINE GRAPH OF CHANGE IN VALUE APPEARS HERE]
<TABLE>
<CAPTION>
VALUE VALUE VALUE S&P 500
CLASS A B C
==============================================================================
<S> <C> <C> <C> <C>
12/31/91 9,450.00 10,000.00 10,000.00 10,000.00
01/31/92 9,723.19 10,289.09 10,289.09 9,814.00
02/29/92 10,051.99 10,637.03 10,637.03 9,941.58
03/31/92 9,826.52 10,398.44 10,398.44 9,747.72
04/30/92 9,871.04 10,445.55 10,445.55 10,034.30
05/31/92 9,785.79 10,355.33 10,355.33 10,083.47
06/30/92 9,577.38 10,134.79 10,134.79 9,933.43
07/31/92 9,917.30 10,494.50 10,494.50 10,339.21
08/31/92 9,630.95 10,191.48 10,191.48 10,127.57
09/30/92 9,764.58 10,332.89 10,332.89 10,246.57
10/31/92 9,826.99 10,398.93 10,398.93 10,281.92
11/30/92 10,355.00 10,957.68 10,957.68 10,632.02
12/31/92 10,692.23 11,314.53 11,314.53 10,762.47
01/31/93 10,917.92 11,553.35 11,553.35 10,852.44
02/28/93 11,035.95 11,678.25 11,678.25 11,000.36
03/31/93 11,380.21 12,042.55 12,042.55 11,232.47
04/30/93 11,181.82 11,832.62 11,832.62 10,960.98
05/31/93 11,340.15 12,000.16 12,000.16 11,254.19
06/30/93 11,419.31 12,083.93 12,083.93 11,287.16
07/31/93 11,365.19 12,026.65 12,026.65 11,241.79
08/31/93 11,982.75 12,680.16 12,680.16 11,668.30
09/30/93 12,012.63 12,711.78 12,711.78 11,578.81
10/31/93 12,429.38 13,152.78 13,152.78 11,818.37
11/30/93 12,304.25 13,020.37 13,020.37 11,705.74
12/31/93 12,446.26 13,170.65 13,170.65 11,847.27
01/31/94 13,023.27 13,781.23 13,781.23 12,250.07
02/28/94 12,811.85 13,557.51 13,557.51 11,917.61
03/31/94 12,124.74 12,830.42 12,830.42 11,398.00
04/30/94 11,977.64 12,674.75 12,674.75 11,544.12
05/31/94 11,977.64 12,674.75 12,674.75 11,733.56
06/30/94 11,702.29 12,383.38 12,383.38 11,445.97
07/31/94 12,191.80 12,901.37 12,901.37 11,821.86
08/31/94 12,706.04 13,445.54 13,445.54 12,306.55
09/30/94 12,320.36 13,037.42 13,037.42 12,005.66
10/31/94 12,451.79 13,176.50 13,176.50 12,275.42
11/30/94 11,826.51 12,514.82 12,514.82 11,828.35
12/31/94 11,939.47 12,634.36 12,634.36 12,003.77
01/31/95 12,264.65 12,978.46 12,978.46 12,315.02
02/28/95 12,813.26 13,559.01 13,559.01 12,794.94
03/31/95 13,166.82 13,933.14 13,933.14 13,172.52
04/30/95 13,523.20 14,310.26 14,310.26 13,560.45
05/31/95 14,038.60 14,855.66 14,855.66 14,102.46
06/30/95 14,284.03 15,115.38 15,115.38 14,430.06
07/31/95 14,913.70 15,781.69 15,781.69 14,908.56
08/31/95 15,098.88 15,977.65 15,977.65 14,945.98
09/30/95 15,518.64 16,421.84 16,421.84 15,576.70
10/31/95 15,563.91 16,469.75 16,469.75 15,521.09
11/30/95 16,234.66 17,179.54 17,179.54 16,202.47
12/31/95 16,584.67 17,549.91 17,549.91 16,514.53
01/31/96 17,059.75 18,052.65 18,052.65 17,076.68
02/29/96 17,434.06 18,448.74 18,448.74 17,234.98
03/31/96 17,577.30 18,600.32 18,600.32 17,400.96
04/30/96 17,808.77 18,845.26 18,845.26 17,657.45
05/31/96 18,170.45 19,227.98 19,227.98 18,112.83
06/30/96 18,091.77 19,144.73 19,144.73 18,181.84
07/31/96 17,118.94 18,115.28 18,115.28 17,378.57
08/31/96 17,786.86 18,822.07 18,822.07 17,745.08
09/30/96 18,274.12 19,337.69 19,337.69 18,743.78
10/31/96 18,536.84 19,615.71 19,615.71 19,260.73
11/30/96 20,127.80 21,299.26 21,299.26 20,716.65
12/31/96 19,958.27 21,119.87 21,119.87 20,306.25
01/31/97 20,630.87 21,831.61 21,831.61 21,574.99
02/28/97 20,983.66 22,187.46 22,187.46 21,744.13
03/31/97 20,238.74 21,386.49 21,386.49 20,850.67
04/30/97 21,021.98 22,197.04 22,197.04 22,095.45
05/31/97 22,266.48 23,495.57 23,495.57 23,440.62
06/30/97 22,814.23 23,825.85 24,068.86 24,490.76
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. All
returns represent the blended performance of the Fund's retail class shares
(for the period from 1/13/97) and the prior performance of the Fund's
institutional class shares (for the period from 12/30/91). Retail class shares
have higher expenses than institutional class shares. Therefore, total return
of retail class shares would have been lower had they been in existence since
the Fund's inception. Past performance is not an indication of future results.
See page 27 for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Top 10 Stocks % of Total Investments
- --------------------------------------------------------------------------------
<S> <C>
V. F. Corp. 3.1%
Apparel manufacturer
- --------------------------------------------------------------------------------
CIGNA Corp. 3.0%
Multi-line insurance holding company
- --------------------------------------------------------------------------------
Amoco Corp. 2.9%
International oil company
- --------------------------------------------------------------------------------
Mellon Bank Corp. 2.9%
Commercial banking
- --------------------------------------------------------------------------------
NICOR, Inc. 2.7%
Natural gas
- --------------------------------------------------------------------------------
Ultramar Diamond Shamrock 2.7%
Petroleum products
- --------------------------------------------------------------------------------
Repsol SA SP - ADR 2.6%
Integrated oil company in Spain
- --------------------------------------------------------------------------------
Anheuser Busch Cos., Inc. 2.5%
Brewery, baking
- --------------------------------------------------------------------------------
Bear Stearns Cos. 2.5%
Investment banking, brokerage
- --------------------------------------------------------------------------------
Chase Manhattan Corp. 2.4%
Commercial banking
- --------------------------------------------------------------------------------
Top Ten Total 27.3%
- --------------------------------------------------------------------------------
<CAPTION>
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
<S> <C>
Consumer Discretionary 22.0%
- --------------------------------------------------------------------------------
Financial and Business Services 16.1%
- --------------------------------------------------------------------------------
Energy 12.0%
- --------------------------------------------------------------------------------
Utilities 10.8%
- --------------------------------------------------------------------------------
Technology 9.0%
- --------------------------------------------------------------------------------
<CAPTION>
Portfolio Composition
- --------------------------------------------------------------------------------
<S> <C>
Common Stock 95%
- --------------------------------------------------------------------------------
Cash 5%
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The Value Fund posted solid results for the year ended June 30, 1997, with
returns in line with an average of mutual funds with the same objective
(measured by the Lipper Growth and Income Fund Average). Specifically, the
Fund's shares increased 26.1%, 25.7% and 24.7% for its Class A, B and C shares,
respectively.
Falling interest rates helped the performance of the Value Fund's finance
sector holdings in recent months. Although the portfolio was underweight in this
sector relative to the S&P 500 Index, the Fund manager's stock selection
resulted in returns that outperformed the Index by more than three percentage
points. As the yield on the 30-year Treasury bond decreased from 7.1% to 6.8%
during the second quarter, financial firms paid less in interest and therefore
boosted earnings.
An example of a winning stock in the Fund's portfolio is V.F. Corporation,
an international apparel company that has been expanding a number of its product
lines by introducing new brands and acquiring companies. The company's intimate
apparel brands have been the most successful, helping to drive net income much
higher than the market's expectations. Growth in the Victoria's Secret private
label business, new Vanity Fair product introductions, and a possible purchase
of Maidenform Worldwide, Inc. in particular have had a positive effect. The
manager currently believes this momentum will continue, and will benefit not
only the gross margins of V.F. Corp., but the share price as well.
With the strong performance in the large-cap market for most of the year, the
only aspect of the Fund manager's investment philosophy that somewhat hindered
performance was the relative underweighting within certain sectors of the
market. For example, in the second quarter of this year the Fund's technology
holdings did well, but with a weighting that was less than that of the S&P 500,
the sector's performance did not match that of the overall index.
The Fund's manager believes that the market has yet to fully realize the
intrinsic value of many of the portfolio's holdings. Although it is tempting to
become very bullish in the current market environment, the manager will adhere
to the investment strategy of buying stocks that are a good value.
--
See page 31 for financial details. 13
--
<PAGE>
PIMCO Capital Appreciation Fund
June 30, 1997
OBJECTIVE:
Long-term growth of capital and current income.
PORTFOLIO:
Primarily common stocks of companies with market capitalizations of at least
$100 million that have improving fundamentals and whose stock is reasonably
valued by the market.
TOTAL NET ASSETS:
$562 million
NUMBER OF SECURITIES IN THE PORTFOLIO
77 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital Management
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 6/30/97
<TABLE>
<CAPTION>
A Shares B Shares C Shares Lipper Cap.
(INCEP. 3/8/91) (INCEP. 3/8/91) (INCEP. 3/8/91) S&P 500 App. Fund
Adjusted Adjusted Adjusted Index Avg.
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 31.3% 24.1% 31.0% 26.0% 30.0% 34.7% 14.4%
3 years 26.6% 24.3% 26.5% 25.9% 26.5% 28.9% 19.9%
5 years 20.9% 19.6% 20.9% 20.7% 20.9% 19.8% 15.9%
Inception 18.9% 17.9% 18.9% -- 18.9% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
CAPITAL CAPITAL CAPITAL S&P
APPRECIATION APPRECIATION APPRECIATION 500
CLASS A B C
========= =================================================== =========
<S> <C> <C> <C> <C>
03/31/91 9,450.00 10,000.00 10,000.00 10,000.00
04/30/91 9,174.72 9,708.70 9,708.70 10,024.00
05/31/91 9,628.37 10,188.75 10,188.75 10,457.04
06/30/91 9,109.92 9,640.12 9,640.12 9,978.10
07/31/91 9,761.59 10,329.72 10,329.72 10,443.08
08/31/91 10,068.09 10,654.06 10,654.06 10,690.59
09/30/91 9,928.77 10,506.64 10,506.64 10,512.05
10/31/91 10,269.03 10,866.70 10,866.70 10,652.91
11/30/91 9,970.84 10,551.15 10,551.15 10,223.60
12/31/91 11,356.11 12,017.05 12,017.05 11,393.18
01/31/92 11,247.92 11,902.56 11,902.56 11,181.27
02/29/92 11,369.37 12,031.08 12,031.08 11,326.62
03/31/92 10,995.69 11,635.65 11,635.65 11,105.76
04/30/92 10,971.96 11,610.54 11,610.54 11,432.26
05/31/92 11,018.85 11,660.15 11,660.15 11,488.28
06/30/92 10,671.87 11,292.98 11,292.98 11,317.34
07/31/92 10,982.95 11,622.17 11,622.17 11,779.65
08/31/92 10,710.25 11,333.60 11,333.60 11,538.52
09/30/92 10,992.35 11,632.12 11,632.12 11,674.10
10/31/92 11,375.77 12,037.85 12,037.85 11,714.37
11/30/92 12,041.96 12,742.81 12,742.81 12,113.25
12/31/92 12,209.10 12,919.69 12,919.69 12,261.88
01/31/93 12,624.16 13,358.90 13,358.90 12,364.39
02/28/93 12,472.43 13,198.34 13,198.34 12,532.91
03/31/93 13,049.01 13,808.48 13,808.48 12,797.36
04/30/93 12,729.41 13,470.27 13,470.27 12,488.05
05/31/93 13,307.09 14,081.58 14,081.58 12,822.10
06/30/93 13,519.93 14,306.80 14,306.80 12,859.67
07/31/93 13,328.61 14,104.35 14,104.35 12,807.97
08/31/93 13,816.24 14,620.36 14,620.36 13,293.91
09/30/93 14,222.60 15,050.37 15,050.37 13,191.94
10/31/93 14,257.89 15,087.72 15,087.72 13,464.89
11/30/93 13,972.95 14,786.19 14,786.19 13,336.57
12/31/93 14,370.64 15,207.03 15,207.03 13,497.81
01/31/94 14,877.17 15,743.04 15,743.04 13,956.73
02/28/94 14,675.56 15,529.69 15,529.69 13,577.95
03/31/94 13,943.37 14,754.89 14,754.89 12,985.95
04/30/94 13,996.21 14,810.80 14,810.80 13,152.43
05/31/94 13,985.57 14,799.55 14,799.55 13,368.26
06/30/94 13,592.06 14,383.13 14,383.13 13,040.60
07/31/94 13,924.31 14,734.72 14,734.72 13,468.85
08/31/94 14,340.44 15,175.07 15,175.07 14,021.08
09/30/94 13,956.32 14,768.59 14,768.59 13,678.26
10/31/94 14,277.07 15,108.01 15,108.01 13,985.61
11/30/94 13,624.22 14,417.17 14,417.17 13,476.26
12/31/94 13,758.99 14,559.77 14,559.77 13,676.11
01/31/95 13,750.54 14,550.84 14,550.84 14,030.73
02/28/95 14,437.53 15,277.81 15,277.81 14,577.51
03/31/95 15,070.85 15,947.99 15,947.99 15,007.69
04/30/95 15,589.68 16,497.01 16,497.01 15,449.67
05/31/95 16,160.29 17,100.84 17,100.84 16,067.19
06/30/95 16,860.11 17,841.38 17,841.38 16,440.43
07/31/95 17,796.71 18,832.50 18,832.50 16,985.60
08/31/95 17,969.50 19,015.34 19,015.34 17,028.23
09/30/95 18,682.23 19,769.56 19,769.56 17,746.82
10/31/95 18,333.24 19,400.25 19,400.25 17,683.46
11/30/95 18,896.34 19,996.13 19,996.13 18,459.77
12/31/95 18,869.56 19,967.79 19,967.79 18,815.30
01/31/96 19,504.70 20,639.90 20,639.90 19,445.78
02/29/96 20,243.78 21,421.99 21,421.99 19,636.13
03/31/96 20,282.25 21,462.70 21,462.70 19,825.23
04/30/96 20,536.93 21,732.21 21,732.21 20,117.45
05/31/96 21,057.88 22,283.47 22,283.47 20,636.28
06/30/96 21,018.86 22,242.18 22,242.18 20,714.90
07/31/96 19,962.11 21,123.92 21,123.92 19,799.72
08/31/96 20,821.44 22,033.27 22,033.27 20,217.30
09/30/96 22,098.83 23,385.01 23,385.01 21,355.13
10/31/96 22,656.24 23,974.86 23,974.86 21,944.10
11/30/96 24,305.23 25,719.82 25,719.82 23,602.85
12/31/96 23,925.15 25,317.62 25,317.62 23,135.28
01/31/97 25,319.99 26,793.64 26,793.64 24,580.77
02/28/97 25,046.53 26,504.27 26,490.87 24,773.49
03/31/97 24,132.34 25,510.36 25,510.71 23,755.54
04/30/97 24,890.09 26,296.08 26,296.44 25,173.75
05/31/97 26,468.12 27,952.73 27,953.12 26,706.33
06/30/97 27,603.61 29,126.75 29,127.15 27,902.77
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. All
returns represent the blended performance of the Fund's retail class shares (for
the period from 1/20/97) and the prior performance of the Fund's institutional
class shares (for the period from 3/8/91). Retail class shares have higher
expenses than institutional class shares. Therefore, total return of retail
class shares would have been lower had they been in existence since the Fund's
inception. Past performance is not an indication of future results. See page 27
for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Top 10 Stocks % of Total Investments
- --------------------------------------------------------------------------------
<S> <C>
Travelers Group, Inc. 1.7%
Diversified financial services
- --------------------------------------------------------------------------------
AlliedSignal, Inc. 1.7%
Aerospace, automotive, fibers
- --------------------------------------------------------------------------------
Kroger Co. 1.7%
Supermarket/convenience stores
- --------------------------------------------------------------------------------
Xerox Corp. 1.7%
Copiers and duplicators
- --------------------------------------------------------------------------------
Textron, Inc. 1.6%
Aerospace/commercial
products/financial services
- --------------------------------------------------------------------------------
TJX Corp., Inc. 1.6%
Off-price specialty stores
- --------------------------------------------------------------------------------
Tyco Labs 1.6%
Fire protection systems
- --------------------------------------------------------------------------------
United Technologies Corp. 1.6%
Aerospace, climate control systems
- --------------------------------------------------------------------------------
Perkin-Elmer Corp. 1.6%
Analytical instruments, optics
- --------------------------------------------------------------------------------
Dayton-Hudson Corp. 1.6%
Department/specialty stores
- --------------------------------------------------------------------------------
Top Ten Total 16.4%
- --------------------------------------------------------------------------------
<CAPTION>
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
<S> <C>
Financial and Business Services 20.4%
- --------------------------------------------------------------------------------
Consumer Discretionary 18.9%
- --------------------------------------------------------------------------------
Capital Goods 13.3%
- --------------------------------------------------------------------------------
Technology 11.7%
- --------------------------------------------------------------------------------
Energy 9.1%
- --------------------------------------------------------------------------------
<CAPTION>
Portfolio Composition
- --------------------------------------------------------------------------------
<S> <C>
Common Stock 94%
- --------------------------------------------------------------------------------
Cash Equivalents 6%
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The Capital Appreciation Fund had an outstanding 12 months ended June 30, 1997,
with returns of 31.3% for Class A shares, 31.0% for Class B shares and 30.0% for
Class C shares. These results far exceeded an average of funds with the same
objective (measured by the Lipper Capital Appreciation Fund Average). The Fund
has also posted strong results for the longer term.
Although the large-cap market performed well over the last year, as evidenced
by the S&P 500's strong return, it was the largest stocks in the Index that were
the clear standouts. Known as the "Nifty 50," the 50 largest stocks in the S&P
500 were up 26.2% over the one-year period ended June 30, 1997, compared to
15.8% for the remaining 450 stocks in the Index. Due to what the Fund's manager
believes are relatively high valuations, the Capital Appreciation Fund did not
have a large exposure to the market's largest companies last year. Yet, astute
stock picking and sector rotation in the Fund helped to post returns similar to
that of the entire S&P 500 Index.
Over the past 12 months, the Fund's manager modified the portfolio,
decreasing exposure to the technology sector in favor of financial services
stocks. These changes were advantageous for the Fund, as technology stocks
experienced a sharp correction earlier in the year while falling interest rates
have helped the profitability of the financial services sector.
The Fund's third largest sector, energy, has also proved an outstanding
performer for the Fund. Led by three oil services companies, the Fund's exposure
to this industry handily beat that of the S&P 500 Index's energy sector. Oil
services companies reaped the benefits of stepped-up exploration for oil and
natural gas. This higher demand allowed the companies to charge higher prices,
driving up corporate profits as well as stock prices.
Among the other winners in the Fund's portfolio was Dayton-Hudson Corp. The
nation's fourth largest general merchandise retailer posted strong results, as
both sales and operating profits from its Target discount stores continued to
increase. The company's most recent quarterly results reported an 88% increase
in operating profits at Target, mostly due to merchandise improvements and cost
reductions. Considering this division of Dayton-Hudson accounts for 70% of total
sales, and expansion plans into the Northeast are proceeding as expected, the
Fund's manager believes the company should continue to offer strong growth
potential going forward.
As the Fund's fiscal year ended, many investors continued to favor large-cap
stocks. However, the strong returns of these stocks has led to extremely high
valuations in many cases. As a result, the Fund's manager believes its approach
of seeking growth stocks that are reasonably priced could be especially
beneficial going forward.
- --
14 See page 32 for financial details.
- --
<PAGE>
PIMCO Growth Fund
June 30, 1997
OBJECTIVE:
Long-term growth of capital; income is incidental.
PORTFOLIO:
Primarily stocks of larger, well-established companies.
TOTAL NET ASSETS:
$1,717 million
NUMBER OF SECURITIES IN THE PORTFOLIO
55 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Columbus Circle Investors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 6/30/97
<TABLE>
<CAPTION>
A Shares B Shares C Shares Lipper
(INCEP. 10/26/90) (INCEP. 5/23/95) (INCEP. 2/24/84) S&P 500 Growth
Adjusted Adjusted Adjusted Index Fund Avg.
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 20.5% 13.9% 19.6% 14.6% 18.6% 34.7% 24.0%
5 years 15.2% 13.9% -- -- 14.4% 19.8% 16.9%
10 years -- -- -- -- 12.6% 14.7% 12.7%
Inception 17.2% 16.3% 19.9% 18.7% 16.4% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Growth
------------------------
C S&P 500
---------- ----------
<S> <C> <C>
Value Date
12/31/83 10,000.00 10,000.00
03/31/84 10,250.00 10,173.18
06/30/84 10,180.32 9,911.89
09/30/84 10,986.38 10,872.72
12/31/84 11,211.05 11,076.74
03/31/85 12,138.35 12,093.98
06/30/85 13,073.11 12,980.99
09/30/85 12,627.67 12,449.46
12/31/85 14,632.19 14,591.12
03/31/86 16,917.01 16,649.13
06/30/86 17,948.98 17,630.44
09/30/86 17,409.21 16,400.58
12/31/86 18,025.65 17,314.55
03/31/87 22,171.64 21,011.62
06/30/87 23,276.81 22,066.36
09/30/87 24,640.76 23,522.05
12/31/87 19,396.43 18,223.64
03/31/88 20,073.57 19,257.86
06/30/88 21,608.44 20,537.40
09/30/88 21,007.12 20,607.15
12/31/88 21,213.96 21,241.92
03/31/89 23,104.02 22,747.27
06/30/89 26,246.52 24,751.46
09/30/89 29,902.82 27,398.04
12/31/89 29,159.72 27,961.05
03/31/90 28,351.53 27,119.90
06/30/90 31,667.40 28,821.94
09/30/90 27,507.91 24,866.03
12/31/90 29,245.93 27,091.82
03/31/91 33,846.61 31,020.58
06/30/91 33,555.43 30,946.46
09/30/91 37,155.18 32,597.70
12/31/91 41,492.79 35,327.71
03/31/92 39,837.70 34,436.79
06/30/92 38,913.92 35,090.23
09/30/92 39,722.22 36,197.04
12/31/92 42,356.04 38,015.37
03/31/93 43,420.36 39,674.41
06/30/93 43,932.82 39,864.57
09/30/93 46,415.69 40,891.22
12/31/93 46,303.24 41,839.90
03/31/94 45,392.79 40,319.00
06/30/94 44,352.00 40,488.00
09/30/94 46,650.00 42,468.00
12/31/94 45,958.33 42,461.00
03/31/95 48,645.55 46,595.00
06/30/95 53,790.31 51,044.82
09/30/95 57,281.40 55,102.89
12/31/95 58,583.00 58,420.08
03/31/96 62,342.00 61,557.24
06/30/96 63,612.00 64,321.16
09/30/96 65,997.00 66,308.68
12/31/96 68,848.07 71,838.83
03/31/97 66,286.92 73,764.11
06/30/97 76,070.87 86,643.32
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. The
line graph above reflects the performance of the Class C shares since inception.
Past performance is not an indication of future results. See page 27 for
Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Top 10 Stocks % of Total Investments
- --------------------------------------------------------------------------------
<S> <C>
HBO & Co. 3.8%
Hospital information system
- --------------------------------------------------------------------------------
Microsoft Corp. 3.7%
Computer software
- --------------------------------------------------------------------------------
Schlumberger Ltd. 3.6%
Oil field services
- --------------------------------------------------------------------------------
WorldCom, Inc. 3.1%
Long distance telephone services
- --------------------------------------------------------------------------------
Lucent Technologies, Inc. 3.1%
Telecommunications systems
- --------------------------------------------------------------------------------
CUC International, Inc. 2.8%
Member-based consumer svcs.
- --------------------------------------------------------------------------------
Honeywell, Inc. 2.7%
Computer/individual control systems
- --------------------------------------------------------------------------------
Allstate Corp. 2.6%
Property, liability life insurance
- --------------------------------------------------------------------------------
Warner-Lambert Co. 2.6%
Drugs, toiletries, food
- --------------------------------------------------------------------------------
Boeing Co. (The) 2.6%
Jet airplanes manufacturer
- --------------------------------------------------------------------------------
Top Ten Total 30.6%
- --------------------------------------------------------------------------------
<CAPTION>
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
<S> <C>
Technology 33.0%
- --------------------------------------------------------------------------------
Health Care 18.9%
- --------------------------------------------------------------------------------
Financial and Business Services 12.2%
- --------------------------------------------------------------------------------
Consumer Discretionary 11.0%
- --------------------------------------------------------------------------------
Energy 5.4%
- --------------------------------------------------------------------------------
<CAPTION>
Portfolio Composition
- --------------------------------------------------------------------------------
<S> <C>
Common Stock 93%
- --------------------------------------------------------------------------------
Cash Equivalents 7%
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the one-year period ended June 30, 1997, the Growth Fund produced returns of
20.5%, 19.6% and 18.6%, respectively, for its Class A, B and C shares. These
returns fell short of the average return for competitive funds with the same
objective (as measured by the Lipper Growth Fund Average). However, over the
longer term the Fund has posted strong results. Since its inception, the Fund
has outperformed its Lipper Average. In addition, the Fund has had only one down
calendar year since its inception in 1984.
The reason for the Fund's recent under-performance was largely due to its
lack of exposure to the largest stocks in the S&P 500 Index. The Fund was not
invested in a majority of the "Nifty 50," the 50 largest stocks in the index.
While these securities have shown impressive gains over the last year, the
Fund's manager believed that, in many cases, the high price-to-earnings ratio of
these stocks was not justified. Therefore, the manager felt that the Fund would
suffer if these stocks experienced a correction in their share price.
The Fund did benefit, however, from its increased exposure to the technology
and healthcare sectors. The Fund's large position in technology proved
beneficial in the second quarter, as many of these companies rebounded strongly
after suffering first-quarter losses. Stronger earnings from computer software
companies such as Microsoft, and from telecommunications firms such as Lucent
Technologies, boosted the overall performance of the industry. The Fund's
manager remains optimistic about the long-term prospects for this sector, due to
positive supply and demand trends and positive fundamentals.
In healthcare, the Fund realized strong returns from Warner-Lambert Co.
Revenues for two of the company's recently released drugs, the diabetes-treating
Rezulin and Lipitor, a cholesterol-lowering medication, greatly exceeded market
expectations. An increase in the number of prescriptions and support from
medical associations have raised optimism that sales from these two products may
triple within the next 18 months, encouraging the Fund's manager to remain
optimistic about this security's future.
Looking ahead, the manager of the Fund currently anticipates maintaining its
large weighting in the technology sector, as personal computer demand continues
to increase and infrastructure growth overseas offers U.S. companies attractive
partnership opportunities. As in the past, the Fund will continue to seek
growing companies that are exceeding consensus expectations.
----
See page 33 for financial details. 15
----
<PAGE>
PIMCO Mid Cap Growth Fund
June 30, 1997
OBJECTIVE:
Growth of capital.
PORTFOLIO:
Primarily common stocks of companies with medium capitalizations that have
improving fundamentals and whose stock is reasonably valued.
TOTAL NET ASSETS:
$388 million
NUMBER OF SECURITIES IN THE PORTFOLIO
104 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital Management
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 6/30/97
<TABLE>
<CAPTION>
A Shares B Shares C Shares Lipper
(INCEP. 8/26/91) (INCEP. 8/26/91) (INCEP. 8/26/91) S&P Mid- Mid-Cap
Adjusted Adjusted Adjusted Cap Index Fund Avg.
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 30.3% 23.2% 29.9% 24.9% 28.9% 23.4% 15.6%
3 years 26.2% 23.8% 26.0% 25.4% 26.0% 22.6% 21.8%
5 years 20.1% 18.8% 20.1% 19.9% 20.1% 17.6% 17.8%
Inception 18.4% 17.3% 18.4% 18.3% 18.4% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
MID CAP MID CAP MID CAP S&P 500
GROWTH GROWTH GROWTH MID CAP
CLASS A B C
========= ========= ========= ========= =========
<S> <C> <C> <C> <C>
08/31/91 9,450.00 10,000.00 10,000.00 10,000.00
09/30/91 9,402.66 9,949.90 9,949.90 9,967.45
10/31/91 9,747.00 10,314.29 10,314.29 10,357.92
11/30/91 9,472.04 10,023.32 10,023.32 10,008.88
12/31/91 10,707.41 11,330.60 11,330.60 11,191.96
01/31/92 10,719.46 11,343.35 11,343.35 11,389.96
02/29/92 10,824.09 11,454.06 11,454.06 11,571.19
03/31/92 10,500.70 11,111.85 11,111.85 11,135.40
04/30/92 10,431.15 11,038.25 11,038.25 11,002.40
05/31/92 10,440.67 11,048.32 11,048.32 11,106.57
06/30/92 10,164.66 10,756.25 10,756.25 10,789.48
07/31/92 10,444.00 11,051.85 11,051.85 11,325.11
08/31/92 10,138.78 10,728.87 10,728.87 11,054.23
09/30/92 10,472.61 11,082.13 11,082.13 11,208.93
10/31/92 10,815.12 11,444.57 11,444.57 11,477.21
11/30/92 11,466.51 12,133.88 12,133.88 12,118.62
12/31/92 11,690.41 12,370.81 12,370.81 12,525.27
01/31/93 12,123.59 12,829.20 12,829.20 12,681.89
02/28/93 11,749.53 12,433.36 12,433.36 12,504.48
03/31/93 12,229.10 12,940.84 12,940.84 12,936.20
04/30/93 11,894.02 12,586.27 12,586.27 12,597.71
05/31/93 12,403.22 13,125.10 13,125.10 13,171.58
06/30/93 12,787.52 13,531.76 13,531.76 13,237.63
07/31/93 12,630.20 13,365.29 13,365.29 13,212.21
08/31/93 13,255.46 14,026.94 14,026.94 13,757.69
09/30/93 13,611.38 14,403.57 14,403.57 13,903.11
10/31/93 13,473.59 14,257.77 14,257.77 13,948.52
11/30/93 13,097.45 13,859.73 13,859.73 13,639.97
12/31/93 13,534.28 14,321.99 14,321.99 14,273.20
01/31/94 13,814.64 14,618.66 14,618.66 14,605.21
02/28/94 13,795.30 14,598.20 14,598.20 14,397.96
03/31/94 13,292.60 14,066.24 14,066.24 13,731.08
04/30/94 13,340.75 14,117.20 14,117.20 13,833.24
05/31/94 13,098.90 13,861.27 13,861.27 13,702.29
06/30/94 12,663.56 13,400.59 13,400.59 13,230.40
07/31/94 12,949.91 13,703.61 13,703.61 13,678.39
08/31/94 13,627.92 14,421.08 14,421.08 14,394.76
09/30/94 13,279.23 14,052.10 14,052.10 14,126.14
10/31/94 13,547.15 15,335.61 14,335.61 14,280.59
11/30/94 12,907.13 13,658.34 13,658.34 13,636.47
12/31/94 13,214.27 13,983.36 13,983.36 13,761.63
01/31/95 13,088.05 13,849.79 13,849.79 13,904.89
02/28/95 13,884.21 14,692.28 14,692.28 14,634.47
03/31/95 14,330.83 15,164.90 15,164.90 14,888.42
04/30/95 14,654.27 15,507.16 15,507.16 15,187.34
05/31/95 15,159.59 16,041.89 16,041.89 15,553.70
06/30/95 16,053.61 16,987.95 16,987.95 16,186.88
07/31/95 17,568.47 18,590.98 18,590.98 17,031.31
08/31/95 17,704.66 18,735.09 18,735.09 17,346.29
09/30/95 17,957.59 19,002.74 19,002.74 17,766.75
10/31/95 17,682.29 18,711.42 18,711.42 17,309.61
11/30/95 18,023.08 19,072.04 19,072.04 18,065.61
12/31/95 18,142.18 19,198.07 19,198.07 18,020.66
01/31/96 18,501.43 19,578.23 19,578.23 18,282.10
02/29/96 18,950.49 20,053.43 20,053.43 18,903.47
03/31/96 19,188.00 20,304.77 20,304.77 19,130.01
04/30/96 19,589.01 20,729.11 20,729.11 19,714.26
05/31/96 19,919.84 21,079.19 21,079.19 19,980.88
06/30/96 19,515.12 20,650.92 20,650.92 19,681.07
07/31/96 18,581.53 19,662.99 19,662.99 18,349.56
08/31/96 19,595.43 20,735.91 20,735.91 19,407.84
09/30/96 20,970.73 22,191.24 22,191.24 20,254.02
10/31/96 21,111.27 22,339.97 22,339.97 20,312.96
11/30/96 22,396.21 23,699.70 23,699.70 21,457.19
12/31/96 22,379.95 23,682.49 23,682.49 21,481.00
01/31/97 23,297.53 24,639.26 24,639.26 22,287.40
02/28/97 22,894.48 24,213.00 24,200.68 22,104.20
03/31/97 22,241.99 23,493.88 23,481.92 21,161.90
04/30/97 22,706.85 23,973.15 23,960.95 21,710.20
05/31/97 24,264.54 25,608.12 25,595.09 23,608.54
06/30/97 25,434.09 26,551.19 26,818.54 24,271.94
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. All
returns represent the blended performance of the Fund's retail class shares (for
the period from 1/13/97) and the prior performance of the Fund's institutional
class shares (for the period from 8/26/91). Retail class shares have higher
expenses than institutional class shares. Therefore, total return of retail
class shares would have been lower had they been in existence since the Fund's
inception. Past performance is not an indication of future results. See page 27
for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Top 10 Stocks % of Total Investments
- --------------------------------------------------------------------------------
<S> <C>
Falcon Drilling Co., Inc. 1.7%
Contract drilling: oil/gas
- --------------------------------------------------------------------------------
Borders Group, Inc. 1.5%
Book superstores
- --------------------------------------------------------------------------------
Consolidated Stores Corp. 1.5%
Retail close-out merchandise
- --------------------------------------------------------------------------------
Compuware Corp. 1.5%
Systems software products developer
- --------------------------------------------------------------------------------
Cullen/Frost Bankers, Inc. 1.4%
Commercial banking
- --------------------------------------------------------------------------------
McAfee Associates, Inc. 1.4%
Network, security software developer
- --------------------------------------------------------------------------------
Fort Howard Corp. 1.4%
Paper company
- --------------------------------------------------------------------------------
Tandem Computers, Inc. 1.4%
Multi-processor computer systems
- --------------------------------------------------------------------------------
Cooper Cameron Corp. 1.4%
Oil & gas industry services/products
- --------------------------------------------------------------------------------
Smith International, Inc. 1.4%
Varied line drill, boring equipment
- --------------------------------------------------------------------------------
Top Ten Total 14.6%
- --------------------------------------------------------------------------------
<CAPTION>
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
<S> <C>
Financial and Business Services 30.7%
- --------------------------------------------------------------------------------
Consumer Discretionary 24.0%
- --------------------------------------------------------------------------------
Energy 14.0%
- --------------------------------------------------------------------------------
Technology 11.4%
- --------------------------------------------------------------------------------
Health Care 5.6%
- --------------------------------------------------------------------------------
<CAPTION>
Portfolio Composition
- --------------------------------------------------------------------------------
<S> <C>
Common Stock 100%
- --------------------------------------------------------------------------------
Cash Equivalents 0%
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The Mid Cap Growth Fund posted excellent results for the one-year period ended
June 30, 1997, with returns of 30.3% for Class A shares, 29.9% for Class B
shares and 28.9% for Class C shares. These returns handily outperformed the S&P
Mid-Cap Index and an average of mutual funds with the same objective (as
measured by the Lipper Mid-Cap Fund Average). Over the longer term, the Fund has
also provided strong results--surpassing both the S&P Mid-Cap Index and the
Lipper Average.
During the past year, the Fund's manager maintained the portfolio's exposure
to the financial sector. This strategy proved to be beneficial, as this industry
has been a strong performer for the Fund. Helped by lower interest rates, which
in turn lowered the interest that financial institutions paid to their account
holders, several Fund holdings were able to improve their margins and report
better-than-expected earnings. Specific examples include SunAmerica, Inc., a
firm that specializes in selling investments to the pre-retirement market, and
Public Storage, Inc., the largest self-storage real estate investment trust in
the country. The manager remains bullish on this sector going forward, as
consolidation and cost-cutting could lead to profitable opportunities in the
future.
Another success for the Fund was its position in the Borders Group, a leading
player in the growing superstore and mall-based book retailing industry. The
company looks to be on its way to another stellar fiscal year, as quarterly
profits exceeded expectations. Driven by the popularity of the book
"superstore", where retail outlets sell books along with CDs, cassettes, coffee
and desserts, Borders continues to post strong sales growth. The Fund's manager
is attracted to the price of the company's stock, as it is well below its
historical price level and, the manager feels, trading at a discount.
There were limited areas within the Fund's portfolio that hindered its
performance over the past year. For example, the Fund's holdings in the capital
goods and raw materials sectors underperformed the market, yet still added value
to the Fund's overall performance.
Looking ahead, one aspect the Fund's manager will closely monitor is the high
market valuations that have resulted from this record bull run. Given this
market environment, the manager currently plans to maintain its long-held
strategy of investing in growth stocks that have strong upside potential and are
reasonably priced.
- ----
16 See page 35 for financial details.
- ----
<PAGE>
PIMCO Target Fund
June 30, 1997
OBJECTIVE:
Capital appreciation; no consideration given to income.
PORTFOLIO:
Primarily common stocks of companies with medium-sized capitalizations.
TOTAL NET ASSETS:
$1,188 million
NUMBER OF SECURITIES IN THE PORTFOLIO
56 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Columbus Circle Investors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 6/30/97
<TABLE>
<CAPTION>
A Shares B Shares C Shares S&P Lipper
(INCEP. 12/17/92) (INCEP. 5/22/95) (INCEP. 12/17/92) Mid-Cap Mid-Cap
Adjusted Adjusted Adjusted Index Fund Avg.
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 10.6% 4.5% 9.8% 4.8% 8.7% 23.4% 15.6%
3 years 22.0% 19.7% -- -- 21.1% 22.4% 21.8%
Inception 18.7% 17.2% 20.2% 19.1% 17.8% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Target
---------------------------------------------
A C S&P Mid-cap
--------- --------- -----------
<S> <C> <C> <C>
Value Date
09/30/92 9,450.00 10,000.00 10,000.00
12/31/92 9,553.95 10,110.00 10,000.00
03/31/93 10,092.60 10,660.00 10,328.00
06/30/93 10,791.90 11,380.00 10,568.64
09/30/93 12,020.40 12,650.00 11,100.25
12/31/93 11,991.15 12,589.07 11,395.51
03/31/94 11,695.43 12,255.92 10,962.48
06/30/94 11,304.00 11,822.00 10,563.00
09/30/94 12,525.00 13,074.00 11,278.00
12/31/94 12,454.29 12,978.17 10,987.00
03/31/95 13,372.18 13,908.84 11,876.00
06/30/95 14,512.29 15,064.50 12,923.46
09/30/95 15,845.65 16,414.47 14,184.79
12/31/95 16,344.72 16,912.00 14,387.64
03/31/96 17,208.00 17,759.00 15,273.91
06/30/96 18,556.00 19,122.00 15,713.80
09/30/96 18,459.00 18,984.00 16,171.07
12/31/96 19,060.76 19,563.01 17,151.04
03/31/97 18,132.50 18,575.08 16,895.49
06/30/97 20,524.18 20,982.41 19,385.89
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. The
line graph above reflects the performance of the Class A and C shares since
inception. Past performance is not an indication of future results. See page 27
for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Top 10 Stocks % of Total Investments
- --------------------------------------------------------------------------------
<S> <C>
Sunbeam-Oster, Inc. 3.7%
Consumer products: outdoor, household
- -------------------------------------------------------------------------------
General Nutrition Cos., Inc. 3.2%
Chain health product stores operator
- --------------------------------------------------------------------------------
National Semiconductor Corp. 2.8%
Integrated circuits & transistors
- --------------------------------------------------------------------------------
Safeskin Corp. 2.7%
Disposable latex gloves manufacturer
- --------------------------------------------------------------------------------
McKesson Corp. 2.5%
Drugs, toiletries/home products distributor
- --------------------------------------------------------------------------------
Federal-Mogul Corp. 2.5%
Bearings, transmission products mfr.
- --------------------------------------------------------------------------------
Maxim Integrated Products, Inc. 2.5%
Integrated circuits mfr.
- --------------------------------------------------------------------------------
Greenpoint Financial Corp. 2.4%
Savings bank
- --------------------------------------------------------------------------------
Autodesk, Inc. 2.4%
Computer-aided design/drafting
- --------------------------------------------------------------------------------
DSC Communications Corp. 2.4%
Digital switching system products
- --------------------------------------------------------------------------------
Top Ten Total 27.1%
- --------------------------------------------------------------------------------
<CAPTION>
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
<S> <C>
Technology 28.3%
- --------------------------------------------------------------------------------
Consumer Discretionary 19.1%
- --------------------------------------------------------------------------------
Financial and Business Services 12.5%
- --------------------------------------------------------------------------------
Health Care 11.0%
- --------------------------------------------------------------------------------
Energy 9.6%
- --------------------------------------------------------------------------------
<CAPTION>
Portfolio Composition
- --------------------------------------------------------------------------------
<S> <C>
Common Stock 97%
- --------------------------------------------------------------------------------
Cash 3%
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the 12 months ended June 30, 1997, the return of the Target Fund fell below
the Lipper Mid-Cap Fund Average, with returns of 10.6% for Class A shares, 9.8%
for Class B shares and 8.7% for Class C shares. However, since the Fund's
inception, it has outperformed both the Lipper Mid-Cap Average and the Standard
& Poor's Mid-Cap Index.
During the past year, the Fund's manager increased the portfolio's holdings
in the technology and the consumer cyclical goods sectors, and decreased
holdings in the health sector. Following poor results during the first quarter
of 1997, the technology sector rebounded strongly, making a positive
contribution to the Fund's performance. The primary factors driving technology's
performance were software and semiconductor stocks. Software stocks were helped
by spending on innovations to avoid system problems in the year 2000, while
semiconductor holdings recovered after experiencing a downward cycle.
National Semiconductor Corp. was a leading performer for the Target Fund in
recent months. Working with state-of-the-art technologies, the integrated
circuit and semiconductor manufacturer has been developing many new products to
increase cost-effectiveness and efficiency. The company recently introduced an
improved Boomer Multimedia Audio System, which is highly useful in multimedia
applications due to its greater level of integration for audio amplifiers.
National Semiconductor is also focusing on its profitable business of producing
complex chips that are used in cellular phones, personal computers and other
devices.
The increase in the Fund's exposure to the financial sector during the first
quarter paid off, as this group outperformed in the improved interest rate
environment. The lack of inflationary signs kept the Federal Reserve from
raising interest rates despite the continued robust economy. The Fund's exposure
in this sector focused on regional banks and savings and loans, both of which
could potentially benefit from continued industry consolidation.
An overweighting in the healthcare sector detracted from the Fund's returns,
specifically in its biotech exposure. Investors' focus on this industry's high
valuations dragged some of the strong performers down, as stocks were sold
during profit-taking. The group was also pressured by Medicare reimbursement
issues faced by industry-giant Amgen.
Going forward, the manager will closely monitor the financial and economic
conditions for potentially adverse trends. And the manager will continue to
focus on strong companies that are posting returns that are exceeding market
expectations.
----
See page 37 for financial details. 17
----
<PAGE>
PIMCO Small Cap Value Fund
June 30, 1997
OBJECTIVE:
Long-term growth of capital and income.
PORTFOLIO:
Primarily common stocks of companies with small-sized capitalizations and
below-average price-to-earnings ratios relative to their industry groups.
TOTAL NET ASSETS:
$79 million
NUMBER OF SECURITIES IN THE PORTFOLIO
102 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
NFJ Investment Group
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 6/30/97
<TABLE>
<CAPTION>
A Shares B Shares C Shares Lipper
(INCEP. 10/1/91) (INCEP. 10/1/91) (INCEP. 10/1/91) Russell Small-Cap
Adjusted Adjusted Adjusted 2000 Index Fund Avg.
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 31.7% 24.5% 31.4% 26.4% 30.4% 16.3% 13.7%
3 years 23.0% 20.7% 22.8% 22.2% 22.8% 20.1% 22.0%
5 years 18.1% 16.8% 18.1% 17.9% 18.1% 17.9% 18.7%
Inception 17.6% 16.5% 17.6% 17.5% 17.6% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
SMALL CAP SMALL CAP SMALL CAP RUSSELL 2000
VALUE VALUE VALUE
CLASS A B C
- --------- --------- --------- --------- ------------
<S> <C> <C> <C> <C>
09/30/91 9,450.00 10,000.00 10,000.00 10,000.00
10/31/91 9,559.18 10,115.53 10,115.53 10,264.40
11/30/91 9,341.28 9,884.95 9,884.95 9,789.36
12/31/91 10,031.57 10,615.42 10,615.42 10,572.71
01/31/92 10,715.32 11,338.96 11,338.96 11,430.16
02/29/92 11,077.91 11,722.65 11,722.65 11,763.80
03/31/92 10,982.49 11,621.68 11,621.68 11,365.71
04/30/92 10,758.83 11,385.01 11,385.01 10,966.66
05/31/92 10,768.40 11,395.14 11,395.14 11,112.52
06/30/92 10,423.81 11,030.49 11,030.49 10,590.34
07/31/92 10,741.50 11,366.66 11,366.66 10,958.46
08/31/92 10,578.02 11,193.67 11,193.67 10,648.56
09/30/92 10,683.80 11,305.61 11,305.61 10,893.79
10/31/92 10,878.70 11,511.85 11,511.85 11,237.60
11/30/92 11,651.51 12,329.64 12,329.64 12,098.18
12/31/92 11,911.45 12,604.71 12,604.71 12,519.32
01/31/93 12,439.10 13,163.07 13,163.07 12,942.72
02/28/93 12,379.35 13,099.84 13,099.84 12,644.26
03/31/93 12,698.04 13,437.08 13,437.08 13,054.44
04/30/93 12,364.35 13,083.97 13,083.97 12,695.57
05/31/93 12,574.42 13,306.27 13,306.27 13,257.10
06/30/93 12,604.43 13,338.02 13,338.02 13,339.43
07/31/93 12,648.66 13,384.82 13,384.82 13,523.64
08/31/93 13,070.61 13,831.34 13,831.34 14,107.59
09/30/93 13,191.17 13,958.91 13,958.91 14,505.71
10/31/93 13,442.68 14,225.06 14,225.06 14,879.23
11/30/93 13,201.32 13,969.65 13,969.65 14,394.47
12/31/93 13,559.45 14,348.62 14,348.62 14,886.33
01/31/94 14,067.51 14,886.25 14,886.25 15,352.71
02/28/94 14,046.24 14,863.74 14,863.74 15,296.98
03/31/94 13,418.89 14,199.88 14,199.88 14,491.29
04/30/94 13,464.68 14,248.33 14,248.33 14,577.22
05/31/94 13,144.09 13,909.09 13,909.09 14,413.23
06/30/94 12,908.99 13,660.31 13,660.31 13,926.93
07/31/94 13,110.79 13,873.85 13,873.85 14,155.89
08/31/94 13,637.37 14,431.08 14,431.08 14,944.37
09/30/94 13,304.23 14,078.55 14,078.55 14,893.71
10/31/94 13,057.22 13,817.16 13,817.16 14,833.54
11/30/94 12,754.32 13,496.63 13,496.63 14,234.12
12/31/94 13,059.78 13,819.88 13,819.88 14,615.16
01/31/95 13,131.03 13,895.27 13,895.27 14,430.57
02/28/95 13,718.81 14,517.26 14,517.26 15,031.32
03/31/95 13,801.10 14,604.34 14,604.34 15,288.95
04/30/95 14,123.43 14,945.43 14,945.43 15,628.67
05/31/95 14,466.46 15,308.42 15,308.42 15,897.33
06/30/95 14,927.78 15,796.59 15,796.59 16,722.09
07/31/95 15,670.19 16,582.21 16,582.21 17,685.28
08/31/95 15,979.32 16,909.33 16,909.33 18,051.19
09/30/95 16,288.44 17,236.44 17,236.44 18,373.58
10/31/95 15,651.86 16,562.81 16,562.81 17,551.91
11/30/95 16,297.05 17,245.56 17,245.56 18,289.27
12/31/95 16,385.85 17,339.52 17,339.52 18,771.74
01/31/96 16,309.75 17,259.00 17,259.00 18,751.47
02/29/96 16,664.86 17,634.78 17,634.78 19,335.95
03/31/96 17,173.46 18,172.97 18,172.97 19,729.44
04/30/96 17,759.93 18,793.58 18,793.58 20,784.37
05/31/96 18,333.65 19,400.69 19,400.69 21,603.48
06/30/96 18,210.19 19,270.04 19,270.04 20,716.44
07/31/96 17,209.91 18,211.55 18,211.55 18,907.07
08/31/96 18,030.65 19,080.06 19,080.06 20,004.81
09/30/96 18,582.09 19,663.58 19,663.58 20,786.60
10/31/96 18,941.16 20,043.56 20,043.56 20,466.28
11/30/96 20,197.92 21,373.46 21,373.46 21,309.49
12/31/96 20,927.93 22,145.96 22,145.96 21,868.01
01/31/97 21,614.36 22,872.34 22,872.34 22,304.93
02/28/97 21,690.02 22,936.39 22,936.39 21,764.04
03/31/97 20,867.96 22,048.75 22,048.75 20,737.00
04/30/97 21,066.21 22,258.21 22,258.21 20,794.85
05/31/97 22,877.90 24,143.48 24,143.48 23,108.28
06/30/97 23,989.77 25,066.08 25,319.27 24,098.70
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. All
returns represent the blended performance of the Fund's retail class shares (for
the period from 1/20/97) and the prior performance of the Fund's institutional
class shares (for the period from 10/1/91). Retail class shares have higher
expenses than institutional class shares. Therefore, total return of retail
class shares would have been lower had they been in existence since the Fund's
inception. Past performance is not an indication of future results. See page 27
for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Top 10 Stocks % of Total Investments
- --------------------------------------------------------------------------------
<S> <C>
ICN Pharmaceuticals, Inc. 1.1%
Specialty/generic products mfr.
- --------------------------------------------------------------------------------
Westinghouse Air Brake Co. 1.0%
Train air brakes manufacturer
- --------------------------------------------------------------------------------
Bindley Western Industries, Inc. 1.0%
Ethical drugs wholesaler
- --------------------------------------------------------------------------------
Roadway Express, Inc. 1.0%
Transportation services
- --------------------------------------------------------------------------------
Sturm Ruger & Co., Inc. 1.0%
Firearms & titanium manufacturer
- --------------------------------------------------------------------------------
Caraustar Industries, Inc. 1.0%
Recycled paperboard/products mfr.
- --------------------------------------------------------------------------------
<CAPTION>
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
<S> <C>
Materials and Processing 20.0%
- --------------------------------------------------------------------------------
Consumer Discretionary 18.5%
- --------------------------------------------------------------------------------
Financial and Business Services 17.2%
- --------------------------------------------------------------------------------
Utilities 8.2%
- --------------------------------------------------------------------------------
Capital Goods 7.5%
- --------------------------------------------------------------------------------
<CAPTION>
Portfolio Composition
- --------------------------------------------------------------------------------
<S> <C>
Common Stock 90%
- --------------------------------------------------------------------------------
Cash Equivalents 10%
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The Small Cap Value Fund posted excellent results for the year ended June 30,
1997, outperforming its benchmark (the Russell 2000, an unmanaged index of
small-cap common stocks) and the Lipper Small-Cap Fund Average by a wide margin.
Specifically, the Fund's results were 31.7%, 31.4% and 30.4% for its Class A, B
and C shares, respectively.
Small-cap funds in general have been hindered lately by assets being diverted
into other investments, especially large-cap stocks. However, the Fund's value
investment style helped it to surpass many competing funds, and to do so with
less volatility than the small-cap market in general. Based on the Fund's beta,
it was 36% less risky than the average small-cap fund over the past three years.
Over the past year, the Fund's manager benefited from its positions in the
financial and producer durables sectors. As of June 30th, financial services was
one of the largest sectors in the Small Cap Value Fund's portfolio. A
combination of restructuring within the industry and declining interest rates
helped drive this sector's earnings to record levels. Examples of Fund holdings
include Raymond James, BankAtlantic and Eaton Vance. The manager believes the
forecast for lower interest rates will result in continuing strong potential for
the finance sector going forward.
A specific example of a shining star in the Fund's portfolio is Westinghouse
Air Brake Co., North America's largest manufacturer of air brakes and other
safety equipment for trains. The company's performance in recent months
benefited the Small Cap Value Fund, as it reported an increase in net income
greater than the market's expectations. Aggressive efforts for overseas
expansion, as evidenced by the opening of offices in Brazil and China, have paid
off, as have recent acquisitions of domestic companies. These developments,
combined with a relatively low price-to-earnings ratio, make this an attractive
stock going forward.
The Fund's manager currently believes that the market has yet to fully
realize the intrinsic value of many of the portfolio's holdings, making them
very optimistic about future performance. In pursuing this continued success,
the manager remains committed to the investment strategy of buying stocks that
are a good value, rather than following the latest trend in the market.
- ----
18 See page 38 for financial details.
- ----
<PAGE>
PIMCO Opportunity Fund
June 30, 1997
OBJECTIVE:
Capital appreciation; no consideration given to income.
PORTFOLIO:
Primarily stocks of small-capitalization companies.
TOTAL NET ASSETS:
$843 million
NUMBER OF SECURITIES IN THE PORTFOLIO
49 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Columbus Circle Investors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 6/30/97
<TABLE>
<CAPTION>
A Shares C Shares Lipper
(INCEP. 12/17/90) (INCEP. 2/24/84) Russell Cap. App.
Adjusted Adjusted 2000 Index Fund Avg.
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 year -9.6% -14.5% -11.1% 16.3% 14.4%
5 years 20.4% 19.0% 19.5% 17.9% 15.9%
10 years -- -- 17.1% 11.2% 11.2%
Inception 25.6% 24.5% 18.0% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Opportunity
------------------------------
C Russell 2000
----------- ------------
Value Date
- ----------
<S> <C> <C>
12/31/83 10,000.00 10,000.00
03/31/84 10,090.00 10,059.49
06/30/84 10,279.96 9,757.09
09/30/84 11,213.52 10,293.48
12/31/84 11,199.44 9,995.24
03/31/85 12,752.05 11,385.91
06/30/85 13,310.99 11,789.44
09/30/85 12,462.23 11,275.88
12/31/85 14,542.86 13,098.82
03/31/86 16,247.27 14,953.36
06/30/86 17,824.81 15,678.09
09/30/86 14,610.13 13,758.34
12/31/86 15,196.89 13,843.13
03/31/87 19,250.20 17,209.07
06/30/87 18,858.34 17,087.21
09/30/87 20,487.02 17,802.73
12/31/87 16,170.12 12,629.18
03/31/88 17,980.79 15,037.92
06/30/88 19,476.57 16,029.07
09/30/88 18,642.08 15,878.12
12/31/88 18,437.40 15,773.09
03/31/89 20,011.90 16,988.22
06/30/89 22,137.48 18,069.81
09/30/89 24,845.61 19,289.84
12/31/89 24,089.32 18,335.18
03/31/90 23,503.94 17,929.70
06/30/90 25,632.60 18,621.26
09/30/90 21,162.42 14,052.02
12/31/90 22,320.32 14,758.38
03/31/91 28,718.44 19,147.21
06/30/91 27,914.10 18,850.40
09/30/91 32,667.00 20,387.29
12/31/91 37,516.87 21,554.89
03/31/92 40,314.54 23,193.22
06/30/92 37,476.62 21,590.63
09/30/92 39,449.08 22,209.03
12/31/92 48,194.60 25,524.17
03/31/93 51,898.74 26,614.08
06/30/93 57,353.20 27,195.06
09/30/93 66,694.97 29,572.75
12/31/93 65,621.66 30,347.55
03/31/94 61,282.12 29,542.00
06/30/94 52,978.00 28,393.00
09/30/94 61,767.00 30,364.00
12/31/94 62,515.22 29,797.00
03/31/95 66,996.85 31,170.00
06/30/95 76,733.55 34,090.63
09/30/95 85,628.55 37,359.92
12/31/95 88,479.00 38,170.63
03/31/96 91,692.00 40,128.78
06/30/96 101,529.00 42,135.22
09/30/96 100,591.00 42,278.48
12/31/96 98,689.83 44,476.96
03/31/97 78,418.94 42,177.50
06/30/97 91,130.65 49,014.48
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. The
line graph above reflects the performance of the Class C shares since inception.
Past performance is not an indication of future results. See page 27 for
Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Top 10 Stocks % of Total Investments
- --------------------------------------------------------------------------------
<S> <C>
Comverse Technology, Inc. 6.0%
Computer systems developer
- --------------------------------------------------------------------------------
Computer Horizons Corp. 4.0%
Diversified information technology svcs.
- --------------------------------------------------------------------------------
Norrell Corp. 3.4%
Temporary personnel services
- --------------------------------------------------------------------------------
Glendale Federal Bank FSB 3.3%
Savings bank-California
- --------------------------------------------------------------------------------
Airborne Freight Corp. 2.9%
International air express/freight
- --------------------------------------------------------------------------------
Wind River Systems 2.6%
Software operating systems developer
- --------------------------------------------------------------------------------
RMI Titanium Co. 2.5%
Titanium metal products producer
- --------------------------------------------------------------------------------
Cognos, Inc. 2.4%
Information systems software developer
- --------------------------------------------------------------------------------
Data General 2.3%
General purpose computers
- --------------------------------------------------------------------------------
Brightpoint, Inc. 2.2%
Cellular phone wholesaler
- --------------------------------------------------------------------------------
Top Ten Total 31.6%
- --------------------------------------------------------------------------------
<CAPTION>
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
<S> <C>
Technology 45.3%
- --------------------------------------------------------------------------------
Consumer Services 9.9%
- --------------------------------------------------------------------------------
Consumer Discretionary 8.5%
- --------------------------------------------------------------------------------
Financial and Business Services 6.0%
- --------------------------------------------------------------------------------
Energy 5.6%
- --------------------------------------------------------------------------------
<CAPTION>
Portfolio Composition
- --------------------------------------------------------------------------------
<S> <C>
Common Stock 91%
- --------------------------------------------------------------------------------
Cash Equivalents 9%
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
Although the Opportunity Fund's second-quarter performance showed a profound
turnaround with a 16% return, for the year ended June 30, 1997 it trailed its
benchmark, the Russell 2000 Index (an unmanaged index of small-cap stocks).
Specifically, for the year ended June 30, 1997, the Fund's shares decreased 9.6%
and 11.1% for its Class A and C shares, respectively.
However, over the longer-term, the Fund has been a strong performer. Over the
last 5-, 10-year and since inception periods ended June 30, 1997, the Fund has
handily outperformed funds with the same objective (measured by the Lipper
Capital Appreciation Fund Average) and the Russell 2000 Index.
Over the last year, investors have clearly favored large-capitalization
(large-cap) stocks over small-cap stocks. The increased demand for large-caps
significantly drives up their prices relative to their small-cap counterparts.
The Opportunity Fund faltered during this period, as many of the fundamentally
sound stocks in its portfolio dropped during a widespread sell-off. However,
investors have recognized that many small-cap stocks now represent significant
values, and the prices of the Fund's holdings now appear to be back in sync with
their business prospects.
The Fund's recent rebound was led by its holdings in the technology sector.
The Fund increased its exposure to this sector by more than 10% during the
second quarter, just in time to reap the benefits of a rally in technology
stocks. An example of a winning holding in this sector was Wind River Systems,
Inc., a firm that develops advanced software operating systems. One such product
was recently employed by NASA, to help it control the journey of the Mars
Pathfinder probe. Pathfinder, which landed on Mars on July 4th, utilized the
system as the main software running the flight and communications of this
historical operation.
Looking ahead, the manager currently believes that small-cap stocks are
coming back into favor, as the high valuations of large-cap stocks leave them
especially vulnerable to price drops brought on by negative news. Given this,
the manager feels the future for small-cap stocks is bright, especially relative
to the rest of the market. And the manager believes that technology will
continue to offer outstanding reward potential over the long term.
--
See page 40 for financial details. 19
--
<PAGE>
PIMCO International Developed Fund
June 30, 1997
OBJECTIVE:
Long-term growth of capital.
PORTFOLIO:
Primarily international equity securities (developed markets).
TOTAL NET ASSETS:
$100 million
NUMBER OF SECURITIES IN THE PORTFOLIO
158 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Blairlogie Capital Management
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 6/30/97
<TABLE>
<CAPTION>
A Shares B Shares C Shares MSCI Lipper
(INCEP. 6/8/93) (INCEP. 6/8/93) (INCEP. 6/8/93) EAFE International
Adjusted Adjusted Adjusted Index Fund Avg.
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 9.7% 3.7% 9.6% 4.6% 8.6% 12.8% 16.5%
3 years 9.7% 7.7% 9.7% 8.8% 9.7% 9.1% 10.9%
Inception 11.2% 9.6% 11.1% 10.8% 11.1% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
INTERNATIONAL INTERNATIONAL INTERNATIONAL EAFE
DEVELOPED DEVELOPED DEVELOPED
CLASS A B C
========= =============================================== =========
<S> <C> <C> <C> <C>
06/30/93 9,450.00 10,000.00 10,000.00 10,000.00
07/31/93 9,831.13 10,403.31 10,403.31 10,352.35
08/31/93 10,505.43 11,116.86 11,116.86 10,913.55
09/30/93 10,251.34 10,847.98 10,847.98 10,670.29
10/31/93 10,496.12 11,107.00 11,107.00 11,001.46
11/30/93 9,632.08 10,192.67 10,192.67 10,042.12
12/31/93 10,356.11 10,958.85 10,958.85 10,769.51
01/31/94 11,263.50 11,919.05 11,919.05 11,682.35
02/28/94 11,184.60 11,835.56 11,835.56 11,652.40
03/31/94 10,799.95 11,428.51 11,428.51 11,153.00
04/30/94 11,263.50 11,919.05 11,919.05 11,628.69
05/31/94 11,224.05 11,877.30 11,877.30 11,564.41
06/30/94 11,381.86 12,044.30 12,044.30 11,730.43
07/31/94 11,618.57 12,294.78 12,294.78 11,845.86
08/31/94 11,756.65 12,440.90 12,440.90 12,128.91
09/30/94 11,362.13 12,023.42 12,023.42 11,749.56
10/31/94 11,724.69 12,407.08 12,407.08 12,143.56
11/30/94 11,082.10 11,727.09 11,727.09 11,562.61
12/31/94 11,086.01 11,731.23 11,731.23 11,637.74
01/31/95 10,726.07 11,350.34 11,350.34 11,193.39
02/28/95 10,849.48 11,480.93 11,480.93 11,164.18
03/31/95 11,456.23 12,122.99 12,122.99 11,863.61
04/30/95 11,867.58 12,558.29 12,558.29 12,312.98
05/31/95 11,764.74 12,449.46 12,449.46 12,169.36
06/30/95 11,559.07 12,231.82 12,231.82 11,959.18
07/31/95 12,381.78 13,102.41 13,102.41 12,706.99
08/31/95 12,320.07 13,037.11 13,037.11 12,225.35
09/30/95 12,505.18 13,233.00 13,233.00 12,467.29
10/31/95 12,169.36 12,877.63 12,877.63 12,135.35
11/30/95 12,604.72 13,338.33 13,338.33 12,476.18
12/31/95 12,985.22 13,740.97 13,740.97 12,982.09
01/31/96 13,105.35 13,868.09 13,868.09 13,038.43
02/29/96 13,116.27 13,879.65 13,879.65 13,085.76
03/31/96 13,389.30 14,168.57 14,168.57 13,366.97
04/30/96 13,913.51 14,723.29 14,723.29 13,758.89
05/31/96 13,618.64 14,411.26 14,411.26 13,509.03
06/30/96 13,695.09 14,492.16 14,492.16 13,588.33
07/31/96 13,214.56 13,983.66 13,983.66 13,194.54
08/31/96 13,192.72 13,960.55 13,960.55 13,226.87
09/30/96 13,520.35 14,307.25 14,307.25 13,581.61
10/31/96 13,442.06 14,203.24 14,203.24 13,446.07
11/30/96 13,869.83 14,677.07 14,677.07 13,984.45
12/31/96 13,741.90 14,541.70 14,541.70 13,807.96
01/31/97 13,317.28 14,092.36 14,092.36 13,327.86
02/28/97 13,535.68 14,323.47 14,323.47 13,549.10
03/31/97 13,547.86 14,323.47 14,323.47 13,601.54
04/30/97 13,719.92 14,505.38 14,505.38 13,677.03
05/31/97 14,374.36 15,198.74 15,198.74 14,570.41
06/30/97 15,029.83 15,562.05 15,879.64 15,377.17
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. All
returns represent the blended performance of the Fund's retail class shares (for
the period from 1/20/97) and the prior performance of the Fund's institutional
class shares (for the period from 6/8/93). Retail class shares have higher
expenses than institutional class shares. Therefore, total return of retail
class shares would have been lower had they been in existence since the Fund's
inception. Past performance is not an indication of future results. See page 27
for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Top Holdings in % of Total
Selected Countries Investments
- --------------------------------------------------------------------------------
<S> <C>
Belgium/Belgium Webs 3.5%
- --------------------------------------------------------------------------------
Japan/NEC Corp. 1.8%
- --------------------------------------------------------------------------------
Switzerland/Roche 1.8%
- --------------------------------------------------------------------------------
Germany/Veba 1.7%
- --------------------------------------------------------------------------------
Netherlands/Royal Dutch Petroleum 1.5%
- --------------------------------------------------------------------------------
Italy/ENI 1.4%
- --------------------------------------------------------------------------------
France/Elf Aquitaine 1.2%
- --------------------------------------------------------------------------------
United Kingdom/Lloyds TSB 1.0%
- --------------------------------------------------------------------------------
Finland/Nokia 1.0%
- --------------------------------------------------------------------------------
Singapore/Overseas Chinese Bank 0.7%
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
<S> <C>
Japan 26.1%
- --------------------------------------------------------------------------------
Germany 12.0%
- --------------------------------------------------------------------------------
United Kingdom 10.9%
- --------------------------------------------------------------------------------
France 10.8%
- --------------------------------------------------------------------------------
Switzerland 8.9%
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Regional Breakdown
- --------------------------------------------------------------------------------
<S> <C>
Stocks: Europe 62.7%
- --------------------------------------------------------------------------------
Japan 26.1%
- --------------------------------------------------------------------------------
Pacific/Far East 8.8%
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Portfolio Composition
- -------------------------------------------------------------------------------
<S> <C>
Common Stock 98%
- --------------------------------------------------------------------------------
Cash Equivalents 2%
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the year ended June 30, 1997, shares of the International Developed Fund
increased 9.7%, 9.6% and 8.6% for its Class A, B and C shares, respectively.
These returns fell short of the Fund's benchmark (the MSCI EAFE Index).
The major factor that limited performance for the Fund was the strength of
the U.S. dollar versus many European countries. The value of the German mark and
the French franc declined relative to the dollar, and, as a result, the strong
returns of the stocks from those foreign markets were much lower when measured
in U.S. terms. This was true for Italy as well, where the Milan market's returns
were nearly cut in half when exchanged into U.S. dollars, due to the declining
lira.
In Japan, on the other hand, the yen began to appreciate against the dollar,
and the stock market rebounded after a disappointing 1996. A national sales tax
in Japan had a less serious impact than was anticipated, and investors moved
additional assets into the country as opportunities rose. The Hong Kong market
rose almost 20% during the last three months in anticipation of its transfer
back to Chinese rule, with property companies benefiting from optimism for the
future. The manager raised the Fund's exposure to Singapore, as the country
appears safe from recent currency worries and has a stable economic outlook.
Turning to specific success stories, Royal Dutch Shell was a significant
contributor to the Fund and continues to display promising growth potential. The
company has posted strong results thus far in 1997, and the manager believes
this could continue despite the relatively flat outlook for oil prices. This
optimism is driven by several factors, including a successful cost-reduction
program, strong cash flow that has increased the likelihood of higher dividend
payouts, and successful exploration.
Looking ahead, the Fund's manager plans to remain overweight in European
stocks, especially those of Germany and the Scandinavian countries. In Germany,
the recession, which began in 1991 after the collapse of the Berlin Wall, has
helped exporters through currency depreciation, but the domestic economy has
suffered greatly. Now, however, there are signs of a turnaround in the economy,
and the recovery is expected to trickle down into general corporate earnings
growth.
- ----
20 See page 41 for financial details.
- ----
<PAGE>
PIMCO International Fund
June 30, 1997
OBJECTIVE:
Capital appreciation; income is incidental.
PORTFOLIO:
Primarily stocks of foreign (non-U.S.) companies.
TOTAL NET ASSETS:
$195 million
NUMBER OF SECURITIES
IN THE
PORTFOLIO
257 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Blairlogie Capital Management
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
<TABLE>
Average Annual Total Return For periods ended 6/30/97
A Shares B Shares C Shares MSCI Lipper
(INCEP. 2/1/91) (INCEP. 5/22/95) (INCEP. 8/25/86) EAFE International
Adjusted Adjusted Adjusted Index Fund Avg.
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 10.1% 4.1% 9.3% 4.3% 8.3% 12.8% 16.5%
5 years 10.1% 8.8% -- -- 9.2% 12.8% 12.3%
10 years -- -- -- -- 6.1% 6.6% 8.7%
Inception 9.3% 8.3% 10.7% 9.4% 7.4% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
International
------------------------
<S> <C> <C>
C EAFE
---------- ----------
Value Date
06/30/86 10,000.00 10,000.00
09/30/86 9,700.00 9,897.35
12/31/86 9,920.00 10,286.26
03/31/87 11,890.00 12,680.31
06/30/87 12,100.00 13,574.85
09/30/87 12,870.00 14,337.97
12/31/87 10,507.27 12,820.01
03/31/88 11,067.80 14,774.49
06/30/88 11,408.52 14,126.27
09/30/88 11,067.80 14,217.17
12/31/88 11,617.35 16,444.08
03/31/89 12,100.95 16,489.62
06/30/89 12,826.34 15,472.23
09/30/89 14,650.83 17,389.16
12/31/89 14,929.18 18,176.71
03/31/90 13,507.36 14,582.61
06/30/90 14,856.89 15,975.94
09/30/90 12,097.58 12,589.27
12/31/90 12,615.04 13,914.87
03/31/91 13,556.06 14,949.15
06/30/91 13,160.56 14,133.43
09/30/91 14,306.14 15,345.10
12/31/91 15,127.54 15,602.19
03/31/92 14,114.41 13,750.68
06/30/92 14,003.38 14,041.40
09/30/92 13,767.45 14,253.06
12/31/92 14,243.58 13,703.02
03/31/93 15,588.73 15,345.57
06/30/93 16,336.03 16,889.08
09/30/93 17,815.69 18,009.21
12/31/93 19,010.96 18,164.09
03/31/94 18,203.60 18,799.83
06/30/94 18,432.00 19,760.00
09/30/94 19,133.00 19,779.00
12/31/94 17,455.78 19,578.00
03/31/95 16,957.93 19,942.00
06/30/95 17,424.67 20,087.58
09/30/95 18,280.34 20,925.23
12/31/95 18,467.00 21,772.70
03/31/96 19,323.00 22,401.93
06/30/96 19,914.00 22,755.88
09/30/96 19,401.00 22,726.30
12/31/96 19,530.99 23,105.83
03/31/97 19,739.97 22,759.24
06/30/97 21,763.32 25,731.60
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. The
line graph above reflects the performance of the Class C shares since inception.
Past performance is not an indication of future results. See page 27 for
Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
<TABLE>
Top Holdings in % of Total
Selected Countries Investments
- --------------------------------------------------------------------------------
<S> <C>
Belgium/Webs-Belgium 2.6%
- --------------------------------------------------------------------------------
Switzerland/Novartis 2.1%
- --------------------------------------------------------------------------------
Netherlands/Royal Dutch Petroleum 1.4%
- --------------------------------------------------------------------------------
Japan/Hitachi 1.3%
- --------------------------------------------------------------------------------
Italy/ENI 1.3%
- --------------------------------------------------------------------------------
Germany/Volkswagen 1.3%
- --------------------------------------------------------------------------------
Finland/Nokia 1.2%
- --------------------------------------------------------------------------------
France/Elf Aquitaine 0.8%
- --------------------------------------------------------------------------------
Israel/ECI Telecom 0.6%
- --------------------------------------------------------------------------------
Malaysia/Telekom Malaysia 0.6%
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
Top 5 Countries % of Total Investments
- --------------------------------------------------------------------------------
<S> <C>
Japan 15.6%
- --------------------------------------------------------------------------------
Germany 9.5%
- --------------------------------------------------------------------------------
Switzerland 9.0%
- --------------------------------------------------------------------------------
France 7.5%
- --------------------------------------------------------------------------------
Italy 6.5%
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
Regional Breakdown
- --------------------------------------------------------------------------------
<S> <C>
Stocks: Europe 57.1%
- --------------------------------------------------------------------------------
Japan 15.6%
- --------------------------------------------------------------------------------
Pacific/Far East 15.0%
- --------------------------------------------------------------------------------
Latin America 8.6%
- --------------------------------------------------------------------------------
Middle East 3.7%
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
Portfolio Composition
- --------------------------------------------------------------------------------
<S> <C>
Common Stock 100%
- --------------------------------------------------------------------------------
Cash Equivalents 0%
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the year ended June 30, 1997, the International Fund's shares increased
10.1%, 9.3% and 8.3% for its Class A, B and C shares, respectively. These
returns fell short of the Fund's benchmark (the MSCI EAFE Index).
The major factor hindering the Fund's performance was the strength of the
U.S. dollar versus the currencies of many European countries. In particular, the
German mark and French franc declined relative to the dollar, diluting the
strong returns of the stocks from those foreign markets. This was true for Italy
as well, where the Milan market's returns were nearly cut in half when exchanged
into U.S. dollars. On the flip-side, the Fund benefited from currency exchange
in its investments in Brazil. Brazil has linked its currency to the U.S. dollar
and is also experiencing very little inflation and low interest rates as a
result, making it a strong investment region for the Fund.
Country allocation contributed strongly to the Fund over the past year. For
example, in continental Europe, Germany posted solid results for the Fund in
recent months. Companies that export their products, including automobile and
capital goods manufacturers, made the most of the declining currency, taking
advantage of the devaluating German mark by concentrating on overseas revenues.
For example, Germany's Volkswagen AG, the auto maker, had a strong second
quarter, with sales increasing due to recently introduced European models such
as VW Passat, Audi A3, Audi A6, and Skoda Octavia. The stock was further helped
by optimism about the upcoming launch of the fourth generation Golf, followed by
the comeback of the VW Beetle in January 1998. After 20 years out of U.S.
markets, the new Beetle will be aimed at middle-aged baby boomers and a new,
younger following. The manager believes these upcoming introductions, along with
lower expenses due to shorter assembly time, should continue to support
Volkswagen's earnings going forward.
Individual stock selection, on the other hand, detracted slightly from the
Fund's overall returns. Select holdings in India and Malaysia, such as the
textile company Raymond Woollens and the auto company Proton Saga, are examples
of securities that hindered overall performance. The manager is almost finished
removing these securities from the Fund, and expects better results in these
markets in the future.
Looking ahead, the manager currently intends to focus on existing areas of
strength, such as Germany and Brazil. At the same time, while the
Fund will maintain some emerging market exposure, the manager will avoid markets
such as Venezuela and Thailand, which it considers currently to be fundamentally
weak.
----
See page 43 for financial details. 21
----
<PAGE>
PIMCO Emerging Markets Fund
June 30, 1997
OBJECTIVE:
Long-term growth of capital.
PORTFOLIO:
Primarily common stocks of companies located in emerging market countries.
TOTAL NET ASSETS:
$55 million
NUMBER OF SECURITIES IN THE PORTFOLIO
203 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Blairlogie Capital Management
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 6/30/97
<TABLE>
<CAPTION>
A Shares B Shares C Shares MSCI Lipper
(INCEP. 6/1/93) (INCEP. 6/1/93) (INCEP. 6/1/93) EMF Emg. Mkts
Adjusted Adjusted Adjusted Index Fund Avg.
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 10.7% 4.6% 10.3% 5.3% 9.3% 10.6% 18.1%
3 years 2.2% 0.3% 2.1% 1.1% 2.1% 5.0% 6.8%
Inception 11.2% 9.7% 11.1% 10.8% 11.1% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
EMERGING EMERGING EMERGING MSCI
MARKETS MARKETS MARKETS EMERGING
CLASS A B C MKTS
========= ======================================== ========
<S> <C> <C> <C> <C>
05/31/93 9,450.00 10,000.00 10,000.00 10,000.00
06/30/93 9,591.75 10,150.00 10,150.00 10,296.33
07/31/93 9,884.70 10,460.00 10,460.00 10,568.49
08/31/93 10,858.05 11,490.00 11,490.00 11,460.90
09/30/93 11,065.95 11,710.00 11,710.00 11,880.00
10/31/93 11,861.85 12,552.22 12,552.22 12,945.96
11/30/93 12,751.24 13,493.38 13,493.38 13,518.84
12/31/93 14,785.92 15,646.48 15,646.48 15,753.27
01/31/94 15,735.12 16,650.92 16,650.92 16,040.08
02/28/94 15,304.56 16,195.30 16,195.30 15,754.74
03/31/94 14,120.51 14,942.34 14,942.34 14,328.99
04/30/94 13,719.30 14,517.78 14,517.78 14,042.42
05/31/94 14,384.72 15,221.92 15,221.92 14,523.04
06/30/94 13,660.59 14,455.65 14,455.65 14,122.73
07/31/94 14,433.65 15,273.70 15,273.70 15,000.73
08/31/94 16,067.83 17,002.99 17,002.99 16,862.67
09/30/94 16,596.25 17,562.16 17,562.16 17,054.29
10/31/94 16,175.47 17,116.90 17,116.90 16,746.49
11/30/94 15,392.63 16,288.49 16,288.49 15,875.56
12/31/94 13,635.77 14,429.39 14,429.39 14,600.91
01/31/95 11,820.42 12,508.38 12,508.38 13,047.50
02/28/95 11,232.49 11,886.24 11,886.24 12,712.85
03/31/95 11,057.15 11,700.68 11,700.68 12,793.40
04/30/95 11,624.44 12,301.00 12,301.00 13,367.75
05/31/95 12,150.48 12,857.66 12,857.66 14,078.79
06/30/95 12,233.00 12,944.97 12,944.97 14,121.02
07/31/95 12,439.29 13,163.27 13,163.27 14,437.37
08/31/95 12,212.37 12,923.14 12,923.14 14,096.61
09/30/95 12,140.17 12,846.74 12,846.74 14,030.46
10/31/95 11,690.26 12,370.65 12,370.65 13,494.43
11/30/95 11,399.82 12,063.30 12,063.30 13,254.25
12/31/95 11,926.42 12,620.55 12,620.55 13,842.76
01/31/96 12,925.49 13,677.77 13,677.77 14,826.94
02/29/96 12,582.06 13,314.35 13,314.35 14,591.14
03/31/96 12,717.35 13,457.52 13,457.52 14,704.89
04/30/96 13,144.04 13,909.04 13,909.04 15,293.16
05/31/96 13,112.82 13,876.00 13,876.00 15,224.32
06/30/96 13,175.26 13,942.08 13,942.08 15,318.79
07/31/96 12,072.12 12,774.73 12,774.73 14,272.60
08/31/96 12,457.18 13,182.20 13,182.20 14,638.01
09/30/96 12,613.28 13,347.39 13,347.39 14,765.43
10/31/96 12,155.38 12,862.83 12,862.83 14,371.22
11/30/96 12,373.92 13,094.10 13,094.10 14,612.62
12/31/96 12,501.72 13,229.33 13,229.33 14,675.11
01/31/97 13,411.85 14,192.43 14,192.43 15,675.89
02/28/97 13,904.06 14,713.29 14,713.29 16,346.90
03/31/97 13,580.10 14,348.40 14,348.40 15,917.06
04/30/97 13,433.43 14,181.96 14,181.96 15,945.69
05/31/97 13,935.84 14,713.78 14,713.78 16,401.65
06/30/97 14,585.25 15,071.27 15,378.85 17,280.32
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. All
returns represent the blended performance of the Fund's retail class shares (for
the period from 1/20/97) and the prior performance of the Fund's institutional
class shares (for the period from 6/1/93). Retail class shares have higher
expenses than institutional class shares. Therefore, total return of retail
class shares would have been lower had they been in existence since the Fund's
inception. Past performance is not an indication of future results. See page 27
for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Top Holdings in % of Total
Selected Countries Investments
- --------------------------------------------------------------------------------
<S> <C>
Brazil/Telebras ADR 2.9%
- --------------------------------------------------------------------------------
Mexico/Telefonos de Mexico ADR 2.0%
- --------------------------------------------------------------------------------
Korea/Korea Electric Power 1.7%
- --------------------------------------------------------------------------------
Portugal/Portugal Telecom 1.4%
- --------------------------------------------------------------------------------
Chile/Telecom de Chile ADR 1.4%
- --------------------------------------------------------------------------------
India/Tata Engineering 1.3%
- --------------------------------------------------------------------------------
Malaysia/Telekom Malaysia 1.2%
- --------------------------------------------------------------------------------
Israel/Teva 1.0%
- --------------------------------------------------------------------------------
South Africa/Nedcor GDR 0.8%
- --------------------------------------------------------------------------------
Turkey/Arcelik 0.7%
- --------------------------------------------------------------------------------
<CAPTION>
Top 5 Countries % of Total Investments
<S> <C>
Brazil 13.7%
- --------------------------------------------------------------------------------
Malaysia 9.5%
- --------------------------------------------------------------------------------
Mexico 9.4%
- --------------------------------------------------------------------------------
India 8.8%
- --------------------------------------------------------------------------------
Israel 6.0%
- --------------------------------------------------------------------------------
<CAPTION>
Regional Breakdown
- --------------------------------------------------------------------------------
<S> <C>
Stocks: Pacific/Far East 34.3%
- --------------------------------------------------------------------------------
Latin America 33.2%
- --------------------------------------------------------------------------------
Mid-East/Africa 13.9%
- --------------------------------------------------------------------------------
Europe 18.0%
- --------------------------------------------------------------------------------
<CAPTION>
Portfolio Composition
- --------------------------------------------------------------------------------
<S> <C>
Common Stock 99%
- --------------------------------------------------------------------------------
Corporate Bonds & Notes 1%
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The Emerging Markets Fund produced solid results for the year ended June 30,
1997, as the Fund's shares increased 10.7%, 10.3% and 9.3% for its Class A, B
and C shares, respectively. These returns were similar to that of the Fund's
benchmark (the MCSI Emerging Markets Free Index).
The manager's country allocations added significant value to the Fund over
the past year. In particular, Latin America was very strong over the last
quarter, led by Brazil, which was up 34%, Mexico (+25%) and Chile (+16%). After
the currency shocks of 1994, these countries' economies have been able to
continue their growth in an environment of relatively low inflation. In
addition, Chile's performance was aided by interest rates that have fallen much
faster than anticipated.
One success story for the Fund outside of Latin America was Tata Engineering
(Telco), the largest truck manufacturer in India. This company is part of the
Tata group conglomerate, whose products range from steel to software. In an
expanding economy such as India's, lack of modern transportation systems is
often the most serious impediment to growth. As the lead time to improve the
rail system is long, the increased traffic of goods has to be accommodated on
the roads. Tata Engineering has greatly expanded capacity to take care of this
situation.
Stock selection within other countries detracted slightly from returns.
Specifically, certain holdings in India and Malaysia, including the textile
company Raymond Woollens and the auto company Proton Saga, limited overall
performance. The manager has since sold both of these securities, and expects
better results in these markets in the future.
The Fund's manager continues to prefer the Latin American markets to those of
Asia, as the effects of the 1994 devaluation of the Mexican peso still keep the
valuations of Latin American countries relatively inexpensive. Brazil is an
example of a strong Latin American holding, as this country has linked its
currency to the U.S. dollar. As a result, Brazil has experienced very little
inflation and has low interest rates. One Latin American market the manager
plans to avoid is Venezuela, where stock prices have risen very fast, but where
the fundamentals are believed to be weaker compared to those of other countries.
Looking ahead, the Fund manager continues to believe that exposure to
emerging market stocks makes sense for aggressive investors looking to diversify
their portfolios.
- ----
22 See page 46 for financial details.
- ----
<PAGE>
PIMCO Innovation Fund
June 30, 1997
OBJECTIVE:
Capital appreciation; no consideration given to income.
PORTFOLIO:
Primarily technology-related stocks of companies of all sizes.
TOTAL NET ASSETS:
$271 million
NUMBER OF SECURITIES IN THE PORTFOLIO
41 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Columbus Circle Investors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 6/30/97
<TABLE>
<CAPTION>
A Shares B Shares C Shares Lipper
(INCEP. 12/22/94) (INCEP. 5/22/95) (INCEP. 12/22/94) S&P 500 Sc. & Tech.
Adjusted Adjusted Adjusted Index Fund Avg.
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 5.9% 0.1% 5.1% 0.1% 4.1% 34.7% 19.3%
Inception 26.5% 23.7% 21.4% 20.2% 25.5% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Innovation
---------------------------------
A C S&P 500
---------------------------------
<S> <C> <C> <C>
Value Date
09/30/94 9,450.00 10,000.00 10,000.00
12/31/94 9,431.10 9,980.00 10,000.00
03/31/95 10,253.25 10,830.00 10,974.00
06/30/95 12,162.15 12,820.00 12,022.02
09/30/95 13,929.30 14,650.00 12,977.77
12/31/95 13,706.28 14,394.00 13,759.03
03/31/96 14,064.00 14,752.00 14,497.89
06/30/96 16,144.00 16,892.00 15,148.84
09/30/96 16,695.00 17,445.00 15,616.94
12/31/96 16,940.42 17,664.81 16,919.40
03/31/97 14,811.01 15,410.78 17,372.84
06/30/97 17,096.34 17,747.05 20,406.13
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. The
line graph above reflects the performance of the Class A and C shares since
inception. Past performance is not an indication of future results. See page 27
for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Top 10 Stocks % of Total Investments
- --------------------------------------------------------------------------------
<S> <C>
Motorola, Inc. 5.7%
Semiconductors: communications equipment
- --------------------------------------------------------------------------------
Cisco Systems, Inc. 5.0%
Computer network products manufacturer
- --------------------------------------------------------------------------------
America Online, Inc. 4.0%
Online services provider
- --------------------------------------------------------------------------------
Nokia Corp. - ADR 3.6%
Telecommunications systems & equipment
- --------------------------------------------------------------------------------
Texas Instruments, Inc. 3.5%
Semiconductors: electronic equipment
- --------------------------------------------------------------------------------
National Semiconductor Corp. 3.4%
Integrated circuits & transistors
- --------------------------------------------------------------------------------
Northern Telecom Ltd. 3.4%
Telecommunications equipment
- --------------------------------------------------------------------------------
Tellabs, Inc. 3.1%
Data communications equipment
- --------------------------------------------------------------------------------
Xilinx, Inc. 3.1%
Semiconductor supplier
- --------------------------------------------------------------------------------
Lucent Technologies, Inc. 3.0%
Telecommunications systems
- --------------------------------------------------------------------------------
Top Ten Total 37.8%
- --------------------------------------------------------------------------------
<CAPTION>
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
<S> <C>
Technology 78.4%
- --------------------------------------------------------------------------------
Utilities 7.0%
- --------------------------------------------------------------------------------
Health Care 6.7%
- --------------------------------------------------------------------------------
Consumer Discretionary 4.7%
- --------------------------------------------------------------------------------
Materials and Processing 1.3%
- --------------------------------------------------------------------------------
<CAPTION>
Portfolio Composition
- --------------------------------------------------------------------------------
<S> <C>
Common Stock 98%
- --------------------------------------------------------------------------------
Cash Equivalents 2%
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the year ended June 30, 1997, the Innovation Fund posted returns of 5.9%,
5.1% and 4.1% for its Class A, B and C shares, respectively. These returns fell
short of competitive funds with the same objective (measured by the Lipper
Science and Technology Fund Average). However, since the Fund's inception its
returns are in line with those of competitive funds.
In the short term, the Fund was negatively impacted by the broad decline in
the price of technology stocks that occurred earlier in the year. While
virtually every area in the technology sector suffered, semiconductor and
networking stocks were among the hardest hit. Semiconductor stocks were punished
due to concern that worldwide demand for computer chips would fall in the event
of an economic slowdown. And networking stocks underperformed as investors
believed they were "overvalued" relative to other technology stocks.
However, in recent months the Fund's holdings in the technology sector have
rebounded strongly, as continued expansion in this dynamic industry became more
apparent. Two of the most dramatic turn-arounds occurred in the Fund's
networking and telecommunications stocks. Strong earnings and the increasing
popularity of the Internet quickly boosted networking companies close to
all-time highs. By staying ahead of the competition with new products,
telecommunications hardware companies such as Motorola were able to drive
revenues higher while strengthening their market share.
Another winning holding for the Fund was America Online, Inc. (AOL). The
firm continued to establish itself as the world's most popular Internet online
service, passing the eight million member plateau worldwide during the second
quarter. A recent survey solidified that position, as AOL received a 41%
awareness ranking, versus 10% for Compuserve and 8% for Prodigy. The resulting
increase in subscription revenues, coupled with growing advertising profits,
should contribute significantly to the company's bottom line for both the short
and long term.
The manager is encouraged by the recent broad rebound in the technology
sector. Given signs of continued investment opportunities, the manager currently
believes the long-term case for this sector remains bright. However, it's
apparent that short-term periods of volatility, such as we've seen in the past
year, will occur in this sector from time to time.
----
See page 48 for financial details. 23
----
<PAGE>
June 30, 1997
PIMCO Precious Metals Fund
OBJECTIVE:
Capital appreciation; no consideration given to income.
PORTFOLIO:
Primarily stocks of companies that extract, process, distribute or market
precious metals.
TOTAL NET ASSETS:
$33 million
NUMBER OF SECURITIES IN THE PORTFOLIO
71 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Van Eck Associates
(an independent sub-advisor not owned by PIMCO Advisors L.P.)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
PERFORMANCE*
- ---------------------------------------------------------------------------------------------------------
Average Annual Total Return For periods ended 6/30/97
A Shares B Shares C Shares Phil. Gold Lipper
(INCEP. 2/1/91) (INCEP. 6/15/95) (INCEP. 10/10/88) & Silver Gold Oriented
Adjusted Adjusted Adjusted Index Fund Avg.
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year -29.9% -33.8% -30.4% -33.8% -31.0% -22.7% -24.4%
3 years -9.4% -11.1% -- -- -10.0% -6.0% -4.6%
5 years 3.2% 2.0% -- -- 2.5% 4.0% 4.2%
Inception 3.5% 2.6% -13.9% -15.2% -1.8% -- --
</TABLE>
[LINE CHART CHANGE IN VALUE APPEARS HERE]
<TABLE>
<CAPTION>
Precious Metals
-------------------------------
C Phil. Gold &
Silver Index
--------- ------------
<S> <C> <C>
Value Date
09/30/88 10,000.00 10,000.00
12/31/88 9,460.93 9,504.10
03/31/89 9,731.24 10,337.52
06/30/89 9,130.55 10,097.22
09/30/89 9,871.41 11,338.07
12/31/89 10,992.70 13,099.95
03/31/90 9,951.50 12,311.31
06/30/90 8,629.97 11,081.38
09/30/90 9,410.87 11,833.97
12/31/90 8,239.52 10,599.67
03/31/91 7,738.94 9,206.99
06/30/91 8,189.46 9,848.17
09/30/91 7,468.63 8,610.60
12/31/91 7,799.01 8,824.69
03/31/92 7,298.43 7,868.92
06/30/92 7,588.77 8,576.73
09/30/92 7,448.61 8,787.55
12/31/92 6,837.90 7,788.09
03/31/93 8,279.57 9,483.34
06/30/93 11,263.01 12,718.73
09/30/93 10,121.69 11,371.93
12/31/93 12,954.97 14,408.23
03/31/94 12,454.39 14,604.19
06/30/94 11,774.00 12,589.00
09/30/94 13,766.00 14,443.00
12/31/94 11,703.52 11,942.00
03/31/95 11,343.11 13,323.00
06/30/95 11,202.94 13,124.49
09/30/95 11,913.76 13,557.60
12/31/95 11,213.00 13,150.87
03/31/96 13,466.00 15,570.63
06/30/96 12,294.00 13,515.30
09/30/96 11,633.00 12,582.75
12/31/96 10,931.53 12,752.62
03/31/97 10,208.96 11,372.78
06/30/97 8,571.44 10,442.49
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. The
line graph above reflects the performance of the Class C shares since
inception. See page 27 for Footnotes, which include additional details.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Stocks % of Total Investments
- --------------------------------------------------------------------------------
<S> <C>
Newmont Mining Corp. 7.2%
- --------------------------------------------------------------------------------
Getchell Gold Corp. 5.0%
- --------------------------------------------------------------------------------
Homestake Mining Co. 5.0%
- --------------------------------------------------------------------------------
Placer Dome, Inc. 4.2%
- --------------------------------------------------------------------------------
Barrick Gold Corp. 4.2%
- --------------------------------------------------------------------------------
Normandy Mining Limited 2.7%
- --------------------------------------------------------------------------------
Namibian Minerals Corp. 2.5%
- --------------------------------------------------------------------------------
Plutomic Resources Ltd. 2.5%
- --------------------------------------------------------------------------------
Meridian Gold, Inc.
Institutional Receipt - ADR 2.4%
- --------------------------------------------------------------------------------
Western Deep Levels 1.9%
- --------------------------------------------------------------------------------
Top Ten Total 37.6%
- --------------------------------------------------------------------------------
Regions
- --------------------------------------------------------------------------------
Stocks: Canada 31.1%
- --------------------------------------------------------------------------------
United States 23.6%
- --------------------------------------------------------------------------------
South Africa 17.9%
- --------------------------------------------------------------------------------
Australia 13.7%
- --------------------------------------------------------------------------------
Other 1.0%
- --------------------------------------------------------------------------------
Investment Breakdown
- --------------------------------------------------------------------------------
Common Stocks 89%
- --------------------------------------------------------------------------------
Cash Equivalents 11%
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The gold and precious metals markets continued to show that they can be volatile
investments, as the Precious Metals Fund turned in sub-par results for the year
ended June 30, 1997. During that one-year period, the Fund's returns decreased
29.9%, 30.4% and 31.0% for its Class A, B and C shares, respectively--returns
similar to that of the Lipper Gold Oriented Fund Average. The Fund's shares are
tied to the price of gold, which has decreased from $381.60 to $334.20 per ounce
during the one-year period ended June 30, 1997.
There were several recent events that contributed to negative sentiment
toward gold. First, there were recurring rumors of likely European Central bank
gold sales in anticipation of currency unification. Second, Belgium announced
that it would make available another 130 tons of its gold over five years for
sale in the form of commemorative coins. Both of these events would have
increased supply and driven down price. Third, the German government's proposal
to re-value its gold reserves raised concern that Germany, which strongly
opposed and defeated proposals to dispose of some International Monetary Fund
gold last year, might be considering a change in its gold policy. Finally, and
probably most important, equity markets have provided spectacular returns in the
United States and most other major countries, thus providing a wide array of
investment alternatives.
Despite the negative news surrounding the precious metals markets, there were
some bright spots for the Fund, such as Newmont Mining Corporation. The firm
acquired Santa Fe Pacific Gold to form the nation's largest gold company.
Newmont now has an estimated annual gold production of over 3.6 million ounces
in 1997. The manager believes weakness in gold share prices has presented an
opportunity to invest in some of the higher quality gold producing companies,
including Newmont. Large gold resources, a strong exploration program and
growing international development should enable the company to maintain and
increase production levels into the future.
Looking ahead, the manager believes there are several developments that
could positively affect the price of gold. First, the German central bank has
forcefully reaffirmed its commitment to gold as a major element of sound
monetary policy. Second, the recent French election may well lead to the end of
disinflationary economic policies in Europe, and gold tends to perform better
during periods of inflation. Finally, in late June, Japanese Prime Minister
Hashimoto unexpectedly strongly reemphasized both the importance of gold to
monetary policy and the historical weakness of paper currency reserves. As a
result, the Fund's manager continues to view gold-related investments as
portfolio protection against unforeseeable changes in general investment and
monetary conditions.
- --
24 See page 49 for financial details.
- --
<PAGE>
June 30, 1997
PIMCO Balanced Fund
OBJECTIVE:
Total return consistent with prudent investment management.
PORTFOLIO:
Primarily common stocks, fixed income securities and money market instruments.
TOTAL NET ASSETS:
$64 million
NUMBER OF SECURITIES IN THE PORTFOLIO
175 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital Management,
NFJ Investment Group and Pacific Investment Management Company
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
PERFORMANCE*
- ----------------------------------------------------------------------------------------------
Average Annual Total Return For periods ended 6/30/97
A Shares B Shares C Shares S&P500/ Lipper
(INCEP. 6/25/92) (INCEP. 6/25/92) (INCEP. 6/25/92) Leh. Agg. Balanced
Adjusted Adjusted Adjusted Hybrid Index Fund Avg.
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 20.1% 13.5% 19.8% 14.8% 18.8% 23.6% 19.4%
3 years 17.8% 15.6% 17.7% 17.0% 17.7% 20.4% 17.1%
5 years 12.7% 11.5% 12.7% 12.4% 12.7% 14.6% 12.9%
Inception 12.9% 11.6% 12.8% 12.7% 12.8% -- --
</TABLE>
[LINE CHART OF CHANGE IN VALUE APPEARS HERE]
<TABLE>
<CAPTION>
BALANCED BALANCED BALANCED LIPPER 60% S&P 500
BALANCED 40% LBAG
CLASS A B C
========= ========= ========= ========= ============ ============
<S> <C> <C> <C> <C> <C>
06/30/92 9,450.00 10,000.00 10,000.00 10,000.00 10,000.00
07/31/92 9,815.07 10,386.32 10,386.32 10,293.60 10,326.71
08/31/92 9,796.25 10,366.40 10,366.40 10,197.66 10,241.72
09/30/92 9,956.22 10,535.69 10,535.69 10,315.14 10,362.49
10/31/92 9,987.67 10,568.97 10,568.97 10,316.07 10,328.98
11/30/92 10,160.21 10,751.54 10,751.54 10,551.48 10,540.94
12/31/92 10,304.40 10,904.13 10,904.13 10,702.58 10,685.59
01/31/93 10,385.80 10,990.26 10,990.26 10,845.67 10,821.15
02/28/93 10,511.39 11,123.17 11,123.17 10,979.62 10,985.41
03/31/93 10,608.01 11,225.40 11,225.40 11,206.23 11,142.80
04/30/93 10,471.18 11,080.62 11,080.62 11,120.51 11,012.24
05/31/93 10,597.81 11,214.61 11,214.61 11,315.45 11,194.60
06/30/93 10,656.25 11,276.46 11,276.46 11,435.39 11,295.43
07/31/93 10,609.31 11,226.79 11,226.79 11,481.59 11,293.74
08/31/93 10,923.66 11,559.43 11,559.43 11,828.57 11,630.01
09/30/93 10,874.55 11,507.46 11,507.46 11,854.00 11,589.27
10/31/93 10,993.20 11,633.02 11,633.02 11,975.86 11,750.46
11/30/93 10,881.65 11,514.97 11,514.97 11,784.00 11,643.29
12/31/93 10,960.26 11,598.15 11,598.15 11,981.74 11,752.99
01/31/94 11,138.35 11,786.61 11,786.61 12,295.66 12,056.23
02/28/94 10,941.49 11,578.29 11,578.29 12,054.30 11,776.12
03/31/94 10,568.48 11,183.58 11,183.58 11,616.24 11,351.92
04/30/94 10,648.54 11,268.30 11,268.30 11,642.15 11,402.98
05/31/94 10,700.74 11,323.53 11,323.53 11,731.67 11,514.62
06/30/94 10,533.70 11,146.78 11,146.78 11,528.02 11,335.10
07/31/94 10,821.72 11,451.55 11,451.55 11,788.43 11,648.51
08/31/94 11,105.94 11,752.32 11,752.32 12,083.38 11,940.85
09/30/94 10,874.35 11,507.25 11,507.25 11,865.39 11,695.38
10/31/94 10,999.72 11,639.91 11,639.91 11,902.30 11,848.88
11/30/94 10,765.91 11,392.49 11,392.49 11,624.85 11,579.44
12/31/94 10,856.23 11,488.08 11,488.08 11,736.57 11,714.45
01/31/95 11,133.08 11,781.04 11,781.04 11,882.45 11,989.44
02/28/95 11,455.16 12,121.86 12,121.86 12,228.71 12,383.80
03/31/95 11,626.93 12,303.63 12,303.63 12,444.91 12,633.46
04/30/95 11,840.28 12,529.40 12,529.40 12,678.25 12,927.28
05/31/95 12,262.76 12,976.47 12,976.47 13,083.96 13,437.40
06/30/95 12,446.92 13,171.35 13,171.35 13,315.81 13,664.10
07/31/95 12,622.57 13,357.21 13,357.21 13,597.30 13,923.75
08/31/95 12,753.82 13,496.11 13,496.11 13,703.36 14,011.94
09/30/95 13,092.90 13,854.93 13,854.93 14,030.60 14,421.25
10/31/95 13,138.67 13,903.35 13,903.35 13,995.10 14,465.38
11/30/95 13,536.48 14,324.31 14,324.31 14,430.07 14,933.10
12/31/95 13,782.86 14,585.04 14,585.04 14,657.20 15,189.49
01/31/96 14,049.31 14,867.00 14,867.00 14,921.76 15,540.07
02/29/96 13,928.20 14,738.84 14,738.84 14,928.92 15,518.46
03/31/96 13,932.74 14,743.64 14,743.64 14,985.20 15,584.97
04/30/96 14,006.01 14,821.17 14,821.17 15,084.49 15,667.62
05/31/96 14,201.38 15,027.92 15,027.92 15,238.70 15,897.33
06/30/96 14,329.99 15,164.01 15,164.01 15,289.02 16,019.07
07/31/96 13,936.04 14,747.13 14,747.13 14,895.48 15,611.97
08/31/96 14,022.21 14,838.32 14,838.32 15,130.50 15,799.06
09/30/96 14,535.09 15,381.05 15,381.05 15,690.19 16,442.69
10/31/96 14,895.36 15,762.29 15,762.29 16,022.98 16,860.48
11/30/96 15,740.14 16,656.23 16,656.23 16,769.66 17,740.68
12/31/96 15,592.08 16,499.56 16,499.56 16,563.39 17,463.84
01/31/97 16,083.23 17,019.29 17,019.29 17,070.23 18,139.91
02/28/97 16,097.71 17,034.61 17,034.61 17,133.39 18,243.29
03/31/97 15,688.83 16,579.79 16,593.42 16,634.81 17,712.66
04/30/97 16,107.72 17,024.13 17,021.53 17,135.52 18,453.18
05/31/97 16,766.52 17,705.09 17,719.41 17,836.36 19,197.02
06/30/97 17,210.84 17,987.28 18,164.17 18,408.91 19,804.18
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. All
returns represent the blended performance of the Fund's retail class shares
(for the period from 1/20/97) and the prior performance of the Fund's
institutional class shares (for the period from 6/25/92). Retail class shares
have higher expenses than institutional class shares. Therefore, total return
of retail class shares would have been lower had they been in existence since
the Fund's inception. Past performance is not an indication of future results.
See page 27 for Footnotes, which include additional details.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 5 Holdings % of Total Investments
- --------------------------------------------------------------------------------
<S> <C>
Federal National 7.4%
Mortgage Association-8.50%
- --------------------------------------------------------------------------------
Government National 7.2%
Mortgage Association-6.50%
- --------------------------------------------------------------------------------
Long Island 3.0%
Lighting Co.-9.00%
- --------------------------------------------------------------------------------
Government National 2.9%
Mortgage Association-8.50%
- --------------------------------------------------------------------------------
AMR Corp.-9.43% 1.5%
- --------------------------------------------------------------------------------
Total Five Total 22.0%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 53%
- --------------------------------------------------------------------------------
Mtg.-Backed Securities 34%
- --------------------------------------------------------------------------------
Cash Equivalents 7%
- --------------------------------------------------------------------------------
Corporate Bonds & Notes 6%
- --------------------------------------------------------------------------------
Bond Analysis
- --------------------------------------------------------------------------------
Average Quality AA+
- --------------------------------------------------------------------------------
Average Maturity 5.7 Years
- --------------------------------------------------------------------------------
Duration 4.3 Years
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The Balanced Fund posted solid results for the year ended June 30, 1997, in line
with those of mutual funds with the same objective (measured by the Lipper
Balanced Fund Average). Specifically, the Fund's shares increased 20.1%, 19.8%
and 18.8% for its Class A, B and C shares, respectively.
Throughout much of the last fiscal year, the allocation of the Fund's assets
was maintained at 60% stocks and 40% bonds. The Fund's manager felt this
allocation would allow the Balanced Fund to provide the necessary
diversification in the face of sometimes turbulent financial markets. This
strategy proved successful, as the Fund produced strong returns while being less
volatile than the overall market.
Among the winners in the Fund's stock portfolio was Bear Stearns Companies, a
major securities firm with business interests in both the stock and bond
markets. Bear Stearns posted strong results, with net revenues increasing as a
result of growth in investment banking. Combined with its successful
margin-lending business, Bear Stearns should be able to continue its
above-average profitability relative to other securities firms.
Another stock success story for the Fund was Brunswick Corp., a manufacturer
of pleasure boats and bowling equipment. This company took another step toward
transforming itself into a diversified, active recreation company by acquiring
Life Fitness in the second quarter. The purchase of this leading maker of
fitness equipment should enable Brunswick to increase sales without having to
undertake significant additional marketing expense.
On the bond side, the Fund's subadvisors continued to invest based on the
view that interest rates would decline further over the long term. This strategy
is exemplified by a high quality portfolio with an above-average duration
relative to the benchmark. Over the last quarter, this strategy was rewarded as
long-term interest rates fell.
Based on the strong performance of the stock and bond markets over the past
year, there were few sectors that detracted from the Fund's returns.
Underweighting in the consumer durables and consumer staples sectors somewhat
limited the performance during the last quarter, although both industries added
value over the year. And, as the 30-year Treasury bond yield fluctuated from
7.2% to 6.8% during the past 12 months, a few volatile swings within that period
affected the Fund's bond portfolio on a short-term basis.
With the stock market at record highs, the manager believes that more than
ever before it is important to maintain a investment portfolio
that is diversified between stocks and bonds. For this reason, the Fund
currently expects to maintain its 60% stock/40% bond allocation in the coming
months.
--
See page 50 for financial details. 25
--
<PAGE>
June 30, 1997
PIMCO Tax Exempt Fund
OBJECTIVE:
High current income exempt from federal income tax, with preservation of
capital.
PORTFOLIO:
Primarily investment grade municipal securities (tax-exempt bonds).
DURATION RANGE:
3-10 years
TOTAL NET ASSETS:
$50 million
PIMCO ADVISORS INSTITUTIONAL MANAGER
Columbus Circle Investors
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------------------------
Average Annual Total Return For periods ended 6/30/97
A Shares B Shares C Shares Lehman Lipper Muni.
(INCEP. 3/14/91) (INCEP. 5/30/95) (INCEP. 11/1/85) Muni. Bond Fund
Adjusted Adjusted Adjusted Index Avg.
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 6.9% 2.1% 6.0% 1.0% 5.3% 4.9% 4.3%
5 years 6.1% 5.1% -- -- 5.3% 7.1% 6.5%
10 years -- -- -- -- 6.6% 8.2% 7.8%
Inception 6.8% 6.0% 4.4% 3.0% 7.5% -- --
</TABLE>
[LINE CHART OF CHANGE IN VALUE APPEARS HERE]
<TABLE>
<CAPTION>
Tax Exempt
C Leh. Muni. 6 Mo. CD
- ----------- ---------- --------- ---------
<S> <C> <C> <C>
Value Date
09/30/85 10,000.00 10,000.00 10,000.00
12/31/85 10,522.97 10,449.89 10,130.42
03/31/86 11,707.42 11,507.85 10,323.10
06/30/86 11,487.72 11,436.98 10,495.41
09/30/86 12,159.28 12,051.38 10,653.63
12/31/86 12,697.02 12,467.73 10,808.85
03/31/87 12,948.03 12,770.19 10,972.89
06/30/87 12,306.57 12,423.44 11,166.04
09/30/87 11,907.32 12,114.65 11,367.10
12/31/87 12,514.55 12,655.66 11,587.90
03/31/88 12,739.42 13,090.99 11,787.18
06/30/88 13,008.10 13,344.72 12,007.79
09/30/88 13,382.70 13,687.04 12,262.94
12/31/88 13,690.05 13,942.04 12,535.95
03/31/89 13,708.03 14,034.42 12,846.87
06/30/89 14,648.82 14,865.22 13,157.66
09/30/89 14,555.08 14,875.35 13,442.58
12/31/89 15,133.08 15,446.09 13,721.41
03/31/90 14,918.35 15,515.06 14,008.79
06/30/90 15,230.97 15,877.63 14,306.46
09/30/90 15,215.89 15,886.48 14,597.40
12/31/90 15,842.97 16,571.75 14,886.86
03/31/91 16,028.40 16,946.34 15,138.37
06/30/91 16,236.56 17,308.28 15,371.17
09/30/91 16,856.80 17,981.52 15,598.23
12/31/91 17,418.06 18,583.90 15,789.30
03/31/92 17,278.72 18,639.58 15,955.67
06/30/92 17,964.68 19,345.74 16,115.76
09/30/92 18,368.89 19,860.79 16,249.89
12/31/92 18,719.73 20,222.10 16,391.67
03/31/93 19,410.49 20,973.17 16,526.45
06/30/93 20,017.34 21,659.71 16,660.68
09/30/93 20,810.12 22,391.80 16,799.34
12/31/93 21,035.66 22,705.29 16,938.78
03/31/94 19,324.09 21,460.00 17,094.00
06/30/94 19,365.00 21,696.00 17,295.00
09/30/94 19,408.00 21,845.00 17,522.00
12/31/94 19,031.49 21,533.00 17,795.00
03/31/95 20,542.88 23,054.00 18,087.00
06/30/95 20,913.73 23,609.60 18,361.92
09/30/95 21,357.50 24,287.20 18,628.17
12/31/95 22,318.00 25,290.26 18,892.69
03/31/96 21,804.00 24,986.78 19,140.18
06/30/96 21,842.00 25,176.67 19,406.23
09/30/96 22,311.00 25,753.22 19,683.74
12/31/96 22,768.38 26,409.93 19,955.38
03/31/97 22,547.52 26,346.54 20,234.75
06/30/97 23,239.73 27,255.50 20,532.20
</TABLE>
*The adjusted returns above include the effect of applicable sales charges. The
line graph above reflects the performance of the Class C shares since
inception. Past performance is not an indication of future results. See page 27
for Footnotes, which include additional details.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Sector Breakdown % of Net Assets
- --------------------------------------------------------------------------------
<S> <C>
Municipals:
- --------------------------------------------------------------------------------
Transportation Revenue 22%
- --------------------------------------------------------------------------------
Utilities 17%
- --------------------------------------------------------------------------------
General Obligation 13%
- --------------------------------------------------------------------------------
Pre-Refunded 13%
- --------------------------------------------------------------------------------
Education 8%
- --------------------------------------------------------------------------------
Medical Revenue 7%
- --------------------------------------------------------------------------------
Pollution Revenue 6%
- --------------------------------------------------------------------------------
Development Revenue 5%
- --------------------------------------------------------------------------------
Misc. Revenue 4%
- --------------------------------------------------------------------------------
Short-Term 3%
- --------------------------------------------------------------------------------
Facilities Revenue 2%
- --------------------------------------------------------------------------------
Total 100%
- --------------------------------------------------------------------------------
Quality Breakdown
- --------------------------------------------------------------------------------
AAA 49%
- --------------------------------------------------------------------------------
AA 25%
- --------------------------------------------------------------------------------
A 19%
- --------------------------------------------------------------------------------
BBB 7%
- --------------------------------------------------------------------------------
Maturity Profile
- --------------------------------------------------------------------------------
Less than 1 year 7%
- --------------------------------------------------------------------------------
1-5 years 9%
- --------------------------------------------------------------------------------
5-10 years 48%
- --------------------------------------------------------------------------------
10-20 years 28%
- --------------------------------------------------------------------------------
20-30 years 8%
- --------------------------------------------------------------------------------
Average Maturity: 10.1 years
- --------------------------------------------------------------------------------
Duration: 7.0 years
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The PIMCO Tax Exempt Fund continues to provide a high level of federally tax
exempt current income by investing in high-quality municipal bonds. The average
quality of the Fund's portfolio was AA, as rated by Standard & Poor's (AAA is
the highest rating a municipal bond can receive). As of June 30, 1997, the
Fund's current tax-free standardized yield for A shares was 4.3%, which
translates to a 6.7% taxable yield for investors in the 36% tax bracket. For B
and C shares, the current tax-free yield was 3.8%, the equivalent to a 5.9%
taxable yield./+/
For the one-year period ended June 30, 1997 the Fund's A shares returned
6.9%, while the B and C shares returned 6.0% and 5.3%, respectively, slightly
under-performing the Lipper General Municipal Debt Fund Average.
In recent months, transportation, the Fund's largest sector, made a positive
contribution to its performance. Municipalities are focusing more interest on
projects that have high visibility--such as updating their infrastructures with
new roads, highways and bridges--as tax revenues continue to exceed
expectations. Retail investors are more interested in these issues, which has
helped the supply/demand ratio. This, in turn, has maintained the high quality
and stability of these issues.
One sector that hindered the Fund's performance was electric utilities. This
sector has been undergoing consolidation and privatization brought on by
deregulation. One effect of this trend is that privatized companies could
experience a change in their tax status. As a result, prices in this sector have
weakened relative to the overall market.
Looking ahead, the Fund's manager currently plans to underweight electric
utility bonds given that sector's deregulation risk. The Fund will also continue
to overweight its exposure in the intermediate sector given its relative value.
- --
26 See page 52 for financial details.
- --
<PAGE>
- --------------------------------------------------------------------------------
PIMCO FUNDS FOOTNOTES
- --------------------------------------------------------------------------------
A few notes and definitions are needed for a complete understanding of the
performance figures.
Past performance is no indication of future results. Investment return will
fluctuate and the value of an investor's shares will fluctuate and may be worth
more or less than original cost when redeemed. Total return measures
performance, assuming that all dividends and capital gains distributions
were reinvested.
Total return, both with and without a sales charge, has been presented. For
shareholders who have not bought or sold shares during the period quoted, the
non-adjusted figures are probably more meaningful to you than the adjusted
figures. The adjusted figures for Class A shares include the effect of paying
the maximum initial sales charge of either 5.5% (for all stock funds) or 4.5%
(Tax Exempt Fund). The adjusted figures for Class B shares include the effect of
paying the 5% contingent deferred sales charge (CDSC), which declines from 5% in
the first year to 0% at the beginning of the seventh year. The adjusted figures
for Class C shares include the effect of paying the 1% CDSC, which may apply to
shares redeemed during the first year of ownership.
+ Yield is calculated in accordance with current Securities and Exchange
Commission regulations and is based on the one-month period ended June 30, 1997.
The PIMCO stock funds can invest in foreign securities and the International,
International Developed and Emerging Markets Funds invest primarily in these
securities, which can involve special risks due to foreign economic and
political developments. These risks can be more pronounced with emerging market
securities. The Opportunity and Small-Cap Value Funds generally invest in
small-cap stocks, which can be riskier than the overall stock market. The
Innovation and Precious Metals Funds concentrate their portfolios in one sector,
making them more volatile than a more diversified stock portfolio, and,
therefore, should be considered as only part of a diversified portfolio.
The Tax Exempt Fund can invest in high yield bonds, which entail greater risk,
such as less liquidity and possibility of default. Income from the Tax Exempt
Fund is subject to state and local taxes and may at times be subject to the
alternative minimum tax.
Line graphs have been included so an investor can compare a Fund's historical
performance to that of an appropriate broad-based index. Each index reflects a
group of unmanaged securities, and it is not possible to invest in an unmanaged
index. The Standard & Poor's 500 and Standard & Poor's Mid-Cap are indices of
stocks of companies with larger- and medium-sized capitalizations, respectively.
The Russell 2000 is an index of stocks of companies with small capitalizations.
The MSCI EAFE is an index of foreign stocks. The MSCI Emerging Market Free Index
is an index of emerging market stocks. The S&P 500/Lehman Aggregate Bond Hybrid
Index is an index represented by 60% S&P 500 Index and 40% Lehman Aggregate Bond
Index (an index containing a variety of bonds). The Philadelphia Gold and Silver
Index is an index of stocks of companies in the gold and silver mining industry.
The Lehman Municipal Bond Index is an index of municipal securities rated Baa or
better.
Lipper averages are calculated by Lipper Analytical Services, Inc., a nationally
recognized mutual fund performance evaluation firm. They are performance
averages of those funds that are tracked by Lipper, with the investment
objective noted. Lipper rankings are based on total returns, not adjusted for
sales charges.
--
27
--
<PAGE>
Schedule of Investments
Equity Income Fund
June 30, 1997
<TABLE>
Value
Shares (000s)
COMMON STOCKS 95.3%
<S> <C> <C>
Capital Goods 3.9%
GATX Corp. 47,800 $ 2,760
Northrop Grumman Corp. 30,600 2,687
--------------
5,447
Consumer Discretionary 22.4%
Maytag Corp. 197,500 5,160
SUPERVALU, Inc. 146,300 5,047
VF Corp. 33,300 2,835
Springs Indusries, Inc. `A' 53,500 2,822
Chrysler Corp. 83,860 2,752
Ford Motor Co. 72,600 2,741
Penny J.C., Inc. 52,000 2,714
Brunswick Corp. 85,400 2,669
American Greetings Corp. `A' 59,400 2,205
John H. Harland Co. 85,100 1,941
Xerox Corp. 7,800 615
--------------
31,501
Consumer Staples 5.7%
RJR Nabisco Holdings Corp. 161,300 5,323
Anheuser Busch Cos., Inc. 62,400 2,617
--------------
7,940
Energy 9.4%
Ultramar Diamond Shamrock 87,300 2,848
Occidental Petroleum Corp. 106,500 2,669
Amoco Corp. 30,400 2,643
Repsol SA SP - ADR 62,200 2,640
Atlantic Richfield Co. 34,000 2,397
--------------
13,197
Financial and Business Services 15.5%
Lincoln National Corp. 45,500 2,929
Meditrust Corp. 73,100 2,915
CIGNA Corp. 16,000 2,840
Bear Stearns Cos. 82,726 2,828
Mellon Bank Corp. 59,400 2,680
Bankers Trust New York Corp. 30,000 2,610
Chase Manhattan Corp. 25,356 2,461
PNC Bank Corp. 58,600 2,439
--------------
21,702
Health Care 3.8%
Pharmacia & Upjohn, Inc. 79,695 2,769
American Home Products Corp. 33,600 2,570
--------------
5,339
Materials & Processing 9.7%
USX-U.S. Steel, Inc. 87,400 3,065
Phelps Dodge Corp. 31,900 2,717
Vulcan Materials Co. 34,200 2,685
Dow Chemical Co. 30,200 2,631
Illinois Central Corp. 69,700 2,435
--------------
13,533
Technology 5.7%
Harris Corp. 32,600 2,739
International Business Machines Corp. 30,200 2,724
General Dynamics Corp. 34,800 2,610
--------------
8,073
Utilities 19.2%
Southern New England
Telecommunications Corp. 130,900 5,089
Nynex Corp. 52,300 3,014
Washington Water Power Co. 143,000 2,806
DTE Energy Co. 100,200 2,768
U.S. West Communications Group 73,200 2,759
NICOR, Inc. 75,300 2,701
Peoples Energy Corp. 71,000 2,658
PG & E 105,400 2,556
P.P. & L. Resources, Inc. 127,200 2,536
--------------
26,887
--------------
Total Common Stocks 133,619
(Cost $109,629) ==============
</TABLE>
<TABLE>
Value
Shares (000s)
SHORT-TERM INSTRUMENTS 4.2%
<S> <C> <C>
Repurchase Agreements 4.2%
State Street Bank
4.250% due 07/01/97 $ 5,902 $ 5,902
(Dated 06/30/97. Collateralized
by U.S. Treasury Bond 8.500% due
02/15/20 valued at $6,025,995.
Repurchase proceeds are
$5,902,697.)
--------------
Total Short-Term Instruments 5,902
(Cost $5,902) ==============
Total Investments (a) 99.5% $ 139,521
(Cost $115,531)
Other Assets and Liabilities 0.5% 703
--------------
Net Assets 100.0% $ 140,224
==============
<CAPTION>
Notes to Schedule of Investments ($ in thousands):
<S> <C>
(a) At June 30, 1997, 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 tax cost over value. $ 24,945
Aggregate gross unrealized depreciation
for all investments in which there was
an excess of tax cost over value. (987)
--------------
Unrealized appreciation-net $ 23,958
==============
</TABLE>
- ----
28 See accompanying notes
- ----
<PAGE>
Schedule of Investments
Renaissance Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
COMMON STOCKS 80.6%
<S> <C> <C>
Capital Goods 5.9%
Archer-Daniels Midland Co. 264,200 $ 6,209
Kuhlman Corp. 192,200 6,198
Interface, Inc. 202,900 4,489
GATX Corp. 74,200 4,285
Special Devices, Inc. (b) 95,200 1,499
--------------
22,680
Consumer Discretionary 12.2%
Philips Electronics - N.V. 137,800 9,904
Pier 1 Imports, Inc. 346,758 9,189
Browning Ferris Industries, Inc. 220,000 7,315
Caliber System, Inc. 168,400 6,273
Flowers Industries, Inc. 312,600 5,256
Liz Claiborne, Inc. 112,200 5,231
Heilig-Meyers Co. 189,600 3,721
--------------
46,889
Consumer Staples 7.8%
Dean Foods Co. 328,100 13,247
American Stores Co. 117,400 5,797
H.J. Heinz Co. 118,000 5,443
Interstate Bakeries Corp. 90,500 5,368
--------------
29,855
Energy 7.3%
USX Marathon Group 306,100 8,839
Valero Energy Corp. 150,700 5,463
Sun Co., Inc. 159,700 4,951
Texaco, Inc. 45,400 4,937
El Paso Natural Gas Co. 67,300 3,702
--------------
27,892
Financial and Business Services 19.1%
BankAmerica Corp. 177,400 11,453
Morningstar Group, Inc. (b) 306,000 8,989
First Union Corp. 90,200 8,343
Allstate Corp. 101,200 7,388
Fremont General Corp. 151,500 6,098
Washington Mutual, Inc. 98,400 5,880
Signet Bank Corp. 162,600 5,854
Greenpoint Financial Corp. 62,900 4,187
Northern Trust Corp. 85,000 4,112
Hartford Life, Inc. `A' (b) 109,200 4,095
U.S. Freightways Corp. 139,800 3,617
Provident Cos., Inc. `B' 62,900 3,365
--------------
73,381
Health Care 6.7%
McKesson Corp. 167,600 12,989
Wellpoint Health Networks (b) 141,000 6,468
Allegiance Corp. 228,300 6,221
--------------
25,678
Materials & Processing 7.3%
Martin Marietta Materials, Inc. 227,300 7,359
Morrison Knudsen Corp. (b) 447,400 6,096
Reynolds Metals Co. 84,000 5,985
Bowater, Inc. 97,500 4,509
New England Business Services, Inc. 158,700 4,176
--------------
28,125
Technology 7.5%
Nokia Corp. - ADR 141,600 10,443
AVX Corp. 347,500 9,382
Scientific-Atlanta, Inc. 248,400 5,434
Storage Technology Corp. (b) 83,600 3,720
--------------
28,979
Transportation 1.0%
Canadian National Railway Co. 91,500 4,003
Utilities 5.8%
SBC Communications, Inc. 114,900 7,109
Bell Atlantic Corp. 77,200 5,857
BellSouth Corp. 117,900 5,468
Sonat, Inc. 75,000 3,844
--------------
22,278
--------------
Total Common Stocks 309,760
(Cost $257,842) ==============
</TABLE>
<TABLE>
<CAPTION>
Value
Shares (000s)
CONVERTIBLE PREFERRED STOCK 7.8%
<S> <C> <C>
Consumer Discretionary 1.6%
TJX Cos. 20,550 $ 6,011
Consumer Services 1.4%
Royal Carribean Cruises Limited 88,400 5,459
Financial Services 2.7%
American Bankers Insurance 75,600 5,443
Wendy's Financing 84,500 4,954
--------------
10,397
Health Care 1.1%
McKesson Corp. 65,000 4,038
Transportation 1.0%
Consolidated Freightways Corp. 68,700 3,847
--------------
Total Convertible Preferred Stock 29,752
(Cost $24,654) ==============
<CAPTION>
CORPORATE BONDS AND NOTES 4.5%
Principal
Amount
(000s)
<S> <C> <C>
Industrials 4.5%
National Semiconductor Corp.
6.500% due 10/01/02 $ 4,800 4,992
Pier 1 Imports, Inc.
5.750% due 10/01/03 2,650 4,121
SCI Systems, Inc.
5.000% due 05/01/06 5,750 8,280
--------------
Total Corporate Bonds and Notes 17,393
(Cost $14,519) ==============
CONVERTIBLE BONDS AND NOTES 3.1%
Health Care 1.5%
Integrated Health Services, Inc.
5.750% due 01/01/01 4,720 5,605
Technology 1.6%
Data General Corp.
6.000% due 05/15/04 5,000 6,156
--------------
Total Convertible Bonds and Notes 11,761
(Cost $10,165) ==============
SHORT-TERM INSTRUMENTS 5.5%
Discount Notes 5.5%
BBV Finance Delaware, Inc.
5.550% due 07/03/97 4,500 4,498
BellAtlantic Network
5.530% due 07/11/97 4,000 3,994
BellSouth Telecommunications, Inc.
5.480% due 07/07/97 2,500 2,498
CommerzBank
5.550% due 07/07/97 3,500 3,497
Cooperative Association Tractor
5.600% due 07/01/97 4,000 4,000
UBS Finance (DE), Inc.
6.200% due 07/01/97 2,800 2,800
--------------
Total Short-Term Instruments 21,287
(Cost $21,287) ==============
Total Investments (a) 101.5% $ 389,953
(Cost $328,467)
Other Assets and Liabilities (1.5%) (5,868)
--------------
Net Assets 100.0% $ 384,085
==============
</TABLE>
----
See accompanying notes 29
----
<PAGE>
Schedule of Investments (Cont.)
Renaissance Fund
June 30, 1997
<TABLE>
<S> <C>
Notes to Schedule of Investments ($ in thousands):
(a) At June 30, 1997, 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 tax cost
over value. $ 62,204
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (1,181)
--------------
Unrealized appreciation-net $ 61,023
==============
(b) Non-income producing security.
</TABLE>
- ----
30 See accompanying notes
- ----
<PAGE>
Schedule of Investments
Value Fund
June 30, 1997
<TABLE>
Value
Shares (000s)
<S> <C> <C>
COMMON STOCKS 94.8%
Capital Goods 4.2%
Northrop Grumman Corp. 40,000 $ 3,513
Deere & Co. 56,000 3,073
GATX Corp. 17,000 982
--------------
7,568
Consumer Discretionary 21.8%
VF Corp. 65,000 5,533
American Greetings Corp. `A' 115,000 4,269
Maytag Corp. 139,400 3,642
Goodyear Tire & Rubber Co. 55,000 3,482
Chrysler Corp. 104,700 3,435
Brunswick Corp. 107,000 3,344
SUPERVALU, Inc. 95,900 3,308
Westvaco Corp. 81,600 2,565
Tupperware Corp. 70,000 2,555
Washington Post Co. 4,500 1,791
Dillards, Inc. `A' 50,000 1,731
Tandy Corp. 25,000 1,400
Xerox Corp. 14,900 1,175
Springs Indusries, Inc. `A' 19,000 1,002
--------------
39,232
Consumer Staples 7.6%
Anheuser Busch Cos., Inc. 105,000 4,403
RJR Nabisco Holdings Corp. 106,300 3,508
Unilever NV 15,000 3,270
IBP, Inc. 55,000 1,279
Whitman Corp. 50,000 1,266
--------------
13,726
Energy 11.9%
Amoco Corp. 60,000 5,216
Ultramar Diamond Shamrock 145,000 4,731
Repsol SA SP - ADR 110,000 4,668
Atlantic Richfield Co. 50,000 3,525
Union Texas Petroleum Holdings, Inc. 160,000 3,350
--------------
21,490
Financial and Business Services 16.0%
CIGNA Corp. 30,000 5,325
Mellon Bank Corp. 114,000 5,144
Bear Stearns Cos. 128,782 4,403
Chase Manhattan Corp. 45,000 4,368
Countrywide Credit Industries, Inc. 120,000 3,743
Loews Corp. 30,000 3,004
PNC Bank Corp. 23,000 957
Bankers Trust New York Corp. 9,000 783
Meditrust Corp. 17,000 678
Lincoln National Corp. 4,400 283
--------------
28,688
Health Care 6.1%
American Home Products Corp. 47,000 3,596
Beckman Instruments, Inc. 69,900 3,373
Pharmacia & Upjohn, Inc. 68,410 2,377
Foundation Health Systems `A' (b) 52,000 1,576
--------------
10,922
Materials & Processing 5.7%
Phelps Dodge Corp. 50,500 4,302
USG Corp. (b) 80,400 2,935
Union Carbide Corp. 23,600 1,111
Vulcan Materials Co. 13,800 1,083
Wellman, Inc. 48,000 834
--------------
10,265
Technology 8.9%
Tektronix, Inc. 60,000 3,600
Harris Corp. 37,800 3,175
Intel Corp. 20,300 2,879
Seagate Technology, Inc. (b) 80,000 2,815
Adobe Systems, Inc. 50,900 1,785
Wheelabrator Technologies, Inc. 115,000 1,775
--------------
16,029
Transportation 1.8%
UAL Corp. (b) 45,000 3,220
Utilities 10.8%
NICOR, Inc. 135,000 $ 4,843
Nynex Corp. 65,000 3,746
Southern New England Telecommunications
Corp. 85,900 3,339
PG & E 135,000 3,274
DTE Energy Co. 87,400 2,414
U.S. West Communications Group 24,000 905
Peoples Energy Corp. 22,000 824
--------------
19,345
--------------
Total Common Stocks 170,485
(Cost $147,732) ==============
SHORT-TERM INSTRUMENTS 4.5%
Principal
Amount
(000s)
Repurchase Agreements 4.5%
State Street Bank
4.250% due 07/01/97 $ 8,016 8,016
(Dated 06/30/97. Collateralized
by U.S. Treasury Bond 8.500% due
02/15/20 valued at $8,181,189.
Repurchase proceeds are
$8,016,933.)
--------------
Total Short-Term Instruments 8,016
(Cost $8,016) ==============
Total Investments (a) 99.3% $ 178,501
(Cost $155,748)
Other Assets and Liabilities 0.7% 1,303
--------------
Net Assets 100.0% $ 179,804
--------------
</TABLE>
<TABLE>
<S> <C>
Notes to Schedule of Investments ($ in thousands):
(a) At June 30, 1997, 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 tax cost
over value. $ 25,211
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (2,561)
--------------
Unrealized appreciation-net $ 22,650
==============
(b) Non-income producing security.
</TABLE>
----
See accompanying notes 31
----
<PAGE>
Schedule of Investments
Capital Appreciation Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
COMMON STOCKS 97.4%
<S> <C> <C>
Capital Goods 13.7%
AlliedSignal, Inc. 115,900 $ 9,736
Textron, Inc. 143,800 9,545
United Technologies Corp. 112,400 9,329
Perkin Elmer Corp. 116,800 9,293
Sundstrand Corp. 161,400 9,008
Deere & Co. 143,400 7,869
Ingersoll Rand Co. 126,500 7,811
Johnson Controls, Inc. 180,400 7,408
Illinois Tool Works, Inc. 141,000 7,041
------------
77,040
Consumer Discretionary 19.5%
Kroger Co. (b) 332,300 9,637
Xerox Corp. 121,300 9,568
TJX Corp., Inc. 361,800 9,542
Dayton-Hudson Corp. 174,100 9,260
Omnicom Group 137,800 8,492
Costco Cos. (b) 242,900 7,985
Estee Lauder Cos. `A' 154,500 7,764
New York Times Co. 149,700 7,410
Gannett, Inc. 74,900 7,396
Armstrong World Industries 96,600 7,088
Jones Apparel Group, Inc. (b) 147,400 7,038
Brunswick Corp. 206,600 6,456
Federated Department Stores, Inc. (b) 177,700 6,175
Sunbeam-Oster, Inc. 153,000 5,776
Mattel, Inc. 1 0
------------
109,587
Consumer Services 2.9%
Marriott International, Inc. 134,200 8,237
Carnival Corp. `A' 193,100 7,965
------------
16,202
Consumer Staples 4.2%
Safeway, Inc. (b) 178,700 8,243
Campbell Soup Co. 154,600 7,730
Hershey Foods Corp. 136,200 7,533
------------
23,506
Energy 9.3%
Noble Drilling Corp. (b) 391,300 8,829
Rowan Cos., Inc. (b) 267,100 7,529
Halliburton Co. 94,800 7,513
Transocean Offshore, Inc. 102,700 7,459
Global Marine, Inc. (b) 315,200 7,328
Schlumberger Limited 57,200 7,150
ENSCO International, Inc. (b) 126,800 6,689
------------
52,497
Financial and Business Services 21.0%
Travelers Group, Inc. 158,400 9,989
Norwest Corp. 122,900 6,913
American Express Co. 90,400 6,735
Southtrust Corp. 162,600 6,727
Federal Home Loan Mortgage Corp. 194,000 6,669
Federal National Mortgage Assoc. 152,300 6,644
Bear Stearns Cos. 192,303 6,574
Hartford Financial Services Group, Inc. 79,200 6,554
Times Mirror Co. `A' 117,900 6,514
First Union Corp. 69,300 6,410
National City Corp. 119,400 6,269
Lincoln National Corp. 95,300 6,135
Green Tree Financial Corp. 168,200 5,992
Chase Manhattan Corp. 61,600 5,979
PNC Bank Corp. 142,915 5,949
BankBoston Corp. 80,700 5,815
Associates First Capital Corp. `A' 100,100 5,556
BankAmerica Corp. 51,800 3,344
Citicorp 26,600 3,207
------------
117,975
Health Care 7.8%
Schering-Plough Corp. 189,000 9,048
Tenet Healthcare Corp. (b) 262,505 7,760
American Home Products Corp. 94,800 7,252
U.S. Surgical Corp. 184,800 6,884
Lilly Eli & Co. 60,700 6,635
Cognizant Corp. 160,000 6,480
------------
44,059
Materials & Processing 2.5%
Rohm & Haas Co. 81,400 7,331
Dresser Industries, Inc. 177,200 6,601
------------
13,932
Technology 12.1%
Tyco Labs 136,400 9,488
Sun Microsystems, Inc. (b) 212,400 7,905
BMC Software, Inc. (b) 133,900 7,415
Adaptec, Inc. (b) 194,300 6,752
Computer Associates International, Inc. 119,700 6,666
Cisco Systems, Inc. (b) 96,000 6,444
Dell Computer Corp. (b) 52,300 6,142
Intel Corp. 41,300 5,857
Compaq Computer Corp. (b) 55,900 5,548
National Semiconductor Corp. (b) 179,200 5,488
------------
67,705
Transportation 1.1%
Continental Airlines, Inc. `B' (b) 181,900 6,355
Utilities 3.3%
Ameritech Corp. 97,100 6,597
GPU, Inc. 167,800 6,020
American Electric Power, Inc. 141,400 5,939
------------
18,556
------------
Total Common Stocks 547,414
(Cost $422,753) ============
SHORT-TERM INSTRUMENTS 5.7%
<CAPTION>
Principal
Amount
(000s)
<S> <C> <C>
Repurchase Agreements 5.7%
State Street Bank
4.250% due 07/01/97 $ 31,922 31,922
(Dated 06/30/97. Collateralized by U.S.
Treasury Note 6.00% due 05/31/98
valued at $32,564,731. Repurchase
proceeds are $31,925,769.)
------------
Total Short-Term Instruments 31,922
(Cost $31,922) ============
Total Investments (a) 103.1% $ 579,336
(Cost $454,675)
Other Assets and Liabilities (3.1%) (17,385)
------------
Net Assets 100.0% $ 561,951
============
Notes to Schedule of Investments ($ in thousands):
(a) At June 30, 1997, 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 tax
cost over value. $ 124,633
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (239)
------------
Unrealized appreciation-net $ 124,394
============
</TABLE>
(b) Non-income producing security.
- ----
32 See accompanying notes
- ----
<PAGE>
Schedule of Investments
Growth Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
COMMON STOCKS 93.7%
<S> <C> <C>
Capital Goods 2.0%
Archer-Daniels-Midland Co. 750,000 $ 17,625
Deere & Co. 320,000 17,560
------------
35,185
Consumer Discretionary 11.0%
TJX Corp., Inc. 1,600,000 42,200
Gillette Co. 400,000 37,900
Staples, Inc. (b) 1,500,000 34,875
Home Depot, Inc. 420,000 28,954
Costco Cos. (b) 850,000 27,944
Wendy's International, Inc. 700,000 18,156
------------
190,029
Consumer Services 2.8%
CUC International, Inc. (b) 1,900,000 49,044
Consumer Staples 2.4%
Safeway, Inc. (b) 560,000 25,830
American Stores Co. 300,000 14,813
------------
40,643
Energy 5.4%
Schlumberger Limited 500,000 62,500
USX Marathon Group 1,050,000 30,319
------------
92,819
Financial and Business Services 12.3%
Allstate Corp. 625,000 45,625
NationsBank Corp. 600,000 38,700
Washington Mutual, Inc. 550,000 32,862
Associates First Capital Corp. `A' 480,000 26,640
BankAmerica Corp. 400,000 25,825
Merrill Lynch Co. 380,000 22,658
Aetna, Inc. 180,000 18,428
------------
210,738
Health Care 19.1%
HBO & Co. 950,000 65,431
Warner Lambert Co. 360,000 44,730
Pfizer, Inc. 370,000 44,215
Eli Lilly & Co. 400,000 43,725
Boston Scientific Corp. (b) 590,000 36,248
CVS Corp. 470,000 24,088
Oxford Health Plans, Inc. (b) 250,000 17,937
Cardinal Health, Inc. 310,000 17,748
Bristol-Myers Squibb Co. 210,000 17,010
Medtronic, Inc. 200,000 16,200
------------
327,332
Materials & Processing 1.0%
Georgia-Pacific Corp. 200,000 17,075
Technology 33.1%
Microsoft Corp. (b) 500,000 63,188
Lucent Technologies, Inc. 740,000 53,326
Honeywell, Inc. 590,000 44,767
Boeing Co. (The) 840,000 44,573
Motorola, Inc. 575,000 43,700
America Online, Inc. (b) 750,000 41,719
Cisco Systems, Inc. (b) 500,000 33,562
Intel Corp. 230,000 32,617
Nokia Corp. - ADR 410,000 30,237
Tyco International Limited 400,000 27,825
Ascend Communications, Inc. (b) 700,000 27,562
Compaq Computer Corp. (b) 230,000 22,827
Tele-Communications `A' (b) 1,325,000 19,709
American Power Conversion Corp. (b) 1,000,000 19,000
Service Corp. International 500,000 16,437
Westinghouse Electric Corp. 700,000 16,187
LSI Logic Corp. (b) 500,000 16,000
3Com Corp. (b) 330,000 14,850
------------
568,086
Utilities 4.6%
WorldCom, Inc. (b) 1,689,000 54,048
Sonat, Inc. 480,000 24,600
------------
78,648
------------
Total Common Stocks 1,609,599
============
(Cost $1,319,231)
<CAPTION>
Principal
Amount Value
(000s) (000s)
CORPORATE BONDS AND NOTES 0.1%
<S> <C> <C>
Banking and Finance 0.1%
Cabbell Financial Grantor Trust
7.188% due 05/01/98 1,019 1,008
------------
Total Corporate Bonds and Notes 1,008
============
(Cost $1,010)
PURCHASED PUT OPTIONS 0.1%
<CAPTION>
Contracts
<S> <C> <C>
S&P Index (CME)
Strike @ 890.00 Exp. 07/19/97 100,000 1,750
S&P Index (CME)
Strike @ 870.00 Exp. 07/19/97 60,000 585
S&P Index (CME)
Strike @ 830.00 Exp. 07/19/97 50,000 125
------------
Total Purchased Put Options 2,460
============
(Cost $2,956)
SHORT-TERM INSTRUMENTS 6.7%
<CAPTION>
Principal
Amount Value
(000s) (000s)
<S> <C> <C>
Discount Notes 6.7%
BBV Finance Delaware, Inc.
5.550% due 07/03/97 $ 16,000 15,995
CommerzBank
5.550% due 07/07/97 17,000 16,984
General Electric Co.
5.580% due 07/17/97 13,200 13,167
Goldman Sachs Group LP
5.500% due 07/08/97 10,700 10,689
National Rural Utilities Cooperative
5.500% due 07/09/97 15,000 14,982
Petrofina Delaware
5.500% due 07/11/97 6,000 5,991
Societe Generale
5.510% due 07/14/97 1,400 1,397
Southern New England Telecommunications Corp.
5.570% due 07/07/97 2,000 1,998
Statoil
5.520% due 07/10/97 15,000 14,979
UBS Finance (DE), Inc.
6.200% due 07/01/97 19,000 19,000
------------
Total Short-Term Instruments 115,182
============
(Cost $115,182)
Total Investments (a) 100.6% $ 1,728,249
(Cost $1,438,379)
Written Options (c) (0.1%) (1,996)
(Premiums $3,218)
Other Assets and Liabilities (0.5%) (8,919)
------------
Net Assets 100.0% $ 1,717,334
============
Notes to Schedule of Investments ($ in thousands):
(a) At June 30, 1997, 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 tax
cost over value. $ 308,599
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value. (20,871)
------------
Unrealized appreciation-net $ 287,728
============
</TABLE>
(b) Non-income producing security.
----
See accompanying notes 33
----
<PAGE>
Schedule of Investments (Cont.)
Growth Fund
June 30, 1997
================================================================================
(c) Premiums received on Written Options:
<TABLE>
<CAPTION>
Premiums Market
Type Par Received Value
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Call - Boston Scientific Corp. (CBOE)
Strike @ 60.00 Exp. 07/19/97 $ 100,000 $ 197 $ 325
Call - S&P Index (CME)
Strike @ 910.00 Exp. 07/19/97 50,000 760 350
Strike @ 910.00 Exp. 07/19/97 50,000 798 350
Strike @ 925.00 Exp. 07/19/97 60,000 565 195
Strike @ 935.00 Exp. 07/19/97 30,000 198 86
Put - S&P Index (CME)
Strike @ 825.00 Exp. 07/19/97 60,000 178 165
Strike @ 850.00 Exp. 07/19/97 100,000 522 525
--------------------------
$ 3,218 $ 1,996
==========================
</TABLE>
- ----
34 See accompanying notes
- ----
<PAGE>
Schedule of Investments
Mid Cap Growth Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
COMMON STOCKS 95.5%
Capital Goods 3.0%
Waters Corp. (b) 112,000 $ 4,018
Mark IV Industries, Inc. 161,751 3,882
Belden, Inc. 108,000 3,679
--------------
11,579
Consumer Discretionary 23.0%
Borders Group, Inc. (b) 233,200 5,626
Consolidated Stores Corp. (b) 161,156 5,600
Fort Howard Corp. (b) 103,500 5,240
Tiffany & Co. 104,500 4,827
Callaway Golf Co. 134,600 4,778
Herman Miller, Inc. 124,200 4,471
Maytag Corp. 167,100 4,365
U.S. Industries, Inc. (b) 120,400 4,289
Flowers Industries, Inc. 247,700 4,164
Bemis, Inc. 95,800 4,143
Cytec Industries, Inc. (b) 107,500 4,018
International Game Technology 221,400 3,930
Lancaster Colony Corp. 80,700 3,904
Liz Claiborne, Inc. 83,600 3,898
Bed, Bath & Beyond, Inc. (b) 125,400 3,809
Sealed Air Corp. (b) 79,000 3,753
Snap-On, Inc. 94,900 3,737
Kroger Co. (b) 128,400 3,724
Alberto-Culver Co. `A' 151,100 3,523
HON Industries 79,200 3,505
Lear Corp. (b) 77,600 3,444
K2, Inc. 15,000 475
--------------
89,223
Consumer Services 1.2%
Promus Hotel Corp. (b) 119,600 4,635
Consumer Staples 2.5%
Interstate Bakeries Corp. 81,800 4,852
Richfood Holdings, Inc. 183,750 4,778
--------------
9,630
Energy 13.4%
Falcon Drilling Co., Inc. (b) 112,000 6,454
Cooper Cameron Corp. (b) 109,200 5,105
Smith International, Inc. (b) 83,400 5,066
EVI, Inc. (b) 115,700 4,859
BJ Services Co. (b) 83,200 4,462
El Paso Natural Gas Co. 81,100 4,460
Weatherford Enterra, Inc. (b) 109,100 4,200
Diamond Offshore Drilling, Inc. 53,400 4,172
Baker Hughes, Inc. 92,900 3,594
Tosco Corp. 113,500 3,398
Reading & Bates Corp. (b) 111,600 2,985
National Fuel Gas Co. 66,800 2,801
Camco International, Inc. 10,000 547
--------------
52,103
Financial and Business Services 29.4%
Cullen/Frost Bankers, Inc. 124,900 5,293
Citizens Corp. 183,400 5,066
Mutual Risk Management Limited 107,465 4,930
Allmerica Financial Corp. 121,300 4,837
Protective Life Corp. 93,800 4,713
Progressive Corp. 53,200 4,628
Crescent Real Estate Equities Co. 143,300 4,550
Union Planters Corp. 87,700 4,549
Popular, Inc. 108,200 4,368
First American Corp. 112,400 4,313
Penncorp Financial Group, Inc. 108,600 4,181
Banc One Corp. 85,460 4,139
Ambac, Inc. 54,000 4,124
BB&T Corp. 90,200 4,059
Mercantile BanCorp. 66,242 4,024
Travelers Property Casualty `A' 100,700 4,015
Comdisco, Inc. 152,875 3,975
Finova Group, Inc. 49,900 3,817
Equity Residential Properties Trust 79,800 3,791
Public Storage, Inc. 128,100 3,747
AmSouth Bancorp. 98,800 3,736
Ace Limited 50,000 3,694
SunAmerica, Inc. 69,500 3,388
PMI Group, Inc. 52,200 3,256
Summit Bancorp 64,460 3,231
Equifax, Inc. 85,500 3,179
Crestar Financial Corp. 80,600 3,133
HCC Insurance Holdings, Inc. 36,550 975
City National Corp. 25,000 602
Reinsurance Group of America 10,000 575
Magna Group, Inc. 15,000 521
Associated Banc-Corp 12,000 474
Crescent Operating, Inc. (b) 14,330 172
First Midwest Bancorp, Inc. 1,250 40
--------------
114,095
Health Care 5.4%
Guidant Corp. 55,700 4,734
Health Management Association,
Inc. `A' (b) 158,350 4,513
Beckman Instruments, Inc. 83,600 4,034
Watson Pharmaceutical, Inc. (b) 87,900 3,714
DePuy, Inc. (b) 151,800 3,492
Orthodontic Centers of America, Inc. (b) 24,000 437
--------------
20,924
Materials & Processing 4.7%
Lennar Corp. 140,000 4,471
Titanium Metals Corp. (b) 135,200 4,276
Praxair, Inc. 73,800 4,133
Mascotech, Inc. 166,600 3,478
Johns Manville Corp. 50,800 600
Medusa Corp. 15,000 576
Mueller Industries, Inc. (b) 10,000 438
Mississippi Chemical Corp. 15,000 311
--------------
18,283
Technology 11.0%
Compuware Corp. (b) 117,200 5,596
McAfee Associates, Inc. (b) 83,200 5,252
Tandem Computers, Inc. (b) 253,100 5,125
SCI Systems, Inc. (b) 76,000 4,845
Electronics for Imaging, Inc. (b) 93,600 4,423
Gateway 2000, Inc. (b) 119,100 3,863
Cognos, Inc. (b) 123,100 3,831
American Power Conversion Corp. (b) 164,500 3,126
General Dynamics Corp. 41,500 3,113
Adaptec, Inc. (b) 75,200 2,613
Sanmina Corp. (b) 10,000 635
--------------
42,422
Transportation 1.0%
CNF Transportation, Inc. 125,300 4,041
Utilities 0.9%
Cinergy Corp. 83,200 2,897
Oneok, Inc. 15,000 483
--------------
3,380
--------------
Total Common Stocks 370,315
(Cost $288,273) ==============
</TABLE>
<TABLE>
SHORT-TERM INSTRUMENTS 0.4%
Principal
Amount
(000s)
<S> <C> <C>
Repurchase Agreements 0.4%
State Street Bank
4.250% due 07/01/97 $ 1,481 1,481
(Dated 06/30/97. Collateralized
by U.S. Treasury Bond 8.500% due
02/15/20 valued at $1,514,131.
Repurchase proceeds are $1,481,175.)
--------------
Total Short-Term Instruments 1,481
(Cost $1,481) ==============
Total Investments (a) 95.9% $ 371,796
(Cost $289,754)
Other Assets and Liabilities 4.1% 15,773
--------------
Net Assets 100.0% $ 387,569
==============
</TABLE>
----
See accompanying notes 35
----
<PAGE>
Schedule of Investments (Cont.)
Mid Cap Growth Fund
June 30, 1997
<TABLE>
Notes to Schedule of Investments ($ in thousands):
<S> <C>
(a) At June 30, 1997, 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 tax cost
over value. $ 84,186
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (2,212)
--------------
Unrealized appreciation-net $ 81,974
--------------
(b) Non-income producing security.
</TABLE>
- ----
36 See accompanying notes
- ----
<PAGE>
Schedule of Investments
Target Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
COMMON STOCKS 98.1%
Capital Goods 7.6%
Paccar, Inc. 489,600 $ 22,736
Perkin Elmer Corp. 230,200 18,315
Sundstrand Corp. 317,000 17,693
AGCO Corp. 435,900 15,665
Coltec Industries, Inc. (b) 784,200 15,292
--------------
89,701
Consumer Discretionary 19.4%
Sunbeam-Oster, Inc. 1,169,700 44,156
General Nutrition Cos., Inc. (b) 1,367,000 38,276
Federal-Mogul Corp. 859,700 30,090
Hertz Corp. `A' (b) 715,600 25,762
Jones Apparel Group, Inc. (b) 467,900 22,342
Westpoint Stevens, Inc. (b) 466,200 18,240
Cracker Barrel Old Country Store,
Inc. 660,000 17,490
Callaway Golf Co. 487,200 17,296
Borders Group, Inc. (b) 666,900 16,089
--------------
229,741
Consumer Services 5.3%
Starbucks Corp. (b) 476,300 18,546
Gartner Group, Inc. `A' (b) 421,800 15,158
Pittston Brink's Group 502,500 15,075
Williams-Sonoma, Inc. (b) 335,000 14,321
--------------
63,100
Energy 9.8%
Valero Energy Corp. 774,800 28,086
BJ Services Co. (b) 506,200 27,145
Columbia Gas Systems, Inc. 371,800 24,260
Sun Co., Inc. 747,200 23,163
Anadarko Petroleum Corp. 222,500 13,350
--------------
116,004
Financial and Business Services 12.7%
Greenpoint Financial Corp. 439,700 29,268
Dime Bancorp, Inc. 1,504,300 26,325
Everest Reinsurance Holdings, Inc. 628,200 24,892
Union Planters Corp. 405,800 21,051
Southtrust Corp. 448,900 18,573
Marshall & Ilsley Corp. 436,600 17,737
Hartford Life, Inc. `A' (b) 354,100 13,279
--------------
151,125
Health Care 11.1%
Safeskin Corp. (b) 1,125,700 33,138
McKesson Corp. 394,000 30,535
Beverly Enterprises, Inc. (b) 1,721,800 27,979
Wellpoint Health Networks (b) 584,600 26,819
BioChem Pharma, Inc. (b) 610,800 13,590
--------------
132,061
Materials & Processing 2.5%
BetzDearborn, Inc. 230,000 15,180
Owens Illinois, Inc. (b) 473,600 14,682
--------------
29,862
Technology 28.7%
National Semiconductor Corp. (b) 1,112,700 34,076
Maxim Integrated Products, Inc. (b) 521,100 29,638
Autodesk, Inc. 749,300 28,708
DSC Communications Corp. (b) 1,274,300 28,353
Lattice Semiconductor Corp. (b) 380,400 21,493
Kohls Corp. (b) 391,500 20,725
Vishay Intertechnology, Inc. (b) 679,350 19,659
Compuware Corp. (b) 398,500 19,028
International Rectifier Corp. (b) 993,600 18,506
Xilinx, Inc. (b) 374,100 18,354
Cypress Semiconductor Corp. (b) 1,231,600 17,858
Symantec Corp. (b) 897,700 17,505
Qualcomm, Inc. (b) 295,400 15,028
Stratus Computer, Inc. (b) 292,100 14,605
Advanced Fibre Communication (b) 218,200 13,174
General Signal Corp. 291,100 12,699
Storage Technology Corp. (b) 261,200 11,623
American Satellite Network, Inc.
Warrants 53,250 0
--------------
341,032
Transportation 1.0%
CNF Transportation, Inc. 378,100 12,194
--------------
Total Common Stocks 1,164,820
(Cost $1,027,849) --------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000s) (000s)
<S> <C> <C>
SHORT-TERM INSTRUMENTS 3.4%
Discount Notes 3.4%
Commonwealth of Australia
5.520% due07/07/97 $ 500 $ 500
Deutsche Bank AG
5.490% due07/03/97 9,800 9,797
Goldman Sachs & Co.
5.500% due07/08/97 11,000 10,988
McKenna Triangle National Corp.
5.520% due07/09/97 2,000 1,997
Preferred Receivable Funding
5.570% due07/01/97 10,000 10,000
Societe Generale
5.510% due07/14/97 2,000 1,996
UBS Finance (DE), Inc.
6.200% due07/01/97 5,500 5,500
--------------
Total Short-Term Instruments 40,778
(Cost $40,778) --------------
Total Investments (a) 101.5% $ 1,205,598
(Cost $1,068,627)
Other Assets and Liabilities (1.5%) (18,061)
--------------
Net Assets 100.0% $ 1,187,537
==============
</TABLE>
<TABLE>
Notes to Schedule of Investments ($ in thousands):
<S> <C>
(a) At June 30, 1997, 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 tax cost
over value. $ 141,856
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (5,866)
--------------
Unrealized appreciation-net $ 135,990
==============
(b) Non-income producing security.
</TABLE>
----
See accompanying notes 37
----
<PAGE>
Schedule of Investments
Small Cap Value Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
COMMON STOCKS 89.9%
Capital Goods 7.5%
Barnes Group, Inc. 25,900 $ 767
Tecumseh Products Co. `A' 12,400 743
C&D Technologies, Inc. 19,300 724
Zurn Industries, Inc. 24,700 710
Mosinee Paper Corp. 28,550 699
Oshkosh Truck Corp. `B' 48,500 691
Allied Products Corp. 20,600 682
Del Webb Corp. 41,900 681
Gleason Corp. 3,800 177
-------------
5,874
Consumer Discretionary 18.5%
Westinghouse Air Brake Co. 41,200 824
Bindley Western Industries, Inc. 34,500 791
Sturm Ruger & Co., Inc. 39,400 773
Guilford Mills, Inc. 37,050 771
Bowne & Co., Inc. 21,800 760
Brown Group, Inc. 40,000 748
Nash Finch Co. 33,300 737
DIMON, Inc. 27,700 734
Borg-Warner Automotive, Inc. 13,400 725
Harman International Industries, Inc. 16,900 712
Ennis Business Forms 73,800 710
Fleetwood Enterprises, Inc. 23,800 709
Stanhome, Inc. 21,100 694
Rival Co. 47,000 693
Toro Co. 18,200 689
Bergen Brunswig Corp. `A' 24,518 683
Garan, Inc. 33,500 674
Fedders USA, Inc. 117,400 668
Winnebago Industries 83,900 603
ShopKo Stores, Inc. 16,500 421
La-Z-Boy Inc. 11,400 410
-------------
14,529
Consumer Services 0.9%
Lubys Cafeterias, Inc. 35,500 708
Consumer Staples 0.9%
Marsh Supermarkets, Inc. `B' 50,500 707
Energy 5.4%
Vintage Petroleum, Inc. 23,700 729
Offshore Logistics, Inc. (b) 37,800 713
Mitchell Energy & Development Corp. `B' 32,300 703
Aquila Gas Pipeline Corp. 50,100 698
World Fuel Services Corp. 31,900 698
Monterey Resources, Inc. 45,900 683
-------------
4,224
Financial and Business Services 17.2%
Chittenden Corp. 22,300 764
Merrill Corp. 20,300 738
AmVestors Financial Corp. 38,800 728
Centris Group, Inc. 34,300 725
Quick & Reilly Group, Inc. 31,150 724
McGrath Rentcorp 35,300 724
Sovereign Bancorp, Inc. 47,420 723
First Financial Corp. 24,600 723
Morgan Keegan, Inc. 35,850 713
Raymond James Financial Corp. 25,850 708
FirstBank Puerto Rico 27,300 706
Orion Capital Corp. 9,500 701
American Health Properties, Inc. 27,800 698
Commercial Federal Corp. 18,800 698
Eaton Vance Corp. 25,000 695
United Dominion Realty Trust 48,915 694
Excel Realty Trust, Inc. 26,100 688
Capstead Mortgage Corp. 27,350 675
PXRE Corp. 20,700 637
BankAtlantic Bancorp, Inc. `A' 5,900 83
-------------
13,545
Health Care 2.9%
ICN Pharmaceuticals, Inc. 29,924 858
Integrated Health Services, Inc. 18,400 708
Chemed Corp. 18,900 708
-------------
2,274
Materials & Processing 19.9%
Caraustar Industries, Inc. 22,300 772
Kaman Corp. 48,600 747
Commercial Metals Co. 22,900 739
APL Limited 23,500 734
Continental Homes Holding Corp. 41,100 724
Mississippi Chemical Corp. 34,809 722
Glimcher Realty Trust 35,000 722
Cleveland-Cliffs, Inc. 17,600 717
GenCorp, Inc. 31,000 717
Wellman, Inc. 41,200 716
Nacco Industries, Inc. `A' 12,600 711
Southdown, Inc. 16,300 711
Standard Motor Products, Inc. 51,600 710
Ethyl Corp. 76,700 709
Texas Industries, Inc. 26,600 707
Quanex Corp. 23,000 706
Butler Manufacturing Co. 21,200 702
Castle (A.M.) & Co. 31,725 700
Zeigler Coal Holding Co. 29,900 699
Universal Forest Products, Inc. 47,600 696
Varlen Corp. 25,750 692
Universal Corp. 21,000 667
-------------
15,720
Technology 5.7%
Wyle Electronics 19,400 766
Dallas Semiconductor Corp. 18,800 738
MTS Systems Corp. 23,900 729
Thiokol Corp. 10,300 721
Pioneer Standard Electronics, Inc. 51,700 698
Computer Data Systems, Inc. 23,300 682
Innovex, Inc. 5,700 166
-------------
4,500
Transportation 2.8%
Roadway Express, Inc. 33,600 786
ASA Holdings, Inc. 25,500 730
Sea Containers Limited `A' 32,100 726
-------------
2,242
Utilities 8.2%
Aliant Communications, Inc. 39,500 770
Southern California Water Co. 30,500 747
United Illuminating Co. 23,900 738
Commonwealth Energy System 30,200 723
Eastern Enterprises 20,700 718
Central Hudson Gas & Electric 20,800 716
Energen Corp. 20,900 704
Rochester Gas & Electric Corp. 33,000 695
Eastern Utilities Association 37,200 679
-------------
6,490
-------------
Total Common Stocks 70,813
(Cost $60,201) =============
SHORT-TERM INSTRUMENTS 10.0%
<CAPTION>
Principal
Amount
(000s)
<S> <C> <C>
Repurchase Agreements 10.0%
State Street Bank
4.250% due 07/01/97 $ 7,913 7,913
(Dated 06/30/97. Collateralized
by U.S. Treasury Bond 8.500% due
02/15/20 valued at $8,071,293.
Repurchase proceeds are
$7,913,934.)
-------------
Total Short-Term Instruments 7,913
(Cost $7,913) =============
Total Investments (a) 99.9% $ 78,726
(Cost $68,114)
Other Assets and Liabilities 0.1% 106
-------------
Net Assets 100.0% $ 78,832
=============
</TABLE>
- ----
38 See accompanying notes
- ----
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Notes to Schedule of Investments ($ in thousands):
(a) At June 30, 1997, 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 tax cost
over value. $ 11,340
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (871)
------------
Unrealized appreciation-net $ 10,469
============
(b) Non-income producing security.
</TABLE>
--
See accompanying notes 39
--
<PAGE>
Schedule of Investments
Opportunity Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
COMMON STOCKS 94.1%
Capital Goods 1.8%
Tower Automotive, Inc. (b) 345,000 $ 14,835
Consumer Discretionary 8.7%
Proffitt's, Inc. (b) 400,000 17,550
Converse, Inc. (b) 600,000 13,275
Windmere Corp. 800,000 13,100
Heilig-Meyers Co. 550,000 10,794
AnnTaylor Stores Corp. (b) 500,000 9,750
Linens`N Things, Inc. (b) 300,000 8,887
-----------
73,356
Consumer Services 10.2%
Norrell Corp. 890,000 29,370
Airborne Freight Corp. 600,000 25,125
Papa John's International, Inc. (b) 500,000 18,375
U.S. Home Corp. (b) 500,000 13,281
-----------
86,151
Consumer Staples 2.0%
Smithfield Foods (b) 275,000 16,912
Energy 5.8%
RMI Titanium Co. (b) 800,000 21,800
Veritas DGC, Inc. (b) 700,000 15,925
Camco International, Inc. 200,000 10,950
-----------
48,675
Financial and Business Services 6.2%
Glendale Federal Bank FSB (b) 1,100,000 28,738
E*Trade Group, Inc. (b) 600,000 11,775
First Alliance Corp. (b) 400,000 11,700
-----------
52,213
Health Care 8.0%
Dura Pharmaceuticals, Inc. (b) 729,100 29,073
Cytyc Corp. (b) 650,000 17,631
Curative Health Services, Inc. (b) 400,000 11,500
Columbia Laboratories, Inc. (b) 575,000 9,416
-----------
67,620
Materials & Processing 3.1%
Ocean Energy, Inc. (b) 400,000 18,500
Apogee Enterprises, Inc. 340,000 7,310
-----------
25,810
Technology 46.7%
Comverse Technology, Inc. (b) 1,000,000 52,000
Computer Horizons Corp. (b) 1,000,000 34,250
Wind River Systems (b) 600,000 22,950
Cognos, Inc. (b) 675,000 21,009
Data General Corp. (b) 750,000 19,500
Brightpoint, Inc. (b) 590,000 19,212
Lernout & Hauspie Speech
Products N.V. (b) 660,000 18,067
Manugistics Group, Inc. (b) 400,000 17,800
Tracor, Inc. (b) 650,000 16,331
Premiere Technologies, Inc. 600,000 15,600
SpeedFam International, Inc. (b) 425,000 15,247
Credence Systems Corp. (b) 500,000 14,969
Kemet Corp. (b) 600,000 14,925
Imnet Systems, Inc. (b) 480,000 14,910
Winstar Communications, Inc. (b) 1,050,000 14,044
HCIA, Inc. (b) 380,000 12,730
Kent Electronics Corp. (b) 345,100 12,661
Network Appliance, Inc. (b) 319,200 12,130
Dupont Photomasks, Inc. (b) 200,000 10,800
Vanstar Corp. (b) 600,000 8,475
DSP Communications, Inc. (b) 750,000 8,250
Harmonic Lightwaves, Inc. (b) 450,000 7,706
Excite, Inc. (b) 534,000 7,643
New Era of Networks, Inc. (b) 160,000 2,640
-----------
393,849
Transportation 1.6%
America West Holdings Corp. `B' (b) 950,000 13,775
-----------
Total Common Stocks 793,196
===========
(Cost $632,014)
<CAPTION>
Principal
Amount Value
(000s) (000s)
<S> <C> <C>
SHORT-TERM INSTRUMENTS 9.0%
Discount Notes 9.0%
BellSouth Telecommunications, Inc.
5.48% due 07/07/97 $ 5,000 $ 4,995
Deutsche Bank AG
5.49% due 07/03/97 20,300 20,294
Goldman Sachs & Co.
5.50% due 07/08/97 14,000 13,986
McKenna Triangle National Corp.
5.52% due 07/09/97 9,700 9,688
Preferred Receivables Funding
5.57% due 07/01/97 6,500 6,500
UBS Finance (DE), Inc.
6.20% due 07/01/97 10,000 10,000
Windmill Funding Corp.
5.55% due 07/02/97 10,000 9,998
-----------
Total Short-Term Instruments 75,461
===========
(Cost $75,461)
Total Investments (a) 103.1% $ 868,657
(Cost $707,475)
Written Options (c) (0.3%) (2,572)
(Premiums $938)
Other Assets and Liabilities (2.8%) (23,155)
-----------
Net Assets 100.0% $ 842,930
===========
Notes to Schedule of Investments ($ in thousands):
(a) At June 30, 1997, 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 tax cost
over value. $ 179,951
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (19,413)
-----------
Unrealized appreciation-net $ 160,538
===========
(b) Non-income producing security.
(c) Premiums received on Written Options:
<CAPTION>
Premiums Market
Type Par Received Value
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Call - Comverse Technology, Inc.
Strike @ 45.00 Exp. 07/18/97 $ 300,000 $ 478 $ 2,212
Call - Harmonic Lightwaves, Inc.
Strike @ 17.50 Exp. 07/18/97 150,000 256 150
Strike @ 17.50 Exp. 07/18/97 50,000 73 50
Call - Kent Electronics Corp.
Strike @ 35.00 Exp. 07/18/97 69,000 131 160
-----------------------
$ 938 $ 2,572
=======================
</TABLE>
- ----
40 See accompanying notes
- ----
<PAGE>
Schedule of Investments
International Developed Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
COMMON STOCKS 99.2%
<S> <C> <C>
Australia 0.9%
Broken Hill Property Co. 12,022 $ 177
Pasminco Limited 84,000 171
Westpac Banking Corp. 26,700 161
Amcor Limited `A' 14,800 98
News Corp. Limited 18,600 89
Comalco Limited 16,200 87
Leighton Holdings Limited 10,400 51
Tabcorp Holdings Limited 8,850 48
QNI Limited 20,000 36
-------------
918
Belgium 3.6%
Webs-Belgium 205,000 3,588
Finland 4.1%
Nokia Corp. 13,210 985
Werner Soderstrom Osakey `B' 17,800 617
Hartwall OY AB 5,850 339
UPM-Kymmene Corp. 14,380 332
Valmet Corp. OY 15,500 268
Yit-Yhtyma OY 18,580 245
Rautaruukki OY 23,100 243
Neste OY 9,030 240
Metsa Serla `B' 27,890 227
Okobank `A' 16,400 221
Stockmann AB `B' 3,990 212
Viking Line AB 4,000 126
Rauma Group OY 400 9
-------------
4,064
France 11.0%
Elf Aquitaine SA 11,512 1,242
Alcatel Alsthom 8,660 1,085
Carrefour SA 1,272 924
Rhone-Poulenc SA `A' 21,790 890
Societe Generale 7,960 889
Banque National de Paris 21,350 880
Hermes International 7,170 671
Societe BIC SA 4,077 667
Groupe Danone 4,000 661
AXA-UAP 10,540 656
Compagnie Generale des Eaux 5,000 641
Synthelabo 4,490 584
Lafarge SA 9,000 560
Valeo 6,910 429
Schneider SA 5,211 277
Compagnie Gen de Eaux Warrants 2,800 2
-------------
11,058
Germany 12.2%
VEBA AG 29,880 1,688
Volkswagen AG 2,040 1,547
Bayer AG 33,360 1,286
Siemens AG 18,700 1,121
Degussa AG 19,400 1,026
Mannesmann AG 2,203 985
MAN AG 3,850 976
Deutsche Telekom AG 37,200 914
Daimler Benz AG 11,000 895
Allianz AG 3,930 840
Dresdner Bank AG 15,000 526
Commerzbank AG 14,100 403
-------------
12,207
Hong Kong 1.5%
Cheung Kong Holdings Limited 23,000 227
Hutchison Whampoa Limited 25,000 216
Sun Hung Kai Properties 17,816 214
New World Development Co. Limited 28,000 167
HSBC Holdings PLC 5,200 156
Citic Pacific Limited 25,000 156
Wharf Holdings 36,000 156
China Light & Power Co. Limited 24,000 136
Amoy Properties Limited 113,500 125
-------------
1,553
Italy 6.8%
ENI SpA 258,800 1,468
Fiat SpA 230,000 829
Telecom Italia SpA 256,000 768
Telecom Italia Mobile SpA 211,000 684
Instituto Nazionale delle Assicurazioni 418,000 638
Istituto Mobiliare Italiano SpA 70,000 631
Banca Commerciale Italiana 279,000 579
Alleanza Assicurazioni 66,000 519
Benetton Group SpA 27,040 433
Danieli & Co. 45,000 298
-------------
6,847
Japan 26.5%
NEC Corp. 133,000 1,859
Fanuc 48,000 1,845
Matsushita Electric Works Limited 160,000 1,817
Sumitomo Bank Limited 104,000 1,708
Fujisawa Pharmaceutical 162,000 1,670
Nippon Oil Co. 280,000 1,533
Aoyama Trading Co. Limited 47,700 1,533
Murata Manufacturing Co. 36,000 1,434
Marubeni Corp. 312,000 1,417
Nippon Telegraph & Telephone 132 1,268
NKK Corp. 586,000 1,259
Sumitomo Trust & Banking 114,000 1,225
Daiwa Securities Co. Limited 152,000 1,200
Tokyo Tatemono Co. Limited 225,000 1,189
Tokyu Corp. 180,000 1,118
Dainippon Screen Manufacturing Co. 115,000 1,085
Autobacs Seven Co. 13,000 1,031
Sumitomo Metal Mining Co. 133,000 941
Mitsui O.S.K. Lines Limited (b) 424,000 874
Tokyo Steel Manufacturing 45,100 504
Tokyo Electron Limited 2,000 96
-------------
26,606
Malaysia 3.1%
Telekom Malaysia 91,500 428
Edaran Otomobil Nasional 47,000 400
Road Builder (M) Holdings Berhad 80,412 379
United Engineers (Malaysia) Limited 46,000 332
Malayan Banking Berhad 31,000 325
Sungei Way Holdings Berhad 128,000 241
Metacorp Berhad 115,000 239
DCB Holdings Berhad 68,000 216
Resorts World Berhad 69,000 208
Land & General Berhad 136,000 156
IOI Properties Berhad 73,000 139
DCB Holdings Berhad Rights 3,400 0
-------------
3,063
Netherlands 5.0%
Royal Dutch Petroleum Co. 28,800 1,499
Unilever NV 2,766 583
Vendex International NV 6,800 372
Elsevier NV 22,251 372
Philips Electronics NV 5,100 365
ABN-AMRO Holdings 16,280 304
Royal PTT Nederland NV 7,600 298
ING Groep NV 6,195 286
Koninklijke Ahold NV 3,161 267
Akzo Noble NV 1,940 266
Verernigde Nederlandse Uitgeversbedrijven
Verenigd Bezit 10,800 239
DSM NV 1,850 184
-------------
5,035
Singapore 3.4%
Overseas Chinese Banking 66,360 687
Singapore Airlines Limited 64,300 576
United Overseas Bank Limited 53,200 547
Development Bank Of Singapore Limited 42,300 533
City Developments Limited 43,900 430
Keppel Corp. Limited 81,400 362
Fraser & Neave Limited 43,600 311
-------------
3,446
</TABLE>
----
See accompanying notes 41
----
<PAGE>
Schedule of Investments (Cont.)
International Developed Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
================================================================================
<S> <C> <C>
Spain 1.0%
Telefonica de Espana 8,210 $ 237
Banco Bilbao Vizcaya SA 2,630 214
Banco Santander SA 5,400 166
Iberdrola SA 9,226 116
Repsol SA 2,356 100
Tabaclera SA `A' 1,800 97
Gas Y Electricidad SA `2' 1,700 91
-------------
1,021
Switzerland 9.0%
Roche Holding AG 200 1,809
Novartis AG 1,106 1,769
Credit Suisse Group 7,314 940
UBS (Schweiz Bankgesellschaft) 710 812
Nestle SA 601 793
Clariant AG 860 557
Holderbank Financiere Glarus AG 535 505
Tag Heuer International SA (b) 3,040 456
Kuoni Reisen AG 130 445
ABB AG 294 445
Allusuisse-Lonza Holdings AG 385 399
Ciba Specialty Chemicals AG (b) 1,106 102
-------------
9,032
United Kingdom 11.1%
Lloyds TSB Group PLC 104,104 1,067
Zeneca Group 32,060 1,059
Abbey National PLC 77,400 1,056
Smithkline Beecham PLC 56,798 1,045
Scottish & Newcastle PLC 64,800 697
Scottish Power PLC 102,780 668
Shell Transport & Trading Co. 95,400 650
British Telecommunications PLC 86,500 642
Wolseley PLC 71,800 559
Prudential 53,100 514
Unilever PLC 17,500 501
IMI PLC 87,000 496
EMI Group PLC 27,500 493
Boots Co. PLC 39,700 465
LASMO PLC 103,000 445
Burton Group PLC 192,000 376
Commercial Union PLC 34,700 365
-------------
11,098
-------------
Total Common Stocks
(Cost $88,581) 99,536
=============
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM INSTRUMENTS 2.4%
Principal
Amount
(000s)
<S> <C> <C>
Time Deposits 2.4%
Chase Manhattan Bank
5.75%due07/01/97 $ 2,400 2,400
-------------
Total Short-Term Instruments 2,400
(Cost $2,400) =============
Total Investments (a) 101.6% $ 101,936
(Cost $90,981)
Other Assets and Liabilities (Net) (1.6%) (1,623)
-------------
Net Assets 100.0% $ 100,313
=============
</TABLE>
Notes to Schedule of Investments ($ in thousands):
(a) At June 30, 1997, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
<TABLE>
<S> <C>
Aggregate gross unrealized appreciation for all
investments in which there was an excess of tax cost
over value. $ 14,494
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value. (3,594)
-------------
Unrealized appreciation-net $ 10,900
=============
</TABLE>
(b) Non-income producing security.
- ----
42 See accompanying notes
- ----
<PAGE>
Schedule of Investments
International Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
COMMON STOCKS 96.7%
<S> <C> <C>
Belgium 2.5%
Webs-Belgium 279,000 $ 4,883
Brazil 3.0%
Telecomunicacoes Brasileiras - ADR 7,688 1,167
Centrais Electricas Brasileiras SA `B' 1,682,200 1,003
Banco Bradesco SA 53,813,900 542
Banco Itau SA 833,200 467
Usimas Siderurgicas Minas Gerais SA PR 38,656 431
Telecomunicacoes Brasileiras SA 2,973,900 403
Companhia Vale do Rio Doce 16,168 358
Petroleo Brasileiro SA 1,012,200 281
Companhia Cervejaria Brahma 312,400 238
Companhia Energetica de Minas Gerais 4,531,700 234
Souza Cruz SA 16,700 176
Companhia Siderurgica Nacional 5,150,700 170
Aracruz Celulose SA `B' 82,700 168
White Martins SA 57,181 167
Companhia Paulista de Forca e Luz 665,800 112
-------------
5,917
Chile 3.0%
Compania de Telecomunicaciones de Chile SA SP - ADR 38,100 1,257
Enersis SA SP - ADR 34,950 1,243
Empresa Nacional de Electricidad SA SP - ADR 43,500 981
Banco Santander Chile SP - ADR 37,200 549
Chilgener SA SP - ADR 19,350 542
Quimica Minera Chile SA SP - ADR 7,100 469
Compania Cervecerias Unidas SA SP - ADR 12,600 276
Maders Y Sinteticos Sociedad - ADS 16,600 276
Madeco SA - ADR 9,800 240
Chilgener - ADR Rights 6,383 14
-------------
5,847
Finland 4.2%
Nokia Corp. 30,640 2,285
Werner Soderstrom Osakey `B' 31,500 1,093
UPM-Kymmene Corp. 35,650 824
Neste OY 25,250 671
Yit-Yhtyma OY 45,500 601
Okobank `A' 44,500 600
Rautaruukki OY 56,300 591
Valmet Corp. OY 21,820 378
Hartwall OY AB 6,500 376
Metsa Serla `B' 39,470 322
Stockmann AB `B' 5,620 299
Viking Line AB 5,750 182
Rauma Group OY 630 14
-------------
8,236
France 7.2%
Elf Aquitaine SA 14,332 1,546
Carrefour SA 1,845 1,340
Rhone-Poulenc SA `A' 30,490 1,245
Alcatel Alsthom 9,130 1,144
Groupe Danone 6,400 1,058
Societe BIC SA 6,298 1,030
Compagnie Generale des Eaux 7,500 961
Societe Generale 8,440 942
Synthelabo 7,010 913
Lafarge SA 14,300 890
Hermes International 8,877 831
Banque National de Paris 18,550 765
AXA-UAP 10,214 635
Schneider SA 8,231 438
Valeo 6,360 395
Compagnie Gen de Eaux Warrants 2,750 2
-------------
14,135
Germany 9.2%
Volkswagen AG 3,210 2,434
VEBA AG 38,580 2,180
Mannesmann AG 3,860 1,725
Degussa AG 31,670 1,675
Bayer AG 43,140 1,663
Siemens AG 26,700 1,600
MAN AG 6,100 1,547
Allianz AG 7,110 1,519
Deutsche Telekom AG 47,400 1,165
Dresdner Bank AG 26,300 922
Daimler Benz AG 10,000 814
Commerzbank AG 26,000 743
-------------
17,987
Hong Kong 1.6%
Cheung Kong Holdings Limited 45,000 444
Sun Hung Kai Properties 35,182 423
Hutchison Whampoa Limited 48,130 416
New World Development Co. Limited 54,000 322
Wharf Holdings 70,000 304
HSBC Holdings PLC 10,000 301
Citic Pacific Limited 48,000 300
China Light & Power Co. Limited 46,500 264
Amoy Properties Limited 219,500 242
-------------
3,016
Hungary 1.8%
MOL Magyar Olaj-es Gazipare 50,000 1,084
Richter Gedeon 11,000 991
OTP Bank 25,400 664
Borsodchem 8,700 341
Graboplast 5,650 260
EGIS 3,700 231
-------------
3,571
India 2.0%
Videsh Sanchar Nigam Limited - GDR 56,000 1,162
State Bank Of India - GDR 38,800 1,028
Hindalco Industries Limited SP - GDR 27,500 972
Indian Hotels Co. - GDR 29,400 698
-------------
3,860
Indonesia 0.1%
Bank International Indonesia 258,548 223
Bank International Indonesia `F' Warrants 11,692 5
-------------
228
Israel 3.6%
ECI Telecommunications Limited 37,100 1,104
Teva Pharmaceutical Industries Limited 15,860 1,023
Israel Chemicals Limited 602,000 708
Industrial Buildings Corp. 356,000 628
Bank Hapoalim Limited 301,000 626
Blue Square Chain Stores (b) 56,950 554
Clal Israel Limited 1,768,000 507
Bezek Israeli Telecommunication Corp. Limited 199,800 505
Elco Holdings Limited 43,348 386
Elite Industries Limited 13,800 334
Agis Industries Limited 27,800 294
Formula Systems Limited (b) 17,300 282
Industrial Buildings Rights 28,480 0
Tadiran Limited 0 0
-------------
6,951
Italy 6.3%
ENI SpA 440,400 2,498
Fiat SpA 416,000 1,500
Telecom Italia SpA 480,000 1,440
Telecom Italia Mobile SpA 382,000 1,238
Istituto Mobiliare Italiano SpA 134,000 1,208
Instituto Nazionale delle Assicurazioni 703,000 1,073
Alleanza Assicurazioni 128,000 1,007
Banca Commerciale Italiana 468,000 971
Benetton Group SpA 44,720 716
Danieli & Co. 96,000 635
-------------
12,286
Japan 15.1%
Hitachi Limited 226,000 2,526
Matsushita Electric Works Limited 181,000 2,055
Fujisawa Pharmaceutical 198,000 2,041
Aoyama Trading Co. Limited 62,000 1,993
Nippon Telegraph & Telephone 197 1,893
Sumitomo Bank Limited 113,000 1,855
Fanuc 48,000 1,845
Murata Manufacturing Co. 41,000 1,633
Nippon Oil Co. 288,000 1,577
Dainippon Screen Manufacturing Co. 161,000 1,519
Autobacs Seven Co. 18,600 1,475
</TABLE>
----
See accompanying notes 43
----
<PAGE>
Schedule of Investments (Cont.)
International Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
=============================================================
<S> <C> <C>
Sumitomo Trust & Banking 128,000 $ 1,375
Sumitomo Metal Mining Co. 191,000 1,351
Marubeni Corp. 293,000 1,331
NKK Corp. 583,000 1,253
Tokyu Corp. 194,000 1,205
Mitsui O.S.K. Lines Limited (b) 439,000 905
Daiwa Securities Co. Limited 112,000 884
Tokyo Steel Manufacturing 48,800 546
Tokyo Electron Limited 3,300 158
----------
29,420
Malaysia 4.1%
Telekom Malaysia 225,000 1,052
UMW Holdings Berhad 191,000 901
Jaya Tiasa Holdings Berhad 168,000 845
Malayan Banking Berhad 77,000 808
Gamuda Berhad 221,999 778
Road Builder (M) Holdings Berhad 140,000 660
Perusahaan Otomobil Nasional Berhad 139,000 650
Metacorp Berhad 281,000 584
Public Bank Berhad 354,000 553
Sungei Way Holdings Berhad 272,800 514
IOI Properties Berhad 179,000 340
Land & General Berhad 266,000 306
----------
7,991
Mexico 2.1%
Telefonos de Mexico - ADR 16,020 765
Cemex SA de CV 103,500 450
Alfa SA de CV `A' 42,000 286
Fomento Economico Mexicano 47,400 282
Cifra SA de CV `B' 150,900 282
Grupo Carso SA de CV `A1' 35,400 247
Kimberly Clark de Mexico SA de CV `A' 57,500 231
Grupo Modelo SA de CV `C' 31,600 219
Grupo Financiero Banamex Accival `L' 77,881 184
Grupo Televisa SA SP - GDR (b) 5,700 173
Apasco SA de CV 22,500 161
Grupo Industrial Bimbo SA de CV `A' 21,084 151
Tubos de Acero de Mexico SA
SP - ADR (b) 6,400 118
Controladora Comercial
Mexicana SA de CV 122,000 114
Desc SA de CV `B' 15,300 112
Grupo Mexico SA `B' 27,800 105
Empresas ICA Sociedad
Controladora SA de CV 5,910 94
Empresas La Moderna SA de CV 16,300 87
Industrias Penoles SA 14,200 68
Cifra SA de CV `A' 18,456 34
Desc SA de CV `C' 1,567 11
Transport Maritima - ADR 750 5
----------
4,179
Netherlands 5.0%
Royal Dutch Petroleum Co. 52,120 2,712
Unilever NV 5,210 1,097
Philips Electronics NV 10,900 781
Elsevier NV 44,117 738
Vendex International NV 12,200 668
ABN-AMRO Holdings 34,800 649
Akzo Noble NV 4,280 587
Royal PTT Nederland NV 14,500 569
Koninklijke Ahold NV 5,987 505
ING Groep NV 10,955 505
Verernigde Nederlandse
Uitgeversbedrijven Verenigd Bezit 20,500 453
DSM NV 4,223 420
----------
9,684
Peru 0.1%
Southern Peru Copper Corp. `T' 38,159 189
Ferreyros SA 62,849 72
Compania de Minas Buenaventura SA `B' 2,570 25
----------
286
Philippines 2.1%
SM Prime Holdings, Inc. 3,803,900 1,125
Ayala Corp. 993,562 716
Philippine Long Distance
Telephone Co. SP - ADR 10,400 668
Metro Bank Trust Co. 27,875 592
San Miguel Corp. 219,314 578
Petron Corp. 1,412,290 359
Equitable Banking Corp. 24,200 88
----------
4,126
Portugal 3.9%
Portugal Telecom SA 46,290 1,867
Jeronimo Martins & Filho 12,780 893
Banco Espirito Santo e Comercial
de Lisboa SA 35,600 807
Companhia de Seguros Mundial
Confianca SA 49,100 723
Sonae Investimentor-Sociedade
Gestora de Participacoes
Sociais SA 16,730 700
Cimpor-Cimentos de Portugal SGPS SA 28,370 661
EDP-Electricidade de Portugal SA 34,500 633
Investec-Consultoria
Internacional SA (b) 17,100 583
Colep-Companhia Portuguesa de
Embalagens 30,600 491
Telecel-Comunicacoes Pessoais SA (b) 3,300 274
----------
7,632
Singapore 2.9%
Overseas Chinese Banking 107,760 1,116
Singapore Airlines Limited 105,400 944
United Overseas Bank Limited 86,600 890
Development Bank Of Singapore Limited 69,000 869
City Developments Limited 70,300 688
Keppel Corp. Limited 132,000 586
Fraser & Neave Limited 71,800 512
----------
5,605
South Korea 1.9%
Korea Electric Power Corp. 46,780 1,396
Korea Fund, Inc. 85,625 1,263
Cho Hung Bank Co. Limited 83,710 556
Samsung Electronics Co. 2,550 268
Daewoo Securities Co. (b) 9,290 168
Samsung Electronics Co. 2,592 2
----------
3,653
Switzerland 8.7%
Novartis AG 2,504 4,004
Roche Holding AG 359 3,248
UBS (Schweiz Bankgesellschaft) 1,410 1,613
Nestle SA 1,215 1,603
Credit Suisse Group 12,295 1,580
Holderbank Financiere Glarus AG 974 920
Clariant AG 1,339 867
Tag Heuer International SA (b) 5,600 840
Kuoni Reisen AG 240 822
ABB AG 494 748
Allusuisse-Lonza Holdings AG 564 584
Ciba Specialty Chemicals AG (b) 2,034 188
----------
17,017
Turkey 4.3%
Arcelik AS 6,723,750 906
Eregli Demir Ve Celik Fabrikalari
TAS 4,990,000 832
Adana Cimento Sanayii `A' 7,667,000 710
Akbank TAS 6,460,930 555
Haci Omer Sabanci Holding AS 15,000,000 546
Migros Turk TAS 757,400 536
Turkiye Garanti Bankasi AS 14,115,000 532
Turk Sise Ve Cam Fabrikalari AS 8,080,000 512
Yapi ve Kredi Bankasi AS 22,038,000 505
Northern Elektrik Telekomunikasyon
AS 1,822,000 503
Ak-Al Tekstil Sanayii AS 9,296,438 470
Otosan Otomobil Sanayii AS 821,000 437
Izmir Demir Celik Sanayii AS 36,331,000 428
Bagfas Bandirma Gubre Fabrikalari
AS 1,652,000 395
Ege Biracilik Ve Malt Sanajii AS 1,092,000 254
Tansas Izmir Buyuksehir Belediyesi
Ic Ve Dis Ticaret AS 1,169,000 240
Demirbank TAS 6,283,620 123
----------
8,484
</TABLE>
- ----
44 See accompanying notes
- ----
<PAGE>
<TABLE>
<CAPTION>
Value
Shares (000s)
======================================================================
<S> <C> <C>
Smithkline Beecham PLC 20,200 $ 371
Zeneca Group 11,000 363
Abbey National PLC 25,700 351
Lloyds TSB Group PLC 34,096 349
Scottish Power PLC 39,472 257
Shell Transport & Trading Co. 36,000 245
Scottish & Newcastle PLC 22,200 239
British Telecommunications PLC 31,800 236
Wolseley PLC 25,000 195
IMI PLC 33,000 188
Unilever PLC 6,500 186
LASMO PLC 43,000 186
Boots Co. PLC 15,400 180
Prudential 18,000 174
EMI Group PLC 9,300 167
Commercial Union PLC 13,100 138
Burton Group PLC 68,000 133
----------
3,958
----------
Total Common Stocks 188,952
(Cost $164,794) ==========
Total Investments (a) 96.7% $ 188,952
(Cost $164,794)
Other Assets and Liabilities (Net) 3.3% 6,457
----------
Net Assets 100.0% $ 195,409
==========
Notes to Schedule of Investments
($ in thousands):
(a) At June 30, 1997, 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 tax cost over value. $ 30,424
Aggregate gross unrealized depreciation for
all investments in which there was an excess
of tax cost over value. (6,737)
----------
Unrealized appreciation-net $ 23,687
==========
(b) Non-income producing security.
</TABLE>
----
See accompanying notes 45
----
<PAGE>
Schedule of Investments
Emerging Markets Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
COMMON STOCKS 95.7%
<S> <C> <C>
Argentina 3.7%
YPF Sociedad Anonima - ADR 23,100 $ 710
Telefonica de Argentina - ADR 14,100 488
Compania Naviera Perez Co. - ADR 19,912 318
Banco de Galicia y Buenos Aires
SA de CV 20,100 134
Banco Frances del Rio de la Plata SA 11,804 128
Siderca SA `A' 35,667 92
Astra Cia Argentina de Petro SA 22,700 48
Inversiones Y Representaciones
SA - GDR 1,084 47
Molinos Rio de La Plata SA 10,670 42
CIADEA SA 9,300 40
Siderar SAIC `A' 2,946 12
--------
2,059
Brazil 13.2%
Telecomunicacoes Brasileiras - ADR 10,050 1,525
Centrais Electricas Brasileiras
SA `B' 2,196,000 1,310
Banco Bradesco SA 70,255,000 708
Telecomunicacoes Brasileiras SA 3,883,000 527
Companhia Vale do Rio Doce 21,362 473
Banco Itau SA 808,000 452
Petroleo Brasileiro SA 1,321,000 367
Usimas Siderurgicas Minas Gerais
SA PR 32,319 360
Companhia Cervejaria Brahma 408,000 311
Companhia Energetica de Minas
Gerais 5,916,000 305
Souza Cruz SA 21,800 230
White Martins SA 74,555 218
Aracruz Celulose SA `B' 85,300 173
Companhia Siderurgica Nacional 4,808,000 159
Companhia Paulista de Forca e Luz 869,000 146
----------
7,264
Chile 6.0%
Compania de Telecomunicaciones de
Chile SA SP - ADR 21,822 720
Enersis SA SP - ADR 18,900 672
Empresa Nacional de Electricidad
SA SP - ADR 23,700 535
Banco Santander Chile SP - ADR 21,500 317
Chilgener SA SP - ADR 11,300 316
Quimica Minera Chile SA SP - ADR 4,130 273
Maders Y Sinteticos Sociedad - ADS 9,890 164
Compania Cervecerias Unidas SA
SP - ADR 7,300 160
Madeco SA - ADR 6,100 149
Chilgener - ADR Rights 3,728 8
----------
3,314
Hungary 3.2%
MOL Magyar Olaj-es Gazipare 25,800 559
Richter Gedeon 5,500 496
OTP Bank 11,800 308
Borsodchem 4,200 164
Graboplast 2,700 124
EGIS 1,850 116
----------
1,767
India 8.4%
Tata Engineering and Locomotive
Co. Limited SP - GDR 45,224 694
Hindalco Industries Limited
SP - GDR 18,910 668
State Bank Of India - GDR 18,300 485
Larsen & Tourbro Limited - GDR 26,480 457
Videsh Sanchar Nigam Limited
SP - ADR 18,000 374
Indian Hotels Co. - GDR 13,700 325
Bajaj Auto Limited 9,270 318
Indian Rayon & Industries
Limited - GDR 19,550 244
BSES Limited - GDR 9,100 241
Gujarat Ambuja - GDR 20,200 235
EIH Limited 13,540 223
Steel Authority Of India 22,400 198
Videsh Sanchar Nigam Limited - GDR 8,900 185
----------
4,647
Indonesia 4.1%
Bank International Indonesia 840,747 726
Bimantara Citra 251,000 439
Telekomunikasi Indonesia SP - ADR 12,800 416
United Tractors 86,500 320
Hanjaya Mandala Sampoerna 52,000 199
Semen Gresik 57,000 128
Bank International Indonesia
`F' Warrants 88,066 34
Indah Kiat Paper & Pulp Corp. 189 0
Indah Kiat Pulp & Paper Corp.
Rights (b) 170 0
----------
2,262
Israel 6.3%
Teva Pharmaceutical Industries
Limited 8,400 542
ECI Telecommunications Limited 13,800 411
Clal Israel Limited 1,138,000 326
Israel Chemicals Limited 276,000 325
Bank Hapoalim Limited 155,900 325
Industrial Buildings Corp. 152,000 268
Blue Square Chain Stores (b) 26,900 262
Elco Holdings Limited 29,000 258
Bezek Israeli Telecommunication
Corp. Limited 83,300 210
Formula Systems Limited (b) 11,100 181
Agis Industries Limited 16,800 177
Elite Industries Limited 6,600 160
Industrial Buildings Rights 17,200 0
Tadiran Limited 0 0
----------
3,445
Malaysia 9.2%
Telekom Malaysia 139,500 652
Perusahaan Otomobil Nasional Berhad 109,000 510
Jaya Tiasa Holdings Berhad 99,000 498
United Engineers (Malaysia) Limited 69,000 498
Gamuda Berhad 122,500 430
Road Builder (M) Holdings Berhad 86,400 407
Metacorp Berhad 173,000 360
Public Bank Berhad 218,666 341
DCB Holdings Berhad 103,000 326
Sungei Way Holdings Berhad 168,400 318
UMW Holdings Berhad 61,000 288
Land & General Berhad 205,000 236
IOI Properties Berhad 110,000 209
DCB Holdings Berhad Rights 5,150 0
----------
5,073
Mexico 9.1%
Telefonos de Mexico - ADR 21,850 1,043
Cemex SA de CV 98,800 430
Cifra SA de CV `B' 204,580 382
Grupo Carso SA de CV `A1' 48,200 336
Kimberly Clark de Mexico SA de CV `A' 78,000 313
Grupo Modelo SA de CV `C' 43,000 298
Fomento Economico Mexicano 45,100 269
Alfa SA de CV `A' 38,200 260
Grupo Financiero Banamex Accival
`L' (b) 105,907 250
Grupo Televisa SA SP - GDR (b) 7,810 237
Apasco SA de CV 21,400 153
Desc SA de CV `B' 20,600 151
Grupo Mexico SA `B' 37,560 141
Grupo Industrial Bimbo SA de CV `A' 18,916 136
Empresas ICA Sociedad Controladora
SA de CV 8,020 128
Empresas La Moderna SA de CV 22,100 118
Tubos de Acero de Mexico SA SP (b) 6,000 110
Controladora Comercial Mexicana
SA de CV 101,100 94
Industrias Penoles SA 19,200 92
Cifra SA de CV `A' 25,022 46
Desc SA de CV `C' 1,531 11
Transport Maritima - ADR 750 5
----------
5,003
Pakistan 1.0%
Pakistan State Oil 16,523 133
Hub Power Co. Limited SP - GDR (b) 4,700 118
Fauji Fertilizer Co. 53,900 106
Engro Chemical Pakistan Limited 23,000 81
Faysal Bank Limited 71,700 48
Pakistan Telecommunications - GDS 400 31
DG Kahn Cement 97,010 29
Sui Southern Gas Pipeline (b) 28,750 20
----------
566
</TABLE>
- ----
46 See accompanying notes
- ----
<PAGE>
<TABLE>
<CAPTION>
Value
Shares (000s)
===============================================================================
<S> <C> <C>
Peru 2.0%
Telefonica del Peru SA `B' 146,988 $ 386
Credicorp Limited 7,442 164
Southern Peru Copper Corp. `T' 27,359 135
Banco Wiese SP - ADR 11,800 77
Cerveceria Backus Y Johnston SA `T' 66,285 69
Luz del Sur Servicios SA `B' 58,550 69
Compania de Minas Buenaventura SA `A' 7,297 68
Ferreyros SA 32,606 37
Cementos Lima SA 14,941 30
Compania de Minas Buenaventura SA `B' 2,824 28
Minsur SA 5,500 21
------------
1,084
Philippines 4.0%
Philippine Long Distance Telephone Co. SP - ADR 6,800 437
Metro Bank Trust Co. 19,450 413
SM Prime Holdings, Inc. 1,341,000 397
Ayala Corp. 483,750 348
San Miguel Corp. 114,067 301
Petron Corp. 994,130 253
Equitable Banking Corp. 11,300 41
------------
2,190
Poland 0.9%
Elektrim Spolka Akcyjna SA 21,531 187
Bank Rozwoju Eksportu SA 5,310 111
Bank Slaski SA W Katawicach 1,080 77
Polifarb-Cieszyn SA 12,940 66
Debica SA 2,180 45
------------
486
Portugal 5.6%
Portugal Telecom SA 18,110 731
Banco Espirito Santo e Comercial de Lisboa SA 14,250 323
Investec-Consultoria Internacional SA (b) 9,300 317
Jeronimo Martins & Filho 4,338 303
Sonae Investimentor-Sociedade Gestora de
Participacoes Sociais SA 7,100 297
Companhia de Seguros Mundial Confianca SA 18,600 274
Colep-Companhia Portuguesa de Embalagens 15,100 242
Cimpor-Cimentos de Portugal SGPS SA 10,140 236
EDP-Electricidade de Portugal SA 10,900 200
Telecel-Comunicacoes Pessoais SA (b) 2,000 166
------------
3,089
South Africa 6.0%
Nedcor Limited 18,450 406
Gencor Limited 78,810 363
Rembrandt Group Limited 31,240 333
De Beers Centenary AG 7,940 293
South African Breweries Limited 9,490 291
Liberty Life Association of Africa 10,250 278
Sasol Limited 20,800 273
Nasionale Pers Beperk Limited 21,000 241
Barlow Limited 21,180 231
Smith C.G. Limited 40,930 229
Driefontein Consolidated Limited 25,800 174
Metro Cash & Carry Limited 146,500 129
Norwich Holdings SA Limited 47,800 93
------------
3,334
South Korea 4.8%
Korea Electric Power Corp. 29,600 883
Korea Fund, Inc. 37,000 546
Cho Hung Bank Co. Limited 65,316 434
Samsung Electronics Co. 2,800 294
Korea Kumho Petrochemical Co. 37,600 261
Daewoo Securities Co. (b) 8,700 158
Samsung Corp. - GDS 15,850 52
Samsung Corp. SP - GDR 144A 1,172 4
Samsung Electronics Co. 2,892 2
------------
2,634
Taiwan 1.5%
Taiwan Fund 22,000 556
China Steel Corp. SP - GDS 9,350 198
Advanced Semiconductor Engineering - GDR (b) 4,830 96
------------
850
Thailand 0.9%
Electricity Generating Public Co. Limited 51,600 132
Krung Thai Bank Public Co. Limited 106,500 116
Bangkok Bank Public Co. 15,000 107
Cogeneration Public Co. Limited 33,900 95
Thai Farmers Bank Public Company Limited 13,500 60
------------
510
Turkey 5.8%
Arcelik AS 2,766,750 373
Eregli Demir Ve Celik Fabrikalari TAS 1,849,000 308
Adana Cimento Sanayii `A' 2,840,000 263
Akbank TAS 2,830,476 243
Turk Sise Ve Cam Fabrikalari AS 3,198,000 202
Migros Turk TAS 281,400 199
Turkiye Garanti Bankasi AS 5,251,000 198
Haci Omer Sabanci Holding AS 5,000,000 185
Izmir Demir Celik Sanayii AS (b) 14,982,000 177
Northern Elektrik Telekomunikasyon AS 633,000 175
Yapi ve Kredi Bankasi AS 7,614,000 174
Bagfas Bandirma Gubre Fabrikalari AS 724,000 173
Ak-Al Tekstil Sanayii AS 3,294,376 166
Otosan Otomobil Sanayii AS 304,000 162
Tansas Izmir Buyuksehir Belediyesi Ic Ve Dis Ticaret AS 512,000 105
Ege Biracilik Ve Malt Sanajii AS 405,000 94
------------
3,197
------------
Total Common Stocks 52,774
============
(Cost $44,924)
</TABLE>
================================================================================
CORPORATE BONDS AND NOTES 0.6%
================================================================================
<TABLE>
<CAPTION>
Principal
Amount
(000s)
<S> <C> <C>
Taiwan 0.6%
Nan Ya Plastics Corp.
1.750%due07/19/01 180 257
Far Eastern Department Stores
3.000%due07/06/01 75 81
----------
Total Corporate Bonds and Notes 338
----------
(Cost $270)
Total Investments (a) 96.3% $ 53,112
(Cost $45,194)
Other Assets and Liabilities (Net) 3.7% 2,063
----------
Net Assets 100.0% $ 55,175
==========
Notes to Schedule of Investments ($ in thousands):
(a) At June 30, 1997, 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 tax
cost over value. $ 11,315
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value. (3,645)
----------
Unrealized appreciation-net $ 7,670
==========
(b) Non-income producing security.
</TABLE>
----
See accompanying notes 47
----
<PAGE>
Schedule of Investments
Innovation Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
COMMON STOCKS 96.8%
<S> <C> <C>
Consumer Discretionary 4.6%
U.S.A. Waste Services, Inc. (b) 150,000 $ 5,794
Converse, Inc. (b) 200,000 4,425
Thermolase Corp. (b) 160,000 2,250
-------------
12,469
Health Care 6.6%
Warner Lambert Co. 60,000 7,455
Sofamor Danek Group, Inc. (b) 130,000 5,947
Shared Medical Systems Corp. 85,000 4,590
-------------
17,992
Materials & Processing 1.3%
TJ International, Inc. 150,000 3,525
Technology 77.4%
Motorola, Inc. 200,000 15,200
Cisco Systems, Inc. (b) 200,000 13,425
America Online, Inc. (b) 190,000 10,569
Nokia Corp. - ADR 130,000 9,587
Texas Instruments, Inc. 110,000 9,247
National Semiconductor Corp. (b) 300,000 9,187
Northern Telecom Limited 100,000 9,100
Tellabs, Inc. (b) 150,000 8,381
Xilinx, Inc. (b) 170,000 8,341
Lucent Technologies, Inc. 110,000 7,927
Ascend Communications, Inc. (b) 200,000 7,875
Intel Corp. 55,000 7,800
Viasoft, Inc. (b) 150,000 7,612
Dell Computer Corp. (b) 60,000 7,046
Microsoft Corp. (b) 55,000 6,951
Saville Systems - ADR (b) 130,000 6,760
Qualcomm, Inc. (b) 130,000 6,614
CBT Group PLC SP - ADR (b) 100,000 6,313
Adaptec, Inc. (b) 170,000 5,908
Scientific-Atlanta, Inc. 250,000 5,469
Electronics For Imaging, Inc. (b) 100,000 4,725
Yahoo, Inc. (b) 130,000 4,583
3Com Corp. (b) 100,000 4,500
American Power Conversion Corp. (b) 220,000 4,180
LSI Logic Corp. (b) 130,600 4,179
DSC Communications Corp. (b) 180,000 4,005
Checkfree Corp. (b) 225,000 3,966
PMC - Sierra, Inc. (b) 150,000 3,937
Network Appliance, Inc. (b) 80,000 3,040
Pairgain Technologies, Inc. (b) 185,000 2,868
-------------
209,295
Utilities 6.9%
ADC Telecommunication, Inc. (b) 185,000 6,174
Worldcom, Inc. (b) 180,000 5,760
Nextel Communications, Inc. `A' (b) 200,000 3,787
Clearnet Communications, Inc. `A' (b) 239,100 2,899
-------------
18,620
-------------
Total Common Stocks 261,901
=============
(Cost $215,108)
</TABLE>
SHORT-TERM INSTRUMENTS 1.8%
<TABLE>
<CAPTION>
Principal
Amount
(000s)
<S> <C> <C>
Discount Notes 1.8%
McKenna Triangle National
5.520% due 07/02/97 $ 5,000 4,999
-------------
Total Short-Term Instruments 4,999
=============
(Cost $4,999)
Total Investments (a) 98.6% $ 266,900
(Cost $220,107)
Other Assets and Liabilities 1.4% 3,676
-------------
Net Assets 100.0% $ 270,576
=============
</TABLE>
================================================================================
Notes to Schedule of Investments ($ in thousands):
(a) At June 30, 1997, 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 tax cost
over value. $ 51,975
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (5,585)
-------------
Unrealized appreciation-net $ 46,390
=============
(b) Non-income producing security.
- ----
48 See accompanying notes
- ----
<PAGE>
Schedule of Investments
Precious Metals Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
COMMON STOCKS 98.6%
<S> <C> <C>
Australia 15.2%
Normandy Mining Limited 890,000 $ 1,001
Plutonic Resources Limited 290,000 906
Sons Of Gwalia Limited `A' 150,000 558
Eagle Mining Corp. (b) 230,000 439
Acacia Resources Limited (b) 300,000 394
Ranger Minerals NL 104,000 318
Delta Gold NL 170,000 284
Emperor Mines Limited 190,000 265
St. Barbara Mines Limited 550,000 224
Macraes Mining Co. Limited 130,000 182
Resolute Samantha Limited 100,000 178
Menzies Gold NL (b) 500,000 151
Herald Resources Limited 205,000 104
Gullewa Gold NL 2,000,000 53
-------------
5,057
Canada 35.8%
Placer Dome, Inc. 95,000 1,556
Barrick Gold Corp. 70,000 1,540
Namibian Minerals Corp. 209,900 912
Meridian Gold, Inc. - Institutional Receipt 330,000 896
Euro-Nevada Mining Corp. 22,600 696
Richmont Mines, Inc. (b) 144,600 537
Cambior, Inc. 45,000 512
Franco-Nevada Mining Corp. Limited 10,000 501
Golden Star Resources Limited 57,000 463
Goldcorp, Inc. `A' 65,000 463
TVX Gold, Inc. 80,000 425
Agnico-Eagle Mines Limited 40,000 385
Greenstone Resources Limited 40,000 350
Echo Bay Mines Limited 59,999 345
Battle Mountain Canada Limited 50,000 286
Battle Mountain Gold Co. 50,000 284
IAMGOLD (b) 70,000 274
Royal Oak Mines, Inc. (b) 115,000 273
Miramar Mining Corp. (b) 70,000 258
Meridian Gold, Inc. 50,000 219
Pangea Goldfields, Inc. 65,000 188
Bema Gold Corp. 30,000 181
Viceroy Resources Corp. (b) 55,000 179
Dayton Mining Corp. 20,600 72
Rio Narcea Gold Mines Limited 20,000 60
Minefinders Special Warrants 24,000 48
Pacific Rim Mining Special Warrants 9,000 22
Queenstake Resources Limited 8,400 12
-------------
11,937
Ghana 0.7%
Ashanti Goldfields Co. - GDR 20,000 234
South Africa 19.8%
Western Deep Levels - ADR 30,000 716
Gold Fields of South Africa Limited SP - ADR 30,000 705
Elandsrand Gold Mining Co. Limited - ADR 195,000 703
Randgold & Exploration `C' 140,000 617
Driefontein Consolidated Limited SP - ADR 90,000 608
Vaal Reefs Exploration & Mining Co. Limited - ADR 100,000 481
Free State Consolidated Gold Mines Limited - ADR 95,000 475
Kloof Gold Mining Co. - ADR 70,000 416
Beatrix Mines Limited - ADR 90,000 408
St. Helens Gold Mine - ADR 90,000 383
Harmony Gold Mining Co. 75,000 343
Deelkraal Gold Mining - ADR (b) 300,000 212
Durban Roodepoort Deep 41,961 184
Joel Gold Mining Limited 200,000 154
West Rand Consolidated Mines Limited 50,000 88
Durban Roodepoort Deep Warrants 41,961 46
Harmony Gold Mining Co. Limited SP - ADR 10,000 46
Kalahari Goldridge Mining 64,500 34
-------------
6,619
United Kingdom 1.1%
Rangold Resources 17,000 280
Reunion Mining PLC (b) 50,000 83
-------------
363
United States 26.0%
Newmont Mining Corp. 68,000 2,652
Getchell Gold Corp. 52,700 1,858
Homestake Mining Co. 140,000 1,829
Stillwater Mining Co. (b) 30,000 643
Freeport-McMoran Copper `A' 20,000 622
Pegasus Gold, Inc. 75,000 459
Royal Gold, Inc. 44,600 379
Alta Gold Co. (b) 100,000 247
-------------
8,689
-------------
Total Common Stocks 32,899
(Cost $40,001) =============
</TABLE>
SHORT-TERM INSTRUMENTS 11.9%
<TABLE>
<CAPTION>
Principal
Amount
(000s)
<S> <C> <C>
Discount Notes 3.0%
General Electric Co.
5.900% due 07/01/97 $ 985 985
U.S. Treasury Bills 8.9%
5.030% due 08/14/97 3,000 2,982
-------------
Total Short-Term Instruments 3,967
(Cost $3,967) =============
Total Investments (a) 110.5% $ 36,866
(Cost $43,968)
Other Assets and Liabilities (Net) (10.5%) (3,489)
-------------
Net Assets 100.0% $ 33,377
=============
Notes to Schedule of Investments ($ in thousands):
(a) At June 30, 1997, 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 tax cost over value. $ 2,404
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value. (10,405)
-------------
Unrealized depreciation-net $ (8,001)
=============
</TABLE>
(b) Non-income producing security.
----
See accompanying notes 49
----
<PAGE>
Schedule of Investments
Balanced Fund
June 30, 1997
<TABLE>
<CAPTION>
Value
Shares (000s)
COMMON STOCKS 59.3%
<S> <C> <C>
Capital Goods 5.4%
Deere & Co. 11,300 $ 620
Northrop Grumman Corp. 4,800 422
Textron, Inc. 5,000 332
Perkin Elmer Corp. 4,100 326
Sundstrand Corp. 5,800 324
United Technologies Corp. 3,800 315
AlliedSignal, Inc. 3,700 311
Johnson Controls, Inc. 6,800 279
Ingersoll Rand Co. 4,400 272
Illinois Tool Works, Inc. 4,700 235
---------
3,436
Consumer Discretionary 12.5%
VF Corp. 7,200 613
Brunswick Corp. 18,200 569
American Greetings Corp. `A' 12,600 468
Xerox Corp. 5,800 457
Goodyear Tire & Rubber Co. 7,000 443
Westvaco Corp. 13,000 409
Tupperware Corp. 10,900 398
Maytag Corp. 14,700 384
Chrysler Corp. 11,500 377
TJX Corp., Inc. 12,600 332
Dayton Hudson Corp. 6,100 324
Omnicom Group 4,900 302
Kroger Co. (b) 10,000 290
Estee Lauder Cos. `A' 5,500 276
Costco Cos. 8,400 276
Jones Apparel Group, Inc. (b) 5,400 258
Armstrong World Industries 3,500 257
Gannett, Inc. 2,600 257
New York Times Co. 5,100 252
Dillards, Inc. `A' 6,800 235
Tandy Corp. 4,000 224
Federated Department Stores, Inc. (b) 6,300 219
Sunbeam-Oster, Inc. 5,400 204
Washington Post Co. 500 199
---------
8,023
Consumer Services 0.9%
Carnival Corp. `A' 7,000 289
Marriott International, Inc. 4,600 282
---------
571
Consumer Staples 4.6%
Anheuser Busch Cos., Inc. 11,900 499
SUPERVALU, Inc. 12,400 428
Unilever NV 1,900 414
RJR Nabisco Holdings Corp. 11,700 386
Campbell Soup Co. 5,500 275
Safeway, Inc. (b) 5,900 272
Hershey Foods Corp. 4,800 266
Whitman Corp. 8,500 215
IBP, Inc. 8,000 186
---------
2,941
Energy 6.2%
Ultramar Diamond Shamrock 16,100 525
Amoco Corp. 6,000 522
Repsol SA SP - ADR 11,800 501
Atlantic Richfield Co. 5,000 353
Noble Drilling Corp. (b) 13,500 305
Halliburton Co. 3,400 269
Transocean Offshore, Inc. 3,700 269
Global Marine, Inc. (b) 11,400 265
Rowan Cos., Inc. (b) 9,300 262
Union Texas Petroleum Holdings, Inc. 12,200 256
Schlumberger Limited 1,900 238
ENSCO International, Inc. (b) 3,800 200
---------
3,965
Financial and Business Services 10.9%
Chase Manhattan Corp. 7,600 738
Bear Stearns Cos. 18,365 628
Mellon Bank Corp. 13,000 587
CIGNA Corp. 3,300 586
Loews Corp. 3,900 390
Travelers Group, Inc. 6,133 387
Countrywide Credit Industries, Inc. 11,500 359
American Express Co. 3,200 238
Norwest Corp. 4,200 236
Southtrust Corp. 5,700 236
Federal Home Loan Mortgage Corp. 6,600 227
Federal National Mortgage Assoc. 5,200 227
Times Mirror Co. `A' 4,100 227
Hartford Financial Services Group, Inc. 2,700 223
First Union Corp. 2,400 222
National City Corp. 4,100 215
Green Tree Financial Corp. 6,000 214
Lincoln National Corp. 3,300 212
PNC Bank Corp. 5,000 208
BankBoston Corp. 2,700 195
Associates First Capital Corp. `A' 3,500 194
BankAmerica Corp. 1,700 110
Citicorp 800 97
---------
6,956
Health Care 4.4%
American Home Products Corp. 8,200 627
Pharmacia & Upjohn, Inc. 11,400 396
Schering-Plough Corp. 6,500 311
Tenet Healthcare Corp. (b) 9,175 271
Eli Lilly & Co. 2,200 240
Beckman Instruments, Inc. 4,900 236
U.S. Surgical Corp. 6,300 235
Foundation Health Systems `A' (b) 7,540 229
Cognizant Corp. 5,600 227
---------
2,772
Materials & Processing 2.5%
Phelps Dodge Corp. 4,900 417
USG Corp. (b) 8,900 325
Rohm & Haas Co. 2,900 261
Dresser Industries, Inc. 6,200 231
Union Carbide Corp. 4,200 198
Wellman, Inc. 11,200 195
---------
1,627
Technology 6.6%
Intel Corp. 3,900 553
Tektronix, Inc. 6,600 396
Harris Corp. 4,500 378
Tyco Labs 4,900 341
Seagate Technology, Inc. 8,800 310
Sun Microsystems, Inc. 7,300 272
BMC Software, Inc. 4,400 244
Adaptec, Inc. 6,800 236
Dell Computer Corp. 2,000 235
Cisco Systems, Inc. 3,400 228
Computer Associates International, Inc. 4,000 223
Wheelabrator Technologies, Inc. 14,000 216
Compaq Computer Corp. (b) 2,100 208
National Semiconductor Corp. (b) 6,200 190
Adobe Systems, Inc. 5,100 179
---------
4,209
Transportation 0.9%
UAL Corp. (b) 5,000 358
Continental Airlines, Inc. `B' (b) 6,300 220
---------
578
Utilities 4.4%
NICOR, Inc. 16,100 578
Nynex Corp. 7,200 415
DTE Energy Co. 14,300 395
Southern New England Telecommunications Corp. 9,600 373
Pacific Gas & Electric 14,600 354
Ameritech Corp. 3,800 258
American Electric Power, Inc. 5,400 227
GPU, Inc. 6,300 226
---------
2,826
---------
Total Common Stocks 37,904
=========
(Cost $30,805)
</TABLE>
- ----
50 See accompanying notes
- ----
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000s) (000s)
CORPORATE BONDS AND NOTES 7.5%
<S> <C> <C>
Industrials 2.4% AMR Corp.
10.000% due 02/01/01 $ 400 $ 440
9.430% due 05/10/01 1,000 1,081
--------
1,521
Utilities 5.1%
Cleveland Electric Illuminating Co.
9.375% due 03/01/17 1,000 1,041
Long Island Lighting Co.
9.000% due 11/01/22 2,000 2,201
--------
3,242
--------
Total Corporate Bonds and Notes 4,763
========
(Cost $4,443)
MORTGAGE-BACKED SECURITIES 38.2%
Collateralized Mortgage Obligations 5.0%
<S> <C> <C>
Capstead Mortgage Corp.
8.900% due 12/25/21 257 266
Federal Home Loan Mortgage Corp.
10.150% due 04/15/06 49 49
Federal National Mortgage Assoc.
9.500% due 06/25/18 543 577
Independent National Mortgage Corp.
7.954% due 11/25/24(d) 910 935
8.121% due 11/25/24(d) 773 793
PNC Mortgage Securities Corp.
7.500% due 06/25/10 559 557
--------
3,177
Federal Home Loan Mortgage Corporation 4.1%
6.500% due 08/13/27 2,000 1,913
8.500% due 03/01/23 691 729
--------
2,642
Federal Housing Administration 0.9%
6.930% due 07/01/14 587 564
Federal National Mortgage Association 9.1%
8.035% due 12/01/23(d) 469 491
8.500% due 07/01/02-01/01/08 (e) 1,033 1,068
8.500% due 03/01/25-07/01/25 (e) 4,118 4,283
--------
5,842
Government National Mortgage Association 17.6%
6.500% due 03/15/26-01/15/27 (e) 5,461 5,226
7.120% due 08/20/24(d) 780 800
7.125% due 04/20/23(d) 1,730 1,780
7.500% due 05/15/17 18 18
8.000% due 09/15/06 75 78
8.000% due 07/21/27 500 512
8.500% due 07/21/27 2,000 2,078
9.500% due 09/15/09-10/15/09 (e) 157 170
10.750% due 09/15/00-10/15/00 (e) 136 143
14.000% due 08/15/12 31 36
16.000% due 10/15/11-04/15/12 (e) 335 391
--------
11,232
Other Mortgage-Backed Securities 1.5%
Home Savings of America
5.758% due 05/25/27(d) 1,020 983
--------
Total Mortgage-Backed Securities 24,440
(Cost $24,330)
<CAPTION>
SHORT-TERM INSTRUMENTS 7.8%
<S> <C> <C>
Discount Notes 5.3%
General Electric Capital Corp.
5.550% due 08/15/97 100 99
General Motors Acceptance Corp.
5.570% due 08/27/97 400 397
Motorola, Inc.
5.500% due 07/16/97 1,000 998
National Rural Utilities Cooperative
5.580% due 07/21/97 100 100
5.530% due 07/22/97 200 199
5.550% due 09/03/97 600 594
New Center Asset Trust
5.550% due 08/15/97 300 298
5.550% due 08/20/97 600 595
5.560% due 09/10/97 100 99
--------
3,379
Repurchase Agreements 2.4%
State Street Bank
4.250% due 07/01/97 1,566 1,566
(Dated 06/30/97. Collateralized by
U.S. Treasury Bond 8.500% due 02/15/20
valued at $1,605,711. Repurchase
proceeds are $1,566,185.)
U.S. Treasury Bills 0.1%
5.038% due 07/03/97-10/02/97 (c)(e) 70 69
--------
Total Short-Term Instruments 5,014
(Cost $5,014) ========
Total Investments (a) 112.8% $ 72,121
(Cost $64,592)
Other Assets and Liabilities (12.8%) (8,192)
--------
Net Assets 100.0% $ 63,929
========
Notes to Schedule of Investments
($ in thousands):
(a) At June 30, 1997, 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 tax cost over value.
$ 7,785
Aggregate gross unrealized depreciation for
all investments in which there was an excess
of tax cost over value. (335)
--------
Unrealized appreciation-net $7,450
========
(b) Non-income producing security.
(c) Securities with an aggregate market
value of $39 have been segregated with the
custodian to cover margin requirements for
the following open futures contract at
June 30, 1997:
<CAPTION>
Unrealized
Type Contracts Appreciation
- --------------------------------------------------------------------------------
<S> <C> <C>
U.S. Treasury 10 Year Note (09/97) 29 $ 17
(d) Variable rate security. The rate
listed is as of June 30, 1997.
(e) Securities are grouped by coupon
and represent a range of maturities.
</TABLE>
----
See accompanying notes 51
----
<PAGE>
Schedule of Investments
Tax Exempt Fund
June 30, 1997
<TABLE>
<CAPTION>
Principal
Amount Value
(000s) (000s)
MUNICIPAL BONDS AND NOTES 96.4%
<S> <C> <C>
Arizona 2.5%
Scottsdale, Arizona Industrial Development
Authority Hospital Revenue Bonds, (AMBAC Insured),
Series 1997 A, 6.500%, 09/01/04 $ 1,130 $ 1,250
California 11.1%
Los Angeles Convention & Exhibition Center
Authority, Certificates of Participation, Series
1985, (Prerefunded 12/01/05), 9.000%,
12/01/10-12/01/20 3,000 3,896
Los Angeles County Transportation Commission, Sales
Tax Revenue Refunding Bonds, Series 1991 B,
6.500%, 07/01/13 1,000 1,066
City of San Jose Redevelopment Agency Merged Area
Project, Tax Allocation Bonds, (MBIA Insured),
Series 1993, 6.000%, 08/01/15 500 538
----------
5,500
==========
Florida 2.2%
Jacksonville Electric Authority, Bulk Power Supply
System Revenue Bonds, (Prerefunded 10/01/00),
Scherer 4-1-A Project, Issue One, Series 1991,
6.750%, 10/01/21 1,000 1,085
Georgia 7.4%
State of Georgia, General Obligation Bond, Series
1993, 6.500%, 12/01/04 2,000 2,240
Metropolitan Atlanta Rapid Transit Authority Sales
Tax Revenue Bonds, Series 1992 N, 6.000%, 07/01/07 1,340 1,451
----------
3,691
==========
Hawaii 2.3%
State of Hawaii, Airport System Revenue Bonds,
Second Series of 1991, 6.900%, 07/01/12 1,000 1,145
Illinois 8.6%
Chicago, O'Hare International Airport Revenue
Bonds, (MBIA Insured), Series 1994 A, 6.750%,
01/01/06. 1,000 1,121
Metropolitan Pier & Exposition Authority Tax
Revenue Bonds, (AMBAC Insured), Series 1996 A,
6.000%, 06/15/07 1,000 1,077
State of Illinois, Sales Tax Revenue Refunding
Bonds, Series Q, 6.000%, 06/15/12 1,000 1,071
University of Illinois Board of Trustees, Auxiliary
Facility System Revenue Bonds, Series 1991,
5.750%, 04/01/22 1,000 1,019
----------
4,288
==========
Indiana 2.9%
Indiana, Local Public Improvement Bonds Bank,
Transportation Revenue Bonds, Series 1992 and
1992 D, 6.000%-6.750%, 07/01/10-02/01/14 1,300 1,456
Michigan 2.5%
Michigan State Environmental Protection General
Obligation Bonds, Series 1992, 6.250%, 11/01/12 1,100 1,222
New Hampshire 2.3%
New Hampshire Turnpike System, Refunding Revenue
Bonds, (FGIC Insured), Series 1991 A, 6.750%, 11/01/11 1,000 1,122
New Mexico 2.2%
Los Alamos County, Utility Revenue Bonds, Series
1994 A, 6.000%, 07/01/08 1,000 1,066
New York 17.3%
New York State Dorm Authority Mental Health
Services Revenue Bonds, Series 1997 B,
6.000%, 08/15/05 $ 1,850 $ 1,947
Triborough Bridge & Tunnel Authority, General
Purpose Revenue Bonds, Series Y, 6.000%, 01/01/12 1,500 1,613
New York City General Obligation Bonds, Series 1996
A, 7.000%, 08/01/07 1,000 1,123
New York City, Municipal Water Finance Authority
Water & Sewer Revenue Bonds, Series 1991 C,
7.375%, 06/15/13 1,000 1,119
State of New York Thruway Authority Revenue Bonds,
(AMBAC-TCRS Insured), Series 1996, 6.000%, 04/01/05 1,000 1,075
State of New York Thruway Authority Revenue Bonds,
(MBIA Insured), Series 1995 A, 5.500%, 04/01/15 1,000 1,003
State of New York Local Government Assistance
Corp., Sales Tax Revenue Bonds, Series 1992 C,
6.000%, 04/01/12 650 695
----------
8,575
==========
North Carolina 2.2%
North Carolina Municipal Power Agency, Catawaba
Electric Revenue Bonds, (AMBAC Insured), Series
1992, 6.000%, 01/01/08 1,000 1,081
North Dakota 2.2%
Mercer County Pollution Control Revenue Bonds,
Series 1991, 6.900%, 02/01/19 1,000 1,071
Ohio 4.2%
Ohio State Water Development Authority Pollution
Control Revenue Bonds, (MBIA Insured), Series 1995,
6.000%, 06/01/05 1,000 1,076
Cleveland Water and Sewer Refunding and Improvement
Revenue Bonds, (MBIA Insured), Series 1993 G,
Number 1, 5.500%, 01/01/21 1,000 1,006
----------
2,082
==========
Pennsylvania 5.2%
Pittsburgh, Pennsylvania General Obligation Bonds,
(AMBAC Insured), Series 1993 A, 5.500%, 09/01/14 1,525 1,559
State of Pennsylvania, Industrial Development
Authority Revenue Bonds, (AMBAC Insured),
5.500%, 01/01/14 1,000 1,003
----------
2,562
==========
South Carolina 7.7%
Piedmont Municipal Power Agency Electric Revenue
Bonds, (MBIA Insured), Series 1996 B, 5.250%,
01/01/11-01/01/13 2,000 1,976
Charleston County, Resource Recovery Revenue Bonds,
(Foster Wheeler Charleston Resource Recovery
Project), Series 1987 A, 9.250%, 01/01/10 1,750 1,839
----------
3,815
==========
Texas 8.1%
Houston, Texas, Water & Sewer System Revenue Bonds,
Series 1993 B, 5.000%, 12/01/18 2,000 1,873
Board of Regents of the University of Texas System,
Revenue Financing System Refunding Bonds,
Prefunded and Unrefunded Series 1991 B,
6.750%, 08/15/13 1,000 1,090
University of Texas Revenue Bonds, Series 1996,
5.250%, 08/15/07 1,000 1,033
----------
3,996
==========
</TABLE>
- ----
52 See accompanying notes
- ----
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000s) (000s)
=================================================================
<S> <C> <C>
Virginia 4.3%
Metropolitan Washington DC Airports
Authority System Revenue Bonds,
(MBIA Insured), Series 1992 A,
6.625%, 10/01/19 $ 1,000 $ 1,065
Virginia State Public School
Authority Revenue Bonds, (Local
Issuer Insured), Series 1995 A,
5.300%, 08/01/04 1,000 1,039
-----------
2,104
===========
Wyoming 1.2%
Lincoln County Pollution Industrial
Contol Revenue Bonds, Variable Rate
Demand Notes, 3.800%, 07/01/14 600 600
----------
Total Investments (a) 96.4% $ 47,711
(Cost $44,715)
Other Assets and Liabilities 3.6% 1,798
----------
Net Assets 100.0% $ 49,509
==========
Notes to Schedule of Investments
($ in thousands):
(a) At June 30, 1997, 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 tax cost over value. $ 3,002
Aggregate gross unrealized depreciation
for all investments in which there was
an excess of tax cost over value. (6)
----------
Unrealized appreciation-net $ 2,996
==========
</TABLE>
----
See accompanying notes 53
----
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights
A, B and C Classes
Selected Per Share Data Net Realized/ Dividends
for the Period Ended: Net Asset Value Net Unrealized Total Income From Net
Beginning Investment Gain (Loss) on From Investment Investment
Equity Income Fund of Period Income (Loss) Investments Operations Income
Class A --------------- -------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
01/20/97-06/30/97 $ 13.94 $ 0.15 $ 1.48 $ 1.63 $ (0.18)
Class B
01/20/97-06/30/97 13.94 0.11 1.48 1.59 (0.16)
Class C
01/20/97-06/30/97 13.94 0.11 1.48 1.59 (0.16)
Renaissance Fund
Class A
10/01/96-06/30/97 $ 16.08 $ 0.12(a) $ 3.90(a) $ 4.02 $ (0.12)
9/30/96 14.14 0.23 2.79 3.02 (0.23)
9/30/95 12.50 0.36 1.61 1.97 (0.33)
9/30/94 12.88 0.34 (0.17) 0.17 (0.33)
9/30/93 10.57 0.33 2.30 2.63 (0.32)
9/30/92 9.92 0.34 0.71 1.05 (0.40)
Class B
10/01/96-06/30/97 16.12 0.03(a) 3.92(a) 3.95 (0.05)
9/30/96 14.13 0.09 2.83 2.92 (0.11)
5/22/95-9/30/95 12.55 0.11 1.55 1.66 (0.08)
Class C
10/01/96-06/30/97 16.05 0.03(a) 3.90(a) 3.93 (0.04)
9/30/96 14.09 0.12 2.78 2.90 (0.13)
9/30/95 12.47 0.27 1.59 1.86 (0.24)
9/30/94 12.85 0.24 (0.16) 0.08 (0.24)
9/30/93 10.56 0.25 2.29 2.54 (0.25)
9/30/92 9.91 0.29 0.68 0.97 (0.32)
Value Fund
Class A
01/13/97-06/30/97 $ 13.17 $ 0.47 $ 1.26 $ 1.73 $ (0.10)
Class B
01/13/97-06/30/97 13.16 0.44 1.26 1.70 (0.06)
Class C
01/13/97-06/30/97 13.15 0.43 1.28 1.71 (0.06)
Capital Appreciation Fund
Class A
01/20/97-06/30/97 $ 19.31 $ 0.09 $ 1.76 $ 1.85 $ 0.00
Class B
01/20/97-06/30/97 19.31 0.01 1.78 1.79 0.00
Class C
01/20/97-06/30/97 19.31 0.02 1.77 1.79 0.00
Growth Fund
Class A
10/01/96-06/30/97 $ 26.58 $ 0.69 $ 3.27 $ 3.96 $ 0.00
9/30/96 25.73 0.06 3.72 3.78 0.00
9/30/95 22.01 0.12 4.79 4.91 0.00
9/30/94 23.64 0.12 0.12 0.24 0.00
9/30/93 20.76 0.09 3.53 3.62 0.00
9/30/92 20.63 0.14 1.38 1.52 (0.14)
Class B
10/01/96-06/30/97 25.46 0.35 3.29 3.64 0.00
9/30/96 24.94 0.07 3.52 3.45 0.00
5/23/95-9/30/95 22.63 (0.03) 2.34 2.31 0.00
Class C
10/01/96-06/30/97 25.46 0.45 3.18 3.63 0.00
9/30/96 24.94 (0.12) 3.57 3.45 0.00
9/30/95 21.52 (0.04) 4.65 4.61 0.00
9/30/94 23.32 (0.04) 0.11 0.07 0.00
9/30/93 20.64 (0.07) 3.49 3.42 0.00
9/30/92 20.54 (0.01) 1.37 1.36 (0.01)
Dividends in Distributions Distributions
Selected Per Share Data Excess of Net From Net in Excess of
for the Period Ended: Investment Realized Capital Net Realized
Income Gains Capital Gains
Equity Income Fund -------------- --------------- -------------
<S> <C> <C> <C>
Class A
01/20/97-06/30/97 $ 0.00 $ 0.00 $ 0.00
Class B
01/20/97-06/30/97 0.00 0.00 0.00
Class C
01/20/97-06/30/97 0.00 0.00 0.00
Renaissance Fund
Class A
10/01/96-06/30/97 $ 0.00 $ (2.25) $ 0.00
9/30/96 (0.07) (0.78) 0.00
9/30/95 0.00 0.00 0.00
9/30/94 0.00 (0.22) 0.00
9/30/93 0.00 0.00 0.00
9/30/92 0.00 0.00 0.00
Class B
10/01/96-06/30/97 0.00 (2.25) 0.00
9/30/96 (0.04) (0.78) 0.00
5/22/95-9/30/95 0.00 0.00 0.00
Class C
10/01/96-06/30/97 0.00 (2.25) 0.00
9/30/96 (0.03) (0.78) 0.00
9/30/95 0.00 0.00 0.00
9/30/94 0.00 (0.22) 0.00
9/30/93 0.00 0.00 0.00
9/30/92 0.00 0.00 0.00
Value Fund
Class A
01/13/97-06/30/97 $ 0.00 $ 0.00 $ 0.00
Class B
01/13/97-06/30/97 0.00 0.00 0.00
Class C
01/13/97-06/30/97 0.00 0.00 0.00
Capital Appreciation Fund
Class A
01/20/97-06/30/97 $ 0.00 $ 0.00 $ 0.00
Class B
01/20/97-06/30/97 0.00 0.00 0.00
Class C
01/20/97-06/30/97 0.00 0.00 0.00
Growth Fund
Class A
10/01/96-06/30/97 $ 0.00 $ (3.51) $ 0.00
9/30/96 0.00 (2.93) 0.00
9/30/95 0.00 (1.19) 0.00
9/30/94 0.00 (1.87) 0.00
9/30/93 0.00 (0.74) 0.00
9/30/92 0.00 (1.25) 0.00
Class B
10/01/96-06/30/97 0.00 (3.51) 0.00
9/30/96 0.00 (2.93) 0.00
5/23/95-9/30/95 0.00 0.00 0.00
Class C
10/01/96-06/30/97 0.00 (3.51) 0.00
9/30/96 0.00 (2.93) 0.00
9/30/95 0.00 (1.19) 0.00
9/30/94 0.00 (1.87) 0.00
9/30/93 0.00 (0.74) 0.00
9/30/92 0.00 (1.25) 0.00
</TABLE>
* Annualized
(a) Per share amounts based upon average number of shares outstanding during the
period.
- ----
54 See accompanying notes
- ----
<PAGE>
<TABLE>
<CAPTION>
Selected Per Share Data
for the Period Ended: Distributions Tax Basis Net Asset
from Return of Total Value End of
Equalization Capital Distributions Period Total Return
Equity Income Fund ------------- --------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Class A
01/20/97-06/30/97 $ 0.00 $ 0.00 $ (0.18) $ 15.39 11.77%
- ------------------------ ------------ --------- ------------- ------------ -------------
Class B
01/20/97-06/30/97 0.00 0.00 (0.16) 15.37 11.45
- ------------------------ ------------ --------- ------------- ------------ -------------
Class C
01/20/97-06/30/97 0.00 0.00 (0.16) 15.37 11.42
- ------------------------ ------------ --------- ------------- ------------ -------------
Renaissance Fund
Class A
10/01/96-06/30/97 $ 0.00 $ 0.00 $ (2.37) $ 17.73 27.53%
- ------------------------ ------------ --------- ------------- ------------ -------------
9/30/96 0.00 0.00 (1.08) 16.08 22.37
- ------------------------ ------------ --------- ------------- ------------ -------------
9/30/95 0.00 0.00 (0.33) 14.14 16.10
- ------------------------ ------------ --------- ------------- ------------ -------------
9/30/94 0.00 0.00 (0.55) 12.50 1.40
- ------------------------ ------------ --------- ------------- ------------ -------------
9/30/93 0.00 0.00 (0.32) 12.88 25.30
- ------------------------ ------------ --------- ------------- ------------ -------------
9/30/92 0.00 0.00 (0.40) 10.57 10.70
- ------------------------ ------------ --------- ------------- ------------ -------------
Class B
10/01/96-06/30/97 0.00 0.00 (2.30) 17.77 26.88
- ------------------------ ------------ --------- ------------- ------------ -------------
9/30/96 0.00 0.00 (0.93) 16.12 21.54
- ------------------------ ------------ --------- ------------- ------------ -------------
5/22/95-9/30/95 0.00 0.00 (0.08) 14.13 13.30
- ------------------------ ------------ --------- ------------- ------------ -------------
Class C
10/01/96-06/30/97 0.00 0.00 (2.29) 17.69 26.86
- ------------------------ ------------ --------- ------------- ------------ -------------
9/30/96 0.00 0.00 (0.94) 16.05 21.52
- ------------------------ ------------ --------- ------------- ------------ -------------
9/30/95 0.00 0.00 (0.24) 14.09 15.20
- ------------------------ ------------ --------- ------------- ------------ -------------
9/30/94 0.00 0.00 (0.46) 12.47 0.70
- ------------------------ ------------ --------- ------------- ------------ -------------
9/30/93 0.00 0.00 (0.25) 12.85 24.40
- ------------------------ ------------ --------- ------------- ------------ -------------
9/30/92 0.00 0.00 (0.32) 10.56 9.90
- ------------------------ ------------ --------- ------------- ------------ -------------
Value Fund
Class A
01/13/97-06/30/97 $ 0.00 $ 0.00 $ (0.10) $ 14.80 13.19%
- ------------------------ ------------ --------- ------------- ------------ -------------
Class B
01/13/97-06/30/97 0.00 0.00 (0.06) 14.80 12.93
- ------------------------ ------------ --------- ------------- ------------ -------------
Class C
01/13/97-06/30/97 0.00 0.00 (0.06) 14.80 13.02
- ------------------------ ------------ --------- ------------- ------------ -------------
Capital Appreciation Fund
Class A
01/20/97-06/30/97 $ 0.00 $ 0.00 $ 0.00 $ 21.16 9.58%
- ------------------------ ------------ --------- ------------- ------------ -------------
Class B
01/20/97-06/30/97 0.00 0.00 0.00 21.10 9.27
- ------------------------ ------------ --------- ------------- ------------ -------------
Class C
01/20/97-06/30/97 0.00 0.00 0.00 21.10 9.27
- ------------------------ ------------ --------- ------------- ------------ -------------
Growth Fund
Class A
10/01/96-06/30/97 $ 0.00 $ 0.00 $ (3.51) $ 27.03 15.93%
- ------------------------ ------------ --------- ------------- ------------ -------------
9/30/96 0.00 0.00 (2.93) 26.58 16.11
- ------------------------ ------------ --------- ------------- ------------ -------------
9/30/95 0.00 0.00 (1.19) 25.73 23.70
- ------------------------ ------------ --------- ------------- ------------ -------------
9/30/94 0.00 0.00 (1.87) 22.01 1.30
- ------------------------ ------------ --------- ------------- ------------ -------------
9/30/93 0.00 0.00 (0.74) 23.64 17.70
- ------------------------ ------------ --------- ------------- ------------ -------------
9/30/92 0.00 0.00 (1.39) 20.76 7.70
- ------------------------ ------------ --------- ------------- ------------ -------------
Class B
10/01/96-06/30/97 0.00 0.00 (3.51) 25.59 15.32
- ------------------------ ------------ --------- ------------- ------------ -------------
9/30/96 0.00 0.00 (2.93) 25.46 15.22
- ------------------------ ------------ --------- ------------- ------------ -------------
5/23/95-9/30/95 0.00 0.00 0.00 24.94 10.20
- ------------------------ ------------ --------- ------------- ------------ -------------
Class C
- ------------------------ ------------ --------- ------------- ------------ -------------
10/01/96-06/30/97 0.00 0.00 (3.51) 25.58 15.27
- ------------------------ ------------ --------- ------------- ------------ -------------
9/30/96 0.00 0.00 (2.93) 25.46 15.22
- ------------------------ ------------ --------- ------------- ------------ -------------
9/30/95 0.00 0.00 (1.19) 24.94 22.80
- ------------------------ ------------ --------- ------------- ------------ -------------
9/30/94 0.00 0.00 (1.87) 21.52 0.50
- ------------------------ ------------ --------- ------------- ------------ -------------
9/30/93 0.00 0.00 (0.74) 23.32 16.90
- ------------------------ ------------ --------- ------------- ------------ -------------
9/30/92 0.00 0.00 (1.26) 20.64 6.90
- ------------------------ ------------ --------- ------------- ------------ -------------
<CAPTION>
Ratio of Net
Ratio of Investment
Selected Per Share Data Expenses to Income to
For the Period Ended: Net Assets End Average Net Average Net Portfolio Average
of Period (000s) Assets Assets Turnover Rate Commision Rate
Equity Income Fund ---------------- ----------- ------------ ------------- --------------
<S> <C> <C> <C> <C> <C>
Class A
01/20/97-06/30/97 $ 1,756 1.13%* 2.85%* 45% $ 0.06
- ------------------------ ---------------- ----------- ------------ ------------- --------------
Class B
01/20/97-06/30/97 2,561 1.87* 2.11* 45 0.06
- ------------------------ ---------------- ----------- ------------ ------------- --------------
Class C
01/20/97-06/30/97 6,624 1.87* 2.15* 45 0.06
- ------------------------ ---------------- ----------- ------------ ------------- --------------
Renaissance Fund
Class A
10/01/96-06/30/97 $ 33,606 1.23%* 0.95%* 131% $ 0.06
- ------------------------ ---------------- ----------- ------------ ------------- --------------
9/30/96 20,631 1.25 1.60 203 0.06
- ------------------------ ---------------- ----------- ------------ ------------- --------------
9/30/95 12,933 1.30 2.90 177
- ------------------------ ---------------- ----------- ------------ -------------
9/30/94 14,942 1.30 2.70 175
- ------------------------ ---------------- ----------- ------------ -------------
9/30/93 6,328 1.30 2.90 168
- ------------------------ ---------------- ----------- ------------ -------------
9/30/92 2,593 1.40 3.30 149
- ------------------------ ---------------- ----------- ------------ -------------
Class B
10/01/96-06/30/97 37,253 1.97* 0.20* 131 $ 0.06
- ------------------------ ---------------- ----------- ------------ ------------- --------------
9/30/96 15,693 2.00 0.85 203 0.06
- ------------------------ ---------------- ----------- ------------ ------------- --------------
5/22/95-9/30/95 1,760 2.10* 2.20* 177
- ------------------------ ---------------- ----------- ------------ -------------
Class C
10/01/96-06/30/97 313,226 1.97* 0.21* 131 $ 0.06
- ------------------------ ---------------- ----------- ------------ ------------- --------------
9/30/96 230,058 2.00 0.85 203 0.06
- ------------------------ ---------------- ----------- ------------ ------------- --------------
9/30/95 174,316 2.10 2.10 177
- ------------------------ ---------------- ----------- ------------ -------------
9/30/94 178,892 2.00 2.00 175
- ------------------------ ---------------- ----------- ------------ -------------
9/30/93 94,247 2.10 2.20 168
- ------------------------ ---------------- ----------- ------------ -------------
9/30/92 45,101 2.10 2.70 149
- ------------------------ ---------------- ----------- ------------ -------------
Value Fund
Class A
01/13/97-06/30/97 $ 15,648 1.11%* 1.71%* 71% $ 0.06
- ------------------------ ---------------- ----------- ------------ ------------- --------------
Class B
01/13/97-06/30/97 25,433 1.86* 0.96* 71 0.06
- ------------------------ ---------------- ----------- ------------ ------------- --------------
Class C
01/13/97-06/30/97 64,110 1.86* 0.97* 71 0.06
- ------------------------ ---------------- ----------- ------------ ------------- --------------
Capital Appreciation Fund
Class A
01/20/97-06/30/97 $ 6,534 1.11%* 0.59%* 87% $ 0.06
- ------------------------ ---------------- ----------- ------------ ------------- --------------
Class B
01/20/97-06/30/97 3,022 1.85* (0.26)* 87 0.06
- ------------------------ ---------------- ----------- ------------ ------------- --------------
Class C
01/20/97-06/30/97 13,093 1.86* (0.23)* 87 0.06
- ------------------------ ---------------- ----------- ------------ ------------- --------------
Growth Fund
Class A
10/01/96-06/30/97 $ 147,276 1.11%* 0.13%* 94% $ 0.05
- ------------------------ ---------------- ----------- ------------ ------------- --------------
9/30/96 151,103 1.11 0.24 104 0.07
- ------------------------ ---------------- ----------- ------------ ------------- --------------
9/30/95 134,819 1.10 0.50 111
- ------------------------ ---------------- ----------- ------------ -------------
9/30/94 107,269 1.10 0.60 115
- ------------------------ ---------------- ----------- ------------ -------------
9/30/93 97,509 1.10 0.40 110
- ------------------------ ---------------- ----------- ------------ -------------
9/30/92 71,209 1.10 0.70 92
- ------------------------ ---------------- ----------- ------------ -------------
Class B
10/01/96-06/30/97 55,626 1.86* (0.62)* 94 0.05
- ------------------------ ---------------- ----------- ------------ ------------- --------------
9/30/96 37,256 1.86 (0.51) 104 0.07
- ------------------------ ---------------- ----------- ------------ ------------- --------------
5/23/95-9/30/95 7,671 1.90* (0.40)* 111
- ------------------------ ---------------- ----------- ------------ -------------
Class C
10/01/96-06/30/97 1,514,432 1.86* (0.61)* 94 0.05
- ------------------------ ---------------- ----------- ------------ ------------- --------------
9/30/96 1,450,216 1.86 (0.51) 104 0.07
- ------------------------ ---------------- ----------- ------------ ------------- --------------
9/30/95 1,290,152 1.90 (0.20) 111
- ------------------------ ---------------- ----------- ------------ -------------
9/30/94 1,085,427 1.90 (0.20) 115
- ------------------------ ---------------- ----------- ------------ -------------
9/30/93 1,077,490 1.90 (0.30) 110
- ------------------------ ---------------- ----------- ------------ -------------
9/30/92 853,121 1.90 (0.10) 92
- ------------------------ ---------------- ----------- ------------ -------------
</TABLE>
----
See accompanying notes 55
----
<PAGE>
Financial Highlights
A, B and C Classes (Cont.)
<TABLE>
<CAPTION>
Net Realized/
Selected Per Share Data Net Asset Value Net Unrealized Total Income
for the Period Ended: Beginning Investment Gain (Loss) on From Investment
of Period Income (Loss) Investments Operations
--------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
Mid Cap Growth Fund
Class A
01/13/97-06/30/97 $ 18.14 $ (0.04) $ 2.14 $ 2.10
- --------------------- --------------- ---------------- --------------- ----------------
Class B
01/13/97-06/30/97 18.14 (0.11) 2.14 2.03
- --------------------- --------------- ---------------- --------------- ----------------
Class C
01/13/97-06/30/97 18.14 (0.10) 2.14 2.04
- --------------------- --------------- ---------------- --------------- ----------------
Target Fund
Class A
10/01/96-06/30/97 $ 17.11 $ (0.04) (a) $ 1.82 (a) $ 1.78
- --------------------- --------------- ---------------- --------------- ----------------
9/30/96 16.40 (0.05) 2.54 2.49
- --------------------- --------------- ---------------- --------------- ----------------
9/30/95 13.13 (0.02) 3.45 3.43
- --------------------- --------------- ---------------- --------------- ----------------
9/30/94 12.72 (0.04) 0.57 0.53
- --------------------- --------------- ---------------- --------------- ----------------
12/17/92-9/30/93 10.00 (0.02) 2.74 2.72
- --------------------- --------------- ---------------- --------------- ----------------
Class B
10/01/96-06/30/97 16.58 (0.12) (a) 1.75 (a) 1.63
- --------------------- --------------- ---------------- --------------- ----------------
9/30/96 16.06 (0.09) 2.39 2.30
- --------------------- --------------- ---------------- --------------- ----------------
5/22/95-9/30/95 13.93 (0.05) 2.18 2.13
- --------------------- --------------- ---------------- --------------- ----------------
Class C
10/01/96-06/30/97 16.58 (0.12) (a) 1.74 (a) 1.62
- --------------------- --------------- ---------------- --------------- ----------------
9/30/96 16.05 (0.16) 2.47 2.31
- --------------------- --------------- ---------------- --------------- ----------------
9/30/95 12.95 (0.12) 3.38 3.26
- --------------------- --------------- ---------------- --------------- ----------------
9/30/94 12.65 (0.14) 0.56 0.42
- --------------------- --------------- ---------------- --------------- ----------------
12/17/92-9/30/93 10.00 (0.09) 2.74 2.65
- --------------------- --------------- ---------------- --------------- ----------------
Small Cap Value Fund
Class A
01/20/97-06/30/97 $ 14.02 $ 0.10 $ 1.63 $ 1.73
- --------------------- --------------- ---------------- --------------- ----------------
Class B
01/20/97-06/30/97 14.02 0.08 1.61 1.69
- --------------------- --------------- ---------------- --------------- ----------------
Class C
01/20/97-06/30/97 14.02 0.08 1.61 1.69
- --------------------- --------------- ---------------- --------------- ----------------
Opportunity Fund
Class A
10/01/96-06/30/97 $ 37.36 $ 0.00 $ (3.10) $ (3.10)
- --------------------- --------------- ---------------- --------------- ----------------
9/30/96 39.08 (0.11) 6.12 6.01
- --------------------- --------------- ---------------- --------------- ----------------
9/30/95 28.87 (0.11) 11.19 11.08
- --------------------- --------------- ---------------- --------------- ----------------
9/30/94 33.43 (0.17) (2.02) (2.19)
- --------------------- --------------- ---------------- --------------- ----------------
9/30/93 19.84 (0.15) 14.00 13.85
- --------------------- --------------- ---------------- --------------- ----------------
9/30/92 17.95 (0.04) 3.61 3.57
- --------------------- --------------- ---------------- --------------- ----------------
Class C
10/01/96-06/30/97 35.38 (0.04) (3.05) (3.09)
- --------------------- --------------- ---------------- --------------- ----------------
9/30/96 37.64 (0.35) 5.82 5.47
- --------------------- --------------- ---------------- --------------- ----------------
9/30/95 28.04 (0.34) 10.81 10.47
- --------------------- --------------- ---------------- --------------- ----------------
9/30/94 32.77 (0.38) (1.98) (2.36)
- --------------------- --------------- ---------------- --------------- ----------------
9/30/93 19.60 (0.34) 13.77 13.43
- --------------------- --------------- ---------------- --------------- ----------------
9/30/92 17.87 (0.18) 3.59 3.41
- --------------------- --------------- ---------------- --------------- ----------------
International Developed Fund
Class A
01/20/97-06/30/97 $ 11.71 $ 0.09 (a) $ 1.28 (a) $ 1.37
- --------------------- --------------- ---------------- --------------- ----------------
Class B
01/20/97-06/30/97 11.71 0.06 (a) 1.29 (a) 1.35
- --------------------- --------------- ---------------- --------------- ----------------
Class C
01/20/97-06/30/97 11.71 0.06 (a) 1.29 (a) 1.35
- --------------------- --------------- ---------------- --------------- ----------------
<CAPTION>
Dividends Dividends in Distributions Distributions
From Net Excess of Net From Net in Excess of
Selected Per Share Data Investment Investment Realized Capital Net Realized
for the Period Ended Income Income Gains Capital Gains
-------------- --------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Mid Cap Growth Fund
Class A
01/13/97-06/30/97 $ 0.00 $ 0.00 $ 0.00 $ 0.00
- --------------------- -------------- --------------- ---------------- ---------------
Class B
01/13/97-06/30/97 0.00 0.00 0.00 0.00
- --------------------- -------------- --------------- ---------------- ---------------
Class C
01/13/97-06/30/97 0.00 0.00 0.00 0.00
- --------------------- -------------- --------------- ---------------- ---------------
Target Fund
Class A
10/01/96-06/30/97 $ 0.00 $ 0.00 $ (2.07) $ 0.00
- --------------------- -------------- --------------- ---------------- ---------------
9/30/96 0.00 0.00 (1.78) 0.00
- --------------------- -------------- --------------- ---------------- ---------------
9/30/95 0.00 0.00 (0.16) 0.00
- --------------------- -------------- --------------- ---------------- ---------------
9/30/94 0.00 0.00 (0.12) 0.00
- --------------------- -------------- --------------- ---------------- ---------------
12/17/92-9/30/93 0.00 0.00 0.00 0.00
- --------------------- -------------- --------------- ---------------- ---------------
Class B
10/01/96-06/30/97 0.00 0.00 (2.07) 0.00
- --------------------- -------------- --------------- ---------------- ---------------
9/30/96 0.00 0.00 (1.78) 0.00
- --------------------- -------------- --------------- ---------------- ---------------
5/22/95-9/30/95 0.00 0.00 0.00 0.00
- --------------------- -------------- --------------- ---------------- ---------------
Class C
10/01/96-06/30/97 0.00 0.00 (2.07) 0.00
- --------------------- -------------- --------------- ---------------- ---------------
9/30/96 0.00 0.00 (1.78) 0.00
- --------------------- -------------- --------------- ---------------- ---------------
9/30/95 0.00 0.00 (0.16) 0.00
- --------------------- -------------- --------------- ---------------- ---------------
9/30/94 0.00 0.00 (0.12) 0.00
- --------------------- -------------- --------------- ---------------- ---------------
12/17/92-9/30/93 0.00 0.00 0.00 0.00
- --------------------- -------------- --------------- ---------------- ---------------
Small Cap Value Fund
Class A
01/20/97-06/30/97 $ 0.00 $ 0.00 $ 0.00 $ 0.00
- --------------------- -------------- --------------- ---------------- ---------------
Class B
01/20/97-06/30/97 0.00 0.00 0.00 0.00
- --------------------- -------------- --------------- ---------------- ---------------
Class C
01/20/97-06/30/97 0.00 0.00 0.00 0.00
- --------------------- -------------- --------------- ---------------- ---------------
Opportunity Fund
Class A
10/01/96-06/30/97 $ 0.00 $ 0.00 $ (4.91) $ 0.00
- --------------------- -------------- --------------- ---------------- ---------------
9/30/96 0.00 0.00 (7.73) 0.00
- --------------------- -------------- --------------- ---------------- ---------------
9/30/95 0.00 0.00 (0.87) 0.00
- --------------------- -------------- --------------- ---------------- ---------------
9/30/94 0.00 0.00 (2.26) 0.00
- --------------------- -------------- --------------- ---------------- ---------------
9/30/93 0.00 0.00 (0.26) 0.00
- --------------------- -------------- --------------- ---------------- ---------------
9/30/92 0.00 0.00 (1.68) 0.00
- --------------------- -------------- --------------- ---------------- ---------------
Class C
10/01/96-06/30/97 0.00 0.00 (4.91) 0.00
- --------------------- -------------- --------------- ---------------- ---------------
9/30/96 0.00 0.00 (7.73) 0.00
- --------------------- -------------- --------------- ---------------- ---------------
9/30/95 0.00 0.00 (0.87) 0.00
- --------------------- -------------- --------------- ---------------- ---------------
9/30/94 0.00 0.00 (2.26) 0.00
- --------------------- -------------- --------------- ---------------- ---------------
9/30/93 0.00 0.00 (0.26) 0.00
- --------------------- -------------- --------------- ---------------- ---------------
9/30/92 0.00 0.00 (1.68) 0.00
- --------------------- -------------- --------------- ---------------- ---------------
International Developed Fund
Class A
01/20/97-06/30/97 $ 0.00 $ 0.00 $ 0.00 $ 0.00
- --------------------- -------------- --------------- ---------------- ---------------
Class B
01/20/97-06/30/97 0.00 0.00 0.00 0.00
- --------------------- -------------- --------------- ---------------- ---------------
Class C
01/20/97-06/30/97 0.00 0.00 0.00 0.00
- --------------------- -------------- --------------- ---------------- ---------------
</TABLE>
*Annualized
(a)Per share amounts based upon average number of shares outstanding during the
period.
- ----
56 See accompanying notes
- ----
<PAGE>
<TABLE>
<CAPTION>
Selected Per Share Data Distributions Tax Basis Net Asset
for the Period Ended: from Return of Total Value End of
Equalization Capital Distributions Period Total Return
--------------- -------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
Mid Cap Growth Fund
Class A
01/13/97-06/30/97 $ 0.00 $ 0.00 $ 0.00 $ 20.24 11.58%
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
Class B
01/13/97-06/30/97 0.00 0.00 0.00 20.17 11.19
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
Class C
01/13/97-06/30/97 0.00 0.00 0.00 20.18 11.25
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
Target Fund
Class A
10/01/96-06/30/97 $ 0.00 $ 0.00 $ (2.07) $ 16.82 11.19%
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
9/30/96 0.00 0.00 (1.78) 17.11 16.50
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
9/30/95 0.00 0.00 (0.16) 16.40 26.50
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
9/30/94 0.00 0.00 (0.12) 13.13 4.20
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
12/17/92-9/30/93 0.00 0.00 0.00 12.72 27.20
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
Class B
10/01/96-06/30/97 0.00 0.00 (2.07) 16.14 10.58
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
9/30/96 0.00 0.00 (1.78) 16.58 15.58
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
5/22/95-9/30/95 0.00 0.00 0.00 16.06 15.30
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
Class C
10/01/96-06/30/97 0.00 0.00 (2.07) 16.13 10.52
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
9/30/96 0.00 0.00 (1.78) 16.58 15.66
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
9/30/95 0.00 0.00 (0.16) 16.05 25.60
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
9/30/94 0.00 0.00 (0.12) 12.95 3.40
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
12/17/92-9/30/93 0.00 0.00 0.00 12.65 26.50
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
Small Cap Value Fund
Class A
01/20/97-06/30/97 $ 0.00 $ 0.00 $ 0.00 $ 15.75 12.34%
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
Class B
01/20/97-06/30/97 0.00 0.00 0.00 15.71 12.05
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
Class C
01/20/97-06/30/97 0.00 0.00 0.00 15.71 12.05
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
Opportunity Fund
Class A
10/01/96-06/30/97 $ 0.00 $ 0.00 $ (4.91) $ 29.35 (8.87)%
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
9/30/96 0.00 0.00 (7.73) 37.36 18.35
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
9/30/95 0.00 0.00 (0.87) 39.08 39.70
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
9/30/94 0.00 (0.11) (2.37) 28.87 (6.70)
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
9/30/93 0.00 0.00 (0.26) 33.43 70.40
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
9/30/92 0.00 0.00 (1.68) 19.84 21.60
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
Class C
10/01/96-06/30/97 0.00 0.00 (4.91) 27.38 (9.40)
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
9/30/96 0.00 0.00 (7.73) 35.38 17.47
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
9/30/95 0.00 0.00 (0.87) 37.64 38.60
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
9/30/94 0.00 (0.11) (2.37) 28.04 (7.40)
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
9/30/93 0.00 0.00 (0.26) 32.77 69.10
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
9/30/92 0.00 0.00 (1.68) 19.60 20.80
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
International Developed Fund
Class A
01/20/97-06/30/97 $ 0.00 $ 0.00 $ 0.00 $ 13.08 11.70%
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
Class B
01/20/97-06/30/97 0.00 0.00 0.00 13.06 11.53
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
Class C
01/20/97-06/30/97 0.00 0.00 0.00 13.06 11.53
- ---------------------------- --------------- -------------- --------------- -------------- ---------------
<CAPTION>
Ratio of Net
Ratio of Investment
Selected Per Share Data Expenses to Income to
for the Period Ended: Net Assets End Average Net Average Net Portfolio Average
of Period (000s) Assets Assets Turnover Rate Commision Rate
---------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Mid Cap Growth Fund
Class A
01/13/97-06/30/97 $ 12,184 1.11%* 0.17%* 82% $ 0.06
- ---------------------------- ---------------- -------------- -------------- -------------- --------------
Class B
01/13/97-06/30/97 28,259 1.85* (0.58)* 82 0.06
- ---------------------------- ---------------- -------------- -------------- -------------- --------------
Class C
01/13/97-06/30/97 53,686 1.86* (0.58)* 82 0.06
- ---------------------------- ---------------- -------------- -------------- -------------- --------------
Target Fund
Class A
10/01/96-06/30/97 $ 150,689 1.20%* (0.31)%* 145% $ 0.04
- ---------------------------- ---------------- -------------- -------------- -------------- --------------
9/30/96 156,027 1.18 (0.34) 141 0.06
- ---------------------------- ---------------- -------------- -------------- -------------- --------------
9/30/95 121,915 1.20 (0.10) 128
- ---------------------------- ---------------- -------------- -------------- --------------
9/30/94 90,527 1.20 (0.30) 104
- ---------------------------- ---------------- -------------- -------------- --------------
12/17/92-9/30/93 48,787 1.30* (0.30)* 76
- ---------------------------- ---------------- -------------- -------------- --------------
Class B
10/01/96-06/30/97 67,531 1.94* (1.05)* 145 0.04
- ---------------------------- ---------------- -------------- -------------- -------------- --------------
9/30/96 49,851 1.93 (1.09) 141 0.06
- ---------------------------- ---------------- -------------- -------------- -------------- --------------
5/22/95-9/30/95 7,554 2.00* (0.90)* 128
- ---------------------------- ---------------- -------------- -------------- --------------
Class C
10/01/96-06/30/97 969,317 1.94* (1.06)* 145 0.04
- ---------------------------- ---------------- -------------- -------------- -------------- --------------
9/30/96 974,948 1.93 (1.09) 141 0.06
- ---------------------------- ---------------- -------------- -------------- -------------- --------------
9/30/95 780,355 2.00 (0.90) 128
- ---------------------------- ---------------- -------------- -------------- --------------
9/30/94 556,043 2.00 (1.10) 104
- ---------------------------- ---------------- -------------- -------------- --------------
12/17/92-9/30/93 298,238 2.00* (1.00)* 76
- ---------------------------- ---------------- -------------- -------------- --------------
Small Cap Value Fund
Class A
01/20/97-06/30/97 $ 6,563 1.30%* 1.94%* 48% $ 0.06
- ---------------------------- ---------------- -------------- -------------- -------------- --------------
Class B
01/20/97-06/30/97 11,077 2.04* 1.23* 48 0.06
- ---------------------------- ---------------- -------------- -------------- -------------- --------------
Class C
01/20/97-06/30/97 20,637 2.05* 1.13* 48 0.06
- ---------------------------- ---------------- -------------- -------------- -------------- --------------
Opportunity Fund
Class A
10/01/96-06/30/97 $ 213,484 1.25%* (0.12)%* 69% $ 0.06
- ---------------------------- ---------------- -------------- -------------- -------------- --------------
9/30/96 134,859 1.13 (0.32) 91 0.07
- ---------------------------- ---------------- -------------- -------------- -------------- --------------
9/30/95 120,830 1.20 (0.40) 102
- ---------------------------- ---------------- -------------- -------------- --------------
9/30/94 95,261 1.10 (0.60) 78
- ---------------------------- ---------------- -------------- -------------- --------------
9/30/93 106,666 1.20 (0.60) 105
- ---------------------------- ---------------- -------------- -------------- --------------
9/30/92 22,454 1.30 (0.20) 94
- ---------------------------- ---------------- -------------- -------------- --------------
Class C
10/01/96-06/30/97 629,446 1.97* (0.95)* 69 $ 0.06
- ---------------------------- ---------------- -------------- -------------- -------------- --------------
9/30/96 800,250 1.88 (1.07) 91 0.07
- ---------------------------- ---------------- -------------- -------------- -------------- --------------
9/30/95 715,191 1.90 (1.10) 102
- ---------------------------- ---------------- -------------- -------------- --------------
9/30/94 553,460 1.90 (1.40) 78
- ---------------------------- ---------------- -------------- -------------- --------------
9/30/93 618,193 2.00 (1.30) 105
- ---------------------------- ---------------- -------------- -------------- --------------
9/30/92 179,081 2.00 (1.00) 94
- ---------------------------- ---------------- -------------- -------------- --------------
International Developed Fund
Class A
01/20/97-06/30/97 $ 318 1.54%* 1.74%* 77% $ 0.03
- ---------------------------- ---------------- -------------- -------------- -------------- --------------
Class B
01/20/97-06/30/97 1,123 2.28* 1.08* 77 0.03
- ---------------------------- ---------------- -------------- -------------- -------------- --------------
Class C
01/20/97-06/30/97 2,526 2.28* 1.07* 77 0.03
- ---------------------------- ---------------- -------------- -------------- -------------- --------------
</TABLE>
----
See accompanying notes 57
----
<PAGE>
Financial Highlights
A, B and C Classes (Cont.)
<TABLE>
<CAPTION>
Net Realized/ Dividends
Selected Per Share Data Net Asset Value Net Unrealized Total Income From Net
for the Period Ended: Beginning Investment Gain (Loss) on From Investment Investment
of Period Income (Loss) Investments Operations Income
---------------- -------------- --------------- ---------------- --------------
<S> <C> <C> <C> <C> <C>
International Fund
Class A
10/01/96-06/30/97 $ 13.03 $ 0.29 $ 1.33 $ 1.62 $ 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/96 12.19 0.07 0.77 0.84 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/95 12.92 0.07 (0.56) (0.49) 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/94 12.17 0.04 0.94 0.98 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/93 10.04 0.07 2.80 2.87 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/92 10.54 0.05 (0.37) (0.32) 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
Class B
10/01/96-06/30/97 12.48 0.16 1.31 1.47 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/96 11.75 0.00 (a) 0.73 (a) 0.73 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
5/22/95-9/30/95 11.30 0.00 0.45 0.45 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
Class C
10/01/96--06/30/97 12.47 0.18 1.29 1.47 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/96 11.75 (0.05) 0.77 0.72 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/95 12.56 (0.02) (0.55) (0.57) 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/94 11.92 (0.06) 0.93 0.87 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/93 9.92 (0.01) 2.75 2.74 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/92 10.49 (0.06) (0.33) (0.39) 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
Emerging Markets Fund
Class A
01/20/97-06/30/97 $ 12.82 $ 0.09 (a) $ 1.03 (a) $ 1.12 $ 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
Class B
01/20/97-06/30/97 12.82 0.03 (a) 1.04 (a) 1.07 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
Class C
01/20/97-06/30/97 12.82 0.04 (a) 1.03 (a) 1.07 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
Innovation Fund
Class A
01/20/97-06/30/97 $ 17.26 $ 0.07 $ 0.36 $ 0.43 $ 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/96 14.74 (0.07) 2.94 2.87 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
12/22/94-9/30/95 10.00 (0.06) 4.80 4.74 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
Class B
10/01/96-06/30/97 17.04 (0.03) 0.35 0.32 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/96 14.66 (0.11) 2.84 2.73 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
5/22/95-9/30/95 11.81 (0.08) 2.93 2.85 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
Class C
10/01/96-06/30/97 17.04 (0.02) 0.33 0.31 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/96 14.65 (0.15) 2.89 2.74 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
12/22/94-9/30/95 10.00 (0.13) 4.78 4.65 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
Precious Metals Fund
Class A
10/01/96-06/30/97 $ 12.12 $ 0.17 $ (3.29) $ (3.12) $ 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/96 12.33 0.03 (0.24) (0.21) 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/95 14.14 0.07 (1.88) (1.81) 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/94 10.32 0.08 3.74 3.82 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/93 7.54 0.06 2.72 2.78 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/92 7.51 (0.01) 0.04 0.03 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
Class B
10/01/96-06/30/97 11.62 0.00 (3.03) (3.03) 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/96 11.90 (0.03) (0.25) (0.28) 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
6/15/95-9/30/95 11.61 (0.01) 0.30 0.29 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
Class C
10/01/96-06/30/97 11.62 (0.03) (2.99) (3.02) 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/96 11.90 (0.07) (0.21) (0.28) 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/95 13.75 (0.02) (1.83) (1.85) 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/94 10.11 (0.02) 3.66 3.64 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/93 7.44 (0.02) 2.69 2.67 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
9/30/92 7.46 (0.06) 0.04 (0.02) 0.00
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
<CAPTION>
Dividends in Distributions Distributions
Selected Per Share Data Excess of Net From Net in Excess of
for the Period Ended Investment Realized Capital Net Realized
Income Gains Capital Gains
---------------- ------------------ ----------------
<S> <C> <C> <C>
International Fund
Class A
10/01/96-06/30/97 $ 0.00 $ (0.39) $ 0.00
- ----------------------------- ---------------- ------------------ ----------------
9/30/96 0.00 0.00 0.00
- ----------------------------- ---------------- ------------------ ----------------
9/30/95 0.00 (0.24) 0.00
- ----------------------------- ---------------- ------------------ ----------------
9/30/94 0.00 (0.23) 0.00
- ----------------------------- ---------------- ------------------ ----------------
9/30/93 0.00 (0.74) 0.00
- ----------------------------- ---------------- ------------------ ----------------
9/30/92 0.00 (0.18) 0.00
- ----------------------------- ---------------- ------------------ ----------------
Class B
10/01/96-06/30/97 0.00 (0.39) 0.00
- ----------------------------- ---------------- ------------------ ----------------
9/30/96 0.00 0.00 0.00
- ----------------------------- ---------------- ------------------ ----------------
5/22/95-9/30/95 0.00 0.00 0.00
- ----------------------------- ---------------- ------------------ ----------------
Class C
10/01/96--06/30/97 0.00 (0.39) 0.00
- ----------------------------- ---------------- ------------------ ----------------
9/30/96 0.00 0.00 0.00
- ----------------------------- ---------------- ------------------ ----------------
9/30/95 0.00 (0.24) 0.00
- ----------------------------- ---------------- ------------------ ----------------
9/30/94 0.00 (0.23) 0.00
- ----------------------------- ---------------- ------------------ ----------------
9/30/93 0.00 (0.74) 0.00
- ----------------------------- ---------------- ------------------ ----------------
9/30/92 0.00 (0.18) 0.00
- ----------------------------- ---------------- ------------------ ----------------
Emerging Markets Fund
Class A
01/20/97-06/30/97 $ 0.00 $ 0.00 $ 0.00
- ----------------------------- ---------------- ------------------ ----------------
Class B
01/20/97-06/30/97 0.00 0.00 0.00
- ----------------------------- ---------------- ------------------ ----------------
Class C
01/20/97-06/30/97 0.00 0.00 0.00
- ----------------------------- ---------------- ------------------ ----------------
Innovation Fund
Class A
01/20/97-06/30/97 $ 0.00 $ (0.26) $ 0.00
- ----------------------------- ---------------- ------------------ ----------------
9/30/96 0.00 (0.35) 0.00
- ----------------------------- ---------------- ------------------ ----------------
12/22/94-9/30/95 0.00 0.00 0.00
- ----------------------------- ---------------- ------------------ ----------------
Class B
10/01/96-06/30/97 0.00 (0.26) 0.00
- ----------------------------- ---------------- ------------------ ----------------
9/30/96 0.00 (0.35) 0.00
- ----------------------------- ---------------- ------------------ ----------------
5/22/95-9/30/95 0.00 0.00 0.00
- ----------------------------- ---------------- ------------------ ----------------
Class C
10/01/96-06/30/97 0.00 (0.26) 0.00
- ----------------------------- ---------------- ------------------ ----------------
9/30/96 0.00 (0.35) 0.00
- ----------------------------- ---------------- ------------------ ----------------
12/22/94-9/30/95 0.00 0.00 0.00
- ----------------------------- ---------------- ------------------ ----------------
Precious Metals Fund
Class A
10/01/96-06/30/97 $ 0.00 $ 0.00 $ (0.17)
- ----------------------------- ---------------- ------------------ ----------------
9/30/96 0.00 0.00 0.00
- ----------------------------- ---------------- ------------------ ----------------
9/30/95 0.00 0.00 0.00
- ----------------------------- ---------------- ------------------ ----------------
9/30/94 0.00 0.00 0.00
- ----------------------------- ---------------- ------------------ ----------------
9/30/93 0.00 0.00 0.00
- ----------------------------- ---------------- ------------------ ----------------
9/30/92 0.00 0.00 0.00
- ----------------------------- ---------------- ------------------ ----------------
Class B
10/01/96-06/30/97 0.00 0.00 (0.17)
- ----------------------------- ---------------- ------------------ ----------------
9/30/96 0.00 0.00 0.00
- ----------------------------- ---------------- ------------------ ----------------
6/15/95-9/30/95 0.00 0.00 0.00
- ----------------------------- ---------------- ------------------ ----------------
Class C
10/01/96-06/30/97 0.00 0.00 (0.17)
- ----------------------------- ---------------- ------------------ ----------------
9/30/96 0.00 0.00 0.00
- ----------------------------- ---------------- ------------------ ----------------
9/30/95 0.00 0.00 0.00
- ----------------------------- ---------------- ------------------ ----------------
9/30/94 0.00 0.00 0.00
- ----------------------------- ---------------- ------------------ ----------------
9/30/93 0.00 0.00 0.00
- ----------------------------- ---------------- ------------------ ----------------
9/30/92 0.00 0.00 0.00
- ----------------------------- ---------------- ------------------ ----------------
</TABLE>
*Annualized
(a) Per share amounts based upon average number of shares outstanding during
the period.
- ----
58 See accompanying notes
- ----
<PAGE>
<TABLE>
<CAPTION>
Distributions Tax Basis Net Asset
Selected Per Share Date from Return of Total Value End of
for the Period Ended Equalization Capital Distributions Period Total Return
----------------- -------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
International Fund
Class A
10/01/96-06/30/97 $ 0.00 $ 0.00 $ (0.39) $ 14.26 12.82%
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/96 0.00 0.00 0.00 13.03 6.89
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/95 0.00 0.00 (0.24) 12.19 (3.70)
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/94 0.00 0.00 (0.23) 12.92 8.20
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/93 0.00 0.00 (0.74) 12.17 30.40
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/92 0.00 0.00 (0.18) 10.04 (3.10)
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
Class B
10/01/96-06/30/97 0.00 0.00 (0.39) 13.56 12.17
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/96 0.00 0.00 0.00 12.48 6.21
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
5/22/95-9/30/95 0.00 0.00 0.00 11.75 4.00
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
Class C
10/01/96--06/30/97 0.00 0.00 (0.39) 13.55 12.18
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/96 0.00 0.00 0.00 12.47 6.13
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/95 0.00 0.00 (0.24) 11.75 (4.50)
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/94 0.00 0.00 (0.23) 12.56 7.40
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/93 0.00 0.00 (0.74) 11.92 29.40
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/92 0.00 0.00 (0.18) 9.92 (3.80)
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
Emerging Markets Fund
Class A
01/20/97-06/30/97 $ 0.00 $ 0.00 $ 0.00 $ 13.94 8.74%
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
Class B
01/20/97-06/30/97 0.00 0.00 0.00 13.89 8.35
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
Class C
01/20/97-06/30/97 0.00 0.00 0.00 13.89 8.35
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
Innovation Fund
Class A
01/20/97-06/30/97 $ 0.00 $ 0.00 $ (0.26) $ 17.43 2.41%
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/96 0.00 0.00 (0.35) 17.26 19.86
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
12/22/94-9/30/95 0.00 0.00 0.00 14.74 47.40
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
Class B
10/01/96-06/30/97 0.00 0.00 (0.26) 17.10 1.79
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/96 0.00 0.00 (0.35) 17.04 18.99
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
5/22/95-9/30/95 0.00 0.00 0.00 14.66 24.10
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
Class C
10/01/96-06/30/97 0.00 0.00 (0.26) 17.09 1.73
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/96 0.00 0.00 (0.35) 17.04 19.08
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
12/22/94-9/30/95 0.00 0.00 0.00 14.65 46.50
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
Precious Metals Fund
Class A
10/01/96-06/30/97 $ 0.00 $ 0.00 $ (0.17) $ 8.83 (26.05)%
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/96 0.00 0.00 0.00 12.12 (1.70)
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/95 0.00 0.00 0.00 12.33 (12.80)
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/94 0.00 0.00 0.00 14.14 37.00
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/93 0.00 0.00 0.00 10.32 36.90
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/92 0.00 0.00 0.00 7.54 0.40
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
Class B
10/01/96-06/30/97 0.00 0.00 (0.17) 8.42 (26.40)
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/96 0.00 0.00 0.00 11.62 (2.35)
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
6/15/95-9/30/95 0.00 0.00 0.00 11.90 2.50
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
Class C
10/01/96-06/30/97 0.00 0.00 (0.17) 8.43 (26.31)
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/96 0.00 0.00 0.00 11.62 (2.35)
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/95 0.00 0.00 0.00 11.90 (13.50)
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/94 0.00 0.00 0.00 13.75 36.00
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/93 0.00 0.00 0.00 10.11 35.90
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
9/30/92 0.00 0.00 0.00 7.44 (0.30)
- ----------------------------- ----------------- -------------- ---------------- --------------- ---------------
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses to Income to
Selected Per Share Data Net Assets End Average Net Average Net Portfolio Average
for the Period Ended: of Period (000s) Assets Assets Turnover Rate Commision Rate
----------------- ------------- --------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
International Fund
Class A
10/01/96-06/30/97 $ 18,287 1.51%* 0.58%* 59% $ 0.00
- ----------------------------- ----------------- ------------- --------------- --------------- --------------
9/30/96 20,056 1.41 0.49 110 0.00
- ----------------------------- ----------------- ------------- --------------- --------------- --------------
9/30/95 17,951 1.50 0.60 170
- ----------------------------- ----------------- ------------- --------------- ---------------
9/30/94 23,289 1.40 0.30 55
- ----------------------------- ----------------- ------------- --------------- ---------------
9/30/93 11,992 1.40 0.60 68
- ----------------------------- ----------------- ------------- --------------- ---------------
9/30/92 471 1.90 0.50 160
- ----------------------------- ----------------- ------------- --------------- ---------------
Class B
10/01/96-06/30/97 8,676 2.26* 0.18* 59 0.00
- ----------------------------- ----------------- ------------- --------------- --------------- --------------
9/30/96 5,893 2.16 (0.26) 110 0.00
- ----------------------------- ----------------- ------------- --------------- --------------- --------------
5/22/95-9/30/95 503 2.30* (0.10)* 170
- ----------------------------- ----------------- ------------- --------------- ---------------
Class C
10/01/96--06/30/97 168,446 2.25* (0.25)* 59 0.00
- ----------------------------- ----------------- ------------- --------------- --------------- --------------
9/30/96 203,544 2.16 (0.26) 110 0.00
- ----------------------------- ----------------- ------------- --------------- --------------- --------------
9/30/95 215,349 2.20 (0.20) 170
- ----------------------------- ----------------- ------------- --------------- ---------------
9/30/94 294,492 2.20 (0.50) 55
- ----------------------------- ----------------- ------------- --------------- ---------------
9/30/93 147,194 2.20 (0.10) 68
- ----------------------------- ----------------- ------------- --------------- ---------------
9/30/92 28,299 2.60 (0.60) 160
- ----------------------------- ----------------- ------------- --------------- ---------------
Emerging Markets Fund
Class A
01/20/97-06/30/97 $ 214 1.89%* 1.52%* 74% $ 0.00
- ----------------------------- ----------------- ------------- --------------- --------------- --------------
Class B
01/20/97-06/30/97 308 2.62* 0.47* 74 0.00
- ----------------------------- ----------------- ------------- --------------- --------------- --------------
Class C
01/20/97-06/30/97 1,833 2.63* 0.66* 74 0.00
- ----------------------------- ----------------- ------------- --------------- --------------- --------------
Innovation Fund
Class A
01/20/97-06/30/97 $ 56,215 1.28%* (0.68)%* 80% $ 0.05
- ----------------------------- ----------------- ------------- --------------- --------------- --------------
9/30/96 50,067 1.31 (0.61) 123 0.06
- ----------------------------- ----------------- ------------- --------------- --------------- --------------
12/22/94-9/30/95 28,239 1.40* (0.60)* 86
- ----------------------------- ----------------- ------------- --------------- ---------------
Class B
10/01/96-06/30/97 51,472 2.03* (1.43)* 80 0.05
- ----------------------------- ----------------- ------------- --------------- --------------- --------------
9/30/96 33,778 2.06 (1.36) 123 0.06
- ----------------------------- ----------------- ------------- --------------- --------------- --------------
5/22/95-9/30/95 6,509 2.30* (1.70)* 86
- ----------------------------- ----------------- ------------- --------------- ---------------
Class C
10/01/96-06/30/97 162,889 2.03* (1.43)* 80 0.05
- ----------------------------- ----------------- ------------- --------------- --------------- --------------
9/30/96 137,752 2.06 (1.36) 123 0.06
- ----------------------------- ----------------- ------------- --------------- --------------- --------------
12/22/94-9/30/95 63,952 2.20* (1.40)* 86
- ----------------------------- ----------------- ------------- --------------- ---------------
Precious Metals Fund
Class A
10/01/96-06/30/97 $4,016 1.37%* 0.33%* 46% $ 0.03
- ----------------------------- ----------------- ------------- --------------- --------------- --------------
9/30/96 6,245 1.32 0.19 35 0.02
- ----------------------------- ----------------- ------------- --------------- --------------- --------------
9/30/95 7,670 1.40 0.60 9
- ----------------------------- ----------------- ------------- --------------- ---------------
9/30/94 11,229 1.30 0.60 11
- ----------------------------- ----------------- ------------- --------------- ---------------
9/30/93 3,425 1.40 0.60 10
- ----------------------------- ----------------- ------------- --------------- ---------------
9/30/92 668 1.90 (0.10) 30
- ----------------------------- ----------------- ------------- --------------- ---------------
Class B
10/01/96-06/30/97 4,248 2.13%* (0.33)* 46 0.03
- ----------------------------- ----------------- ------------- --------------- --------------- --------------
9/30/96 2,218 2.07 (0.56) 35 0.02
- ----------------------------- ----------------- ------------- --------------- --------------- --------------
6/15/95-9/30/95 251 2.20* (0.20)* 9
- ----------------------------- ----------------- ------------- --------------- ---------------
Class C
10/01/96-06/30/97 25,113 2.15* (0.41)* 46 0.03
- ----------------------------- ----------------- ------------- --------------- --------------- --------------
9/30/96 37,609 2.07 (0.56) 35 0.02
- ----------------------------- ----------------- ------------- --------------- --------------- --------------
9/30/95 42,341 2.20 (0.20) 9
- ----------------------------- ----------------- ------------- --------------- ---------------
9/30/94 62,825 2.10 (0.20) 11
- ----------------------------- ----------------- ------------- --------------- ---------------
9/30/93 23,884 2.20 (0.20) 10
- ----------------------------- ----------------- ------------- --------------- ---------------
9/30/92 6,633 2.60 (0.80) 30
- ----------------------------- ----------------- ------------- --------------- ---------------
</TABLE>
*Annualized
(a) Per share amounts based upon average number of shares outstanding during
the period.
----
See accompanying notes 59
----
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights
A, B and C Classes (Cont.)
Net Realized/ Dividends in
Selected Per Share Data Net Asset Value Net Unrealized Total Income Excess of Net
for the Period Ended: Beginning Investment Gain (Loss) on From Investment Investment
of Period Income (Loss) Investments Operations Income
--------------- ------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Balanced Fund
Class A
01/20/97-06/30/97 $ 10.77 $ 0.21 $ 0.58 $ 0.79 $ (0.16)
- -------------------------- --------------- ------------- ------------- -------------- --------------
Class B
01/20/97-06/30/97 10.77 0.19 0.58 0.77 (0.15)
- -------------------------- --------------- ------------- ------------- -------------- --------------
Class C
01/20/97-06/30/97 10.77 0.18 0.58 0.76 (0.14)
- -------------------------- --------------- ------------- ------------- -------------- --------------
Tax Exempt Fund
Class A
10/01/96-06/30/97 $ 11.87 $ 0.42 $ 0.11 $ 0.53 $ (0.43)
- -------------------------- --------------- ------------- ------------- -------------- --------------
9/30/96 11.83 0.62 (0.01) 0.61 (0.52)
- -------------------------- --------------- ------------- ------------- -------------- --------------
9/30/95 11.21 0.57 0.63 1.20 (0.58)
- -------------------------- --------------- ------------- ------------- -------------- --------------
9/30/94 12.74 0.56 (1.31) (0.75) (0.58)
- -------------------------- --------------- ------------- ------------- -------------- --------------
9/30/93 11.94 0.61 1.02 1.63 (0.64)
- -------------------------- --------------- ------------- ------------- -------------- --------------
9/30/92 11.53 0.65 0.42 1.07 (0.66)
- -------------------------- --------------- ------------- ------------- -------------- --------------
Class B
10/01/96-06/30/97 11.89 0.36 0.09 0.45 (0.37)
- -------------------------- --------------- ------------- ------------- -------------- --------------
9/30/96 11.84 0.53 0.00 0.53 (0.44)
- -------------------------- --------------- ------------- ------------- -------------- --------------
5/30/95-9/30/95 11.90 0.16 (0.07) 0.09 (0.15)
- -------------------------- --------------- ------------- ------------- -------------- --------------
Class C
10/01/96-06/30/97 11.86 0.36 0.11 0.47 (0.36)
- -------------------------- --------------- ------------- ------------- -------------- --------------
9/30/96 11.82 0.52 0.00 0.52 (0.44)
- -------------------------- --------------- ------------- ------------- -------------- --------------
9/30/95 11.21 0.48 0.62 1.10 (0.49)
- -------------------------- --------------- ------------- ------------- -------------- --------------
9/30/94 12.73 0.47 (1.30) (0.83) (0.49)
- -------------------------- --------------- ------------- ------------- -------------- --------------
9/30/93 11.94 0.52 1.01 1.53 (0.55)
- -------------------------- --------------- ------------- ------------- -------------- --------------
9/30/92 11.53 0.58 0.41 0.99 (0.58)
- -------------------------- --------------- ------------- ------------- -------------- --------------
<CAPTION>
Dividends in Distributions Distributions
Selected Per Share Data Excess of Net from Net in Excess of
for the Period Ended: Investment Realized Capital Net Realized
Income Gains Capital Gains
Balanced Fund ------------- ---------------- ---------------
<S> <C> <C> <C>
Class A
01/20/97-06/30/97 $ 0.00 $ 0.00 $ 0.00
- -------------------------- ------------- ---------------- ---------------
Class B
01/20/97-06/30/97 0.00 0.00 0.00
- -------------------------- ------------- ---------------- ---------------
Class C
01/20/97-06/30/97 0.00 0.00 0.00
- -------------------------- ------------- ---------------- ---------------
Tax Exempt Fund
Class A
10/01/96-06/30/97 $ 0.00 $ 0.00 $ 0.00
- -------------------------- ------------- ---------------- ---------------
9/30/96 (0.05) 0.00 0.00
- -------------------------- ------------- ---------------- ---------------
9/30/95 0.00 0.00 0.00
- -------------------------- ------------- ---------------- ---------------
9/30/94 0.00 (0.20) 0.00
- -------------------------- ------------- ---------------- ---------------
9/30/93 0.00 (0.19) 0.00
- -------------------------- ------------- ---------------- ---------------
9/30/92 0.00 0.00 0.00
- -------------------------- ------------- ---------------- ---------------
Class B
10/01/96-06/30/97 0.00 0.00 0.00
- -------------------------- ------------- ---------------- ---------------
9/30/96 (0.04) 0.00 0.00
- -------------------------- ------------- ---------------- ---------------
5/30/95-9/30/95 0.00 0.00 0.00
- -------------------------- ------------- ---------------- ---------------
Class C
10/01/96-06/30/97 0.00 0.00 0.00
- -------------------------- ------------- ---------------- ---------------
9/30/96 (0.04) 0.00 0.00
- -------------------------- ------------- ---------------- ---------------
9/30/95 0.00 0.00 0.00
- -------------------------- ------------- ---------------- ---------------
9/30/94 0.00 (0.20) 0.00
- -------------------------- ------------- ---------------- ---------------
9/30/93 0.00 (0.19) 0.00
- -------------------------- ------------- ---------------- ---------------
9/30/92 0.00 0.00 0.00
- -------------------------- ------------- ---------------- ---------------
</TABLE>
* Annualized
- ----
60 See accompanying notes
- ----
<PAGE>
<TABLE>
<CAPTION>
Selected Per Share Data
for the Period Ended: Distributions Tax Basis Net Asset
from Return of Total Value End of
Equalization Capital Distributions Period Total Return
Balanced Fund ------------- ------------ ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
Class A
01/20/97-06/30/97 $ 0.00 $ 0.00 $ (0.16) $ 11.40 7.42%
- ------------------------ ------------- ------------ ------------- ------------- ---------------
Class B
01/20/97-06/30/97 0.00 0.00 (0.15) 11.39 7.15
- ------------------------ ------------- ------------ ------------- ------------- ---------------
Class C
01/20/97-06/30/97 0.00 0.00 (0.14) 11.39 7.12
- ------------------------ ------------- ------------ ------------- ------------- ---------------
Tax Exempt Fund
Class A
10/01/96-06/30/97 $ 0.00 $ 0.00 $ (0.43) $ 11.97 4.65%
- ------------------------ ------------- ------------ ------------- ------------- ---------------
9/30/96 0.00 0.00 (0.57) 11.87 5.22
- ------------------------ ------------- ------------ ------------- ------------- ---------------
9/30/95 0.00 0.00 (0.58) 11.83 11.00
- ------------------------ ------------- ------------ ------------- ------------- ---------------
9/30/94 0.00 0.00 (0.78) 11.21 (6.10)
- ------------------------ ------------- ------------ ------------- ------------- ---------------
9/30/93 0.00 0.00 (0.83) 12.74 14.20
- ------------------------ ------------- ------------ ------------- ------------- ---------------
9/30/92 0.00 0.00 (0.66) 11.94 9.50
- ------------------------ ------------- ------------ ------------- ------------- ---------------
Class B
10/01/96-06/30/97 0.00 0.00 (0.37) 11.97 3.79
- ------------------------ ------------- ------------ ------------- ------------- ---------------
9/30/96 0.00 0.00 (0.48) 11.89 4.54
- ------------------------ ------------- ------------ ------------- ------------- ---------------
5/30/95-9/30/95 0.00 0.00 (0.15) 11.84 0.80
- ------------------------ ------------- ------------ ------------- ------------- ---------------
Class C
10/01/96-06/30/97 0.00 0.00 (0.36) 11.97 4.07
- ------------------------ ------------- ------------ ------------- ------------- ---------------
9/30/96 0.00 0.00 (0.48) 11.86 4.46
- ------------------------ ------------- ------------ ------------- ------------- ---------------
9/30/95 0.00 0.00 (0.49) 11.82 10.10
- ------------------------ ------------- ------------ ------------- ------------- ---------------
9/30/94 0.00 0.00 (0.69) 11.21 (6.70)
- ------------------------ ------------- ------------ ------------- ------------- ---------------
9/30/93 0.00 0.00 (0.74) 12.73 13.30
- ------------------------ ------------- ------------ ------------- ------------- ---------------
9/30/92 0.00 0.00 (0.58) 11.94 8.80
- ------------------------ ------------- ------------ ------------- ------------- ---------------
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses to Income to
Net Assets End Average Net Average Net Portfolio Average
of Period (000s) Assets Assets Turnover Rate Commision Rate
Balanced Fund ---------------- ----------- ------------ -------------- --------------
<S> <C> <C> <C> <C> <C>
Class A
01/20/97-06/30/97 $ 366 1.15%* 3.01%* 199% $ 0.06
- ----------------------- --------------- ----------- ------------ -------------- --------------
Class B
01/20/97-06/30/97 1,124 1.90* 2.28* 199 0.06
- ----------------------- --------------- ----------- ------------ -------------- --------------
Class C
01/20/97-06/30/97 921 1.90* 2.26* 199 0.06
- ----------------------- --------------- ----------- ------------ -------------- --------------
Tax Exempt Fund
Class A
10/01/96-06/30/97 $ 5,503 1.09%* 4.76%* 70% $ N/A
- ----------------------- --------------- ----------- ------------ -------------- --------------
9/30/96 5,864 1.07 5.12 49 N/A
- ----------------------- --------------- ----------- ------------ -------------- --------------
9/30/95 2,701 1.10 5.00 35
- ----------------------- --------------- ----------- ------------ --------------
9/30/94 2,726 1.10 4.70 63
- ----------------------- --------------- ----------- ------------ --------------
9/30/93 2,852 1.10 5.00 56
- ----------------------- --------------- ----------- ------------ --------------
9/30/92 2,295 1.10 5.60 107
- ----------------------- --------------- ----------- ------------ --------------
Class B
10/01/96-06/30/97 2,542 1.82* 4.02* 70 N/A
- ----------------------- --------------- ----------- ------------ -------------- --------------
9/30/96 2,258 1.82 4.37 49 N/A
- ----------------------- --------------- ----------- ------------ -------------- --------------
5/30/95-9/30/95 288 1.90* 4.00* 35
- ----------------------- --------------- ----------- ------------ --------------
Class C
10/01/96-06/30/97 41,464 1.83* 4.01* 70 N/A
- ----------------------- --------------- ----------- ------------ -------------- --------------
9/30/96 47,082 1.82 4.37 49 N/A
- ----------------------- --------------- ----------- ------------ -------------- --------------
9/30/95 54,224 1.80 4.30 35
- ----------------------- --------------- ----------- ------------ --------------
9/30/94 68,214 1.80 4.00 63
- ----------------------- --------------- ----------- ------------ --------------
9/30/93 81,475 1.80 4.20 56
- ----------------------- --------------- ----------- ------------ --------------
9/30/92 52,113 1.80 4.90 107
- ----------------------- --------------- ----------- ------------ --------------
</TABLE>
----
See accompanying notes 61
----
<PAGE>
Financial Highlights
Institutional and Administrative Classes
<TABLE>
<CAPTION>
Net Realized/ Dividends Dividends in
Selected Per Share Data Net Asset Value Net Unrealized Total Income From Net Excess of Net
for the Period Ended: Beginning Investment Gain (Loss) on From Investment Investment Investment
of Period Income (loss) Investments Operations Income Income
----------------- --------------- ----------------- ---------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Equity Income Fund
Institutional Class
06/30/97 $ 14.36 $ 0.40 $ 3.17 $ 3.57 $ (0.55) $ 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
11/01/95-06/30/96 13.09 0.78 1.31 2.09 (0.34) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
10/31/95 11.75 0.46 1.67 2.13 (0.46) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
10/31/94 11.95 0.42 (0.16) 0.26 (0.42) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
10/31/93 10.92 0.40 1.40 1.80 (0.40) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
10/31/92 10.77 0.45 0.93 1.38 (0.43) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
03/08/91-10/31/91 10.00 0.24 0.92 1.16 (0.24) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
Administrative Class
06/30/97 14.35 0.27 3.26 3.53 (0.51) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
11/01/95-06/30/96 13.13 0.75 1.31 2.06 (0.36) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
11/30/94-10/31/95 11.12 0.39 2.35 2.74 (0.40) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
Value Fund
Institutional Class
06/30/97 $ 12.46 $ 1.05 $ 2.11 $ 3.16 $ (0.31) $ 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
11/01/95-06/30/96 12.53 0.25 1.62 1.87 (0.17) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
10/31/95 11.55 0.30 2.18 2.48 (0.30) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
10/31/94 11.92 0.30 (0.28) 0.02 (0.29) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
10/31/93 10.05 0.28 2.36 2.64 (0.28) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
12/30/91-10/31/92 10.00 0.24 0.23 0.47 (0.24) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
Capital Appreciation Fund
Institutional Class
06/30/97 $ 18.10 $ 0.24 $ 5.08 $ 5.32 $ (0.10) $ 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
11/01/95-06/30/96 16.94 0.35 1.99 2.34 (0.15) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
10/31/95 13.34 0.18 3.60 3.78 (0.18) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
10/31/94 13.50 0.14 (0.12) 0.02 (0.14) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
10/31/93 11.27 0.11 2.73 2.84 (0.11) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
10/31/92 11.02 0.14 1.05 1.19 (0.14) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
03/08/91-10/31/91 10.00 0.09 1.02 1.11 (0.09) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
Administrative Class
07/31/96-06/30/97 17.19 0.16 6.03 6.19 (0.09) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
Mid Cap Growth Fund
Institutional Class
06/30/97 $ 19.44 $ (0.07) $ 5.25 $ 5.18 $ (0.05) $ 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
11/01/95-06/30/96 18.16 0.32 1.53 1.85 (0.14) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
10/31/95 13.97 0.07 4.19 4.26 (0.07) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
10/31/94 13.97 0.06 0.01 0.07 (0.06) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
10/31/93 11.29 0.07 2.70 2.77 (0.07) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
10/31/92 10.28 0.10 1.03 1.13 (0.10) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
08/26/91-10/31/91 10.00 0.02 0.27 0.29 (0.01) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
Administrative Class
06/30/97 19.44 (0.13) 5.25 5.12 (0.03) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
11/01/95-06/30/96 18.17 0.28 1.53 1.81 (0.11) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
11/30/94-10/31/95 13.31 0.03 4.85 4.88 (0.02) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
Small Cap Value Fund
Institutional Class
06/30/97 $ 14.20 $ 0.46 $ 3.63 $ 4.09 $ (0.13) $ 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
11/01/95-06/30/96 13.10 0.56 1.49 2.05 (0.21) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
10/31/95 12.07 0.28 1.92 2.20 (0.28) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
10/31/94 12.81 0.29 (0.65) (0.36) (0.29) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
10/31/93 10.98 0.24 2.33 2.57 (0.24) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
10/31/92 10.09 0.22 1.17 1.39 (0.22) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
10/01/91-10/31/91 10.00 0.02 0.10 0.12 (0.03) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
Administrative Class
06/30/97 14.20 0.38 3.68 4.06 (0.12) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
11/01/95-06/30/96 13.16 0.54 1.43 1.97 (0.19) 0.00
- ------------------------- ----------------- --------------- ----------------- ---------------- -------------- ---------------
<CAPTION>
Distributions Distributions
From Net in Excess of
Selected Per Share Data Realized Capital Net Realized
for the Period Ended: Gains Capital Gains
-------------------- ----------------
<S> <C> <C>
Equity Income Fund
Institutional Class
06/30/97 $ (1.97) $ 0.00
- --------------------------- -------------------- ----------------
11/01/95-06/30/96 (0.48) 0.00
- --------------------------- -------------------- ----------------
10/31/95 (0.33) 0.00
- --------------------------- -------------------- ----------------
10/31/94 (0.04) 0.00
- --------------------------- -------------------- ----------------
10/31/93 (0.37) 0.00
- --------------------------- -------------------- ----------------
10/31/92 (0.57) 0.00
- --------------------------- -------------------- ----------------
03/08/91-10/31/91 (0.15) 0.00
- --------------------------- -------------------- ----------------
Administrative Class
06/30/97 (1.97) 0.00
- --------------------------- -------------------- ----------------
11/01/95-06/30/96 (0.48) 0.00
- --------------------------- -------------------- ----------------
11/30/94-10/31/95 (0.33) 0.00
- --------------------------- -------------------- ----------------
Value Fund
Institutional Class
06/30/97 $ (0.50) $ 0.00
- --------------------------- -------------------- ----------------
11/01/95-06/30/96 (1.77) 0.00
- --------------------------- -------------------- ----------------
10/31/95 (1.20) 0.00
- --------------------------- -------------------- ----------------
10/31/94 (0.10) 0.00
- --------------------------- -------------------- ----------------
10/31/93 (0.49) 0.00
- --------------------------- -------------------- ----------------
12/30/91-10/31/92 (0.18) 0.00
- --------------------------- -------------------- ----------------
Capital Appreciation Fund
Institutional Class
06/30/97 $ (2.13) $ 0.00
- --------------------------- -------------------- ----------------
11/01/95-06/30/96 (1.03) 0.00
- --------------------------- -------------------- ----------------
10/31/95 0.00 0.00
- --------------------------- -------------------- ----------------
10/31/94 (0.04) 0.00
- --------------------------- -------------------- ----------------
10/31/93 (0.50) 0.00
- --------------------------- -------------------- ----------------
10/31/92 (0.72) 0.00
- --------------------------- -------------------- ----------------
03/08/91-10/31/91 0.00 0.00
- --------------------------- -------------------- ----------------
Administrative Class
07/31/96-06/30/97 (2.13) 0.00
- --------------------------- -------------------- ----------------
Mid Cap Growth Fund
Institutional Class
06/30/97 $ (4.29) $ 0.00
- --------------------------- -------------------- ----------------
11/01/95-06/30/96 (0.43) 0.00
- --------------------------- -------------------- ----------------
10/31/95 0.00 0.00
- --------------------------- -------------------- ----------------
10/31/94 (0.01) 0.00
- --------------------------- -------------------- ----------------
10/31/93 (0.02) 0.00
- --------------------------- -------------------- ----------------
10/31/92 0.00 0.00
- --------------------------- -------------------- ----------------
08/26/91-10/31/91 0.00 0.00
- --------------------------- -------------------- ----------------
Administrative Class
06/30/97 (4.29) 0.00
- --------------------------- -------------------- ----------------
11/01/95-06/30/96 (0.43) 0.00
- --------------------------- -------------------- ----------------
11/30/94-10/31/95 0.00 0.00
- --------------------------- -------------------- ----------------
Small Cap Value Fund
Institutional Class
06/30/97 $ (2.38) $ 0.00
- --------------------------- -------------------- ----------------
11/01/95-06/30/96 (0.74) 0.00
- --------------------------- -------------------- ----------------
10/31/95 (0.89) 0.00
- --------------------------- -------------------- ----------------
10/31/94 (0.09) 0.00
- --------------------------- -------------------- ----------------
10/31/93 (0.50) 0.00
- --------------------------- -------------------- ----------------
10/31/92 (0.24) 0.00
- --------------------------- -------------------- ----------------
10/01/91-10/31/91 0.00 0.00
- --------------------------- -------------------- ----------------
Administrative Class
06/30/97 (2.38) 0.00
- --------------------------- -------------------- ----------------
11/01/95-06/30/96 (0.74) 0.00
- --------------------------- -------------------- ----------------
</TABLE>
*Annualized
- ----
62 See accompanying notes
- ----
<PAGE>
<TABLE>
<CAPTION>
Distributions Tax Basis Net Asset
Selected Per Share Data from Return of Total Value End of
for the Period Ended: Equalization Capital Distributions Period Total Return
----------------- ---------------- ----------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
Equity Income Fund
Institutional Class
06/30/97 $ 0.00 $ 0.00 $ (2.52) $ 15.41 27.67%
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
11/01/95-06/30/96 0.00 0.00 (0.82) 14.36 16.35
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
10/31/95 0.00 0.00 (0.79) 13.09 19.36
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
10/31/94 0.00 0.00 (0.46) 11.75 2.25
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
10/31/93 0.00 0.00 (0.77) 11.95 16.65
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
10/31/92 (0.23) 0.00 (1.23) 10.92 12.89
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
03/08/91-10/31/91 0.00 0.00 (0.39) 10.77 11.81
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
Administrative Class
06/30/97 0.00 0.00 (2.48) 15.40 27.40
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
11/01/95-06/30/96 0.00 0.00 (0.84) 14.35 16.08
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
11/30/94-10/31/95 0.00 0.00 (0.73) 13.13 25.69
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
Value Fund
Institutional Class
06/30/97 $ 0.00 $ 0.00 $ (0.81) $ 14.81 26.38%
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
11/01/95-06/30/96 0.00 0.00 (1.94) 12.46 16.24
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
10/31/95 0.00 0.00 (1.50) 12.53 24.98
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
10/31/94 0.00 0.00 (0.39) 11.55 0.15
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
10/31/93 0.00 0.00 (0.77) 11.92 26.35
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
12/30/91-10/31/92 0.00 0.00 (0.42) 10.05 4.68
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
Capital Appreciation Fund
Institutional Class
06/30/97 $ 0.00 $ 0.00 $ (2.23) $ 21.19 31.52%
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
11/01/95-06/30/96 0.00 0.00 (1.18) 18.10 14.65
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
10/31/95 0.00 0.00 (0.18) 16.94 28.47
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
10/31/94 0.00 0.00 (0.18) 13.34 0.15
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
10/31/93 0.00 0.00 (0.61) 13.50 25.30
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
10/31/92 (0.08) 0.00 (0.94) 11.27 10.75
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
03/08/91-10/31/91 0.00 0.00 (0.09) 11.02 11.19
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
Administrative Class
07/31/96-06/30/97 0.00 0.00 (2.22) 21.16 38.26
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
Mid Cap Growth Fund
Institutional Class
06/30/97 $ 0.00 $ 0.00 $ (4.34) $ 20.28 30.58%
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
11/01/95-06/30/96 0.00 0.00 (0.57) 19.44 10.37
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
10/31/95 0.00 0.00 (0.07) 18.16 30.54
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
10/31/94 0.00 0.00 (0.07) 13.97 0.58
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
10/31/93 0.00 0.00 (0.09) 13.97 24.57
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
10/31/92 (0.02) 0.00 (0.12) 11.29 10.91
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
08/26/91-10/31/91 0.00 0.00 (0.01) 10.28 2.98
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
Administrative Class
06/30/97 0.00 0.00 (4.32) 20.24 30.23
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
11/01/95-06/30/96 0.00 0.00 (0.54) 19.44 10.17
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
11/30/94-10/31/95 0.00 0.00 (0.02) 18.17 36.64
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
Small Cap Value Fund
Institutional Class
06/30/97 $ 0.00 $ 0.00 $ (2.51) $ 15.78 31.99%
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
11/01/95-06/30/96 0.00 0.00 (0.95) 14.20 16.35
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
10/31/95 0.00 0.00 (1.17) 13.10 19.88
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
10/31/94 0.00 0.00 (0.38) 12.07 (2.89)
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
10/31/93 0.00 0.00 (0.74) 12.81 23.60
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
10/31/92 (0.04) 0.00 (0.50) 10.98 13.75
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
10/01/91-10/31/91 0.00 0.00 (0.03) 10.09 1.19
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
Administrative Class
06/30/97 0.00 0.00 (2.50) 15.76 31.70
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
11/01/95-06/30/96 0.00 0.00 (0.93) 14.20 15.64
- ----------------------------- ----------------- ---------------- ----------------- ---------------- ---------------
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses to Income to
Selected Per Share Data Net Assets End Average Net Average Net Portfolio Average
for the Period Ended: of Period (000s) Assets Assets Turnover Rate Commision Rate
----------------- ---------------- ----------------- ---------------- --------------
<S> <C> <C> <C> <C> <C>
Equity Income Fund
Institutional Class
06/30/97 $ 121,138 0.72% 3.03% 45% $ 0.06
- ----------------------------- ----------------- ---------------- ----------------- ---------------- --------------
11/01/95-06/30/96 116,714 0.70* 3.41* 52 0.06
- ----------------------------- ----------------- ---------------- ----------------- ---------------- --------------
10/31/95 118,015 0.70 3.83 46 0.06
- ----------------------------- ----------------- ---------------- ----------------- ---------------- --------------
10/31/94 92,365 0.70 3.77 36
- ----------------------------- ----------------- ---------------- ----------------- ----------------
10/31/93 67,854 0.70 3.55 39
- ----------------------------- ----------------- ---------------- ----------------- ----------------
10/31/92 30,506 0.70 3.83 47
- ----------------------------- ----------------- ---------------- ----------------- ----------------
03/08/91-10/31/91 15,628 0.74* 4.18* 62
- ----------------------------- ----------------- ---------------- ----------------- ----------------
Administrative Class
06/30/97 8,145 0.97 2.79 45 $ 0.06
- ----------------------------- ----------------- ---------------- ----------------- ---------------- --------------
11/01/95-06/30/96 6,097 0.95* 3.19* 52 0.06
- ----------------------------- ----------------- ---------------- ----------------- ---------------- --------------
11/30/94-10/31/95 140 0.95* 3.43* 43 N/A
- ----------------------------- ----------------- ---------------- ----------------- ---------------- --------------
Value Fund
Institutional Class
06/30/97 $ 74,613 0.73% 2.02% 71% $ 0.06
- ----------------------------- ----------------- ---------------- ----------------- ---------------- --------------
11/01/95-06/30/96 52,727 0.70* 2.40* 29 0.06
- ----------------------------- ----------------- ---------------- ----------------- ---------------- --------------
10/31/95 14,443 0.70 2.50 71 0.06
- ----------------------------- ----------------- ---------------- ----------------- ---------------- --------------
10/31/94 15,442 0.70 2.34 44
- ----------------------------- ----------------- ---------------- ----------------- ----------------
10/31/93 22,930 0.70 2.43 28
- ----------------------------- ----------------- ---------------- ----------------- ----------------
12/30/91-10/31/92 18,083 0.70* 2.57* 73
- ----------------------------- ----------------- ---------------- ----------------- ----------------
Capital Appreciation Fund
Institutional Class
06/30/97 $ 536,187 0.71% 1.02% 87% $ 0.06
- ----------------------------- ----------------- ---------------- ----------------- ---------------- --------------
11/01/95-06/30/96 348,728 0.70* 1.33* 73 0.04
- ----------------------------- ----------------- ---------------- ----------------- ---------------- --------------
10/31/95 236,220 0.70 1.22 83 0.05
- ----------------------------- ----------------- ---------------- ----------------- ---------------- --------------
10/31/94 165,441 0.70 1.17 77
- ----------------------------- ----------------- ---------------- ----------------- ----------------
10/31/93 84,990 0.70 0.94 81
- ----------------------------- ----------------- ---------------- ----------------- ----------------
10/31/92 36,334 0.70 1.13 134
- ----------------------------- ----------------- ---------------- ----------------- ----------------
03/08/91-10/31/91 18,813 0.75* 1.55* 41
- ----------------------------- ----------------- ---------------- ----------------- ----------------
Administrative Class
07/31/96-06/30/97 3,115 0.96* 0.66* 87 0.06
- ----------------------------- ----------------- ---------------- ----------------- ---------------- --------------
Mid Cap Growth Fund
Institutional Class
06/30/97 $ 291,374 0.71% 0.53% 82% $ 0.06
- ----------------------------- ----------------- ---------------- ----------------- ---------------- --------------
11/01/95-06/30/96 231,011 0.70* 1.11* 79 0.04
- ----------------------------- ----------------- ---------------- ----------------- ---------------- --------------
10/31/95 189,320 0.70 0.43 78 0.04
- ----------------------------- ----------------- ---------------- ----------------- ---------------- --------------
10/31/94 121,791 0.70 0.45 61
- ----------------------------- ----------------- ---------------- ----------------- ----------------
10/31/93 67,625 0.70 0.56 98
- ----------------------------- ----------------- ---------------- ----------------- ----------------
10/31/92 21,213 0.70 0.87 66
- ----------------------------- ----------------- ---------------- ----------------- ----------------
08/26/91-10/31/91 2,748 0.82* 0.92* 13
- ----------------------------- ----------------- ---------------- ----------------- ----------------
Administrative Class
06/30/97 2,066 0.96 0.28 82 0.06
- ----------------------------- ----------------- ---------------- ----------------- ---------------- --------------
11/01/95-06/30/96 1,071 0.95* 0.89* 79 0.04
- ----------------------------- ----------------- ---------------- ----------------- ---------------- --------------
11/30/94-10/31/95 892 0.94* 0.23* 72 N/A
- ----------------------------- ----------------- ---------------- ----------------- ---------------- --------------
Small Cap Value Fund
Institutional Class
06/30/97 $ 34,639 0.90% 1.92% 48% $ 0.06
- ----------------------------- ----------------- ---------------- ----------------- ---------------- --------------
11/01/95-06/30/96 29,017 0.85* 2.12* 35 0.04
- ----------------------------- ----------------- ---------------- ----------------- ---------------- --------------
10/31/95 35,093 0.85 2.25 50 0.04
- ----------------------------- ----------------- ---------------- ----------------- ---------------- --------------
10/31/94 31,236 0.85 2.23 48
- ----------------------------- ----------------- ---------------- ----------------- ----------------
10/31/93 46,523 0.85 2.05 42
- ----------------------------- ----------------- ---------------- ----------------- ----------------
10/31/92 18,261 0.85 2.16 27
- ----------------------------- ----------------- ---------------- ----------------- ----------------
10/01/91-10/31/91 5,060 1.09* 3.06* 0
- ----------------------------- ----------------- ---------------- ----------------- ----------------
Administrative Class
06/30/97 5,916 1.16 1.68 48 0.06
- ----------------------------- ----------------- ---------------- ----------------- ---------------- --------------
11/01/95-06/30/96 4,433 1.10* 1.86* 35 0.04
- ----------------------------- ----------------- ---------------- ----------------- ---------------- --------------
</TABLE>
*Annualized
----
See accompanying notes 63
----
<PAGE>
Financial Highlights
Institutional and Administrative Classes (Cont.)
Selected Per Share Data
for the Period Ended:
<TABLE>
<CAPTION>
Net Realized/ Dividends in
Net Asset Value Net Unrealized Total Income From Net
Beginning Investment Gain (Loss) on From Investments Investment
of period Income (Loss) Investment Operations Income
International Developed Fund --------------- ------------- -------------- ---------------- -------------
<S> <C> <C> <C> <C> <C>
Institutional Class
06/30/97 $ 12.54 $ 0.10 (a) $ 1.09 (a) $ 1.19 $ 0.00
- ---------------------------- --------------- ------------- --------------- ---------------- -------------
11/01/95-06/30/96 11.74 0.72 0.72 1.44 (0.07)
- ---------------------------- --------------- ------------- --------------- ---------------- -------------
10/31/95 11.86 0.10 0.30 0.40 (0.09)
- ---------------------------- --------------- ------------- --------------- ---------------- -------------
10/31/94 10.69 0.09 1.15 1.24 (0.03)
- ---------------------------- --------------- ------------- --------------- ---------------- -------------
06/08/93-10/31/93 10.00 0.05 0.69 0.74 (0.04)
- ---------------------------- --------------- ------------- --------------- ---------------- -------------
Administrative Class
06/30/97 12.51 0.06 (a) 1.09 (a) 1.15 0.00
- ---------------------------- --------------- ------------- --------------- ---------------- -------------
11/01/95-06/30/96 11.73 0.69 (a) 0.72 (a) 1.41 (0.07)
- ---------------------------- --------------- ------------- --------------- ---------------- -------------
11/30/94-10/31/95 11.21 0.02 1.01 1.03 (0.08)
- ---------------------------- --------------- ------------- --------------- ---------------- -------------
Emerging Markets Fund
Institutional Class
06/30/97 $ 12.66 $ 0.06 (a) $ 1.30 (a) $ 1.36 $ (0.06)
- ---------------------------- --------------- ------------- --------------- ---------------- -------------
11/01/95-06/30/96 11.27 0.03 1.40 1.43 (0.04)
- ---------------------------- --------------- ------------- --------------- ---------------- -------------
10/31/95 16.53 0.07 (4.55) (4.48) (0.06)
- ---------------------------- --------------- ------------- --------------- ---------------- -------------
10/31/94 12.27 (0.01) 4.45 4.44 0.00
- ---------------------------- --------------- ------------- --------------- ---------------- -------------
06/01/93-10/31/93 10.00 0.03 2.52 2.55 (0.02)
- ---------------------------- --------------- ------------- --------------- ---------------- -------------
Administrative Class
06/30/97 12.63 0.00 (a) 1.32 (a) 1.32 0.00
- ---------------------------- --------------- ------------- --------------- ---------------- -------------
11/01/95-06/30/96 11.24 0.02 (a) 1.40 (a) 1.42 (0.03)
- ---------------------------- --------------- ------------- --------------- ---------------- -------------
10/31/95 16.95 0.00 (4.95) (4.95) (0.05)
- ---------------------------- --------------- ------------- --------------- ---------------- -------------
Balanced Fund
Institutional Class
06/30/97 $ 11.64 $ 0.89 $ 1.21 $ 2.10 $ (0.36)
- ---------------------------- --------------- ------------- --------------- ---------------- -------------
11/01/95-06/30/96 11.89 0.27 0.76 1.03 (0.27)
- ---------------------------- --------------- ------------- --------------- ---------------- -------------
10/31/95 10.35 0.44 1.54 1.98 (0.44)
- ---------------------------- --------------- ------------- --------------- ---------------- -------------
10/31/94 10.84 0.34 (0.34) 0.00 (0.34)
- ---------------------------- --------------- ------------- --------------- ---------------- -------------
10/31/93 10.42 0.35 0.68 1.03 (0.35)
- ---------------------------- --------------- ------------- --------------- ---------------- -------------
06/25/92-10/31/92 10.00 0.12 0.52 0.64 (0.12)
- ---------------------------- --------------- ------------- --------------- ---------------- -------------
<CAPTION>
Dividends in Distributions Distributions
Excess of Net From Net in Excess of
Investment Realized Capital Net Realized
Income Gains Capital Gains
International Developed Fund --------------- ---------------- --------------
<S> <C> <C> <C>
Institutional Class
06/30/97 $ 0.00 $ (0.61) $ 0.00
- ---------------------------- --------------- ---------------- -------------
11/01/95-06/30/96 (0.36) (0.21) 0.00
- ---------------------------- --------------- ---------------- -------------
10/31/95 0.00 (0.43) 0.00
- ---------------------------- --------------- ---------------- -------------
10/31/94 0.00 (0.04) 0.00
- ---------------------------- --------------- ---------------- -------------
06/08/93-10/31/93 0.00 (0.01) 0.00
- ---------------------------- --------------- ---------------- -------------
Administrative Class
06/30/97 0.00 (0.61) 0.00
- ---------------------------- --------------- ---------------- -------------
11/01/95-06/30/96 (0.35) (0.21) 0.00
- ---------------------------- --------------- ---------------- -------------
11/30/94-10/31/95 0.00 (0.43) 0.00
- ---------------------------- --------------- ---------------- -------------
Emerging Markets Fund
Institutional Class
06/30/97 $ 0.00 $ 0.00 $ 0.00
- ---------------------------- --------------- ---------------- -------------
11/01/95-06/30/96 0.00 0.00 0.00
- ---------------------------- --------------- ---------------- -------------
10/31/95 0.00 (0.72) 0.00
- ---------------------------- --------------- ---------------- -------------
10/31/94 0.00 (0.18) 0.00
- ---------------------------- --------------- ---------------- -------------
06/01/93-10/31/93 0.00 (0.26) 0.00
- ---------------------------- --------------- ---------------- -------------
Administrative Class
06/30/97 0.00 0.00 0.00
- ---------------------------- --------------- ---------------- -------------
11/01/95-06/30/96 0.00 0.00 0.00
- ---------------------------- --------------- ---------------- -------------
10/31/95 0.00 (0.71) 0.00
- ---------------------------- --------------- ---------------- -------------
Balanced Fund
Institutional Class
06/30/97 $ 0.00 $ (1.96) $ 0.00
- ---------------------------- --------------- ---------------- -------------
11/01/95-06/30/96 0.00 (1.01) 0.00
- ---------------------------- --------------- ---------------- -------------
10/31/95 0.00 0.00 0.00
- ---------------------------- --------------- ---------------- -------------
10/31/94 0.00 (0.15) 0.00
- ---------------------------- --------------- ---------------- -------------
10/31/93 0.00 (0.26) 0.00
- ---------------------------- --------------- ---------------- -------------
06/25/92-10/31/92 0.00 (0.10) 0.00
- ---------------------------- --------------- ---------------- -------------
</TABLE>
* Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
<PAGE>
Financial Highlights
Institutional and Administrative Classes (Cont.)
Selected Per Share Data
for the Period Ended:
<TABLE>
<CAPTION>
Distributions Tax Basis Net Asset
from Return of Total Value End of
Equalization Capital Distributions Period Total Return
International Developed Fund ----------- ---------- ------------- ------------ ------------
Institutional Class
<S> <C> <C> <C> <C> <C>
06/30/97 $ 0.00 $ 0.00 $ (0.61) $ 13.12 10.07%
- ---------------------------- ----------- ---------- ------------- ------------ ------------
11/01/95-06/30/96 0.00 0.00 (0.64) 12.54 12.54
- ---------------------------- ----------- ---------- ------------- ------------ ------------
10/31/95 0.00 0.00 (0.52) 11.74 3.83
- ---------------------------- ----------- ---------- ------------- ------------ ------------
10/31/94 0.00 0.00 (0.07) 11.86 11.68
- ---------------------------- ----------- ---------- ------------- ------------ ------------
06/08/93-10/31/93 0.00 0.00 (0.05) 10.69 7.39
- ---------------------------- ----------- ---------- ------------- ------------ ------------
Administrative Class
06/30/97 0.00 0.00 (0.61) 13.05 9.77
- ---------------------------- ----------- ---------- ------------- ------------ ------------
11/01/95-06/30/96 0.00 0.00 (0.63) 12.51 12.33
- ---------------------------- ----------- ---------- ------------- ------------ ------------
11/30/94-10/31/95 0.00 0.00 (0.51) 11.73 9.61
- ---------------------------- ----------- ---------- ------------- ------------ ------------
Emerging Markets Fund
Institutional Class
06/30/97 $0.00 $ 0.00 $(0.06) $13.96 10.85%
- ---------------------------- ----------- ---------- ------------- ------------ ------------
11/01/95-06/30/96 0.00 0.00 (0.04) 12.66 12.70
- ---------------------------- ----------- ---------- ------------- ------------ ------------
10/31/95 0.00 0.00 (0.78) 11.27 (27.70)
- ---------------------------- ----------- ---------- ------------- ------------ ------------
10/31/94 0.00 0.00 (0.18) 16.53 36.31
- ---------------------------- ----------- ---------- ------------- ------------ ------------
06/01/93-10/31/93 0.00 0.00 (0.28) 12.27 25.55
- ---------------------------- ----------- ---------- ------------- ------------ ------------
Administrative Class
06/30/97 0.00 0.00 0.00 13.95 10.45
- ---------------------------- ----------- ---------- ------------- ------------ ------------
11/01/95-06/30/96 0.00 0.00 (0.03) 12.63 12.70
- ---------------------------- ----------- ---------- ------------- ------------ ------------
10/31/95 0.00 0.00 (0.76) 11.24 (27.96)
- ---------------------------- ----------- ---------- ------------- ------------ ------------
Balanced Fund
Institutional Class
06/30/97 $0.00 $ 0.00 $(2.32) $11.42 20.37%
- ---------------------------- ----------- ---------- ------------- ------------ ------------
11/01/95-06/30/96 0.00 0.00 (1.28) 11.64 9.07
- ---------------------------- ----------- ---------- ------------- ------------ ------------
10/31/95 0.00 0.00 (0.44) 11.89 19.47
- ---------------------------- ----------- ---------- ------------- ------------ ------------
10/31/94 0.00 0.00 (0.49) 10.35 0.08
- ---------------------------- ----------- ---------- ------------- ------------ ------------
10/31/93 0.00 0.00 (0.61) 10.84 10.06
- ---------------------------- ----------- ---------- ------------- ------------ ------------
06/25/92-10/31/92 0.00 0.00 (0.22) 10.42 6.40
- ---------------------------- ----------- ---------- ------------- ------------ ------------
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses to Income to
Net Assets End Average Net Average Net Portfolio Average
of Period (000s) Assets Assets Turnover Rate Commission Rate
International Developed Fund ---------------- -------------- ------------- ------------- ---------------
Institutional Class
<S> <C> <C> <C> <C> <C>
06/30/97 $ 94,044 1.13% 0.85% 77% $ 0.03
- ---------------------------- ---------------- -------------- ------------- ------------- --------------
11/01/95-06/30/96 70,207 1.10* 0.81* 60 0.02
- ---------------------------- ---------------- -------------- ------------- ------------- --------------
10/31/95 63,607 1.10 1.10 63 0.03
- ---------------------------- ---------------- -------------- ------------- ------------- --------------
10/31/94 22,569 1.10 1.12 89
- ---------------------------- ---------------- -------------- ------------- -------------
06/08/93-10/31/93 8,299 1.10* 0.91* 20
- ---------------------------- ---------------- -------------- ------------- -------------
Administrative Class
06/30/97 2,302 1.38 0.52 77 0.03
- ---------------------------- ---------------- -------------- ------------- ------------- --------------
11/01/95-06/30/96 5,624 1.35* 1.04* 60 0.02
- ---------------------------- ---------------- -------------- ------------- ------------- --------------
11/30/94-10/31/95 675 1.34* 0.50* 58 N/A
- ---------------------------- ---------------- -------------- ------------- ------------- --------------
Emerging Markets Fund
Institutional Class
06/30/97 $ 52,703 1.45% 0.45% 74% $ 0.00
- ---------------------------- ---------------- -------------- ------------- ------------- --------------
11/01/95-06/30/96 80,545 1.35* 0.84* 74 0.01
- ---------------------------- ---------------- -------------- ------------- ------------- --------------
10/31/95 73,539 1.35 0.57 118 0.03
- ---------------------------- ---------------- -------------- ------------- ------------- --------------
10/31/94 79,620 1.35 (0.06) 79
- ---------------------------- ---------------- -------------- ------------- -------------
06/01/93-10/31/93 14,625 1.34* 0.64* 37
- ---------------------------- ---------------- -------------- ------------- -------------
Administrative Class
06/30/97 117 1.69 0.02 74 0.00
- ---------------------------- ---------------- -------------- ------------- ------------- --------------
11/01/95-06/30/96 368 1.61* 0.18* 74 0.01
- ---------------------------- ---------------- -------------- ------------- ------------- --------------
10/31/95 830 1.62 0.02 118 N/A
- ---------------------------- ---------------- -------------- ------------- ------------- --------------
Balanced Fund
Institutional Class
06/30/97 $ 61,518 0.74% 3.33% 199% $ 0.06
- ---------------------------- ---------------- -------------- ------------- ------------- --------------
11/01/95-06/30/96 82,562 0.70* 3.46* 140 0.05
- ---------------------------- ---------------- -------------- ------------- ------------- --------------
10/31/95 72,638 0.70 3.73 43 0.04
- ---------------------------- ---------------- -------------- ------------- ------------- --------------
10/31/94 130,694 0.70 3.25 47
- ---------------------------- ---------------- -------------- ------------- -------------
10/31/93 126,410 0.70 3.10 19
- ---------------------------- ---------------- -------------- ------------- -------------
06/25/92-10/31/92 99,198 0.70* 3.36* 39
- ---------------------------- ---------------- -------------- ------------- ------------- --------------
</TABLE>
<PAGE>
Statement of Assets and Liabilities
June 30, 1997
Amounts in thousands, except per share amounts
<TABLE>
<CAPTION>
Capital
Equity Renaissance Appreciation Mid Cap
Income Fund Fund Value Fund Fund Growth Fund Growth Fund
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at value $ 139,521 $ 389,953 $ 178,501 $ 579,336 $ 1,728,249 $ 371,796
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Cash and foreign currency 1 330 1 0 4,720 13,391
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Receivable for investments and
foreign currency sold 1,485 2,931 6,776 6,077 58,681 0
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Receivable for Fund shares sold 430 2,596 255 750 973 3,502
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Interest and dividends receivable 492 695 462 411 402 214
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
141,929 396,505 185,995 586,574 1,793,025 388,903
======================================== ============ ============ ============ ============ ============ ============
Liabilities:
Payable for investments and foreign
currency purchased $ 1,533 $ 10,927 $ 5,721 $ 24,092 $ 53,939 $ 611
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Written options outstanding 0 0 0 0 1,996 0
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Payable for Fund shares redeemed 84 843 254 207 16,984 393
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Dividends payable 0 0 0 0 0 0
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Accrued investment advisor's fee 50 178 64 198 687 133
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Accrued administrator's fee 29 119 48 112 550 85
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Accrued distribution and/or
servicing fee 5 203 53 9 939 46
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Accrued servicing fee 4 74 21 5 344 18
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Variation margin payable 0 0 0 0 0 0
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Other liabilities 0 76 30 0 252 48
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
1,705 12,420 6,191 24,623 75,691 1,334
======================================== ============ ============ ============ ============ ============ ============
Net Assets $ 140,224 $ 384,085 $ 179,804 $ 561,951 $ 1,717,334 $ 387,569
======================================== ============ ============ ============ ============ ============ ============
Net Assets Consist of:
Paid in capital $ 99,898 $ 284,654 $ 145,228 $ 405,396 $ 1,254,333 $ 292,286
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Undistributed (overdistributed) net
investment income 2,380 28,688 6,824 8,727 37,051 513
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Accumulated undistributed net realized
gain (loss) 13,956 9,258 4,999 23,166 134,859 12,728
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Net unrealized appreciation
(depreciation) 23,990 61,485 22,753 124,662 291,091 82,042
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
$ 140,224 $ 384,085 $ 179,804 $ 561,951 $ 1,717,334 $ 387,569
======================================== ============ ============ ============ ============ ============ ============
Shares Issued and Outstanding
Class A 114 1,895 1,057 309 5,449 602
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Class B 167 2,097 1,719 143 2,174 1,401
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Class C 431 17,711 4,333 621 59,197 2,661
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Institutional Classes 8,389 0 5,039 25,446 0 14,472
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Net Asset Value and Redemption Price*
Per Share (Net Assets Per Share
Outstanding)
Class A $ 15.39 $ 17.73 $ 14.80 $ 21.16 $ 27.03 $ 20.24
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Class B 15.37 17.77 14.80 21.10 25.59 20.17
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Class C 15.37 17.69 14.80 21.10 25.58 20.18
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Institutional Class 15.41 0 14.81 21.19 0 20.28
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Administrative Class 15.40 0 0 21.16 0 20.24
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Cost of Investments Owned 115,531 328,467 155,748 454,675 1,438,379 289,754
======================================== ============ ============ ============ ============ ============ ============
Cost of Foreign Currency Held 0 0 0 0 0 0
======================================== ============ ============ ============ ============ ============ ============
</TABLE>
* With respect to the Retail Classes, the redemption price
varies by the length of time the shares are held.
- ----
66 See accompanying notes
- ----
<PAGE>
<TABLE>
<CAPTION>
International
Small Cap Opportunity Developed International
Target Fund Value Fund Fund Fund Fund
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments, at value $ 1,205,598 $ 78,726 $ 868,657 $ 101,936 $ 188,952
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Cash and foreign currency 421 56 1,295 210 6,460
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Receivable for investments and
foreign currency sold 34,740 91 0 589 11,712
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Receivable for Fund shares sold 751 1,418 4,753 237 173
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Interest and dividends receivable 294 154 36 235 822
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
1,241,804 80,445 874,741 103,207 208,119
======================================== ============ ============ ============ ============ ============
Liabilities:
Payable for investments and foreign
currency purchased $ 43,003 $ 1,534 $ 23,454 $ 0 $ 5,987
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Written options outstanding 0 0 2,572 0 0
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Payable for Fund shares redeemed 9,235 2 4,449 2,801 6,339
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Dividends payable 0 0 0 0 0
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Accrued investment advisor's fee 521 35 425 48 86
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Accrued administrator's fee 379 18 261 41 102
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Accrued distribution and/or
servicing fee 618 16 366 2 107
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Accrued servicing fee 237 8 163 2 39
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Variation margin payable 0 0 0 0 0
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Other liabilities 274 0 121 0 50
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
54,267 1,613 31,811 2,894 12,710
======================================== ============ ============ ============ ============ ============
Net Assets $ 1,187,537 $ 78,832 $ 842,930 $ 100,313 $ 195,409
======================================== ============ ============ ============ ============ ============
Net Assets Consist of:
Paid in capital $ 909,592 $ 63,775 $ 676,315 $ 86,123 $ 161,445
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Undistributed (overdistributed) net
investment income 72,458 1,920 0 1,129 2,463
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Accumulated undistributed net realized
gain (loss) 68,516 2,525 7,066 2,133 7,360
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Net unrealized appreciation
(depreciation) 136,971 10,612 159,549 10,928 24,141
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
$ 1,187,537 $ 78,832 $ 842,930 $ 100,313 $ 195,409
======================================== ============ ============ ============ ============ ============
Shares Issued and Outstanding
Class A 8,960 417 7,274 24 1,283
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Class B 4,185 705 0 86 640
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Class C 60,086 1,314 22,987 193 12,436
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Institutional Classes 0 2,570 0 7,347 0
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Net Asset Value and Redemption Price*
Per Share (Net Assets Per Share
Outstanding)
Class A $ 16.82 $ 15.75 $ 29.35 $ 13.08 $ 14.26
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Class B 16.14 15.71 0 13.06 13.56
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Class C 16.13 15.71 27.38 13.06 13.55
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Institutional Class 0 15.78 0 13.12 0
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Administrative Class 0 15.76 0 13.05 0
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Cost of Investments Owned 1,068,627 68,114 707,475 90,981 164,794
======================================== ============ ============ ============ ============ ============
Cost of Foreign Currency Held 0 0 0 0 696
======================================== ============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
Emerging Innovation Precious Balanced Tax Exempt
Markets Fund Fund Metals Fund Fund Fund
<S> <C> <C> <C> <C> <C>
Assets:
Investments, at value $ 53,112 $ 266,900 $ 36,866 $ 72,121 $ 47,711
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Cash and foreign currency 159 539 0 29 112
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Receivable for investments and
foreign currency sold 2,765 2,973 182 3,847 1,048
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Receivable for Fund shares sold 10 2,151 362 138 1
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Interest and dividends receivable 288 69 169 263 915
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
56,334 272,632 37,579 76,398 49,787
======================================== ============ ============ ============ ============ ============
Liabilities:
Payable for investments and foreign
currency purchased $ 707 $ 382 $ 3,993 $ 12,400 $ 0
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Written options outstanding 0 0 0 0 0
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Payable for Fund shares redeemed 390 1,261 134 22 127
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Dividends payable 0 0 0 0 68
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Accrued investment advisor's fee 38 139 19 23 12
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Accrued administrator's fee 22 86 14 13 16
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Accrued distribution and/or
servicing fee 1 127 19 1 26
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Accrued servicing fee 1 54 8 0 10
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Variation margin payable 0 0 0 10 0
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Other liabilities 0 7 15 0 19
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
1,159 2,056 4,202 12,469 278
======================================== ============ ============ ============ ============ ============
Net Assets $ 55,175 $ 270,576 $ 33,377 $ 63,929 $ 49,509
======================================== ============ ============ ============ ============ ============
Net Assets Consist of:
Paid in capital $ 57,673 $ 221,921 $ 41,506 $ 52,384 $ 46,860
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Undistributed (overdistributed) net
investment income (69) 0 (17) 2,860 189
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Accumulated undistributed net realized
gain (loss) (10,347) 1,862 (1,012) 1,139 (536)
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Net unrealized appreciation
(depreciation) 7,918 46,793 (7,100) 7,546 2,996
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
$ 55,175 $ 270,576 $ 33,377 $ 63,929 $ 49,509
======================================== ============ ============ ============ ============ ============
Shares Issued and Outstanding
Class A 15 3,226 455 32 460
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Class B 22 3,011 505 99 212
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Class C 132 9,529 2,980 81 3,464
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Institutional Classes 3,784 0 0 5,387 0
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Net Asset Value and Redemption Price*
Per Share (Net Assets Per Share
Outstanding)
Class A $ 13.94 $ 17.43 $ 8.83 $ 11.40 $ 11.97
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Class B 13.89 17.10 8.42 11.39 11.97
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Class C 13.89 17.09 8.43 11.39 11.97
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Institutional Class 13.96 0 0 11.42 0
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Administrative Class 13.95 0 0 0 0
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------
Cost of Investments Owned 45,194 220,107 43,968 64,592 44,715
======================================== ============ ============ ============ ============ ============
Cost of Foreign Currency Held 159 0 0 0 0
======================================== ============ ============ ============ ============ ============
</TABLE>
----
See accompanying notes 67
----
<PAGE>
Statement of Operations
For the periods ended June 30, 1997
<TABLE>
<CAPTION>
$ in thousands Equity Renaissance
Income Fund Fund Value Fund
---------------- ---------------- ----------------
<S> <C> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 4,473 $ 4,327 $ 2,697
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Interest 168 973 175
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Total income 4,641 5,300 2,872
================================================================= ================ ================ ================
Expenses:
Investment advisory fees 555 1,567 464
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Administration fees 312 606 319
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Distribution fees - Class B 4 152 76
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Distribution fees - Class C 10 1,498 184
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Servicing fees - Class A 1 54 15
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Servicing fees - Class B 1 53 25
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Servicing fees - Class C 3 526 61
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Distribution and/or servicing fees - Administrative Class 17 0 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Trustees' fees 8 10 6
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Reorganization costs 20 20 20
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Custodian and transfer agent fees 0 124 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Registration fees 0 15 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Miscellaneous 0 11 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Total expenses 931 4,636 1,170
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net Investment Income (Loss) 3,710 664 1,702
================================================================= ================ ================ ================
Net Realized and Unrealized Gain (Loss):
Net realized gain on investments 20,609 42,917 13,315
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net realized gain (loss) on futures contracts and written options 0 0 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net realized loss on foreign currency transactions 0 0 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net change in unrealized appreciation (depreciation)
on investments 6,318 33,883 19,593
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net change in unrealized appreciation (depreciation)
on futures contracts and written options 0 0 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net change in unrealized appreciation (depreciation)
on translation of assets and liabilities denominated
in foreign currencies 0 0 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net Gain (Loss) 26,927 76,800 32,908
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net Increase (Decrease) in Assets Resulting from Operations $ 30,637 $ 77,464 $ 34,610
================================================================= ================ ================ ================
<CAPTION>
Capital
$ in thousands Appreciation Mid Cap
Fund Growth Fund Growth Fund
---------------- ---------------- ----------------
<S> <C> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 6,017 $ 10,052 $ 2,806
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Interest 1,470 5,800 576
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Total income 7,487 15,852 3,382
================================================================= ================ ================ ================
Expenses:
Investment advisory fees 1,953 7,129 1,220
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Administration fees 1,093 2,993 730
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Distribution fees - Class B 4 264 78
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Distribution fees - Class C 21 8,330 148
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Servicing fees - Class A 6 291 12
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Servicing fees - Class B 1 88 26
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Servicing fees - Class C 7 2,777 49
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Distribution and/or servicing fees - Administrative Class 3 0 4
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Trustees' fees 30 54 18
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Reorganization costs 20 0 20
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Custodian and transfer agent fees 0 594 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Registration fees 0 69 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Miscellaneous 0 122 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Total expenses 3,138 22,711 2,305
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net Investment Income (Loss) 4,349 (6,859) 1,077
================================================================= ================ ================ ================
Net Realized and Unrealized Gain (Loss):
Net realized gain on investments 45,370 209,267 30,855
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net realized gain (loss) on futures contracts and written options 0 0 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net realized loss on foreign currency transactions 0 0 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net change in unrealized appreciation (depreciation)
on investments 74,013 37,469 50,902
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net change in unrealized appreciation (depreciation)
on futures contracts and written options 0 1,221 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net change in unrealized appreciation (depreciation)
on translation of assets and liabilities denominated
in foreign currencies 0 0 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net Gain (Loss) 119,383 247,957 81,757
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net Increase (Decrease) in Assets Resulting from Operations $ 123,732 $ 241,098 $ 82,834
================================================================= ================ ================ ================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
$ in thousands Small Cap Opportunity
Target Fund Value Fund Fund
---------------- ---------------- ----------------
<S> <C> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 3,656 $ 1,055 $ 478
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Interest 4,174 145 5,998
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Total income 7,830 1,200 6,476
================================================================= ================ ================ ================
Expenses:
Investment advisory fees 5,472 249 4,223
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Administration fees 2,077 114 1,425
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Distribution fees - Class B 338 13 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Distribution fees - Class C 5,429 30 3,713
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Servicing fees - Class A 288 3 320
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Servicing fees - Class B 113 4 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Servicing fees - Class C 1,810 10 1,238
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Distribution and/or servicing fees - Administrative Class 0 12 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Trustees' fees 42 3 24
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Reorganization costs 3 20 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Custodian and transfer agent fees 668 0 304
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Registration fees 65 0 22
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Miscellaneous 96 0 64
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Total expenses 16,401 458 11,333
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net Investment Income (Loss) (8,571) 742 (4,857)
================================================================= ================ ================ ================
Net Realized and Unrealized Gain (Loss):
Net realized gain on investments 188,697 5,616 7,066
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net realized gain (loss) on futures contracts and written options 0 0 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net realized loss on foreign currency transactions 0 0 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net change in unrealized appreciation (depreciation)
on investments (60,110) 6,732 (89,042)
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net change in unrealized appreciation (depreciation)
on futures contracts and written options 0 0 (1,634)
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net change in unrealized appreciation (depreciation)
on translation of assets and liabilities denominated
in foreign currencies 0 0 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net Gain (Loss) 128,587 12,348 (83,610)
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net Increase (Decrease) in Assets Resulting from Operations $ 120,016 $ 13,090 $ (88,467)
================================================================= ================ ================ ================
</TABLE>
<TABLE>
<CAPTION>
International
$ in thousands Developed International Emerging
Fund Fund Markets Fund
---------------- ---------------- ----------------
<S> <C> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 1,508 $ 3,029 $ 1,132
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Interest 231 151 62
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Total income 1,739 3,180 1,194
================================================================= ================ ================ ================
Expenses:
Investment advisory fees 526 1,097 568
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Administration fees 437 567 313
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Distribution fees - Class B 2 40 1
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Distribution fees - Class C 4 1,016 4
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Servicing fees - Class A 0 34 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Servicing fees - Class B 1 13 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Servicing fees - Class C 1 339 1
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Distribution and/or servicing fees - Administrative Class 13 0 1
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Trustees' fees 6 2 4
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Reorganization costs 20 0 20
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Custodian and transfer agent fees 0 290 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Registration fees 0 13 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Miscellaneous 0 13 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Total expenses 1,010 3,424 912
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net Investment Income (Loss) 729 (244) 282
================================================================= ================ ================ ================
Net Realized and Unrealized Gain (Loss):
Net realized gain on investments 5,106 14,966 3,171
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net realized gain (loss) on futures contracts and written options (358) (128) 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net realized loss on foreign currency transactions (940) (3,155) (131)
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net change in unrealized appreciation (depreciation)
on investments 4,863 11,788 1,574
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net change in unrealized appreciation (depreciation)
on futures contracts and written options 21 0 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net change in unrealized appreciation (depreciation)
on translation of assets and liabilities denominated
in foreign currencies (120) (17) 11
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net Gain (Loss) 8,572 23,454 4,625
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net Increase (Decrease) in Assets Resulting from Operations $ 9,301 $ 23,210 $ 4,907
================================================================= ================ ================ ================
</TABLE>
<TABLE>
<CAPTION>
$ in thousands Innovation Precious Balanced
Fund Metals Fund Fund
---------------- ---------------- ----------------
<S> <C> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 305 $ 407 $ 786
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Interest 826 177 1,972
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Total income 1,131 584 2,758
================================================================= ================ ================ ================
Expenses:
Investment advisory fees 1,296 227 307
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Administration fees 458 85 170
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Distribution fees - Class B 249 16 2
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Distribution fees - Class C 862 191 1
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Servicing fees - Class A 100 14 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Servicing fees - Class B 83 5 1
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Servicing fees - Class C 287 65 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Distribution and/or servicing fees - Administrative Class 0 0 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Trustees' fees 4 0 5
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Reorganization costs 11 0 20
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Custodian and transfer agent fees 129 55 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Registration fees 21 12 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Miscellaneous 28 7 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Total expenses 3,528 677 506
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net Investment Income (Loss) (2,397) (93) 2,252
================================================================= ================ ================ ================
Net Realized and Unrealized Gain (Loss):
Net realized gain on investments 3,357 99 12,264
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net realized gain (loss) on futures contracts and
written options 0 0 399
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net realized loss on foreign currency transactions 0 (12) 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net change in unrealized appreciation (depreciation)
on investments 2,593 (11,123) (2,880)
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net change in unrealized appreciation (depreciation)
on futures contracts and written options 0 0 (185)
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net change in unrealized appreciation (depreciation)
on translation of assets and liabilities denominated
in foreign currencies 0 1 0
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net Gain (Loss) 5,950 (11,035) 9,598
- ----------------------------------------------------------------- ---------------- ---------------- ----------------
Net Increase (Decrease) in Assets Resulting from
Operations $ 3,553 $ (11,128) $ 11,850
================================================================= ================ ================ ================
</TABLE>
<TABLE>
<CAPTION>
$ in thousands Tax Exempt
Fund
----------------
<S> <C>
Investment Income:
Dividends, net of foreign taxes $ 0
- ----------------------------------------------------------------- ----------------
Interest 2,264
- ----------------------------------------------------------------- ----------------
Total income 2,264
================================================================= ================
Expenses:
Investment advisory fees 166
- ----------------------------------------------------------------- ----------------
Administration fees 89
- ----------------------------------------------------------------- ----------------
Distribution fees - Class B 14
- ----------------------------------------------------------------- ----------------
Distribution fees - Class C 247
- ----------------------------------------------------------------- ----------------
Servicing fees - Class A 10
- ----------------------------------------------------------------- ----------------
Servicing fees - Class B 5
- ----------------------------------------------------------------- ----------------
Servicing fees - Class C 82
- ----------------------------------------------------------------- ----------------
Distribution and/or servicing fees - Administrative Class 0
- ----------------------------------------------------------------- ----------------
Trustees' fees 1
- ----------------------------------------------------------------- ----------------
Reorganization costs 30
- ----------------------------------------------------------------- ----------------
Custodian and transfer agent fees 27
- ----------------------------------------------------------------- ----------------
Registration fees 9
- ----------------------------------------------------------------- ----------------
Miscellaneous 0
- ----------------------------------------------------------------- ----------------
Total expenses 680
- ----------------------------------------------------------------- ----------------
Net Investment Income (Loss) 1,584
================================================================= ================
Net Realized and Unrealized Gain (Loss):
Net realized gain on investments 528
- ----------------------------------------------------------------- ----------------
Net realized gain (loss) on futures contracts and
written options 0
- ----------------------------------------------------------------- ----------------
Net realized loss on foreign currency transactions 0
- ----------------------------------------------------------------- ----------------
Net change in unrealized appreciation (depreciation)
on investments (23)
- ----------------------------------------------------------------- ----------------
Net change in unrealized appreciation (depreciation)
on futures contracts and written options 0
- ----------------------------------------------------------------- ----------------
Net change in unrealized appreciation (depreciation)
on translation of assets and liabilities denominated
in foreign currencies 0
- ----------------------------------------------------------------- ----------------
Net Gain (Loss) 505
- ----------------------------------------------------------------- ----------------
Net Increase (Decrease) in Assets Resulting from
Operations $ 2,089
================================================================= ================
</TABLE>
See accompanying notes 69
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
$ in thousands Equity Income Fund Renaissance Fund
------------------------------------ -------------------------------------
Eight Nine
Increase (Decrease) in Net Assets from: Year Ended Months Ended Months Ended Year Ended
June 30, 1997 June 30, 1996 June 30, 1997 September 30, 1996
<S> <C> <C> <C> <C>
Operations
Net investment income (loss) $ 3,710 $ 3,220 $ 664 $ 1,973
- -------------------------------------------------- ------------------------------------ -------------------------------------
Net realized gain (loss) 20,609 11,596 42,917 37,469
- -------------------------------------------------- ------------------------------------ -------------------------------------
Net change in unrealized appreciation (depreciation) 6,318 6,902 33,883 3,195
- -------------------------------------------------- ------------------------------------ -------------------------------------
Net increase (decrease) resulting from operations 30,637 21,718 77,464 42,637
================================================== ==================================== =====================================
Net equalization credits (debits) 0 (222) 0 0
================================================== ==================================== =====================================
Distributions to Shareholders
From net investment income
Class A (15) 0 (221) (240)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class B (17) 0 (82) (58)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class C (47) 0 (670) (1,676)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Institutional Classes (4,580) (3,220) 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
In excess of net investment income
Class A 0 0 0 (73)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class B 0 0 0 (18)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class C 0 0 0 (505)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Institutional Classes 0 (7) 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
From net realized capital gains
Class A 0 0 (3,107) (710)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class B 0 0 (2,821) (132)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class C 0 0 (32,865) (9,562)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Institutional Classes (14,904) (4,636) 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Total Distributions (19,563) (7,863) (39,766) (12,974)
================================================== ==================================== =====================================
Fund Share Transactions
Receipts for shares sold
Class A 1,691 0 17,402 8,421
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class B 3,040 0 21,111 13,373
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class C 7,063 0 112,880 51,279
- -------------------------------------------------- ------------------------------------ -------------------------------------
Institutional Classes 16,418 41,175 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class B 0 0 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class C 0 0 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Issued as reinvestment of distributions
Class A 13 0 200 909
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class B 15 0 73 169
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class C 43 0 613 10,718
- -------------------------------------------------- ------------------------------------ -------------------------------------
Institutional Classes 18,898 7,339 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Cost of shares redeemed
Class A (69) 0 (7,973) (3,756)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class B (670) 0 (3,265) (679)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class C (899) 0 (61,037) (32,723)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Institutional Classes (39,204) (57,491) 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Net increase (decrease) resulting from Fund share
transactions 6,339 (8,977) 80,004 47,711
- -------------------------------------------------- ------------------------------------ -------------------------------------
- -------------------------------------------------- ------------------------------------ -------------------------------------
Total Increase (Decrease) in Net Assets 17,413 4,656 117,702 77,374
================================================== ==================================== =====================================
Net Assets
Beginning of period 122,811 118,155 266,383 189,009
- -------------------------------------------------- ------------------------------------ -------------------------------------
End of period * $ 140,224 $ 122,811 $ 384,085 $ 266,383
- -------------------------------------------------- ------------------------------------ -------------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 2,380 $ 3,782 $ 28,688 $ 21,658
- -------------------------------------------------- ------------------------------------ -------------------------------------
</TABLE>
<TABLE>
<CAPTION>
$ in thousands Value Fund
------------------------------------
Eight
Year Ended Months Ended
Increase (Decrease) in Net Assets from: June 30, 1997 June 30, 1997
<S> <C>
Operations
Net investment income (loss) $ 1,702 $ 355
- -------------------------------------------------- ------------------------------------
Net realized gain (loss) 13,315 1,115
- -------------------------------------------------- ------------------------------------
Net change in unrealized appreciation (depreciation) 19,593 1,082
- -------------------------------------------------- ------------------------------------
Net increase (decrease) resulting from operations 34,610 2,552
================================================== ====================================
Net equalization credits (debits) 0 42
================================================== ====================================
Distributions to Shareholders
From net investment income
Class A (105) 0
- -------------------------------------------------- ------------------------------------
Class B (99) 0
- -------------------------------------------------- ------------------------------------
Class C (247) 0
- -------------------------------------------------- ------------------------------------
Institutional Classes (1,517) (355)
- -------------------------------------------------- ------------------------------------
In excess of net investment income
Class A 0 0
- -------------------------------------------------- ------------------------------------
Class B 0 0
- -------------------------------------------------- ------------------------------------
Class C 0 0
- -------------------------------------------------- ------------------------------------
Institutional Classes 0 0
- -------------------------------------------------- ------------------------------------
From net realized capital gains
Class A 0 0
- -------------------------------------------------- ------------------------------------
Class B 0 0
- -------------------------------------------------- ------------------------------------
Class C 0 0
- -------------------------------------------------- ------------------------------------
Institutional Classes (2,344) (2,045)
- -------------------------------------------------- ------------------------------------
Total Distributions (4,312) (2,400)
================================================== ====================================
Fund Share Transactions
Receipts for shares sold
Class A 3,387 0
- -------------------------------------------------- ------------------------------------
Class B 1,609 0
- -------------------------------------------------- ------------------------------------
Class C 16,250 0
- -------------------------------------------------- ------------------------------------
Institutional Classes 17,251 36,330
- -------------------------------------------------- ------------------------------------
Shares issued in reorganization
Class A 11,374 0
- -------------------------------------------------- ------------------------------------
Class B 20,538 0
- -------------------------------------------------- ------------------------------------
Class C 48,923 0
- -------------------------------------------------- ------------------------------------
Issued as reinvestment of distributions
Class A 95 0
- -------------------------------------------------- ------------------------------------
Class B 86 0
- -------------------------------------------------- ------------------------------------
Class C 225 0
- -------------------------------------------------- ------------------------------------
Institutional Classes 3,854 2,397
- -------------------------------------------------- ------------------------------------
Cost of shares redeemed
Class A (1,972) 0
- -------------------------------------------------- ------------------------------------
Class B (1,562) 0
- -------------------------------------------------- ------------------------------------
Class C (12,509) 0
- -------------------------------------------------- ------------------------------------
Institutional Classes (10,770) (637)
- -------------------------------------------------- ------------------------------------
Net increase (decrease) resulting from Fund share
transactions 96,779 38,090
- -------------------------------------------------- ------------------------------------
- -------------------------------------------------- ------------------------------------
Total Increase (Decrease) in Net Assets 127,077 38,284
================================================== ====================================
Net Assets
Beginning of period 52,727 14,443
- -------------------------------------------------- ------------------------------------
End of period * $ 179,804 $ 52,727
- -------------------------------------------------- ------------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 6,824 $ 348
- -------------------------------------------------- ------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
$ in thousands Capital Appreciation Fund Growth Fund
------------------------------------ -------------------------------------
Eight Nine
Increase (Decrease) in Net Assets from: Year Ended Months Ended Months Ended Year Ended
June 30, 1997 June 30, 1996 June 30, 1997 September 30, 1996
<S> <C> <C> <C> <C>
Operations
Net investment income (loss) $ 4,349 $ 2,624 $ (6,859) $ (6,704)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Net realized gain (loss) 45,370 31,135 209,267 216,171
- -------------------------------------------------- ------------------------------------ -------------------------------------
Net change in unrealized appreciation (depreciation) 74,013 6,136 38,690 8,598
- -------------------------------------------------- ------------------------------------ -------------------------------------
Net increase (decrease) resulting from operations 123,732 39,895 241,098 218,065
================================================== ==================================== =====================================
Net equalization credits (debits) 0 214 0 0
================================================== ==================================== =====================================
Distributions to Shareholders
From net investment income
Class A 0 0 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class B 0 0 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class C 0 0 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Institutional Classes (2,210) (2,624) 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
In excess of net investment income
Class A 0 0 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class B 0 0 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class C 0 0 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Institutional Classes 0 0 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
From net realized capital gains
Class A 0 0 (19,626) (15,282)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class B 0 0 (5,682) (1,264)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class C 0 0 (198,720) (150,649)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Institutional Classes (44,170) (15,492) 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Total Distributions (46,380) (18,116) (224,028) (167,195)
================================================== ==================================== =====================================
Fund Share Transactions
Receipts for shares sold
Class A 6,440 0 139,954 44,645
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class B 2,819 0 22,425 29,313
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class C 13,152 0 428,074 289,628
- -------------------------------------------------- ------------------------------------ -------------------------------------
Institutional Classes 168,885 93,460 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class B 0 0 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class C 0 0 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Issued as reinvestment of distributions
Class A 0 0 0 14,386
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class B 0 0 3 1,119
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class C 0 0 4 140,590
- -------------------------------------------------- ------------------------------------ -------------------------------------
Institutional Classes 36,688 15,598 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Cost of shares redeemed
Class A (415) 0 (147,335) (48,670)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class B (11) 0 (5,108) (2,796)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class C (1,161) 0 (376,328) (313,152)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Institutional Classes (90,526) (18,543) 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Net increase (decrease) resulting from Fund share
transactions 135,871 90,515 61,689 155,063
- -------------------------------------------------- ------------------------------------ -------------------------------------
- -------------------------------------------------- ------------------------------------ -------------------------------------
Total Increase (Decrease) in Net Assets 213,223 112,508 78,759 205,933
================================================== ==================================== =====================================
Net Assets
Beginning of period 348,728 236,220 1,638,575 1,432,642
- -------------------------------------------------- ------------------------------------ -------------------------------------
End of period * $ 561,951 $ 348,728 $ 1,717,334 $ 1,638,575
- -------------------------------------------------- ------------------------------------ -------------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 8,727 $ 3,922 $ 37,051 $ 5,470
- -------------------------------------------------- ------------------------------------ -------------------------------------
</TABLE>
<TABLE>
<CAPTION>
$ in thousands Mid Cap Growth Fund Target Fund
------------------------------------ -------------------------------------
Eight Nine
Increase (Decrease) in Net Assets from: Year Ended Months Ended Months Ended Year Ended
June 30, 1997 June 30, 1996 June 30, 1997 September 30, 1996
<S> <C> <C> <C> <C>
Operations
Net investment income (loss) $ 1,077 $ 1,524 $ (8,571) $ (10,187)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Net realized gain (loss) 30,855 30,980 188,697 111,518
- -------------------------------------------------- ------------------------------------ -------------------------------------
Net change in unrealized appreciation (depreciation) 50,902 (13,220) (60,110) 51,871
- -------------------------------------------------- ------------------------------------ -------------------------------------
Net increase (decrease) resulting from operations 82,834 19,284 120,016 153,202
================================================== ==================================== =====================================
Net equalization credits (debits) 0 59 0 0
================================================== ==================================== =====================================
Distributions to Shareholders
From net investment income
Class A 0 0 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class B 0 0 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class C 0 0 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Institutional Classes (606) (1,524) 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
In excess of net investment income
Class A 0 0 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class B 0 0 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class C 0 0 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Institutional Classes 0 (2) 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
From net realized capital gains
Class A 0 0 (19,003) (87,762)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class B 0 0 (6,747) 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class C 0 0 (120,762) 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Institutional Classes (43,786) (4,266) 0 (14,626)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Total Distributions (44,392) (5,792) (146,512) (102,388)
================================================== ==================================== =====================================
Fund Share Transactions
Receipts for shares sold
Class A 673 0 550,283 372,363
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class B 1,840 0 27,085 40,171
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class C 8,401 0 293,453 314,741
- -------------------------------------------------- ------------------------------------ -------------------------------------
Institutional Classes 72,315 65,762 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Shares issued in reorganization
Class A 11,362 0 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class B 22,472 0 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class C 41,588 0 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Issued as reinvestment of distributions
Class A 0 0 4 12,468
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class B 0 0 1 1,097
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class C 0 0 1 82,368
- -------------------------------------------------- ------------------------------------ -------------------------------------
Institutional Classes 43,184 5,575 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Cost of shares redeemed
Class A (2,743) 0 (553,973) (359,867)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class B (1,818) 0 (8,959) (1,509)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Class C (7,250) 0 (274,688) (241,645)
- -------------------------------------------------- ------------------------------------ -------------------------------------
Institutional Classes (72,979) (43,018) 0 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
Net increase (decrease) resulting from Fund share
transactions 117,045 28,319 33,207 220,187
- -------------------------------------------------- ------------------------------------ -------------------------------------
- -------------------------------------------------- ------------------------------------ -------------------------------------
Total Increase (Decrease) in Net Assets 155,487 41,870 6,711 271,001
================================================== ==================================== =====================================
Net Assets
Beginning of period 232,082 190,212 1,180,826 909,825
- -------------------------------------------------- ------------------------------------ -------------------------------------
End of period * $ 387,569 $ 232,082 $ 1,187,537 $ 1,180,826
- -------------------------------------------------- ------------------------------------ -------------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 513 $ 2,129 $ 72,458 $ 0
- -------------------------------------------------- ------------------------------------ -------------------------------------
</TABLE>
<TABLE>
<CAPTION>
$ in thousands Small Cap Value Fund
------------------------------------
Eight
Increase (Decrease) in Net Assets from: Year Ended Months Ended
June 30, 1997 June 30, 1996
<S> <C> <C>
Operations
Net investment income (loss) $ 742 $ 544
- -------------------------------------------------- ------------------------------------
Net realized gain (loss) 5,616 3,943
- -------------------------------------------------- ------------------------------------
Net change in unrealized appreciation (depreciation) 6,732 1,415
- -------------------------------------------------- ------------------------------------
Net increase (decrease) resulting from operations 13,090 5,902
================================================== ====================================
Net equalization credits (debits) 0 (26)
================================================== ====================================
Distributions to Shareholders
From net investment income
Class A 0 0
- -------------------------------------------------- ------------------------------------
Class B 0 0
- -------------------------------------------------- ------------------------------------
Class C 0 0
- -------------------------------------------------- ------------------------------------
Institutional Classes (343) (545)
- -------------------------------------------------- ------------------------------------
In excess of net investment income
Class A 0 0
- -------------------------------------------------- ------------------------------------
Class B 0 0
- -------------------------------------------------- ------------------------------------
Class C 0 0
- -------------------------------------------------- ------------------------------------
Institutional Classes 0 (6)
- -------------------------------------------------- ------------------------------------
From net realized capital gains
Class A 0 0
- -------------------------------------------------- ------------------------------------
Class B 0 0
- -------------------------------------------------- ------------------------------------
Class C 0 0
- -------------------------------------------------- ------------------------------------
Institutional Classes (5,390) (2,342)
- -------------------------------------------------- ------------------------------------
Total Distributions (5,733) (2,893)
================================================== ====================================
Fund Share Transactions
Receipts for shares sold
Class A 6,136 0
- -------------------------------------------------- ------------------------------------
Class B 10,821 0
- -------------------------------------------------- ------------------------------------
Class C 19,512 0
- -------------------------------------------------- ------------------------------------
Institutional Classes 6,922 8,467
- -------------------------------------------------- ------------------------------------
Shares issued in reorganization
Class A 0 0
- -------------------------------------------------- ------------------------------------
Class B 0 0
- -------------------------------------------------- ------------------------------------
Class C 0 0
- -------------------------------------------------- ------------------------------------
Issued as reinvestment of distributions
Class A 0 0
- -------------------------------------------------- ------------------------------------
Class B 0 0
- -------------------------------------------------- ------------------------------------
Class C 0 0
- -------------------------------------------------- ------------------------------------
Institutional Classes 5,710 2,856
- -------------------------------------------------- ------------------------------------
Cost of shares redeemed
Class A (78) 0
- -------------------------------------------------- ------------------------------------
Class B (588) 0
- -------------------------------------------------- ------------------------------------
Class C (535) 0
- -------------------------------------------------- ------------------------------------
Institutional Classes (9,875) (15,949)
- -------------------------------------------------- ------------------------------------
Net increase (decrease) resulting from Fund share
transactions 38,025 (4,626)
- -------------------------------------------------- ------------------------------------
- -------------------------------------------------- ------------------------------------
Total Increase (Decrease) in Net Assets 45,382 (1,643)
================================================== ====================================
Net Assets
Beginning of period 33,450 35,093
- -------------------------------------------------- ------------------------------------
End of period * 78,832 $33,450
- -------------------------------------------------- ------------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 1,920 $ 837
- -------------------------------------------------- ------------------------------------
</TABLE>
----
See accompanying notes 71
----
<PAGE>
Statement of Changes in Net Assets (Cont.)
<TABLE>
<CAPTION>
$ in thousands Opportunity Fund International Developed Fund
----------------------------------- ----------------------------------
Nine Eight
Increase (Decrease) in Net Assets from: Months Ended Year Ended Year Ended Months Ended
June 30, 1997 September 30, 1996 June 30, 1997 June 30, 1996
<S> <C> <C> <C> <C>
Operations
Net investment income (loss) $ (4,857) $ (8,362) $ 729 $ 399
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Net realized gain (loss) 7,066 127,759 3,808 2,749
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Net change in unrealized appreciation (depreciation) (90,676) 25,501 4,764 5,113
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Net increase (decrease) resulting from operations (88,467) 144,898 9,301 8,261
====================================================== =================================== ==================================
Net equalization credits (debits) 0 0 0 62
====================================================== =================================== ==================================
Distributions to Shareholders
From net investment income
Class A 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class B 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class C 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Institutional Classes 0 0 0 (386)
- ------------------------------------------------------ ----------------------------------- ----------------------------------
In excess of net investment income
Class A 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class B 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class C 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Institutional Classes 0 0 0 (1,917)
- ------------------------------------------------------ ----------------------------------- ----------------------------------
From net realized capital gains
Class A (17,083) (23,619) 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class B 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class C (109,891) (145,763) 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Institutional Classes 0 0 (4,444) (1,140)
- ------------------------------------------------------ ----------------------------------- ----------------------------------
In excess of net realized capital gains
Class A 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class B 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class C 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Institutional Classes 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Total Distributions (126,974) (169,382) (4,444) (3,443)
====================================================== =================================== ==================================
Fund Share Transactions
Receipts for shares sold
Class A 225,467 52,255 477 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class B 0 0 1,057 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class C 587,295 406,910 2,759 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Institutional Classes 0 0 45,331 19,439
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class B 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class C 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Issued as reinvestment of distributions
Class A 0 21,540 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class B 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class C 0 131,687 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Institutional Classes 0 0 3,704 2,209
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Cost of shares redeemed
Class A (114,318) (56,734) (189) 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class B 0 0 (15) 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class C (575,183) (432,085) (433) 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Institutional Classes 0 0 (33,066) (14,979)
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Net increase (decrease) resulting from Fund share
transactions 123,261 123,573 19,625 6,669
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Total Increase (Decrease) in Net Assets (92,180) 99,089 24,482 11,549
====================================================== =================================== ==================================
Net Assets
Beginning of period 935,110 836,021 75,831 64,282
- ------------------------------------------------------ ----------------------------------- ----------------------------------
End of period * $ 842,930 $ 935,110 $ 100,313 $ 75,831
- ------------------------------------------------------ ----------------------------------- ----------------------------------
- ------------------------------------------------------ ----------------------------------- ----------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 0 $ 0 $ 1,129 $ 1,936
- ------------------------------------------------------ ----------------------------------- ----------------------------------
</TABLE>
<TABLE>
<CAPTION>
$ in thousands International Fund
-----------------------------------
Nine
Increase (Decrease) in Net Assets from: Months Ended Year Ended
June 30, 1997 September 30, 1996
<S> <C> <C>
Operations
Net investment income (loss) $ (244) $ (534)
- ------------------------------------------------------ -----------------------------------
Net realized gain (loss) 11,683 9,721
- ------------------------------------------------------ -----------------------------------
Net change in unrealized appreciation (depreciation) 11,771 4,720
- ------------------------------------------------------ -----------------------------------
Net increase (decrease) resulting from operations 23,210 13,907
====================================================== ===================================
Net equalization credits (debits) 0 0
====================================================== ===================================
Distributions to Shareholders
From net investment income
Class A 0 0
- ------------------------------------------------------ -----------------------------------
Class B 0 0
- ------------------------------------------------------ -----------------------------------
Class C 0 0
- ------------------------------------------------------ -----------------------------------
Institutional Classes 0 0
- ------------------------------------------------------ -----------------------------------
In excess of net investment income
Class A 0 0
- ------------------------------------------------------ -----------------------------------
Class B 0 0
- ------------------------------------------------------ -----------------------------------
Class C 0 0
- ------------------------------------------------------ -----------------------------------
Institutional Classes 0 0
- ------------------------------------------------------ -----------------------------------
From net realized capital gains
Class A (597) 0
- ------------------------------------------------------ -----------------------------------
Class B (203) 0
- ------------------------------------------------------ -----------------------------------
Class C (6,105) 0
- ------------------------------------------------------ -----------------------------------
Institutional Classes 0 0
- ------------------------------------------------------ -----------------------------------
In excess of net realized capital gains
Class A 0 0
- ------------------------------------------------------ -----------------------------------
Class B 0 0
- ------------------------------------------------------ -----------------------------------
Class C 0 0
- ------------------------------------------------------ -----------------------------------
Institutional Classes 0 0
- ------------------------------------------------------ -----------------------------------
Total Distributions (6,905) 0
====================================================== ===================================
Fund Share Transactions
Receipts for shares sold
Class A 126,751 83,979
- ------------------------------------------------------ -----------------------------------
Class B 2,790 5,925
- ------------------------------------------------------ -----------------------------------
Class C 87,308 82,691
- ------------------------------------------------------ -----------------------------------
Institutional Classes 0 0
- ------------------------------------------------------ -----------------------------------
Shares issued in reorganization
Class A 0 0
- ------------------------------------------------------ -----------------------------------
Class B 0 0
- ------------------------------------------------------ -----------------------------------
Class C 0 0
- ------------------------------------------------------ -----------------------------------
Issued as reinvestment of distributions
Class A 0 0
- ------------------------------------------------------ -----------------------------------
Class B 0 0
- ------------------------------------------------------ -----------------------------------
Class C 0 0
- ------------------------------------------------------ -----------------------------------
Institutional Classes 0 0
- ------------------------------------------------------ -----------------------------------
Cost of shares redeemed
Class A (130,471) (83,424)
- ------------------------------------------------------ -----------------------------------
Class B (702) (673)
- ------------------------------------------------------ -----------------------------------
Class C (136,065) (106,715)
- ------------------------------------------------------ -----------------------------------
Institutional Classes 0 0
- ------------------------------------------------------ -----------------------------------
Net increase (decrease) resulting from Fund share
transactions (50,389) (18,217)
- ------------------------------------------------------ -----------------------------------
Total Increase (Decrease) in Net Assets (34,084) (4,310)
====================================================== ===================================
Net Assets
Beginning of period 229,493 233,803
- ------------------------------------------------------ -----------------------------------
End of period * $ 195,409 $ 229,493
- ------------------------------------------------------ -----------------------------------
- ------------------------------------------------------ -----------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 2,463 $ (407)
- ------------------------------------------------------ -----------------------------------
</TABLE>
- ----
72 See accompanying notes
- ----
<PAGE>
<TABLE>
<CAPTION>
$ in thousands Emerging Markets Fund Innovation Fund
----------------------------------- ----------------------------------
Increase (Decrease) in Net Assets from: Eight Nine Months
Year Ended Months Ended Ended Year Ended
June 30, 1997 June 30, 1996 June 30, 1997 September 30, 1996
<S> <C> <C> <C> <C>
Operations
Net investment income (loss) $ 282 $ 434 $ (2,397) $ (1,655)
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Net realized gain (loss) 3,040 1,358 3,357 3,337
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Net change in unrealized appreciation (depreciation) 1,585 7,303 2,593 27,654
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Net increase (decrease) resulting from operations 4,907 9,095 3,553 29,336
====================================================== =================================== ==================================
Net equalization credits (debits) 0 (4) 0 0
====================================================== =================================== ==================================
Distributions to Shareholders
From net investment income
Class A 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class B 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class C 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Institutional Classes (310) (239) 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
In excess of net investment income
Class A 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class B 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class C 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Institutional Classes 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
From net realized capital gains
Class A 0 0 (776) (1,571)
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class B 0 0 (599) 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class C 0 0 (2,217) 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Institutional Classes 0 0 0 (908)
- ------------------------------------------------------ ----------------------------------- ----------------------------------
In excess of net realized capital gains
Class A 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class B 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class C 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Institutional Classes 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Total Distributions (310) (239) (3,592) (2,479)
====================================================== =================================== ==================================
Fund Share Transactions
Receipts for shares sold
Class A 214 0 86,364 49,497
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class B 362 0 28,789 27,246
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class C 2,021 0 97,510 115,417
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Institutional Classes 13,089 32,769 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class B 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class C 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Issued as reinvestment of distributions
Class A 0 0 0 632
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class B 0 0 0 211
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class C 0 0 0 1,501
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Institutional Classes 222 177 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Cost of shares redeemed
Class A (10) 0 (80,778) (34,767)
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class B (73) 0 (11,137) (3,798)
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class C (277) 0 (71,730) (59,900)
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Institutional Classes (45,883) (35,254) 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Net increase (decrease) resulting from Fund share
transactions (30,335) (2,308) 49,018 96,039
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Total Increase (Decrease) in Net Assets (25,738) 6,544 48,979 122,896
====================================================== =================================== ==================================
Net Assets
Beginning of period 80,913 74,369 221,597 98,701
- ------------------------------------------------------ ----------------------------------- ----------------------------------
End of period * $ 55,175 $ 80,913 $ 270,576 $ 221,597
- ------------------------------------------------------ ----------------------------------- ----------------------------------
- ------------------------------------------------------ ----------------------------------- ----------------------------------
*Including net undistributed (overdistributed)
investment income of: $ (69) $ (33) $ 0 $ 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
</TABLE>
<TABLE>
<CAPTION>
$ in thousands Precious Metals Fund Balanced Fund
----------------------------------- ----------------------------------
Nine Months Eight
Ended Year Ended Year Ended Months Ended
June 30, 1997 September 30, 1996 June 30, 1997 June 30, 1997
<S> <C> <C> <C> <C>
Operations
Net investment income (loss) $ (93) $ (222) $ 2,252 $ 1,802
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Net realized gain (loss) 87 147 12,663 1,778
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Net change in unrealized appreciation (depreciation) (11,122) 272 (3,065) 3,088
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Net increase (decrease) resulting from operations (11,128) 197 11,850 6,668
====================================================== =================================== ==================================
Net equalization credits (debits) 0 0 0 0
====================================================== =================================== ==================================
Distributions to Shareholders
From net investment income
Class A 0 0 (4) 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class B 0 0 (10) 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class C 0 0 (8) 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Institutional Classes 0 0 (2,191) (1,802)
- ------------------------------------------------------ ----------------------------------- ----------------------------------
In excess of net investment income
Class A 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class B 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class C 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Institutional Classes 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
From net realized capital gains
Class A 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class B 0 0 (10,060) (6,227)
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class C 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Institutional Classes 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
In excess of net realized capital gains
Class A (98) 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class B (36) 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class C (575) 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Institutional Classes 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Total Distributions (709) 0 (12,273) (8,029)
====================================================== =================================== ==================================
Fund Share Transactions
Receipts for shares sold
Class A 228,982 145,746 354 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class B 4,276 3,194 1,113 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class C 93,686 151,402 969 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Institutional Classes 0 0 10,422 9,459
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class B 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class C 0 0 0 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Issued as reinvestment of distributions
Class A 89 0 3 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class B 32 0 9 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class C 529 0 7 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Institutional Classes 0 0 12,237 8,025
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Cost of shares redeemed
Class A (230,377) (147,981) (4) 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class B (1,186) (1,010) (44) 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Class C (96,889) (155,738) (91) 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Institutional Classes 0 0 (43,185) (6,199)
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Net increase (decrease) resulting from Fund share
transactions (858) (4,387) (18,210) 11,285
- ------------------------------------------------------ ----------------------------------- ----------------------------------
Total Increase (Decrease) in Net Assets (12,695) (4,190) (18,633) 9,924
====================================================== =================================== ==================================
Net Assets
Beginning of period 46,072 50,262 82,562 72,638
- ------------------------------------------------------ ----------------------------------- ----------------------------------
End of period * $ 33,377 $ 46,072 $ 63,929 $ 82,562
- ------------------------------------------------------ ----------------------------------- ----------------------------------
- ------------------------------------------------------ ----------------------------------- ----------------------------------
*Including net undistributed (overdistributed)
investment income of: $ (17) $ 0 $ 2,860 $ 0
- ------------------------------------------------------ ----------------------------------- ----------------------------------
</TABLE>
<TABLE>
<CAPTION>
$ in thousands Tax Exempt Fund
-----------------------------------
Nine Months
Increase (Decrease) in Net Assets from: Ended Year Ended
June 30, 1997 September 30, 1996
<S> <C> <C>
Operations
Net investment income (loss) $ 1,584 $ 2,459
- ------------------------------------------------------ -----------------------------------
Net realized gain (loss) 528 (8)
- ------------------------------------------------------ -----------------------------------
Net change in unrealized appreciation (depreciation) (23) 28
- ------------------------------------------------------ -----------------------------------
Net increase (decrease) resulting from operations 2,089 2,479
====================================================== ===================================
Net equalization credits (debits) 0 0
====================================================== ===================================
Distributions to Shareholders
From net investment income
Class A (195) (182)
- ------------------------------------------------------ -----------------------------------
Class B (78) (55)
- ------------------------------------------------------ -----------------------------------
Class C (1,353) (1,870)
- ------------------------------------------------------ -----------------------------------
Institutional Classes 0 0
- ------------------------------------------------------ -----------------------------------
In excess of net investment income
Class A 0 (14)
- ------------------------------------------------------ -----------------------------------
Class B 0 (4)
- ------------------------------------------------------ -----------------------------------
Class C 0 (144)
- ------------------------------------------------------ -----------------------------------
Institutional Classes 0 0
- ------------------------------------------------------ -----------------------------------
From net realized capital gains
Class A 0 0
- ------------------------------------------------------ -----------------------------------
Class B 0 0
- ------------------------------------------------------ -----------------------------------
Class C 0 0
- ------------------------------------------------------ -----------------------------------
Institutional Classes 0 0
- ------------------------------------------------------ -----------------------------------
In excess of net realized capital gains
Class A 0 0
- ------------------------------------------------------ -----------------------------------
Class B 0 0
- ------------------------------------------------------ -----------------------------------
Class C 0 0
- ------------------------------------------------------ -----------------------------------
Institutional Classes 0 0
- ------------------------------------------------------ -----------------------------------
Total Distributions (1,626) (2,269)
====================================================== ===================================
Fund Share Transactions
Receipts for shares sold
Class A 2,047 3,795
- ------------------------------------------------------ -----------------------------------
Class B 551 2,150
- ------------------------------------------------------ -----------------------------------
Class C 2,193 4,814
- ------------------------------------------------------ -----------------------------------
Institutional Classes 0 0
- ------------------------------------------------------ -----------------------------------
Shares issued in reorganization
Class A 0 0
- ------------------------------------------------------ -----------------------------------
Class B 0 0
- ------------------------------------------------------ -----------------------------------
Class C 0 0
- ------------------------------------------------------ -----------------------------------
Issued as reinvestment of distributions
Class A 98 110
- ------------------------------------------------------ -----------------------------------
Class B 31 32
- ------------------------------------------------------ -----------------------------------
Class C 766 1,456
- ------------------------------------------------------ -----------------------------------
Institutional Classes 0 0
- ------------------------------------------------------ -----------------------------------
Cost of shares redeemed
Class A (2,535) (757)
- ------------------------------------------------------ -----------------------------------
Class B (312) (197)
- ------------------------------------------------------ -----------------------------------
Class C (8,997) (13,622)
- ------------------------------------------------------ -----------------------------------
Institutional Classes 0 0
- ------------------------------------------------------ -----------------------------------
Net increase (decrease) resulting from Fund share
transactions (6,158) (2,219)
- ------------------------------------------------------ -----------------------------------
Total Increase (Decrease) in Net Assets (5,695) (2,009)
====================================================== ===================================
Net Assets
Beginning of period 55,204 57,213
- ------------------------------------------------------ -----------------------------------
End of period * $ 49,509 $ 55,204
- ------------------------------------------------------ -----------------------------------
- ------------------------------------------------------ -----------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 189 $ 231
- ------------------------------------------------------ -----------------------------------
</TABLE>
----
See accompanying notes 73
----
<PAGE>
Notes to Financial Statements
June 30, 1997
1. Organization
PIMCO Funds: Multi-Manager Series (the "Trust"), formerly known as PIMCO Funds:
Equity Advisors Series, 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 an open-end management investment company. The Trust
currently consists of twenty two separate investment funds (the "Funds"): the
Equity Income Fund; the Renaissance Fund; the Small Cap Value Fund; the Value
Fund; the Capital Appreciation Fund; the Mid Cap Growth Fund; the Micro Cap
Growth Fund; the Small Cap Growth Fund; the Core Equity Fund; the Mid Cap Equity
Fund; the Innovation Fund; the Enhanced Equity Fund; the Emerging Markets Fund;
the International Fund; the International Developed Fund; the Target Fund; the
Tax Exempt Fund; the Growth Fund; the Opportunity Fund; the Precious Metals
Fund; the Structured Emerging Markets Fund; and the Balanced Fund. The
Structured Emerging Markets Fund had not commenced operations as of June 30,
1997. As used in the financial statements, "Institutional Classes" refers to the
Institutional and Administrative Classes and "Retail Classes" refers to the A,
B, and C Classes of the Trust.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Trust in preparation of its financial statements. These policies
are in conformity with generally accepted accounting principles. The preparation
of financial statements in accordance with generally accepted accounting
principles requires management to make estimates and assumptions that affect the
reported amounts and disclosures in the financial statements. Actual results
could differ from those estimates.
Security Valuation. Portfolio securities and other financial instruments 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, the
mean between representative bid and asked quotations obtained from a quotation
reporting system or from established market makers. Foreign currency amounts are
converted to U.S. dollars using foreign exchange quotations received from
independent dealers. Short-term investments having a maturity of 60 days or less
are valued at amortized cost, which approximates market 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.
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, except certain
dividends from foreign securities where the ex-dividend date may have passed,
are recorded as soon as the Fund is informed of the ex-dividend date. Interest
income, adjusted for the accretion of discounts and amortization of premiums, is
recorded on the accrual basis.
During the year ended June 30, 1997, the Capital Appreciation and Mid Cap
Growth Funds incurred one redemption in kind each, resulting in net realized
gains of $2,666,079 and $4,329,586, respectively. A redemption in kind occurs
when a Fund pays a shareholder with portfolio securities in lieu of cash.
Dividends and Distributions to Shareholders. Dividends from net investment
income, if any, are declared daily and paid monthly to shareholders of record by
the Tax Exempt Fund and declared and paid quarterly to shareholders of record by
the Equity Income, Renaissance, Value and Balanced Funds. Dividends from net
investment income, if any, are declared and paid at least annually to
shareholders of record by the other Funds. Net long-term capital gains earned by
a Fund, if any, will be distributed no less frequently than once each year.
Foreign exchange gains or losses on investments and the income generated from
such investments, arising from fluctuations of exchange rates of the non-dollar
denominated investments relative to the U.S. dollar, are reported to
shareholders as income in accordance with the provisions of the Internal Revenue
Code.
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 such items as wash sales, foreign currency transactions, net
operating losses and capital loss carryforwards. Certain amounts have been
reclassified between undistributed net investment income, accumulated
undistributed net realized gains or losses and paid in capital due to
differences in accounting and tax requirements. Certain amounts have been
reclassified between undistributed net investment income, accumulated
undistributed net realized gains or losses and paid in capital to more
appropriately conform financial accounting and tax characterizations of dividend
distributions.
- ----
74
- ----
<PAGE>
Multiclass Operations. Each class offered by the Trust has equal rights as to
assets and voting privileges. Income, non-class specific expenses and realized
and unrealized capital gains and losses are allocated to each class of shares
based on the relative net assets of each class, except the Tax Exempt Fund which
allocates income and non-class specific expenses based on the value of settled
shares.
Federal Income Taxes. Each Fund intends to qualify as a regulated investment
company and distribute all of its taxable income and net realized gains, if
applicable, to shareholders. Accordingly, no provision for Federal income taxes
has been made.
Foreign Taxes on Dividends. Dividend income in the statement of operations is
shown net of foreign taxes withheld on dividends from foreign securities.
Foreign taxes withheld were as follows: Equity Income Fund - $13,433;
Renaissance Fund - $54,317; Value Fund - $18,234; Capital Appreciation Fund -
$26,287; Mid Cap Growth Fund - $4,463; Target Fund - $5,506; Small Cap Value
Fund - $885; International Developed Fund - $235,194; International Fund -
$360,797; Emerging Markets Fund - $153,802; Innovation Fund - $13,128; Precious
Metals Fund - $24,054; and Balanced Fund - $3,328.
Equalization. Prior to July 1, 1996, the Equity Income, Value, Capital
Appreciation, Mid Cap Growth, Small Cap Value, International Developed, Emerging
Markets and Balanced Funds followed 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, was credited or
charged to undistributed income. As a result, undistributed investment income
per share was unaffected by sales or redemptions of Fund shares. As of July 1,
1996, the Funds discontinued using equalization. This change has no effect on
the Funds' net assets, net asset values per share, or their net increases
(decreases) in net assets resulting from operations.
Futures and Options. Certain Funds are authorized to enter into futures
contracts and options. A Fund may use futures contracts to manage its exposure
to the stock and bond markets or change in interest rates and currency values,
or for gaining exposure to markets. The primary risks associated with the use of
futures contracts and options are imperfect correlation between the change in
market value of the securities held by a Fund and the prices of futures
contracts and options, the possibility of an illiquid market, and the inability
of the counterparty to meet the terms of the contract. Futures contracts and
purchased options are valued based upon their quoted daily settlement prices.
The premium received for a written option 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 instruments are recorded as
unrealized appreciation (depreciation) until terminated, at which time realized
gains and losses are recognized.
Forward Currency Transactions. Certain Funds are authorized to enter into
forward foreign exchange 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 may also 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. All
commitments are marked to market daily at the applicable translation rates and
any resulting unrealized gains or losses are recorded. Realized gains or losses
are recorded at the time the forward contract matures or by delivery of the
currency. Risks may arise upon entering these contracts from the potential
inability of counterparties to meet the terms of their contracts and from
unanticipated movements in the value of a foreign currency relative to the U.S.
dollar. The following foreign forward currency contracts were outstanding at
June 30, 1997 (amounts in thousands):
<TABLE>
<CAPTION>
Principal
Amount Unrealized
Covered by Expiration Appreciation
Fund Type Contract Month (Depreciation)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Emerging Markets Fund
Sell Brazillian Real
Cruzeiro 989 7/97 $ 0
Sell Israeli Shekel 261 7/97 0
Sell Peruvian Inti 1,038 7/97 1
Sell Philippines Peso 9,190 7/97 0
------------
$ 1
============
International Developed Fund
Buy Japanese Yen 220,000 7/97 (16)
International Fund
Buy Finnish Markka 9,209 7/97 0
Buy Portuguese Escudo 299,697 7/97 (6)
------------
$ (6)
============
Precious Metals Fund
Sell Australian Dollar 111 7/97 (1)
</TABLE>
For assets and liabilities other than investments in securities, net realized
and unrealized gains and losses from foreign currency transactions arise from
changes in currency exchange rates.
----
75
----
<PAGE>
Notes to Financial Statements (Cont.)
June 30, 1997
Repurchase Agreements. Each Fund may engage in repurchase transactions. Under
the terms of a typical repurchase agreement, the Fund takes possession of an
underlying debt obligation subject to an obligation of the seller to repurchase,
and the Fund to resell, the obligation at an agreed-upon price and time. The
market value of the collateral must be equal at all times to the total amount of
the repurchase obligations, including interest. Generally, in the event of
counterparty default, the Fund has the right to use the collateral to offset
losses incurred.
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: 0.30% for the Tax Exempt Fund; 0.50% for the Growth Fund;
0.55% for the Target and International Funds; 0.60% for the Renaissance, Small
Cap Value, International Developed and Precious Metals Funds; 0.65% for the
Opportunity and Innovation Funds; 0.85% for the Emerging Markets Fund; and 0.45%
for all other Funds. Each of the Funds also has a sub-advisor which, under the
supervision of PIMCO Advisors, directs the investments of the Fund's assets.
Other than the sub-advisor of the Precious Metals Fund, all of the sub-advisors
are affiliates of PIMCO Advisors. The advisory fees received by PIMCO Advisors
are paid in all or in part to each of the sub-advisors in accordance with the
portfolio management agreements.
Administration Fee. PIMCO provides administrative services to the Trust for
which it receives from each Fund a monthly administrative fee based on each
share class's average daily net assets. The Administration Fee for the Retail
Classes is charged at the annual rate of 0.65% for the International Developed,
International and Emerging Markets Funds; 0.45% for the Precious Metals Fund;
and 0.40% for all other Funds. The Administration Fee for the Institutional
Classes is charged at the annual rate of 0.50% for the Emerging Markets and
International Developed and 0.25% for all other Funds.
Distribution and Servicing Fees. PIMCO Funds Distribution Company ("PFDCO"), a
wholly-owned subsidiary of PIMCO Advisors L.P., serves as the distributor of the
Trust's shares.
The Trust 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 distribution of shares or administration of plans or
programs that use Fund shares as their funding medium. The effective rate paid
to PFDCO was 0.25% during the current fiscal year.
Pursuant to the Distribution and Servicing Plans adopted by the Retail
Classes of the Trust, the Trust compensates PFDCO for services provided and
expenses incurred in connection with assistance rendered in the sale of shares
and services rendered to shareholders and for maintenance of shareholder
accounts of the Retail Classes. The Trust paid PFDCO distribution and servicing
fees at an effective rate as set forth below (calculated as a percentage of each
Fund's average daily net assets attributable to each class):
<TABLE>
<CAPTION>
Distribution Fee(%) Servicing Fee(%)
- --------------------------------------------------------------------------------
<S> <C> <C>
Class A
All Funds - 0.25
Class B
All Funds 0.75 0.25
Class C
All Funds 0.75 0.25
</TABLE>
PFDCO also receives the proceeds of the initial sales charges paid by the
shareholders upon the purchase of Class A shares and the contingent deferred
sales charges paid by the shareholders upon certain redemptions of Class A,
Class B and Class C shares. For the year ended June 30, 1997, the Funds were
informed that PFDCO received $3,045,377 representing commissions (sales charges)
and contingent deferred sales charges related to the Retail Classes.
- ----
76
- ----
<PAGE>
Expenses. The Trust is also 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 its subsidiaries or affiliates; (ii) taxes and governmental fees;
(iii) brokerage fees and commissions and other portfolio transaction expenses;
(iv) the cost of borrowing money, including interest expenses; (v) fees and
expenses of the Trustees who are not "interested persons" of the Advisor, 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 such as organizational 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 and
subject to review and approval by the Trustees. The ratio of expenses to average
net assets per share class, as disclosed in Financial Highlights, may differ
from the annual fund operating expenses per share class as disclosed in the
Prospectus for the reasons set forth above. During the reporting period ended
June 30, 1997, differences occurred primarily due to reorganization expenses
incurred as a result of the reorganization of the former PIMCO Funds: Equity
Advisors Series and PIMCO Advisors Funds and the related adoption of a new fee
structure, compensation of the Trustees and overdraft expenses. The
reorganization expenses are non-recurring.
In conjunction with the reorganization of the PIMCO Advisors Funds, the
Renaissance, Growth, Target, Opportunity, International, Innovation, Precious
Metals and Tax Exempt Funds adopted a unified fee structure on January 17, 1997
whereby PIMCO provides services necessary for the operation of the Fund for a
single administration fee.
Each unaffiliated Trustee receives an annual retainer of $45,000, plus
$2,000 for each Board of Trustees meeting attended, plus reimbursement of
related expenses. In addition, each committee chair receives an annual retainer
of $2,000. These expenses are allocated to the Funds of the Trust according to
their respective net assets.
4. Purchases and Sales of Securities
Purchases and sales of securities (excluding short-term investments) for the
period ended June 30, 1997 were as follows ($ in thousands):
<TABLE>
<CAPTION>
U.S. Government/Agency All Other
---------------------------------------------------------
Purchases Sales Purchases Sales
---------------------------------------------------------
<S> <C> <C> <C> <C>
Equity Income Fund $ 53,991 $ 68,130
Renaissance Fund 438,223 399,282
Value Fund 92,324 71,400
Capital Appreciation Fund 468,212 334,686
Growth Fund 1,454,009 1,669,290
Mid Cap Growth Fund 255,660 213,102
Target Fund 1,566,349 1,604,955
Small Cap Value Fund 45,651 18,674
Opportunity Fund 514,770 489,157
International Developed Fund 81,697 63,192
International Fund 117,017 161,878
Emerging Markets Fund 45,590 74,451
Innovation Fund 234,851 186,074
Precious Metals Fund 18,745 18,604
Balanced Fund $ 77,683 $ 77,504 65,440 85,173
Tax Exempt Fund 36,019 43,330
</TABLE>
----
77
----
<PAGE>
Notes to Financial Statements (Cont.)
June 30, 1997
5. Transactions in Written Call and Put Options
Transactions in written call and put options were as follows ($ in thousands):
<TABLE>
<CAPTION>
Growth Fund Target Fund Opportunity Fund Innovation Fund Balanced Fund
- -----------------------------------------------------------------------------------------------------------------------------------
Premium Contracts Premium Contracts Premium Contracts Premium Contracts Premium Contracts
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at 06/30/96 $ 3 8
Balance at 09/30/96 $ 181 842 $ 0 0 $ 1,636 5,520 $ 0 0
Sales 26,721 71,277 1,162 5,350 4,703 20,697 55 300 47 70
Closing Buys (16,194) (46,870) (831) (3,350) (2,153) (8,864) (55) (300) 0 0
Expirations (4,393) (14,304) (331) (2,000) (2,482) (8,154) 0 0 (50) (78)
Exercised (3,097) (6,445) 0 0 (766) (3,509) 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
Balance at 06/30/97 $ 3,218 4,500 $ 0 0 $ 938 5,690 $ 0 0 $ 0 0
===================================================================================================================================
</TABLE>
6. Institutional Class Summaries
The following amounts relate to items accumulated in the Statement of Assets and
Liabilities, the Statement of Operations and the Statement of Changes in Net
Assets (amounts in thousands):
<TABLE>
<CAPTION>
Capital International
Equity Income Appreciation Mid Cap Small Cap Developed Emerging Balanced
Fund Value Fund Fund Growth Fund Value Fund Fund Markets Fund Fund
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares Outstanding
Institutional Class 7,860 5,039 25,299 14,370 2,195 7,171 3,776 5,387
Administrative Class 529 0 147 102 375 176 8 0
--------------------------------------------------------------------------------------------------------
8,389 5,039 25,446 14,472 2,570 7,347 3,784 5,387
========================================================================================================
Distributions to Shareholders
From net investment income
Institutional Class $ 4,331 $ 1,517 $ 2,203 $ 604 $ 302 $ 0 $ 310 $ 2,191
Administrative Class 249 0 7 2 41 0 0 0
--------------------------------------------------------------------------------------------------------
$ 4,580 $ 1,517 $ 2,210 $ 606 $ 343 $ 0 $ 310 $ 2,191
========================================================================================================
From net realized capital
gains
Institutional Class $14,051 $ 2,344 $44,041 $43,528 $ 4,690 $ 4,189 $ 0 $10,060
Administrative Class 853 0 129 258 700 255 0 0
--------------------------------------------------------------------------------------------------------
$14,904 $ 2,344 $44,170 $43,786 $ 5,390 $ 4,444 $ 0 $10,060
========================================================================================================
</TABLE>
- ----
78
- ----
<PAGE>
7. Change in Portfolio Manager for the Balanced Fund
Effective August 1, 1996, NFJ Investment Group and Cadence Capital Management
replaced Parametric Portfolio Associates as managers of the common stock segment
of the Balanced Fund. There was no change to the advisory fee. PIMCO continues
to manage the fixed income segment of the Balanced Fund.
8. Federal Income Tax Matters
As of June 30, 1997, the Funds listed in the table below have remaining capital
loss carryforwards that were realized in prior years (amounts in thousands):
<TABLE>
<CAPTION>
Capital Loss Carryforwards
------------------------------------------------------
Realized Acquired
Losses Losses Expiration
------------------------------------------------------
<S> <C> <C> <C>
Emerging Markets Fund $ 10,105 $ 0 6/30/03
Tax Exempt Fund 536 0 6/30/03
</TABLE>
9. Reorganization
On September 17, 1996, the Board of Trustees approved the reorganization of
certain of the funds of PIMCO Advisors Funds ("PAF"), an affiliated management
investment company, into the Trust. The reorganization occurred on January 17,
1997. In conjunction with the reorganization, the name of the Trust was changed
to "PIMCO Funds: Multi-Manager Series" from "PIMCO Funds: Equity Advisors
Series." Certain PAF funds were acquired intact and became new Funds of the
Trust. Two Funds of the Trust, the NFJ Diversified Low P/E and the Cadence Mid
Cap Growth Funds, were combined with funds acquired from PAF.
Also, as part of the reorganization, the NFJ Diversified Low P/E Fund and
the Blairlogie International Active Fund were renamed Value Fund and
International Developed Fund, respectively, to more accurately describe their
investment styles.
Each Acquiring Fund, as listed below, acquired the assets and certain
liabilities of the Acquired Fund, also listed below, in a tax-free exchange for
shares of the Acquiring Fund, pursuant to a plan of reorganization approved by
the Acquired Fund's shareholders (amounts in thousands):
<TABLE>
<CAPTION>
Value of
Shares Issued Shares Issued Total Net Assets
by Acquiring by Acquiring of Acquired
Acquiring Fund Acquired Fund Date Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PIMCO NFJ Diversified PIMCO Advisors
Low P/E Fund (renamed Value Fund
Value Fund) 01/17/97 5,988 $ 80,835 $ 80,835
- ------------------------------------------------------------------------------------------------------------------------------------
PIMCO Cadence Mid PIMCO Advisors
Cap Growth Fund (renamed Discovery Fund
Mid Cap Growth Fund) 01/17/97 4,103 75,422 75,422
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Total Net Assets
Total Net Assets of Acquiring Acquired Fund
of Acquiring Fund After Unrealized
Acquiring Fund Acquired Fund Date Fund Acquisition Appreciation
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PIMCO NFJ Diversified PIMCO Advisors
Low P/E Fund (renamed Value Fund
Value Fund) 01/17/97 $ 67,334 $ 148,169 $ 9,962
- ------------------------------------------------------------------------------------------------------------------------------------
PIMCO Cadence Mid PIMCO Advisors
Cap Growth Fund (renamed Discovery Fund
Mid Cap Growth Fund) 01/17/97 237,494 312,916 11,691
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
On January 17, 1997, the Renaissance, Growth, Target, Opportunity,
International, Innovation, Precious Metals and Tax Exempt Funds, portfolios in
the PIMCO Advisors Funds, were reorganized as portfolios of the Trust pursuant
to an agreement and plan of reorganization approved by each Fund's shareholders.
In connection with the reorganization, the year end dates of the Funds were
changed from September 30 to June 30.
----
79
----
<PAGE>
Notes to Financial Statements (Cont.)
June 30, 1997
10. 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>
Equity Income Fund Renaissance Fund
-------------------------------------------------- ---------------------------------------------
Year Ended Eight Months Nine Months Ended Year Ended
6/30/97 Ended 6/30/96 6/30/97 9/30/96
Shares Amount Shares Amount Shares Amount Shares Amount
- -------------------------------- -------------------------------------------------- ---------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 1,004 $ 14,387 2,560 $ 34,285 0 $ 0 0 $ 0
- -------------------------------- -------------------------------------------------- ---------------------------------------------
Administrative Class 142 2,032 524 6,890 0 0 0 0
- -------------------------------- -------------------------------------------------- ---------------------------------------------
Class A 118 1,691 0 0 1,108 17,402 559 8,421
- -------------------------------- -------------------------------------------------- ---------------------------------------------
Class B 213 3,040 0 0 1,321 21,111 882 13,373
- -------------------------------- -------------------------------------------------- ---------------------------------------------
Class C 488 7,063 0 0 7,139 112,880 3,430 51,279
- -------------------------------- -------------------------------------------------- ---------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0 0 0 0 0
- -------------------------------- -------------------------------------------------- ---------------------------------------------
Class B 0 0 0 0 0 0 0 0
- -------------------------------- -------------------------------------------------- ---------------------------------------------
Class C 0 0 0 0 0 0 0 0
- -------------------------------- -------------------------------------------------- ---------------------------------------------
Issued as reinvestment
of distributions
Institutional Class 1,299 17,796 514 6,952 0 0 0 0
- -------------------------------- -------------------------------------------------- ---------------------------------------------
Administrative Class 80 1,101 29 387 0 0 0 0
- -------------------------------- -------------------------------------------------- ---------------------------------------------
Class A 1 13 0 0 12 200 63 909
- -------------------------------- -------------------------------------------------- ---------------------------------------------
Class B 1 15 0 0 5 73 12 169
- -------------------------------- -------------------------------------------------- ---------------------------------------------
Class C 3 43 0 0 39 613 752 10,718
- -------------------------------- -------------------------------------------------- ---------------------------------------------
Cost of shares redeemed
Institutional Class (2,573) (37,514) (3,957) (55,588) 0 0 0 0
- -------------------------------- -------------------------------------------------- ---------------------------------------------
Administrative Class (118) (1,690) (139) (1,903) 0 0 0 0
- -------------------------------- -------------------------------------------------- ---------------------------------------------
Class A (5) (69) 0 0 (509) (7,973) (254) (3,756)
- -------------------------------- -------------------------------------------------- ---------------------------------------------
Class B (47) (670) 0 0 (203) (3,265) (45) (679)
- -------------------------------- -------------------------------------------------- ---------------------------------------------
Class C (60) (899) 0 0 (3,802) (61,037) (2,213) 32,723
- -------------------------------- -------------------------------------------------- ---------------------------------------------
Net increase (decrease)
resulting from Fund
share transactions 546 $ 6,339 (469) $ (8,977) 5,110 $ 80,004 3,186 $ 113,157
================================ ================================================== =============================================
<CAPTION>
Value Fund
-----------------------------------------------------
Year Ended Eight Months Ended
6/30/97 6/30/96
Shares Amount Shares Amount
- -------------------------------- -----------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 1,317 $ 17,251 2,925 $ 36,330
- -------------------------------- -----------------------------------------------------
Administrative Class 0 0 0 0
- -------------------------------- -----------------------------------------------------
Class A 349 3,387 0 0
- -------------------------------- -----------------------------------------------------
Class B 303 1,609 0 0
- -------------------------------- -----------------------------------------------------
Class C 1,607 16,250 0 0
- -------------------------------- -----------------------------------------------------
Shares issued in reorganization
Class A 843 11,374 0 0
- -------------------------------- -----------------------------------------------------
Class B 1,521 20,538 0 0
- -------------------------------- -----------------------------------------------------
Class C 3,624 48,923 0 0
- -------------------------------- -----------------------------------------------------
Issued as reinvestment
of distributions
Institutional Class 293 3,854 207 2,397
- -------------------------------- -----------------------------------------------------
Administrative Class 0 0 0 0
- -------------------------------- -----------------------------------------------------
Class A 7 95 0 0
- -------------------------------- -----------------------------------------------------
Class B 6 86 0 0
- -------------------------------- -----------------------------------------------------
Class C 16 225 0 0
- -------------------------------- -----------------------------------------------------
Cost of shares redeemed
Institutional Class (803) (10,770) (53) (637)
- -------------------------------- -----------------------------------------------------
Administrative Class 0 0 0 0
- -------------------------------- -----------------------------------------------------
Class A (142) (1,972) 0 0
- -------------------------------- -----------------------------------------------------
Class B (112) (1,562) 0 0
- -------------------------------- -----------------------------------------------------
Class C (913) (12,509) 0 0
- -------------------------------- -----------------------------------------------------
Net increase (decrease)
resulting from Fund
share transactions 7,916 $ 96,779 3,079 $ 38,090
================================ =====================================================
</TABLE>
<TABLE>
<CAPTION>
Small Cap Value Fund Opportunity Fund
------------------------------------------------ ------------------------------------------------
Year Ended Eight Months Nine Months Ended Year Ended
6/30/97 Ended 6/30/96 6/30/97 9/30/96
Shares Amount Shares Amount Shares Amount Shares Amount
- -------------------------------- ------------------------------------------------ ------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 395 $ 5,653 201 $ 2,712 0 $ 0 0 $ 0
- -------------------------------- ------------------------------------------------ ------------------------------------------------
Administrative Class 90 1,269 437 5,755 0 0 0 0
- -------------------------------- ------------------------------------------------ ------------------------------------------------
Class A 422 6,136 0 0 7,683 225,467 1,508 52,255
- -------------------------------- ------------------------------------------------ ------------------------------------------------
Class B 743 10,821 0 0 0 0 0 0
- -------------------------------- ------------------------------------------------ ------------------------------------------------
Class C 1,351 19,512 0 0 21,251 587,295 12,429 406,910
- -------------------------------- ------------------------------------------------ ------------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0 0 0 0 0
- -------------------------------- ------------------------------------------------ ------------------------------------------------
Class B 0 0 0 0 0 0 0 0
- -------------------------------- ------------------------------------------------ ------------------------------------------------
Class C 0 0 0 0 0 0 0 0
- -------------------------------- ------------------------------------------------ ------------------------------------------------
Issued as reinvestment
of distributions
Institutional Class 368 4,969 192 2,501 0 0 0 0
- -------------------------------- ------------------------------------------------ ------------------------------------------------
Admininistrative Class 55 741 27 355 0 0 0 0
- -------------------------------- ------------------------------------------------ ------------------------------------------------
Class A 0 0 0 0 0 0 663 21,540
- -------------------------------- ------------------------------------------------ ------------------------------------------------
Class B 0 0 0 0 0 0 0 0
- -------------------------------- ------------------------------------------------ ------------------------------------------------
Class C 0 0 0 0 0 0 4,255 131,687
- -------------------------------- ------------------------------------------------ ------------------------------------------------
Cost of shares redeemed
Institutional Class (612) (8,698) (1,028) (13,943) 0 0 0 0
- -------------------------------- ------------------------------------------------ ------------------------------------------------
Administrative Class (82) (1,177) (152) (2,006) 0 0 0 0
- -------------------------------- ------------------------------------------------ ------------------------------------------------
Class A (5) (78) 0 0 (4,019) (114,318) (1,653) (56,734)
- -------------------------------- ------------------------------------------------ ------------------------------------------------
Class B (38) (588) 0 0 0 0 0 0
- -------------------------------- ------------------------------------------------ ------------------------------------------------
Class C (37) (535) 0 0 (20,883) (575,183) (8,616) (432,085)
- -------------------------------- ------------------------------------------------ ------------------------------------------------
Net increase (decrease)
resulting from Fund
share transactions 2,650 $ 38,025 (323) $ (4,626) 4,032 $ 123,261 8,586 $ 123,573
================================ ================================================ ================================================
<CAPTION>
International Developed Fund
----------------------------------------------------------
Year Ended Eight Months Ended
6/30/97 6/30/96
Shares Amount Shares Amount
- -------------------------------- ----------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 3,568 $ 43,648 1,178 $ 14,180
- -------------------------------- ----------------------------------------------------------
Administrative Class 140 1,683 428 5,259
- -------------------------------- ----------------------------------------------------------
Class A 39 477 0 0
- -------------------------------- ----------------------------------------------------------
Class B 87 1,057 0 0
- -------------------------------- ----------------------------------------------------------
Class C 228 2,759 0 0
- -------------------------------- ----------------------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0
- -------------------------------- ----------------------------------------------------------
Class B 0 0 0 0
- -------------------------------- ----------------------------------------------------------
Class C 0 0 0 0
- -------------------------------- ----------------------------------------------------------
Issued as reinvestment
of distributions
Institutional Class 296 3,449 182 2,171
- -------------------------------- ----------------------------------------------------------
Administrative Class 22 255 3 38
- -------------------------------- ----------------------------------------------------------
Class A 0 0 0 0
- -------------------------------- ----------------------------------------------------------
Class B 0 0 0 0
- -------------------------------- ----------------------------------------------------------
Class C 0 0 0 0
- -------------------------------- ----------------------------------------------------------
Cost of shares redeemed
Institutional Class (2,294) (27,613) (1,178) (14,496)
- -------------------------------- ----------------------------------------------------------
Administrative Class (435) (5,453) (39) (483)
- -------------------------------- ----------------------------------------------------------
Class A (15) (189) 0 0
- -------------------------------- ----------------------------------------------------------
Class B (1) (15) 0 0
- -------------------------------- ----------------------------------------------------------
Class C (35) (433) 0 0
- -------------------------------- ----------------------------------------------------------
Net increase (decrease)
resulting from Fund
share transactions 1,600 $ 19,625 574 $ 6,669
================================ ==========================================================
</TABLE>
- ----
80
- ----
<PAGE>
<TABLE>
<CAPTION>
Capital Appreciation Fund Growth Fund
------------------------------------------------- ----------------------------------------------
Year Ended Eight Months Ended Nine Months Year Ended
6/30/97 6/30/96 Ended 6/30/97 9/30/96
Shares Amount Shares Amount Shares Amount Shares Amount
- -------------------------------- ------------------------------------------------- ----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 8,723 $ 165,774 5,442 $ 93,460 0 $ 0 0 $ 0
- -------------------------------- ------------------------------------------------- ----------------------------------------------
Administrative Class 157 3,111 0 0 0 0 0 0
- -------------------------------- ------------------------------------------------- ----------------------------------------------
Class A 330 6,440 0 0 5,519 139,954 1,783 44,645
- -------------------------------- ------------------------------------------------- ----------------------------------------------
Class B 144 2,819 0 0 923 22,424 1,222 29,313
- -------------------------------- ------------------------------------------------- ----------------------------------------------
Class C 676 13,152 0 0 17,754 428,075 12,080 289,628
- -------------------------------- ------------------------------------------------- ----------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0 0 0 0 0
- -------------------------------- ------------------------------------------------- ----------------------------------------------
Class B 0 0 0 0 0 0 0 0
- -------------------------------- ------------------------------------------------- ----------------------------------------------
Class C 0 0 0 0 0 0 0 0
- -------------------------------- ------------------------------------------------- ----------------------------------------------
Issued as reinvestment
of distributions
Institutional Class 2,018 36,552 947 15,598 0 0 0 0
- -------------------------------- ------------------------------------------------- ----------------------------------------------
Administrative Class 8 136 0 0 0 0 0 0
- -------------------------------- ------------------------------------------------- ----------------------------------------------
Class A 0 0 0 0 0 0 608 14,386
- -------------------------------- ------------------------------------------------- ----------------------------------------------
Class B 0 0 0 0 0 3 49 1,119
- -------------------------------- ------------------------------------------------- ----------------------------------------------
Class C 0 0 0 0 0 4 6,164 140,590
- -------------------------------- ------------------------------------------------- ----------------------------------------------
Cost of shares redeemed
Institutional Class (4,708) (90,177) (1,070) (18,543) 0 0 0 0
- -------------------------------- ------------------------------------------------- ----------------------------------------------
Administrative Class (17) (349) 0 0 0 0 0 0
- -------------------------------- ------------------------------------------------- ----------------------------------------------
Class A (21) (415) 0 0 (5,755) (147,335) (1,944) (48,670)
- -------------------------------- ------------------------------------------------- ----------------------------------------------
Class B (1) (11) 0 0 (213) (5,108) (116) (2,796)
- -------------------------------- ------------------------------------------------- ----------------------------------------------
Class C (55) (1,161) 0 0 (15,525) (376,328) (13,015) (313,152)
- -------------------------------- ------------------------------------------------- ----------------------------------------------
Net increase (decrease)
resulting from Fund
share transactions 7,254 $ 135,871 5,319 $ 90,515 2,703 $ 61,689 6,831 $ 155,063
================================ ================================================= ==============================================
<CAPTION>
Mid Cap Growth Fund Target Fund
------------------------------------------------- ------------------------------------------------
Year Ended Eight Months Ended Nine Months Ended Year Ended
6/30/97 6/30/96 6/30/97 9/30/96
Shares Amount Shares Amount Shares Amount Shares Amount
- ------------------------------- ------------------------------------------------- ------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 3,798 $ 71,437 3,438 $ 65,496 0 $ 0 0 $ 0
- ------------------------------- ------------------------------------------------- ------------------------------------------------
Administrative Class 47 878 14 266 0 0 0 0
- ------------------------------- ------------------------------------------------- ------------------------------------------------
Class A 133 673 0 0 34,398 550,283 23,466 372,363
- ------------------------------- ------------------------------------------------- ------------------------------------------------
Class B 277 1,840 0 0 1,754 27,085 2,560 40,171
- ------------------------------- ------------------------------------------------- ------------------------------------------------
Class C 792 8,401 0 0 19,148 293,453 20,255 314,741
- ------------------------------- ------------------------------------------------- ------------------------------------------------
Shares issued in reorganization
Class A 618 11,363 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- ------------------------------------------------
Class B 1,223 22,472 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- ------------------------------------------------
Class C 2,262 41,587 0 0 0 0 0 0
- ------------------------------- ------------------------------------------------- ------------------------------------------------
Issued as reinvestment
of distributions
Institutional Class 2,481 42,923 301 5,548 0 0 0 0
- ------------------------------- ------------------------------------------------- ------------------------------------------------
Administrative Class 15 261 2 27 0 0 0 0
- ------------------------------- ------------------------------------------------- ------------------------------------------------
Class A 0 0 0 0 0 4 817 12,468
- ------------------------------- ------------------------------------------------- ------------------------------------------------
Class B 0 0 0 0 0 1 74 1,097
- ------------------------------- ------------------------------------------------- ------------------------------------------------
Class C 0 0 0 0 0 1 5,536 82,368
- ------------------------------- ------------------------------------------------- ------------------------------------------------
Cost of shares redeemed
Institutional Class (3,791) (72,699) (2,281) (42,836) 0 0 0 0
- ------------------------------- ------------------------------------------------- ------------------------------------------------
Administrative Class (15) (280) (10) (182) 0 0 0 0
- ------------------------------- ------------------------------------------------- ------------------------------------------------
Class A (149) (2,743) 0 0 (34,558) (553,973) (22,596) (359,867)
- ------------------------------- ------------------------------------------------- ------------------------------------------------
Class B (99) (1,818) 0 0 (575) (8,959) (97) (1,509)
- ------------------------------- ------------------------------------------------- ------------------------------------------------
Class C (392) (7,250) 0 0 (17,874) (274,688) (15,586) (241,645)
- ------------------------------- ------------------------------------------------- ------------------------------------------------
Net increase (decrease)
resulting from Fund
share transactions 7,200 $ 117,045 1,464 $ 28,319 2,293 $ 33,207 14,429 $ 220,187
=============================== ================================================= ================================================
</TABLE>
<TABLE>
<CAPTION>
International Fund Emerging Markets Fund
--------------------------------------------------- ---------------------------------------------
Nine Months Ended Year Ended Year Eight Months Ended
6/30/97 9/30/96 Ended 6/30/97 6/30/96
Shares Amount Shares Amount Shares Amount Shares Amount
- -------------------------------- --------------------------------------------------- ---------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 0 $ 0 0 $ 0 1,007 $ 12,784 2,675 $ 32,382
- -------------------------------- --------------------------------------------------- ---------------------------------------------
Administrative Class 0 0 0 0 26 305 33 387
- -------------------------------- --------------------------------------------------- ---------------------------------------------
Class A 9,707 126,752 6,580 83,979 16 214 0 0
- -------------------------------- --------------------------------------------------- ---------------------------------------------
Class B 224 2,790 484 5,925 28 362 0 0
- -------------------------------- --------------------------------------------------- ---------------------------------------------
Class C 6,983 87,308 6,776 82,691 153 2,021 0 0
- -------------------------------- --------------------------------------------------- ---------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0 0 0 0 0
- -------------------------------- --------------------------------------------------- ---------------------------------------------
Class B 0 0 0 0 0 0 0 0
- -------------------------------- --------------------------------------------------- ---------------------------------------------
Class C 0 0 0 0 0 0 0 0
- -------------------------------- --------------------------------------------------- ---------------------------------------------
Issued as reinvestment
of distributions
Institutional Class 0 0 0 0 19 222 14 174
- -------------------------------- --------------------------------------------------- ---------------------------------------------
Administrative Class 0 0 0 0 0 0 0 3
- -------------------------------- --------------------------------------------------- ---------------------------------------------
Class A 0 0 0 0 0 0 0 0
- -------------------------------- --------------------------------------------------- ---------------------------------------------
Class B 0 0 0 0 0 0 0 0
- -------------------------------- --------------------------------------------------- ---------------------------------------------
Class C 0 0 0 0 0 0 0 0
- -------------------------------- --------------------------------------------------- ---------------------------------------------
Cost of shares redeemed
Institutional Class 0 0 0 0 (3,613) (45,330) (2,853) (34,303)
- -------------------------------- --------------------------------------------------- ---------------------------------------------
Administrative Class 0 0 0 0 (46) (553) (78) (951)
- -------------------------------- --------------------------------------------------- ---------------------------------------------
Class A (9,963) (130,472) (6,514) (83,424) (1) (10) 0 0
- -------------------------------- --------------------------------------------------- ---------------------------------------------
Class B (56) (702) (55) (673) (5) (73) 0 0
- -------------------------------- --------------------------------------------------- ---------------------------------------------
Class C (10,866) (136,065) (8,788) (106,715) (21) (277) 0 0
- -------------------------------- --------------------------------------------------- ---------------------------------------------
Net increase (decrease)
resulting from Fund
share transactions (3,971) $ (50,389) (1,517) $ (18,217) (2,437) $ (30,335) (209) $ (2,308)
================================ =================================================== =============================================
<CAPTION>
Innovation Fund Precious Metals Fund
-------------------------------------------------- ------------------------------------------------
Nine Months Ended Year Ended Nine Months Ended Year Ended
6/30/97 9/30/96 6/30/97 9/30/96
Shares Amount Shares Amount Shares Amount Shares Amount
- ------------------------------ -------------------------------------------------- ------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 0 $ 0 0 $ 0 0 $ 0 0 $ 0
- ------------------------------ -------------------------------------------------- ------------------------------------------------
Administrative Class 0 0 0 0 0 0 0 0
- ------------------------------ -------------------------------------------------- ------------------------------------------------
Class A 5,118 86,364 3,281 49,497 21,209 228,982 11,051 145,746
- ------------------------------ -------------------------------------------------- ------------------------------------------------
Class B 1,700 28,789 1,776 27,246 423 4,275 249 3,194
- ------------------------------ -------------------------------------------------- ------------------------------------------------
Class C 5,804 97,510 7,695 115,417 8,931 93,686 11,876 151,402
- ------------------------------ -------------------------------------------------- ------------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0 0 0 0 0
- ------------------------------ -------------------------------------------------- ------------------------------------------------
Class B 0 0 0 0 0 0 0 0
- ------------------------------ -------------------------------------------------- ------------------------------------------------
Class C 0 0 0 0 0 0 0 0
- ------------------------------ -------------------------------------------------- ------------------------------------------------
Issued as reinvestment
of distributions
Institutional Class 0 0 0 0 0 0 0 0
- ------------------------------ -------------------------------------------------- ------------------------------------------------
Administrative Class 0 0 0 0 0 0 0 0
- ------------------------------ -------------------------------------------------- ------------------------------------------------
Class A 0 0 43 632 8 89 0 0
- ------------------------------ -------------------------------------------------- ------------------------------------------------
Class B 0 0 14 211 3 32 0 0
- ------------------------------ -------------------------------------------------- ------------------------------------------------
Class C 0 0 103 1,501 49 530 0 0
- ------------------------------ -------------------------------------------------- ------------------------------------------------
Cost of shares redeemed
Institutional Class 0 0 0 0 0 0 0 0
- ------------------------------ -------------------------------------------------- ------------------------------------------------
Administrative Class 0 0 0 0 0 0 0 0
- ------------------------------ -------------------------------------------------- ------------------------------------------------
Class A (4,792) (80,778) (2,340) (34,767) (21,276) (230,377) (11,158) (147,981)
- ------------------------------ -------------------------------------------------- ------------------------------------------------
Class B (672) (11,137) (252) (3,798) (112) (1,186) (79) (1,010)
- ------------------------------ -------------------------------------------------- ------------------------------------------------
Class C (4,360) (71,730) (4,076) (59,900) (9,238) (96,889) (12,198) (155,738)
- ------------------------------ -------------------------------------------------- ------------------------------------------------
Net increase (decrease)
resulting from Fund
share transactions 2,798 $ 49,018 6,244 $ 96,039 (3) $ (858) (259) $ (4,387)
============================== ================================================== ================================================
</TABLE>
----
81
----
<PAGE>
Notes to Financial Statements (Cont.)
June 30, 1997
10. Shares of Beneficial Interest (Cont.)
<TABLE>
<CAPTION>
Balanced Fund Tax Exempt Fund
----------------------------------------------- ----------------------------------------------
Year Ended Eight Months Ended Nine Months Ended Year Ended
6/30/97 6/30/96 6/30/97 9/30/96
Shares Amount Shares Amount Shares Amount Shares Amount
- -------------------------------- ----------------------------------------------- ----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 926 $ 10,421 821 $ 9,459 0 $ 0 0 $ 0
- -------------------------------- ----------------------------------------------- ----------------------------------------------
Administrative Class 0 0 0 0 0 0 0 0
- -------------------------------- ----------------------------------------------- ----------------------------------------------
Class A 32 354 0 0 171 2,047 320 3,795
- -------------------------------- ----------------------------------------------- ----------------------------------------------
Class B 102 1,113 0 0 46 551 180 2,150
- -------------------------------- ----------------------------------------------- ----------------------------------------------
Class C 89 969 0 0 184 2,193 404 4,814
- -------------------------------- ----------------------------------------------- ----------------------------------------------
Shares issued in reorganization
Class A 0 0 0 0 0 0 0 0
- -------------------------------- ----------------------------------------------- ----------------------------------------------
Class B 0 0 0 0 0 0 0 0
- -------------------------------- ----------------------------------------------- ----------------------------------------------
Class C 0 0 0 0 0 0 0 0
- -------------------------------- ----------------------------------------------- ----------------------------------------------
Issued as reinvestment
of distributions
Institutional Class 1,158 12,237 704 8,025 0 0 0 0
- -------------------------------- ----------------------------------------------- ----------------------------------------------
Administrative Class 0 0 0 0 0 0 0 0
- -------------------------------- ----------------------------------------------- ----------------------------------------------
Class A 0 3 0 0 8 98 9 110
- -------------------------------- ----------------------------------------------- ----------------------------------------------
Class B 1 9 0 0 3 31 3 32
- -------------------------------- ----------------------------------------------- ----------------------------------------------
Class C 1 7 0 0 64 766 122 1,456
- -------------------------------- ----------------------------------------------- ----------------------------------------------
Cost of shares redeemed
Institutional Class (3,794) (43,185) (538) (6,199) 0 0 0 0
- -------------------------------- ----------------------------------------------- ----------------------------------------------
Administrative Class 0 0 0 0 0 0 0 0
- -------------------------------- ----------------------------------------------- ----------------------------------------------
Class A 0 (4) 0 0 (213) (2,535) (63) (757)
- -------------------------------- ----------------------------------------------- ----------------------------------------------
Class B (4) (44) 0 0 (26) (312) (17) (197)
- -------------------------------- ----------------------------------------------- ----------------------------------------------
Class C (8) (90) 0 0 (756) (8,997) (1,141) (13,622)
- -------------------------------- ----------------------------------------------- ----------------------------------------------
Net increase resulting from
Fund share transactions (1,497) $ (18,210) 987 $ 11,285 (519) $ (6,158) (183) $ (2,219)
================================ =============================================== ==============================================
</TABLE>
- --
82
- --
<PAGE>
Report of Independent Accountants
To the Trustees and Shareholders of the
PIMCO Funds: Multi-Manager Series
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Equity Income Fund, Renaissance
Fund, Value Fund, Capital Appreciation Fund, Growth Fund, Mid Cap Growth Fund,
Target Fund, Small Cap Value Fund, Opportunity Fund, International Developed
Fund, International Fund, Emerging Markets Fund, Innovation Fund, Precious
Metals Fund, Balanced Fund and Tax Exempt Fund (each a Fund of the PIMCO Funds:
Multi-Manager Series, hereafter referred to as the "Funds") at June 30, 1997,
and the results of each of their operations, the changes in each of their net
assets and the financial highlights for the periods indicated, in conformity
with generally accepted accounting principles. These financial statements and
the financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at June 30, 1997 by
correspondence with the custodians and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above. The
statement of changes in net assets for the period ended September 30, 1996 and
the financial highlights for each of the periods then ended for the Renaissance
Fund, Growth Fund, Target Fund, Opportunity Fund, International Fund, Innovation
Fund, Precious Metals Fund and Tax Exempt Fund were audited by other independent
accountants whose report dated November 22, 1996 expressed an unqualified
opinion on those statements.
Price Waterhouse LLP
Kansas City, Missouri
August 15, 1997
----
83
----
<PAGE>
Shareholder Vote (unaudited)
Special meetings of shareholders were held on December 20, 1996, and January 8,
1997, to vote on the following resolutions:
1. Election of eight additional Trustees. The following Trustees were
recommended for election: E. Philip Cannon, Donald P. Carter, Gary A.
Childress, Gary L. Light, Robert A. Prindiville, Joel Segall, W. Bryant
Stooks and Gerald M. Thorne. The following Trustees continue to serve the
Trust: William D. Cvengros, Richard L. Nelson, Lyman W. Porter and Alan
Richards.
2. The Cadence Mid Cap Growth Fund will acquire the assets (subject to the
liabilities) of the Discovery Fund, a series of PIMCO Advisors Funds
("PAF"). The NFJ Diversified Low P/E Fund will acquire the assets (subject
to the liabilities) of the Value Fund, a series of PAF.
3. Approve Addendum to the Portfolio Management Agreement. Reallocate
investment advisory fees paid to PIMCO Advisors L.P. ("the Advisor")
between the Advisor and each of the portfolio managers.
4. Approve Second Amended and Restated Declaration of Trust. The Declaration
states that shareholder voting requirements will be provided for in the
provisions of the proposed Bylaws adopted by the Trustees, eliminate the
requirement of a shareholder vote with respect to consolidations or mergers
of the Trust, allows the Trustees to assign certain preferences and special
or relative rights and privileges (including conversion rights, if any) to
the classes of the Trust, eliminate the provision of "reasonable and fair"
for advisory and distribution contracts entered into with certain
interested parties of the Trust and retain the requirement that the
contracts remain subject to the requirements of the Investment Company Act
of 1940, and clarifies the procedures for determining whether parties are
entitled to indemnification by the Trust.
5. Approve the Administrative Class Distribution Plan. Under the terms of the
Plan, the Trust will reimburse brokers and other service organizations for
costs and expenses incurred in connection with the distribution and
marketing of the Administrative Class shares and/or the provision of
shareholder services to its customers that invest in the Funds.
Shareholders adopted all resolutions, except for Resolution 5 which was not
adopted by the shareholders of the Cadence Capital Appreciation Fund, Cadence
Small Cap Growth Fund and the Blairlogie Emerging Markets Fund.
The voting on each resolution is summarized below:
<TABLE>
<CAPTION>
Resolution 1
==========================================================================================
For Withheld
- ------------------------------------------------------------------------------------------
<S> <C> <C>
E. Philip Cannon 57,405,747 129,451
Donald P. Carter 57,405,747 129,451
Gary A. Childress 57,405,747 129,451
Gary L. Light 57,405,747 129,451
Robert A. Prindiville 57,417,947 117,250
Joel Segall 57,010,964 524,233
W. Bryant Stooks 57,405,747 129,451
Gerald M. Thorne 57,405,747 129,451
<CAPTION>
Resolution 2
==========================================================================================
Broker
For Against Abstain Non-Votes
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NFJ Diversified Low P/E Fund 3,563,807 161 5,813 525
Cadence Mid Cap Growth Fund 6,125,657 4,053 570 23,439
- ------------------------------------------------------------------------------------------
<CAPTION>
Resolution 3
==========================================================================================
Broker
For Against Abstain Non-Votes
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NFJ Equity Income Fund 4,324,360 14,756 15,001 0
NFJ Diversified Low P/E Fund 3,560,691 94 5,813 3,708
NFJ Small Cap Value Fund 1,326,551 0 5,235 0
Cadence Capital Appreciation Fund 14,313,578 908,626 109,950 0
Cadence Mid Cap Growth Fund 6,149,096 4,053 570 23,439
Cadence Micro Cap Growth Fund 3,536,653 9,159 12,186 0
Cadence Small Cap Growth Fund 1,167,224 3,790 0 0
Columbus Circle Investors Core
Equity Fund 2,798,640 0 2,673 0
- ------------------------------------------------------------------------------------------
Columbus Circle Investors Mid Cap
Equity Fund 478,678 0 633 0
- ------------------------------------------------------------------------------------------
Parametric Enhanced Equity Fund 3,839,764 0 15,960 0
- ------------------------------------------------------------------------------------------
Blairlogie Emerging Markets Fund 4,238,889 23,349 36,439 0
- ------------------------------------------------------------------------------------------
Blairlogie International Active Fund 4,793,969 4,033 4,715 0
- ------------------------------------------------------------------------------------------
Balanced Fund (NFJ Addendum) 4,758,053 0 12,693 0
- ------------------------------------------------------------------------------------------
Balanced Fund (Cadence Addendum) 4,755,416 2,637 12,693 0
- ------------------------------------------------------------------------------------------
<CAPTION>
Resolution 4
==========================================================================================
Broker
For Against Abstain Non-Votes
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NFJ Equity Income Fund 4,227,369 21,829 15,700 89,218
- ------------------------------------------------------------------------------------------
NFJ Diversified Low P/E Fund 3,559,510 94 5,813 4,889
- ------------------------------------------------------------------------------------------
NFJ Small Cap Value Fund 1,326,201 0 5,235 350
- ------------------------------------------------------------------------------------------
Cadence Capital Appreciation Fund 10,756,595 1,418,188 118,236 3,025,336
- ------------------------------------------------------------------------------------------
Cadence Mid Cap Growth Fund 6,124,869 4,841 570 0
- ------------------------------------------------------------------------------------------
Cadence Micro Cap Growth Fund 2,665,179 11,236 12,149 863,922
- ------------------------------------------------------------------------------------------
Cadence Small Cap Growth Fund 1,167,224 3,790 0 0
- ------------------------------------------------------------------------------------------
Columbus Circle Investors Core
Equity Fund 2,798,640 0 2,672 0
- ------------------------------------------------------------------------------------------
Columbus Circle Investors Mid Cap
Equity Fund 478,678 0 633 0
- ------------------------------------------------------------------------------------------
Parametric Enhanced Equity Fund 3,839,764 0 15,960 0
- ------------------------------------------------------------------------------------------
Blairlogie Emerging Markets Fund 3,265,118 26,693 33,658 1,378,527
- ------------------------------------------------------------------------------------------
Blairlogie International Active Fund 4,398,987 5,859 4,150 393,722
- ------------------------------------------------------------------------------------------
Balanced Fund 4,755,416 2,637 12,693 0
- ------------------------------------------------------------------------------------------
<CAPTION>
Resolution 5
==========================================================================================
Broker
For Against Abstain Non-Votes
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NFJ Equity Income Fund 418,547 0 0 10,270
- ------------------------------------------------------------------------------------------
NFJ Small Cap Value Fund 306,741 0 0 1,255
- ------------------------------------------------------------------------------------------
Cadence Capital Appreciation Fund 886 0 0 4,667
- ------------------------------------------------------------------------------------------
Cadence Mid Cap Growth Fund 48,900 0 0 8,939
- ------------------------------------------------------------------------------------------
Cadence Micro Cap Growth Fund 51,948 0 0 0
- ------------------------------------------------------------------------------------------
Cadence Small Cap Growth Fund 0 0 0 5,313
- ------------------------------------------------------------------------------------------
Columbus Circle Investors Core
Equity Fund 2,203,401 0 0 0
- ------------------------------------------------------------------------------------------
Blairlogie Emerging Markets Fund 5,184 0 0 19,689
- ------------------------------------------------------------------------------------------
Blairlogie International Active Fund 286,674 0 0 183,042
</TABLE>
- ----
84
- ----
<PAGE>
Federal Income Tax Information (unaudited)
As required by the Internal Revenue Code regulations, shareholders must be
notified within 60 days of the Trust's fiscal year end (June 30, 1997) regarding
the status of the dividend received deduction for corporations.
Dividend Received Deduction. Corporate shareholders are generally entitled to
take the dividend received deduction on the portion of a Fund's dividend
distribution that qualifies under tax law. The percentage of each Fund's fiscal
1997 ordinary income dividends that qualifies for the corporate dividend
received deduction is set forth below:
<TABLE>
<S> <C>
Equity Income Fund 60.76%
Renaissance Fund 14.19%
Value Fund 39.30%
Capital Appreciation Fund 42.81%
Growth Fund 45.26%
Mid Cap Growth Fund 66.85%
Target Fund 3.54%
Small Cap Value Fund 40.96%
Balanced Fund 13.56%
</TABLE>
For the benefit of shareholders of the Tax Exempt Fund, this is to inform you
that 99.42% of the dividends paid by the Fund during its fiscal year qualify as
exempt-interest dividends.
Shareholders are advised to consult their own tax advisor 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 1998,
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 1997.
----
85
----
<PAGE>
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<PAGE>
(This Page Intentionally Left Blank)
<PAGE>
PIMCO Funds: Access to the highest standard
PIMCO Funds offer discerning investors unique access to the institutional
investment expertise of PIMCO Advisors L.P. Managing over $119 billion in assets
($27 billion in mutual funds), PIMCO Advisors consists of six institutional
investment firms, each specializing in a particular investment discipline or
style. Together their reputation and performance record has attracted many
prestigious institutional clients, including 35 of the 100 largest U.S.
corporations.
- --------------------------------------------------------------------------------
Manager PIMCO Advisors L.P. 800 Newport Center Drive, Suite 100,
Newport Beach, CA 92660
- --------------------------------------------------------------------------------
Distributor PIMCO Funds Distribution Company, 2187 Atlantic Street,
Stamford, CT 06902
- --------------------------------------------------------------------------------
Custodian Investors Fiduciary Trust Company, 127 West 10th Street,
Kansas City, MD 64105
- --------------------------------------------------------------------------------
Shareholder Shareholder Services, Inc., P.O. Box 5866, Denver, CO 80217
Servicing Agent and
Transfer Agent
- --------------------------------------------------------------------------------
Independent Price Waterhouse LLP, 1055 Broadway, Kansas City, MO 64105
Accountant
- --------------------------------------------------------------------------------
Legal Counsel Ropes & Gray, One International Place
Boston, MA 02110
- --------------------------------------------------------------------------------
For Account For PIMCO Funds account information contact your financial
Information advisor, or if you receive account statements directly from
PIMCO Funds, you can also call 1-800-426-0107. Telephone
representatives are available Monday-Friday 8:30 am to 8:00
pm eastern time.
- --------------------------------------------------------------------------------
This is a copy of a report by PIMCO Funds to its shareholders. Distribution of
this report to persons other than shareholders of the Trust is authorized only
when accompanied by the Trust's Prospectus. This report does not offer for sale
or solicit orders to buy any securities.
------------------
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U.S. POSTAGE
PAID
SMITHTOWN, NY
PERMIT NO. 700
------------------
P I M C O
FUNDS
PIMCO Funds
Distribution Company
2187 Atlantic Street
Stamford, CT 06902
