<PAGE>
PIMCO Funds Semi-Annual Report
Multi-Manager Series
December 31, 1998
Share Classes
. Institutional
. Administrative
BLAIRLOGIE CAPITAL MANAGEMENT
Emerging Markets Fund International Fund
International Developed Fund
CADENCE CAPITAL MANAGEMENT
Capital Appreciation Fund Micro-Cap Growth Fund
Mid-Cap Growth Fund Small-Cap Growth Fund
COLUMBUS CIRCLE INVESTORS
Renaissance Fund Mid-Cap Equity Fund
Core Equity Fund International Growth Fund
NFJ INVESTMENT GROUP
Equity Income Fund Value 25 Fund
Value Fund Small-Cap Value Fund
PARAMETRIC PORTFOLIO ASSOCIATES
Enhanced Equity Fund Tax-Efficient Equity Fund
Structured Emerging Markets Fund
Tax-Efficient Structured Emerging
Markets Fund
MULTIPLE MANAGERS
Balanced Fund
[LOGO OF PIMCO FUNDS APPEARS HERE]
<PAGE>
PIMCO Funds Semi-Annual Report
Dear Fellow Shareholder:
Despite a volatile third quarter, stocks rebounded and finished the year with
strong positive returns. For the year ended December 31, 1998, the S&P 500 Index
returned an impressive 28.7%. However, to a great extent these returns were
limited to the large-cap growth and technology sectors, as both value and
small-cap stocks continued to underperform the rest of the market.
Market Reaches New Highs While the stock market reached new highs in the fourth
quarter, we remain concerned about international problems and their effects on
the markets. Investors' anxiety over global economic turmoil in the third
quarter was quickly soothed by several interest rate cuts in the fourth quarter.
Though these cuts ended the decline that was taking place in the domestic
markets, they were unable to have much effect on the troubled economies
overseas. While central banks have cut interest rates globally, weakness remains
in Asia and Russia--and recently spread to Brazil, as well. We do not believe
the international conditions are going to be corrected quickly. In addition, we
believe we will see a slowing domestic economy in 1999. This could lead to a
reduction in corporate profits as well as smaller returns for the year. We are
positioning our portfolios with this in mind, hoping to benefit from the upside
potential of the market while limiting downside risk.
Meeting our Shareholders' Needs 1998 was an eventful year, not just for the
financial markets but for the PIMCO Funds family. We launched two new funds,
PIMCO Tax-Efficient Equity Fund and PIMCO Value 25 Fund, as part of PIMCO Funds'
efforts to increase the investment options available to shareholders.
Furthermore, the year ended on a high note as PIMCO Innovation Fund was named
the 1998 Fund of the Year by Mutual Funds magazine, and Bill Gross and his
investment team were named 1998 Fixed-Income Manager of the Year by Morningstar.
As always, we appreciate the trust you have placed in us through your
investments. We will continue to work hard to help you meet your financial
objectives. If you have any questions regarding your investment, please contact
your financial adviser, or call us at 1-800-426-0107. Or, visit our Web site at
www.pimcofunds.com.
Sincerely,
/s/ William D. Cvengros
William D. Cvengros
Chairman of the Board
January 29, 1999
2
<PAGE>
Today's
Investor
Stock Market
Another Strong Year for Stocks
The stock market realized a strong performance in 1998 despite a mid-year
downturn.
S & P 500 INDEX
1/2 975.04 5/1 1121.00 9/4 973.89
1/9 927.69 5/8 1108.14 9/11 1009.06
1/16 961.51 5/15 1108.73 9/18 1020.09
1/23 957.59 5/22 1110.47 9/25 1044.75
1/30 980.28 5/29 1090.82
10/2 1002.60
2/6 1012.46 6/5 1113.86 10/9 984.39
2/13 1020.09 6/12 1098.84 10/16 1056.42
2/20 1034.21 6/19 1100.65 10/23 1070.67
2/27 1049.34 6/26 1133.20 10/30 1098.67
3/6 1055.69 7/3 1146.42 11/6 1141.01
3/13 1068.61 7/10 1164.33 11/13 1125.72
3/20 1099.16 7/17 1186.75 11/20 1163.55
3/27 1095.44 7/24 1140.80 11/27 1192.29
7/31 1120.67
4/3 1122.70 12/4 1176.74
4/10 1110.67 8/7 1089.45 12/11 1166.46
4/17 1122.72 8/14 1062.75 12/18 1188.03
4/24 1107.90 8/21 1081.18 12/25 1226.27
8/28 1027.14
The stock market had more than its share of ups and downs in 1998. However, by
the end of the year the overall stock market posted its fourth consecutive 20%+
gain. The year began with a jolt as the market dropped in January but then
rebounded quickly. In the second quarter of 1998, a recurring case of the Asian
flu dealt a powerful blow to the market, and that mood prevailed through most of
the third quarter. Then Alan Greenspan came to the rescue, enacting the first of
three interest rate cuts in late September. The market resumed the climb it had
begun in the first quarter, albeit more quickly.
Throughout much of the year the market was propelled by technology issues and,
more specifically, Internet stocks. Despite concerns about overvaluation,
Internet stocks continued their meteoric ascent, dumbfounding Wall Street
pundits. The rally spread to computers, as Year 2000-motivated PC purchases and
better inventory management boosted this industry in the fourth quarter, lifting
semiconductor and semiconductor-related stocks as well.
A few areas in the equity markets saw disappointing returns this year. Energy
stocks suffered from the low price of oil. Small-caps underperformed as
investors continued their flight to quality, seeking blue-chip names instead of
smaller, relatively unknown companies.
Although Europe was boosted by the inception of the European Monetary Union,
most other international regions did poorly. Devaluations, high interest rates,
and failing economies dragged many Asian and Latin American countries' markets
down.
Looking ahead, we remain cautiously optimistic about the stock market. We
believe there is a strong possibility of an earnings slowdown in the coming
year, which could temper the market but not push it into negative territory.
Stock selection will be of utmost importance, and we believe that many good
opportunities still exist.
- -------------------------------------------------------------------------------
Bond Market
Good Times for Bonds
Bond prices have risen in the past year, as interest rates have fallen.
TREASURY
30 - YEAR U.S. TREASURY RATES
1/2 5.839 5/1 5.934 9/4 5.289
1/9 5.729 5/8 5.978 9/11 5.230
1/16 5.810 5/15 5.973 9/18 5.148
1/23 5.971 5/22 5.901 9/25 5.110
1/30 5.801 5/29 5.803
10/2 4.841
2/6 5.921 6/5 5.788 10/9 5.116
2/13 5.850 6/12 5.663 10/16 4.979
2/20 5.872 6/19 5.670 10/23 5.179
2/27 5.924 6/26 5.633 10/30 5.158
3/6 6.020 7/3 5.600 11/6 5.388
3/13 5.894 7/10 5.626 11/13 5.251
3/20 5.886 7/17 5.747 11/20 5.219
3/27 5.959 7/24 5.687 11/27 5.160
7/31 5.714
4/3 5.795 12/4 5.041
4/10 5.882 8/7 5.632 12/11 5.025
4/17 5.877 8/14 5.541 12/18 4.999
4/24 5.946 8/21 5.434 12/25 5.217
8/28 5.339
Six months ago in our annual report to shareholders we predicted the yield on
long-term U.S. Treasury bonds could range from 4 to 6%, with the 5% "handle"
containing most of the movement. This was evident in the past two quarters, as
late in the third quarter yields fell to below 5% for the first time since 1967.
Yields remained around 5% through the end of the year.
The Treasury market benefited from continued global turmoil. The economic
problems that began in Asia and spread to Russia this past summer, have more
recently affected Latin America, particularly Brazil.
Unsuccessful action by the International Monetary Fund further unsettled
investor confidence. This global uncertainty contributed to a massive flight to
quality, as investors around the world sought relative safety in U.S.
Treasuries.
Although the municipal bond market did not benefit from the global flight to
quality, the sector is currently experiencing a resurgence, with some
non-taxable yields actually higher than Treasuries. While Treasuries prospered,
some other sectors of the fixed income market missed out on the rally. For
example, investment grade corporate bonds along with high yield bonds were hurt
by fears that global problems would affect U.S. corporate earnings and growth.
Going forward, we expect to see more countries acting to defend their
currencies, either by raising interest rates or tightening control of capital.
In either case, we believe financial uncertainties around the world may
increase, ultimately causing the U.S. economy to slow from its accelerated pace.
We expect the Federal Reserve may again cut interest rates in the second half of
1999, reducing the Fed Funds rate to the 4-4.5% range. If inflation remains in
its current low range, the real rate of returns on bonds should be historically
high, making this a relatively attractive opportunity for bond investors.
3
<PAGE>
PIMCO Funds Financial Information
We are pleased to present an in-depth review of the PIMCO Multi-Manager Series
Funds as of December 31, 1998. 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 5-24 Fund Summaries
A summary of a Fund's performance record and portfolio composition, and a review
from the Fund's investment manager.
Pages 25-59 Schedule of Investments
The Schedule of Investments includes a listing of securities in the Fund's
portfolio as of December 31, 1998, including the number of shares or principal
amount and value as of that date.
Schedule of
Fund Name Fund Summary Investments
Emerging Markets Fund Page 5 Page 25
International Developed Fund Page 6 Page 27
International Fund Page 7 Page 29
Capital Appreciation Fund Page 8 Page 31
Mid-Cap Growth Fund Page 9 Page 32
Micro-Cap Growth Fund Page 10 Page 33
Small-Cap Growth Fund Page 11 Page 34
Renaissance Fund Page 12 Page 35
Core Equity Fund Page 13 Page 36
Mid-Cap Equity Fund Page 14 Page 37
International Growth Fund Page 15 Page 38
Equity Income Fund Page 16 Page 39
Value Fund Page 17 Page 40
Value 25 Fund Page 18 Page 41
Small-Cap Value Fund Page 19 Page 42
Enhanced Equity Fund Page 20 Page 44
Structured Emerging Markets Fund Page 21 Page 46
Tax-Efficient Structured Emerging Markets Fund Page 22 Page 50
Tax-Efficient Equity Fund Page 23 Page 54
Balanced Fund Page 24 Page 57
Pages 60-69 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
returns, the chart reports distributions, asset sizes, expense ratios and
portfolio turnover rates.
Pages 70-72 Statements 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.
Pages 73-75 Statements of Operations
This statement lists a Fund's income, expenses, and gains and losses on
securities and currency transactions, and appreciation or depreciation from
portfolio holdings.
Pages 76-80 Statements 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.
Pages 81-87 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.
4
<PAGE>
December 31, 1998
PIMCO Emerging Markets Fund
OBJECTIVE
Long-term growth of capital
PORTFOLIO
Primarily common stocks of companies located in emerging market countries
TOTAL NET ASSETS
$20 million
NUMBER OF SECURITIES IN THE PORTFOLIO
169 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Blairlogie Capital Management
- -------------------------------------------------------------------------------
PERFORMANCE
- -------------------------------------------------------------------------------
Average Annual Total Return For period ended 12/31/98
Lipper Emerging
Inst'l Class Admin. Class MSCI Emerging Markets
(Incep. 6/1/93) (Incep. 11/1/94) Markets Free Index Fund Average
- --------------------------------------------------------------------------------
6 months -16.47% -16.67% -7.98% -13.45%
1 year -27.39% -27.65% -25.34% -26.85%
3 years* -9.31% -9.58% -11.22% -8.27%
5 years* -9.66% -- -9.27% -10.25%
Inception* -1.08% -14.06% -- --
*Annualized
Change in Value
$5,000,000 invested at the Fund's inception
PIMCO Emerging Markets Fund
MSCI Emerging Markets Free Index
INSTITUT
PIMCO MSCI
Emerging Emerging
MONTH Markets Markets
Fund Free Index
======================== ============== =============
05/31/93 5,000,000 5,000,000
06/30/93 5,075,000 5,148,164
07/31/93 5,230,000 5,284,246
08/31/93 5,745,000 5,730,448
09/30/93 5,855,000 5,940,002
10/31/93 6,276,110 6,472,979
11/30/93 6,746,690 6,759,422
12/31/93 7,823,240 7,876,635
01/31/94 8,325,460 8,020,040
02/28/94 8,097,649 7,877,368
03/31/94 7,471,168 7,164,494
04/30/94 7,258,890 7,021,212
05/31/94 7,610,962 7,261,521
06/30/94 7,227,825 7,061,365
07/31/94 7,636,849 7,500,366
08/31/94 8,501,496 8,431,337
09/30/94 8,781,082 8,527,143
10/31/94 8,558,449 8,373,243
11/30/94 8,144,247 7,937,781
12/31/94 7,214,695 7,300,454
01/31/95 6,254,191 6,523,750
02/28/95 5,943,118 6,356,425
03/31/95 5,850,342 6,396,700
04/30/95 6,150,500 6,683,875
05/31/95 6,428,828 7,039,397
06/30/95 6,472,487 7,060,511
07/31/95 6,581,635 7,218,683
08/31/95 6,461,572 7,048,306
09/30/95 6,423,370 7,015,231
10/31/95 6,185,324 6,747,217
11/30/95 6,031,651 6,627,124
12/31/95 6,310,276 6,921,378
01/31/96 6,838,885 7,413,469
02/29/96 6,657,176 7,295,572
03/31/96 6,728,758 7,352,446
04/30/96 6,954,519 7,646,578
05/31/96 6,938,000 7,612,161
06/30/96 6,971,038 7,659,393
07/31/96 6,387,365 7,136,302
08/31/96 6,591,100 7,319,005
09/30/96 6,673,695 7,382,713
10/31/96 6,431,416 7,185,608
11/30/96 6,547,049 7,306,312
12/31/96 6,614,667 7,337,556
01/31/97 7,096,237 7,837,947
02/28/97 7,361,930 8,173,452
03/31/97 7,184,801 7,958,529
04/30/97 7,112,843 7,972,845
05/31/97 7,384,072 8,200,827
06/30/97 7,727,259 8,640,158
07/31/97 7,727,259 8,769,039
08/31/97 6,825,008 7,653,168
09/30/97 7,184,801 7,865,285
10/31/97 6,232,732 6,574,644
11/30/97 6,166,309 6,334,822
12/31/97 6,481,820 6,487,490
01/31/98 6,022,391 5,978,935
02/28/98 6,409,861 6,603,135
03/31/98 6,786,261 6,889,654
04/30/98 6,858,219 6,814,099
05/31/98 6,072,209 5,880,568
06/30/98 5,634,921 5,263,498
07/31/98 5,867,403 5,430,336
08/31/98 4,018,618 3,860,208
09/30/98 4,212,353 4,105,155
10/31/98 4,511,258 4,537,444
11/30/98 4,732,670 4,914,812
12/31/98 4,706,737 4,843,536
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 6/1/93, the Fund's Institutional Class
inception, compared to the Morgan Stanley Capital International (MSCI) Emerging
Markets Free Index, an unmanaged market index. The performance of the
Administrative Class (shown above) reflects the payment of a service fee in an
amount not to exceed 0.25% on an annualized basis. The Administrative Class
commenced operations on 11/1/94. The performance since inception (shown above)
begins 11/1/94. The Fund may invest in foreign securities which involve
potentially higher risks including foreign currency fluctuations and political
or economic uncertainty.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top Holdings in Selected Countries % of Total Investments
- --------------------------------------------------------------------------------
Hungary/Magyar Tavkozlesi Rt. 3.7%
- --------------------------------------------------------------------------------
Mexico/Telefonos de Mexico - ADR 3.1%
- --------------------------------------------------------------------------------
Brazil/Telecomunicacoes 2.5%
Brasileiras SA SP - ADR
- --------------------------------------------------------------------------------
Turkey/Turkiye Is Bankasi 'C' 2.2%
- --------------------------------------------------------------------------------
Argentina/YPF Sociedad Anonima - ADR 2.1%
- --------------------------------------------------------------------------------
Hungary/MOL Magyar Olaj-es 2.1%
Gazipari Rights
- --------------------------------------------------------------------------------
Poland/Elektrim Spolka Akcyjna SA 2.0%
- --------------------------------------------------------------------------------
Chile/Enersis SA SP - ADR 2.0%
- --------------------------------------------------------------------------------
Peru/Telefonica del Peru SA 'B' 2.0%
- --------------------------------------------------------------------------------
Chile/Compania de Telecomunicaciones 1.6%
de Chile SA SP - ADR
- --------------------------------------------------------------------------------
Top Ten Total 23.3%
- --------------------------------------------------------------------------------
Top 5 Countries % of Total Investments
- --------------------------------------------------------------------------------
Mexico 10.5%
- --------------------------------------------------------------------------------
Poland 10.1%
- --------------------------------------------------------------------------------
Brazil 10.1%
- --------------------------------------------------------------------------------
Turkey 9.0%
- --------------------------------------------------------------------------------
Hungary 8.7%
- --------------------------------------------------------------------------------
Regional Breakdown
- --------------------------------------------------------------------------------
Stock: Latin America 43%
- --------------------------------------------------------------------------------
Eastern Europe 33%
- --------------------------------------------------------------------------------
Asia 18%
- --------------------------------------------------------------------------------
South Africa 6%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stocks 100%
- --------------------------------------------------------------------------------
Cash Equivalents 0%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-month period ended December 31, 1998, PIMCO Emerging Markets Fund
Institutional Class shares returned -16.5%.
For most investors in developing stock markets, 1998 was a year to forget,
with the MSCI EMF Index plummeting 25.34%. A new buzzword entered the lexicon of
the financial markets - "contagion." Fear and risk aversion swept from Asia to
Russia to Latin America and short-term volatility reached new highs. It was a
disappointing year for the Fund insofar as a successful first half was erased by
a poor second half.
Despite some weakness in December, the fourth quarter saw somewhat of a
recovery in emerging markets. The Fund's under-performance of the benchmark was
a result of the Fund's top-down investment philosophy. Being underweight in
Korea, Indonesia, Philippines and Thailand accounted for the bulk of the
shortfall. On a brighter note, stock selection was positive, notably in Turkey
and Chile.
In general, Europe's developing markets had a difficult third quarter
followed by a recovery in the fourth quarter. The Russian market plummeted in
the third quarter after the country's default, but bounced back substantially in
the year's final quarter. Hungary and Poland's economies continued to be
healthy, which led to sizable gains in their markets in the fourth quarter.
After a weak third quarter, Asia's developing markets improved toward the end
of the year. October's sharp rise in the yen acted as the catalyst for
foreigners to return to Asian markets. There is no doubt that investors repriced
Asian risk, as the economic situation in the region showed early signs of
stabilizing. Liquidity had been rising for some months, with a portion of it
undoubtedly reaching equities. This excess money, as illustrated by negative
real rates, together with investor underexposure explains the scale of the
region's outperformance rather than tangible signs of economic health.
Latin America was a disappointment for the Fund. Latin American markets
experienced a hearty bounce off their September lows before profit-taking took
hold in December. Brazil was the focal point of concern as the next crisis
waiting to happen, which caused market jitters. It required the combined muscle
of the U.S. Treasury, the IMF and the bullish rhetoric from almost every head of
state to ensure that Brazil did not fail. President Cardoso was successfully re-
elected despite an IMF reform manifesto, and capital outflows finally slowed.
Looking ahead, the manager believes that global economic growth will remain
subdued in 1999, especially in Europe and the United States. In Asia, the
manager expects stability during the first half of 1999, with true recovery
creeping through only later in the year.
See page 25 for financial details. 5
<PAGE>
December 31, 1998
PIMCO International Developed Fund
OBJECTIVE
Long-term growth of capital
PORTFOLIO
Primarily international equity securities (developed markets)
FUND INCEPTION DATE
6/8/93
TOTAL NET ASSETS
$132 million
NUMBER OF SECURITIES IN THE PORTFOLIO
175 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Blairlogie Capital Management
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
Average Annual Total Return For period ended 12/31/98
Lipper
Inst'l Class Admin. Class MSCI International
(Incep. 6/8/93) (Incep. 11/30/94) EAFE Index Fund Average
- --------------------------------------------------------------------------------
6 months -0.49% -0.67% 3.66% -2.30%
1 year 23.92% 23.41% 20.34% 13.01%
3 years* 10.15% 9.81% 9.31% 9.94%
5 years* 10.88% -- 9.50% 7.69%
Inception* 10.87% 11.28% -- --
*Annualized
Change in Value
$5,000,000 invested at the Fund's inception
PIMCO International Developed Fund
MSCI EAFE Index
<TABLE>
<CAPTION>
INSTITUT
PIMCO
International MSCI
Developed EAFE
MONTH Fund Index
======================== ============= =========
<S> <C> <C>
06/30/93 5,000,000 5,000,000
07/31/93 5,201,655 5,176,175
08/31/93 5,558,428 5,456,775
09/30/93 5,423,992 5,335,144
10/31/93 5,553,501 5,500,731
11/30/93 5,096,337 5,021,062
12/31/93 5,479,424 5,384,757
01/31/94 5,959,526 5,841,175
02/28/94 5,917,778 5,826,198
03/31/94 5,714,257 5,576,499
04/30/94 5,959,526 5,814,347
05/31/94 5,938,652 5,782,206
06/30/94 6,022,148 5,865,215
07/31/94 6,147,392 5,922,929
08/31/94 6,220,451 6,064,457
09/30/94 6,011,711 5,874,779
10/31/94 6,203,538 6,071,778
11/30/94 5,863,547 5,781,304
12/31/94 5,865,613 5,818,871
01/31/95 5,675,171 5,596,695
02/28/95 5,740,465 5,582,088
03/31/95 6,061,496 5,931,805
04/30/95 6,279,144 6,156,490
05/31/95 6,224,732 6,084,681
06/30/95 6,115,908 5,979,592
07/31/95 6,551,204 6,353,496
08/31/95 6,518,557 6,112,673
09/30/95 6,616,498 6,233,643
10/31/95 6,438,816 6,067,673
11/30/95 6,669,165 6,238,089
12/31/95 6,870,485 6,491,044
01/31/96 6,934,047 6,519,215
02/29/96 6,939,826 6,542,880
03/31/96 7,084,285 6,683,486
04/30/96 7,361,647 6,879,446
05/31/96 7,205,631 6,754,515
06/30/96 7,246,079 6,794,164
07/31/96 6,991,831 6,597,269
08/31/96 6,980,274 6,613,433
09/30/96 7,153,626 6,790,805
10/31/96 7,101,620 6,723,033
11/30/96 7,338,533 6,992,223
12/31/96 7,270,848 6,903,981
01/31/97 7,045,914 6,663,930
02/28/97 7,161,421 6,774,551
03/31/97 7,173,579 6,800,768
04/30/97 7,270,848 6,838,513
05/31/97 7,623,448 7,285,204
06/30/97 7,976,047 7,688,586
07/31/97 8,164,506 7,814,525
08/31/97 7,404,593 7,232,343
09/30/97 7,830,144 7,638,801
10/31/97 7,368,117 7,053,668
11/30/97 7,307,324 6,983,132
12/31/97 7,410,313 7,045,980
01/31/98 7,777,607 7,370,095
02/28/98 8,286,663 7,844,729
03/31/98 8,815,051 8,087,916
04/30/98 8,943,926 8,153,428
05/31/98 9,117,907 8,115,922
06/30/98 9,227,451 8,179,226
07/31/98 9,382,101 8,264,290
08/31/98 8,138,457 7,241,998
09/30/98 7,764,720 7,021,841
10/31/98 8,421,982 7,755,623
11/30/98 8,847,270 8,155,038
12/31/98 9,182,499 8,478,793
</TABLE>
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 7/1/93, the first full month following
the Fund's Institutional Class inception on 6/8/93, compared to the Morgan
Stanley Capital International EAFE Index (Europe, Australasia, Far East), an
unmanaged market index. The performance of the Administrative Class (shown
above) reflects the payment of a service fee in an amount not to exceed 0.25% on
an annualized basis. The Administrative Class commenced operations on 11/30/94.
The Fund may invest in foreign securities which involve potentially higher risks
including foreign currency fluctuations and political or economic uncertainty.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top Holdings in
Selected Countries % of Total Investments
- --------------------------------------------------------------------------------
Finland/Nokia OYJ 'A' 3.6%
- --------------------------------------------------------------------------------
Netherlands/Royal 2.0%
Dutch Petroleum Co.
- --------------------------------------------------------------------------------
Italy/ENI SpA 1.9%
- --------------------------------------------------------------------------------
France/France Telecom SA 1.8%
- --------------------------------------------------------------------------------
Portugal/EDP-Electricidade 1.6%
de Portugal SA
- --------------------------------------------------------------------------------
Ireland/Allied Irish Banks PLC 1.5%
- --------------------------------------------------------------------------------
Italy/Telecom Italia Mobile SpA 1.4%
- --------------------------------------------------------------------------------
France/Carrefour SA 1.4%
- --------------------------------------------------------------------------------
Switzerland/Novartis 1.4%
- --------------------------------------------------------------------------------
France/Suez Lyonnaise des Eaux 1.3%
- --------------------------------------------------------------------------------
Top Ten Total 17.9%
- --------------------------------------------------------------------------------
Top 5 Countries % of Total Investments
- --------------------------------------------------------------------------------
France 15.5%
- --------------------------------------------------------------------------------
United Kingdom 14.3%
- --------------------------------------------------------------------------------
Germany 11.3%
- --------------------------------------------------------------------------------
Italy 11.0%
- --------------------------------------------------------------------------------
Japan 10.6%
- --------------------------------------------------------------------------------
Regional Breakdown
- --------------------------------------------------------------------------------
Stock: Eastern Europe 48%
- --------------------------------------------------------------------------------
Europe 37%
- --------------------------------------------------------------------------------
Asia 11%
- --------------------------------------------------------------------------------
Australia 3%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stocks 99%
- --------------------------------------------------------------------------------
Cash Equivalents 1%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six month period ended December 31, 1998, PIMCO International Developed
Fund Institutional Class shares returned -0.5%, outperforming the Lipper
International Fund Average, which returned -2.3%. For the one-year period, the
Fund outperformed both its Lipper Average and the MSCI EAFE Index, returning
23.9% for the Institutional Class shares, versus 20.3% for the Index and 13.0%
for the Lipper Average.
Once again, European developed markets were strong performers for the Fund.
The impending introduction of the euro currency helped to stimulate the
economies of these countries in the fourth quarter. Finland's returns were
outstanding, while Ireland, Italy and Spain also produced respectable results.
For the past 18 months, these countries have been solid performers, boosted by
falling interest rates and above-average growth prospects. Despite strong rises,
these markets do not seem to be stretched in terms of value, particularly when
domestic bond yields and cash rates are considered.
The Finnish standout stock was Nokia, the cellular phone maker. Several
different factors drove the performance of this stock. First, the company's
products are considered to be of a better quality than its competitors' and they
are therefore more popular. Also, the conversion from analog to digital is
driving an increase in sales for all cellular phone makers. Finally, the
introduction of "one rate" plans is increasing the number of cellular phone
users worldwide.
Asian developed markets turned in a mixed performance for the period, lagging
in the third quarter but recovering in the fourth quarter. The second rate cut
by the Federal Reserve, followed by the spike in the yen, led to sharp rises
across Asia. Liquidity had been improving in previous months and some of it
found its way into financial instruments. While it is uncertain whether an
economic recovery is underway, there are some preliminary signs of stability if
not recovery (e.g., increasing monthly department store sales).
Looking ahead, the manager remains optimistic about international developed
markets, especially those in Europe. The manager is cautiously optimistic about
the prospects for an Asian recovery, but remains conservative about investing in
that region. In general, the manager believes international developed markets
may outperform the United States market in the coming year, as many
international stocks offer investors more growth potential.
6 See page 27 for financial details.
<PAGE>
December 31, 1998
PIMCO International Fund
OBJECTIVE
Capital appreciation; income is incidental
PORTFOLIO
Primarily stocks of foreign (non-U.S.) companies
TOTAL NET ASSETS
$138 million
NUMBER OF SECURITIES IN THE PORTFOLIO
215 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Blairlogie Capital Management
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
Total Return For period ended 12/31/98
Lipper
Inst'l Class Admin. Class MSCI International
(Incep. 9/30/98) (Incep. 9/30/98) EAFE Index Fund Average
- --------------------------------------------------------------------------------
Inception 16.93% 16.54% -- --
The Institutional and Administrative Classes of the International Fund were
opened on September 30, 1998. Past performance is not an indication of future
results. The Fund may invest in foreign securities which involve potentially
higher risks including foreign currency fluctuations and political or economic
uncertainty.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top Holdings in
Selected Countries % of Total Investments
- --------------------------------------------------------------------------------
Finland/Nokia OYJ 'A' 4.4%
- --------------------------------------------------------------------------------
United Kingdom/WEBS Index Fund 4.0%
- --------------------------------------------------------------------------------
Hungary/Magyar Tavkozlesi Rt. 2.2%
- --------------------------------------------------------------------------------
Ireland/Allied Irish Banks PLC 2.2%
- --------------------------------------------------------------------------------
Portugal/EDP-Electricidade 2.1%
de Portugal SA
- --------------------------------------------------------------------------------
Italy/ENI SpA 1.8%
- --------------------------------------------------------------------------------
France/France Telecom SA 1.7%
- --------------------------------------------------------------------------------
Portugal/Portugal Telecom SA 1.6%
- --------------------------------------------------------------------------------
Hungary/MOL Magyar Olaj-es 1.4%
Gazipari Rights
- --------------------------------------------------------------------------------
France/Banque National de Paris 1.4%
- --------------------------------------------------------------------------------
Top Ten Total 22.8%
- --------------------------------------------------------------------------------
Top 5 Countries % of Total Investments
- --------------------------------------------------------------------------------
France 14.6%
- --------------------------------------------------------------------------------
Italy 11.0%
- --------------------------------------------------------------------------------
Portugal 8.2%
- --------------------------------------------------------------------------------
Germany 6.9%
- --------------------------------------------------------------------------------
Japan 6.8%
- --------------------------------------------------------------------------------
Regional Breakdown
- --------------------------------------------------------------------------------
Stock: Eastern Europe 41%
- --------------------------------------------------------------------------------
Europe 33%
- --------------------------------------------------------------------------------
Asia 11%
- --------------------------------------------------------------------------------
Latin America 6%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stocks 91%
- --------------------------------------------------------------------------------
Cash Equivalents 9%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
Since the Fund's inception through December 31, 1998, the International Fund
posted a return of 16.9% for the Institutional Class shares.
European developed markets were strong performers for the Fund this period.
Finland's returns were outstanding, while Ireland, Italy and Spain also produced
respectable returns. For the past 18 months, these countries have been solid
performers as a result of falling interest rates and above average growth
prospects. Despite strong rises, these markets do not seem to be stretched in
terms of value, particularly when domestic bond yields and cash rates are
considered.
Despite a difficult third quarter, the Fund's Asian holdings ended the year
on a better note. The second rate cut by the Federal Reserve, followed by the
spike in the yen, led to sharp rises across Asia. Liquidity had been improving
in previous months and some of it found its way into financial instruments.
Although it is not certain whether an economic recovery is underway for Japan,
the country stabilized in the fourth quarter. At the same time, other Asian
countries such as Thailand and Korea outperformed.
Latin America was not a strong performer for the Fund this period. While
Latin American markets experienced a hearty bounce off their September lows,
profit-taking took hold in December and reduced their gains. Brazil was the
focal point of attention as the next crisis waiting to happen, and it required
the combined muscle of the U.S. Treasury, the IMF, and the bullish rhetoric from
almost every head of state to ensure that Brazil did not fail. President Cardoso
was successfully re-elected despite an IMF reform manifesto, and capital
outflows waned for the present. Growth estimates for Latin America started to
decline sharply in October, and the Fund manager reversed the Fund's
bullishness, cutting back on above-Index allocations in Brazil and Chile as
stocks recovered from their lows.
Looking ahead, the Fund manager believes there will be downward revisions of
earnings forecasts in both the U.S. and Europe, where bottom-up numbers look
unrealisticN although Europe's growth should still be respectable. In Asia, the
manager expects stability during the first half of 1999, with true recovery
creeping through only later in the year. The manager is confident that the Fund
is well-positioned for this climate.
See page 29 for financial details. 7
<PAGE>
December 31, 1998
PIMCO Capital Appreciation Fund
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
$1,144 million
NUMBER OF SECURITIES IN THE PORTFOLIO
91 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital Management
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
Average Annual Total Return For period ended 12/31/98
Inst'l Class Admin. Class S&P 500 Lipper Capital
(Incep. 3/8/91) (Incep. 7/31/96) Index Apprec. Fund Average
- --------------------------------------------------------------------------------
6 months 2.74% 2.64% 9.23% 5.27%
1 year 17.59% 17.26% 28.58% 19.99%
3 years* 26.02% -- 28.23% 16.12%
5 years* 21.32% -- 24.06% 14.97%
Inception* 19.72% 29.84% -- --
*Annualized
Change in Value
$5,000,000 invested at the Fund's inception
PIMCO Capital Appreciation Fund
S&P 500 Index
[LINE GRAPH APPEARS HERE]
INSTITUT
PIMCO
Capital S&P 500
MONTH Appreciation Index
Fund
========================= ============== =================
03/31/91 5,000,000 5,000,000
04/30/91 4,854,350 5,012,000
05/31/91 5,094,373 5,228,518
06/30/91 4,820,061 4,989,052
07/31/91 5,164,862 5,221,542
08/31/91 5,327,032 5,345,293
09/30/91 5,253,318 5,256,026
10/31/91 5,433,351 5,326,457
11/30/91 5,275,577 5,111,801
12/31/91 6,008,526 5,696,591
01/31/92 5,951,282 5,590,634
02/29/92 6,015,540 5,663,312
03/31/92 5,817,823 5,552,878
04/30/92 5,805,268 5,716,132
05/31/92 5,830,077 5,744,142
06/30/92 5,646,491 5,658,669
07/31/92 5,811,083 5,889,825
08/31/92 5,666,801 5,769,261
09/30/92 5,816,058 5,837,050
10/31/92 6,018,924 5,857,187
11/30/92 6,371,407 6,056,624
12/31/92 6,459,843 6,130,939
01/31/93 6,679,451 6,182,194
02/28/93 6,599,169 6,266,457
03/31/93 6,904,241 6,398,680
04/30/93 6,735,135 6,244,023
05/31/93 7,040,790 6,411,051
06/30/93 7,153,400 6,429,835
07/31/93 7,052,175 6,403,987
08/31/93 7,310,181 6,646,954
09/30/93 7,525,186 6,595,972
10/31/93 7,543,860 6,732,443
11/30/93 7,393,094 6,668,283
12/31/93 7,603,513 6,748,903
01/31/94 7,871,521 6,978,365
02/28/94 7,764,846 6,788,973
03/31/94 7,377,445 6,492,973
04/30/94 7,405,400 6,576,213
05/31/94 7,399,773 6,684,129
06/30/94 7,191,566 6,520,301
07/31/94 7,367,360 6,734,427
08/31/94 7,587,534 7,010,539
09/30/94 7,384,297 6,839,131
10/31/94 7,554,006 6,992,806
11/30/94 7,208,583 6,738,128
12/31/94 7,279,887 6,838,055
01/31/95 7,275,418 7,015,365
02/28/95 7,638,905 7,288,754
03/31/95 7,973,994 7,503,845
04/30/95 8,248,506 7,724,833
05/31/95 8,550,420 8,033,595
06/30/95 8,920,691 8,220,215
07/31/95 9,416,251 8,492,798
08/31/95 9,507,671 8,514,115
09/30/95 9,884,778 8,873,410
10/31/95 9,700,127 8,841,732
11/30/95 9,998,064 9,229,884
12/31/95 9,983,895 9,407,652
01/31/96 10,319,950 9,727,888
02/29/96 10,710,996 9,818,066
03/31/96 10,731,348 9,912,614
04/30/96 10,866,103 10,058,726
05/31/96 11,141,737 10,318,140
06/30/96 11,121,089 10,357,452
07/31/96 10,561,962 9,899,860
08/31/96 11,016,637 10,108,648
09/30/96 11,692,504 10,677,563
10/31/96 11,987,428 10,972,050
11/30/96 12,859,911 11,801,427
12/31/96 12,658,812 11,567,641
01/31/97 13,397,357 12,290,387
02/28/97 13,259,311 12,386,744
03/31/97 12,776,151 11,877,772
04/30/97 13,183,386 12,586,875
05/31/97 14,025,466 13,353,165
06/30/97 14,625,966 13,951,386
07/31/97 16,206,592 15,061,498
08/31/97 15,599,190 14,217,753
09/30/97 16,544,805 14,996,459
10/31/97 16,248,006 14,495,577
11/30/97 16,662,144 15,166,577
12/31/97 16,691,599 15,426,988
01/31/98 16,723,663 15,597,610
02/28/98 17,951,702 16,722,510
03/31/98 18,949,019 17,578,870
04/30/98 18,963,905 17,755,713
05/31/98 18,651,313 17,450,492
06/30/98 19,447,678 18,159,332
07/31/98 18,889,478 17,965,934
08/31/98 15,808,216 15,368,420
09/30/98 16,693,892 16,352,921
10/31/98 17,460,487 17,683,067
11/30/98 18,599,214 18,754,838
12/31/98 19,980,246 19,835,492
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 4/1/91, the first full month following
the Fund's Institutional Class inception on 3/8/91, compared to the S&P 500
Index, an unmanaged market index. The performance of the Administrative Class
(shown above) reflects the payment of a service fee in an amount not to exceed
0.25% on an annualized basis. The Administrative Class commenced operations on
7/31/96.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Tyco International Limited 1.8%
Fire protection services
- --------------------------------------------------------------------------------
United Technologies Corp. 1.5%
Aerospace/climate control systems
- --------------------------------------------------------------------------------
Albertson's, Inc. 1.5%
Food supermarket chain
- --------------------------------------------------------------------------------
Wellpoint Health Networks, Inc. 1.5%
Healthcare services
- --------------------------------------------------------------------------------
Capital One Financial Corp. 1.4%
Bank card issuer/services
- --------------------------------------------------------------------------------
Kroger Co. 1.4%
Supermarket/convenience stores
- --------------------------------------------------------------------------------
Safeway, Inc. 1.4%
Food supermarket chain
- --------------------------------------------------------------------------------
Johnson Controls, Inc. 1.4%
Building controls/auto products
- --------------------------------------------------------------------------------
Harley-Davidson, Inc. 1.3%
Motorcycle manufacturer
- --------------------------------------------------------------------------------
Compuware Corp. 1.3%
Systems software
- --------------------------------------------------------------------------------
Top Ten Total 14.5%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Financial & Business Services 20.4%
- --------------------------------------------------------------------------------
Technology 18.3%
- --------------------------------------------------------------------------------
Consumer Discretionary 12.7%
- --------------------------------------------------------------------------------
Health Care 10.5%
- --------------------------------------------------------------------------------
Consumer Staples 9.0%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stocks 95%
- --------------------------------------------------------------------------------
Cash Equivalents 5%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six months ended December 31, 1998, PIMCO Capital Appreciation Fund
posted a return of 2.7% for the Institutional Class shares.
One of the sectors that made the greatest contribution to the Capital
Appreciation Fund this period was consumer cyclicals. The strong domestic
economy drove this sector throughout the year, as consumers continued to spend
despite global economic uncertainty in the third quarter. Strong holiday
shopping sales helped these stocks end the year on a high note. Fund holdings
Home Depot, Lowe's, Wal-Mart, The Gap and TJX all experienced extraordinary
price appreciation.
Another sector that performed well for the Fund was financial services.
During the third quarter these stocks were hit hard by fears of economic and
currency weakness spreading from Southeast Asia to Russia and into Latin
America. However, the stocks rebounded in the fourth quarter, posting average
price gains of 13%, as a result of a strong economy and interest rate cuts. The
Fund's top performers for the fourth quarter included American Express, Bank One
and Capital One Financial.
A particularly strong performer for the Fund this period was Tyco
International, a diversified manufacturer of home security and fire protection
services. Tyco recently purchased ADT, one of the best-known home security
companies, which increases its presence in this industry. The company is
currently involved in the purchase of AMP, an electronic connector manufacturer,
which helped its stock rise. Tyco is continuing to provide shareholders with
earnings surprises and top-line growth.
One disappointing stock for the Fund this period was Jones Apparel, the
women's apparel maker. It suffered from same store sales that were
disappointing, due in part to increased competition from rivals in this market
niche. The stock also suffered because investors shunned it in the third
quarter, as they attempted to avoid cyclical stocks because of the volatile
market. The manager sold this stock in October.
Looking ahead, the manager believes the domestic economy will slow, but will
still remain relatively strong, which should continue to bode well for the
Fund's consumer cyclical stocks. The manager believes the Fund is well-
positioned to benefit from this environment in 1999.
8 See page 31 for financial details.
<PAGE>
December 31, 1998
PIMCO Mid-Cap Growth Fund
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
$969 million
Number of Securities in the Portfolio
87 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital Management
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Average Annual Total Return For period ended 12/31/98
Inst'l Class Admin. Class S&P Mid-Cap 400 Russell Lipper Mid-Cap
(Incep. 8/26/91) (Incep. 11/30/94) Index Mid-Cap Index Fund Average
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
6 months 0.81% 0.93% 8.85% 0.86% 0.79%
1 year 7.93% 7.81% 18.25% 10.09% 12.26%
3 years* 21.34% 21.09% 23.08% 19.12% 16.35%
5 years* 19.08% -- 18.67% 17.34% 14.88%
Inception* 18.21% 24.99% -- -- --
</TABLE>
*Annualized
Change in Value
$5,000,000 invested at the Fund's inception
INSTITUT
PIMCO
Mid-Cap S&P 500 Russell
MONTH Growth Mid-Cap Mid-Cap
Fund Index Index
================================ ========= ========= =========
08/31/91 5,000,000 5,000,000 5,000,000
09/30/91 4,974,950 4,983,725 4,970,800
10/31/91 5,157,144 5,178,962 5,072,701
11/30/91 5,011,661 5,004,442 4,862,945
12/31/91 5,665,299 5,595,982 5,407,887
01/31/92 5,671,673 5,694,980 5,509,555
02/29/92 5,727,031 5,785,593 5,636,110
03/31/92 5,555,924 5,567,702 5,492,107
04/30/92 5,519,126 5,501,201 5,535,055
05/31/92 5,524,162 5,553,287 5,570,812
06/30/92 5,378,127 5,394,740 5,480,453
07/31/92 5,525,925 5,662,557 5,709,591
08/31/92 5,364,436 5,527,114 5,578,099
09/30/92 5,541,064 5,604,466 5,693,789
10/31/92 5,722,284 5,738,603 5,833,116
11/30/92 6,066,939 6,059,311 6,127,047
12/31/92 6,185,404 6,262,637 6,291,558
01/31/93 6,414,599 6,340,945 6,417,263
02/28/93 6,216,680 6,252,242 6,424,579
03/31/93 6,470,422 6,468,100 6,633,570
04/30/93 6,293,134 6,298,856 6,457,781
05/31/93 6,562,549 6,585,788 6,662,815
06/30/93 6,765,881 6,618,816 6,738,172
07/31/93 6,682,647 6,606,107 6,770,650
08/31/93 7,013,472 6,878,847 7,071,740
09/30/93 7,201,787 6,951,557 7,098,825
10/31/93 7,128,883 6,974,260 7,104,717
11/30/93 6,929,867 6,819,983 6,939,959
12/31/93 7,160,996 7,136,600 7,191,324
01/31/94 7,309,331 7,302,605 7,389,733
02/28/94 7,299,101 7,198,981 7,289,232
03/31/94 7,033,122 6,865,539 6,978,711
04/30/94 7,058,599 6,916,618 7,026,585
05/31/94 6,930,633 6,851,145 7,036,141
06/30/94 6,700,295 6,615,199 6,827,801
07/31/94 6,851,806 6,839,196 7,062,131
08/31/94 7,210,540 7,197,378 7,396,947
09/30/94 7,026,048 7,063,068 7,216,165
10/31/94 7,167,804 7,140,296 7,271,369
11/30/94 6,829,168 6,818,233 6,950,556
12/31/94 6,991,678 6,880,817 7,040,844
01/31/95 6,924,894 6,952,447 7,185,463
02/28/95 7,346,142 7,317,235 7,557,383
03/31/95 7,582,451 7,444,211 7,773,675
04/30/95 7,753,580 7,593,668 7,890,902
05/31/95 8,020,945 7,776,850 8,150,197
06/30/95 8,493,975 8,093,438 8,424,125
07/31/95 9,295,489 8,515,656 8,833,116
08/31/95 9,367,547 8,673,145 8,968,440
09/30/95 9,501,369 8,883,373 9,171,037
10/31/95 9,355,709 8,654,804 8,965,881
11/30/95 9,536,022 9,032,803 9,411,754
12/31/95 9,599,034 9,010,329 9,466,624
01/31/96 9,789,114 9,141,051 9,666,181
02/29/96 10,026,714 9,451,737 9,893,143
03/31/96 10,152,383 9,565,006 10,036,296
04/30/96 10,364,554 9,857,131 10,320,625
05/31/96 10,539,595 9,990,439 10,476,466
06/30/96 10,325,462 9,840,533 10,319,110
07/31/96 9,831,497 9,174,781 9,680,460
08/31/96 10,367,953 9,703,918 10,141,443
09/30/96 11,095,622 10,127,009 10,642,329
10/31/96 11,169,983 10,156,479 10,727,681
11/30/96 11,849,848 10,728,593 11,381,211
12/31/96 11,841,245 10,740,502 11,265,123
01/31/97 12,326,596 11,143,700 11,686,551
02/28/97 12,120,488 11,052,099 11,668,787
03/31/97 11,774,758 10,580,948 11,172,864
04/30/97 12,027,407 10,855,101 11,450,845
05/31/97 12,858,488 11,804,271 12,286,299
06/30/97 13,483,461 12,135,971 12,688,306
07/31/97 14,733,407 13,337,553 13,746,765
08/31/97 14,713,461 13,321,548 13,596,925
09/30/97 15,750,651 14,087,537 14,373,309
10/31/97 15,418,218 13,474,729 13,814,188
11/30/97 15,524,596 13,674,155 14,142,965
12/31/97 15,887,569 14,204,712 14,533,311
01/31/98 15,605,123 13,934,823 14,260,085
02/28/98 16,523,072 15,088,626 15,375,224
03/31/98 17,031,474 15,769,123 16,104,009
04/30/98 17,278,614 16,057,698 16,144,269
05/31/98 16,692,539 15,335,102 15,645,411
06/30/98 17,010,291 15,431,713 15,862,100
07/31/98 16,523,072 14,832,962 15,105,478
08/31/98 13,578,576 12,072,548 12,688,602
09/30/98 14,560,074 13,198,917 13,509,554
10/31/98 14,962,560 14,378,900 14,430,906
11/30/98 15,788,713 15,096,407 15,113,487
12/31/98 17,147,689 16,797,772 15,999,138
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 9/1/91, the first full month following
the Fund's Institutional Class inception on 8/26/91, compared to the S&P Mid-Cap
400 Index and Russell Mid-Cap Index, each an unmanaged market index. The
performance of the Administrative Class (shown above) reflects the payment of a
service fee in an amount not to exceed 0.25% on an annualized basis. The
Administrative Class commenced operations on 11/30/94.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Waters Corp. 1.7%
Liquid chromatography instruments
- --------------------------------------------------------------------------------
Network Associates, Inc. 1.6%
Network security software
- --------------------------------------------------------------------------------
Abercrombie & Fitch Co. 'A' 1.5%
Retail apparel stores
- --------------------------------------------------------------------------------
Unisys Corp. 1.5%
Business info. systems
- --------------------------------------------------------------------------------
Comverse Technology, Inc. 1.5%
Multimedia communications
- --------------------------------------------------------------------------------
Bergen Brunswig Corp. 'A' 1.4%
Drug and healthcare distributor
- --------------------------------------------------------------------------------
Symbol Technologies, Inc. 1.4%
Bar code laser scanners
- --------------------------------------------------------------------------------
Century Telephone Enterprises, Inc. 1.4%
Telephone services
- --------------------------------------------------------------------------------
Best Buy Co., Inc. 1.4%
Electric/appliances stores
- --------------------------------------------------------------------------------
Shaw Industries, Inc. 1.4%
Carpet manufacturer
- --------------------------------------------------------------------------------
Top Ten Total 14.8%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Financial & Business Services 24.8%
- --------------------------------------------------------------------------------
Technology 18.8%
- --------------------------------------------------------------------------------
Consumer Discretionary 14.4%
- --------------------------------------------------------------------------------
Health Care 11.9%
- --------------------------------------------------------------------------------
Utilities 6.3%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stocks 96%
- --------------------------------------------------------------------------------
Cash Equivalents 4%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six months ended December 31, 1998, PIMCO Mid-Cap Growth Fund posted a
return of 0.8% for Institutional Class shares.
The strongest performing sector for the Fund this period was health care.
New product introductions and expanding markets in the aging population made for
attractive growth prospects in this area. Although these stocks were strong
across the board, one stock in particular, Guidant, performed very well, rising
nearly 50%. It continues to achieve success in its release of new cardiovascular
products while growing its bottom line. A number of mergers in this sector also
drove up stock prices. For instance, cardiac device maker Arterial Vascular
Engineering was purchased by Medtronic, helping its stock rise nearly 20%. Other
mergers in the industry included hospital supplier Allegiance Corp., which is in
the process of being taken over by Cardinal Health and saw a huge uptick in its
stock price.
Another strong sector for the Fund this period was technology, as these
stocks benefited from increased spending for the Year 2000 (Y2K) problem as well
as a decrease in the severity of the global economic crisis. One standout
technology stock this year was Network Associates, a data storage supplier. This
company benefited from three secular stories: increased Y2K spending, an
increase in Internet applications and continuous upgrades in the PC area.
Another strong sector for the Fund was consumer cyclicals, an area that was
driven by the strong domestic economy. Consumers continued to spend, driven by
the additional wealth related to a strong stock market. Portfolio holdings such
as Harley-Davidson benefited from the 'deep pockets' of American consumers, as
its sales saw a large increase, especially among its higher-end product
offerings.
A disappointing sector for the Fund proved to be utilities. Although the
sector ended the year in positive territory, its returns were low. Many of the
Fund's holdings are diversified providers and distributors of power that are
learning to adjust to a new era of deregulation. Their management teams are
strong and they have adjusted well, but their profits continue to suffer.
Looking ahead, the manager believes the Fund's holdings continue to reflect
its philosophy of growth at a reasonable price. The reasons for holding these
stocks include reasonable revenue growth, stable margins and the strategic use
of cash flow to buy back stock. The positive fundamentals of these holdings,
accompanied with very reasonable valuation measures, lead the manager to remain
optimistic about the prospects for the Fund.
See page 32 for financial details. 9
<PAGE>
December 31, 1998
PIMCO Micro-Cap Growth Fund
Objective
Growth of capital
Portfolio
Common stocks of companies with market capitalization less than $100 million
that have improving fundamentals and whose stock is reasonably valued by the
market
Total Net Assets
$262 million
Number of Securities in the Portfolio
67 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital Management
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
Average Annual Total Return For period ended 12/31/98
Inst'l Class Admin. Class Russell 2000 Lipper Micro-Cap
(Incep. 6/25/93) (Incep. 4/1/96) Index Fund Average
- --------------------------------------------------------------------------------
6 months -13.18% -13.30% -7.12% -3.25%
1 year -3.88% -4.08% -2.55% 1.36%
3 years* 17.61% -- 11.58% 14.92%
5 years* 17.50% -- 11.86% 11.08%
Inception* 19.20% 16.76% -- --
*Annualized
Change in Value
$5,000,000 invested at the Fund's inception
[GRAPH APPEARS HERE]
INSTITUT
PIMCO
Micro-Cap Russell 2000
MONTH Growth Index
Fund
================================= ============ ============
06/30/93 5,000,000 5,000,000
07/31/93 5,021,687 5,069,050
08/31/93 5,277,282 5,287,932
09/30/93 5,442,666 5,437,157
10/31/93 5,547,911 5,577,164
11/30/93 5,517,841 5,395,460
12/31/93 5,893,716 5,579,823
01/31/94 6,099,194 5,754,639
02/28/94 6,084,159 5,733,749
03/31/94 5,763,413 5,431,753
04/30/94 5,903,739 5,463,963
05/31/94 5,723,320 5,402,493
06/30/94 5,487,771 5,220,213
07/31/94 5,482,760 5,306,033
08/31/94 5,808,518 5,601,580
09/30/94 5,958,868 5,582,590
10/31/94 5,953,856 5,560,037
11/30/94 5,838,588 5,335,355
12/31/94 5,953,856 5,478,183
01/31/95 5,803,506 5,408,993
02/28/95 6,003,973 5,634,170
03/31/95 6,124,253 5,730,740
04/30/95 6,389,871 5,858,077
05/31/95 6,455,022 5,958,777
06/30/95 6,941,154 6,267,918
07/31/95 7,472,390 6,628,950
08/31/95 7,602,693 6,766,103
09/30/95 7,813,183 6,886,946
10/31/95 7,707,938 6,578,962
11/30/95 7,923,440 6,855,344
12/31/95 8,111,989 7,036,188
01/31/96 7,666,725 7,028,589
02/29/96 8,040,337 7,247,670
03/31/96 8,444,657 7,395,160
04/30/96 9,355,656 7,790,579
05/31/96 9,729,268 8,097,606
06/30/96 9,452,898 7,765,118
07/31/96 8,736,381 7,086,913
08/31/96 9,268,651 7,498,379
09/30/96 9,601,319 7,791,416
10/31/96 9,350,538 7,671,350
11/30/96 9,780,448 7,987,410
12/31/96 10,044,807 8,196,760
01/31/97 10,387,828 8,360,531
02/28/97 10,073,392 8,157,788
03/31/97 9,581,728 7,772,822
04/30/97 9,324,462 7,794,508
05/31/97 10,444,998 8,661,647
06/30/97 11,348,288 9,032,885
07/31/97 11,977,160 9,453,185
08/31/97 12,520,277 9,669,663
09/30/97 13,800,890 10,377,483
10/31/97 13,292,075 9,921,911
11/30/97 13,349,245 9,857,419
12/31/97 13,730,013 10,029,924
01/31/98 13,453,742 9,871,451
02/28/98 14,488,151 10,601,938
03/31/98 15,561,110 11,038,738
04/30/98 15,708,883 11,099,782
05/31/98 15,137,066 10,501,504
06/30/98 15,201,315 10,523,557
07/31/98 14,237,580 9,671,149
08/31/98 11,635,495 7,793,012
09/30/98 12,053,114 8,403,205
10/31/98 12,001,715 8,746,055
11/30/98 12,522,132 9,204,349
12/31/98 13,197,781 9,774,098
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 7/1/93, the first full month following
the Fund's Institutional Class inception on 6/25/93, compared to the Russell
2000 Index, an unmanaged market index. The performance of the Administrative
Class (shown above) reflects the payment of a service fee in an amount not to
exceed 0.25% on an annualized basis. The Administrative Class commenced
operations on 4/1/96. The Fund may invest in stocks of small and intermediate
sized companies which may have less liquidity than those of larger companies and
may be subject to greater price volatility than the overall stock market.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Osteotech, Inc. 3.1%
Medical products
- --------------------------------------------------------------------------------
Dendrite International, Inc. 2.9%
Large sales force manager
- --------------------------------------------------------------------------------
AVT Corp. 2.6%
Communications software
- --------------------------------------------------------------------------------
Astec Industries, Inc. 2.2%
Asphalt and paving equipment
- --------------------------------------------------------------------------------
Chico's Fas, Inc. 2.1%
Clothing retailer
- --------------------------------------------------------------------------------
HA-LO Industries, Inc. 2.1%
Specialty advertising distributor
- --------------------------------------------------------------------------------
Cotelligent Group, Inc. 2.1%
Computer consulting services
- --------------------------------------------------------------------------------
Ardent Software, Inc. 2.0%
Software developer
- --------------------------------------------------------------------------------
Morton's Restaurant Group, Inc. 2.0%
Own and operate full service restaurants
- --------------------------------------------------------------------------------
Winsloew Furniture, Inc. 2.0%
Office Furnishings
- --------------------------------------------------------------------------------
Top Ten Total 23.1%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Consumer Discretionary 19.5%
- --------------------------------------------------------------------------------
Technology 16.7%
- --------------------------------------------------------------------------------
Financial & Business Services 15.1%
- --------------------------------------------------------------------------------
Capital Goods 12.1%
- --------------------------------------------------------------------------------
Consumer Services 8.6%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stocks 93%
- --------------------------------------------------------------------------------
Cash Equivalents 7%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six months ended December 31, 1998, PIMCO Micro Cap Growth Fund
Institutional Class shares returned -13.2%.
The dramatic downward shift in expectations that took place in the third
quarter was reversed by the Federal Reserve's rate cut at the end of September.
The subsequent rate cuts, and the realization that specific company fundamentals
were not as bad as some analysts feared, helped the equity markets to recover
strongly in the fourth quarter. The S&P 500 Index posted a total return of 21.3%
for the fourth quarter, finishing the year with a total return of 28.7%. Stocks
of smaller companies, as measured by the Russell 2000 Index, also rebounded
nicely in the fourth quarter by gaining 16.3%, leaving small-cap stocks down
2.6% for the full year. While the Fund underperformed on a relative basis for
the six-month period and year, longer-term returns remain very strong.
The period saw a number of sectors with positive returns, led by health
care. One of the better performers in this industry was Osteotech, a processor
of bone tissue for transplantation into the orthopedic, dental and ear, nose and
throat markets. This company continued to impress investors by increasing gross
margins, reducing operating expenses and expanding globally.
Technology was another strong contributor for the Fund this period. AVT
Corporation, which develops a broad line of software products that automate call
answering operations, performed well because of the company's continued ability
to expand product lines and distribution channels.
Financial and business services accounted for approximately 15.1% of the
portfolio at year end. Ciber, an information technology consulting-service
company, continued to improve earnings through its aggressive acquisition
activity. Crossman Communities, a regional single-family homebuilder, continues
to benefit from strong consumer demand and low interest rates.
Part of the relative underperformance in the period can be attributed to the
consumer services sector. Several of these stocks fell victim to changing
economic expectations. Both Atlantic Coast Airlines and Mesaba Holdings were
sold because of earnings reductions and a slowing economic outlook for 1999. In
addition, American Coin Merchandising, Inc., a longtime holding in the Fund, was
sold due to management's inability to integrate some recent acquisitions. While
the positive performance of retail stocks such as Brookstone, Inc., Chico's Fas
and Shoe Carnival helped the sector, it was not enough to offset the
underperformance of others.
Looking ahead, the manager is confident in its ability to continue finding
growing companies that are profitable, where expectations are improving, yet are
trading at reasonable valuations.
10 See page 33 for financial details.
<PAGE>
December 31, 1998
PIMCO Small-Cap Growth Fund
OBJECTIVE
Growth of capital
PORTFOLIO
Common stocks of companies with market capitalizations between $50 million and
$1 billion that have improving fundamentals and whose stock is reasonably
valued by the market
TOTAL NET ASSETS
$61 million
NUMBER OF SECURITIES IN THE PORTFOLIO
85 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital Management
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
Average Annual Total Return For period ended 12/31/98
Inst'l Class Admin. Class Russell 2000 Lipper Small-Cap
(INCEP. 1/17/91) (INCEP. 9/27/95) Index Fund Average
- --------------------------------------------------------------------------------
6 months -13.21% -13.39% -7.12% -6.49%
1 year -8.50% -8.89% -2.55% -0.33%
3 years* 10.65% 10.55% 11.58% 12.65%
5 years* 10.66% -- 11.86% 12.87%
Inception* 18.43% 8.48% -- --
*Annualized
Change in Value
$5,000,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
INSTITUT
PIMCO
Small-Cap Russell 2000
MONTH Growth Index
Fund
========================== ============ =============
12/31/90
01/31/91 5,000,000 5,000,000
02/28/91 5,463,287 5,560,750
03/31/91 5,843,531 5,950,725
04/30/91 5,766,171 5,935,373
05/31/91 6,033,043 6,218,074
06/30/91 5,766,171 5,858,483
07/31/91 6,099,236 6,063,471
08/31/91 6,374,882 6,287,092
09/30/91 6,383,633 6,336,132
10/31/91 6,581,876 6,503,659
11/30/91 6,263,398 6,202,670
12/31/91 6,995,446 6,699,007
01/31/92 7,323,081 7,242,297
02/29/92 7,544,456 7,453,699
03/31/92 7,247,813 7,201,466
04/30/92 7,066,286 6,948,623
05/31/92 7,030,866 7,041,039
06/30/92 6,694,376 6,710,181
07/31/92 6,951,171 6,943,427
08/31/92 6,712,086 6,747,067
09/30/92 6,955,598 6,902,452
10/31/92 7,249,837 7,120,293
11/30/92 7,809,634 7,665,565
12/31/92 8,162,949 7,932,403
01/31/93 8,548,383 8,200,677
02/28/93 8,456,613 8,011,570
03/31/93 9,066,884 8,271,465
04/30/93 8,644,742 8,044,082
05/31/93 9,154,066 8,399,872
06/30/93 9,374,314 8,452,035
07/31/93 9,374,314 8,568,758
08/31/93 9,934,112 8,938,757
09/30/93 10,250,718 9,191,009
10/31/93 10,066,641 9,427,677
11/30/93 9,599,036 9,120,523
12/31/93 10,158,807 9,432,172
01/31/94 10,348,945 9,727,682
02/28/94 10,609,706 9,692,370
03/31/94 9,979,534 9,181,873
04/30/94 10,202,267 9,236,321
05/31/94 9,887,181 9,132,413
06/30/94 9,631,853 8,824,285
07/31/94 9,903,478 8,969,356
08/31/94 10,354,377 9,468,950
09/30/94 10,316,350 9,436,850
10/31/94 10,528,218 9,398,725
11/30/94 9,898,046 9,018,923
12/31/94 10,214,126 9,260,359
01/31/95 9,843,666 9,143,401
02/28/95 10,372,895 9,524,041
03/31/95 10,437,578 9,687,283
04/30/95 10,502,262 9,902,534
05/31/95 10,766,877 10,072,759
06/30/95 11,296,106 10,595,333
07/31/95 12,824,991 11,205,624
08/31/95 12,836,751 11,437,469
09/30/95 13,160,169 11,641,742
10/31/95 12,360,445 11,121,123
11/30/95 12,383,966 11,588,322
12/31/95 12,445,286 11,894,022
01/31/96 12,400,748 11,881,176
02/29/96 12,807,956 12,251,512
03/31/96 13,037,010 12,500,831
04/30/96 13,787,799 13,169,250
05/31/96 14,144,106 13,688,250
06/30/96 13,253,339 13,126,211
07/31/96 12,318,034 11,979,767
08/31/96 13,132,449 12,675,313
09/30/96 13,717,811 13,170,664
10/31/96 13,533,295 12,967,704
11/30/96 14,214,095 13,501,973
12/31/96 14,540,393 13,855,860
01/31/97 14,856,225 14,132,700
02/28/97 14,005,909 13,789,982
03/31/97 13,738,667 13,139,233
04/30/97 13,787,257 13,175,891
05/31/97 15,342,119 14,641,709
06/30/97 16,277,466 15,269,253
07/31/97 17,309,992 15,979,731
08/31/97 17,686,560 16,345,667
09/30/97 18,877,002 17,542,170
10/31/97 18,233,192 16,772,069
11/30/97 17,953,802 16,663,050
12/31/97 18,425,982 16,954,654
01/31/98 17,857,536 16,686,770
02/28/98 19,368,772 17,921,591
03/31/98 20,380,883 18,659,961
04/30/98 20,699,768 18,763,150
05/31/98 19,493,552 17,751,816
06/30/98 19,424,230 17,789,095
07/31/98 18,231,879 16,348,179
08/31/98 14,294,347 13,173,362
09/30/98 14,599,368 14,204,837
10/31/98 14,627,097 14,784,394
11/30/98 15,971,958 15,559,096
12/31/98 16,859,127 16,522,204
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 2/1/91, the first full month following
the Fund's Institutional Class inception on 1/17/91, compared to the Russell
2000 Index, an unmanaged market index. The performance of the Administrative
Class (shown above) reflects the payment of a service fee in an amount not to
exceed 0.25% on an annualized basis. The Administrative Class commenced
operations on 9/27/95. The Fund may invest in stocks of small and intermediate
sized companies which may have less liquidity than those of larger companies and
may be subject to greater price volatility than the overall stock market.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Chattem, Inc. 1.8%
Specialty consumer products
- --------------------------------------------------------------------------------
Osteotech, Inc. 1.8%
Medical products
- --------------------------------------------------------------------------------
Martin Marietta Materials, Inc. 1.8%
Aggregates/building materials
- --------------------------------------------------------------------------------
NeoMagic Corp. 1.7%
Computer memory devices
- --------------------------------------------------------------------------------
Foodmaker, Inc. 1.7%
Operate Jack-in-the-Box/Chi Chi's
- --------------------------------------------------------------------------------
HA-LO Industries, Inc. 1.6%
Advertising services
- --------------------------------------------------------------------------------
Gilat Satellite Networks Limited 1.6%
Satellite stations manufacturer
- --------------------------------------------------------------------------------
American Eagle Outfitters, Inc. 1.6%
Retail apparell
- --------------------------------------------------------------------------------
Alternative Living Services, Inc. 1.6%
Assisted living residences
- --------------------------------------------------------------------------------
Manitowoc Co., Inc. 1.5%
Machinery
- --------------------------------------------------------------------------------
Top Ten Total 16.7%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Financial & Business Services 23.2%
- --------------------------------------------------------------------------------
Technology 14.3%
- --------------------------------------------------------------------------------
Consumer Discretionary 13.9%
- --------------------------------------------------------------------------------
Capital Goods 12.0%
- --------------------------------------------------------------------------------
Health Care 8.2%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stocks 94%
- --------------------------------------------------------------------------------
Cash Equivalents 6%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six months ended December 31, 1998, PIMCO Small-Cap Growth Fund returned
- - 13.2% for Institutional Class shares.
Despite the wrenching volatility of returns for both the Fund and the
Russell 2000 during this six-month period, the Fund's characteristics are sound.
Overall, the holdings continue to reflect better-than-average growth and
profitability at lower-than-average prices.
The health care sector saw a large uptick, as all of the Fund's holdings
showed strong performance. After an early fourth quarter sell-off, Hooper
Holmes, a provider of health information services to insurance companies through
a large branch network, rose 45%. Osteotech, whose composite bone putty (made
from cadaver material) is propelling both top-line growth and margin expansion,
saw its price jump accordingly.
Consumer cyclical stocks contributed to the Fund's performance. Consumer
confidence recovered and grew again after a shaky September and early October.
The advance was led by Ames Department Stores, the nationwide off-price
retailing chain. Buoyed by the acquisition of Hills Department Stores, Ames
stock rose 99.8% during the fourth quarter. American Eagle Outfitters, a
specialty retailer of casual clothes, saw a large increase in its stock price
due to a strong following among trend-conscious young people as well as terrific
profitability.
Results for the financial services sector were mixed. CMAC Investment, a
mortgage provider, was sold because of the potential for increased competition
from Freddie Mac and Fannie Mae. On the positive side, holdings in Reinsurance
Group of America saw a gain in stock price caused by the trend toward
restructuring in the life insurance industry. West-America Bancorp also rose,
reflecting the strong competitive position of this northern California-based
commercial bank.
Technology stocks were a drag to the overall performance of the portfolio.
Part of the reason was the Fund's lack of ownership of companies with no
earnings (e.g., Internet stocks) and companies whose stock price ran up well in
advance of a potential earnings rebound (e.g., semiconductor equipment). These
groups performed better than those that exhibited strong profitability. Gains by
Neomagic, CHS Electronics and Visio were countered by declines in Datastream
Systems, Veritas Software, ITDS and Scitex. We sold stocks that had specific
problems impacting future profits.
The manager remains confident that this portfolio of high-growth companies
selling at reasonable prices is more likely to provide for good long-term
performance. The manager believes the Fund is well-positioned for the time when
earnings growth begins to matter again, and investors re-focus their attention
on the small-cap universe.
See page 34 for financial details. 11
<PAGE>
December 31, 1998
PIMCO Renaissance Fund
OBJECTIVE
Long-term growth of capital and current income
PORTFOLIO
Value stocks showing signs of a strong revival
TOTAL NET ASSETS
$636 million
NUMBER OF SECURITIES IN THE PORTFOLIO
51 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Columbus Circle Investors
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
Average Annual Total Return For period ended 12/31/98
Inst'l Class Admin. Class S&P 500 Lipper Equity Income
(INCEP. 12/30/97) (INCEP. 8/31/98) Index Fund Average
- --------------------------------------------------------------------------------
6 months -1.07% -- 9.23% 1.80%
1 year 11.83% -- 28.58% 10.89%
Inception* 12.73% 22.91% -- --
*Annualized
Change in Value
$5,000,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
INSTITUT
<TABLE>
<CAPTION>
PIMCO
Renaissance S&P 500
MONTH Fund Index
======================== =========== =========
<S> <C> <C>
12/31/97 5,000,000 5,000,000
01/31/98 5,005,928 5,055,300
02/28/98 5,388,263 5,419,888
03/31/98 5,595,732 5,697,441
04/30/98 5,723,177 5,754,757
05/31/98 5,604,624 5,655,833
06/30/98 5,652,045 5,885,573
07/31/98 5,536,455 5,822,891
08/31/98 4,555,424 4,981,018
09/30/98 4,718,435 5,300,102
10/31/98 4,922,940 5,731,212
11/30/98 5,234,143 6,078,581
12/31/98 5,591,637 6,428,829
</TABLE>
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 1/1/98, the first full month following
the Fund's Institutional Class inception on 12/30/97, compared to the S&P 500
Index, an unmanaged market index. The performance of the Administrative Class
(shown above) reflects the payment of a service fee in an amount not to exceed
0.25% on an annualized basis. The Administrative Class commenced operations on
8/31/98.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Martin Marietta Materials, Inc. 4.0%
Aggregates/building materials
- --------------------------------------------------------------------------------
International Business Machines Corp. 3.8%
Business machines manufacturer
- --------------------------------------------------------------------------------
Allegiance Corp. 3.8%
Broadband communications
- --------------------------------------------------------------------------------
Enron Corp. 3.7%
Gas pipeline systems
- --------------------------------------------------------------------------------
Corning, Inc. 3.0%
Consumer products
- --------------------------------------------------------------------------------
Philip Morris Co., Inc. 2.8%
Cigarettes/food products/brewing
- --------------------------------------------------------------------------------
Cendant Corp. 2.8%
Consumer services
- --------------------------------------------------------------------------------
Anheuser Busch Cos., Inc. 2.8%
Largest U.S. brewer
- --------------------------------------------------------------------------------
General Motors Corp. 2.7%
Auto maker
- --------------------------------------------------------------------------------
Tele-Communications, Inc. 'A' 2.7%
Cable TV systems
- --------------------------------------------------------------------------------
Top Ten Total 32.1%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Financial & Business Services 20.4%
- --------------------------------------------------------------------------------
Consumer Discretionary 15.7%
- --------------------------------------------------------------------------------
Communications 12.7%
- --------------------------------------------------------------------------------
Technology 11.1%
- --------------------------------------------------------------------------------
Health Care 10.5%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stocks 97%
- --------------------------------------------------------------------------------
Cash Equivalents 3%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six months ended December 31, 1998, PIMCO Renaissance Fund returned
- -1.07% for Institutional Class shares.
The consumer staples sector made one of the most positive contributions to
the Fund's performance this period. As investors questioned the cyclical
strength of the U.S. economy, this sector's stocks benefited from their lack of
reliance on domestic growth. One of the Fund's largest consumer staples
holdings, Philip Morris, had a strong year, as the two biggest risks to its
stock price, legislation and litigation risk, were overcome. Congress' inability
to pass a tobacco bill and a multi-state court settlement for the tobacco
industry eased concerns regarding potentially unknown burdens on cash flow.
While a risk of individual and class action suits remains, these two types of
suits pose less risk, as they have been largely unsuccessful thus far. As a
result, Philip Morris is able to re-focus on shareholder-friendly activities. It
already has made progress in that regard, raising its dividend this summer.
The Fund's exposure to the technology sector also contributed to performance
this period. Despite the fact that the Asian economic crisis hurt many
technology issues in the third quarter, the sector bounced back in the fourth
quarter. For instance, the Fund saw a strong contribution from IBM, one of its
largest holdings. A recovery in the PC industry, which was finally able to
control inventory, aided most PC stocks in general, including IBM. Specifically,
IBM performed very well due to strong demand for its new mainframe as well as
the continued rapid growth of its MIS outsourcing business. The company has
increasingly been recognized as generating more than half of its results from
software and services, areas resistant to economic downturns, which bodes well
for its future.
One sector that saw poor performance this period was utilities. Despite a
strong third quarter, most electric and power utilities did not show strong
performance for the year.
Oil stocks had a particularly poor year. Last year's relatively warm winter
as well as OPECs inability to control output resulted in historically low prices
for oil. In fact, this year oil reached its lowest price-per-barrel in 12 years!
Even conflict with Iraq in the fourth quarter could not raise its price. As a
result, almost all oil stocks were hurt, including one of Renaissance Fund's
holdings, Exxon, which is considered one of the stronger names in the sector.
The manager believes that, more than ever, a stock's underlying value and
price will be important to investors. The manager will continue to adhere to the
Fund's investment strategy of purchasing out-of-favor companies that are showing
signs of a turnaround.
12 See page 35 for financial details.
<PAGE>
December 31, 1998
PIMCO Core Equity Fund
OBJECTIVE
Long-term growth of capital
PORTFOLIO
Common stocks of companies with market capitalizations in excess of $3 billion
TOTAL NET ASSETS
$170 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 period ended 12/31/98
Inst'l Class Admin. Class S&P 500 Lipper Growth
(Incep. 12/28/94) (Incep. 5/31/95) Index Fund Average
- --------------------------------------------------------------------------------
6 months 10.69% 10.33% 9.23% 6.24%
1 year 41.06% 40.47% 28.58% 22.89%
3 years* 27.75% 27.34% 28.23% 22.24%
Inception* 27.75% 26.15% -- --
*Annualized
Change in Value
$5,000,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
INSTITUT
PIMCO
Core Equity S&P 500
MONTH Fund Index
======================== =========== ==========
12/31/94 5,000,000 5,000,000
01/31/95 5,034,965 5,129,650
02/28/95 5,189,810 5,329,552
03/31/95 5,339,660 5,486,828
04/30/95 5,545,390 5,648,415
05/31/95 5,735,746 5,874,182
06/30/95 5,921,094 6,010,639
07/31/95 6,181,582 6,209,952
08/31/95 6,246,704 6,225,539
09/30/95 6,422,032 6,488,256
10/31/95 6,386,996 6,465,093
11/30/95 6,502,485 6,748,911
12/31/95 6,397,852 6,878,895
01/31/96 6,444,715 7,113,052
02/29/96 6,799,004 7,178,990
03/31/96 6,772,780 7,248,124
04/30/96 6,875,788 7,354,962
05/31/96 7,107,556 7,544,646
06/30/96 6,987,958 7,573,391
07/31/96 6,513,499 7,238,799
08/31/96 6,761,043 7,391,465
09/30/96 7,225,188 7,807,457
10/31/96 7,333,489 8,022,786
11/30/96 7,777,005 8,629,229
12/31/96 7,546,203 8,458,284
01/31/97 7,917,776 8,986,757
02/28/97 7,731,989 9,057,213
03/31/97 7,327,631 8,685,052
04/30/97 7,628,168 9,203,550
05/31/97 8,245,634 9,763,862
06/30/97 8,496,992 10,201,283
07/31/07 9,327,566 11,012,999
08/31/97 8,748,350 10,396,051
09/30/97 9,322,102 10,965,443
10/31/97 9,065,279 10,599,197
11/30/97 9,185,494 11,089,834
12/31/97 9,456,557 11,280,246
01/31/98 9,675,240 11,405,006
02/28/98 10,425,854 12,227,535
03/31/98 11,129,186 12,853,707
04/30/98 11,353,799 12,983,015
05/31/98 11,206,020 12,759,837
06/30/98 12,051,200 13,278,142
07/31/98 11,867,979 13,136,729
08/31/98 9,840,730 11,237,421
09/30/98 10,679,999 11,957,290
10/31/98 11,117,365 12,929,896
11/30/98 11,950,724 13,713,577
12/31/98 13,339,575 14,503,754
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 1/1/95, the first full month following
the Fund's Institutional Class inception on 12/28/94, compared to the S&P 500
Index, an unmanaged market index. The performance of the Administrative Class
(shown above) reflects the payment of a service fee in an amount not to exceed
0.25% on an annualized basis. The Administrative Class commenced operations on
5/31/95.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
America Online, Inc. 4.1%
Online computer services
- --------------------------------------------------------------------------------
Microsoft Corp. 3.9%
Computer software provider
- --------------------------------------------------------------------------------
Intel Corp. 3.4%
Semiconductor circuits
- --------------------------------------------------------------------------------
Home Depot, Inc. 3.3%
Building/home improvements materials
- --------------------------------------------------------------------------------
Safeway, Inc. 3.2%
Food supermarket chain
- --------------------------------------------------------------------------------
CVS Corp. 2.9%
Retail health stores
- --------------------------------------------------------------------------------
HBO & Co. 2.9%
Hospital information systems
- --------------------------------------------------------------------------------
Cendant Corp. 2.7%
Member-based consumer services
- --------------------------------------------------------------------------------
Eli Lilly & Co. 2.7%
Pharmaceuticals
- --------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 2.7%
Discount stores
- --------------------------------------------------------------------------------
Top Ten Total 31.8%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Technology 22.3%
- --------------------------------------------------------------------------------
Consumer Discretionary 18.3%
- --------------------------------------------------------------------------------
Health Care 16.8%
- --------------------------------------------------------------------------------
Financial & Business Services 12.6%
- --------------------------------------------------------------------------------
Consumer Staples 7.6%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stocks 96%
- --------------------------------------------------------------------------------
Cash Equivalents 4%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six months ended December 31, 1998, the Core Equity Fund's Institutional
Class shares returned 10.7%, compared to 9.2% for the S&P 500 Index and 6.2% for
the Lipper Growth Fund Average.
Technology was the best performing sector for the Fund this period. The
Fund's strongest performer in this sector was America Online, the largest
provider of online services in the world. A rise in the company's stock price
was fueled by AOL's proposed acquisition of Netscape Communications, which will
give AOL control of a major Internet portal and allow it to extend its dominance
in the Internet industry. AOL continues to report phenomenal growth in its
membership, surpassing 15 million subscribers in the fourth quarter. In 1998,
the company expanded its networking capabilities and saw a resulting jump in
subscribers. By increasing monthly subscription rates from $19.95 to $21.95, the
company was able to dramatically increase revenue.
Another strong performer for the Fund was the retail sector. With the
economy experiencing low unemployment, rising wages and low interest rates, the
Fund's manager focused on consumer spending as a key theme in the portfolio.
Retail stocks were sold off during the third quarter as investors grew concerned
that the market's decline would shake consumer confidence and impact spending
intentions. However, the October rate cut sparked a recovery, and the Fund's
largest sector holdings, Home Depot and Wal-Mart, responded well.
The health care sector provided mixed performance for the Fund this period.
Although the Fund's healthcare stocks turned in a strong performance in 1998,
they underperformed during the fourth quarter. The poor performance can be
attributed in part to profit-taking associated with the strength of these stocks
earlier this year. More importantly, pharmaceutical companies are nearing the
end of very strong product cycles and are expected to experience a six-month
pause as they reload for the next cycle. Anticipating this event, the manager
cut back the Fund's position in pharmaceutical stocks from an overweight
position to market weight, thereby minimizing the impact of the group's poor
performance in the fourth quarter.
Energy was a disappointing sector for the Fund this period. This
underperformance was largely due to the low price of oil, which made it
extremely difficult for companies in this industry to grow earnings in 1998.
Even conflagration between the U.S. and Iraq could not boost the price of oil,
as this commodity suffered from over-supply and last year's warm winter.
Looking forward, the manager remains cautious about the market's prospects
in 1999 and believes that the current uncertain environment places a greater
emphasis on stock selection, which should benefit PIMCO Core Equity Fund.
See page 36 for financial details. 13
<PAGE>
December 31, 1998
PIMCO Mid-Cap Equity Fund
OBJECTIVE
Long-term growth of capital
PORTFOLIO
Common stocks of companies with market capitalizations between $800 million and
$3 billion
TOTAL NET ASSETS
$13 million
NUMBER OF SECURITIES IN THE PORTFOLIO
57 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Columbus Circle Investors
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
Average Annual Total Return For period ended 12/31/98
Inst'l Class Admin. Class S&P Mid-Cap Lipper Mid-Cap
(Incep. 12/28/94) (Incep. 8/21/97) 400 Index Fund Average
- --------------------------------------------------------------------------------
6 months 8.10% 7.97% 8.85% 0.79%
1 year 29.89% 29.56% 18.25% 12.26%
3 years* 20.98% -- 23.08% 16.35%
Inception* 23.51% 20.69% -- --
*Annualized
Change in Value
$5,000,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
INSTITUT
<TABLE>
<CAPTION>
<S>
PIMCO
Mid-Cap S&P
Equity Mid-Cap
MONTH Fund Index
======================== =============== ===============
<S> <C> <C>
12/31/94 5,000,000 5,000,000
01/31/95 4,910,000 5,052,050
02/28/95 5,190,000 5,317,126
03/31/95 5,370,000 5,409,394
04/30/95 5,445,000 5,517,999
05/31/95 5,435,000 5,651,109
06/30/95 5,850,000 5,881,160
07/31/95 6,205,000 6,187,969
08/31/95 6,205,000 6,302,409
09/30/95 6,375,000 6,455,173
10/31/95 6,467,605 6,289,081
11/30/95 6,542,693 6,563,757
12/31/95 6,585,784 6,547,426
01/31/96 6,539,441 6,642,416
02/29/96 6,750,557 6,868,179
03/31/96 7,002,866 6,950,487
04/30/96 7,389,054 7,162,762
05/31/96 7,734,048 7,259,631
06/30/96 7,548,678 7,150,700
07/31/96 6,704,215 6,666,927
08/31/96 7,100,701 7,051,429
09/30/96 7,574,424 7,358,871
10/31/96 7,574,424 7,380,285
11/30/96 7,945,164 7,796,017
12/31/96 7,725,848 7,804,670
01/31/97 7,914,427 8,097,657
02/28/97 7,578,521 8,031,095
03/31/97 7,266,187 7,688,729
04/30/97 7,454,766 7,887,944
05/31/97 8,073,541 8,577,666
06/30/97 8,273,906 8,818,698
07/31/97 8,957,505 9,691,838
08/31/97 9,122,512 9,680,208
09/30/97 9,700,035 10,236,819
10/31/97 9,051,795 9,791,518
11/30/97 9,063,581 9,936,432
12/31/97 8,978,700 10,321,966
01/31/98 8,811,246 10,125,849
02/28/98 9,568,774 10,964,269
03/31/98 10,055,187 11,458,757
04/30/98 10,414,016 11,668,453
05/31/98 10,015,317 11,143,372
06/30/98 19,788,793 11,213,575
07/31/98 10,485,782 10,778,489
08/31/98 8,731,506 8,772,612
09/30/98 9,544,852 9,591,097
10/31/98 9,616,618 10,448,541
11/30/98 10,190,744 10,969,923
12/31/98 11,662,454 12,206,233
</TABLE>
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 1/1/95, the first full month following
the Fund's Institutional Class inception on 12/28/94, compared to the S&P
Mid-Cap 400 Index, an unmanaged market index. The performance of the
Administrative Class (shown above) reflects the payment of a service fee in an
amount not to exceed 0.25% on an annual basis. The Administrative Class
commenced operations on 8/21/97.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Rite Aid Corp. 4.0%
Discount drug stores
- --------------------------------------------------------------------------------
Watson Pharmaceuticals, Inc. 3.4%
Manufacturer of patient medications
- --------------------------------------------------------------------------------
Providian Financial Corp. 3.1%
Credit card services
- --------------------------------------------------------------------------------
Bed, Bath & Beyond, Inc. 2.8%
Domestics/home superstore
- --------------------------------------------------------------------------------
Firstar Corp. 2.7%
Commercial banking
- --------------------------------------------------------------------------------
Countrywide Credit Industries, Inc. 2.6%
Mortgage loan services
- --------------------------------------------------------------------------------
Whitman Corp. 2.6%
Produce/distribute Pepsi
- --------------------------------------------------------------------------------
American Power Conversion Corp. 2.5%
Manufacture constant power supply production
- --------------------------------------------------------------------------------
IMS Health, Inc. 2.4%
Medical info. systems
- --------------------------------------------------------------------------------
Shaw Industries, Inc. 2.2%
Carpet manufacturer
- --------------------------------------------------------------------------------
Top Ten Total 28.3%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Technology 25.3%
- --------------------------------------------------------------------------------
Consumer Discretionary 21.3%
- --------------------------------------------------------------------------------
Financial & Business Services 18.9%
- --------------------------------------------------------------------------------
Health Care 11.9%
- --------------------------------------------------------------------------------
Consumer Services 6.6%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stocks 96%
- --------------------------------------------------------------------------------
Cash Equivalents 4%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The Mid-Cap Equity Fund posted strong results for the six months ended December
31, 1998, returning 8.1% for Institutional Class shares. These returns far
outperformed the average return of funds with the same objective (as measured by
the Lipper Mid-Cap Fund Average), which returned 0.8% for the same period.
The Federal Reserve's decision to aggressively ease monetary policy prompted
the manager to reposition the portfolio in the month of October to a more
economically positive and offensive position. In response to these adjustments,
the Fund's outperformance resumed in November and December.
The consumer cyclicals sector was a strong performer for the Fund during
this six-month period. Despite a bumpy third quarter, in which holdings in this
sector were cut back because of the volatile environment, this sector performed
well in the fourth quarter. After the first Federal Reserve rate cut, the Fund
increased its holdings in the sector and was rewarded. For instance, Fund
holding Bed, Bath & Beyond performed well this period. The Federal Reserve's
actions to ease recessionary fears, along with solid sales increases, fueled the
rise in this stock.
The financial sector also performed well for the Fund this period. While the
financial sector underperformed in the third quarter, it was a solid performer
in the fourth quarter. Providian, a credit card issuer with solid fundamentals,
was one of the Fund's largest holdings during this period and also one of its
biggest success stories. A strong domestic economy resulted in fewer credit card
defaults as well as an increase in credit quality.
One of the best performing stocks for the Fund this period was Amazon.com,
the on-line bookseller. The company, like many other Internet stocks, benefited
from a strong secular trend toward Internet commerce. However, Amazon.com proved
itself to be a standout among Internet stocks because of its strong management
and commitment to new product offerings. The company added several new products
to its Web site this year, including music, video and a gift center. In fact, it
vaulted to the position of number one on-line music seller after only one
quarter of offering music on its Web site.
One disappointment for the Fund this period was BMC Software, a provider of
systems management software solutions. Investors' concerns that corporate
spending on the Year 2000 (Y2K) problem would reduce IT spending on non-Y2K
software or services, negatively affected the stock's price. Specifically,
client server growth, a new opportunity for the company, showed disappointing
and decelerating growth.
Looking ahead, the Fund manager believes that mid-cap growth stocks will
emerge as the strongest performers in the coming year, since they offer more
growth potential than large-cap stocks but with more liquidity than small-cap
stocks. The manager believes that the Mid-Cap Equity Fund is poised to benefit
from this environment.
14 See page 37 for financial details.
<PAGE>
December 31, 1998
PIMCO International Growth Fund
OBJECTIVE
Long-term growth of capital
PORTFOLIO
Common stocks of companies domiciled outside the United States
TOTAL NET ASSETS
$6 million
NUMBER OF SECURITIES IN THE PORTFOLIO
52 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Columbus Circle Investors
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
Average Annual Total Return For period ended 12/31/98
Inst'l Class MSCI Lipper International
(Incep. 12/31/97) EAFE Index Fund Average
- --------------------------------------------------------------------------------
6 months 2.88% 3.66% -2.30%
1 year 39.40% 20.34% 13.01%
Inception* 39.40% -- --
*Annualized
Change in Value
$5,000,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
INSTITUT
PIMCO
International MSCI
MONTH Growth EAFE
Fund Index
===========================================================
12/31/97 5,000,000 5,000,000
01/31/98 5,190,000 5,230,000
02/28/98 5,595,000 5,566,812
03/31/98 6,090,000 5,739,383
04/30/98 6,385,000 5,785,872
05/31/98 6,635,000 5,759,257
06/30/98 6,775,000 5,804,179
07/31/98 7,040,000 5,864,543
08/31/98 5,940,000 5,139,099
09/30/98 5,570,000 4,982,870
10/31/98 5,895,000 5,503,580
11/30/98 6,490,000 5,787,015
12/31/98 6,970,063 6,016,759
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 1/1/98, the first full month following
the Fund's Institutional Class inception on 12/31/97, compared to the Morgan
Stanley Capital International (MSCI) EAFE Index (Europe, Australasia, Far East),
an unmanaged market index. The Fund may invest in foreign securities which
involve potentially higher risks including foreign currency fluctuations and
political or economic uncertainty.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top Holdings in % of Total
Selected Countries Investments
- --------------------------------------------------------------------------------
Finland/Nokia Corp. - ADR 3.5%
- --------------------------------------------------------------------------------
Netherlands/ING Groep NV 3.4%
- --------------------------------------------------------------------------------
Germany/Mannesmann AG 3.4%
- --------------------------------------------------------------------------------
France/Business Objects SA SP - ADR 3.1%
- --------------------------------------------------------------------------------
Greece/National Bank of Greece - GDR 2.8%
- --------------------------------------------------------------------------------
Ireland/Bank of Ireland 2.8%
- --------------------------------------------------------------------------------
Italy/Telecom Italia Mobile SpA 2.6%
- --------------------------------------------------------------------------------
United States/Newbridge 2.6%
Networks Corp.
- --------------------------------------------------------------------------------
United Kingdom/Vodafone Group PLC - ADR 2.5%
- --------------------------------------------------------------------------------
United Kingdom/Energis PLC 2.5%
- --------------------------------------------------------------------------------
Top Ten Total 29.2%
- --------------------------------------------------------------------------------
Top 5 Countries % of Total Investments
- --------------------------------------------------------------------------------
United Kingdom 12.1%
- --------------------------------------------------------------------------------
Japan 10.1%
- --------------------------------------------------------------------------------
Netherlands 9.7%
- --------------------------------------------------------------------------------
Germany 8.3%
- --------------------------------------------------------------------------------
Switzerland 8.2%
- --------------------------------------------------------------------------------
Regional Breakdown
- --------------------------------------------------------------------------------
Stock: Eastern Europe 51%
- --------------------------------------------------------------------------------
Europe 22%
- --------------------------------------------------------------------------------
Asia 14%
- --------------------------------------------------------------------------------
United States 4%
- --------------------------------------------------------------------------------
Canada 2%
- --------------------------------------------------------------------------------
Latin America 1%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stocks 94%
- --------------------------------------------------------------------------------
Cash Equivalents 6%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO International Growth Fund Institutional Class shares returned 2.9% for the
six months ended December 31, 1998.
The fourth quarter produced a sharp rebound from the depressed levels at
summer's end as widespread monetary easing countered the panic caused by fear of
emerging market debt failures and their potential to harm worldwide economies.
The U.S. Federal Reserve lowered rates three times and Japan put forward a
massive program to bail out its banks and stimulate its economy. The 11 Euro
countries converged to a lower-than-expected interest rate of 3% and the United
Kingdom, moving to fight recession, cut rates as well.
The Fund's European holdings led the performance in the fourth quarter as
strength in technology, telecommunications and financial stocks more than offset
underexposure to the strong yen and a dramatic bounce in depressed Pacific Rim
emerging markets. Demand for data communications, benefiting from explosive
Internet growth, drove holdings in telecommunications stocks sharply higher.
Newer entrants, such as Energis in the UK, and the recently privatized telephone
carriers in Finland and Switzerland, also benefited.
While lower interest rates served to bolster the market's valuation level
and offset the worst fears of global depression, the outlook for economic growth
and corporate earnings suffered. Most nations are now forecasted to experience
slower growth in 1999. The softer earnings outlook and higher valuations
produced by the fourth quarter's rally could eventually limit equity returns
until broader earnings growth is restored.
To counter the weaker earnings picture, the Fund continues to focus on
secular trends, stronger regional economies and company-specific stories that
can generate positive results. Global telecommunications should continue as a
powerful secular trend. Similarly, corporate restructuring, which swept the U.S.
over the past 15 years, is likely to gain strength in the more mature economies
of Europe and Japan. Finally, the commencement of the 11-country Euro zone, with
a common currency and monetary policy, is likely to lead many industries to
consolidate and may create opportunities for efficient companies to gain share
across borders.
See page 38 for financial details. 15
<PAGE>
December 31, 1998
PIMCO Equity Income Fund
OBJECTIVE
Current income as a primary objective and long-term growth of capital
PORTFOLIO
Primarily common stocks with below-average price-to-earnings ratios and higher
dividend yields relative to their industry groups
TOTAL NET ASSETS
$200 million
NUMBER OF SECURITIES IN THE PORTFOLIO
47 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
NFJ Investment Group
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
Average Annual Total Return For period ended 12/31/98
Inst'l Class Admin. Class S&P 500 Lipper Equity
(Incep. 3/8/91) (Incep. 11/30/94) Index Income Fund Average
- --------------------------------------------------------------------------------
6 months 1.51% 1.39% 9.23% 1.80%
1 year 8.37% 8.12% 28.58% 10.89%
3 years* 20.04% 19.75% 28.23% 18.75%
5 years* 17.83% -- 24.06% 16.60%
Inception* 16.49% 22.50% -- --
*Annualized
Change in Value
$5,000,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
INSTITUT
PIMCO
Equity Income S&P 500
MONTH Fund Index
======================== =================== ===================
03/31/91 5,000,000 5,000,000
04/30/91 5,034,636 5,012,000
05/31/91 5,319,615 5,228,518
06/30/91 5,134,629 4,989,052
07/31/91 5,421,923 5,221,542
08/31/91 5,502,697 5,345,293
09/30/91 5,532,987 5,256,026
10/31/91 5,571,975 5,326,457
11/30/91 5,349,510 5,111,801
12/31/91 5,820,738 5,696,591
01/31/92 5,965,177 5,590,634
02/29/92 6,116,657 5,663,312
03/31/92 6,017,412 5,552,878
04/30/92 6,125,605 5,716,132
05/31/92 6,136,148 5,744,142
06/30/92 6,141,420 5,658,669
07/31/92 6,416,503 5,889,825
08/31/92 6,230,286 5,769,261
09/30/92 6,283,491 5,837,050
10/31/92 6,291,695 5,857,187
11/30/92 6,481,829 6,056,624
12/31/92 6,678,968 6,130,939
01/31/93 6,713,379 6,182,194
02/28/93 6,852,877 6,266,457
03/31/93 7,009,814 6,398,680
04/30/93 6,872,708 6,244,023
05/31/93 6,925,440 6,411,051
06/30/93 7,048,480 6,429,835
07/31/93 7,037,196 6,403,987
08/31/93 7,285,359 6,646,954
09/30/93 7,279,450 6,595,972
10/31/93 7,338,489 6,732,443
11/30/93 7,264,797 6,668,283
12/31/93 7,244,360 6,748,903
01/31/94 7,485,093 6,978,365
02/28/94 7,323,454 6,788,973
03/31/94 7,031,262 6,492,973
04/30/94 7,086,480 6,576,213
05/31/94 7,130,480 6,684,129
06/30/94 7,030,089 6,520,301
07/31/94 7,261,756 6,734,427
08/31/94 7,559,317 7,010,539
09/30/94 7,420,033 6,839,131
10/31/94 7,508,099 6,992,806
11/30/94 7,105,537 6,738,128
12/31/94 7,128,119 6,838,055
01/31/95 7,360,723 7,015,365
02/28/95 7,600,312 7,288,754
03/31/95 7,819,936 7,503,845
04/30/95 8,022,855 7,724,833
05/31/95 8,318,505 8,033,595
06/30/95 8,345,382 8,220,215
07/31/95 8,637,759 8,492,798
08/31/95 8,759,800 8,514,115
09/30/95 8,990,321 8,873,410
10/31/95 8,955,485 8,841,732
11/30/95 9,263,351 9,229,884
12/31/95 9,513,516 9,407,652
01/31/96 9,656,255 9,727,888
02/29/96 9,784,719 9,818,066
03/31/96 9,980,549 9,912,614
04/30/96 10,232,220 10,058,726
05/31/96 10,397,604 10,318,140
06/30/96 10,419,988 10,357,452
07/31/96 9,941,075 9,899,860
08/31/96 10,282,119 10,108,648
09/30/96 10,636,733 10,677,563
10/31/96 10,878,310 10,972,050
11/30/96 11,698,210 11,801,427
12/31/96 11,556,478 11,567,641
01/31/97 11,812,152 12,290,387
02/28/97 12,153,051 12,386,744
03/31/97 11,746,786 11,877,772
04/30/97 12,175,500 12,586,875
05/31/97 12,938,613 13,353,165
06/30/97 13,303,510 13,951,386
07/31/97 14,149,548 15,061,498
08/31/97 13,830,125 14,217,753
09/30/97 14,693,065 14,996,459
10/31/97 14,241,238 14,495,577
11/30/97 14,832,089 15,166,577
12/31/97 15,183,146 15,426,988
01/31/98 15,242,961 15,597,610
02/28/98 16,140,192 16,722,510
03/31/98 16,902,461 17,578,870
04/30/98 16,662,284 17,755,713
05/31/98 16,552,203 17,450,492
06/30/98 16,209,160 18,159,332
07/31/98 15,574,494 17,965,934
08/31/98 13,448,868 15,368,420
09/30/98 14,436,778 16,352,921
10/31/98 15,349,856 17,683,067
11/30/98 16,404,968 18,754,838
12/31/98 16,454,558 19,835,492
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 4/1/91, the first full month following
the Fund's Institutional Class inception on 3/8/91, compared to the S&P 500
Index, an unmanaged market index. The performance of the Administrative Class
(shown above) reflects the payment of a service fee in an amount not to exceed
0.25% on an annualized basis. The Administrative Class commenced operations on
11/30/94.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
RJR Nabisco Holdings Corp. 4.2%
Tobacco/food products
- --------------------------------------------------------------------------------
PNC Bank Corp. 4.1%
Commercial banking
- --------------------------------------------------------------------------------
Union Planters Corp. 3.6%
Commercial banking
- --------------------------------------------------------------------------------
Kimberly-Clark Corp. 2.2%
Consumer products
- --------------------------------------------------------------------------------
BFGoodrich Co. 2.2%
Aerospace/climate control systems
- --------------------------------------------------------------------------------
Ford Motor Co. 2.2%
Auto maker
- --------------------------------------------------------------------------------
American Home Products Corp. 2.1%
Drug/consumer goods
- --------------------------------------------------------------------------------
Georgia-Pacific Corp. (Timber Group) 2.1%
Timber company
- --------------------------------------------------------------------------------
Dana Corp. 2.1%
Auto industry parts
- --------------------------------------------------------------------------------
Intimate Brands, Inc. 2.1%
Intimate apparel
- --------------------------------------------------------------------------------
Top Ten Total 26.9%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Financial & Business Services 19.6%
- --------------------------------------------------------------------------------
Consumer Discretionary 14.0%
- --------------------------------------------------------------------------------
Materials & Processing 13.4%
- --------------------------------------------------------------------------------
Utilities 11.5%
- --------------------------------------------------------------------------------
Consumer Staples 10.4%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stocks 99%
- --------------------------------------------------------------------------------
Cash Equivalents 1%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The PIMCO Equity Income Fund under-performed the Lipper Equity Income Fund
Average for the six-month period ended December 31, 1998, posting a return of
1.51% for Institutional Class shares.
One of the best performing sectors for the Fund this period was consumer
staples, which performed especially well in the difficult third quarter. In
particular, overweighting in RJR Nabisco greatly enhanced the Fund's
performance. The company's stock price rose after the settlement between the
tobacco industry and the states attorney generals was finalized this year. The
Fund also benefited from holdings in American Home Products and Budweiser. These
consumer staples stocks are value stocks with some growth characteristics that
have shown the ability to generate attractive earnings in any type of economy,
especially during down markets.
The Equity Income Fund also benefited from its exposure to the financial
sector. After a difficult third quarter, the sector performed well in the fourth
quarter as a result of low interest rates and a strong domestic economy. For
instance, Fund holding Chase Manhattan was a very strong performer this period
despite suffering in the third quarter. Although its stock is at all time highs,
its valuation is low and therefore appears to be positioned for further growth.
One standout stock held by the Fund this period was Intimate Brands. The
company, a leading retailer of intimate apparel and personal care products, was
added to the portfolio during the past six months. Through its Victoria's Secret
and Bath & Body Works brands, the company continued to post solid sales and
earnings growth. New product introductions, national television advertising, and
a Web site launch all strengthened brand recognition for Victoria's Secret,
especially the popular Web site, which is expected to boost its catalog sales.
The company continues to expand and find new sources of revenue and has a low
valuation, making it an attractive investment.
The energy sector detracted from the Fund's performance this period.
Unfortunately, a warm winter and over-supply from OPEC caused the price of oil
to reach a 12-year low and was responsible for much of the underperformance of
the sector. For instance, Kerr McGee, a crude oil and natural gas
exploration/production company (also engaged in chemical manufacturing) saw its
stock decrease throughout the past six months because of the price of oil,
despite an increase in its sales volume.
Looking ahead, the manager believes the Fund is well-positioned to continue
its strong performance. The manager is optimistic that the Fund's higher-
yielding stock holdings will soon outperform growth offerings.
16 See page 39 for financial details.
<PAGE>
- ------------------
December 31, 1998
- ------------------
PIMCO Value Fund
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
$244 million
NUMBER OF SECURITIES IN THE PORTFOLIO
46 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
NFJ Investment Group
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
Average Annual Total Return For period ended 12/31/98
Inst'l Class Admin. Class S&P 500 Lipper Growth and
(Incep. 12/30/91) (Incep. 8/21/97) Index Income Fund Average
- --------------------------------------------------------------------------------
6 months 1.69% 1.46% 9.23% 3.08%
1 year 10.17% 9.76% 28.58% 15.59%
3 years* 18.72% -- 28.23% 21.25%
5 years* 17.39% -- 24.06% 18.35%
Inception* 16.73% 10.36% -- --
*Annualized
Change in Value
$5,000,000 invested at the Fund's inception
INSTITUT
PIMCO
Value S&P
MONTH Fund Index
======================== ========= =========
12/31/91 5,000,000 5,000,000
01/31/92 5,144,543 4,907,000
02/29/92 5,318,513 4,970,791
03/31/92 5,199,220 4,873,861
04/30/92 5,222,775 5,017,152
05/31/92 5,177,665 5,041,736
06/30/92 5,067,395 4,966,715
07/31/92 5,247,250 5,169,606
08/31/92 5,095,741 5,063,784
09/30/92 5,166,445 5,123,283
10/31/92 5,199,464 5,140,958
11/30/92 5,478,838 5,316,008
12/31/92 5,657,265 5,381,235
01/31/93 5,776,676 5,426,222
02/28/93 5,839,127 5,500,182
03/31/93 6,021,274 5,616,236
04/30/93 5,916,309 5,480,491
05/31/93 6,000,080 5,627,094
06/30/93 6,041,965 5,643,583
07/31/93 6,013,326 5,620,895
08/31/93 6,340,080 5,834,151
09/30/93 6,355,890 5,789,403
10/31/93 6,576,391 5,909,186
11/30/93 6,510,186 5,852,872
12/31/93 6,585,234 5,923,633
01/31/94 6,890,617 6,125,037
02/28/94 6,778,756 5,958,803
03/31/94 6,415,209 5,698,999
04/30/94 6,337,376 5,772,060
05/31/94 6,337,376 5,866,780
06/30/94 6,191,689 5,722,985
07/31/94 6,450,687 5,910,928
08/31/94 6,722,772 6,153,276
09/30/94 6,518,708 6,002,828
10/31/94 6,588,249 6,137,712
11/30/94 6,257,410 5,914,176
12/31/94 6,317,178 6,001,883
01/31/95 6,489,231 6,157,512
02/28/95 6,779,505 6,397,470
03/31/95 6,966,570 6,586,260
04/30/95 7,155,132 6,780,225
05/31/95 7,427,832 7,051,231
06/30/95 7,557,689 7,215,031
07/31/95 7,890,844 7,454,281
08/31/95 7,988,826 7,472,991
09/30/95 8,210,920 7,788,352
10/31/95 8,234,873 7,760,547
11/30/95 8,589,768 8,101,235
12/31/95 8,774,957 8,257,265
01/31/96 9,026,323 8,538,342
02/29/96 9,224,369 8,617,492
03/31/96 9,300,160 8,700,479
04/30/96 9,422,631 8,828,724
05/31/96 9,613,992 9,056,417
06/30/96 9,572,367 9,090,922
07/31/96 9,057,641 8,689,285
08/31/96 9,411,035 8,872,542
09/30/96 9,668,844 9,371,889
10/31/96 9,807,853 9,630,365
11/30/96 10,649,629 10,358,325
12/31/96 10,559,934 10,153,126
01/31/97 10,916,251 10,787,494
02/28/97 11,102,507 10,872,067
03/31/97 10,714,973 10,425,334
04/30/97 11,137,719 11,047,727
05/31/97 11,796,226 11,720,312
06/30/97 12,097,138 12,245,382
07/31/97 12,897,623 13,219,747
08/31/97 12,628,072 12,479,177
09/30/97 13,388,728 13,162,661
10/31/97 12,716,422 12,723,028
11/30/97 13,027,978 13,311,977
12/31/97 14,327,284 13,540,544
01/31/98 13,832,242 13,690,302
02/28/98 14,179,131 14,677,647
03/31/98 14,755,186 15,429,389
04/30/98 14,461,368 15,584,508
05/31/98 14,406,277 15,316,610
06/30/98 14,438,304 15,938,771
07/31/98 13,829,793 15,769,023
08/31/98 11,847,523 13,489,138
09/30/98 12,527,952 14,353,252
10/31/98 13,639,900 15,520,746
11/30/98 14,427,531 16,461,458
12/31/98 14,682,095 17,409,967
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 1/1/92, the first full month following
the Fund's Institutional Class inception on 12/30/91, compared to the S&P 500
Index, an unmanaged market index. The performance of the Administrative Class
(shown above) reflects the payment of a service fee in an amount not to exceed
0.25% on an annual basis. The Administrative Class commenced operations on
8/21/97.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
GTE Corp. 3.0%
Telecommunications services
- --------------------------------------------------------------------------------
Public Service Enterprise Group, Inc. 3.0%
Electric & gas utility
- --------------------------------------------------------------------------------
Repsol SA SP - ADR 3.0%
Oil
- --------------------------------------------------------------------------------
Amgen, Inc. 3.0%
Biotechnology
- --------------------------------------------------------------------------------
Bell Atlantic Corp. 3.0%
Telecommunications services
- --------------------------------------------------------------------------------
DTE Energy Co. 3.0%
Electric/steam utility
- --------------------------------------------------------------------------------
SUPERVALU, Inc. 3.0%
Large food wholesaler/retailer
- --------------------------------------------------------------------------------
Whirlpool Corp. 3.0%
Home appliances
- --------------------------------------------------------------------------------
NICOR, Inc. 2.9%
Natural gas utility
- --------------------------------------------------------------------------------
Chase Manhattan Corp. 2.9%
Commercial banking
- --------------------------------------------------------------------------------
Top Ten Total 29.8%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Consumer Staples 13.1%
- --------------------------------------------------------------------------------
Consumer Discretionary 12.9%
- --------------------------------------------------------------------------------
Financial & Business Services 11.8%
- --------------------------------------------------------------------------------
Energy 9.8%
- --------------------------------------------------------------------------------
Health Care 9.2%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stocks 97%
- --------------------------------------------------------------------------------
Cash Equivalents 3%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six months ended December 31, 1998, PIMCO Value Fund posted a return of
1.7% for Institutional Class shares.
Value stocks have had a difficult year, as the stocks that outperformed the
market had relatively high valuations and were within high revenue growth
sectors. While value stocks did outperform during the market uncertainty of the
third quarter, this strength was short-lived, as growth stocks once again
resumed their outperformance in the fourth quarter.
The consumer staples sector contributed to the Fund's performance this
year, performing well in both up and down markets. For example, SUPERVALU, a
supermarket chain, saw its stock price rise due to a number of factors: a strong
management team, earnings growth, successful expansion, and, more generally,
investor attraction to consumer staples stocks in down markets. Other strong
performers for the Fund included Iowa Beef Products, a meat packing company. The
low price of pigs and cattle enabled the company to increase its profit margins,
and its stock rose as a result.
Another strong sector for the Fund this year was financials. In particular,
Chase Manhattan saw its stock price increase significantly during the year. The
company performed well, avoiding the market declines and trading losses that
plagued other banking companies. Chase benefited from a surge in lending,
profits in currency trading, and falling interest rates. Strong consumer and
investment banking businesses, along with reduced emerging markets trading, also
helped the second-largest U.S. bank. Chase displayed confidence in its own
future by announcing a stock buyback of approximately $3 billion.
One disappointing sector for the Fund this year was transportation. Despite
the low price of fuel, cutthroat competition caused a reduction in profit
margins for the major airlines. In addition, investors shunned this type of
cyclical company, adding to this sector's stock price decline. Fund holding
United Airlines, despite solid fundamentals, saw its stock price drop during the
year as a result.
Despite value stocks' short-term underperformance relative to growth
stocks, the manager remains optimistic that investors will finally diversify
away from growth stocks because of their excessive valuations. The manager
believes that value stocks' lower P/E ratios and lower volatility will make them
attractive investments, especially in uncertain markets.
See page 40 for financial details. 17
<PAGE>
- --------------------
December 31, 1998
- --------------------
PIMCO Value 25 Fund
OBJECTIVE
Long-term growth of capital and income
PORTFOLIO
Approximately 25 common stocks of companies with medium market capitalizations
that have below-average price-to-earnings ratios relative to their industry
groups
TOTAL NET ASSETS
$2 million
NUMBER OF SECURITIES IN THE PORTFOLIO
24 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
NFJ Investment Group
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
Total Return For period ended 12/31/98
Inst'l Class S&P 500 Lipper Mid-Cap
(Incep. 7/10/98) Index Fund Average
Inception -14.51% -- --
Past performance is not an indication of future results.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Clayton Homes, Inc. 6.5%
Produces/finances manufactured homes
- --------------------------------------------------------------------------------
Old Republic International Corp. 6.4%
Life insurance provider
- --------------------------------------------------------------------------------
Cordant Technologies, Inc. 6.0%
Aerospace propulsion systems
- --------------------------------------------------------------------------------
Lennar Corp. 5.5%
Residential communities
- --------------------------------------------------------------------------------
Bowater, Inc. 5.1%
Newsprint/paper products
- --------------------------------------------------------------------------------
Lancaster Colony Corp. 4.9%
Food/auto products
- --------------------------------------------------------------------------------
Thomas & Betts Corp. 4.9%
Electrical connectors/components
- --------------------------------------------------------------------------------
Ross Stores, Inc. 4.9%
Apparel/shoes
- --------------------------------------------------------------------------------
Crescent Real Estate Equities Co. 4.8%
Real Estate Investment Trust
- --------------------------------------------------------------------------------
Golden West Financial Corp. 4.5%
Savings & loan
- --------------------------------------------------------------------------------
Top Ten Total 53.5%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Financial & Business Services 27.5%
- --------------------------------------------------------------------------------
Consumer Discretionary 21.0%
- --------------------------------------------------------------------------------
Building 18.1%
- --------------------------------------------------------------------------------
Capital Goods 10.8%
- --------------------------------------------------------------------------------
Materials & Processing 7.9%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stocks 95%
- --------------------------------------------------------------------------------
Cash Equivalents 5%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the period since inception through December 31, 1998, the PIMCO Value 25
Fund posted a return of -14.5% for Institutional Class shares.
PIMCO Value 25 Fund was launched on July 10, 1998. The Fund's objective is
to seek long-term growth of capital and income. The Fund invests in
approximately 25 mid-cap value stocks. The Fund manager maintains this
concentrated portfolio in order to maximize these holdings' potential returns.
The Fund held several home-building stocks, including Lennar Corporation
and Clayton Homes. These stocks benefited from low interest rates and a strong
domestic economy, which drove home-sales and home remodelings. Clayton Homes in
particular was a standout performer. The company builds, sells, finances and
insures manufactured homes, as well as owns and operates residential
manufactured housing communities, operating in 28 states. It has increased its
number of sales centers, which has resulted in an increase in sales as well as
an increase in its stock price.
Several financial stocks also contributed to the Fund's performance during
this period, also due to low interest rates and a strong economy. Golden West
Financial, for instance, saw its stock rise after the Federal Reserve cut
interest rates in the fourth quarter. Golden West, a savings and loan holding
company, also benefited from the strong domestic economy, which resulted in
fewer loan defaults and higher credit quality.
One stock that did not perform well for the Fund in the past six months was
Crescent Real Estate, a Real Estate Investment Trust. Its dividend yields are
high at 10%, but the stock suffered because REITs in general were unpopular with
investors, who were attracted to high growth stocks. The company remains
fundamentally sound with a very low valuation.
Looking ahead, the Fund manager believes the mid-cap value sector offers
attractive valuations, good liquidity and growth potential and is poised to
appreciate in value in the coming year.
18 See page 41 for financial details.
<PAGE>
- --------------------
December 31, 1998
- --------------------
PIMCO Small-Cap Value Fund
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
$400 million
NUMBER OF SECURITIES IN THE PORTFOLIO
101 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
NFJ Investment Group
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
Average Annual Total Return For period ended 12/31/98
Inst'l Class Admin. Class Russell 2000 Lipper Small-Cap
(Incep. 10/1/91) (Incep. 11/1/95) Index Fund Average
- --------------------------------------------------------------------------------
6 months -9.31% -9.43% -7.12% -6.49%
1 year -9.16% -9.38% -2.55% -0.33%
3 years* 16.14% 15.85% 11.58% 12.65%
5 years* 13.62% -- 11.86% 12.87%
Inception* 14.77% 16.45% -- --
*Annualized
Change in Value
$5,000,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
INSTITUT
PIMCO
Small-Cap Russell 2000
MONTH Value Index
Fund
======================== ========== ============
09/30/91 5,000,000 5,000,000
10/31/91 5,057,765 5,132,200
11/30/91 4,942,474 4,894,682
12/31/91 5,307,711 5,286,354
01/31/92 5,669,482 5,715,078
02/29/92 5,861,326 5,881,901
03/31/92 5,810,840 5,682,857
04/30/92 5,692,503 5,483,332
05/31/92 5,697,568 5,556,260
06/30/92 5,515,246 5,295,172
07/31/92 5,683,331 5,479,232
08/31/92 5,596,835 5,324,279
09/30/92 5,652,803 5,446,897
10/31/92 5,755,927 5,618,801
11/30/92 6,164,818 6,049,089
12/31/92 6,302,353 6,259,658
01/31/93 6,581,536 6,471,360
02/28/93 6,549,919 6,322,130
03/31/93 6,718,541 6,527,220
04/30/93 6,541,983 6,347,787
05/31/93 6,653,133 6,628,549
06/30/93 6,669,012 6,669,713
07/31/93 6,692,411 6,761,821
08/31/93 6,915,669 7,053,797
09/30/93 6,979,457 7,252,855
10/31/93 7,112,529 7,439,616
11/30/93 6,984,825 7,197,233
12/31/93 7,174,310 7,443,163
01/31/94 7,443,124 7,676,357
02/28/94 7,431,872 7,648,492
03/31/94 7,099,942 7,245,646
04/30/94 7,124,167 7,288,612
05/31/94 6,954,544 7,206,616
06/30/94 6,830,154 6,963,464
07/31/94 6,936,926 7,077,944
08/31/94 7,215,540 7,472,185
09/30/94 7,039,274 7,446,854
10/31/94 6,908,581 7,416,769
11/30/94 6,748,316 7,117,058
12/31/94 6,909,938 7,307,581
01/31/95 6,947,635 7,215,286
02/28/95 7,258,630 7,515,659
03/31/95 7,302,170 7,644,477
04/30/95 7,472,713 7,814,337
05/31/95 7,654,211 7,948,666
06/30/95 7,898,295 8,361,043
07/31/95 8,291,107 8,842,639
08/31/95 8,454,664 9,025,593
09/30/95 8,618,222 9,186,790
10/31/95 8,281,407 8,775,957
11/30/95 8,622,778 9,144,635
12/31/95 8,669,760 9,385,870
01/31/96 8,629,498 9,375,733
02/29/96 8,817,388 9,667,975
03/31/96 9,086,486 9,864,718
04/30/96 9,396,789 10,392,185
05/31/96 9,700,346 10,801,741
06/30/96 9,635,021 10,358,221
07/31/96 9,105,773 9,453,534
08/31/96 9,540,028 10,002,407
09/30/96 9,831,792 10,393,301
10/31/96 10,021,779 10,233,140
11/30/96 10,686,731 10,654,745
12/31/96 11,072,978 10,934,006
01/31/97 11,435,630 11,152,467
02/28/97 11,483,984 10,882,020
03/31/97 11,048,801 10,368,498
04/30/97 11,161,626 10,397,426
05/31/97 12,120,640 11,554,139
06/30/97 12,717,001 12,049,350
07/31/97 13,369,775 12,610,006
08/31/97 13,732,427 12,898,775
09/30/97 14,739,794 13,842,965
10/31/97 14,489,967 13,235,259
11/30/97 14,659,205 13,149,230
12/31/97 14,950,861 13,379,342
01/31/98 14,696,739 13,167,948
02/28/98 15,620,050 14,142,376
03/31/98 16,238,414 14,725,042
04/30/98 16,187,590 14,806,472
05/31/98 15,450,635 14,008,403
06/30/98 14,976,274 14,037,820
07/31/98 13,892,018 12,900,757
08/31/98 11,850,569 10,395,430
09/30/98 12,189,399 11,209,392
10/31/98 12,672,231 11,666,735
11/30/98 13,112,710 12,278,072
12/31/98 13,581,889 13,038,085
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 10/1/91, the Fund's Institutional Class
inception, compared to the Russell 2000 Index, an unmanaged market index. The
performance of the Administrative Class (shown above) reflects the payment of a
service fee in an amount not to exceed 0.25% on an annualized basis. The
Administrative Class commenced operations on 11/1/95. The Fund may invest in
stocks of small and intermediate sized companies which may have less liquidity
than those of larger companies and may be subject to greater price volatility
than the overall stock market.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Bowne & Co., Inc. 1.2%
Legal printing
- --------------------------------------------------------------------------------
Michael Foods, Inc. 1.2%
Retail stores
- --------------------------------------------------------------------------------
Merrill Corp. 1.2%
Printing services
- --------------------------------------------------------------------------------
Intermet Corp. 1.2%
Telecommunications equip. services
- --------------------------------------------------------------------------------
Lennar Corp. 1.2%
Residential communities
- --------------------------------------------------------------------------------
Universal Foods 1.1%
Lumber products
- --------------------------------------------------------------------------------
Borg-Warner Automotive, Inc. 1.1%
Automotive powertrain components
- --------------------------------------------------------------------------------
Claire's Stores, Inc. 1.1%
Women's specialty retail stores
- --------------------------------------------------------------------------------
Wausau-Mosinee Paper Corp. 1.1%
Specialty papers
- --------------------------------------------------------------------------------
Newport News Shipbuilding, Inc. 1.1%
Shipbuilder
- --------------------------------------------------------------------------------
Top Ten Total 11.5%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Financial & Business Services 24.1%
- --------------------------------------------------------------------------------
Consumer Discretionary 14.5%
- --------------------------------------------------------------------------------
Capital Goods 12.6%
- --------------------------------------------------------------------------------
Materials & Processing 7.9%
- --------------------------------------------------------------------------------
Utilities 7.7%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stocks 96%
- --------------------------------------------------------------------------------
Cash Equivalents 4%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six months ended December 31, 1998, PIMCO Small Cap Value Fund
Institutional Class shares returned -9.3%. It is worth noting that, for the
fourth quarter of 1998, the Fund returned 11.4% for Institutional shares.
The Fund had a difficult six months, as both value stocks and small-cap
stocks underperformed. Those funds that outperformed the market had portfolios
which held larger market capitalization companies, concentrated in highly priced
stocks within high revenue growth sectors.
The technology sector contributed positively to the Fund's performance
during this six-month period. Technology stocks in general seemed to recover
from the Asian currency crisis and benefited from a strong domestic economy as
well as increased Y2K spending. One technology stock in particular that was a
standout was Autodesk, a software company, which saw its stock price rise by
approximately 30%. The company's sales were strong, its fundamentals were solid,
its profit margin was good, and its P/E and P/B ratios were very attractive.
Consumer cyclicals were another sector that positively affected the Fund's
performance. After a difficult third quarter, this sector performed well in the
fourth quarter. In particular, Fund holding Rival saw its stock double in price.
This maker of appliances is a fundamentally strong company that was undervalued
for some time. However, it became a takeover target in the fourth quarter, as
its stock price was far lower than what the company's assets were actually
worth.
The Fund's exposure to energy-related stocks, especially oil companies,
negatively affected the Fund's performance in this time period. In 1998, oil
dropped to its lowest price in 12 years, which hurt the profitability of even
the largest oil companies. The Fund's overweighting in basic materials also
affected returns, as price competition from Asia has decreased these companies'
profit margins.
Looking ahead, the Fund manager remains committed to the low valuations and
attractive growth prospects of smaller-capitalization companies. The manager
believes the wide credit spread is a factor which currently favors large-cap
stocks, as the cost of capital has clearly risen for small companies. But the
spread is historically wide, and a stronger economy in the first half of 1999
would likely narrow it. This change should impact small company stocks more
favorably.
See page 42 for financial details. 19
<PAGE>
- --------------------
December 31, 1998
- --------------------
PIMCO Enhanced Equity Fund
OBJECTIVE
Long-term growth of capital
PORTFOLIO
Common stocks represented in the Standard & Poor's 500 Composite Stock Price
Index
TOTAL NET ASSETS
$55 million
NUMBER OF SECURITIES IN THE PORTFOLIO
173 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Parametric Portfolio Associates
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
Average Annual Total Return For period ended 12/31/98
Inst'l Class Admin. Class S&P 500 Lipper Growth and
(Incep. 2/11/91) (Incep. 8/21/97) Index Income Fund Average
- --------------------------------------------------------------------------------
6 months 6.39% 6.30% 9.23% 3.08%
1 year 26.51% 26.14% 28.58% 15.59%
3 years* 26.10% -- 28.23% 21.25%
5 years* 21.82% -- 24.06% 18.35%
Inception* 17.38% 22.38% -- --
*Annualized
Change in Value
$5,000,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
INSTITUT
PIMCO
Enhanced S&P 500
MONTH Equity Index
Fund
========================= ============ =============
02/28/91 5,000,000 5,000,000
03/31/91 5,144,566 5,121,000
04/30/91 5,115,155 5,133,290
05/31/91 5,300,523 5,355,049
06/30/91 5,075,075 5,109,787
07/31/91 5,333,939 5,347,903
08/31/91 5,480,005 5,474,649
09/30/91 5,419,564 5,383,222
10/31/91 5,465,540 5,455,357
11/30/91 5,283,355 5,235,506
12/31/91 5,952,777 5,834,448
01/31/92 5,802,938 5,725,928
02/29/92 5,823,246 5,800,365
03/31/92 5,655,707 5,687,258
04/30/92 5,745,137 5,854,463
05/31/92 5,780,821 5,883,150
06/30/92 5,689,062 5,795,608
07/31/92 5,951,493 6,032,359
08/31/92 5,890,137 5,908,877
09/30/92 6,002,622 5,978,306
10/31/92 6,088,490 5,998,931
11/30/92 6,269,695 6,203,195
12/31/92 6,345,501 6,279,308
01/31/93 6,344,518 6,331,803
02/28/93 6,386,122 6,418,105
03/31/93 6,490,130 6,553,528
04/30/93 6,278,351 6,395,129
05/31/93 6,424,602 6,566,198
06/30/93 6,393,262 6,585,437
07/31/93 6,319,865 6,558,964
08/31/93 6,550,824 6,807,811
09/30/93 6,472,088 6,755,595
10/31/93 6,590,333 6,895,368
11/30/93 6,519,411 6,829,656
12/31/93 6,581,173 6,912,226
01/31/94 6,709,580 7,147,242
02/28/94 6,566,472 6,953,266
03/31/94 6,296,768 6,650,103
04/30/94 6,377,723 6,735,358
05/31/94 6,460,694 6,845,885
06/30/94 6,300,283 6,678,092
07/31/94 6,508,397 6,897,400
08/31/94 6,786,534 7,180,194
09/30/94 6,586,276 7,004,638
10/31/94 6,707,298 7,162,032
11/30/94 6,489,129 6,901,191
12/31/94 6,549,132 7,003,536
01/31/95 6,755,489 7,185,137
02/28/95 6,989,421 7,465,142
03/31/95 7,143,473 7,685,438
04/30/95 7,302,946 7,911,774
05/31/95 7,589,561 8,228,008
06/30/95 7,772,994 8,419,145
07/31/95 8,015,780 8,698,323
08/31/95 8,056,089 8,720,156
09/30/95 8,395,839 9,088,147
10/31/95 8,352,166 9,055,702
11/30/95 8,681,857 9,453,247
12/31/95 8,803,247 9,635,317
01/31/96 9,059,190 9,963,303
02/29/96 9,094,903 10,055,663
03/31/96 9,156,282 10,152,499
04/30/96 9,281,710 10,302,147
05/31/96 9,490,758 10,567,839
06/30/96 9,538,857 10,608,103
07/31/96 9,083,198 10,139,437
08/31/96 9,305,032 10,353,277
09/30/96 9,838,632 10,935,960
10/31/96 10,114,426 11,237,574
11/30/96 10,863,864 12,087,022
12/31/96 10,664,922 11,847,578
01/31/97 11,388,613 12,587,815
02/28/97 11,480,027 12,868,503
03/31/97 10,969,634 12,165,215
04/30/97 11,441,938 12,891,478
05/31/97 12,089,451 13,676,311
06/30/97 12,538,901 14,289,010
07/31/97 13,712,042 15,425,986
08/31/97 12,942,644 14,561,822
09/30/97 13,742,514 15,359,373
10/31/97 13,194,032 14,846,370
11/30/97 13,750,131 15,533,609
12/31/97 13,954,567 15,800,321
01/31/98 14,164,608 15,975,072
02/28/98 15,241,065 17,127,195
03/31/98 16,068,100 18,004,278
04/30/98 16,186,248 18,185,401
05/31/98 15,910,569 17,872,794
06/30/98 16,593,201 18,598,787
07/31/98 16,278,140 18,400,710
08/31/98 13,692,016 15,740,336
09/30/98 14,414,031 16,748,661
10/31/98 15,687,401 18,110,998
11/30/98 16,606,329 19,208,705
12/31/98 17,653,581 20,315,511
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 3/1/91, the first full month following
the Fund's Institutional Class inception on 2/11/91, compared to the S&P 500
Index, an unmanaged market index. The performance of the Administrative Class
(shown above) reflects the payment of a service fee in an amount not to exceed
0.25% on an annual basis. The Administrative Class commenced operations on
8/21/97.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Microsoft Corp. 4.7%
Computer software manufacturer
- --------------------------------------------------------------------------------
General Electric Co. 3.2%
Conglomerate
- --------------------------------------------------------------------------------
Lucent Technologies, Inc. 2.3%
Telecommunications software manufacturer
- --------------------------------------------------------------------------------
AT&T Corp. 1.9%
Telecommunications services
- --------------------------------------------------------------------------------
Intel Corp. 1.9%
Semiconductor memory circuits
- --------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 1.8%
Pharmaceutical production
- --------------------------------------------------------------------------------
Merck & Co., Inc. 1.8%
Ethical drugs/specialty chemicals
- --------------------------------------------------------------------------------
Exxon Corp. 1.7%
World's leading oil company
- --------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 1.7%
Discount stores
- --------------------------------------------------------------------------------
Coca-Cola Co. 1.7%
Soft drinks
- --------------------------------------------------------------------------------
Top Ten Total 22.7%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Technology 18.2%
- --------------------------------------------------------------------------------
Financial & Business Services 16.5%
- --------------------------------------------------------------------------------
Consumer Discretionary 12.7%
- --------------------------------------------------------------------------------
Health Care 11.5%
- --------------------------------------------------------------------------------
Communications 8.8%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stocks 100%
- --------------------------------------------------------------------------------
Cash Equivalents 0%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six months ended December 31, 1998, PIMCO Enhanced Equity Fund
Institutional Class shares returned 6.39%.
After a disappointing third quarter, the Fund saw sharp gains in its
holdings in the fourth quarter. These gains were propelled by interest rate
cuts, which drove already richly priced growth stocks higher. The Federal
Reserve announced two rate cuts during the fourth quarter, easing investors'
concerns and infusing capital back into the stock market. With earnings growth
weakening among many sectors, investors were looking for sectors with higher
earnings growth potential. This was especially true in the technology sector
where computer-related companies continued to deliver earnings growth.
Blockbuster merger announcements also helped drive the market upward. The
pending Exxon/Mobil merger topped the list of mega-deals made this year.
All economic sectors of the portfolio experienced losses in the third
quarter, with the exception of utilities stocks. In the fourth quarter, the
strongest performances for the Fund came from the retail, technology and
consumer services sectors. Both the retail and consumer services sectors
benefited from the strong domestic economy.
Sectors that did not fare so well in the fourth quarter included raw
materials and energy. Raw materials are still feeling the effects of Asia's
deflationary price pressures, while stocks of energy companies were hurt by the
12-year low in oil prices.
The Fund also benefited from its technology holdings in the fourth
quarter, a market where investors continued to purchase growth stocks despite
their high prices. Quantitative stock selection was highly successful in this
sector, with technology picks responsible for close to half of the
outperformance for the quarter.
The Fund's financial services holdings contributed to the Fund's
performance in the fourth quarter - but this sector did not fully recover from
its third quarter collapse, triggered by perceptions of a global financial
meltdown. Even with strong returns for the fourth quarter, top-performing Chase
Manhattan and Morgan Stanley Dean Witter still finished the year below their
July 17th highs.
20 See page 44 for financial details.
<PAGE>
- ---------------------
December 31, 1998
- ---------------------
PIMCO Structured Emerging Markets Fund
OBJECTIVE
Long-term growth of capital
PORTFOLIO
Common stocks of companies located in emerging market countries
TOTAL NET ASSETS
$33 million
NUMBER OF SECURITIES IN THE PORTFOLIO
371 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Parametric Portfolio Associates
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
Average Annual Total Return For period ended 12/31/98
Inst'l Class IFC Investable Lipper Emerging Mkts.
(Incep. 6/30/98) Composite Index Fund Average
- ---------------------------------------------------------------------------
6 months -7.04% -7.57% -13.45%
Inception -7.04% -- --
Past performance is not an indication of future results. The Fund may invest in
foreign securities which involve potentially higher risks including foreign
currency fluctuations and political or economic uncertainty.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top Holdings in % of Total
Selected Countries Investments
- --------------------------------------------------------------------------------
Indonesia/PT Astra International, Inc. 1.0%
- --------------------------------------------------------------------------------
Taiwan/Taiwan Fund, Inc. 1.0%
- --------------------------------------------------------------------------------
Taiwan/R.O.C. Taiwan Fund 1.0%
- --------------------------------------------------------------------------------
Baltic Nations/Baltic Fund 'A' 1.0%
- --------------------------------------------------------------------------------
Peru/Telefonica del Peru SA 'B' 1.0%
- --------------------------------------------------------------------------------
Turkey/Migros Turk TAS 0.9%
- --------------------------------------------------------------------------------
South Korea/Daewoo Securities 0.8%
- --------------------------------------------------------------------------------
South Korea/Samsung Electronics 0.8%
- --------------------------------------------------------------------------------
Philippines/San Miguel Corp. 'B' 0.8%
- --------------------------------------------------------------------------------
South Korea/Hanwha Chem. Corp. 0.8%
- --------------------------------------------------------------------------------
Top Ten Total 9.1%
- --------------------------------------------------------------------------------
Top 5 Countries % of Total Investments
- --------------------------------------------------------------------------------
South Korea 6.8%
- --------------------------------------------------------------------------------
Mexico 5.0%
- --------------------------------------------------------------------------------
Greece 4.9%
- --------------------------------------------------------------------------------
Hungary 4.9%
- --------------------------------------------------------------------------------
Poland 4.5%
- --------------------------------------------------------------------------------
Regional Breakdown
- --------------------------------------------------------------------------------
Stock: Asia 45%
- --------------------------------------------------------------------------------
Latin America 24%
- --------------------------------------------------------------------------------
Africa 16%
- --------------------------------------------------------------------------------
Eastern Europe 15%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stocks 100%
- --------------------------------------------------------------------------------
Cash Equivalents 0%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO Structured Emerging Markets Fund Institutional Class shares returned -7.0%
for the six months ended December 31, 1998.
Emerging markets rebounded strongly in the fourth quarter as the pall of
pessimism, which covered the world equity markets in the summer, began to lift.
Several key events were instrumental in reducing the fears of a global market
meltdown. In particular, three cuts in Fed Funds rates by the U.S., and the
accompanying central bank cuts in Europe, sent a clear signal that developed
markets, even those with strong current growth, were vigilant enough to prevent
a worldwide credit crunch. In addition, the U.S.'s $18 billion funding of the
IMF in October, and the G-7 policy statement of backing countries like Brazil,
confirmed that developed country governments would take action toward
containment. Finally, a strengthening of the yen allowed the Asian emerging
countries to further lower interest rates and boost their economies. This helped
propel the emerging Asian stock markets, the first markets to be hit by last
year's crisis, by more than 40% in the fourth quarter.
So, despite a difficult third quarter, the Fund's fourth quarter performance was
strong. It was driven by outstanding returns in emerging Asia and Europe. These
two regions rebounded significantly from the depth of the summer crisis, and the
Fund had a higher weight in these two regions than the benchmark. This relative
outperformance, however, was offset by the Fund's higher exposure in Africa
(ex-South Africa). African markets such as Morocco, which had significantly
outperformed the average emerging market during the crisis, did not share in the
rebound as strongly as those markets that had been depressed.
The Fund took advantage of the upswing in many markets by taking profits in
countries like Indonesia and Greece where exposures had significantly exceeded
our targets. Proceeds were invested in many markets, including Hungary and
Mexico, which had fallen below our initial target weights.
Overall, the Fund showed good protection during the crisis and reacted well in
the ensuing rebound in the fourth quarter. Much of this was due to the Fund's
strategy of disciplined investing within its broad and balanced structure.
Looking ahead, the manager is optimistic about the Fund's future performance.
According to the World Bank, the emerging economies grew only 2.0% in 1998 with
predictions for only a slight recovery in 1999. However, despite the long-term
economic effects of this and last year's crises, the World Bank predicts a
healthy 5.2% annual growth in the developing economies from 2001 to 2007. This
growth rate, nearly twice that of the developed economies, further underlines
the long-term resiliency and potential of the emerging market economies. While
there will undoubtedly be periods of volatility in the emerging markets produced
by events in such places as Brazil, the long-term argument for investing in
emerging markets remains intact.
See page 46 for financial details. 21
<PAGE>
- --------------------
December 31, 1998
- --------------------
PIMCO Tax-Efficient Structured Emerging Markets Fund
OBJECTIVE
Maximum after-tax growth of capital
PORTFOLIO
Common stocks of emerging market countries
TOTAL NET ASSETS
$46 million
NUMBER OF SECURITIES IN THE PORTFOLIO
360 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Parametric Portfolio Associates
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
Average Annual Total Return For period ended 12/31/98
Inst'l Class IFC Investable Lipper Emerging Mkts.
(Incep. 6/30/98) Composite Index Fund Average
6 months -5.37% -7.57% -13.45%
Inception -5.37% -- --
Past performance is not an indication of future results. The Fund may invest in
foreign securities which involve potentially higher risks including foreign
currency fluctuations and political or economic uncertainty.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
South Korea/Daewoo Securities 1.1%
- --------------------------------------------------------------------------------
Indonesia/PT Astra International 0.9%
- --------------------------------------------------------------------------------
Taiwan/Taiwan Fund, Inc. 0.9%
- --------------------------------------------------------------------------------
Taiwan/R.O.C. Taiwan Fund 0.9%
- --------------------------------------------------------------------------------
South Korea/Samsung Electronics 0.9%
- --------------------------------------------------------------------------------
South Korea/Hanwha Chemical Corp. 0.8%
- --------------------------------------------------------------------------------
Greece/Attica Enterprises S.A. 0.8%
- --------------------------------------------------------------------------------
Turkey/Migros Turk TAS 0.8%
- --------------------------------------------------------------------------------
Peru/Telefonica del Peru SA 'B' 0.7%
- --------------------------------------------------------------------------------
Indonesia/PT Indah Kiat 0.7%
Pulp & Paper Corp.
- --------------------------------------------------------------------------------
Top Ten Total 8.5%
- --------------------------------------------------------------------------------
Top 5 Countries % of Total Investments
- --------------------------------------------------------------------------------
South Korea 7.0%
- --------------------------------------------------------------------------------
Greece 4.8%
- --------------------------------------------------------------------------------
Malaysia 4.8%
- --------------------------------------------------------------------------------
Hungary 4.7%
- --------------------------------------------------------------------------------
Mexico 4.6%
- --------------------------------------------------------------------------------
Regional Breakdown
- --------------------------------------------------------------------------------
Stock: Asia 45%
- --------------------------------------------------------------------------------
Latin America 23%
- --------------------------------------------------------------------------------
Africa 15%
- --------------------------------------------------------------------------------
Eastern Europe 15%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stocks 98%
- --------------------------------------------------------------------------------
Cash Equivalents 2%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six months ended December 31, 1998, PIMCO Tax-Efficient Structured
Emerging Markets Fund Institutional Class shares returned -5.4%.
The emerging markets rebounded strongly in the fourth quarter as the pall
of pessimism, which covered the world equity markets in the summer, began to
lift. Several key events were instrumental in reducing the fears of a global
market meltdown. In particular, three cuts in the Fed Funds rate by the U.S.,
and the accompanying central bank cuts in Europe, sent a clear signal that
developed markets, even those with strong current growth, were vigilant enough
to prevent a worldwide credit crunch. In addition, the U.S.'s $18 billion
funding of the IMF in October, and the G-7 policy statement of backing countries
like Brazil, confirmed that developed country governments would take action
toward containment. Finally, a strengthening of the yen allowed the Asian
emerging countries to further lower interest rates to boost their economies.
This helped propel the emerging Asian stock markets, the first markets to be hit
by last year's crisis, by more than 40% in the fourth quarter.
So, despite a difficult third quarter, the Fund's fourth quarter
performance was strong. It was driven by outstanding returns in emerging Asia
and Europe. These two regions rebounded significantly from the depth of the
summer crisis, and the Fund had a higher weight in these two regions than the
benchmark. Early third quarter cash flows into the Fund allowed us to bring
these regions up to their target weights prior to their run-up in the fourth
quarter.
The Fund continued to take the opportunity to harvest losses in certain
countries by swapping out of positions held with losses and investing the
proceeds into similar securities in the same country. In Indonesia, where the
market rose over 100% from September to October, the Fund sold some of its
holdings to pare back its exposure. However, the Fund was able to complete this
transaction by selling only tax lots with unrealized losses. The Fund begins
1999 with a reserve of over $8 million in realized losses to offset against
future realized gains, equivalent to 18% of the portfolio.
Overall, the Fund showed good protection during the crisis and reacted well
in the ensuing rebound in the fourth quarter. Much of this was due to the Fund's
strategy of disciplined investing within its broad and balanced structure.
Looking ahead, the manager is optimistic about the Fund's future
performance. According to the World Bank, the emerging economies grew only 2.0%
in 1998 with predictions for only a slight recovery in 1999. However, despite
the long-term economic effects of this and last year's crises, the World Bank
predicts a healthy 5.2% annual growth in the developing economies from 2001 to
2007. This growth rate, nearly twice that of the developed economies, further
underlines the long-term resiliency and potential of the emerging market
economies. While there will undoubtedly be periods of volatility in the emerging
markets produced by events in such places as Brazil, the long-term argument for
investing in emerging markets remains intact.
22 See page 50 for financial details.
<PAGE>
- -------------------
December 31, 1998
- -------------------
PIMCO Tax-Efficient Equity Fund
OBJECTIVE
Maximum after-tax growth of capital
PORTFOLIO
Broadly diversified portfolio of at least 250 common stocks of companies with
larger market capitalizatons
TOTAL NET ASSETS
$13 million
NUMBER OF SECURITIES IN THE PORTFOLIO
262 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Parametric Portfolio Associates
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
Total Return For period ended 12/31/98
Admin. Class S&P 500 Lipper Growth & Income
(Incep. 9/30/98) Index Fund Average
- --------------------------------------------------------------------------------
Inception 21.79% -- --
Past performance is not an indication of future results.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Microsoft Corp. 3.4%
Computer software
- --------------------------------------------------------------------------------
General Electric Co. 2.8%
Conglomerate
- --------------------------------------------------------------------------------
Intel Corp. 2.2%
Semiconductor memory chips
- --------------------------------------------------------------------------------
Exxon Corp. 1.9%
Oil
- --------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 1.7%
Discount stores
- --------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 1.6%
Pharmaceutical/medical products
- --------------------------------------------------------------------------------
Cisco Systems, Inc. 1.6%
Computer networks manufacturer
- --------------------------------------------------------------------------------
International Business Machines Corp. 1.5%
Business machines manufacturer
- --------------------------------------------------------------------------------
Bell Atlantic Corp. 1.4%
Telecommunications services
- --------------------------------------------------------------------------------
Philip Morris Co., Inc. 1.4%
Cigarettes/food/brewing
- --------------------------------------------------------------------------------
Top Ten Total 19.5%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Technology 16.3%
- --------------------------------------------------------------------------------
Financial & Business Services 14.8%
- --------------------------------------------------------------------------------
Consumer Discretionary 12.1%
- --------------------------------------------------------------------------------
Health Care 11.6%
- --------------------------------------------------------------------------------
Capital Goods 7.9%
- --------------------------------------------------------------------------------
Communications 7.9%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stocks 95%
- --------------------------------------------------------------------------------
Cash Equivalents 5%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the period since inception through December 31, 1998, the Tax-Efficient
Equity Fund posted a return of 21.8% for its Administrative Class shares. This
return outperformed the 21.3% of the S&P 500 Index and the 17.8% of the Lipper
Growth & Income Fund Average.
PIMCO Tax-Efficient Equity Fund was started on September 30, 1998. The Fund
is an actively managed stock fund seeking low tax exposure without compromising
return potential. Its manager uses an innovative investment process featuring
quantitative stock selection and active tax management.
Technology was a strong performer for the Fund in the fourth quarter. The
Fund's quantitative stock selection was highly successful in this sector. Lucent
Technologies in particular was a strong performer for the Fund this period. The
company continues to thrive outside of AT&T's shadow, building innovative new
products and winning new contracts. In fact, its performance was so strong this
year that it surpassed its old parent AT&T in market capitalization.
The Fund's retail stocks performed well, aided by the strength of consumer
spending that was driven by a strong economy. One of the strongest performers in
this sector was Gap, Inc., which saw strong sales in all three of its retail
chains: The Gap, Banana Republic and Old Navy.
The Fund's financial services holdings were a mixed bag for the portfolio
this year. While the financial stocks' performance strongly contributed to the
Fund's performance in the fourth quarter, it was a poor performer in the third
quarter. In fact, this sector did not fully recover from its third quarter
collapse, triggered by perceptions of a global financial meltdown. Even with
returns greater than 65% for the fourth quarter, top-performing holdings Chase
Manhattan and Morgan Stanley Dean Witter still finished the year below their
July 17th highs.
The Fund's energy holdings continued to disappoint due to the plunge in oil
prices during 1998, reaching a 12-year low. However, quantitative stock
selection was successful in domestic petroleum stocks, which contributed to the
Fund's performance.
Looking ahead, the manager believes corporate profits will decrease but
remain in positive territory in 1999. The manager is confident that the Fund is
well-positioned to maximize its earnings in a slowing growth environment.
See page 54 for financial details. 23
<PAGE>
- ------------------
December 31, 1998
- -------------------
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
$71 million
NUMBER OF SECURITIES IN THE PORTFOLIO
199 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGERS
Cadence Capital Management, NFJ Investment Group and Pacific Investment
Management Company
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
Average Annual Total Return For period ended 12/31/98
60% S&P 500 Index Lipper
Inst'l Class Lipper Balanced and 40% Lehman Bros. Balanced
(Incep. 6/25/92) Index Aggregate Bond Index Fund Average
- --------------------------------------------------------------------------------
6 months 3.17% 5.05% 7.92% 4.19%
1 year 12.23% 15.03% 20.99% 13.52%
3 years* 15.68% 15.97% 19.80% 15.80%
5 years* 14.25% 13.80% 17.32% 13.84%
Inception* 13.43% -- -- --
*Annualized
Change in Value
$5,000,000 invested at the Fund's inception
INSTITUT
PIMCO
Balanced Lipper 60% S&P 500 Index
MONTH Fund Balanced and 40% Lehman Bros
Aggregate Bond
Index
========================= ==================================================
06/30/92 5,000,000 5,000,000 5,000,000
07/31/92 5,193,158 5,146,799 5,163,355
08/31/92 5,183,200 5,098,831 5,120,861
09/30/92 5,267,844 5,157,571 5,181,243
10/31/92 5,284,484 5,158,034 5,164,491
11/30/92 5,375,770 5,275,740 5,270,468
12/31/92 5,452,066 5,351,289 5,342,793
01/31/93 5,495,132 5,422,836 5,410,574
02/28/93 5,561,584 5,489,808 5,492,707
03/31/93 5,612,702 5,603,117 5,571,400
04/30/93 5,540,308 5,560,253 5,506,122
05/31/93 5,607,307 5,657,725 5,597,299
06/30/93 5,638,230 5,717,697 5,647,716
07/31/93 5,613,394 5,740,796 5,646,870
08/31/93 5,779,717 5,914,283 5,815,007
09/30/93 5,753,729 5,926,998 5,794,635
10/31/93 5,816,510 5,987,929 5,875,231
11/30/93 5,757,487 5,892,002 5,821,644
12/31/93 5,799,077 5,990,869 5,876,495
01/31/94 5,893,306 6,147,830 6,028,113
02/28/94 5,789,146 6,027,149 5,888,059
03/31/94 5,591,788 5,808,122 5,675,961
04/30/94 5,634,149 5,821,074 5,701,492
05/31/94 5,661,767 5,865,837 5,757,308
06/30/94 5,573,389 5,764,008 5,667,552
07/31/94 5,725,776 5,894,215 5,824,256
08/31/94 5,876,161 6,041,690 5,970,424
09/30/94 5,753,625 5,932,697 5,847,688
10/31/94 5,819,956 5,951,148 5,924,442
11/30/94 5,696,247 5,812,427 5,789,718
12/31/94 5,744,038 5,868,285 5,857,227
01/31/95 5,890,519 5,941,227 5,994,720
02/28/95 6,060,930 6,114,353 6,191,901
03/31/95 6,151,815 6,222,455 6,316,730
04/30/95 6,264,701 6,339,126 6,463,641
05/31/95 6,488,235 6,541,979 6,718,702
06/30/95 6,585,673 6,657,903 6,832,050
07/31/95 6,678,606 6,798,651 6,961,877
08/31/95 6,748,055 6,851,680 7,005,970
09/30/95 6,927,463 7,015,299 7,210,625
10/31/95 6,951,677 6,997,550 7,232,688
11/30/95 7,162,157 7,215,033 7,466,550
12/31/95 7,292,520 7,328,598 7,594,747
01/31/96 7,433,500 7,460,880 7,770,035
02/29/96 7,369,418 7,464,461 7,759,228
03/31/96 7,371,821 7,492,602 7,782,486
04/30/96 7,410,586 7,542,247 7,833,808
05/31/96 7,513,959 7,619,352 7,948,665
06/30/96 7,582,005 7,644,512 8,009,534
07/31/96 7,373,565 7,447,742 7,805,984
08/31/96 7,419,161 7,565,252 7,899,528
09/30/96 7,690,524 7,845,097 8,221,345
10/31/96 7,881,144 8,011,492 8,430,238
11/30/96 8,328,115 8,384,828 8,870,342
12/31/96 8,249,779 8,281,695 8,731,919
01/31/97 8,509,553 8,535,115 9,069,956
02/28/97 8,525,297 8,566,695 9,121,646
03/31/97 8,308,693 8,317,404 8,856,329
04/30/97 8,538,609 8,567,758 9,226,592
05/31/97 8,895,376 8,918,179 9,598,509
06/30/97 9,126,126 9,204,453 9,902,088
07/31/97 9,717,486 9,728,186 10,481,645
08/31/97 9,509,711 9,419,803 10,093,573
09/30/97 9,903,777 9,795,653 10,484,813
10/31/97 9,726,780 9,617,371 10,335,540
11/30/97 9,887,686 9,793,369 10,641,636
12/31/97 10,058,979 9,938,310 10,794,124
01/31/98 10,085,684 10,007,878 10,921,185
02/28/98 10,486,263 10,405,192 11,390,281
03/31/98 10,809,467 10,723,589 11,756,120
04/30/98 10,782,622 10,797,582 11,851,625
05/31/98 10,755,778 10,688,527 11,774,356
06/30/98 10,943,031 10,881,989 12,101,263
07/31/98 10,690,846 10,754,670 12,034,233
08/31/98 9,736,145 9,827,617 11,068,627
09/30/98 10,169,292 10,252,170 11,597,735
10/31/98 10,559,372 10,635,601 12,139,222
11/30/98 10,967,595 11,024,864 12,608,235
12/31/98 11,289,520 11,431,683 13,059,290
Past performance is not an indication of future results. The line graph above
assumes the investment of $5,000,000 on 7/1/92, the first full month following
the Fund's Institutional Class inception on 6/25/92, compared to a static 60/40
blend of the Standard and Poor's 500 Index and the Lehman Brothers Aggregate
Bond Index, and the Lipper Balanced Fund Average, each an unmanaged market
index. The Fund may invest in foreign securities which involve potentially
higher risks including foreign currency fluctuations and political or economic
uncertainty.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 5 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Government National 5.2%
Mortgage Assn., 6.50%
- --------------------------------------------------------------------------------
U.S. Treasury Bond, 8.875% 4.0%
- --------------------------------------------------------------------------------
Federal Home Loan 3.8%
Mortgage Corp., 6.50%
- --------------------------------------------------------------------------------
Federal National 3.5%
Mortgage Assn., 8.50%
- --------------------------------------------------------------------------------
New England Educational 2.4%
Loan Marketing, 5.86%
- --------------------------------------------------------------------------------
Top Five Total 18.9%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stocks 55.2%
- --------------------------------------------------------------------------------
Mortgage-Backed Securities 24.1%
- --------------------------------------------------------------------------------
Corporate Bonds & Notes 7.4%
- --------------------------------------------------------------------------------
U.S. Treasury Obligations 5.9%
- --------------------------------------------------------------------------------
Short-Term Instruments 5.7%
- --------------------------------------------------------------------------------
Other 1.7%
- --------------------------------------------------------------------------------
Bond Analysis
- --------------------------------------------------------------------------------
Average Quality AA+
- --------------------------------------------------------------------------------
Duration 5.8 years
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The Balanced Fund's Institutional Class shares posted a return of 3.2% for the
six-month period ended December 31, 1998.
At the end of this six-month period, the Fund's assets were allocated
approximately 55% to stocks and 45% to bonds. This allocation has remained
basically unchanged throughout the year, as the managers believed this split
provided shareholders with sufficient exposure to opportunities in both markets,
while maintaining the Fund's "prudent" investment style.
With regard to stocks, the financial services sector contributed to the
Fund's performance. In particular, Chase Manhattan saw its stock price increase
significantly during the year, as it avoided the market declines and trading
losses that plagued other banking companies. Chase benefited from a surge in
lending, profits in currency trading, and falling interest rates. Strong
consumer and investment banking businesses, along with reduced emerging markets
trading, also helped the second-largest U.S. bank. Chase displayed confidence in
its own future by announcing a stock buyback of approximately $3 billion.
The consumer cyclical sector also contributed to the Fund's performance
this period. The strong domestic economy and low interest rates drove increased
consumer spending in the fourth quarter. A particularly strong performer for the
Fund this period was Tyco International, a diversified manufacturer of home
security and fire protection services. Tyco recently purchased ADT, one of the
best-known home security companies, which increases its presence in this
industry. The company is currently involved in the purchase of AMP, an
electronic connector manufacturer, which helped its stock rise. Tyco is
continuing to provide shareholders with earnings surprises and top-line growth.
The stock portion of the portfolio in general suffered from investors
attraction to large-cap, high-valuation growth stocks at the expense of lower
valuation issues. Many of the equity holdings in the Fund that had strong
fundamentals and low valuations were shunned by investors, and their stock
prices did not appreciate as much as large-cap growth offerings.
As for the bond portion of the portfolio, the Treasury market benefited
from continued global turmoil. The economic problems that began in 1997 in Asia
spread to Russia last summer and have, more recently, affected Latin America,
particularly Brazil. Unsuccessful action by the International Monetary Fund
further unsettled investor confidence. Global uncertainty contributed to a
massive flight to quality, as investors around the world sought relative safety
in U.S. Treasuries. Corporate bonds also performed well, as a result of the
strong domestic economy and low interest rates, despite a difficult third
quarter.
Concerns about overvaluations and global economic problems make the future
of the market seem uncertain, which means this is an ideal time to hold a more
diversified portfolio. The Fund's managers currently have no plans to make major
adjustments to the allocation or to sector investments at this time.
24 See page 57 for financial details.
<PAGE>
Schedule of Investments
Emerging Markets Fund
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Value
Shares (000s)
- --------------------------------------------------------------------------------------------
COMMON STOCKS 99.6%
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Argentina 6.1%
YPF Sociedad Anonima SP - ADR 15,250 $ 426
Telefonica de Argentina SP - ADR 9,733 272
Compania Naviera Perez Co. SP - ADR 17,912 152
Astra Cia Argentina de Petro SA 72,050 85
Banco de Galicia y Buenos Aires SA de CV "B" 15,989 70
Banco Frances SA 9,820 70
Siderca SA "A" 53,416 61
Transportadora de Gas del Sur SA 23,900 48
Inversiones Y Representaciones SA - GDR 1,329 37
Molinos Rio de la Plata SA 6,276 15
Renault Argentina 11,160 14
-----------
1,250
Brazil 10.1%
Telecomunicacoes Brasileiras SA SP - ADR 7,060 513
Centrais Electricas Brasileiras SA "B" 14,120 271
Cia Vale De Rio 15,262 196
Petroleo Brasileiro SA 1,608 182
Banco Itau SA 344 168
Banco Bradesco SA 22,292 124
Companhia Siderurgica Nacional 5,511 123
Companhia Energetica de Minas Gerais 5,263 100
Telecomunicacoes Brasileiras SA (b) 1,938 87
Souza Cruz SA 12,400 80
Companhia Cervejaria Brahma 155 68
Usimas Siderurgicas Minas Gerais SA PR 23,519 53
Aracruz Celulose SA "B" 60,600 45
Companhia Paulista de Forca e Luz 552 40
BCO Brazil Rights (b) 924 1
Companhia Vale do Rio Doce - Bonus Shares 29,662 0
-----------
2,051
Chile 8.6%
Enersis SA SP - ADR 15,400 398
Compania de Telecomunicaciones
de Chile SA SP - ADR 15,751 326
Empresa Nacional de Electricidad SA SP - ADR 26,350 300
Banco Santander Chile SP - ADR 16,300 238
Gener SA SP - ADR 9,428 151
Sociedad Quimica y Minera de Chile SA SP - ADR 3,330 112
Compania Cervecerias Unidas SA SP - ADR 4,200 81
Maderas y Sinteticos SA SP - ADR 11,190 71
Madeco SA SP - ADR 8,057 67
-----------
1,744
Hungary 8.7%
Magyar Tavkozlesi Rights 132,800 759
MOL Magyar Olaj-es Gazipari Rights 15,500 425
OTP Bank Rights 5,240 262
Gedeon Richter Rights 4,625 197
Pick Szeged Rights 1,500 64
Danubius Hotel and Spa Rights 2,500 52
Graboplast Rights 1,300 10
-----------
1,769
India 3.7%
Videsh Sanchar Nigam Limited SP - ADR (b) 9,000 110
Mahanagar Telephone Nigam Limited 8,700 106
Tata Engineering and
Locomotive Co. Limited SP - GDR 20,624 82
State Bank of India - GDR 9,300 77
Hindalco Industries Limited SP - GDR 6,310 74
Reliance Industries SP - GDR 12,500 71
Bajaj Auto Limited SP - GDR 3,500 55
BSES Limited SP - GDR 2,700 34
Gujarat Ambuja SP - GDR 5,000 33
Larsen & Tourbro Limited - GDR 4,180 32
Indian Hotels Co. SP - GDR 3,530 31
Indian Rayon & Industries Limited SP - GDR 8,225 21
EIH Limited 3,380 19
-----------
745
Israel 8.2%
Teva Pharmaceutical Industries Limited 5,800 237
ECI Telecommunications Limited 6,200 221
Bank Hapoalim Limited 104,400 189
Koor Industries Limited 1,880 164
Bezek Israeli Telecommunication Corp. Limited 45,100 141
Formula Systems Limited (b) 5,100 126
Israel Chemicals Limited 125,000 124
Supersol Limited 49,400 123
Blue Square Chain Investments
and Properties Limited (b) 8,000 96
Bank Leumi Le-Israel 67,000 95
Elite Industries Limited 3,100 95
Agis Industries Limited 9,200 49
-----------
1,660
Mexico 10.5%
Telefonos de Mexico SP - ADR 13,050 635
Grupo Modelo SA de CV 'C' 98,800 203
Cifra SA de CV "V" 150,137 182
Empresas La Moderna SA de CV (b) 23,100 136
Grupo Carso SA de CV "A1" 32,000 109
Kimberly-Clark de Mexico SA de CV "A" 32,800 103
Grupo Mexico SA "B" 42,310 100
Grupo Industrial Bimbo SA de CV "A" 55,464 98
Alfa SA de CV "A" 34,100 96
Industrias Penoles SA "CP" 30,000 90
Formento Economico Mexicano SP - ADR 3,100 83
Grupo Televisa SA SP - GDR (b) 3,240 80
Grupo Financiero Banamex Accival "L" (b) 63,707 73
Cemex SA de CV "CPO" 29,223 62
Desc SA de CV "B" 71,000 59
TV Azteca SA de CV SP - ADR 4,000 27
-----------
2,136
Peru 4.1%
Telefonica del Peru SA "B" 316,238 398
Credicorp Limited 16,816 151
Cerveceria Backus & Johnston SA "T" 256,283 84
Compania de Minas Buenaventura SA "A" 10,947 66
Banco Wiese SP - ADR 25,200 47
Luz del Sur Servicios SA "B" 64,100 41
Ferreyros SA 21,738 20
Cementos Lima SA 12,643 15
Compania de Minas Buenaventura SA "B" 1,574 9
Southern Peru Limited "T" 2,200 7
Minsur SA 3,867 6
-----------
844
Philippines 1.8%
Philippine Long Distance Telephone Co. 3,200 82
SM Prime Holdings, Inc. 324,400 62
Metro Bank Trust Co. 8,500 61
San Miguel Corp. "B" 29,700 57
Manila Electric Co. "B" 14,100 45
Petron Corp. 363,000 40
Ayala Land, Inc. 96,100 27
-----------
374
Poland 10.1%
Elektrim Spolka Akcyjna SA 37,531 406
Telekomunikacja Polska 57,000 291
Bank Slaski SA W Katowicach 4,880 253
Bank Rozwoju Eksportu SA 8,915 206
Wielkopolski Bank Kredytowy SA 31,498 198
Bank Handlowy W. Warszawie 12,970 160
Big Bank Gdanski SA 153,600 138
Polifarb-Cieszyn-Wroclaw SA 40,056 95
Bank Przemyslowo-Handlow SA 1,500 89
Softbank SA 2,840 74
Debica SA 3,980 59
Amica Wronki SA (b) 8,800 39
Stomil Olsztyn SA 7,600 39
Agros Holding SA 2,300 8
-----------
2,055
</TABLE>
See accompanying notes 25
<PAGE>
Schedule of Investments (Cont.)
Emerging Markets Fund
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Value
Shares (000s)
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Portugal 5.6%
Portugal Telecom SA 5,040 $ 230
EDP-Electricidade de Portugal SA 10,100 222
BPI-SGPS SA 3,000 102
Banco Comercial Portugues SA "R" 3,170 97
Banco Espirito Santo e Comercial de Lisboa SA 3,116 97
Cimpor-Cimentos de Portugal SGPS SA 2,855 91
Jeronimo Martins - SGPS SA 1,465 80
Sonae Investimentos-Sociedade Gestora de 1,530 74
Participacoes Sociais SA
Companhia de Seguros Mundial Confianca SA (b) 2,000 64
Brisa-Auto Estradas de Portugal SA 900 53
Investec-Consultoria Internacional SA (b) 1,200 41
-----------
1,151
South Africa 6.3%
Rembrandt Group Limited 26,940 165
South African Breweries Limited 8,990 151
De Beers Centenary 11,620 148
Liberty Life Association of Africa Limited 9,550 131
Nedcor Limited - GDR 7,210 126
Anglo American Platinum Corp. Limited 5,800 79
Barlow Limited 19,170 74
Nasionale Pers Beperk Limited 18,600 73
FirstRand Limited 53,400 58
Sasol Limited 15,000 57
Anglo American Gold Investment Co. Limited 1,440 56
ABSA Group Limited 11,480 54
Smith C.G. Limited 22,430 51
Driefontein Consolidated Limited 9,400 38
Woolworth SP - GDR (b) 5,300 24
-----------
1,285
South Korea 3.7%
Korea Electric Power Corp. 10,800 268
Korea Fund, Inc. (b) 17,100 158
Samsung Electronics 2,000 134
Samsung Display Devices Co. 1,400 69
L.G. Chemical Limited 4,500 49
Hyundai Motor Co. Limited 2,300 41
Shinsegae Department Store Co. 1,700 37
-----------
756
Turkey 8.9%
Turkiye Is Bankasi "C" 1,708,750 444
Turkiye Garanti Bankasi AS 833,625 206
Migros Turk TAS 17,740 177
Yapi ve Kredi Bankasi AS 1,529,304 177
Arcelik AS 404,950 117
Ege Biracilik ve Malt Sanayii AS 126,500 98
Aygaz AS 146,000 97
Akbank TAS 452,568 92
Cukurova Elektrik AS 8,000 86
Brisa Bridgestone Sabanci Lastik San. ve Tic AS 372,700 84
Haci Omer Sabanci Holding AS 483,050 74
Adana Cimento Sanayii "A" 377,046 69
Eregli Demir Ve Celik Fabrikalari TAS 146,900 61
Netas Northern Electric Telekomunikasyon AS 188,760 35
-----------
1,817
Venezuela 3.2%
Compania Anonima Nacional
Telefonos de Venezuela SP-ADR 16,500 294
La Electricidad de Caracas 348,153 150
Banco Provincial SA 77,385 84
Corporacion Venezolana de Cementos 94,550 60
Siderurgica Venezolana Sivensa "A" 474,483 31
Mavesa SA SP - ADR 8,150 31
-----------
650
-----------
Total Common Stocks 20,287
(Cost $25,671) -----------
Total Investments (a) 99.6% $ 20,287
(Cost $25,673)
Other Assets and Liabilities (Net) 0.4% 86
-----------
Net Assets 100.0% $ 20,373
-----------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1998, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation
for all investments in which there was an
excess of value over tax cost. $ 1,861
Aggregate gross unrealized depreciation
for all investments in which there was an
excess of tax cost over value. (7,247)
-----------
Unrealized depreciation-net $ (5,386)
-----------
(b) Non-income producing security.
</TABLE>
26 See accompanying notes
<PAGE>
Schedule of Investments
International Developed Fund
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Value
Shares (000s)
- ----------------------------------------------------------------------------------------------
COMMON STOCKS 94.5%
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Australia 2.6%
National Australia Bank Limited 38,800 $ 584
Westpac Banking Corp. 70,497 471
Broken Hill Property Co. 48,810 359
Telstra Corp. Limited (b) 73,900 345
Lend Lease Corp. Limited 25,496 343
News Corp. Limited 51,384 339
Southcorp Limited 74,400 237
Amcor Limited "A" 50,756 216
Leighton Holdings Limited 40,854 175
Tabcorp Holdings Limited 28,051 172
Comalco Limited 27,009 103
Pasminco Limited 89,073 68
-----------
3,412
Finland 4.9%
Nokia OYJ "A" 36,820 4,478
Werner Soderstrom Osakey "B" 7,450 473
UPM-Kymmene Corp. 11,723 326
Metsa Serla "B" 24,340 198
Rautaruukki OY 30,600 197
Viking Line AB 4,000 192
Hartwall OY AB 11,620 188
Yit-Yhtyma OY 18,580 160
Okobank "A" 6,914 126
Fortum Corp. (b) 11,500 70
Sonera Group OYJ (b) 1,000 18
Rauma Group OY 400 6
-----------
6,432
France 14.8%
France Telecom SA 27,936 2,220
Carrefour SA 2,270 1,714
Suez Lyonnaise des Eaux 8,250 1,694
Banque National de Paris 20,000 1,647
Elf Aquitaine SA 12,733 1,472
Total SA 14,431 1,461
Groupe Danone 4,000 1,145
VIVENDI 4,100 1,065
L'OREAL 1,390 1,005
Groupe GTM 8,800 913
Pinault-Printemps Redout 4,250 812
PSA Peugeot Citroen 5,100 789
Alcatel Alsthom 6,410 784
Castorama Dubois 3,200 730
Valeo 6,910 544
Compagnie de Saint Gobain 3,600 508
LVMH 2,450 485
Lafarge SA 4,496 427
VIVENDI Warrants (b) 2,800 7
-----------
19,422
Germany 10.8%
DaimlerChrysler AG (b) 16,844 1,674
VEBA AG 21,550 1,278
Allianz AG 3,317 1,235
SAP AG-Vorzug 2,565 1,232
Muenchener Rueckversicherungs-Gesellschaft AG 2,460 1,204
Mannesmann AG 9,430 1,092
Bayer AG 24,641 1,035
Siemens AG 12,446 819
Metro AG 9,470 745
Volkswagen AG 8,780 711
Deutsche Bank 10,897 643
Bayerische Vereinsbank AG 8,100 641
Viag AG 950 562
BASF AG 14,714 562
RWE AG 7,969 440
Dresdner Bank AG 7,763 325
-----------
14,198
Ireland 3.2%
Allied Irish Banks PLC 103,300 $ 1,850
CRH PLC 68,800 1,188
Irish Life PLC 51,700 486
Kerry Group PLC 28,300 385
Jefferson Smurfit Group PLC 142,000 256
-----------
4,165
Italy 10.4%
ENI SpA 370,095 2,420
Telecom Italia Mobile SpA 242,000 1,788
Telecom Italia SpA 190,720 1,628
Assicuazioni Generali 37,335 1,560
Fiat SpA 327,356 1,138
Edison SpA 88,000 1,037
Benetton Group SpA 474,400 956
Istituto Bancario San Paolo di Torino 45,980 813
Banca Commerciale Italiana 110,000 759
Alleanza Assicurazioni 44,500 629
Instituto Nazionale delle Assicurazioni 211,000 558
Danieli & Co. 52,000 378
Unione Immobiliare SpA (b) 165,000 86
-----------
13,750
Japan 10.1%
Kirin Brewery Co. Limited 93,000 1,180
Fujisawa Pharmaceutical 78,000 1,100
NEC Corp. 117,000 1,072
Fanuc 31,000 1,057
Nippon Telegraph & Telephone 264 1,014
Murata Manufacturing Co. 21,000 868
Aoyama Trading Co. Limited 28,800 802
Tokyo Electric Power 26,700 656
Toyota Motor Corp. 24,000 649
Matsushita Electric Industrial Co. Limited 35,000 617
Fuji Photo Film 16,000 592
Mitsubishi Heavy Industries Limited 139,000 539
Sekisui Chemical Co. Limited 80,000 536
Bridgestone Corp. 22,000 497
Ito-Yokado Co. Limited 7,000 487
Canon, Inc. 21,000 447
Tokio Marine & Fire Insurance Co. 35,000 416
Hitachi Limited 67,000 413
Mitsui O.S.K. Lines Limited 201,000 322
-----------
13,264
Netherlands 6.6%
Royal Dutch Petroleum Co. 50,307 2,502
Unilever NV 14,020 1,197
ING Groep NV 17,611 1,073
Fortis Amev NV 8,554 708
Philips Electronics NV 6,344 425
Koninklijke KPN NV 8,461 423
Verernigde Nederlandse Uitgeversbedrijven Verenigd 11,164 420
ABN-AMRO Holdings 19,179 403
Elsevier NV 25,850 362
TNT Post Groep NV (b) 10,461 337
Akzo Noble NV 6,188 281
Heineken NV 4,400 264
Koninklijke Ahold NV 6,600 244
-----------
8,639
Norway 0.9%
Norsk Hydro ASA 10,210 345
Storebrand ASA 20,000 151
Christiania Bank Og Kreditkasse 36,220 126
Orkla ASA "B" 9,420 123
Norske Skogindustrier ASA 3,530 89
Petroleum Geo-Services (b) 6,910 88
Hafslund ASA 15,700 67
Merkantildata ASA 6,420 63
Den Norske Bank ASA 18,250 63
Tomra Systems ASA 1,820 60
Unitor ASA 3,770 37
-----------
1,212
</TABLE>
See accompanying notes 27
<PAGE>
Schedule of Investments (Cont.)
International Developed Fund
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Value
Shares (000s)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Portugal 5.2%
EDP-Electricidade de Portugal SA 91,427 $ 2,010
Portugal Telecom SA 27,475 1,258
Jeronimo Martins - SGPS SA 14,508 792
Banco Comercial Portugues SA "R" 24,913 765
Cimpor-Cimentos de Portugal SGPS SA 15,532 495
Sonae Investimentos-Sociedade Gestora de
Participacoes Sociais SA 8,478 411
Banco Espirito Santo e Comercial de Lisboa SA 11,600 359
BPI-SGPS SA 8,700 295
Companhia de Seguros Mundial Confianca SA (b) 8,400 267
Brisa-Auto Estradas de Portugal SA 4,261 250
-----------
6,902
Spain 6.1%
Telefonica de Espana 34,174 1,519
Banco Bilbao Vizcaya 67,278 1,055
Endesa SA 34,095 903
Corp. Bancaria de Espana 33,368 864
Iberdrola SA 45,082 843
Gas Natural SDG SA "E" 6,980 760
Autopistas Concesionaria Espanola SA 30,387 505
Gas Y Electricidad SA "2" 4,732 470
Repsol SA 7,658 408
Banco Santander SA 19,167 381
Banco Central Hispanoame 31,128 370
-----------
8,078
Switzerland 5.3%
Novartis AG 871 1,712
Roche Holding AG 122 1,488
Nestle SA 501 1,090
UBS AG (b) 2,695 828
Zurich Allied AG 700 518
Credit Suisse Group 3,066 480
Holderbank Financiere Glarus AG 385 456
TAG Heuer International SA 3,040 209
Clariant AG (b) 315 147
ABB AG 94 110
Ciba Specialty Chemicals AG 6 1
-----------
7,039
United Kingdom 13.6%
Lloyds TSB Group PLC 102,720 1,453
SmithKline Beecham PLC 95,252 1,332
Zeneca Group 27,796 1,210
Glaxo Wellcome PLC 32,265 1,103
British Telecommunications PLC 72,500 1,087
Unilever PLC 96,688 1,083
British Petroleum Co. PLC 71,103 1,058
Abbey National PLC 48,872 1,043
Prudential 64,831 977
Boots Co. PLC 54,660 926
Scottish & Newcastle PLC 68,877 778
Commercial Union PLC 47,834 745
Scottish Power PLC 71,858 733
Tesco PLC 240,245 687
Cadbury Schweppes PLC 40,000 679
HSBC Holdings PLC 23,272 632
National Power PLC 61,100 538
Diageo PLC 39,900 447
Wolseley PLC 65,074 410
Shell Transport & Trading Co. 59,537 363
TI Group PLC 54,000 290
IMI PLC 67,229 265
LASMO PLC 79,798 131
-----------
17,970
-----------
Total Common Stocks 124,483
(Cost $99,386) ===========
<CAPTION>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.8%
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Time Deposit 0.8%
State Street Bank
4.000% due 01/04/99 $ 1,051 $ 1,051
-----------
Total Short-Term Instruments 1,051
(Cost $1,051) ===========
Total Investments (a) 95.3% $ 125,534
(Cost $99,644)
Other Assets and Liabilities (Net) 4.7% 6,154
-----------
Net Assets 100.0% $ 131,688
===========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1998, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation
for all investments in which there was an
excess of value over tax cost $ 29,302
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value (3,412)
-----------
Unrealized appreciation-net $ 25,890
===========
(b) Non-income producing security.
(c) Foreign cash in the amount of $549,636
has been segregated with the custodian to cover
margin requirements for the following open futures
contracts at December 31,1998:
<CAPTION>
Unrealized
Type Contracts (Depreciation)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Osaka 300 Index (03/99) 10,000 $ (170)
(d) Foreign forward currency contracts outstanding at December 31, 1998:
<CAPTION>
Principal
Amount Unrealized
Covered Expiration Appreciation/
Type by Contract Month (Depreciation)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sell DM 27,500 01/99 $ 123
Buy DM 27,500 01/99 (234)
Buy BP 3,400 01/99 (102)
-----------
$ (213)
===========
(e) Principal amount denoted in indicated currency:
DM - German Mark
BP - British Pound
</TABLE>
28 See accompanying notes
<PAGE>
Schedule of Investments
International Fund
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Value
Shares (000s)
- ----------------------------------------------------------------------------------------------------
COMMON STOCKS 95.8%
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Brazil 1.3%
Telecomunicacoes Brasileiras SA SP - ADR 5,000 $ 363
Centrais Electricas Brasileiras SA "B" 9,759,800 187
Companhia Siderurgica Nacional 7,867,300 176
Cia Vale De Rio 12,700 163
Companhia Energetica de Minas Gerais 7,407,400 141
Petroleo Brasileiro SA 1,131,500 128
Banco Itau SA 241,800 118
Usimas Siderurgicas Minas Gerais SA PR 52,300 117
Companhia Cervejaria Brahma 212,800 93
Banco Bradesco SA 15,511,800 86
Telecomunicacoes Brasileiras SA (b) 1,309,400 59
Souza Cruz SA 8,500 55
Aracruz Celulose SA "B" 69,400 52
Companhia Paulista de Forca e Luz 386,495 28
-----------
1,766
Chile 3.2%
Enersis SA SP - ADR 39,900 1,030
Compania de Telecomunicaciones
de Chile SA SP - ADR 38,355 793
Empresa Nacional de Electricidad SA SP - ADR 59,200 673
Banco Santander Chile SP - ADR 41,850 612
Gener SA SP - ADR 23,733 380
Sociedad Quimica y Minera de Chile SA SP - ADR 9,200 310
Compania Cervecerias Unidas SA SP - ADR 11,400 219
Maderas y Sinteticos SA SP - ADR 30,400 194
Madeco SA SP - ADR 20,742 174
-----------
4,385
Finland 6.5%
Nokia OYJ "A" 52,100 6,335
Werner Soderstrom Osakey "B" 11,200 712
UPM-Kymmene Corp. 16,350 455
Yit-Yhtyma OY 45,500 393
Metsa Serla "B" 34,470 281
Viking Line AB 5,750 276
Hartwall OY AB 16,200 262
Okobank "A" 11,772 215
Fortum Corp. (b) 15,500 94
Sonera Group OYJ (b) 1,000 18
Rauma Group OY 630 9
-----------
9,050
France 15.2%
France Telecom SA 30,871 2,452
Banque National de Paris 24,630 2,028
Carrefour SA 2,420 1,827
Suez Lyonnaise des Eaux 8,450 1,735
Total SA 14,810 1,500
Elf Aquitaine SA 12,972 1,499
Groupe Danone 4,360 1,248
VIVENDI 4,540 1,178
Alcatel Alsthom 9,130 1,117
L'OREAL 1,450 1,048
PSA Peugeot Citroen 6,240 966
Groupe GTM 9,140 948
Pinault-Printemps Redout 4,350 831
Castorama Dubois 3,200 730
Compagnie de Saint Gobain 3,750 529
Valeo 6,360 501
LVMH 2,510 497
Lafarge SA 4,701 447
VIVENDI Warrants (b) 1 7
Schneider SA 1 0
-----------
21,088
Germany 7.3%
DaimlerChrysler AG (b) 10,899 1,083
Allianz AG 2,517 937
SAP AG-Vorzug 1,910 917
VEBA AG 13,960 828
Mannesmann AG 7,050 816
Muenchener Rueckversicherungs-Gesellschaft AG 1,590 778
Bayer AG 18,400 773
Metro AG 7,060 555
Siemens AG 8,243 542
Volkswagen AG 6,590 534
Deutsche Bank 8,750 517
Bayerische Vereinsbank AG 6,000 475
BASF AG 9,900 378
Viag AG 620 367
RWE AG 5,960 329
Dresdner Bank AG 4,720 198
-----------
10,027
Hungary 5.6%
Magyar Tavkozlesi Rights 558,600 3,191
MOL Magyar Olaj-es Gazipari Rights 75,600 2,072
OTP Bank Rights 26,000 1,302
Gedeon Richter Rights 15,525 661
Pick Szeged Rights 5,400 229
Danubius Hotel and Spa Rights 10,300 216
Graboplast Rights 4,450 34
-----------
7,705
Ireland 4.7%
Allied Irish Banks PLC 174,000 3,116
CRH PLC 109,000 1,882
Irish Life PLC 56,600 533
Kerry Group PLC 38,500 524
Jefferson Smurfit Group PLC 271,300 489
-----------
6,544
Israel 4.4%
ECI Telecommunications Limited 24,200 862
Teva Pharmaceutical Industries Limited 20,920 855
Koor Industries Limited 7,400 646
Bezek Israeli Telecommunication Corp. Limited 199,800 624
Bank Hapoalim Limited 301,000 545
Supersol Limited 179,900 447
Formula Systems Limited (b) 17,300 429
Elite Industries Limited 13,800 421
Bank Leumi Le-Israel 269,000 380
Blue Square Chain Investments and
Properties Limited (b) 31,200 375
Israel Chemicals Limited 353,000 349
Agis Industries Limited 27,800 147
-----------
6,080
Italy 11.5%
ENI SpA 402,400 2,631
Telecom Italia SpA 227,665 1,944
Telecom Italia Mobile SpA 252,000 1,861
Assicuazioni Generali 44,480 1,858
Edison SpA 121,000 1,426
Istituto Bancario San Paolo di Torino 66,357 1,173
Fiat SpA 332,600 1,156
Alleanza Assicurazioni 68,200 964
Benetton Group SpA 435,200 877
Banca Commerciale Italiana 115,000 794
Instituto Nazionale delle Assicurazioni 235,000 621
Danieli & Co. 61,000 443
Unione Immobiliare SpA (b) 235,000 123
-----------
15,871
Japan 7.1%
Fujisawa Pharmaceutical 70,000 987
Nippon Telegraph & Telephone 214 822
Kirin Brewery Co. Limited 64,000 812
Fanuc 22,200 757
Hitachi Limited 115,000 709
Aoyama Trading Co. Limited 24,800 691
Murata Manufacturing Co. 16,000 661
Matsushita Electric Industrial Co. Limited 29,000 511
Fuji Photo Film 12,000 444
Toyota Motor Corp. 16,000 433
Sekisui Chemical Co., Limited 63,000 422
Tokyo Electric Power 15,800 388
Canon, Inc. 18,000 383
Bridgestone Corp. 16,000 362
Ito-Yokado Co. Limited 5,000 348
Tokio Marine & Fire Insurance Co. 26,000 309
Mitsui O.S.K. Lines Limited 185,000 297
NEC Corp. 30,000 275
Mitsubishi Heavy Industries Limited 67,000 260
-----------
9,871
Mexico 2.3%
Telefonos de Mexico SP - ADR 20,770 1,011
Grupo Modelo SA de CV "C" 154,000 317
Empresas La Moderna SA de CV (b) 39,100 231
Cifra SA de CV "V" 180,593 219
</TABLE>
See accompanying notes 29
<PAGE>
Schedule of Investments (Cont.)
International Fund
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Value
Shares (000s)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Grupo Mexico SA "B" 64,800 $ 153
Kimberly-Clark de Mexico SA de CV "A" 47,050 148
Grupo Televisa SA SP - GDR (b) 5,900 146
Grupo Carso SA de CV "A1" 40,350 137
Alfa SA de CV "A" 42,250 119
Formento Economico Mexicano SP - ADR 4,440 118
Cemex SA de CV "CPO" 52,839 113
Grupo Financiero Banamex Accival "L" (b) 91,881 106
Grupo Industrial Bimbo SA de CV "A" 57,336 101
Industrias Penoles SA "CP" 30,900 92
Desc SA de CV "B" 73,500 62
Controladora Comercial Mexicana SA de CV 67,600 47
TV Azteca SA de CV SP - ADR 4,100 27
Desc SA de CV "C" 7,835 7
Transport Maritima SP - ADR 750 4
-----------
3,158
Netherlands 4.7%
Royal Dutch Petroleum Co. 33,370 1,660
Unilever NV 11,820 1,009
ING Groep NV 14,585 888
Fortis Amev NV 7,830 648
Koninklijke KPN NV 7,290 365
Verernigde Nederlandse
Uitgeversbedrijven Verenigd Bezit 7,880 297
ABN-AMRO Holdings 16,700 351
Philips Electronics NV 4,240 284
Elsevier NV 17,630 247
TNT Post Groep NV (b) 7,290 235
Heineken NV 3,100 186
Akzo Noble NV 3,980 181
Koninklijke Ahold NV 4,700 174
-----------
6,525
Peru 0.6%
Telefonica del Peru SA "B" 361,700 455
Credicorp Limited 18,500 167
Cerveceria Backus & Johnston SA "T" 269,765 89
Luz del Sur Servicios SA "B" 83,400 54
Banco Wiese SP - ADR 18,700 35
Cementos Lima SA 28,140 34
Compania de Minas Buenaventura SA "B" 4,700 28
Compania de Minas Buenaventura SA "A" 1,780 11
-----------
873
Poland 2.8%
Elektrim Spolka Akcyjna SA 76,500 828
Bank Slaski SA W Katowicach 9,400 487
Telekomunikacja Polska 84,000 428
Bank Rozwoju Eksportu SA 18,010 416
Wielkopolski Bank Kredytowy SA 56,300 354
Bank Handlowy W. Warszawie 28,000 345
Big Bank Gdanski SA 304,100 273
Polifarb-Cieszyn-Wroclaw SA 68,300 162
Softbank SA 5,920 153
Debica SA 6,900 102
Bank Przemyslowo-Handlow SA 1,700 101
Stomil Olsztyn SA 14,500 74
Amica Wronki SA (b) 15,000 67
Agros Holding SA 4,400 16
-----------
3,806
Portugal 8.5%
EDP-Electricidade de Portugal SA 138,400 3,042
Portugal Telecom SA 49,290 2,256
Cimpor-Cimentos de Portugal SGPS SA 29,195 930
Banco Espirito Santo e Comercial de Lisboa SA 28,945 897
BPI-SGPS SA 25,650 869
Banco Comercial Portugues SA "R" 28,118 863
Jeronimo Martins - SGPS SA 14,400 787
Sonae Investimentos-Sociedade
Gestora de Participacoes Sociais SA 14,380 698
Brisa-Auto Estradas de Portugal SA 8,800 517
Companhia de Seguros Mundial Confianca SA (b) 15,700 499
Investec-Consultoria Internacional SA (b) 13,000 447
-----------
11,805
Switzerland 2.1%
Novartis AG 344 676
Roche Holding AG 53 646
Nestle SA 190 413
UBS AG (b) 1,250 384
Zurich Allied AG 340 252
Holderbank Financiere Glarus AG 134 159
Credit Suisse Group 865 135
TAG Heuer International SA 1,120 77
Clariant AG (b) 153 71
ABB AG 44 52
-----------
2,865
Turkey 3.9%
Turkiye Is Bankasi "C" 5,264,500 1,369
Turkiye Garanti Bankasi AS 2,296,250 568
Migros Turk TAS 50,440 504
Arcelik AS 1,630,750 471
Yapi ve Kredi Bankasi AS 3,148,059 364
Ege Biracilik ve Malt Sanayii AS 434,500 338
Akbank TAS 1,568,233 318
Cukurova Elektrik AS 24,700 266
Haci Omer Sabanci Holding AS 1,543,500 237
Aygaz AS 316,000 210
Brisa Bridgestone Sabanci Lastik San. ve Tic AS 809,300 182
Eregli Demir Ve Celik Fabrikalari TAS 436,900 180
Adana Cimento Sanayii "A" 843,553 155
Bagfas Bandirma Gubre Fabrikalari AS 327,000 130
Netas Northern Electric Telekomunikasyon AS 422,760 78
-----------
5,370
United Kingdom 4.1%
WEBS Index Fund 280,000 5,723
Venezuela 0.0%
Mavesa SA SP - ADR 50 0
-----------
Total Common Stocks 132,512
(Cost $115,065) ===========
<CAPTION>
- --------------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 8.8%
- --------------------------------------------------------------------------------------------------
Principal
Amount
(000s)
<S> <C> <C>
Time Deposits 8.8%
State Street Bank
4.500% due 01/04/99 $ 12,223 12,223
-----------
Total Short-Term Instruments 12,223
(Cost $12,223) ===========
Total Investments (a) 104.6% $ 144,735
(Cost $127,288)
Other Assets and Liabilities (Net) (4.6%) (6,365)
-----------
Net Assets 100.0% $ 138,370
===========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1998, the net unrealized appreciation (depreciation)
of investments based on cost for federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value tax cost $ 29,757
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value (12,310)
-----------
Unrealized appreciation-net $ 17,447
===========
(b) Non-income producing security.
(c) Foreign forward currency contracts outstanding at December 31, 1998:
<CAPTION>
Principal
Amount Unrealized
Covered by Expiration Appreciation/
Type Contract Month (Depreciation)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sell DM 16,200 01/99 $ 72
Buy DM 16,200 01/99 (143)
-----------
$ (71)
===========
</TABLE>
(d) Principal amount denoted in indicated currency:
DM - German Mark
30 See accompanying notes
<PAGE>
Schedule of Investments
Capital Appreciation Fund
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Value
Shares (000s)
- ---------------------------------------------------------------------------------------------------
COMMON STOCKS 95.4%
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Building 1.4%
Lafarge Corp. 235,850 $ 9,552
Centex Corp. 139,900 6,304
------------
15,856
Capital Goods 8.3%
Tyco International Limited 271,900 20,511
United Technologies Corp. 158,400 17,226
Johnson Controls, Inc. 268,100 15,818
Honeywell, Inc. 147,700 11,124
Textron, Inc. 138,900 10,548
Dana Corp. 250,600 10,243
Perkin Elmer Corp. 98,800 9,639
------------
95,109
Communications 4.7%
SBC Communications, Inc. 258,600 13,867
U.S. West, Inc. 212,700 13,746
AT&T Corp. 181,600 13,665
ALLTEL Corp. 211,300 12,638
------------
53,916
Consumer Discretionary 12.7%
Harley-Davidson, Inc. 324,200 15,359
Wal-Mart Stores, Inc. 174,400 14,203
Lowe's Cos., Inc. 276,600 14,158
TJX Cos., Inc. 487,600 14,140
Mohawk Industries, Inc. 335,800 14,125
Gap, Inc. 247,700 13,933
CVS Corp. 251,500 13,833
Home Depot, Inc. 225,800 13,816
Ford Motor Co. 225,000 13,205
Eastman Kodak Co. 154,800 11,146
Costco Cos., Inc. (b) 104,700 7,558
Cintas Corp. 5,900 416
------------
145,892
Consumer Services 3.3%
Gannett, Inc. 202,900 13,429
New York Times Co. 385,800 13,382
Omnicom Group 198,000 11,484
------------
38,295
Consumer Staples 9.0%
Albertson's, Inc. 265,400 16,903
Kroger Co. (b) 272,700 16,498
Safeway, Inc. (b) 267,400 16,295
Clorox Co. 117,900 13,772
Anheuser Busch Cos., Inc. 203,800 13,374
Quaker Oats Co. 198,600 11,817
Sara Lee Corp. 405,600 11,433
H.J. Heinz Co. 54,400 3,080
------------
103,172
Energy 2.1%
Peco Energy Co. 285,700 11,892
Energy East Corp. 205,700 11,622
------------
23,514
Financial & Business Services 20.4%
Capital One Financial Corp. 143,500 16,503
Associates First Capital Corp. 'A' 345,474 14,639
Fleet Financial Group, Inc. 320,800 14,336
Provident Cos., Inc. 'B' 329,300 13,666
BankAmerica Corp. 224,415 13,493
American Express Co. 125,000 12,781
Southtrust Corp. 345,950 12,779
Wells Fargo & Co. 319,100 12,744
First Union Corp. 202,300 12,302
Countrywide Credit Industries, Inc. 240,600 12,075
Bank One Corp. 232,600 11,877
Hartford Financial Services Group, Inc. 213,000 11,688
American International Group, Inc. 117,600 11,363
PNC Bank Corp. 207,515 11,232
Alliance Capital Management LP 419,200 10,794
Ambac, Inc. 175,400 10,557
Equity Residential Properties Trust 239,400 9,681
Allstate Corp. 233,200 9,007
Household International, Inc. 140,200 5,555
Simon Property Group, Inc. 165,800 4,725
MBNA Corp. 67,020 1,671
------------
233,468
Health Care 10.5%
Wellpoint Health Networks, Inc. (b) 194,200 16,896
Guidant Corp. 129,100 14,233
HBO & Co. 436,800 12,531
Biogen, Inc. 140,200 11,637
American Home Products Corp. 205,800 11,589
CIGNA Corp. 136,700 10,569
Health Management Associates, Inc. 'A' (b) 488,150 10,556
Cardinal Health, Inc. 125,200 9,500
Schering-Plough Corp. 162,400 8,973
Eli Lilly & Co. 98,200 8,728
Warner-Lambert Co. 64,100 4,820
------------
120,032
Materials & Processing 1.0%
Leggett & Platt, Inc. 515,530 11,342
Technology 18.3%
Compuware Corp. (b) 193,400 15,109
Oracle Corp. (b) 343,300 14,805
Lucent Technologies, Inc. 129,100 14,201
International Business Machines Corp. 76,100 14,059
Tellabs, Inc. (b) 202,700 13,898
Unisys Corp. (b) 402,400 13,858
EMC Corp. (b) 162,200 13,787
Dell Computer Corp. (b) 186,400 13,642
Microsoft Corp. (b) 96,600 13,397
Cisco Systems, Inc. (b) 141,650 13,147
Intel Corp. 110,600 13,113
Ascend Communications, Inc. (b) 196,200 12,900
Sun Microsystems, Inc. (b) 144,800 12,399
IMS Health, Inc. (b) 163,500 12,334
BMC Software, Inc. (b) 243,900 10,869
Gateway 2000, Inc. (b) 154,300 7,898
------------
209,416
Transportation 1.0%
Burlington Northern Santa Fe Corp. 330,700 11,161
Utilities 2.7%
Ameritech Corp. 226,500 14,354
Consolidated Edison, Inc. 237,700 12,568
New Century Energies, Inc. 72,400 3,530
------------
30,452
------------
Total Common Stocks 1,091,625
(Cost $854,567) ============
<CAPTION>
- ---------------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 4.7%
- ---------------------------------------------------------------------------------------------------
Principal
Amount
(000s)
<S> <C> <C>
Repurchase Agreement 4.7%
State Street Bank
3.500% due 01/04/99 $ 53,310 53,310
(Dated 12/31/98. Collateralized by U.S. Treasury
Note 7.750% 12/31/99 valued at $3,377,377 and
U.S. Treasury Note 6.000% 02/15/26 valued at
$51,005,453. Repurchase proceeds are $53,330,731.)
------------
Total Short-Term Instruments 53,310
(Cost $53,310) ============
Total Investments (a) 100.1% $1,144,935
(Cost $907,877)
Other Assets and Liabilities (Net) (0.1%) (519)
------------
Net Assets 100.0% $1,144,416
============
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1998, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value tax cost $ 251,151
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value (14,093)
------------
Unrealized appreciation-net $ 237,058
============
</TABLE>
(b) Non-income producing security.
See accompanying notes 31
<PAGE>
Schedule of Investments
Mid-Cap Growth Fund
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Value
Shares (000s)
- -------------------------------------------------------------------------------------------------
COMMON STOCKS 96.8%
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Building 2.4%
Lennar Corp. 494,700 $ 12,491
Pulte Corp. 382,000 10,624
-------------
23,115
Capital Goods 4.9%
Waters Corp. (b) 190,100 16,586
General Dynamics Corp. 200,400 11,748
Tower Automotive, Inc. (b) 418,500 10,436
Lear Corp. (b) 218,600 8,416
-------------
47,186
Communications 1.9%
Century Telephone Enterprises, Inc. 205,700 13,885
Superior Telecom, Inc. 91,700 4,333
-------------
18,218
Consumer Discretionary 14.5%
Abercrombie & Fitch Co. 'A'(b) 209,400 14,815
Shaw Industries, Inc. 566,300 13,733
Borders Group, Inc. (b) 530,200 13,222
Premark International, Inc. 368,000 12,742
Bed, Bath & Beyond, Inc. (b) 351,100 11,981
Fred Meyer, Inc. (b) 191,200 11,520
Family Dollar Stores, Inc. 510,900 11,240
Dial Corp. 371,300 10,721
Westpoint Stevens, Inc. (b) 321,400 10,144
Furniture Brands International, Inc. 299,300 8,156
Maytag Corp. 129,600 8,068
Herman Miller, Inc. 197,800 5,316
Tommy Hilfiger Corp. (b) 86,100 5,166
HON Industries 177,800 4,256
-------------
141,080
Consumer Services 3.6%
Best Buy Co., Inc. (b) 223,800 13,736
CKE Restaurants, Inc. 365,046 10,746
Darden Restaurants, Inc. 588,400 10,591
-------------
35,073
Consumer Staples 5.8%
Food Lion, Inc. 'A' 1,179,100 12,528
SUPERVALU, Inc. 443,000 12,404
IBP, Inc. 392,500 11,432
Flowers Industries, Inc. 430,000 10,293
McCormick & Co. 270,200 9,136
-------------
55,793
Financial & Business Services 25.0%
Valassis Communications, Inc. (b) 265,200 13,691
Providian Financial Corp. 174,900 13,118
Protective Life Corp. 325,000 12,939
Dime Bancorp, Inc. 464,400 12,278
Liberty Property Trust 498,500 12,276
Duke Realty Investments 522,700 12,153
Allmerica Financial Corp. 207,900 12,032
First American Corp. 271,100 12,030
AmSouth Bancorp 261,700 11,940
Crestar Financial Corp. 156,200 11,246
Travelers Property Casualty 'A' 354,600 10,993
Ambac Financial Group, Inc. 181,800 10,942
Mutual Risk Management Limited 268,730 10,514
Mercantile Bankshares Co. 257,800 9,916
BB&T Corp. 243,000 9,796
Cullen/Frost Bankers, Inc. 169,800 9,318
Bank United Corp. 235,900 9,259
Exel Limited 'A' 120,800 9,060
Finova Group, Inc. 166,200 8,964
Peoples Heritage Financial Group 448,000 8,960
Equity Residential Properties Trust 188,700 7,631
Summit Bancorp 167,490 7,317
Equifax, Inc. 90,600 3,097
Centura Banks, Inc. 40,300 2,997
-------------
242,467
Health Care 12.0%
Bergen Brunswig Corp. 'A' 409,800 14,292
Guidant Corp. 120,300 13,263
Total Renal Care Holdings (b) 444,900 13,152
Health Management Associates, Inc. 'A' (b) 596,387 12,897
Allegiance Corp. 275,600 12,850
Watson Pharmaceuticals, Inc. (b) 184,700 11,613
Trigon Healthcare, Inc. (b) 308,600 11,515
Safeskin Corp. (b) 444,600 10,726
Mylan Laboratories, Inc. 274,900 8,659
Arterial Vascular Engineering, Inc. (b) 144,300 7,576
-------------
116,543
Materials & Processing 1.4%
Southdown, Inc. 229,100 13,560
Technology 19.0%
Network Associates, Inc. (b) 233,825 15,490
Unisys Corp. (b) 424,200 14,608
Comverse Technology, Inc. (b) 205,100 14,562
Symbol Technologies, Inc. 217,800 13,926
Citrix Systems, Inc. (b) 141,000 13,686
Lexmark International Group, Inc. 'A' (b) 132,200 13,286
Computer Horizons Corp. (b) 487,900 12,990
Compuware Corp. (b) 159,500 12,461
Apple Computer, Inc. 290,900 11,909
American Power Conversion Corp. (b) 242,100 11,727
Platinum Technology, Inc. (b) 584,200 11,173
Tech Data Corp. (b) 239,400 9,636
Legato Systems, Inc. (b) 141,600 9,337
Veritas Software Corp. (b) 144,700 8,673
Comdisco, Inc. 499,350 8,427
The Reynolds & Reynolds Co. 80,900 1,856
-------------
183,747
Utilities 6.3%
IPALCO Enterprises, Inc. 239,300 13,235
Florida Progress Corp. 258,600 11,589
Minnesota Power, Inc. 219,100 9,640
DQE, Inc. 213,100 9,363
BEC Energy 219,100 9,024
Nipsco Industries, Inc. 276,600 8,419
-------------
61,270
-------------
Total Common Stocks 938,052
(Cost $759,339) =============
<CAPTION>
- -------------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 4.1%
- -------------------------------------------------------------------------------------------------
Principal
Amount
(000s)
<S> <C> <C>
Repurchase Agreement 4.1%
State Street Bank
3.500% due 01/04/99 $ 39,504 39,504
(Dated 12/31/98. Collateralized by
U.S. Treasury Note 5.750% 10/31/02
valued at $40,296,319. Repurchase
proceeds are $39,519,363.)
-------------
Total Short-Term Instruments 39,504
(Cost $39,504) -------------
Total Investments (a) 100.9% $ 977,556
(Cost $798,843)
Other Assets and Liabilities (Net) (0.9%) (8,800)
-------------
Net Assets 100.0% $ 968,756
=============
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1998, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation
for all investments in which there was an
excess of value over tax cost. $ 193,969
Aggregate gross unrealized depreciation
for all investments in which there was an
excess of tax cost over value. (15,256)
-------------
Unrealized appreciation-net $ 178,713
=============
</TABLE>
(b) Non-income producing security.
32 See accompanying notes
<PAGE>
Schedule of Investments
Micro-Cap Growth Fund
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Value
Shares (000s)
- ---------------------------------------------------------------------------------------------------
COMMON STOCKS 92.8%
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Building 5.6%
Crossmann Communities, Inc. (b) 185,250 $ 5,117
Meritage Corp. 298,000 3,688
Dal-Tile International, Inc. (b) 327,100 3,394
Dayton Superior Corp. (b) 123,700 2,381
---------------
14,580
Capital Goods 12.1%
Astec Industries, Inc. 103,800 5,774
HEICO Corp. 137,700 4,346
Engineered Support Systems, Inc. 287,050 4,270
Strattec Strategy Corp. (b) 140,200 4,206
Quixote Corp. 332,700 4,096
Johnstown America Industries, Inc. (b) 213,800 2,806
Harmon Industries, Inc. 119,000 2,744
HEICO Corp. 'A' 87,300 2,019
MYR Group, Inc. 119,500 1,374
---------------
31,635
Consumer Discretionary 19.5%
Chico's Fas, Inc. (b) 238,000 5,562
Winsloew Furniture, Inc. (b) 194,400 5,152
Movado Group, Inc. 192,212 5,118
Craftmade International, Inc. 282,900 4,703
Brookstone, Inc. (b) 241,600 4,137
Dover Downs Entertainment, Inc. 321,800 3,882
Racing Champions Corp. (b) 269,300 3,602
Pillowtex Corp. 132,300 3,539
Shoe Carnival, Inc. (b) 314,400 3,498
Stanley Furniture Co, Inc. 187,600 3,424
K-Swiss, Inc. 'A' 116,000 3,118
United Natural Foods, Inc. 124,100 2,994
Virco Manufacturing Corp. 104,630 1,923
Roadhouse Grill, Inc. (b) 55,000 297
JAKKS Pacific, Inc. (b) 20,000 215
---------------
51,164
Consumer Services 8.7%
HA-LO Industries, Inc. (b) 146,050 5,495
Morton's Restaurant Group, Inc. (b) 275,100 5,193
Taco Cabana, Inc. 'A' (b) 625,800 4,850
INTRAV, Inc. 125,300 2,381
Seaway Food Town, Inc. 133,900 2,209
Rock of Ages Corp. (b) 147,500 2,102
Group 1 Automotive, Inc. (b) 17,000 442
---------------
22,672
Consumer Staples 2.7%
Hain Food Group, Inc. (b) 154,900 3,873
Pilgrim's Pride Corp. 130,000 2,592
Hansen Natural Corp. (b) 125,000 672
---------------
7,137
Energy 1.6%
Evergreen Resources, Inc. (b) 241,100 4,280
Financial & Business Services 15.1%
Premier National Bancorp, Inc. 249,598 4,633
Chittenden Corp. 139,743 4,472
CIBER, Inc. (b) 155,600 4,347
Community First Bankshares, Inc. 198,900 4,189
Alabama National Bancorp 155,300 4,145
Provident Bankshares Corp. 160,825 4,001
Warren Bancorp, Inc. 414,700 3,758
AG Services of America, Inc. (b) 254,100 3,637
West Coast Bancorp 164,500 3,455
Abington Bancorp, Inc. 211,300 2,932
---------------
39,569
Health Care 6.0%
Osteotech, Inc. (b) 172,750 8,032
Empi, Inc. (b) 132,600 3,315
Minntech Corp. 144,600 2,241
Sheridan Healthcare, Inc. (b) 242,500 2,031
---------------
15,619
Materials & Processing 1.2%
Building Material Holding Corp. (b) 260,300 3,156
Technology 16.7%
Dendrite International, Inc. (b) 300,100 7,492
AVT Corp. (b) 236,300 6,852
Cotelligent Group, Inc. (b) 256,700 5,470
Ardent Software, Inc. (b) 232,600 5,350
Intelligroup, Inc. (b) 282,400 5,048
DSP Group, Inc. 192,000 4,008
Cybex Computer Products (b) 131,350 3,858
Ansys, Inc. (b) 308,500 3,394
Catalyst International, Inc. (b) 100,000 1,200
Software Spectrum, Inc. (b) 74,500 1,183
---------------
43,855
Transportation 3.6%
Greenbrier Companies, Inc. 274,700 3,880
Providence & Worcester Railroad Co. 235,100 2,939
Railamerica, Inc. (b) 295,000 2,508
---------------
9,327
---------------
Total Common Stocks 242,994
(Cost $192,049) ===============
<CAPTION>
- --------------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 7.4%
- --------------------------------------------------------------------------------------------------
Principal
Amount
(000s)
<S> <C> <C>
Repurchase Agreement 7.4%
State Street Bank
3.500% due 01/04/99 $ 19,242 19,242
(Dated 12/31/98. Collateralized by
U.S. Treasury Note 7.750% 12/31/99
valued at $19,631,002. Repurchase
proceeds are $19,249,483.)
---------------
Total Short-Term Instruments 19,242
(Cost $19,241) ---------------
Total Investments (a) 100.2% $ 262,236
(Cost $211,291)
Other Assets and Liabilities (Net) (0.2%) (544)
---------------
Net Assets 100.0% $ 261,692
===============
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1998, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation
for all investments in which there was an
excess of value over tax cost. $ 55,286
Aggregate gross unrealized depreciation
for all investments in which there was an
excess of tax cost over value. (4,341)
---------------
Unrealized appreciation-net $ 50,945
===============
</TABLE>
(b) Non-income producing security.
See accompanying notes 33
<PAGE>
Schedule of Investments
Small-Cap Growth Fund
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Value
Shares (000s)
- --------------------------------------------------------------------------------------------
COMMON STOCKS 97.3%
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Building 4.1%
D.R. Horton, Inc. 39,300 $ 904
Lone Star Industries, Inc. 24,000 884
NVR, Inc. (b) 15,600 744
------------
2,532
Capital Goods 12.4%
Manitowoc Co., Inc. 21,100 936
Applied Power, Inc. 'A' 19,900 751
Dura Automotive Systems, Inc. (b) 21,600 737
MotivePower Industries, Inc (b) 21,600 695
Terex Corp. 24,200 691
GenCorp, Inc. 27,500 686
Arvin Industries, Inc. 16,100 671
Astec Industries, Inc. 12,000 668
Kellstrom Industries, Inc. (b) 23,200 667
A.O. Smith Corp. 24,000 590
Barnes Group, Inc. 15,600 458
Simpson Industries 7,300 71
------------
7,621
Communications 3.7%
Pacific Gateway Exchange, Inc. (b) 18,900 908
Superior Telecom, Inc. 15,400 728
IDT Corp. (b) 39,900 613
------------
2,249
Consumer Discretionary 14.5%
Chattem, Inc. (b) 23,900 1,144
American Eagle Outfitters, Inc. (b) 15,050 1,003
Ames Department Stores, Inc. (b) 33,700 910
Renters Choice, Inc. (b) 27,300 867
Action Performance Cos., Inc. (b) 21,900 775
Ethan Allen Interiors, Inc. 18,100 742
Pillowtex Corp. 26,998 722
CEC Entertainment, Inc. 24,300 674
Movado Group, Inc. 22,800 607
Helen of Troy Limited (b) 33,200 488
Buffets, Inc. (b) 31,200 372
Russ Berrie & Co., Inc. 14,300 336
Winsloew Furniture, Inc. (b) 8,900 236
------------
8,876
Consumer Services 6.1%
Foodmaker, Inc. (b) 48,900 1,079
HA-LO Industries, Inc. (b) 27,625 1,039
Ruby Tuesday, Inc. 42,800 910
Bob Evans Farms, Inc. 26,900 701
------------
3,729
Consumer Staples 3.6%
Keebler Foods Co. 21,500 809
Michael Foods, Inc. 26,300 789
Earthgrains Co. 19,700 609
------------
2,207
Financial & Business Services 24.1%
CIBER, Inc. (b) 33,500 936
Hooper Holmes, Inc. 32,000 928
Westamerica BanCorp 23,600 867
City National Corp. 20,700 862
Metris Companies 16,700 840
Reinsurance Group of America 11,450 802
First Midwest Bancorp, Inc. 20,725 789
Protective Life Corp. 18,500 737
Associated Banc-Corp 20,855 713
Peoples Heritage Financial Group 35,600 712
Hubco, Inc. 23,500 708
Enhance Financial Services Group, Inc. 22,100 663
UST Corp. 28,000 660
Prentiss Properties Trust 29,000 647
Colonial BancGroup, Inc. 53,800 646
Innkeepers USA Trust 50,900 601
Highwoods Properties, Inc. 22,900 590
Mail-Well, Inc. (b) 50,800 581
Chittenden Corp. 13,100 419
Developers Diversified Realty Corp. 21,800 387
Commerce Group, Inc. 10,500 372
Parkway Properties, Inc. 9,100 284
Resource America, Inc. 800 7
------------
14,751
Health Care 8.5%
Osteotech, Inc. (b) 24,500 1,139
Alternative Living Services, Inc. (b) 29,200 1,000
Medical Manager Corp. (b) 27,600 866
Curative Health Services, Inc. (b) 22,200 744
Veterinary Centers of America, Inc. (b) 33,900 676
Wesley Jessen VisionCare, Inc. (b) 21,500 597
Health Care REIT, Inc. 7,100 184
------------
5,206
Materials & Processing 3.0%
Martin Marietta Materials, Inc. 18,300 1,138
Cambrex Corp. 29,200 701
------------
1,839
Technology 14.8%
NeoMagic Corp. (b) 48,900 1,081
Gilat Satellite Networks Limited (b) 18,500 1,020
Brightpoint, Inc. (b) 67,200 924
Visio Corp. (b) 24,400 892
AVT Corp. (b) 28,000 812
World Access, Inc. (b) 37,400 799
Computer Task Group, Inc. 29,400 797
CHS Electronics, Inc. (b) 39,800 674
International Telecommunication
Data Systems, Inc. (b) 41,000 605
Dendrite International, Inc. (b) 22,900 572
Hyperion Solutions Corp. 21,400 385
Lernout & Hauspie Speech Products NV (b) 8,200 268
Memco Software Limited (b) 16,200 247
------------
9,076
Transportation 2.5%
Coach USA, Inc. (b) 24,200 839
Wabash National Corp. 33,400 678
------------
1,517
------------
Total Common Stocks 59,603
(Cost $51,530) ============
<CAPTION>
- --------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 6.6%
- --------------------------------------------------------------------------------------------
Principal
Amount
(000s)
<S> <C> <C>
Repurchase Agreement 6.6%
State Street Bank
3.500% due 01/04/99 $ 4,077 4,077
(Dated 12/31/98. Collateralized by
U.S. Treasury Note 6.625% 06/30/01
valued at $4,159,100. Repurchase
proceeds are $4,078,586.)
------------
Total Short-Term Instruments 4,077
(Cost $4,077) ------------
Total Investments (a) 103.9% $ 63,680
(Cost $55,607)
Other Assets and Liabilities (Net) (3.9%) (2,390)
------------
Net Assets 100.0% $ 61,290
============
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1998, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation
for all investments in which there was an
excess of value over tax cost $ 9,716
Aggregate gross unrealized depreciation
for all investments in which there was an
excess of tax cost over value (1,643)
Unrealized appreciation-net $ 8,073
============
</TABLE>
(b) Non-income producing security.
34 See accompanying notes
<PAGE>
Schedule of Investments
Renaissance Fund
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Value
Shares (000s)
- ------------------------------------------------------------------------------------------------
COMMON STOCKS 98.1%
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Building 0.9%
Owens Corning 168,100 $ 5,957
Communications 12.7%
Tele-Communications, Inc. 'A' (b) 312,400 17,280
Sprint Corp. 185,200 15,580
ALLTEL Corp. 258,500 15,462
Newbridge Networks Corp. (b) 496,500 15,081
MediaOne Group, Inc. (b) 232,600 10,932
AT&T Corp. 92,000 6,923
------------
81,258
Consumer Discretionary 15.8%
Corning, Inc. 423,900 19,075
Cendant Corp. (b) 933,300 17,790
General Motors Corp. 242,500 17,354
Hasbro, Inc. 421,300 15,219
Tommy Hilfiger Corp. (b) 143,700 8,622
Time Warner, Inc. 123,200 7,646
B.J.'s Wholesale Club, Inc. (b) 158,400 7,336
Maytag Corp. 117,100 7,289
------------
100,331
Consumer Services 2.6%
Carnival Corp. 'A' 194,700 9,346
Reader's Digest Assn., Inc. 288,100 7,257
------------
16,603
Consumer Staples 8.7%
Philip Morris Cos., Inc. 332,600 17,794
Anheuser Busch Cos., Inc. 270,000 17,719
American Stores Co. 367,300 13,567
Champion International 'C' 149,200 6,043
------------
55,123
Energy 6.1%
Enron Corp. 411,800 23,498
Exxon Corp. 207,500 15,173
------------
38,671
Financial & Business Services 20.6%
Chase Manhattan Corp. 208,200 14,171
Fleet Financial Group, Inc. 315,600 14,103
Federal National Mortgage Assn 188,600 13,956
Equitable Cos., Inc. 240,100 13,896
Hartford Life, Inc. 'A' (b) 228,300 13,298
Allmerica Financial Corp. 208,000 12,038
Capital One Financial Corp. 101,200 11,638
Valassis Communications, Inc. (b) 194,400 10,036
Citigroup, Inc. 190,000 9,405
Fremont General Corp. 259,600 6,425
First Union Corp. 98,300 5,978
Bank One Corp. 115,600 5,903
------------
130,847
Health Care 10.6%
Allegiance Corp. 523,500 24,408
Amgen, Inc. (b) 149,600 15,643
CIGNA Corp. 157,700 12,192
Bausch & Lomb, Inc. 136,700 8,202
Baxter International, Inc. 103,600 6,663
------------
67,108
Materials & Processing 5.5%
Martin Marietta Materials, Inc. 407,600 25,348
Vulcan Materials Co. 70,400 9,262
------------
34,610
Technology 11.2%
International Business Machines Corp. 132,300 24,442
Motorola, Inc. 216,500 13,220
Learning Company, Inc. (b) 366,900 9,516
Diebold, Inc. 256,300 9,147
Teradyne, Inc. (b) 177,700 7,530
Micron Technology, Inc. (b) 141,700 7,165
NCR Corp. (b) 1,000 42
------------
71,062
Transportation 2.5%
Atlas Air, Inc. 326,900 15,998
Utilities 0.9%
Duke Energy Corp. 92,200 5,907
------------
Total Common Stocks 623,475
(Cost $506,971) ============
- ------------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 2.6%
- ------------------------------------------------------------------------------------------------
Principal
Amount
(000s)
<S> <C> <C>
Repurchase Agreement 2.6%
State Street Bank
3.500% due 01/04/99 $ 16,437 16,437
(Dated 12/31/98. Collateralized by
U.S. Treasury Note 7.500% 02/15/05
valued at $16,766,750. Repurchase
proceeds are $16,443,392.)
------------
Total Short-Term Instruments 16,437
(Cost $16,437) ------------
Total Investments (a) 100.7% $ 639,912
(Cost $523,408)
Written Options (c) (0.0%) (72)
(Premiums $133)
Other Assets and Liabilities (Net) (0.7%) (4,282)
------------
Net Assets 100.0% $ 635,558
============
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1998, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation
for all investments in which there was an
excess of value over tax cost $ 119,072
Aggregate gross unrealized depreciation
for all investments in which there was an
excess of tax cost over value (2,568)
------------
Unrealized appreciation-net $ 116,504
============
</TABLE>
(b) Non-income producing security.
(c) Premiums received on written options:
<TABLE>
<CAPTION>
Type Contracts Premium Value
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Call - OTC Micron Technology, Inc.
Strike @ 55.00 Exp. 01/22/99 676 $ 133 $ 72
</TABLE>
See accompanying notes 35
<PAGE>
Schedule of Investments
Core Equity Fund
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Value
Shares (000s)
- ---------------------------------------------------------------------------------------------------
COMMON STOCKS 95.6%
- ---------------------------------------------------------------------------------------------------
Capital Goods 2.6%
<S> <C> <C>
Tyco International Limited 49,100 $ 3,704
Perkin Elmer Corp. 8,100 790
--------
4,494
Communications 6.5%
Chancellor Media Corp. 95,900 4,591
Tele-Communications, Inc. "A" (b) 76,568 4,235
Nextel Communications, Inc. "A" (b) 95,200 2,249
--------
11,075
Consumer Discretionary 18.3%
Home Depot, Inc. 91,400 5,592
CVS Corp. 90,100 4,956
Cendant Corp. (b) 243,700 4,646
Wal-Mart Stores, Inc. 56,900 4,634
Costco Cos., Inc. (b) 58,500 4,223
Staples, Inc. (b) 71,200 3,111
Ford Motor Co. 35,900 2,107
Pitney Bowes, Inc. 30,000 1,982
--------
31,251
Consumer Services 5.5%
McDonald's Corp. 36,400 2,789
Omnicom Group 44,300 2,569
Tricon Global Restaurants, Inc. (b) 44,300 2,221
Waste Management, Inc. 37,960 1,770
--------
9,349
Consumer Staples 7.6%
Safeway, Inc. (b) 88,500 5,393
Anheuser Busch Cos., Inc. 49,600 3,255
Philip Morris Cos., Inc. 46,500 2,488
Champion International "C" 43,600 1,766
--------
12,902
Energy 3.4%
Enron Corp. 68,000 3,880
Exxon Corp. 26,900 1,967
--------
5,847
Financial & Business Services 12.6%
Citigroup, Inc. 79,850 3,953
Chase Manhattan Corp. 56,900 3,873
Federal National Mortgage Assn 46,300 3,426
Capital One Financial Corp. 28,500 3,278
Wells Fargo & Co. 75,000 2,995
Associates First Capital Corp. "A" 57,000 2,415
Donaldson Lufkin & Jenrette, Inc. 36,200 1,484
--------
21,424
Health Care 16.8%
HBO & Co. 170,800 4,900
Eli Lilly & Co. 52,200 4,639
Pfizer, Inc. 31,600 3,964
Cardinal Health, Inc. 46,800 3,551
Schering-Plough Corp. 63,400 3,503
Guidant Corp. 29,100 3,208
Warner-Lambert Co. 37,400 2,812
CIGNA Corp. 26,100 2,018
--------
28,595
Technology 22.3%
America Online, Inc. (b) 48,200 6,977
Microsoft Corp. (b) 47,400 6,574
Intel Corp. 48,400 5,738
Compaq Computer Corp. (b) 109,100 4,575
Ascend Communications, Inc. (b) 56,900 3,741
Cisco Systems, Inc. (b) 35,000 3,248
International Business Machines Corp. 13,800 2,550
3Com Corp. (b) 52,600 2,357
Motorola, Inc. 36,700 2,241
America Online, Inc. Rights (b) 42,200 0
--------
38,001
--------
Total Common Stocks 162,938
(Cost $118,372) --------
<CAPTION>
Value
Shares (000s)
- ---------------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 4.4%
- ---------------------------------------------------------------------------------------------------
Repurchase Agreement 4.4%
<S> <C> <C>
State Street Bank
3.500% due 01/04/99 $ 7,420 $ 7,420
(Dated 12/31/98. Collateralized by
U.S. Treasury Note 5.750% 10/31/02
valued at $7,569,619. Repurchase
proceeds are $7,422,886.)
------------
Total Short-Term Instruments 7,420
------------
(Cost $7,420)
Total Investments (a) 100.0% $ 170,358
(Cost $125,792)
Other Assets and Liabilities (Net) (0.0%) (14)
------------
Net Assets 100.0% $ 170,344
------------
Notes to Schedule of Investments (amounts in thousands);
(a) At December 31, 1998, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation
for all investments in which there was an
excess of value over tax cost $ 45,372
Aggregate gross unrealized depreciation
for all investments in which there was an
excess of tax cost over value (806)
------------
Unrealized appreciation-net $ 44,566
------------
</TABLE>
(b) Non-income producing security.
36 See accompanying notes
<PAGE>
Schedule of Investments
Mid-Cap Equity Fund
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Value
Shares (000s)
- ---------------------------------------------------------------------------------------------------
COMMON STOCKS 94.1%
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Building 1.6%
Centex Corp. 4,800 $ 216
Capital Goods 3.0%
SPX Corp. 3,800 255
Waters Corp. (b) 1,600 140
---------
395
Communications 2.9%
General Instrument Corp. (b) 6,400 217
Century Telephone Enterprise 2,500 169
---------
386
Consumer Discretionary 20.9%
Rite Aid Corp. 10,300 511
Bed, Bath & Beyond, Inc. (b) 10,400 355
Shaw Industries, Inc. 11,900 289
Staples, Inc. (b) 5,600 245
Solectron Corp. 2,500 232
Family Dollar Stores, Inc. 10,400 229
Amazon.com, Inc. (b) 700 225
Gucci Group 4,000 195
99 Cents Only Stores 3,075 151
Intimate Brands, Inc. 4,500 134
Harley-Davidson, Inc. 2,800 133
Catalina Marketing Corp. (b) 800 55
---------
2,754
Consumer Services 6.5%
Metzler Group, Inc. (b) 5,100 248
Tricon Global Restaurants, Inc. (b) 4,700 236
Starbucks Corp. (b) 3,800 213
Jacor Communications, Inc. (b) 2,500 161
---------
858
Consumer Staples 2.5%
Whitman Corp. 13,000 330
Energy 3.6%
Montana Power Co. 3,700 209
Valero Energy Corp. 6,400 136
Unicom Corp. 3,200 123
---------
468
Financial & Business Services 16.6%
Providian Financial Corp. 5,400 405
Firstar Corp. 3,728 348
Countrywide Credit Industries, Inc. 6,700 336
AFLAC, Inc. 5,900 260
Charles Schwab Corp. 4,500 253
PaineWebber Group, Inc. 6,300 243
Paychex, Inc. 3,400 175
Zions Bancorporation 2,700 168
---------
2,188
Health Care 11.7%
Watson Pharmaceuticals, Inc. (b) 6,900 434
Express Scripts, Inc. "A" (b) 3,300 222
Biogen, Inc. 2,400 199
Allergan, Inc. 3,000 194
C.R. Bard, Inc. 3,100 153
Biomet, Inc. 3,300 133
ALZA Corp. (b) 2,400 125
Immunex Corp. (b) 600 75
---------
1,535
Technology 24.8%
American Power Conversion Corp. (b) 6,600 320
IMS Health, Inc. (b) 4,100 309
Symbol Technologies, Inc. 4,100 262
Maxim Integrated Products, Inc. (b) 5,600 245
Altera Corp. (b) 4,000 244
KLA-Tencor Corp. (b) 5,600 243
Unisys Corp. (b) 6,600 227
Exodus Communications, Inc. 3,000 193
International Network Services 2,800 186
3Com Corp. (b) 4,100 184
NCR Corp. (b) 3,900 163
CSG Systems International, Inc. 2,000 158
Synopsys, Inc. (b) 2,700 146
Inktomi Corp. (b) 1,100 142
Flextronics International Limited 1,600 137
Maxtor Corp. 7,500 105
---------
3,264
---------
Total Common Stocks 12,394
(Cost $9,682) ---------
<CAPTION>
- ---------------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 3.9%
- ---------------------------------------------------------------------------------------------------
Principal
Amount
(000s)
<S> <C> <C>
Repurchase Agreement 3.9%
State Street Bank
3.500% due 01/04/99 $ 515 515
(Dated 12/31/98. Collateralized by
U.S. Treasury Note 6.625% 06/30/01
valued at $527,725. Repurchase
proceeds are $515,200.)
-----------
Total Short-Term Instruments 515
-----------
(Cost $515)
Total Investments (a) 98.0% $ 12,909
(Cost $10,197)
Other Assets and Liabilities (Net) 2.0% 269
-----------
Net Assets 100.0% $ 13,178
-----------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1998, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation
for all investments in which there was an
excess of value over tax cost $ 2,738
Aggregate gross unrealized depreciation
for all investments in which there was an
excess of tax cost over value (26)
-----------
Unrealized appreciation-net $ 2,712
-----------
</TABLE>
(b) Non-income producing security.
See accompanying notes 37
<PAGE>
Schedule of Investments
International Growth Fund
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Value
Shares (000s)
- -----------------------------------------------------------------------------------------------------
COMMON STOCKS 94.5%
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Canada 1.6%
JDS Fitel, Inc. (b) 4,100 $ 102
China 2.9%
VTech Holdings Limited 28,800 126
HSBC Holdings PLC 2,400 60
---------
186
Denmark 1.9%
Tele Danmark AS "A" 1,800 122
Finland 5.6%
Nokia Corp. - ADR 1,900 229
Sonera Group OYJ (b) 4,000 71
Fortum Corp. (b) 10,000 61
---------
361
France 6.9%
Business Objects SA SP - ADR (b) 6,100 198
Societe Generale 800 130
Sanofi SA 735 121
---------
449
Germany 8.3%
Mannesmann AG 1,900 220
DaimlerChrysler AG (b) 1,300 125
Douglas Holding AG 1,700 101
Porsche AG 40 92
---------
538
Greece 2.8%
National Bank of Greece SP - GDR 4,200 183
Ireland 7.1%
Bank of Ireland 8,223 180
Esat Telecom Group PLC SP - ADR (b) 3,700 142
CRH PLC 7,967 138
---------
460
Italy 7.0%
Telecom Italia Mobile SpA 23,000 170
Credito Italiano 17,500 104
Instituto Nazionale delle Assicurazioni 38,400 101
SAI SpA 6,200 75
---------
450
Japan 10.1%
NTT Mobile Communication Network, Inc. 30 123
Kao Corp. 5,200 117
Takeda Chemical Industries 3,000 115
Sumitomo Bank Limited 9,000 92
Softbank Corp. 1,200 72
Olympus Optical Co. Limited 6,000 69
Kirin Brewery Co. Limited 5,000 63
---------
651
Mexico 1.1%
Organizacion Soriana SA de CV "B" 22,000 69
Netherlands 9.7%
ING Groep NV 3,722 221
STMicroelectronics NV (b) 1,600 125
Heineken NV 1,900 114
Equant (b) 1,600 109
Laurus NV 2,400 61
---------
630
Portugal 2.4%
Companhia de Seguros Mundial Confianca SA (b) 2,800 89
BPI-SGPS SA 1,900 64
---------
153
Singapore 1.6%
Natsteel Electronics Limited 41,200 105
Spain 1.6%
Corp. Financiera Reunida SA (b) 6,915 101
Switzerland 8.2%
Julius Baer Holding AG "B" 45 150
Novartis AG 67 132
Schweizerische Lebensversicherungs-
und Rentenanstalt (b) 125 93
Swisscom AG (b) 2,000 85
Kudelski SA (b) 25 69
---------
529
United Kingdom 12.0%
Vodafone Group PLC SP - ADR 1,000 161
Energis PLC (b) 7,200 161
Royal Bank of Scotland Group PLC 9,200 148
Colt Telecom Group PLC SP - ADR (b) 2,100 126
Cadbury Schweppes PLC 7,200 122
British Aerospace PLC 7,200 61
---------
779
United States 3.7%
Newbridge Networks Corp. (b) 5,500 167
Gilat Satellite Networks Limited (b) 1,300 72
---------
239
---------
Total Common Stocks 6,107
(Cost $4,993) ---------
<CAPTION>
- -----------------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 5.5%
- -----------------------------------------------------------------------------------------------------
Principal
Amount
(000s)
<S> <C> <C>
Repurchase Agreement 5.5%
State Street Bank
3.500% due 01/04/99 $ 356 356
(Dated 12/31/98. Collateralized by
U.S. Treasury Note 7.125% 02/15/23
valued at $365,717. Repurchase
proceeds are $356,138.)
------------
Total Short-Term Instruments 356
(Cost $356) ------------
Total Investments (a) 100.0% $ 6,463
(Cost $5,349)
Other Assets and Liabilities (Net) 0.0% 1
------------
Net Assets 100.0% $ 6,464
------------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1998, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation
for all investments in which there was an
excess of value tax cost. $ 1,175
Aggregate gross unrealized depreciation
for all investments in which there was an
excess of tax cost over value. (61)
------------
Unrealized appreciation-net $ 1,114
------------
(b) Non-income producing security.
</TABLE>
38 See accompanying notes
<PAGE>
Schedule of Investments
Equity Income Fund
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Value
Shares (000s)
- ----------------------------------------------------------------------------------------------
COMMON STOCKS 97.5%
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Aerospace 2.2%
BFGoodrich Co. 121,500 $ 4,359
Capital Goods 6.2%
Dana Corp. 102,900 4,206
GATX Corp. 109,000 4,128
Hubbell, Inc. "B" 107,700 4,093
------------
12,427
Communications 6.0%
U.S. West, Inc. 64,000 4,136
GTE Corp. 60,800 4,100
Bell Atlantic Corp. 66,932 3,803
------------
12,039
Consumer Discretionary 13.8%
Ford Motor Co. 73,300 4,302
Intimate Brands, Inc. 140,500 4,197
Springs Industries, Inc. "A" 97,300 4,032
American Greetings Corp. "A" 98,000 4,024
VF Corp. 83,600 3,919
Armstrong World Industries 59,600 3,595
Penney J.C., Inc. 73,900 3,464
------------
27,533
Consumer Staples 10.3%
RJR Nabisco Holdings Corp. 279,000 8,283
Kimberly-Clark Corp. 80,300 4,376
SUPERVALU, Inc. 142,600 3,993
Anheuser Busch Cos., Inc. 58,900 3,865
------------
20,517
Energy 9.3%
Kerr McGee Corp. 104,600 4,001
Mobil Corp. 45,000 3,921
Repsol SA SP - ADR 69,500 3,796
Atlantic Richfield Co. 55,400 3,615
Ultramar Diamond Shamrock Corp. 139,500 3,383
------------
18,716
Financial & Business Services 19.3%
PNC Bank Corp. 150,000 8,119
Union Planters Corp. 155,900 7,064
Ohio Casualty Corp. 99,900 4,108
Deluxe Corp. 111,000 4,058
Bankers Trust New York Corp. 46,800 3,998
CIGNA Corp. 51,000 3,943
Chase Manhattan Corp. 56,000 3,812
HRPT Properties Trust 252,600 3,552
------------
38,654
Health Care 4.0%
American Home Products Corp. 75,000 4,223
Mallinckrodt Group, Inc. 123,500 3,805
------------
8,028
Materials & Processing 13.2%
Georgia-Pacific Corp. (Timber Group) 176,700 4,208
Tenneco, Inc. 119,600 4,074
Westvaco Corp. 150,000 4,022
Dow Chemical Co. 41,300 3,756
Phelps Dodge Corp. 70,000 3,561
USX-U.S. Steel Group, Inc. 151,200 3,478
Union Carbide Corp. 80,000 3,400
------------
26,499
Technology 1.9%
Harris Corp. 102,000 3,736
Utilities 11.3%
Allegheny Energy, Inc. 120,000 4,139
Baltimore Gas & Electric 129,000 3,983
Peoples Energy Corp. 99,000 3,948
Public Service Enterprise Group, Inc. 94,500 3,780
NICOR, Inc. 85,000 3,591
DTE Energy Co. 76,000 3,259
------------
22,700
------------
Total Common Stocks 195,208
(Cost $178,144) ------------
<CAPTION>
Principal
Amount Value
(000s) (000s)
- ----------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.9%
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreement 0.9%
State Street Bank
3.500% due 01/04/99 $ 1,845 $ 1,845
(Dated 12/31/98. Collateralized by
U.S. Treasury Note 5.750% 10/31/02
valued at $1,883,250. Repurchase
proceeds are $1,845,718.)
------------
Total Short-Term Instruments 1,845
------------
(Cost $1,845)
Total Investments (a) 98.4% $ 197,053
(Cost $179,989)
Other Assets and Liabilities (Net) 1.6% 3,260
------------
Net Assets 100.0% $ 200,313
------------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1998, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation
for all investments in which there was an
excess of value over tax cost $ 27,721
Aggregate gross unrealized depreciation
for all investments in which there was an
excess of tax cost over value (10,657)
------------
Unrealized appreciation-net $ 17,064
------------
</TABLE>
See accompanying notes 39
<PAGE>
Schedule of Investments
Value Fund
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Value
Shares (000s)
- -------------------------------------------------------------------------------------------------
COMMON STOCKS 97.0%
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Aerospace 1.2%
Northrop Grumman Corp. 40,000 $ 2,925
Capital Goods 3.8%
Dana Corp. 120,200 4,913
Deere & Co. 134,100 4,442
------------
9,355
Communications 6.0%
GTE Corp. 110,000 7,418
Bell Atlantic Corp. 128,300 7,289
------------
14,707
Consumer Discretionary 12.9%
Whirlpool Corp. 130,000 7,199
VF Corp. 150,000 7,031
American Greetings Corp. "A" 115,000 4,722
Dillards, Inc. "A" 165,000 4,682
Tupperware Corp. 169,900 2,793
King World Productions, Inc. 90,000 2,649
Cracker Barrel Old Country Store, Inc. 105,000 2,448
------------
31,524
Consumer Services 2.1%
Central Newspapers, Inc. "A" 70,800 5,058
Consumer Staples 13.1%
SUPERVALU, Inc. 260,000 7,280
Whitman Corp. 210,000 5,329
Kimberly-Clark Corp. 90,000 4,905
RJR Nabisco Holdings Corp. 165,000 4,898
Anheuser Busch Cos., Inc. 74,100 4,863
IBP, Inc. 160,000 4,660
------------
31,935
Energy 9.7%
Repsol SA SP - ADR 135,000 7,374
Mobil Corp. 77,000 6,709
Kerr McGee Corp. 127,000 4,858
Ultramar Diamond Shamrock Corp. 200,000 4,850
------------
23,791
Environmental Services 2.7%
Browning Ferris Industries, Inc. 230,000 6,541
Financial & Business Services 11.7%
Chase Manhattan Corp. 105,000 7,147
Countrywide Credit Industries, Inc. 100,000 5,019
PNC Bank Corp. 92,000 4,980
Union Planters Corp. 100,000 4,531
Bear Stearns Cos. 120,000 4,485
Loews Corp. 26,000 2,555
------------
28,717
Health Care 9.2%
Amgen, Inc. (b) 70,000 7,319
American Home Products Corp. 98,000 5,519
CIGNA Corp. 66,000 5,103
Mallinckrodt Group, Inc. 147,500 4,545
------------
22,486
Materials & Processing 7.8%
Union Carbide Corp. 140,100 5,954
USG Corp. (b) 100,000 5,094
USX-U.S. Steel Group, Inc. 180,000 4,140
Westvaco Corp. 144,600 3,877
------------
19,065
Technology 6.8%
Apple Computer, Inc. 120,000 4,913
Harris Corp. 130,000 4,761
Storage Technology Corp. (b) 131,200 4,666
Adobe Systems, Inc. 47,500 2,221
------------
16,561
Transportation 1.0%
UAL Corp. (b) 40,000 $ 2,388
Utilities 9.0%
Public Service Enterprise Group, Inc. 185,000 7,396
DTE Energy Co. 170,000 7,289
NICOR, Inc. 170,000 7,183
------------
21,868
------------
Total Common Stocks 236,921
(Cost $222,027) ------------
- -------------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 2.9%
- -------------------------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreement 2.9%
<S> <C> <C>
State Street Bank
3.500% due 01/04/99 $ 7,002 7,002
(Dated 12/31/98. Collateralized by
U.S. Treasury Note 7.500% 02/15/05
valued at $105,525. Repurchase
proceeds are $100,039.)
------------
Total Short-Term Instruments 7,002
------------
(Cost $7,002)
Total Investments (a) 99.9% $ 243,923
(Cost $229,029)
Other Assets and Liabilities (Net) 0.1% 280
------------
Net Assets 100.0% $ 244,203
------------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1998, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation
for all investments in which there was an
excess of value over tax cost. $ 29,842
Aggregate gross unrealized depreciation
for all investments in which there was an
excess of tax cost over value. (14,948)
------------
Unrealized appreciation-net $ 14,894
------------
</TABLE>
(b) Non-income producing security.
40 See accompanying notes
<PAGE>
Schedule of Investments
Value 25 Fund
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Value
Shares (000s)
- ------------------------------------------------------------------------------------------------
COMMON STOCKS 91.6%
- ------------------------------------------------------------------------------------------------
<S> <C>
Aerospace 5.8%
Cordant Technologies, Inc. 3,100 $ 116
Building 17.4%
Clayton Homes, Inc. 9,062 127
Lennar Corp. 4,200 106
Lafarge Corp. 1,900 77
York International Corp. 1,000 41
----------
351
Capital Goods 10.4%
Snap-On, Inc. 2,350 82
Paccar, Inc. 1,700 70
GATX Corp. 1,500 57
----------
209
Consumer Discretionary 20.3%
Lancaster Colony Corp. 3,000 96
Thomas & Betts Corp. 2,200 95
Ross Stores, Inc. 2,400 95
Warnaco Group, Inc. "A" 3,400 86
Armstrong World Industries 600 36
----------
408
Energy 3.5%
Ultramar Diamond Shamrock Corp. 2,900 70
Financial & Business Services 26.6%
Old Republic International Corp. 5,500 124
Crescent Real Estate Equities Co. 4,100 94
Golden West Financial Corp. 950 87
American National Insurance Co. 1,000 83
UnionBanCal Corp. 1,800 61
SLM Holding Corp. 650 31
Deluxe Corp. 800 29
Lehman Brothers Holdings, Inc. 600 26
----------
535
Materials & Processing 7.6%
Bowater, Inc. 2,400 99
Millennium Chemicals, Inc. 2,700 54
----------
153
----------
Total Common Stocks 1,842
(Cost $1,800) ----------
<CAPTION>
- ------------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 5.0%
- ------------------------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreement 5.0%
State Street Bank
3.500% due 01/04/99 $ 100 100
(Dated 12/31/98. Collateralized by
U.S. Treasury Note 7.500% 02/15/05
valued at $105,525. Repurchase
proceeds are $100,039.)
----------
Total Short-Term Instruments 100
----------
(Cost $100)
Total Investments (a) 96.6% $ 1,942
(Cost $1,900)
Other Assets and Liabilities (Net) 3.4% 68
----------
Net Assets 100.0% $ 2,010
----------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1998, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation
for all investments in which there was an
excess of value over tax cost. $ 87
Aggregate gross unrealized depreciation
for all investments in which there was an
excess of tax cost over value. (45)
----------
Unrealized appreciation-net $ 42
----------
</TABLE>
See accompanying notes 41
<PAGE>
Schedule of Investments
Small-Cap Value Fund
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Value
Shares (000s)
- ------------------------------------------------------------------------------------------------------
COMMON STOCKS 96.4%
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Aerospace 2.9%
Newport News Shipbuilding, Inc. 130,300 $ 4,356
Cordant Technologies, Inc. 100,000 3,750
Kaman Corp. 228,000 3,662
--------
11,768
Building 5.0%
Lennar Corp. 184,000 4,646
Hughes Supply, Inc. 140,000 4,095
Fleetwood Enterprises, Inc. 111,000 3,857
Lone Star Industries, Inc. 100,000 3,681
Butler Manufacturing Co. 158,000 3,535
--------
19,814
Capital Goods 12.6%
Intermet Corp. 359,000 4,689
Borg-Warner Automotive, Inc. 79,000 4,409
Meritor Automotive, Inc. 196,500 4,163
Westinghouse Air Brake Co. 170,000 4,154
Standard Products 203,000 4,135
GenCorp, Inc. 163,000 4,065
Precision Castparts Corp. 91,000 4,027
MTS Systems Corp. 289,000 3,902
Aeroquip-Vickers, Inc. 127,000 3,802
Barnes Group, Inc. 123,000 3,613
Tecumseh Products Co. 'A' 73,000 3,404
C&D Technologies, Inc. 118,000 3,245
Gleason Corp. 169,000 3,063
--------
50,671
Communications 2.0%
General Cable Corp. 199,200 4,084
Aliant Communications, Inc. 96,000 3,924
--------
8,008
Consumer Discretionary 14.6%
Claire's Stores, Inc. 215,000 4,408
Great Atlantic & Pacific Tea Co., Inc. 146,000 4,325
Burlington Coat Factory Warehouse Corp. 259,000 4,225
Jostens, Inc. 160,000 4,190
Toro Co. 144,000 4,103
Haverty Furniture Cos., Inc. 195,000 4,095
Sturm Ruger & Co., Inc. 340,000 4,059
Brown Group, Inc. 222,000 3,899
Harman International Industries, Inc. 100,000 3,813
Pillowtex Corp. 141,200 3,777
Kimball International 'B' 194,000 3,686
Enesco Group, Inc. 158,000 3,674
Rival Co. 270,000 3,628
Ennis Business Forms 340,000 3,379
Guilford Mills, Inc. 190,000 3,171
--------
58,432
Consumer Services 4.9%
Chemed Corp. 125,000 4,188
Applebee's International, Inc. 188,000 3,878
Lubys Cafeterias, Inc. 250,000 3,859
Norrell Corp. 257,000 3,791
Sbarro, Inc. 143,000 3,745
--------
19,461
Consumer Staples 4.2%
Michael Foods, Inc. 160,000 4,800
Universal Foods 163,000 4,472
Nash Finch Co. 272,300 3,880
Universal Corp. 107,000 3,758
--------
16,910
Energy 3.7%
Helmerich & Payne, Inc. 205,300 3,978
Snyder Oil Corp. 275,000 3,661
World Fuel Services Corp. 296,000 3,182
Mitchell Energy & Development Corp. 'B' 185,000 2,151
Vintage Petroleum, Inc. 203,000 1,751
--------
14,723
Financial & Business Services 24.3%
Bowne & Co., Inc. 277,000 4,951
Merrill Corp. 243,000 4,693
Orion Capital Corp. 108,000 4,300
Firstbank Corp. 142,000 4,287
PXRE Corp. 164,000 4,110
Innkeepers USA Trust 340,000 4,016
AmerUs Life Holdings, Inc. 179,000 4,005
Presidential Life Corp. 200,000 3,975
New Plan Excel Realty Trust 178,400 3,958
McGrath Rentcorp 179,200 3,942
Hubco, Inc. 130,700 3,937
Southwest Securities Group, Inc. 195,000 3,924
Selective Insurance Group 192,000 3,864
Arthur J. Gallagher & Co. 87,000 3,839
National Golf Properties, Inc. 132,000 3,820
Commercial Federal Corp. 163,000 3,780
Washington Federal, Inc. 141,000 3,763
TriNet Corp. Realty Trust, Inc. 135,000 3,611
Franchise Finance Corp. of America 148,000 3,552
United Dominion Realty Trust 340,000 3,506
American Health Properties, Inc. 170,000 3,506
Glimcher Realty Trust 220,000 3,451
Dain Rauscher Corp. 113,000 3,334
BankAtlantic Bancorp, Inc. 'A' 470,000 3,026
Kelly Services, Inc. 64,800 2,057
Rollins Truck Leasing Co. 124,700 1,839
--------
97,046
Health Care 1.8%
Invacare Corp. 167,000 4,008
Arrow International, Inc. 101,500 3,185
--------
7,193
Materials & Processing 7.9%
Wausau-Mosinee Paper Corp. 248,400 4,394
Caraustar Industries, Inc. 143,000 4,084
Commercial Metals Co. 145,000 4,024
Cleveland-Cliffs, Inc. 95,000 3,830
Universal Forest Products, Inc. 189,200 3,796
Mississippi Chemical Corp. 265,000 3,710
Ethyl Corp. 628,000 3,650
Wellman, Inc. 265,000 2,700
Castle (A.M.) & Co. 103,900 1,559
--------
31,747
Technology 1.6%
Autodesk, Inc. 95,000 4,055
Dallas Semiconductor Corp. 60,300 2,457
--------
6,512
Transportation 3.1%
USFreightways Corp. 146,000 4,252
Airborne Freight Corp. 114,000 4,111
Sea Containers Limited 'A' 132,300 3,961
--------
12,324
Utilities 7.8%
Public Service Co. of New Mexico 200,000 4,087
Commonwealth Energy System 100,000 4,050
Eastern Utilities Assn. 143,000 4,040
Eastern Enterprises 90,000 3,938
Washington Gas Light Co. 142,000 3,852
Rochester Gas & Electric Corp. 122,000 3,813
CMP Group, Inc. 200,000 3,775
National Fuel Gas Co. 80,000 3,615
--------
31,170
--------
Total Common Stocks 385,779
(Cost $402,830) --------
</TABLE>
42 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000s) (000s)
- ----------------------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 4.1%
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreement 4.1%
State Street Bank
3.500% due 01/04/99 $ 16,493 $ 16,493
(Dated 12/31/98. Collateralized by
U.S. Treasury Note 5.625% 11/30/99
valued at $16,824,781. Repurchase
proceeds are $16,499,414.)
---------
Total Short-Term Instruments 16,493
(Cost $16,493) ---------
Total Investments (a) 100.5% $ 402,272
(Cost $419,323)
Other Assets and Liabilities (Net) (0.5%) (2,138)
---------
Net Assets 100.0% $ 400,134
---------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1998, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation
for all investments in which there was an
excess of value tax cost $ 24,175
Aggregate gross unrealized depreciation
for all investments in which there was an
excess of tax cost over value (41,226)
---------
Unrealized depreciation-net $ (17,051)
---------
</TABLE>
See accompanying notes 43
<PAGE>
Schedule of Investments
Enhanced Equity Fund
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Value
Shares (000s)
- ------------------------------------------------------------------------------------------------
COMMON STOCKS 99.5%
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Aerospace 0.4%
Raytheon Co. 'B' 2,200 $ 117
BF Goodrich Co. 2,200 79
--------
196
Building 0.7%
Centex Corp. 7,200 324
Fleetwood Enterprises, Inc. 1,800 63
--------
387
Capital Goods 8.7%
General Electric Co. 17,300 1,766
United Technologies Corp. 3,800 413
AlliedSignal, Inc. 9,200 408
Honeywell, Inc. 4,200 316
Sunoco, Inc. 6,700 242
Ingersoll-Rand Co. 4,700 221
Nacco Industries, Inc. 'A' 2,300 212
Tyco International Limited 2,700 204
W.R. Grace & Co. 11,600 182
McDermott International, Inc. 7,200 178
Deere & Co. 4,300 142
General Dynamics Corp. 2,400 141
Paccar, Inc. 3,100 127
Avery Dennison Corp. 1,700 77
Caterpillar, Inc. 1,200 55
Engelhard Corp. 2,100 41
Dana Corp. 800 33
--------
4,758
Communications 8.8%
AT&T Corp. 14,000 1,054
SBC Communications, Inc. 12,300 660
U.S. West, Inc. 8,600 556
BellSouth Corp. 11,140 556
Bell Atlantic Corp. 8,518 484
MCI WorldCom, Inc. 5,100 366
GTE Corp. 5,200 351
Viacom, Inc. 'B' (b) 4,400 326
Knight-Ridder, Inc. 4,800 245
Viacom, Inc. 'A' 1,600 118
MediaOne Group, Inc. (b) 1,600 75
--------
4,791
Consumer Discretionary 12.7%
Wal-Mart Stores, Inc. 11,400 928
Ford Motor Co. 14,200 833
Dayton Hudson Corp. 12,800 694
Procter & Gamble Co. 7,200 657
Gap, Inc. 9,900 557
TJX Cos., Inc. 13,000 377
Costco Cos., Inc. (b) 5,000 361
Eastman Kodak Co. 3,800 274
VF Corp. 5,600 263
Liz Claiborne, Inc. 8,200 259
Federated Department Stores, Inc. (b) 5,900 257
General Motors Corp. 3,200 229
Masco Corp. 7,900 227
Hasbro, Inc. 4,950 179
Lowe's Cos., Inc. 3,300 169
Black & Decker Corp. 2,300 129
Pitney Bowes, Inc. 1,700 112
Alberto-Culver Co. 4,000 107
King World Productions, Inc. 3,600 106
Colgate-Palmolive Co. 1,000 93
Cendant Corp. (b) 4,300 82
Tandy Corp. 500 21
--------
6,914
Consumer Services 1.6%
Gannett, Inc. 8,100 536
Omnicom Group 2,900 168
New York Times Co. 4,500 156
--------
860
Consumer Staples 7.1%
Coca-Cola Co. 13,500 903
Albertson's, Inc. 6,500 414
Quaker Oats Co. 6,400 381
Pepsico, Inc. 8,000 328
Philip Morris Cos., Inc. 5,100 273
Unilever NV 3,200 265
SUPERVALU, Inc. 9,200 258
Sara Lee Corp. 8,200 231
Kroger Co. (b) 3,500 212
Fortune Brands, Inc. 5,800 183
Adolph Coors Co. 'B' 3,000 169
General Mills, Inc. 1,400 109
Bestfoods 1,500 80
Louisiana-Pacific Corp. 2,500 46
Sysco Corp. 1,600 44
--------
3,896
Energy 4.8%
Exxon Corp. 13,000 951
Chevron Corp. 5,900 489
Royal Dutch Petroleum Co. 6,100 292
Mobil Corp. 3,100 270
Halliburton Co. 7,600 225
Ashland, Inc. 3,000 145
Rowan Cos., Inc. (b) 11,400 114
USX Marathon Group 3,700 111
--------
2,597
Financial & Business Services 16.4%
Federal National Mortgage Assn. 9,500 703
First Union Corp. 11,430 695
Citigroup, Inc. 11,907 589
BankAmerica Corp. 9,274 558
American International Group, Inc. 5,050 488
Chase Manhattan Corp. 6,458 440
Allstate Corp. 11,300 436
Conseco, Inc. 12,600 384
Sun Trust Banks, Inc. 4,500 344
State Street Corp. 4,800 334
Countrywide Credit Industries, Inc. 6,100 306
Bank of New York 6,900 278
Bank One Corp. 5,244 268
Morgan Stanley, Dean Witter, Discover and Co. 3,530 251
Deluxe Corp. 6,600 241
Federal Home Loan Mortgage Corp. 3,700 238
Lincoln National Corp. 2,500 205
BankBoston Corp. 5,200 202
Dun & Bradstreet Corp. 6,000 189
Mellon Bank Corp. 2,700 186
Lehman Brothers Holdings, Inc. 4,000 176
Fleet Financial Group, Inc. 3,900 174
MGIC Investment Corp. 4,200 167
Aon Corp. 2,600 144
American Express Co. 1,400 143
Northern Trust Corp. 1,600 140
Bear Stearns Cos. 3,600 135
National City Corp. 1,800 131
Merrill Lynch & Co. 1,900 127
Comerica, Inc. 1,500 102
Loews Corp. 800 79
H&R Block, Inc. 1,100 50
Golden West Financial Corp. 500 46
MBIA, Inc. 200 13
--------
8,962
Health Care 11.5%
Bristol-Myers Squibb Co. 7,400 990
Merck & Co., Inc. 6,500 960
Pfizer, Inc. 7,100 891
Schering-Plough Corp. 15,600 862
Eli Lilly & Co. 5,800 515
Warner-Lambert Co. 5,000 376
Johnson & Johnson 3,400 285
Becton Dickinson & Co. 5,500 235
Bausch & Lomb, Inc. 3,400 204
</TABLE>
44 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Value
Shares (000s)
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Guidant Corp. 1,800 $ 198
HBO & Co. 6,900 198
CIGNA Corp. 2,000 155
Allergan, Inc. 1,900 123
Abbott Laboratories 2,000 98
Cardinal Health, Inc. 1,050 80
St. Jude Medical Inc. 1,800 50
Shared Medical Systems Corp. 700 35
PharMerica, Inc. (b) 1,500 9
--------
6,264
Materials & Processing 2.1%
Fort James Corp. 7,400 296
Bethlehem Steel Corp. (b) 24,600 206
Armco, Inc. (b) 36,300 159
Air Products & Chemicals 3,700 148
Reynolds Metals Co. 2,100 111
FMC Corp. (b) 1,600 90
Aluminum Co. of America 1,000 75
USX-U.S. Steel Group, Inc. 2,400 55
--------
1,140
Technology 18.2%
Microsoft Corp. (b) 18,600 2,578
Lucent Technologies, Inc. 11,200 1,230
Intel Corp. 8,800 1,043
International Business Machines Corp. 4,700 868
Sun Microsystems, Inc. (b) 8,600 736
Dell Computer Corp. (b) 8,700 637
Cisco Systems, Inc. (b) 5,950 552
Unisys Corp. (b) 13,400 461
Compaq Computer Corp. (b) 7,474 313
Oracle Corp. (b) 6,300 272
Autodesk, Inc. 6,300 269
IMS Health, Inc. (b) 3,000 226
Xerox Corp. 1,600 189
Tellabs, Inc. (b) 2,200 151
Northern Telecom Limited 3,000 150
Computer Associates International, Inc. 3,300 141
Apple Computer, Inc. 1,700 70
Computer Sciences Corp. 700 45
Andrew Corp. (b) 500 8
--------
9,939
Transportation 2.5%
AMR Corp. (b) 7,700 457
U.S. Airways Group, Inc. (b) 5,400 281
Navistar International Corp. (b) 6,900 197
Laidlaw, Inc. 18,600 187
Southwest Airlines Co. 8,050 181
Delta Air Lines, Inc. 1,200 62
--------
1,365
Utilities 4.0%
Ameritech Corp. 11,700 741
FPL Group, Inc. 5,000 308
Houston Industry, Inc. 8,000 257
Consolidated Edison, Inc. 4,600 243
DTE Energy Co. 5,600 240
Edison International 6,200 173
Dominion Resources, Inc. 2,500 117
Coastal Corp. 3,000 105
--------
2,184
--------
Total Common Stocks 54,253
(Cost $40,730) --------
<CAPTION>
Principal
Amount Value
(000s) (000s)
- -------------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.4%
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreement 0.4%
State Street Bank
3.500% due 01/04/99 $ 227 $ 227
(Dated 12/31/98. Collateralized by
U.S. Treasury Note 10.625% 08/15/15
valued at $235,466. Repurchase
proceeds are $227,088.)
---------
Total Short-Term Instruments 227
(Cost $227) ---------
Total Investments (a) 99.9% $ 54,480
(Cost $40,957)
Other Assets and Liabilities 0.1% 60
---------
Net Assets 100.0% $ 54,540
---------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31,1998, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation
for all investments in which there was an
excess of value over tax costs $ 15,057
Aggregate gross unrealized depreciation
for all investments in which there was an
excess of tax cost over value (1,534)
---------
Unrealized appreciation-net $ 13,523
---------
(b) Non-income producing security.
</TABLE>
See accompanying notes 45
<PAGE>
Schedule of Investments
Structured Emerging Markets Fund
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Value
Shares (000s)
- --------------------------------------------------------------------------------------------------------------
COMMON STOCKS 99.6%
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Argentina 3.9%
Perez Companc SA "B" 57,588 $ 244
Molinos Rio de la Plata SA 61,050 144
YPF Sociedad Anonima "D" 5,076 142
Telecom Argentina SA "B" 24,749 140
Nobleza Piccardo S.A.I.C. y F. 40,467 138
Telefonica de Argentina SA 46,356 132
Banco Frances SA 18,485 131
Acindar Industria Argentina de Aceros SA "B" 104,706 125
Banco de Galicia y Buenos Aires SA de CV "B" 19,436 86
Buenos Aires Embotella 113 0
----------
1,282
Baltic Nations 1.0%
Baltic Fund "A" 4,460 316
Baltic Fund "C" 320 9
----------
325
Botswana 1.2%
Standard Chart Bank Botswana 33,946 180
Sechaba Breweries Limited 121,900 141
Sefalana Holding Co. Limited 80,500 72
----------
393
Brazil 3.9%
Companhia Fabricadora de Pecas 22,047 137
Telecomunicacoes Brasileiras SA SP - ADR 1,800 131
Brasmotor SA (b) 1,270,000 126
Petroleo Brasileiro SA 9,850 112
Companhia Cervejaria Brahma 234,531 101
Banco Estado de Sao Paul 2,410,000 100
Companhia Vidraria Santa Marina 48,000 75
Casa Anglo Brasileira SA 4,360,773 72
Telecomunicacoes Brasileiras SA Receipts (b) 971,323 71
Banco Do Brasil SA 10,300,000 69
Itausa-Investimentos Itau SA 123,700 69
Petroleo Brasileiro SA 534,543 61
Telecomunicacoes de Sao Paulo SA 388,495 53
Centrais Electricas Brasileiras SA "B" 2,310,490 44
Light -Servicos de Electricidade SA 174,301 21
Companhia Suzano de Papel e Celulose 46,000 21
Telesp Celular SA "B" (b) 371,057 17
----------
1,280
Chile 3.8%
Sociedad Quimica y Minera de Chile SA SP - ADR 4,000 135
Banco Santiago SA SP - ADR 8,400 125
Cristalerias de Chile SP - ADR 9,200 121
Maderas y Sinteticos SA SP - ADR 18,400 117
Compania Cervecerias Unidas SA SP - ADR 5,600 108
Administradora de Fondos
de Pensiones Provida SA SP - ADR 7,900 106
Madeco SA SP - ADR 11,400 95
Compania de Telecomunicaciones
de Chile SA SP - ADR 4,545 94
Enersis SA SP - ADR 3,000 77
Laboratorio Chile SA - ADR 4,600 66
Gener SA SP - ADR 3,900 62
Embotelladora Andina SA SP - ADR "B" 4,300 56
Empresa Nacional de Electricidad SA SP - ADR 4,900 56
Embotelladora Andina SA SP - ADR "A" 3,500 51
----------
1,269
China 3.8%
China Telecom Limited (b) 119,000 206
China Resources Enterprise Limited 68,000 106
Yizheng Chemical Fibre Co. Limited "H" 988,000 91
Qingling Motors Co. "H" 502,000 88
China Travel International
Investment Hong Kong Limited 621,000 80
China Overseas Land & Investment 595,000 80
Shanghai Petrochemical Co. Limited "H" 813,000 73
Shanghai Dazhong Taxi Co. "B" 169,000 71
Shanghai Diesel Engine Co. Limited "B" 592,000 71
Shanghai New Asia Group Co. Limited "B" 554,840 71
China Merchants Shekou Port Service Co. Limited 355,400 65
Jilin Chemical Industrial Co. Limited 1,181,000 62
Guangdong Investment Limited 271,000 54
Guangshen Railway Co. Limited "H" (b) 428,000 50
Maanshan Iron & Steel Co. "H" 1,044,000 47
Harbin Power Equipment Co. Limited "H" 600,000 44
Shanghai Dajiang Group Co. Limited "B" 181,200 13
----------
1,272
Colombia 0.7%
Bancolumbia SP - ADR 17,400 82
Cadena Almacenes SP - ADR 31,040 58
Banco Ganadero SA SP - ADR 4,966 45
Carulla y Compania SP - ADR 34,700 35
Cementos Diamante SA SP - GDR 8,100 14
----------
234
Czech Republic 2.2%
SPT Telecom AS 13,270 203
Ceske Energeticke Zavody AS 5,312 120
Skoda Plzen AS 19,058 111
Komercni Banka AS 7,033 85
Vodni Stavby Praha AS 10,580 49
Ceska Pojistovna 1,058 48
Synthesia AS 16,237 46
ZDB (b) 10,273 30
Fatra AS 5,342 25
----------
717
Egypt 1.4%
Egyptian International Pharmaceutical Industries Co. 1,647 83
Al-Ahram Beverages Co. S.A.E 1,425 82
Suez Cement Co. 5,011 75
Paints & Chemical Industries Co. S.A.E. 3,034 62
Heliopolis Housing & Development Co. 778 61
Egyptian Financial & Industrial Co. 3,432 57
Commercial International Bank 5,949 47
----------
467
Ghana 1.1%
Ashanti Goldfields Co. Limited - GDR 9,734 91
Unilever Ghana Limited (b) 113,960 78
Mobil Oil Ghana Limited (b) 8,631 63
Standard Chartered Bank Ghana Limited 4,700 48
Social Security Bank Limited (b) 40,000 38
Aluworks Ghana Limited (b) 32,200 34
----------
352
Greece 4.9%
Attica Enterprises SA 23,210 208
Intracom SA 3,100 141
Hellenic Telecommunication Organization SA 5,239 139
Titan Cement Co. SA 1,630 125
Commercial Bank of Greece SA 1,164 114
National Bank of Greece SA 506 114
Hellenic Bottling Co. SA 3,570 110
Alpha Leasing SA 6,158 99
Elais Co. SA 4,340 91
Ergo Bank SA 759 88
Alpha Credit Bank 834 87
Aegek SA 14,430 84
J. Boutaris & Son Holdings 18,990 84
General Construction SA 13,426 69
Aluminium of Greece SA 1,090 63
Naussa Spinning Mills 30 0
Radio Athinai 4 0
----------
1,616
Hungary 4.8%
OTP Bank Rights 3,841 192
Demasz Rights 2,100 185
Gedeon Richter Rights 3,752 160
MOL Magyar Olaj-es Gazipari Rights 5,630 154
BorsodChem Rights (b) 5,681 148
Danubius Hotel and Spa Rights 6,990 146
Magyar Tavkozlesi Rights SP - ADR 4,800 143
Pannonplast Rights 4,760 135
Inter-Europa Bank Rights 2,362 114
Pick Szeged Rights 2,500 106
Graboplast Rights 11,870 91
Primagaz Rights 2,357 28
----------
1,602
</TABLE>
46 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Value
Shares (000s)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
India 3.0%
CESC Limited SP - GDR 176,000 $ 106
Bajaj Auto Limited SP - GDR 5,702 86
Indo Gulf Corp. Limited SP - GDR 132,600 83
I.T.C. Limited SP - GDR 3,700 78
Tata Electric Cos. SP - GDR 410 74
Ranbaxy Laboratories Limited SP - GDR 8,000 71
Hindalco Industries Limited SP- GDR 6,000 70
Southern Petrochemical SP - GDR 23,200 68
Tata Engineering and
Locomotive Co. Limited SP - GDR 15,850 63
State Bank of India - GDR 7,800 61
Mahindra & Mahindra Limited SP - GDR 13,129 51
Indian Hotels Limited SP - ADR 5,600 47
Grasim Industries SP - GDR 8,600 36
Reliance Industries - GDR 6,208 35
Indian Rayon & Industries Limited - GDR 13,300 35
Indian Hotels Limited SP - GDR 3,300 28
---------
992
Indonesia 4.4%
PT Astra International, Inc. 2,744,500 343
PT Indah Kiat Pulp & Paper Corp. 711,000 193
PT Indofood Sukses Makmur 375,000 190
PT Hanjaya Mandala Sampoerna 281,000 185
PT Indocement Tunggal Prakarsa 444,500 176
PT Telekomunikasi Indonesia 363,500 123
PT Indosat (Persero) 83,500 109
PT Jakarta International Hotels 2,023,500 57
PT Mayora Indah 724,500 38
PT Bank Internasional Indonesia 826,500 23
PT Lippo Bank 442,000 22
PT Lippo Bank Rights (b) 8,840,000 1
PT Bank Dagang Nasional Indonesia "F" 1,022,750 0
---------
1,460
Israel 1.7%
Bezek Israeli Telecommunication Corp. Limited 34,175 107
Teva Pharmaceutical Industries Limited 1,986 81
Tadiran Limited 2,059 75
Leumi Insurance Holdings (b) 121,262 63
Blue Square Chain Investments
and Properties Limited 4,167 50
Israel Chemicals Limited 47,734 47
Koor Industries Limited 518 45
Industrial Buildings Corp. 36,596 44
Bank Hapoalim Limited 20,774 38
---------
550
Kenya 1.2%
Uchumi Supermarket Limited 132,100 94
Firestone East Africa Limited 303,150 79
Kenya Power & Lighting Co. Limited 25,050 51
Sasini Tea & Coffee Limited 43,600 49
Kenya Airways Limited 364,500 48
National Industrial Credit Bank 50,768 31
Kenya Commercial Bank Limited 28,451 28
Athi River Mining Limited 256,800 27
---------
407
Malaysia 3.6%
Sime Darby Bhd. 159,700 166
Malayan Banking Bhd. 76,400 140
Commerce Asset-Holding Bhd. 188,000 132
Leader Universal Holdings Bhd. 524,000 131
Telekom Malaysia Bhd. 41,000 98
Malaysia Internation Shipping Bhd. 67,000 80
Edaran Otomobil Nasional Bhd. 53,000 76
Rashid Hussain Bhd. 95,000 61
Genting Bhd. 30,200 59
Nestle Malaysia Bhd. 16,000 58
Technology Resources Industries Bhd. 113,000 53
Magnum Corp. Bhd. 122,000 47
United Engineers (Malaysia) Bhd. 67,200 44
Tenaga Nasional Bhd. 16,000 30
Aokam Perdana Bhd. 905,000 0
---------
1,175
Mauritius Island 1.1%
State Bank of Mauritius Limited (b) 63,350 46
The United Basalt Products 39,500 43
Sun Resorts Limited (b) 18,800 43
Rogers & Co. Limited (b) 6,455 42
New Mauritius Hotels Limited (b) 18,605 40
Mauritius Commercial Bank (b) 9,034 39
Mon Tresor & Mon Desert Limited (b) 23,449 35
Shell Mauritius Limited (b) 26,979 33
Ireland Blyth Limited (b) 29,400 24
Air Mauritius Limited (b) 19,100 24
---------
369
Mexico 5.0%
Grupo Financiero Bancomer SA de CV "B" 833,000 178
Grupo Financiero Banamex Accival SA de CV "B" 127,000 166
Alfa SA de CV "A" 58,572 165
Grupo Carso SA de CV "A1" 47,000 159
Carso Global Telecom "A1" 41,000 138
Grupo Industrial Bimbo SA de CV "A" 64,000 113
Coca-Cola Femsa SA "L" 78,000 104
Grupo Televisa SA "CPO" 8,000 100
Grupo Mexico SA "B" 41,000 96
Industrias Penoles SA "CP" 32,000 96
Cemex SA de CV "CPO" 41,630 89
Telefonos de Mexico SA (b) 36,200 88
Cifra SA de CV "V" 68,569 83
Kimberly-Clark de Mexico SA de CV "A" 23,000 73
Grupo Situr SA de CV "B" 641,000 6
---------
1,654
Morocco 3.6%
Omnium Nord Africain SA 2,006 234
Ciments du Maroc 1,970 208
Cie Transports LN 4,185 194
Brasseries du Nord Marocain 473 133
Wafabank 1,048 130
Banque Commercial du Marocco 1,037 113
Societe Marocaine de l'Industrie du Raffinage 3,020 110
Lesieur Cristal 414 63
---------
1,185
Peru 4.4%
Telefonica del Peru SA "B" 250,949 316
Ferreyros SA 205,144 185
Banco Wiese Limited 295,309 158
Cerveceria Backus & Johnston SA "T" 446,345 147
Alicorp SA (b) 899,556 145
Credicorp Limited 15,737 142
Cementos Lima SA 9,300 121
Compania de Minas Buenaventura SA "B" 16,157 97
Southern Peru Limited. "T" 27,374 82
Indeco SA Trabajo 618,448 69
---------
1,462
Philippines 4.2%
San Miguel Corp. "B" 134,200 259
Philippine Long Distance Telephone Co. 7,040 181
SM Prime Holdings, Inc. 932,000 177
Manila Electric Co. "B" 54,000 174
Ayala Corp. 350,280 124
Ayala Land, Inc. 432,600 122
Aboitiz Equity Ventures, Inc. (b) 3,141,000 113
Petron Corp. 739,100 81
International Container Term Services, Inc. 832,245 70
Fortune Cement Corp. 1,022,250 43
Sanitary Wares Manufacturing Corp. 2,302,918 27
First Philippine Holdings Corp."B" 28,520 15
Philex Mining Corp. "B" 1,689,745 13
---------
1,399
Poland 4.5%
Zaklady Piwowarskie W Zywcu SA 1,920 230
Elektrim Spolka Akcyjna SA 17,295 187
Telekomunikacja Polska SA 28,100 139
Wielkopolski Bank Kredytowy SA 21,628 136
Bank Rozwoju Eksportu SA 4,860 112
Fabryka Kotlow Rafako SA (b) 55,460 109
Stalexport SA 18,715 103
</TABLE>
See accompanying notes 47
<PAGE>
Schedule of Investments (Cont.)
Structured Emerging Markets Fund
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Value
Shares (000s)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Prokom Software SA 2,562 $ 99
Bank Slaski SA W Katowicach 1,145 59
Mostostal Export SA 53,490 56
Polifarb-Cieszyn-Wroclaw SA 23,370 56
Przedsiebiorstwo Farmaceutyczne JELFA SA 6,130 51
Zaklady Metali Lekkich Kety (b) 3,845 36
Bank Handlowy W. Warszawie 2,885 36
Krosnienskie Huty SZKLA SA 6,910 30
Huta Szkla Gospodarczego Irena 30,840 29
Agros Holding SA 2,515 9
--------
1,477
Portugal 3.9%
EDP-Electricidade de Portugal SA 6,550 144
Portugal Telecom SA 2,850 130
Banco Comercial Portugues SA 'R' 4,133 127
Corticeira Amorim SGPS SA 8,500 122
Banco Espirito Santo e Comercial de Lisboa SA 3,825 119
Jeronimo Martins - SGPS SA 2,000 109
Salvador Caetano - Industrias
Metalurgicas e Veiculos de Transporte SA 4,000 108
Mague-Gestao e Participation SA 2,900 98
UNICER - Uniao Cervejeira SA 4,100 98
Sonae Investimentos-Sociedade
Gestora de Participacoes Sociais SA 1,900 92
Cin-Corporacao Industrial do Norte SA 1,895 76
Engil - SGPS 6,400 43
Modelo Continente - Sociedade
Gestora de participa Sociais SA 700 17
--------
1,283
Romania 0.6%
Romania Investment Fund 401 116
Society Generale Romania Fund 1,200 45
Romanian Growth Fund 28,875 36
--------
197
Russia 1.4%
Uralmash-Zavody SP - ADR (b) 80,000 60
Uralmash-Zavody 67,000 50
Trade House GUM SP - ADR 44,100 41
Trading House TSUM 263,100 38
Surgutneftegaz SP - ADR 8,900 29
Rao Gazprom - ADR 3,100 26
Gorkovsky Auto Plant 1,400 25
Vimpel-Communications SP - ADR (b) 1,900 25
Chernogorneft SP - ADR (b) 12,050 25
Irkutskenergo SP - ADR 11,385 23
Menatep Bank SP - ADR 6,350 23
Mosenergo SP - ADR 11,575 22
Electrosila 31,200 20
LUKoil Holding SP - ADR 1,300 20
Trading House TSUM SP - ADR 3,200 9
LUKoil Holding SP - ADR 2,650 9
Avtov 3 8
Rostelecom 1 7
Unified Energy System - ADR 2,030 6
Menatep Bank SP - ADR 1,200 5
Moscow City Telephone 1 4
A.O. Tatneft - ADR 1,700 3
Mosenergo SP - ADR 426 1
--------
479
South Africa 3.5%
Comparex Holdings Limited 24,100 196
Nedcor Limited 8,900 151
Impala Platinum Holdings Limited 10,570 144
Sasol Limited 32,836 124
Liberty Life Association of Africa Limited 6,216 85
DataTec Limited (b) 6,000 77
Anglo American Corp. of South Africa Limited 2,568 72
South African Breweries Limited 3,901 66
Barlow Limited 16,400 63
De Beers Centenary 4,640 59
Pepkor Limited (b) 13,840 58
Wooltru Limited 18,870 24
Wooltru Limited 'N' 18,500 23
--------
1,142
South Korea 6.8%
Daewoo Securities Co. 17,700 277
Samsung Electronics 4,039 271
Hanwha Chemical Corp. 52,830 253
SK Telecom Co. Limited 321 180
Shinhan Bank 23,144 177
Korean Air 23,320 172
Korea Electric Power Corp. 6,770 168
SK Corp. 11,110 152
Trigem Computer, Inc. 21,730 142
Samsung Fire and Marine Insurance 340 127
Hite Brewery Co. Limited 12,220 124
LG Electronics 8,780 107
Pohang Iron & Steel Co. Limited 1,650 88
Samsung Fire & Marine Insurance 103 0
--------
2,238
Taiwan 3.9%
Taiwan Fund, Inc. 27,135 340
R.O.C. Taiwan Fund 53,910 334
Yang Ming Marine Transport - GDR (b) 13,667 86
Acer, Inc. SP - GDR (b) 15,389 81
China Steel Corp. SP - GDR 5,986 73
Asia Cement Corp. SP - GDR 7,874 72
Walsin Lihwa Corp. SP - GDR (b) 15,571 70
President Enterprise Corp. SP - GDR (b) 7,090 63
Yageo Corp. SP - GDR (b) 9,236 60
Macronix International Co. Limited SP - ADR 5,786 46
Tuntex Distinct Corp. SP - GDR (b) 22,552 41
Teco Electric & Machinery SP - GDR (b) 2,002 15
--------
1,281
Thailand 4.4%
Electricity Generating Public Co. Limited 65,700 178
Hana Microelectronics Public Co. Limited 62,800 152
Siam Cement Public Co. Limited 'R' 6,600 150
Siam Cement Public Co. Limited 9,700 149
Advanced Info Service Public Co. Limited 24,600 146
Shinawatra Computer Co. Limited 41,100 141
BEC World Public Co. Limited 16,000 88
I.C.C. International PLC 43,350 76
Thai Farmers Bank Public Co. Limited 37,000 65
Bangkok Bank Public Co. 29,700 61
TelecomAsia Corp. Public Co. Limited 132,000 57
United Communication Industries 102,000 55
Land & Houses Public Co. Limited 80,000 54
Banpu Public Co. Limited 17,800 36
Charoen Pokphand Feedmill Public Co. Limited 29,200 36
--------
1,444
Turkey 3.5%
Migros Turk TAS 29,565 295
Dogan Sirketler Grubu Holding AS 2,156,277 150
Turk Hava Yollari Anonim Ortakligi 236,000 103
Akbank TAS 498,963 101
Petrol Ofisi AS 64,603 87
Netas Northern Electric Telekomunikasyon AS 432,880 80
Koc Holding AS 87,779 77
Cukurova Elektrik AS 5,984 65
Eregli Demir Ve Celik Fabrikalari TAS 156,089 64
Arcelik AS 189,522 55
Ford Otomotiv Sanayi AS 16,310 33
Bursa Cimento Fabrikasi AS 80,000 32
Aksa Akrilik Kimya Sanayii AS 241,064 29
--------
1,171
Venezuela 1.6%
Banco Venezolano de Creditio SP - ADR 22,294 122
Mavesa SA SP - ADR 32,000 120
Compania Anonima Nacional
Telefonos de Venezuela SP - ADR 5,800 103
Mantex S.A.C.A. SP - ADR 8,800 82
Siderurgica Venezolana Sivensa SP - ADR 17,433 79
International Briquettes Holding, Inc. (b) 6,667 30
--------
536
</TABLE>
48 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Value
Shares (000s)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Zimbabwe 0.6%
Delta Corp. Limited 287,308 $ 63
Wankie Colliery Co. Limited 1,364,428 62
Barclays Bank of Zimbabwe 561,400 45
Interfresh Limited 1,829,700 34
Trans Zambezi Industries Limited (b) 100,700 5
---------
209
---------
Total Common Stocks 32,919
(Cost $38,164) ---------
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.2%
- -------------------------------------------------------------------------------------------------------------
Principal
Amount
(000s)
<S> <C> <C>
Repurchase Agreement 0.2%
State Street Bank
3.500% due 01/04/99 $ 69 69
(Dated 12/31/98. Collateralized by
U.S. Treasury Note 8.000% 11/15/21
valued at $74,233. Repurchase
proceeds are $69,027.)
---------
Total Short-Term Instruments 69
(Cost $69) ---------
Total Investments (a) 99.8% $ 32,988
(Cost $38,233)
Other Assets and Liabilities (Net) 0.2% 70
---------
Net Assets 100.0% $ 33,058
---------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1998, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation
for all investments in which there was an
excess of value over tax cost $ 6,013
Aggregate gross unrealized depreciation
for all investments in which there was an
excess of tax cost over value (11,258)
---------
Unrealized depreciation-net $ (5,245)
---------
(b) Non-income producing security.
</TABLE>
See accompanying notes 49
<PAGE>
Schedule of Investments
Tax Efficient Structured Emerging Markets Fund
December 31, 1998 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 97.3%
- --------------------------------------------------------------------------------
Argentina 3.8%
Perez Companc SA "B" 69,906 $ 296
Molinos Rio de la Plata SA 94,638 223
Telecom Argentina SA "B" 33,114 187
Banco de Galicia y Buenos Aires SA de CV "B" 40,589 179
Telefonica de Argentina SA 62,024 177
Banco Frances SA 24,667 175
Nobleza Piccardo S.A.I.C. y F. 49,664 169
YPF Sociedad Anonima "D" 5,934 166
Acindar Industria Argentina de Aceros SA "B" 132,821 159
Buenos Aires Embotella 134 0
-----------
1,731
Baltic Nations 0.7%
Baltic Fund "A" 4,300 304
Baltic Fund "C" 380 10
-----------
314
Botswana 1.0%
Standard Chart Bank Botswana 40,335 214
Sechaba Breweries Limited 144,600 167
Sefalana Holding Co. Limited 93,100 84
-----------
465
Brazil 3.7%
Telecomunicacoes Brasileiras SA SP - ADR 4,100 298
Petroleo Brasileiro SA 24,900 282
Companhia Cervejaria Brahma 277,000 119
Companhia Fabricadora de Pecas 18,777 117
Banco Estado de Sao Paul 2,800,457 116
Brasmotor SA (b) 1,063,000 106
Companhia Vidraria Santa Marina 57,700 91
Casa Anglo Brasileira SA 5,208,000 86
Banco Do Brasil SA 12,274,300 82
Itausa-Investimentos Itau SA 147,500 82
Telecomunicacoes Brasileiras SA Receipts (b) 1,068,397 78
Petroleo Brasileiro SA 630,000 71
Telecomunicacoes de Sao Paulo SA 468,534 64
Centrais Electricas Brasileiras SA "B" 2,800,000 54
Companhia Suzano de Papel e Celulose 55,200 25
Telesp Celular SA "B" (b) 447,502 20
Light - Servicos de Electricidade SA 20,000 2
-----------
1,693
Chile 4.0%
Madeco SA SP - ADR 26,100 219
Sociedad Quimica y Minera de Chile SA SP - ADR 6,300 212
Maderas y Sinteticos SA SP - ADR 27,900 178
Cristalerias de Chile SP - ADR 13,100 172
Banco Santiago SA SP - ADR 9,900 147
Administradora de Fondos de
Pensiones Provida SA SP - ADR 10,600 142
Compania Cervecerias Unidas SA SP - ADR 6,700 129
Compania de Telecomunicaciones
de Chile SA SP - ADR 5,396 112
Laboratorio Chile SA - ADR 6,800 98
Enersis SA SP - ADR 3,500 90
Gener SA SP - ADR 5,500 88
Embotelladora Andina SA SP - ADR "B" 6,700 87
Empresa Nacional de Electricidad SA SP - ADR 7,500 85
Embotelladora Andina SA SP - ADR "A" 4,200 61
-----------
1,820
China 3.7%
China Telecom Limited (b) 139,000 240
Maanshan Iron & Steel Co. "H" 2,866,000 129
Guangdong Investment Limited 631,800 126
China Resources Enterprise Limited 80,000 125
Jilin Chemical Industrial Co. Limited 2,354,000 123
Qingling Motors Co. "H" 672,000 118
Yizheng Chemical Fibre Co. Limited "H" 1,170,000 107
China Travel International
Investment Hong Kong Limited 800,000 103
China Overseas Land & Investment 762,000 102
Shanghai Petrochemical Co. Limited "H" 962,000 87
Shanghai Dazhong Taxi Co. "B" 201,000 85
Shanghai Diesel Engine Co. Limited "B" 702,120 84
Shanghai New Asia Group Co. Limited "B" 656,500 84
China Merchants Shekou Port Service Co. Limited 421,380 77
Guangshen Railway Co. Limited "H" (b) 508,000 59
Harbin Power Equipment Co. Limited "H" 710,000 52
Shanghai Dajiang Group Co. Limited "B" 214,800 15
-----------
1,716
Colombia 0.7%
Banco Ganadero SA SP - ADR 14,600 132
Bancolumbia SP - ADR 24,700 116
Carulla y Compania SP - ADR 41,200 41
Cadena Almacenes SP - ADR 10,400 20
Cementos Diamante SA SP - GDR 6,900 12
Cementos Diamante SA SP - GDR 2,800 5
-----------
326
Czech Republic 1.8%
SPT Telecom AS 15,730 241
Ceske Energeticke Zavody AS 6,296 142
Skoda Plzen AS 22,591 132
Komercni Banka AS 8,337 100
Vodni Stavby Praha AS 12,541 58
Ceska Pojistovna 1,255 57
Synthesia AS 19,246 54
ZDB (b) 12,178 35
Fatra AS 6,332 30
-----------
849
Egypt 1.7%
Alexandria National Iron & Steel Co. (b) 2,546 122
Egyptian Financial & Industrial Co. 6,716 111
Suez Cement Co. 7,439 111
Commercial International Bank 13,920 109
Egyptian International Pharmaceutical Industries C 1,953 99
Al-Ahram Beverages Co. S.A.E. 1,675 97
Paints & Chemical Industries Co. S.A.E. 3,596 74
Heliopolis Housing & Development Co. 922 72
-----------
795
Ghana 0.9%
Ashanti Goldfields Co. Limited - GDR 11,566 108
Unilever Ghana Limited (b) 135,040 92
Mobil Oil Ghana Limited (b) 10,174 74
Standard Chartered Bank Ghana Limited 5,500 56
Social Security Bank Limited (b) 47,400 46
Aluworks Ghana Limited (b) 38,100 41
-----------
417
Greece 4.8%
Attica Enterprises SA 39,500 354
Intracom SA 5,025 229
Hellenic Telecommunication Organization SA 7,626 203
Titan Cement Co. SA 2,565 197
Alpha Leasing SA 10,080 163
Commercial Bank of Greece SA 1,248 123
Hellenic Bottling Co. SA 3,620 112
Aegek SA 18,140 106
National Bank of Greece SA 470 106
Alpha Credit Bank 924 96
J. Boutaris & Son Holdings 20,910 92
Elais Co. SA 4,280 90
General Construction SA 15,918 82
Ergo Bank SA 680 79
Heracles General Cement SA 2,790 76
Aluminium of Greece SA 1,300 76
-----------
2,184
Hungary 4.7%
OTP Bank Rights 4,871 244
Demasz Rights 2,700 237
Magyar Tavkozlesi Rights SP - ADR 7,300 215
MOL Magyar Olaj-es Gazipari Rights 7,675 210
Inter-Europa Bank Rights 4,090 197
Graboplast Rights 25,772 197
Pannonplast Rights 6,800 192
BorsodChem Rights (b) 6,964 181
Danubius Hotel and Spa Rights 7,558 158
Gedeon Richter Rights 3,700 158
Pick Szeged Rights 3,262 139
-----------
2,128
50 See accompanying notes
<PAGE>
Value
Shares (000s)
- --------------------------------------------------------------------------------
India 2.4%
The India Fund, Inc. 50,000 $ 316
Morgan Stanley India Investment Fund 30,000 203
Bajaj Auto Limited SP - GDR 6,775 102
I.T.C. Limited SP - GDR 4,333 91
Indo Gulf Corp. Limited SP - GDR 138,300 86
Hindalco Industries Limited SP- GDR 7,067 83
CESC Limited SP - GDR 109,800 66
Mahindra & Mahindra Limited SP - GDR 15,490 60
Reliance Industries - GDR 7,300 41
Ranbaxy Laboratories Limited SP - GDR 2,400 21
Tata Electric Cos. SP - GDR 100 18
Tata Engineering and
Locomotive Co. Limited SP - GDR 2,400 10
Indian Hotels Limited SP - GDR 700 6
-----------
1,103
Indonesia 4.4%
PT Astra International, Inc. 3,370,500 421
PT Indah Kiat Pulp & Paper Corp. 1,203,848 327
PT Indofood Sukses Makmur 612,000 310
PT Hanjaya Mandala Sampoerna 440,000 290
PT Indocement Tunggal Prakarsa 526,500 209
PT Telekomunikasi Indonesia 431,000 145
PT Indosat (Persero) 103,500 135
PT Mayora Indah 1,780,940 95
PT Bank Internasional Indonesia 979,744 28
PT Lippo Bank 524,250 26
PT Lippo Bank Rights (b) 10,485,000 1
PT Bank Dagang Nasional Indonesia "F" 2,067,500 0
-----------
1,987
Israel 2.2%
Bezek Israeli Telecommunication Corp. Limited 68,442 214
Israel Chemicals Limited 109,892 109
Leumi Insurance Holdings (b) 207,322 108
Koor Industries Limited 1,207 105
Bank Hapoalim Limited 55,024 100
Blue Square Chain Investments
and Properties Limited 8,150 98
Teva Pharmaceutical Industries Limited 2,355 96
Industrial Buildings Corp. 76,709 93
Tadiran Limited 2,441 88
-----------
1,011
Kenya 1.1%
Uchumi Supermarket Limited 156,500 111
Firestone East Africa Limited 359,250 94
Kenya Power & Lighting Co. Limited 29,700 60
Sasini Tea & Coffee Limited 51,620 58
Kenya Airways Limited 432,000 57
National Industrial Credit Bank 60,200 37
Kenya Commercial Bank Limited 33,755 34
Athi River Mining Limited 304,400 33
-----------
484
Malaysia 4.7%
Leader Universal Holdings Bhd. 1,217,000 304
Sime Darby Bhd. 263,000 273
United Engineers (Malaysia) Bhd. 396,800 262
Commerce Asset-Holding Bhd. 322,000 225
Malayan Banking Bhd. 90,400 166
Rashid Hussain Bhd. 247,000 159
Tenaga Nasional Bhd. 75,000 139
Telekom Malaysia Bhd. 48,000 114
Genting Bhd. 50,100 98
Magnum Corp. Bhd. 245,500 95
Malaysia Internation Shipping Bhd. 80,000 95
Edaran Otomobil Nasional Bhd. 63,000 90
Nestle Malaysia Bhd. 20,000 72
Technology Resources Industries Bhd. 135,000 64
Aokam Perdana Bhd. 1,072,000 0
-----------
2,156
Mauritius Island 1.0%
State Bank of Mauritius Limited (b) 75,070 54
The United Basalt Products 46,900 51
Sun Resorts Limited (b) 22,200 50
Rogers & Co. Limited (b) 7,600 50
New Mauritius Hotels Limited (b) 22,000 47
Mauritius Commercial Bank (b) 10,700 47
Mon Tresor & Mon Desert Limited (b) 27,800 41
Shell Mauritius Limited (b) 32,000 39
Ireland Blyth Limited (b) 34,809 29
Air Mauritius Limited (b) 22,600 28
-----------
436
Mexico 4.6%
Alfa SA de CV "A" 78,000 220
Grupo Financiero Banamex Accival SA de CV "B" 167,000 219
Grupo Carso SA de CV "A1" 64,000 217
Grupo Financiero Bancomer SA de CV "B" 948,000 203
Carso Global Telecom "A1" 46,000 155
Grupo Industrial Bimbo SA de CV "A" 75,777 133
Grupo Mexico SA "B" 55,369 130
Industrias Penoles SA "CP" 43,000 129
Grupo Televisa SA "CPO" 10,000 125
Coca-Cola Femsa SA "L" 93,000 124
Telefonos de Mexico SA (b) 50,000 121
Cemex SA de CV "CPO" 55,136 118
Cifra SA de CV "V" 82,151 100
Kimberly-Clark de Mexico SA de CV "A" 28,000 88
Grupo Situr SA de CV "B" 759,751 7
-----------
2,089
Morocco 3.1%
Omnium Nord Africain SA 2,377 277
Ciments du Marocco 2,335 247
Cie Transports LN 4,961 230
Brasseries du Nord Marocain 561 158
Wafabank 1,242 154
Banque Commercial du Marocco 1,229 134
Societe Marocaine de l'Industrie du Raffinage 3,580 130
Lesieur Cristal 491 75
-----------
1,405
Peru 3.6%
Telefonica del Peru SA "B" 268,617 338
Ferreyros SA 243,167 220
Cerveceria Backus & Johnston SA "T" 477,769 157
Alicorp SA (b) 962,888 156
Credicorp Limited 16,932 152
Compania de Minas Buenaventura SA "B" 24,428 147
Indeco SA Trabajo 1,286,336 143
Cementos Lima SA 9,300 121
Southern Peru Limited "T" 32,448 98
Banco Wiese Limited 180,361 97
Credicorp Limited 2,600 22
-----------
1,651
Philippines 4.0%
San Miguel Corp. `B' 159,182 307
Philippine Long Distance Telephone Co. 8,340 214
Ayala Corp. 599,844 212
SM Prime Holdings, Inc. 1,104,860 210
Manila Electric Co. "B" 64,008 206
Ayala Land, Inc. 612,101 173
International Container Term Services, Inc. 1,620,888 135
Aboitiz Equity Ventures, Inc. (b) 3,722,205 134
Petron Corp. 987,400 108
Fortune Cement Corp. 1,212,125 50
Sanitary Wares Manufacturing Corp. 2,725,680 32
First Philippine Holdings Corp."B" 33,792 18
Philex Mining Corp. "B" 2,003,300 16
-----------
1,815
Poland 4.2%
Zaklady Piwowarskie W Zywcu SA 2,280 273
Elektrim Spolka Akcyjna SA 20,505 222
Telekomunikacja Polska SA 35,400 175
Polifarb-Cieszyn-Wroclaw SA 72,221 172
Wielkopolski Bank Kredytowy SA 25,638 161
Prokom Software SA 3,659 141
See accompanying notes 51
<PAGE>
Schedule of Investments (Cont.)
Tax Efficient Structured Emerging Markets Fund
December 31, 1998 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
Bank Rozwoju Eksportu SA 5,760 $ 133
Fabryka Kotlow Rafako SA (b) 65,740 129
Stalexport SA 22,185 123
Bank Handlowy W. Warszawie 6,630 82
Bank Slaski SA W Katowicach 1,355 70
Mostostal Export SA 63,410 67
Przedsiebiorstwo Farmaceutyczne JELFA SA 7,270 60
Zaklady Metali Lekkich Kety (b) 4,555 43
Krosnienskie Huty SZKLA SA 8,190 35
Huta Szkla Gospodarczego Irena 36,560 34
Agros Holding SA 2,985 11
-----------
1,931
Portugal 3.1%
EDP-Electricidade de Portugal SA 6,700 147
Banco Comercial Portugues SA 'R' 4,625 142
Portugal Telecom SA 2,975 136
Banco Espirito Santo e Comercial de Lisboa SA 3,852 119
UNICER - Uniao Cervejeira SA 4,900 117
Corticeira Amorim SGPS SA 7,900 113
Jeronimo Martins - SGPS SA 2,050 112
Mague-Gestao e Participation SA 2,800 95
Sonae Investimentos-Sociedade Gestora de
Participacoes Sociais SA 1,951 95
Salvador Caetano - Industrias Metalurgicas e
Veiculos de Transporte SA 3,500 94
Engil - SGPS 13,822 94
Cin-Corporacao Industrial do Norte SA 2,200 88
Modelo Continente - Sociedade Gestora de
participacoes Sociais SA 1,800 45
-----------
1,397
Romania 0.5%
Romania Investment Fund 441 128
Society Generale Romania Fund 1,500 56
Romanian Growth Fund 34,125 42
-----------
226
Russia 1.7%
Fleming Russia Securities 49,000 159
Uralmash-Zavody SP - ADR (b) 94,000 71
Vimpel-Communications SP - ADR (b) 5,180 67
Surgutneftegaz SP - ADR 18,200 59
Mosenergo SP - ADR 27,100 52
Trade House GUM SP - ADR 54,990 51
Irkutskenergo SP - ADR 23,300 47
Gorkovsky Auto Plant 2,600 46
Trading House TSUM 311,900 45
LUKoil Holding SP - ADR 2,850 44
Menatep Bank SP - ADR 10,400 37
Chernogorneft SP - ADR (b) 14,200 29
Electrosila 36,800 24
Rostelecom 2 15
Trading House TSUM SP - ADR 3,800 11
Avtov 3 8
Menatep Bank SP - ADR 1,400 5
Moscow City Telephone 1 4
-----------
774
South Africa 3.5%
Comparex Holdings Limited 28,500 231
Nedcor Limited 10,583 180
Impala Platinum Holdings Limited 12,601 171
Sasol Limited 40,210 152
Liberty Life Association of Africa Limited 10,830 149
DataTec Limited (b) 9,800 126
De Beers Centenary 8,791 112
Anglo American Corp. of South Africa Limited 3,900 110
Pepkor Limited (b) 26,323 109
South African Breweries Limited 6,000 101
Barlow Limited 19,375 74
Wooltru Limited `N' 55,000 67
Wooltru Limited 22,298 28
-----------
1,610
South Korea 6.9%
Daewoo Securities Co. 31,036 485
Samsung Electronics 5,788 388
Hanwha Chemical Corp. 80,200 383
Samsung Fire and Marine Insurance 663 248
Trigem Computer, Inc. 35,360 231
SK Telecom Co. Limited 375 210
Shinhan Bank 27,426 210
Korean Air 27,642 204
Korea Electric Power Corp. 8,030 199
SK Corp. 13,179 181
LG Electronics 14,863 180
Hite Brewery Co. Limited 14,480 147
Pohang Iron & Steel Co. Limited 1,950 105
Samsung Fire & Marine Insurance - PF 202 0
-----------
3,171
Taiwan 3.6%
Taiwan Fund, Inc. 33,603 420
R.O.C. Taiwan Fund 66,882 414
Yang Ming Marine Transport - GDR (b) 16,100 101
Acer, Inc. - GDR (b) 18,250 96
Tuntex Distinct Corp. SP - GDR (b) 52,304 95
China Steel Corp. SP - GDR 7,100 87
Asia Cement Corp. SP - GDR 9,394 86
Walsin Lihwa Corp. SP - GDR (b) 18,479 83
President Enterprise Corp. SP - GDR (b) 8,519 76
Yageo Corp. SP - GDR (b) 11,060 72
Teco Electric & Machinery SP - GDR (b) 7,649 57
Macronix International Co. Limited SP - ADR 6,760 53
-----------
1,640
Thailand 4.5%
Banpu Public Co. Limited 113,200 230
Thai Farmers Bank Public Co. Limited 119,900 211
Electricity Generating Public Co. Limited 77,900 211
Land & Houses Public Co. Limited 296,000 200
Hana Microelectronics Public Co. Limited 74,400 180
Siam Cement Public Co. Limited 11,400 176
Advanced Info Service Public Co. Limited 29,100 173
Siam Makro Public Co-for 86,300 171
Shinawatra Computer Co. Limited 48,800 168
BEC World Public Co. Limited 27,600 152
Krung Thai Bank Public Co. Limited 124,800 68
TelecomAsia Corp. Public Co. Limited 156,400 68
Charoen Pokphand Feedmill Public Co. Limited 34,500 42
-----------
2,050
Turkey 3.8%
Migros Turk TAS 35,025 350
Akbank TAS 1,049,553 213
Dogan Sirketler Grubu Holding AS 2,555,700 178
Cukurova Elektrik AS 15,000 162
Turk Hava Yollari Anonim Ortakligi 336,600 147
Petrol Ofisi AS 95,817 129
Arcelik AS 418,000 121
Bursa Cimento Fabrikasi AS 275,500 111
Koc Holding AS 102,398 89
Eregli Demir Ve Celik Fabrikalari TAS 202,600 84
Netas Northern Electric Telekomunikasyon AS 435,000 80
Ford Otomotiv Sanayi AS 19,240 38
Aksa Akrilik Kimya Sanayii AS 285,800 34
-----------
1,736
Venezuela 2.0%
Mavesa SA SP - ADR 57,900 217
Compania Anonima Nacional
Telefonos de Venezuela SP - ADR 12,100 216
Banco Venezolano de Creditio SP - ADR 31,613 174
Mantex S.A.C.A. SP - ADR 15,033 140
Siderurgica Venezolana Sivensa SP - ADR 26,067 118
International Briquettes Holding, Inc. (b) 8,000 36
-----------
901
Zimbabwe 0.9%
Interfresh Limited 5,547,900 104
Wankie Colliery Co. Limited 2,199,200 101
Delta Corp. Limited 447,984 98
Barclays Bank of Zimbabwe 1,105,400 88
Trans Zambezi Industries Limited (b) 119,300 6
-----------
397
-----------
Total Common Stocks 44,408
(Cost $67,052) ===========
52 See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 1.5%
- --------------------------------------------------------------------------------
Repurchase Agreement 1.5%
State Street Bank
3.500% due 01/04/99 $ 707 $ 707
(Dated 12/31/98. Collateralized by
U.S. Treasury Note 7.750% 12/31/99
valued at $725,930. Repurchase
proceeds are $707,275.)
-----------
Total Short-Term Instruments 707
(Cost $707) ===========
Total Investments (a) 98.8% $ 45,115
(Cost $67,760)
Other Assets and Liabilities (Net) 1.2% 534
-----------
Net Assets 100.0% $ 45,649
===========
Notes to Schedule of Investments (amounts in thousands);
(a) December 31, 1998, the net unrealized appreciation
(depreciation) of investments based on cost for federal income
tax purposes was as follows:
Aggregate gross unrealized appreciation
for all investments in which there was an
excess of value over tax cost $ 4,905
Aggregate gross unrealized depreciation
for all investments in which there was an
excess of tax cost over value (27,550)
-----------
Unrealized depreciation-net $ (22,645)
===========
(b) Non-income producing security.
See accompanying notes 53
<PAGE>
Schedule of Investments
Tax Efficient Equity Fund
December 31, 1998 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 98.1%
- --------------------------------------------------------------------------------
Aerospace 0.8%
Northrop Grumman Corp. 900 $ 66
Lockheed Martin Corp. 200 17
BFGoodrich Co. 400 14
Raytheon Co. `B' 200 11
-------------
108
Building 0.8%
Centex Corp. 800 36
Fleetwood Enterprises, Inc. 800 28
Kaufman & Broad Home Corp. 900 26
Crane Co. 500 15
-------------
105
Capital Goods 8.1%
General Electric Co. 3,700 378
United Technologies Corp. 800 87
AlliedSignal, Inc. 1,900 84
Dana Corp. 1,900 78
Honeywell, Inc. 1,000 75
McDermott International, Inc. 2,500 62
Tyco International Limited 800 60
Ingersoll-Rand Co. 800 38
Engelhard Corp. 1,200 23
PPG Industries, Inc. 400 23
Caterpillar, Inc. 500 23
Briggs & Stratton 400 20
Johnson Controls, Inc. 300 18
Newell Co. 400 17
Paccar, Inc. 400 16
W.R. Grace & Co. 1,000 16
Hercules, Inc. 500 14
Avery Dennison Corp. 300 14
Nacco Industries, Inc. `A' 100 9
Textron, Inc. 100 8
Sunoco, Inc. 200 7
Minnesota Mining & Manufacturing Co. 100 7
Dover Corp. 100 4
-------------
1,081
Communications 8.2%
Bell Atlantic Corp. 3,400 193
AT&T Corp. 2,500 188
BellSouth Corp. 2,600 130
SBC Communications, Inc. 2,400 129
Viacom, Inc. `B' (b) 1,300 96
GTE Corp. 1,400 94
U.S. West, Inc. 1,300 84
AirTouch Communications, Inc. (b) 700 50
MCI WorldCom, Inc. 700 50
Knight-Ridder, Inc. 700 36
ALLTEL Corp. 500 30
-------------
1,080
Consumer Discretionary 12.6%
Wal-Mart Stores, Inc. 2,800 227
Ford Motor Co. 2,400 140
Home Depot, Inc. 1,900 116
Procter & Gamble Co. 1,200 110
Time Warner, Inc. 1,200 74
TJX Cos., Inc. 2,300 67
Gap, Inc. 1,150 65
UST, Inc. 1,600 56
Cendant Corp. (b) 2,900 55
Eastman Kodak Co. 700 50
Avon Products, Inc. 1,100 49
VF Corp. 1,000 47
Pitney Bowes, Inc. 700 46
Lowe's Cos., Inc. 900 46
Dayton Hudson Corp. 800 43
Costco Cos., Inc. (b) 600 43
King World Productions, Inc. 1,400 41
TRW, Inc. 700 39
Maytag Corp. 600 37
Walgreen Co. 600 35
Federated Department Stores, Inc. (b) 700 30
Emerson Electric Co. 400 25
Alberto-Culver Co. 900 24
Harrah's Entertainment, Inc. 1,500 24
Colgate-Palmolive Co. 200 19
Liz Claiborne, Inc. 500 16
Brunswick Corp. 600 15
General Motors Corp. 200 14
Consolidated Stores Corp. (b) 700 14
Dollar General Corp. 525 12
Armstrong World Industries 200 12
Mattel, Inc. 500 11
Rite Aid Corp. 200 10
Gillette Co. 200 10
Wm. Wrigley Jr. Co. 100 9
The Stanley Works 300 8
Parker Hannifin Corp. 200 7
K Mart Corp. (b) 400 6
Whirlpool Corp. 100 6
Goodyear Tire & Rubber Co. 100 5
Hasbro, Inc. 100 4
-------------
1,667
Consumer Services 2.1%
McDonald's Corp. 800 61
Gannett, Inc. 900 60
Interpublic Group of Companies, Inc. 600 48
McGraw-Hill Companies, Inc. 400 41
Omnicom Group 400 23
New York Times Co. 600 21
Marriott International, Inc. `A' 300 9
Tribune Co. 100 7
Hilton Hotels Corp. 200 4
Darden Restaurants, Inc. 200 4
-------------
278
Consumer Staples 7.9%
Philip Morris Cos., Inc. 3,600 193
Coca-Cola Co. 2,500 167
Anheuser Busch Cos., Inc. 1,400 92
H.J. Heinz Co. 1,100 62
Kimberly-Clark Corp. 1,100 60
Clorox Co. 500 58
Albertson's, Inc. 800 51
SUPERVALU, Inc. 1,600 45
Quaker Oats Co. 700 42
Sara Lee Corp. 1,400 39
General Mills, Inc. 500 39
Pepsico, Inc. 900 37
Safeway, Inc. (b) 500 30
Kroger Co. (b) 500 30
Adolph Coors Co. `B' 500 28
Campbell Soup Co. 400 22
Sysco Corp. 700 19
Bestfoods 300 16
Kellogg Co. 200 7
Fortune Brands, Inc. 200 6
Cooper Tire & Rubber Co. 300 6
Louisiana-Pacific Corp. 300 5
-------------
1,054
Energy 6.2%
Exxon Corp. 3,600 263
Chevron Corp. 1,500 124
USX Marathon Group 3,000 90
Mobil Corp. 700 61
Phillips Petroleum Co. 1,200 51
Rowan Cos., Inc. (b) 3,900 39
Halliburton Co. 1,300 39
AES Corp. (b) 700 33
Southern Co. 1,000 29
Texaco, Inc. 500 26
Sun Co., Inc. 500 18
Enron Corp. 300 17
Ashland, Inc. 300 15
Unicom Corp. 300 12
Atlantic Richfield Co. 100 7
-------------
824
54 See accompanying notes
<PAGE>
Value
Shares (000s)
- --------------------------------------------------------------------------------
Environmental Services 0.1%
Service Systems International 200 $ 8
Financial & Business Services 15.3%
Bank One Corp. 2,424 124
Morgan Stanley, Dean Witter, Discover and Co. 1,300 92
Comerica, Inc. 1,300 89
American International Group, Inc. 900 87
First Union Corp. 1,400 85
Mellon Bank Corp. 1,200 83
Federal National Mortgage Assn. 1,100 81
Sun Trust Banks, Inc. 900 69
Chase Manhattan Corp. 1,000 68
Allstate Corp. 1,500 58
MBNA Corp. 2,200 55
Fleet Financial Group, Inc. 1,200 54
Northern Trust Corp. 600 52
Progressive Corp. 300 51
Citigroup, Inc. 1,000 50
SunAmerica, Inc. 600 49
Countrywide Credit Industries, Inc. 900 45
Bank of New York 1,100 44
National City Corp. 600 44
American Express Co. 400 41
PNC Bank Corp. 700 38
Wells Fargo & Co. 900 36
Lehman Brothers Holdings, Inc. 800 35
SLM Holding Corp. 700 34
MBIA, Inc. 500 33
Automatic Data Processing, Inc. 400 32
MGIC Investment Corp. 800 32
BankBoston Corp. 800 31
Marsh & Mclennan Cos. 500 29
State Street Corp. 400 28
Golden West Financial Corp. 300 28
Conseco, Inc. 900 28
Federal Home Loan Mortgage Corp. 400 26
Charles Schwab Corp. 450 25
Capital One Financial Corp. 200 23
Aon Corp. 400 22
Paychex, Inc. 400 21
KeyCorp 600 19
Washington Mutual, Inc. 500 19
Bear Stearns Cos 500 19
Deluxe Corp. 500 18
Lincoln National Corp. 200 16
BB&T Corp. 400 16
Regions Financial Corp. 400 16
U.S. Bancorp 400 14
Provident Cos., Inc. `B' 300 12
Franklin Resources, Inc. 300 10
Republic New York Corp. 200 9
H&R Block, Inc. 200 9
Associates First Capital Corp. `A' 200 8
Torchmark Corp. 200 7
Equifax, Inc. 200 7
Summit Bancorp 100 4
BankAmerica Corp. 39 2
Waddell & Reed Financial, Inc. `B' 48 1
----------
2,028
Health Care 12.0%
Bristol-Myers Squibb Co. 1,700 226
Merck & Co., Inc. 1,300 191
Pfizer, Inc. 1,400 175
Eli Lilly & Co. 1,300 116
Johnson & Johnson 1,300 109
Amgen, Inc. (b) 1,000 105
Abbott Laboratories 2,000 98
Warner-Lambert Co. 1,300 98
Schering-Plough Corp. 1,700 94
Cardinal Health, Inc. 600 46
Guidant Corp. 400 44
HBO & Co. 1,500 43
American Home Products Corp. 700 39
Becton Dickinson & Co. 900 38
Medtronic, Inc. 500 37
Allergan, Inc. 500 32
Tenet Healthcare Corp. (b) 1,200 32
Biomet, Inc. 500 20
CIGNA Corp. 200 15
HEALTHSOUTH Corp. (b) 700 11
United Healthcare Corp. 200 9
Baxter International 100 6
Mallinckrodt Group, Inc. 200 6
----------
1,590
Materials & Processing 2.3%
Rohm & Haas Co. 3,100 93
Aluminum Co. of America 500 37
E.I. Du Pont de Nemours, Inc. 700 37
Fort James Corp. 900 36
Air Products & Chemicals 900 36
Praxair, Inc. 700 25
Owens Illinois, Inc. (b) 800 25
Nucor Corp. 200 9
Allegheny Teledyne, Inc. 200 4
Pioneer Hi-Bred International, Inc. 100 3
----------
305
Technology 16.9%
Microsoft Corp. (b) 3,400 472
Intel Corp. 2,600 308
Cisco Systems, Inc. (b) 2,350 218
International Business Machines Corp. 1,100 203
Lucent Technologies, Inc. 1,600 176
Dell Computer Corp. (b) 1,600 117
Oracle Corp. (b) 1,800 78
EMC Corp. (b) 900 77
Tellabs, Inc. (b) 1,100 75
Hewlett Packard Co. 1,100 75
Sun Microsystems, Inc. (b) 800 69
Compaq Computer Corp. (b) 1,300 55
Northern Telecom Limited 1,000 50
Xerox Corp. 400 47
Unisys Corp. (b) 1,100 38
Gateway 2000, Inc. (b) 600 31
Computer Associates International, Inc. 700 30
Computer Sciences Corp. 400 26
Apple Computer, Inc. 600 25
First Data Corp. 700 22
Ceridian Corp. (b) 300 21
EG&G, Inc. 600 17
IMS Health, Inc. (b) 100 8
Applied Materials, Inc. (b) 100 4
----------
2,242
Transportation 1.1%
Burlington Northern Santa Fe Corp. 1,100 37
Delta Air Lines, Inc. 600 31
AMR Corp. (b) 500 30
Navistar International Corp. (b) 900 26
Southwest Airlines Co. 700 16
----------
140
Utilities 3.7%
Ameritech Corp. 1,600 101
Central & South West Corp. 3,200 88
FPL Group, Inc. 1,100 68
Duke Energy Corp. 600 38
Coastal Corp. 1,000 35
Houston Industry, Inc. 800 26
Edison International 900 25
Public Service Enterprise Group, Inc. 600 24
Columbia Gas Systems, Inc. 400 23
Consolidated Edison, Inc. 400 21
Baltimore Gas & Electric 400 12
GPU, Inc. 200 9
DTE Energy Co. 200 9
Peoples Energy Corp. 200 8
----------
487
----------
Total Common Stocks 12,997
(Cost $11,850) ==========
See accompanying notes 55
<PAGE>
Schedule of Investments (Cont.)
Tax Efficient Equity Fund
December 31, 1998 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 5.5%
- --------------------------------------------------------------------------------
Repurchase Agreement 5.5%
State Street Bank
3.500% due 01/04/99 $ 734 $ 734
(Dated 12/31/98. Collateralized by
U.S. Treasury Note 6.250% 08/31/02
valued at $750,838. Repurchase
proceeds are $734,285.)
----------
Total Short-Term Instruments 734
(Cost $734) ==========
Total Investments (a) 103.6% $ 13,731
(Cost $12,584)
Other Assets and Liabilities (Net) (3.6%) (477)
----------
Net Assets 100.0% $ 13,254
==========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1998, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation
for all investments in which there was an
excess of value over tax cost $ 1,318
Aggregate gross unrealized depreciation
for all investments in which there was an
excess of tax cost over value (171)
----------
Unrealized appreciation-net $ 1,147
==========
(b) Non-income producing security.
56 See accompanying notes
<PAGE>
Schedule of Investments
Balanced Fund
December 31, 1998 (Unaudited)
Value
Shares (000s)
- ------------------------------------------------------------------------------
COMMON STOCKS 63.6%
- ------------------------------------------------------------------------------
Aerospace 0.6%
Northrop Grumman Corp. 6,000 $ 439
Building 0.5%
Lafarge Corp. 5,000 203
Centex Corp. 2,900 131
------------
334
Capital Goods 3.8%
Dana Corp. 16,700 682
Deere & Co. 13,700 454
Tyco International Limited 5,700 430
United Technologies Corp. 3,300 359
Johnson Controls, Inc. 5,500 325
Textron, Inc. 2,900 220
Perkin Elmer Corp. 2,100 205
------------
2,675
Communications 3.5%
GTE Corp. 10,300 694
Bell Atlantic Corp. 11,900 676
AT&T Corp. 3,800 286
U.S. West, Inc. 4,400 284
SBC Communications, Inc. 5,300 284
ALLTEL Corp. 4,400 263
------------
2,487
Consumer Discretionary 8.6%
VF Corp. 15,500 727
Whirlpool Corp. 12,100 670
Tupperware Corp. 27,900 459
American Greetings Corp. `A' 11,000 452
Dillards, Inc. `A' 11,600 329
Harley-Davidson, Inc. 6,400 303
Lowe's Cos., Inc. 5,900 302
TJX Cos., Inc. 10,300 299
Home Depot, Inc. 4,800 294
Wal-Mart Stores, Inc. 3,600 293
Gap, Inc. 5,200 293
CVS Corp. 5,300 292
Mohawk Industries, Inc. 6,900 290
Ford Motor Co. 4,400 258
Eastman Kodak Co. 3,300 238
King World Productions, Inc. 7,900 233
Cracker Barrel Old Country Store, Inc. 9,600 224
Costco Cos., Inc. (b) 2,200 159
Cintas Corp. 100 7
------------
6,122
Consumer Services 1.7%
Central Newspapers, Inc. `A' 6,800 486
New York Times Co. 7,500 260
Omnicom Group 4,100 238
Gannett, Inc. 3,500 232
------------
1,216
Consumer Staples 7.4%
Anheuser Busch Cos., Inc. 11,300 742
SUPERVALU, Inc. 25,600 717
Kimberly-Clark Corp. 9,400 512
Whitman Corp. 18,700 475
IBP, Inc. 15,800 460
RJR Nabisco Holdings Corp. 15,500 460
Kroger Co. (b) 5,800 351
Safeway, Inc. (b) 5,700 347
Albertson's, Inc. 5,200 331
Clorox Co. 2,400 280
Quaker Oats Co. 4,000 238
Sara Lee Corp. 8,400 237
H.J. Heinz Co. 1,100 62
------------
5,212
Energy 3.9%
Mobil Corp. 8,100 706
Repsol SA SP - ADR 12,700 694
Kerr McGee Corp. 11,800 451
Ultramar Diamond Shamrock Corp. 17,000 412
Energy East Corp. 4,400 249
Peco Energy Co. 5,900 246
------------
2,758
Environmental Services 0.9%
Browning Ferris Industries, Inc. 22,400 637
Financial & Business Services 10.4%
PNC Bank Corp. 12,900 698
Countrywide Credit Industries, Inc. 13,900 697
Chase Manhattan Corp. 9,000 613
Bear Stearns Cos 12,800 478
Union Planters Corp. 9,300 421
Capital One Financial Corp. 3,000 345
Associates First Capital Corp. `A' 6,696 284
Fleet Financial Group, Inc. 6,200 277
Southtrust Corp. 7,200 266
Provident Cos., Inc. `B' 6,400 266
BankAmerica Corp. 4,413 265
First Union Corp. 4,100 249
American Express Co. 2,400 245
American International Group, Inc. 2,500 242
Bank One Corp. 4,700 240
Wells Fargo & Co. 6,000 240
Hartford Financial Services Group, Inc. 4,200 230
Loews Corp. 2,300 226
Ambac Financial Group, Inc. 3,700 223
Alliance Capital Management LP 8,500 219
Equity Residential Properties Trust 5,100 206
Allstate Corp. 4,400 170
Household International, Inc. 3,000 119
Simon Property Group, Inc. 3,500 100
MBNA Corp. 1,300 32
------------
7,351
Health Care 6.0%
American Home Products Corp. 12,600 710
CIGNA Corp. 8,700 673
Amgen, Inc. (b) 4,600 481
Mallinckrodt Group, Inc. 13,900 428
Wellpoint Health Networks, Inc. (b) 3,900 339
Guidant Corp. 2,700 298
HBO & Co. 8,700 250
Biogen, Inc. 3,000 249
Health Management Associates, Inc. `A' (b) 10,150 219
Cardinal Health, Inc. 2,500 190
Schering-Plough Corp. 3,400 188
Eli Lilly & Co. 2,000 178
Warner-Lambert Co. 1,300 98
------------
4,301
Materials & Processing 3.1%
Union Carbide Corp. 14,200 604
USG Corp. (b) 9,200 469
USX-U.S. Steel Group, Inc. 19,500 449
Westvaco Corp. 16,500 442
Leggett & Platt, Inc. 10,500 231
------------
2,195
Technology 9.0%
Apple Computer, Inc. 13,500 553
Harris Corp. 12,800 469
Storage Technology Corp. (b) 12,400 441
Compuware Corp. (b) 4,100 320
Oracle Corp. (b) 7,300 315
International Business Machines Corp. 1,700 314
Lucent Technologies, Inc. 2,800 308
Tellabs, Inc. (b) 4,300 295
Dell Computer Corp. (b) 4,000 293
Unisys Corp. (b) 8,500 293
Intel Corp. 2,400 285
EMC Corp. (b) 3,300 281
Cisco Systems, Inc. (b) 3,025 280
Microsoft Corp. (b) 2,000 277
Sun Microsystems, Inc. (b) 3,100 265
Ascend Communications, Inc. (b) 4,000 263
IMS Health, Inc. (b) 3,400 256
See accompanying notes 57
<PAGE>
Schedule of Investments (Cont.)
Balanced Fund
December 31, 1998 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
Adobe Systems, Inc. 5,400 $ 252
Honeywell, Inc. 3,100 233
BMC Software, Inc. (b) 4,800 214
Gateway 2000, Inc. (b) 3,100 159
------------
6,366
Transportation 0.6%
Burlington Northern Santa Fe Corp. 6,300 213
UAL Corp. (b) 3,500 209
------------
422
Utilities 3.6%
Public Service Enterprise Group, Inc. 16,700 668
DTE Energy Co. 15,300 655
NICOR, Inc. 14,300 604
Ameritech Corp. 4,600 292
Consolidated Edison, Inc. 4,700 249
New Century Energies, Inc. 1,600 78
------------
2,546
------------
Total Common Stocks 45,061
(Cost $39,355) ============
- --------------------------------------------------------------------------------
CORPORATE BONDS & NOTES 8.6%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Banking & Finance 6.5%
AT&T Capital Corp.
6.061% due 04/01/99 (d) $ 500 500
Ford Motor Credit Corp.
5.838% due 02/10/15 (d) 1,000 994
General Motors Acceptance Corp.
5.787% due 03/08/15 (d) 1,000 992
Lehman Brothers Holdings, Inc.
8.150% due 05/15/00 100 102
New England Educational Loan Marketing
5.857% due 01/06/11 (d) 2,000 1,993
------------
4,581
Industrials 2.1%
AMR Corp.
9.430% due 01/05/10 1,000 1,073
10.000% due 01/02/01 400 429
------------
1,502
------------
Total Corporate Bonds & Notes 6,083
(Cost $6,011) ============
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES 0.5%
- --------------------------------------------------------------------------------
Student Loan Marketing Assn
5.300% due 04/04/25 (d) 335 334
------------
Total U.S. Government Agencies 334
(Cost $335) ============
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS 6.8%
- --------------------------------------------------------------------------------
U.S. Treasury Bonds
7.250% due 05/15/16 1,000 1,213
8.875% due 08/15/17 2,300 3,244
U.S. Treasury Strips
0.000% due 08/15/19 1,200 384
------------
Total U.S. Treasury Obligations 4,841
(Cost $4,821) ============
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES 27.8%
- --------------------------------------------------------------------------------
Collateralized Mortgage Obligations 2.8%
Federal Home Loan Mortgage Corp.
10.150% due 06/04/15 17 17
Federal National Mortgage Assn
9.500% due 06/25/18 322 345
First Plus Home Loan Trust
6.060% due 11/09/10 1,000 1,002
Independent National Mortgage Corp.
7.790% due 11/25/24 (d) 353 363
8.260% due 11/25/24 (d) 224 229
------------
1,956
Federal Home Loan Mortgage Corporation 5.0%
6.500% due 01/12/29-01/14/29 (e) 3,100 3,102
8.500% due 03/01/23 430 455
------------
3,557
Federal Housing Administration 3.6%
6.000% due 03/20/28 1,971 1,944
7.000% due 07/01/14 (d) 559 578
------------
2,522
Federal National Mortgage Association 5.8%
5.500% due 01/14/29 1,000 964
7.032% due 12/01/23 (d) 270 276
8.500% due 02/07/01-07/01/25 (e) 2,723 2,850
------------
4,090
Government National Mortgage Association 9.4%
6.500% due 01/15/24-01/21/29 (e) 4,246 4,270
6.620% due 08/20/24 (d) 472 477
6.875% due 04/20/23 (d) 1,078 1,094
7.500% due 05/15/17 10 11
8.000% due 06/09/15-11/15/26 (e) 386 402
9.500% due 09/09/15-09/10/15 (e) 102 109
10.750% due 09/15/00-10/15/00 (e) 60 62
16.000% due 11/10/15-12/04/15 (e) 181 221
------------
6,646
Mortgage-Backed Securities 0.2%
Federal National Mortgage Assn.
6.740% due 07/08/25 145 153
Other Mortgage-Backed Securities 1.0%
Home Savings of America
5.830% due 05/25/27 (d) 740 732
------------
Total Mortgage-Backed Securities 19,656
(Cost $19,538) ============
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES 1.4%
- --------------------------------------------------------------------------------
MBNA Master Credit Card Trust
5.591% due 02/01/15 1,000 1,001
------------
Total Asset-Backed Securities 1,001
(Cost $997) ============
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 6.6%
- --------------------------------------------------------------------------------
Commercial Paper 2.5%
Ameritech Corp.
5.660% due 01/15/99 1,000 998
General Electric Capital Corp.
5.540% due 01/26/99 400 399
5.890% due 01/13/99 300 300
Procter & Gamble Co.
4.850% due 02/26/99 100 99
------------
1,796
Repurchase Agreement 3.8%
State Street Bank
3.500% due 01/04/99 2,716 2,716
(Dated 12/31/98. Collateralized by
U.S. Treasury Bond 10.625% 08/15/15
valued at $414,096,
U.S. Treasury Note 6.250% 08/31/02
valued at $1,040,447 and
U.S. Treasury Bond 6.750% 08/15/26
valued at $1,324,378. Repurchase
proceeds are $2,717,056.)
U.S. Treasury Bills (c)(e) 0.3%
4.012% due 02/04/99-03/04/99 175 174
------------
Total Short-Term Instruments 4,686
(Cost $4,686) ============
58 See accompanying notes
<PAGE>
Value
(000s)
- --------------------------------------------------------------------------------
Total Investments (a) 115.3% $ 81,662
(Cost $75,744)
Written Options (f) (0.0%) (1)
(Premiums $1)
Other Assets and Liabilities (Net) (15.3%) (10,822)
------------
Net Assets 100.0% $ 70,839
============
Notes to Schedule of Investments (amounts in thousands):
(a) December 31, 1998, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost $ 7,585
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value (1,667)
------------
Unrealized appreciation-net $ 5,918
============
(b) Non-income producing security.
(c) Securities with an aggregate market value of $174
have been segregated with the custodian to cover margin
requirements for the following open futures contracts at
December 31, 1998:
Unrealized
Appreciation/
Type Contracts (Depreciation)
- --------------------------------------------------------------------------------
Eurodollar March Futures (3/00) 6 $ (2)
Eurodollar March Futures (3/01) 1 2
Eurodollar June Futures (6/00) 6 0
Eurodollar June Futures (6/01) 1 2
Eurodollar September Futures (9/00) 7 2
Eurodollar September Futures (9/01) 3 4
Eurodollar December Futures (12/99) 6 (4)
Eurodollar December Futures (12/00) 1 2
U.S. Treasury 5 Year Note (3/99) 6 (4)
U.S. Treasury 10 Year Note (3/99) 28 (25)
U.S. Treasury 30 Year Bond (3/99) 1 (2)
------------
$ (25)
============
(d) Variable rate security.
(e) Securities are grouped by coupon and represent a range of maturities.
(f) Premiums received on written options:
Type Contracts Premium Value
- --------------------------------------------------------------------------------
Call - CBOT U.S. Treasury Bond March Futures
Strike @ 138.00 Exp. 02/20/99 3 $ 0 $ 0
Call - CBOT U.S. Treasury Bond March Futures
Strike @ 120.00 Exp. 02/20/99 2 0 0
Call - CBOT U.S. Treasury Bond March Futures
Strike @ 122.00 Exp. 02/20/99 2 1 1
--------------------------
$ 1 $ 1
==========================
See accompanying notes 59
<PAGE>
Financial Highlights - Institutional Classes
<TABLE>
<CAPTION>
Net Asset Net Realized / Dividends
Value Unrealized Total Income from Net
Selected Per Share Data for Beginning Net Investment Gain (Loss) on from Investment Investment
the Year or Period Ended: of Period Income (Loss) Investments Operations Income
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Emerging Markets Fund
Institutional Class
12/31/98 (a) $ 10.18 $ 0.05(b) $ (1.73)(b) $ (1.68) $ (0.04)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 13.96 0.06(b) (3.84)(b) (3.78) 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 12.66 0.06(b) 1.30(b) 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
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class
12/31/98 (a) 10.14 0.03(b) (1.72)(b) (1.69) 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 13.95 0.09(b) (3.90)(b) (3.81) 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 12.63 0.00(b) 1.32(b) 1.32 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 11.24 0.02(b) 1.40(b) 1.42 (0.03)
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/95 16.95 0.00 (4.95) (4.95) (0.05)
- ------------------------------------------------------------------------------------------------------------------------------------
International Developed Fund
Institutional Class
12/31/98 (a) $ 14.32 $ (0.01)(b) $ (0.07)(b) $ (0.08) $ (0.05)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 13.12 0.16(b) 1.73(b) 1.89 (0.11)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 12.54 0.10(b) 1.09(b) 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)
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class
12/31/98 (a) 14.30 (0.02)(b) (0.08)(b) (0.10) 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 13.05 0.17(b) 1.69(b) 1.86 (0.03)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 12.51 0.06(b) 1.09(b) 1.15 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 11.73 0.69(b) 0.72(b) 1.41 (0.07)
- ------------------------------------------------------------------------------------------------------------------------------------
11/30/94-10/31/95 11.21 0.02 1.01 1.03 (0.08)
- ------------------------------------------------------------------------------------------------------------------------------------
International Fund
Institutional Class
09/30/98-12/31/98 (a) $ 10.47 $ (0.01)(b) $ 1.73(b) $ 1.72 $ 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class
09/30/98-12/31/98 (a) 10.47 (0.01)(b) 1.69(b) 1.68 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Appreciation Fund
Institutional Class
12/31/98 (a) $ 26.13 $ 0.09(b) $ 0.52(b) $ 0.61 $ (0.15)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 21.19 0.15(b) 6.59(b) 6.74 (0.12)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 18.10 0.24 5.08 5.32 (0.10)
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 16.94 0.35 1.99 2.34 (0.15)
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/95 13.34 0.18 3.60 3.78 (0.18)
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/94 13.50 0.14 (0.12) 0.02 (0.14)
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class
12/31/98 (a) 25.99 0.06(b) 0.52(b) 0.58 (0.13)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 21.16 0.10(b) 6.55(b) 6.65 (0.14)
- ------------------------------------------------------------------------------------------------------------------------------------
07/31/96-06/30/97 17.19 0.16 6.03 6.19 (0.09)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized
(a) Unaudited
(b) Per share amounts based on average number of shares outstanding during the
period.
60 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Dividends in Distributions
Excess of Net from Net
Selected Per Share Data for Investment Realized Total Net Asset Value
the Year or Period Ended: Income Capital Gains Distributions End of Period Total Return
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Emerging Markets Fund
Institutional Class
12/31/98 (a) $ 0.00 $ 0.00 $ (0.04) $ 8.46 (16.47%)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 0.00 0.00 0.00 10.18 (27.08)
- ------------------------------------------------------------------------------------------------------------------------------------
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 (0.72) (0.78) 11.27 (27.70)
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/94 0.00 (0.18) (0.18) 16.53 36.31
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class
12/31/98 (a) 0.00 0.00 0.00 8.45 (16.67)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 0.00 0.00 0.00 10.14 (27.31)
- ------------------------------------------------------------------------------------------------------------------------------------
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 (0.71) (0.76) 11.24 (27.96)
- ------------------------------------------------------------------------------------------------------------------------------------
International Developed Fund
Institutional Class
12/31/98 (a) $ 0.00 $ (0.15) $ (0.20) $ 14.04 (0.49)%
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 0.00 (0.58) (0.69) 14.32 15.69
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 0.00 (0.61) (0.61) 13.12 10.07
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 (0.36) (0.21) (0.64) 12.54 12.54
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/95 0.00 (0.43) (0.52) 11.74 3.83
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/94 0.00 (0.04) (0.07) 11.86 11.68
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class
12/31/98 (a) 0.00 (0.15) (0.15) 14.05 (0.67)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 0.00 (0.58) (0.61) 14.30 15.33
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 0.00 (0.61) (0.61) 13.05 9.77
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 (0.35) (0.21) (0.63) 12.51 12.33
- ------------------------------------------------------------------------------------------------------------------------------------
11/30/94-10/31/95 0.00 (0.43) (0.51) 11.73 9.61
- ------------------------------------------------------------------------------------------------------------------------------------
International Fund
Institutional Class
09/30/98-12/31/98 (a) $ 0.00 $ (1.15) $ (1.15) $ 11.04 16.93%
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class
09/30/98-12/31/98 (a) 0.00 (1.15) (1.15) 11.00 16.54
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Appreciation Fund
Institutional Class
12/31/98 (a) $ 0.00 $ (1.65) $ (1.80) $ 24.94 2.74%
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 0.00 (1.68) (1.80) 26.13 32.97
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 0.00 (2.13) (2.23) 21.19 31.52
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 0.00 (1.03) (1.18) 18.10 14.65
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/95 0.00 0.00 (0.18) 16.94 28.47
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/94 0.00 (0.04) (0.18) 13.34 0.15
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class
12/31/98 (a) 0.00 (1.65) (1.78) 24.79 2.64
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 0.00 (1.68) (1.82) 25.99 32.55
- ------------------------------------------------------------------------------------------------------------------------------------
07/31/96-06/30/97 0.00 (2.13) (2.22) 21.16 38.26
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Ratio of Net
Ratio of Investment
Net Assets Expenses Income (Loss)
Selected Per Share Data for End of Period to Average to Average Portfolio
the Year or Period Ended: (000s) Net Assets Net Assets Turnover Rate
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Emerging Markets Fund
Institutional Class
12/31/98 (a) $ 19,017 1.40%* 1.09%* 23%
- ---------------------------------------------------------------------------------------------------------------
06/30/98 24,251 1.39 0.52 52
- ---------------------------------------------------------------------------------------------------------------
06/30/97 52,703 1.45 0.45 74
- ---------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 80,545 1.35* 0.84* 74
- ---------------------------------------------------------------------------------------------------------------
10/31/95 73,539 1.35 0.57 118
- ---------------------------------------------------------------------------------------------------------------
10/31/94 79,620 1.35 (0.06) 79
- ---------------------------------------------------------------------------------------------------------------
Administrative Class
12/31/98 (a) 2 1.64* 0.81* 23
- ---------------------------------------------------------------------------------------------------------------
06/30/98 1,339 1.65 0.81 52
- ---------------------------------------------------------------------------------------------------------------
06/30/97 117 1.69 0.02 74
- ---------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 368 1.61* 0.18* 74
- ---------------------------------------------------------------------------------------------------------------
10/31/95 830 1.62 0.02 118
- ---------------------------------------------------------------------------------------------------------------
International Developed Fund
Institutional Class
12/31/98 (a) $ 121,427 1.12%* (0.10)%* 20%
- ---------------------------------------------------------------------------------------------------------------
06/30/98 122,126 1.11 1.20 60
- ---------------------------------------------------------------------------------------------------------------
06/30/97 94,044 1.13 0.85 77
- ---------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 70,207 1.10* 0.81* 60
- ---------------------------------------------------------------------------------------------------------------
10/31/95 63,607 1.10 1.10 63
- ---------------------------------------------------------------------------------------------------------------
10/31/94 22,569 1.10 1.12 89
- ---------------------------------------------------------------------------------------------------------------
Administrative Class
12/31/98 (a) 35 1.38* (0.29)* 20
- ---------------------------------------------------------------------------------------------------------------
06/30/98 6,299 1.36 1.31 60
- ---------------------------------------------------------------------------------------------------------------
06/30/97 2,302 1.38 0.52 77
- ---------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 5,624 1.35* 1.04* 60
- ---------------------------------------------------------------------------------------------------------------
11/30/94-10/31/95 675 1.34* 0.50* 58
- ---------------------------------------------------------------------------------------------------------------
International Fund
Institutional Class
09/30/98-12/31/98 (a) $ 1,168 1.27%* (0.46)%* 17%
- ---------------------------------------------------------------------------------------------------------------
Administrative Class
09/30/98-12/31/98 (a) 9,978 1.39* (0.48)* 17
- ---------------------------------------------------------------------------------------------------------------
Capital Appreciation Fund
Institutional Class
12/31/98 (a) $ 712,374 0.71%* 0.74%* 62%
- ---------------------------------------------------------------------------------------------------------------
06/30/98 805,856 0.71 0.64 75
- ---------------------------------------------------------------------------------------------------------------
06/30/97 536,187 0.71 1.02 87
- ---------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 348,728 0.70* 1.33* 73
- ---------------------------------------------------------------------------------------------------------------
10/31/95 236,220 0.70 1.22 83
- ---------------------------------------------------------------------------------------------------------------
10/31/94 165,441 0.70 1.17 77
- ---------------------------------------------------------------------------------------------------------------
Administrative Class
12/31/98 (a) 203,574 0.95* 0.49* 62
- ---------------------------------------------------------------------------------------------------------------
06/30/98 132,384 0.96 0.39 75
- ---------------------------------------------------------------------------------------------------------------
07/31/96-06/30/97 3,115 0.96* 0.66* 87
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes 61
<PAGE>
Financial Highlights - Institutional Classes
<TABLE>
<CAPTION>
Net Asset Net Realized / Dividends
Value Unrealized Total Income from Net
Selected Per Share Data for Beginning Net Investment Gain (Loss) from Investment Investment
the Year or Period Ended: of Period Income (Loss) on Investments Operations Income
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Mid-Cap Growth Fund
Institutional Class
12/31/98(a) $ 24.09 $ 0.05(b) $ 0.07(b) $ 0.12 $ (0.02)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 20.28 0.11(b) 5.11(b) 5.22 (0.07)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 19.44 (0.07) 5.25 5.18 (0.05)
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 18.16 0.32 1.53 1.85 (0.14)
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/95 13.97 0.07 4.19 4.26 (0.07)
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/94 13.97 0.06 0.01 0.07 (0.06)
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class
12/31/98(a) 23.96 0.03(b) 0.11(b) 0.14 (0.01)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 20.24 0.05(b) 5.08(b) 5.13 (0.07)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 19.44 (0.13) 5.25 5.12 (0.03)
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 18.17 0.28 1.53 1.81 (0.11)
- ------------------------------------------------------------------------------------------------------------------------------------
11/30/94-10/31/95 13.31 0.03 4.85 4.88 (0.02)
- ------------------------------------------------------------------------------------------------------------------------------------
Micro-Cap Growth Fund
Institutional Class
12/31/98(a ) $ 23.66 $ (0.06)(b) $ (3.09)(b) $ (3.15) $ 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 19.85 (0.11)(b) 6.54(b) 6.43 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 18.47 0.00 3.41 3.41 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 15.38 0.00 3.43 3.43 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/95 11.87 (0.04) 3.55 3.51 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/94 11.06 (0.03) 0.84 0.81 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class
12/31/98 (a) 23.52 (0.09)(b) (3.07)(b) (3.16) 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 19.78 (0.17)(b) 6.53(b) 6.36 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 18.46 (0.06) 3.41 3.35 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
04/01/96-06/30/96 16.73 0.03 1.70 1.73 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Small-Cap Growth Fund
Institutional Class
12/31/98(a) $ 14.01 $ (0.01)(b) $ (1.88)(b) $ (1.89) $ 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 13.40 (0.03)(b) 2.52(b) 2.49 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 20.83 (0.01)(b) 3.17(b) 3.16 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 21.02 2.02 (0.61) 1.41 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/95 19.38 (0.05) 3.12 3.07 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/94 19.15 (0.02) 0.89 0.87 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class
12/31/98(a) 13.97 (0.02)(b) (1.89)(b) (1.91) 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 13.41 (0.07)(b) 2.51(b) 2.44 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 20.82 (0.06)(b) 3.24(b) 3.18 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 21.01 2.02(b) (0.61)(b) 1.41 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
09/27/95-10/31/95 21.90 (0.02) (0.87) (0.89) 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized
(a) Unaudited
(b) Per share amounts based on average number of shares outstanding during the
period.
62 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Dividends in
Excess of Net Distributions Net Asset Net Assets
Investment from Net Realized Total Value End Total End of
Income Capital Gains Distributions of Period Return Period (000s)
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Mid-Cap Growth Fund
Institutional Class
12/31/98 (a) $ 0.00 $ (1.07) $ (1.09) $ 23.12 0.81% $ 518,586
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 (0.01) (1.33) (1.41) 24.09 26.16 437,985
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 0.00 (4.29) (4.34) 20.28 30.58 291,374
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 0.00 (0.43) (0.57) 19.44 10.37 231,011
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/95 0.00 0.00 (0.07) 18.16 30.54 189,320
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/94 0.00 (0.01) (0.07) 13.97 0.58 121,791
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class
12/31/98(a) 0.00 (1.07) (1.08) 23.02 0.93 107,131
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 (0.01) (1.33) (1.41) 23.96 25.75 73,614
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 0.00 (4.29) (4.32) 20.24 30.23 2,066
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 0.00 (0.43) (0.54) 19.44 10.17 1,071
- ------------------------------------------------------------------------------------------------------------------------------------
11/30/94-10/31/95 0.00 0.00 (0.02) 18.17 36.64 892
- ------------------------------------------------------------------------------------------------------------------------------------
Micro-Cap Growth Fund
Institutional Class
12/31/98(a) $ 0.00 $ (0.63) $ (0.63) $ 19.88 (13.18)% $ 258,983
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 0.00 (2.62) (2.62) 23.66 33.95 257,842
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 0.00 (2.03) (2.03) 19.85 20.05 164,139
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 0.00 (0.34) (0.34) 18.47 22.64 83,973
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/95 0.00 0.00 0.00 15.38 29.54 69,775
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/94 0.00 0.00 0.00 11.87 7.31 32,605
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class
12/31/98(a) 0.00 (0.63) (0.63) 19.73 (13.30) 2,709
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 0.00 (2.62) (2.62) 23.52 33.70 4,779
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 0.00 (2.03) (2.03) 19.78 19.72 2,116
- ------------------------------------------------------------------------------------------------------------------------------------
04/01/96-06/30/96 0.00 0.00 0.00 18.46 10.34 566
- ------------------------------------------------------------------------------------------------------------------------------------
Small-Cap Growth Fund
Institutional Class
12/31/98(a) $ 0.00 $ (0.47) $ (0.47) $ 11.65 (13.21)% $ 59,907
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 0.00 (1.88) (1.88) 14.01 19.33 47,641
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 0.00 (10.59) (10.59) 13.40 22.82 33,390
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 0.00 (1.60) (1.60) 20.83 7.22 32,954
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/95 0.00 (1.43) (1.43) 21.02 17.39 73,977
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/94 0.00 (0.64) (0.64) 19.38 4.62 50,425
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class
12/31/98(a) 0.00 (0.47) (0.47) 11.59 (13.39) 1,383
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 0.00 (1.88) (1.88) 13.97 18.90 981
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 0.00 (10.59) (10.59) 13.41 23.12 1
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 0.00 (1.60) (1.60) 20.82 7.18 112
- ------------------------------------------------------------------------------------------------------------------------------------
09/27/95-10/31/95 0.00 0.00 0.00 21.01 (5.34) 544
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses Income (Loss)
to Average to Average Portfolio
Net Assets Net Assets Turnover Rate
------------------------------------------------------------------
<S> <C> <C> <C>
Mid-Cap Growth Fund
Institutional Class
12/31/98 (a) 0.71%* 0.49% 45%*
- ---------------------------------------------------------------------------------------------------
06/30/98 0.71 0.46 66
- ---------------------------------------------------------------------------------------------------
06/30/97 0.71 0.53 82
- ---------------------------------------------------------------------------------------------------
11/01/95-06/30/96 0.70* 1.11* 79
- ---------------------------------------------------------------------------------------------------
10/31/95 0.70 0.43 78
- ---------------------------------------------------------------------------------------------------
10/31/94 0.70 0.45 61
- ---------------------------------------------------------------------------------------------------
Administrative Class
12/31/98 (a) 0.96* 0.24* 45
- ---------------------------------------------------------------------------------------------------
06/30/98 0.95 0.22 66
- ---------------------------------------------------------------------------------------------------
06/30/97 0.96 0.28 82
- ---------------------------------------------------------------------------------------------------
11/01/95-06/30/96 0.95* 0.89* 79
- ---------------------------------------------------------------------------------------------------
11/30/94-10/31/95 0.94* 0.23* 72
- ---------------------------------------------------------------------------------------------------
Micro-Cap Growth Fund
Institutional Class
12/31/98 (a) 1.51%* (0.64)% 37%
- ---------------------------------------------------------------------------------------------------
06/30/98 1.51 (0.50) 72
- ---------------------------------------------------------------------------------------------------
06/30/97 1.52 (0.49) 84
- ---------------------------------------------------------------------------------------------------
11/01/95-06/30/96 1.50* (0.45)* 54
- ---------------------------------------------------------------------------------------------------
10/31/95 1.50 (0.37) 87
- ---------------------------------------------------------------------------------------------------
10/31/94 1.50 (0.25) 59
- ---------------------------------------------------------------------------------------------------
Administrative Class
12/31/98 (a) 1.76* (0.90)* 37
- ---------------------------------------------------------------------------------------------------
06/30/98 1.76 (0.74) 72
- ---------------------------------------------------------------------------------------------------
06/30/97 1.77 (0.74) 84
- ---------------------------------------------------------------------------------------------------
04/01/96-06/30/96 1.73* (0.74)* 54
- ---------------------------------------------------------------------------------------------------
Small-Cap Growth Fund
Institutional Class
12/31/98 (a) 1.26%* (0.09)% 48%
- ---------------------------------------------------------------------------------------------------
06/30/98 1.26 (0.20) 77
- ---------------------------------------------------------------------------------------------------
06/30/97 1.32 (0.05) 129
- ---------------------------------------------------------------------------------------------------
11/01/95-06/30/96 1.25* (0.20)* 59
- ---------------------------------------------------------------------------------------------------
10/31/95 1.25 (0.27) 86
- ---------------------------------------------------------------------------------------------------
10/31/94 1.25 (0.33) 66
- ---------------------------------------------------------------------------------------------------
Administrative Class
12/31/98 (a) 1.51* (0.34)* 48
- ---------------------------------------------------------------------------------------------------
06/30/98 1.49 (0.51) 77
- ---------------------------------------------------------------------------------------------------
06/30/97 1.54 (0.36) 129
- ---------------------------------------------------------------------------------------------------
11/01/95-06/30/96 1.50* (0.41)* 59
- ---------------------------------------------------------------------------------------------------
09/27/95-10/31/95 1.60* (0.82)* 9
- ---------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes 63
<PAGE>
Financial Highlights - Institutional Classes
<TABLE>
<CAPTION>
Net Asset Net Realized/ Dividends
Value Unrealized Total Income from Net
Selected Per Share Data for Beginning Net Investment Gain (Loss) on from Investment Investment
the Year or Period Ended: of Period Income (Loss) Investments Operations Income
------------ -------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Renaissance Fund
Institutional Class
12/31/98 (a) $ 19.07 $ 0.03(b) $ (0.41)(b) $ (0.38) $ 0.00
- ---------------------------------- ------------ -------------- ------------- ------------- ------------
12/30/97-06/30/98 16.73 0.05 2.29 2.34 0.00
- ---------------------------------- ------------ -------------- ------------- ------------- ------------
Administrative Class
08/31/98-12/31/98 (a) 15.37 0.03(b) 3.28(b) 3.31 0.00
- ---------------------------------- ------------ -------------- ------------- ------------- ------------
Core Equity Fund
Institutional Class
12/31/98 (a) $ 20.39 $ 0.01(b) $ 2.11(b) $ 2.12 $ 0.00
- ---------------------------------- ------------ -------------- ------------- ------------- ------------
06/30/98 15.55 0.03(b) 6.11(b) 6.14 0.00
- ---------------------------------- ------------ -------------- ------------- ------------- ------------
06/30/97 13.55 0.03(b) 2.78(b) 2.81 (0.02)
- ---------------------------------- ------------ -------------- ------------- ------------- ------------
11/01/95-06/30/96 12.72 0.51 0.65 1.16 (0.04)
- ---------------------------------- ------------ -------------- ------------- ------------- ------------
12/28/94-10/31/95 10.00 0.07 2.71 2.78 (0.06)
- ---------------------------------- ------------ -------------- ------------- ------------- ------------
Administrative Class
12/31/98 (a) 20.32 (0.02)(b) 2.06 (b) 2.04 0.00
- ---------------------------------- ------------ -------------- ------------- ------------- ------------
06/30/98 15.53 (0.01)(b) 6.10 (b) 6.09 0.00
- ---------------------------------- ------------ -------------- ------------- ------------- ------------
06/30/97 13.56 0.00(b) 2.77 (b) 2.77 (0.01)
- ---------------------------------- ------------ -------------- ------------- ------------- ------------
11/01/95-06/30/96 12.73 0.49 0.65 1.14 (0.02)
- ---------------------------------- ------------ -------------- ------------- ------------- ------------
05/31/95-10/31/95 11.45 0.02 1.28 1.30 (0.02)
- ---------------------------------- ------------ -------------- ------------- ------------- ------------
Mid-Cap Equity Fund
Institutional Class
12/31/98 (a) $ 13.53 $ (0.01)(b) $ 1.03 (b) $ 1.02 $ 0.00
- ---------------------------------- ------------ -------------- ------------- ------------- ------------
06/30/98 14.04 (0.03)(b) 3.61(b) 3.58 0.00
- ---------------------------------- ------------ -------------- ------------- ------------- ------------
06/30/97 14.66 (0.06)(b) 1.31(b) 1.25 0.00
- ---------------------------------- ------------ -------------- ------------- ------------- ------------
11/01/95-06/30/96 12.92 0.49 1.62 2.11 0.00
- ---------------------------------- ------------ -------------- ------------- ------------- ------------
12/28/94-10/31/95 10.00 0.02 2.92 2.94 (0.02)
- ---------------------------------- ------------ -------------- ------------- ------------- ------------
Administrative Class
12/31/98 (a) 13.50 (0.02)(b) 1.02(b) 1.00 0.00
- ---------------------------------- ------------ -------------- ------------- ------------- ------------
08/21/97-06/30/98 15.27 (0.05)(b) 2.37(b) 2.32 0.00
- ---------------------------------- ------------ -------------- ------------- ------------- ------------
International Growth Fund
Institutional Class
12/31/98 (a) $ 13.55 $ (0.03)(b) $ 0.36(b) $ 0.33 $ (0.02)
- ---------------------------------- ------------ -------------- ------------- ------------- ------------
12/31/97-06/30/98 10.00 0.00(b) 3.55(b) 3.55 0.00
- ---------------------------------- ------------ -------------- ------------- ------------- ------------
</TABLE>
* Annualized
(a) Unaudited
(b) Per share amounts based on average number of shares outstanding during the
period.
64 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Dividends in Distributions
Excess of Net from Net Net Asset
Selected Per Share Data for Investment Realized Total Value End Net Assets End
the Year or Period Ended: Income Capital Gains Distributions of Period Total Return of Period (000s)
------------- ------------- -------------- ----------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Renaissance Fund
Institutional Class
12/31/98 (a) $ 0.00 $ (2.33) $ (2.33) $ 16.36 (1.07)% $ 77
- -------------------------------- ------------- ------------- -------------- ----------- ------------ ---------------
12/30/97-06/30/98 0.00 0.00 0.00 19.07 13.99 851
- -------------------------------- ------------- ------------- -------------- ----------- ------------ ---------------
Administrative Class
08/31/98-12/31/98 (a) 0.00 (2.33) (2.33) 16.35 22.91 261
- -------------------------------- ------------- ------------- -------------- ----------- ------------ ---------------
Core Equity Fund
Institutional Class
12/31/98 (a) $ 0.00 $ (0.73) $ (0.73) $ 21.78 10.69% $ 1,775
- -------------------------------- ------------- ------------- -------------- ----------- ------------ ---------------
06/30/98 0.00 (1.30) (1.30) 20.39 41.83 1,915
- -------------------------------- ------------- ------------- -------------- ----------- ------------ ---------------
06/30/97 0.00 (0.79) (0.81) 15.55 21.59 6,444
- -------------------------------- ------------- ------------- -------------- ----------- ------------ ---------------
11/01/95-06/30/96 (0.01) (0.28) (0.33) 13.55 9.41 10,452
- -------------------------------- ------------- ------------- -------------- ----------- ------------ ---------------
12/28/94-10/31/95 0.00 0.00 (0.06) 12.72 27.86 7,791
- -------------------------------- ------------- ------------- -------------- ----------- ------------ ---------------
Administrative Class
12/31/98 (a) 0.00 (0.73) (0.73) 21.63 10.33 168,569
- -------------------------------- ------------- ------------- -------------- ----------- ------------ ---------------
06/30/98 0.00 (1.30) (1.30) 20.32 41.54 128,666
- -------------------------------- ------------- ------------- -------------- ----------- ------------ ---------------
06/30/97 0.00 (0.79) (0.80) 15.53 21.20 29,332
- -------------------------------- ------------- ------------- -------------- ----------- ------------ ---------------
11/01/95-06/30/96 (0.01) (0.28) (0.31) 13.56 9.23 33,575
- -------------------------------- ------------- ------------- -------------- ----------- ------------ ---------------
05/31/95-10/31/95 0.00 0.00 (0.02) 12.73 11.34 24,645
- -------------------------------- ------------- ------------- -------------- ----------- ------------ ---------------
Mid-Cap Equity Fund
Institutional Class
12/31/98 (a) $ 0.00 $ (0.65) $ (0.65) $ 13.90 8.10 $ 9,254
- -------------------------------- ------------- ------------- -------------- ----------- ------------ ---------------
06/30/98 0.00 (4.09) (4.09) 13.53 30.40 8,488
- -------------------------------- ------------- ------------- -------------- ----------- ------------ ---------------
06/30/97 0.00 (1.87) (1.87) 14.04 9.61 7,591
- -------------------------------- ------------- ------------- -------------- ----------- ------------ ---------------
11/01/95-06/30/96 0.00 (0.37) (0.37) 14.66 16.72 8,378
- -------------------------------- ------------- ------------- -------------- ----------- ------------ ---------------
12/28/94-10/31/95 0.00 0.00 (0.02) 12.92 29.34 8,357
- -------------------------------- ------------- ------------- -------------- ----------- ------------ ---------------
Administrative Class
12/31/98 (a) 0.00 (0.65) (0.65) 13.85 7.97 3,924
- -------------------------------- ------------- ------------- -------------- ----------- ------------ ---------------
08/21/97-06/30/98 0.00 (4.09) (4.09) 13.50 19.65 2,371
- -------------------------------- ------------- ------------- -------------- ----------- ------------ ---------------
International Growth Fund
Institutional Class
12/31/98 (a) $ 0.00 $ (1.03) $ (1.05) $ 12.83 2.88% $ 6,464
- -------------------------------- ------------- ------------- -------------- ----------- ------------ ---------------
12/31/97-06/30/98 0.00 0.00 0.00 13.55 35.50 6,822
- -------------------------------- ------------- ------------- -------------- ----------- ------------ ---------------
</TABLE>
<TABLE>
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses Income (Loss)
to Average to Average Portfolio
Net Assets Net Assets Turnover Rate
--------------- --------------- --------------
<S> <C> <C> <C>
Renaissance Fund
Institutional Class
12/31/98 (a) 0.86%* 0.40%* 104%
- ------------------------------------------------- --------------- --------------- --------------
12/30/97-06/30/98 0.86 0.55 192
- ------------------------------------------------- --------------- --------------- --------------
Administrative Class
08/31/98-12/31/98 (a) 1.02* 0.58* 104
- ------------------------------------------------- --------------- --------------- --------------
Core Equity Fund
Institutional Class
12/31/98 (a) 0.83%* 0.06%* 50%
- ------------------------------------------------- --------------- --------------- --------------
06/30/98 0.83 0.20 120
- ------------------------------------------------- --------------- --------------- --------------
06/30/97 0.87 0.23 139
- ------------------------------------------------- --------------- --------------- --------------
11/01/95-06/30/96 0.82* 0.53* 73
- ------------------------------------------------- --------------- --------------- --------------
12/28/94-10/31/95 0.82* 0.79* 123
- ------------------------------------------------- --------------- --------------- --------------
Administrative Class
12/31/98 (a) 1.08* (0.19)* 50
- ------------------------------------------------- --------------- --------------- --------------
06/30/98 1.08 (0.07) 120
- ------------------------------------------------- --------------- --------------- --------------
06/30/97 1.13 (0.03) 139
- ------------------------------------------------- --------------- --------------- --------------
11/01/95-06/30/96 1.07* 0.28* 73
- ------------------------------------------------- --------------- --------------- --------------
05/31/95-10/31/95 1.06* 0.34* 58
- ------------------------------------------------- --------------- --------------- --------------
Mid-Cap Equity Fund
Institutional Class
12/31/98 (a) 0.89%* (0.09)%* 136%
- ------------------------------------------------- --------------- --------------- --------------
06/30/98 0.89 (0.25) 268
- ------------------------------------------------- --------------- --------------- --------------
06/30/97 1.15 (0.43) 202
- ------------------------------------------------- --------------- --------------- --------------
11/01/95-06/30/96 0.88* (0.32)* 97
- ------------------------------------------------- --------------- --------------- --------------
12/28/94-10/31/95 0.88* 0.24* 132
- ------------------------------------------------- --------------- --------------- --------------
Administrative Class
12/31/98 (a) 1.14* (0.34)* 136
- ------------------------------------------------- --------------- --------------- --------------
08/21/97-06/30/98 1.13* (0.49)* 268
- ------------------------------------------------- --------------- --------------- --------------
International Growth Fund
Institutional Class
12/31/98 (a) 1.42%* (0.53)%* 115%
- ------------------------------------------------- --------------- --------------- --------------
12/31/97-06/30/98 1.36 0.08 60
- ------------------------------------------------- --------------- --------------- --------------
</TABLE>
See accompanying notes 65
<PAGE>
Financial Highlights - Institutional Classes
<TABLE>
<CAPTION>
Net Asset Net Realized/ Dividends
Value Unrealized Total Income from Net
Selected Per Share Data for Beginning Net Investment Gain (Loss) on from Investment Investment
the Year or Period Ended: of Period Income (Loss) Investments Operations Income
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Equity Income Fund
Institutional Class
12/31/98 (a) $ 16.09 $ 0.22(b) $ (0.04)(b) $ 0.18 $ (0.20)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 15.41 0.44(b) 2.75(b) 3.19 (0.42)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 14.36 0.40 3.17 3.57 (0.55)
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 13.09 0.78 1.31 2.09 (0.34)
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/95 11.75 0.46 1.67 2.13 (0.46)
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/94 11.95 0.42 (0.16) 0.26 (0.42)
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class
12/31/98 (a) 16.08 0.20(b) (0.03)(b) 0.17 (0.19)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 15.40 0.40(b) 2.75(b) 3.15 (0.38)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 14.35 0.27 3.26 3.53 (0.51)
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 13.13 0.75 1.31 2.06 (0.36)
- ------------------------------------------------------------------------------------------------------------------------------------
11/30/94-10/31/95 11.12 0.39 2.35 2.74 (0.40)
- ------------------------------------------------------------------------------------------------------------------------------------
Value Fund
Institutional Class
12/31/98 (a) $ 15.66 $ 0.14(b) $ 0.05(b) $ 0.19 $ (0.13)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 14.81 0.25(b) 2.47(b) 2.72 (0.24)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 12.46 1.05 2.11 3.16 (0.31)
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 12.53 0.25 1.62 1.87 (0.17)
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/95 11.55 0.30 2.18 2.48 (0.30)
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/94 11.92 0.30 (0.28) 0.02 (0.29)
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class
12/31/98 (a) 15.65 0.12(b) 0.03(b) 0.15 (0.11)
- ------------------------------------------------------------------------------------------------------------------------------------
08/21/97-06/30/98 15.66 0.19(b) 1.65(b) 1.84 (0.22)
- ------------------------------------------------------------------------------------------------------------------------------------
Value 25 Fund
Institutional Class
07/10/98-12/31/98 (a) $ 10.00 $ (0.16)(b) $ (1.35)(b) $ (1.51) $ 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Small-Cap Value Fund
Institutional Class
12/31/98 (a) $ 17.68 $ 0.15(b) $ (1.83)(b) $ (1.68) $ (0.21)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 15.78 0.29(b) 2.50(b) 2.79 (0.13)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 14.20 0.46 3.63 4.09 (0.13)
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 13.10 0.56 1.49 2.05 (0.21)
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/95 12.07 0.28 1.92 2.20 (0.28)
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/94 12.81 0.29 (0.65) (0.36) (0.29)
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class
12/31/98 (a) 17.63 0.14(b) (1.83)(b) (1.69) (0.20)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 15.76 0.25(b) 2.49(b) 2.74 (0.11)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 14.20 0.38 3.68 4.06 (0.12)
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 13.16 0.54 1.43 1.97 (0.19)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized
(a) Unaudited
(b) Per share amounts based on average number of shares outstanding during the
period.
66 See accompanying notes
<PAGE>
Financial Highlights - Institutional Classes
<TABLE>
<CAPTION>
Dividends in
Excess of Net Distributions Net Asset
Selected Per Share Data for Investment from Net Realized Total Value End Total Net Assets End
the Year or Period Ended: Income Capital Gains Distributions of Period Return of Period (000s)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Equity Income Fund
Institutional Class
12/31/98 (a) $ 0.00 $ (1.76) $ (1.96) $ 14.31 1.51% $ 131,474
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 0.00 (2.09) (2.51) 16.09 21.84 138,650
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 0.00 (1.97) (2.52) 15.41 27.67 121,138
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 0.00 (0.48) (0.82) 14.36 16.35 116,714
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/95 0.00 (0.33) (0.79) 13.09 19.36 118,015
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/94 0.00 (0.04) (0.46) 11.75 2.25 92,365
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class
12/31/98 (a) 0.00 (1.76) (1.95) 14.30 1.39 10,733
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 0.00 (2.09) (2.47) 16.08 21.58 11,699
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 0.00 (1.97) (2.48) 15.40 27.40 8,145
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 0.00 (0.48) (0.84) 14.35 16.08 6,097
- ------------------------------------------------------------------------------------------------------------------------------------
11/30/94-10/31/95 0.00 (0.33) (0.73) 13.13 25.69 140
- ------------------------------------------------------------------------------------------------------------------------------------
Value Fund
Institutional Class
12/31/98 (a) $ 0.00 $ (1.72) $ (1.85) $ 14.00 1.69% $ 90,942
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 0.00 (1.63) (1.87) 15.66 19.35 83,219
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 0.00 (0.50) (0.81) 14.81 26.38 74,613
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 0.00 (1.77) (1.94) 12.46 16.24 52,727
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/95 0.00 (1.20) (1.50) 12.53 24.98 14,443
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/94 0.00 (0.10) (0.39) 11.55 0.15 15,442
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class
12/31/98 (a) 0.00 (1.72) (1.83) 13.97 1.46 15,735
- ------------------------------------------------------------------------------------------------------------------------------------
08/21/97-06/30/98 0.00 (1.63) (1.85) 15.65 12.71 10,349
- ------------------------------------------------------------------------------------------------------------------------------------
Value 25 Fund
Institutional Class
07/10/98-12/31/98 (a) $ 0.00 $ 0.00 $ 0.00 $ 8.49 (14.51)% $ 160
- ------------------------------------------------------------------------------------------------------------------------------------
Small-Cap Value Fund
Institutional Class
12/31/98 (a) $ 0.00 $ (0.45) $ (0.66) $ 15.34 (9.31)% $ 59,431
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 0.00 (0.76) (0.89) 17.68 17.77 47,432
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 0.00 (2.38) (2.51) 15.78 31.99 34,639
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 0.00 (0.74) (0.95) 14.20 16.35 29,017
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/95 0.00 (0.89) (1.17) 13.10 19.88 35,093
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/94 0.00 (0.09) (0.38) 12.07 (2.89) 31,236
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class
12/31/98 (a) 0.00 (0.45) (0.65) 15.29 (9.43) 19,175
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 0.00 (0.76) (0.87) 17.63 17.41 10,751
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 0.00 (2.38) (2.50) 15.76 31.70 5,916
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 0.00 (0.74) (0.93) 14.20 15.64 4,433
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses Income (Loss)
to Average to Average Portfolio
Equity Income Fund Net Assets Net Assets Turnover Rate
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Institutional Class
12/31/98 (a) 0.71%* 2.86%* 38%
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 0.71 2.71 45
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 0.72 3.03 45
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 0.70* 3.41* 52
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/95 0.70 3.83 46
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/94 0.70 3.77 36
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class
12/31/98 (a) 0.96* 2.59* 38
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 0.96 2.45 45
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 0.97 2.79 45
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 0.95* 3.19* 52
- ------------------------------------------------------------------------------------------------------------------------------------
11/30/94-10/31/95 0.95* 3.43* 43
- ------------------------------------------------------------------------------------------------------------------------------------
Value Fund
Institutional Class
12/31/98 (a) 0.71%* 1.85%* 47%
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 0.71 1.59 77
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 0.73 2.02 71
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 0.70* 2.40* 29
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/95 0.70 2.50 71
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/94 0.70 2.34 44
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class
12/31/98 (a) 0.96* 1.62* 47
- ------------------------------------------------------------------------------------------------------------------------------------
08/21/97-06/30/98 0.96* 1.40* 77
- ------------------------------------------------------------------------------------------------------------------------------------
Value 25 Fund
Institutional Class
07/10/98-12/31/98 (a) 0.75%* (3.97)%* 35%
- ------------------------------------------------------------------------------------------------------------------------------------
Small-Cap Value Fund
Institutional Class
12/31/98 (a) 0.86%* 1.99%* 24%
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 0.85 1.65 41
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 0.90 1.92 48
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 0.85* 2.12* 35
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/95 0.85 2.25 50
- ------------------------------------------------------------------------------------------------------------------------------------
10/31/94 0.85 2.23 48
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class
12/31/98 (a) 1.10* 1.78* 24
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 1.10 1.39 41
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/97 1.16 1.68 48
- ------------------------------------------------------------------------------------------------------------------------------------
11/01/95-06/30/96 1.10* 1.86* 35
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes 67
<PAGE>
Financial Highlights - Institutional Classes
<TABLE>
<CAPTION>
Net Asset Net Realized / Dividends
Value Unrealized Total Income from Net
Selected Per Share Data for the Beginning Net Investment Gain (Loss) on from Investment Investment
Year or Period Ended: of Period Income (Loss) Investments Operations Income
-------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Enhanced Equity Fund
Institutional Class
12/31/98 (a) $ 12.64 $ 0.04(b) $ 0.68(b) $ 0.72 $ (0.06)
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
06/30/98 16.46 0.11(b) 3.91(b) 4.02 (0.11)
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
06/30/97 15.91 1.18 3.10 4.28 (0.10)
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
11/01/95-06/30/96 14.44 0.34 1.67 2.01 (0.16)
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
10/31/95 11.99 0.25 2.62 2.87 (0.25)
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
10/31/94 12.08 0.25 (0.04) 0.21 (0.25)
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
Administrative Class
12/31/98 (a) 12.59 0.03(b) 0.68(b) 0.71 (0.06)
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
08/21/97-06/30/98 17.53 0.05(b) 2.85(b) 2.90 (0.11)
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
Structured Emerging Markets Fund
Institutional Class
12/31/98 (a) $ 10.00 $ 0.07(b) $ (0.77)(b) $ (0.70) $ (0.07)
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
Tax Efficient Structured Emerging Markets Fund
Institutional Class
12/31/98 (a) $ 10.00 $ 0.07(b) $ (0.61)(b) $ (0.54) $ (0.06)
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
Tax Efficient Equity Fund
Administrative Class
09/30/98-12/31/98 (a) $ 8.65 $ 0.03(b) $ 1.85(b) $ 1.88 $ 0.00
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
Balanced Fund
Institutional Class
12/31/98 (a) $ 12.15 $ 0.21(b) $ 0.11(b) $ 0.32 $ (0.14)
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
06/30/98 11.42 0.35(b) 1.81(b) 2.16 (0.34)
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
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)
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
</TABLE>
* Annualized
(a) Unaudited
(b) Per share amounts based on average number of shares outstanding during the
period.
68 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Dividends in Distributions
Excess of Net from Net
Selected Per Share Data for the Investment Realized Total Net Asset Value
Year or Period Ended: Income Capital Gains Distributions End of Period Total Return
-------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Enhanced Equity Fund
Institutional Class
12/31/98 (a) $ 0.00 $ (1.61) $ (1.67) $ 11.69 6.39%
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
06/30/98 0.00 (7.73) (7.84) 12.64 32.33
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
06/30/97 0.00 (3.63) (3.73) 16.46 31.45
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
11/01/95-06/30/96 0.00 (0.38) (0.54) 15.91 14.21
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
10/31/95 0.00 (0.17) (0.42) 14.44 24.46
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
10/31/94 0.00 (0.05) (0.30) 11.99 1.83
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
Administrative Class
12/31/98 (a) 0.00 (1.61) (1.67) 11.63 6.30
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
08/21/97-06/30/98 0.00 (7.73) (7.84) 12.59 23.85
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
Structured Emerging Markets Fund
Institutional Class
12/31/98 (a) $ 0.00 $ (0.28) $ (0.35) $ 8.95 (7.04)%
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
Tax Efficient Structured Emerging Markets Fund
Institutional Class
12/31/98 (a) $ 0.00 $ 0.00 $ (0.06) $ 9.40 (5.37)%
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
Tax Efficient Equity Fund
Administrative Class
09/30/98-12/31/98 (a) $ 0.00 $ 0.00 $ 0.00 $ 10.53 21.79%
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
Balanced Fund
Institutional Class
12/31/98 (a) $ 0.00 $ (1.64) $ (1.78) $ 10.69 3.17%
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
06/30/98 0.00 (1.09) (1.43) 12.15 19.91
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
06/30/97 0.00 (1.96) (2.32) 11.42 20.37
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
11/01/95-06/30/96 0.00 (1.01) (1.28) 11.64 9.07
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
10/31/95 0.00 0.00 (0.44) 11.89 19.47
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
10/31/94 0.00 (0.15) (0.49) 10.35 0.08
- ---------------------------------------------- -------------- --------------- --------------- --------------- ---------------
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses Income (Loss)
Selected Per Share Data for the Net Assets End to Average to Average Portfolio
Year or Period Ended: of Period (000s) Net Assets Net Assets Turnover Rate
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Enhanced Equity Fund
Institutional Class
12/31/98 (a) $ 37,868 0.71%* 0.70%* 24%
- ---------------------------------------------- ---------------- ---------------- ---------------- ----------------
06/30/98 36,584 0.71 0.63 65
- ---------------------------------------------- ---------------- ---------------- ---------------- ----------------
06/30/97 44,838 0.74 1.31 91
- ---------------------------------------------- ---------------- ---------------- ---------------- ----------------
11/01/95-06/30/96 83,425 0.70* 1.58* 53
- ---------------------------------------------- ---------------- ---------------- ---------------- ----------------
10/31/95 73,999 0.70 1.91 21
- ---------------------------------------------- ---------------- ---------------- ---------------- ----------------
10/31/94 65,915 0.70 2.20 44
- ---------------------------------------------- ---------------- ---------------- ---------------- ----------------
Administrative Class
12/31/98 (a) 16,672 0.96* 0.45* 24
- ---------------------------------------------- ---------------- ---------------- ---------------- ----------------
08/21/97-06/30/98 10,409 0.95* 0.47* 65
- ---------------------------------------------- ---------------- ---------------- ---------------- ----------------
Structured Emerging Markets Fund
Institutional Class
12/31/98 (a) $ 33,058 0.95%* 1.64%* 15%
- ---------------------------------------------- ---------------- ---------------- ---------------- ----------------
Tax Efficient Structured Emerging Markets Fund
Institutional Class
12/31/98 (a) $ 45,649 0.96%* 1.52%* 19%
- ---------------------------------------------- ---------------- ---------------- ---------------- ----------------
Tax Efficient Equity Fund
Administrative Class
09/30/98-12/31/98 (a) $ 392 0.87%* 1.23* 8%
- ---------------------------------------------- ---------------- ---------------- ---------------- ----------------
Balanced Fund
Institutional Class
12/31/98 (a) $ 38,014 0.71% 3.69%* 100%
- ---------------------------------------------- ---------------- ---------------- ---------------- ----------------
06/30/98 41,222 0.72 2.91 186
- ---------------------------------------------- ---------------- ---------------- ---------------- ----------------
06/30/97 61,518 0.74 3.33 199
- ---------------------------------------------- ---------------- ---------------- ---------------- ----------------
11/01/95-06/30/96 82,562 0.70 3.46* 140
- ---------------------------------------------- ---------------- ---------------- ---------------- ----------------
10/31/95 72,638 0.70 3.73 43
- ---------------------------------------------- ---------------- ---------------- ---------------- ----------------
10/31/94 130,694 0.70 3.25 47
- ---------------------------------------------- ---------------- ---------------- ---------------- ----------------
</TABLE>
See accompanying notes 69
<PAGE>
Statements of Assets and Liabilities
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Capital
Emerging International International Appreciation
Amounts in thousands, except per share amounts Markets Fund Developed Fund Fund Fund
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets:
Investments, at value $ 20,287 $ 125,534 $ 144,735 $ 1,144,935
- ---------------------------------------------------------------------------------------------------------------------------------
Cash and foreign currency 0 5,041 1,129 0
- ---------------------------------------------------------------------------------------------------------------------------------
Receivable for investments and foreign currency sold 748 1,188 398 10,602
- ---------------------------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold 28 161 398 1,662
- ---------------------------------------------------------------------------------------------------------------------------------
Interest and dividends receivable 56 265 436 1,345
- ---------------------------------------------------------------------------------------------------------------------------------
Other assets 0 0 4 0
- ---------------------------------------------------------------------------------------------------------------------------------
21,119 132,189 147,100 1,158,544
=================================================================================================================================
Liabilities:
Payable for investments and foreign currency purchased $ 512 $ 230 $ 5,985 $ 11,701
- ---------------------------------------------------------------------------------------------------------------------------------
Written options outstanding 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed 204 128 2,484 1,483
- ---------------------------------------------------------------------------------------------------------------------------------
Accrued investment advisory fee 18 73 69 471
- ---------------------------------------------------------------------------------------------------------------------------------
Accrued administration fee 11 62 80 292
- ---------------------------------------------------------------------------------------------------------------------------------
Accrued distribution fee 1 5 81 88
- ---------------------------------------------------------------------------------------------------------------------------------
Accrued servicing fee 0 3 31 93
- ---------------------------------------------------------------------------------------------------------------------------------
Variation margin payable 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
Other liabilities 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
746 501 8,730 14,128
=================================================================================================================================
Net Assets $ 20,373 $ 131,688 $ 138,370 $ 1,144,416
=================================================================================================================================
Net Assets Consist of:
Paid in capital $ 41,317 $ 103,873 $ 120,286 $ 875,555
- ---------------------------------------------------------------------------------------------------------------------------------
Undistributed (overdistributed) net investment income 8 (134) (1,288) 459
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net realized gain (loss) (15,566) 1,771 2,010 31,344
- ---------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) (5,386) 26,178 17,362 237,058
- ---------------------------------------------------------------------------------------------------------------------------------
$ 20,373 $ 131,688 $ 138,370 $ 1,144,416
=================================================================================================================================
Net Assets:
Institutional Class $ 19,017 $ 121,427 $ 1,168 $ 712,374
- ---------------------------------------------------------------------------------------------------------------------------------
Administrative Class 2 35 9,978 203,574
- ---------------------------------------------------------------------------------------------------------------------------------
Other Classes 1,354 10,226 127,224 228,468
- ---------------------------------------------------------------------------------------------------------------------------------
Shares Issued and Outstanding:
Institutional Class 2,248 8,651 106 28,559
- ---------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 3 907 8,211
- ---------------------------------------------------------------------------------------------------------------------------------
Net Asset Value and Redemption Price Per Share
(Net Assets Per Share Outstanding):
Institutional Class $ 8.46 $ 14.04 $ 11.04 $ 24.94
- ---------------------------------------------------------------------------------------------------------------------------------
Administrative Class 8.45 14.05 11.00 24.79
- ---------------------------------------------------------------------------------------------------------------------------------
Cost of Investments Owned $ 25,673 $ 99,644 $ 127,288 $ 907,877
- ---------------------------------------------------------------------------------------------------------------------------------
Cost of Foreign Currency Held $ 504 $ 4,770 $ 2,257 $ 0
- ---------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Mid-Cap Micro-Cap
Amounts in thousands, except per share amounts Growth Fund Growth Fund
--------------------------------
<S> <C> <C>
Assets:
Investments, at value $ 977,556 $ 262,236
- -------------------------------------------------------------------------------------------
Cash and foreign currency 22 80
- -------------------------------------------------------------------------------------------
Receivable for investments and foreign currency sold 3,920 1,102
- -------------------------------------------------------------------------------------------
Receivable for Fund shares sold 2,833 239
- -------------------------------------------------------------------------------------------
Interest and dividends receivable 619 103
- -------------------------------------------------------------------------------------------
Other assets 0 0
- -------------------------------------------------------------------------------------------
984,950 263,760
===========================================================================================
Liabilities:
Payable for investments and foreign currency purchased $ 9,322 $ 1,510
- -------------------------------------------------------------------------------------------
Written options outstanding 0 0
- -------------------------------------------------------------------------------------------
Payable for Fund shares redeemed 5,996 205
- -------------------------------------------------------------------------------------------
Accrued investment advisory fee 375 293
- -------------------------------------------------------------------------------------------
Accrued administration fee 253 59
- -------------------------------------------------------------------------------------------
Accrued distribution fee 152 0
- -------------------------------------------------------------------------------------------
Accrued servicing fee 96 1
- -------------------------------------------------------------------------------------------
Variation margin payable 0 0
- -------------------------------------------------------------------------------------------
Other liabilities 0 0
- -------------------------------------------------------------------------------------------
16,194 2,068
- -------------------------------------------------------------------------------------------
Net Assets $ 968,756 $ 261,692
===========================================================================================
Net Assets Consist of:
Paid in capital $ 813,060 $ 224,690
- -------------------------------------------------------------------------------------------
Undistributed (overdistributed) net investment income 66 (798)
- -------------------------------------------------------------------------------------------
Accumulated undistributed net realized gain (loss) (23,083) (13,145)
- -------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) 178,713 50,945
- -------------------------------------------------------------------------------------------
$ 968,756 $ 261,692
===========================================================================================
Net Assets:
Institutional Class $ 518,586 $ 258,983
- -------------------------------------------------------------------------------------------
Administrative Class 107,131 2,709
- -------------------------------------------------------------------------------------------
Other Classes 343,039 0
- -------------------------------------------------------------------------------------------
Shares Issued and Outstanding:
Institutional Class 22,432 13,025
- -------------------------------------------------------------------------------------------
Administrative Class 4,654 137
- -------------------------------------------------------------------------------------------
Net Asset Value and Redemption Price Per Share
(Net Assets Per Share Outstanding):
Institutional Class $ 23.12 $ 19.88
- -------------------------------------------------------------------------------------------
Administrative Class 23.02 19.73
- -------------------------------------------------------------------------------------------
Cost of Investments Owned $ 798,843 $ 211,291
- -------------------------------------------------------------------------------------------
Cost of Foreign Currency Held $ 0 $ 0
- -------------------------------------------------------------------------------------------
</TABLE>
70 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Small-Cap Renaissance Mid-Cap
Amounts in thousands, except per share amounts Growth Fund Fund Core Equity Fund Equity Fund
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets:
Investments, at value $ 63,680 $ 639,912 $ 170,358 $ 12,909
- -------------------------------------------------------------------------------------------------------------------------------
Cash and foreign currency 205 271 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Receivable for investments and foreign currency sold 149 937 0 546
- -------------------------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold 7 1,566 98 18
- -------------------------------------------------------------------------------------------------------------------------------
Interest and dividends receivable 33 772 55 5
- -------------------------------------------------------------------------------------------------------------------------------
Other assets 0 2 0 0
- -------------------------------------------------------------------------------------------------------------------------------
64,074 643,460 170,511 13,478
===============================================================================================================================
Liabilities:
Payable for investments and foreign currency purchased $ 2,719 $ 4,715 $ 0 $ 289
- -------------------------------------------------------------------------------------------------------------------------------
Written options outstanding 0 72 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed 0 2,042 8 0
- -------------------------------------------------------------------------------------------------------------------------------
Accrued investment advisory fee 52 339 86 7
- -------------------------------------------------------------------------------------------------------------------------------
Accrued administration fee 13 226 38 3
- -------------------------------------------------------------------------------------------------------------------------------
Accrued distribution fee 0 367 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Accrued servicing fee 0 141 35 1
- -------------------------------------------------------------------------------------------------------------------------------
Variation margin payable 0 0 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Other liabilities 0 0 0 0
- -------------------------------------------------------------------------------------------------------------------------------
2,784 7,902 167 300
===============================================================================================================================
Net Assets $ 61,290 $ 635,558 $ 170,344 $ 13,178
===============================================================================================================================
Net Assets Consist of:
Paid in capital $ 60,105 $ 584,306 $ 123,680 $ 10,558
- -------------------------------------------------------------------------------------------------------------------------------
Undistributed (overdistributed) net investment income (20) 44,815 1,238 404
- -------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net realized gain (loss) (6,868) (110,128) 860 (496)
- -------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) 8,073 116,565 44,566 2,712
- -------------------------------------------------------------------------------------------------------------------------------
$ 61,290 $ 635,558 $ 170,344 $ 13,178
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets:
Institutional Class $ 59,907 $ 77 $ 1,775 $ 9,254
- -------------------------------------------------------------------------------------------------------------------------------
Administrative Class 1,383 261 168,569 3,924
- -------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 635,220 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Shares Issued and Outstanding:
Institutional Class 5,143 5 82 666
- -------------------------------------------------------------------------------------------------------------------------------
Administrative Class 119 16 7,793 283
- -------------------------------------------------------------------------------------------------------------------------------
Net Asset Value and Redemption Price Per Share
(Net Assets Per Share Outstanding):
Institutional Class $ 11.65 $ 16.36 $ 21.78 $ 13.90
- -------------------------------------------------------------------------------------------------------------------------------
Administrative Class 11.59 16.35 21.63 13.85
- -------------------------------------------------------------------------------------------------------------------------------
Cost of Investments Owned $ 55,607 $ 523,408 $ 125,792 $ 10,197
- -------------------------------------------------------------------------------------------------------------------------------
Cost of Foreign Currency Held $ 0 $ 0 $ 0 $ 0
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
International Equity Small-Cap
Amounts in thousands, except per share amounts Growth Fund Income Fund Value Fund Value 25 Fund Value Fund
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments, at value $ 6,463 $ 197,053 $ 243,923 $ 1,942 $ 402,272
- ------------------------------------------------------------------------------------------------------------------------------------
Cash and foreign currency 65 0 0 1 187
- ------------------------------------------------------------------------------------------------------------------------------------
Receivable for investments and foreign currency
sold 27 3,863 0 12 2,314
- ------------------------------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold 0 313 266 53 1,768
- ------------------------------------------------------------------------------------------------------------------------------------
Interest and dividends receivable 10 645 588 5 1,026
- ------------------------------------------------------------------------------------------------------------------------------------
Other assets 0 63 0 0 3
- ------------------------------------------------------------------------------------------------------------------------------------
6,565 201,937 244,777 2,013 407,570
====================================================================================================================================
Liabilities:
Payable for investments and foreign currency
purchased $ 93 $ 607 $ 8 $ 0 $ 3,947
- ------------------------------------------------------------------------------------------------------------------------------------
Written options outstanding 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed 0 832 279 0 2,912
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued investment advisory fee 5 85 99 1 215
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued administration fee 3 55 74 1 133
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued distribution fee 0 29 80 1 153
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued servicing fee 0 16 34 0 76
- ------------------------------------------------------------------------------------------------------------------------------------
Variation margin payable 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Other liabilities 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
101 1,624 574 3 7,436
====================================================================================================================================
Net Assets $ 6,464 $ 200,313 $ 244,203 $ 2,010 $ 400,134
====================================================================================================================================
Net Assets Consist of:
Paid in capital $ 5,050 $ 174,937 $ 222,831 $ 2,087 $ 430,179
- ------------------------------------------------------------------------------------------------------------------------------------
Undistributed (overdistributed) net investment
income 276 4,816 5,638 (1) 5,605
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net realized gain (loss) 24 3,496 840 (118) (18,599)
- ------------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) 1,114 17,064 14,894 42 (17,051)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 6,464 $ 200,313 $ 244,203 $ 2,010 $ 400,134
====================================================================================================================================
Net Assets:
Institutional Class $ 6,464 $ 131,474 $ 90,942 $ 160 $ 59,431
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 10,733 15,735 0 19,175
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 58,106 137,526 1,850 321,528
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Issued and Outstanding:
Institutional Class 504 9,185 6,498 19 3,874
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 751 1,126 0 1,254
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value and Redemption Price Per Share
(Net Assets Per Share Outstanding):
Institutional Class $ 12.83 $ 14.31 $ 14.00 $ 8.49 $ 15.34
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0.00 14.30 13.97 0.00 15.29
- ------------------------------------------------------------------------------------------------------------------------------------
Cost of Investments Owned $ 5,349 $ 179,989 $ 229,029 $ 1,900 $ 419,323
====================================================================================================================================
Cost of Foreign Currency Held $ 62 $ 0 $ 0 $ 0 $ 0
====================================================================================================================================
</TABLE>
See accompanying notes 71
<PAGE>
Statements of Assets and Liabilities
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Tax-Efficient
Structured Structured
Enhanced Emerging Emerging Tax-Efficient Balanced
Amounts in thousands, except per share amounts Equity Fund Markets Fund Markets Fund Equity Fund Fund
------------ ------------ -------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments, at value $ 54,480 $ 32,988 $ 45,115 $ 13,731 $ 81,662
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
Cash and foreign currency 102 37 323 0 0
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
Receivable for investments and foreign currency sold 0 0 14 29 2,248
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
Receivable for Fund shares sold 40 0 248 215 102
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
Interest and dividends receivable 57 71 93 11 326
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
Other assets 0 0 6 0 0
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
54,679 33,096 45,799 13,986 84,338
==================================================== ============ ============ ============== ============= =============
Liabilities:
Payable for investments and foreign currency
purchased $ 101 $ 0 $ 105 $ 716 $ 13,373
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
Written options outstanding 0 0 0 0 1
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
Payable for Fund shares redeemed 0 0 0 0 50
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
Accrued investment advisory fee 22 14 19 5 29
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
Accrued administration fee 12 15 21 4 21
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
Accrued distribution fee 0 0 0 4 16
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
Accrued servicing fee 4 0 0 3 7
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
Variation margin payable 0 0 0 0 2
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
Other liabilities 0 9 5 0 0
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
139 38 150 732 13,499
==================================================== ============ ============ ============== ============= =============
Net Assets $ 54,540 $ 33,058 $ 45,649 $ 13,254 $ 70,839
==================================================== ============ ============ ============== ============= =============
Net Assets Consist of:
Paid in capital $ 39,874 $ 39,253 $ 76,400 $ 12,204 $ 63,815
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
Undistributed (overdistributed) net investment income 1,295 13 16 (1) 2,623
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
Accumulated undistributed net realized gain (loss) (152) (963) (8,119) (96) (1,493)
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
Net unrealized appreciation (depreciation) 13,523 (5,245) (22,648) 1,147 5,894
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
$ 54,540 $ 33,058 $ 45,649 $ 13,254 $ 70,839
==================================================== ============ ============ ============== ============= =============
Net Assets:
Institutional Class $ 37,868 $ 33,058 $ 45,649 $ 0 $ 38,014
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
Administrative Class 16,672 0 0 392 0
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
Other Classes 0 0 0 12,862 32,825
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
Shares Issued and Outstanding:
Institutional Class 3,239 3,692 4,856 0 3,557
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
Administrative Class 1,434 0 0 37 0
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
Net Asset Value and Redemption Price Per Share
(Net Assets Per Share Outstanding):
Institutional Class $ 11.69 $ 8.95 $ 9.40 $ 0.00 $ 10.69
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
Administrative Class 11.63 0.00 0.00 10.53 0.00
- ---------------------------------------------------- ------------ ------------ -------------- ------------- -------------
Cost of Investments Owned $ 40,957 $ 38,233 $ 67,760 $ 12,584 $ 75,744
==================================================== ============ ============ ============== ============= =============
Cost of Foreign Currency Held $ 0 $ 37 $ 337 $ 0 $ 0
==================================================== ============ ============ ============== ============= =============
</TABLE>
72 See accompanying notes
<PAGE>
Statements of Operations
For the six months ended December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Emerging International Capital
Markets Developed International Appreciation Mid-Cap
Amounts in thousands Fund Fund Fund Fund Growth Fund
----------- ------------- ------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 270 $ 492 $ 598 $ 7,094 $ 3,419
- ---------------------------------------------------------------------------------------------------------------------------------
Interest 28 169 46 1,122 1,443
- ---------------------------------------------------------------------------------------------------------------------------------
Total Income 298 661 644 8,216 4,862
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment advisory fees 102 386 386 2,564 1,843
- ---------------------------------------------------------------------------------------------------------------------------------
Administration fees 61 331 456 1,577 1,255
- ---------------------------------------------------------------------------------------------------------------------------------
Distribution and/or servicing fees - Administrative Class 2 8 2 235 108
- ---------------------------------------------------------------------------------------------------------------------------------
Distribution and/or servicing fees - Other Classes 6 50 646 698 1,190
- ---------------------------------------------------------------------------------------------------------------------------------
Trustees' fees 1 5 5 40 28
- ---------------------------------------------------------------------------------------------------------------------------------
Miscellaneous 6 10 99 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
Total Expenses 178 790 1,594 5,114 4,424
- ---------------------------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) 120 (129) (950) 3,102 438
- ---------------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments (2,300) 4,204 6,621 33,019 (22,826)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
futures contracts and written options 0 (117) 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
foreign currency transactions (9) (1,181) (628) 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) on investments (2,522) (1,566) (14,025) (12,629) 38,989
- ---------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) on futures contracts and written options 0 (296) 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) on translation of assets
and liabilities denominated in foreign currencies 3 801 (44) 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
Net Gain (Loss) (4,828) 1,845 (8,076) 20,390 16,163
- ---------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease)
in Assets Resulting from Operations $ (4,708) $ 1,716 $ (9,026) $ 23,492 $ 16,601
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes 73
<PAGE>
Statements of Operations
For the six months ended December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Micro-Cap Small-Cap Renaissance Core Equity
Amounts in thousands Growth Fund Growth Fund Fund Fund
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 620 $ 218 $ 3,641 $ 406
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Interest 485 101 581 222
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Total Income 1,105 319 4,222 628
=============================================================== ============= ============= ============= =============
Expenses:
Investment advisory fees 1,575 273 1,870 403
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Administration fees 315 68 1,246 177
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Distribution and/or servicing fees - Administrative Class 4 0 0 174
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Distribution and/or servicing fees - Other Classes 0 0 2,796 0
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Trustees' fees 9 2 23 5
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Miscellaneous 0 0 6 0
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Total Expenses 1,903 343 5,941 759
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net Investment Income (Loss) (798) (24) (1,719) (131)
=============================================================== ============= ============= ============= =============
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments (13,145) (6,675) (60,991) 2,208
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net realized gain (loss) on
futures contracts and written options 0 0 (642) 86
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net realized gain (loss) on
foreign currency transactions 0 0 0 0
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net change in unrealized appreciation
(depreciation) on investments (22,977) (1,954) 51,051 15,300
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net change in unrealized appreciation
(depreciation) on futures contracts and written options 0 0 (16) 0
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net change in unrealized appreciation
(depreciation) on translation of assets
and liabilities denominated in foreign currencies 0 0 0 0
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net Gain (Loss) (36,122) (8,629) (10,598) 17,594
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net Increase (Decrease)
in Assets Resulting from Operations $ (36,920) $ (8,653) $ (12,317) $ 17,463
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
<CAPTION>
Mid-Cap International
Amounts in thousands Equity Fund Growth Fund
- --------------------------------------------------------------- ------------- -------------
<S> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 24 $ 21
- --------------------------------------------------------------- ------------- -------------
Interest 20 8
- --------------------------------------------------------------- ------------- -------------
Total Income 44 29
=============================================================== ============= =============
Expenses:
Investment advisory fees 35 28
- --------------------------------------------------------------- ------------- -------------
Administration fees 14 16
- --------------------------------------------------------------- ------------- -------------
Distribution and/or servicing fees - Administrative Class 4 0
- --------------------------------------------------------------- ------------- -------------
Distribution and/or servicing fees - Other Classes 0 0
- --------------------------------------------------------------- ------------- -------------
Trustees' fees 0 0
- --------------------------------------------------------------- ------------- -------------
Miscellaneous 0 2
- --------------------------------------------------------------- ------------- -------------
Total Expenses 53 46
- --------------------------------------------------------------- ------------- -------------
Net Investment Income (Loss) (9) (17)
=============================================================== ============= =============
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments (72) 547
- --------------------------------------------------------------- ------------- -------------
Net realized gain (loss) on
futures contracts and written options 0 0
- --------------------------------------------------------------- ------------- -------------
Net realized gain (loss) on
foreign currency transactions 0 (3)
- --------------------------------------------------------------- ------------- -------------
Net change in unrealized appreciation
(depreciation) on investments 1,201 (363)
- --------------------------------------------------------------- ------------- -------------
Net change in unrealized appreciation
(depreciation) on futures contracts and written options 0 0
- --------------------------------------------------------------- ------------- -------------
Net change in unrealized appreciation
(depreciation) on translation of assets
and liabilities denominated in foreign currencies 0 0
- --------------------------------------------------------------- ------------- -------------
Net Gain (Loss) 1,129 181
- --------------------------------------------------------------- ------------- -------------
Net Increase (Decrease)
in Assets Resulting from Operations $ 1,120 $ 164
=============================================================== ============= =============
</TABLE>
74 See accompanying notes
<PAGE>
Statements of Operations
For the six months ended December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Equity Small-Cap
Amounts in thousands Income Fund Value Fund Value 25 Fund Value Fund
------------- ------------- ------------- -------------
Investment Income:
Dividends, net of foreign taxes $ 3,371 $ 2,805 $ 13 $ 4,833
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Interest 151 137 2 408
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Total Income 3,522 2,942 15 5,241
=============================================================== ============= ============= ============= =============
Expenses:
Investment advisory fees 448 523 3 1,119
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Administration fees 290 393 2 696
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Distribution and/or servicing fees - Administrative Class 13 16 0 17
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Distribution and/or servicing fees - Other Classes 216 603 3 1,223
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Trustees' fees 7 9 0 13
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Miscellaneous 0 0 0 0
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Total Expenses 974 1,544 8 3,068
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net Investment Income (Loss) 2,548 1,398 7 2,173
=============================================================== ============= ============= ============= =============
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments 11,693 12,336 (118) (13,324)
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net realized gain (loss) on
futures contracts and written options 0 0 0 0
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net realized gain (loss) on
foreign currency transactions 0 0 0 0
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net change in unrealized appreciation
(depreciation) on investments (11,187) (10,947) 42 (24,115)
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net change in unrealized appreciation
(depreciation) on futures contracts and written options 0 0 0 0
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net change in unrealized appreciation
(depreciation) on translation of assets
and liabilities denominated in foreign currencies 0 0 0 0
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net Gain (Loss) 506 1,389 (76) (37,439)
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net Increase (Decrease)
in Assets Resulting from Operations $ 3,054 $ 2,787 $ (69) $ (35,266)
=============================================================== ============= ============= ============= =============
<CAPTION>
Tax-Efficient
Structured Structured
Enhanced Emerging Emerging Tax-Efficient
Amounts in thousands Equity Fund Markets Fund Markets Fund Equity Fund
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 325 $ 406 $ 502 $ 38
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Interest 13 17 19 6
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Total Income 338 423 521 44
=============================================================== ============= ============= ============= =============
Expenses:
Investment advisory fees 108 74 96 13
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Administration fees 60 82 106 12
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Distribution and/or servicing fees - Administrative Class 17 0 0 0
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Distribution and/or servicing fees - Other Classes 0 0 0 20
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Trustees' fees 2 1 1 0
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Miscellaneous 1 1 2 0
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Total Expenses 188 158 205 45
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net Investment Income (Loss) 150 265 316 (1)
=============================================================== ============= ============= ============= =============
Net Realized and Unrealized Gain (Loss):
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net realized gain (loss) on investments 2,611 46 (8,072) (96)
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net realized gain (loss) on
futures contracts and written options 0 0 0 0
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net realized gain (loss) on
foreign currency transactions 0 (29) (47) 0
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net change in unrealized appreciation
(depreciation) on investments 970 (5,244) (22,645) 1,147
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net change in unrealized appreciation
(depreciation) on futures contracts and written options 0 0 0 0
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net change in unrealized appreciation
(depreciation) on translation of assets
and liabilities denominated in foreign currencies 0 (1) (3) 0
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net Gain (Loss) 3,581 (5,228) (30,767) 1,051
- --------------------------------------------------------------- ------------- ------------- ------------- -------------
Net Increase (Decrease)
in Assets Resulting from Operations $ 3,731 $ (4,963) $ (30,451) $ 1,050
=============================================================== ============= ============= ============= =============
<CAPTION>
Amounts in thousands Balanced Fund
-------------
<S> <C>
Investment Income:
Dividends, net of foreign taxes $ 388
- --------------------------------------------------------------- -------------
Interest 870
- --------------------------------------------------------------- -------------
Total Income 1,258
=============================================================== =============
Expenses:
Investment advisory fees 155
- --------------------------------------------------------------- -------------
Administration fees 109
- --------------------------------------------------------------- -------------
Distribution and/or servicing fees - Administrative Class 0
- --------------------------------------------------------------- -------------
Distribution and/or servicing fees - Other Classes 114
- --------------------------------------------------------------- -------------
Trustees' fees 2
- --------------------------------------------------------------- -------------
Miscellaneous 0
- --------------------------------------------------------------- -------------
Total Expenses 380
- --------------------------------------------------------------- -------------
Net Investment Income (Loss) 878
=============================================================== =============
Net Realized and Unrealized Gain (Loss):
- --------------------------------------------------------------- -------------
Net realized gain (loss) on investments 1,086
- --------------------------------------------------------------- -------------
Net realized gain (loss) on
futures contracts and written options 623
- --------------------------------------------------------------- -------------
Net realized gain (loss) on
foreign currency transactions 0
- --------------------------------------------------------------- -------------
Net change in unrealized appreciation
(depreciation) on investments (474)
- --------------------------------------------------------------- -------------
Net change in unrealized appreciation
(depreciation) on futures contracts and written options (132)
- --------------------------------------------------------------- -------------
Net change in unrealized appreciation
(depreciation) on translation of assets
and liabilities denominated in foreign currencies 0
- --------------------------------------------------------------- -------------
Net Gain (Loss) 1,103
- --------------------------------------------------------------- -------------
Net Increase (Decrease)
in Assets Resulting from Operations $ 1,981
=============================================================== =============
</TABLE>
See accompanying notes 75
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Amounts in thousands Emerging Markets Fund International Developed Fund
----------------------------------- ------------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
December 31, 1998 June 30, 1998 December 31, 1998 June 30, 1998
Increase (Decrease) in Net Assets from: (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Operations
Net investment income (loss) $ 120 $ 195 $ (129) $ 1,254
- --------------------------------------------------- ------------------------------------ ------------------------------------
Net realized gain (loss) (2,309) (3,044) 2,906 1,678
- --------------------------------------------------- ------------------------------------ ------------------------------------
Net change in unrealized appreciation (depreciation) (2,519) (10,785) (1,061) 16,311
- --------------------------------------------------- ------------------------------------ ------------------------------------
Net increase (decrease) resulting from operations (4,708) (13,634) 1,716 19,243
=================================================== ==================================== ====================================
Distributions to Shareholders:
From net investment income
Institutional Class (107) 0 (462) (834)
- --------------------------------------------------- ------------------------------------ ------------------------------------
Administrative Class 0 0 0 (4)
- --------------------------------------------------- ------------------------------------ ------------------------------------
Other Classes (2) 0 0 (33)
- --------------------------------------------------- ------------------------------------ ------------------------------------
From net realized capital gains
Institutional Class 0 0 (1,239) (4,188)
- --------------------------------------------------- ------------------------------------ ------------------------------------
Administrative Class 0 0 (73) (94)
- --------------------------------------------------- ------------------------------------ ------------------------------------
Other Classes 0 0 (115) (291)
- --------------------------------------------------- ------------------------------------ ------------------------------------
Total Distributions (109) 0 (1,889) (5,444)
=================================================== ==================================== ====================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 12,831 23,187 46,431 66,712
- --------------------------------------------------- ------------------------------------ ------------------------------------
Administrative Class 501 1,685 2,047 5,786
- --------------------------------------------------- ------------------------------------ ------------------------------------
Other Classes 1,878 4,265 108,816 66,482
- --------------------------------------------------- ------------------------------------ ------------------------------------
Issued as reinvestment of distributions
Institutional Class 84 0 1,555 4,242
- --------------------------------------------------- ------------------------------------ ------------------------------------
Administrative Class 0 0 21 98
- --------------------------------------------------- ------------------------------------ ------------------------------------
Other Classes 1 0 106 285
- --------------------------------------------------- ------------------------------------ ------------------------------------
Cost of shares redeemed
Institutional Class (13,976) (39,014) (48,389) (54,800)
- --------------------------------------------------- ------------------------------------ ------------------------------------
Administrative Class (1,520) (199) (7,813) (2,245)
- --------------------------------------------------- ------------------------------------ ------------------------------------
Other Classes (2,178) (3,896) (109,664) (61,921)
- --------------------------------------------------- ------------------------------------ ------------------------------------
Net increase (decrease) resulting from Fund
share transactions (2,379) (13,972) (6,890) 24,639
- --------------------------------------------------- ------------------------------------ ------------------------------------
Total Increase (Decrease) in Net Assets (7,196) (27,606) (7,063) 38,438
=================================================== ==================================== ====================================
Net Assets:
Beginning of period 27,569 55,175 138,751 100,313
- --------------------------------------------------- ------------------------------------ ------------------------------------
End of period * $ 20,373 $ 27,569 $ 131,688 $ 138,751
- --------------------------------------------------- ------------------------------------ ------------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 8 $ (3) $ (134) $ 457
- --------------------------------------------------- ------------------------------------ ------------------------------------
<CAPTION>
Amounts in thousands International Fund
------------------------------------
Six Months Ended Year Ended
December 31, 1998 June 30, 1998
Increase (Decrease) in Net Assets from: (Unaudited)
<S> <C> <C>
Operations
Net investment income (loss) $ (950) $ (580)
- ---------------------------------------------------- ----------------- ----------------
Net realized gain (loss) 5,993 8,506
- ---------------------------------------------------- ----------------- ----------------
Net change in unrealized appreciation (depreciation) (14,069) 7,290
- ---------------------------------------------------- ----------------- ----------------
Net increase (decrease) resulting from operations (9,026) 15,216
- ---------------------------------------------------- ----------------- ----------------
Distributions to Shareholders:
From net investment income
Institutional Class 0 0
- ---------------------------------------------------- ----------------- ----------------
Administrative Class 0 0
- ---------------------------------------------------- ----------------- ----------------
Other Classes 0 0
- ---------------------------------------------------- ----------------- ----------------
From net realized capital gains
Institutional Class (67) 0
- ---------------------------------------------------- ----------------- ----------------
Administrative Class (129) 0
- ---------------------------------------------------- ----------------- ----------------
Other Classes (11,816) (13,713)
- ---------------------------------------------------- ----------------- ----------------
Total Distributions (12,012) (13,713)
- ---------------------------------------------------- ----------------- ----------------
Fund Share Transactions:
Receipts for shares sold
Institutional Class 1,144 0
- ---------------------------------------------------- ----------------- ----------------
Administrative Class 9,632 0
- ---------------------------------------------------- ----------------- ----------------
Other Classes 498,836 559,851
- ---------------------------------------------------- ----------------- ----------------
Issued as reinvestment of distributions
Institutional Class 67 0
- ---------------------------------------------------- ----------------- ----------------
Administrative Class 129 0
- ---------------------------------------------------- ----------------- ----------------
Other Classes 11,020 12,731
- ---------------------------------------------------- ----------------- ----------------
Cost of shares redeemed
Institutional Class (42) 0
- ---------------------------------------------------- ----------------- ----------------
Administrative Class (243) 0
- ---------------------------------------------------- ----------------- ----------------
Other Classes (515,587) (615,042)
- ---------------------------------------------------- ----------------- ----------------
Net increase (decrease) resulting from Fund
share transactions 4,956 (42,460)
- ---------------------------------------------------- ----------------- ----------------
Total Increase (Decrease) in Net Assets (16,082) (40,957)
==================================================== ================= ================
Net Assets:
Beginning of period 154,452 195,409
- ---------------------------------------------------- ----------------- ----------------
End of period * $ 138,370 $ 154,452
- ---------------------------------------------------- ----------------- ----------------
*Including net undistributed (overdistributed)
investment income of: $ (1,288) $ (338)
- ---------------------------------------------------- ----------------- ----------------
</TABLE>
76 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Amounts in thousands Capital Appreciation Fund Mid-Cap Growth Fund
---------------------------------- -----------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
December 31, 1998 June 30, 1998 December 31, 1998 June 30, 1998
Increase (Decrease) in Net Assets from: (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Operations
Net investment income (loss) $ 3,102 $ 4,296 $ 438 $ 841
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Net realized gain (loss) 33,019 89,980 (22,826) 58,714
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Net change in unrealized appreciation (depreciation) (12,629) 125,025 38,989 57,682
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Net increase (decrease) resulting from operations 23,492 219,301 16,601 117,237
======================================================== =================================== ===================================
Distributions to Shareholders:
From net investment income
Institutional Class (4,164) (3,482) (342) (1,419)
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Administrative Class (1,045) (171) (48) (35)
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Other Classes (398) (177) (34) (41)
- -------------------------------------------------------- ----------------------------------- -----------------------------------
From net realized capital gains
Institutional Class (43,875) (44,474) (21,475) (21,350)
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Administrative Class (12,574) (1,807) (4,502) (510)
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Other Classes (14,257) (4,063) (15,306) (8,377)
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Total Distributions (76,313) (54,174) (41,707) (31,732)
======================================================== =================================== ===================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 158,767 261,189 231,251 273,380
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Administrative Class 95,535 134,100 50,079 77,781
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Other Classes 62,387 165,130 132,228 249,617
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Issued as reinvestment of distributions
Institutional Class 35,601 37,066 19,853 22,222
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Administrative Class 13,611 1,973 4,542 544
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Other Classes 13,709 4,064 14,074 7,672
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Cost of shares redeemed
Institutional Class (253,066) (164,429) (158,761) (208,995)
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Administrative Class (28,254) (18,481) (19,360) (8,950)
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Other Classes (24,596) (24,147) (73,922) (92,467)
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Net increase (decrease) resulting from Fund
share transactions 73,694 396,465 199,984 320,804
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Total Increase (Decrease) in Net Assets 20,873 561,592 174,878 406,309
======================================================== =================================== ===================================
Net Assets:
Beginning of period 1,123,543 561,951 793,878 387,569
- -------------------------------------------------------- ----------------------------------- -----------------------------------
End of period * $ 1,144,416 $ 1,123,543 $ 968,756 $ 793,878
- -------------------------------------------------------- ----------------------------------- -----------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 459 $ 2,964 $ 66 $ 52
- -------------------------------------------------------- ----------------------------------- -----------------------------------
<CAPTION>
Amounts in thousands Micro-Cap Growth Fund Small-Cap Growth Fund
----------------------------------- -----------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
December 31, 1998 June 30, 1998 December 31, 1998 June 30, 1998
Increase (Decrease) in Net Assets from: (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Operations
Net investment income (loss) $ (798) $ (1,116) $ (24) $ (84)
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Net realized gain (loss) (13,145) 24,846 (6,675) 3,966
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Net change in unrealized appreciation (depreciation) (22,977) 36,520 (1,954) 2,887
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Net increase (decrease) resulting from operations (36,920) 60,250 (8,653) 6,769
======================================================== =================================== ===================================
Distributions to Shareholders:
From net investment income
Institutional Class 0 0 0 0
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Administrative Class 0 0 0 0
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Other Classes 0 0 0 0
- -------------------------------------------------------- ----------------------------------- -----------------------------------
From net realized capital gains
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Institutional Class (7,982) (22,885) (2,229) (4,791)
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Administrative Class (83) (396) (52) (8)
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Other Classes 0 0 0 0
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Total Distributions (8,065) (23,281) (2,281) (4,799)
======================================================== =================================== ===================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 64,107 69,180 23,500 13,396
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Administrative Class 678 4,130 598 1,166
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Other Classes 0 0 0 0
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Issued as reinvestment of distributions
Institutional Class 6,383 19,223 2,229 4,781
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Administrative Class 83 396 51 7
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Other Classes 0 0 0 0
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Cost of shares redeemed
Institutional Class (25,120) (31,187) (2,694) (5,918)
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Administrative Class (2,075) (2,345) (82) (171)
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Other Classes 0 0 0 0
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Net increase (decrease) resulting from Fund
share transactions 44,056 59,397 23,602 13,261
- -------------------------------------------------------- ----------------------------------- -----------------------------------
Total Increase (Decrease) in Net Assets (929) 96,366 12,668 15,231
======================================================== =================================== ===================================
Net Assets:
Beginning of period 262,621 166,255 48,622 33,391
- -------------------------------------------------------- ----------------------------------- -----------------------------------
End of period * $ 261,692 $ 262,621 $ 61,290 $ 48,622
- -------------------------------------------------------- ----------------------------------- -----------------------------------
*Including net undistributed (overdistributed)
investment income of: $ (798) $ 0 $ (20) $ 4
- -------------------------------------------------------- ----------------------------------- -----------------------------------
<CAPTION>
Amounts in thousands Renaissance Fund
-----------------------------------
Six Months Ended Year Ended
December 31, 1998 June 30, 1998
Increase (Decrease) in Net Assets from: (Unaudited)
<S> <C> <C>
Operations
Net investment income (loss) $ (1,719) $ (1,489)
- -------------------------------------------------------- -----------------------------------
Net realized gain (loss) (61,633) 123,570
- -------------------------------------------------------- -----------------------------------
Net change in unrealized appreciation (depreciation) 51,035 4,045
- -------------------------------------------------------- -----------------------------------
Net increase (decrease) resulting from operations (12,317) 126,126
======================================================== ===================================
Distributions to Shareholders:
From net investment income
Institutional Class 0 0
- -------------------------------------------------------- -----------------------------------
Administrative Class 0 0
- -------------------------------------------------------- -----------------------------------
Other Classes 0 (425)
- -------------------------------------------------------- -----------------------------------
From net realized capital gains
Institutional Class (11) 0
- -------------------------------------------------------- -----------------------------------
Administrative Class (25) 0
- -------------------------------------------------------- -----------------------------------
Other Classes (80,825) (80,722)
- -------------------------------------------------------- -----------------------------------
Total Distributions (80,861) (81,147)
======================================================== ==================================
Fund Share Transactions:
Receipts for shares sold 55 761
- -------------------------------------------------------- -----------------------------------
Institutional Class 236 0
- -------------------------------------------------------- -----------------------------------
Administrative Class 216,333 464,673
- -------------------------------------------------------- -----------------------------------
Other Classes
- -------------------------------------------------------- -----------------------------------
Issued as reinvestment of distributions
Institutional Class 0 0
- -------------------------------------------------------- -----------------------------------
Administrative Class 25 0
- -------------------------------------------------------- -----------------------------------
Other Classes 74,622 74,240
- -------------------------------------------------------- -----------------------------------
Cost of shares redeemed
Institutional Class (744) 0
- -------------------------------------------------------- -----------------------------------
Administrative Class (5) 0
- -------------------------------------------------------- -----------------------------------
Other Classes (218,810) (311,714)
- -------------------------------------------------------- -----------------------------------
Net increase (decrease) resulting from Fund
share transactions 71,712 227,960
- -------------------------------------------------------- -----------------------------------
Total Increase (Decrease) in Net Assets (21,466) 272,939
======================================================== ===================================
Net Assets:
Beginning of period 657,024 384,085
- -------------------------------------------------------- -----------------------------------
End of period * $ 635,558 $ 657,024
- -------------------------------------------------------- -----------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 44,815 $ 46,534
- -------------------------------------------------------- -----------------------------------
</TABLE>
See accompanying notes 77
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Amounts in thousands Core Equity Fund Mid-Cap Equity Fund
-------------------------------------------------------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
Increase (Decrease) in Net Assets from: December 31, 1998 June 30, 1998 December 31, 1998 June 30, 1998
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ (131) $ (48) $ (9) $ (23)
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 2,294 7,541 (72) 1,680
- ----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) 15,300 23,946 1,201 714
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from
operations 17,463 31,439 1,120 2,371
==================================================================================================================================
Distributions to Shareholders:
From net investment income
Institutional Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
From net realized capital gains
Institutional Class (60) (310) (425) (2,113)
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class (5,514) (7,237) (168) (138)
- ----------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Total Distributions (5,574) (7,547) (593) (2,251)
==================================================================================================================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 340 998 697 1,655
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 34,711 87,923 1,385 2,245
- ----------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 57 308 184 618
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 5,514 7,237 168 138
- ----------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (632) (6,755) (433) (1,428)
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class (12,116) (18,798) (209) (80)
- ----------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from Fund
share transactions 27,874 70,913 1,792 3,148
- ----------------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets 39,763 94,805 2,319 3,268
==================================================================================================================================
Net Assets:
Beginning of period 130,581 35,776 10,859 7,591
- ----------------------------------------------------------------------------------------------------------------------------------
End of period * $ 170,344 $ 130,581 $ 13,178 $ 10,859
- ----------------------------------------------------------------------------------------------------------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 1,238 $ 1,369 $ 404 $ 413
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Amounts in thousands International Growth Fund
-----------------------------------------
Six Months Ended Period from
Increase (Decrease) in Net Assets from: December 31, 1998 December 31, 1997
(Unaudited) to June 30, 1998
<S> <C> <C>
Operations:
Net investment income (loss) $ (17) $ 0
- --------------------------------------------------------------------------------------------
Net realized gain (loss) 544 305
- --------------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) (363) 1,473
- --------------------------------------------------------------------------------------------
Net increase (decrease) resulting from
operations 164 1,778
============================================================================================
Distributions to Shareholders:
From net investment income
Institutional Class (9) 0
- --------------------------------------------------------------------------------------------
Administrative Class 0 0
- --------------------------------------------------------------------------------------------
Other Classes 0 0
- --------------------------------------------------------------------------------------------
From net realized capital gains
Institutional Class (519) 0
- --------------------------------------------------------------------------------------------
Administrative Class 0 0
- --------------------------------------------------------------------------------------------
Other Classes 0 0
- --------------------------------------------------------------------------------------------
Total Distributions (528) 0
============================================================================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 30 5,044
- --------------------------------------------------------------------------------------------
Administrative Class 0 0
- --------------------------------------------------------------------------------------------
Other Classes 0 0
- --------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 2 0
- --------------------------------------------------------------------------------------------
Administrative Class 0 0
- --------------------------------------------------------------------------------------------
Other Classes 0 0
- --------------------------------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (26) 0
- --------------------------------------------------------------------------------------------
Administrative Class 0 0
- --------------------------------------------------------------------------------------------
Other Classes 0 0
- --------------------------------------------------------------------------------------------
Net increase (decrease) resulting from Fund
share transactions 6 5,044
- --------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets (358) 6,822
============================================================================================
Net Assets:
Beginning of period 6,822 0
- --------------------------------------------------------------------------------------------
End of period * $ 6,464 $ 6,822
- --------------------------------------------------------------------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 276 $ 302
- --------------------------------------------------------------------------------------------
</TABLE>
78 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Amounts in thousands Equity Income Fund Value Fund
--------------------------------------------------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
Increase (Decrease) in Net Assets from: December 31, 1998 June 30, 1998 December 31, 1998 June 30, 1998
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ 2,548 $ 4,503 $ 1,398 $ 2,032
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 11,693 23,527 12,336 29,304
- ----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) (11,187) 4,261 (10,947) 3,088
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from operations 3,054 32,291 2,787 34,424
==================================================================================================================================
Distributions to Shareholders:
From net investment income
Institutional Class (1,820) (3,573) (749) (1,220)
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class (133) (251) (111) (72)
- ----------------------------------------------------------------------------------------------------------------------------------
Other Classes (533) (611) (521) (723)
- ----------------------------------------------------------------------------------------------------------------------------------
From net realized capital gains
Institutional Class (15,114) (16,363) (9,693) (7,693)
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class (1,194) (1,189) (1,646) (412)
- ----------------------------------------------------------------------------------------------------------------------------------
Other Classes (6,359) (3,155) (14,993) (12,584)
- ----------------------------------------------------------------------------------------------------------------------------------
Total Distributions (25,153) (25,142) (27,713) (22,704)
==================================================================================================================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 14,383 18,221 13,314 17,292
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 1,284 4,124 5,891 10,641
- ----------------------------------------------------------------------------------------------------------------------------------
Other Classes 16,492 44,411 25,988 62,175
- ----------------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 16,664 19,487 10,390 8,878
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class 1,325 1,437 1,752 483
- ----------------------------------------------------------------------------------------------------------------------------------
Other Classes 6,514 3,576 14,348 12,266
- ----------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (23,358) (24,500) (6,711) (22,371)
- ----------------------------------------------------------------------------------------------------------------------------------
Administrative Class (2,289) (2,429) (1,080) (725)
- ----------------------------------------------------------------------------------------------------------------------------------
Other Classes (10,310) (7,993) (34,122) (40,804)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from Fund
share transactions 20,705 54,334 29,770 47,835
- ----------------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets (1,394) 61,483 4,844 59,555
==================================================================================================================================
Net Assets:
Beginning of period 201,707 140,224 239,359 179,804
- ----------------------------------------------------------------------------------------------------------------------------------
End of period * $ 200,313 $ 201,707 $ 244,203 $ 239,359
- ----------------------------------------------------------------------------------------------------------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 4,816 $ 4,754 $ 5,638 $ 5,621
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Amounts in thousands Value 25 Fund Small-Cap Value Fund
--------------------------------------------------------------
Period from
July 10, 1998 to Six Months Ended Year Ended
Increase (Decrease) in Net Assets from: December 31, 1998 December 31, 1998 June 30, 1998
(Unaudited) (Unaudited)
<S> <C> <C> <C>
Operations:
Net investment income (loss) $ 7 $ 2,173 $ 2,083
- ------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) (118) (13,324) 15,567
- ------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 42 (24,115) (3,548)
- ------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from operations (69) (35,266) 14,102
==================================================================================================================
Distributions to Shareholders:
From net investment income
Institutional Class (1) (796) (339)
- ------------------------------------------------------------------------------------------------------------------
Administrative Class 0 (247) (55)
- ------------------------------------------------------------------------------------------------------------------
Other Classes (7) (1,810) (946)
- ------------------------------------------------------------------------------------------------------------------
From net realized capital gains
Institutional Class 0 (1,632) (1,659)
- ------------------------------------------------------------------------------------------------------------------
Administrative Class 0 (543) (373)
- ------------------------------------------------------------------------------------------------------------------
Other Classes 0 (9,214) (6,325)
- ------------------------------------------------------------------------------------------------------------------
Total Distributions (8) (14,242) (9,697)
==================================================================================================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 187 24,613 44,619
- ------------------------------------------------------------------------------------------------------------------
Administrative Class 0 12,003 6,309
- ------------------------------------------------------------------------------------------------------------------
Other Classes 2,137 102,527 307,809
- ------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 1 2,201 1,770
- ------------------------------------------------------------------------------------------------------------------
Administrative Class 0 790 427
- ------------------------------------------------------------------------------------------------------------------
Other Classes 6 10,427 6,863
- ------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Institutional Class 0 (8,354) (38,130)
- ------------------------------------------------------------------------------------------------------------------
Administrative Class 0 (3,246) (2,525)
- ------------------------------------------------------------------------------------------------------------------
Other Classes (244) (65,871) (35,827)
- ------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from Fund
share transactions 2,087 75,090 291,315
- ------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets 2,010 25,582 295,720
==================================================================================================================
Net Assets:
Beginning of period 0 374,552 78,832
- ------------------------------------------------------------------------------------------------------------------
End of period * $ 2,010 $ 400,134 $ 374,552
- ------------------------------------------------------------------------------------------------------------------
*Including net undistributed (overdistributed)
investment income of: $ (1) $ 5,605 $ 6,285
- ------------------------------------------------------------------------------------------------------------------
<CAPTION>
Amounts in thousands Enhanced Equity Fund
-----------------------------------
Six Months Ended Year Ended
Increase (Decrease) in Net Assets from: December 31, 1998 June 30, 1998
(Unaudited)
<S> <C> <C>
Operations:
Net investment income (loss) $ 150 $ 332
- ---------------------------------------------------------------------------------------------
Net realized gain (loss) 2,611 8,536
- ---------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 970 3,781
- ---------------------------------------------------------------------------------------------
Net increase (decrease) resulting from operations 3,731 12,649
=============================================================================================
Distributions to Shareholders:
From net investment income
Institutional Class (201) (414)
- ---------------------------------------------------------------------------------------------
Administrative Class (83) (30)
- ---------------------------------------------------------------------------------------------
Other Classes 0 0
- ---------------------------------------------------------------------------------------------
From net realized capital gains
Institutional Class (4,601) (16,994)
- ---------------------------------------------------------------------------------------------
Administrative Class (1,927) (1,166)
- ---------------------------------------------------------------------------------------------
Other Classes 0 0
- ---------------------------------------------------------------------------------------------
Total Distributions (6,812) (18,604)
=============================================================================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 3,373 4,869
- ---------------------------------------------------------------------------------------------
Administrative Class 6,054 9,937
- ---------------------------------------------------------------------------------------------
Other Classes 0 0
- ---------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 4,794 17,291
- ---------------------------------------------------------------------------------------------
Administrative Class 2,003 1,196
- ---------------------------------------------------------------------------------------------
Other Classes 0 0
- ---------------------------------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (4,551) (24,666)
- ---------------------------------------------------------------------------------------------
Administrative Class (1,045) (517)
- ---------------------------------------------------------------------------------------------
Other Classes 0 0
- ---------------------------------------------------------------------------------------------
Net increase (decrease) resulting from Fund
share transactions 10,628 8,110
- ---------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets 7,547 2,155
=============================================================================================
Net Assets:
Beginning of period 46,993 44,838
- ---------------------------------------------------------------------------------------------
End of period * $ 54,540 $ 46,993
- ---------------------------------------------------------------------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 1,295 $ 1,429
- ---------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes 79
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Tax-Efficient
Structured Structured
Emerging Emerging Tax-Efficient
Amounts in thousands Markets Fund Markets Fund Equity Fund Balanced Fund
-----------------------------------------------------------------------------------------
Period from
Six Months September 30,
Six Months Ended Ended 1998 to Six Months Ended
December 31, 1998 December 31, 1998 December 31, 1998 December 31, 1998 Year Ended
Increase (Decrease) in Net Assets from: (Unaudited) (Unaudited) (Unaudited) (Unaudited) June 30, 1998
------------------------------------ ---------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ 265 $ 316 $ (1) $ 878 $ 1,822
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 17 (8,119) (96) 1,709 11,033
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized
appreciation (depreciation) (5,245) (22,648) 1,147 (606) (1,046)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
resulting from operations (4,963) (30,451) 1,050 1,981 11,809
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders:
From net investment income
Institutional Class (252) (300) 0 (475) (1,462)
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 (358) (328)
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized capital gains
Institutional Class (980) 0 0 (5,061) (5,071)
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 (4,529) (1,027)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (1,232) (300) 0 (10,423) (7,888)
====================================================================================================================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 38,792 77,624 0 1,822 5,975
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 359 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 15,052 11,610 26,009
- ------------------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 1,209 300 0 5,495 6,512
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 3,835 1,271
- ------------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (748) (1,524) 0 (5,948) (36,139)
- ------------------------------------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 (3,207) (5,787) (3,224)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from Fund
share transactions 39,253 76,400 12,204 11,027 404
- ------------------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets 33,058 45,649 13,254 2,585 4,325
====================================================================================================================================
Net Assets:
Beginning of period 0 0 0 68,254 63,929
- ------------------------------------------------------------------------------------------------------------------------------------
End of period * $ 33,058 $ 45,649 $ 13,254 $ 70,839 $ 68,254
- ------------------------------------------------------------------------------------------------------------------------------------
*Including net undistributed
(overdistributed) investment income of: $ 13 $ 16 $ (1) $ 2,623 $ 2,578
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
80 See accompanying notes
<PAGE>
Notes to Financial Statements
December 31, 1998 (Unaudited)
1. Organization
PIMCO Funds: Multi-Manager Series (the "Trust" is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company organized as a Massachusetts business trust. The Trust currently
consists of twenty-eight separate investment funds (the "Funds"). The Trust may
offer up to six classes of shares: Institutional, Administrative, A, B, C and D.
Each share class has identical voting rights (except shareholders of a class
that have exclusive voting rights regarding any matter relating solely to that
class of shares). Information presented in these financial statements pertains
to the Institutional and Administrative Classes (the "Institutional Classes") of
the Trust. Certain detailed financial information for the A, B, C and D Classes
(the "Other Classes") is provided separately and is available upon request.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements 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.
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.
Foreign Currency. Foreign currencies, investments, and other assets and
liabilities are translated into U.S. dollars at the exchange rates prevailing at
the end of the period. Fluctuations in the value of these assets and liabilities
resulting from changes in exchange rates are recorded as unrealized foreign
currency gains (losses). Realized gains (losses) and unrealized appreciation
(depreciation) on investment securities and income and expenses are translated
on the respective dates of such transactions. The effect of changes in foreign
currency exchange rates on investments in securities are not segregated in the
Statement of Operations from the effects of changes in market prices of those
securities, but are included with the net realized and unrealized gain or loss
on investment securities.
Dividends and Distributions to Shareholders. Dividends from net investment
income, if any, are declared and paid quarterly to shareholders of record by the
Renaissance, Equity Income, 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.
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 to
more appropriately conform financial accounting and tax characterizations of
dividend distributions.
Multiclass Operations. Each class offered by the Trust has equal rights as to
assets. 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.
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.
81
<PAGE>
Notes to Financial Statements (Cont.)
December 31, 1998 (Unaudited)
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: Emerging Markets Fund - $39,490;
International Developed Fund - $66,404; International Fund - $109,643; Mid-Cap
Growth Fund - $5,933; Renaissance Fund - $8,699; Core Equity Fund - $190;
International Growth Fund - $ 2,730; Equity Income Fund - $7,736; Value Fund -
$13,783; Value 25 Fund - $61; Small-Cap Value Fund - $2,070; Enhanced Equity
Fund - $887; Structured Emerging Markets Fund - $26,467; Tax-Efficient
Structured Emerging Markets Fund - $32,732; Tax-Efficient Equity Fund - $10; and
Balanced Fund - $1,122.
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 markets or to movements in interest rates and currency values. 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.
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: 0.50% for the Value Fund;
0.55% for the International Fund; 0.57% for the Core Equity Fund; 0.60% for the
International Developed, Renaissance and Small-Cap Value Funds; 0.63% for the
Mid-Cap Equity Fund; 0.85% for the International Growth and Emerging Markets
Funds; 1.00% for the Small-Cap Growth Fund; 1.25% for the Micro-Cap Growth 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. 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
Institutional and Administrative Classes is charged at the annual rate of 0.50%
for the Emerging Markets, International Developed, International, International
Growth, Structured Emerging Markets and Tax-Efficient Structured Emerging
Markets Funds and 0.25% for all other Funds. The Administration Fee for the A, B
and C Classes is charged at the annual rate of 0.65% for the International,
Emerging Markets and International Developed Funds, 0.45% for the Precious
Metals Fund and 0.40% for all other Funds. The Administration Fee for Class D is
charged at the annual rate of 0.40%.
82
<PAGE>
Distribution and Servicing Fees. PIMCO Funds Distributors LLC ("PFD"), formerly
PIMCO Funds Distribution Company, 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 PFD was 0.25% during the current fiscal year.
Pursuant to the Distribution and Servicing Plans adopted by the A, B, C
and D Classes of the Trust, the Trust compensates PFD or an affiliate with
respect to Class D 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 A, B, C and D
Classes. The Trust paid PFD 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):
Distribution Fee (%) Servicing Fee (%)
- --------------------------------------------------------------------------------
Class A
All Funds -- 0.25
Class B
All Funds 0.75 0.25
Class C
All Funds 0.75 0.25
Class D
All Funds -- 0.25
PFD 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, B
and C shares. For the period ended December 31, 1998, PFD received $1,827,985
representing commissions (sales charges) and contingent deferred sales charges.
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, as disclosed in the Financial Highlights, may
differ from the annual fund operating expenses as disclosed in the Prospectus
for the reasons set forth above.
Each unaffiliated Trustee receives an annual retainer of $45,000, plus
$2,000 for each Board of Trustees meeting attended, and $500 for each Audit and
Performance Committee meeting attended, plus reimbursement of related expenses.
Each Audit and Performance Committee receives an additional annual retainer of
$1,000, the Chairman of the Audit and Performance Committees receives an
additional annual retainer of $2,000, the Chairman of the Independent Trustees
receives an additional annual retainer of $6,000, and each Vice Chairman of the
entire Board receives an additional annual retainer of $3,000. These expenses
are allocated to the Funds of the Trust according to their respective net
assets.
83
<PAGE>
Notes to Financial Statements (Cont.)
December 31, 1998 (Unaudited)
4. 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 and amounts in thousands):
<TABLE>
<CAPTION>
Emerging Markets Fund
----------------------------------------------------------------------
Six Months Ended 12/31/98 Year Ended 6/30/98
Shares Amount Shares Amount
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 1,543 $ 12,831 1,946 $ 23,187
- ----------------------------------------------------- ----------------------------------------------------------------------
Administrative Class 57 501 141 1,685
- ----------------------------------------------------- ----------------------------------------------------------------------
Other Classes 216 1,878 361 4,265
- ----------------------------------------------------- ----------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 10 84 0 0
- ----------------------------------------------------- ----------------------------------------------------------------------
Administrative Class 0 0 0 0
- ----------------------------------------------------- ----------------------------------------------------------------------
Other Classes 0 1 0 0
- ----------------------------------------------------- ----------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (1,686) (13,976) (3,341) (39,014)
- ----------------------------------------------------- ----------------------------------------------------------------------
Administrative Class (189) (1,520) (17) (199)
- ----------------------------------------------------- ----------------------------------------------------------------------
Other Classes (250) (2,178) (333) (3,896)
- ----------------------------------------------------- ----------------------------------------------------------------------
Net increase resulting from
Fund share transactions (299) $ (2,379) (1,243) $ (13,972)
===================================================== ======================================================================
<CAPTION>
International Developed Fund
----------------------------------------------------------------------
Six Months Ended 12/31/98 Year Ended 6/30/98
Shares Amount Shares Amount
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 3,454 $ 46,431 5,097 $ 66,712
- ----------------------------------------------------- ----------------------------------------------------------------------
Administrative Class 147 2,047 434 5,786
- ----------------------------------------------------- ----------------------------------------------------------------------
Other Classes 8,180 108,816 4,888 66,482
- ----------------------------------------------------- ----------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 115 1,555 367 4,242
- ----------------------------------------------------- ----------------------------------------------------------------------
Administrative Class 5 21 8 98
- ----------------------------------------------------- ----------------------------------------------------------------------
Other Classes 8 106 25 285
- ----------------------------------------------------- ----------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (3,449) (48,389) (4,103) (54,800)
- ----------------------------------------------------- ----------------------------------------------------------------------
Administrative Class (591) (7,813) (178) (2,245)
- ----------------------------------------------------- ----------------------------------------------------------------------
Other Classes (8,180) (109,664) (4,488) (61,921)
- ----------------------------------------------------- ----------------------------------------------------------------------
Net increase resulting from
Fund share transactions (311) $ (6,890) 2,050 $ 24,639
===================================================== ======================================================================
<CAPTION>
International Fund
-----------------------------------------------------------------------
Six Months Ended 12/31/98 Year Ended 6/30/98
Shares Amount Shares Amount
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 103 $ 1,144 0 $ 0
- ----------------------------------------------------- ----------------------------------------------------------------------
Administrative Class 916 9,632 0 0
- ----------------------------------------------------- ----------------------------------------------------------------------
Other Classes 41,065 498,836 42,826 559,851
- ----------------------------------------------------- ----------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 6 67 0 0
- ----------------------------------------------------- ----------------------------------------------------------------------
Administrative Class 12 129 0 0
- ----------------------------------------------------- ----------------------------------------------------------------------
Other Classes 1,044 11,020 1,129 12,731
- ----------------------------------------------------- ----------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (4) (42) 0 0
- ----------------------------------------------------- ----------------------------------------------------------------------
Administrative Class (21) (243) 0 0
- ----------------------------------------------------- ----------------------------------------------------------------------
Other Classes (42,016) (515,587) (46,890) (615,042)
- ----------------------------------------------------- ----------------------------------------------------------------------
Net increase resulting from
Fund share transactions 1,105 $ 4,956 (2,935) $ (42,460)
===================================================== ======================================================================
<CAPTION>
Renaissance Fund
-----------------------------------------------------------------------
Six Months Ended 12/31/98 Year Ended 6/30/98
Shares Amount Shares Amount
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 3 $ 55 44 $ 761
- ----------------------------------------------------- -----------------------------------------------------------------------
Administrative Class 15 236 0 0
- ----------------------------------------------------- -----------------------------------------------------------------------
Other Classes 12,708 216,333 25,025 464,673
- ----------------------------------------------------- -----------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 0 0 0 0
- ----------------------------------------------------- -----------------------------------------------------------------------
Administrative Class 2 25 0 0
- ----------------------------------------------------- -----------------------------------------------------------------------
Other Classes 4,945 74,622 4,447 74,240
- ----------------------------------------------------- -----------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (43) (744) 0 0
- ----------------------------------------------------- -----------------------------------------------------------------------
Administrative Class 0 (5) 0 0
- ----------------------------------------------------- -----------------------------------------------------------------------
Other Classes (12,979) (218,810) (16,657) (311,714)
- ----------------------------------------------------- -----------------------------------------------------------------------
Net increase resulting from
Fund share transactions 4,651 $ 71,712 12,859 $ 227,960
===================================================== =======================================================================
<CAPTION>
Core Equity Fund
-----------------------------------------------------------------------
Six Months Ended 12/31/98 Year Ended 6/30/98
Shares Amount Shares Amount
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 18 $ 340 60 $ 998
- ----------------------------------------------------- -----------------------------------------------------------------------
Administrative Class 1,820 34,711 5,068 87,923
- ----------------------------------------------------- -----------------------------------------------------------------------
Other Classes 0 0 0 0
- ----------------------------------------------------- -----------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 3 57 19 308
- ----------------------------------------------------- -----------------------------------------------------------------------
Administrative Class 275 5,514 456 7,237
- ----------------------------------------------------- -----------------------------------------------------------------------
Other Classes 0 0 0 0
- ----------------------------------------------------- -----------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (33) (632) (400) (8,755)
- ----------------------------------------------------- -----------------------------------------------------------------------
Administrative Class (636) (12,116) (1,077) (18,798)
- ----------------------------------------------------- -----------------------------------------------------------------------
Other Classes 0 0 0 0
- ----------------------------------------------------- -----------------------------------------------------------------------
Net increase resulting from
Fund share transactions 1,447 $ 27,874 4,125 $ 70,913
===================================================== =======================================================================
<CAPTION>
Mid-Cap Equity Fund
-----------------------------------------------------------------------
Six Months Ended 12/31/98 Year Ended 6/30/98
Shares Amount Shares Amount
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 56 $ 697 142 $ 1,655
- ----------------------------------------------------- -----------------------------------------------------------------------
Administrative Class 111 1,385 170 2,245
- ----------------------------------------------------- -----------------------------------------------------------------------
Other Classes 0 0 0 0
- ----------------------------------------------------- -----------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 15 184 53 618
- ----------------------------------------------------- -----------------------------------------------------------------------
Administrative Class 14 168 12 138
- ----------------------------------------------------- -----------------------------------------------------------------------
Other Classes 0 0 0 0
- ----------------------------------------------------- -----------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (33) (433) (109) (1,428)
- ----------------------------------------------------- -----------------------------------------------------------------------
Administrative Class (17) (209) (6) (80)
- ----------------------------------------------------- -----------------------------------------------------------------------
Other Classes 0 0 0 0
- ----------------------------------------------------- -----------------------------------------------------------------------
Net increase resulting from
Fund share transactions 146 $ 1,792 262 $ 3,148
===================================================== =======================================================================
</TABLE>
84
<PAGE>
<TABLE>
<CAPTION>
Capital Appreciation Fund
--------------------------------------------------------------
Six Months Ended 12/31/98 Year Ended 6/30/98
Shares Amount Shares Amount
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 6,562 $ 158,767 10,851 $ 261,189
- ---------------------------------------------- --------------------------------------------------------------
Administrative Class 3,735 95,535 5,609 134,100
- ---------------------------------------------- --------------------------------------------------------------
Other Classes 2,558 62,387 6,924 165,130
- ---------------------------------------------- --------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 1,505 35,601 1,599 37,066
- ---------------------------------------------- --------------------------------------------------------------
Administrative Class 579 13,611 85 1,973
- ---------------------------------------------- --------------------------------------------------------------
Other Classes 589 13,709 176 4,064
- ---------------------------------------------- --------------------------------------------------------------
Cost of shares redeemed
Institutional Class (10,353) (253,066) (6,904) (164,429)
- ---------------------------------------------- --------------------------------------------------------------
Administrative Class (1,196) (28,254) (748) (18,481)
- ---------------------------------------------- --------------------------------------------------------------
Other Classes (1,056) (24,596) (1,007) (24,147)
- ---------------------------------------------- --------------------------------------------------------------
Net increase resulting from
Fund share transactions 2,923 $ 73,694 16,585 $ 396,465
============================================== ==============================================================
<CAPTION>
Mid-Cap Growth Fund
----------------------------------------------------------------
Six Months Ended 12/31/98 Year Ended 6/30/98
Shares Amount Shares Amount
----------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 10,493 $ 231,251 11,844 $ 273,380
- ----------------------------------------------- ----------------------------------------------------------------
Administrative Class 2,255 50,079 3,327 77,781
- ----------------------------------------------- ----------------------------------------------------------------
Other Classes 5,994 132,228 10,834 249,617
- ----------------------------------------------- ----------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 923 19,853 975 22,222
- ----------------------------------------------- ----------------------------------------------------------------
Administrative Class 213 4,542 24 544
- ----------------------------------------------- ----------------------------------------------------------------
Other Classes 664 14,074 339 7,672
- ----------------------------------------------- ----------------------------------------------------------------
Cost of shares redeemed
Institutional Class (7,162) (158,761) (9,011) (208,995)
- ----------------------------------------------- ----------------------------------------------------------------
Administrative Class (886) (19,360) (381) (8,950)
- ----------------------------------------------- ----------------------------------------------------------------
Other Classes (3,441) (73,922) (3,985) (92,467)
- ----------------------------------------------- ----------------------------------------------------------------
Net increase resulting from
Fund share transactions 9,053 $ 199,984 13,966 $ 320,804
=============================================== ================================================================
<CAPTION>
Micro-Cap Growth Fund
---------------------------------------------------------------
Six Months Ended 12/31/98 Year Ended 6/30/98
Shares Amount Shares Amount
---------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 3,103 $ 64,107 3,100 $ 69,180
- --------------------------------------------- ---------------------------------------------------------------
Administrative Class 35 678 181 4,130
- --------------------------------------------- ---------------------------------------------------------------
Other Classes 0 0 0 0
- --------------------------------------------- ---------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 339 6,383 910 19,223
- --------------------------------------------- ---------------------------------------------------------------
Administrative Class 4 83 19 396
- --------------------------------------------- ---------------------------------------------------------------
Other Classes 0 0 0 0
- --------------------------------------------- ---------------------------------------------------------------
Cost of shares redeemed
Institutional Class (1,314) (25,120) (1,382) (31,187)
- --------------------------------------------- ---------------------------------------------------------------
Administrative Class (105) (2,075) (104) (2,345)
- --------------------------------------------- ---------------------------------------------------------------
Other Classes 0 0 0 0
- --------------------------------------------- ---------------------------------------------------------------
Net increase resulting from
Fund share transactions 2,062 $ 44,056 2,724 $ 59,397
============================================= ===============================================================
<CAPTION>
Small-Cap Growth Fund
---------------------------------------------------------------
Six Months Ended 12/31/98 Year Ended 6/30/98
Shares Amount Shares Amount
---------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 1,789 $ 23,500 957 $ 13,396
- --------------------------------------------- ---------------------------------------------------------------
Administrative Class 51 598 81 1,166
- --------------------------------------------- ---------------------------------------------------------------
Other Classes 0 0 0 0
- --------------------------------------------- ---------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 205 2,229 360 4,781
- --------------------------------------------- ---------------------------------------------------------------
Administrative Class 5 51 1 7
- --------------------------------------------- ---------------------------------------------------------------
Other Classes 0 0 0 0
- --------------------------------------------- ---------------------------------------------------------------
Cost of shares redeemed
Institutional Class (251) (2,694) (408) (5,918)
- --------------------------------------------- ---------------------------------------------------------------
Administrative Class (7) (82) (12) (171)
- --------------------------------------------- ---------------------------------------------------------------
Other Classes 0 0 0 0
- --------------------------------------------- ---------------------------------------------------------------
Net increase resulting from
Fund share transactions 1,792 $ 23,602 979 $ 13,261
============================================= ===============================================================
<CAPTION>
International Growth Fund
------------------------------------------------------------
Six Months Ended 12/31/98 Year Ended 6/30/98
Shares Amount Shares Amount
------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 2 $ 30 504 $ 5,044
- -------------------------------------- ------------------------------------------------------------
Administrative Class 0 0 0 0
- -------------------------------------- ------------------------------------------------------------
Other Classes 0 0 0 0
- -------------------------------------- ------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 0 2 0 0
- -------------------------------------- ------------------------------------------------------------
Administrative Class 0 0 0 0
- -------------------------------------- ------------------------------------------------------------
Other Classes 0 0 0 0
- -------------------------------------- ------------------------------------------------------------
Cost of shares redeemed
Institutional Class (2) (26) 0 0
- -------------------------------------- ------------------------------------------------------------
Administrative Class 0 0 0 0
- -------------------------------------- ------------------------------------------------------------
Other Classes 0 0 0 0
- -------------------------------------- ------------------------------------------------------------
Net increase resulting from
Fund share transactions 0 $ 6 504 $ 5,044
====================================== ============================================================
<CAPTION>
Equity Income Fund
-------------------------------------------------------------
Six Months Ended 12/31/98 Year Ended 6/30/98
Shares Amount Shares Amount
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 970 $ 14,383 1,001 $ 16,221
- ---------------------------------------- -------------------------------------------------------------
Administrative Class 82 1,284 253 4,124
- ---------------------------------------- -------------------------------------------------------------
Other Classes 1,106 16,492 2,756 44,411
- ---------------------------------------- -------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 1,182 16,664 1,266 19,487
- ---------------------------------------- -------------------------------------------------------------
Administrative Class 94 1,325 93 1,437
- ---------------------------------------- -------------------------------------------------------------
Other Classes 466 6,514 234 3,576
- ---------------------------------------- -------------------------------------------------------------
Cost of shares redeemed
Institutional Class (1,583) (23,358) (1,511) (24,500)
- ---------------------------------------- -------------------------------------------------------------
Administrative Class (153) (2,289) (148) (2,429)
- ---------------------------------------- -------------------------------------------------------------
Other Classes (696) (10,310) (493) (7,993)
- ---------------------------------------- -------------------------------------------------------------
Net increase resulting from
Fund share transactions 1,468 $ 20,705 3,451 $ 54,334
======================================== =============================================================
<CAPTION>
Value Fund Value 25 Fund
-------------------------------------------------------- ----------------------
Period From
Six Months Ended 12/31/98 Year Ended 6/30/98 7/10/98 to 12/31/98
Shares Amount Shares Amount Shares Amount
-------------------------------------------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 883 $ 13,314 1,109 $ 17,292 19 $ 187
- ------------------------------------------ --------------------------------------------------------- ---------------------
Administrative Class 408 5,891 674 10,641 0 0
- ------------------------------------------ --------------------------------------------------------- ---------------------
Other Classes 1,824 25,988 4,014 62,175 248 2,137
- ------------------------------------------ --------------------------------------------------------- ---------------------
Issued as reinvestment of distributions
Institutional Class 769 10,390 604 8,878 0 1
- ------------------------------------------ --------------------------------------------------------- ---------------------
Administrative Class 130 1,752 33 483 0 0
- ------------------------------------------ --------------------------------------------------------- ---------------------
Other Classes 1,067 14,348 841 12,266 0 6
- ------------------------------------------ --------------------------------------------------------- ---------------------
Cost of shares redeemed
Institutional Class (470) (6,711) (1,437) (22,371) 0 0
- ------------------------------------------ --------------------------------------------------------- ---------------------
Administrative Class (73) (1,080) (46) (725) 0 0
- ------------------------------------------ --------------------------------------------------------- ---------------------
Other Classes (2,375) (34,122) (2,636) (40,804) (30) (244)
- ------------------------------------------ --------------------------------------------------------- ---------------------
Net increase resulting from
Fund share transactions 2,163 $ 29,770 3,156 $ 47,835 237 $ 2,087
========================================== ========================================================= =====================
</TABLE>
85
<PAGE>
Notes to Financial Statements (Cont.)
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Small-Cap Value Fund
--------------------------------------------------------------
Six Months Ended 12/31/98 Year Ended 6/30/98
Shares Amount Shares Amount
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 1,590 $ 24,613 2,482 $ 44,619
- --------------------------------------------------------------------------------------------------------------
Administrative Class 805 12,003 347 6,309
- --------------------------------------------------------------------------------------------------------------
Other Classes 6,668 102,527 17,288 307,809
- --------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 149 2,201 101 1,770
- --------------------------------------------------------------------------------------------------------------
Administrative Class 54 790 24 427
- --------------------------------------------------------------------------------------------------------------
Other Classes 716 10,427 393 6,863
- --------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (547) (8,354) (2,095) (38,130)
- --------------------------------------------------------------------------------------------------------------
Administrative Class (215) (3,246) (137) (2,525)
- --------------------------------------------------------------------------------------------------------------
Other Classes (4,361) (65,871) (2,005) (35,827)
- --------------------------------------------------------------------------------------------------------------
Net increase resulting from
Fund share transactions 4,859 $ 75,090 16,398 $ 291,315
==============================================================================================================
<CAPTION>
Structured
Emerging Markets
Enhanced Equity Fund Fund
--------------------------------------------------------------------------------------
Six Months Ended 12/31/98 Year Ended 6/30/98 Six Months Ended 12/31/98
Shares Amount Shares Amount Shares Amount
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 282 $ 3,373 394 $ 4,869 3,640 $ 38,792
- ---------------------------------------------------------------------------------------------------------------------------------
Administrative Class 514 6,054 760 9,937 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 430 4,794 1,579 17,291 135 1,209
- ---------------------------------------------------------------------------------------------------------------------------------
Administrative Class 181 2,003 109 1,196 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (366) (4,551) (1,803) (24,666) (83) (748)
- ---------------------------------------------------------------------------------------------------------------------------------
Administrative Class (88) (1,045) (43) (517) 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase resulting from
Fund share transactions 953 $ 10,628 996 $ 8,110 3,692 $ 39,253
=================================================================================================================================
<CAPTION>
Tax-Efficient
Structured
Emerging Tax-Efficient
Markets Fund Equity Fund
-------------------------- ---------------------------
Period From
Six Months Ended 12/31/98 09/30/98 to 12/31/98
Shares Amount Shares Amount
-------------------------- ---------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 4,994 $ 77,624 0 $ 0
- -----------------------------------------------------------------------------------------------------------
Administrative Class 0 0 37 359
- -----------------------------------------------------------------------------------------------------------
Other Classes 0 0 1,548 15,052
- -----------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 32 300 0 0
- -----------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- -----------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0
- -----------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (170) (1,524) 0 0
- -----------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- -----------------------------------------------------------------------------------------------------------
Other Classes 0 0 (323) (3,207)
- -----------------------------------------------------------------------------------------------------------
Net increase resulting from
Fund share transactions 4,856 $ 76,400 1,262 $ 12,204
===========================================================================================================
<CAPTION>
Balanced Fund
------------------------------------------------------------
Six Months Ended 12/31/98 Year Ended 6/30/98
Shares Amount Shares Amount
------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 158 $ 1,822 504 $ 5,975
- --------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- --------------------------------------------------------------------------------------------------------
Other Classes 1,009 11,610 2,189 26,009
- --------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Institutional Class 525 5,495 567 6,512
- --------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- --------------------------------------------------------------------------------------------------------
Other Classes 371 3,835 111 1,271
- --------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Institutional Class (518) (5,948) (3,066) (36,139)
- --------------------------------------------------------------------------------------------------------
Administrative Class 0 0 0 0
- --------------------------------------------------------------------------------------------------------
Other Classes (512) (5,787) (275) (3,224)
- --------------------------------------------------------------------------------------------------------
Net increase resulting from
Fund share transactions 1,033 $ 11,027 30 $ 404
========================================================================================================
</TABLE>
86
<PAGE>
5. Purchases and Sales of Securities
Purchases and sales of securities (excluding short-term investments) for the
period ended December 31, 1998 were as follows (amounts in thousands):
<TABLE>
<CAPTION>
U.S. Government/Agency All Other
------------------------------------------------------------------------
Purchases Sales Purchases Sales
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Emerging Markets Fund $ 5,027 $ 6,863
International Developed Fund 22,725 23,583
International Fund 23,517 44,567
Capital Appreciation Fund 740,050 656,609
Mid-Cap Growth Fund 493,490 334,742
Micro-Cap Growth Fund 114,455 84,050
Small-Cap Growth Fund 47,327 23,518
Renaissance Fund 616,624 605,913
Core Equity Fund 89,026 64,875
Mid-Cap Equity Fund 15,065 13,724
International Growth Fund 6,836 7,614
Equity Income Fund 70,941 70,240
Value Fund 106,255 103,491
Value 25 Fund 2,294 376
Small-Cap Value Fund 161,631 81,254
Enhanced Equity Fund 15,643 11,249
Structured
Emerging Markets Fund 5,604 4,612
Tax-Efficient Structured
Emerging Markets Equity Fund 13,138 7,597
Tax-Efficient Equity Fund 12,460 514
Balanced Fund $ 55,136 $ 47,182 25,515 21,897
</TABLE>
5. Transactions in Written Call and Put Options
Transactions in written call and put options were as follows (amounts in
thousands):
<TABLE>
<CAPTION>
Renaissance Fund Balanced Fund
-----------------------------------------------------------------------------
Premium Contracts Premium Contracts
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at 06/30/98 $ 132 630 $ 0 0
Sales 704 4,351 1 7
Closing Buys (571) (3,675) 0 0
Expirations (132) (630) 0 0
Exercised 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------
Balance at 12/31/98 $ 133 676 $ 1 7
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
6. Federal Income Tax Matters
As of June 30, 1998, the Funds listed in the table below had remaining capital
loss carryforwards that were realized in current and prior years. Additionally,
the Emerging Markets Fund realized foreign currency losses, in the amount of
$3,263, during the period November 1, 1997 through June 30, 1998, which the Fund
elected to defer to the following fiscal year pursuant to income tax
regulations.
The Fund will resume capital gain distributions in the future to the extent
gains are realized in excess of the available carryforwards (amounts in
thousands):
Capital Loss Carryforwards
----------------------------------------
Realized Losses Expiration
- ----------------------------------------------------------------------
Emerging Markets Fund $ 10,098 06/30/03
3,074 06/30/06
87
<PAGE>
PIMCO Advisors Holdings L.P. is the nation's third largest publicly traded
investment management firm with assets under management in excess of $244
billion. Comprised of seven independent investment firms, PIMCO Advisors is
recognized for providing consistent performance and high-quality service to
mutual fund and institutional clients worldwide.
The seven affiliated firms are:
Pacific Investment Management Company/Newport Beach, California
Oppenheimer Capital/New York, New York
Columbus Circle Investors/Stamford, Connecticut
Cadence Capital Management/Boston, Massachusetts
NFJ Investment Group/Dallas, Texas
Parametric Portfolio Associates/Seattle, Washington
Blairlogie Capital Management/Edinburgh, Scotland
Units of PIMCO Advisors Holdings L.P. trade on the New York Stock Exchange under
the ticker symbol "PA."
Trustees and Officers Investment Adviser and Administrator
William D. Cvengros, PIMCO Advisors L.P.
Chairman and Trustee 800 Newport Center Drive, Suite 600
Newport Beach, California 92660
Stephen J. Treadway,
President, Chief Executive Officer
and Trustee
E. Philip Cannon, Trustee
Donald P. Carter, Trustee
Gary A. Childress, Trustee
Richard L. Nelson, Trustee
Lyman W. Porter, Trustee
Alan Richards, Trustee
Dr. Joel Segall, Trustee
W. Bryant Stooks, Trustee
Gerald M. Thorne, Trustee
Newton B. Schott, Jr., Secretary
John P. Hardaway, Treasurer
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PIMCO Funds: Access to the highest standard
PIMCO Funds offers unique access to the investment expertise of PIMCO Advisors
L.P. PIMCO Advisors manages approximately $244 billion, including assets for 46
of the 100 largest U.S. corporations. The firm's institutional heritage is
reflected in the PIMCO Funds, each seeking the highest caliber performance in a
specific investment style.
Manager PIMCO Advisors L.P., 800 Newport Center Drive,
Newport Beach, CA 92660
Distributor PIMCO Funds Distributors LLC, 2187 Atlantic Street,
Stamford, CT 06902
Custodian Investors Fiduciary Trust Company, 801 Pennsylvania,
Kansas City, MO 64105
Shareholder National Financial Data Services, 330 W. 9th Street,
Servicing Agent and 4th Floor Kansas City, MO 64105
Transfer Agent
Independent PricewaterhouseCoopers LLP, 1055 Broadway,
Accountant Kansas City, MO, 64105
Legal Counsel Ropes & Gray, One International Place,
Boston, MA 02110
For Account For PIMCO Funds account information contact your
Information financial advisor, or if you receive account statements
directly from PIMCO Funds, you can also call
1-800-927-4648. 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.
This material is authorized for use only when preceded or accompanied by a
current PIMCO Funds prospectus, which describes in greater detail the investment
policies, management fees and other matters of interest to prospective
investors. Please read the prospectus carefully before you invest or send money.
[LOGO OF PIMCO FUNDS APPEARS HERE]
840 Newport Center Drive, Suite 300
Newport Beach, CA 92660
