<PAGE>
PIMCO Funds Shareholder Update
and Semi-Annual Report
This Update is published twice a year to provide PIMCO Funds shareholders with
general market commentary and fund information. It also includes the financial
report for the PIMCO Funds Multi-Manager Series.
[ARTWORK APPEARS HERE]
If investment jargon has you confused, take a quick course in "Street Talk."
Class is in session on page 2.
December 31, 1998
Multi-Manager Series
Share Classes
A B C
Equity Income
Value
Renaissance
Tax-Efficient Equity
Capital Appreciation
Value 25
Growth
Mid-Cap Growth
Target
Small-Cap Value
Opportunity
International Developed
International
Emerging Markets
Innovation
Precious Metals
Balanced
Page 2 Today's Investor
Wall Street 101--A quick course in Street Talk
Page 4 Market Review
Page 5 Manager Spotlight
PIMCO Innovation Fund's Dennis McKechnie
Page 6 Meet Our New Managers
Ken Corba & Mike Gaffney
Page 7 In The News
Recent News on PIMCO Funds
Page 8 Service Update
What's New @ www.pimcofunds.com
Page 10 Overview: Comprehensive Fund Family
Page 11 PIMCO Funds Multi-Manager Series
Semi-Annual Report
P I M C O
-------------
Funds
<PAGE>
Today's
Investor
Wall Street 101--A quick course in Street Talk
[ARTWORK APPEARS HERE]
Are you puzzling over P/Es? Having trouble telling a small-cap from a pillbox
hat? Take heart. You're in good company. Today, millions of Americans are
learning the language of Wall Street. That's because more and more of us are
investing in the market. In the past ten years, we've doubled the percentage of
our assets we invest in stocks. In fact, stocks now represent a greater share of
our personal wealth than our homes do. And mutual funds have overtaken banks as
our investment medium of choice.
So, to give you a leg up on some of the basic jargon, we've put together this
short overview. It's intended to give you a better understanding of what's
happening on Wall Street and in your investment portfolio.
The Bulls Versus the Bears
Despite some bumps in the road, for the past eight years the stock market has
posted one of the all-time great "bull runs". A bull run is just another way of
saying bull market, which typically refers to a prolonged period of rising
stock, bond or commodity prices. A bear market is just the opposite. Many bears
view 1998's sharp and frequent fluctuations (i.e., volatility) as the early
stages of a down market. Bulls, on the other hand, see these dizzying bursts of
volatility as mere blips in the course of a continuing upward trend.
A New Economy?
1998 was the fourth consecutive year the overall stock market gained over 20%.
This unprecedented performance has led some observers to speculate about a new
paradigm, or a new set of rules governing the market. You'll also hear Wall
Street bulls and Silicon Valley pundits talking about a new economy. That's a
term they use to describe the way globalization and information technologies are
changing the way the economy works. Governments around the world are stepping
back and allowing the free market to drive their economies. The spirit of
enterprise is widespread, and new technological innovations have made it
possible for businesses to do more at lower cost and in less time.
The Pros and Cons of Globalization
Many large American companies have expanded their overseas operations in recent
years, partly in response to a new, friendlier international business climate.
In fact, many of these multinationals now earn more of their profits abroad than
at home. In many ways, this globalization has been a boon to the American market
and to the individual investor.
Percent of Foreign Sales
Many companies derive a large portion of their sales from foreign countries.
[BAR CHART APPEARS HERE]
Coca-Cola 64%
McDonalds 49%
General Electric 42%
Nike 40%
Based on non-U.S. sales, 1997.
Source: Company annual reports.
However, globalization is a double-edged sword. These new rewards have brought
new risks. When companies are heavily invested in overseas markets, and thus
reliant on foreign earnings, they are more vulnerable to international crises
such as those that occurred in recent years. So even though you may not be
investing directly in international stocks or mutual funds, your investments may
not be immune to international turmoil. In fact, the Asian crisis that began in
1997 and the collapse of the Russian economy in 1998 are two threats to the
ongoing health of the bull market.
[LINE GRAPH APPEARS HERE]
Short-Term Market Gyrations Were the Norm Last Year
The bulls and the bears could each make a case for their views given the
market's volatility in 1998
STANDARD & POOR'S 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
2
<PAGE>
The Ongoing Appeal of Blue Chips
A common strategy to manage risk during times of instability is to focus on
higher quality investments. In the case of equities, quality means "blue chips",
a term, which derives from the most expensive (blue) chips, used in poker. Most
blue-chip stocks are household names, like IBM, Coca-Cola, Gillette and Walt
Disney. They have long records of profit, growth and solid reputations for the
high standard of their management, products and services. Their relatively high
stock prices are often justified by their unique combination of growth and
stability. The largest capitalized stocks are known collectively as "The Nifty
Fifty."
Disappearing Dividends
Blue-chip stocks have had a long-standing reputation for paying dividends, the
portion of a company's net profits it pays to its shareholders. But
increasingly, blue chip and many other companies are reinvesting their earnings
in their own businesses to pay for expansion, research and marketing. A dividend
certainly can no longer be taken as a measure of a company's success, as it once
was. For example, thriving companies like Microsoft, Cisco, and Oracle do not
pay them.
The Valuation Game
As an investor, you can determine the value of a stock in a number of ways. One
of the most commonly used is a stock's "price/earnings (P/E) ratio", also known
as its multiple. Because a stock is essentially a claim on a company's future
profits, it's important to know how much you're paying for each dollar of that
profit. The P/E will give you the answer. And it's obtained by dividing the
price of a stock by its earnings per share. Here's an example:
How to Calculate P/E
(Stockprice / Earnings per share)
Stock price $40
Earnings per share / $2
-------------------------------
= P/E ratio: 20
While P/Es are fairly straight forward, it's important to know what's being used
as the "earnings per share" figure. P/Es may be based on earnings for the most
recent four quarters (i.e. trailing P/Es) or on a forecast of next year's
earnings (i.e. forward P/Es). The Wall Street Journal's stock quotations, for
example, list trailing P/Es. In the past, stocks with high P/Es (over 20) tended
to belong to young, dynamic companies. Low P/E stocks were associated with
older, more mature companies. But in these days of soaring stock prices, many
blue-chip stocks have sported record-high P/Es. As of December 31, 1998,
well-established companies like Gillette and Coca-Cola had P/Es over 40.
Net Stocks--How High is Up?
The truth is, no one really knows how to value "Net" (Internet) stocks, like
Yahoo! and Amazon.com. As their prices have soared up, up, and away, they've
left the old rules of valuation behind in the dust. Despite sky-high stock
prices, many Internet companies have yet to make a dime of profit, making P/E
ratios virtually meaningless. As a result, many analysts have turned to
price/sales (P/S) ratios and price/cash-flow (P/CF) ratios in an attempt to
measure what these companies actually earn each year.
Diversification--the Real Name of the Game
One last thing to keep in mind--your best protection against all the market's
ups and downs is to maintain a well-balanced portfolio. That means working with
your financial advisor to ensure that you have the right mix of stock, bond and
money market funds. That's called asset allocation, and some experts believe it
is the single most important factor in determining the long-term success of your
portfolio, even more important than the specific investments you choose.
A truly diversified portfolio includes funds with different investment styles
(growth, value, etc.). That way, it can be more resilient as economic conditions
change. You may also want to consider funds that specialize in different
geographic regions or different business sectors. Your choices all depend on
your individual investment goals and risk tolerance. And, always remember, your
financial advisor can help you determine what's right for you.
America Online's Stock Increased over 400% in 1998
High growth prospects led to sky-high return for many Internet companies.
[LINE GRAPH APPEARS HERE]
AMERICAN ONLINE'S STOCK PRICE RANGE FROM 12/31/97-12/31-98
1/2 22 13/32 5/1 41 3/4 9/4 43
1/9 21 11/32 5/8 45 1/16 9/11 47 1/2
1/16 23 1/4 5/15 42 15/32 9/18 48 15/16
1/23 23 13/16 5/22 42 5/16 9/25 57 3/8
1/30 23 29/32 5/29 41 21/32
10/2 53 19/32
2/6 24 5/8 6/5 41 5/8 10/9 46 5/32
2/13 28 9/16 6/12 43 9/16 10/16 51
2/20 29 55/64 6/19 48 3/16 10/23 57 15/32
2/27 30 11/32 6/26 53 7/8 10/30 63 11/16
3/6 30 3/8 7/3 55 5/32 11/6 70
3/13 31 29/32 7/10 56 1/4 11/13 70
3/20 31 1/4 7/17 64 11/20 84 7/8
3/27 34 1/2 7/24 59 19/32 11/27 94 7/8
7/31 58 9/16
4/3 37 1/4 8/7 55 15/16 12/4 88
4/10 36 3/4 8/14 53 1/8 12/11 91 9/16
4/17 36 25/32 8/21 55 1/16 12/18 104 1/4
4/24 37 1/4 8/28 48 1/8 12/25 136 5/8
Returns from America Online from 12/31/97- 12/31/98. Past performance is no
guarantee of future results.
3
<PAGE>
Market
Review
Stock Market
Another Strong Year for Stocks
The stock market realized a strong performance in 1998 despite a mid-year
downturn.
[LINE GRAPH APPEARS HERE]
Sheet 3
S & P 500 INDEX
<TABLE>
<S> <C> <C> <C> <C> <C>
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
</TABLE>
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. And 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 under-performed as
investors continued their flight to quality, seeking blue-chip names instead of
smaller, relatively unknown companies. Also, though 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.
[LINE GRAPH APPEARS HERE]
TREASURY
30 - YEAR U.S. TREASURY RATES
<TABLE>
<S> <C> <C> <C> <C> <C>
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
</TABLE>
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. And 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.
4
<PAGE>
Manager
Spotlight
PIMCO Innovation Fund
Dennis McKechnie
By all measures, the high-tech PIMCO Innovation Fund has been an excellent
performer. In 1998 it posted a 79% return. And since its inception in 1994 it
has posted a 36.6% annual return, versus 26.1% from the Lipper Science &
Technology Fund Average. To learn more about Innovation we spoke with Fund
manager Dennis McKechnie.
Q: Technology as a whole had a great year in 1998, led by the Internet industry.
Why do you think these stocks were such high-flyers?
[PHOTO APPEARS HERE]
A: I believe Wall Street is coming to appreciate the tremendous growth potential
of this medium. The release of the Starr report over the Internet and the
exponential increase in holiday shopping via the Web were two important drivers.
And we are seeing a lot of companies increasing their Internet advertising
budgets, which is an indicator of the growing power of the Internet.
Q: Can you give us an example of a winning Internet holding?
A: America Online was one of our best performers. The company has consistently
beaten Wall Street expectations in key factors such as subscriber growth,
advertising traffic and electronic commerce revenues. And AOL has added new
growth aspects to its story through acquisitions of companies such as Mirabilis
and Netscape, which bring it additional exposure to informal chat services and
corporate Internet users.
Q: What is your outlook for Internet stocks going forward?
A: We have been very successful in buying the Internet group, with initial
purchases of key holdings 15-30 months ago. We're working hard to ensure that we
are equally successful in paring the group and/or individual names if the time
comes. We're looking at all Internet stocks with a discriminating eye, since
there certainly is concern about overvaluation.
Q: How about an example of a non-Internet success?
A: Nokia contributed meaningfully to the Fund's performance, driven by greater
demand for cellular phones and Nokia's astute product positioning relative to
its competition. Cellular phones are experiencing accelerated growth as the new
digital technology makes both the phones and the service less expensive. Nokia's
products have garnered higher customer satisfaction than phones from Ericsson
and Motorola, leading to an increase in demand.
Q: What other technology-related areas have you focused on?
A: We are very optimistic about the personal computer, semiconductor and disk
drive areas as a result of recent data as well as anecdotal information. PC
manufacturers have been able to overcome the excess inventory and oversupply
that had plagued them for much of 1998.
Also, PC demand at the retail level has been very strong. And it's becoming
increasingly likely that the Year 2000 problem will drive incremental PC demand
for all of 1999, as corporations race to replace their non-compliant systems,
rather than attempt to fix them. This bodes well for the semiconductor and other
PC-related industries as well.
Q: Despite the Innovation Fund's success, it has been less volatile than other
tech funds. How do you achieve this balance?
A: We have a relatively more diversified portfolio than many of our
counterparts. In addition to traditional tech firms we also can invest in
companies in other industries that use technology in innovative ways to advance
their business.
Q: Can you give us an example of a non-traditional tech holding?
A: Sofamor Danek is one of our successes that benefited from the use of
technology. The company is a developer of devices used by surgeons to correct
spinal disorders. The market for these products is growing more than 30% per
year and Sofamor Danek is the industry leader. The company is an attractive
investment that garnered attention from a much larger medical technology
company, Medtronic, which has made an offer to buy it at a premium.
Q: What's your outlook for technology stocks going forward?
A: Despite the sector's success, we believe there continues to be many long-term
investment opportunities. There will undoubtedly be some bumps in the road, so
we feel a dollar cost averaging plan is a smart way to approach an investment in
the Fund.
The views of Mr. McKechnie are not indicative of the future performance of any
PIMCO Fund. Please refer to page to page 27 for more complete performance
information on the Innovation Fund.
With a dollar cost averaging plan there is no assurance of making a profit or a
guarantee against loss during declining markets. Investors should consider their
ability to continue investing during periods of declining markets.
5
<PAGE>
Meet Our New Managers
Ken Corba & Mike Gaffney
In January, PIMCO Advisors L.P. established a new investment division, PIMCO
Equity Advisors. Initially, the division will primarily focus on managing
growth-oriented equity funds.
[PHOTO OF KEN CORBA APPEARS HERE]
Ken Corba
Portfolio Manager
PIMCO Growth and Target Funds
Located in New York City, the division's Chief Investment Officer is Ken Corba.
With over 14 years of investment experience, Mr. Corba has distinguished himself
as a superior growth equity manager. Most recently, he was the Chief Investment
Officer of Eagle Asset Management--responsible for over $2 billion in assets
under management--and portfolio manager of its Heritage Growth Equity Fund.
Prior to joining Eagle, Mr. Corba served as director of the Capital Management
Group at Stein Roe & Farnham. This division managed more than $2 billion in
assets for individuals, mutual funds and institutional investors. He earned his
B.S. and M.B.A. from the University of Michigan, and is a chartered financial
analyst.
Heading the small-cap growth management area for PIMCO Equity Advisors will be
Michael Gaffney. Mr. Gaffney has 11 years of investment experience, most
recently as senior vice president at Alliance Capital. There he managed
approximately $1.8 billion in small-cap assets for institutional clients and
developed a marketing and management program that helped to increase assets more
than tenfold.
[PHOTO OF MIKE GAFFNEY APPEARS HERE]
Mike Gaffney
Portfolio Manager
PIMCO Opportunity Fund
Mr. Gaffney began his investment career at Equitable Capital (which was acquired
by Alliance Capital in 1993). He focused on the small-cap markets as an analyst
in the media, technology and telecommunications industries for
small-capitalization stocks. He earned his B.A. from St. Johns University and an
M.B.A. from New York University's Graduate School of Business.
In addition, Dennis McKechnie, co-manager of PIMCO Innovation Fund, has joined
the division from PIMCO's Columbus Circle Investors affiliate and will continue
to manage the Fund.
Mr. Corba will initially assume responsibility for the PIMCO Growth and Target
Funds. Mr. Gaffney will become portfolio manager of our small-cap Opportunity
Fund. It's important to note that the investment objectives and "growth" style
of these Funds will remain the same.
<TABLE>
<CAPTION>
Ken Corba Mike Gaffney
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Background . 14 years of investment experience. . 11 years of investment experience.
. Previously Chief Investment Officer . Previously senior vice president at
of Eagle Asset Management, overseeing Alliance Capital, managing more than $1.8
$2 billion in retail and institutional billion in small-cap assets.
assets, including the Heritage Growth . Earned his BA from St. John's University and
Equity Fund. an MBA from NYU Graduate School of Business.
. Earned his BS and MBA from the
University of Michigan.
. Chartered Financial Analyst.
- -------------------------------------------------------------------------------------------------------------------
PIMCO Funds Growth Fund Opportunity Fund
Managed . Objective-Long-term growth . Objective-Capital appreciation
(effective of capital . Style-Growth
3/8/99) . Style-Growth . Primary Portfolio-Stocks of small-cap companies
. Primary Portfolio-Stocks of larger- . Assets (12/31/98)-$517 Million
capitalized companies
. Assets (12/31/98)-$2.2 billion
Target Fund
. Objective-Capital appreciation
. Style-Growth
. Primary Portfolio-Stocks of
mid-cap companies
. Assets (12/31/98)-$1.1 billion
</TABLE>
6
<PAGE>
In The
News
Recent News on PIMCO Funds
The PIMCO Funds and their institutional portfolio managers are regularly
featured in the press. Here is a sample of some recent articles:
. Innovation Fund's High-Tech Success The high-tech PIMCO Innovation Fund was
named the Fund of the Year by Mutual Funds magazine. In recent months the Fund
has been featured in The Wall Street Journal, Barron's, USA Today and
SmartMoney. For additional Fund details turn to page 27.
. Bill Gross Named Manager of the Year Bill Gross, manager of the PIMCO Total
Return, Low Duration, Short-Term and StocksPLUS Funds was named Morningstar's
1998 Fixed Income Manager of the Year. In its presentation of the award,
Morningstar said, "Gross has set PIMCO apart by building a fixed income
management process that blends discipline and flexibility. The firm's investment
committee has moved aggressively to take advantage of declining interest rates,
but has also protected shareholders from losses by taking a more defensive
position in time to avoid shakier markets."
. Tempering Risk and Reward Morningstar praised the managers of the PIMCO
Capital Appreciation and Mid-Cap Growth Funds for their prudent investment
technique. Morningstar said Mid-Cap Growth "tempers the risks of growth
investing without sacrificing the rewards" (8/98). Of the Capital Appreciation
Fund it pointed out that its "since inception return still outstrips the average
large-blend vehicle's by a healthy margin...but the co-managers don't take many
chances"(12/98).
. A High Yield Standout The Wall Street Journal, Barron's Online and Investor's
Business Daily all took note of PIMCO High Yield Fund's outstanding record in
1998.
Morningstar Inc., an independent organization, provides investors with
information regarding a wide range of investment products. One service offered
by Morningstar is assigning star ratings to the mutual funds it tracks. Funds
begin to be rated once they have a three-year record. The highest Morningstar
rating is five-stars, and the lowest rating is one-star. Following are the PIMCO
Fund family's five- and four-star rated Funds as of December 31, 1998.
- --------------------------------------------------------------------------------
PIMCO STOCK FUNDS Overall 3 Year 5 Year 10 Year
- --------------------------------------------------------------------------------
Equity Income **** 4 4 -
StocksPLUS ***** 5 5 -
Capital
Appreciation **** 4 4 -
Growth **** 4 3 4
Mid-Cap Growth **** 4 3 -
Innovation **** 4 - -
- --------------------------------------------------------------------------------
PIMCO BOND FUNDS Overall 3 Year 5 Year 10 Year
- --------------------------------------------------------------------------------
Short-Term ***** 5 5 5
Low Duration ***** 5 5 5
Total Return ***** 5 4 5
High Yield ***** 5 5 -
Global Bond II ***** 5 - -
Foreign Bond ***** 5 5 -
The chart above is based on December 31, 1998 Morningstar ratings. Overall
rating is a weighted average of a fund's 3-, 5- and 10-year ratings (when
applicable). During the 3-, 5- and 10-year periods there were 2,802, 1,702 and
732 domestic equity funds and 1,488, 987 and 368 taxable bond funds rated,
respectively.
Morningstar proprietary ratings reflect historical risk-adjusted performance and
are subject to monthly changes. Therefore, past ratings are not a guarantee of
future results. Overall ratings are calculated from a fund's 3-, 5- and 10-year
(if applicable) average annual total returns in excess of 90-day Treasury bill
returns with appropriate fee adjustments and a risk factor that reflects fund
performance below 90-day T-bill returns. With the exception of Growth C and
Innovation C, ratings are based on institutional class shares. Class A, B and C
shares, which were initially offered on 1/17/97, have not yet been rated by
Morningstar. Had Class A, B and C shares been in existence for the same time
period as the institutional class shares, they may have received different
ratings due to Class A, B and C shares' higher expense and sales charges. 5 star
ratings are limited to the top 10% of funds in an investment category, the next
22.5% earn 4 stars and the next 35% earn 3 stars. Institutional class shares
generally have a $5 million minimum investment. Under special circumstances,
institutional shares may be available. Call for details.
7
<PAGE>
Service
Update
New Transfer Agent for PIMCO Funds
At PIMCO Funds, we are always looking for ways to improve the service you
receive from us. After careful review, we have selected First Data Investor
Services Group, Inc. as the new transfer agent for the PIMCO Funds. The Funds'
transfer agent is responsible for maintaining account records and shareholder
servicing. First Data has more than 15 years of experience in servicing mutual
fund shareholders. We look forward to the many service enhancements that will
occur, including:
. expanded Customer Service Representative hours
. a simplified 24-hour automated telephone account information system
. new, redesigned quarterly consolidated account statements*
. a single account number for all your PIMCO Funds accounts*
. access to your PIMCO Funds account on our Web site--www.pimcofunds.com* (see
"What's New" story below)
. transaction capability through the PIMCO Funds Web site (expected in 1999).*
Note that changes to statements and account numbers apply to direct accounts
only--those accounts where the shareholder presently receives statements
directly from PIMCO Funds.
We are excited about the increased level of service that the change to First
Data will bring to our shareholders. If you have any questions or comments, you
can contact us directly at 1-800-426-0107.
*Applies to direct accounts only.
Preparing for the Year 2000
There has been much written about the potential pitfalls associated with the
Year 2000, or Y2K. We would like to take this opportunity to provide you with an
update on how PIMCO Funds Distributors is addressing this issue.
The firm is in the process of implementing its Year 2000 preparedness plan. This
plan has been reviewed and approved by upper management and the firm's
management board. The plan includes awareness, inventory, assessment,
implementation, testing and contingency planning. This includes a compliance
review of the Y2K preparedness of all our business partners. Based on our review
and analysis of the situation, we believe we have allocated necessary staffing
and funding for the project.
We are fortunate in that we have relatively new computer systems. Therefore,
large portions of our systems are already Year 2000 ready. We expect all our
internal systems to be compliant and tested well in advance of the year 2000.
Portfolio Implications
Investment analysts and portfolio managers generally are aware of the potential
for losses as a result of Year 2000. Not unlike other risks associated with the
purchase of securities, they plan to take Year 2000 risk into account when
making investment decisions. The type of evaluation conducted with respect to
specific issuers generally will vary depending upon a Fund's investment
objectives, policies, strategies, and restrictions, as well as with respect to
the nature of specific instruments.
While we do take Year 2000 risk into account, due to the uncertain nature of the
Year 2000 problem, there can be no guarantee that clients will not suffer
adverse consequences as a result of entering into the Year 2000. If you have any
questions regarding our Year 2000 preparedness, please call us at
1-800-426-0107. This is a Year 2000 readiness disclosure.
8
<PAGE>
What's new @ www.pimcofunds.com
Access Your PIMCO Funds Account On-line
If you've visited the PIMCO Funds Web site, you know that we provide "one-stop"
access to the most timely and complete information available on all of the PIMCO
Funds.
[GRAPHIC OF COMPUTER SCREEN APPEARS HERE]
Once you've received your Personal Identification Number (PIN), you can access
your account--simply, securely, whenever you want.
There's always room for improvement, however, and so we are pleased to announce
an enhancement to the site that will make it even more useful.
Now, access your account--securely--on-line. Shareholders with direct accounts
are now able to access their accounts on-line. A direct account is an account
where the shareholder receives statements directly from PIMCO Funds.
To access your account, click on "My PIMCO Funds Account" on the site's Home
page. This link brings you to a page where you will enter your PIN (Personal
Identification Number) and Social Security number. Your PIMCO Funds Customer
Service Representative can provide you with a temporary PIN over the phone. Call
1-800-426-0107, Mon.-Fri., 8:00am-8:00pm ET.
We know how important your privacy is, so we've employed 128-bit encryption--the
highest level available on the Internet. If your Web browser does not support
this level of encryption, you will get a message indicating your browser needs
to be upgraded.* Simply follow the links provided for information on how to
download a browser that meets our security requirements.
[GRAPHIC OF COMPUTER SCREEN APPEARS HERE]
View your account balance, check recent transactions and see all your
distributions--all on the PIMCO Funds Web site.
Once you gain access to your account, you'll be able to:
. view your current account balance (both for individual funds and your account
total)
. check recent transactions
. see cumulative distributions for both the current and previous year (such as
dividends and capital gains)
. change your PIN.
Also, remember the site features "My Portfolio," which enables you to track
the market value of your entire investment portfolio--PIMCO Funds as well as
other funds, stocks, futures and options holdings.
If you have any comments or questions about the site, please call us today at
1-800-426-0107. Or use the e-mail feature of the site to contact us.
*You may also elect to use the system if your browser supports 40-bit
encryption.
9
<PAGE>
The PIMCO Funds Family
PIMCO Funds offers unique access to the investment expertise of PIMCO Advisors
L.P. PIMCO 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. To learn more about any of the PIMCO Funds, please call us at
1-800-227-7337.
<TABLE>
<CAPTION>
Fund Name Objective Primary Portfolio Composition
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Stock
Equity Income Current income and long-term growth Stocks of companies with below-average P/Es
and above-average dividends
Value Long-term growth of capital and income Stocks of companies with below-average P/Es
Renaissance Long-term growth of capital and income Stocks with below-average valuations
Tax-Efficient Equity Maximum after-tax growth of capital Stocks of larger-capitalized companies
StocksPLUS Total return exceeding the S&P 500 Index S&P 500 stock index futures backed by a
portfolio of short-term, fixed-income securities
Capital Appreciation Growth of capital Stocks of larger-capitalized companies the
manager believes are reasonably priced
Growth Long-term growth of capital Stocks of larger-capitalized companies
Value 25 Long-term growth of capital and income Stocks of medium-capitalized companies with
below-average P/Es
Mid-Cap Growth Growth of capital Stocks of medium-capitalized companies the
manager believes are reasonably priced
Target Capital appreciation Stocks of medium-capitalized companies
- ----------------------------------------------------------------------------------------------------------------------------------
Aggressive Stock
Small-Cap Value Growth of capital and income Stocks of smaller-capitalized companies with
below-average P/Es
Opportunity Capital appreciation Stocks of smaller-capitalized companies
- ----------------------------------------------------------------------------------------------------------------------------------
Specialized Stock
International Capital appreciation Stocks of non-U.S. companies in developed and
emerging markets
Innovation Capital appreciation Stocks of technology-related companies
Precious Metals Capital appreciation Stocks of precious metals-related companies
- ----------------------------------------------------------------------------------------------------------------------------------
Asset Allocation
90/10 Portfolio Long-term capital appreciation 90% in PIMCO Stock Funds and 10% in PIMCO Bond Funds
60/40 Portfolio Long-term capital appreciation and 60% in PIMCO Stock Funds and 40% in PIMCO Bond Funds
current income
30/70 Portfolio Current income, with long-term capital 30% in PIMCO Stock Funds and 70% in PIMCO Bond Funds
appreciation as a secondary objective
- ----------------------------------------------------------------------------------------------------------------------------------
Stock & Bond
Balanced Maximum total return Stocks, bonds and money market instruments
- ----------------------------------------------------------------------------------------------------------------------------------
Longer-Term Bond
Municipal Bond High current income exempt from Investment-grade municipal bonds (3-10 year duration)
federal taxes, preservation of capital
Long-Term U.S. Government Maximum total return Long-term U.S. government bonds (8+ year duration)
- ----------------------------------------------------------------------------------------------------------------------------------
Intermediate-Term Bond
Real Return Bond Maximum total return Inflation-adjusted government bonds
Total Return Maximum total return Intermediate-term, investment-grade bonds (3-6 year
duration)
High Yield Maximum total return High-yield bonds (2-6 year duration)
Global Bond II Maximum total return Investment-grade U.S. and foreign bonds (3-7 year
duration)
Foreign Bond Maximum total return Investment-grade foreign bonds (3-7 year duration)
Emerging Markets Bond Maximum total return Emerging market bonds (0-8 year duration)
- ----------------------------------------------------------------------------------------------------------------------------------
Shorter-Term Bond
Short-Term Maximum current income consistent with Money market securities and short-term bonds (up to
preservation of capital and daily liquidity 1 year duration)
Low Duration Maximum total return Shorter-term, investment-grade bonds (1-3 year
duration)
Money Market Maximum current income, consistent with Money market securities (less than or equal to
preservation of capital and daily liquidity 90 days)
</TABLE>
Van Eck Associates serves as a sub-advisor to the Precious Metals Fund and is
unaffiliated with PIMCO Advisors L.P.
10
<PAGE>
Multi-Manager
Series
PIMCO Funds Semi-Annual Report
Dear Fellow Shareholder:
Despite a volatile third quarter, stocks rebounded in the fourth quarter,
finishing the year with strong positive returns. For the year ended December 31,
1998, the S&P 500 Index returned an impressive 28.6%. 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. And, 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. The year saw the introduction
of the PIMCO Asset Allocation Series, a set of three actively managed mutual
funds that invest in a diversified portfolio of PIMCO Funds according to varying
stock/bond ratios. In addition, we introduced two other 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. Finally,
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 was 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 advisor, or call us at 1-800-426-0107. Or, visit our Web site at
www.pimcofunds.com.
Sincerely,
/s/ Stephen J. Treadway
Stephen J. Treadway
President
January 12, 1999
11
<PAGE>
The Stock Market
Headline
The Stock Market
Headline
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 13-30 Fund Summaries
A summary of a Fund's performance record and portfolio composition, and a review
from the Fund's investment manager.
Pages 31-55 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
Equity Income Fund Page 13 Page 31
Value Fund Page 14 Page 32
Renaissance Fund Page 15 Page 33
Tax-Efficient Equity Fund Page 16 Page 34
Capital Appreciation Fund Page 17 Page 37
Growth Fund Page 18 Page 38
Value 25 Fund Page 19 Page 39
Mid-Cap Growth Fund Page 20 Page 40
Target Fund Page 21 Page 41
Small-Cap Value Fund Page 22 Page 42
Opportunity Fund Page 23 Page 44
International Developed Fund Page 24 Page 45
International Fund Page 25 Page 47
Emerging Markets Fund Page 26 Page 49
Innovation Fund Page 27 Page 51
Precious Metals Fund Page 28 Page 52
Balanced Fund Page 29 Page 53
Pages 56-65 Financial Highlights
This chart shows a per share breakdown of the factors that affect a Fund's NAV
for the current and past reporting periods. In addition to showing total return,
the chart reports distributions, asset size, expense ratio and portfolio
turnover rate.
Pages 66-67 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 68-69 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 70-73 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 74-80 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.
12
<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
FUND INCEPTION DATE
3/8/91
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 periods ended 12/31/98
A Shares B Shares C Shares Lipper
S&P 500 Equity Inc.
Adjusted Adjusted Adjusted Index Fund Avg.
- --------------------------------------------------------------------------------
6 months 1.4% -4.2% 1.0% -3.5% 0.1% 9.2% 1.8%
1 year 8.0% 2.1% 7.2% 2.5% 6.4% 28.6% 10.9%
3 years 19.6% 17.4% 18.7% 18.0% 18.7% 28.2% 18.8%
5 years 17.4% 16.1% 16.5% 16.3% 16.5% 24.1% 16.6%
Inception 16.1% 15.2% 15.2% 15.2% 15.2% -- --
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
RETAIL
<TABLE>
<CAPTION>
PIMCO PIMCO PIMCO S&P 500
Equity Income A Equity Income B Equity Income C Index
========== =============== =============== =============== =========
<S> <C> <C> <C> <C>
03/31/91 9,450.00 10,000.00 10,000.00 10,000.00
04/30/91 9,512.29 10,059.84 10,059.84 10,024.00
05/31/91 10,047.51 10,619.43 10,619.43 10,457.04
06/30/91 9,694.84 10,240.19 10,240.19 9,978.10
07/31/91 10,233.91 10,803.23 10,803.23 10,443.08
08/31/91 10,382.92 10,953.60 10,953.60 10,690.59
09/30/91 10,436.62 11,003.62 11,003.62 10,512.05
10/31/91 10,506.51 11,070.44 11,070.44 10,652.91
11/30/91 10,083.65 10,617.91 10,617.91 10,223.60
12/31/91 10,968.45 11,542.85 11,542.85 11,393.18
01/31/92 11,236.83 11,818.02 11,818.02 11,181.27
02/29/92 11,518.57 12,107.38 12,107.38 11,326.62
03/31/92 11,327.78 11,899.12 11,899.12 11,105.76
04/30/92 11,527.69 12,101.77 12,101.77 11,432.26
05/31/92 11,543.65 12,110.80 12,110.80 11,488.28
06/30/92 11,549.83 12,109.84 12,109.84 11,317.34
07/31/92 12,063.31 12,640.40 12,640.40 11,779.65
08/31/92 11,709.11 12,261.26 12,261.26 11,538.52
09/30/92 11,805.25 12,354.35 12,354.35 11,674.10
10/31/92 11,816.51 12,358.48 12,358.48 11,714.37
11/30/92 12,169.76 12,720.31 12,720.31 12,113.25
12/31/92 12,535.82 13,094.77 13,094.77 12,261.88
01/31/93 12,596.20 13,149.35 13,149.35 12,364.39
02/28/93 12,854.13 13,411.02 13,411.02 12,532.91
03/31/93 13,144.13 13,704.99 13,704.99 12,797.36
04/30/93 12,882.80 13,424.04 13,424.04 12,488.05
05/31/93 12,977.23 13,513.95 13,513.95 12,822.10
06/30/93 13,203.62 13,741.36 13,741.36 12,859.67
07/31/93 13,178.00 13,705.87 13,705.87 12,807.97
08/31/93 13,638.19 14,175.69 14,175.69 13,293.91
09/30/93 13,622.64 14,150.80 14,150.80 13,191.94
10/31/93 13,728.42 14,251.68 14,251.68 13,464.89
11/30/93 13,586.18 14,095.15 14,095.15 13,336.57
12/31/93 13,543.28 14,041.69 14,041.69 13,497.81
01/31/94 13,988.70 14,494.72 14,494.72 13,956.73
02/28/94 13,682.45 14,168.95 14,168.95 13,577.95
03/31/94 13,131.84 13,589.71 13,589.71 12,985.95
04/30/94 13,230.59 13,683.59 13,683.59 13,152.43
05/31/94 13,308.14 13,754.93 13,754.93 13,368.26
06/30/94 13,116.68 13,548.50 13,548.50 13,040.60
07/31/94 13,544.37 13,981.70 13,981.70 13,468.85
08/31/94 14,094.86 14,540.92 14,540.92 14,021.08
09/30/94 13,830.46 14,259.22 14,259.22 13,678.26
10/31/94 13,989.84 14,414.59 14,414.59 13,985.61
11/30/94 13,235.09 13,628.06 13,628.06 13,476.26
12/31/94 13,272.77 13,657.96 13,657.96 13,676.11
01/31/95 13,701.40 14,090.33 14,090.33 14,030.73
02/28/95 14,143.09 14,536.58 14,536.58 14,577.51
03/31/95 14,547.01 14,942.43 14,942.43 15,007.69
04/30/95 14,919.66 15,316.13 15,316.13 15,449.67
05/31/95 15,464.42 15,865.65 15,865.65 16,067.19
06/30/95 15,509.16 15,901.91 15,901.91 16,440.43
07/31/95 16,047.11 16,443.57 16,443.57 16,985.60
08/31/95 16,268.28 16,659.82 16,659.82 17,028.23
09/30/95 16,691.16 17,082.53 17,082.53 17,746.82
10/31/95 16,620.74 16,999.56 16,999.56 17,683.46
11/30/95 17,186.81 17,567.93 17,567.93 18,459.77
12/31/95 17,645.20 18,025.06 18,025.06 18,815.30
01/31/96 17,903.83 18,277.86 18,277.86 19,455.78
02/29/96 18,136.47 18,504.20 18,504.20 19,636.13
03/31/96 18,493.09 18,856.52 18,856.52 19,825.23
04/30/96 18,953.42 19,314.01 19,314.01 20,117.45
05/31/96 19,253.49 19,607.20 19,607.20 20,636.28
06/30/96 19,288.74 19,630.69 19,630.99 20,714.90
07/31/96 18,395.69 18,709.28 18,709.28 19,799.72
08/31/96 19,020.70 19,332.87 19,332.87 20,217.30
09/30/96 19,670.64 19,981.29 19,981.29 21,355.13
10/31/96 20,110.83 20,415.68 20,415.68 21,944.10
11/30/96 21,619.76 21,934.98 21,934.98 23,602.85
12/31/96 21,350.66 21,647.89 21,647.89 23,135.28
01/31/97 21,819.07 22,115.33 22,115.33 24,580.77
02/28/97 22,433.00 22,721.65 22,721.65 24,773.49
03/31/97 21,681.20 21,951.27 21,946.00 23,755.54
04/30/97 22,473.06 22,721.37 22,731.95 25,173.75
05/31/97 23,866.69 24,117.23 24,127.76 26,706.33
06/30/97 24,528.84 24,790.82 24,783.84 27,902.77
07/31/97 26,074.75 26,339.31 26,331.89 30,123.00
08/31/97 25,485.17 25,710.27 25,719.15 28,435.51
09/30/97 27,068.39 27,286.49 27,286.99 29,992.92
10/31/97 26,218.63 26,427.51 26,428.62 28.991.15
11/30/97 27,292.99 27,496.90 27,497.66 30,333.15
12/31/97 27,943.55 28,126.12 28,120.84 30,853.98
01/31/98 28,035.62 28,219.10 28,213.55 31,195.22
02/28/98 29,691.35 29,852.62 29,845.79 33,445.02
03/31/98 31,073.63 31,212.26 31,215.74 35,157.74
04/30/98 30,612.09 30,747.35 30,732.74 35,511.43
05/31/98 30,427.44 30,524.09 30,528.09 34,900.98
06/30/98 29,767.04 29,865.14 29,867.31 36,318.66
07/31/98 28,597.20 28,649.63 28,654.70 35,931.87
08/31/98 24,682.24 24,727.49 24,717.54 30,736.84
09/30/98 26,498.86 26,527.66 26,514.51 32,705.84
10/31/98 28,160.33 28,159.11 28,163.71 35,366.13
11/30/98 30,083.68 30,073.93 30,076.03 37,509.68
12/31/98 30,188.98 30,152.12 30,172.27 39,670.98
</TABLE>
*The adjusted returns above include the effect of applicable sales charges.
Excluding the 6-month and 1-year returns, these returns represent the blended
performance of the Fund's retail class shares (for the period from 1/20/97) and
the prior performance of the Fund's institutional class shares (for the period
from 3/8/91), adjusted for retail class fees and expenses. Past performance is
not an indication of future results. See page 30 for Footnotes, which include
additional details.
- --------------------------------------------------------------------------------
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 Stock 99%
- --------------------------------------------------------------------------------
Cash Equivalents 1%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-month period ended December 31, 1998, the PIMCO Equity Income Fund
posted a return of 1.4% for Class A shares and 1.0% for Class B and 0.1% for
Class C 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 state attorneys general 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. Despite 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 even though it suffered a bad third quarter. And, 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 last 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 last 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. And the manager is optimistic that the Fund's
higher-yielding stock holdings will soon outperform growth offerings.
See page 31 for financial details. 13
<PAGE>
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
FUND INCEPTION DATE
12/30/91
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 periods ended 12/31/98
A Shares B Shares C Shares Lipper Gr.
S&P 500 & Income
Adjusted Adjusted Adjusted Index Fund Avg.
6 months 1.6% -4.0% 1.2% -3.3% 0.3% 9.2% 3.1%
1 year 9.8% 3.7% 9.0% 4.1% 8.1% 28.6% 15.6%
3 years 18.3% 16.1% 17.4% 16.7% 17.4% 28.2% 21.3%
5 years 16.9% 15.6% 16.1% 15.9% 16.1% 24.1% 18.4%
Inception 16.3% 15.4% 15.4% 15.4% 15.4% -- --
Change in Value
$10,000 invested at the Fund's inception
[LINE CHART APPEARS HERE]
RETAIL
<TABLE>
<CAPTION>
PIMCO PIMCO PIMCO S&P 500
Value A Value B Value C Index
======== ========= ========= ========= =========
<S> <C> <C> <C> <C>
12/31/91 9,450.00 10,000.00 10,000.00 10,000.00
01/31/92 9,719.88 10,279.37 10,279.37 9,814.00
02/29/92 10,045.54 10,617.63 10,617.63 9,941.58
03/31/92 9,816.81 10,369.04 10,369.04 9,747.72
04/30/92 9,858.14 10,406.24 10,406.24 10,034.30
05/31/92 9,769.63 10,306.19 10,306.19 10,083.47
06/30/92 9,558.30 10,076.99 10,076.99 9,933.43
07/31/92 9,894.34 10,424.83 10,424.83 10,339.21
08/31/92 9,605.34 10,113.66 10,113.66 10,127.57
09/30/92 9,735.46 10,244.41 10,244.41 10,246.57
10/31/92 9,794.28 10,299.81 10,299.81 10,281.92
11/30/92 10,317.22 10,843.50 10,843.50 10,632.02
12/31/92 10,649.84 11,185.99 11,185.99 10,762.47
01/31/93 10,870.93 11,411.09 11,411.09 10,852.44
02/28/93 10,985.16 11,524.39 11,524.39 11,000.36
03/31/93 11,323.99 11,872.59 11,872.59 11,232.47
04/30/93 11,122.85 11,654.52 11,654.52 10,960.98
05/31/93 11,276.62 11,808.11 11,808.11 11,254.19
06/30/93 11,351.69 11,879.34 11,879.34 11,287.16
07/31/93 11,294.06 11,811.32 11,811.32 11,241.79
08/31/93 11,903.91 12,441.70 12,441.70 11,668.30
09/30/93 11,929.72 12,460.97 12,460.97 11,578.81
10/31/93 12,339.60 12,881.14 12,881.14 11,818.37
11/30/93 12,211.34 12,739.31 12,739.31 11,705.74
12/31/93 12,348.17 12,873.72 12,873.72 11,847.27
01/31/94 12,916.39 13,457.93 13,457.93 12,250.07
02/28/94 12,702.78 13,227.64 13,227.64 11,917.61
03/31/94 12,017.13 12,505.28 12,505.28 11,398.00
04/30/94 11,867.36 12,341.62 12,341.62 11,544.12
05/31/94 11,863.30 12,329.66 12,329.66 11,733.56
06/30/94 11,586.68 12,034.64 12,034.64 11,445.97
07/31/94 12,067.44 12,526.22 12,526.22 11,821.86
08/31/94 12,572.30 13,042.31 13,042.31 12,306.55
09/30/94 12,186.63 12,634.14 12,634.14 12,005.66
10/31/94 12,312.40 12,756.64 12,756.64 12,275.42
11/30/94 11,690.17 12,104.10 12,104.10 11,828.35
12/31/94 11,797.75 12,207.89 12,207.89 12,003.77
01/31/95 12,115.09 12,528.46 12,528.46 12,315.02
02/28/95 12,653.31 13,077.77 13,077.77 12,794.94
03/31/95 12,998.23 13,425.77 13,425.77 13,172.52
04/30/95 13,345.79 13,776.38 13,776.38 13,560.45
05/31/95 13,849.78 14,287.98 14,287.98 14,102.46
06/30/95 14,087.46 14,524.29 14,524.29 14,430.06
07/31/95 14,703.82 15,150.39 15,150.39 14,908.56
08/31/95 14,881.27 15,323.72 15,323.72 14,945.98
09/30/95 15,290.13 15,735.13 15,735.13 15,576.70
10/31/95 15,329.66 15,765.72 15,765.72 15,521.09
11/30/95 15,985.38 16,430.26 16,430.26 16,202.47
12/31/95 16,324.61 16,768.56 16,768.56 16,514.53
01/31/96 16,786.63 17,232.57 17,232.57 17,076.68
02/29/96 17,149.55 17,594.97 17,594.97 17,234.98
03/31/96 17,284.71 17,722.27 17,722.27 17,400.96
04/30/96 17,506.61 17,938.92 17,939.06 17,657.45
05/31/96 17,856.08 18,285.86 18,285.77 18,112.83
06/30/96 17,772.83 18,189.55 18,189.46 18,181.84
07/31/96 16,810.95 17,193.60 17,193.51 17,378.57
08/31/96 17,461.26 17,847.57 17,847.49 17,745.08
09/30/96 17,934.17 18,319.61 18,319.52 18,743.78
10/31/96 18,185.82 18,565.09 18,565.00 19,260.73
11/30/96 19,740.65 20,140.91 20,140.81 20,716.65
12/31/96 19,567.94 19,951.75 19,951.65 20,306.25
01/31/97 20,226.07 20,618.48 20,618.38 21,574.99
02/28/97 20,571.19 20,954.99 20,954.89 21,744.13
03/31/97 19,841.45 20,199.75 20,198.82 20,850.67
04/30/97 20,609.33 20,966.19 20,965.22 22,095.45
05/31/97 21,828.72 22,192.17 22,191.14 23,440.62
06/30/97 22,366.76 22,731.28 22,732.20 24,490.76
07/31/97 23,847.95 24,221.25 24,222.23 26,439.49
08/31/97 23,349.10 23,683.85 23,684.81 24,958.35
09/30/97 24,735.20 25,082.95 25,083.19 26,325.32
10/31/97 23,492.57 23,806.48 23,806.70 25,446.06
11/30/97 24,068.47 24,375.31 24,375.54 26,623.95
12/31/97 24,598.02 24,901.92 24,887.14 27,081.09
01/31/98 24,699.61 24,970.42 24,973.00 27,380.60
02/28/98 26,154.47 26,444.25 26,429.82 29,355.29
03/31/98 27,195.81 27,489.75 27,475.44 30,858.58
04/30/98 26,670.42 26,924.12 26,926.94 31,169.02
05/31/98 26,551.63 26,787.13 26,789.94 30,633.22
06/30/98 26,584.63 26,818.31 26,819.86 31,877.54
07/31/98 25,462.33 25,667.81 25,669.29 31,538.05
08/31/98 21,808.48 21,961.38 21,962.65 26,978.28
09/30/98 23,055.63 23,215.37 23,214.52 28,706.50
10/31/98 25,087.15 25,244.39 25,243.47 31,041.49
11/30/98 26,519.63 26,670.70 26,669.72 32,922.92
12/31/98 26,999.64 27,129.44 27,128.44 34,819.93
</TABLE>
*The adjusted returns above include the effect of applicable sales charges.
Excluding the 6-month and 1-year returns, these returns represent the blended
performance of the Fund's retail class shares (for the period from 1/13/97) and
the prior performance of the Fund's institutional class shares (for the period
from 12/30/91), adjusted for retail class fees and expenses. Past performance is
not an indication of future results. See page 30 for Footnotes, which include
additional details.
- --------------------------------------------------------------------------------
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 Stock 97%
- --------------------------------------------------------------------------------
Cash Equivalents 3%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six months ended December 31, 1998, PIMCO Value Fund posted returns of
1.6% for Class A shares and 1.2% for Class B and 0.3% for C 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 United States bank. And 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 their 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.
14 See page 32 for financial details.
<PAGE>
December 31, 1998
PIMCO Renaissance Fund
OBJECTIVE
Long-term growth of capital and current income
PORTFOLIO
Primarily stocks common stocks with below-average valuations that have improving
business fundamentals
FUND INCEPTION DATE
4/18/88
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 periods ended 12/31/98
A Shares B Shares C Shares Lipper
S&P 500 Equity Inc.
Adjusted Adjusted Adjusted Index Fund Avg.
- -----------------------------------------------------------------------------
6 months -1.1% -6.5% -1.7% -5.9% -2.3% 9.2% 1.8%
1 year 11.5% 5.4% 10.5% 5.7% 9.8% 28.6% 10.9%
5 years 18.5% 17.2% 17.6% 17.4% 17.6% 24.1% 16.6%
10 years 14.8% 14.1% 13.9% 13.9% 13.9% 19.2% 14.5%
Inception 14.4% 13.8% 13.5% 13.5% 13.5% -- --
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH G APPEARS HERE]
RETAIL
<TABLE>
<CAPTION>
PIMCO PIMCO PIMCO S&P 500
Renaissance A Renaissance B Renaissance C Index
======== ============= ============= ============= =========
<S> <C> <C> <C> <C>
04/30/88 9,450.00 10,000.00 10,000.00 10,000.00
05/31/88 9,459.62 9,999.99 9,999.99 10,087.00
06/30/88 9,671.29 10,219.76 10,219.76 10,549.99
07/31/88 9,651.99 10,189.82 10,189.82 10,509.90
08/31/88 9,515.81 10,038.22 10,038.22 10,152.57
09/30/88 9,652.44 10,180.01 10,180.01 10,585.07
10/31/88 9,769.54 10,291.38 10,291.38 10,879.33
11/30/88 9,710.52 10,230.13 10,230.13 10,723.76
12/31/88 10,029.60 10,561.21 10,561.21 10,911.42
01/31/89 10,339.59 10,872.46 10,872.46 11,710.14
02/28/89 10,279.61 10,810.23 10,810.23 11,418.56
03/31/89 10,379.91 10,903.78 10,903.78 11,684.61
04/30/89 10,652.80 11,186.88 11,186.88 12,291.04
05/31/89 10,956.05 11,501.44 11,501.44 12,788.83
06/30/89 11,036.43 11,574.14 11,574.14 12,715.93
07/31/89 11,251.38 11,797.12 11,797.12 13,864.18
08/31/89 11,599.49 12,147.53 12,147.53 14,135.92
09/30/89 11,465.40 11,997.80 11,997.80 14,077.96
10/31/89 11,258.23 11,772.30 11,772.30 13,751.35
11/30/89 11,237.48 11,750.84 11,750.84 14,031.88
12/31/89 11,239.72 11,741.47 11,741.47 14,368.64
01/31/90 10,689.51 11,159.63 11,159.63 13,404.51
02/28/90 10,689.51 11,159.60 11,159.60 13,577.42
03/31/90 10,966.70 11,435.27 11,435.27 13,937.23
04/30/90 10,637.50 11,082.36 11,082.36 13,588.80
05/31/90 11,296.00 11,764.70 11,764.70 14,913.70
06/30/90 11,249.44 11,704.51 11,704.51 14,812.29
07/31/90 10,947.25 11,382.70 11,382.70 14,764.89
08/31/90 10,198.97 10,596.04 10,596.04 13,430.14
09/30/90 9,477.52 9,836.97 9,836.97 12,776.10
10/31/90 9,093.29 9,427.10 9,427.10 12,721.16
11/30/90 9,396.01 9,740.51 9,740.51 13,542.95
12/31/90 9,575.19 9,925.95 9,925.95 13,920.79
01/31/91 9,882.56 10,231.97 10,231.97 14,527.74
02/28/91 10,485.42 10,843.91 10,843.91 15,566.47
03/31/91 10,728.60 11,095.65 11,095.65 15,943.18
04/30/91 10,847.80 11,206.76 11,206.76 15,981.45
05/31/91 11,408.05 11,786.83 11,786.83 16,671.85
06/30/91 11,012.91 11,365.31 11,365.31 15,908.27
07/31/91 11,421,66 11,776.10 11,776.10 16,649.60
08/31/91 11,890.53 12,249.11 12,249.11 17,044.20
09/30/91 12,075.31 12,438.95 12,438.95 16,759.56
10/31/91 12,330.88 12,689.97 12,689.97 16,984.14
11/30/91 11,941.40 12,288.30 12,288.30 16,299.68
12/31/91 12,863.97 13,225.78 13,225.78 18,164.36
01/31/92 13,086.33 13,454.40 13,454.40 17,826.50
02/29/92 13,358.23 13,708.54 13,708.54 18,058.25
03/31/92 13,098.46 13,435.11 13,435.11 17,706.11
04/30/92 13,110.93 13,447.87 13,447.87 18,226.67
05/31/92 13,247.81 13,575.61 13,575.61 18,315.98
06/30/92 13,097.42 13,415.06 13,415.06 18,043.44
07/31/92 13,410.41 13,723.19 13,723.19 18,780.51
08/31/92 13,235.15 13,530.57 13,530.57 18,396.08
09/30/92 13,368.84 13,664.89 13,664.89 18,612.23
10/31/92 13,330.84 13,626.06 13,626.06 18,676.44
11/30/92 13,685.03 13,975.49 13,975.49 19,312.37
12/31/92 13,978.82 14.254.06 14.254.06 19,549.34
01/31/93 14,183.32 14,462.67 14,462.67 19,712.77
02/28/93 14,055.53 14,332.20 14,332.20 19,981.45
03/31/93 14,605.73 14,873.95 14,873.95 20,403.06
04/30/93 14,489.99 14,742.95 14,742.95 19,909.92
05/31/93 14,837.12 15,083.69 15,083.69 20,442.51
06/30/93 15,134.29 15,379.77 15,379.77 20,502.41
07/31/93 15,470.59 15,722.05 15,722.05 20,419.99
08/31/93 16,479.53 16,722.75 16,722.75 21,194.72
09/30/93 16,753.19 16,994.36 16,994.36 21,032.16
10/31/93 16,987.37 17,232.42 17,232.42 21,467.32
11/30/93 16,571.21 16,782.78 16,782.78 21,262.73
12/31/93 17,068.60 17,280.69 17,280.69 21,519.80
01/31/94 17,563.24 17,768.24 17,768.24 22,251.47
02/28/94 17,376.23 17,565.21 17,565.21 21,647.57
03/31/94 16,421.98 16,592,69 16,592,69 20,703.73
04/30/94 16,314.47 16,470.24 16,470.24 20,969.15
05/31/94 16,233.77 16,388.56 16,388.56 21,313.26
06/30/94 15,856.08 15,999.92 15,999.92 20,790,87
07/31/94 16,247.99 16,382.48 16,382.48 21,473.64
08/31/94 17,032.07 17,147.67 17,147.67 22,354.06
09/30/94 16,992,68 17,114.43 17,114.43 21,807.50
10/31/94 16,951.90 17,059.44 17,059.44 22,297.52
11/30/94 16,258.50 16,345.86 16,345.86 21,485.44
12/31/94 16,325.71 16,407.99 16,407.99 21,804.07
01/31/95 16,366,85 16,435.60 16,435.60 22,369.45
02/28/95 16,737.66 16,794.77 16,794.77 23,241.19
03/31/95 17,190.63 17,243.69 17,243.69 23,927.04
04/30/95 17,494.33 17,548.99 17,548.99 24,631.69
05/31/95 17,549.65 17,576.65 17,576.65 25,616.22
06/30/95 17,991.46 18,027.58 18,013.80 26,211.28
07/31/95 18,879.81 18,903.25 18,891.61 27,080.45
08/31/95 19,101,82 19,111.64 19,100.52 27,148.42
09/30/95 19,727.00 19,716.72 19,707.03 28,294.08
10/31/95 19,768.76 19,744.52 19,748.91 28,193.07
11/30/95 20,731.50 20,693.26 20,686.14 29,430.75
12/31/95 20,992.59 20,938.91 20,937.76 29,997.58
01/31/96 21,705.10 21,647.75 21,634.84 31,018.70
02/29/96 22,001.88 21,928.37 21,916.55 31,306.24
03/31/96 22,179.72 22,089.37 22,078.16 31,607.72
04/30/96 22,537.17 22,444.37 22,434.81 32,073.62
05/31/96 23,073.46 22,962.34 22,939.91 32,900.80
06/30/96 23,133.71 23,001.33 22,987.79 33,026.15
07/31/96 22,131.72 22,007.88 21,990.32 31,567.06
08/31/96 23,014.15 22,867.88 22,839.04 32,232,81
09/30/96 24,139.87 23,964.65 23,947.42 34,046.87
10/31/96 24,965.52 24,767.54 24,753.01 34,985.88
11/30/96 26,241.44 26,016.32 26,006.20 37,630.46
12/31/96 26,312.13 26,081.10 26,045.63 36,885.00
01/31/97 27,262.94 27,004.11 26,972.10 39,189.58
02/29/97 27,124.83 26,850.24 26,817,58 39,496.83
03/31/97 26,438.22 26,147.30 26,126.14 37,873.90
04/30/97 27,547.12 27,241.67 27,207.58 40,134.97
05/31/97 29,244.96 28,883.52 28,872.44 42,578.39
06/30/97 30,784.65 30,406.06 30,380.13 44,485.90
07/31/97 33,528.27 33,075.59 33,041.97 48,025,64
08/31/97 32,712.42 32,254.23 32,217,61 45,335.25
09/30/97 35,095.26 34,581.53 34,550.36 47,818.26
10/31/97 33,477.37 32,972.31 32,935.71 46,221.13
11/30/97 34,799.73 34,239.11 34,207.20 48,360.70
12/31/97 35,764.23 35,169.21 35,135.24 49,191,06
01/31/98 35,785.41 35,169.07 35,135.34 49,735.11
02/28/98 38,508.86 37,823.18 37,780.51 53,322.01
03/31/98 39,965.91 39,233.57 39,217.72 56,052.63
04/30/98 40,852.48 40,083.68 40,051.01 56,616.52
05/31/98 40,008.30 39,233.42 39,197.05 55,643.28
06/30/98 40,324.65 39,523.63 39,488.67 57,903.51
07/31/98 39,502.03 38,673.88 38,635.72 57,286.84
08/31/98 32,490.42 31,789.93 31,762.42 49.004.31
09/30/98 33,630.83 32,889.86 32,867.76 52,143.52
10/31/98 35,087.04 34,300.83 34,264.64 56,384.88
11/30/98 37,304.55 36,437.77 36,409.60 59,802.36
12/31/98 39,878.56 38,871.82 38,903.66 63,248.18
</TABLE>
*The adjusted returns above include the effect of paying the applicable sales
charges. Class A and B shares commenced operations after the inception date
shown. Total return for the periods shown before the inception of Class A and B
shares reflects the performance for this Fund's oldest class of shares (Class
C), restated to reflect the appropriate operating expenses for those shares.
Had Class A share returns been restated on the basis of different sales
charges, but without regard to the lower operating expenses of Class A shares,
the adjusted total return figures for the 10-year and since inception periods
would have been lower, namely 14.0% and 13.6%, respectively. Past performance
is not an indication of future results. See page 30 for Footnotes, which
include additional details.
- --------------------------------------------------------------------------------
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 Cos., 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 Stock 97%
- --------------------------------------------------------------------------------
Cash Equivalients 3%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six months ended December 31, 1998, PIMCO Renaissance Fund returned
- -1.1% for Class A shares, -1.7% for Class B shares, and -2.3% for Class C
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 put behind it. Congress'
inability to pass a tobacco bill and a multi-state court settlement for the
tobacco industry both 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 its
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, and oil stocks had a particularly poor year. Last
year's relatively warm winter as well as OPEC's 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 and will continue to adhere to the Fund's
investment strategy of purchasing out-of-favor companies that are showing signs
of a turnaround.
See page 33 for financial details. 15
<PAGE>
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 capitalizations
FUND INCEPTION DATE
7/10/98
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 periods ended 12/31/98
A Shares B Shares C Shares Lipper
S&P 500 Gr. & Income
Adjusted Adjusted Adjusted Index Fund Avg.
- --------------------------------------------------------------------------------
Inception 5.3% -0.5% 4.9% -0.1% 3.9% -- --
*The adjusted returns above include the effect of paying the applicable sales
charges. Past performance is not an indication of future results. See page 30
for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
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 Cos., 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%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 95%
- --------------------------------------------------------------------------------
Cash Equivalients 5%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the period since inception through December 31, 1998, the Tax-Efficient
Equity Fund posted returns of 5.3% for its Class A shares, 4.9% for its Class B
shares and 3.9% for its Class C shares. These returns outperformed the S&P 500
Index and the Lipper Equity Income Fund Average.
PIMCO Tax-Efficient Equity Fund was started on July 10, 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 17 highs.
The Fund's energy holdings continued to disappoint due to the plunge in oil
prices--during 1998, they reached 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.
16 See page 34 for financial details.
<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
FUND INCEPTION DATE
3/8/91
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 periods ended 12/31/98
A Shares B Shares C Shares Lipper Cap.
S&P 500 App. Fund
Adjusted Adjusted Adjusted Index Avg.
- --------------------------------------------------------------------------------
6 months 2.6% -3.1% 2.2% -2.5% 1.2% 9.2% 5.3%
1 year 17.2% 10.7% 16.3% 11.3% 15.3% 28.6% 20.0%
3 years 25.6% 23.2% 24.6% 24.0% 24.6% 28.2% 16.1%
5 years 20.9% 19.5% 20.0% 19.8% 20.0% 24.1% 15.0%
Inception 19.3% 18.4% 18.4% 18.4% 18.4% -- --
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
RETAIL
<TABLE>
<CAPTION>
PIMCO PIMCO PIMCO S&P 500
Capital Capital Capital Index
Appreciation A Appreciation B Appreciation C
============== ============== ============== ============== ==============
<S> <C> <C> <C> <C>
03/31/91 9,450.00 10,000.00 10,000.00 10,000.00
04/30/91 9,171.65 9,699.17 9,699.17 10,024.00
05/31/91 9,622.01 10,169.28 10,169.28 10,457.04
06/30/91 9,100.72 9,612.10 9,612.10 9,978.10
07/31/91 9,748.62 10,290.38 10,290.38 10,443.08
08/31/91 10,051.40 10,603.33 10,603.33 10,690.59
09/30/91 9,909.07 10,446.57 10,446.57 10,512.05
10/31/91 10,245.16 10,794.39 10,794.39 10,652.91
11/30/91 9,944.30 10,470.67 10,470.67 10,223.60
12/31/91 11,322.50 11,915.13 11,915.13 11,393.18
01/31/92 11,210.85 11,789.98 11,789.98 11,181.27
02/29/92 11,328.27 11,906.55 11,906.55 11,326.62
03/31/92 10,952.15 11,503.69 11,503.69 11,105.76
04/30/92 10,924.77 11,467.91 11,467.91 11,432.26
05/31/92 10,967.74 11,505.74 11,505.74 11,488.28
06/30/92 10,618.81 11,132.57 11,132.57 11,317.34
07/31/92 10,924.67 11,446.15 11,446.15 11,779.65
08/31/92 10,649.78 11,150.80 11,150.80 11,538.52
09/30/92 10,926.72 11,433.96 11,433.96 11,674.10
10/31/92 11,304.06 11,821.74 11,821.74 11,714.37
11/30/92 11,962.40 12,502.84 12,502.84 12,113.25
12/31/92 12,124.22 12,664.13 12,664.13 12,261.88
01/31/93 12,532.35 13,082.34 13,082.34 12,364.39
02/28/93 12,377.78 12,913.50 12,913.50 12,532.91
03/31/93 12,945.75 13,497.94 13,497.94 12,797.36
04/30/93 12,624.40 13,154.64 13,154.64 12,488.05
05/31/93 13,193.13 13,738.80 13,738.80 12,822.10
06/30/93 13,399.79 13,945.47 13,945.47 12,859.67
07/31/93 13,205.60 13,734.65 13,734.65 12,807.97
08/31/93 13,684.33 14,223.75 14,223.75 13,293.91
09/30/93 14,082.34 14,628.53 14,628.53 13,191.94
10/31/93 14,112.53 14,650.74 14,650.74 13,464.89
11/30/93 13,825.78 14,344.04 14,344.04 13,336.57
12/31/93 14,214.64 14,738.11 14,738.11 13,497.81
01/31/94 14,710.82 15,243.39 15,243.39 13,956.73
02/28/94 14,507.06 15,023.29 15,023.29 13,577.95
03/31/94 13,778.32 14,259.12 14,259.12 12,985.95
04/30/94 13,826.04 14,299.66 14,299.66 13,152.43
05/31/94 13,810.77 14,274.72 14,274.72 13,368.26
06/30/94 13,417.61 13,859.61 13,859.61 13,040.60
07/31/94 13,741.22 14,184.98 14,184.98 13,468.85
08/31/94 14,147.24 14,594.98 14,594.98 14,021.08
09/30/94 13,763.64 14,190.26 14,190.26 13,678.26
10/31/94 14,075.41 14,502.52 14,502.52 13,985.61
11/30/94 13,427.23 13,825.54 13,825.54 13,476.26
12/31/94 13,555.44 13,948.75 13,948.75 13,676.11
01/31/95 13,542.65 13,926.46 13,926.46 14,030.73
02/28/95 14,215.01 14,609.96 14,609.96 14,577.51
03/31/95 14,833.78 15,236.55 15,236.55 15,007.69
04/30/95 15,339.46 15,746.75 15,746.75 15,449.67
05/31/95 15,895.64 16,307.88 16,307.88 16,067.19
06/30/95 16,578.85 16,998.65 16,998.65 16,440.43
07/31/95 17,494.12 17,926,30 17,926,30 16,985.60
08/31/95 17,658.05 18,082.84 18,082.84 17,028.23
09/30/95 18,352.78 18,782.99 18,782.99 17,746.82
10/31/95 18,003.45 18,414.03 18,414.03 17,683.46
11/30/95 18,550.39 18,962.05 18,962.05 18,459.77
12/31/95 18,517.99 18,916.96 18,916.96 18,815.30
01/31/96 19,134.88 19,535.26 19,535.26 19,455.78
02/29/96 19,853.96 20,257.50 20,257.50 19,636.13
03/31/96 19,884.78 20,276.14 20,276.14 19,825.23
04/30/96 20,128.09 20,511.66 20,511.66 20,117.45
05/31/96 20,631.77 21,011.76 21,011.76 20,636.28
06/30/96 20,586.59 20,952.99 20,952.99 20,714.90
07/31/96 19,544.60 19,879.25 19,879.25 19,799.72
08/31/96 20,379.49 20,715.61 20,715.61 20,217.30
09/30/96 21,623.20 21,966.88 21,966.88 21,355.13
10/31/96 22,161.10 22,499.44 22,499.44 21,944.10
11/30/96 23,766.94 24,115.64 24,115.64 23,602.85
12/31/96 23,387.45 23,715.18 23,715.18 23,135.28
01/31/97 24,752.11 25,086.06 25,086.06 24,580.77
02/28/97 24,484.39 24,814.73 24,801.81 24,773.49
03/31/97 23,591.57 23,884.03 23,883.97 23,755.54
04/30/97 24,331.17 24,620.92 24,620.86 25,173.75
05/31/97 25,874.22 26,171.62 26,171.56 26,706.33
06/30/97 26,983.48 27,270.33 27,270.26 27,902.77
07/31/97 29,890.98 30,178.08 30,178.01 30,123.00
08/31/97 28,755.96 29,015.20 29,015.13 28,435.51
09/30/97 30,490.31 30,759.68 30,759.61 29,992.92
10/31/97 29,929.57 30,165.31 30,165.24 28,991.15
11/30/97 30,682.23 30,902.07 30,902.00 30,333.15
12/31/97 31,275.08 31,488.72 31,482.15 30,853.98
01/31/98 30,780.30 30,959.86 30,967.79 31,195.22
02/28/98 33,032.90 33,214.14 33,205.37 33,445.02
03/31/98 34,859.62 35,023.38 35,026.59 35,157.74
04/30/98 34,873.25 35,023.52 35,013.10 35,511.43
05/31/98 34,269.28 34,397.51 34,401.25 34,900.98
06/30/98 35,725.07 35,830.69 35,832.86 36,318.66
07/31/98 34,696.19 34,773.68 34,775.79 35,931.87
08/31/98 29,023.36 29,081.23 29,076.04 30,736.84
09/30/98 30,642.87 30,666.16 30,675.22 32,705.84
10/31/98 32,043.25 32,058.40 32,049.47 35,366.13
11/30/98 34,103.63 34,103.73 34,107.04 37,509.68
12/31/98 36,647.76 36,630.81 36,617.32 39,670.98
</TABLE>
*The Adjusted returns above include the effect of applicable sales charges.
Excluding the 6-month and 1-year returns, these returns represent the blended
performance of the Fund's retail class shares (for the period from 1/20/97) and
the prior performance of the Fund's institutional class shares (for the period
from 33/8/91), adjusted for retail class fees and expenses. Past performance is
not an indication of future results. See page 30 for Footnotes, which include
additional details.
- --------------------------------------------------------------------------------
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 Stock 95%
- --------------------------------------------------------------------------------
Cash Equivalents 5%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six months ended December 31, 1998, PIMCO Capital Appreciation Fund
posted returns of 2.6% for Class A shares, 2.2% for Class B shares and 1.2% for
Class C 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. Portfolio
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. And 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 global
economic uncertainties. The manager sold this stock in October.
Looking ahead, the manager believes the domestic economy will slow
somewhat, but will still remain relatively strong. The manager believes the Fund
is well-positioned to benefit from this environment in 1999.
See page 37 for financial details. 17
<PAGE>
PIMCO Growth Fund
OBJECTIVE
Long-term growth of capital; income is incidental
PORTFOLIO
Primarily stocks of larger, well-established companies
FUND INCEPTION DATE
2/24/84
TOTAL NET ASSETS
$2,240 million
NUMBER OF SECURITIES IN THE PORTFOLIO
45 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Columbus Circle Investors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/98
A Shares B Shares C Shares Lipper
S&P 500 Growth
Adjusted Adjusted Adjusted Index Fund Avg.
- --------------------------------------------------------------------------------
6 months 9.8% 3.8% 9.4% 4.6% 8.5% 9.2% 6.2%
1 year 39.9% 32.2% 38.9% 33.9% 37.9% 28.6% 22.9%
5 years 21.2% 19.8% 20.3% 20.1% 20.3% 24.1% 18.6%
10 years 19.4% 18.8% 18.6% 18.6% 18.6% 19.2% 16.7%
Inception 18.9% 18.4% 18.0% 18.0% 18.0% -- --
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
RETAIL
<TABLE>
<CAPTION>
PIMCO PIMCO PIMCO S&P 500
Growth A Growth B Growth C Index
=============================================================================
<S> <C> <C> <C> <C>
02/29/84 9,450.00 10,000.00 10,000.00 10,000.00
03/31/84 9,693.23 10,250.00 10,250.00 10,180.00
04/30/84 9,755.95 10,310.00 10,310.00 10,251.34
05/31/84 9,421.49 9,949.98 9,949.98 9,708.01
06/30/84 9,645.42 10,180.32 10,180.32 9,911.79
07/31/84 9,718.37 10,250.89 10,250.89 9,763.24
08/31/84 10,498.68 11,067.28 11,067.28 10,866.25
09/30/84 10,428.34 10,986.40 10,986.40 10,877.25
10/31/84 10,521.72 11,077.73 11,077.73 10,909.97
11/30/84 10,448.76 10,994.08 10,994.08 10,800.80
12/31/84 10,661.68 11,210.94 11,210.94 11,081.54
01/31/85 11,421.52 12,002.82 12,002.82 11,947.02
02/28/85 11,517.36 12,096.65 12,096.65 12,095.06
03/31/85 11,564.42 12,138.37 12,138.37 12,103.50
04/30/85 11,510.90 12,074.75 12,074.75 12,092.51
05/31/85 12,129.38 12,715.76 12,715.76 12,790.01
06/30/85 12,477.64 13,073.12 13,073.12 12,975.89
07/31/85 12,495.22 13,083.19 13,083.19 12,957.74
08/31/85 12,432.30 13,009.08 13,009.08 12,847.54
09/30/85 12,075.41 12,627.67 12,627.67 12,449.18
10/31/85 12,573.19 13,140.19 13,140.19 13,021.91
11/30/85 13,267.10 13,857.32 13,857.32 13,920.38
12/31/85 14,017.60 14,632.23 14,632.23 14,588.48
01/31/86 14,349.09 14,968.58 14,968.58 14,670.17
02/28/86 15,509.23 16,170.20 16,170.20 15,767.50
03/31/86 16,235.22 16,916.86 16,916.86 16,647.33
04/30/86 16,256.05 16,928.31 16,928.31 16,459.22
05/31/86 16,953.67 17,643.91 17,643.91 17,334.84
06/30/86 17,257.08 17,948.83 17,948.83 17,627.81
07/31/86 16,873.83 17,538.73 17,538.73 16,642.41
08/31/86 17,837.90 18,529.36 18,529.36 17,877.28
09/30/86 16,770.12 17,408.94 17,408.94 16,398.83
10/31/86 17,584.01 18,242.66 18,242.66 17,345.04
11/30/86 17,895.71 18,554.90 18,554.90 17,766.52
12/31/86 17,396.58 18,025.56 18,025.56 17,313.48
01/31/87 19,736.59 20,438.57 20,438.57 19,645.60
02/28/87 21,025.80 21,762.13 21,762.13 20,421.60
03/31/87 21,434.78 22,171.48 22,171.48 21,011.79
04/30/87 21,395.27 22,116.74 22,116.74 20,824.78
05/31/87 21,606.74 22,321.27 22,321.27 21,005.96
06/30/87 22,544.63 23,276.45 23,276.45 22,066.76
07/31/87 23,388.61 24,081.58 24,081.58 23,185.54
08/31/87 24,014.63 24,763.45 24,763.45 24,050.36
09/30/87 23,910.22 24,640.42 24,640.42 23,523.66
10/31/87 18,910.22 19,040.20 19,040.20 18,456.66
11/30/87 17,226.82 17,727.93 17,727.93 16,935.84
12/31/87 18,858.76 19,396.18 19,396.18 18,224.65
01/31/88 18,651.36 19,170.58 19,170.58 18,991.91
02/29/88 19,818.97 20,359.35 20,359.35 19,876.93
03/31/88 19,553.08 20,073.48 20,073.48 19,262.74
04/30/88 19,726.57 20,239.13 20,239.13 19,476.55
05/31/88 19,900.58 20,404.52 20,404.52 19,646.00
06/30/88 21,086.79 21,608.25 21,608.25 20,547.75
07/31/88 20,703.77 21,201.99 21,201.99 20,469.67
08/31/88 19,627.88 20,087.02 20,087.02 19,773.70
09/30/88 20,538.77 21,006.91 21,006.91 20,616.06
10/31/88 20,684.82 21,142.78 21,142.78 21,189.19
11/30/88 20,314.11 20,750.79 20,750.79 20,886.18
12/31/88 20,780.52 21,213.74 21,213.74 21,251.69
01/31/89 22,156.40 22,604.85 22,604.85 22,807.31
02/28/89 21,739.44 22,166.48 22,166.48 22,239.41
03/31/89 22,672.67 23,104.01 23,104.01 22,757.59
04/30/89 24,318.86 24,767.24 24,767.24 23,938.71
05/31/89 26,131.52 26,596.78 26,596.78 24,908.23
06/30/89 25,803.31 26,246.42 26,246.42 24,766.25
07/31/89 28,027.40 28,491.53 28,491.53 27,002.64
08/31/89 28,880.75 29,341.04 29,341.04 27,531.89
09/30/89 29,451.29 29,902.19 29,902.19 27,419.01
10/31/89 28,558.56 28,976.95 28,976.95 26,782.89
11/30/89 29,144.35 29,553.45 29,553.45 27,329.26
12/31/89 28,774.22 29,159.80 29,159.80 27,985.16
01/31/90 26,670.42 27,009.82 27,009.82 26,107.36
02/28/90 27,340.33 27,672.34 27,672.34 26,444.14
03/31/90 28,028.70 28,351.11 28,351.11 27,144.91
04/30/90 27,869.98 28,173.55 28,173.55 26,466.29
05/31/90 30,829.77 31,147.49 31,147.49 29,046.75
06/30/90 31,363.55 31,666.91 31,666.91 28,849.24
07/31/90 30,804.00 31,081.77 31,081.77 28,756.92
08/31/90 28,536.85 28,774.66 28,774.66 26,157.29
09/30/90 27,297.73 27,507.20 27,507.20 24,883.43
10/31/90 27,247.64 27,442.33 27,442.33 24,776.43
11/30/90 28,619.06 28,823.56 28,823.56 26,376.99
12/31/90 29,057.94 29,245.80 29,245.80 27,112.91
01/31/91 30,456.81 30,652.90 30,652.90 28,295.03
02/28/91 32,752.83 32,926.06 32,926.06 30,318.13
03/31/91 33,685.86 33,846.47 33,846.47 31,051.83
04/30/91 33,362.92 33,503.75 33,503.75 31,126.35
05/31/91 35,174.25 35,325.78 35,325.78 32,471.01
06/30/91 33,431.41 33,555.60 33,555.60 30,983.84
07/31/91 35,715.07 35,816.51 35,816.51 32,427.68
08/31/91 37,513.08 37,589.22 37,589.22 33,196.22
09/30/91 37,099.76 37,154.91 37,154.91 32,641.84
10/31/91 38,322.56 38,366.50 38,366.50 33,079.24
11/30/91 36,829.67 36,847.37 36,847.37 31,746.15
12/31/91 41,485.01 41,492.24 41,492.24 35,377.91
01/31/92 40,522.77 40,491.33 40,491.33 34,719.88
02/29/92 40,811.05 40,761.16 40,761.16 35,171.24
03/31/92 39,907.08 39,837.10 39,837.10 34,485.40
04/30/92 39,695.42 39,586.77 39,586.77 35,499.27
05/31/92 40,311.05 40,182.95 40,182.95 35,673.22
06/30/92 39,060.60 38,913.00 38,913.00 35,142.40
07/31/92 40,272.77 40,106.19 40,106.19 36,577.97
08/31/92 38,771.68 38,566.88 38,566.88 35,829.22
09/30/92 39,945.58 39,721.41 39,721.41 36,250.21
10/31/92 40,600.16 40,337.57 40,337.57 36,373.27
11/30/92 42,408.58 42,108.19 42,108.19 37,613.85
12/31/92 42,694.62 42,355.87 42,355.87 38,075.37
01/31/93 43,758.78 43,400.24 43,400.24 38,393.68
02/28/93 42,852.72 42,473.65 42,473.65 38,916.99
03/31/93 43,837.81 43,419.96 43,419.96 39,738.14
04/30/93 41,887.43 41,469.06 41,469.06 38,777.67
05/31/93 44,054.97 43,578.42 43,578.42 39,814.97
06/30/93 44,429.62 43,932.80 43,932.80 39,931.63
07/31/93 44,488.84 43,952.35 43,952.35 39,771.10
08/31/93 45,986.29 45,410.82 45,410.82 41,280.02
09/30/93 47,029.72 46,416.17 46,416.17 40,963.40
10/31/93 46,890.28 46,257.34 46,257.34 41,810.93
11/30/93 46,114.62 45,440.99 45,440.99 41,412.47
12/31/93 46,996.52 46,303.41 46,303.41 41,913.15
01/31/94 49,247.32 48,470.69 48,470.69 43,338.20
02/28/94 48,338.85 47,560.55 47,560.55 42,162.00
03/31/94 46,153.70 45,392.93 45,392.93 40,323.74
04/30/94 45,525.87 44,742.14 44,742.14 40,840.69
05/31/94 46,326.94 45,501.19 45,501.19 41,510.88
06/30/94 45,179.98 44,352.51 44,352.51 40,493.45
07/31/94 46,305.41 45,414.84 45,414.84 41,823.25
08/31/94 48,599.06 47,647.93 47,647.93 43,538.01
09/30/94 47,625.76 46,650.85 46,650.85 42,473.50
10/31/94 49,378.58 48,341.29 48,341.29 43,427.88
11/30/94 47,063.07 46,021.73 46,021.73 41,846.24
12/31/94 47,001.04 45,958.18 45,958.18 42,466.82
01/31/95 47,344.25 46,256.77 46,256.77 43,567.98
02/28/95 48,763.77 47,611.44 47,611.44 45,265.83
03/31/95 49,862.27 48,644.71 48,644.71 46,601.62
04/30/95 51,488.08 50,206.10 50,206.10 47,974.04
05/31/95 53,090.39 51,745.27 51,745.27 49,891.56
06/30/95 55,219.47 53,789.06 53,789.06 51,050.54
07/31/95 57,142.05 55,627.03 55,627.03 52,743.38
08/31/95 57,645.58 56,086.12 56,086.12 52,875.76
09/30/95 58,904.62 57,280.36 57,280.36 55,107.12
10/31/95 59,133.35 57,440.80 57,440.80 54,910.39
11/30/95 60,621.91 58,864.76 58,864.76 57,320.95
12/31/95 60,367.72 58,581.68 58,581.68 58,424.95
01/31/96 63,095.74 61,199.99 61,199.99 60,413.74
02/29/96 64,279.35 62,288.79 62,288.79 60,973.77
03/31/96 64,356.49 62,341.18 62,341.18 61,560.95
04/30/96 65,179.93 63,092.83 63,092.83 62,468.36
05/31/96 66,672.62 64,493.17 64,493.17 64,079.42
06/30/96 65,797.47 63,611.94 63,611.94 64,323.56
07/31/96 61,988.59 59,879.51 59,879.51 61,481.75
08/31/96 63,583.99 61,382.90 61,382.90 62,778.40
09/30/96 68,395.13 65,997.42 65,997.42 66,311.57
10/31/96 69,501.08 67,033.78 67,033.78 68,140.44
11/30/96 73,540.28 70,870.66 70,870.66 73,291.18
12/31/96 71,489.90 68,848.51 68,848.51 71,839.28
01/31/97 74,921.99 72,120.67 72,120.67 76,327.80
02/28/97 72,868.00 70,098.12 70,098.12 76,926.20
03/31/97 68,967.09 66,291.65 66,291.65 73,765.31
04/30/97 71,871.15 69,057.27 69,057.27 78,169.10
05/31/97 77,121.55 74,053.08 74,053.08 82,928.03
06/30/97 79,291.76 76,076.06 76,076.06 86,643.21
07/31/97 87,681.62 84,076.15 84,076.15 93,537.40
08/31/97 82,166.71 78,752.19 78,752.19 88,297.44
09/30/97 87,506.80 83,807.30 83,807.30 93,133.49
10/31/97 85,012.60 81,368.25 81,368.25 90,022.83
11/30/97 85,747.10 82,023.19 82,023.19 94,189.99
12/31/97 87,761.13 83,881.75 83,881.75 95,807.23
01/31/98 89,716.36 85,708.53 85,708.53 96,866.86
02/28/98 96,539.29 92,169.58 92,169.58 103,852.90
03/31/98 103,051.93 98,348.72 98,348.72 109,171.20
04/30/98 105,075.25 100,175.84 100,175.84 110,269.47
05/31/98 103,634.04 98,771.88 98,771.88 108,373.93
06/30/98 111,828.38 106,495.94 106,495.94 112,776.08
07/31/98 109,837.84 104,525.76 104,525.76 111,575.02
08/31/98 89,957.19 85,533.43 85,564.79 95,443.50
09/30/98 97,945.39 93,077.48 93,111.60 101,557.61
10/31/98 101.921.97 96,800.58 96,836.07 109,818.31
11/30/98 109,637.46 104,060.62 104,098.77 116,474.40
12/31/98 122,815.89 116.495.87 116,496.94 123,185.65
</TABLE>
*The adjusted returns above include the effect of paying the applicable sales
charges. Class A and B shares commenced operations after the inception date
shown. Total return for the periods shown before the inception of Class A and B
shares reflects the performance for this Fund's oldest class of shares (Class
C), restated to reflect the appropriate operating expenses for those shares. Had
Class A share returns been restated on the basis of different sales charges, but
without regard to the lower operating expenses of Class A shares, the adjusted
total return figures for the 10-year and since inception periods would have been
lower, namely 18.6% and 18.0%, respectively. Past performance is not an
indication of future results. See page 30 for Footnotes, which include
additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Microsoft Corp. 3.9%
Computer software
- --------------------------------------------------------------------------------
Intel Corp. 3.3%
Intel Corp.
- --------------------------------------------------------------------------------
Home Depot, Inc. 3.2%
Semiconductor memory circuits
- --------------------------------------------------------------------------------
America Online, Inc. 3.2%
Online service provider
- --------------------------------------------------------------------------------
Safeway, Inc. 3.2%
Food supermarket chain
- --------------------------------------------------------------------------------
Cendant Corp. 3.0%
Consumer services
- --------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 3.0%
Discount stores
- --------------------------------------------------------------------------------
HBO & Co. 2.9%
Hospital information systems
- --------------------------------------------------------------------------------
CVS Corp. 2.9%
Retail health stores
- --------------------------------------------------------------------------------
Eli Lilly & Co. 2.7%
Ethical drugs/chemicals
- --------------------------------------------------------------------------------
Top Ten Total 31.3%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Technology 19.6%
- --------------------------------------------------------------------------------
Consumer Discretionary 19.0%
- --------------------------------------------------------------------------------
Health Care 17.1%
- --------------------------------------------------------------------------------
Financial & Business Services 12.8%
- --------------------------------------------------------------------------------
Consumer Staples 7.9%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 95%
- --------------------------------------------------------------------------------
Cash Equivalents 5%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six months ended December 31, 1998, the Growth Fund's Class A shares
returned 9.8%, Class B shares returned 9.4%, and Class C shares returned 8.5%
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. And 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 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 in the group, and
the Fund's largest sector holdings, Home Depot and Wal-Mart, responded well.
The health care sector turned in 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 United States 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 Growth Fund.
18 See page 38 for financial details.
<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
and that have below-average price to earnings ratios relative to their industry
groups
FUND INCEPTION DATE
7/10/98
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 periods ended 12/31/98
A Shares B Shares C Shares Lipper
S&P 500 Mid-Cap
Adjusted Adjusted Adjusted Index Fund Avg.
- --------------------------------------------------------------------------------
Inception -14.7% -19.4% -15.0% -19.2% -15.8% -- --
*The adjusted returns above include the effect of paying the applicable sales
charges. Past performance is not an indication of future results. See page 30
for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Clayton Homes, Inc. 6.5%
Produces/finances man.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 Stock 95%
- --------------------------------------------------------------------------------
Cash Equivalents 5%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the period since inception through December 31, 1998, the PIMCO Value 25
Fund posted returns of -14.7% for Class A shares, -15.0% for Class B shares and
- -15.8% for Class C shares.
PIMCO Value 25 Fund was started 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.
See page 39 for financial details. 19
<PAGE>
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
FUND INCEPTION DATE
8/26/91
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*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/98
A Shares B Shares C Shares Lipper
S&P Mid- Mid-Cap
Adjusted Adjusted Adjusted Cap Index Fund Avg.
- --------------------------------------------------------------------------------
6 months 0.5% -5.0% 0.2% -4.6% -0.8% 8.9% 0.8%
1 year 7.5% 1.6% 6.7% 1.7% 5.7% 18.3% 12.3%
3 years 20.8% 18.6% 20.0% 19.3% 20.0% 23.1% 16.4%
5 years 18.6% 17.3% 17.7% 17.5% 17.7% 18.7% 14.9%
Inception 17.8% 16.9% 16.9% 16.9% 16.9% -- --
Change in Value
$10,000 invested at the Fund's inception
RETAIL
<TABLE>
<CAPTION>
PIMCO PIMCO PIMCO S&P
Mid-Cap Mid-Cap Mid-Cap Mid-Cap
Growth A Growth B Growth C Index
======== ========= ========= ========= =========
<S> <C> <C> <C> <C>
08/31/91 9,450.00 10,000.00 10,000.00 10,000.00
09/30/91 9,399.57 9,940.38 9,940.38 9,967.45
10/31/91 9,740.67 10,294.67 10,294.67 10,357.92
11/30/91 9,462.70 9,994.60 9,994.60 10,008.88
12/31/91 10,693.64 11,288.31 11,288.31 11,191.96
01/31/92 10,701.94 11,289.90 11,289.90 11,389.96
02/29/92 10,802.97 11,389.72 11,389.72 11,571.19
03/31/92 10,476.53 11,038.33 11,083.33 11,135.40
04/30/92 10,403.77 10,954.71 10,954.71 11,002.40
05/31/92 10,409.70 10,954.03 10,954.03 11,106.57
06/30/92 10,131.07 10,654.08 10,654.08 10,789.48
07/31/92 10,406.07 10,936.50 10,936.50 11,325.11
08/31/92 10,098.41 10,606.27 10,606.27 11,054.23
09/30/92 10,427.53 10,945.53 10,945.53 11,208.93
10/31/92 10,764.97 11,292.86 11,292.86 11,477.21
11/30/92 11,409.81 11,962.32 11,962.32 12,118.62
12/31/92 11,628.73 12,184.26 12,184.26 12,525.27
01/31/93 12,055.69 12,623.91 12,623.91 12,681.89
02/28/93 11,680.02 12,223.24 12,223.24 12,504.48
03/31/93 12,152.78 12,710.25 12,710.25 12,936.20
04/30/93 11,815.71 12,349.94 12,349.94 12,597.71
05/31/93 12,317.63 12,866.70 12,866.70 13,171.58
06/30/93 12,695.15 13,253.28 13,253.28 13,237.63
07/31/93 12,534.85 13,077.33 13,077.33 13,212.21
08/31/93 13,151.14 13,711.95 13,711.95 13,757.69
09/30/93 13,499.84 14,067.16 14,067.16 13,903.11
10/31/93 13,358.58 13,911.09 13,911.09 13,948.52
11/30/93 12,981.29 13,509.52 13,509.52 13,639.97
12/31/93 13,409.82 13,946.87 13,946.87 14,273.20
01/31/94 13,683.11 14,222.05 14,222.05 14,605.21
02/28/94 13,659.83 14,189.64 14,189.64 14,397.96
03/31/94 13,157.45 13,658.82 13,658.82 13,731.08
04/30/94 13,200.75 13,695.41 13,695.41 13,833.24
05/31/94 12,957.03 13,433.65 13,433.65 13,702.29
06/30/94 12,522.11 12,974.44 12,974.44 13,230.40
07/31/94 12,800.99 13,255.22 13,255.22 13,678.39
08/31/94 13,466.95 13,936.34 13,936.34 14,394.76
09/30/94 13,117.92 13,566.55 13,566.55 14,126.14
10/31/94 13,378.15 13,827.03 13,827.03 14,280.59
11/30/94 12,741.66 13,160.83 13,160.83 13,636.47
12/31/94 13,040.58 13,461.12 13,461.12 13,761.63
01/31/95 12,911.74 13,319.51 13,319.51 13,904.89
02/28/95 13,693.26 14,117.97 14,117.97 14,634.47
03/31/95 14,129.02 14,558.35 14,558.35 14,888.42
04/30/95 14,443.32 14,873.37 14,873.37 15,187.34
05/31/95 14,936.34 15,371.71 15,371.71 15,553.70
06/30/95 15,812.21 16,263.84 16,263.84 16,186.88
07/31/95 17,299.04 17,782.43 17,782.43 17,031.31
08/31/95 17,427.21 17,903.01 17,903.01 17,346.29
09/30/95 17,670.48 18,141.91 18,141.91 17,766.75
10/31/95 17,393.34 17,845.85 17,845.85 17,309.61
11/30/95 17,722.92 18,172.93 18,172.93 18,065.61
12/31/95 17,834.10 18,275.41 18,275.41 18,020.66
01/31/96 18,181.06 18,619.35 18,619.35 18,282.10
02/29/96 18,616.48 19,054.07 19,054.07 18,903.47
03/31/96 18,843.58 19,274.32 19,274.32 19,130.01
04/30/96 19,231.36 19,658.77 19,658.77 19,714.26
05/31/96 19,549.70 19,971.52 19,971.52 19,980.88
06/30/96 19,146.21 19,546.92 19,546.92 19,681.07
07/31/96 18,223.92 18,592.54 18,592.54 18,349.56
08/31/96 19,212.09 19,588.84 19,588.84 19,407.84
09/30/96 20,554.21 20,945.04 20,945.04 20,254.02
10/31/96 20,684.79 21,065.03 21,065.03 20,321.96
11/30/96 21,936.95 22,327.25 22,327.25 21,457.19
12/31/96 21,913.80 22,289.49 22,289.49 21,481.00
01/31/97 22,809.49 23,183.46 23,195.99 22,287.40
02/28/97 22,415.61 22,783.29 22,782.93 22,104.20
03/31/97 21,775.96 22,107.72 22,107.38 21,161.90
04/30/97 22,231.10 22,558.10 22,557.75 21,710.20
05/31/97 23,756.49 24,096.94 24,096.57 23,608.54
06/30/97 24,900.81 25,235.45 25,247.57 24,271.94
07/31/97 27,201.38 27,562.79 27,562.14 26,675.11
08/31/97 27,164.22 27,500.44 27,499.79 26,643.10
09/30/97 29,058.92 29,402.26 29,401.57 28,175.07
10/31/97 28,443.77 28,751.53 28,750.85 26,949.46
11/30/97 28,628.57 28,926.63 28,938.45 27,348.31
12/31/97 29,282.56 29,577.22 29,576.37 28,409.42
01/31/98 28,760.54 29,021.05 29,020.21 27,869.65
02/28/98 30,442.81 30,703.05 30,702.17 30,177.25
03/31/98 31,368.94 31,617.27 31,616.36 31,538.25
04/30/98 31,812.37 32,041.44 32,053.77 32,115.40
05/31/98 30,716.43 30,928.52 30,927.69 30,670.20
06/30/98 31,303.49 31,485.17 31,484.32 30,863.43
07/31/98 30,389.42 30,559.50 30,558.68 29,665.02
08/31/98 24,964.91 25,089.35 25,088.68 24,145.10
09/30/98 26,764.88 26,878.22 26,877.50 26,397.83
10/31/98 27,495.56 27,593.18 27,592.44 28,757.80
11/30/98 29,007.82 29,091.49 29,090.71 30,192.81
12/31/98 31,467.68 31,552.63 31,551.79 33,595.54
</TABLE>
*The adjusted returns above include the effect of applicable sales charges.
Excluding the 6 -month and 1-year returns, these returns represent the blended
performance of the Fund's retail class shares (for the period from 1/13/97) and
the prior performance of the Fund's institutional class shares (for the period
from 8/26/91), adjusted for retail class fees and expenses. Past performance is
not an indication of future results. See page 30 for Footnotes, which include
additional details.
- --------------------------------------------------------------------------------
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 Stock 96%
- --------------------------------------------------------------------------------
Cash Equivalents 4%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six months ended December 31, 1998, PIMCO Mid-Cap Growth Fund posted
returns of 0.5% for Class A shares, 0.2% for Class B shares and -0.8% for Class
C 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 growth at a reasonable price philosophy. 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.
20 See page 40 for financial details.
<PAGE>
PIMCO Target Fund
OBJECTIVE
Capital appreciation; no consideration given to income
PORTFOLOIO
Primarily common stocks of companies with medium-sized capitalizations
Fund Inception date
12/17/92
Total Net Assets
$1,123 million
Number of Securities in the Portfolio
54 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Columbus Circle Investors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/98
A Shares B Shares C Shares S&P Lipper
Mid-Cap Mid-Cap
Adjusted Adjusted Adjusted Index Fund Avg.
- --------------------------------------------------------------------------------
6 months 5.2% -0.6% 4.9% 0.0% 3.9% 8.9% 0.8%
1 year 24.2% 17.3% 23.3% 18.3% 22.3% 18.3% 12.3%
3 years 19.0% 16.8% 18.1% 17.4% 18.1% 23.1% 16.4%
5 years 18.1% 16.8% 17.2% 17.0% 17.2% 18.7% 14.9%
Inception 19.4% 18.3% 18.5% 18.5% 18.5% -- --
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
RETAIL
<TABLE>
<CAPTION>
PIMCO PIMCO PIMCO S&P
Target A Target B Target C Mid-Cap
Index
======== ========= ========= ========= =========
<S> <C> <C> <C> <C>
12/31/92 9,450.00 10,000.00 10,000.00 10,000.00
01/31/93 9,571.52 10,118.70 10,118.70 10,125.04
02/28/93 9,515.41 10,049.49 10,049.49 9,983.40
03/31/93 9,982.79 10,544.02 10,544.02 10,328.08
04/30/93 9,749.11 10,286.90 10,286.90 10,057.83
05/31/93 10,375.34 10,949.63 10,949.63 10,516.00
06/30/93 10,674.44 11,256.23 11,256.23 10,568.74
07/31/93 10,964.25 11,543.02 11,543.02 10,548.44
08/31/93 11,758.69 12,373.91 12,373.91 10,983.95
09/30/93 11,889.52 12,512.37 12,512.37 11,100.05
10/31/93 11,982.94 12,591.44 12,591.44 11,136.30
11/30/93 11,403.40 11,978.25 11,978.25 10,889.95
12/31/93 11,860.45 12,452.13 12,452.13 11,395.52
01/31/94 12,162.31 12,761.61 12,761.61 11,660.59
02/28/94 11,945.37 12,521.91 12,521.91 11,495.13
03/31/94 11,567.96 12,122.51 12,122.51 10,962.70
04/30/94 11,841.58 12,402.06 12,402.06 11,044.26
05/31/94 11,605.65 12,142.38 12,142.38 10,939.71
06/30/94 11,181.08 11,693.06 11,693.06 10,562.96
07/31/94 11,869.84 12,412.00 12,412.00 10,920.63
08/31/94 12,539.72 13,101.08 13,101.08 11,492.57
09/30/94 12,388.83 12,931.41 12,931.41 11,278.11
10/31/94 12,634.08 13,181.04 13,181.04 11,401.42
11/30/94 12,181.23 12,701.80 12,701.80 10,887.16
12/31/94 12,318.38 12,837.00 12,837.00 10,987.09
01/31/95 12,079.54 12,584.07 12,584.07 11,101.47
02/28/95 12,777.18 13,292.20 13,292.20 11,683.95
03/31/95 13,226.29 13,757.61 13,757.61 11,886.70
04/30/95 13,379.13 13,909.28 13,909.28 12,125.35
05/31/95 13,340.99 13,858.65 13,858.65 12,417.85
06/30/95 14,353.94 14,900.64 14,900.64 12,923.37
07/31/95 15,290.51 15,871.83 15,871.83 13,597.56
08/31/95 15,252.28 15,811.17 15,811.17 13,849.03
09/30/95 15,672.86 16,246.28 16,236.16 14,184.72
10/31/95 15,892.77 16,458.85 16,458.63 13,819.74
11/30/95 16,064.71 16,620.75 16,620.53 14,423.32
12/31/95 16,166.54 16,728.07 16,727.85 14,387.44
01/31/96 16,006.58 16,546.91 16,546.69 14,596.17
02/29/96 16,540.20 17,090.47 17,090.25 15,092.26
03/31/96 17,020.37 17,566.13 17,565.90 15,273.13
04/30/96 17,788.70 18,359.07 18,347.50 15,739.59
05/31/96 18,706.42 19,299.02 19,287.40 15,952.45
06/30/96 18,354.25 18,913.79 18,913.69 15,713.08
07/31/96 16,294.87 16,784.51 16,784.42 14,650.03
08/31/96 17,116.59 17,611.18 17,611.09 15,494.94
09/30/96 18,258.36 18,777.80 18,777.70 16,170.52
10/31/96 18,279.60 18,789.24 18,777.81 16,217.57
11/30/96 19,015.86 18,525.30 19,525.42 17,131.11
12/31/96 18,853.24 19,350.18 19,350.29 17,150.13
01/31/97 19,456.58 19,954.76 19,954.87 17,793.94
02/28/97 18,623.84 19,092.89 19,093.00 17,647.68
03/31/97 17,935.91 18,385.16 18,372.39 16,895.36
04/30/97 18,141.17 18,578.15 18,565.38 17,333.11
05/31/97 19,650.03 20,109.15 20,109.26 18,848.72
06/30/97 20,301.78 20,765.46 20,752.69 19,378.37
07/31/97 21,701.89 22,180.75 22,180.70 21,297.02
08/31/97 22,172.48 22,644.06 22,631.15 21,271.47
09/30/97 23,415.86 23,904.83 23,891.82 22,494.58
10/31/97 22,136.28 22,579.53 22,597.37 21,516.06
11/30/97 22,100.22 22,528.04 22,527.89 21,834.50
12/31/97 21,940.61 22,338.31 22,338.16 22,681.68
01/31/98 21,449.87 21,841.80 21,824.54 22,250.73
02/28/98 23,270.42 23,673.39 23,673.10 24,093.09
03/31/98 24,520.93 24,923.11 24,922.80 25,179.68
04/30/98 25,328,36 25,744.62 25,744.31 25,640.47
05/31/98 24,204.41 24,580.50 24,580.20 24,486.65
06/30/98 25,882.33 26,258.05 26,257.72 24,640.92
07/31/98 24,994.57 25,349.52 25,349.21 23,684.85
08/31/98 20,545.54 20,814.49 20,814.23 19,277.10
09/30/98 22,476.82 22,783.54 22,766.61 21,075.65
10/31/98 22,586.95 22,851.89 22,853.12 22,959.82
11/30/98 23,948.95 24,220.72 24,222.02 24,105.51
12/31/98 27,237.14 27,536.53 27,538.02 26,822.20
</TABLE>
*The adjusted returns above include the effect of paying the applicable sales
charges. Class B shares commenced operations after the inception date shown.
Total return for the periods shown before the inception of Class B shares
reflects the performance for one of this Fund's oldest classes of shares (Class
C), restated to reflect the appropriate operating expenses for those shares.
Past performance is not an indication of future results. See page 30 for
Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Rite Aid Corp. 4.0%
Discount drug stores
- --------------------------------------------------------------------------------
Watson Pharmaceuticals, Inc. 3.4%
Off-patient medication
- --------------------------------------------------------------------------------
Providian Financial Corp. 3.3%
Consumer loans/services
- --------------------------------------------------------------------------------
Firstar Corp. 2.8%
Commercial banking
- --------------------------------------------------------------------------------
Countrywide Credit Industries, Inc. 2.7%
Mortgage loans services
- --------------------------------------------------------------------------------
Bed, Bath & Beyond, Inc. 2.7%
Home products superstores
- --------------------------------------------------------------------------------
American Power Conversion Corp. 2.5%
Power supply products
- --------------------------------------------------------------------------------
IMS Health, Inc. 2.4%
Healthcare
- --------------------------------------------------------------------------------
Whitman Corp. 2.4%
Pepsi producer/distributor
- --------------------------------------------------------------------------------
Tricon Global Restaurants, Inc. 2.2%
Family restaurant oper.
- --------------------------------------------------------------------------------
Top Ten Total 28.4%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Technology 23.0%
- --------------------------------------------------------------------------------
Consumer Discretionary 19.3%
- --------------------------------------------------------------------------------
Financial & Business Services 17.1%
- --------------------------------------------------------------------------------
Health Care 11.6%
- --------------------------------------------------------------------------------
Consumer Services 5.1%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 94%
- --------------------------------------------------------------------------------
Cash Equivalents 6%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The Target Fund posted strong results for the six months ended December 31,
1998, returning 5.2% for Class A shares, 4.9% for Class B shares and 3.9% for
Class C 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 in October to aggressively ease monetary
policy prompted the manager to position the portfolio to a more economically
positive and offensive position. In response to these adjustments, the portfolio
outperformed 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 because of the volatile
environment, this sector performed well in the fourth quarter. After the Federal
Reserve cut interest rates in October, the Fund increased its exposure to 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. Again, the Federal Reserve's rate cut, along
with better-than-expected company fundamentals, drove the price of the stock.
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 the 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 product offerings to its website this year, including music, video and a
gift center.
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 problem (Y2K) 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
perform well in the coming year. A solid economy and modest inflation should
provide a favorable environment for stocks. And the manager believes Target
Fund, with its emphasis on stock selection, is poised to benefit from this
environment.
See page 41 for financial details. 21
<PAGE>
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
FUND INCEPTION DATE
10/1/91
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 periods ended 12/31/98
A Shares B Shares C Shares Lipper
Russell Small-Cap
Adjusted Adjusted Adjusted 2000 Index Fund Avg.
- --------------------------------------------------------------------------------
6 months -9.5% -14.5% -9.9% -14.2% -10.8% -7.1% -6.5%
1 year -9.5% -14.5% -10.2% -14.5% -11.1% -2.6% -0.3%
3 years 15.7% 13.5% 14.8% 14.1% 14.8% 11.6% 12.6%
5 years 13.2% 11.9% 12.3% 12.1% 12.3% 11.9% 12.9%
Inception 14.3% 13.4% 13.5% 13.5% 13.5% -- --
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
RETAIL
PIMCO PIMCO PIMCO Russell 2000
Small-Cap Small-Cap Small-Cap Index
Value A Value B Value C
============= ========== ========== ========== =============
09/30/91 9,450.00 10,000.00 10,000.00 10,000.00
10/31/91 9,556.05 10,106.12 10,106.12 10,264.40
11/30/91 9,335.06 9,866.14 9,866.14 9,789.36
12/31/91 10,021.71 10,585.58 10,585.58 10,572.71
01/31/92 10,701.39 11,296.75 11,296.75 11,430.16
02/29/92 11,060.00 11,668.68 11,668.68 11,763.80
03/31/92 10,961.01 11,556.80 11,556.80 11,365.71
04/30/92 10,734.12 11,310.41 11,310.41 10,966.66
05/31/92 10,740.04 11,309.32 11,309.32 11,112.52
06/30/92 10,392.85 10,936.77 10,936.77 10,590.34
07/31/92 10,706.11 11,259.33 11,259.33 10,958.46
08/31/92 10,539.55 11,077.00 11,077.00 10,648.56
09/30/92 10,641.45 11,177.29 11,177.29 10,893.79
10/31/92 10,831.82 11,370.30 11,370.30 11,237.60
11/30/92 11,597.70 12,167.25 12,167.25 12,098.18
12/31/92 11,852.45 12,426.88 12,426.88 12,519.32
01/31/93 12,373.66 12,965.24 12,965.24 12,942.72
02/28/93 12,310.27 12,891.58 12,891.58 12,644.26
03/31/93 12,623.10 13,210.90 13,210.90 13,054.44
04/30/93 12,287.26 12,851.28 12,851.28 12,695.57
05/31/93 12,491.89 13,057.04 13,057.04 13,257.10
06/30/93 12,517.67 13,075.70 13,075.70 13,339.43
07/31/93 12,557.36 13,108.84 13,108.84 13,523.64
08/31/93 12,971.97 13,533.37 13,533.37 14,107.59
09/30/93 13,087.30 13,645.35 13,645.35 14,505.71
10/31/93 13,332.31 13,892.12 13,892.12 14,879.23
11/30/93 13,088.53 13,892.57 13,629.57 14,394.47
12/31/93 13,439.05 13,986.01 13,986.01 14,886.33
01/31/94 13,938.05 14,496.32 14,496.32 15,352.71
02/28/94 13,912.73 14,461.72 14,461.72 15,296.98
03/31/94 13,286.61 13,801.58 13,801.58 14,491.29
04/30/94 13,327.59 13,835.62 13,835.62 14,577.22
05/31/94 13,005.82 13,492.73 13,492.73 14,413.23
06/30/94 12,769.01 13,238.67 13,238.67 13,926.93
07/31/94 12,964.25 13,432.66 13,432.66 14,155.89
08/31/94 13,480.64 13,959.02 13,959.02 14,944.37
09/30/94 13,146.86 13,604.78 13,604.78 14,893.71
10/31/94 12,898.28 13,338.85 13,338.85 14,833.54
11/30/94 12,594.96 13,016.85 13,016.85 14,234.12
12/31/94 12,892.34 13,315.94 13,315.94 14,615.16
01/31/95 12,958.37 13,375.53 13,375.53 14,430.57
02/28/95 13,534.44 13,962.56 13,962.56 15,031.32
03/31/95 13,610.99 14,032.64 14,032.64 15,288.95
04/30/95 13,924.22 14,347.21 14,347.21 15,628.67
05/31/95 14,257.74 14,681.72 14,681.72 15,897.33
06/30/95 14,707.61 15,136.12 15,136.12 16,722.09
07/31/95 15,434.04 15,874.18 15,874.18 17,685.28
08/31/95 15,733.27 16,171.84 16,171.84 18,051.19
09/30/95 16,032.52 16,469.42 16,469.42 18,373.58
10/31/95 15,400.58 15,809.54 15,809.54 17,551.91
11/30/95 16,030.48 16,446.33 16,446.33 18,289.27
12/31/95 16,112.43 16,519.98 16,519.98 18,771.74
01/31/96 16,032.20 16,426.99 16,426.99 18,751.47
02/29/96 16,376.19 16,769.60 16,769.60 19,335.95
03/31/96 16,870.59 17,265.09 17,265.09 19,729.44
04/30/96 17,441.30 17,838.40 17,838.40 20,784.37
05/31/96 17,998.78 18,397.28 18,397.28 21,603.48
06/30/96 17,871.60 18,255.86 18,255.86 20,716.44
07/31/96 16,883.92 17,235.19 17,235.19 18,907.07
08/31/96 17,683.46 18,040.31 18,040.31 20,004.81
09/30/96 18,218.44 18,574.96 18,574.96 20,786.60
10/31/96 18,564.19 18,915.71 18,915.71 20,466.28
11/30/96 19,789.84 20,153.03 20,153.03 21,309.49
12/31/96 20,498.31 20,861.41 20,861.41 21,868.01
01/31/97 21,165.82 21,533.33 21,533.33 22,304.93
02/28/97 21,240.34 21,593.99 21,593.99 21,764.04
03/31/97 20,434.97 20,759.34 20,759.34 20,737.00
04/30/97 20,628.96 20,956.49 20,956.49 20,794.85
05/31/97 22,404.11 22,731.86 22,731.86 23,108.28
06/30/97 23,493.03 23,839.75 23,839.75 24,098.70
07/31/97 24,701.23 25,038.67 25,038.67 25,220.01
08/31/97 25,342.43 25,676.01 25,676.01 25,797.55
09/30/97 27,206.87 27,557.85 27,542.68 27,685.93
10/31/97 26,744.68 27,057.04 27,056.88 26,470.52
11/30/97 27,042.78 27,345.26 27,345.09 26,298.46
12/31/97 27,562.97 27,844.80 27,850.51 26,758.68
01/31/98 27,092.69 27,367.40 27,357.22 26,335.90
02/28/98 28,785.80 29,054.79 29,043.99 28,284.75
03/31/98 29,898.86 30,169.48 30,158.26 29,450.08
04/30/98 29,804.56 30,041.86 30,046.61 29,612.94
05/31/98 28,440.61 28,656.69 28,646.08 28,016.81
06/30/98 27,562.73 27,749.45 27,755.10 28,075.64
07/31/98 25,539.63 25,712.64 25,701.22 25,801.51
08/31/98 21,777.64 21,907.17 21,897.44 20,790.86
09/30/98 22,404.84 22,527.14 22,517.14 22,418.78
10/31/98 23,283.11 23,387.68 23,377.29 23,333.47
11/30/98 24,098.02 24,182.86 24,172.12 24,556.14
12/31/98 24,951.09 25,017.17 25,008.48 26,076.17
*The adjusted returns above include the effect of applicable sales charges.
Excluding the 6-month and 1-year returns, these returns represent the blended
performance of the Fund's retail class shares (for the period from 1/20/97) and
the prior performance of the Fund's institutional class shares (for the period
from 10/1/91), adjusted for retail class fees and expenses. Past performance is
not an indication of future results. See page 30 for Footnotes, which include
additional details.
- --------------------------------------------------------------------------------
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 Stock 96%
- --------------------------------------------------------------------------------
Cash Equivalents 4%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six months ended December 31, 1998, PIMCO Small Cap Value Fund returned
- -9.5% for Class A shares, -9.9% Class B shares and -10.8% for Class C shares. It
is worth noting that, for the fourth quarter of 1998, the Fund returned 11.4%
for Class A shares and 11.1% for Class B shares and 10.1% for Class C 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 has been
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.
22 See page 42 for financial details.
<PAGE>
PIMCO Opportunity Fund
OBJECTIVE
Capital appreciation; no consideration given to income
PORTFOLIO
Primarily stocks of small-capitalization companies
FUND INCEPTION DATE
2/24/84
TOTAL NET ASSETS
$517 million
NUMBER OF SECURITIES IN THE PORTFOLIO
46 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Columbus Circle Investors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/98
A Shares C Shares Lipper
Russell Cap. App.
Adjusted Adjusted 2000 Index Fund Avg.
- --------------------------------------------------------------------------------
6 months -7.3% -12.4% -8.3% -7.1% 5.3%
1 year 2.0% -3.6% 0.5% -2.6% 20.0%
5 years 8.5% 7.3% 7.7% 11.9% 16.1%
10 years 18.7% 18.0% 17.8% 12.9% 15.0%
Inception 17.2% 16.8% 16.4% -- --
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
RETAIL
<TABLE>
<CAPTION>
PIMCO PIMCO Russell 2000
Opportunity A Opportunity C Index
======== ============= ============= ============
<S> <C> <C> <C>
02/29/84 9,450.00 10,000.00 10,000.00
03/31/84 9,087.01 9,609.51 10,059.00
04/30/84 9,245.79 9,771.41 10,003.68
05/31/84 8,981.27 9,485.70 9,485.49
06/30/84 9,275.46 9,790.49 9,756.77
07/31/84 9,045.86 9,541.88 9,280.64
08/31/84 10,520.03 11.090.72 10,372.97
09/30/84 10,136.40 10,679.51 10,293.10
10/31/84 10,033.63 10,564.33 10,103.71
11/30/84 9,641.62 10,145.22 9,834.95
12/31/84 10,142.86 10,666.04 9,995.26
01/31/85 11,884.21 12,489.65 11,319.63
02/28/85 12,134.95 12,746.01 11,624.13
03/31/85 11,570.16 12,144.77 11,385.83
04/30/85 11,361.30 11,918.06 11,244.65
05/31/85 11,828.92 12,401.10 11,658.45
06/30/85 12,099.58 12,677.08 11,790.19
07/31/85 12,380.16 12,962.87 12,120.32
08/31/85 12,030.26 12,588.33 12,003.96
09/30/85 11,350.01 11,868.78 11,277.72
10/31/85 11,699.93 12,227.03 11,706.28
11/30/85 12,564.56 13,122.99 12,549.13
12/31/85 13,268.92 13,850.24 13,101.29
01/31/86 13,337.57 13,913.58 13,308.29
02/28/86 14,194.06 14,799.07 14,263.82
03/31/86 14,849.99 15,473.65 14,955.62
04/30/86 15,324.54 15,958.55 15,176.96
05/31/86 16,068.21 16,722.63 15,700.57
06/30/86 16,321.53 16,975.91 15,681.73
07/31/86 14,515.17 15,086.17 14,215.49
08/31/86 14,646.35 15,212.85 14,667.54
09/30/86 13,405.17 13,914.26 13,762.55
10/31/86 13,840.00 14,356.56 14,308.92
11/30/86 14,095.86 14,613.18 14,260.27
12/31/86 13,969.71 14,473.14 13,848.15
01/31/87 15,565.82 16,117.52 15,450.38
02/28/87 17,050.21 17,645.34 16,749.76
03/31/87 17,726.11 18.333.47 17,200.33
04/30/87 17,285.97 17,866.90 16,703.24
05/31/87 17,105.16 17,668.60 16,649.79
06/30/87 17,397.99 17,960.27 17,075.69
07/31/87 18,053.16 18,625.01 17,607.26
08/31/87 19,036.64 19,627.86 18,124.73
09/30/87 18,935.25 19,511.33 17,790.70
10/31/87 14,011.10 14,426.52 12,344.07
11/30/87 13,170.18 13,551.87 11,681.69
12/31/87 14,975.10 15,400.15 12,620.67
01/31/88 14,882.62 15.295.19 13,169.16
02/29/88 16,044.16 16,479.78 14,354.12
03/31/88 16,682.06 17,124.62 15,027.76
04/30/88 17,159.79 17,604.54 15,368.29
05/31/88 16,512.90 16,929.77 14,951.19
06/30/88 18,102.63 18,549.28 16,018.26
07/31/88 17,206.69 17,619.62 15,864.80
08/31/88 16,734.44 17,124.71 15,458.82
09/30/88 17,360.34 17,754.57 15,867.40
10/31/88 16,931.50 17,304.62 15,691.11
11/30/88 16,633.80 16,989.69 15,168.44
12/31/88 17,202.22 17,559.46 15,762.44
01/31/89 18,182.59 18,549.12 16,465.29
02/28/89 17,972.64 18,324.25 16,586.47
03/31/89 18,704.83 19,059.00 16,976.75
04/30/89 20,026.14 20,393.53 17,716.94
05/31/89 21,452.66 21,832.95 18,478.94
06/30/89 20,729.38 21,083.09 18,057.62
07/31/89 22,378.88 22,747.63 18,760.25
08/31/89 23,101.25 23,467.54 19,216.87
09/30/89 23,307.38 23,662.56 19,276.83
10/31/89 21,948.58 22,267.86 18,134.29
11/30/89 22,405.53 22,717.70 18,249.99
12/31/89 22,641.06 22,942.37 18,322.80
01/31/90 20,588.06 20,847.58 16,722.49
02/28/90 21,250.66 21,506.38 17,241.39
03/31/90 22,132.50 22,385.00 17,917.60
04/30/90 21,661.70 21,895.15 17,332.05
05/31/90 23,681.00 23,922.33 18,559.68
06/30/90 24,180.65 24,412.10 18,608.67
07/31/90 23,978.74 24,192.41 17,792.87
08/31/90 21,164.04 21,337.18 15,412.90
09/30/90 20,004.28 20,154.71 14,042.54
10/31/90 19,329.57 19.461.97 13,185.24
11/30/90 20,835.00 20,965.65 14,191.14
12/31/90 21,149.92 21,257.44 14,748.43
01/31/91 23,174.90 23,276.97 16,077.26
02/28/91 24,750.02 24,843.74 17,880.32
03/31/91 27,259.60 27,350.72 19,134.27
04/30/91 26,636.50 26,724.09 19,084.91
05/31/91 29,301.78 29,405.40 19,993.92
06/30/91 26,515.35 26,585.15 18,837.67
07/31/91 28,799.89 28,865.92 19,496.80
08/31/91 30,392.12 30,450.43 20,215.84
09/30/91 31,067.34 31,112.27 20,373.53
10/31/91 32,849.86 32,870.89 20,912.20
11/30/91 30,651.78 30,659.70 19,944.39
12/31/91 35,710.27 35,731.70 21,540.34
01/31/92 38,433.54 38,415.37 23,287.26
02/29/92 39,804.81 39,757.06 23,967.01
03/31/92 38,452.68 38,396.02 23,155.97
04/30/92 36,338.28 36,248.99 22,342.96
05/31/92 36,681.17 36,574.83 22,640.12
06/30/92 35,824.08 35,693.12 21,576.26
07/31/92 37,252.31 37,073.52 22,326.26
08/31/92 35,747.91 35,558.92 21,694.87
09/30/92 37,786.12 37,571.44 22,194.50
10/31/92 39,842.85 39,583.88 22,894.96
11/30/92 43,156.62 42,842.47 24,648.26
12/31/92 46,271.28 45,900.48 25,506.26
01/31/93 49,140.79 48,711.42 26,368.88
02/28/93 46,541.30 46,133.27 25,760.82
03/31/93 49,911.54 49,428.71 26,596.50
04/30/93 48,235.96 47,742.70 25,865.36
05/31/93 52,472.04 51,929.78 27,009.39
06/30/93 55,244.50 54,623.64 27,177.11
07/31/93 57,227.28 56,542.40 27,552.43
08/31/93 61,096.94 60,342.00 28,742.14
09/30/93 64,370.51 63,520.27 29,553.25
10/31/93 63,965.62 63,094.43 30,314.24
11/30/93 60,653.03 59,799.26 29,326.60
12/31/93 63,452.17 62,499.32 30,328.70
01/31/94 65,907.26 64,890.41 31,278.89
02/28/94 64,326.87 63,295.80 31,165.35
03/31/94 59,376.34 58,366.45 29,523.87
04/30/94 59,418.73 58,386.82 29,698.95
05/31/94 56,318.80 55,302.13 29,364.84
06/30/94 51,429.31 50,455.50 28,374.07
07/31/94 54,570.72 53,518.45 28,840.54
08/31/94 58,835.26 57,650.93 30,446.95
09/30/94 60,063.27 58,825.63 30,343.74
10/31/94 63,204.69 61,867.03 30,221.15
11/30/94 59,812.81 58,510.75 28,999.91
12/31/94 60,894.59 59,538.02 29,776.24
01/31/95 58,942.19 57,566.24 29,400.17
02/28/95 62,205.52 60,728.76 30,624.10
03/31/95 65,383.17 63,805.15 31,148.99
04/30/95 67,272.22 65,603.69 31,841.12
05/31/95 68,624.32 66,860.07 32,388.47
06/30/95 75,041.66 73,077.19 34,068.79
07/31/95 82,124.76 79,944.54 36,031.15
08/31/95 81,223.36 79,012.15 36,776.63
09/30/95 83,884.81 81,547.57 37,433.46
10/31/95 81,181.70 78,859.68 35,759.44
11/30/95 84,916.55 82,435.81 37,261.69
12/31/95 86,816.56 84,260.61 38,244.66
01/31/96 82,750.42 80,227.05 38,203.35
02/29/96 86,630.09 83,964.67 39.394.15
03/31/96 90,138.26 87,323.09 40,195.82
04/30/96 99,172.91 95,988.51 42,345.09
05/31/96 105,868.37 102,406.69 44,013.91
06/30/96 100,020.62 96,693.21 42,206.70
07/31/96 87,822.01 84,859.32 38,520.37
08/31/96 92,388.78 89,164.23 40,756.86
09/30/96 99,274.25 95,796.02 42,349.64
10/31/96 93,137.42 89,814.12 41,697.03
11/30/96 93,776.25 90,356.51 43,414.95
12/31/96 97,592.56 93,989.84 44,552.85
01/31/97 94,018.04 90,471.70 45,443.02
02/28/97 84,524.10 81,311.44 44,341.03
03/31/97 77,712.22 74,685.37 42,248.57
04/30/97 76,017.16 73,005.55 42,366.45
05/31/97 87,238.96 83.752.62 47,079.71
06/30/97 90,476.58 86,795.61 49,097.55
07/31/97 93,591.32 89,743.71 51,382.06
08/31/97 97,382.80 93,293.61 52,558.71
09/30/97 104,597.70 100,172.71 56,406.01
10/31/97 96,673.59 92,502.48 53,929.78
11/30/97 93,067.56 89,015.32 53,579.24
12/31/97 93,657.71 89,526.27 54,516.88
01/31/98 92,078.26 87,928.68 53,655.51
02/28/98 101,581.20 96,970.12 57,626.02
03/31/98 105,198.71 100,335.56 60,000.21
04/30/98 104,706.17 99,824.75 60,332.01
05/31/98 98,523.69 93,875.80 57,080.11
06/30/98 103,029.47 98,091.29 57,199.98
07/31/98 94,179.24 89,626.01 52,566.78
08/31/98 70,964.06 67,497.35 42,358.31
09/30/98 76,584.41 72,795.89 45,674.97
10/31/98 79,908.17 75,889.72 47,538.51
11/30/98 86,452.65 82,074.73 50,029.53
12/31/98 95,521.54 90,676.16 53,126.35
</TABLE>
*The adjusted returns above include the effect of paying the applicable sales
charges. Class A shares commenced operations after the inception date shown.
Total return for the periods shown before the inception of Class A shares
reflects the performance for this Fund's oldest class of shares (Class C),
restated to reflect the appropriate operating expenses for those shares. Had
Class A share returns been restated on the bases of different sales charges, but
without regard to the lower operating expenses of Class A shares, the adjusted
total return figures for the 10-year and since inception periods would have been
lower, namely 17.9% and 16.4%, respectively. Past performance is not an
indication of future results. See page 30 for Footnotes, which include
additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Network Appliance, Inc. 5.9%
Network data storage
- --------------------------------------------------------------------------------
The Men's Wearhouse, Inc. 4.5%
Men's clothing
- --------------------------------------------------------------------------------
WinStar Communications, Inc. 4.3%
Telecom. Services
- --------------------------------------------------------------------------------
Linens'n Things, Inc. 4.1%
Retail home accessories
- --------------------------------------------------------------------------------
MotivePower Industries, Inc 3.9%
Locomotive manufacturer
- --------------------------------------------------------------------------------
Tower Automotive, Inc. 3.8%
Engineered mental stampings
- --------------------------------------------------------------------------------
Wind River Systems 3.7%
Software development systems
- --------------------------------------------------------------------------------
Mohawk Industries, Inc. 3.6%
Residential/commercial carpet
- --------------------------------------------------------------------------------
Gilat Satellite Networks Limited 3.5%
Satellite stations & hubs
- --------------------------------------------------------------------------------
Veritas Software Corp. 3.4%
Software
- --------------------------------------------------------------------------------
Top Ten Total 40.7%
- --------------------------------------------------------------------------------
Top 5 % of Total Investments
- --------------------------------------------------------------------------------
Technology 41.2%
- --------------------------------------------------------------------------------
Consumer Descretionary 19.5%
- --------------------------------------------------------------------------------
Health Care 9.6%
- --------------------------------------------------------------------------------
Capital Goods 7.7%
- --------------------------------------------------------------------------------
Communications 6.1%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 95%
- --------------------------------------------------------------------------------
Cash Equivalents 5%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The PIMCO Opportunity Fund's results for the six months ended December 31, 1998,
were -7.3% for Class A shares and -8.3% for Class C shares. Despite a
disappointing third quarter, it is worth noting that the Fund posted returns of
24.7% for Class A shares and 23.6% for Class C shares for the fourth quarter of
1998.
It was a difficult six months for small-cap stocks, as investors largely
ignored them, preferring instead to allocate most of their equity assets to what
they believed was the relative safety of large-cap growth stocks. The issues
that outperformed the market during this time period were larger market
capitalization, high priced stocks in high revenue growth sectors.
However, the Fund did benefit from certain areas, including the technology
sector. One example of the success of this sector is Network Appliance, one of
the Fund's largest holdings and a standout stock this year. This company
designs, manufactures, markets and supports high performance network data
storage devices. These instruments provide fast, reliable and cost effective
file service for data-intensive network environments. An increase in Internet
use and the need for data storage has fueled an increase in sales for the
company.
Consumer cyclicals were a solid performer for the Fund this year. Although
a number of the Fund's consumer cyclical holdings suffered a difficult third
quarter as a result of the volatile market, they bounced back in the fourth
quarter, ending the year in positive territory. Men's Wearhouse, one of the
country's largest retailers of men's tailored business attire, is just such an
example. Men's Wearhouse benefited from its aggressive expansion this year and
the enlargement of its product line into casual clothes to meet the increasing
demand for informal workplace attire. The stock dropped in the third quarter but
ended the year higher.
One disappointment for the Fund this year was financial services. Although
it never occurred, fear of a bounce in interest rates in the fourth quarter hurt
the financial services segment of the market, which had already suffered due to
third quarter market volatility. In particular, attractive regional banks and
savings and loans proved to be a drag on performance.
Looking ahead, the manager believes that small-cap stocks will soon return
to favor because of their growth potential and attractive valuations. The
manager is confident that the Fund is positioned to benefit from this climate.
See page 44 for financial details. 23
<PAGE>
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 periods ended 12/31/98
A Shares B Shares C Shares MSCI Lipper
EAFE International
Adjusted Adjusted Adjusted Index Fund Avg.
- --------------------------------------------------------------------------------
6 months -0.7% -6.1% -1.1% -6.0% -2.1% 3.7% -2.3%
1 year 23.6% 16.8% 22.3% 17.3% 21.4% 20.3% 13.0%
3 years 9.8% 7.7% 8.9% 8.0% 8.9% 9.3% 9.9%
5 years 10.5% 9.2% 9.6% 9.3% 9.6% 9.5% 7.7%
Inception 10.5% 9.3% 9.6% 9.5% 9.6% -- --
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
RETAIL
PIMCO PIMCO PIMCO MSCI
International International International EAFE
Developed A Developed B Developed C Index
======== ============= ============= ============= =========
06/30/93 9,450.00 10,000.00 10,000.00 10,000.00
07/31/93 9,827.92 10,393.48 10,393.48 10,352.35
08/31/93 10,498.61 11,096.25 11,096.25 10,913.55
09/30/93 10,241.23 10,817.36 10,817.36 10,670.29
10/31/93 10,482.33 11,065.19 11,065.19 11,001.46
11/30/93 9,615.95 10,143.85 10,143.85 10,042.12
12/31/93 10,335.52 10,896.52 10,896.52 10,769.51
01/31/94 11,237.56 11,840.64 11,840.64 11,682.35
02/28/94 11,155.45 11,747.31 11,747.31 11,652.40
03/31/94 10,767.95 11,331.83 11,331.83 11,153.00
04/30/94 11,226.64 11,807.45 11,807.45 11,628.69
05/31/94 11,183.45 11,754.49 11,754.49 11,564.41
06/30/94 11,337.13 11,908.69 11,908.69 11,730.43
07/31/94 11,569.08 12,144.70 12,144.70 11,845.86
08/31/94 11,702.65 12,277.26 12,277.26 12,128.91
09/30/94 11,306.02 11,853.53 11,853.53 11,749.56
10/31/94 11,663.00 12,220.18 12,220.18 12,143.56
11/30/94 11,020.03 11,538.87 11,538.87 11,562.61
12/31/94 11,020.17 11,531.75 11,531.75 11,637.74
01/31/95 10,658.71 11,146.06 11,146.06 11,193.39
02/28/95 10,777.96 12,264.43 11,264.43 11,164.18
03/31/95 11,377.07 11,883.33 11,883.33 11,863.61
04/30/95 11,781.81 12,298.87 12,298.87 12,312.98
05/31/95 11,675.67 12,180.33 12,180.33 12,169.36
06/30/95 11,467.69 11,955.84 11,955.84 11,959.18
07/31/95 12,297.95 12,795.07 12,795.07 12,706.99
08/31/95 12,214.65 12,718.87 12,718.87 12,225.35
09/30/95 12,394.11 12,897.97 12,897.97 12,467.29
10/31/95 12,057.00 12,538.96 12,538.96 12,135.35
11/30/95 12,484.40 12,975.78 12,975.78 12,476.18
12/31/95 12,857.06 13,354.83 13,354.83 12,982.09
01/31/96 12,971.66 13,465.30 13,465.30 13,038.43
02/29/96 12,978.31 13,464.16 13,464.16 13,085.76
03/31/96 13,244.02 13,731.29 13,731.29 13,366.97
04/30/96 13,758.13 14,255.82 14,255.82 13,758.89
05/31/96 13,461.95 13,939.73 13,939.73 13,509.03
06/30/96 13,533.02 14,004.72 14,004.72 13,588.33
07/31/96 13,053.62 13,499.71 13,499.71 13,194.54
08/31/96 13,027.51 13,464.23 13,464.23 13,226.87
09/30/96 13,346.75 13,785.92 13,785.92 13,581.61
10/31/96 13,245.21 13,672.22 13,672.22 13,446.07
11/30/96 13,682.65 14,115.41 14,115.41 13,984.45
12/31/96 13,551.88 13,971.39 13,971.39 13,807.96
01/31/97 13,130.12 13,531.88 13,531.88 13,327.86
02/28/97 13,345.32 13,753.67 13,753.67 13,549.10
03/31/97 13,356.71 13,753.72 13,753.72 13,601.54
04/30/97 13,526.70 13,928.92 13,928.92 13,677.03
05/31/97 14,172.44 14,594.27 14,594.37 14,570.41
06/30/97 14,818.17 15,248.20 15,248.20 15,377.17
07/31/97 15,169.45 15,586.86 15,598.52 15,629.05
08/31/97 13,753.42 14,127.35 14,127.35 14,464.69
09/30/97 14,535.06 14,933.04 14,933.03 15,277.60
10/31/97 13,674.01 14,034.01 14,034.00 14,107.34
11/30/97 13,549.38 13,905.62 13,905.62 13,966.26
12/31/97 13,753.41 14,090.62 14,088.40 14,091.96
01/31/98 14,425.47 14,768.64 14,766.30 14,740.19
02/28/98 15,361.62 15,717.79 15,727.63 15,689.46
03/31/98 16,357.73 16,716.24 16,713.71 16,175.83
04/30/98 16,597.85 16,938.07 16,947.83 16,306.86
05/31/98 16,921.99 17,246.21 17,255.91 16,231.84
06/30/98 17,114.02 17,431.21 17,440.89 16,358.45
07/31/98 17,353.61 17,715.34 17,723.44 16,528.58
08/31/98 15,036.91 15,360.97 15,357.36 14,848.00
09/30/98 14,400.85 14,634.39 14,643.24 14,043.68
10/31/98 15,613.40 15,854.90 15,863.02 15,511.25
11/30/98 16,405.00 16,644.48 16,651.42 16,310.08
12/31/98 16,998.86 17,140.35 17,247.54 16,957.59
*The adjusted returns above include the effect of applicable sales charges.
Excluding the 6-month and 1-year returns, these returns represent the blended
performance of the Fund's retail class shares (for the period from 1/20/97) and
the prior performance of the Fund's institutional class shares (for the period
from 6/8/93), adjusted for retail class fees and expenses. Past performance is
not an indication of future results. See page 30 for Footnotes, which include
additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top Holdings in % of Total
Selected Countries Investments
- --------------------------------------------------------------------------------
Finland/Nokia OYJ 'A' 3.6%
- --------------------------------------------------------------------------------
Netherlands/Royal Dutch Petroleum Co. 2.0%
- --------------------------------------------------------------------------------
Italy/ENI SpA 1.9%
- --------------------------------------------------------------------------------
France/France Telecom SA 1.8%
- --------------------------------------------------------------------------------
Portugal/EDP-Electricidade de Portugal SA 1.6%
- --------------------------------------------------------------------------------
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 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 Stock 99%
- --------------------------------------------------------------------------------
Cash Equivalents 1%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six month period ended December 31, 1998, PIMCO International Developed
Fund returned -0.7% for Class A shares, -1.1% for Class B shares and -2.1% for
Class C shares, 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 23.6% for Class A shares, 22.3% for
Class B shares and 21.4% for Class C 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 certainly 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.
24 See page 45 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
FUNDWORK
8/25/86
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*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/98
A Shares B Shares C Shares MSCI Lipper
EAFE International
Adjusted Adjusted Adjusted Index Fund Avg.
6 months -8.8% -13.8% -9.4% -13.4% -10.2% 3.7% -2.3%
1 year 9.3% 3.3% 8.3% 3.4% 7.3% 20.3% 13.0%
5 years 3.3% 2.2% 2.5% 2.2% 2.5% 9.5% 7.7%
10 years 7.2% 6.6% 6.4% 6.4% 6.4% 5.9% 9.0%
Inception 7.2% 6.7% 6.4% 6.4% 6.4% -- --
Change in Value
$10,000 invested at the Fund's inception
RETAIL
MSCI
PIMCO PIMCO PIMCO EAFE
International A International B International C Index
=========== =============== =============== =============== =========
08/31/86 9,450.00 10,000.00 10,000.00 10,000.00
09/30/86 9,163.20 9,690.30 9,690.30 9,897.00
10/31/86 8,847.81 9,350.65 9,350.65 9,235.88
11/30/86 9,306.95 9,830.21 9,830.21 9,767.87
12/31/86 9,388.58 9,910.13 9,910.13 10,285.56
01/31/87 10,331.51 10,899.09 10,889.10 11,377.89
02/28/87 10,858.25 11,448.54 11,448.55 11,719.23
03/31/87 11,272.63 11,878.10 11,878.11 12,680.20
04/30/87 11,677.75 12,297.63 12,297.65 14,021.77
05/31/87 11,742.13 12,357.61 12,357.62 14,021.77
06/30/87 11,493.05 12,087.92 12,087.93 13,577.56
07/31/87 11,709.24 12,307.75 12,307.76 13,556.24
08/31/87 12,286.95 12,907.17 12,907.18 14,575.54
09/30/87 12,246.99 12,857.16 12,857.17 14,348.74
10/31/87 9,437.14 9,900.10 9,900.11 12,340.92
11/30/87 9,223.90 9,670.31 9,670.32 12,465.32
12/31/87 10,018.06 10,496.75 10,496.76 12,838.53
01/31/88 9,804.30 10,266.22 10,266.23 13,070.65
02/29/88 10,324.07 10,804.26 10,804.27 13,945.21
03/31/88 10,571.84 11,056.80 11,056.81 14,805.35
04/30/88 10,756.88 11,243.47 11,243.48 15,023.28
05/31/88 10,616.68 11,089.72 11,089.73 14,545.09
06/30/88 10,917.49 11,397.18 11,397.19 14,164.74
07/31/88 10,808.70 11,276.39 11,276.40 14,612.06
08/31/88 10,205.21 10,639.55 10,639.56 13,664.91
09/30/88 10,611.72 11,056.77 11,056.78 14,264.66
10/31/88 10,903.01 11,353.25 11,353.26 15,488.57
11/30/88 10,962.52 11,408.18 11,408.19 16,414.47
12/31/88 11,159.39 11,605.77 11,605.78 16,508.86
01/31/89 11,652.24 12,110.79 12,110.80 16,802.72
02/28/89 11,500.41 11,946.12 11,946.13 16,892.27
03/31/89 11,645.17 12,088,89 12,088.90 16,564.06
04/30/89 12,244.63 12,703.83 12,703.84 16,720.92
05/31/89 12,622.97 13,088.07 13,088.08 15,814.14
06/30/89 12,365.99 12,813.62 12,813.63 15,551.47
07/31/89 13,698.42 14,186.15 14,186.17 17,507.53
08/31/89 13,792.02 14,273.92 14,273.94 16,723.37
09/30/89 14,150.69 14,636.25 14,636.27 17,488.30
10/31/89 13,703.16 14,164.16 14,164.17 16,789.12
11/30/89 14,126.00 14,592.32 14,592.33 17,636.46
12/31/89 14,446.89 14,914.46 14,914.47 18,291.48
01/31/90 13,756.46 14,192.16 14,192.18 17,614.51
02/28/90 13,414.40 13,831.10 13,831.11 16,388.90
03/31/90 13,096.09 13,494.02 13,494.03 14,684.94
04/30/90 12,963.97 13,349.57 13,349.58 14,572.31
05/31/90 14,129.52 14,541.23 14,541.24 16,239.53
06/30/90 14,430.67 14,842.09 14,842.10 16,100.35
07/31/90 14,849.55 15,263.40 15,263.41 16,331.23
08/31/90 13,254.58 13,614.22 13,614.23 14,749.72
09/30/90 11,774.39 12,085.44 12,085.45 12,698.47
10/31/90 12,684.91 13,012.37 13,012.38 14,681.21
11/30/90 12,387.67 12,699.40 12,699.42 13,819.43
12/31/90 12,301.08 12,602.48 12,602.49 14,048.69
01/31/91 12,614.70 12,915.83 12,915.84 14,507.10
02/28/91 13,612.93 13,937.63 13,937.64 16,066.47
03/31/91 13,240.37 13,542.57 13,542.58 15,105.85
04/30/91 13,227.13 13,515.37 13,515.38 15,258.57
05/31/91 13,466.70 13,760.56 13,760.57 15,422.30
06/30/91 12,881.17 13,147.48 13,147.49 14,293.08
07/31/91 13,599.77 13,883.20 13,883.21 14,999.15
08/31/91 13,852.55 14,114.76 14,114.77 14,698.27
09/30/91 14,025.47 14,291.86 14,291.87 15,531.08
10/31/91 14,238.43 14,496.24 14,496.26 15,755.19
11/30/91 13,479.95 13,719.67 13,719.68 15,023.83
12/31/91 14,840.21 15,112.50 15,112.51 15,804.47
01/31/92 14,677.74 14,946.11 14,946.13 15,471.47
02/29/92 14,474.65 14,724.22 14,724.24 14,921.92
03/31/92 13,878.81 14,100.33 14,100.34 13,940.96
04/30/92 13,946.51 14,169.59 14,169.60 14,010.80
05/31/92 14,325.58 14,530.02 14,530.03 14,952.89
06/30/92 13,797.51 13,989.33 13,989.34 14,248.61
07/31/92 13,865.15 14,044.78 14,044.80 13,888.54
08/31/92 13,851.57 14,030.96 14,030.98 14,764.36
09/30/92 13,594.35 13,753.64 13,753.65 14,477.50
10/31/92 13,905.84 14,058.60 14,058.61 13,722.48
11/30/92 14,068.33 14,211.07 14,211.08 13,855.83
12/31/92 14,100.63 14,229.24 14,229.25 13,931.69
01/31/93 14,129.79 14,259.14 14,259.15 13,934.10
02/28/93 14,319.18 14,438.30 14,438.32 14,359.17
03/31/93 15,455.34 15,573.12 15,573.14 15,614.98
04/30/93 16,445.93 16,573.46 16,573.48 17,101.17
05/31/93 16,708.15 16,827.27 16,827.29 17,466.52
06/30/93 16,212.88 16,319.59 16,319.61 17,198.04
07/31/93 16,795.51 16,886.91 16,886.92 17,804.01
08/31/93 17,815.13 17,902.15 17,902.17 18,769.17
09/30/93 17,727.70 17,797.67 17,797.69 18,350.80
10/31/93 18,164.63 18,215.83 18,215.85 18,920.36
11/30/93 17,348.80 17,394.59 17,394.60 17,270.48
12/31/93 18,957.54 18,998.80 18,991.86 18,521.45
01/31/94 19,863.22 19,896.93 19,889.67 20,091.35
02/28/94 19,491.97 19,516.33 19,509.20 20,039.83
03/31/94 18,185.46 18,191.87 18,185.22 19,180.97
04/30/94 18,675.44 18,679.01 18,672.19 19,999.07
05/31/94 18,779.29 18,755.22 18,748.37 19,888.52
06/30/94 18,437.75 18,420.35 18,413.62 20,174.04
07/31/94 19,031.48 18,983.70 18,976.76 20,372.55
08/31/94 19,565.89 19,516.40 19,509.27 20,859.35
09/30/94 19,180.03 19,120.57 19,113.58 20,206.93
10/31/94 19,491.68 19,409.86 19,402.77 20,884.53
11/30/94 18,229.73 18,146.24 18,139.61 19,885.42
12/31/94 17,545.61 17,444.72 17,438.35 20,014.63
01/31/95 16,545.65 16,449.75 16,443.74 19,250.43
02/28/95 16,288.05 16,185.43 16,179.52 19,200.19
03/31/95 17,060.74 16,947.20 16,941.01 20,403.08
04/30/95 17,742.57 17,600.19 17,593.76 21,175.91
05/31/95 17,818.32 17,677.88 17,655.89 20,928.91
06/30/95 17,575.88 17,429.17 17,407.19 20,567.45
07/31/95 18,666.81 18,501.95 18,479.66 21,853.53
08/31/95 18,272.91 18,097.80 18,075.51 21,025.20
09/30/95 18,469.94 18,268.89 18,262.12 21,441.29
10/31/95 17,742.56 17,553.61 17,531.56 20,870.41
11/30/95 18,106.18 17,895.68 17,888.94 21,456.58
12/31/95 18,681.93 18,455.40 18,448.46 22,326.64
01/31/96 19,348.60 19,108.41 19,085.68 22,423.54
02/29/96 19,257.80 18,999.59 18,976.84 22,504.94
03/31/96 19,591.09 19,326.07 19,303.20 22,988.57
04/30/96 20,348.80 20,056.95 20,033.60 23,662.59
05/31/96 20,045.72 19,761.43 19,738.42 23,232.88
06/30/96 20,227.60 19,916.85 19,893.80 23,369.26
07/31/96 19,242.63 18,937.34 18,914,65 22,692.02
08/31/96 19,378.97 19,061.78 19,038.92 22,747.61
09/30/96 19,742.59 19,403.82 19,380.93 23,357.70
10/31/96 19,515.32 19,155.01 19,132.16 23,124.59
11/30/96 19,985.09 19,621.49 19,598.47 24,050.50
12/31/96 19,915.18 19,533.55 19,510.81 23,746.99
01/31/97 20,118.14 19,710.03 19,687.34 22,921.30
02/28/97 20,414.98 19,998.88 19,976.25 23,301.80
03/31/97 20,165.04 19,742.12 19,719.46 23,391.97
04/30/97 20,227.43 19,790.31 19,767.59 23,521.80
05/31/97 21,289.55 20,817.54 20,794.52 25,058.24
06/30/97 22,273.73 21,764.53 21,741.04 26,445.72
07/31/97 22,648.53 22,117.55 22,094.12 26,878.90
08/31/97 20,633.74 20,143.36 20,120.67 24,876,42
09/30/97 21,992.59 21,443.38 21,420.39 26,274.48
10/31/97 20,149.55 19,645.65 19,623.21 24,261.85
11/30/97 19,899.53 19,388.76 19,366.46 24,019,23
12/31/97 20,440.02 19,894.81 19,872.61 24,235.41
01/31/98 20,713.45 20,159.57 20,137.35 25,350.23
02/28/98 22,183.15 21,571,89 21,549.16 26,982.79
03/31/98 23,806.85 23,142.99 23,119.88 27,819.26
04/30/98 24,507.72 23,813.91 23,790.56 28,044.59
05/31/98 23,439.37 23,743.30 23,702.32 27,915.59
06/30/98 24,490.62 23,760.82 23,737.57 28,133.33
07/31/98 25,379.63 24,625.71 24,601.62 28,425.91
08/31/98 20,080.36 19,471.55 19,447.58 24,909.63
09/30/98 19,106.46 18,482.40 18,477.14 24,152.38
10/31/98 20,524.16 19,859.34 19,835.21 26,676.30
11/30/98 21,720.72 20,989.33 20,963.84 28,050.13
12/31/98 22,341.93 21,539.25 21,513.09 29,163.72
*The adjusted returns above include the effect of paying the applicable sales
charges. Class A and B shares commenced operations after the inception date
shown. Total return for the periods shown before the inception of Class A and B
shares reflects the performance for this Fund's oldest class of shares (Class
C), restated to reflect the appropriate operating expenses for those shares. Had
the Class A share returns been restated on the basis of different sales charges,
but without regard to the lower operating expenses of Class A shares, the
adjusted total return figures for the 10-year and since inception periods would
have been lower, namely 6.4% and 5.6% for both periods. Past performance is not
an indication of future results. See page 30 for Footnotes, which include
additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top Holdings in % of Total
Selected Countries 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 de Portugal SA 2.1%
- --------------------------------------------------------------------------------
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 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 Stock 91%
- --------------------------------------------------------------------------------
Cash Equivalents 9%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six months ended December 31, 1998, the International Fund posted
returns of -8.8% for Class A shares, -9.4% for Class B shares and -10.2% for
Class C 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 cute 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
unrealistic--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 47 for financial details. 25
<PAGE>
PIMCO Emerging Markets Fund
OBJECTIVE
Long-term growth of capital
PORTFOLIO
Primarily common stocks of companies located in emerging market countries
FUND INCEPTION DATE
6/1/93
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 periods ended 12/31/98
A Shares B Shares C Shares MSCI Lipper
EMF Emg. Mkts
Adjusted Adjusted Adjusted Index Fund Avg.
- --------------------------------------------------------------------------------
6 months -16.6% -21.2% -17.0% -21.1% -17.8% -8.0% -13.5%
1 year -27.7% -31.7% -28.2% -31.8% -28.9% -25.3% -26.9%
3 years -9.7% -11.4% -10.3% -11.2% -10.3% -11.2% -8.3%
5 years -10.0% -11.0% -10.7% -11.0% -10.7% -9.3% -10.3%
Inception -1.5% -2.5% -2.2% -2.4% -2.2% -- --
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
RETAIL
PIMCO PIMCO PIMCO MSCI
Emerging Emerging Emerging Emerging Markets
Markets A Markets B Markets C Free Index
============= =================================== ================
05/31/93 9,450.00 10,000.00 10,000.00 10,000.00
06/30/93 9,588.68 10,140.93 10,140.93 10,296.33
07/31/93 9,878.21 10,440.64 10,440.64 10,568.49
08/31/93 10,847.52 11,458.64 11,458.63 11,460.90
09/30/93 11,051.69 11,667.24 11,667.24 11,880.00
10/31/93 11,842.69 12,494.97 12,494.97 12,945.96
11/30/93 12,726.82 13,419.97 13,419.97 13,518.84
12/31/93 14,753.17 15,548,36 15,548.36 15,753.27
01/31/94 15,695.19 16,531.41 16,531.41 16,040.08
02/28/94 15,260.86 16,064.44 16,064.44 15,754.74
03/31/94 14,075.03 14,805.99 14,805.99 14,328.99
04/30/94 13,670.51 14,371.36 14,371.36 14,042.42
05/31/94 14,328.97 15,054.36 15,054.36 14,523.04
06/30/94 13,602.86 14,282.31 14,282.31 14,122.73
07/31/94 14,368.13 15,076.63 15,076.63 15,000.73
08/31/94 15,990.03 16,768.99 16,768.99 16,862.67
09/30/94 16,510.61 17,304.74 17,304.74 17,054.29
10/31/94 16,086.33 16,849.31 16,849.31 16,746.49
11/30/94 15,302.41 16,018.02 16,018.02 15,875.56
12/31/94 13,550.68 14,174.10 14,174.10 14,600.91
01/31/95 11,742.10 12,273.23 12,273.23 13,047.50
02/28/95 11,154.46 11,651.98 11,651.98 12,712.85
03/31/95 10,976.49 11,458.62 11,458.62 12,793.40
04/30/95 11,536.09 12,035.80 12,035.80 13,367.75
05/31/95 12,054.18 12,568.60 12,568.80 14,078.79
06/30/95 12,132.02 12,642.19 12,642.19 14,121.02
07/31/95 12,332.54 12,843.05 12,843.05 14,437.37
08/31/95 12,103.45 12,596.14 12,596.14 14,096.61
09/30/95 12,027.86 12,509.69 12,509.69 14,030.46
10/31/95 11,578.08 12,033.85 12,033.85 13,494.43
11/30/95 11,286.58 11,723.54 11,723.54 13,254.25
12/31/95 11,804.20 12,253.64 12,253.64 13,842.76
01/31/96 12,789.04 13,268.26 13,268.26 14,826.94
02/29/96 12,445.16 12,903.60 12,903.60 14,591.14
03/31/96 12,574.68 13,029.70 13,029.70 14,704.89
04/30/96 12,992.46 13,454.59 13,454.59 15,293.16
05/31/96 12,957.17 13,409.52 13,409.52 15,224.32
06/30/96 13,014.61 13,460.66 13,460.66 15,318.79
07/31/96 11,920.51 12,320.53 12,320.53 14,272.60
08/31/96 12,296.77 12,701.47 12,701.47 14,638.01
09/30/96 12,446.83 12,848.61 12,848.61 14,765.43
10/31/96 11,990,62 12,369.54 12,369.54 14,371.22
11/30/96 12,202.28 12,580.26 12,580.26 14,612.62
12/31/96 12,324.16 12,697.87 12,697.87 14,675.11
01/31/97 13,219.03 13,615.48 13,615.48 15,675.89
02/28/97 13,703.64 14,114.62 14,114.62 16,346.90
03/31/97 13,384.07 13,764.23 13,764.23 15,917.06
04/30/97 13,239.78 13,604.84 13,604.84 15,945.69
05/31/97 13,734.78 14,114.63 14,114.63 16,401.65
06/30/97 14,374.08 14,751.94 14,751.94 17,280.32
07/31/97 14,363.76 14,741.28 14,741.28 17,538.08
08/31/97 12,683.09 13,010.12 13,010.12 15,306.34
09/30/97 13,353.36 13,679.27 13,679.27 15,730.57
10/31/97 11,569.46 11,852.57 11,852.57 13,149.29
11/30/97 11,445.78 11,714.53 11,714.53 12,669.64
12/31/97 12,033.52 12,309.52 12,309.31 12,974.98
01/31/98 11,177.70 11,427.77 11,427.77 11,957.87
02/28/98 11,889.21 12,160.62 12,149.99 13,206.27
03/31/98 12,580.04 12,850.93 12,851.01 13,779.31
04/30/98 12,703.74 12,967.81 12,967.89 13,628.20
05/31/98 11,249.85 11,470.29 11,470.36 11,761.14
06/30/98 10,435.23 10,641.93 10,641.99 10,527.00
07/31/98 10,868.30 11,066.54 11,066.61 10,860.67
08/31/98 7,435.00 7,572.83 7,572.88 7,720.42
09/30/98 7,795.60 7,934.06 7,934.11 8,210.31
10/31/98 8,342.07 8,486.27 8,476.01 9,074.89
11/30/98 8,754.17 8,900.40 8,900.65 9,829.62
12/31/98 8,699.89 8,736.32 8,836.57 9,687.07
*The adjusted returns above include the effect of applicable sales charges.
Excluding the 6-month and 1-year returns, these returns represent the blended
performance of the Fund's retail class shares (for the period from 1/20/97) and
the prior performance of the Fund's institutional class shares (for the period
from 6/11/93), adjusted for retail class fees and expenses. Past performance is
not an indication of future results. See page 30 for Footnotes, which include
additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top Holdings in % of Total
Selected Countries 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 1.6%
Telecomunicaciones de Chile SA SP-AD
- --------------------------------------------------------------------------------
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 Stock 100%
- --------------------------------------------------------------------------------
Cash Equivalents 0%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-month period ended December 31, 1998, PIMCO Emerging Markets Fund
returned -16.6% for Class A shares, -17.0% for Class B shares and -17.8% for
Class C shares.
For most investors in developing stock markets, 1998 was a year to forget,
with the MSCI EMF Index plummeting 25.3%. 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.
26 See page 49 for financial details.
<PAGE>
December 31, 1998
PIMCO Innovation Fund
OBJECTIVE
Capital appreciation; no consideration given to income
PORTFOLIO
Primarily technology-related stocks of companies of all sizes
FUND INCEPTION DATE
12/22/94
TOTAL NET ASSETS
$625 million
NUMBER OF SECURITIES IN THE PORTFOLIO
37 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Columbus Circle Investors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/98
A Shares B Shares C Shares Lipper
S&P 500 Sc. & Tech.
Adjusted Adjusted Adjusted Index Fund Avg.
- --------------------------------------------------------------------------------
6 months 30.9% 23.7% 30.4% 25.4% 29.4% 9.2% 25.9%
1 year 79.4% 69.5% 78.0% 73.0% 77.1% 28.6% 51.1%
3 years 34.2% 31.7% 33.2% 32.6% 33.2% 28.2% 22.9%
Inception 36.6% 34.7% 35.6% 35.4% 35.6% -- --
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
RETAIL
PIMCO PIMCO PIMCO S&P 500
Innovation A Innovation B Innovation C Index
=========== ============ ============ ============ =========
12/31/94 9,450.00 10,000.00 10,000.00 10,000.00
01/31/95 9,374.21 9,909.78 9,909.78 10,259.30
02/28/95 9,970.74 10,541.01 10,541.01 10,659.10
03/31/95 10,273.77 10,851.63 10,851.63 10,973.66
04/30/95 10,718.82 11,312.53 11,312.53 11,296.83
05/31/95 10,974.45 11,573.05 11,573.05 11,748.36
06/30/95 12,186.43 12,845.58 12,845.58 12,021.28
07/31/95 13,322.68 14,037.93 14,037.93 12,419.90
08/31/95 13,635.11 14,358.66 14,348.63 12,451.08
09/30/95 13,956.96 14,689.38 14,679.21 12,976.51
10/31/95 13,786.61 14,499.04 14,498.78 12,930.19
11/31/95 14,165.30 14,889.93 14,889.66 13,497.82
12/31/95 13,733.41 14,432.75 14,422.45 13,757.79
01/31/96 13,549.34 14,227.56 14,227.61 14,226.10
02/29/96 14,208.44 14,914.82 14,914.87 14,357.98
03/31/96 14,092.17 14,781.51 14,781.56 14,496.25
04/30/96 15,594.48 16,340.64 16,340.69 14,709.92
05/31/96 16,864.02 17,664.00 17,664.06 15,089.29
06/30/96 16,175.82 16,925.43 16,925.49 15,146.78
07/31/96 13,878.80 14,525.08 14,514.88 14,477.60
08/31/96 14,721.91 15,386.64 15,386.71 14,782.93
09/30/96 16,728.19 17,479.32 17,479.40 15,614.91
10/31/96 16,611.76 17,335.57 17,335.65 16,045.57
11/30/96 17,609.99 18,371.73 18,371.82 17,258.46
12/31/96 16,974.41 17,698.92 17,699.00 16,916.57
01/31/97 17,908.19 18,656.20 18,656.29 17,973.51
02/28/97 15,883.53 16,533.44 16,533.52 18,114.43
03/31/97 14,841.62 15,441.01 15,441.09 17,370.10
04/30/97 15,077.46 15,680.22 15,680.30 18,407.10
05/31/97 16,974.42 17,636.35 17,636.43 19,527.72
06/30/97 17,131.72 17,792.41 17,782.09 20,402.57
07/31/97 19,667.46 20,414.62 20,404.24 22,026.00
08/31/97 19,195.67 19,915.04 19,904.64 20,792.10
09/30/97 20,620.74 21,371.88 21,371.77 21,930.89
10/31/97 19,293.67 19,987.82 19,987.72 21,198.39
11/30/97 19,205.06 19,883.68 19,883.58 22,179.67
12/31/97 18,506.70 19,143.81 19,132.64 22,560.49
01/31/98 19,238.11 19,885.94 19,886.02 22,810.01
02/28/98 21,599.64 22,312.00 22,301.02 24,455.07
03/31/98 22,414.60 23,142.68 23,142.95 25,707.41
04/30/98 24,034.28 24,793.47 24,793.76 25,966.03
05/31/98 22,508.48 23,209.39 23,198.58 25,519.67
06/30/98 25,371.54 26,145.35 26,134.13 26,556.28
07/31/98 25,518.70 26,278.69 26,267.41 26,273.46
08/31/98 20,420.06 21,017.70 21,016.56 22,474.84
09/30/98 24,203.90 24,895.46 24,883.60 23,914.58
10/31/98 25,113.96 25,814.11 25,814.25 25,859.79
11/30/98 27,936.77 28,694.96 28,682.21 27,427.15
12/31/98 33,208.44 33,883.87 34,080.20 29,007.51
*The adjusted returns above include the effect of paying the applicable sales
charges. Class B shares commenced operations after the inception date shown.
Total return for the periods shown before the inception of Class B shares
reflects the performance for this Fund's oldest class of shares, restated to
reflect the appropriate operating expenses for those shares. Past performance is
not an indication of future results. See page 30 for Footnotes, which include
additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
America Online, Inc. 8.6%
Online service provider
- --------------------------------------------------------------------------------
Cisco Systems, Inc. 5.0%
Computer network products
- --------------------------------------------------------------------------------
Microsoft Corp. 4.1%
Computer software
- --------------------------------------------------------------------------------
Intel Corp. 3.9%
Microcomputer parts
- --------------------------------------------------------------------------------
Compaq Computer Corp. 3.8%
Computer manufacturer
- --------------------------------------------------------------------------------
International Business Machines Corp. 3.7%
Business machines manufacturer
- --------------------------------------------------------------------------------
Micron Technology, Inc. 3.5%
Semiconductor memory circuits
- --------------------------------------------------------------------------------
Amgen, Inc. 3.3%
Biotechnology
- --------------------------------------------------------------------------------
3Com Corp. 3.1%
Computer communication systems
- --------------------------------------------------------------------------------
Nokia Corp. - ADR 3.0%
Telecommunications services
- --------------------------------------------------------------------------------
Top Ten Total 42.0%
- --------------------------------------------------------------------------------
Top 3 Industries % of Total Investments
- --------------------------------------------------------------------------------
Technology 75.7%
- --------------------------------------------------------------------------------
Health Care 9.7%
- --------------------------------------------------------------------------------
Communications 6.6%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 92%
- --------------------------------------------------------------------------------
Cash Equivalents 8%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO Innovation Fund had a stellar six months, returning 30.9% for Class A
shares and 30.4% for Class B shares and 29.4% for Class C shares versus the S&P
500's return of 9.2% for the same period. And Innovation Fund has turned in a
strong performance for the longer term, handily beating the S&P 500 for both the
one-year and three-year periods ended December 31, 1998.
America Online was one of the Fund's best performing holdings in this
period. A variety of factors contributed to its success. Membership reached 15
million subscribers in the fourth quarter. In addition, the release of the Starr
Report via the Web increased Internet traffic and confirmed the importance of
this medium in general and AOL in particular. The company's announced merger
with Netscape and the increase in holiday shopping on the Internet also helped
the stock's performance this year.
Another strong performer for the Fund was Nokia, a cellular phone
manufacturer. Nokia, whose product line is considered to be of a higher quality
than that of its competitors, benefited from a number of positive factors.
'OneRate' plans initiated by AT&T are being emulated by other cell phone service
providers, which is driving an increase in business subscribers, while pre-paid
plans are accelerating entry-level subscribers. And Nokia continues to benefit
from the major worldwide conversion in cellular telephones from analog to
digital, which has increased sales of its phones.
Among our non-technology holdings that have benefited from the use of
technology, Amgen was a strong performer. The biotechnology company's anemia
drug, Epogen, benefited from last year's increase in recommended dosages by
Medicare for dialysis, which increased sales. Another contributor to the
company's success this period was a favorable arbitration ruling in a dispute
with pharmaceuticals giant Johnson & Johnson. The outcome allows Amgen to market
their NESP drug worldwide.
Another strong area for the Fund was semiconductor stocks. Because of their
poor performance for the last several years, the Fund was underweight in this
area when, in October, the Federal Reserve cut interest rates and re-ignited a
bull market. The Fund quickly increased its semiconductor holdings, and saw a
large uptick in the fourth quarter as a result.
The manager believes the Fund is well-positioned to benefit from the
reality that technology spending has become a critical driver of success for
most companies. In addition, the Fund is positioned to benefit from the
increased spending for the Year 2000 problem and the rapid rise of Internet
commerce. The manager is confident that the Fund will continue to identify
exciting opportunities within the technology sector.
See page 51 for financial details. 27
<PAGE>
PIMCO Precious Metals Fund
OBJECTIVE
Capital appreciation; no consideration given to income
PORTFOLIO
Primarily stocks of companies that extract, process, distribute or market
precious metals
FUND INCEPTION DATE
10/10/88
TOTAL NET ASSETS
$23 million
NUMBER OF SECURITIES IN THE PORTFOLIO
53 (not including short-term instruments)
MANAGER
Van Eck Associates (an independent sub-advisor not owned by PIMCO Advisors L.P.
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/98
A Shares B Shares C Shares Phil. Gold Lipper
& Silver Gold Oriented
Adjusted Adjusted Adjusted Index Fund Avg.
6 month 1.8% -3.8% 1.5% -3.5% 0.5% -9.4% -2.2%
1 year -7.4% -12.5% -8.5% -13.0% -9.6% -12.4% -10.9%
5 years -16.1% -17.0% -16.8% -17.1% -16.8% -13.2% -13.7%
10 years -5.1% -5.6% -5.9% -5.9% -5.9% -2.9% -3.8%
Inception -5.5% -6.0% -6.3% -6.3% -6.3% -- --
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
PIMCO PIMCO PIMCO Phil. Gold
Precious Precious Precious & Silver
Metals A Metals B Metals C Index
==========================================================================
10/31/88 9,450.00 10,000.00 10,000.00 10,000.00
11/30/88 9,475.21 10,020.61 10,020.61 10,125.66
12/31/88 9,209.77 9,733.49 9,733.49 9,507.21
01/31/89 9,673.77 10,217.57 10,217.57 9,868.88
02/28/89 9,562.26 10,093.93 10,093.93 11,007.43
03/31/89 9,490.32 10,011.56 10,011.56 10,340.91
04/30/89 9,095.83 9,589.29 9,589.29 9,719.19
05/31/89 8,574.12 9,033.05 9,033.05 9,466.78
06/30/89 8,921.59 9,393.54 9,393.54 10,100.52
07/31/89 9,240.29 9,723.13 9,723.13 10,428.32
08/31/89 9,667.06 10,166.01 10,166.01 11,159.31
09/30/89 9,663.15 10,155.70 10,155.70 11,341.78
10/31/89 9,649.64 10,135.12 10,135.12 11,524.26
11/30/89 10,881.45 11,422.60 11,422.60 13,041.96
12/31/89 10,780.41 11,309.27 11,309.27 13,104.24
01/31/90 11,013.13 11,546.21 11,546.21 14,235.14
02/28/90 10,380.79 10,876.70 10,876.70 13,190.56
03/31/90 9,778.04 10,238.11 10,238.11 12,315.34
04/30/90 8,751.18 9,156.66 9,156.66 10,868.66
05/31/90 9,140.59 9,558.36 9,558.36 11,731.86
06/30/90 8,496.21 8,878.60 8,878.60 11,085.01
07/31/90 9,240.84 9,651.07 9,651.07 11,904.50
08/31/90 9,236.87 9,640.81 9,640.81 11,806.16
09/30/90 9,282.01 9,682.05 9,682.05 11,837.85
10/31/90 7,796.90 8,126.74 8,126.74 9,809.88
11/30/90 7,584.33 7,900.16 7,900.16 9,313.81
12/31/90 8,142.85 8,476.96 8,476.96 10,603.15
01/31/91 7,119.11 7,405.77 7,405.77 8,755.46
02/28/91 7,743.01 8,044.37 8,044.37 9,396.85
03/31/91 7,673.68 7,961.97 7,961.97 9,210.01
04/30/91 7,535.05 7,807.46 7,807.46 8,803.54
05/31/91 7,643.96 7,920,75 7,920.75 8,994.76
06/30/91 8,129.16 8,425.46 8,425.46 9,637.24
07/31/91 8,099.48 8,384.23 8,384.23 9,609.92
08/31/91 7,356.84 7,611.72 7,611.72 8,294.36
09/30/91 7,436.08 7,683.82 7,683.82 8,613.42
10/31/91 7,871.76 8,126.71 8,126.71 9,058.13
11/30/91 7,881.65 8,147.33 8,147.33 9,192.53
12/31/91 7,782.63 8,023.71 8,023.71 8,827.58
01/31/92 7,911.32 8,157.62 8,157.62 9,126.97
02/29/92 7,792.48 8,034.04 8,034.04 8,894.23
03/31/92 7,297.41 7,508.73 7,508.73 7,871.50
04/30/92 6,812.23 7,014.32 7,014.32 7,640.95
05/31/92 7,228.10 7,436.62 7,436.62 8,197.12
06/30/92 7,594.44 7,807.41 7,807.41 8,579.55
07/31/92 7,911.28 8,126.70 8,126.70 9,028.63
08/31/92 7,584.51 7,786.82 7,786.82 8,617.79
09/30/92 7,465.67 7,663.21 7,663.21 8,790.43
10/31/92 7,178.54 7,364.53 7,364.53 8,261.58
11/30/92 6,584.45 6,746.52 6,746.52 7,190.78
12/31/92 6,861,69 7,034.94 7,034.94 7,790.65
01/31/93 6,673.56 6,839.24 6,839.24 7,815.78
02/28/93 7,237.94 7,405.72 7,405.72 8,302.01
03/31/93 8,337.01 8,518.12 8,518.12 9,486.45
04/30/93 9,436.08 9,640.82 9,640.82 10,796.55
05/31/93 11,178.75 11,422.76 11,422.76 12,140.52
06/30/93 11,347.08 11,587.52 11,587.52 12,722.90
07/31/93 12,634.27 12,895.64 12,895.64 14,084.35
08/31/93 11,357.00 11,577.20 11,577.20 12,879.15
09/30/93 10,218.33 10,413.30 10,413.30 11,375.66
10/31/93 11,654.02 11,865.60 11,865.60 13,488.85
11/30/93 11,436.22 11,639.06 11,639.06 12,970.94
12/31/93 13,099.65 13,328.33 13,328.33 14,413.24
01/31/94 13,198.69 13,421.07 13,421.07 14,405.59
02/28/94 12,604.65 12,813.37 12,813.37 14,028.63
03/31/94 12,624.51 12,813.39 12,813.39 14,608.83
04/30/94 11,802.63 11,968.80 11,968.80 12,503.28
05/31/94 12,198.75 12,370.58 12,370.58 13,146.85
06/30/94 11,951.24 12,113.08 12,113.08 12,592.88
07/31/94 12,139.36 12,298.49 12,298.49 12,210.45
08/31/94 12,852.27 13,009.19 13,009.19 12,950.17
09/30/94 14,000.93 14,162.90 14,162.90 14,448.21
10/31/94 13,080.01 13,225.53 13,225.53 12,828.89
11/30/94 11,545.22 11,670.24 11,670.24 11,221.59
12/31/94 11,921.45 12,041.02 12,041.02 11,946.02
01/31/95 10,149.01 10,238.44 10,238.44 10,640.30
02/28/95 10,515.37 10,598.99 10,598.99 11,345.06
03/31/95 11,584.74 11,670.25 11,670.25 13,327.14
04/30/95 11,644.13 11,721.72 11,721.72 12,776.44
05/31/95 11,495.61 11,577.46 11,577.46 13,111.89
06/30/95 11,465.95 11,536.27 11,525.96 13,132.65
07/31/95 11,743.22 11,804.11 11,793.84 12,969.84
08/31/95 12,050.16 12,113.12 12,102.81 13,402.53
09/30/95 12,208.55 12,257.33 12,257.26 13,570.80
10/31/95 10,743.13 10,784.44 10,774.08 11,711.10
11/30/95 11,406.54 11,443.66 11,443.56 13,233.17
12/31/95 11,505.62 11,536.36 11,536.26 13,157.78
01/31/96 13,891.98 13,926.09 13,925.96 15,411.93
02/29/96 14,099.94 14,121.69 14,121.57 15,740.82
03/31/96 13,842.56 13,864.10 14,853.68 15,715.69
04/30/96 14,159.46 14,173.06 14,162.61 15,670.89
05/31/96 14,803.06 14,801.28 14,801.15 16,268.58
06/30/96 12,664.36 12,648.48 12,648.37 13,522.73
07/31/96 12,406.91 12,390.94 12,390.84 13,587.19
08/31/96 13,030.64 13,009.02 13,008.91 13,609.05
09/30/96 12,000.89 11,968.78 11,968.67 12,585.23
10/31/96 12,050.36 12,020.35 12,020.25 12,631.12
11/30/96 11,555.24 11,515.66 11,515.56 13,132.65
12/31/96 11,237.25 11,195.06 11,194.96 12,756.77
01/31/97 10,523.56 10,473.14 10,473.05 12,041.08
02/28.97 11,950.83 11,843.74 11,843.64 13,380.68
03/31/97 10,553.68 10,441.72 10,452.10 11,376.75
04/30/97 9,608.86 9,479.12 9,499.99 10,255.68
05/31/97 9,960.70 9,866.20 9,886.17 11,397.51
06/30/97 8,875.16 8,809.52 8,819.95 10,445.80
07/31/97 8,372.58 8,317.79 8,328.21 10,699.30
08/31/97 8,382.63 8,317.79 8,328.20 10,803.10
09/30/97 8,855.02 8,778.13 8,788.55 11,964.60
10/31/97 7,347.33 7,282.01 7,292.43 9,605.55
11/30/97 5,658.75 5,618.44 5,618.41 7,738.20
12/31/97 5,889.93 5,817.24 5,817.21 8,106.42
01/31/98 6,442.72 6,340.36 6,340.34 8,191.65
02/28/98 6.090.92 5,984.65 5,984.62 8,249.31
03/31/98 6,402.52 6,277.60 6,277.57 8,934.91
04/30/98 7,045.80 6,915.84 6,915.81 9,622.75
05/31/98 6,040.68 5,942.80 5,942.78 8,187.93
06/30/98 5,357.20 5,241.80 5,231.31 7,861.87
07/31/98 5,156.30 5,053.62 5,042.98 6,901.94
08/31/98 4,171.45 4,080.80 4,080.28 8,434.17
09/30/98 5,930.55 5,796.77 5,785,43 12,937.17
10/31/98 5,950.71 5,817.64 5,806.25 13,017.38
11/30/98 5,679.36 5,545.37 5,534.52 12,270.18
12/31/98 5,454.46 5,320,79 5,309.82 11,237.03
*The adjusted returns above include the effect of paying the applicable sales
charges. Class A and B shares commenced operations after the inception date
shown. Total return for the periods shown before the inception of Class A and B
shares reflects the performance for this Fund's oldest class of shares (Class
C), restated to reflect the appropriate operating expenses for those shares. Had
Class A share returns been restated on the basis of different sales charges, but
without regard to the lower operating expenses of Class A shares, the adjusted
total return figure for the 10-year and since inception periods would have been
lower, namely -5.8% and -6.2%. Past performance is not an indication of future
results. See page 30 for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Stocks % of Total Investments
- --------------------------------------------------------------------------------
Getchell Gold Corp. 11.1%
- --------------------------------------------------------------------------------
Meridian Gold, Inc. 7.5%
- --------------------------------------------------------------------------------
Newmont Mining Corp. 5.5%
- --------------------------------------------------------------------------------
Homestake Mining Corp. 5.4%
- --------------------------------------------------------------------------------
Barrick Gold Corp. 5.0%
- --------------------------------------------------------------------------------
Anglo American Gold Investment 4.1%
Co. Limited
- --------------------------------------------------------------------------------
Harmony Gold Mining Co. Limited 3.8%
- --------------------------------------------------------------------------------
Battle Mountain Gold Co. 3.7%
- --------------------------------------------------------------------------------
Placer Dome, Inc. 3.5%
- --------------------------------------------------------------------------------
Western Areas Gold Mining 3.3%
Co. Limited
- --------------------------------------------------------------------------------
Top Ten Total 52.9%
- --------------------------------------------------------------------------------
Regions % of Total Investments
- --------------------------------------------------------------------------------
Stock: Canada 32%
- --------------------------------------------------------------------------------
South Africa 28%
- --------------------------------------------------------------------------------
United States 26%
- --------------------------------------------------------------------------------
Australia 10%
- --------------------------------------------------------------------------------
Europe 1%
- --------------------------------------------------------------------------------
South Africa 1%
- --------------------------------------------------------------------------------
Investment Breakdown
- --------------------------------------------------------------------------------
Common Stock 98%
- --------------------------------------------------------------------------------
Cash Equivalents 2%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The Precious Metals Fund returned 1.8% for Class A shares, 1.5% for Class B
shares and 0.5% for Class C shares for the six months ended December 31, 1998,
outperforming the Lipper Gold Oriented Fund Average, which returned -2.2% for
the same period.
Gold funds, which historically have had an inverse relationship to economic
performance, suffered this period as a result of robust domestic growth. Only in
the third quarter, when the U.S. stock market sank because of jitters over the
Russian default and the Long-Term Capital Management debacle, did gold funds
perform well. However, those gains were quickly erased in the fourth quarter,
when successive Federal Reserve interest rate cuts revived the bull market and
pushed it to new highs, resulting in less demand for gold as a safe haven.
Meridian Gold, the Fund's second largest holding, was one of the strongest
performing stocks for the Fund this period. Its Nevada mines proved to be highly
efficient, allowing gold production to begin in a new mine while continuing at
good rates in existing mines. As a result, the company expects to meet or exceed
its 1998 gold production projections. And Meridian Gold discovered that one of
its mines, El Penon in northern Chile, is larger and richer than had been
previously expected. It has secured financing to develop the El Penon mine,
which is expected to double the company's current gold production rate.
Another strong contributor to the Fund's performance this period was
Getchell Gold. The company is in the process of developing a new mine that it
estimates will double Getchell's gold production. And Getchell's property has
other exploration possibilities, making it a very attractive stock. In addition,
the company is a tremendous acquisition opportunity for nearby mines, which has
helped its stock price rise.
One disappointment for the Fund this period was Durban Roodeport Deep
Levels Mines. The stock closely tracks the price of gold, so it performs poorly
in static-to-down gold markets, like the one that occurred for much of this
year.
Looking ahead, the manager believes the strong economy will continue. The
Fund will therefore focus on higher grade gold stocks, which perform better in
such an environment.
28 See page 52 for financial details.
<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
FUND INCEPTION DATE
6/25/92
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 periods ended 12/31/98
A Shares B Shares C Shares S&P 500/ Lipper
Leh. Agg. Balanced
Adjusted Adjusted Adjusted Hybrid Index Fund Avg.
- --------------------------------------------------------------------------------
6 month 2.9% -2.7% 2.5% -1.9% 1.7% 7.9% 4.2%
1 year 11.8% 5.7% 11.0% 6.3% 10.0% 21.0% 13.5%
3 years 15.2% 13.0% 14.4% 13.7% 14.4% 19.8% 15.8%
5 years 13.8% 12.5% 13.0% 12.7% 13.0% 17.3% 13.8%
Inception 13.0% 12.0% 12.1% 12.1% 12.2% -- --
Change in Value
$10,000 invested at the Fund's inception
[LINE GRAPH APPEARS HERE]
RETAIL
PIMCO PIMCO PIMCO LIPPER S&P 500/
Balanced A Balanced B Balanced C Balanced Leh. Agg.
Hybrid Index
======== ========== ========== ========== ========= ============
06/30/92 9,450.00 10,000.00 10,000.00 10,000.00 10,000.00
07/31/92 9,811.89 10,376.54 10,376.54 10,293.60 10,326.71
08/31/92 9,789.72 10,346.53 10,346.53 10,197.66 10,241.72
09/30/92 9,946.37 10,505.77 10,505.77 10,315.14 10,362.49
10/31/92 9,974.46 10,528.66 10,528.66 10,316.07 10,328.98
11/30/92 10,143.45 10,700.61 10,700.61 10,551.48 10,540.94
12/31/92 10,283.93 10,842.05 10,842.05 10,702.58 10,685.59
01/31/93 10,361.77 10,917.08 10,917.08 10,845.67 10,821.15
02/28/93 10,483.85 11,039.43 11,039.43 10,979.62 10,985.41
03/31/93 10,576.74 11,130.17 11,130.17 11,206.23 11,142.80
04/30/93 10,436.81 10,976.21 10,976.21 11,120.51 11,120.24
05/31/93 10,559.49 11,098.22 11,098.22 11,315.45 11,194.60
06/30/93 10,614.27 11,148.81 11,148.81 11,435.39 11,295.43
07/31/93 10,563.90 11,088.89 11,088.89 11,481.59 11,293.74
08/31/93 10,873.29 11,406.52 11,406.52 11,828.57 11,630.01
09/30/93 10,820.77 11,344.49 11,344.49 11,854.00 11,589.27
10/31/93 10,935.21 11,457.20 11,457.20 11,975.86 11,750.46
11/30/93 10,820.78 11,330.18 11,330.18 11,784.00 11,643.29
12/31/93 10,895.14 11,400.96 11,400.96 11,981.74 11,752.99
01/31/94 11,068.51 11,575.11 11,575.11 12,295.66 12,056.23
02/28/94 10,869.52 11,360.35 11,360.35 12,054.30 11,776.12
03/31/94 10,495.34 10,962.01 10,962.01 11,616.24 11,351.92
04/30/94 10,571.42 11,034.67 11,034.67 11,642.15 11,402.98
05/31/94 10,619.62 11,077.93 11,077.93 11,731.67 11,514.62
06/30/94 10,450.35 10,894.58 10,894.58 11,528.02 11,335.10
07/31/94 10,732.52 11,181.81 11,181.81 11,788.43 11,648.51
08/31/94 11,010.75 11,464.63 11,464.63 12,083.38 11,940.85
09/30/94 10,777.55 11,214.63 11,214.63 11,865.39 11,695.38
10/31/94 10,898.06 11,332.99 11,332.99 11,902.30 11,848.88
11/30/94 10,662.80 11,081.40 11,081.40 11,624.85 11,579.44
12/31/94 10,748.75 11,163.50 11,163.50 11,736.57 11,714.45
01/31/95 11,019.30 11,437.40 11,437.40 11,882.45 11,989.44
02/28/95 11,334.68 11,758.09 11,758.09 12,228.71 12,383.80
03/31/95 11,500.74 11,922.95 11,922.95 12,444.91 12,633.46
04/30/95 11,708.17 12,130.38 12,130.38 12,678.25 12,927.28
05/31/95 12,121.93 12,551.33 12,551.33 13,083.96 13,437.40
06/30/95 12,299.86 12,727.93 12,727.93 13,315.81 13,664.10
07/31/95 12,469.38 12,895.14 12,895.14 13,597.30 13,923.75
08/31/95 12,594.82 13,016.67 13,016.67 13,703.36 14,011.94
09/30/95 12,925.62 13,350.45 13,350.45 14,030.60 14,421.25
10/31/95 12,966.35 13,384.00 13,384.00 13,995.10 14,465.38
11/30/95 13,354.60 13,776.48 13,776.48 14,430.07 14,933.10
12/31/95 13,592.99 14,013.91 14,013.91 14,657.20 15,189.49
01/31/96 13,851.32 14,271.09 14,271.09 14,921.76 15,540.07
02/29/96 13,727.51 14,135.19 14,135.19 14,928.92 15,518.46
03/31/96 13,727.42 14,125.93 14,125.93 14,985.20 15,564.97
04/30/96 13,795.12 14,186.81 14,186.81 15,084.49 15,667.62
05/31/96 13,982.80 14,370.84 14,370.84 15,238.70 15,897.33
06/30/96 14,104.82 14,487.26 14,487.26 15,289.02 16,019.07
07/31/96 13,712.31 14,074.89 14,074.89 14,895.48 15,611.97
08/31/96 13,792.48 14,148.15 14,148.15 15,130.50 15,799.06
09/30/96 14,292.32 14,652.28 14,652.28 15,690.19 16,442.69
10/31/96 14,641.80 15,001.17 15,001.17 16,022.98 16,860.48
11/30/96 15,467.24 15,837.78 15,837.78 16,769.66 17,740.68
12/31/96 15,316.55 15,673.58 15,673.58 16,563.39 17,463.84
01/31/97 15,796.05 16,158.67 16,158.67 17,070.23 18,139.91
02/28/97 15,810.67 16,173.64 16,173.64 17,133.39 18,243.29
03/31/97 15,409.75 15,741.85 15,754.69 16,634.81 17,712.66
04/30/97 15,821.85 16,163.18 16,160.97 17,135.52 18,453.18
05/31/97 16,469.39 16,810.34 16,823.09 17,836.36 19,197.02
06/30/97 16,906.04 17,250.46 17,245.73 18,408.91 19,804.18
07/31/97 17,988.56 18,340.87 18,335.84 19,456.37 20,963.29
08/31/97 17,602.93 17,931.86 17,926.95 18,839.61 20,187.15
09/30/97 18,321.86 18,670.80 18,669.86 19,591.31 20,969.63
10/31/97 17,993.56 18,320.91 18,319.98 19,234.74 20,671.08
11/30/97 18,292.02 18,609.92 18,608.98 19,586.74 21,283.27
12/31/97 18,581.42 18,890.56 18,904.96 19,876.62 21,588.25
01/31/98 18,630.94 18,940.98 18,938.61 20,015.76 21,842.37
02/28/98 19,357.05 19,664.32 19,661.86 20,810.38 22,780.56
03/31/98 19,956.59 20,253.70 20,248.09 21,447.18 23,512.24
04/30/98 19,906.76 20,186.11 20,180.53 21,595.16 23,703.25
05/31/98 19,840.47 20,118.59 20,113.02 21,377.05 23,548.71
06/30/98 20,185.69 20,456.58 20,450.92 21,763.98 24,202.53
07/31/98 19,719.40 19,965.62 19,960.10 21,509.34 24,068.47
08/31/98 17,952.55 18,152.74 18,163.69 19,655.23 22,137.25
09/30/98 18,737.07 18,955.09 18,951.99 20,504.34 23,195.47
10/31/98 19,441.59 19,652.64 19,649.43 21,271.20 24,278.44
11/30/98 20,195.92 20,385.68 20,382.35 22,049.73 25,216.47
12/31/98 20,777.56 20,964.64 20,981.59 22,863.37 26,118.58
*The adjusted returns above include the effect of applicable sales charges.
Excluding the 6 month and 1-year returns, these returns represent the blended
performance of the Fund's retail class shares (for the period from 1/20/97) and
the prior performance of the Fund's institutional class shares (for the period
from 6/25/95), adjusted for retail class fees and expenses. Past performance is
not an indication of future results. See page 30 for Footnotes, which include
additional details.
- --------------------------------------------------------------------------------
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 Stock 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 posted returns of 2.9% for Class A shares, 2.5% for Class B
shares and 1.7% for Class C shares 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 United States bank. And 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. And 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 price
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 which 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.
See page 53 for financial details. 29
<PAGE>
- --------------------------------------------------------------------------------
Footnotes
- --------------------------------------------------------------------------------
A few notes and definitions are needed for a complete understanding of the
performance figures.
Past performance is no indication of future results. Investment return will
fluctuate and the value of an investor's shares will fluctuate and may be worth
more or less than original cost when redeemed. Total return measures
performance, assuming that all dividends and capital gains distributions were
reinvested.
Total return, both with and without a sales charge, has been presented. For
shareholders who have not bought or sold shares during the period quoted, the
non-adjusted figures are probably more meaningful to you than the adjusted
figures. The adjusted figures for Class A shares include the effect of paying
the maximum initial sales charge of 5.5%. The adjusted figures for Class B
shares include the effect of paying the contingent deferred sales charge (CDSC),
which declines from 5% in the first year to 0% at the beginning of the seventh
year. The adjusted figures for Class C shares include the effect of paying the
1% CDSC, which may apply to shares redeemed during the first year of ownership.
The PIMCO stock funds can invest in foreign securities and the International,
International Developed and Emerging Markets Funds invest primarily in these
securities, which can involve special risks due to foreign economic and
political developments. These risks can be more pronounced with emerging market
securities. The Opportunity and Small-Cap Value Funds generally invest in
small-cap stocks, which can be riskier than the overall stock market. The
Innovation and Precious Metals Funds concentrate their portfolios in one sector,
making them more volatile than a more diversified stock portfolio, and,
therefore, should be considered as only part of a diversified portfolio.
Line graphs have been included so an investor can compare a Fund's historical
performance to that of an appropriate broad-based index. Each index reflects a
group of unmanaged securities, and it is not possible to invest directly in an
unmanaged index. The Standard & Poor's 500 and Standard & Poor's Mid-Cap are
indices of stocks of companies with larger- and medium-sized capitalizations,
respectively. The Russell 2000 is an index of stocks of companies with small
capitalizations. The MSCI EAFE is an index of foreign stocks. The MSCI world
ex-USA Index is an index of foreign developed and emerging market stocks. The
MSCI Emerging Market Free Index is an index of emerging market stocks. The S&P
500/Lehman Aggregate Bond Hybrid Index is an index represented by 60% S&P 500
Index and 40% Lehman Aggregate Bond Index (an index containing a variety of
bonds). The Philadelphia Gold and Silver Index is an index of stocks of
companies in the gold and silver mining industry.
Lipper averages are calculated by Lipper Analytical Services, Inc., a nationally
recognized mutual fund performance evaluation firm. They are total-return
performance averages of those funds that are tracked by Lipper, with the
investment objective noted. They do not take sales charges into account.
For additional details on the PIMCO taxable bond funds, contact your financial
advisor to receive a prospectus that contains more complete information,
including charges and expenses. Or contact PIMCO Funds Distributors LLC at 2187
Atlantic Street, Stamford, CT 06902, 1-800-277-7337, www.pimcofunds.com. Please
read the prospectus carefully before you invest or send money.
30
<PAGE>
Schedule of Investments
Equity Income Fund
December 31, 1998 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 97.5%
- --------------------------------------------------------------------------------
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) ===========
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.9%
- --------------------------------------------------------------------------------
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
-----------
See accompanying notes 31
<PAGE>
Schedule of Investments
Value Fund
December 31, 1998 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 97.0%
- --------------------------------------------------------------------------------
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%
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
-----------
(b) Non-income producing security.
32 See accompanying notes
<PAGE>
Schedule of Investments
Renaissance Fund
December 31, 1998 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 98.1%
- --------------------------------------------------------------------------------
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)
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
-----------
(b) Non-income producing security.
(c) Premiums received on written options:
Type Contracts Premium Value
- --------------------------------------------------------------------------------
Call - OTC Micron Technology, Inc.
Strike @ 55.00 Exp. 01/22/99 676 $133 $ 72
See accompanying notes 33
<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
34 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 35
<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.
36 See accompanying notes
<PAGE>
Schedule of Investments
Capital Appreciation Fund
December 31, 1998 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 95.4%
- --------------------------------------------------------------------------------
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) -----------
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 4.7%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
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
-----------
(b) Non-income producing security.
See accompanying notes 37
<PAGE>
Schedule of Investments
Growth Fund
December 31, 1998 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 95.8%
- --------------------------------------------------------------------------------
Capital Goods 2.8%
Tyco International Limited 657,500 $ 49,600
Perkin Elmer Corp. 136,600 13,327
-----------
62,927
Communications 6.6%
Chancellor Media Corp. 1,251,900 59,935
Tele-Communications, Inc. `A' (b) 1,036,701 57,343
Nextel Communications, Inc. `A' (b) 1,291,200 30,505
-----------
147,783
Consumer Discretionary 19.2%
Home Depot, Inc. 1,190,900 72,868
Cendant Corp. (b) 3,575,000 68,148
Wal-Mart Stores, Inc. 822,900 67,015
CVS Corp. 1,186,400 65,252
Costco Cos., Inc. (b) 792,400 57,201
Staples, Inc. (b) 945,700 41,315
Pitney Bowes, Inc. 453,400 29,953
Ford Motor Co. 470,200 27,595
-----------
429,347
Consumer Services 5.8%
McDonald's Corp. 482,300 36,956
Tricon Global Restaurants, Inc. (b) 697,800 34,977
Omnicom Group 586,300 34,005
Waste Management, Inc. 499,142 23,272
-----------
129,210
Consumer Staples 7.9%
Safeway, Inc. (b) 1,177,600 71,760
Anheuser Busch Cos., Inc. 768,400 50,426
Philip Morris Cos., Inc. 611,100 32,694
Champion International `C' 570,400 23,101
-----------
177,981
Energy 3.7%
Enron Corp. 964,200 55,020
Exxon Corp. 376,800 27,554
-----------
82,574
Financial & Business Services 12.9%
Citigroup, Inc. 1,072,100 53,069
Chase Manhattan Corp. 767,000 52,204
Federal National Mortgage Assn 617,000 45,658
Capital One Financial Corp. 384,800 44,252
Wells Fargo & Co. 993,300 39,670
Associates First Capital Corp. `A' 756,600 32,061
Donaldson Lufkin & Jenrette, Inc. 539,800 22,132
-----------
289,046
Health Care 17.2%
HBO & Co. 2,276,200 65,298
Eli Lilly & Co. 687,000 61,057
Cardinal Health, Inc. 733,500 55,654
Pfizer, Inc. 415,700 52,144
Schering-Plough Corp. 834,000 46,079
Guidant Corp. 384,400 42,380
Warner-Lambert Co. 493,100 37,075
CIGNA Corp. 343,400 26,549
-----------
386,236
Technology 19.7%
Microsoft Corp. (b) 630,500 87,443
Intel Corp. 635,200 75,311
America Online, Inc. (b) 500,200 72,404
Compaq Computer Corp. (b) 1,235,400 51,810
Ascend Communications, Inc. (b) 751,900 49,437
Cisco Systems, Inc. (b) 456,500 42,369
International Business Machines Corp. 183,200 33,846
Motorola, Inc. 477,900 29,182
-----------
441,802
-----------
Total Common Stocks 2,146,906
(Cost $1,465,778) -----------
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS & NOTES 0.0%
- --------------------------------------------------------------------------------
Banking & Finance 0.0%
Cabbell Financial Grantor Trust
7.188% due 12/31/02 $ 588 $ 474
-----------
Total Corporate Bonds & Notes 474
(Cost $558) -----------
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 4.8%
- --------------------------------------------------------------------------------
Repurchase Agreement 4.8%
State Street Bank
3.500% due 01/04/99 107,207 107,207
(Dated 12/31/98. Collateralized by
U.S. Treasury Note 6.000% 02/15/26
valued at $58,357,791 and
U.S. Treasury Note 6.250% 04/30/01
valued at $51,001,225. Repurchase
proceeds are $107,248,691.)
-----------
Total Short-Term Instruments 107,207
(Cost $107,207) -----------
Total Investments (a) 100.6% $2,254,587
(Cost $1,573,544)
Other Assets and Liabilities (Net) (0.6%) (14,288)
-----------
Net Assets 100.0% $2,240,299
-----------
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 $ 691,169
Aggregate gross unrealized depreciation
for all investments in which there was an
excess of tax cost over value (10,126)
-----------
Unrealized appreciation-net $ 681,043
-----------
(b) Non-income producing security.
38 See accompanying notes
<PAGE>
Schedule of Investments
Value 25 Fund
December 31, 1998 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 91.6%
- --------------------------------------------------------------------------------
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) -----------
- --------------------------------------------------------------------------------
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
-----------
See accompanying notes 39
<PAGE>
Schedule of Investments
Mid-Cap Growth Fund
December 31, 1998 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 96.8%
- --------------------------------------------------------------------------------
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) -----------
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 4.1%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
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
-----------
(b) Non-income producing security
40 See accompanying notes
<PAGE>
Schedule of Investments
Target Fund
December 31, 1998 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 92.8%
- --------------------------------------------------------------------------------
Building 1.7%
Centex Corp. 424,100 $ 19,111
Capital Goods 2.0%
SPX Corp. 330,800 22,164
Communications 4.7%
Level 3 Communications, Inc. 450,900 19,445
General Instrument Corp. (b) 546,900 18,560
Century Telephone Enterprise 215,600 14,553
-----------
52,558
Consumer Discretionary 19.1%
Rite Aid Corp. 910,200 45,111
Bed, Bath & Beyond, Inc. (b) 872,800 29,784
Staples, Inc. (b) 487,900 21,315
Family Dollar Stores, Inc. 962,200 21,168
Solectron Corp. 207,800 19,312
Amazon.com, Inc. (b) 54,500 17,508
Maytag Corp. 265,700 16,540
Harley-Davidson, Inc. 239,800 11,361
Gucci Group 232,000 11,281
Lowe's Cos., Inc. 215,700 11,041
Cintas Corp. 152,300 10,728
-----------
215,149
Consumer Services 5.0%
Tricon Global Restaurants, Inc. (b) 481,800 24,150
Starbucks Corp. (b) 330,100 18,527
Jacor Communications, Inc. (b) 212,400 13,673
-----------
56,350
Consumer Staples 2.4%
Whitman Corp. 1,045,500 26,530
Energy 3.5%
Peco Energy Co. 391,700 16,305
Valero Energy Corp. 573,900 12,195
Unicom Corp. 277,200 10,690
-----------
39,190
Financial & Business Services 16.9%
Providian Financial Corp. 483,450 36,258
Firstar Corp. 331,360 30,899
Countrywide Credit Industries, Inc. 607,100 30,469
AFLAC, Inc. 512,200 22,537
Charles Schwab Corp. 399,300 22,436
PaineWebber Group, Inc. 422,300 16,311
Paychex, Inc. 309,100 15,899
Zions Bancorporation 245,200 15,294
-----------
190,103
Health Care 11.5%
Watson Pharmaceuticals, Inc. (b) 608,500 38,259
Allergan, Inc. 278,700 18,046
Biogen, Inc. 204,100 16,940
C.R. Bard, Inc. 268,400 13,286
Biomet, Inc. 310,900 12,514
Health Management Associates, Inc. `A' (b) 561,900 12,151
ALZA Corp. (b) 210,700 11,009
Immunex Corp. (b) 55,900 7,033
-----------
129,238
Technology 22.9%
American Power Conversion Corp. (b) 576,800 27,939
IMS Health, Inc. (b) 358,900 27,075
Symbol Technologies, Inc. 367,900 23,523
Maxim Integrated Products, Inc. (b) 502,600 21,957
Altera Corp. (b) 348,700 21,227
KLA-Tencor Corp. (b) 488,800 21,202
Unisys Corp. (b) 571,500 19,681
NCR Corp. (b) 423,600 17,685
3Com Corp. (b) 347,300 15,563
Inktomi Corp. 119,900 15,512
Synopsys, Inc. (b) 235,200 12,760
Flextronics International Limited 140,100 11,996
Rambus, Inc. 119,300 11,483
Micron Electronics, Inc. 520,000 9,003
-----------
256,606
Transportation 3.1%
Airborne Freight Corp. 502,700 18,129
Kansas City Southern Industries, Inc. 337,300 16,591
-----------
34,720
-----------
Total Common Stocks 1,041,719
(Cost $808,898) -----------
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 6.5%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreement 6.5%
State Street Bank
3.500% due 01/04/99 $ 72,442 72,442
(Dated 12/31/98. Collateralized by
U.S. Treasury Note 8.875% 02/15/19
valued at $22,896,789 and
U.S. Treasury Note 5.750% 04/30/03
valued at $51,002,688. Repurchase
proceeds are $72,470,171.)
-----------
Total Short-Term Instruments 72,442
(Cost $72,442) -----------
Total Investments (a) 99.3% $1,114,161
(Cost $881,340)
Other Assets and Liabilities (Net) 0.7% 8,709
-----------
Net Assets 100.0% $1,122,870
-----------
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 $ 237,105
Aggregate gross unrealized depreciation
for all investments in which there was an
excess of tax cost over value (4,284)
-----------
Unrealized appreciation-net $ 232,821
-----------
(b) Non-income producing security.
See accompanying notes 41
<PAGE>
Schedule of Investments
Small-Cap Value Fund
December 31, 1998 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 96.4%
- --------------------------------------------------------------------------------
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) -----------
42 See accompanying notes
<PAGE>
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 4.1%
- --------------------------------------------------------------------------------
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)
==============
43
<PAGE>
Schedule of Investments
Opportunity Fund
December 31, 1998 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 97.2%
- --------------------------------------------------------------------------------
Building 4.5%
Lone Star Industries, Inc. 356,000 $ 13,105
Champion Enterprises, Inc.(b) 200,000 5,475
D.R. Horton, Inc. 200,000 4,600
----------
23,180
Capital Goods 7.8%
MotivePower Industries, Inc(b) 638,900 20,565
Tower Automotive, Inc.(b) 800,000 19,950
----------
40,515
Communications 6.2%
WinStar Communications, Inc. (b) 575,000 22,425
Echostar Communications Corp. (b) 120,000 5,805
Mastec, Inc. (b) 185,000 3,885
----------
32,115
Consumer Discretionary 19.8%
The Men's Wearhouse, Inc. (b) 750,000 23,813
Linens`n Things, Inc. (b) 550,000 21,794
Mohawk Industries, Inc. (b) 450,000 18,928
Williams-Sonoma, Inc. (b) 350,000 14,109
Knoll, Inc. (b) 275,000 8,147
Petsmart, Inc. (b) 650,000 7,150
Micro Warehouse, Inc. (b) 200,000 6,763
Canandaigua Wine Co. `A' (b) 29,200 1,688
----------
102,392
Consumer Staples 1.3%
Adolph Coors Co. `B' 118,300 6,677
Energy 0.8%
Tidewater, Inc. 186,200 4,318
Financial & Business Services 3.7%
Golden State Bancorp, Inc. (b) 745,800 12,399
Golden State Bancorp, Inc. Warrants (b) 745,800 3,403
Fidelity National Financial, Inc. 110,000 3,355
----------
19,157
Health Care 9.8%
Medimmune, Inc. 150,000 14,916
IDEXX Laboratories, Inc. (b) 432,000 11,624
Barr Laboratories, Inc. (b) 240,000 11,520
ADAC Laboratories (b) 325,000 6,490
PSS World Medical, Inc. (b) 250,000 5,750
----------
50,300
Technology 42.0%
Network Appliance, Inc. (b) 684,600 30,805
Wind River Systems (b) 411,000 19,317
Gilat Satellite Networks Limited (b) 330,000 18,191
Veritas Software Corp. (b) 300,000 17,981
Electronics for Imaging, Inc. (b) 370,000 14,869
Rational Software Corp. 550,000 14,575
Lycos, Inc. (b) 261,100 14,507
The Reynolds & Reynolds Co. 500,000 11,469
Earthlink Network, Inc. (b) 200,500 11,429
Adaptec, Inc. (b) 500,000 8,781
Informix Corp. (b) 830,000 8,196
Vitesse Semiconductor Co. (b) 170,000 7,756
SMART Modular Technologies, Inc. (b) 275,000 7,631
Maxtor Corp. (b) 500,000 7,000
Learning Company, Inc. (b) 261,800 6,790
Psinet, Inc. (b) 277,500 5,793
Cypress Semiconductor Corp. (b) 600,000 4,988
Western Digital Corp. 275,000 4,142
Infoseek Corp. (b) 50,000 2,469
----------
216,689
Transportation 1.3%
Comair Holdings, Inc. 200,000 6,750
----------
Total Common Stocks 502,093
(Cost $344,991) ==========
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 4.6%
- --------------------------------------------------------------------------------
Repurchase Agreement 4.6%
State Street Bank
3.500% due 01/04/99 $ 23,815 $ 23,815
(Dated 12/31/98. Collateralized by
U.S. Treasury Note 7.125% 09/30/99
valued at $24,294,881. Repurchase
proceeds are $23,824,261.)
----------
Total Short-Term Instruments 23,815
(Cost $23,815) ----------
Total Investments (a) 101.8% $ 525,908
(Cost $368,805)
Written Options (c) (0.5%) (2,378)
(Premiums $1,200)
Other Assets and Liabilities (Net) (1.3%) (6,877)
----------
Net Assets 100.0% $ 516,653
==========
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. $ 161,450
Aggregate gross unrealized depreciation
for all investments in which there was an
excess of tax cost over value. (4,347)
----------
Unrealized appreciation-net $ 157,103
==========
(b) Non-income producing security.
(c) Premiums received on written options:
Type Contracts Premium Value
- --------------------------------------------------------------------------------
Call - OTC Medimmune, Inc.
Strike @ 80.00 Exp. 01/22/99 750 $ 560 $ 1,500
Call - OTC Network Appliance, Inc.
Strike @ 40.00 Exp. 01/22/99 900 155 439
Call - OTC Network Appliance, Inc.
Strike @ 45.00 Exp. 01/22/99 770 176 183
Call - OTC Veritas Software Corp.
Strike @ 60.00 Exp. 01/22/99 1,000 309 256
--------------------
$ 1,200 $ 2,378
====================
44 See accompanying notes
<PAGE>
Schedule of Investments
International Developed Fund
December 31, 1998 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 94.5%
- --------------------------------------------------------------------------------
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
See accompanying notes 45
<PAGE>
Schedule of Investments (Cont.)
International Developed Fund
December 31, 1998 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
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) =========
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.8%
- --------------------------------------------------------------------------------
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:
Unrealized
Type Contracts (Depreciation)
- --------------------------------------------------------------------------------
Osaka 300 Index (03/99) 10,000 $ (170)
(d) Foreign forward currency contracts outstanding at December 31, 1998:
Principal
Amount Unrealized
Covered Expiration Appreciation/
Type by Contract Month (Depreciation)
- --------------------------------------------------------------------------------
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
46 See accompanying notes
<PAGE>
Schedule of Investments
International Fund
December 31, 1998 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 95.8%
- --------------------------------------------------------------------------------
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
See accompanying notes 47
<PAGE>
Schedule of Investments (Cont.)
International Fund
December 31, 1998 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
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) ==========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 8.8%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
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:
Principal
Amount Unrealized
Covered by Expiration Appreciation/
Type Contract Month (Depreciation)
- --------------------------------------------------------------------------------
Sell DM 16,200 01/99 $ 72
Buy DM 16,200 01/99 (143)
----------
$ (71)
==========
(d) Principal amount denoted in indicated currency:
DM - German Mark
48 See accompanying notes
<PAGE>
Schedule of Investments
Emerging Markets Fund
December 31, 1998 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 99.6%
- --------------------------------------------------------------------------------
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
See accompanying notes 49
<PAGE>
Schedule of Investments (Cont.)
Emerging Markets Fund
December 31, 1998 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
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.
50 See accompanying notes
<PAGE>
Schedule of Investments
Innovation Fund
December 31, 1998 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 94.5%
- --------------------------------------------------------------------------------
Communications 6.8%
Qwest Communications International, Inc.(b) 305,000 $ 15,250
MCI WorldCom, Inc. 200,000 14,350
General Instrument Corp.(b) 370,000 12,557
-----------
42,157
Health Care 10.0%
Amgen, Inc. (b) 201,100 21,028
Sofamor Danek Group, Inc. (b) 120,000 14,610
Safeskin Corp. (b) 330,000 7,961
Quintiles Transnational Corp. (b) 145,000 7,739
Alpharma, Inc. `A' 190,000 6,709
Theragenics Corp. (b) 250,000 4,203
-----------
62,250
Technology 77.7%
America Online, Inc. (b) 379,800 54,976
Cisco Systems, Inc. (b) 345,000 32,020
Microsoft Corp. (b) 190,000 26,351
Intel Corp. 210,000 24,898
Compaq Computer Corp. (b) 582,500 24,429
International Business Machines Corp. 130,000 24,016
Micron Technology, Inc. (b) 450,000 22,753
3Com Corp. (b) 440,000 19,718
Nokia Corp. - ADR 160,000 19,270
Dell Computer Corp. (b) 255,000 18,663
Teradyne, Inc. (b) 430,000 18,221
Xilinx, Inc. (b) 275,000 17,909
Compuware Corp. (b) 222,000 17,344
Ascend Communications, Inc. (b) 250,000 16,438
Oracle Corp. (b) 340,000 14,663
Citrix Systems, Inc. (b) 150,000 14,559
EMC Corp. (b) 170,000 14,450
Veritas Software Corp. (b) 240,000 14,385
Yahoo, Inc. (b) 60,000 14,104
Altera Corp. (b) 200,000 12,175
Inktomi Corp. (b) 79,000 10,221
Business Objects SA SP - ADR (b) 300,000 9,750
Applied Materials, Inc. (b) 220,000 9,391
Tellabs, Inc. (b) 122,500 8,399
Maxim Integrated Products, Inc. (b) 160,000 6,990
Sun Microsystems, Inc. (b) 80,000 6,850
Novellus Systems, Inc. 135,000 6,683
Micron Electronics, Inc. 340,000 5,886
-----------
485,512
-----------
Total Common Stocks 589,919
(Cost $349,342) ===========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 8.2%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreement 8.2%
State Street Bank
3.500% due 01/04/99 $ 51,387 51,387
(Dated 12/31/98. Collateralized by
U.S. Treasury Note 6.125% 12/31/01
valued at $51,002,140 and
U.S. Treasury Note 5.750% 04/30/03
valued at $1,418,346. Repurchase
proceeds are $51,406,983.)
-----------
Total Short-Term Instruments 51,387
(Cost $51,387)
Total Investments (a) 102.7% $ 641,306
(Cost $400,729)
Written Options (c) (0.5%) (3,250)
(Premiums $323)
Other Assets and Liabilities (Net) (2.2%) (13,503)
-----------
Net Assets 100.0% $ 624,553
===========
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. $ 240,951
Aggregate gross unrealized depreciation
for all investments in which there was an
excess of tax cost over value. (374)
-----------
Unrealized appreciation-net $ 240,577
===========
(b) Non-income producing security.
(c) Premiums received on written options:
Type Contracts Premium Value
- --------------------------------------------------------------------------------
Call-OTC American Online, Inc.
Strike @ 95.00 Exp. 01/22/99 650 $ 323 $ 3,250
See accompanying notes 51
<PAGE>
Schedule of Investments
Precious Metals Fund
December 31, 1998 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 84.2%
- --------------------------------------------------------------------------------
Australia 8.4%
Normandy Mining Limited 500,000 $ 462
Acacia Resources Limited (b) 250,000 369
Sons of Gwalia Limited `A' 100,000 284
Delta Gold NL 170,000 258
Ranger Minerals NL (b) 104,000 254
Lihir Gold Limited (b) 200,000 224
Emperor Mines Limited (b) 190,000 70
-----------
1,921
Canada 27.5%
Meridian Gold, Inc. (b) 250,000 1,466
Barrick Gold Corp. 50,000 975
Placer Dome, Inc. 60,000 690
Euro-Nevada Mining Corp. 40,000 653
Franco-Nevada Mining Corp. Limited 32,500 623
Goldcorp, Inc. `A' (b) 55,000 316
Richmont Mines, Inc. (b) 110,000 284
Agnico-Eagle Mines Limited 60,000 248
IAMGOLD (b) 93,000 243
Battle Mountain Canada Limited 50,000 216
Barrick Gold Corp. 16,700 208
Cambior, Inc. 27,000 130
Namibian Minerals Corp. (b) 95,000 102
Romarco Minerals, Inc. (b) 45,000 44
Rio Narcea Gold Mines Limited (b) 20,000 33
Royal Oak Mines, Inc. (b) 60,000 15
-----------
6,246
Ghana 0.8%
Ashanti Goldfields Co. Limited SP - GDR 20,000 188
South Africa 24.3%
Anglo American Gold Investment Co. Limited 20,708 806
Harmony Gold Mining Co. Limited (b) 150,000 750
Western Areas Gold Mining Co. Limited 200,000 650
Gold Fields Limited (b) 102,106 563
Anglo American Gold Investment Co. Limited 13,000 486
Randfontein Estates Gold Mining Co. Witwatersrand 200,000 441
Driefontein Consolidated Limited SP - ADR 70,000 280
Durban Roodeport Deep Limited (b) 90,039 248
St. Helens Gold Mine - ADR 80,000 215
Anglo American Gold Investment Co. Limited - ADR 9,800 192
ASA Limited 12,000 187
Gold Fields Limited - ADR (b) 33,222 184
Driefontein Consolidated Limited 30,000 120
Durban Roodepoort Deep Limited SP - ADR (b) 41,961 120
Randgold & Exploration Co. Limited (b) 140,000 69
West Rand Consolidated Mines Limited (b) 50,000 55
Harmony Gold Mining Co. Limited SP - ADR (b) 10,000 48
Durban Roodepoort Deep Warrantes (b) 83,922 33
Standard Bank Investment Corp. Limited 9,621 29
Kalahari Goldridge Mining Co., Limited (b) 64,500 25
Durban Roodepoort Deep Options `B' (b) 20,980 7
Randfontein Estates Limited Warrants (b) 7,800 5
-----------
5,513
United Kingdom 0.5%
Rangold Resources Limited (b) 28,900 73
Reunion Mining PLC (b) 60,000 47
-----------
120
United States 22.7%
Getchell Gold Corp. (b) 80,000 2,180
Newmont Mining Corp. 60,000 1,084
Homestake Mining Co. 115,000 1,057
Battle Mountain Gold Co. 160,000 660
Royal Gold, Inc. (b) 46,000 167
-----------
5,148
-----------
Total Common Stocks 19,136
(Cost $24,395) ===========
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 2.2%
- --------------------------------------------------------------------------------
Repurchase Agreements 2.2%
State Street Bank $ 501 $ 501
(Dated 12/31/98. Collateralized by
U.S. Treasury Note 7.500% 02/15/05
valued at $515,900. Repurchase
proceeds are $501,195.)
-----------
Total Short-Term Instruments 501
(Cost $501) ===========
Total Investments (a) 86.4% $ 19,637
(Cost $24,896)
Other Assets and Liabilities (Net) 13.6% 3,080
-----------
Net Assets 100.0% $ 22,717
===========
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. $ 1,568
Aggregate gross unrealized depreciation
for all investments in which there was an
excess of tax cost over value. (6,827)
-----------
Unrealized depreciation-net $ (5,259)
===========
(b) Non-income producing security.
52 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 53
<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
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
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) ===========
54 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 55
<PAGE>
Financial Highlights - A, B and C 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) from Investment Investment
Year or Period Ended: of Period Income (Loss) on Investments Operations Income
--------------- -------------------- -------------------- --------------------- ------------
<S> <C> <C> <C> <C> <C>
Equity Income Fund
Class A
12/31/98 (a) $ 16.04 $ 0.19(b) $ (0.02)(b) $ 0.17 $ (0.18)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
06/30/98 15.39 0.39(b) 2.73 (b) 3.12 (0.38)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
01/20/97-06/30/97 13.94 0.15 1.48 1.63 (0.18)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
Class B
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
12/31/98 (a) 15.99 0.13 (b) (0.03)(b) 0.10 (0.13)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
06/30/98 15.37 0.26 (b) 2.73 (b) 2.99 (0.28)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
01/20/97-06/30/97 13.94 0.11 1.48 1.59 (0.16)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
Class C
12/31/98 (a) 16.01 0.13 (b) (0.02)(b) 0.11 (0.13)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
06/30/98 15.37 0.26 (b) 2.74 (b) 3.00 (0.27)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
01/20/97-06/30/97 13.94 0.11 1.48 1.59 (0.16)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
Value Fund
Class A
12/31/98(a) $ 15.64 $ 0.10 (b) $ 0.07 (b) $ 0.17 $ (0.10)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
06/30/98 14.80 0.19 (b) 2.46 (b) 2.65 (0.18)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
01/13/97-06/30/97 13.17 0.47 1.26 1.73 (0.10)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
Class B
12/31/98 (a) 15.63 0.05 (b) 0.06 (b) 0.11 (0.05)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
06/30/98 14.80 0.07 (b) 2.46 (b) 2.53 (0.07)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
01/13/97-06/30/97 13.16 0.44 1.26 1.70 (0.06)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
Class C
12/31/98 (a) 15.63 0.05 (b) 0.06 (b) 0.11 (0.05)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
06/30/98 14.80 0.07 (b) 2.46 (b) 2.53 (0.07)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
01/13/97-06/30/97 13.15 0.43 1.28 1.71 (0.06)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
Renaissance Fund
Class A
12/31/98 (a) $ 19.10 $ 0.01 (b) $ (0.40) (b) $ (0.39) $ 0.00
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
06/30/98 17.73 0.07 (b) 4.91 (b) 4.98 (0.08)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
10/01/96-06/30/97 16.08 0.12 (b) 3.90 (b) 4.02 (0.12)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
09/30/96 14.14 0.23 2.79 3.02 (0.23)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
09/30/95 12.50 0.36 1.61 1.97 (0.33)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
09/30/94 12.88 0.34 (0.17) 0.17 (0.33)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
Class B
12/31/98 (a) 19.06 (0.06) (b) (0.43) (b) (0.49) 0.00
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
06/30/98 17.77 (0.07) (b) 4.91 (b) 4.84 (0.02)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
10/01/96-06/30/97 16.12 0.03 (b) 3.92 (b) 3.95 (0.05)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
09/30/96 14.13 0.09 2.83 2.92 (0.11)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
05/22/95-09/30/95 12.55 0.11 1.55 1.66 (0.08)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
Class C
12/31/98 (a) 18.96 (0.06) (b) (0.40) (b) (0.46) 0.00
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
06/30/98 17.69 (0.07) (b) 4.88 (b) 4.81 (0.01)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
10/01/96-06/30/97 16.05 0.03 (b) 3.90 (b) 3.93 (0.04)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
09/30/96 14.09 0.12 2.78 2.90 (0.13)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
09/30/95 12.47 0.27 1.59 1.86 (0.24)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
09/30/94 12.85 0.24 (0.16) 0.08 (0.24)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
Tax Efficient Equity Fund
Class A
09/30/98-12/31/98 (a) $ 10.00 $ 0.01 (b) $ 0.52 (b) $ 0.53 $ 0.00
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
Class B
09/30/98-12/31/98 (a) 10.00 (0.02) (b) 0.51 (b) 0.49 0.00
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
Class C
09/30/98-12/31/98 (a) 10.00 (0.02) (b) 0.51 (b) 0.49 0.00
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
</TABLE>
* Annualized
(a) Unaudited
(b) Per share amounts based on average number of shares outstanding during the
period.
See accompanying notes
56
<PAGE>
<TABLE>
<CAPTION>
Dividends in
Excess of Net Distributions
Selected Per Share Data for the Investment from Net Realized Net Asset Value
Year or Period Ended: Income Capital Gains Total Distributions End of Period Total Return
- ---------------------------------- --------------- -------------------- -------------------- --------------------- ------------
<S> <C> <C> <C> <C> <C>
Equity Income Fund
Class A
12/31/98 (a) $ 0.00 $ (1.76) $ (1.94) $ 14.27 1.41%
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
06/30/98 0.00 (2.09) (2.47) 16.04 21.35
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
01/20/97-06/30/97 0.00 0.00 (0.18) 15.39 11.77
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
Class B
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
12/31/98 (a) 0.00 (1.76) (1.89) 14.20 0.97
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
06/30/98 0.00 (2.09) (2.37) 15.99 20.47
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
01/20/97-06/30/97 0.00 0.00 (0.16) 15.37 11.45
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
Class C
12/31/98 (a) 0.00 (1.76) (1.89) 14.23 1.02
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
06/30/98 0.00 (2.09) (2.36) 16.01 20.51
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
01/20/97-06/30/97 0.00 0.00 (0.16) 15.37 11.42
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
Value Fund
Class A
12/31/98(a) $ 0.00 $ (1.72) $ (1.82) $ 13.99 1.56%
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
06/30/98 0.00 (1.63) (1.81) 15.64 18.86
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
01/13/97-06/30/97 0.00 0.00 (0.10) 14.80 13.19
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
Class B
12/31/98 (a) 0.00 (1.72) (1.77) 13.97 1.17
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
06/30/98 0.00 (1.63) (1.70) 15.63 17.98
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
01/13/97-06/30/97 0.00 0.00 (0.06) 14.80 12.93
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
Class C
12/31/98 (a) 0.00 (1.72) (1.77) 13.97 1.16
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
06/30/98 0.00 (1.63) (1.70) 15.63 17.98
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
01/13/97-06/30/97 0.00 0.00 (0.06) 14.80 13.02
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
Renaissance Fund
Class A
12/31/98 (a) 0.00 $ (2.33) $ (2.33) $ 16.38 (1.10)%
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
06/30/98 0.00 (3.53) (3.61) 19.10 30.98
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
10/01/96-06/30/97 0.00 (2.25) (2.37) 17.73 27.53
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
09/30/96 (0.07) (0.78) (1.08) 16.08 22.37
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
09/30/95 0.00 0.00 (0.33) 14.14 16.10
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
09/30/94 0.00 (0.22) (0.55) 12.50 1.40
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
Class B
12/31/98 (a) 0.00 (2.33) (2.33) 16.24 (1.66)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
06/30/98 0.00 (3.53) (3.55) 19.06 29.99
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
10/01/96-06/30/97 0.00 (2.25) (2.30) 17.77 26.88
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
09/30/96 (0.04) (0.78) (0.93) 16.12 21.54
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
05/22/95-09/30/95 0.00 0.00 (0.08) 14.13 13.30
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
Class C
12/31/98 (a) 0.00 (2.33) (2.33) 16.17 (1.48)
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
06/30/98 0.00 (3.53) (3.54) 18.96 29.98
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
10/01/96-06/30/97 0.00 (2.25) (2.29) 17.69 26.86
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
09/30/96 (0.03) (0.78) (0.94) 16.05 21.52
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
09/30/95 0.00 0.00 (0.24) 14.09 15.20
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
09/30/94 0.00 (0.22) (0.46) 12.47 0.70
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
Tax Efficient Equity Fund
Class A
09/30/98-12/31/98 (a) 0.00 $ 0.00 $ 0.00 $ 10.53 5.32%
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
Class B
09/30/98-12/31/98 (a) 0.00 0.00 0.00 10.49 4.90
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
Class C
09/30/98-12/31/98 (a) 0.00 0.00 0.00 10.49 4.90
- ---------------------------------- --------------- -------------------- -------------------- --------------------- -----------
<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>
Equity Income Fund
Class A
12/31/98 (a) $ 15,361 1.11%* 2.48%* 38%
- ---------------------------------- --------------- ------------- -------------- ---------------
06/30/98 12,954 1.11 2.39 45
- ---------------------------------- --------------- ------------- -------------- ---------------
01/20/97-06/30/97 1,756 1.13* 2.85* 45
- ---------------------------------- --------------- ------------- -------------- ---------------
Class B
- ---------------------------------- --------------- ------------- -------------- ---------------
12/31/98 (a) 18,417 1.85* 1.71* 38
- ---------------------------------- --------------- ------------- -------------- ---------------
06/30/98 15,178 1.85 1.63 45
- ---------------------------------- --------------- ------------- -------------- ---------------
01/20/97-06/30/97 2,561 1.87* 2.11* 45
- ---------------------------------- --------------- ------------- -------------- ---------------
Class C
12/31/98 (a) 24,222 1.86* 1.69* 38
- ---------------------------------- --------------- ------------- -------------- ---------------
06/30/98 23,122 1.85 1.60 45
- ---------------------------------- --------------- ------------- -------------- ---------------
01/20/97-06/30/97 6,624 1.87* 2.15* 45
- ---------------------------------- --------------- ------------- -------------- ---------------
Value Fund
Class A
12/31/98(a) $ 19,868 1.11%* 1.39%* 47%
- ---------------------------------- --------------- ------------- -------------- ---------------
06/30/98 21,742 1.11 1.19 77
- ---------------------------------- --------------- ------------- -------------- ---------------
01/13/97-06/30/97 15,648 1.11* 1.71* 71
- ---------------------------------- --------------- ------------- -------------- ---------------
Class B
12/31/98 (a) 34,705 1.86* 0.69* 47
- ---------------------------------- --------------- ------------- -------------- ---------------
06/30/98 35,716 1.86 0.45 77
- ---------------------------------- --------------- ------------- -------------- ---------------
01/13/97-06/30/97 25,433 1.86* 0.96* 71
- ---------------------------------- --------------- ------------- -------------- ---------------
Class C
12/31/98 (a) 82,845 1.86* 0.68* 47
- ---------------------------------- --------------- ------------- -------------- ---------------
06/30/98 88,235 1.86 0.45 77
- ---------------------------------- --------------- ------------- -------------- ---------------
01/13/97-06/30/97 64,110 1.86* 0.97* 71
- ---------------------------------- --------------- ------------- -------------- ---------------
Renaissance Fund
Class A
12/31/98 (a) $ 85,787 1.26%* 0.10%* 104%
- ---------------------------------- --------------- ------------- -------------- ---------------
06/30/98 85,562 1.26 0.35 192
- ---------------------------------- --------------- ------------- -------------- ---------------
10/01/96-06/30/97 33,606 1.23* 0.95* 131
- ---------------------------------- --------------- ------------- -------------- ---------------
09/30/96 20,631 1.25 1.60 203
- ---------------------------------- --------------- ------------- -------------- ---------------
09/30/95 12,933 1.30 2.90 177
- ---------------------------------- --------------- ------------- -------------- ---------------
09/30/94 14,942 1.30 2.70 175
- ---------------------------------- --------------- ------------- -------------- ---------------
Class B
12/31/98 (a) 116,449 2.01* (0.64)* 104
- ---------------------------------- --------------- ------------- -------------- ---------------
06/30/98 100,688 2.01 (0.39) 192
- ---------------------------------- --------------- ------------- -------------- ---------------
10/01/96-06/30/97 37,253 1.97* 0.20* 131
- ---------------------------------- --------------- ------------- -------------- ---------------
09/30/96 15,693 2.00 0.85 203
- ---------------------------------- --------------- ------------- -------------- ---------------
05/22/95-09/30/95 1,760 2.10* 2.20* 177
- ---------------------------------- --------------- ------------- -------------- ---------------
Class C
12/31/98 (a) 432,876 2.01* (0.67)* 104
- ---------------------------------- --------------- ------------- -------------- ---------------
06/30/98 469,797 2.01 (0.37) 192
- ---------------------------------- --------------- ------------- -------------- ---------------
10/01/96-06/30/97 313,226 1.97* 0.21* 131
- ---------------------------------- --------------- ------------- -------------- ---------------
09/30/96 230,058 2.00 0.85 203
- ---------------------------------- --------------- ------------- -------------- ---------------
09/30/95 174,316 2.10 2.10 177
- ---------------------------------- --------------- ------------- -------------- ---------------
09/30/94 178,892 2.00 2.00 175
- ---------------------------------- --------------- ------------- -------------- ---------------
Tax Efficient Equity Fund
Class A
09/30/98-12/31/98 (a) $ 3,612 1.11%* 0.32%* 8%
- ---------------------------------- --------------- ------------- -------------- ---------------
Class B
09/30/98-12/31/98 (a) 2,727 1.86 (0.35) 8
- ---------------------------------- --------------- ------------- -------------- ---------------
Class C
09/30/98-12/31/98 (a) 5,733 1.86 (0.41) 8
- ---------------------------------- --------------- ------------- -------------- ---------------
</TABLE>
See accompanying notes 57
<PAGE>
Financial Highlights - A, B and C Classes
<TABLE>
<CAPTION>
Net Asset Net Realized /
Value Unrealized Total Income
Beginning Net Investment Gain (Loss) on from Investment
Selected Per Share Data for the Year or Period Ended: of Period Income (Loss) Investments Operations
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Appreciation Fund
Class A
12/31/98 (a) $ 26.01 $ 0.04 (b) $ 0.52 (b) $ 0.56
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 21.16 0.07 (b) 6.55 (b) 6.62
- ------------------------------------------------------------------------------------------------------------------------------------
01/20/97-06/30/97 19.31 0.09 1.76 1.85
- ------------------------------------------------------------------------------------------------------------------------------------
Class B
12/31/98 (a) 25.75 (0.05) (b) 0.52 (b) 0.47
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 21.10 (0.11) (b) 6.51 (b) 6.40
- ------------------------------------------------------------------------------------------------------------------------------------
01/20/97-06/30/97 19.31 0.01 1.78 1.79
- ------------------------------------------------------------------------------------------------------------------------------------
Class C
12/31/98 (a) 25.78 (0.05) (b) 0.51 (b) 0.46
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 21.10 (0.12) (b) 6.53 (b) 6.41
- ------------------------------------------------------------------------------------------------------------------------------------
01/20/97-06/30/97 19.31 0.02 1.77 1.79
- ------------------------------------------------------------------------------------------------------------------------------------
Growth Fund
Class A
12/31/98 (a) $ 32.62 $ (0.06) (b) $ 2.94 (b) $ 2.88
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 27.03 (0.08) (b) 9.99 (b) 9.91
- ------------------------------------------------------------------------------------------------------------------------------------
10/01/96-06/30/97 26.58 0.69 3.27 3.96
- ------------------------------------------------------------------------------------------------------------------------------------
09/30/96 25.73 0.06 3.72 3.78
- ------------------------------------------------------------------------------------------------------------------------------------
09/30/95 22.01 0.12 4.79 4.91
- ------------------------------------------------------------------------------------------------------------------------------------
09/30/94 23.64 0.12 0.12 0.24
- ------------------------------------------------------------------------------------------------------------------------------------
Class B
12/31/98 (a) 30.34 (0.16) (b) 2.69 (b) 2.53
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 25.59 (0.28) (b) 9.35 (b) 9.07
- ------------------------------------------------------------------------------------------------------------------------------------
10/01/96-06/30/97 25.46 0.35 3.29 3.64
- ------------------------------------------------------------------------------------------------------------------------------------
09/30/96 24.94 (0.07) 3.52 3.45
- ------------------------------------------------------------------------------------------------------------------------------------
05/23/95-09/30/95 22.63 (0.03) 2.34 2.31
- ------------------------------------------------------------------------------------------------------------------------------------
Class C
12/31/98 (a) 30.33 (0.16) (b) 2.69 (b) 2.53
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 25.58 (0.28) (b) 9.35 (b) 9.07
- ------------------------------------------------------------------------------------------------------------------------------------
10/01/96-06/30/97 25.46 0.45 3.18 3.63
- ------------------------------------------------------------------------------------------------------------------------------------
09/30/96 24.94 (0.12) 3.57 3.45
- ------------------------------------------------------------------------------------------------------------------------------------
09/30/95 21.52 (0.04) 4.65 4.61
- ------------------------------------------------------------------------------------------------------------------------------------
09/30/94 23.32 (0.04) 0.11 0.07
- ------------------------------------------------------------------------------------------------------------------------------------
Value 25 Fund
Class A
07/10/98-12/31/98 (a) $ 10.00 $ 0.12 (b) $ (1.64) (b) $ (1.52)
- ------------------------------------------------------------------------------------------------------------------------------------
Class B
07/10/98-12/31/98 (a) 10.00 0.09 (b) (1.62) (b) (1.53)
- ------------------------------------------------------------------------------------------------------------------------------------
Class C
07/10/98-12/31/98 (a) 10.00 0.08 (b) (1.59) (b) (1.51)
- ------------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Growth Fund
Class A
12/31/98 (a) $ 24.00 $ 0.01 (b) $ 0.04 (b) $ 0.05
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 20.24 0.02 (b) 5.11 (b) 5.13
- ------------------------------------------------------------------------------------------------------------------------------------
01/13/97-06/30/97 18.14 (0.04) 2.14 2.10
- ------------------------------------------------------------------------------------------------------------------------------------
Class B
12/31/98 (a) 23.77 (0.07) (b) 0.04 (b) (0.03)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 20.17 (0.16) (b) 5.09 (b) 4.93
- ------------------------------------------------------------------------------------------------------------------------------------
01/13/97-06/30/97 18.14 (0.11) 2.14 2.03
- ------------------------------------------------------------------------------------------------------------------------------------
Class C
12/31/98 (a) 23.77 (0.07) (b) 0.04 (b) (0.03)
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 20.18 (0.16) (b) 5.08 (b) 4.92
- ------------------------------------------------------------------------------------------------------------------------------------
01/13/97-06/30/97 18.14 (0.10) 2.14 2.04
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized
(a) Unaudited
(b) Per share amounts based on average number of shares outstanding during the
period.
58 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Dividends
from Net Distributions
Investment from Net Realized Net Asset Value
Income Capital Gains Total Distributions End of Period Total Return
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Capital Appreciation Fund
Class A
12/31/98 (a) $ (0.10) $ (1.65) $ (1.75) $ 24.82 2.58%
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 (0.09) (1.68) (1.77) 26.01 32.39
- ------------------------------------------------------------------------------------------------------------------------------------
01/20/97-06/30/97 0.00 0.00 0.00 21.16 9.58
- ------------------------------------------------------------------------------------------------------------------------------------
Class B
12/31/98 (a) 0.00 (1.65) (1.65) 24.57 2.24
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 (0.07) (1.68) (1.75) 25.75 31.39
- ------------------------------------------------------------------------------------------------------------------------------------
01/20/97-06/30/97 0.00 0.00 0.00 21.10 9.27
- ------------------------------------------------------------------------------------------------------------------------------------
Class C
12/31/98 (a) 0.00 (1.65) (1.65) 24.59 2.19
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 (0.05) (1.68) (1.73) 25.78 31.40
- ------------------------------------------------------------------------------------------------------------------------------------
01/20/97-06/30/97 0.00 0.00 0.00 21.10 9.27
- ------------------------------------------------------------------------------------------------------------------------------------
Growth Fund
Class A
12/31/98 (a) $ 0.00 $ (3.92) $ (3.92) $ 31.58 9.82%
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 0.00 (4.32) (4.32) 32.62 41.03
- ------------------------------------------------------------------------------------------------------------------------------------
10/01/96-06/30/97 0.00 (3.51) (3.51) 27.03 15.93
- ------------------------------------------------------------------------------------------------------------------------------------
09/30/96 0.00 (2.93) (2.93) 26.58 16.11
- ------------------------------------------------------------------------------------------------------------------------------------
09/30/95 0.00 (1.19) (1.19) 25.73 23.70
- ------------------------------------------------------------------------------------------------------------------------------------
09/30/94 0.00 (1.87) (1.87) 22.01 1.30
- ------------------------------------------------------------------------------------------------------------------------------------
Class B
12/31/98 (a) 0.00 (3.92) (3.92) 28.95 9.40
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 0.00 (4.32) (4.32) 30.34 39.97
- ------------------------------------------------------------------------------------------------------------------------------------
10/01/96-06/30/97 0.00 (3.51) (3.51) 25.59 15.32
- ------------------------------------------------------------------------------------------------------------------------------------
09/30/96 0.00 (2.93) (2.93) 25.46 15.22
- ------------------------------------------------------------------------------------------------------------------------------------
05/23/95-09/30/95 0.00 0.00 0.00 24.94 10.20
- ------------------------------------------------------------------------------------------------------------------------------------
Class C
12/31/98 (a) 0.00 (3.92) (3.92) 28.94 9.40
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 0.00 (4.32) (4.32) 30.33 39.99
- ------------------------------------------------------------------------------------------------------------------------------------
10/01/96-06/30/97 0.00 (3.51) (3.51) 25.58 15.27
- ------------------------------------------------------------------------------------------------------------------------------------
09/30/96 0.00 (2.93) (2.93) 25.46 15.22
- ------------------------------------------------------------------------------------------------------------------------------------
09/30/95 0.00 (1.19) (1.19) 24.94 22.80
- ------------------------------------------------------------------------------------------------------------------------------------
09/30/94 0.00 (1.87) (1.87) 21.52 0.50
- ------------------------------------------------------------------------------------------------------------------------------------
Value 25 Fund
Class A
07/10/98-12/31/98 (a) $ 0.00 $ 0.00 $ 0.00 $ 8.48 (14.68)%
- ------------------------------------------------------------------------------------------------------------------------------------
Class B
07/10/98-12/31/98 (a) 0.00 0.00 0.00 8.47 (14.98)
- ------------------------------------------------------------------------------------------------------------------------------------
Class C
07/10/98-12/31/98 (a) 0.00 0.00 0.00 8.49 (14.91)
- ------------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Growth Fund
Class A
12/31/98 (a) $ (0.01) $ (1.07) $ (1.08) $ 22.97 0.52%
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 (0.04) (1.33) (1.37) 24.00 25.71
- ------------------------------------------------------------------------------------------------------------------------------------
01/13/97-06/30/97 0.00 0.00 0.00 20.24 11.58
- ------------------------------------------------------------------------------------------------------------------------------------
Class B
12/31/98 (a) 0.00 (1.07) (1.07) 22.67 0.20
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 0.00 (1.33) (1.33) 23.77 24.76
- ------------------------------------------------------------------------------------------------------------------------------------
01/13/97-06/30/97 0.00 0.00 0.00 20.17 11.19
- ------------------------------------------------------------------------------------------------------------------------------------
Class C
12/31/98 (a) 0.00 (1.07) (1.07) 22.67 0.20
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 0.00 (1.33) (1.33) 23.77 24.70
- ------------------------------------------------------------------------------------------------------------------------------------
01/13/97-06/30/97 0.00 0.00 0.00 20.18 11.25
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses Income (Loss)
Net Assets End to Average to Average Portfolio
of Period (000s) Net Assets Net Assets Turnover Rate
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Appreciation Fund
Class A
12/31/98 (a) $ 96,706 1.11%* 0.35%* 62%
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 72,803 1.10 0.27 75
- ------------------------------------------------------------------------------------------------------------------------------------
01/20/97-06/30/97 6,534 1.11* 0.59* 87
- ------------------------------------------------------------------------------------------------------------------------------------
Class B
12/31/98 (a) 50,845 1.86* (0.42)* 62
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 40,901 1.85 (0.47) 75
- ------------------------------------------------------------------------------------------------------------------------------------
01/20/97-06/30/97 3,022 1.85* (0.26)* 87
- ------------------------------------------------------------------------------------------------------------------------------------
Class C
12/31/98 (a) 80,709 1.86* (0.42)* 62
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 71,481 1.85 (0.49) 75
- ------------------------------------------------------------------------------------------------------------------------------------
01/20/97-06/30/97 13,093 1.86* (0.23)* 87
- ------------------------------------------------------------------------------------------------------------------------------------
Growth Fund
Class A
12/31/98 (a) $ 202,520 1.16%* (0.41)%* 53%
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 180,119 1.16 (0.27) 123
- ------------------------------------------------------------------------------------------------------------------------------------
10/01/96-06/30/97 147,276 1.11* 0.13* 94
- ------------------------------------------------------------------------------------------------------------------------------------
09/30/96 151,103 1.11 0.24 104
- ------------------------------------------------------------------------------------------------------------------------------------
09/30/95 134,819 1.10 0.50 111
- ------------------------------------------------------------------------------------------------------------------------------------
09/30/94 107,269 1.10 0.60 115
- ------------------------------------------------------------------------------------------------------------------------------------
Class B
12/31/98 (a) 100,937 1.90* (1.16)* 53
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 80,719 1.91 (1.02) 123
- ------------------------------------------------------------------------------------------------------------------------------------
10/01/96-06/30/97 55,626 1.86* (0.62)* 94
- ------------------------------------------------------------------------------------------------------------------------------------
09/30/96 37,256 1.86 (0.51) 104
- ------------------------------------------------------------------------------------------------------------------------------------
05/23/95-09/30/95 7,671 1.90* (0.40)* 111
- ------------------------------------------------------------------------------------------------------------------------------------
Class C
12/31/98 (a) 1,936,842 1.91* (1.16)* 53
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 1,853,002 1.91 (1.02) 123
- ------------------------------------------------------------------------------------------------------------------------------------
10/01/96-06/30/97 1,514,432 1.86* (0.61)* 94
- ------------------------------------------------------------------------------------------------------------------------------------
09/30/96 1,450,216 1.86 (0.51) 104
- ------------------------------------------------------------------------------------------------------------------------------------
09/30/95 1,290,152 1.90 (0.20) 111
- ------------------------------------------------------------------------------------------------------------------------------------
09/30/94 1,085,427 1.90 (0.20) 115
- ------------------------------------------------------------------------------------------------------------------------------------
Value 25 Fund
Class A
07/10/98-12/31/98 (a) $ 500 1.15%* 2.95%* 35%
- ------------------------------------------------------------------------------------------------------------------------------------
Class B
07/10/98-12/31/98 (a) 701 1.90 2.17 35
- ------------------------------------------------------------------------------------------------------------------------------------
Class C
07/10/98-12/31/98 (a) 649 1.90 1.98 35
- ------------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Growth Fund
Class A
12/31/98 (a) $ 110,426 1.10%* 0.09%* 45%
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 57,164 1.11 0.07 66
- ------------------------------------------------------------------------------------------------------------------------------------
01/13/97-06/30/97 12,184 1.11* 0.17* 82
- ------------------------------------------------------------------------------------------------------------------------------------
Class B
12/31/98 (a) 93,857 1.86* (0.68)* 45
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 84,535 1.86 (0.68) 66
- ------------------------------------------------------------------------------------------------------------------------------------
01/13/97-06/30/97 28,259 1.85* (0.58)* 82
- ------------------------------------------------------------------------------------------------------------------------------------
Class C
12/31/98 (a) 138,504 1.86* (0.69)* 45
- ------------------------------------------------------------------------------------------------------------------------------------
06/30/98 140,438 1.86 (0.68) 66
- ------------------------------------------------------------------------------------------------------------------------------------
01/13/97-06/30/97 53,686 1.86* (0.58)* 82
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes 59
<PAGE>
Financial Highlights - A, B and C Classes
<TABLE>
<CAPTION>
Net Asset Net Realized / Dividends
Value Unrealized Total Income from Net
Selected Per Share Data Beginning Net Investment Gain (Loss) on from Investment Investment
for the Year or Period Ended: of Period Income (Loss) Investments Operations Income
<S> <C> <C> <C> <C> <C>
Target Fund
Class A
12/31/98 (a) $ 16.35 $ (0.03) $ 0.78(b) $ 0.75 $ 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 16.82 (0.08)(b) 4.06(b) 3.98 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
10/01/96-06/30/97 17.11 (0.04)(b) 1.82(b) 1.78 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/96 16.40 (0.05) 2.54 2.49 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/95 13.13 (0.02) 3.45 3.43 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/94 12.72 (0.04) 0.57 0.53 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
Class B
12/31/98 (a) 15.34 (0.08)(b) 0.72(b) 0.64 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 16.14 (0.19)(b) 3.84(b) 3.65 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
10/01/96-06/30/97 16.58 (0.12)(b) 1.75(b) 1.63 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/96 16.06 (0.09) 2.39 2.30 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
05/22/95-09/30/95 13.93 (0.05) 2.18 2.13 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
Class C
12/31/98 (a) 15.34 (0.08)(b) 0.72(b) 0.64 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 16.13 (0.19)(b) 3.85(b) 3.66 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
10/01/96-06/30/97 16.58 (0.12)(b) 1.74(b) 1.62 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/96 16.05 (0.16) 2.47 2.31 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/95 12.95 (0.12) 3.38 3.26 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/94 12.65 (0.14) 0.56 0.42 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
Small-Cap Value Fund
Class A
12/31/98 (a) $ 17.58 $ 0.12(b) $ (1.82)(b) $ (1.70) $ (0.17)
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 15.75 0.23(b) 2.49(b) 2.72 (0.13)
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
01/20/97-06/30/97 14.02 0.10 1.63 1.73 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
Class B
12/31/98 (a) 17.43 0.06(b) (1.80)(b) (1.74) (0.06)
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 15.71 0.09(b) 2.48(b) 2.57 (0.09)
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
01/20/97-06/30/97 14.02 0.08 1.61 1.69 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
Class C
12/31/98 (a) 17.44 0.06(b) (1.81)(b) (1.75) (0.04)
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 15.71 0.09(b) 2.49(b) 2.58 (0.09)
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
01/20/97-06/30/97 14.02 0.08 1.61 1.69 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
Opportunity Fund
Class A
12/31/98 (a) $ 31.33 $ (0.12)(b) $ (2.55)(b) $ (2.67) $ 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 29.35 (0.27)(b) 4.19(b) 3.92 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
10/01/96-06/30/97 37.36 0.00 (3.10) (3.10) 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/96 39.08 (0.11) 6.12 6.01 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/95 28.87 (0.11) 11.19 11.08 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/94 33.43 (0.17) (2.02) (2.19) 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
Class C
12/31/98 (a) 28.86 (0.20)(b) (2.37)(b) (2.57) 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 27.38 (0.46)(b) 3.88(b) 3.42 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
10/01/96-06/30/97 35.38 (0.04) (3.05) (3.09) 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/96 37.64 (0.35) 5.82 5.47 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/95 28.04 (0.34) 10.81 10.47 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/94 32.77 (0.38) (1.98) (2.36) 0.00
- --------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
</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>
Distributions
Selected Per Share Data from Net Realized Tax Basis Total Net Asset Value
for the Year or Period Ended: Capital Gains Return of Capital Distributions End of Period Total Return
---------------- ------------------ ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Target Fund
Class A
12/31/98 (a) $ (0.98) $ 0.00 $ (0.98) $ 16.12 5.24%
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
06/30/98 (4.45) 0.00 (4.45) 16.35 27.49
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
10/01/96-06/30/97 (2.07) 0.00 (2.07) 16.82 11.19
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
09/30/96 (1.78) 0.00 (1.78) 17.11 16.50
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
09/30/95 (0.16) 0.00 (0.16) 16.40 26.50
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
09/30/94 (0.12) 0.00 (0.12) 13.13 4.20
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
Class B
12/31/98 (a) (0.98) 0.00 (0.98) 15.00 4.87
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
06/30/98 (4.45) 0.00 (4.45) 15.34 26.45
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
10/01/96-06/30/97 (2.07) 0.00 (2.07) 16.14 10.58
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
09/30/96 (1.78) 0.00 (1.78) 16.58 15.58
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
05/22/95-09/30/95 0.00 0.00 0.00 16.06 15.30
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
Class C
12/31/98 (a) (0.98) 0.00 (0.98) 15.00 4.87
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
06/30/98 (4.45) 0.00 (4.45) 15.34 26.53
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
10/01/96-06/30/97 (2.07) 0.00 (2.07) 16.13 10.52
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
09/30/96 (1.78) 0.00 (1.78) 16.58 15.66
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
09/30/95 (0.16) 0.00 (0.16) 16.05 25.60
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
09/30/94 (0.12) 0.00 (0.12) 12.95 3.40
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
Small-Cap Value Fund
Class A
12/31/98 (a) $ (0.45) $ 0.00 $ (0.62) $ 15.26 (9.48)%
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
06/30/98 (0.76) 0.00 (0.89) 17.58 17.33
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
01/20/97-06/30/97 0.00 0.00 0.00 15.75 12.34
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
Class B
12/31/98 (a) (0.45) 0.00 (0.51) 15.18 (9.85)
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
06/30/98 (0.76) 0.00 (0.85) 17.43 16.40
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
01/20/97-06/30/97 0.00 0.00 0.00 15.71 12.05
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
Class C
12/31/98 (a) (0.45) 0.00 (0.49) 15.20 (9.89)
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
06/30/98 (0.76) 0.00 (0.85) 17.44 16.42
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
01/20/97-06/30/97 0.00 0.00 0.00 15.71 12.05
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
Opportunity Fund
Class A
12/31/98 (a) $ (4.62) $ 0.00 $ (4.62) $ 24.04 (7.28)%
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
06/30/98 (1.94) 0.00 (1.94) 31.33 13.87
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
10/01/96-06/30/97 (4.91) 0.00 (4.91) 29.35 (8.87)
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
09/30/96 (7.73) 0.00 (7.73) 37.36 18.35
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
09/30/95 (0.87) 0.00 (0.87) 39.08 39.70
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
09/30/94 (2.26) (0.11) (2.37) 28.87 (6.70)
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
Class C
12/31/98 (a) (4.62) 0.00 (4.62) 21.67 (7.55)
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
06/30/98 (1.94) 0.00 (1.94) 28.86 13.01
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
10/01/96-06/30/97 (4.91) 0.00 (4.91) 27.38 (9.40)
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
09/30/96 (7.73) 0.00 (7.73) 35.38 17.47
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
09/30/95 (0.87) 0.00 (0.87) 37.64 38.60
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
09/30/94 (2.26) (0.11) (2.37) 28.04 (7.40)
- --------------------------------- ---------------- ------------------ ---------------- ---------------- ----------------
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses Income (Loss)
Selected Per Share Data Net Assets End to Average to Average Portfolio
for the Year or Period Ended: of Period (000s) Net Assets Net Assets Turnover Rate
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Target Fund
Class A
12/31/98 (a) $ 144,643 1.21%* (0.44)%* 128%
- --------------------------------- ---------------- ---------------- ---------------- ----------------
06/30/98 157,277 1.22 (0.49) 226
- --------------------------------- ---------------- ---------------- ---------------- ----------------
10/01/96-06/30/97 150,689 1.20* (0.31)* 145
- --------------------------------- ---------------- ---------------- ---------------- ----------------
09/30/96 156,027 1.18 (0.34) 141
- --------------------------------- ---------------- ---------------- ---------------- ----------------
09/30/95 121,915 1.20 (0.10) 128
- --------------------------------- ---------------- ---------------- ---------------- ----------------
09/30/94 90,527 1.20 (0.30) 104
- --------------------------------- ---------------- ---------------- ---------------- ----------------
Class B
12/31/98 (a) 73,872 1.95* (1.18)* 128
- --------------------------------- ---------------- ---------------- ---------------- ----------------
06/30/98 76,194 1.96 (1.24) 226
- --------------------------------- ---------------- ---------------- ---------------- ----------------
10/01/96-06/30/97 67,531 1.94* (1.05)* 145
- --------------------------------- ---------------- ---------------- ---------------- ----------------
09/30/96 49,851 1.93 (1.09) 141
- --------------------------------- ---------------- ---------------- ---------------- ----------------
05/22/95-09/30/95 7,554 2.00* (0.90)* 128
- --------------------------------- ---------------- ---------------- ---------------- ----------------
Class C
12/31/98 (a) 904,355 1.95* (1.18)* 128
- --------------------------------- ---------------- ---------------- ---------------- ----------------
06/30/98 952,728 1.96 (1.24) 226
- --------------------------------- ---------------- ---------------- ---------------- ----------------
10/01/96-06/30/97 969,317 1.94* (1.06)* 145
- --------------------------------- ---------------- ---------------- ---------------- ----------------
09/30/96 974,948 1.93 (1.09) 141
- --------------------------------- ---------------- ---------------- ---------------- ----------------
09/30/95 780,355 2.00 (0.90) 128
- --------------------------------- ---------------- ---------------- ---------------- ----------------
09/30/94 556,043 2.00 (1.10) 104
- --------------------------------- ---------------- ---------------- ---------------- ----------------
Small-Cap Value Fund
Class A
12/31/98 (a) $ 94,203 1.26%* 1.59%* 24%
- --------------------------------- ---------------- ---------------- ---------------- ----------------
06/30/98 75,070 1.25 1.27 41
- --------------------------------- ---------------- ---------------- ---------------- ----------------
01/20/97-06/30/97 6,563 1.30* 1.94* 48
- --------------------------------- ---------------- ---------------- ---------------- ----------------
Class B
12/31/98 (a) 107,758 2.01* 0.80* 24
- --------------------------------- ---------------- ---------------- ---------------- ----------------
06/30/98 110,833 2.00 0.53 41
- --------------------------------- ---------------- ---------------- ---------------- ----------------
01/20/97-06/30/97 11,077 2.04* 1.23* 48
- --------------------------------- ---------------- ---------------- ---------------- ----------------
Class C
12/31/98 (a) 119,567 2.01* 0.80* 24
- --------------------------------- ---------------- ---------------- ---------------- ----------------
06/30/98 130,466 2.00 0.52 41
- --------------------------------- ---------------- ---------------- ---------------- ----------------
01/20/97-06/30/97 20,637 2.05* 1.13* 48
- --------------------------------- ---------------- ---------------- ---------------- ----------------
Opportunity Fund
Class A
12/31/98 (a) $ 144,001 1.31%* (0.91)%* 41%
- --------------------------------- ---------------- ---------------- ---------------- ----------------
06/30/98 200,935 1.31 (0.88) 86
- --------------------------------- ---------------- ---------------- ---------------- ----------------
10/01/96-06/30/97 213,484 1.25* (0.12)* 69
- --------------------------------- ---------------- ---------------- ---------------- ----------------
09/30/96 134,859 1.13 (0.32) 91
- --------------------------------- ---------------- ---------------- ---------------- ----------------
09/30/95 120,830 1.20 (0.40) 102
- --------------------------------- ---------------- ---------------- ---------------- ----------------
09/30/94 95,261 1.10 (0.60) 78
- --------------------------------- ---------------- ---------------- ---------------- ----------------
Class C
12/31/98 (a) 372,652 2.06* (1.69)* 41
- --------------------------------- ---------------- ---------------- ---------------- ----------------
06/30/98 500,011 2.06 (1.63) 86
- --------------------------------- ---------------- ---------------- ---------------- ----------------
10/01/96-06/30/97 629,446 1.97* (0.95)* 69
- --------------------------------- ---------------- ---------------- ---------------- ----------------
09/30/96 800,250 1.88 (1.07) 91
- --------------------------------- ---------------- ---------------- ---------------- ----------------
09/30/95 715,191 1.90 (1.10) 102
- --------------------------------- ---------------- ---------------- ---------------- ----------------
09/30/94 553,460 1.90 (1.40) 78
- --------------------------------- ---------------- ---------------- ---------------- ----------------
</TABLE>
See accompanying notes 61
<PAGE>
Financial Highlights - A, B and C Classes
<TABLE>
<CAPTION>
Net Asset Net Realized / Dividends
Value Unrealized Total Income from Net
Selected Per Share Data Beginning Net Investment Gain (Loss) from Investment Investment
for the Year or Period Ended: of Period Income (Loss) on Investments Operations Income
---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
International Developed Fund
Class A
12/31/98 (a) $ 14.26 $ (0.03)(b) $ (0.07)(b) $ (0.10) $ 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 13.08 0.18(b) 1.68(b) 1.86 (0.10)
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
01/20/97-06/30/97 11.71 0.09(b) 1.28(b) 1.37 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
Class B
12/31/98 (a) 14.14 (0.08)(b) (0.08)(b) (0.16) 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 13.06 0.01(b) 1.71(b) 1.72 (0.06)
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
01/20/97-06/30/97 11.71 0.06(b) 1.29(b) 1.35 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
Class C
12/31/98 (a) 14.15 (0.08)(b) (0.08)(b) (0.16) 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 13.06 0.02(b) 1.71(b) 1.73 (0.06)
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
01/20/97-06/30/97 11.71 0.06(b) 1.29(b) 1.35 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
International Fund
Class A
12/31/98 (a) $ 14.33 $ (0.04)(b) $ (1.27)(b) $ (1.31) $ 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 14.26 0.06(b) 1.13(b) 1.19 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
10/01/96-06/30/97 13.03 0.29 1.33 1.62 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/96 12.19 0.07 0.77 0.84 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/95 12.92 0.07 (0.56) (0.49) 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/94 12.17 0.04 0.94 0.98 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
Class B
12/31/98 (a) 13.46 (0.09)(b) (1.22)(b) (1.31) 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 13.56 (0.05)(b) 1.07(b) 1.02 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
10/01/96-06/30/97 12.48 0.16 1.31 1.47 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/96 11.75 0.00(b) 0.73(b) 0.73 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
05/22/95-09/30/95 11.30 0.00 0.45 0.45 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
Class C
12/31/98 (a) 13.45 (0.09)(b) (1.22)(b) (1.31) 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 13.55 (0.06)(b) 1.08(b) 1.02 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
10/01/96-06/30/97 12.47 0.18 1.29 1.47 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/96 11.75 (0.05) 0.77 0.72 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/95 12.56 (0.02) (0.55) (0.57) 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/94 11.92 (0.06) 0.93 0.87 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
Emerging Markets Fund
Class A
12/31/98 (a) $ 10.12 $ 0.03(b) $ (1.71)(b) $ (1.68) $ (0.05)
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 13.94 0.03(b) (3.85)(b) (3.82) 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
01/20/97-06/30/97 12.82 0.09(b) 1.03(b) 1.12 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
Class B
12/31/98 (a) 10.02 0.00(b) (1.70)(b) (1.70) 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 13.89 (0.06)(b) (3.81)(b) (3.87) 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
01/20/97-06/30/97 12.82 0.03(b) 1.04(b) 1.07 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
Class C
12/31/98 (a) 10.02 0.00(b) (1.70)(b) (1.70) 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 13.89 (0.06)(b) (3.81)(b) (3.87) 0.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
01/20/97-06/30/97 12.82 0.04(b) 1.03(b) 1.07 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>
Distributions Distributions
from in Excess of
Selected Per Share Data Net Realized Net Realized Total Net Asset Value
for the Year or Period Ended: Capital Gains Capital Gains Distributions End of Period Total Return
---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
International Developed Fund
Class A
12/31/98 (a) $ (0.15) $ 0.00 $ (0.15) $ 14.01 $ (0.67)%
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 (0.58) 0.00 (0.68) 14.26 15.49
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
01/20/97-06/30/97 0.00 0.00 0.00 13.08 11.70
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
Class B
12/31/98 (a) (0.15) 0.00 (0.15) 13.83 (1.10)
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 (0.58) 0.00 (0.64) 14.14 14.32
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
01/20/97-06/30/97 0.00 0.00 0.00 13.06 11.53
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
Class C
12/31/98 (a) (0.15) 0.00 (0.15) 13.84 (1.10)
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 (0.58) 0.00 (0.64) 14.15 14.38
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
01/20/97-06/30/97 0.00 0.00 0.00 13.06 11.53
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
International Fund
Class A
12/31/98 (a) $ (1.15) $ 0.00 $ (1.15) $ 11.87 (8.76)%
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 (0.82) (0.30) (1.12) 14.33 9.95
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
10/01/96-06/30/97 (0.39) 0.00 (0.39) 14.26 12.82
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/96 0.00 0.00 0.00 13.03 6.89
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/95 (0.24) 0.00 (0.24) 12.19 (3.70)
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/94 (0.23) 0.00 (0.23) 12.92 8.20
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
Class B
12/31/98 (a) (1.15) 0.00 (1.15) 11.00 (9.35)
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 (0.82) (0.30) (1.12) 13.46 9.17
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
10/01/96-06/30/97 (0.39) 0.00 (0.39) 13.56 12.17
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/96 0.00 0.00 0.00 12.48 6.21
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
05/22/95-09/30/95 0.00 0.00 0.00 11.75 4.00
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
Class C
12/31/98 (a) (1.15) 0.00 (1.15) 10.99 (9.36)
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 (0.82) (0.30) (1.12) 13.45 9.18
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
10/01/96-06/30/97 (0.39) 0.00 (0.39) 13.55 12.18
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/96 0.00 0.00 0.00 12.47 6.13
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/95 (0.24) 0.00 (0.24) 11.75 (4.50)
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
09/30/94 (0.23) 0.00 (0.23) 12.56 7.40
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
Emerging Markets Fund
Class A
12/31/98 (a) $ 0.00 $ 0.00 $ (0.05) $ 8.39 (16.63)%
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 0.00 0.00 0.00 10.12 (27.40)
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
01/20/97-06/30/97 0.00 0.00 0.00 13.94 8.74
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
Class B
12/31/98 (a) 0.00 0.00 0.00 8.32 (16.97)
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 0.00 0.00 0.00 10.02 (27.86)
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
01/20/97-06/30/97 0.00 0.00 0.00 13.89 8.35
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
Class C
12/31/98 (a) 0.00 0.00 0.00 8.32 (16.97)
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
06/30/98 0.00 0.00 0.00 10.02 (27.86)
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
01/20/97-06/30/97 0.00 0.00 0.00 13.89 8.35
- -------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
<CAPTION>
Ratio of Net
Ratio of Investment
Net Assets Expense Income (Loss)
Selected Per Share Data End of to Average to Average Portfolio
for the Year or Period Ended: Period (000s) Net Assets Net Assets Turnover Rate
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
International Developed Fund
Class A
12/31/98 (a) $ 1,494 1.54%* (0.40)%* 20%
- -------------------------------- ---------------- ---------------- ---------------- ----------------
06/30/98 1,061 1.57 1.38 60
- -------------------------------- ---------------- ---------------- ---------------- ----------------
01/20/97-06/30/97 318 1.54* 1.74* 77
- -------------------------------- ---------------- ---------------- ---------------- ----------------
Class B
12/31/98 (a) 2,698 2.34* (1.27)* 20
- -------------------------------- ---------------- ---------------- ---------------- ----------------
06/30/98 2,902 2.25 0.08 60
- -------------------------------- ---------------- ---------------- ---------------- ----------------
01/20/97-06/30/97 1,123 2.28* 1.08* 77
- -------------------------------- ---------------- ---------------- ---------------- ----------------
Class C
12/31/98 (a) 6,034 2.34* (1.27)* 20
- -------------------------------- ---------------- ---------------- ---------------- ----------------
06/30/98 6,363 2.25 0.19 60
- -------------------------------- ---------------- ---------------- ---------------- ----------------
01/20/97-06/30/97 2,526 2.28* 1.07* 77
- -------------------------------- ---------------- ---------------- ---------------- ----------------
International Fund
Class A
12/31/98 (a) $ 8,659 1.62%* (0.65)% 17%
- -------------------------------- ---------------- ---------------- ---------------- ----------------
06/30/98 12,510 1.48 0.41 60
- -------------------------------- ---------------- ---------------- ---------------- ----------------
10/01/96-06/30/97 18,287 1.51* 0.58* 59
- -------------------------------- ---------------- ---------------- ---------------- ----------------
09/30/96 20,056 1.41 0.49 110
- -------------------------------- ---------------- ---------------- ---------------- ----------------
09/30/95 17,951 1.50 0.60 170
- -------------------------------- ---------------- ---------------- ---------------- ----------------
09/30/94 23,289 1.40 0.30 55
- -------------------------------- ---------------- ---------------- ---------------- ----------------
Class B
12/31/98 (a) 8,393 2.34* (1.47)* 17
- -------------------------------- ---------------- ---------------- ---------------- ----------------
06/30/98 8,956 2.22 (0.37) 60
- -------------------------------- ---------------- ---------------- ---------------- ----------------
10/01/96-06/30/97 8,676 2.26* 0.18* 59
- -------------------------------- ---------------- ---------------- ---------------- ----------------
09/30/96 5,893 2.16 (0.26) 110
- -------------------------------- ---------------- ---------------- ---------------- ----------------
05/22/95-09/30/95 503 2.30* (0.10)* 170
- -------------------------------- ---------------- ---------------- ---------------- ----------------
Class C
12/31/98 (a) 110,172 2.34* (1.45)* 17
- -------------------------------- ---------------- ---------------- ---------------- ----------------
06/30/98 132,986 2.22 (0.43) 60
- -------------------------------- ---------------- ---------------- ---------------- ----------------
10/01/96-06/30/97 168,446 2.25* (0.25)* 59
- -------------------------------- ---------------- ---------------- ---------------- ----------------
09/30/96 203,544 2.16 (0.26) 110
- -------------------------------- ---------------- ---------------- ---------------- ----------------
09/30/95 215,349 2.20 (0.20) 170
- -------------------------------- ---------------- ---------------- ---------------- ----------------
09/30/94 294,492 2.20 (0.50) 55
- -------------------------------- ---------------- ---------------- ---------------- ----------------
Emerging Markets Fund
Class A
12/31/98 (a) $ 408 1.80%* 0.65%* 23%
- -------------------------------- ---------------- ---------------- ---------------- ----------------
06/30/98 426 1.78 0.25 52
- -------------------------------- ---------------- ---------------- ---------------- ----------------
01/20/97-06/30/97 214 1.89* 1.52* 74
- -------------------------------- ---------------- ---------------- ---------------- ----------------
Class B
12/31/98 (a) 235 2.55* (0.06)* 23
- -------------------------------- ---------------- ---------------- ---------------- ----------------
06/30/98 384 2.54 (0.51) 52
- -------------------------------- ---------------- ---------------- ---------------- ----------------
01/20/97-06/30/97 308 2.62* 0.47* 74
- -------------------------------- ---------------- ---------------- ---------------- ----------------
Class C
12/31/98 (a) 711 2.55* (0.06)* 23
- -------------------------------- ---------------- ---------------- ---------------- ----------------
06/30/98 1,169 2.54 (0.54) 52
- -------------------------------- ---------------- ---------------- ---------------- ----------------
01/20/97-06/30/97 1,833 2.63* 0.66* 74
- -------------------------------- ---------------- ---------------- ---------------- ----------------
</TABLE>
See accompanying notes 63
<PAGE>
Financial Highlights - A, B and C Classes
<TABLE>
<CAPTION>
Net Asset Net Realized/ Dividends
Value Unrealized Total Income from from Net
Selected Per Share Data for the Year Beginning Net Investment Gain (Loss) on Investment Investment
or Period Ended: of Period Income (Loss) Investments Operations Income
------------- ------------------- ------------------ ----------------- --------------
<S> <C> <C> <C> <C> <C>
Innovation Fund
Class A
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
12/31/98 (a) $ 24.28 $ (0.12)(b) $ 7.48(b) $ 7.36 $ 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
06/30/98 17.43 (0.19)(b) 8.21(b) 8.02 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
10/01/96-06/30/97 17.26 0.07 0.36 0.43 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
09/30/96 14.74 (0.07) 2.94 2.87 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
12/22/94-09/30/95 10.00 (0.06) 4.80 4.74 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
Class B
12/31/98 (a) 23.60 (0.20)(b) 7.23(b) 7.03 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
06/30/98 17.10 (0.33)(b) 8.00(b) 7.67 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
10/01/96-06/30/97 17.04 (0.03) 0.35 0.32 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
09/30/96 14.66 (0.11) 2.84 2.73 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
05/22/95-09/30/95 11.81 (0.08) 2.93 2.85 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
Class C
12/31/98 (a) 23.59 (0.20)(b) 7.24(b) 7.04 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
06/30/98 17.09 (0.33)(b) 8.00(b) 7.67 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
10/01/96-06/30/97 17.04 (0.02) 0.33 0.31 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
09/30/96 14.65 (0.15) 2.89 2.74 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
12/22/94-09/30/95 10.00 (0.13) 4.78 4.65 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
Precious Metals Fund
Class A
12/31/98 (a) $ 5.33 $ 0.10(b) $ (0.01)(b) $ 0.09 $ (0.11)
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
06/30/98 8.83 0.04(b) (3.54)(b) (3.50) 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
10/01/96-06/30/97 12.12 0.17 (3.29) (3.12) 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
09/30/96 12.33 0.03 (0.24) (0.21) 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
09/30/95 14.14 0.07 (1.88) (1.81) 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
09/30/94 10.32 0.08 3.74 3.82 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
Class B
12/31/98 (a) 5.01 0.09(b) (0.02)(b) 0.07 (0.12)
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
06/30/98 8.42 (0.01)(b) (3.40)(b) (3.41) 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
10/01/96-06/30/97 11.62 0.00 (3.03) (3.03) 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
09/30/96 11.90 (0.03) (0.25) (0.28) 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
06/15/95-09/30/95 11.61 (0.01) 0.30 0.29 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
Class C
12/31/98 (a) 5.00 0.09(b) (0.02)(b) 0.07 (0.14)
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
06/30/98 8.43 0.00(b) (3.43)(b) (3.43) 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
10/01/96-06/30/97 11.62 (0.03) (2.99) (3.02) 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
09/30/96 11.90 (0.07) (0.21) (0.28) 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
09/30/95 13.75 (0.02) (1.83) (1.85) 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
09/30/94 10.11 (0.02) 3.66 3.64 0.00
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
Balanced Fund
Class A
12/31/98 (a) $ 12.11 $ 0.15(b) $ 0.14(b) $ 0.29 $ (0.14)
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
06/30/98 11.40 0.29(b) 1.81(b) 2.10 (0.30)
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
01/20/97-06/30/97 10.77 0.21 0.58 0.79 (0.16)
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
Class B
12/31/98 (a) 12.07 0.10(b) 0.14(b) 0.24 (0.12)
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
06/30/98 11.39 0.20(b) 1.82(b) 2.02 (0.25)
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
01/20/97-06/30/97 10.77 0.19 0.58 0.77 (0.15)
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
Class C
12/31/98 (a) 12.07 0.10(b) 0.15(b) 0.25 (0.12)
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
06/30/98 11.39 0.20(b) 1.82(b) 2.02 (0.25)
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
01/20/97-06/30/97 10.77 0.18 0.58 0.76 (0.14)
- ------------------------------------- ------------- ------------------- ------------------ ----------------- --------------
</TABLE>
* Annualized
(a) Unaudited
(b) Per share amounts based on average number of shares outstanding during the
period.
(c) Ratio of expenses to average net assets excluding overdraft expense is
1.32%.
(d) Ratio of expenses to average net assets excluding overdraft expense is
2.05%.
(e) Ratio of expenses to average net assets excluding overdraft expense is
2.05%.
(f) Ratio of expenses to average net assets excluding overdraft expense is
1.26%.
(g) Ratio of expenses to average net assets excluding overdraft expense is
2.06%.
(h) Ratio of expenses to average net assets excluding overdraft expense is
2.06%.
64 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Distributions
Distributions in Excess of
Selected Per Share Data for the Year from Net Realized of Net Realized Net Asset Value
or Period Ended: Capital Gains Capital Gains Total Distributions End of Period
------------------ ------------------ ------------------- -------------------
<S> <C> <C> <C> <C>
Innovation Fund
Class A
12/31/98 (a) $ (1.08) $ (0.18) $ (1.26) $ 30.38
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
06/30/98 (0.99) (0.18) (1.17) 24.28
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
10/01/96-06/30/97 (0.26) 0.00 (0.26) 17.43
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
09/30/96 (0.35) 0.00 (0.35) 17.26
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
12/22/94-09/30/95 0.00 0.00 0.00 14.74
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
Class B
12/31/98 (a) (1.08) (0.18) (1.26) 29.37
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
06/30/98 (0.99) (0.18) (1.17) 23.60
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
10/01/96-06/30/97 (0.26) 0.00 (0.26) 17.10
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
09/30/96 (0.35) 0.00 (0.35) 17.04
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
05/22/95-09/30/95 0.00 0.00 0.00 14.66
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
Class C
12/31/98 (a) (1.08) (0.18) (1.26) 29.37
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
06/30/98 (0.99) (0.18) (1.17) 23.59
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
10/01/96-06/30/97 (0.26) 0.00 (0.26) 17.09
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
09/30/96 (0.35) 0.00 (0.35) 17.04
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
12/22/94-09/30/95 0.00 0.00 0.00 14.65
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
Precious Metals Fund
Class A
12/31/98 (a) $ 0.00 $ 0.00 $ (0.11) $ 5.31
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
06/30/98 0.00 0.00 0.00 5.33
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
10/01/96-06/30/97 0.00 (0.17) (0.17) 8.83
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
09/30/96 0.00 0.00 0.00 12.12
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
09/30/95 0.00 0.00 0.00 12.33
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
09/30/94 0.00 0.00 0.00 14.14
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
Class B
12/31/98 (a) 0.00 0.00 (0.12) 4.96
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
06/30/98 0.00 0.00 0.00 5.01
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
10/01/96-06/30/97 0.00 (0.17) (0.17) 8.42
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
09/30/96 0.00 0.00 0.00 11.62
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
06/15/95-09/30/95 0.00 0.00 0.00 11.90
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
Class C
12/31/98 (a) 0.00 0.00 (0.14) 4.93
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
06/30/98 0.00 0.00 0.00 5.00
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
10/01/96-06/30/97 0.00 (0.17) (0.17) 8.43
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
09/30/96 0.00 0.00 0.00 11.62
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
09/30/95 0.00 0.00 0.00 11.90
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
09/30/94 0.00 0.00 0.00 13.75
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
Balanced Fund
Class A
12/31/98 (a) $ (1.64) 0.00 $ (1.78) $ 10.62
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
06/30/98 (1.09) 0.00 (1.39) 12.11
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
01/20/97-06/30/97 0.00 0.00 (0.16) 11.40
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
Class B
12/31/98 (a) (1.64) 0.00 (1.76) 10.55
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
06/30/98 (1.09) 0.00 (1.34) 12.07
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
01/20/97-06/30/97 0.00 0.00 (0.15) 11.39
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
Class C
12/31/98 (a) (1.64) 0.00 (1.76) 10.56
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
06/30/98 (1.09) 0.00 (1.34) 12.07
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
01/20/97-06/30/97 0.00 0.00 (0.14) 11.39
- ------------------------------------- ------------------- ------------------ ------------------- -------------------
<CAPTION>
Ratio of
Expenses Income (Loss)
Selected Per Share Data for the Year Net Assets End to Average to Average Portfolio
or Period Ended: Total Return of Period (000s) Net Assets Net Assets Turnover Rate
----------------- ------------------ ------------- ------------- -------------------
<S> <C> <C> <C> <C> <C>
Innovation Fund
Class A
12/31/98 (a) 30.86% $ 140,497 1.31%* (0.93)%* 60%
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
06/30/98 48.10 85,800 1.31 (0.94) 100
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
10/01/96-06/30/97 2.41 56,215 1.28* (0.68)* 80
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
09/30/96 19.86 50,067 1.31 (0.61) 123
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
12/22/94-09/30/95 47.40 28,239 1.40* (0.60)* 86
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
Class B
12/31/98 (a) 30.35 147,112 2.05* (1.69)* 60
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
06/30/98 46.95 81,130 2.06 (1.69) 100
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
10/01/96-06/30/97 1.79 51,472 2.03* (1.43)* 80
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
09/30/96 18.99 33,778 2.06 (1.36) 123
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
05/22/95-09/30/95 24.10 6,509 2.30* (1.70)* 86
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
Class C
12/31/98 (a) 30.41 331,705 2.06* (1.69)* 60
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
06/30/98 46.97 219,258 2.06 (1.69) 100
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
10/01/96-06/30/97 1.73 162,889 2.03* (1.43)* 80
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
09/30/96 19.08 137,752 2.06 (1.36) 123
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
12/22/94-09/30/95 46.50 63,952 2.20* (1.40)* 86
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
Precious Metals Fund
Class A
12/31/98 (a) 1.80% $ 3,576 1.45%*(c) 3.77%* 35%
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
06/30/98 (39.64) 4,709 1.31(f) 0.70 56
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
10/01/96-06/30/97 (26.05) 4,016 1.37* 0.33* 46
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
09/30/96 (1.70) 6,245 1.32 0.19 35
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
09/30/95 (12.80) 7,670 1.40 0.60 9
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
09/30/94 37.00 11,229 1.30 0.60 11
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
Class B
12/31/98 (a) 1.50 3,974 2.13*(d) 3.33* 35
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
06/30/98 (40.50) 3,889 2.11(g) (0.07) 56
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
10/01/96-06/30/97 (26.40) 4,248 2.13* (0.33)* 46
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
09/30/96 (2.35) 2,218 2.07 (0.56) 35
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
06/15/95-09/30/95 2.50 251 2.20* (0.20)* 9
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
Class C
12/31/98 (a) 1.50 15,167 2.15*(e) 3.50* 35
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
06/30/98 (40.69) 16,943 2.11(h) (0.07) 56
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
10/01/96-06/30/97 (26.31) 25,113 2.15* (0.41)* 46
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
09/30/96 (2.35) 37,609 2.07 (0.56) 35
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
09/30/95 (13.50) 42,341 2.20 (0.20) 9
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
09/30/94 36.00 62,825 2.10 (0.20) 11
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
Balanced Fund
Class A
12/31/98 (a) 2.93% $ 9,161 1.11%* 2.57%* 100%
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
06/30/98 19.40 9,586 1.12 2.47 186
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
01/20/97-06/30/97 7.42 366 1.15* 3.01* 199
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
Class B
12/31/98 (a) 2.48 11,901 1.85* 1.82* 100
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
06/30/98 18.59 8,977 1.86 1.71 186
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
01/20/97-06/30/97 7.15 1,124 1.90* 2.28* 199
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
Class C
12/31/98 (a) 2.59 11,763 1.86* 1.83* 100
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
06/30/98 18.59 8,469 1.86 1.71 186
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
01/20/97-06/30/97 7.12 921 1.90* 2.26* 199
- -------------------------------------- ----------------- ------------------ ------------- ------------- -------------------
</TABLE>
See accompanying notes 65
<PAGE>
Statements of Assets and Liabilities
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Capital
Equity Renaissance Tax-Efficient Appreciation
Amounts in thousands, except per share amounts Income Fund Value Fund Fund Equity Fund Fund
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments, at value $ 197,053 $ 243,923 $ 639,912 $ 13,731 $ 1,144,935
- ------------------------------------------------------------------------------------------------------------------------------------
Cash and foreign currency 0 0 271 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Receivable for investments and foreign currency sold 3,863 0 937 29 10,602
- ------------------------------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold 313 266 1,566 215 1,662
- ------------------------------------------------------------------------------------------------------------------------------------
Interest and dividends receivable 645 588 772 11 1,345
- ------------------------------------------------------------------------------------------------------------------------------------
Other assets 63 0 2 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
201,937 244,777 643,460 13,986 1,158,544
====================================================================================================================================
Liabilities:
Payable for investments and foreign currency purchased $ 607 $ 8 $ 4,715 $ 716 $ 11,701
- ------------------------------------------------------------------------------------------------------------------------------------
Written options outstanding 0 0 72 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed 832 279 2,042 0 1,483
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends payable 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued investment advisory fee 85 99 339 5 471
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued administration fee 55 74 226 4 292
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued distribution fee 29 80 367 4 88
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued servicing fee 16 34 141 3 93
- ------------------------------------------------------------------------------------------------------------------------------------
Variation margin payable 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
1,624 574 7,902 732 14,128
====================================================================================================================================
Net Assets $ 200,313 $ 244,203 $ 635,558 $ 13,254 $ 1,144,416
====================================================================================================================================
Net Assets Consist of:
Paid in capital $ 174,937 $ 222,831 $ 584,306 $ 12,204 $ 875,555
- ------------------------------------------------------------------------------------------------------------------------------------
Undistributed (overdistributed) net investment income 4,816 5,638 44,815 (1) 459
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net realized gain (loss) 3,496 840 (110,128) (96) 31,344
- ------------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) 17,064 14,894 116,565 1,147 237,058
- ------------------------------------------------------------------------------------------------------------------------------------
$ 200,313 $ 244,203 $ 635,558 $ 13,254 $ 1,144,416
====================================================================================================================================
Net Assets:
Class A $ 15,361 $ 19,868 $ 85,787 $ 3,612 $ 96,706
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 18,417 34,705 116,449 2,727 50,845
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 24,222 82,845 432,876 5,733 80,709
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 142,313 106,785 446 1,182 916,156
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Issued and Outstanding:
Class A 1,077 1,420 5,236 343 3,896
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 1,297 2,484 7,171 260 2,070
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 1,703 5,931 26,777 547 3,282
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value and Redemption Price*
Per Share (Net Assets Per Share Outstanding):
Class A $ 14.27 $ 13.99 $ 16.38 $ 10.53 $ 24.82
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 14.20 13.97 16.24 10.49 24.57
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 14.23 13.97 16.17 10.49 24.59
- ------------------------------------------------------------------------------------------------------------------------------------
Cost of Investments Owned $ 179,989 $ 229,029 $ 523,408 $ 12,584 $ 907,877
====================================================================================================================================
Cost of Foreign Currency Held $ 0 $ 0 $ 0 $ 0 $ 0
====================================================================================================================================
</TABLE>
With respect to the Retail Classes, the redemption price varies by the length of
time the shares are held.
66 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Mid-Cap Small-Cap
Amounts in thousands, except per share amounts Growth Fund Value 25 Fund Growth Fund Target Fund Value Fund
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments, at value $ 2,254,587 $ 1,942 $ 977,556 $ 1,114,161 $ 402,272
- ------------------------------------------------------------------------------------------------------------------------------------
Cash and foreign currency 54 1 22 258 187
- ------------------------------------------------------------------------------------------------------------------------------------
Receivable for investments and foreign currency sold 11,109 12 3,920 31,571 2,314
- ------------------------------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold 9,011 53 2,833 2,404 1,768
- ------------------------------------------------------------------------------------------------------------------------------------
Interest and dividends receivable 728 5 619 445 1,026
- ------------------------------------------------------------------------------------------------------------------------------------
Other assets 1 0 0 6 3
- ------------------------------------------------------------------------------------------------------------------------------------
2,275,490 2,013 984,950 1,148,845 407,570
====================================================================================================================================
Liabilities:
Payable for investments and foreign currency purchased $ 26,073 $ 0 $ 9,322 $ 20,688 $ 3,947
- ------------------------------------------------------------------------------------------------------------------------------------
Written options outstanding 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed 5,526 0 5,996 3,482 2,912
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends payable 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued investment advisory fee 980 1 375 536 215
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued administration fee 784 1 253 390 133
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued distribution fee 1,339 1 152 635 153
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued servicing fee 489 0 96 244 76
- ------------------------------------------------------------------------------------------------------------------------------------
Variation margin payable 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
35,191 3 16,194 25,975 7,436
====================================================================================================================================
Net Assets $ 2,240,299 $ 2,010 $ 968,756 $ 1,122,870 $ 400,134
====================================================================================================================================
Net Assets Consist of:
Paid in capital $ 1,484,706 $ 2,087 $ 813,060 $ 881,584 $ 430,179
- ------------------------------------------------------------------------------------------------------------------------------------
Undistributed (overdistributed) net investment income 43,300 (1) 66 32,139 5,605
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net realized gain (loss) 31,250 (118) (23,083) (23,674) (18,599)
- ------------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) 681,043 42 178,713 232,821 (17,051)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 2,240,299 $ 2,010 $ 968,756 $ 1,122,870 $ 400,134
====================================================================================================================================
Net Assets:
Class A $ 202,520 $ 500 $ 110,426 $ 144,643 $ 94,203
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 100,937 701 93,857 73,872 107,758
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 1,936,842 649 138,504 904,355 119,567
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 160 625,969 0 78,606
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Issued and Outstanding:
Class A 6,413 59 4,806 8,975 6,174
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 3,487 83 4,141 4,926 7,097
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 66,921 76 6,110 60,308 7,864
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value and Redemption Price*
Per Share (Net Assets Per Share Outstanding):
Class A $ 31.58 $ 8.48 $ 22.97 $ 16.12 $ 15.26
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 28.95 8.47 22.67 15.00 15.18
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 28.94 8.49 22.67 15.00 15.20
- ------------------------------------------------------------------------------------------------------------------------------------
Cost of Investments Owned $ 1,573,544 $ 1,900 $ 798,843 $ 881,340 $ 419,323
====================================================================================================================================
Cost of Foreign Currency Held $ 0 $ 0 $ 0 $ 0 $ 0
====================================================================================================================================
<CAPTION>
International
Opportunity Developed International Emerging Innovation
Amounts in thousands, except per share amounts Fund Fund Fund Markets Fund Fund
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments, at value $ 525,908 $ 125,534 $ 144,735 $ 20,287 $ 641,306
- ------------------------------------------------------------------------------------------------------------------------------------
Cash and foreign currency 1,461 5,041 1,129 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Receivable for investments and foreign currency sold 0 1,188 398 748 0
- ------------------------------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold 11,531 161 398 28 11,668
- ------------------------------------------------------------------------------------------------------------------------------------
Interest and dividends receivable 59 265 436 56 32
- ------------------------------------------------------------------------------------------------------------------------------------
Other assets 2 0 4 0 7
- ------------------------------------------------------------------------------------------------------------------------------------
538,961 132,189 147,100 21,119 653,013
====================================================================================================================================
Liabilities:
Payable for investments and foreign currency purchased $ 1,091 $ 230 $ 5,985 $ 512 $ 21,767
- ------------------------------------------------------------------------------------------------------------------------------------
Written options outstanding 2,378 0 0 0 3,250
- ------------------------------------------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed 17,988 128 2,484 204 2,475
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends payable 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued investment advisory fee 301 73 69 18 335
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued administration fee 185 62 80 11 206
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued distribution fee 249 5 81 1 298
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued servicing fee 116 3 31 0 129
- ------------------------------------------------------------------------------------------------------------------------------------
Variation margin payable 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
22,308 501 8,730 746 28,460
====================================================================================================================================
Net Assets $ 516,653 $ 131,688 $ 138,370 $ 20,373 $ 624,553
====================================================================================================================================
Net Assets Consist of:
Paid in capital $ 423,996 $ 103,873 $ 120,286 $ 41,317 $ 357,052
- ------------------------------------------------------------------------------------------------------------------------------------
Undistributed (overdistributed) net investment income (3,902) (134) (1,288) 8 (3,276
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net realized gain (loss) (59,366) 1,771 2,010 (15,566) 33,127
- ------------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) 155,925 26,178 17,362 (5,386) 237,650
- ------------------------------------------------------------------------------------------------------------------------------------
$ 516,653 $ 131,688 $ 138,370 $ 20,373 $ 624,553
====================================================================================================================================
Net Assets:
Class A $ 144,001 $ 1,494 $ 8,659 $ 408 $ 140,497
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 0 2,698 8,393 235 147,112
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 372,652 6,034 110,172 711 331,705
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 121,462 11,146 19,019 5,239
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Issued and Outstanding:
Class A 5,991 106 730 49 4,626
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 0 195 763 28 5,008
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 17,195 436 10,024 86 11,294
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value and Redemption Price*
Per Share (Net Assets Per Share Outstanding):
Class A $ 24.04 $ 14.01 $ 11.87 $ 8.39 $ 30.38
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 0.00 13.83 11.00 8.32 29.37
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 21.67 13.84 10.99 8.32 29.37
- ------------------------------------------------------------------------------------------------------------------------------------
Cost of Investments Owned $ 368,805 $ 99,644 $ 127,288 $ 25,673 $ 400,729
====================================================================================================================================
Cost of Foreign Currency Held $ 0 $ 4,770 $ 2,257 $ 504 $ 0
====================================================================================================================================
<CAPTION>
Precious
Amounts in thousands, except per share amounts Metals Fund Balanced Fund
-------------------------------
<S> <C> <C>
Assets:
Investments, at value $ 19,637 $ 81,662
- ----------------------------------------------------------------------------------------
Cash and foreign currency 91 0
- ----------------------------------------------------------------------------------------
Receivable for investments and foreign currency sold 29 2,248
- ----------------------------------------------------------------------------------------
Receivable for Fund shares sold 3,279 102
- ----------------------------------------------------------------------------------------
Interest and dividends receivable 58 326
- ----------------------------------------------------------------------------------------
Other assets 0 0
- ----------------------------------------------------------------------------------------
23,094 84,338
========================================================================================
Liabilities:
Payable for investments and foreign currency purchased $ 95 $ 13,373
- ----------------------------------------------------------------------------------------
Written options outstanding 0 1
- ----------------------------------------------------------------------------------------
Payable for Fund shares redeemed 236 50
- ----------------------------------------------------------------------------------------
Dividends payable 8 0
- ----------------------------------------------------------------------------------------
Accrued investment advisory fee 12 29
- ----------------------------------------------------------------------------------------
Accrued administration fee 9 21
- ----------------------------------------------------------------------------------------
Accrued distribution fee 12 16
- ----------------------------------------------------------------------------------------
Accrued servicing fee 5 7
- ----------------------------------------------------------------------------------------
Variation margin payable 0 2
- ----------------------------------------------------------------------------------------
377 13,499
========================================================================================
Net Assets $ 22,717 $ 70,839
========================================================================================
Net Assets Consist of:
Paid in capital $ 40,955 $ 63,815
- ----------------------------------------------------------------------------------------
Undistributed (overdistributed) net investment income (111) 2,623
- ----------------------------------------------------------------------------------------
Accumulated undistributed net realized gain (loss) (12,872) (1,493)
- ----------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) (5,255) 5,894
- ----------------------------------------------------------------------------------------
$ 22,717 $ 70,839
- ----------------------------------------------------------------------------------------
Net Assets:
Class A $ 3,576 $ 9,161
- ----------------------------------------------------------------------------------------
Class B 3,974 11,901
- ----------------------------------------------------------------------------------------
Class C 15,167 11,763
- ----------------------------------------------------------------------------------------
Other Classes 0 38,014
- ----------------------------------------------------------------------------------------
Shares Issued and Outstanding:
Class A 674 862
- ----------------------------------------------------------------------------------------
Class B 803 1,128
- ----------------------------------------------------------------------------------------
Class C 3,076 1,115
- ----------------------------------------------------------------------------------------
Net Asset Value and Redemption Price*
Per Share (Net Assets Per Share Outstanding):
Class A $ 5.31 $ 10.62
- ----------------------------------------------------------------------------------------
Class B 4.96 10.55
- ----------------------------------------------------------------------------------------
Class C 4.93 10.56
- ----------------------------------------------------------------------------------------
Cost of Investments Owned $ 24,896 $ 75,744
========================================================================================
Cost of Foreign Currency Held $ 79 $ 0
========================================================================================
</TABLE>
See accompanying notes 67
<PAGE>
Statements of Operations
For the six months ended December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Equity Renaissance Tax-Efficient
Amounts in thousands Income Fund Value Fund Fund Equity Fund
-----------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 3,371 $ 2,805 $ 3,641 $ 38
- -------------------------------------------------------------------------------------------------------------
Interest 151 137 581 6
- -------------------------------------------------------------------------------------------------------------
Total Income 3,522 2,942 4,222 44
- -------------------------------------------------------------------------------------------------------------
Expenses:
Investment advisory fees 448 523 1,870 13
- -------------------------------------------------------------------------------------------------------------
Administration fees 290 393 1,246 12
- -------------------------------------------------------------------------------------------------------------
Distribution fees - Class B 61 128 400 5
- -------------------------------------------------------------------------------------------------------------
Distribution fees - Class C 87 306 1,619 8
- -------------------------------------------------------------------------------------------------------------
Servicing fees - Class A 18 25 105 2
- -------------------------------------------------------------------------------------------------------------
Servicing fees - Class B 21 42 133 2
- -------------------------------------------------------------------------------------------------------------
Servicing fees - Class C 29 102 539 2
- -------------------------------------------------------------------------------------------------------------
Distribution and/or servicing fees - Other Classes 13 16 0 1
- -------------------------------------------------------------------------------------------------------------
Trustees' fees 7 9 23 0
- -------------------------------------------------------------------------------------------------------------
Miscellaneous 0 0 6 0
- -------------------------------------------------------------------------------------------------------------
Total Expenses 974 1,544 5,941 45
- -------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) 2,548 1,398 (1,719) (1)
- -------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments 11,693 12,336 (60,991) (96)
- -------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
futures contracts and written options 0 0 (642) 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) 51,051 1,147
- -------------------------------------------------------------------------------------------------------------
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) 506 1,389 (10,598) 1,051
- -------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in
Assets Resulting from Operations $ 3,054 $ 2,787 $ (12,317) $ 1,050
- -------------------------------------------------------------------------------------------------------------
<CAPTION>
Capital
Appreciation
Fund Growth Fund Value 25 Fund
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 7,094 $ 5,941 $ 13
- ---------------------------------------------------------------------------------------------------
Interest 1,122 1,769 2
- ---------------------------------------------------------------------------------------------------
Total Income 8,216 7,710 15
- ---------------------------------------------------------------------------------------------------
Expenses:
Investment advisory fees 2,564 5,034 3
- ---------------------------------------------------------------------------------------------------
Administration fees 1,577 4,027 2
- ---------------------------------------------------------------------------------------------------
Distribution fees - Class B 169 311 1
- ---------------------------------------------------------------------------------------------------
Distribution fees - Class C 274 6,594 2
- ---------------------------------------------------------------------------------------------------
Servicing fees - Class A 107 215 0
- ---------------------------------------------------------------------------------------------------
Servicing fees - Class B 57 104 0
- ---------------------------------------------------------------------------------------------------
Servicing fees - Class C 91 2,198 0
- ---------------------------------------------------------------------------------------------------
Distribution and/or servicing fees - Other Classes 235 0 0
- ---------------------------------------------------------------------------------------------------
Trustees' fees 40 72 0
- ---------------------------------------------------------------------------------------------------
Miscellaneous 0 2 0
- ---------------------------------------------------------------------------------------------------
Total Expenses 5,114 18,557 8
- ---------------------------------------------------------------------------------------------------
Net Investment Income (Loss) 3,102 (10,847) 7
- ---------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments 33,019 122,671 (118)
- ---------------------------------------------------------------------------------------------------
Net realized gain (loss) on
futures contracts and written options 0 1,267 0
- ---------------------------------------------------------------------------------------------------
Net realized gain (loss)
on foreign currency transactions
0 0 0
- ---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) on investments (12,629) 77,094 42
- ---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)
on futures contracts and written options 0 0 0
- ---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)
on translation of assets and liabilities
denominated in foreign currencies 0 0 0
- ---------------------------------------------------------------------------------------------------
Net Gain (Loss) 20,390 201,032 (76)
- ---------------------------------------------------------------------------------------------------
Net Increase (Decrease) in
Assets Resulting from Operations $ 23,492 $ 190,185 $ (69)
- ---------------------------------------------------------------------------------------------------
</TABLE>
68 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
International
Mid-Cap Small-Cap Opportunity Developed
Growth Fund Target Fund Value Fund Fund Fund
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 3,419 $ 2,356 $ 4,833 $ 243 $ 492
- -----------------------------------------------------------------------------------------------------------------------------
Interest 1,443 1,844 408 831 169
- -----------------------------------------------------------------------------------------------------------------------------
Total Income 4,862 4,200 5,241 1,074 661
- -----------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment advisory fees 1,843 2,921 1,119 1,748 386
- -----------------------------------------------------------------------------------------------------------------------------
Administration fees 1,255 2,124 696 1,075 331
- -----------------------------------------------------------------------------------------------------------------------------
Distribution fees - Class B 316 259 392 0 11
- -----------------------------------------------------------------------------------------------------------------------------
Distribution fees - Class C 489 3,195 447 1,456 24
- -----------------------------------------------------------------------------------------------------------------------------
Servicing fees - Class A 116 176 104 187 4
- -----------------------------------------------------------------------------------------------------------------------------
Servicing fees - Class B 106 86 131 0 3
- -----------------------------------------------------------------------------------------------------------------------------
Servicing fees - Class C 163 1,065 149 485 8
- -----------------------------------------------------------------------------------------------------------------------------
Distribution and/or servicing fees - Other Classes 108 0 17 0 8
- -----------------------------------------------------------------------------------------------------------------------------
Trustees' fees 28 40 13 22 5
- -----------------------------------------------------------------------------------------------------------------------------
Miscellaneous 0 8 0 3 10
- -----------------------------------------------------------------------------------------------------------------------------
Total Expenses 4,424 9,874 3,068 4,976 790
- -----------------------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) 438 (5,674) 2 (3,902) (129)
- -----------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments (22,826) 13,614 (13,324) (59,950) 4,204
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
futures contracts and written options 0 1,262 0 793 (117)
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss)
on foreign currency transactions 0 0 0 0 (1,181)
- -----------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) on investments 38,989 38,988 (24,115) 14,392 (1,566)
- -----------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)
on futures contracts and written options 0 0 0 (1,177) (296)
- -----------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)
on translation of assets and liabilities
denominated in foreign currencies 0 0 0 0 801
- -----------------------------------------------------------------------------------------------------------------------------
Net Gain (Loss) 16,163 53,864 (37,439) (45,942) 1,845
- -----------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in
Assets Resulting from Operations $ 16,601 $ 48,190 $ (35,266) $ (49,844) $ 1,716
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
International Emerging Innovation Precious
Fund Markets Fund Fund Metals Fund Balanced Fund
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 598 $ 270 $ 73 $ 558 $ 388
- -----------------------------------------------------------------------------------------------------------------------------
Interest 46 28 773 91 870
- -----------------------------------------------------------------------------------------------------------------------------
Total Income 644 298 846 649 1,258
- -----------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment advisory fees 386 102 1,419 70 155
- -----------------------------------------------------------------------------------------------------------------------------
Administration fees 456 61 873 53 109
- -----------------------------------------------------------------------------------------------------------------------------
Distribution fees - Class B 32 1 364 16 38
- -----------------------------------------------------------------------------------------------------------------------------
Distribution fees - Class C 440 3 907 56 38
- -----------------------------------------------------------------------------------------------------------------------------
Servicing fees - Class A 16 1 120 5 12
- -----------------------------------------------------------------------------------------------------------------------------
Servicing fees - Class B 11 0 121 5 13
- -----------------------------------------------------------------------------------------------------------------------------
Servicing fees - Class C 147 1 303 19 13
- -----------------------------------------------------------------------------------------------------------------------------
Distribution and/or servicing fees - Other Classes 2 2 2 0 0
- -----------------------------------------------------------------------------------------------------------------------------
Trustees' fees 5 1 13 1 2
- -----------------------------------------------------------------------------------------------------------------------------
Miscellaneous 99 6 0 11 0
- -----------------------------------------------------------------------------------------------------------------------------
Total Expenses 1,594 178 4,122 236 380
- -----------------------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) (950) 120 (3,276) 413 878
- -----------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments 6,621 (2,300) 58,761 (3,792) 1,086
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
futures contracts and written options 0 0 (2,080) 0 623
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss)
on foreign currency transactions (628) (9) 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) on investments (14,025) (2,523) 83,889 4,935 (475)
- -----------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)
on futures contracts and written options 0 0 (2,602) 0 (131)
- -----------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)
on translation of assets and liabilities
denominated in foreign currencies (44) 4 0 4 0
- -----------------------------------------------------------------------------------------------------------------------------
Net Gain (Loss) (8,076) (4,828) 137,968 1,147 1,103
- -----------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in
Assets Resulting from Operations $ (9,026) $ (4,708) $ 134,692 $ 1,560 $ 1,981
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes 69
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Amounts in thousands Equity Income Fund Value Fund
--------------------------------------------------------------------
Six Months Ended Year Ended Six Months Ended
Increase (Decrease) in Net Assets from: December 31, 1998 June 30, 1998 December 31, 1998
(Unaudited) (Unaudited)
Operations:
<S> <C> <C> <C>
Net investment income (loss) $ 2,548 $ 4,503 $ 1,398
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 11,693 23,527 12,336
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) (11,187) 4,261 (10,947)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from operations 3,054 32,291 2,787
====================================================================================================================================
Distributions to Shareholders:
From net investment income
Class A (176) (214) (131)
- ------------------------------------------------------------------------------------------------------------------------------------
Class B (152) (152) (116)
- ------------------------------------------------------------------------------------------------------------------------------------
Class C (204) (244) (273)
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes (1,954) (3,825) (861)
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized capital gains
Class A (1,680) (1,062) (2,117)
- ------------------------------------------------------------------------------------------------------------------------------------
Class B (1,999) (745) (3,839)
- ------------------------------------------------------------------------------------------------------------------------------------
Class C (2,668) (1,348) (9,026)
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes (16,320) (17,552) (11,350)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (25,153) (25,142) (27,713)
====================================================================================================================================
Fund Share Transactions:
Receipts for shares sold
Class A 4,670 13,092 15,407
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 4,859 12,684 2,635
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 6,963 18,527 7,938
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 15,667 20,453 19,213
- ------------------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 1,761 1,244 2,014
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 1,970 825 3,540
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 2,770 1,506 8,782
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 18,002 20,925 12,154
- ------------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (2,451) (3,164) (17,386)
- ------------------------------------------------------------------------------------------------------------------------------------
Class B (1,760) (961) (3,479)
- ------------------------------------------------------------------------------------------------------------------------------------
Class C (6,099) (3,868) (13,257)
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes (25,647) (26,929) (7,791)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from Fund share transactions 20,705 54,334 29,770
- ------------------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets (1,394) 61,483 4,844
====================================================================================================================================
Net Assets:
Beginning of period 201,707 140,224 239,359
- ------------------------------------------------------------------------------------------------------------------------------------
End of period * $ 200,313 $ 201,707 $ 244,203
- ------------------------------------------------------------------------------------------------------------------------------------
*Including net undistributed (overdistributed) investment income of: $ 4,816 $ 4,754 $ 5,638
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Renaissance Fund
--------------------------------------------------------
Year Ended Six Months Ended Year Ended
Increase (Decrease) in Net Assets from: June 30, 1998 December 31, 1998 June 30, 1998
(Unaudited)
Operations:
<S> <C> <C> <C>
Net investment income (loss) $ 2,032 $ (1,719) $ (1,489)
- ---------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 29,304 (61,633) 123,570
- ---------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 3,088 51,035 4,045
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from operations 34,424 (12,317) 126,126
===========================================================================================================================
Distributions to Shareholders:
From net investment income
Class A (221) 0 (170)
- ---------------------------------------------------------------------------------------------------------------------------
Class B (145) 0 (42)
- ---------------------------------------------------------------------------------------------------------------------------
Class C (357) 0 (213)
- ---------------------------------------------------------------------------------------------------------------------------
Other Classes (1,292) 0 0
- ---------------------------------------------------------------------------------------------------------------------------
From net realized capital gains
Class A (1,819) (10,816) (7,515)
- ---------------------------------------------------------------------------------------------------------------------------
Class B (3,062) (14,778) (8,922)
- ---------------------------------------------------------------------------------------------------------------------------
Class C (7,703) (55,218) (64,285)
- ---------------------------------------------------------------------------------------------------------------------------
Other Classes (8,105) (49) 0
- ---------------------------------------------------------------------------------------------------------------------------
Total Distributions (22,704) (80,861) (81,147)
===========================================================================================================================
Fund Share Transactions:
Receipts for shares sold
Class A 19,311 131,113 203,937
- ---------------------------------------------------------------------------------------------------------------------------
Class B 9,503 31,748 57,972
- ---------------------------------------------------------------------------------------------------------------------------
Class C 33,261 53,459 202,638
- ---------------------------------------------------------------------------------------------------------------------------
Other Classes 28,033 304 887
- ---------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 1,885 9,521 7,011
- ---------------------------------------------------------------------------------------------------------------------------
Class B 2,853 13,415 8,021
- ---------------------------------------------------------------------------------------------------------------------------
Class C 7,528 51,673 59,208
- ---------------------------------------------------------------------------------------------------------------------------
Other Classes 9,361 38 0
- ---------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (16,080) (129,390) (164,942)
- ---------------------------------------------------------------------------------------------------------------------------
Class B (3,736) (13,462) (7,786)
- ---------------------------------------------------------------------------------------------------------------------------
Class C (20,988) (75,931) (138,986)
- ---------------------------------------------------------------------------------------------------------------------------
Other Classes (23,096) (776) 0
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from Fund share transactions 47,835 71,712 227,960
- ---------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets 59,555 (21,466) 272,939
===========================================================================================================================
Net Assets:
Beginning of period 179,804 657,024 384,085
- ---------------------------------------------------------------------------------------------------------------------------
End of period * $ 239,359 $ 635,558 $ 657,024
- ---------------------------------------------------------------------------------------------------------------------------
*Including net undistributed (overdistributed) investment income of: $ 5,621 $ 44,815 $ 46,534
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
70 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Tax-Efficient
Equity Fund Capital Appreciation Fund Growth Fund
------------------------------------------------------------------------
Period from
July 10, 1998 to Six Months Ended Year Ended Six Months Ended
Increase (Decrease) in Net Assets from: December 31, 1998 December 31, 1998 June 30, 1998 December 31, 1998
(Unaudited) (Unaudited) (Unaudited)
Operations:
<S> <C> <C> <C> <C>
Net investment income (loss) $ (1) $ 3,102 $ 4,296 $ (10,847)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) (96) 33,019 89,980 123,938
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 1,147 (12,629) 125,025 77,094
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from operations 1,050 23,492 219,301 190,185
====================================================================================================================================
Distributions to Shareholders:
From net investment income
Class A 0 (397) (56) 0
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 0 0 (40) 0
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 0 0 (81) 0
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 (5,210) (3,653) 0
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized capital gains
Class A 0 (6,025) (881) (21,401)
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 0 (3,186) (754) (11,616)
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 0 (5,032) (2,428) (230,472)
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 (56,463) (46,281) 0
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions 0 (76,313) (54,174) (263,489)
====================================================================================================================================
Fund Share Transactions:
Receipts for shares sold
Class A 4,185 30,486 66,636 211,083
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 3,511 13,203 35,779 23,283
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 6,606 18,586 62,600 274,067
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 1,109 254,414 395,404 0
- ------------------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 0 5,855 887 20,135
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 0 3,011 737 10,648
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 0 4,828 2,440 215,651
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 49,227 39,039 0
- ------------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (893) (9,043) (8,606) (206,028)
- ------------------------------------------------------------------------------------------------------------------------------------
Class B (982) (4,517) (1,820) (11,063)
- ------------------------------------------------------------------------------------------------------------------------------------
Class C (1,332) (11,007) (13,721) (338,013)
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 (281,349) (182,910) 0
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from Fund share transactions 12,204 73,694 396,465 199,763
- ------------------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets 13,254 20,873 561,592 126,459
====================================================================================================================================
Net Assets:
Beginning of period 0 1,123,543 561,951 2,113,840
- ------------------------------------------------------------------------------------------------------------------------------------
End of period * $ 13,254 $ 1,144,416 $ 1,123,543 $ 2,240,299
- ------------------------------------------------------------------------------------------------------------------------------------
*Including net undistributed (overdistributed) investment $ (1) $ 459 $ 2,964 $ 43,300
income of:
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Value 25 Fund Mid-Cap Growth Fund
---------------------------------------------------------------------
Period from
Year Ended July 10,1998 to Six Months Ended Year Ended
Increase (Decrease) in Net Assets from: June 30, 1998 December 31, 1998 December 31,1998 June 30,1998
(Unaudited) (Unaudited)
Operations:
<S> <C> <C> <C> <C>
Net investment income (loss) $ (17,931) $ 7 $ 438 $ 841
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 344,619 (118) (22,826) 58,714
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 312,858 42 38,989 57,682
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from operations 639,546 (69) 16,601 117,237
====================================================================================================================================
Distributions to Shareholders:
From net investment income
Class A 0 (4) (34) (41)
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 0 (2) 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 0 (1) 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 (1) (390) (1,454)
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized capital gains
Class A (22,078) 0 (4,870) (1,205)
- ------------------------------------------------------------------------------------------------------------------------------------
Class B (9,680) 0 (4,178) (2,602)
- ------------------------------------------------------------------------------------------------------------------------------------
Class C (241,892) 0 (6,249) (4,570)
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 (25,986) (21,860)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (273,650) (8) (41,707) (31,732)
====================================================================================================================================
Fund Share Transactions:
Receipts for shares sold
Class A 330,680 719 91,898 104,053
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 16,100 712 18,262 54,506
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 370,235 706 21,865 90,916
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 187 281,533 351,303
- ------------------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 20,743 3 4,391 1,158
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 8,981 2 3,820 2,327
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 226,702 1 5,853 4,187
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 1 24,405 22,766
- ------------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (355,128) (193) (41,436) (64,062)
- ------------------------------------------------------------------------------------------------------------------------------------
Class B (12,901) 0 (9,089) (7,281)
- ------------------------------------------------------------------------------------------------------------------------------------
Class C (574,802) (51) (23,297) (21,124)
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 (178,221) (217,945)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from Fund share transactions 30,610 2,087 199,984 320,804
- ------------------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets 396,506 2,010 174,878 406,309
===================================================================================================================================
Net Assets:
Beginning of period 1,717,334 0 793,878 387,569
- ------------------------------------------------------------------------------------------------------------------------------------
End of period * $ 2,113,840 $ 2,010 $ 968,756 $ 793,878
- ------------------------------------------------------------------------------------------------------------------------------------
*Including net undistributed (overdistributed) investment
income of: $ 54,147 $ (1) $ 66 $ 52
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Target Fund
-----------------------------------
<CAPTION> Six Months Ended Year Ended
Increase (Decrease) in Net Assets from: December 31,1998 June 30, 1998
(Unaudited)
Operations:
<S> <C> <C>
Net investment income (loss) $ (5,674) $ (13,703)
- ---------------------------------------------------------------------------------------------------------
Net realized gain (loss) 14,876 242,973
- ---------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 38,988 56,862
- ---------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from operations 48,190 286,132
=========================================================================================================
Distributions to Shareholders:
From net investment income
Class A 0 0
- ---------------------------------------------------------------------------------------------------------
Class B 0 0
- ---------------------------------------------------------------------------------------------------------
Class C 0 0
- ---------------------------------------------------------------------------------------------------------
Other Classes 0 0
- ---------------------------------------------------------------------------------------------------------
From net realized capital gains
Class A (7,963) (35,690)
- ---------------------------------------------------------------------------------------------------------
Class B (4,562) (18,642)
- ---------------------------------------------------------------------------------------------------------
Class C (55,675) (248,454)
- ---------------------------------------------------------------------------------------------------------
Other Classes 0 0
- ---------------------------------------------------------------------------------------------------------
Total Distributions (68,200) (302,786)
=========================================================================================================
Fund Share Transactions:
Receipts for shares sold
Class A 626,279 1,137,516
- ---------------------------------------------------------------------------------------------------------
Class B 6,098 9,446
- ---------------------------------------------------------------------------------------------------------
Class C 76,400 143,022
- ---------------------------------------------------------------------------------------------------------
Other Classes 0 0
- ---------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 7,489 32,770
- ---------------------------------------------------------------------------------------------------------
Class B 4,206 17,256
- ---------------------------------------------------------------------------------------------------------
Class C 52,768 234,139
- ---------------------------------------------------------------------------------------------------------
Other Classes 0 0
- ---------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (650,044) (1,171,453)
- ---------------------------------------------------------------------------------------------------------
Class B (10,858) (16,188)
- ---------------------------------------------------------------------------------------------------------
Class C (155,657) (371,192)
- ---------------------------------------------------------------------------------------------------------
Other Classes 0 0
- ---------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from Fund share transactions (43,319) 15,316
- ---------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets (63,329) (1,338)
=========================================================================================================
Net Assets:
Beginning of period 1,186,199 1,187,537
- ---------------------------------------------------------------------------------------------------------
End of period * $ 1,122,870 $ 1,186,199
- ---------------------------------------------------------------------------------------------------------
*Including net undistributed (overdistributed) investment income of: $ 32,139 $ 37,813
- ---------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes 71
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Amounts in thousands Small-Cap Value 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) $ 2,173 $ 2,083
- ----------------------------------------------------------------------------------------------------------
Net realized gain (loss) (13,324) 15,567
- ----------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) (24,115) (3,548)
- ----------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from operations (35,266) 14,102
==========================================================================================================
Distributions to Shareholders:
From net investment income
Class A (1,065) (226)
- ----------------------------------------------------------------------------------------------------------
Class B (416) (310)
- ----------------------------------------------------------------------------------------------------------
Class C (329) (410)
- ----------------------------------------------------------------------------------------------------------
Other Classes (1,043) (394)
- ----------------------------------------------------------------------------------------------------------
From net realized capital gains
Class A (2,675) (1,098)
- ----------------------------------------------------------------------------------------------------------
Class B (3,114) (2,248)
- ----------------------------------------------------------------------------------------------------------
Class C (3,425) (2,979)
- ----------------------------------------------------------------------------------------------------------
Other Classes (2,175) (2,032)
- ----------------------------------------------------------------------------------------------------------
In excess of net realized capital gains
Class A 0 0
- ----------------------------------------------------------------------------------------------------------
Class B 0 0
- ----------------------------------------------------------------------------------------------------------
Class C 0 0
- ----------------------------------------------------------------------------------------------------------
Other Classes 0 0
- ----------------------------------------------------------------------------------------------------------
Total Distributions (14,242) (9,697)
==========================================================================================================
Fund Share Transactions:
Receipts for shares sold
Class A 45,753 78,581
- ----------------------------------------------------------------------------------------------------------
Class B 25,214 105,195
- ----------------------------------------------------------------------------------------------------------
Class C 31,560 124,033
- ----------------------------------------------------------------------------------------------------------
Other Classes 36,616 50,928
- ----------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 3,547 1,246
- ----------------------------------------------------------------------------------------------------------
Class B 3,300 2,393
- ----------------------------------------------------------------------------------------------------------
Class C 3,580 3,224
- ----------------------------------------------------------------------------------------------------------
Other Classes 2,991 2,197
- ----------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (19,513) (10,783)
- ----------------------------------------------------------------------------------------------------------
Class B (16,908) (6,886)
- ----------------------------------------------------------------------------------------------------------
Class C (29,450) (18,158)
- ----------------------------------------------------------------------------------------------------------
Other Classes (11,600) (40,655)
- ----------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from Fund share transactions 75,090 291,315
- ----------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets 25,582 295,720
==========================================================================================================
Net Assets:
Beginning of period 374,552 78,832
- ----------------------------------------------------------------------------------------------------------
End of period * $ 400,134 $ 374,552
- ----------------------------------------------------------------------------------------------------------
*Including net undistributed (overdistributed) investment
income of: $ 5,605 $ 6,285
- ----------------------------------------------------------------------------------------------------------
<CAPTION>
Amounts in thousands Opportunity Fund International Developed 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) $ (3,902) $ (11,377) $ (129) $ 1,254
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) (59,157) 134,358 2,906 1,678
- --------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 13,215 (16,839) (1,061) 16,311
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from operations (49,844) 106,142 1,716 19,243
================================================================================================================================
Distributions to Shareholders:
From net investment income
Class A 0 0 0 (4)
- --------------------------------------------------------------------------------------------------------------------------------
Class B 0 0 0 (11)
- --------------------------------------------------------------------------------------------------------------------------------
Class C 0 0 0 (18)
- --------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 (462) (838)
- --------------------------------------------------------------------------------------------------------------------------------
From net realized capital gains
Class A (21,702) (13,050) (17) (23)
- --------------------------------------------------------------------------------------------------------------------------------
Class B 0 0 (29) (99)
- --------------------------------------------------------------------------------------------------------------------------------
Class C (66,671) (40,210) (69) (169)
- --------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 (1,312) (4,282)
- --------------------------------------------------------------------------------------------------------------------------------
In excess of net realized capital gains
Class A 0 0 0 0
- --------------------------------------------------------------------------------------------------------------------------------
Class B 0 0 0 0
- --------------------------------------------------------------------------------------------------------------------------------
Class C 0 0 0 0
- --------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0
- --------------------------------------------------------------------------------------------------------------------------------
Total Distributions (88,373) (53,260) (1,889) (5,444)
================================================================================================================================
Fund Share Transactions:
Receipts for shares sold
Class A 651,197 595,236 106,058 58,239
- --------------------------------------------------------------------------------------------------------------------------------
Class B 0 0 806 2,740
- --------------------------------------------------------------------------------------------------------------------------------
Class C 243,574 548,593 1,952 5,503
- --------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 48,478 72,498
- --------------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 19,981 12,054 15 25
- --------------------------------------------------------------------------------------------------------------------------------
Class B 0 0 25 77
- --------------------------------------------------------------------------------------------------------------------------------
Class C 61,613 36,779 66 183
- --------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 1,576 4,340
- --------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (698,821) (639,360) (106,529) (58,269)
- --------------------------------------------------------------------------------------------------------------------------------
Class B 0 0 (957) (1,269)
- --------------------------------------------------------------------------------------------------------------------------------
Class C (323,620) (748,168) (2,178) (2,383)
- --------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 (56,202) (57,045)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from
Fund share transactions (46,076) (194,866) (6,890) 24,639
- --------------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets (184,293) (141,984) (7,063) 38,438
================================================================================================================================
Net Assets:
Beginning of period 700,946 842,930 138,751 100,313
- --------------------------------------------------------------------------------------------------------------------------------
End of period * $ 516,653 $ 700,946 $ 131,688 $ 138,751
- --------------------------------------------------------------------------------------------------------------------------------
*Including net undistributed (overdistributed)
investment income of: $ (3,902) $ 0 $ (134) $ 457
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
72 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Amounts in thousands International Fund Emerging Markets 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) $ (950) $ (580) $ 120 $ 195
- -------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 5,993 8,506 (2,309) (3,044)
- -------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) (14,069) 7,290 (2,519) (10,785)
- -------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from operations (9,026) 15,216 (4,708) (13,634)
===============================================================================================================================
Distributions to Shareholders:
From net investment income
Class A 0 0 (2) 0
- -------------------------------------------------------------------------------------------------------------------------------
Class B 0 0 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Class C 0 0 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 (107) 0
- -------------------------------------------------------------------------------------------------------------------------------
From net realized capital gains
Class A (772) (1,244) 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Class B (789) (719) 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Class C (10,255) (11,750) 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Other Classes (196) 0 0 0
- -------------------------------------------------------------------------------------------------------------------------------
In excess of net realized capital gains
Class A 0 0 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Class B 0 0 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Class C 0 0 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Total Distributions (12,012) (13,713) (109) 0
===============================================================================================================================
Fund Share Transactions:
Receipts for shares sold
Class A 256,676 283,880 1,654 2,177
- -------------------------------------------------------------------------------------------------------------------------------
Class B 17,966 7,431 71 694
- -------------------------------------------------------------------------------------------------------------------------------
Class C 224,194 268,540 153 1,394
- -------------------------------------------------------------------------------------------------------------------------------
Other Classes 10,776 0 13,332 24,872
- -------------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 724 1,179 1 0
- -------------------------------------------------------------------------------------------------------------------------------
Class B 715 643 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Class C 9,581 10,909 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Other Classes 196 0 84 0
- -------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (262,238) (292,362) (1,593) (1,874)
- -------------------------------------------------------------------------------------------------------------------------------
Class B (17,767) (7,860) (158) (460)
- -------------------------------------------------------------------------------------------------------------------------------
Class C (235,582) (314,820) (427) (1,562)
- -------------------------------------------------------------------------------------------------------------------------------
Other Classes (285) 0 (15,496) (39,213)
- -------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from Fund share transactions 4,956 (42,460) (2,379) (13,972)
- -------------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets (16,082) (40,957) (7,196) (27,606)
===============================================================================================================================
Net Assets:
Beginning of period 154,452 195,409 27,569 55,175
- -------------------------------------------------------------------------------------------------------------------------------
End of period * $ 138,370 $ 154,452 $ 20,373 $ 27,569
- -------------------------------------------------------------------------------------------------------------------------------
*Including net undistributed (overdistributed)
investment income of: $ (1,288) $ (338) $ 8 $ (3)
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Amounts in thousands Innovation Fund Precious Metals Fund
-------------------------------------------------------------------------
Six Months Ended Six Months Ended
Increase (Decrease) in Net Assets from: December 31, 1998 Year Ended December 31, 1998 Year Ended
(Unaudited) June 30, 1998 (Unaudited) June 30, 1998
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ (3,276) $ (4,786) $ 413 $ 22
- -------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 56,681 18,138 (3,792) (8,090)
- -------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 81,287 109,570 4,939 (3,094)
- -------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from operations 134,692 122,922 1,560 (11,162)
===============================================================================================================================
Distributions to Shareholders:
From net investment income
Class A 0 0 (47) 0
- -------------------------------------------------------------------------------------------------------------------------------
Class B 0 0 (95) 0
- -------------------------------------------------------------------------------------------------------------------------------
Class C 0 0 (366) 0
- -------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0
- -------------------------------------------------------------------------------------------------------------------------------
From net realized capital gains
Class A (4,919) (2,994) 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Class B (5,496) (3,093) 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Class C (12,996) (9,130) 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Other Classes (143) 0 0 0
- -------------------------------------------------------------------------------------------------------------------------------
In excess of net realized capital gains
Class A 0 (528) 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Class B 0 (546) 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Class C 0 (1,611) 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Total Distributions (23,554) (17,902) (508) 0
===============================================================================================================================
Fund Share Transactions:
Receipts for shares sold
Class A 222,675 353,943 103,978 371,343
- -------------------------------------------------------------------------------------------------------------------------------
Class B 45,635 18,925 2,565 8,049
- -------------------------------------------------------------------------------------------------------------------------------
Class C 108,044 89,214 80,347 124,855
- -------------------------------------------------------------------------------------------------------------------------------
Other Classes 4,967 124 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 4,536 3,237 46 0
- -------------------------------------------------------------------------------------------------------------------------------
Class B 5,124 3,439 95 0
- -------------------------------------------------------------------------------------------------------------------------------
Class C 12,328 10,261 363 0
- -------------------------------------------------------------------------------------------------------------------------------
Other Classes 142 0 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (196,989) (351,255) (106,091) (370,208)
- -------------------------------------------------------------------------------------------------------------------------------
Class B (10,210) (13,734) (2,552) (6,475)
- -------------------------------------------------------------------------------------------------------------------------------
Class C (68,457) (103,423) (82,627) (124,238)
- -------------------------------------------------------------------------------------------------------------------------------
Other Classes (707) 0 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) resulting from Fund share transactions 127,088 10,731 (3,876) 3,326
- -------------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets 238,266 115,751 (2,824) (7,836)
===============================================================================================================================
Net Assets:
Beginning of period 386,327 270,576 25,541 33,377
- -------------------------------------------------------------------------------------------------------------------------------
End of period * $ 624,553 $ 386,327 $ 22,717 $ 25,541
- -------------------------------------------------------------------------------------------------------------------------------
*Including net undistributed (overdistributed) investment
income of: $ (3,276) $ 0 $ (111) $ (16)
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Amounts in thousands Balanced Fund
-----------------------------------
Six Months Ended
Increase (Decrease) in Net Assets from: December 31, 1998 Year Ended
(Unaudited) June 30, 1998
<S> <C> <C>
Operations:
Net investment income (loss) $ 878 $ 1,822
- ----------------------------------------------------------------------------------------
Net realized gain (loss) 1,709 11,033
- ----------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) (606) (1,046)
- ----------------------------------------------------------------------------------------
Net increase (decrease) resulting from operations 1,981 11,809
========================================================================================
Distributions to Shareholders:
From net investment income
Class A (118) (130)
- ----------------------------------------------------------------------------------------
Class B (119) (100)
- ----------------------------------------------------------------------------------------
Class C (121) (98)
- ----------------------------------------------------------------------------------------
Other Classes (475) (1,462)
- ----------------------------------------------------------------------------------------
From net realized capital gains
Class A (1,439) (495)
- ----------------------------------------------------------------------------------------
Class B (1,545) (247)
- ----------------------------------------------------------------------------------------
Class C (1,545) (285)
- ----------------------------------------------------------------------------------------
Other Classes (5,061) (5,071)
- ----------------------------------------------------------------------------------------
In excess of net realized capital gains
Class A 0 0
- ----------------------------------------------------------------------------------------
Class B 0 0
- ----------------------------------------------------------------------------------------
Class C 0 0
- ----------------------------------------------------------------------------------------
Other Classes 0 0
- ----------------------------------------------------------------------------------------
Total Distributions (10,423) (7,888)
========================================================================================
Fund Share Transactions:
Receipts for shares sold
Class A 3,439 10,035
- ----------------------------------------------------------------------------------------
Class B 3,936 8,086
- ----------------------------------------------------------------------------------------
Class C 4,235 7,888
- ----------------------------------------------------------------------------------------
Other Classes 1,822 5,975
- ----------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 835 602
- ----------------------------------------------------------------------------------------
Class B 1,453 302
- ----------------------------------------------------------------------------------------
Class C 1,547 367
- ----------------------------------------------------------------------------------------
Other Classes 5,495 6,512
- ----------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (3,426) (1,454)
- ----------------------------------------------------------------------------------------
Class B (1,136) (827)
- ----------------------------------------------------------------------------------------
Class C (1,225) (943)
- ----------------------------------------------------------------------------------------
Other Classes (5,948) (36,139)
- ----------------------------------------------------------------------------------------
Net increase (decrease) resulting from Fund share transactions 11,027 404
- ----------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets 2,586 4,325
- ----------------------------------------------------------------------------------------
Net Assets:
Beginning of period 68,254 63,929
- ----------------------------------------------------------------------------------------
End of period * $ 70,839 $ 68,254
- ----------------------------------------------------------------------------------------
*Including net undistributed (overdistributed) investment
income of: $ 2,623 $ 2,578
- ----------------------------------------------------------------------------------------
</TABLE>
See accompanying notes 73
<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 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 A, B and C Classes (the "Retail Classes") of the Trust. Certain detailed
financial information for the Institutional, Administrative 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
Equity Income, Renaissance, Value and Balanced Funds. Dividends from net
investment income, if any, are declared and paid at least annually to
shareholders of record by the other Funds. Net long-term capital gains earned by
a Fund, if any, will be distributed no less frequently than once each year.
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.
74
<PAGE>
Foreign Taxes on Dividends. Dividend income in the statement of operations is
shown net of foreign taxes withheld on dividends from foreign securities.
Foreign taxes withheld were as follows: Equity Income Fund - $7,736; Value Fund
- - $13,783; Renaissance Fund - $8,699; Tax-Efficient Equity Fund - $10; Growth
Fund - $3,432; Value 25 Fund - $61; Mid-Cap Growth Fund - $5,933; Small-Cap
Value Fund - $2,070; International Developed Fund - $66,404; International Fund
- - $109,643; Emerging Markets Fund - $39,490; Precious Metals Fund - $7,902; 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 Growth and
Value 25 Funds; 0.55% for the Target and International Funds; 0.60% for the
Renaissance, Small-Cap Value, International Developed and Precious Metals Funds;
0.65% for the Opportunity and Innovation Funds; 0.85% for the Emerging Markets
Funds; and 0.45% for all other Funds. Each of the Funds also has a sub-advisor
which, under the supervision of PIMCO Advisors, directs the investments of the
Fund's assets. Other than the sub-advisor of the Precious Metals Fund, all of
the sub-advisors are affiliates of PIMCO Advisors. The advisory fees received by
PIMCO Advisors are paid in all or in part to each of the sub-advisors in
accordance with the portfolio management agreements.
Administration Fee. PIMCO provides administrative services to the Trust for
which it receives from each Fund a monthly administrative fee based on each
share class's average daily net assets. The Administration Fee for the Retail
Classes is charged at the annual rate of 0.65% for the International Developed,
International and Emerging Markets Funds; 0.45% for the Precious Metals Fund;
and 0.40% for all other Funds. The Administration Fee for the Institutional and
Administrative Classes is charged at the annual rate of 0.50% for the
International Growth, Emerging Markets and International Developed Funds and
0.25% for all other Funds. The Administration Fee for Class D is charged at the
annual rate of 0.40%.
75
<PAGE>
Notes to Financial Statements (Cont.)
December 31, 1998 (Unaudited)
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 Retail
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 Retail 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 Retail
Classes shares. For the period ended December 31, 1998, PFD received $3,300,341
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 per share class, as disclosed in the Financial Highlights, may differ
from the annual fund operating expenses per share class 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.
76
<PAGE>
4. 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):
U.S. Government/Agency All Other
-------------------------------------------------
Purchases Sales Purchases Sales
- --------------------------------------------------------------------------------
Equity Income Fund $ 70,941 $ 70,240
Value Fund 106,255 103,491
Renaissance Fund 616,624 605,913
Tax-Efficient Equity Fund 12,460 514
Capital Appreciation Fund 740,050 656,609
Growth Fund 994,762 1,098,429
Value 25 Fund 2,294 376
Mid-Cap Growth Fund 493,490 334,742
Target Fund 1,234,709 1,356,167
Small-Cap Value Fund 161,631 81,254
Opportunity Fund 190,563 309,378
International Developed Fund 22,725 23,583
International Fund 23,517 44,567
Emerging Markets Fund 5,027 6,863
Innovation Fund 321,406 235,262
Precious Metals Fund 7,188 6,737
Balanced Fund $ 55,136 $ 47,182 25,515 21,897
5. Federal Income Tax Matters
As of June 30, 1998, the Funds listed in the table below have remaining capital
loss carryforwards that were realized in current and prior years. Additionally,
the International, Emerging Markets, and Precious Metals Funds realized capital
losses and/or foreign currency losses during the period November 1, 1997 through
June 30, 1998, which the Funds elected to defer to the following fiscal year
pursuant to income tax regulations. The amounts are $332,309, $3,263 and
$6,320,994 respectively.
Each Fund will resume capital gain distribution 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
Precious Metals Fund 1,636 06/30/06
6. Transactions in Written Call and Put Options
Transactions in written call and put options were as follows (amounts in
thousands):
<TABLE>
<CAPTION>
Renaissance Fund Growth Fund Target Fund
- --------------------------------------------------------------------------------------------------
Premium Contracts Premium Contracts Premium Contracts
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at 06/30/98 $ 132 630 $ 0 0 $ 0 0
Sales 704 4,351 1,316 4,436 1,590 112,700
Closing Buys (571) (3,675) (340) (956) (1,140) (111,775)
Expirations (132) (630) (976) (3,480) (450) (925)
Exercised 0 0 0 0 0 0
- --------------------------------------------------------------------------------------------------
Balance at 12/31/98 $ 133 676 $ 0 0 $ 0 0
- --------------------------------------------------------------------------------------------------
<CAPTION>
Opportunity Fund Innovation Fund
- --------------------------------------------------------------------------
Premium Contracts Premium Contracts
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at 06/30/98 $ 0 0 $ 650 1,500
Sales 2,541 9,187 3,790 7,100
Closing Buys (339) (1,000) (2,975) (5,948)
Expirations (479) (2,000) (1,141) (2,000)
Exercised (523) (2,767) (1) (2)
- -------------------------------------------------------------------------
Balance at 12/31/98 $ 1,200 3,420 $ 323 650
- -------------------------------------------------------------------------
</TABLE>
77
<PAGE>
Notes to Financial Statements (Cont.)
December 31, 1998 (Unaudited)
7. 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
(amounts in thousands):
<TABLE>
<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
Class A 308 $ 4,670 807 $ 13,092
- --------------------------------------------------------------------------------------------------
Class B 326 4,859 788 12,684
- --------------------------------------------------------------------------------------------------
Class C 472 6,963 1,154 18,527
- --------------------------------------------------------------------------------------------------
Other Classes 1,052 15,667 1,260 20,453
- --------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 126 1,761 81 1,244
- --------------------------------------------------------------------------------------------------
Class B 141 1,970 54 825
- --------------------------------------------------------------------------------------------------
Class C 198 2,770 99 1,506
- --------------------------------------------------------------------------------------------------
Other Classes 1,277 18,002 1,359 20,925
- --------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (164) (2,451) (195) (3,164)
- --------------------------------------------------------------------------------------------------
Class B (120) (1,760) (59) (961)
- --------------------------------------------------------------------------------------------------
Class C (412) (6,099) (238) (3,868)
- --------------------------------------------------------------------------------------------------
Other Classes (1,736) (25,647) (1,659) (26,929)
- --------------------------------------------------------------------------------------------------
Net increase resulting from Fund share transactions 1,468 $ 20,705 3,451 $ 54,334
==================================================================================================
<CAPTION>
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
Class A 1,085 $ 15,407 1,242 $ 19,311
- --------------------------------------------------------------------------------------------------
Class B 181 2,635 613 9,503
- --------------------------------------------------------------------------------------------------
Class C 557 7,938 2,153 33,261
- --------------------------------------------------------------------------------------------------
Other Classes 1,292 19,213 1,789 28,033
- --------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 149 2,014 128 1,885
- --------------------------------------------------------------------------------------------------
Class B 263 3,540 196 2,853
- --------------------------------------------------------------------------------------------------
Class C 654 8,782 517 7,528
- --------------------------------------------------------------------------------------------------
Other Classes 900 12,154 637 9,361
- --------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (1,204) (17,386) (1,038) (16,080)
- --------------------------------------------------------------------------------------------------
Class B (245) (3,479) (242) (3,736)
- --------------------------------------------------------------------------------------------------
Class C (926) (13,257) (1,356) (20,988)
- --------------------------------------------------------------------------------------------------
Other Classes (543) (7,791) (1,483) (23,096)
- --------------------------------------------------------------------------------------------------
Net increase resulting from Fund share transactions 2,163 $ 29,770 3,156 $ 47,835
==================================================================================================
<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
Class A 4,134 $ 91,898 4,474 $ 104,053
- --------------------------------------------------------------------------------------------------------------
Class B 838 18,262 2,368 54,506
- --------------------------------------------------------------------------------------------------------------
Class C 1,013 21,865 3,986 90,916
- --------------------------------------------------------------------------------------------------------------
Other Classes 12,757 281,533 15,177 351,303
- --------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 205 4,391 51 1,158
- --------------------------------------------------------------------------------------------------------------
Class B 181 3,820 103 2,327
- --------------------------------------------------------------------------------------------------------------
Class C 278 5,853 185 4,187
- --------------------------------------------------------------------------------------------------------------
Other Classes 1,136 24,405 999 22,766
- --------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (1,915) (41,436) (2,744) (64,062)
- --------------------------------------------------------------------------------------------------------------
Class B (434) (9,089) (316) (7,281)
- --------------------------------------------------------------------------------------------------------------
Class C (1,088) (23,297) (925) (21,124)
- --------------------------------------------------------------------------------------------------------------
Other Classes (8,052) (178,221) (9,392) (217,945)
- --------------------------------------------------------------------------------------------------------------
Net increase resulting from Fund share transactions 9,053 $ 199,984 13,966 $ 320,804
==============================================================================================================
<CAPTION>
Target 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
Class A 42,676 $ 626,279 70,981 $ 1,137,516
- -------------------------------------------------------------------------------------------------------------
Class B 433 6,098 601 9,446
- -------------------------------------------------------------------------------------------------------------
Class C 5,566 76,400 9,280 143,022
- -------------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0
- -------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 517 7,489 2,292 32,770
- -------------------------------------------------------------------------------------------------------------
Class B 312 4,206 1,280 17,256
- -------------------------------------------------------------------------------------------------------------
Class C 3,915 52,768 17,369 234,139
- -------------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0
- -------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (43,838) (650,044) (72,612) (1,171,453)
- -------------------------------------------------------------------------------------------------------------
Class B (786) (10,858) (1,100) (16,188)
- -------------------------------------------------------------------------------------------------------------
Class C (11,280) (155,657) (24,627) (371,192)
- -------------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0
- -------------------------------------------------------------------------------------------------------------
Net increase resulting from Fund share transactions (2,485) $ (43,319) 3,464 $ 15,316
=============================================================================================================
</TABLE>
78
<PAGE>
<TABLE>
<CAPTION>
Tax-Efficient
Renaissance Fund Equity 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
Class A 7,748 $ 131,113 10,943 $ 203,937 432 $ 4,185
- --------------------------------------------------------------------------------------------------------------------------------
Class B 1,811 31,748 3,123 57,972 360 3,511
- --------------------------------------------------------------------------------------------------------------------------------
Class C 3,148 53,459 10,952 202,638 681 6,606
- --------------------------------------------------------------------------------------------------------------------------------
Other Classes 19 304 51 887 112 1,109
- --------------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 625 9,521 418 7,011 0 0
- --------------------------------------------------------------------------------------------------------------------------------
Class B 886 13,415 478 8,021 0 0
- --------------------------------------------------------------------------------------------------------------------------------
Class C 3,433 51,673 3,551 59,208 0 0
- --------------------------------------------------------------------------------------------------------------------------------
Other Classes 3 38 0 0 0 0
- --------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (7,611) (129,390) (8,781) (164,942) (89) (893)
- --------------------------------------------------------------------------------------------------------------------------------
Class B (804) (13,462) (420) (7,786) (100) (982)
- --------------------------------------------------------------------------------------------------------------------------------
Class C (4,562) (75,931) (7,456) (138,986) (134) (1,332)
- --------------------------------------------------------------------------------------------------------------------------------
Other Classes (45) (776) 0 0 0 0
- --------------------------------------------------------------------------------------------------------------------------------
Net increase resulting from Fund share transactions 4,651 $ 71,712 12,859 $ 227,960 1,262 $ 12,204
================================================================================================================================
<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
Class A 1,228 $ 30,486 2,800 $ 66,636
- ----------------------------------------------------------------------------------------------------
Class B 547 13,203 1,489 35,779
- ----------------------------------------------------------------------------------------------------
Class C 779 18,586 2,630 62,600
- ----------------------------------------------------------------------------------------------------
Other Classes 10,301 254,414 16,465 395,404
- ----------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 249 5,855 38 887
- ----------------------------------------------------------------------------------------------------
Class B 130 3,011 32 737
- ----------------------------------------------------------------------------------------------------
Class C 209 4,828 106 2,440
- ----------------------------------------------------------------------------------------------------
Other Classes 2,085 49,227 1,684 39,039
- ----------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (381) (9,043) (348) (8,606)
- ----------------------------------------------------------------------------------------------------
Class B (195) (4,517) (76) (1,820)
- ----------------------------------------------------------------------------------------------------
Class C (479) (11,007) (583) (13,721)
- ----------------------------------------------------------------------------------------------------
Other Classes (11,550) (281,349) (7,652) (182,910)
- ----------------------------------------------------------------------------------------------------
Net increase resulting from Fund share transactions 2,923 $ 73,694 16,585 $ 396,465
====================================================================================================
<CAPTION>
Growth 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
Class A 6,992 $ 211,083 11,481 $ 330,680 83 $ 719
- --------------------------------------------------------------------------------------------------------------------------------
Class B 824 23,283 588 16,100 83 712
- --------------------------------------------------------------------------------------------------------------------------------
Class C 9,882 274,067 13,609 370,235 82 706
- --------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0 19 187
- --------------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 690 20,135 809 20,743 0 3
- --------------------------------------------------------------------------------------------------------------------------------
Class B 398 10,648 375 8,981 0 2
- --------------------------------------------------------------------------------------------------------------------------------
Class C 8,068 215,651 9,474 226,702 0 1
- --------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0 0 1
- --------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (6,791) (206,028) (12,217) (355,128) (24) (193)
- --------------------------------------------------------------------------------------------------------------------------------
Class B (396) (11,063) (476) (12,901) 0 0
- --------------------------------------------------------------------------------------------------------------------------------
Class C (12,122) (338,013) (21,186) (574,802) (6) (51)
- --------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------------------------------
Net increase resulting from Fund share transactions 7,545 $ 199,763 2,457 $ 30,610 237 $ 2,087
================================================================================================================================
<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
Class A 2,957 $ 45,753 4,385 $ 78,581
- -----------------------------------------------------------------------------------------------------
Class B 1,639 25,214 5,902 105,195
- -----------------------------------------------------------------------------------------------------
Class C 2,072 31,560 7,001 124,033
- -----------------------------------------------------------------------------------------------------
Other Classes 2,395 36,616 2,829 50,928
- -----------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 242 3,547 71 1,246
- -----------------------------------------------------------------------------------------------------
Class B 227 3,300 137 2,393
- -----------------------------------------------------------------------------------------------------
Class C 247 3,580 185 3,224
- -----------------------------------------------------------------------------------------------------
Other Classes 203 2,991 125 2,197
- -----------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (1,295) (19,513) (602) (10,783)
- -----------------------------------------------------------------------------------------------------
Class B (1,128) (16,908) (386) (6,886)
- -----------------------------------------------------------------------------------------------------
Class C (1,938) (29,450) (1,017) (18,158)
- -----------------------------------------------------------------------------------------------------
Other Classes (762) (11,600) (2,232) (40,655)
- -----------------------------------------------------------------------------------------------------
Net increase resulting from Fund share transactions 4,859 $ 75,090 16,398 $ 291,315
=====================================================================================================
<CAPTION>
Opportunity 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
Class A 26,037 $ 651,197 19,485 $ 595,236
- ----------------------------------------------------------------------------------------------------
Class B 0 0 0 0
- ----------------------------------------------------------------------------------------------------
Class C 10,664 243,574 19,302 548,593
- ----------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0
- ----------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 900 19,981 416 12,054
- ----------------------------------------------------------------------------------------------------
Class B 0 0 0 0
- ----------------------------------------------------------------------------------------------------
Class C 3,081 61,613 1,371 36,779
- ----------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0
- ----------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (27,359) (698,821) (20,762) (639,360)
- ----------------------------------------------------------------------------------------------------
Class B 0 0 0 0
- ----------------------------------------------------------------------------------------------------
Class C (13,872) (323,620) (26,338) (748,168)
- ----------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0
- ----------------------------------------------------------------------------------------------------
Net increase resulting from Fund share transactions (549) $ (46,076) (6,526) $(194,866)
====================================================================================================
<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
Class A 7,974 $ 106,058 4,256 $ 58,239
- ------------------------------------------------------------------------------------------------------
Class B 61 806 206 2,740
- ------------------------------------------------------------------------------------------------------
Class C 145 1,952 426 5,503
- ------------------------------------------------------------------------------------------------------
Other Classes 3,601 48,478 5,531 72,498
- ------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 1 15 2 25
- ------------------------------------------------------------------------------------------------------
Class B 2 25 7 77
- ------------------------------------------------------------------------------------------------------
Class C 5 66 16 183
- ------------------------------------------------------------------------------------------------------
Other Classes 120 1,576 375 4,340
- ------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (7,943) (106,529) (4,208) (58,269)
- ------------------------------------------------------------------------------------------------------
Class B (73) (957) (94) (1,269)
- ------------------------------------------------------------------------------------------------------
Class C (164) (2,178) (186) (2,383)
- ------------------------------------------------------------------------------------------------------
Other Classes (4,040) (56,202) (4,281) (57,045)
- ------------------------------------------------------------------------------------------------------
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
Class A 20,634 $ 256,676 21,036 $ 283,880
- -------------------------------------------------------------------------------------------------------
Class B 1,562 17,966 593 7,431
- -------------------------------------------------------------------------------------------------------
Class C 18,869 224,194 21,197 268,540
- -------------------------------------------------------------------------------------------------------
Other Classes 1,019 10,776 0 0
- -------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 64 724 99 1,179
- -------------------------------------------------------------------------------------------------------
Class B 68 715 57 643
- -------------------------------------------------------------------------------------------------------
Class C 912 9,581 973 10,909
- -------------------------------------------------------------------------------------------------------
Other Classes 18 196 0 0
- -------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (20,841) (262,238) (21,545) (292,362)
- -------------------------------------------------------------------------------------------------------
Class B (1,532) (17,767) (625) (7,860)
- -------------------------------------------------------------------------------------------------------
Class C (19,643) (235,582) (24,720) (314,820)
- -------------------------------------------------------------------------------------------------------
Other Classes (25) (285) 0 0
- -------------------------------------------------------------------------------------------------------
Net increase resulting from Fund share transactions 1,105 $ 4,956 (2,935) $ (42,460)
=======================================================================================================
</TABLE>
79
<PAGE>
Notes to Financial Statements (Cont.)
December 31, 1998 (Unaudited)
<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
Class A 189 $ 1,654 187 $ 2,177
- -------------------------------------------------------------------------------------------------------
Class B 9 71 57 694
- -------------------------------------------------------------------------------------------------------
Class C 18 153 117 1,394
- -------------------------------------------------------------------------------------------------------
Other Classes 1,600 13,332 2,087 24,872
- -------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 0 1 0 0
- -------------------------------------------------------------------------------------------------------
Class B 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Class C 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Other Classes 10 84 0 0
- -------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (182) (1,593) (160) (1,874)
- -------------------------------------------------------------------------------------------------------
Class B (19) (158) (41) (460)
- -------------------------------------------------------------------------------------------------------
Class C (49) (427) (132) (1,562)
- -------------------------------------------------------------------------------------------------------
Other Classes (1,875) (15,496) (3,358) (39,213)
- -------------------------------------------------------------------------------------------------------
Net increase resulting from Fund share transactions (299) $ (2,379) (1,243) $ (13,972)
=======================================================================================================
<CAPTION>
Innovation Fund
-----------------------------------------------------
Six Months Ended 12/31/98 Year Ended 6/30/98
Shares Amount Shares Amount
-----------------------------------------------------
Receipts for shares sold
<S> <C> <C> <C> <C>
Class A 9,113 $ 222,675 17,255 $ 353,943
- ---------------------------------------------------------------------------------------------------------
Class B 1,820 45,635 945 18,925
- ---------------------------------------------------------------------------------------------------------
Class C 4,397 108,044 4,460 89,214
- ---------------------------------------------------------------------------------------------------------
Other Classes 190 4,967 6 124
- ---------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 166 4,536 174 3,237
- ---------------------------------------------------------------------------------------------------------
Class B 193 5,124 190 3,439
- ---------------------------------------------------------------------------------------------------------
Class C 465 12,328 566 10,261
- ---------------------------------------------------------------------------------------------------------
Other Classes 5 142 0 0
- ---------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (8,187) (196,989) (17,121) (351,255)
- ---------------------------------------------------------------------------------------------------------
Class B (443) (10,210) (708) (13,734)
- ---------------------------------------------------------------------------------------------------------
Class C (2,861) (68,457) (5,262) (103,423)
- ---------------------------------------------------------------------------------------------------------
Other Classes (29) (707) 0 0
- ---------------------------------------------------------------------------------------------------------
Net increase resulting from Fund share transactions 4,829 $ 127,088 505 $ 10,731
- ---------------------------------------------------------------------------------------------------------
<CAPTION>
Precious Metals Fund
-----------------------------------------------------
Six Months Ended 12/31/98 Year Ended 6/30/98
Shares Amount Shares Amount
-----------------------------------------------------
Receipts for shares sold
<S> <C> <C> <C> <C>
Class A 18,868 $ 103,978 54,468 $ 371,343
- -------------------------------------------------------------------------------------------------------
Class B 478 2,565 1,291 8,049
- -------------------------------------------------------------------------------------------------------
Class C 15,504 80,347 20,195 124,855
- -------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 9 46 0 0
- -------------------------------------------------------------------------------------------------------
Class B 20 95 0 0
- -------------------------------------------------------------------------------------------------------
Class C 76 363 0 0
- -------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (19,087) (106,091) (54,039) (370,208)
- -------------------------------------------------------------------------------------------------------
Class B (472) (2,552) (1,019) (6,475)
- -------------------------------------------------------------------------------------------------------
Class C (15,892) (82,627) (19,787) (124,238)
- -------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0
- -------------------------------------------------------------------------------------------------------
Net increase resulting from Fund share transactions (496) $ (3,876) 1,109 $ 3,326
=======================================================================================================
<CAPTION>
Balanced Fund
-----------------------------------------------------
Six Months Ended 12/31/98 Year Ended 6/30/98
Shares Amount Shares Amount
-----------------------------------------------------
Receipts for shares sold
<S> <C> <C> <C> <C>
Class A 295 $ 3,439 830 $ 10,035
- ------------------------------------------------------------------------------------------------------
Class B 342 3,936 688 8,086
- ------------------------------------------------------------------------------------------------------
Class C 372 4,235 671 7,888
- ------------------------------------------------------------------------------------------------------
Other Classes 158 1,822 504 5,975
- ------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 80 835 53 602
- ------------------------------------------------------------------------------------------------------
Class B 141 1,453 26 302
- ------------------------------------------------------------------------------------------------------
Class C 150 1,547 32 367
- ------------------------------------------------------------------------------------------------------
Other Classes 525 5,495 567 6,512
- ------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (304) (3,426) (124) (1,454)
- ------------------------------------------------------------------------------------------------------
Class B (99) (1,136) (69) (827)
- ------------------------------------------------------------------------------------------------------
Class C (109) (1,225) (82) (943)
- ------------------------------------------------------------------------------------------------------
Other Classes (518) (5,948) (3,066) (36,139)
- ------------------------------------------------------------------------------------------------------
Net increase resulting from Fund share transactions 1,033 $ 11,027 30 $ 404
======================================================================================================
</TABLE>
80
<PAGE>
PIMCO Funds: Access to the highest standard
PIMCO Funds offers unique access to the investment expertise of PIMCO Advisors
L.P. PIMCO 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 First Data Investor Services Group, Inc.,
Servicing Agent and P.O. Box 9688, Providence, RI 02940-9688
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 1-800-426-
0107. Telephone representatives are available Monday-
Friday 8:30 am to 8:00 pm Eastern Time.
Smithtown, NY
Permit NO. 700
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.
PZ005.1/99
P I M C O
Funds
PIMCO Funds
Distributors LLC
2187 Atlantic Street
Stamford, CT 06902
