<PAGE>
PIMCO FUNDS ANNUAL REPORT
MULTI-MANAGER SERIES
June 30, 2000
Share Classes
/Ins/ Institutional
/Adm/ Administrative
PIMCO EQUITY ADVISORS
Equity Income Fund Mid-Cap Equity Fund
Value Fund Opportunity Fund
Renaissance Fund Innovation Fund
Growth Fund Global Innovation Fund
Select Growth Fund International Growth Fund
Target Fund
-------------------------------------------------------------------------------
CADENCE CAPITAL MANAGEMENT
Mega-Cap Fund Small-Cap Fund
Capital Appreciation Fund Micro-Cap Fund
Mid-Cap Fund
-------------------------------------------------------------------------------
NFJ INVESTMENT GROUP
Small-Cap Value Fund NFJ Equity Income Fund
NFJ Value Fund
-------------------------------------------------------------------------------
PARAMETRIC PORTFOLIO ASSOCIATES
Enhanced Equity Fund Tax-Efficient Structured
Tax-Efficient Equity Fund Emerging Markets Fund
Structured Emerging Markets Fund
-------------------------------------------------------------------------------
BLAIRLOGIE CAPITAL MANAGEMENT
International Fund
PIMCO FUNDS
<PAGE>
PIMCO FUNDS ANNUAL REPORT
MULTI-MANAGER
SERIES
Dear PIMCO Funds Shareholder:
The first half of 2000 could serve as a textbook illustration of U.S. stock
market volatility. After reaching record highs in the first quarter, both the
Dow Jones Industrial Average and the tech-focused NASDAQ Composite Index tumbled
during the second quarter, before starting to recover lost ground as the quarter
ended.
This unprecedented volatility has presented a challenge for many investors, some
of whom may have lost sight of the stock market's inherent risks, especially in
the context of the longest bull market in history. In times like these that try
investors' souls--and patience--it's more important than ever to remember a few
time-honored principles...
Maintain a diversified investment portfolio. Have a healthy respect for risk.
Keep your focus on the long term. Or as Bill Gross--PIMCO's oft-quoted bond
chief--has said, "Set your sights on a horizon and sail until you get there."
Those who can stick with these precepts will be able to ride out short-term
market gyrations and ultimately reach their investment goals. At PIMCO, we're
committed to providing investors with the kind of high quality investment
vehicles that can help them get there.
How have our Funds fared during these volatile times? Well, I'm pleased to
report that they have weathered the storms well, overcoming the extreme market
fluctuations to report strong performance over the past six months. You see, our
Fund Managers keep their sights firmly planted on the horizon too.
On the following pages you will find a more complete review of each Fund in
light of financial market activities as well as specific details about the total
return investment performance. We appreciate the trust you have placed in us,
and we will continue to focus our efforts to meet your investment needs.
If you have any questions regarding your investment, contact your financial
adviser, or call us at 1-888-87-PIMCO. Or visit our Web site at
www.pimcofunds.com.
Sincerely,
/s/ Stephen J. Treadway
Stephen J. Treadway
President, Chief Executive Officer
July 31, 2000
OF INTEREST On May 5, 2000, Allianz AG completed the acquisition of
approximately 70% of the outstanding partnership interests in PIMCO Advisors
L.P. ("PIMCO Advisors"), of which PIMCO is a subsidiary partnership. As a result
of this transaction, PIMCO Advisors, and its subsidiaries, are now controlled by
Allianz AG, a leading provider of financial services, particularly in Europe.
PIMCO remains operationally independent, continues to operate under its existing
name, and now leads the global fixed income investment efforts of Allianz AG.
Key employees at each of PIMCO Advisors' investment units, including PIMCO's
Bill Gross, have signed long-term employment contracts and have significant
profit-sharing and retention arrangements to ensure continuity of the investment
process and staff. With the addition of PIMCO Advisors, the Allianz Group
manages assets of approximately $650 billion, including more than 300 mutual
funds for retail and institutional clients around the world.
ANNUAL REPORT 1
<PAGE>
GROWTH, VALUE OR BLEND? A ROUNDTABLE DISCUSSION
MANAGER
Q & A
Ken Corba is PIMCO's leading growth investment expert and the manager of PIMCO
Growth, Select Growth and Growth and Income (formerly the Mid-Cap Equity Fund)
Funds. He has more than 15 years of growth investment experience. John Schneider
manages PIMCO Renaissance and Value Funds and has more than 12 years of value
investing experience. Dave Breed manages PIMCO Capital Appreciation and Mid-Cap
Funds and has more than 30 years of experience, specializing in
growth-at-a-reasonable-price, a type of blend investing.
Q: EACH OF YOU IS A STRONG BELIEVER IN YOUR OWN PARTICULAR INVESTMENT STYLE.
CAN YOU EXPLAIN WHY AN INVESTOR SHOULD HAVE EXPOSURE TO IT?
KC: While it's true that different investment styles outperform at various
times, I believe growth stock investing offers the greatest potential for
capital appreciation over the long term. For the last several years, growth
stocks have dominated the stock market in terms of both performance and
earnings growth--and I think this trend is likely to continue.
JS: I think it's prudent to have exposure to value stocks. Although they've
underperformed in recent years, history has shown that different investment
styles fall in and out of favor, so it makes sense to have exposure to various
investment styles. In addition, stock valuations are at historically high
levels, which I do not believe are sustainable. I would not be surprised to see
a rotation towards lower valuation issues in the near term.
DB: Growth-at-a-reasonable-price (GARP) investing represents what I believe
to be the best of both worlds for investors. It provides access to growth
potential but it also places importance on reasonable valuation. While
investors are certainly enamored with growth stocks right now, I believe they
are becoming more price sensitive, which usually happens during periods of
rising interest rates. GARP investing is the often-overlooked alternative to
growth and value investing.
Q: CAN YOU GIVE US AN EXAMPLE OF ONE OF YOUR BEST PERFORMING HOLDINGS THAT
EXEMPLIFIES YOUR INVESTMENT STYLE?
KC: One of our best performing holdings is JDS Uniphase, which makes fiber optic
components. Fiber optic telecommunications equipment is one of the
fastest-growing industries right now, and JDS Uniphase is the leader in this
area. The company has a very successful acquisition strategy, which has enabled
it to gain market share and complement its existing product line. It's one of
the great wealth-creating companies of our time--and just the kind of stock we
like to own.
JS: Ace Limited, a property and casualty insurance (P&C) company, has nearly
doubled since we added it to the portfolio. For more than a decade, property and
casualty insurance companies performed poorly because the industry suffered from
too much competition. However, we anticipated that the industry would lose its
weakest players, which would enable it to gain pricing power and increase
extremely narrow profit margins. As a result, we added fundamentally strong P&C
insurers, such as Ace, that we expected would benefit from the industry
consolidation. Ace, which boasts a strong balance sheet and an exceptional
management team, did indeed outperform.
DB: Corning, a fiber optic telecommunications equipment maker, has turned in a
strong performance for the Fund. We were attracted to the company last year
because of its relatively low valuation in such a high-growth industry. Its
stock price has risen as a result of several strategic acquisitions and plant
expansions that would increase capacity, as well as general investor enthusiasm
for this industry.
Q: WHAT AREAS OF TECHNOLOGY DO YOUR RESPECTIVE PORTFOLIOS HAVE EXPOSURE TO?
HOW DO THESE FIT WITH YOUR RESPECTIVE INVESTMENT STYLES?
KC: Because technology is such an important part of the stock market in
general--it now comprises 34% of the S&P 500 Index--and growth investing in
particular, we have significant exposure to this sector. We are invested in many
high-growth industries within technology, such as networking, fiber optics and
wireless telecommunications. We own many of the premier, blue chip tech
companies, including Cisco Systems, EMC and Nokia.
JS: We limit our exposure in the technology sector to companies we understand
and can value--typically commodity technology companies, such as semiconductor
manufacturers. They are cyclical companies, and we like to purchase them at the
time in their business cycle when they are undervalued and offer upside
potential. While we had a lot of exposure to commodity technology last year
(chip maker Micron was our largest holding for much of the year), we don't have
much exposure right now because we believe these stocks are near the peak of
their business cycle and are relatively overvalued.
2 PIMCO FUNDS
<PAGE>
[PHOTO] [PHOTO] [PHOTO]
Ken Corba John Schneider David Breed
DB: We own a number of different technology companies, such as chip maker Intel
and networking giant Cisco Systems. Because our goal is to offer investors an
overall portfolio that is growth-oriented but reasonably valued, we are able to
own these higher growth tech names and balance them out with companies, such as
Tyco and General Electric, that offer low relative valuations.
Q: TO WHAT DO YOU ATTRIBUTE THE RECENT VOLATILITY IN THE MARKET?
KC: I think when you see the kind of huge appreciation that we've experienced in
the past year, it only makes sense that the market would experience a
correction. I welcomed this correction, because I felt it was needed. And it
proved to be just the kind of correction that usually is best for the
market--deep, hard, frightening and short. A lot of the excesses were shaken out
of the stock market, which was healthy, and now the stock market appears to be
resuming its ascent.
JS: I attribute the volatility to the shift from institutional investors
dominating the stock market to individual investors, especially day traders,
comprising the majority of stock market investors. This has resulted in a
dramatic shortening of investors' time horizons as well as a dramatic increase
in investors' expectations. In addition, individual investors are much more
likely to adopt a herd mentality, resulting in mass exoduses from particular
stocks and sectors.
DB: I agree with both Ken and John. Certainly the en masse addition of day
traders and do-it-yourself investors to the stock market has changed the
environment and contributed to recent volatility. However, I believe a
correction was virtually inevitable after such a huge rise in the stock market
over a relatively short period of time.
Q: WHAT IS YOUR OUTLOOK FOR THE STOCK MARKET IN THE COMING MONTHS?
KC: I think the volatility is behind us, and the stock market should outperform
in the second half of the year for several reasons. First of all, the Federal
Reserve is almost finished tightening the money supply--if it hasn't already.
And growth stocks have historically performed best in periods of economic
deceleration with declining interest rates. In addition, we think the political
backdrop is also positive for the stock market. Proposed tax cuts, such as the
elimination of the estate tax, should stimulate the economy and the stock
market. And, of course, corporate fundamentals remain very strong, which should
augur well for equities.
JS: I don't think the volatility is necessarily behind us, and I think the stock
market may turn in a lackluster performance in the coming months. I believe
there is still a good chance that the domestic economy could plunge into a
recession and take the stock market down with it. However, I'm confident that
many value stocks have such low valuations that they can withstand a recession.
DB: I am optimistic about the stock market for the second half of the year. I
agree with Ken that corporate fundamentals are strong and that the economic
backdrop should be positive for equities. However, I believe that we still have
the specter of rising inflation, as gas prices show no signs of dropping soon. I
think that, in this environment, investors will become increasingly concerned
about valuations and, while they will not abandon growth stocks, they will flock
to those growth stocks that have reasonable prices.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The views of the manager are
not indicative of the future performance of any PIMCO Fund. 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. This article is distributed
for educational purposes and the opinions of the managers should not be
considered investment advice. Equity funds are subject to the basic stock market
risk that a particular security or securities, in general, may decrease in
value. All holdings are as of 6/30/00. PIMCO Growth Fund held JDS Uniphase
(4.11%), Cisco Systems (5.45%), EMC (7.92%) and Nokia (5.99%) in its portfolio.
PIMCO Select Growth Fund held JDS Uniphase (5.30%), Cisco Systems (5.61%), EMC
(6.80%), and Nokia (4.41%) in its portfolio. PIMCO Growth & Income Fund
(formerly the Mid-Cap Equity Fund) held EMC (2.34%) in its portfolio. PIMCO
Renaissance Fund held Ace Limited (5.44%) in its portfolio, as did PIMCO Value
Fund (5.14% of its portfolio). PIMCO Capital Appreciation Fund held Corning
(2.03%), Intel (1.88%), Cisco Systems (1.69%), Tyco (1.54%) and General Electric
(2.43%) in its portfolio.
The S&P 500 Index is an unmanaged market index. It is not possible to invest
directly in an unmanaged index.
ANNUAL REPORT 3
<PAGE>
PIMCO FUNDS FINANCIAL INFORMATION
We are pleased to present an in-depth review of the PIMCO Multi-Manager Series
Funds as of June 30, 2000. In order to help analyze, compare and contrast the
Funds, the report is broken down into a number of sections. Listed below is a
table of contents and descriptions of the various sections.
Pages 5-28 FUND SUMMARIES*
A summary of a Fund's performance record and portfolio composition, and a
review from the Fund's investment manager.
Pages 50-83 SCHEDULE OF INVESTMENTS*
The Schedule of Investments includes a listing of securities in the Fund's
portfolio as of June 30, 2000, including the number of shares or principal
amount and value as of that date.
<TABLE>
<CAPTION>
SCHEDULE OF
FUND NAME FUND SUMMARY INVESTMENTS
<S> <C> <C>
Equity Income Fund Page 5 Page 50
Value Fund Page 6 Page 51
Renaissance Fund Page 7 Page 52
Growth Fund Page 8 Page 53
Select Growth Fund Page 9 Page 54
Target Fund Page 10 Page 55
Mid-Cap Equity Fund Page 11 Page 56
Opportunity Fund Page 12 Page 57
Innovation Fund Page 13 Page 58
Global Innovation Fund Page 14 Page 59
International Growth Fund Page 15 Page 60
Mega-Cap Fund Page 16 Page 61
Capital Appreciation Fund Page 17 Page 62
Mid-Cap Fund Page 18 Page 63
Small-Cap Fund Page 19 Page 64
Micro-Cap Fund Page 20 Page 65
Small-Cap Value Fund Page 21 Page 66
Enhanced Equity Fund Page 22 Page 68
Tax-Efficient Equity Fund Page 23 Page 70
Structured Emerging Markets Fund Page 24 Page 73
Tax-Efficient Structured Emerging Markets Fund Page 25 Page 76
International Fund Page 26 Page 79
NFJ Equity Income Fund Page 27 Page 82
NFJ Value Fund Page 28 Page 83
</TABLE>
Pages 30-37 FINANCIAL HIGHLIGHTS
This chart shows a per share breakdown of the factors that affect a Fund's
NAV for the current and past reporting periods. In addition to showing total
returns, the chart reports distributions, asset sizes, expense ratios and
portfolio turnover rates.
Pages 38-40 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 41-43 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 44-49 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 84-91 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.
*The Fund Summaries and Schedule of Investments for many Funds include a summary
of the Fund's allocation of investments to certain "Related Industries," such as
"Technology." "Communication," "Financial & Business Services," and "Health
Care." These Related Industries represent broad groupings of loosely-associated
industries and sectors developed by PIMCO Advisors for informational purposes,
and are not intended to show a Fund's investment allocation to (or concentration
in) a particular industry. (Individual industries are normally classified for
these purposes by reference to Standard Industrial Classification (SIC) codes
developed by the U.S. Office of Management and Budget.) Funds that invest a
substantial portion of their assets in Related Industries (such as "Technology")
may be subject to greater levels of risk and volatility because companies in
Related Industries are often subject to similar business risks and regulatory
burdens, and their securities may react similarly to economic, market, political
and other developments.
4 PIMCO FUNDS
<PAGE>
PIMCO EQUITY INCOME FUND
JUNE 30, 2000
OBJECTIVE
Current income as a
primary objective and
long-term growth of capital
as a secondary objective
PORTFOLIO
Income producing common
stocks of companies with
market capitalizations of
more than $2 billion.
TOTAL NET ASSETS
$69.9 million
NUMBER OF SECURITIES IN THE PORTFOLIO
40 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
(as of 5/8/00)
------------------------------------------------------------------------------
PERFORMANCE*
------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
<TABLE>
<CAPTION>
INST'L CLASS ADMIN. CLASS S&P 500 Lipper Equity
(INCEP. 3/08/91) (INCEP. 11/30/94) Index Income Fund Average
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 YEAR -12.83% -13.17% 7.25% -6.71%
3 YEARS 6.13% 5.84% 19.67% 7.07%
5 YEARS 13.77% 13.46% 23.80% 13.58%
INCEPTION 13.29% 15.25% -- --
</TABLE>
CHANGE IN VALUE
$5,000,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO
Equity
Income S&P 500
Month Fund Index
=================== ============= =============
<S> <C> <C>
3/31/1991 5,000,000 5,000,000
4/30/1991 5,034,636 5,012,000
5/31/1991 5,319,615 5,228,518
6/30/1991 5,134,629 4,989,052
7/31/1991 5,421,923 5,221,542
8/31/1991 5,502,697 5,345,293
9/30/1991 5,532,987 5,256,026
10/31/1991 5,571,975 5,326,457
11/30/1991 5,349,510 5,111,801
12/31/1991 5,820,738 5,696,591
1/31/1992 5,965,177 5,590,634
2/29/1992 6,116,657 5,663,312
3/31/1992 6,017,412 5,552,878
4/30/1992 6,125,605 5,716,132
5/31/1992 6,136,148 5,744,142
6/30/1992 6,141,420 5,658,669
7/31/1992 6,416,503 5,889,825
8/31/1992 6,230,286 5,769,261
9/30/1992 6,283,491 5,837,050
10/31/1992 6,291,695 5,857,187
11/30/1992 6,481,829 6,056,624
12/31/1992 6,678,968 6,130,939
1/31/1993 6,713,379 6,182,194
2/28/1993 6,852,877 6,266,457
3/31/1993 7,009,814 6,398,680
4/30/1993 6,872,708 6,244,023
5/31/1993 6,925,440 6,411,051
6/30/1993 7,048,480 6,429,835
7/31/1993 7,037,196 6,403,987
8/31/1993 7,285,359 6,646,954
9/30/1993 7,279,450 6,595,972
10/31/1993 7,338,489 6,732,443
11/30/1993 7,264,797 6,668,283
12/31/1993 7,244,360 6,748,903
1/31/1994 7,485,093 6,978,365
2/28/1994 7,323,454 6,788,973
3/31/1994 7,031,262 6,492,973
4/30/1994 7,086,480 6,576,213
5/31/1994 7,130,340 6,684,129
6/30/1994 7,030,089 6,520,301
7/31/1994 7,261,756 6,734,427
8/31/1994 7,559,317 7,010,539
9/30/1994 7,420,033 6,839,131
10/31/1994 7,508,099 6,992,806
11/30/1994 7,105,537 6,738,128
12/31/1994 7,128,119 6,838,055
1/31/1995 7,360,723 7,015,365
2/28/1995 7,600,312 7,288,754
3/31/1995 7,819,936 7,503,845
4/30/1995 8,022,855 7,724,833
5/31/1995 8,318,505 8,033,595
6/30/1995 8,345,382 8,220,215
7/31/1995 8,637,759 8,492,798
8/31/1995 8,759,800 8,514,115
9/30/1995 8,990,321 8,873,410
10/31/1995 8,955,485 8,841,732
11/30/1995 9,263,351 9,229,884
12/31/1995 9,513,516 9,407,652
1/31/1996 9,656,255 9,727,888
2/29/1996 9,784,719 9,818,066
3/31/1996 9,980,549 9,912,614
4/30/1996 10,232,220 10,058,726
5/31/1996 10,397,604 10,318,140
6/30/1996 10,419,988 10,357,452
7/31/1996 9,941,075 9,899,860
8/31/1996 10,282,119 10,108,648
9/30/1996 10,636,733 10,677,563
10/31/1996 10,878,310 10,972,050
11/30/1996 11,698,210 11,801,427
12/31/1996 11,556,478 11,567,641
1/31/1997 11,812,152 12,290,387
2/28/1997 12,153,051 12,386,744
3/31/1997 11,746,786 11,877,772
4/30/1997 12,175,500 12,586,875
5/31/1997 12,938,613 13,353,165
6/30/1997 13,303,510 13,951,386
7/31/1997 14,149,548 15,061,498
8/31/1997 13,830,125 14,217,753
9/30/1997 14,693,065 14,996,459
10/31/1997 14,241,238 14,495,577
11/30/1997 14,832,089 15,166,577
12/31/1997 15,183,146 15,426,988
1/31/1998 15,242,961 15,597,610
2/28/1998 16,140,192 16,722,510
3/31/1998 16,902,461 17,578,870
4/30/1998 16,662,284 17,755,713
5/31/1998 16,552,203 17,450,492
6/30/1998 16,209,160 18,159,332
7/31/1998 15,574,494 17,965,934
8/31/1998 13,448,868 15,368,420
9/30/1998 14,436,778 16,352,921
10/31/1998 15,349,856 17,683,067
11/30/1998 16,404,968 18,754,838
12/31/1998 16,454,558 19,835,492
1/31/1999 16,098,100 20,665,012
2/28/1999 15,580,661 20,022,744
3/31/1999 15,719,974 20,823,854
4/30/1999 17,480,796 21,630,362
5/31/1999 17,863,080 21,119,669
6/30/1999 18,245,156 22,291,811
7/31/1999 17,614,402 21,595,860
8/31/1999 17,135,496 21,488,291
9/30/1999 16,586,425 20,899,948
10/31/1999 16,445,364 22,222,497
11/30/1999 15,951,651 22,674,280
12/31/1999 16,138,353 24,009,796
1/31/2000 15,110,148 22,803,955
2/29/2000 13,485,881 22,371,873
3/31/2000 15,378,675 24,560,513
4/30/2000 15,648,213 23,821,487
5/31/2000 15,453,546 23,332,670
6/30/2000 15,904,195 23,907,821
</TABLE>
*Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that fund shares, when redeemed, may be worth
more or less than their original cost. The line graph above assumes the
investment of $5,000,000 on 4/01/91, the first full month following the Fund's
Institutional Class inception on 3/08/91, compared to the S&P 500 Index, an
unmanaged market index. The performance of the Administrative Class (shown
above) reflects the payment of a service fee in an amount not to exceed 0.25% on
an annualized basis. The Administrative Class commenced operations on 11/30/94.
------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
-----------------------------------------------
<S> <C>
EMC CORP. 4.4%
Technology
-----------------------------------------------
CALPINE CAPITAL TRUST II 3.7%
Utilities
-----------------------------------------------
CITIGROUP, INC. 3.5%
Financial & Business Services
-----------------------------------------------
GENERAL MOTORS CORP. `H' 3.2%
Consumer Discretionary
-----------------------------------------------
COX COMMUNICATIONS, INC. 3.1%
Communications
-----------------------------------------------
UTILICORP UNITED 3.1%
Energy
-----------------------------------------------
TYCO INTERNATIONAL LTD. 3.1%
Capital Goods
-----------------------------------------------
NEXTEL COMM. 2.9%
(5.250% due 01/15/2010)
Technology
-----------------------------------------------
JABIL CIRCUIT, INC. 2.9%
Technology
-----------------------------------------------
DUKE ENERGY CORP. 2.8%
Utilities
-----------------------------------------------
TOP TEN TOTAL 32.7%
-----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
-----------------------------------------------
<S> <C>
TECHNOLOGY 19.9%
-----------------------------------------------
FINANCIAL & BUSINESS SERVICES 19.4%
-----------------------------------------------
ENERGY 17.0%
-----------------------------------------------
HEALTH CARE 11.1%
-----------------------------------------------
COMMUNICATIONS 10.6%
-----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-----------------------------------------------
<S> <C>
COMMON STOCK 97.1%
-----------------------------------------------
CONVERTIBLE BONDS & NOTES 2.9%
-----------------------------------------------
</TABLE>
------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
------------------------------------------------------------------------------
For the one-year period ended June 30, 2000, PIMCO Equity Income Fund posted a
return of -12.83% for Institutional Class shares and -13.17% for Administrative
Class shares.
With investors yearning for high earnings growth, the technology sector
dominated the market dramatically this year to the exclusion of virtually all
other sectors. Prior to its management change in May, the Fund had very little
exposure to the tech sector, which hurt the Fund's performance. However, recent
additions to the portfolio in this sector did help to boost performance. For
instance, EMC, the leading provider of data storage solutions, benefited from
increased corporate demand for computing storage due to greater data traffic and
Internet use.
The Fund's exposure to the energy sector contributed to its performance.
Energy stocks benefited from significantly higher prices for oil and gas.
Ultramar Diamond Shamrock, an independent petroleum refining company reported
strong results this year. This news, along with the ever-increasing demand for
power generation, helped advance the stock's price significantly.
The financial services sector also helped the Fund's performance, despite the
rising interest rate environment. Morgan Stanley Dean Witter, the financial
services giant, experienced strong earnings growth in the second half of the
fiscal year, benefiting from an increase in equity underwriting and merger
activity. The company also benefited from dynamic growth in its global business.
One disappointment for the Fund this year was Fortune Brands, a holding
company involved in a variety of businesses including home products, golf
products, liquor and office products. As concern about rising interest rates and
a slowing economy increased, investors shied away from retailers, and the
company's performance suffered. Fortune Brands has since been removed from the
portfolio.
The manager's outlook for the Fund is optimistic. While the Fund's
philosophy of investing in dividend-paying, reasonably valued securities remains
intact, the Fund's increased exposure to technology issues could contribute
positively to the Fund's performance going forward.
ANNUAL REPORT 5
<PAGE>
PIMCO VALUE FUND
JUNE 30, 2000
OBJECTIVE
Long-term growth of
capital and income
PORTFOLIO
Primarily common stocks of
companies with market
capitalizations of more than $5
billion and below average
valuations whose business
fundamentals are expected to
improve
TOTAL NET ASSETS
$166.2 million
NUMBER OF SECURITIES IN THE PORTFOLIO
41 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
------------------------------------------------------------------------------
PERFORMANCE*
------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
<TABLE>
<CAPTION>
INST'L CLASS ADMIN. CLASS S&P 500 Lipper Multi-Cap
(INCEP. 12/30/91) (INCEP. 8/21/97) Index Value Fund Avg.
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 YEAR -6.65% -7.00% 7.25% -3.99%
3 YEARS 7.76% -- 19.67% 7.78%
5 YEARS 14.90% -- 23.80% 14.20%
INCEPTION 14.04% 5.75% -- --
</TABLE>
CHANGE IN VALUE
$5,000,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO S&P 500
Month Value Fund Index
================== ============= =============
<S> <C> <C>
12/31/1991 5,000,000 5,000,000
1/31/1992 5,144,543 4,907,000
2/29/1992 5,318,513 4,970,791
3/31/1992 5,199,220 4,873,861
4/30/1992 5,222,775 5,017,152
5/31/1992 5,177,665 5,041,736
6/30/1992 5,067,395 4,966,715
7/31/1992 5,247,250 5,169,606
8/31/1992 5,095,741 5,063,784
9/30/1992 5,166,445 5,123,283
10/31/1992 5,199,464 5,140,958
11/30/1992 5,478,838 5,316,008
12/31/1992 5,657,265 5,381,235
1/31/1993 5,776,676 5,426,222
2/28/1993 5,839,127 5,500,182
3/31/1993 6,021,274 5,616,236
4/30/1993 5,916,309 5,480,491
5/31/1993 6,000,080 5,627,094
6/30/1993 6,041,965 5,643,582
7/31/1993 6,013,326 5,620,895
8/31/1993 6,340,080 5,834,151
9/30/1993 6,355,890 5,789,403
10/31/1993 6,576,391 5,909,186
11/30/1993 6,510,186 5,852,872
12/31/1993 6,585,324 5,923,633
1/31/1994 6,890,617 6,125,037
2/28/1994 6,778,756 5,958,803
3/31/1994 6,415,209 5,698,999
4/30/1994 6,337,376 5,772,060
5/31/1994 6,337,376 5,866,780
6/30/1994 6,191,689 5,722,985
7/31/1994 6,450,687 5,910,928
8/31/1994 6,722,772 6,153,276
9/30/1994 6,518,708 6,002,828
10/31/1994 6,588,249 6,137,712
11/30/1994 6,257,410 5,914,176
12/31/1994 6,317,178 6,001,883
1/31/1995 6,489,231 6,157,512
2/28/1995 6,779,505 6,397,470
3/31/1995 6,966,570 6,586,260
4/30/1995 7,155,132 6,780,225
5/31/1995 7,427,832 7,051,231
6/30/1995 7,557,689 7,215,031
7/31/1995 7,890,844 7,454,281
8/31/1995 7,988,826 7,472,991
9/30/1995 8,210,920 7,788,352
10/31/1995 8,234,873 7,760,547
11/30/1995 8,589,768 8,101,235
12/31/1995 8,774,957 8,257,265
1/31/1996 9,026,323 8,538,342
2/29/1996 9,224,369 8,617,492
3/31/1996 9,300,160 8,700,479
4/30/1996 9,422,631 8,828,724
5/31/1996 9,613,992 9,056,417
6/30/1996 9,572,367 9,090,922
7/31/1996 9,057,641 8,689,285
8/31/1996 9,411,035 8,872,542
9/30/1996 9,668,844 9,371,889
10/31/1996 9,807,853 9,630,365
11/30/1996 10,649,629 10,358,325
12/31/1996 10,559,934 10,153,126
1/31/1997 10,916,251 10,787,494
2/28/1997 11,102,507 10,872,067
3/31/1997 10,714,973 10,425,334
4/30/1997 11,137,719 11,047,727
5/31/1997 11,796,226 11,720,312
6/30/1997 12,097,138 12,245,382
7/31/1997 12,897,623 13,219,747
8/31/1997 12,628,072 12,479,177
9/30/1997 13,388,728 13,162,661
10/31/1997 12,716,422 12,723,028
11/30/1997 13,027,978 13,311,977
12/31/1997 13,327,284 13,540,544
1/31/1998 13,382,242 13,690,302
2/28/1998 14,179,131 14,677,647
3/31/1998 14,755,186 15,429,289
4/30/1998 14,461,368 15,584,508
5/31/1998 14,406,277 15,316,610
6/30/1998 14,438,304 15,938,771
7/31/1998 13,829,793 15,769,023
8/31/1998 11,847,523 13,489,138
9/30/1998 12,527,952 14,353,252
10/31/1998 13,639,900 15,520,746
11/30/1998 14,427,531 16,461,458
12/31/1998 14,682,095 17,409,967
1/31/1999 14,315,043 18,138,052
2/28/1999 13,790,682 17,574,322
3/31/1999 13,750,211 18,277,470
4/30/1999 15,204,256 18,985,357
5/31/1999 15,615,182 18,537,112
6/30/1999 16,214,406 19,565,922
7/31/1999 16,044,844 18,955,074
8/31/1999 15,896,477 18,860,659
9/30/1999 15,442,287 18,344,260
10/31/1999 15,474,193 19,505,085
11/30/1999 15,240,219 19,901,623
12/31/1999 15,313,324 21,073,829
1/31/2000 14,393,210 20,015,441
2/29/2000 13,013,039 19,636,194
3/31/2000 15,019,464 21,557,203
4/30/2000 14,979,870 20,908,547
5/31/2000 15,639,776 20,479,504
6/30/2000 15,135,471 20,984,323
</TABLE>
*Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that fund shares, when redeemed, may be worth
more or less than their original cost. The line graph above assumes the
investment of $5,000,000 on 1/01/92, the first full month following the Fund's
Institutional Class inception on 12/30/91, compared to the S&P 500 Index, an
unmanaged market index. The performance of the Administrative Class (shown
above) reflects the payment of a service fee in an amount not to exceed 0.25% on
an annual basis. The Administrative Class commenced operations on 8/21/97.
------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
--------------------------------------------------------
<S> <C>
WASHINGTON MUTUAL, INC. 5.5%
Financial & Business Services
--------------------------------------------------------
ACE LTD. 5.1%
Financial & Business Services
--------------------------------------------------------
DEERE & CO. 5.0%
Capital Goods
--------------------------------------------------------
TENET HEALTHCARE CORP. 4.4%
Health Care
--------------------------------------------------------
XL CAPITAL LTD. 4.3%
Financial & Business Services
--------------------------------------------------------
R & B FALCON CORP. 3.7%
Energy
--------------------------------------------------------
RAYTHEON CO. `B' 3.6%
Aerospace
--------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORP. 3.5%
Financial & Business Services
--------------------------------------------------------
AON CORP. 3.3%
Financial & Business Services
--------------------------------------------------------
PETROLEO BRASILEIRO SA 3.2%
Energy
--------------------------------------------------------
TOP TEN TOTAL 41.6%
--------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
--------------------------------------------------------
<S> <C>
FINANCIAL & BUSINESS SERVICES 29.7%
--------------------------------------------------------
CONSUMER STAPLES 11.1%
--------------------------------------------------------
ENERGY 10.1%
--------------------------------------------------------
AEROSPACE 8.6%
--------------------------------------------------------
COMMUNICATIONS 8.2%
--------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
--------------------------------------------------------
<S> <C>
COMMON STOCK 96.1%
--------------------------------------------------------
CASH EQUIVALENTS 3.9%
--------------------------------------------------------
</TABLE>
------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
------------------------------------------------------------------------------
PIMCO Value Fund Institutional Class shares returned -6.65% and Administrative
Class shares returned -7.00% for the twelve-month period ended June 30, 2000.
Management of PIMCO Value Fund was shifted from NFJ Investment Group to PIMCO
Equity Advisors on May 8, 2000. The new manager will continue to focus on low
valuation stocks, but will purchase only issues from that universe that show a
strong catalyst for change.
The Fund's exposure to the energy sector, which benefited from significantly
higher prices for oil, gas and natural gas liquids, helped its performance
during this year. Ultramar Diamond Shamrock, an independent petroleum refining
company, reported strong revenues as a result of higher profit margins and
increased demand. The company recently announced the completion of the Colorado
Springs pipeline expansion project, which should help its efforts to grow
earnings and returns through integrated operations. This news, accompanied with
the ever-increasing demand for power generation, helped boost the stock's price
significantly this year.
The financial services sector posted lackluster returns during this period.
As a result of rising interest rates, J.P. Morgan, Federal Home Loan Management
and Washington Mutual all suffered. These companies witnessed a drop in their
respective stock prices as profit margins narrowed because of the hike in
interest rates. In addition, indications of a slowing economy in the first half
of 2000 caused financial services companies to be unpopular with investors.
The Fund's performance was hurt by its exposure to the health care sector.
In particular, the HMO industry was punished by investors for much of the
year, despite exceeding earnings expectations. The area was unpopular with
investors in the second half of 1999 because of external problems, such as
class-action lawsuits and federal attempts at HMO legislation, which received
much attention from the press. Aetna, one of the Fund's largest holdings, saw
its profits squeezed by rising medical costs.
Looking ahead, the manager is optimistic that value stocks will once again
return to favor. The manager believes the Fund's philosophy of investing in low
valuation stocks with a catalyst should bode well for PIMCO Value Fund.
6 PIMCO FUNDS
<PAGE>
PIMCO RENAISSANCE FUND
JUNE 30, 2000
OBJECTIVE
Long-term growth of
capital and income
PORTFOLIO
Primarily common stocks of
companies with below-average
valuations whose business
fundamentals are expected
to improve
TOTAL NET ASSETS
$478.2 million
NUMBER OF SECURITIES IN THE PORTFOLIO
60 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
------------------------------------------------------------------------------
PERFORMANCE*
------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
<TABLE>
<CAPTION>
INST'L CLASS ADMIN. CLASS Russell 1000 Lipper Multi-Cap
(INCEP. 12/30/97) (INCEP. 8/31/98) Value Index Value Fund Avg.
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 YEAR 3.30% 3.36% -8.92% -3.99%
INCEPTION 11.02% 20.68% -- --
</TABLE>
CHANGE IN VALUE
$5,000,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO Russell
Renaissance 1000 Value
Month Fund Index
================ ============ =============
<S> <C> <C>
12/31/1997 5,000,000 5,000,000
1/31/1998 5,005,928 4,929,500
2/28/1998 5,388,263 5,261,255
3/31/1998 5,595,732 5,583,244
4/30/1998 5,723,177 5,620,596
5/31/1998 5,604,624 5,537,411
6/30/1998 5,652,045 5,608,401
7/31/1998 5,536,455 5,509,693
8/31/1998 4,555,424 4,689,851
9/30/1998 4,718,435 4,959,048
10/31/1998 4,922,940 5,343,374
11/30/1998 5,234,143 5,592,376
12/31/1998 5,591,637 5,782,516
1/31/1999 5,947,095 5,828,777
2/28/1999 5,659,994 5,746,591
3/31/1999 5,912,917 5,865,545
4/30/1999 6,217,107 6,413,387
5/31/1999 6,032,542 6,342,840
6/30/1999 6,230,779 6,526,782
7/31/1999 6,261,539 6,335,547
8/31/1999 6,066,721 6,100,499
9/30/1999 5,612,144 5,886,981
10/31/1999 5,577,965 6,226,071
11/30/1999 5,779,620 6,177,508
12/31/1999 6,139,865 6,207,160
1/31/2000 5,881,887 6,004,807
2/29/2000 5,512,120 5,558,649
3/31/2000 6,208,659 6,236,805
4/30/2000 6,432,239 6,164,458
5/31/2000 6,642,921 6,229,185
6/30/2000 6,436,539 5,944,511
</TABLE>
*Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that fund shares, when redeemed, may be worth
more or less than their original cost. The line graph above assumes the
investment of $5,000,000 on 1/1/98, the first full month following the Fund's
Institutional Class inception on 12/30/97, compared to the Russell 1000 Value
Index, an unmanaged market index. The performance of the Administrative Class
(shown above) reflects the payment of a service fee in an amount not to exceed
0.25% on an annualized basis. The Administrative Class commenced operations on
8/31/98.
------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
-----------------------------------------------------------
<S> <C>
FOUNDATION HEALTH SYSTEMS, INC. `A' 5.8%
Health Care
-----------------------------------------------------------
ACE LTD. 5.4%
Financial & Business Services
-----------------------------------------------------------
WASHINGTON MUTUAL, INC. 4.8%
Financial & Business Services
-----------------------------------------------------------
TUPPERWARE CORP. 4.3%
Consumer Discretionary
-----------------------------------------------------------
NIAGARA MOHAWK HOLDINGS, INC. 4.0%
Utilities
-----------------------------------------------------------
CNH GLOBAL NV 3.9%
Capital Goods
-----------------------------------------------------------
AETNA, INC. 3.4%
Health Care & Business Services
-----------------------------------------------------------
R & B FALCON CORP. 3.3%
Energy
-----------------------------------------------------------
ARROW ELECTRONICS, INC. 2.7%
Technology
-----------------------------------------------------------
SUIZA FOODS CORP. 2.6%
Consumer Staples
-----------------------------------------------------------
TOP TEN TOTAL 40.2%
-----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
-----------------------------------------------------------
<S> <C>
FINANCIAL & BUSINESS SERVICES 21.9%
-----------------------------------------------------------
CONSUMER STAPLES 12.4%
-----------------------------------------------------------
HEALTH CARE 11.6%
-----------------------------------------------------------
UTILITIES 8.7%
-----------------------------------------------------------
ENERGY 8.5%
-----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-----------------------------------------------------------
<S> <C>
COMMON STOCK 95.3%
-----------------------------------------------------------
CASH EQUIVALENTS 3.8%
-----------------------------------------------------------
CONVERTIBLE BONDS & NOTES 0.9%
-----------------------------------------------------------
</TABLE>
------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
------------------------------------------------------------------------------
PIMCO Renaissance Fund posted strong relative returns for the one-year period
ended June 30, 2000. The Fund's Institutional Class shares returned 3.30%,
outperforming the Russell 1000 Value Index return of -8.92% and the Lipper
Multi-Cap Value Fund Average return of -3.99% for the same period.
The technology sector contributed to the Fund's performance this year. The
Fund invested in a number of cyclical technology companies, such as
semiconductor manufacturers and electronics distributors, that exhibited low
valuations early in this period. Micron Technology, a leading maker of chips for
PCs, contributed to the Fund's performance for much of the year, as the demand
for semiconductors outpaced supply. Arrow Electronics, the world's largest
distributor of electronic components and computer products to industrial and
commercial customers, was another standout performer. It benefited from the
global economic recovery, which boosted demand for its products. The company's
global distribution network spans the world's three dominant electronic
markets--North America, Europe and the Asia/Pacific region. Furthermore, it is
poised to continue its growth given the strong global economy.
The property and casualty (P&C) industry also boosted the Fund's returns.
The industry was finally able to gain pricing power in the past year, as it
shed its weakest players and finally increased its extremely narrow profit
margins. As a result, we added fundamentally strong P&C insurers, such as Ace
Limited, that we expected would benefit from the industry consolidation. Ace,
which boasts a strong balance sheet and an exceptional management team,
outperformed.
The financial services sector was a disappointment, although the Fund's
underweighting in this area benefited its performance. Companies such as
Federal Home Loan Management modestly underperformed in the first half of
2000 as a result of rising interest rates and signs that the economy is
slowing. With profit margins being squeezed and fewer home mortgage
originations, these companies proved unattractive to investors.
Looking ahead, the manager is optimistic that PIMCO Renaissance Fund will
continue its relative outperformance, given the positioning of its portfolio
and its philosophy of investing in low valuation stocks with a catalyst for
positive price appreciation. In addition, the manager is hopeful that, in the
coming months, investors will once again favor value stocks.
ANNUAL REPORT 7
<PAGE>
PIMCO GROWTH FUND
JUNE 30, 2000
OBJECTIVE
Long-term growth of capital;
income is an incidental
consideration
PORTFOLIO
Primarily common stocks of
companies with market
capitalizations of at least
$5 billion
TOTAL NET ASSETS
$2.9 billion
NUMBER OF SECURITIES IN THE PORTFOLIO
41 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
------------------------------------------------------------------------------
PERFORMANCE*
------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
<TABLE>
<CAPTION>
INST'L CLASS ADMIN. CLASS S&P 500 Lipper Lg.-Cap
(INCEP. 3/31/99) (INCEP. 3/31/99) Index Growth Fund Average
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 YEAR 32.66% 32.66% 7.25% 26.43%
INCEPTION 25.31% 24.71% -- --
</TABLE>
CHANGE IN VALUE
$5,000,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO
Growth S&P 500
Month Fund Index
================= ============= ===========
<S> <C> <C>
3/31/1999 5,000,000 5,000,000
4/30/1999 4,876,879 5,193,650
5/31/1999 4,624,240 5,071,028
6/30/1999 4,995,203 5,352,470
7/31/1999 4,785,737 5,185,366
8/31/1999 4,798,529 5,159,538
9/30/1999 4,779,341 5,018,271
10/31/1999 5,172,689 5,335,827
11/30/1999 5,521,266 5,444,305
12/31/1999 6,500,721 5,764,974
1/31/2000 6,231,270 5,475,441
2/29/2000 6,875,690 5,371,694
3/31/2000 7,216,742 5,897,206
4/30/2000 6,572,323 5,719,760
5/31/2000 6,027,770 5,602,390
6/30/2000 6,626,966 5,740,489
</TABLE>
*Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that fund shares, when redeemed, may be worth
more or less than their original cost. The line graph above assumes the
investment of $5,000,000 on 4/1/99, the first full month following the Fund's
Institutional Class inception on 3/31/99, compared to the S&P 500 Index, an
unmanaged market index. The performance of the Administrative Class (shown
above) reflects the payment of a service fee in an amount not to exceed 0.25% on
an annualized basis. The Administrative Class commenced operations on 3/31/99.
------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
-----------------------------------------------------
<S> <C>
EMC CORP. 7.9%
Technology
-----------------------------------------------------
NOKIA CORP. SP- ADR 6.0%
Communications
-----------------------------------------------------
CISCO SYSTEMS, INC. 5.5%
Technology
-----------------------------------------------------
NORTEL NETWORKS CORP. 4.7%
Technology
-----------------------------------------------------
MORGAN STANLEY, DEAN WITTER, 4.3%
DISCOVER AND CO.
Financial & Business Services
-----------------------------------------------------
JDS UNIPHASE CORP. 4.1%
Technology
-----------------------------------------------------
CITIGROUP, INC. 3.6%
Financial & Business Services
-----------------------------------------------------
ENRON CORP. 3.3%
Energy
-----------------------------------------------------
SUN MICROSYSTEMS, INC. 3.1%
Technology
-----------------------------------------------------
OMNICOM GROUP 3.1%
Financial & Business Services
-----------------------------------------------------
TOP TEN TOTAL 45.6%
-----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
-----------------------------------------------------
<S> <C>
TECHNOLOGY 43.7%
-----------------------------------------------------
FINANCIAL & BUSINESS SERVICES 18.7%
-----------------------------------------------------
HEALTH CARE 12.1%
-----------------------------------------------------
COMMUNICATIONS 8.8%
-----------------------------------------------------
CONSUMER DISCRETIONARY 7.5%
-----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-----------------------------------------------------
<S> <C>
COMMON STOCK 98.9%
-----------------------------------------------------
CASH EQUIVALENTS 1.1%
-----------------------------------------------------
</TABLE>
------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
------------------------------------------------------------------------------
PIMCO Growth Fund posted stellar returns for the one-year period ended June 30,
2000. The Fund's Institutional Class shares returned 32.66%, significantly
outpacing both the S&P 500 Index's return of 7.25% and its Lipper Average return
of 26.43%.
Technology was the best performing sector for the Fund over the past year.
Although this sector began to turn downwards in the second quarter, it dominated
the market for the previous three quarters and overwhelmingly outperformed all
other sectors over the past year. In particular, fiber optics and wireless
telecommunications saw explosive growth during this period. For example, JDS
Uniphase, a maker of fiber optic components for telecom networks, experienced
enormous growth over the past year. The rush to add public network bandwidth to
handle growing Internet and data traffic has spawned rapid development of
optical networking technology, which in turn has driven demand for optical
components to dramatic proportions. As the largest independent supplier of this
equipment, JDS Uniphase has benefited enormously from this increased demand.
Another standout for the Fund was Cisco Systems, a company that creates
hardware and software solutions for engaging in networking on the Internet. As
the information superhighway grows faster than ever, and companies race to
participate in commerce over the Internet, Cisco should benefit from strong
demand for its Internet infrastructure equipment and its optical networking
capabilities. As the largest supplier of these products, Cisco exhibits major
market dominance in this industry.
The Fund also benefited from its exposure to the financial services industry.
Citigroup, the banking and financial services giant, contributed to the Fund's
performance despite the rising interest rate environment. The stock's price
increased more than 33% since June of last year while its net revenue and income
increased significantly as well. These results reflect volume-related growth in
commissions and higher income at Salomon Smith Barney, which accounts for more
than a quarter of the company's earnings.
Looking ahead, the manager believes the economic climate will be positive for
growth stocks, as inflation appears to be under control and there is a strong
possibility of significant tax cuts in the near future. The manager is
optimistic that PIMCO Growth Fund is poised to continue its outperformance in
this environment.
8 PIMCO FUNDS
<PAGE>
PIMCO SELECT GROWTH FUND
JUNE 30, 2000
OBJECTIVE
Long-term growth of capital;
income is an incidental
consideration
PORTFOLIO
Primarily common stocks of
companies with market
capitalizations of at least
$10 billion
TOTAL NET ASSETS
$16.9 million
NUMBER OF SECURITIES IN THE PORTFOLIO
16 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
------------------------------------------------------------------------------
PERFORMANCE*
------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
<TABLE>
<CAPTION>
INST'L CLASS ADMIN. CLASS S&P 500 Lipper Lg.-Cap
(INCEP. 12/28/94) (INCEP. 5/31/95) Index Growth Fund Average
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 YEAR 13.11% 12.54% 7.25% 26.43%
3 YEAR 26.55% 26.09% 19.67% 27.69%
5 YEAR 23.80% 23.41% 23.80% 25.59%
INCEPTION 25.27% 23.80% -- --
</TABLE>
CHANGE IN VALUE
$5,000,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO
Select
Growth S&P 500
Month Fund Index
================= ============= =============
<S> <C> <C>
12/31/1994 5,000,000 5,000,000
1/31/1995 5,034,965 5,129,650
2/28/1995 5,189,810 5,329,552
3/31/1995 5,339,660 5,486,828
4/30/1995 5,545,390 5,648,415
5/31/1995 5,735,746 5,874,182
6/30/1995 5,921,094 6,010,639
7/31/1995 6,181,582 6,209,952
8/31/1995 6,246,704 6,225,539
9/30/1995 6,422,032 6,488,256
10/31/1995 6,386,996 6,465,093
11/30/1995 6,502,485 6,748,911
12/31/1995 6,397,852 6,878,895
1/31/1996 6,644,715 7,113,052
2/29/1996 6,799,004 7,178,990
3/31/1996 6,772,780 7,248,124
4/30/1996 6,875,788 7,354,962
5/31/1996 7,107,556 7,544,646
6/30/1996 6,987,958 7,573,391
7/31/1996 6,513,499 7,238,799
8/31/1996 6,761,043 7,391,465
9/30/1996 7,225,188 7,807,457
10/31/1996 7,333,489 8,022,786
11/30/1996 7,777,005 8,629,229
12/31/1996 7,546,203 8,458,284
1/31/1997 7,917,776 8,986,757
2/28/1997 7,731,989 9,057,213
3/31/1997 7,327,631 8,685,052
4/30/1997 7,628,168 9,203,550
5/31/1997 8,245,634 9,763,862
6/30/1997 8,496,992 10,201,283
7/31/1997 9,327,566 11,012,999
8/31/1997 8,748,350 10,396,051
9/30/1997 9,322,102 10,965,443
10/31/1997 9,065,279 10,599,197
11/30/1997 9,185,494 11,089,834
12/31/1997 9,456,557 11,280,246
1/31/1998 9,675,240 11,405,006
2/28/1998 10,425,854 12,227,535
3/31/1998 11,129,186 12,853,707
4/30/1998 11,353,779 12,983,015
5/31/1998 11,206,020 12,759,837
6/30/1998 12,051,200 13,278,142
7/31/1998 11,867,979 13,136,729
8/31/1998 9,840,730 11,237,421
9/30/1998 10,679,999 11,957,290
10/31/1998 11,117,365 12,929,896
11/30/1998 11,950,724 13,713,577
12/31/1998 13,339,575 14,503,754
1/31/1999 14,552,263 15,110,301
2/28/1999 13,903,046 14,640,673
3/31/1999 14,717,630 15,226,446
4/30/1999 14,711,505 15,816,166
5/31/1999 14,099,036 15,442,747
6/30/1999 15,225,979 16,299,819
7/31/1999 14,968,742 15,790,939
8/31/1999 14,901,371 15,712,284
9/30/1999 14,050,039 15,282,086
10/31/1999 14,607,386 16,249,137
11/30/1999 15,323,974 16,579,482
12/31/1999 16,576,821 17,556,013
1/31/2000 15,823,981 16,674,300
2/29/2000 16,354,554 16,358,361
3/31/2000 16,670,030 17,958,699
4/30/2000 16,756,069 17,418,322
5/31/2000 15,508,505 17,060,898
6/30/2000 17,222,112 17,481,449
</TABLE>
*Past performance is no guarantee for future results. Investment return and
principal value will fluctuate so that fund shares, when redeemed, may be worth
more or less than their original cost. The line graph above assumes the
investment of $5,000,000 on 1/1/95, the first full month following the Fund's
Institutional Class inception on 12/28/94, compared to the S&P 500 Index, an
unmanaged market index. The performance of the Administrative Class (shown
above) reflects the payment of a service fee in an amount not to exceed 0.25% on
an annualized basis. The Administrative Class commenced operations on 5/31/95.
------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
-----------------------------------------------------
<S> <C>
CORNING, INC. 8.0%
Technology
-----------------------------------------------------
GENENTECH, INC. 7.6%
Health Care
-----------------------------------------------------
AMERICAN INTERNATIONAL GROUP, INC. 6.9%
Financial & Business Services
-----------------------------------------------------
EMC CORP. 6.8%
Technology
-----------------------------------------------------
NORTEL NETWORKS CORP. 6.0%
Technology
-----------------------------------------------------
JOHNSON & JOHNSON 6.0%
Health Care
-----------------------------------------------------
CISCO SYSTEMS, INC. 5.6%
Technology
-----------------------------------------------------
COMVERSE TECHNOLOGY, INC. 5.5%
Technology
-----------------------------------------------------
SUN MICROSYSTEMS, INC. 5.4%
Technology
-----------------------------------------------------
CITIGROUP, INC. 5.3%
Financial & Business Services
-----------------------------------------------------
TOP TEN TOTAL 63.1%
-----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
-----------------------------------------------------
<S> <C>
TECHNOLOGY 46.6%
-----------------------------------------------------
FINANCIAL & BUSINESS SERVICES 17.2%
-----------------------------------------------------
HEALTH CARE 13.6%
-----------------------------------------------------
CONSUMER DISCRETIONARY 5.1%
-----------------------------------------------------
COMMUNICATIONS 4.4%
-----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-----------------------------------------------------
<S> <C>
COMMON STOCK 90.6%
-----------------------------------------------------
CASH EQUIVALENTS 9.4%
-----------------------------------------------------
</TABLE>
------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
------------------------------------------------------------------------------
PIMCO Select Growth Fund, which was the PIMCO Core Equity Fund prior to April 3,
2000, posted strong returns for its first quarter in existence. As a result of
its prior weighting in value securities, the Fund's Institutional Class shares
posted a relatively weak one-year return of 13.11%.
The Fund greatly benefited from its exposure to the technology sector, which
performed extremely well over the past year. It offered investors the greatest
earnings growth potential of any sector due to an increase in corporate
spending, as companies realized technology's ability to boost profit margins. A
standout performer within technology was EMC, the data storage company.
Corporate demand for data storage continued to grow at a fast pace in the second
half of the year. EMC is the greatest beneficiary of this growing demand, which
is expanding its already dominant market share. As the capabilities of computers
and networks continue to increase, the need for data storage will grow even
further.
Another strong area for the Fund was telecommunications, which has seen
tremendous growth recently. A holding that benefited from the growth in telecom
was Comverse Technology, the eighth largest holding in the Fund. It is the
leading provider of voicemail systems to digital wireless carriers and derives
approximately 65% of its business from this activity. A shortening of cell phone
handset upgrade cycles, as well as an increase in cell phone subscriptions, were
also key to Comverse's growth.
The financial services sector also helped the Fund, despite the rising
interest rate environment. Morgan Stanley Dean Witter experienced strong
earnings growth in the second half of the year. It benefited from an increase in
equity underwriting and merger activity, as well as dynamic growth in its global
business.
Looking ahead, the manager is optimistic that the economic climate will be
positive for growth stocks, as inflation appears to be under control and there
is a strong possibility of significant tax cuts in the near future, all of which
should augur well for PIMCO Select Growth Fund.
ANNUAL REPORT 9
<PAGE>
PIMCO TARGET FUND
June 30, 2000
OBJECTIVE
Capital appreciation;
no consideration given
to income
PORTFOLIO
Primarily common stocks
of companies with market
capitalizations of between
$1 billion and $10 billion
TOTAL NET ASSETS
$2.2 billion
NUMBER OF SECURITIES
IN THE PORTFOLIO
63 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
------------------------------------------------------------------------------
PERFORMANCE*
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
INST'L CLASS ADMIN. CLASS S&P Mid-Cap Lipper Multi-Cap
(INCEP. 3/31/99) (INCEP. 3/31/99) 400 Index Growth Fund Average
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 YEAR 89.85% 91.13% 17.09% 45.76%
INCEPTION 78.47% 79.35% -- --
</TABLE>
CHANGE IN VALUE
$5,000,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO S&P
Target Mid-Cap
Month Fund 400 Index
================= ============= =============
<S> <C> <C>
3/31/1999 5,000,000 5,000,000
4/30/1999 5,143,819 5,394,000
5/31/1999 5,003,060 5,417,734
6/30/1999 5,428,397 5,707,041
7/31/1999 5,345,777 5,586,051
8/31/1999 5,431,457 5,395,008
9/30/1999 5,370,257 5,228,303
10/31/1999 5,875,153 5,494,946
11/30/1999 6,741,126 5,783,431
12/31/1999 8,204,952 6,126,966
1/31/2000 8,436,917 5,954,186
2/29/2000 11,525,372 6,370,979
3/31/2000 10,995,165 6,904,230
4/30/2000 9,977,831 6,663,272
5/31/2000 9,076,479 6,580,648
6/30/2000 10,305,896 6,682,648
</TABLE>
*Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that fund shares, when redeemed, may be worth
more or less than their original cost. The line graph above assumes the
investment of $5,000,000 on 4/01/99, the first full month following the Fund's
Institutional Class inception on 3/31/99, compared to the S&P Mid-Cap 400 Index,
an unmanaged market index. The performance of the Administrative Class (shown
above) reflects the payment of a service fee in an amount not to exceed 0.25% on
an annualized basis. The Administrative Class commenced operations on 3/31/99.
------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
------------------------------------------
<S> <C>
SDL, INC. 6.4%
Technology
------------------------------------------
COMVERSE TECHNOLOGY, INC. 4.6%
Technology
------------------------------------------
SANMINA CORP. 3.8%
Technology
------------------------------------------
JABIL CIRCUIT, INC. 3.6%
Technology
------------------------------------------
CALPINE CORP. 3.5%
Utilities
------------------------------------------
MINIMED, INC. 3.2%
Health Care
------------------------------------------
E-TEK DYNAMICS, INC. 2.7%
Technology
------------------------------------------
PMC - SIERRA, INC. 2.4%
Technology
------------------------------------------
MEDIMMUNE, INC. 2.4%
Health Care
------------------------------------------
CIENA CORP. 2.2%
Technology
------------------------------------------
TOP TEN TOTAL 34.8%
------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
------------------------------------------
<S> <C>
TECHNOLOGY 53.4%
------------------------------------------
HEALTH CARE 14.0%
------------------------------------------
CONSUMER DISCRETIONARY 5.5%
------------------------------------------
COMMUNICATIONS 5.5%
------------------------------------------
UTILITIES 4.3%
------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
------------------------------------------
<S> <C>
COMMON STOCK 94.4%
------------------------------------------
CASH EQUIVALENTS 5.6%
------------------------------------------
</TABLE>
------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
------------------------------------------------------------------------------
PIMCO Target Fund posted stellar results for the one-year period ended June 30,
2000, with its Institutional Class shares returning 89.85%. These results
dramatically outperformed those of the S&P Mid-Cap 400 Index, which returned
17.09%, as well as its Lipper Average, which returned 45.76% for the same
period.
The technology sector dominated the market dramatically in the first three
quarters of the fiscal year. Although the last quarter brought about a slight
downturn because of rising interest rates, the technology sector performed
extremely well overall. One of the strongest areas of technology was
telecommunications, which has seen huge growth over the past year. In
particular, Spectra Diode Laboratories (SDL) helped the Fund's performance.
SDL is a provider of solutions for optical communications, providing products
to power the transmission of data, voice, and Internet information over fiber
optic networks. The company's products enable customers to meet the need for
increasing bandwidth by expanding their fiber optic communication networks
more quickly and efficiently than by using conventional electronic and
optical technologies. Due to rapidly growing demand in this area, SDL's stock
price rose substantially during the year.
Another holding that benefited from the growth in technology was Jabil
Circuit, a company that designs and manufactures electronic circuit board
assemblies and systems for major original equipment manufacturers. Due to the
explosive growth in telecommunications, personal computers, and computer
peripherals, Jabil Circuit saw significant growth as a major supplier for these
industries, with its stock price rising more than 100% over the past year.
The biotechnology sector also enhanced the Fund's performance during the
year. Investors showed renewed interest in this area because of its exciting
product offerings.
For example, Medimmune is a company that is focused on using advances in
immunology and other biological sciences to develop important new products that
address significant medical needs. It benefited from sales of Synagis, which is
used for the treatment of respiratory problems in premature infants. The market
opportunity for this drug is huge because it addresses an area of healthcare
that is both sensitive and growing.
The manager's outlook for mid-cap stocks remains positive. The manager
believes that, if the Federal Reserve is able to negotiate a soft landing for
the economy, mid-caps could continue to see strong earnings growth and
significantly outperform.
10 PIMCO FUNDS
<PAGE>
PIMCO MID-CAP EQUITY FUND
June 30, 2000
OBJECTIVE
Capital appreciation;
no consideration given
to income
PORTFOLIO
Primarily common stocks
of companies with market
capitalizations of $1 billion
to $10 billion
TOTAL NET ASSETS
$4.9 million
NUMBER OF SECURITIES
IN THE
PORTFOLIO
36 (not including
short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
------------------------------------------------------------------------------
PERFORMANCE*
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
INST'L CLASS S&P Mid-Cap Lipper Mid-Cap
(INCEP. 12/28/94) 400 Index Core Fund Average
---------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 YEAR 49.32% 17.09% 37.60%
3 YEARS 33.86% 20.38% 20.94%
5 YEARS 27.67% 21.21% 20.59%
INCEPTION 28.52% -- --
</TABLE>
CHANGE IN VALUE
$5,000,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO
Mid-Cap S&P
Equity Mid-Cap 400
Month Fund Index
================= ============= =============
<S> <C> <C>
12/31/1994 5,000,000 5,000,000
1/31/1995 4,910,000 5,052,050
2/28/1995 5,190,000 5,317,126
3/31/1995 5,370,000 5,409,394
4/30/1995 5,445,000 5,517,999
5/31/1995 5,435,000 5,651,109
6/30/1995 5,850,000 5,881,160
7/31/1995 6,205,000 6,187,969
8/31/1995 6,205,000 6,302,409
9/30/1995 6,375,000 6,455,173
10/31/1995 6,467,605 6,289,081
11/30/1995 6,542,693 6,563,757
12/31/1995 6,585,784 6,547,426
1/31/1996 6,539,441 6,642,416
2/29/1996 6,750,557 6,868,179
3/31/1996 7,002,866 6,950,487
4/30/1996 7,389,054 7,162,762
5/31/1996 7,734,048 7,259,631
6/30/1996 7,548,678 7,150,700
7/31/1996 6,704,215 6,666,927
8/31/1996 7,100,701 7,051,429
9/30/1996 7,574,424 7,358,871
10/31/1996 7,574,424 7,380,285
11/30/1996 7,945,164 7,796,017
12/31/1996 7,725,848 7,804,670
1/31/1997 7,914,427 8,097,657
2/28/1997 7,578,521 8,031,095
3/31/1997 7,266,187 7,688,729
4/30/1997 7,454,766 7,887,944
5/31/1997 8,073,541 8,577,666
6/30/1997 8,273,906 8,818,698
7/31/1997 8,957,505 9,691,838
8/31/1997 9,122,512 9,680,208
9/30/1997 9,700,035 10,236,819
10/31/1997 9,051,795 9,791,518
11/30/1997 9,063,581 9,936,432
12/31/1997 8,978,700 10,321,966
1/31/1998 8,811,246 10,125,849
2/28/1998 9,568,774 10,964,269
3/31/1998 10,055,187 11,458,757
4/30/1998 10,414,016 11,668,453
5/31/1998 10,015,317 11,143,372
6/30/1998 10,788,793 11,213,575
7/31/1998 10,485,782 10,778,489
8/31/1998 8,731,506 8,772,612
9/30/1998 9,544,852 9,591,097
10/31/1998 9,616,618 10,448,541
11/30/1998 10,190,744 10,969,923
12/31/1998 11,662,454 12,295,090
1/31/1999 12,056,796 11,816,811
2/28/1999 11,268,112 11,197,610
3/31/1999 12,115,528 11,511,143
4/30/1999 12,753,187 12,418,221
5/31/1999 12,434,358 12,472,861
6/30/1999 13,290,164 13,138,912
7/31/1999 13,105,578 12,860,367
8/31/1999 13,223,041 12,420,542
9/30/1999 12,635,724 12,036,748
10/31/1999 13,525,091 12,650,622
11/30/1999 15,589,093 13,314,779
12/31/1999 17,704,654 14,105,677
1/31/2000 17,490,608 13,707,897
2/29/2000 20,288,494 14,667,450
3/31/2000 21,251,701 15,895,115
4/30/2000 20,074,448 15,340,376
5/31/2000 18,973,641 15,150,155
6/30/2000 19,845,113 15,384,983
</TABLE>
*Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that fund shares, when redeemed, may be worth
more or less than their original cost. The line graph above assumes the
investment of $5,000,000 on 1/01/95, the first full month following the Fund's
Institutional Class inception on 12/28/94, compared to the S&P Mid-Cap 400
Index, an unmanaged market index.
------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of total investments
----------------------------------------------
<S> <C>
EL PASO ENERGY CORP. 4.2%
Energy
----------------------------------------------
JOHNSON & JOHNSON 4.1%
Health Care
----------------------------------------------
MINIMED, INC. 3.8%
Health Care
----------------------------------------------
COMVERSE TECHNOLOGY, INC. 3.8%
Technology
----------------------------------------------
PMC - SIERRA, INC. 3.6%
Technology
----------------------------------------------
VALERO ENERGY CORP. 3.5%
Energy
----------------------------------------------
ACE LTD. 3.3%
Financial & Business Services
----------------------------------------------
GENERAL ELECTRIC CO. 3.2%
Capital Goods
----------------------------------------------
NABORS INDUSTRIES, INC. 3.2%
Energy
----------------------------------------------
SDL, Inc. 2.9%
Technology
----------------------------------------------
TOP TEN TOTAL 35.6%
----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
----------------------------------------------
<S> <C>
TECHNOLOGY 25.3%
----------------------------------------------
FINANCIAL & BUSINESS SERVICES 17.1%
----------------------------------------------
ENERGY 16.4%
----------------------------------------------
HEALTH CARE 14.9%
----------------------------------------------
CAPITAL GOODS 8.7%
----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
----------------------------------------------
<S> <C>
COMMON STOCK 89.7%
----------------------------------------------
CASH EQUIVALENTS 10.3%
----------------------------------------------
</TABLE>
------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
------------------------------------------------------------------------------
PIMCO Mid-Cap Equity Fund Institutional Class shares posted a return of 49.32%
for the one-year period ended June 30, 2000 besting the 17.09% return for the
S&P Mid-Cap 400 Index.
The technology sector contributed to the Fund's performance. One of the
strongest areas of technology was telecommunications, which has seen huge growth
over the past year. In particular, Spectra Diode Laboratories was a standout
performer. SDL is a provider of solutions for optical communications, providing
products to power the transmission of data, voice, and Internet information over
fiber optic networks. The company's products enable customers to meet the need
for increasing bandwidth by expanding their fiber optic communication networks
more quickly and efficiently than by using conventional electronic and optical
technologies. Due to the increased need for optical components to handle the
increased demand for more bandwidth, SDL's stock price rose significantly.
The biotechnology sector also enhanced the Fund's performance during the
fiscal year. Investors showed renewed interest in this area because of its
exciting product offerings.
For example, Medimmune is a company that is focused on using advances in
immunology and other biological sciences to develop important new products that
address significant medical needs. This company saw its stock price rise over
200% since last June. Its most important drug, Synagis, is used for the
treatment of respiratory problems in premature infants. The market opportunity
for this drug is huge because it addresses an area of healthcare that is both
sensitive and growing.
The property and casualty (P&C) industry also boosted the Fund's returns. The
industry was finally able to gain pricing power in the past year, as it shed its
weakest players and finally increased its extremely narrow profit margins. As a
result, we added fundamentally strong P&C insurers, such as Ace Limited, that we
expected would benefit from the industry consolidation. Ace, which boasts a
strong balance sheet and an exceptional management team, outperformed.
It should be noted that on August 7, 2000, this Fund will be renamed PIMCO
Growth & Income Fund. It will invest primarly in securities of companies with
market captiatilizations of at least $1 billion and its investment objective
will be to primarily seek long-term growth of capital, with income as a
secondary objective.
ANNUAL REPORT 11
<PAGE>
PIMCO OPPORTUNITY FUND
June 30, 2000
OBJECTIVE
Capital appreciation;
no consideration given
to income
PORTFOLIO
Primarily common stocks of
companies with market
capitalizations of between
$100 million and $2 billion
TOTAL NET ASSETS
$619.0 million
NUMBER OF SECURITIES
IN THE
PORTFOLIO
94 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity
Advisors
------------------------------------------------------------------------------
PERFORMANCE*
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
INST'L CLASS ADMIN. CLASS Russell 2000 Lipper Sm.-Cap
(INCEP. 3/31/99) (INCEP. 3/31/99) Index Growth Fund Average
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 YEAR 50.24% 50.36% 14.31% 57.71%
INCEPTION 53.19% 53.28% -- --
</TABLE>
CHANGE IN VALUE
$5,000,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO
Opportunity Russell 2000
Month Fund Index
================= ============= ===========
<S> <C> <C>
3/31/1999 5,000,000 5,000,000
4/30/1999 5,338,785 5,448,000
5/31/1999 5,268,692 5,527,541
6/30/1999 5,668,224 5,777,386
7/31/1999 5,703,271 5,619,085
8/31/1999 5,593,458 5,411,179
9/30/1999 5,728,972 5,412,261
10/31/1999 5,971,963 5,433,910
11/30/1999 6,726,636 5,758,315
12/31/1999 8,326,702 6,410,156
1/31/2000 8,385,691 6,306,953
2/29/2000 10,770,071 7,348,230
3/31/2000 10,046,685 6,863,982
4/30/2000 8,177,679 6,450,770
5/31/2000 7,376,676 6,074,690
6/30/2000 8,516,087 6,604,403
</TABLE>
*Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that fund shares, when redeemed, may be worth
more or less than their original cost. The line graph above assumes the
investment of $5,000,000 on 4/01/99, the first full month following the Fund's
Institutional Class inception on 3/31/99, compared to the Russell 2000 Index, an
unmanaged market index. The performance of the Administrative Class (shown
above) reflects the payment of a service fee in an amount not to exceed 0.25% on
an annualized basis. The Administrative Class commenced operations on 3/31/99.
------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
-----------------------------------------------------
<S> <C>
WINSTAR COMMUNICATIONS, INC. 2.4%
Communications
-----------------------------------------------------
ART TECHNOLOGY GROUP, INC. 1.9%
Technology
-----------------------------------------------------
NETRO CORP. 1.9%
Technology
-----------------------------------------------------
AVIS RENT A CAR, INC. 1.9%
Consumer Services
-----------------------------------------------------
AEROFLEX, INC. 1.8%
Technology
-----------------------------------------------------
TRANSWITCH CORP. 1.8%
Technology
-----------------------------------------------------
KANA COMMUNICATIONS, INC. 1.8%
Technology
-----------------------------------------------------
VARIAN SEMICONDUCTOR EQUIPMENT 1.8%
Technology
-----------------------------------------------------
DIGITAL MICROWAVE CORP. 1.7%
Technology
-----------------------------------------------------
INFORMATICA CORP. 1.7%
Technology
-----------------------------------------------------
TOP TEN TOTAL 18.7%
-----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
-----------------------------------------------------
<S> <C>
TECHNOLOGY 51.3%
-----------------------------------------------------
HEALTH CARE 10.7%
-----------------------------------------------------
ENERGY 8.5%
-----------------------------------------------------
FINANCIAL & BUSINESS SERVICES 6.8%
-----------------------------------------------------
COMMUNICATIONS 5.7%
-----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-----------------------------------------------------
<S> <C>
COMMON STOCK 94.5%
-----------------------------------------------------
CASH EQUIVALENTS 5.5%
-----------------------------------------------------
</TABLE>
------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
------------------------------------------------------------------------------
For the twelve-month period ended June 30, 2000, PIMCO Opportunity Fund
Institutional Class shares returned 50.24%, significantly outperforming the
Russell 2000 Index's return of 14.31% for the same period.
The Fund's best performance in the past year was delivered by the technology
sector. This sector benefited from an increase in corporate spending as
companies recognized technology's ability to boost profit margins. Many areas
within technology showed incredible strength, including semiconductors.
Fairchild Semiconductor, a company that designs and develops memory
semiconductors, aided the Fund's performance this year. It benefited from
greater demand for semiconductors, fueled by the global economic recovery as
well as general investor interest in technology stocks.
Another stellar performer for the Fund was True North Communications, the
sixth largest advertising agency in the world. It benefited from the booming
domestic economy, which has caused an increase in corporate advertising
expenditures. Furthermore, the massive increase in Internet advertising has
helped True North considerably, as it owns a significant share of an Internet
advertising agency.
The biotechnology industry also enhanced the Fund's performance during the
past year. Medicis Pharmaceutical, a company that offers prescription and
over-the-counter products to treat a number of dermatological conditions, showed
tremendous strength this period. Aside from announcing record earnings in 1999,
the company recently introduced Plexion, a new prescription cleanser
specifically designed for the treatment of the acne rosacea--the only product of
its kind. This news propelled the stock's price more than 125% in the past year.
The manager believes that the economy is slowing, and that the Fed is nearing
the end of the rate cycle, which should bode well for a market rebound over the
next six months. While the manager expects continued volatility, he is
optimistic that small-cap stocks can perform well if the economy does not enter
a recession and interest rates don't rise significantly.
12 PIMCO FUNDS
<PAGE>
PIMCO INNOVATION FUND
June 30, 2000
OBJECTIVE
Capital appreciation;
no consideration given
to income
PORTFOLIO
Primarily common stocks of
technology-related companies
with market capitalizations of
more than $200 million
TOTAL NET ASSETS
$5.5 billion
NUMBER OF SECURITIES
IN THE
PORTFOLIO
52 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity
Advisors
------------------------------------------------------------------------------
PERFORMANCE*
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
INST'L CLASS ADMIN. CLASS S&P 500 Lipper Science &
(INCEP. 3/5/99) (INCEP. 3/31/00) Index Technology Fund Average
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 YEAR 115.34% -- 7.25% 84.03%
INCEPTION 98.25% -27.45% -- --
</TABLE>
CHANGE IN VALUE
$5,000,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO
Innovation S&P 500
Month Fund Index
================== ============ =============
<S> <C> <C>
3/31/1999 5,000,000 5,000,000
4/30/1999 4,939,306 5,193,650
5/31/1999 4,819,364 5,071,028
6/30/1999 5,419,075 5,352,470
7/31/1999 5,369,942 5,185,366
8/31/1999 5,783,237 5,159,538
9/30/1999 5,881,503 5,018,271
10/31/1999 6,702,312 5,335,827
11/30/1999 7,872,832 5,444,305
12/31/1999 10,557,847 5,764,974
1/31/2000 10,501,543 5,475,441
2/29/2000 14,663,230 5,371,694
3/31/2000 13,292,624 5,897,206
4/30/2000 11,202,933 5,719,760
5/31/2000 9,718,110 5,602,390
6/30/2000 11,669,454 5,740,489
</TABLE>
*Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that fund shares, when redeemed, may be worth
more or less than their original cost. The line graph above assumes the
investment of $5,000,000 on 4/1/99, the first full month following the Fund's
Institutional Class inception on 3/5/99, compared to the S&P 500 Index, an
unmanaged market index.
------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
-------------------------------------------------
<S> <C>
MICRON TECHNOLOGY, INC. 4.2%
Technology
-------------------------------------------------
SIEBEL SYSTEMS, INC. 3.9%
Technology
-------------------------------------------------
INTEL CORP. 3.6%
Technology
-------------------------------------------------
CISCO SYSTEMS, INC. 3.5%
Technology
-------------------------------------------------
E-TEK DYNAMICS, INC. 3.4%
Technology
-------------------------------------------------
CIENA CORP. 3.3%
Technology
-------------------------------------------------
ORACLE CORP. 3.1%
Technology
-------------------------------------------------
GEMSTAR INTERNATIONAL GROUP LTD. 3.1%
Consumer Discretionary
-------------------------------------------------
JUNIPER NETWORKS, INC. 3.0%
Technology
-------------------------------------------------
NORTEL NETWORKS CORP. 3.0%
Technology
-------------------------------------------------
TOP TEN TOTAL 34.1%
-------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 4 RELATED
INDUSTRIES % of Total Investments
-------------------------------------------------
<S> <C>
TECHNOLOGY 80.5%
-------------------------------------------------
COMMUNICATIONS 9.2%
-------------------------------------------------
HEALTH CARE 4.3%
-------------------------------------------------
CONSUMER DISCRETIONARY 4.0%
-------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-------------------------------------------------
<S> <C>
COMMON STOCK 97.9%
-------------------------------------------------
CASH EQUIVALENTS 2.1%
-------------------------------------------------
</TABLE>
------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
------------------------------------------------------------------------------
PIMCO Innovation Fund posted stellar results for the one-year period ended June
30, 2000, with Institutional Class shares returning 115.34%. The Fund was able
to significantly outperform both the S&P 500 Index and its Lipper Average return
during this period.
The technology sector continued to lead the stock market, pushing the Fund's
performance higher this year. It led the market because it offered investors the
greatest earnings growth potential of any sector. A variety of areas within
technology showed tremendous strength, including telecommunications and
software. Ericsson, a manufacturer of advanced systems and products for wired
and mobile communications, is the number one provider of wireless infrastructure
in the world. Its stock rose over 140% this year due to the increase in cell
phone demand and subscriptions stimulated by cheaper service. Furthermore, it
has benefited from recent technological advances in cell phone handset
technology, which has shortened upgrade cycles for cell phones.
Another standout performer for the Fund was Veritas Software, a company that
makes enterprise data storage management software. Veritas' products are in
great demand as companies seek effective, economical ways to store greater
amounts of data. The company experienced a surge in sales growth in the past
year as corporate Internet use and the need for data storage increased.
The biotechnology sector also enhanced the Fund's performance during this
year. Investors showed renewed interest in this area because of its exciting
product offerings. For example, Medimmune is a company that is focused on using
advances in immunology and other biological sciences to develop important new
products that address significant medical needs. It benefited from
better-than-expected prescription trends for its products over the past year. As
a result, the company saw its stock price rise over 200% since last June. Its
most important drug, Synagis, is used for the treatment of respiratory problems
in premature infants. The market opportunity and growth potential for this
company are huge, because we believe that biotech companies have strong product
pipelines which will boost their prices in the years to come.
The manager's outlook for the technology sector for the second half of the
year remains very positive, as he anticipates that the favorable economic
backdrop will remain in place and corporate fundamentals should continue to be
robust.
ANNUAL REPORT 13
<PAGE>
PIMCO GLOBAL INNOVATION FUND
June 30, 2000
OBJECTIVE
Capital appreciation;
no consideration given
to income
PORTFOLIO
Primarily common stocks of
U.S. and non-U.S. technolgy-related
companies with market
capitalizations of more than
$200 million
TOTAL NET ASSETS
$104.7 million
NUMBER OF SECURITIES
IN THE
PORTFOLIO
60 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
------------------------------------------------------------------------------
PERFORMANCE*
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL RETURN For periods ended 6/30/00
INST'L CLASS NASDAQ Lipper Science & Technology
(INCEP. 3/31/00) Composite Index Fund Average
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCEPTION -6.00% -- --
</TABLE>
------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
----------------------------------------------
<S> <C>
JUNIPER NETWORKS, INC. 3.3%
Technology
----------------------------------------------
NORTEL NETWORKS CORP. 2.9%
Technology
----------------------------------------------
INTEL CORP. 2.6%
Technology
----------------------------------------------
EMC CORP. 2.3%
Technology
----------------------------------------------
CISCO SYSTEMS, INC. 2.3%
Technology
----------------------------------------------
REDBACK NETWORKS, INC. 2.2%
Technology
----------------------------------------------
i2 TECHNOLOGIES, INC. 2.2%
Technology
----------------------------------------------
BEA SYSTEMS, INC. 2.2%
Technology
----------------------------------------------
DELL COMPUTER CORP. 2.2%
Technology
----------------------------------------------
VERITAS SOFTWARE CORP. 2.1%
Technology
----------------------------------------------
TOP TEN TOTAL 24.3%
----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 4 RELATED
INDUSTRIES % of Total Investments
----------------------------------------------
<S> <C>
TECHNOLOGY 73.8%
----------------------------------------------
HEALTH CARE 10.3%
----------------------------------------------
COMMUNICATIONS 7.2%
----------------------------------------------
CAPITAL GOODS 1.2%
----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-----------------------------------------------
<S> <C>
COMMON STOCK 92.5%
-----------------------------------------------
CASH EQUIVALENTS 7.5%
-----------------------------------------------
</TABLE>
------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
------------------------------------------------------------------------------
A continuation of the global economic recovery fueled the demand for
semiconductors and other technological commodities. Applied Materials, a
semiconductor manufacturer, experienced revenue growth as a result of increased
global demand. The semiconductor industry finally achieved some pricing power
after several years of extreme pricing pressure and, consequently, Applied
Materials' stock price rose significantly over the past year.
Bookham Technology, a British manufacturer of fiber optic components that
increase the capacity of fiber optic cables to transport voice and data, also
contributed to the Fund's performance. The company benefited from the
explosion in demand for telecommunications capabilities. Investors were
attracted to Bookham because it has the potential to revolutionize the fiber
optics industry because its silicon-based products offer significant
advantages over the competition. Deregulation in Europe should encourage the
build-out of fiber-optics-based networks by new competitive local exchange
carriers (CLECs) and Bookham could experience high growth as a result.
Another standout performer for the Fund was Cisco Systems, a top ten
holding. As the number of companies engaging in commerce via the Internet
increases, Cisco will benefit from the strong demand for its Internet
infrastructure equipment and its optical networking capabilities. As the
leader in networking solutions for the Internet, Cisco should continue to see
its earnings grow as the Internet grows.
The Fund's exposure to biotechnology also enhanced its performance during
this year, as investors have been attracted to their robust product pipelines.
For instance, Teva Pharmaceuticals, the largest producer of branded and generic
pharmaceuticals in Israel, saw its stock price propelled upward as a result of
higher sales. It also recently acquired a Dutch pharmaceutical company, which
allowed it to substantially increase its presence in Europe. With product
offerings in all major therapeutic categories and a greater presence globally,
Teva is poised to continue its rapid growth.
Looking ahead, the manager is optimistic that the Fund will continue its
outperformance. The manager believes that technology could turn in a strong
performance in the second half of the year, fueled by strong corporate
fundamentals and a favorable economic environment.
14 PIMCO FUNDS
<PAGE>
PIMCO INTERNATIONAL GROWTH FUND
June 30, 2000
OBJECTIVE
Long-term
capital appreciation
PORTFOLIO
An international
portfolio of common stocks
TOTAL NET ASSETS
$10.5 million
NUMBER OF SECURITIES
IN THE
PORTFOLIO
68 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity
Advisors
------------------------------------------------------------------------------
PERFORMANCE*
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
INST'L CLASS MSCI Lipper International
(INCEP. 12/31/97) EAFE Index Fund Average
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 YEAR 56.29% 17.46% 24.46%
INCEPTION 49.50% -- --
</TABLE>
CHANGE IN VALUE
$5,000,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO
International MSCI
Growth EAFE
Month Fund Index
================ ============ =============
<S> <C> <C>
12/31/1997 5,000,000 5,000,000
1/31/1998 5,190,000 5,230,000
2/28/1998 5,595,000 5,566,812
3/31/1998 6,090,000 5,739,383
4/30/1998 6,385,000 5,785,872
5/31/1998 6,635,000 5,759,257
6/30/1998 6,775,000 5,804,179
7/31/1998 7,040,000 5,864,543
8/31/1998 5,940,000 5,139,099
9/30/1998 5,570,000 4,982,870
10/31/1998 5,895,000 5,503,580
11/30/1998 6,490,000 5,787,015
12/31/1998 6,970,063 6,016,759
1/31/1999 7,529,624 6,000,514
2/28/1999 7,317,751 5,858,902
3/31/1999 7,801,255 6,104,976
4/30/1999 8,393,412 6,353,448
5/31/1999 8,051,156 6,027,516
6/30/1999 8,713,937 6,263,795
7/31/1999 9,208,306 6,451,709
8/31/1999 9,555,995 6,476,870
9/30/1999 9,936,279 6,543,582
10/31/1999 10,419,783 6,790,275
11/30/1999 12,473,316 7,027,935
12/31/1999 14,617,010 7,659,746
1/31/2000 14,430,636 7,174,118
2/29/2000 16,946,679 7,368,537
3/31/2000 15,974,874 7,655,910
4/30/2000 14,297,512 7,254,740
5/31/2000 13,119,365 7,079,175
6/30/2000 13,618,580 7,357,387
</TABLE>
*Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that fund shares, when redeemed, may be worth
more or less than their original cost. The line graph above assumes the
investment of $5,000,000 on 1/01/98, the first full month following the Fund's
Institutional Class inception on 12/31/97, compared to the Morgan Stanley
Capital International (MSCI) EAFE Index (Europe, Australasia, Far East), an
unmanaged market index. The Fund may invest in foreign securities which involve
potentially higher risks including foreign currency fluctuations and political
or economic uncertainty.
------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
---------------------------------------------------
<S> <C>
GERMANY/SIEMENS AG 5.8%
---------------------------------------------------
UNITED KINGDOM/LASMO PLC 4.2%
---------------------------------------------------
FRANCE/PSA PEUGEOT CITROEN 4.2%
---------------------------------------------------
NETHERLANDS/KONINKLIJKE PHILIPS 4.1%
ELECTRONICS NV SP- ADR
---------------------------------------------------
JAPAN/ORACLE CORP. 3.1%
---------------------------------------------------
JAPAN/NTT DATA CORP. 2.9%
---------------------------------------------------
UNITED KINGDOM/PACE MICRO 2.7%
TECHNOLOGY PLC
---------------------------------------------------
JAPAN/YAMANOUCHI PHARMACEUTICAL 2.6%
---------------------------------------------------
JAPAN/NTT MOBILE COMMUNICATION 2.5%
NETWORK, INC.
---------------------------------------------------
NETHERLANDS/STMICROELECTRONICS NV 2.5%
---------------------------------------------------
TOP TEN TOTAL 34.6%
---------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5
COUNTRIES % of Total Investments
---------------------------------------------------
<S> <C>
JAPAN 22.5%
---------------------------------------------------
UNITED KINGDOM 19.6%
---------------------------------------------------
GERMANY 9.0%
---------------------------------------------------
NETHERLANDS 8.5%
---------------------------------------------------
FRANCE 7.4%
---------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
REGIONAL BREAKDOWN
---------------------------------------------------
<S> <C>
EUROPE 62.8%
---------------------------------------------------
ASIA 28.6%
---------------------------------------------------
CANADA 4.4%
---------------------------------------------------
AUSTRALIA 2.4%
---------------------------------------------------
LATIN AMERICA 1.8%
---------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
---------------------------------------------------
<S> <C>
COMMON STOCK 100.0%
---------------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
--------------------------------------------------------------------------------
PIMCO International Growth Fund posted stellar returns for the one-year period
ended June 30, 2000, gaining 56.29% during this period. The Fund significantly
outperformed the MSCI EAFE Index, which returned 17.46%, as well as the Lipper
International Fund Average, which posted a return of 24.46%.
The Fund benefited from its exposure to the energy sector. Rising oil and gas
prices resulted in wider profit margins for many energy companies. In
particular, Woodside Petroleum, Australia's second largest oil producer,
contributed to the Fund's performance. The company returned nearly 30% in the
second quarter, as rising oil prices and oil field acquisitions boosted earnings
revisions.
The financial services sector also enhanced the Fund's performance. A healthy
worldwide economy boosted earnings for many insurance, asset management and
brokerage firms. ING Groep, the Dutch insurance and financial service giant,
turned in a strong performance, benefiting from the expansion of its global
business through well-timed acquisitions as well as the shedding of less
profitable units.
For much of the year, the technology sector greatly contributed to the
Fund's performance. Investors flocked to tech stocks of all nationalities,
lured by their strong earnings growth. Nokia, the Finnish cell phone handset
maker, saw its stock price more than double during the year as a result of
strong sales and profit growth. However, in the second quarter of 2000,
investors fled the technology sector as rising interest rates caused concerns
about high valuations. In particular, technology stocks in Japan, Italy and
Spain with expensive valuations, suffered significant losses. For instance,
Softbank and Oracle Japan sold off sharply in the second quarter. However,
the Fund had reduced its technology exposure early in the first quarter,
aiding its performance.
Looking ahead, the manager remains confident that its strategy of
minimizing regional bets and concentrating on investing in attractive stocks
within various regions should bode well for the Fund over the long term. The
manager is optimistic that its holdings are poised for significant growth,
and should outperform in the long run.
ANNUAL REPORT 15
<PAGE>
PIMCO MEGA-CAP FUND
June 30, 2000
OBJECTIVE
Seeks long-term
growth of capital
PORTFOLIO
Common stocks of
companies with very
large market capitalizations
that have improving fundamentals
and whose stock is reasonably
valued by the market
TOTAL NET ASSETS
$4.0 million
NUMBER OF SECURITIES
IN THE
PORTFOLIO
45 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital Management
------------------------------------------------------------------------------
PERFORMANCE*
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
ADMIN. CLASS S&P 500 Lipper Multi-Cap
(INCEP.8/31/99) Index Core Fund Average
--------------------------------------------------------------------------------
<S> <C> <C> <C>
INCEPTION 33.54% -- --
</TABLE>
CHANGE IN VALUE
$5,000,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO
Mega-Cap S&P 500
Month Fund Index
================== ============= ============
<S> <C> <C>
8/31/1999 5,000,000 5,000,000
9/30/1999 4,960,000 4,863,102
10/31/1999 5,140,000 5,170,839
11/30/1999 5,520,000 5,275,962
12/31/1999 6,212,079 5,586,716
1/31/2000 6,017,013 5,306,135
2/29/2000 6,802,276 5,205,596
3/31/2000 6,892,306 5,714,859
4/30/2000 6,287,104 5,542,899
5/31/2000 5,941,988 5,429,159
6/30/2000 6,677,234 5,562,988
</TABLE>
*Past performance is no guarantee of future results. Investment returns and
principal value will fluctuate so that fund shares, when redeemed, may be worth
more or less than their original cost. The Fund's Institutional Class Shares
commenced operations on 8/31/99. Since the fund is less than 1-year old, the
reported returns are cumulative. The S&P 500 Index is an unmanaged market index
and it is not possible to invest in an unmanaged market index.
------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
----------------------------------------------
<S> <C>
CORNING, INC. 4.0%
Technology
----------------------------------------------
REDBACK NETWORKS, INC. 3.9%
Technology
----------------------------------------------
PFIZER, INC. 3.5%
Health Care
----------------------------------------------
GENERAL ELECTRIC CO. 3.5%
Capital Goods
----------------------------------------------
CISCO SYSTEMS, INC. 3.3%
Technology
----------------------------------------------
INTEL CORP. 3.3%
Technology
----------------------------------------------
NORTEL NETWORKS CORP. 2.7%
Technology
----------------------------------------------
EMC CORP. 2.6%
Technology
----------------------------------------------
MICRON TECHNOLOGY, INC. 2.6%
Technology
----------------------------------------------
TYCO INTERNATIONAL LTD. 2.5%
Capital Goods
----------------------------------------------
TOP TEN TOTAL 31.9%
----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
----------------------------------------------
<S> <C>
TECHNOLOGY 51.0%
----------------------------------------------
HEALTH CARE 12.4%
----------------------------------------------
ENERGY 8.1%
----------------------------------------------
CAPITAL GOODS 6.0%
----------------------------------------------
CONSUMER STAPLES 5.9%
----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
---------------------------------------------
<S> <C>
COMMON STOCK 95.8%
---------------------------------------------
CASH EQUIVALENTS 4.2%
----------------------------------------------
</TABLE>
------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
------------------------------------------------------------------------------
PIMCO Mega-Cap Fund Institutional Class shares returned 33.54% for the period
since inception through June 30, 2000.
The Fund benefited from its exposure to the technology sector, which
dominated the stock market for much of the year. A standout in this area was
Corning, a maker of fiber optic components for telecommunications networks.
The stock was added to the portfolio last year because of its relatively low
valuation in such a high-growth industry. Its stock price has risen as a
result of several strategic acquisitions and plant expansions that should
increase capacity, as well as general investor enthusiasm for this industry.
Another positive contributor to the Fund's performance was Cisco Systems, the
networking giant. Cisco is one of the greatest beneficiaries of the Internet
explosion, and as companies race to participate in commerce on the Web, strong
demand for Internet infrastructure and optical networking capabilities will
benefit Cisco. As the largest supplier of networking solutions, Cisco remains
the market leader in this industry.
The energy sector also enhanced the Fund's performance. These stocks
turned in a strong performance as a result of rising oil and gas prices,
which created wider profit margins for many energy companies. Apache, an oil
exploration and production company, turned in a strong performance during
this period. Apache's strategic acquisition of fields in the Gulf of Mexico
has significantly increased its overall production, allowing the company to
more greatly benefit from the high prices for oil and gas. With exploration
in what appears to be a promising region in Egypt, Apache is poised to
continue to outperform as the country's demand for exploration continues to
grow.
One disappointment for the Fund this year was the specialty retail industry.
Rising interest rates and a general lack of enthusiasm on the part of investors
hurt this sector. The Fund's exposure to this area remains small, however, as
concerns about a slowing economy should continue to weaken retail sales in the
coming months.
Looking ahead, the manager is optimistic that the Fund is positioned to
continue its strong performance. The manager is confident that, in a rising
interest rate environment, investors will place more emphasis on valuations and
more stable, large-capitalization issues. In such a climate, the manager's
philosophy of purchasing growing but reasonably priced stocks in the large-cap
universe should bode well of the Fund.
16 PIMCO FUNDS
<PAGE>
PIMCO CAPITAL APPRECIATION FUND
June 30, 2000
OBJECTIVE
Growth of capital
PORTFOLIO
Primarily common stocks of
companies with market
capitalizations of at least
$1 billion that have improving
fundamentals and whose stock is
reasonably valued by
the market
TOTAL NET ASSETS
$793.8 million
NUMBER OF SECURITIES
IN THE
PORTFOLIO
94 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital Management
------------------------------------------------------------------------------
PERFORMANCE*
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
INST'L CLASS ADMIN. CLASS S&P 500 Lipper Multi-Cap
(INCEP. 3/08/91) (INCEP. 7/31/96) Index Core Fund Average
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 YEAR 22.79% 22.48% 7.25% 11.54%
3 YEARS 21.76% 21.44% 19.67% 16.27%
5 YEARS 24.24% -- 23.80% 19.33%
INCEPTION 19.90% 26.12% -- --
</TABLE>
CHANGE IN VALUE
$5,000,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO
Capital
Appreciation S&P 500
Month Fund Index
================== ============= =============
<S> <C> <C>
3/31/1991 5,000,000 5,000,000
4/30/1991 4,854,350 5,012,000
5/31/1991 5,094,373 5,228,518
6/30/1991 4,820,061 4,989,052
7/31/1991 5,164,862 5,221,542
8/31/1991 5,327,032 5,345,293
9/30/1991 5,253,318 5,256,026
10/31/1991 5,433,351 5,326,457
11/30/1991 5,275,577 5,111,801
12/31/1991 6,008,526 5,696,591
1/31/1992 5,951,282 5,590,634
2/29/1992 6,015,540 5,663,312
3/31/1992 5,817,823 5,552,878
4/30/1992 5,805,268 5,716,132
5/31/1992 5,830,077 5,744,142
6/30/1992 5,646,491 5,658,669
7/31/1992 5,811,083 5,889,825
8/31/1992 5,666,801 5,769,261
9/30/1992 5,816,058 5,837,050
10/31/1992 6,018,924 5,857,187
11/30/1992 6,371,407 6,056,624
12/31/1992 6,459,843 6,130,939
1/31/1993 6,679,451 6,182,194
2/28/1993 6,599,169 6,266,457
3/31/1993 6,904,241 6,398,680
4/30/1993 6,735,135 6,244,023
5/31/1993 7,040,790 6,411,051
6/30/1993 7,153,400 6,429,835
7/31/1993 7,052,175 6,403,987
8/31/1993 7,310,181 6,646,954
9/30/1993 7,525,186 6,595,972
10/31/1993 7,543,860 6,732,443
11/30/1993 7,393,094 6,668,283
12/31/1993 7,603,513 6,748,903
1/31/1994 7,871,521 6,978,365
2/28/1994 7,764,846 6,788,973
3/31/1994 7,377,445 6,492,973
4/30/1994 7,405,400 6,576,213
5/31/1994 7,399,773 6,684,129
6/30/1994 7,191,566 6,520,301
7/31/1994 7,367,360 6,734,427
8/31/1994 7,587,534 7,010,539
9/30/1994 7,384,297 6,839,131
10/31/1994 7,554,006 6,992,806
11/30/1994 7,208,583 6,738,128
12/31/1994 7,279,887 6,838,055
1/31/1995 7,275,418 7,015,365
2/28/1995 7,638,905 7,288,754
3/31/1995 7,973,994 7,503,845
4/30/1995 8,248,506 7,724,833
5/31/1995 8,550,420 8,033,595
6/30/1995 8,920,691 8,220,215
7/31/1995 9,416,251 8,492,798
8/31/1995 9,507,671 8,514,115
9/30/1995 9,884,778 8,873,410
10/31/1995 9,700,127 8,841,732
11/30/1995 9,998,064 9,229,884
12/31/1995 9,983,895 9,407,652
1/31/1996 10,319,950 9,727,888
2/29/1996 10,710,996 9,818,066
3/31/1996 10,731,348 9,912,614
4/30/1996 10,866,103 10,058,726
5/31/1996 11,141,737 10,318,140
6/30/1996 11,121,089 10,357,452
7/31/1996 10,561,962 9,899,860
8/31/1996 11,016,637 10,108,648
9/30/1996 11,692,504 10,677,563
10/31/1996 11,987,428 10,972,050
11/30/1996 12,859,911 11,801,427
12/31/1996 12,658,812 11,567,641
1/31/1997 13,397,357 12,290,387
2/28/1997 13,259,311 12,386,744
3/31/1997 12,776,151 11,877,772
4/30/1997 13,183,386 12,586,875
5/31/1997 14,025,466 13,353,165
6/30/1997 14,625,966 13,951,386
7/31/1997 16,206,592 15,061,498
8/31/1997 15,599,190 14,217,753
9/30/1997 16,544,805 14,996,459
10/31/1997 16,248,006 14,495,577
11/30/1997 16,662,144 15,166,577
12/31/1997 16,991,599 15,426,988
1/31/1998 16,723,663 15,597,610
2/28/1998 17,951,702 16,722,510
3/31/1998 18,949,019 17,578,870
4/30/1998 18,963,905 17,755,713
5/31/1998 18,651,313 17,450,492
6/30/1998 19,447,678 18,159,332
7/31/1998 18,889,478 17,965,934
8/31/1998 15,808,216 15,368,420
9/30/1998 16,693,892 16,352,921
10/31/1998 17,460,487 17,683,067
11/30/1998 18,599,214 18,754,838
12/31/1998 19,980,246 19,835,492
1/31/1999 20,637,174 20,665,012
2/28/1999 19,812,008 20,022,744
3/31/1999 20,292,687 20,823,854
4/30/1999 20,989,673 21,630,362
5/31/1999 20,268,654 21,119,669
6/30/1999 21,502,398 22,291,811
7/31/1999 20,709,276 21,595,860
8/31/1999 20,300,699 21,488,291
9/30/1999 19,795,985 20,899,948
10/31/1999 21,181,945 22,222,497
11/30/1999 22,199,383 22,674,280
12/31/1999 24,435,384 24,009,796
1/31/2000 23,763,118 22,803,955
2/29/2000 25,653,256 22,371,873
3/31/2000 26,880,871 24,560,513
4/30/2000 25,701,971 23,821,487
5/31/2000 25,331,738 23,332,670
6/30/2000 26,403,465 23,907,821
</TABLE>
*Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that fund shares, when redeemed, may be worth
more or less than their original cost. The line graph above assumes the
investment of $5,000,000 on 4/01/91, the first full month following the Fund's
Institutional Class inception on 3/08/91, compared to the S&P 500 Index, an
unmanaged market index. The performance of the Administrative Class (shown
above) reflects the payment of a service fee in an amount not to exceed 0.25% on
an annualized basis. The Administrative Class commenced operations on 7/31/96.
------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
----------------------------------------------
<S> <C>
GENERAL ELECTRIC CO. 2.4%
Capital Goods
----------------------------------------------
EXXON MOBIL CORP. 2.1%
Energy
----------------------------------------------
CORNING, INC. 2.0%
Technology
----------------------------------------------
PFIZER, INC. 2.0%
Health Care
----------------------------------------------
INTEL CORP. 1.9%
Technology
----------------------------------------------
NORTEL NETWORKS CORP. 1.7%
Technology
----------------------------------------------
CISCO SYSTEMS, INC. 1.7%
Technology
----------------------------------------------
VIACOM, INC. `B' 1.7%
Consumer Services
----------------------------------------------
SDL, INC. 1.7%
Technology
----------------------------------------------
CIENA CORP. 1.7%
Technology
----------------------------------------------
TOP TEN TOTAL 18.9%
----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
----------------------------------------------
<S> <C>
TECHNOLOGY 28.9%
----------------------------------------------
ENERGY 17.0%
----------------------------------------------
FINANCIAL & BUSINESS SERVICES 10.5%
----------------------------------------------
HEALTH CARE 10.0%
----------------------------------------------
CONSUMER DISCRETIONARY 7.1%
----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
----------------------------------------------
<S> <C>
COMMON STOCK 92.9%
----------------------------------------------
CASH EQUIVALENTS 7.1%
----------------------------------------------
</TABLE>
------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
------------------------------------------------------------------------------
PIMCO Capital Appreciation Fund posted strong returns for the twelve months
ended June 30, 2000. The Fund's Institutional Class shares returned 22.79%
during this period, outpacing the S&P 500 Index's return of 7.25% as well as its
Lipper Average return of 11.54% for the same period.
The technology sector greatly contributed to the Fund's performance. These
stocks dominated the market in the past year, due to an increase in corporate
spending as companies realized technology's ability to boost profit margins.
Tech proved extremely attractive to investors because it offered the greatest
earnings growth potential of any sector. Many areas of technology benefited from
this surge in investment, such as semiconductors. For instance, Intel, a leading
maker of chips for PCs, posted returns of more than 100% over the past year. The
company benefited from a continuation of the global economic recovery, which
fueled demand for semiconductors, as well as greater pricing power for the
entire industry.
Another positive contributor to the Fund's performance was Cisco Systems, the
networking giant. Cisco is one of the greatest beneficiaries of the Internet
explosion, and as companies race to participate in commerce on the Web, strong
demand for Internet infrastructure and optical networking capabilities will
benefit Cisco. As the largest supplier of networking solutions, Cisco remains
the market leader in this industry.
The Fund's exposure to the energy sector also boosted its performance this
year. For example, Exxon Mobil, posted strong returns. The company benefited
from significantly higher prices for oil and gas. It announced in May that it
had completed the sale of it's California refinery and fuels terminal and the
assignment of California supply arrangements to Valero Energy Corporation.
This sale, coupled with the high demand for oil, helped Exxon's stock price
appreciate over the past year.
One disappointment for the Fund this year was the retail industry. Rising
interest rates and a general lack of enthusiasm on the part of investors hurt
this sector. The Fund's exposure to this area remains small, however, as
concerns about a slowing economy should continue to weaken retail sales in the
coming months.
Looking ahead, the manager is optimistic that the Fund is positioned to
continue its strong performance. The manager is confident that, in a rising
interest rate environment, investors will place more emphasis on valuations.
In such a climate, the manager's philosophy of purchasing growing but
reasonably priced stocks should bode well for the Fund.
ANNUAL REPORT 17
<PAGE>
PIMCO MID-CAP FUND
June 30, 2000
OBJECTIVE
Growth of capital
PORTFOLIO
Primarily common stocks of
companies with market
capitalizations of more than
$500 million (excluding the
largest 200 companies) that
have improving fundamentals and
whose stock is reasonably valued
by the market
TOTAL NET ASSETS
$1.1 billion
NUMBER OF SECURITIES
IN THE
PORTFOLIO
77 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital Management
-------------------------------------------------------------------------------
PERFORMANCE*
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
INST'L CLASS ADMIN. CLASS Russell 2000 Mid-Cap Lipper Mid-Cap
(INCEP. 8/26/91) (INCEP. 11/30/94) Index Core Fund Average
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 YEAR 34.88% 34.53% 12.65% 37.60%
3 YEARS 19.52% 19.28% 16.16% 20.94%
5 YEARS 22.07% 21.79% 18.74% 20.59%
INCEPTION 18.85% 24.08% -- --
</TABLE>
CHANGE IN VALUE
$5,000,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO Russell 2000
Mid-Cap Mid-Cap
Month Fund Index
================== ============= =============
<S> <C> <C>
8/31/1991 5,000,000 5,000,000
9/30/1991 4,974,950 4,970,800
10/31/1991 5,157,144 5,072,701
11/30/1991 5,011,661 4,862,945
12/31/1991 5,665,299 5,407,887
1/31/1992 5,671,673 5,509,555
2/29/1992 5,727,031 5,636,110
3/31/1992 5,555,924 5,492,107
4/30/1992 5,519,126 5,535,055
5/31/1992 5,524,162 5,570,812
6/30/1992 5,378,127 5,480,453
7/31/1992 5,525,925 5,709,591
8/31/1992 5,364,436 5,578,099
9/30/1992 5,541,064 5,693,789
10/31/1992 5,722,284 5,833,116
11/30/1992 6,066,939 6,127,047
12/31/1992 6,185,404 6,291,558
1/31/1993 6,414,599 6,417,263
2/28/1993 6,216,680 6,424,579
3/31/1993 6,470,422 6,633,570
4/30/1993 6,293,134 6,457,781
5/31/1993 6,562,549 6,662,815
6/30/1993 6,765,881 6,738,172
7/31/1993 6,682,647 6,770,650
8/31/1993 7,013,472 7,071,740
9/30/1993 7,201,787 7,098,825
10/31/1993 7,128,883 7,104,717
11/30/1993 6,929,867 6,939,959
12/31/1993 7,160,996 7,191,324
1/31/1994 7,309,331 7,389,733
2/28/1994 7,299,101 7,289,232
3/31/1994 7,033,122 6,978,711
4/30/1994 7,058,599 7,026,585
5/31/1994 6,930,633 7,036,141
6/30/1994 6,700,295 6,827,801
7/31/1994 6,851,806 7,062,131
8/31/1994 7,210,540 7,396,947
9/30/1994 7,026,048 7,216,165
10/31/1994 7,167,804 7,271,369
11/30/1994 6,829,168 6,950,556
12/31/1994 6,991,678 7,040,844
1/31/1995 6,924,894 7,185,463
2/28/1995 7,346,142 7,557,383
3/31/1995 7,582,451 7,773,675
4/30/1995 7,753,580 7,890,902
5/31/1995 8,020,945 8,150,197
6/30/1995 8,493,975 8,424,125
7/31/1995 9,295,489 8,833,116
8/31/1995 9,367,547 8,968,440
9/30/1995 9,501,369 9,171,037
10/31/1995 9,355,709 8,965,881
11/30/1995 9,536,022 9,411,754
12/31/1995 9,599,034 9,466,624
1/31/1996 9,789,114 9,666,181
2/29/1996 10,026,714 9,893,143
3/31/1996 10,152,383 10,036,296
4/30/1996 10,364,554 10,320,625
5/31/1996 10,539,595 10,476,466
6/30/1996 10,325,462 10,319,110
7/31/1996 9,831,497 9,680,460
8/31/1996 10,367,953 10,141,443
9/30/1996 11,095,622 10,642,329
10/31/1996 11,169,983 10,727,681
11/30/1996 11,849,848 11,381,211
12/31/1996 11,841,245 11,265,123
1/31/1997 12,326,596 11,686,551
2/28/1997 12,120,488 11,668,787
3/31/1997 11,774,758 11,172,864
4/30/1997 12,027,407 11,450,845
5/31/1997 12,858,488 12,286,299
6/30/1997 13,483,461 12,688,306
7/31/1997 14,733,407 13,746,765
8/31/1997 14,713,461 13,596,925
9/30/1997 15,750,651 14,373,309
10/31/1997 15,418,218 13,814,188
11/30/1997 15,524,596 14,142,965
12/31/1997 15,887,569 14,533,311
1/31/1998 15,605,123 14,260,085
2/28/1998 16,523,072 15,375,224
3/31/1998 17,031,474 16,104,009
4/30/1998 17,278,614 16,144,269
5/31/1998 16,692,539 15,645,411
6/30/1998 17,010,291 15,862,100
7/31/1998 16,523,072 15,105,478
8/31/1998 13,578,576 12,688,602
9/30/1998 14,560,074 13,509,554
10/31/1998 14,962,560 14,430,906
11/30/1998 15,788,713 15,113,487
12/31/1998 17,147,689 15,999,138
1/31/1999 16,406,007 15,971,939
2/28/1999 15,523,405 15,440,074
3/31/1999 15,597,573 15,923,348
4/30/1999 16,398,590 17,100,083
5/31/1999 16,361,506 17,050,493
6/30/1999 17,066,104 17,652,376
7/31/1999 16,598,844 17,166,935
8/31/1999 16,035,166 16,722,312
9/30/1999 15,738,493 16,133,686
10/31/1999 16,279,921 16,898,423
11/30/1999 17,221,857 17,385,098
12/31/1999 19,373,700 18,914,986
1/31/2000 18,911,534 18,288,900
2/29/2000 23,033,757 19,695,317
3/31/2000 23,987,906 20,823,858
4/30/2000 22,504,502 19,838,890
5/31/2000 22,019,974 19,313,159
6/30/2000 23,018,848 19,884,829
</TABLE>
*Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that fund shares, when redeemed, may be worth
more or less than their original cost. The line graph above assumes the
investment of $5,000,000 on 9/01/91, the first full month following the Fund's
Institutional Class inception on 8/26/91, compared to the Russell 2000 Mid-Cap
Index, an unmanaged market index. The performance of the Administrative Class
(shown above) reflects the payment of a service fee in an amount not to exceed
0.25% on an annualized basis. The Administrative Class commenced operations on
11/30/94.
------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
----------------------------------------------
<S> <C>
ALLERGAN, INC. 1.9%
Health Care
-----------------------------------------------
INTEGRATED DEVICE TECHNOLOGY, INC. 1.8%
Technology
-----------------------------------------------
TEKTRONIX, INC. 1.8%
Technology
-----------------------------------------------
WATERS CORP. 1.8%
Capital Goods
-----------------------------------------------
BROCADE COMMUNICATIONS SYSTEMS, INC. 1.7%
Technology
-----------------------------------------------
CIENA CORP. 1.6%
Technology
-----------------------------------------------
IDEC PHARMACEUTICALS CORP. 1.6%
Health Care
-----------------------------------------------
ADC TELECOMMUNICATION, INC. 1.6%
Communications
-----------------------------------------------
DENDRITE INTERNATIONAL, INC. 1.6%
Technology
-----------------------------------------------
APACHE CORP. 1.6%
Energy
-----------------------------------------------
TOP TEN TOTAL 17.0%
-----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
-----------------------------------------------
<S> <C>
TECHNOLOGY 31.5%
-----------------------------------------------
FINANCIAL & BUSINESS SERVICES 17.0%
-----------------------------------------------
ENERGY 16.7%
-----------------------------------------------
HEALTH CARE 5.9%
-----------------------------------------------
CONSUMER DISCRETIONARY 5.0%
-----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-----------------------------------------------
<S> <C>
COMMON STOCK 93.7%
-----------------------------------------------
CASH EQUIVALENTS 6.3%
-----------------------------------------------
</TABLE>
------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
-------------------------------------------------------------------------------
For the one-year period ended June 30, 2000, PIMCO Mid-Cap Fund Institutional
Class shares posted a return of 34.88% and Administrative Class shares returned
34.53%, significantly outperforming the Russell 2000 Mid-Cap Index.
The technology sector contributed to the Fund's strong performance. This
sector proved extremely attractive to investors because of its high earnings
growth and solid fundamentals. A variety of areas within technology showed
strength at different times during the year, including semiconductor
manufacturers, business-to-business Internet companies, telecommunications
providers and software companies.
The energy sector also contributed to the Fund's performance over the past
year. Apache, an independent gas and oil exploration company, saw its stock
price soar over the past year, benefiting from rising oil and gas prices. As
a result of a recent acquisition, the company was able to increase its oil
and gas production to meet greater demand. With energy prices showing no
signs of retreating, this company should continue to perform well in the
coming months.
The biotechnology sector also enhanced the Fund's performance during this
period. Investors were attracted to biotech companies because of their strong
product pipelines. In addition, the industry is benefiting from a strong
demographic trend--the aging of Baby Boomers--which has increased demand for
pharmaceutical products. Allergan, the Fund's largest holding and a provider of
eye care and specialty pharmaceutical products, benefited from having a large
share of a growing market--ocular pharmaceuticals. Fourth-largest holding Waters
Corporation also had a substantial impact on the Fund's performance. The
company, which manufactures equipment for the biotechnology industry, enjoyed
higher revenues as a result of increased sales of its equipment, as
biotechnological research continues to expand to new frontiers.
One disappointment for the Fund this year was the retail industry. Rising
interest rates and a general lack of enthusiasm on the part of investors hurt
this sector. The Fund's exposure to this area remains small, however, as
concerns about a slowing economy should continue to weaken retail sales in the
coming months.
Looking ahead, the manager believes that investors will pay more attention to
valuation as a result of the recent market correction and rising interest rates.
In addition, the manager is optimistic that mid-cap stocks in general and PIMCO
Mid-Cap Fund in particular will continue to outperform the stock market given
the positive economic climate.
18 PIMCO FUNDS
<PAGE>
PIMCO SMALL-CAP FUND
June 30, 2000
OBJECTIVE
Growth of capital
PORTFOLIO
Common stocks of companies with market
capitalizations of more than $100 million
(excluding the largest 1,000 companies) that
have improving fundamentals and whose stock
is reasonably valued by the market
TOTAL NET ASSETS
$37.0 million
NUMBER OF SECURITIES IN THE PORTFOLIO
84 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital Management
------------------------------------------------------------------------------
PERFORMANCE*
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
INST'L CLASS ADMIN. CLASS Russell 2000 Lipper Small-Cap
(INCEP. 1/17/91) (INCEP. 9/27/95) Index Core Fund Average
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 YEAR 15.86% 15.70% 14.31% 27.14%
3 YEARS 5.53% 5.25% 10.57% 12.84%
5 YEARS 11.11% -- 14.27% 15.92%
INCEPTION 16.90% 8.55% -- --
</TABLE>
CHANGE IN VALUE
$5,000,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO
Small-Cap Russell 2000
Month Fund Index
================== ============ ===========
<S> <C> <C>
1/31/1991 5,000,000 5,000,000
2/28/1991 5,463,287 5,560,750
3/31/1991 5,843,531 5,950,725
4/30/1991 5,766,171 5,935,373
5/31/1991 6,033,043 6,218,074
6/30/1991 5,766,171 5,858,483
7/31/1991 6,099,236 6,063,471
8/31/1991 6,374,882 6,287,092
9/30/1991 6,383,633 6,336,132
10/31/1991 6,581,876 6,503,659
11/30/1991 6,263,398 6,202,670
12/31/1991 6,995,446 6,699,007
1/31/1992 7,323,081 7,242,297
2/29/1992 7,544,456 7,453,699
3/31/1992 7,247,813 7,201,466
4/30/1992 7,066,286 6,948,623
5/31/1992 7,030,866 7,041,039
6/30/1992 6,694,376 6,710,181
7/31/1992 6,951,171 6,943,427
8/31/1992 6,712,086 6,747,067
9/30/1992 6,955,598 6,902,452
10/31/1992 7,249,837 7,120,293
11/30/1992 7,809,634 7,665,565
12/31/1992 8,162,949 7,932,403
1/31/1993 8,548,383 8,200,677
2/28/1993 8,456,613 8,011,570
3/31/1993 9,066,884 8,271,465
4/30/1993 8,644,742 8,044,082
5/31/1993 9,154,066 8,399,872
6/30/1993 9,374,314 8,452,035
7/31/1993 9,374,314 8,568,758
8/31/1993 9,934,112 8,938,757
9/30/1993 10,250,718 9,191,009
10/31/1993 10,066,641 9,427,677
11/30/1993 9,599,036 9,120,523
12/31/1993 10,158,807 9,432,172
1/31/1994 10,348,945 9,727,682
2/28/1994 10,609,706 9,692,370
3/31/1994 9,979,534 9,181,873
4/30/1994 10,202,267 9,236,321
5/31/1994 9,887,181 9,132,413
6/30/1994 9,631,853 8,824,285
7/31/1994 9,903,478 8,969,356
8/31/1994 10,354,377 9,468,950
9/30/1994 10,316,350 9,436,850
10/31/1994 10,528,218 9,398,725
11/30/1994 9,898,046 9,018,923
12/31/1994 10,214,126 9,260,359
1/31/1995 9,843,666 9,143,401
2/28/1995 10,372,895 9,524,041
3/31/1995 10,437,578 9,687,283
4/30/1995 10,502,262 9,902,534
5/31/1995 10,766,877 10,072,759
6/30/1995 11,296,106 10,595,333
7/31/1995 12,824,991 11,205,624
8/31/1995 12,836,751 11,437,469
9/30/1995 13,160,169 11,641,742
10/31/1995 12,360,445 11,121,123
11/30/1995 12,383,966 11,588,322
12/31/1995 12,445,286 11,894,022
1/31/1996 12,400,748 11,881,176
2/29/1996 12,807,956 12,251,512
3/31/1996 13,037,010 12,500,831
4/30/1996 13,787,799 13,169,250
5/31/1996 14,144,106 13,688,250
6/30/1996 13,253,339 13,126,211
7/31/1996 12,318,034 11,979,767
8/31/1996 13,132,449 12,675,313
9/30/1996 13,717,811 13,170,664
10/31/1996 13,533,295 12,967,704
11/30/1996 14,214,095 13,501,973
12/31/1996 14,540,393 13,855,860
1/31/1997 14,856,225 14,132,700
2/28/1997 14,005,909 13,789,982
3/31/1997 13,738,667 13,139,233
4/30/1997 13,787,257 13,175,891
5/31/1997 15,342,119 14,641,709
6/30/1997 16,277,466 15,269,253
7/31/1997 17,309,992 15,979,731
8/31/1997 17,686,560 16,345,667
9/30/1997 18,877,002 17,542,170
10/31/1997 18,233,192 16,772,069
11/30/1997 17,953,802 16,663,050
12/31/1997 18,425,982 16,954,654
1/31/1998 17,857,536 16,686,770
2/28/1998 19,368,772 17,921,591
3/31/1998 20,380,883 18,659,961
4/30/1998 20,699,768 18,763,150
5/31/1998 19,493,552 17,751,816
6/30/1998 19,424,230 17,789,095
7/31/1998 18,231,879 16,348,179
8/31/1998 14,294,347 13,173,362
9/30/1998 14,599,368 14,204,837
10/31/1998 14,627,097 14,784,394
11/30/1998 15,971,958 15,559,096
12/31/1998 16,859,127 16,522,204
1/31/1999 15,730,361 16,741,950
2/28/1999 14,456,882 15,385,852
3/31/1999 14,225,341 15,625,871
4/30/1999 15,267,278 17,025,949
5/31/1999 15,542,234 17,274,528
6/30/1999 16,511,815 18,055,336
7/31/1999 15,701,419 17,560,620
8/31/1999 14,992,322 16,910,877
9/30/1999 15,137,036 16,914,259
10/31/1999 15,585,648 16,981,916
11/30/1999 15,889,546 17,995,737
12/31/1999 17,857,650 20,032,854
1/31/2000 16,670,999 19,710,325
2/29/2000 20,202,010 22,964,500
3/31/2000 19,955,997 21,451,140
4/30/2000 18,624,632 20,159,781
5/31/2000 17,452,453 18,984,466
6/30/2000 19,131,130 20,639,911
</TABLE>
*Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that fund shares, when redeemed, may be worth
more or less than their original cost. The line graph above assumes the
investment of $5,000,000 on 2/01/91, the first full month following the Fund's
Institutional Class inception on 1/17/91, compared to the Russell 2000 Index, an
unmanaged market index. The performance of the Administrative Class (shown
above) reflects the payment of a service fee in an amount not to exceed 0.25% on
an annualized basis. The Administrative Class commenced operations on 9/27/95.
The Fund may invest in stocks of small and intermediate sized companies which
may have less liquidity than those of larger companies and may be subject to
greater price volatility than the overall stock market.
------------------------------------------------------------------------------
PORTIFOLIO COMPOSITION
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
----------------------------------------------------
<S> <C>
MITCHELL ENERGY & DEVELOPMENT 2.2%
CORP. `A'
Energy
----------------------------------------------------
QUANTA SERVICES, INC. 2.0%
Technology
----------------------------------------------------
CENTRAL NEWSPAPERS, INC. `A' 2.0%
Consumer Services
----------------------------------------------------
POWER-ONE, INC. 2.0%
Capital Goods
----------------------------------------------------
DENDRITE INTERNATIONAL, INC. 1.9%
Technology
----------------------------------------------------
VARIAN, INC. 1.9%
Technology
----------------------------------------------------
INVITROGEN CORP. 1.8%
Health Care
----------------------------------------------------
FEDERATED INVESTORS, INC. `B' 1.7%
Financial & Business Services
----------------------------------------------------
PERKINELMER, INC. 1.7%
Technology
----------------------------------------------------
TEKTRONIX, INC. 1.7%
Technology
----------------------------------------------------
TOP TEN TOTAL 18.9%
----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
----------------------------------------------------
<S> <C>
TECHNOLOGY 35.2%
----------------------------------------------------
ENERGY 15.5%
----------------------------------------------------
FINANCIAL & BUSINESS SERVICES 11.4%
----------------------------------------------------
CONSUMER DISCRETIONARY 7.9%
----------------------------------------------------
HEALTH CARE 7.5%
----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-----------------------------------------------------
<S> <C>
COMMON STOCK 97.2%
-----------------------------------------------------
CASH EQUIVALENTS 2.8%
-----------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
--------------------------------------------------------------------------------
PIMCO Small-Cap Fund Institutional Class shares returned 15.86% and
Administrative Class shares returned 15.70% for the one-year period ended June
30, 2000.
The Fund's exposure to technology enhanced its performance. Tech stocks
performed well for much of the year, until the market correction in the
second quarter. One standout performer in this sector was TranSwitch, which
participates in the high-growth communications semiconductor market, focusing
on products that facilitate the delivery of data over telecommunications
networks. The company is riding a spectacular wave of success as a broadband
communications enabler with strong revenue and earnings growth. The company
benefited from strong demand for its semiconductor products as a result of
the build-up of voice and data traffic on telecommunications networks.
The energy sector also contributed to the Fund's performance. Natural gas
prices are at record highs for this time of year and there is no sign that
equilibrium in the supply and demand of this resource will be restored any time
soon. Stocks of natural gas exploration and production companies rallied as
storage inventory refills remained weak. The imbalance has been exacerbated by a
long and cold spring in many regions followed by unusually hot early summer,
which further strained demand. The Fund was considerably overweighted relative
to the benchmark in this sector, and it was one of the top contributors to
performance.
Consumer discretionary stocks proved disappointing this year. Rising
interest rates and a general lack of enthusiasm on the part of investors hurt
this sector. The Fund's exposure to this area remains small, however, as
concerns about a slowing economy should continue to weaken retail sales in
the coming months.
The manager's hallmark has always been and remains buying profitable, growing
companies at prices that make sense. Recent market volatility and sector
leadership changes have not altered its commitment to this philosophy, and the
manager continues to focus on fundamentals and bottom-up analysis and stock
selection. This philosophy should bode well for the Fund as investors place more
importance on valuations.
ANNUAL REPORT 19
<PAGE>
PIMCO MICRO-CAP FUND
June 30, 2000
OBJECTIVE
Long-term growth
of capital
PORTFOLIO
Common stocks of companies with market
capitalizations of less than $250 million
that have improving fundamentals and whose
stock is reasonably valued by the market
TOTAL NET ASSETS
$238.8 million
NUMBER OF SECURITIES
IN THE
PORTFOLIO
65 (not including
short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital Management
-------------------------------------------------------------------------------
PERFORMANCE*
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
INST'L CLASS ADMIN. CLASS Russell 2000 Lipper Small-Cap
(INCEP. 6/25/93) (INCEP. 4/01/96) Index Core Fund Average
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 YEAR 25.60% 25.28% 14.31% 27.14%
3 YEARS 13.69% 13.41% 10.57% 12.84%
5 YEARS 19.16% -- 14.27% 15.92%
INCEPTION 18.76% 16.75% -- --
</TABLE>
CHANGE IN VALUE
$5,000,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO
Micro-Cap Russell 2000
Month Fund Index
================= ============= =============
<S> <C> <C>
6/30/1993 5,000,000 5,000,000
7/31/1993 5,021,687 5,069,050
8/31/1993 5,277,282 5,287,932
9/30/1993 5,442,666 5,437,157
10/31/1993 5,547,911 5,577,164
11/30/1993 5,517,841 5,395,460
12/31/1993 5,893,716 5,579,823
1/31/1994 6,099,194 5,754,639
2/28/1994 6,084,159 5,733,749
3/31/1994 5,763,413 5,431,753
4/30/1994 5,903,739 5,463,963
5/31/1994 5,723,320 5,402,493
6/30/1994 5,487,771 5,220,213
7/31/1994 5,482,760 5,306,033
8/31/1994 5,808,518 5,601,580
9/30/1994 5,958,868 5,582,590
10/31/1994 5,953,856 5,560,037
11/30/1994 5,838,588 5,335,355
12/31/1994 5,953,856 5,478,183
1/31/1995 5,803,506 5,408,993
2/28/1995 6,003,973 5,634,170
3/31/1995 6,124,253 5,730,740
4/30/1995 6,389,871 5,858,077
5/31/1995 6,455,022 5,958,777
6/30/1995 6,941,154 6,267,918
7/31/1995 7,472,390 6,628,950
8/31/1995 7,602,693 6,766,103
9/30/1995 7,813,183 6,886,946
10/31/1995 7,707,938 6,578,962
11/30/1995 7,923,440 6,855,344
12/31/1995 8,111,989 7,036,188
1/31/1996 7,666,725 7,028,589
2/29/1996 8,040,337 7,247,670
3/31/1996 8,444,657 7,395,160
4/30/1996 9,355,656 7,790,579
5/31/1996 9,729,268 8,097,606
6/30/1996 9,452,898 7,765,118
7/31/1996 8,736,381 7,086,913
8/31/1996 9,268,651 7,498,379
9/30/1996 9,601,319 7,791,416
10/31/1996 9,350,538 7,671,350
11/30/1996 9,780,448 7,987,410
12/31/1996 10,044,807 8,196,760
1/31/1997 10,387,828 8,360,531
2/28/1997 10,073,392 8,157,788
3/31/1997 9,581,728 7,772,822
4/30/1997 9,324,462 7,794,508
5/31/1997 10,444,998 8,661,647
6/30/1997 11,348,288 9,032,885
7/31/1997 11,977,160 9,453,185
8/31/1997 12,520,277 9,669,663
9/30/1997 13,800,890 10,377,483
10/31/1997 13,292,075 9,921,911
11/30/1997 13,349,245 9,857,419
12/31/1997 13,730,013 10,029,924
1/31/1998 13,453,742 9,871,451
2/28/1998 14,488,151 10,601,938
3/31/1998 15,561,110 11,038,738
4/30/1998 15,708,883 11,099,782
5/31/1998 15,137,066 10,501,504
6/30/1998 15,201,315 10,523,557
7/31/1998 14,237,580 9,671,149
8/31/1998 11,635,495 7,793,012
9/30/1998 12,053,114 8,403,205
10/31/1998 12,001,715 8,746,055
11/30/1998 12,522,132 9,204,349
12/31/1998 13,197,781 9,774,098
1/31/1999 13,304,000 9,904,093
2/28/1999 12,374,579 9,101,862
3/31/1999 11,405,325 9,243,851
4/30/1999 12,500,715 10,072,100
5/31/1999 13,025,174 10,219,153
6/30/1999 13,277,445 10,681,058
7/31/1999 13,051,729 10,388,397
8/31/1999 12,573,741 10,004,027
9/30/1999 12,274,998 10,006,027
10/31/1999 12,122,308 10,046,052
11/30/1999 12,826,012 10,645,801
12/31/1999 13,914,763 11,850,906
1/31/2000 14,180,312 11,660,106
2/29/2000 16,596,807 13,585,189
3/31/2000 16,357,813 12,689,925
4/30/2000 15,235,868 11,925,992
5/31/2000 14,439,222 11,230,707
6/30/2000 16,676,471 12,210,024
</TABLE>
*Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that fund shares, when redeemed, may be
worth more or less than their original cost. The line graph above assumes the
investment of $5,000,000 on 7/1/93, the first full month following the Fund's
Institutional Class inception on 6/25/93, compared to the Russell 2000 Index,
an unmanaged market index. The performance of the Administrative Class (shown
above) reflects the payment of a service fee in an amount not to exceed 0.25%
on an annualized basis. The Administrative Class commenced operations on
4/01/96. The Fund may invest in stocks of small and intermediate sized
companies which may have less liquidity than those of larger companies and
may be subject to greater price volatility than the overall stock market.
-------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
-------------------------------------------
<S> <C>
BRAUN'S FASHIONS CORP. 3.9%
Consumer Discretionary
-------------------------------------------
TELCOM SEMICONDUCTOR, INC. 3.7%
Technology
-------------------------------------------
PRIMA ENERGY CORP. 3.4%
Energy
-------------------------------------------
MERIX CORP. 3.3%
Technology
-------------------------------------------
PHOTON DYNAMICS, INC. 3.1%
Technology
-------------------------------------------
CYBEX COMPUTER PRODUCTS 3.1%
Technology
-------------------------------------------
ST. MARY LAND & EXPLORATION 3.1%
Energy
-------------------------------------------
RADIANT SYSTEMS, INC. 3.0%
Technology
-------------------------------------------
PATINA OIL & GAS CORP. 2.8%
Energy
-------------------------------------------
CROSS TIMBERS OIL CO. 2.8%
Energy
-------------------------------------------
TOP TEN TOTAL 32.2%
-------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
-------------------------------------------
<S> <C>
TECHNOLOGY 45.2%
-------------------------------------------
ENERGY 19.8%
-------------------------------------------
CONSUMER DISCRETIONARY 11.9%
-------------------------------------------
CAPITAL GOODS 5.9%
-------------------------------------------
FINANCIAL & BUSINESS SERVICES 4.7%
-------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-------------------------------------------
<S> <C>
COMMON STOCK 92.7%
-------------------------------------------
CASH EQUIVALENTS 7.3%
-------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
-------------------------------------------------------------------------------
PIMCO Micro-Cap Fund Institutional Class shares returned 25.60% and
Administrative Class shares returned 25.28% for the one-year period ended
June 30, 2000.
The technology sector was a strong performer for the Fund for much of this
period. One standout in this area was Merix Corporation, which manufactures
printed circuit boards for use in electronics components used in the
communications, computer and medical instruments industries. Its stock price
rose significantly as a result of strong earnings and several announcements,
including expanded plant capacity and a secondary offering which attracted
additional investor interest in the company and its prospects.
Three-Five Systems, a semiconductor company that specializes in liquid
crystal display components and technology, contributed to the Fund's
performance. Three-Five's stock rose significantly as a result of continued
growth in demand for mobile handsets, as well as important accomplishments in
its R&D efforts.
The energy sector also contributed to the Fund's performance. Rising oil
and gas prices resulted in higher profit margins for many energy companies.
Both Prima Energy and Patina Oil and Gas posted strong gains. Both of these
companies are engaged in natural gas and crude oil exploration and
development, and therefore benefited from the rising natural gas prices and
the unusually short supply. In addition, Patina's recent earnings received a
boost from reduced leverage and the resulting lower interest expense.
An area of disappointment for the Fund was financial services. This sector
was under pressure for much of the year, as rising interest rates squeezed
profit margins. However, it did perform well in the second quarter, as
investors anticipated that the recent round of Federal Reserve rate hikes
were nearing an end.
Looking ahead, the manager is optimistic that investors will place more
importance on valuations. The manager remains committed to its philosophy of
buying stocks of growing, profitable companies at reasonable prices, which
should bode well for the Fund over the long term.
20 PIMCO FUNDS
<PAGE>
PIMCO SMALL-CAP VALUE FUND
June 30, 2000
OBJECTIVE
Long-term
growth of capital
and income
PORTFOLIO
Primarily common stocks of companies
with market capitalizations of between
$100 million and $1.5 billion and
below-average price-to-earnings
ratios relative to the market and
their industry groups
TOTAL NET ASSETS
$285.0 million
NUMBER OF SECURITIES
IN THE
PORTFOLIO
101 (not including
short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
NFJ Investment Group
-------------------------------------------------------------------------------
PERFORMANCE*
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
INST'L CLASS ADMIN. CLASS Russell 2000 Lipper Small-Cap
(INCEP. 10/01/91) (INCEP. 11/01/95) Index Fund Average
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 YEAR -8.88% -9.12% 14.31% 6.40%
3 YEARS 0.60% 0.31% 10.57% 4.95%
5 YEARS 10.39% -- 14.27% 13.14%
INCEPTION 11.52% 9.68% -- --
</TABLE>
CHANGE IN VALUE
$5,000,000 invested at the Fund's inception
<TABLE>
<CAPTION>
Month PIMCO Russell 2000
Small-Cap Index
Value
Fund
================= ============= =============
<S> <C> <C>
9/30/1991 5,000,000 5,000,000
10/31/1991 5,057,765 5,132,200
11/30/1991 4,942,474 4,894,682
12/31/1991 5,307,711 5,286,354
1/31/1992 5,669,482 5,715,078
2/29/1992 5,861,326 5,881,901
3/31/1992 5,810,840 5,682,857
4/30/1992 5,692,503 5,483,332
5/31/1992 5,697,568 5,556,260
6/30/1992 5,515,246 5,295,172
7/31/1992 5,683,331 5,479,232
8/31/1992 5,596,835 5,324,279
9/30/1992 5,652,803 5,446,897
10/31/1992 5,755,927 5,618,801
11/30/1992 6,164,818 6,049,089
12/31/1992 6,302,353 6,259,658
1/31/1993 6,581,536 6,471,360
2/28/1993 6,549,919 6,322,130
3/31/1993 6,718,541 6,527,220
4/30/1993 6,541,983 6,347,787
5/31/1993 6,653,133 6,628,549
6/30/1993 6,669,012 6,669,713
7/31/1993 6,692,411 6,761,821
8/31/1993 6,915,669 7,053,797
9/30/1993 6,979,457 7,252,855
10/31/1993 7,112,529 7,439,616
11/30/1993 6,984,825 7,197,233
12/31/1993 7,174,310 7,443,163
1/31/1994 7,443,124 7,676,357
2/28/1994 7,431,872 7,648,492
3/31/1994 7,099,942 7,245,646
4/30/1994 7,124,167 7,288,612
5/31/1994 6,954,544 7,206,616
6/30/1994 6,830,154 6,963,464
7/31/1994 6,936,926 7,077,944
8/31/1994 7,215,540 7,472,185
9/30/1994 7,039,274 7,446,854
10/31/1994 6,908,581 7,416,769
11/30/1994 6,748,316 7,117,058
12/31/1994 6,909,938 7,307,581
1/31/1995 6,947,635 7,215,286
2/28/1995 7,258,630 7,515,659
3/31/1995 7,302,170 7,644,477
4/30/1995 7,472,713 7,814,337
5/31/1995 7,654,211 7,948,666
6/30/1995 7,898,295 8,361,043
7/31/1995 8,291,107 8,842,639
8/31/1995 8,454,664 9,025,593
9/30/1995 8,618,222 9,186,790
10/31/1995 8,281,407 8,775,957
11/30/1995 8,622,778 9,144,635
12/31/1995 8,669,760 9,385,870
1/31/1996 8,629,498 9,375,733
2/29/1996 8,817,388 9,667,975
3/31/1996 9,086,486 9,864,718
4/30/1996 9,396,789 10,392,185
5/31/1996 9,700,346 10,801,741
6/30/1996 9,635,021 10,358,221
7/31/1996 9,105,773 9,453,534
8/31/1996 9,540,028 10,002,407
9/30/1996 9,831,792 10,393,301
10/31/1996 10,021,779 10,233,140
11/30/1996 10,686,731 10,654,745
12/31/1996 11,072,978 10,934,006
1/31/1997 11,435,630 11,152,467
2/28/1997 11,483,984 10,882,020
3/31/1997 11,048,801 10,368,498
4/30/1997 11,161,626 10,397,426
5/31/1997 12,120,640 11,554,139
6/30/1997 12,717,001 12,049,350
7/31/1997 13,369,775 12,610,006
8/31/1997 13,732,427 12,898,775
9/30/1997 14,739,794 13,842,965
10/31/1997 14,489,967 13,235,259
11/30/1997 14,659,205 13,149,230
12/31/1997 14,950,861 13,379,342
1/31/1998 14,696,739 13,167,948
2/28/1998 15,620,050 14,142,376
3/31/1998 16,238,414 14,725,042
4/30/1998 16,187,590 14,806,472
5/31/1998 15,450,635 14,008,403
6/30/1998 14,976,274 14,037,820
7/31/1998 13,892,018 12,900,757
8/31/1998 11,850,569 10,395,430
9/30/1998 12,189,399 11,209,392
10/31/1998 12,672,231 11,666,735
11/30/1998 13,112,710 12,278,072
12/31/1998 13,581,889 13,038,085
1/31/1999 13,050,655 13,211,491
2/28/1999 12,386,612 12,141,361
3/31/1999 12,209,534 12,330,766
4/30/1999 13,254,295 13,435,602
5/31/1999 13,705,844 13,631,762
6/30/1999 14,210,516 14,247,918
7/31/1999 14,033,438 13,857,525
8/31/1999 13,528,766 13,344,797
9/30/1999 12,944,408 13,347,465
10/31/1999 12,873,577 13,400,855
11/30/1999 12,776,184 14,200,886
12/31/1999 12,712,411 15,808,427
1/31/2000 12,049,549 15,553,911
2/29/2000 11,813,462 18,121,862
3/31/2000 12,458,163 16,927,631
4/30/2000 12,848,615 15,908,588
5/31/2000 13,057,462 14,981,117
6/30/2000 12,948,499 16,287,470
</TABLE>
*Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that fund shares, when redeemed, may be
worth more or less than their original cost. The line graph above assumes the
investment of $5,000,000 on 10/01/91, the Fund's Institutional Class
inception, compared to the Russell 2000 Index, an unmanaged market index. The
performance of the Administrative Class (shown above) reflects the payment of
a service fee in an amount not to exceed 0.25% on an annualized basis. The
Administrative Class commenced operations on 11/01/95. The Fund may invest in
stocks of small and intermediate sized companies which may have less
liquidity than those of larger companies and may be subject to greater price
volatility than the overall stock market.
-------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
-------------------------------------------
<S> <C>
OWENS & MINOR, INC. 1.5%
Health Care
-------------------------------------------
ENERGEN CORP. 1.3%
Utilities
-------------------------------------------
ST. MARY LAND & EXPLORATION 1.3%
Energy
-------------------------------------------
NEWPORT NEWS SHIPBUILDING, INC. 1.2%
Aerospace
-------------------------------------------
MDC HOLDINGS, INC. 1.2%
Building
-------------------------------------------
CROSS TIMBERS OIL CO. 1.2%
Energy
-------------------------------------------
SELECTIVE INSURANCE GROUP 1.2%
Financial & Business Services
-------------------------------------------
DENTSPLY INTERNATIONAL, INC. 1.2%
Health Care
-------------------------------------------
WORLD FUEL SERVICES CORP. 1.2%
Energy
-------------------------------------------
BINDLEY WESTERN INDUSTRIES, INC. 1.2%
Health Care
-------------------------------------------
TOP TEN TOTAL 12.5%
-------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
-------------------------------------------
<S> <C>
FINANCIAL & BUSINESS SERVICES 22.5%
-------------------------------------------
CONSUMER DISCRETIONARY 12.8%
-------------------------------------------
CAPITAL GOODS 10.5%
-------------------------------------------
UTILITIES 10.4%
-------------------------------------------
MATERIALS & PROCESSING 9.5%
-------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-------------------------------------------
<S> <C>
COMMON STOCK 99.3%
-------------------------------------------
CASH EQUIVALENTS 0.7%
-------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
-------------------------------------------------------------------------------
PIMCO Small-Cap Value Fund Institutional Class shares returned -8.88% and
Administrative Class shares returned -9.12% for the twelve-month period ended
June 30, 2000.
The past year proved to be a very difficult one for the value investor.
Due to the complete dominance of high valuation technology stocks over all
other sectors, value funds suffered. PIMCO Small-Cap Value Fund, which is a
style-pure, small-cap value fund that focuses on dividend-yielding stocks
with low fundamental valuations, had little exposure to the technology sector
and therefore did not reap the strong returns.
The Fund's exposure to the energy sector helped its performance during the
fiscal year. The sector benefited from significantly higher prices for oil,
gas and natural gas liquids. Energen Corp., the Fund's second largest
holding, saw its net income rise significantly this year due to higher
production, realized commodity prices and property sales gains. A second
energy holding of the Fund, National Fuel Gas Company, also performed well as
a result of increased oil production due to a 95-well drilling program they
had completed. We anticipate a positive outlook for the company, as
consumption of natural gas for power generation should increase due to
increasing demands for electric power, growing concerns about air quality and
the environmental impact of using coal and oil, and this increase will lead
to a rise in prices, ultimately benefiting the energy sector.
The healthcare sector also aided the Fund's performance, particularly in
the pharmaceutical area. Bindley Western Industries, a wholesale distributor
of pharmaceuticals and related health care products, saw its stock price rise
significantly during the year. Its announced purchase of Premier Pharmacy
Services, an Indianapolis based pharmacy, should accelerate Bindley's growth
projections and offer it the opportunity to operating in a large market area
with an excellent management team already in place. Furthermore, the company
recently posted its twelfth consecutive quarter in which net earnings
increased at least 25%. These results reflect increased direct store delivery
sales.
The financial services sector was disappointing for the Fund. Companies
such as Pacific Century Financial Corporation and Washington Federal Inc.
suffered since last June. These companies, along with many other banks,
witnessed a drop in their respective stock prices as a result of the climbing
interest-rate environment, despite their solid fundamentals.
Looking ahead, the manager remains optimistic that the market will
broaden, as it did in the second quarter of 2000, as investors become more
price-sensitive. The manager remains committed to its style-pure investment
philosophy, which should bode well for the Fund over the long term.
ANNUAL REPORT 21
<PAGE>
PIMCO ENHANCED EQUITY FUND
June 30, 2000
OBJECTIVE
A total return which equals or exceeds the
total return performance of an Index
(currently the S&P 500 Index) that
represents the performance of a reasonably
broad spectrum of common stocks that are
publicly traded in the U.S.
PORTFOLIO
Common stocks represented in the
S&P Index with market capitalizations
of more than $5 billion
TOTAL NET ASSETS
$48.3 million
NUMBER OF SECURITIES
IN THE
PORTFOLIO
170 (not including
short-term
instruments)
-------------------------------------------------------------------------------
PERFORMANCE*
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
INST'L CLASS ADMIN. CLASS S&P 500 Lipper Large-Cap
(INCEP. 2/11/91) (INCEP. 8/21/97) Index Core Fund Average
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 YEAR 4.45% 4.47% 7.25% 11.37%
3 YEARS 17.69% -- 19.67% 18.89%
5 YEARS 21.34% -- 23.80% 21.79%
INCEPTION 16.27% 15.86% -- --
</TABLE>
CHANGE IN VALUE
$5,000,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO
Enhanced
Equity S&P 500
Month Fund Index
================ ============= =============
<S> <C> <C>
2/28/1991 5,000,000 5,000,000
3/31/1991 5,144,566 5,121,000
4/30/1991 5,115,155 5,133,290
5/31/1991 5,300,523 5,355,049
6/30/1991 5,075,075 5,109,787
7/31/1991 5,333,939 5,347,903
8/31/1991 5,480,005 5,474,649
9/30/1991 5,419,564 5,383,222
10/31/1991 5,465,540 5,455,357
11/30/1991 5,283,355 5,235,506
12/31/1991 5,952,777 5,834,448
1/31/1992 5,802,938 5,725,928
2/29/1992 5,823,246 5,800,365
3/31/1992 5,655,707 5,687,258
4/30/1992 5,745,137 5,854,463
5/31/1992 5,780,821 5,883,150
6/30/1992 5,689,062 5,795,608
7/31/1992 5,951,493 6,032,359
8/31/1992 5,890,137 5,908,877
9/30/1992 6,002,622 5,978,306
10/31/1992 6,088,490 5,998,931
11/30/1992 6,269,695 6,203,195
12/31/1992 6,345,501 6,279,308
1/31/1993 6,344,518 6,331,803
2/28/1993 6,386,122 6,418,105
3/31/1993 6,490,130 6,553,528
4/30/1993 6,278,351 6,395,129
5/31/1993 6,424,602 6,566,198
6/30/1993 6,393,262 6,585,437
7/31/1993 6,319,865 6,558,964
8/31/1993 6,550,824 6,807,811
9/30/1993 6,472,088 6,755,595
10/31/1993 6,590,333 6,895,368
11/30/1993 6,519,411 6,829,656
12/31/1993 6,581,173 6,912,226
1/31/1994 6,709,580 7,147,242
2/28/1994 6,566,472 6,953,266
3/31/1994 6,296,768 6,650,103
4/30/1994 6,377,723 6,735,358
5/31/1994 6,460,694 6,845,885
6/30/1994 6,300,283 6,678,092
7/31/1994 6,508,397 6,897,400
8/31/1994 6,786,534 7,180,194
9/30/1994 6,586,276 7,004,638
10/31/1994 6,707,298 7,162,032
11/30/1994 6,489,129 6,901,191
12/31/1994 6,549,132 7,003,536
1/31/1995 6,755,489 7,185,137
2/28/1995 6,989,421 7,465,142
3/31/1995 7,143,473 7,685,438
4/30/1995 7,302,946 7,911,774
5/31/1995 7,589,561 8,228,008
6/30/1995 7,772,994 8,419,145
7/31/1995 8,015,780 8,698,323
8/31/1995 8,056,089 8,720,156
9/30/1995 8,395,839 9,088,147
10/31/1995 8,352,166 9,055,702
11/30/1995 8,681,857 9,453,247
12/31/1995 8,803,247 9,635,317
1/31/1996 9,059,190 9,963,303
2/29/1996 9,094,903 10,055,663
3/31/1996 9,156,282 10,152,499
4/30/1996 9,281,710 10,302,147
5/31/1996 9,490,758 10,567,839
6/30/1996 9,538,857 10,608,103
7/31/1996 9,083,198 10,139,437
8/31/1996 9,305,032 10,353,277
9/30/1996 9,838,632 10,935,960
10/31/1996 10,114,426 11,237,574
11/30/1996 10,863,864 12,087,022
12/31/1996 10,664,922 11,847,578
1/31/1997 11,388,613 12,587,815
2/28/1997 11,480,027 12,686,503
3/31/1997 10,969,634 12,165,215
4/30/1997 11,441,938 12,891,478
5/31/1997 12,089,451 13,676,311
6/30/1997 12,538,901 14,289,010
7/31/1997 13,712,042 15,425,986
8/31/1997 12,942,644 14,561,822
9/30/1997 13,742,514 15,359,373
10/31/1997 13,194,032 14,846,370
11/30/1997 13,750,131 15,533,609
12/31/1997 13,954,567 15,800,321
1/31/1998 14,164,608 15,975,072
2/28/1998 15,241,065 17,127,195
3/31/1998 16,068,100 18,004,278
4/30/1998 16,186,248 18,185,401
5/31/1998 15,910,569 17,872,794
6/30/1998 16,593,201 18,598,787
7/31/1998 16,278,140 18,400,710
8/31/1998 13,692,016 15,740,336
9/30/1998 14,414,031 16,748,661
10/31/1998 15,687,401 18,110,998
11/30/1998 16,606,329 19,208,705
12/31/1998 17,653,581 20,315,511
1/31/1999 18,363,348 21,165,105
2/28/1999 17,653,581 20,507,294
3/31/1999 18,242,537 21,327,791
4/30/1999 18,937,203 22,153,816
5/31/1999 18,408,652 21,630,765
6/30/1999 19,571,463 22,831,272
7/31/1999 18,922,101 22,118,480
8/31/1999 18,801,290 22,008,308
9/30/1999 18,242,537 21,405,727
10/31/1999 19,224,130 22,760,281
11/30/1999 19,480,854 23,222,998
12/31/1999 20,741,274 24,590,833
1/31/2000 19,481,364 23,355,811
2/29/2000 18,993,149 22,913,272
3/31/2000 20,977,507 25,154,877
4/30/2000 20,363,301 24,397,967
5/31/2000 19,906,584 23,897,321
6/30/2000 20,442,045 24,486,390
</TABLE>
*Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that fund shares, when redeemed, may be
worth more or less than their original cost. The line graph above assumes the
investment of $5,000,000 on 3/01/91, the first full month following the
Fund's Institutional Class inception on 2/11/91, compared to the S&P 500
Index, an unmanaged market index. The performance of the Administrative Class
(shown above) reflects the payment of a service fee in an amount not to
exceed 0.25% on an annual basis. The Administrative Class commenced
operations on 8/21/97.
-------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
-------------------------------------------
<S> <C>
INTEL CORP. 4.4%
Technology
-------------------------------------------
GENERAL ELECTRIC CO. 4.1%
Capital Goods
-------------------------------------------
CISCO SYSTEMS, INC. 4.1%
Technology
-------------------------------------------
MICROSOFT CORP. 3.8%
Technology
-------------------------------------------
PFIZER, INC. 3.1%
Health Care
-------------------------------------------
CITIGROUP, INC. 2.4%
Financial & Business Services
-------------------------------------------
ORACLE CORP. 2.2%
Technology
-------------------------------------------
SUN MICROSYSTEMS, INC. 2.2%
Technology
-------------------------------------------
MERCK & CO., INC. 1.8%
Health Care
-------------------------------------------
WAL-MART STORES, INC. 1.6%
Consumer Discretionary
-------------------------------------------
TOP TEN TOTAL 29.7%
-------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
-------------------------------------------
<S> <C>
TECHNOLOGY 31.4%
-------------------------------------------
FINANCIAL & BUSINESS SERVICES 12.8%
-------------------------------------------
HEALTH CARE 12.1%
-------------------------------------------
COMMUNICATIONS 7.6%
-------------------------------------------
CONSUMER DISCRETIONARY 7.4%
-------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-------------------------------------------
<S> <C>
COMMON STOCK 99.2%
-------------------------------------------
CASH EQUIVALENTS 0.8%
-------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
-------------------------------------------------------------------------------
PIMCO Enhanced Equity Fund Institutional Class shares posted a return of
4.45% and Administrative Class shares posted a return of 4.47% for the
one-year period ended June 30, 2000.
The Fund suffered for much of the year because of its
fundamentals-oriented investment strategy. Investors flocked to expensive
growth stocks, which rose to record high levels, and ignored inexpensive but
fundamentally strong value stocks, which suffered. However, the second
quarter of 2000 marked a return to relative normalcy, as investors
reacquainted themselves with earnings as a valuation metric, rather than
focusing on price momentum or lofty long-term growth expectations.
The technology sector turned in a strong performance for much of the year.
Fund holding and Internet search engine Yahoo! saw its stock price rise
significantly over the past year. The company benefited from its dominant
presence on the Internet, strong branding campaign and its inclusion in the
S&P 500 Index. Another standout performer for the Fund was Sun Microsystems,
the network computing giant. The company benefited from increased demand for
networking solutions. It remains the dominant player in this industry, and
continues to take market share away from competitors IBM and Hewlett Packard.
Exposure to the financial services sector also enhanced the Fund's
performance. Despite rising interest rates, companies such as Morgan Stanley
Dean Witter and Citigroup performed well. These companies benefiting from a
healthy worldwide economy, which boosted brokerage and asset management
business for these companies.
The health care sector also contributed to the Fund's performance. In
particular, pharmaceutical and biotechnology companies are benefiting from
the fact that Baby Boomers are aging, and are therefore using more
pharmaceutical products, both prescription and non-prescription. For example,
Allergan, a biotech company that specializes in eye- and skin-care
pharmaceutical products, posted strong returns for the period due to
increased sales. It is poised to continue this outperformance, as it boasts a
robust product pipeline.
A disappointment for the Fund was communications giant AT&T. The company
suffered from management missteps and earnings disappointments in recent
months, driving its stock price down.
Looking ahead, the manager is optimistic that its stock selection will
bode well for the Fund, as investors favor companies that deliver profits
rather than promises.
22 PIMCO FUNDS
<PAGE>
PIMCO TAX-EFFICIENT EQUITY FUND
June 30, 2000
OBJECTIVE
Maximum after-tax
growth of capital
PORTFOLIO
Broadly diversified portfolio of at least
200 common stocks of companies represented
in the S&P 500 Index with market
capitalizations of more than $5 billion.
TOTAL NET ASSETS
$56.8 million
NUMBER OF SECURITIES
IN THE
PORTFOLIO
294 (not including
short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Parametric Portfolio Associates
-------------------------------------------------------------------------------
PERFORMANCE*
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
INST'L CLASS ADMIN. CLASS S&P 500 Lipper Large-Cap
(INCEP. 7/02/99) (INCEP. 9/30/98) Index Core Fund Average
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 YEAR 6.21% 5.77% 7.25% 11.37%
INCEPTION 4.41% 22.26% -- --
</TABLE>
CHANGE IN VALUE
$5,000,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO
Tax-Efficient S&P 500
Month Equity Fund Index
================ ============= =============
<S> <C> <C>
7/31/1999 5,000,000 5,000,000
8/31/1999 4,951,111 4,975,095
9/30/1999 4,791,111 4,838,878
10/31/1999 5,075,556 5,145,083
11/30/1999 5,164,444 5,249,682
12/31/1999 5,515,556 5,558,888
1/31/2000 5,217,778 5,279,705
2/29/2000 5,182,222 5,179,667
3/31/2000 5,631,111 5,686,394
4/30/2000 5,422,222 5,515,290
5/31/2000 5,306,667 5,402,116
6/30/2000 5,471,111 5,535,279
</TABLE>
*Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that fund shares, when redeemed, may be
worth more or less than their original cost. The line graph above assumes the
investment of $5,000,000 on 10/01/98, the first full month following the
Fund's Administration Class inception on 9/30/98, compared to the S&P 500
Index, an unmanaged market index. The performance of the Administrative Class
(shown above) reflects the payment of a service fee in an amount not to
exceed 0.25% on an annualized basis.
-------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
-------------------------------------------
<S> <C>
GENERAL ELECTRIC CO. 4.5%
Capital Goods
-------------------------------------------
INTEL CORP. 4.3%
Technology
-------------------------------------------
CISCO SYSTEMS, INC. 3.5%
Technology
-------------------------------------------
MICROSOFT CORP. 3.4%
Technology
-------------------------------------------
EXXON MOBIL CORP. 2.7%
Energy
-------------------------------------------
ORACLE CORP. 2.3%
Technology
-------------------------------------------
WAL-MART STORES, INC. 2.1%
Consumer Discretionary
-------------------------------------------
PFIZER, INC. 2.1%
Health Care
-------------------------------------------
CITIGROUP, INC. 1.9%
Financial & Business Services
-------------------------------------------
LUCENT TECHNOLOGIES, INC. 1.6%
Technology
-------------------------------------------
TOP TEN TOTAL 28.4%
-------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
-------------------------------------------
<S> <C>
TECHNOLOGY 31.7%
-------------------------------------------
FINANCIAL & BUSINESS SERVICES 13.6%
-------------------------------------------
HEALTH CARE 11.7%
-------------------------------------------
CONSUMER DISCRETIONARY 8.9%
-------------------------------------------
CONSUMER STAPLES 6.5%
-------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-------------------------------------------
<S> <C>
COMMON STOCK 99.6%
-------------------------------------------
CASH EQUIVALENTS 0.4%
-------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
--------------------------------------------------------------------------------
PIMCO Tax-Efficient Fund Institutional Class shares posted a return of 6.21%
for the one-year period ended June 30, 2000.
The Fund's performance suffered because of the importance its investment
process places on earnings, since many of the stocks that performed well
during this period had no earnings. Investors were more concerned about
future earnings growth, and were less interested in strong fundamentals and
current earnings, which did not augur well for the Fund.
Exposure to the technology sector enhanced the Fund's performance. Cisco
Systems, a company that creates hardware and software solutions for engaging
in networking on the Internet, was one positive contributor to the Fund's
performance. As Internet use grows, and companies race to participate in
commerce on the Web, increased demand for Internet infrastructure and optical
networking capabilities will benefit Cisco. As the largest supplier of this
product, Cisco exhibits major market dominance in this industry. Its stock
price soared almost 100% since last June.
Another area of technology that benefited the Fund was semiconductors.
Intel, a semiconductor chip maker, saw incredible returns over the past year.
In the latter half of 1999, a continuation of the global economic recovery
sparked the demand for semiconductors, and this industry finally achieved
some pricing power after several years of pressure. Accompanied by the high
demand for personal computers, this trend boosted Intel's stock price during
this period.
The Fund also benefited from its exposure to the financial services
industry. Citigroup, the banking and financial services giant, contributed to
the Fund's performance despite rising interest rates. The company benefited
from growth of its global business, including asset management and other
services.
During the first half of 2000, rising interest rates caused concern that
the economy would slow. This resulted in investors' fear of a decline in
spending by consumers and manufacturers, which hurt cyclical stocks. Consumer
durables, raw materials, capital goods, business equipment and services and
new home building declined.
Looking ahead, the manager remains cautiously optimistic about the economy
and the stock market. Going forward, the manager expects that the Fund's
fundamentals-based, disciplined stock selection process could outperform, as
investors choose companies that deliver profits and not just promises.
ANNUAL REPORT 23
<PAGE>
PIMCO STRUCTURED EMERGING MARKETS FUND
June 30, 2000
OBJECTIVE
Long-term growth
of capital
PORTFOLIO
Common stocks of companies located in, or
whose business relates to emerging markets
TOTAL NET ASSETS
$35.4 million
NUMBER OF SECURITIES
IN THE
PORTFOLIO
334 (not including
short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Parametric Portfolio Associates
-------------------------------------------------------------------------------
PERFORMANCE*
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
INST'L CLASS IFC Investable Lipper Emerging Mkts.
(INCEP. 6/30/98 ) Composite Index Fund Average
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 YEAR 6.64% 10.70% 15.8%
INCEPTION 17.38% -- --
</TABLE>
CHANGE IN VALUE
$5,000,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO
Structured IFC Investable
Emerging Composite
Month Markets Fund Index
================= ============= =============
<S> <C> <C>
6/30/1998 5,000,000 5,000,000
7/31/1998 5,110,000 5,199,590
8/31/1998 3,870,000 3,737,595
9/30/1998 3,970,000 3,914,989
10/31/1998 4,350,000 4,364,821
11/30/1998 4,700,000 4,693,492
12/31/1998 4,647,944 4,621,682
1/31/1999 4,564,852 4,508,451
2/28/1999 4,580,432 4,588,701
3/31/1999 4,917,992 5,117,778
4/30/1999 5,707,364 5,815,843
5/31/1999 5,873,547 5,711,740
6/30/1999 6,460,383 6,334,319
7/31/1999 6,335,745 6,242,472
8/31/1999 6,346,132 6,309,890
9/30/1999 6,226,687 6,133,844
10/31/1999 6,335,745 6,238,120
11/30/1999 6,735,624 6,798,927
12/31/1999 7,670,735 7,709,983
1/31/2000 7,720,617 7,720,777
2/29/2000 7,831,465 7,713,056
3/31/2000 7,720,617 7,825,667
4/30/2000 7,027,812 7,015,710
5/31/2000 6,756,232 6,819,972
6/30/2000 6,889,251 7,012,295
</TABLE>
*Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that fund shares, when redeemed, may be
worth more or less than their original cost. The line graph above assumes the
investment of $5,000,000 on 7/01/98, the first full month following the
Fund's Institutional Class inception on 6/30/98, compared to the IFC
Investable Composite Index, an unmanaged market index. The Fund may invest in
foreign securities which involve potentially higher risks including foreign
currency fluctuations and political or economic uncertainty.
-------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
-------------------------------------------
<S> <C>
CHINA/CHINA TELECOM LTD. 2.4%
-------------------------------------------
BALTIC NATIONS/BALTIC FUND `A' 2.1%
-------------------------------------------
TAIWAN/R.O.C. TAIWAN FUND 1.6%
-------------------------------------------
VENEZUELA/ELECTRIDAD DE CARACAS 1.5%
SP-ADR
-------------------------------------------
TAIWAN/TAIWAN FUND, INC. 1.5%
-------------------------------------------
MEXICO/CARSO GLOBAL TELECOM `A1' 1.3%
-------------------------------------------
INDIA/UTI INDIA IT FUND 1.2%
-------------------------------------------
SAUDI ARABIA/SAUDI ARABIAN 1.1%
INVEST. FUND
-------------------------------------------
VENEZUELA/COMPANIA ANONIMA 1.1%
NACIONAL TELEFONOS DE V
-------------------------------------------
MEXICO/GRUPO FINANCIERO 1.0%
BANAMEX ACCIVAL SA
-------------------------------------------
TOP TEN TOTAL 14.8%
-------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5
COUNTRIES % of Total Investments
-------------------------------------------
<S> <C>
MEXICO 6.9%
-------------------------------------------
BRAZIL 4.7%
-------------------------------------------
TAIWAN 4.4%
-------------------------------------------
ISRAEL 4.3%
-------------------------------------------
CHINA 4.2%
-------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
REGIONAL BREAKDOWN
-------------------------------------------
<S> <C>
ASIA 39.9%
-------------------------------------------
LATIN AMERICA 25.9%
-------------------------------------------
EUROPE 20.5%
-------------------------------------------
AFRICA 13.6%
-------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-------------------------------------------
<S> <C>
COMMON STOCK 99.9%
-------------------------------------------
CASH EQUIVALENTS 0.1%
-------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
-------------------------------------------------------------------------------
PIMCO Structured Emerging Markets Fund posted a return of 6.64% for the
twelve-month period ended June 30, 2000.
Many emerging markets stocks suffered in the second half of the fiscal
year, as inflation-induced fears of higher interest rates dampened investor
exuberance for riskier stocks and markets. In particular, the dramatic global
slump in technology and telecommunications stocks in the second quarter of
2000 negatively impacted several emerging markets.
The Fund benefited from its exposure to China. The United States'
legislative moves toward permanent normalization of trade with China resulted
in strong price appreciation for many Chinese stocks. In particular, China
Telecom posted strong returns as a result of investor enthusiasm over the
growth potential for wireless communications in the region.
The Fund's exposure to Turkey also enhanced its performance. The Turkish
stock market performed well as a result of falling interest rates. The region
also benefited from a strong European economy, which helped to boost its own
economy and increase corporate profitability.
A standout performer for the Fund was SK Telecom, the dominant wireless
company in Korea. It benefited from the growth of wireless Internet
subscriptions in Korea, where wire line Internet penetration is already
fairly high and citizens have shown a particular affinity for new and `best
of breed' technologies.
Looking ahead, the manager is optimistic that the Fund's overweighting in
Europe will prove beneficial. As markets in Poland, Hungary and the Czech
Republic approach accession to the European Union, the manager expects
significant outperformance due to economic gains and a reduction in
perceptions of investment risk. In addition, these markets are now benefiting
from Europe's current economic strength and are less linked than the Asian
and Latin American regions to the expected economic slowdown in the United
States.
24 PIMCO FUNDS
<PAGE>
PIMCO TAX-EFFICIENT STRUCTURED EMERGING MARKETS FUND
June 30, 2000
OBJECTIVE
Long-term growth of capital; the Fund also
seeks to achieve superior after-tax returns
for its shareholders by using a variety of
tax-efficient management strategies.
PORTFOLIO
Common stocks of companies located in, or
whose business relates to, emerging markets
TOTAL NET ASSETS
$87.0 million
NUMBER OF SECURITIES
IN THE
PORTFOLIO
340 (not including
short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Parametric Portfolio Associates
-------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
INST'L CLASS IFC Investable Lipper Emerging Mkts.
(INCEP. 6/30/98 ) Composite Index Fund Average
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 YEAR 7.55% 10.70% 15.81%
INCEPTION 19.78% -- --
</TABLE>
CHANGE IN VALUE
$5,000,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO
Tax-Efficient
Structured IFC Investable
Emerging Composite
Month Markets Fund Index
================= ============= =============
<S> <C> <C>
6/30/1998 5,000,000 5,000,000
7/31/1998 5,100,000 5,199,590
8/31/1998 3,835,000 3,737,595
9/30/1998 3,970,000 3,914,989
10/31/1998 4,385,000 4,364,821
11/30/1998 4,770,000 4,693,492
12/31/1998 4,731,710 4,621,682
1/31/1999 4,636,069 4,508,451
2/28/1999 4,681,372 4,588,701
3/31/1999 5,023,666 5,117,778
4/30/1999 5,854,232 5,815,843
5/31/1999 6,045,514 5,711,740
6/30/1999 6,669,697 6,334,319
7/31/1999 6,709,967 6,242,472
8/31/1999 6,709,967 6,309,890
9/30/1999 6,599,225 6,133,844
10/31/1999 6,715,001 6,238,120
11/30/1999 7,163,003 6,798,927
12/31/1999 8,167,343 7,709,983
1/31/2000 8,197,781 7,720,777
2/29/2000 8,385,477 7,713,056
3/31/2000 8,218,072 7,825,667
4/30/2000 7,457,139 7,015,710
5/31/2000 7,056,382 6,819,972
6/30/2000 7,173,058 7,012,295
</TABLE>
*Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that fund shares, when redeemed, may be
worth more or less than their original cost. The line graph above assumes the
investment of $5,000,000 on 7/01/98, the first full month following the
Fund's Institutional Class inception on 6/30/98, compared to the IFC
Investable Composite Index, an unmanaged market index. The Fund may invest in
foreign securities which involve potentially higher risks including foreign
currency fluctuations and political or economic uncertainty.
-------------------------------------------------------------------------------
PORTFOLIO COMPOSITIONS
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
--------------------------------------------
<S> <C>
BRAZIL/PETROLEO BRASILEIRO SA 3.0%
--------------------------------------------
BRAZIL/TELECOMUNICACOES
BRASILEIRAS SA SP - ADR 2.5%
--------------------------------------------
CHINA/CHINA TELECOM LTD. 2.3%
--------------------------------------------
INDIA/THE INDIA FUND, INC. 1.8%
--------------------------------------------
SOUTH KOREA/TRIGEM COMPUTER, INC. 1.8%
--------------------------------------------
VENEZUELA/ELECTRIDAD
DE CARACAS SP - ADR 1.3%
--------------------------------------------
HUNGARY/MAGYAR
TAVKOZLESI RT. SP - ADR 1.2%
--------------------------------------------
TURKEY/DOGAN SIRKETLER
GRUBU HOLDING AS 1.2%
--------------------------------------------
BALTIC NATIONS/BALTIC FUND `A' 1.1%
--------------------------------------------
TAIWAN/TAIWAN FUND, INC. 1.1%
--------------------------------------------
TOP TEN TOTAL 17.3%
--------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5
COUNTRIES % of Total Investments
--------------------------------------------
<S> <C>
BRAZIL 6.9%
--------------------------------------------
MEXICO 5.0%
--------------------------------------------
TURKEY 5.0%
--------------------------------------------
CHINA 4.6%
--------------------------------------------
ISRAEL 4.5%
--------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
REGIONAL BREAKDOWN
--------------------------------------------
<S> <C>
ASIA 42.6%
--------------------------------------------
LATIN AMERICA 26.8%
--------------------------------------------
EUROPE 19.2%
--------------------------------------------
AFRICA 11.2%
--------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
--------------------------------------------
<S> <C>
COMMON STOCK 99.8%
--------------------------------------------
CASH EQUIVALENTS 0.2%
--------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
-------------------------------------------------------------------------------
PIMCO Tax-Efficient Structured Emerging Markets Fund Institutional Class
shares posted a return of 7.55% for the one-year period ended June 30, 2000.
Many emerging markets stocks suffered in the second half of the year, as
inflation-induced fears of higher interest rates dampened investor exuberance
for riskier stocks and markets. In particular, the dramatic global slump in
technology and telecommunications stocks in the second quarter of 2000
negatively impacted several emerging markets.
The Fund benefited from its exposure to China. The United States'
legislative moves toward permanent normalization of trade with China resulted
in strong price appreciation for many Chinese stocks. In particular, China
Telecom posted strong returns as a result of investor enthusiasm over the
growth potential for wireless communications in the region.
The Fund's exposure to Turkey also enhanced its performance. The Turkish
stock market performed well as a result of falling interest rates. The region
also benefited from a strong European economy, which helped to boost its own
economy and increase corporate profitability.
A standout performer for the Fund was SK Telecom, the dominant wireless
company in Korea. It benefited from the growth of wireless Internet
subscriptions in Korea, where wire line Internet penetration is already
fairly high and citizens have shown a particular affinity for new and `best
of breed' technologies.
The manager used the drop in emerging markets in the second quarter to
harvest losses in order to offset future capital gains taxes. The manager
remains steadfast in its efforts to maintain a tax-efficient portfolio for
investors.
Looking ahead, the manager is optimistic that the Fund's overweighting in
Europe will prove beneficial. As markets in Poland, Hungary and the Czech
Republic approach accession to the European Union, the manager expects
significant outperformance due to economic gains and a reduction in
perceptions of investment risk. In addiiton, these markets are now benefiting
from Europe's current economic strength and are less linked than the Asian
and Latin American regions to the expected economic slowdown in the United
States.
ANNUAL REPORT 25
<PAGE>
PIMCO INTERNATIONAL FUND
June 30, 2000
OBJECTIVE
Capital appreciation through investment in
an international portfolio; income is an
incidental consideration
PORTFOLIO
Primarily common stocks of foreign
(non-U.S.) issuers (developed and emerging
markets) with market capitalizations of more
than $500 million
TOTAL NET ASSETS
$139.4 million
NUMBER OF SECURITIES
IN THE
PORTFOLIO
271 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Blairlogie Capital Management
(an independent sub-adviser not
owned by PIMCO Advisors L.P.)
-------------------------------------------------------------------------------
PERFORMANCE*
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
INST'L CLASS ADMIN. CLASS MSCI EAFE Lipper International
(INCEP. 9/30/98) (INCEP. 9/30/98) Index Fund Average
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 YEAR 11.10% 10.78% 17.46% 24.46%
INCEPTION 19.63% 19.10% -- --
</TABLE>
CHANGE IN VALUE
$5,000,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO MSCI
International EAFE
Month Fund Index
================= ============= =============
<S> <C> <C>
9/30/1998 5,000,000 5,000,000
10/31/1998 5,377,268 5,522,500
11/30/1998 5,692,455 5,806,909
12/31/1998 5,846,447 6,037,443
1/31/1999 5,851,743 6,021,142
2/28/1999 5,687,576 5,879,043
3/31/1999 5,931,178 6,125,963
4/30/1999 6,153,597 6,375,289
5/31/1999 5,925,882 6,048,237
6/30/1999 6,153,597 6,285,328
7/31/1999 6,280,694 6,473,888
8/31/1999 6,211,850 6,499,136
9/30/1999 6,158,893 6,566,077
10/31/1999 6,381,312 6,813,618
11/30/1999 6,635,506 7,052,095
12/31/1999 7,501,950 7,686,078
1/31/2000 7,105,183 7,198,781
2/29/2000 7,227,265 7,393,868
3/31/2000 7,379,868 7,682,229
4/30/2000 6,952,580 7,279,680
5/31/2000 6,726,728 7,103,512
6/30/2000 6,836,602 7,382,680
</TABLE>
*Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that fund shares, when redeemed, may be
worth more or less than their original cost. The line graph above assumes the
investment of $5,000,000 on 10/01/98, the first full month following the
Fund's Institutional Class inception on 9/30/98, compared to the MSCI EAFE
Index, an unmanaged market index. The Fund may invest in foreign securities
which involve potentially higher risks including foreign currency
fluctuations and political or economic uncertainty. The performance of the
Administrative Class reflects the payment of a service fee in an amount not
to exceed 0.25% on an annualized basis. The Administrative Class commenced
operations on 9/30/98.
-------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
-------------------------------------------
<S> <C>
FINLAND/NOKIA CORP. 3.5%
-------------------------------------------
UNITED KINGDOM/MORGAN 3.4%
STANLEY CAPITAL LLC
-------------------------------------------
UNITED KINGDOM/MSCI WORLD EQUITY 2.5%
BENCHMARK SHARES
-------------------------------------------
SWEDEN/MSCI SWEDEN OPAL SERIES B 2.2%
-------------------------------------------
HUNGARY/MAGYAR TAVKOZLESI RT. 2.0%
-------------------------------------------
GERMANY/DEUTSCHE TELEKOM 1.7%
-------------------------------------------
JAPAN/NIPPON T&T 1.5%
-------------------------------------------
GERMANY/ALLIANZ AG 1.4%
-------------------------------------------
JAPAN/FANUC 1.2%
-------------------------------------------
JAPAN/MURATA MANUFACTURING CO. 1.2%
-------------------------------------------
TOP TEN HOLDINGS 20.6%
-------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5
COUNTRIES % of Total Investments
-------------------------------------------
<S> <C>
JAPAN 21.0%
-------------------------------------------
GERMANY 10.3%
-------------------------------------------
FRANCE 8.6%
-------------------------------------------
UNITED KINGDOM 5.8%
-------------------------------------------
FINLAND 4.4%
-------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
REGIONAL BREAKDOWN
-------------------------------------------
<S> <C>
EUROPE 56.4%
-------------------------------------------
ASIA 34.2%
-------------------------------------------
LATIN AMERICA 2.1%
-------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-------------------------------------------
<S> <C>
COMMON STOCK 92.6%
-------------------------------------------
CASH EQUIVALENTS 7.4%
-------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
-------------------------------------------------------------------------------
PIMCO International Fund Institutional Class shares returned 11.10% for the
one-year period ended June 30, 2000.
The global economic recovery that began
in the second half of 1999 proved to be positive for the Fund this year. Many
emerging markets countries made significant comebacks during the year, and a
number of developed countries also posted solid returns.
However, the Fund's underweight position within these rebounding emerging
market regions proved to be harmful and resulted in its underperformance when
compared to its peers. As evidenced by our Top 10 holdings, we had a greater
exposure to more established names in overseas areas, and although this
approach is beneficial to the fund's stability, it detracted from returns.
In the technology sector, the upsurge in telecommunications positively
contributed to the Fund's performance. One of the Fund's top ten holdings,
Nokia, posted strong gains. The Finnish cell phone handset maker benefited
from an increase in first-time cell phone subscriptions, stimulated by the
introduction of affordable "one rate" plans. Nokia's performance was also
boosted by shorter upgrade cycles for cell phone handsets, which resulted
from technological advances such as longer battery life and the switch from
analog to digital technology. Nokia should continue to perform well, as many
lesser developed countries build out their wireless infrastructure.
Another contributor to the Fund from the telecommunications sector was
Deutsche Telekom. The German telecommunications giant benefited from
Germany's significant economic recovery after a serious recession in 1998.
Furthermore, the explosive growth in cell phone handset subscriptions boosted
the company's stock price this year.
The Fund's exposure to Sony also enhanced its performance. Sony, the
world's leading consumer electronics company, benefited from the worldwide
increase in Internet usage. Investors bid up shares of the company, as Sony
is attempting to leverage its strong music and movie franchises in order to
capture interactive media opportunities on the Internet. As the number of
Internet subscribers grows, the company could see its business increase
significantly.
Looking ahead, the manager is cautiously optimistic about the prospects
for international stocks. Given the slowing economy in the United States, the
manager believes international stocks could outperform in the coming year.
26 PIMCO FUNDS
<PAGE>
PIMCO NFJ EQUITY INCOME FUND
June 30, 2000
OBJECTIVE
Current income as a primary objective
and long-term growth of capital as a
secondary objective
PORTFOLIO
Income producing common stocks of
companies with market capitalizations
of more than $2 billion
TOTAL NET ASSETS
$29.5 million
NUMBER OF SECURITIES
IN THE
PORTFOLIO
47 (not including
short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
NFJ Investment Group
-------------------------------------------------------------------------------
PERFORMANCE*
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL RETURN For periods ended 6/30/00
INST'L CLASS ADMIN. CLASS S&P 500 Lipper Equity
(INCEP. 5/08/00) (INCEP. 5/08/00) Index Income Fund Average
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCEPTION -5.73% -5.78% -- --
</TABLE>
-------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
-------------------------------------------------------------------------------
NFJ Equity Income Fund was started on May 8, 2000. The Fund's Institutional
Class shares posted a return of -5.73% and its Administrative shares posted a
return of -5.78% for the period since inception through June 30, 2000.
Value stocks, although generally outperforming growth stocks on a relative
basis, were buffeted back and forth during the quarter as the internal market
debate raged concerning Federal Reserve policy and the ramifications of an
economic slowdown.
Although the Fund posted negative returns during the period, there were a
number of sectors that positively contributed to its performance. Its
performance was enhanced by an underweighting in the technology sector. Tech
stocks came under pressure in the second quarter, as concerns about rising
interest rates resulted in an investor flight away from many high valuation
tech stocks.
The Fund also benefited from exposure to both consumer staples and
consumer cyclical stocks, which continued to perform well as a result of the
strong domestic economy. Retail giant J.C. Penney saw its stock price rise as
a result of efforts to turn itself around. It hired a turnaround expert as
CEO, sold unprofitable assets, and is paying down its debt--all signs of a
commitment to improve its profitability, which was well received by investors.
Mallinckrodt, a maker of healthcare products and specialty chemicals,
enhanced the Fund's performance during this period. The company's stock
performance over the past several years was lackluster, despite strong
fundamentals and a broad product line. However, in June, Tyco International
agreed to purchase Mallinckrodt at a 65% premium to its stock price,
propelling it upward.
The Fund's exposure to the financial services sector proved disappointing.
Rising interest rates caused investors to shy away from this area. Holdings
such as HRPT Properties Trust and J.P. Morgan suffered as a result.
The manager remains confident that the foundation is currently being laid
for a return to value investing. The manager remains committed to its value
philosophy and process. The manager has not and will not gravitate from its
dedicated value discipline for the sake of short-term performance.
-------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
-------------------------------------------
<S> <C>
USX-U.S. STEEL GROUP, INC. 3.7%
Materials & Processing
-------------------------------------------
DELUXE CORP. 3.6%
Financial & Business Services
-------------------------------------------
UNION PLANTERS CORP. 3.6%
Financial & Business Services
-------------------------------------------
ULTRAMAR DIAMOND SHAMROCK CORP. 3.5%
Energy
-------------------------------------------
MALLINCKRODT, INC. 2.9%
Health Care
-------------------------------------------
THOMAS & BETTS CORP. 2.5%
Consumer Discretionary
-------------------------------------------
J.C. PENNEY CO. 2.0%
Consumer Discretionary
-------------------------------------------
REPSOL SA SP - ADR 1.9%
Energy
-------------------------------------------
U.S. WEST, INC. 1.9%
Communications
-------------------------------------------
KERR MCGEE CORP. 1.9%
Energy
-------------------------------------------
TOP TEN TOTAL 27.5%
-------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
-------------------------------------------
<S> <C>
FINANCIAL & BUSINESS SERVICES 17.9%
-------------------------------------------
CONSUMER DISCRETIONARY 15.2%
-------------------------------------------
ENERGY 12.9%
-------------------------------------------
UTILITIES 9.2%
-------------------------------------------
CONSUMER STAPLES 8.0%
-------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-------------------------------------------
<S> <C>
COMMON STOCK 90.4%
-------------------------------------------
CASH EQUIVALENTS 9.6%
-------------------------------------------
</TABLE>
ANNUAL REPORT 27
<PAGE>
PIMCO NFJ VALUE FUND
June 30, 2000
OBJECTIVE
Long-term growth of
capital and income
PORTFOLIO
Primarily common stocks of companies with
market capitalizations of more than
$2 billion that are undervalued relative
to the market and to their industry groups
TOTAL NET ASSETS
$0.9 million
NUMBER OF SECURITIES
IN THE
PORTFOLIO
41 (not including
short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
NFJ Investment Group
-------------------------------------------------------------------------------
PERFORMANCE*
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL RETURN For periods ended 6/30/00
INST'L CLASS S&P 500 Lipper Multi-Cap
(INCEP. 5/08/00) Index Value Fund Avg.
-------------------------------------------------------------------------------
<S> <C> <C> <C>
INCEPTION -2.90% -- --
</TABLE>
-------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
-------------------------------------------------------------------------------
NFJ Value Fund was launched on May 8, 2000. The Fund's Institutional shares
posted a return of -2.90% for the period since inception through June 30, 2000.
Market volatility was not confined to the NASDAQ Composite Index during
this period, as value stocks also experienced some turbulence. Concerns about
interest rates, inflation, and a domestic economic slowdown resulted in
investor movement in and out of various sectors during this period.
Although the Fund posted negative returns during the period, there were a
number of sectors that positively contributed to its performance, such as the
consumer cyclical sector. Central Newspapers was a strong performer during
this period. This fundamentally strong but under-appreciated stock received a
buyout offer from Gannett, which boosted its stock price significantly.
The Fund's exposure to the energy sector, which benefited from significantly
higher prices for oil, gas and natural gas liquids, saw its profit margins widen
in the second quarter. With no sign of an increase in oil production in the near
future, this sector should continue to perform well.
The Fund's underweighting in technology aided its performance during this
period. Tech stocks came under pressure in the second quarter, as concerns about
rising interest rates resulted in an investor flight away from many high
valuation tech stocks.
Mallinckrodt, a maker of healthcare products and specialty chemicals,
enhanced the Fund's performance during this period. The company's stock
performance over the past several years was lackluster, despite strong
fundamentals and a broad product line. However, in June, Tyco International
agreed to purchase Mallinckrodt at a 65% premium to its stock price,
propelling it upward.
The Fund's exposure to the financial services sector proved disappointing.
Rising interest rates caused investors to shy away from this area. Holdings
such as financial services giant J.P. Morgan suffered as a result.
The manager remains confident that the foundation is currently being laid for
a return to value investing. The manager remains committed to its value
philosophy and process. The manager has not and will not gravitate from its
dedicated value discipline for the sake of short-term performance.
-------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
-------------------------------------------
<S> <C>
ULTRAMAR DIAMOND SHAMROCK CORP. 4.1%
Energy
-------------------------------------------
WESTVACO CORP. 4.1%
Materials & Processing
-------------------------------------------
NICOR, INC. 4.0%
Utilities
-------------------------------------------
KERR MCGEE CORP. 3.9%
Energy
-------------------------------------------
MORGAN, J.P. & CO., INC. 3.7%
Financial & Business Services
-------------------------------------------
BROWN-FORMAN CORP. 3.6%
Consumer Staples
-------------------------------------------
GTE CORP. 3.5%
Communications
-------------------------------------------
VERIZON COMMUNICATIONS 3.5%
Communications
-------------------------------------------
MALLINCKRODT, INC. 3.4%
Health Care
-------------------------------------------
WHIRLPOOL CORP. 3.1%
Consumer Discretionary
-------------------------------------------
TOP TEN TOTAL 36.9%
-------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
-------------------------------------------
<S> <C>
ENERGY 14.2%
-------------------------------------------
FINANCIAL & BUSINESS SERVICES 13.4%
-------------------------------------------
CONSUMER DISCRETIONARY 12.0%
-------------------------------------------
CONSUMER STAPLES 10.1%
-------------------------------------------
COMMUNICATIONS 9.1%
-------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-------------------------------------------
<S> <C>
COMMON STOCK 95.3%
-------------------------------------------
CASH EQUIVALENTS 4.7%
-------------------------------------------
</TABLE>
28 PIMCO FUNDS
<PAGE>
FINANCIAL HIGHLIGHTS -
INSTITUTIONAL AND ADMINISTRATIVE CLASSES
<TABLE>
<CAPTION>
NET ASSET NET REALIZED/ TOTAL DIVIDENDS DIVIDENDS IN
SELECTED PER SHARE VALUE UNREALIZED INCOME FROM FROM NET EXCESS OF NET
DATA FOR THE BEGINNING NET INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT INVESTMENT
YEAR OR PERIOD ENDED: OF PERIOD INCOME (LOSS) INVESTMENTS OPERATIONS INCOME INCOME
--------- -------------- -------------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
EQUITY INCOME FUND
Institutional Class
06/30/2000 $15.62 $ 0.39(a) $(2.44)(a) $(2.05) $(0.39) $ 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1999 16.09 0.44(a) 1.28(a) 1.72 (0.43) 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1998 15.41 0.44(a) 2.75(a) 3.19 (0.42) 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1997 14.36 0.40 3.17 3.57 (0.55) 0.00
--------- -------------- -------------- ---------- ---------- -------------
11/01/1995-06/30/1996 13.09 0.78 1.31 2.09 (0.34) 0.00
--------- -------------- -------------- ---------- ---------- -------------
Administrative Class
06/30/2000 15.61 0.37(a) (2.46)(a) (2.09) (0.33) 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1999 16.08 0.41(a) 1.28(a) 1.69 (0.40) 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1998 15.40 0.40(a) 2.75(a) 3.15 (0.38) 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1997 14.35 0.27 3.26 3.53 (0.51) 0.00
--------- -------------- -------------- ---------- ---------- -------------
11/01/1995-06/30/1996 13.13 0.75 1.31 2.06 (0.36) 0.00
--------- -------------- -------------- ---------- ---------- -------------
VALUE FUND
Institutional Class
06/30/2000 $15.30 $ 0.28(a) $(1.33)(a) $(1.05) $(0.26) $ 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1999 15.66 0.28(a) 1.36(a) 1.64 (0.28) 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1998 14.81 0.25(a) 2.47(a) 2.72 (0.24) 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1997 12.46 1.05 2.11 3.16 (0.31) 0.00
--------- -------------- -------------- ---------- ---------- -------------
11/01/1995-06/30/1996 12.53 0.25 1.62 1.87 (0.17) 0.00
--------- -------------- -------------- ---------- ---------- -------------
Administrative Class
06/30/2000 15.26 0.24(a) (1.33)(a) (1.09) (0.25) 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1999 15.65 0.26(a) 1.32(a) 1.58 (0.25) 0.00
--------- -------------- -------------- ---------- ---------- -------------
08/21/1997-06/30/1998 15.66 0.19(a) 1.65(a) 1.84 (0.22) 0.00
--------- -------------- -------------- ---------- ---------- -------------
RENAISSANCE FUND
Institutional Class
06/30/2000 $18.23 $ 0.42(a) $(0.23)(a) $ 0.19 $0.00 $ 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1999 19.07 0.06(a) 1.43(a) 1.49 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
12/30/1997-06/30/1998 16.73 0.05 2.29 2.34 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
Administrative Class
06/30/2000 18.18 0.11(a) 0.09(a) 0.20 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
08/31/1998-06/30/1999 15.37 0.02(a) 5.12(a) 5.14 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
GROWTH FUND
Institutional Class
06/30/2000 $31.24 $(0.14)(a) $ 9.73(a) $ 9.59 $ 0.00 $ 0.00
--------- -------------- -------------- ---------- ---------- -------------
03/31/1999-06/30/1999 31.27 (0.01)(a) (0.02)(a) (0.03) 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
Administrative Class
06/30/2000 31.23 (0.21)(a) 9.59(a) 9.38 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
03/31/1999-06/30/1999 31.27 (0.04)(a) 0.00(a) (0.04) 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
SELECT GROWTH FUND
Institutional Class
06/30/2000 $24.86 $ 0.05(a) $ 2.86(a) $ 2.91 $(0.02) $ 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1999 20.39 (0.04)(a) 5.24(a) 5.20 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1998 15.55 0.03(a) 6.11(a) 6.14 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1997 13.55 0.03(a) 2.78(a) 2.81 (0.02) 0.00
--------- -------------- -------------- ---------- ---------- -------------
11/01/1995-06/30/1996 12.72 0.51 0.65 1.16 (0.04) (0.01)
--------- -------------- -------------- ---------- ---------- -------------
Administrative Class
06/30/2000 24.67 (0.01)(a) 2.76(a) 2.75 (0.03) 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1999 20.32 (0.03)(a) 5.11(a) 5.08 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1998 15.53 (0.01)(a) 6.10(a) 6.09 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1997 13.56 0.00(a) 2.77(a) 2.77 (0.01) 0.00
--------- -------------- -------------- ---------- ---------- -------------
11/01/1995-06/30/1996 12.73 0.49 0.65 1.14 (0.02) (0.01)
--------- -------------- -------------- ---------- ---------- -------------
<CAPTION>
DISTRIBUTIONS
SELECTED PER SHARE FROM NET
DATA FOR THE REALIZED
YEAR OR PERIOD ENDED: CAPITAL GAINS
-------------
<S> <C>
EQUITY INCOME FUND
Institutional Class
06/30/2000 $(0.48)
-------------
06/30/1999 (1.76)
-------------
06/30/1998 (2.09)
-------------
06/30/1997 (1.97)
-------------
11/01/1995-06/30/1996 (0.48)
-------------
Administrative Class
06/30/2000 (0.48)
-------------
06/30/1999 (1.76)
-------------
06/30/1998 (2.09)
-------------
06/30/1997 (1.97)
-------------
11/01/1995-06/30/1996 (0.48)
-------------
VALUE FUND
Institutional Class
06/30/2000 $(0.57)
-------------
06/30/1999 (1.72)
-------------
06/30/1998 (1.63)
-------------
06/30/1997 (0.50)
-------------
11/01/1995-06/30/1996 (1.77)
-------------
Administrative Class
06/30/2000 (0.57)
-------------
06/30/1999 (1.72)
-------------
08/21/1997-06/30/1998 (1.63)
-------------
RENAISSANCE FUND
Institutional Class
06/30/2000 $(2.59)
-------------
06/30/1999 (2.33)
-------------
12/30/1997-06/30/1998 0.00
-------------
Administrative Class
06/30/2000 (2.59)
-------------
08/31/1998-06/30/1999 (2.33)
-------------
GROWTH FUND
Institutional Class
06/30/2000 $(5.66)
-------------
03/31/1999-06/30/1999 0.00
-------------
Administrative Class
06/30/2000 (5.66)
-------------
03/31/1999-06/30/1999 0.00
-------------
SELECT GROWTH FUND
Institutional Class
06/30/2000 $(3.72)
-------------
06/30/1999 (0.73)
-------------
06/30/1998 (1.30)
-------------
06/30/1997 (0.79)
-------------
11/01/1995-06/30/1996 (0.28)
-------------
Administrative Class
06/30/2000 (3.72)
-------------
06/30/1999 (0.73)
-------------
06/30/1998 (1.30)
-------------
06/30/1997 (0.79)
-------------
11/01/1995-06/30/1996 (0.28)
-------------
</TABLE>
* Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
(b) Ratio of expenses to average net assets excluding interest expense is
0.83%.
(c) Ratio of expenses to average net assets excluding interest expense is
1.08%.
30 SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
DISTRIBUTIONS FUND
SELECTED PER SHARE IN EXCESS TAX BASIC REIMBURSEMENT
DATA FOR THE NET REALIZED RETURN OF TOTAL FEE ADDED TO NET ASSET VALUE
YEAR OR PERIOD ENDED: CAPITAL GAINS CAPITAL DISTRIBUTIONS PAID-IN-CAPITAL END OF PERIOD
------------- ------------- ------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
EQUITY INCOME FUND
Institutional Class
06/30/2000 $(2.16) $0.00 $(3.03) $0.00 $10.54
------------- ------------- ------------- --------------- ---------------
06/30/1999 0.00 0.00 (2.19) 0.00 15.62
------------- ------------- ------------- --------------- ---------------
06/30/1998 0.00 0.00 (2.51) 0.00 16.09
------------- ------------- ------------- --------------- ---------------
06/30/1997 0.00 0.00 (2.52) 0.00 15.41
------------- ------------- ------------- --------------- ---------------
11/01/1995-06/30/1996 0.00 0.00 (0.82) 0.00 14.36
------------- ------------- ------------- --------------- ---------------
Administrative Class
06/30/2000 (2.16) 0.00 (2.97) 0.00 10.55
------------- ------------- ------------- --------------- ---------------
06/30/1999 0.00 0.00 (2.16) 0.00 15.61
------------- ------------- ------------- --------------- ---------------
06/30/1998 0.00 0.00 (2.47) 0.00 16.08
------------- ------------- ------------- --------------- ---------------
06/30/1997 0.00 0.00 (2.48) 0.00 15.40
------------- ------------- ------------- --------------- ---------------
11/01/1995-06/30/1996 0.00 0.00 (0.84) 0.00 14.35
------------- ------------- ------------- --------------- ---------------
VALUE FUND
Institutional Class
06/30/2000 $(2.00) $ 0.00 $(2.83) $0.00 $11.42
------------- ------------- ------------- --------------- ---------------
06/30/1999 0.00 0.00 (2.00) 0.00 15.30
------------- ------------- ------------- --------------- ---------------
06/30/1998 0.00 0.00 (1.87) 0.00 15.66
------------- ------------- ------------- --------------- ---------------
06/30/1997 0.00 0.00 (0.81) 0.00 14.81
------------- ------------- ------------- --------------- ---------------
11/01/1995-06/30/1996 0.00 0.00 (1.94) 0.00 12.46
------------- ------------- ------------- --------------- ---------------
Administrative Class
06/30/2000 (2.00) 0.00 (2.82) 0.00 11.35
------------- ------------- ------------- --------------- ---------------
06/30/1999 0.00 0.00 (1.97) 0.00 15.26
------------- ------------- ------------- --------------- ---------------
08/21/1997-06/30/1998 0.00 0.00 (1.85) 0.00 15.65
------------- ------------- ------------- --------------- ---------------
RENAISSANCE FUND
Institutional Class
06/30/2000 $(0.86) $ 0.00 $(3.45) $0.00 $14.97
------------- ------------- ------------- --------------- ---------------
06/30/1999 0.00 0.00 (2.33) 0.00 18.23
------------- ------------- ------------- --------------- ---------------
12/30/1997-06/30/1998 0.00 0.00 0.00 0.00 19.07
------------- ------------- ------------- --------------- ---------------
Administrative Class
06/30/2000 (0.86) 0.00 (3.45) 0.00 14.93
------------- ------------- ------------- --------------- ---------------
08/31/1998-06/30/1999 0.00 0.00 (2.33) 0.00 18.18
------------- ------------- ------------- --------------- ---------------
GROWTH FUND
Institutional Class
06/30/2000 $ 0.00 $ 0.00 $(5.66) $0.00 $35.17
------------- ------------- ------------- --------------- ---------------
03/31/1999-06/30/1999 0.00 0.00 0.00 0.00 31.24
------------- ------------- ------------- --------------- ---------------
Administrative Class
06/30/2000 0.00 0.00 (5.66) 0.00 34.95
------------- ------------- ------------- --------------- ---------------
03/31/1999-06/30/1999 0.00 0.00 0.00 0.00 31.23
------------- ------------- ------------- --------------- ---------------
SELECT GROWTH FUND
Institutional Class
06/30/2000 $ 0.00 $(0.01) $(3.75) $0.00 $24.02
------------- ------------- ------------- --------------- ---------------
06/30/1999 0.00 0.00 (0.73) 0.00 24.86
------------- ------------- ------------- --------------- ---------------
06/30/1998 0.00 0.00 (1.30) 0.00 20.39
------------- ------------- ------------- --------------- ---------------
06/30/1997 0.00 0.00 (0.81) 0.00 15.55
------------- ------------- ------------- --------------- ---------------
11/01/1995-06/30/1996 0.00 0.00 (0.33) 0.00 13.55
------------- ------------- ------------- --------------- ---------------
Administrative Class
06/30/2000 0.00 (0.01) (3.76) 0.00 23.66
------------- ------------- ------------- --------------- ---------------
06/30/1999 0.00 0.00 (0.73) 0.00 24.67
------------- ------------- ------------- --------------- ---------------
06/30/1998 0.00 0.00 (1.30) 0.00 20.32
------------- ------------- ------------- --------------- ---------------
06/30/1997 0.00 0.00 (0.80) 0.00 15.53
------------- ------------- ------------- --------------- ---------------
11/01/1995-06/30/1996 0.00 0.00 (0.31) 0.00 13.56
------------- ------------- ------------- --------------- ---------------
</TABLE>
<TABLE>
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
SELECTED PER SHARE EXPENSES TO INCOME (LOSS) PORTFOLIO
DATA FOR THE NET ASSETS END AVERAGE NET TO AVERAGE TURNOVER
YEAR OR PERIOD ENDED: TOTAL RETURN OF PERIOD (000S) ASSETS NET ASSETS RATE
------------ ---------------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C>
Equity Income Fund
Institutional Class
06/30/2000 (12.83)% $ 28,812 0.72% 3.21% 114%
------------ ---------------- ------------ ---------- ---------
06/30/1999 12.56 123,012 0.71 3.00 76
------------ ---------------- ------------ ---------- ---------
06/30/1998 21.84 138,650 0.71 2.71 45
------------ ---------------- ------------ ---------- ---------
06/30/1997 27.67 121,138 0.72 3.03 45
------------ ---------------- ------------ ---------- ---------
11/01/1995-06/30/1996 16.35 116,714 0.70* 3.41* 52
------------ ---------------- ------------ ---------- ---------
Administrative Class
06/30/2000 (13.17) 2,827 0.97 3.00 114
------------ ---------------- ------------ ---------- ---------
06/30/1999 12.31 13,797 0.96 2.80 76
------------ ---------------- ------------ ---------- ---------
06/30/1998 21.58 11,699 0.96 2.45 45
------------ ---------------- ------------ ---------- ---------
06/30/1997 27.40 8,145 0.97 2.79 45
------------ ---------------- ------------ ---------- ---------
11/01/1995-06/30/1996 16.08 6,097 0.95* 3.19* 52
------------ ---------------- ------------ ---------- ---------
VALUE FUND
Institutional Class
06/30/2000 (6.65)% $ 41,996 0.70% 2.18% 196%
------------ ---------------- ------------ ---------- ---------
06/30/1999 12.30 69,181 0.71 1.99 101
------------ ---------------- ------------ ---------- ---------
06/30/1998 19.35 83,219 0.71 1.59 77
------------ ---------------- ------------ ---------- ---------
06/30/1997 26.38 74,613 0.73 2.02 71
------------ ---------------- ------------ ---------- ---------
11/01/1995-06/30/1996 16.24 52,727 0.70* 2.40* 29
------------ ---------------- ------------ ---------- ---------
Administrative Class
06/30/2000 (7.00) 24,380 0.96 1.97 196
------------ ---------------- ------------ ---------- ---------
06/30/1999 11.91 23,164 0.95 1.81 101
------------ ---------------- ------------ ---------- ---------
08/21/1997-06/30/1998 12.71 10,349 0.96* 1.40* 77
------------ ---------------- ------------ ---------- ---------
RENAISSANCE FUND
Institutional Class
06/30/2000 3.30% $ 6,394 0.85% 2.73% 133%
------------ ---------------- ------------ ---------- ---------
06/30/1999 10.24 136 0.86 0.38 221
------------ ---------------- ------------ ---------- ---------
12/30/1997-06/30/1998 13.99 851 0.86* 0.55* 192
------------ ---------------- ------------ ---------- ---------
---------
Administrative Class
06/30/2000 3.36 953 1.10 0.71 133
------------ ---------------- ------------ ---------- ---------
08/31/1998-06/30/1999 36.41 427 1.09* 0.13* 221
------------ ---------------- ------------ ---------- ---------
GROWTH FUND
Institutional Class
06/30/2000 32.66% $ 17,533 0.77% (0.39)% 72%
------------ ---------------- ------------ ---------- ---------
03/31/1999-06/30/1999 (0.10) 948 0.74* (0.19)* 131
------------ ---------------- ------------ ---------- ---------
Administrative Class
06/30/2000 31.92 15,116 1.02 (0.63) 72
------------ ---------------- ------------ ---------- ---------
03/31/1999-06/30/1999 (0.13) 6,164 0.97* (0.53)* 131
------------ ---------------- ------------ ---------- ---------
SELECT GROWTH FUND
Institutional Class
06/30/2000 13.11% $ 2,613 0.94%(b) 0.20% 170%
------------ ---------------- ------------ ---------- ---------
06/30/1999 26.34 1,184 1.01 (0.20) 95
------------ ---------------- ------------ ---------- ---------
06/30/1998 41.83 1,915 0.83 0.20 120
------------ ---------------- ------------ ---------- ---------
06/30/1997 21.59 6,444 0.87 0.23 139
------------ ---------------- ------------ ---------- ---------
11/01/1995-06/30/1996 9.41 10,452 0.82* 0.53* 73
------------ ---------------- ------------ ---------- ---------
Administrative Class
06/30/2000 12.54 49 1.18(c) (0.05) 170
------------ ---------------- ------------ ---------- ---------
06/30/1999 25.84 15 1.08 (0.17) 95
------------ ---------------- ------------ ---------- ---------
06/30/1998 41.54 128,666 1.08 (0.07) 120
------------ ---------------- ------------ ---------- ---------
06/30/1997 21.20 29,332 1.13 (0.03) 139
------------ ---------------- ------------ ---------- ---------
11/01/1995-06/30/1996 9.23 33,575 1.07* 0.28* 73
------------ ---------------- ------------ ---------- ---------
</TABLE>
SEE ACCOMPANYING NOTES 31
<PAGE>
FINANCIAL HIGHLIGHTS -
INSTITUTIONAL AND ADMINISTRATIVE CLASSES (CONT.)
<TABLE>
<CAPTION>
NET ASSET NET REALIZED/ TOTAL DIVIDENDS DIVIDENDS IN
SELECTED PER SHARE VALUE UNREALIZED INCOME FROM FROM NET EXCESS OF NET
DATA FOR THE BEGINNING NET INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT INVESTMENT
YEAR OR PERIOD ENDED: OF PERIOD INCOME (LOSS) INVESTMENTS OPERATIONS INCOME INCOME
--------- -------------- -------------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
TARGET FUND
Institutional Class
06/30/2000 $17.74 $(0.14)(a) $15.30(a) $15.16 $ 0.00 $ 0.00
--------- -------------- -------------- ---------- ---------- -------------
03/31/1999-06/30/1999 16.34 (0.02)(a) 1.42(a) 1.40 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
Administrative Class
06/30/2000 17.73 (0.19)(a) 15.55(a) 15.36 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
03/31/1999-06/30/1999 16.34 (0.03)(a) 1.42(a) 1.39 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
MID-CAP EQUITY FUND
Institutional Class
06/30/2000 $15.84 $(0.07)(a) $ 5.81(a) $ 5.74 $ 0.00 $ 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1999 13.53 (0.03)(a) 2.99(a) 2.96 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1998 14.04 (0.03)(a) 3.61(a) 3.58 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1997 14.66 (0.06)(a) 1.31(a) 1.25 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
11/01/1995-06/30/1996 12.92 0.49 1.62 2.11 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
OPPORTUNITY FUND
Institutional Class
06/30/2000 $24.26 $(0.12)(a) $11.17(a) $11.05 $ 0.00 $ 0.00
--------- -------------- -------------- ---------- ---------- -------------
03/31/1999-06/30/1999 21.40 (0.03)(a) 2.89(a) 2.86 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
Administrative Class
06/30/2000 24.26 (0.18)(a) 11.24(a) 11.06 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
03/31/1999-06/30/1999 21.40 (0.05)(a) 2.91(a) 2.86 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
INNOVATION FUND
Institutional Class
06/30/2000 $37.50 $(0.37)(a) $41.80(a) $41.43 $ 0.00 $ 0.00
--------- -------------- -------------- ---------- ---------- -------------
03/05/1999-06/30/1999 32.73 (0.05)(a) 4.82(a) 4.77 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
Administrative Class
3/10/2000 - 6/30/2000 99.70 (0.20)(a) (27.17)(a) (27.37) 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
GLOBAL INNOVATION FUND
Institutional Class
03/31/2000 - 06/30/2000 $20.17 $(0.01)(a) $(1.20)(a) $(1.21) $ 0.00 $ 0.00
--------- -------------- -------------- ---------- ---------- -------------
INTERNATIONAL GROWTH FUND
Institutional Class
06/30/2000 $16.04 $(0.05)(a) $ 8.90(a) $ 8.85 $ 0.00 $ 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1999 13.55 (0.02)(a) 3.56(a) 3.54 (0.02) 0.00
--------- -------------- -------------- ---------- ---------- -------------
12/31/1997-06/30/1998 10.00 0.00(a) 3.55(a) 3.55 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
MEGA-CAP FUND
Institutional Class
08/31/1999 - 06/30/2000 $10.00 $ 0.00(a) $ 3.35(a) $ 3.35 $ 0.00 $ 0.00
--------- -------------- -------------- ---------- ---------- -------------
CAPITAL APPRECIATION FUND
Institutional Class
06/30/2000 $26.84 $ 0.08(a) $ 5.29(a) $ 5.37 $(0.07) $(0.04)
--------- -------------- -------------- ---------- ---------- -------------
06/30/1999 26.13 0.16(a) 2.35(a) 2.51 (0.15) 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1998 21.19 0.15(a) 6.59(a) 6.74 (0.12) 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1997 18.10 0.24 5.08 5.32 (0.10) 0.00
--------- -------------- -------------- ---------- ---------- -------------
11/01/1995-06/30/1996 16.94 0.35 1.99 2.34 (0.15) 0.00
--------- -------------- -------------- ---------- ---------- -------------
Administrative Class
06/30/2000 26.64 0.01(a) 5.25(a) 5.26 (0.03) (0.02)
--------- -------------- -------------- ---------- ---------- -------------
06/30/1999 25.99 0.09(a) 2.34(a) 2.43 (0.13) 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1998 21.16 0.10(a) 6.55(a) 6.65 (0.14) 0.00
--------- -------------- -------------- ---------- ---------- -------------
07/31/1996-06/30/1997 17.19 0.16 6.03 6.19 (0.09) 0.00
--------- -------------- -------------- ---------- ---------- -------------
</TABLE>
* Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
(b) Ratio of expenses to average net assets excluding interest expense is 0.88%.
32 SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS FUND
SELECTED PER SHARE FROM NET IN EXCESS REIMBURSEMENT
DATA FOR THE REALIZED NET REALIZED TOTAL FEE ADDED TO NET ASSET VALUE
YEAR OR PERIOD ENDED: CAPITAL GAINS CAPITAL GAINS DISTRIBUTIONS PAID-IN-CAPITAL END OF PERIOD TOTAL RETURN
------------- ------------- ------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
TARGET FUND
Institutional Class
06/30/2000 $(1.80) $ 0.00 $(1.80) $0.00 $31.10 89.85%
------------- ------------- ------------- --------------- --------------- ------------
03/31/1999-06/30/1999
0.00 0.00 0.00 0.00 17.74 8.57
------------- ------------- ------------- --------------- --------------- ------------
Administrative Class
06/30/2000 (1.80) 0.00 (1.80) 0.00 31.29 91.13
------------- ------------- ------------- --------------- --------------- ------------
03/31/1999-06/30/1999 0.00 0.00 0.00 0.00 17.73 8.51
------------- ------------- ------------- --------------- --------------- ------------
MID-CAP EQUITY FUND
Institutional Class
06/30/2000 $(8.18) $(0.42) $(8.60) $0.00 $12.98 49.32%
------------- ------------- ------------- --------------- --------------- ------------
06/30/1999 (0.65) 0.00 (0.65) 0.00 15.84 23.18
------------- ------------- ------------- --------------- --------------- ------------
06/30/1998 (4.09) 0.00 (4.09) 0.00 13.53 30.40
------------- ------------- ------------- --------------- --------------- ------------
06/30/1997 (1.87) 0.00 (1.87) 0.00 14.04 9.61
------------- ------------- ------------- --------------- --------------- ------------
11/01/1995-06/30/1996 (0.37) 0.00 (0.37) 0.00 14.66 16.72
------------- ------------- ------------- --------------- --------------- ------------
OPPORTUNITY FUND
Institutional Class
06/30/2000 $(7.88) $ 0.00 $(7.88) $0.00 $27.43 50.24%
------------- ------------- ------------- --------------- --------------- ------------
03/31/1999-06/30/1999 0.00 0.00 0.00 0.00 24.26 13.36
------------- ------------- ------------- --------------- --------------- ------------
Administrative Class
06/30/2000 (7.88) 0.00 (7.88) 0.00 27.44 50.36
------------- ------------- ------------- --------------- --------------- ------------
03/31/1999-06/30/1999 0.00 0.00 0.00 0.00 24.26 13.36
------------- ------------- ------------- --------------- --------------- ------------
INNOVATION FUND
Institutional Class
06/30/2000 $(6.39) $ 0.00 $(6.39) $0.00 $72.54 115.34%
------------- ------------- ------------- --------------- --------------- ------------
03/05/1999-06/30/199 0.00 0.00 0.00 0.00 37.50 14.57
------------- ------------- ------------- --------------- --------------- ------------
Administrative Class
3/10/2000 - 6/30/2000 0.00 0.00 0.00 0.00 72.33 (27.45)
------------- ------------- ------------- --------------- --------------- ------------
GLOBAL INNOVATION FUND
Institutional Class
03/31/2000 - 06/30/2000 $ 0.00 $ 0.00 $ 0.00 $0.00 $18.96 (6.00)%
------------- ------------- ------------- --------------- --------------- ------------
INTERNATIONAL GROWTH FUND
Institutional Class
06/30/2000 $(4.43) $ 0.00 $(4.43) $0.00 $20.46 56.28%
------------- ------------- ------------- --------------- --------------- ------------
06/30/1999 (1.03) 0.00 (1.05) 0.00 16.04 28.62
------------- ------------- ------------- --------------- --------------- ------------
12/31/1997-06/30/1998 0.00 0.00 0.00 0.00 13.55 35.50
------------- ------------- ------------- --------------- --------------- ------------
MEGA-CAP FUND
Institutional Class
08/31/1999 - 06/30/2000 $ 0.00 $ 0.00 $ 0.00 $0.00 $13.35 33.54%
------------- ------------- ------------- --------------- --------------- ------------
CAPITAL APPRECIATION FUND
Institutional Class
06/30/2000 $(5.00) $ 0.00 $(5.11) $0.00 $27.10 22.79%
------------- ------------- ------------- --------------- --------------- ------------
06/30/1999 (1.65) 0.00 (1.80) 0.00 26.84 10.57
------------- ------------- ------------- --------------- --------------- ------------
06/30/1998 (1.68) 0.00 (1.80) 0.00 26.13 32.97
------------- ------------- ------------- --------------- --------------- ------------
06/30/1997 (2.13) 0.00 (2.23) 0.00 21.19 31.52
------------- ------------- ------------- --------------- --------------- ------------
11/01/1995-06/30/1996 (1.03) 0.00 (1.18) 0.00 18.10 14.65
------------- ------------- ------------- --------------- --------------- ------------
Administrative Class
06/30/2000 (5.00) 0.00 (5.05) 0.00 26.85 22.49
------------- ------------- ------------- --------------- --------------- ------------
06/30/1999 (1.65) 0.00 (1.78) 0.00 26.64 10.30
------------- ------------- ------------- --------------- --------------- ------------
06/30/1998 (1.68) 0.00 (1.82) 0.00 25.99 32.55
------------- ------------- ------------- --------------- --------------- ------------
07/31/1996-06/30/1997 (2.13) 0.00 (2.22) 0.00 21.16 38.26
------------- ------------- ------------- --------------- --------------- ------------
</TABLE>
<TABLE>
<CAPTION>
RATIO OF NET
SELECTED PER SHARE RATIO OF INVESTMENT
DATA FOR THE EXPENSES TO INCOME (LOSS) PORTFOLIO
YEAR OR PERIOD ENDED: NET ASSETS END AVERAGE NET TO AVERAGE TURNOVER
OF PERIOD (000S) ASSETS NET ASSETS RATE
---------------- ------------ ------------- --------
<S> <C> <C> <C> <C>
[caad 214]TARGET FUND
Institutional Class
06/30/2000 $ 18,436 0.81% (0.50)% 99%
---------------- ------------ ------------- --------
03/31/1999-06/30/1999 1,298 0.79* (0.39)* 229
---------------- ------------ ------------- --------
06/30/2000 6,699 1.06 (0.78) 99
---------------- ------------ ------------- --------
Administrative Class
03/31/1999-06/30/1999 5,513 1.02* (0.61)* 229
---------------- ------------ ------------- --------
MID-CAP EQUITY FUND
Institutional Class
06/30/2000 $ 4,914 1.03%(b) (0.46)% 195%
---------------- ------------ ------------- --------
06/30/1999 7,399 0.89 (0.22) 273
---------------- ------------ ------------- --------
06/30/1998 8,488 0.89 (0.25) 268
---------------- ------------ ------------- --------
06/30/1997 7,591 1,15 (0.43) 202
---------------- ------------ ------------- --------
11/01/1995-06/30/1996 8,378 0.88* (0.32)* 97
---------------- ------------ ------------- --------
OPPORTUNITY FUND
Institutional Class
06/30/2000 $ 39,205 0.91% (0.42)% 254%
---------------- ------------ ------------- --------
03/31/1999-06/30/1999 417 0.88* (0.54)* 175
---------------- ------------ ------------- --------
Administrative Class
06/30/2000 8,486 1.16 (0.67) 254
---------------- ------------ ------------- --------
03/31/1999-06/30/1999 2,010 1.12* (0.82)* 175
---------------- ------------ ------------- --------
INNOVATION FUND
Institutional Class
06/30/2000 $ 28,334 0.90% (0.52)% 186%
---------------- ------------ ------------- --------
03/05/1999-06/30/1999 444 0.88* (0.15)* 119
---------------- ------------ ------------- --------
Administrative Class
3/10/2000 - 6/30/2000 668 1.15* (0.92)* 186
---------------- ------------ ------------- --------
GLOBAL INNOVATION FUND
Institutional Class
03/31/2000 - 06/30/2000 $ 403 1.40%*(c) (0.25)%* 131%
---------------- ------------ ------------- --------
INTERNATIONAL GROWTH FUND
Institutional Class
06/30/2000 $ 10,541 1.35% (0.22)% 62%
---------------- ------------ ------------- --------
06/30/1999 8,408 1.39 (0.15) 269
---------------- ------------ ------------- --------
12/31/1997-06/30/1998 6,822 1.36* 0.08* 60
---------------- ------------ ------------- --------
MEGA-CAP FUND
Institutional Class
08/31/1999 - 06/30/2000 $ 4,009 0.71%*(d) 0.04%* 151%
---------------- ------------ ------------- --------
CAPITAL APPRECIATION FUND
Institutional Class
06/30/2000 $372,028 0.71% 0.29% 119%
---------------- ------------ ------------- --------
06/30/1999 645,967 0.71 0.64 120
---------------- ------------ ------------- --------
06/30/1998 805,856 0.71 0.64 75
---------------- ------------ ------------- --------
06/30/1997 536,187 0.71 1.02 87
---------------- ------------ ------------- --------
11/01/1995-06/30/1996 348,728 0.70* 1.33* 73
---------------- ------------ ------------- --------
Administrative Class
06/30/2000 180,423 0.96 0.04 119
---------------- ------------ ------------- --------
06/30/1999 229,831 0.95 0.38 120
---------------- ------------ ------------- --------
06/30/1998 132,384 0.96 0.39 75
---------------- ------------ ------------- --------
07/31/1996-06/30/1997 3,115 0.96* 0.66* 87
---------------- ------------ ------------- --------
</TABLE>
(c) If the investment manager had not reimbursed expenses, the ratio of
operating expenses to average net assets would have been 1.47% for
the period ended June 30, 2000.
(d) If the investment manager had not reimbursed expenses, the ratio of
operating expenses to average net assets would have been 1.26% for
the period ended June 30, 2000.
SEE ACCOMPANYING NOTES 33
<PAGE>
FINANCIAL HIGHLIGHTS --
INSTITUTIONAL AND ADMINISTRATIVE CLASSES (CONT.)
<TABLE>
<CAPTION>
NET ASSET NET REALIZED/ TOTAL DIVIDENDS DIVIDENDS IN
SELECTED PER SHARE VALUE UNREALIZED INCOME FROM FROM NET EXCESS OF NET
DATA FOR THE BEGINNING NET INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT INVESTMENT
YEAR OR PERIOD ENDED: OF PERIOD INCOME (LOSS) INVESTMENTS OPERATIONS INCOME INCOME
--------- -------------- -------------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
MID-CAP FUND
Institutional Class
06/30/2000 $23.01 $ 0.09(a) $ 7.91(a) $ 8.00 $(0.07) $(0.04)
--------- -------------- -------------- ---------- ---------- -------------
06/30/1999 24.09 0.12(a) (0.11)(a) 0.01 (0.02) 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1998 20.28 0.11(a) 5.11(a) 5.22 (0.07) (0.01)
--------- -------------- -------------- ---------- ---------- -------------
06/30/1997 19.44 (0.07) 5.25 5.18 (0.05) 0.00
--------- -------------- -------------- ---------- ---------- -------------
11/01/1995-06/30/1996 18.16 0.32 1.53 1.85 (0.14) 0.00
--------- -------------- -------------- ---------- ---------- -------------
Administrative Class
06/30/2000 22.88 0.03(a) 7.86(a) 7.89 (0.03) (0.02)
--------- -------------- -------------- ---------- ---------- ------------
06/30/1999 23.96 0.06(a) (0.06)(a) 0.00 (0.01) 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1998 20.24 0.05(a) 5.08(a) 5.13 (0.07) (0.01)
--------- -------------- -------------- ---------- ---------- -------------
06/30/1997 19.44 (0.13) 5.25 5.12 (0.03) 0.00
--------- -------------- -------------- ---------- ---------- -------------
11/01/1995-06/30/1996 18.17 0.28 1.53 1.81 (0.11) 0.00
--------- -------------- -------------- ---------- ---------- -------------
SMALL-CAP FUND
Institutional Class
06/30/2000 $11.41 $(0.05)(a) $ 1.86(a) $ 1.81 $ 0.00 $ 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1999 14.01 (0.01)(a) (2.12)(a) (2.13) 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1998 13.40 (0.03)(a) 2.52(a) 2.49 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1997 20.83 (0.01)(a) 3.17(a) 3.16 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
11/01/1995-06/30/1996 21.02 2.02 (0.61) 1.41 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
Administrative Class
06/30/2000 11.34 (0.08)(a) 1.86(a) 1.78 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1999 13.97 (0.04)(a) (2.12)(a) (2.16) 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1998 13.41 (0.07)(a) 2.51(a) 2.44 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1997 20.82 (0.06)(a) 3.24(a) 3.18 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
11/01/1995-06/30/1996 21.01 2.02(a) (0.61)(a) 1.41 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
MICRO-CAP FUND
Institutional Class
06/30/2000 $20.00 $(0.19)(a) $ 5.31(a) $ 5.12 $ 0.00 $ 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1999 23.66 (0.14)(a) (2.89)(a) (3.03) 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1998 19.85 (0.11)(a) 6.54(a) 6.43 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1997 18.47 0.00 3.41 3.41 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
11/01/1995-06/30/1996 15.38 0.00 3.43 3.43 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
Administrative Class
06/30/2000 19.82 (0.26)(a) 5.27(a) 5.01 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1999 23.52 (0.19)(a) (2.88)(a) (3.07) 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1998 19.78 (0.17)(a) 6.53(a) 6.36 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1997 18.46 (0.06) 3.41 3.35 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
04/01/1996-06/30/1996 16.73 0.03 1.70 1.73 0.00 0.00
--------- -------------- -------------- ---------- ---------- -------------
SMALL-CAP VALUE FUND
Institutional Class
06/30/2000 $16.05 $ 0.37(a) $(1.82)(a) $(1.45) $(0.34) $ 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1999 17.68 0.32(a) (1.29)(a) (0.97) (0.21) 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1998 15.78 0.29(a) 2.50(a) 2.79 (0.13) 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1997 14.20 0.46 3.63 4.09 (0.13) 0.00
--------- -------------- -------------- ---------- ---------- -------------
11/01/1995-06/30/1996 13.10 0.56 1.49 2.05 (0.21) 0.00
--------- -------------- -------------- ---------- ---------- -------------
Administrative Class
06/30/2000 15.97 0.34(a) (1.81)(a) (1.47) (0.31) 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1999 17.63 0.29(a) (1.30)(a) (1.01) (0.20) 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1998 15.76 0.25(a) 2.49(a) 2.74 (0.11) 0.00
--------- -------------- -------------- ---------- ---------- -------------
06/30/1997 14.20 0.38 3.68 4.06 (0.12) 0.00
--------- -------------- -------------- ---------- ---------- -------------
11/01/1995-06/30/1996 13.16 0.54 1.43 1.97 (0.19) 0.00
--------- -------------- -------------- ---------- ---------- -------------
</TABLE>
* Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
34 SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS FUND
SELECTED PER SHARE FROM NET IN EXCESS OF REIMBURSEMENT
DATA FOR THE REALIZED NET REALIZED TOTAL FEE ADDED TO NET ASSET VALUE
YEAR OR PERIOD ENDED: CAPITAL GAINS CAPITAL GAINS DISTRIBUTIONS PAID-IN-CAPITAL END OF PERIOD TOTAL RETURN
------------- ------------- ------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
MID-CAP FUND
Institutional Class
06/30/2000 $ (0.02) $ 0.00 $ (0.13) $0.00 $30.88 34.88%
------------- ------------- ------------- --------------- --------------- ------------
06/30/1999 (1.07) 0.00 (1.09) 0.00 23.01 0.33
------------- ------------- ------------- --------------- --------------- ------------
06/30/1998 (1.33) 0.00 (1.41) 0.00 24.09 26.16
------------- ------------- ------------- --------------- --------------- ------------
06/30/1997 (4.29) 0.00 (4.34) 0.00 20.28 30.58
------------- ------------- ------------- --------------- --------------- ------------
11/01/1995-06/30/1996 (0.43) 0.00 (0.57) 0.00 19.44 10.37
------------- ------------- ------------- --------------- --------------- ------------
Administrative Class
06/30/2000 (0.02) 0.00 (0.07) 0.00 30.70 34.53
------------- ------------- ------------- --------------- --------------- ------------
06/30/1999 (1.07) 0.00 (1.08) 0.00 22.88 0.31
------------- ------------- ------------- --------------- --------------- ------------
06/30/1998 (1.33) 0.00 (1.41) 0.00 23.96 25.75
------------- ------------- ------------- --------------- --------------- ------------
06/30/1997 (4.29) 0.00 (4.32) 0.00 20.24 30.23
------------- ------------- ------------- --------------- --------------- ------------
11/01/1995-06/30/1996 (0.43) 0.00 (0.54) 0.00 19.44 10.17
------------- ------------- ------------- --------------- --------------- ------------
SMALL-CAP FUND
Institutional Class
06/30/2000 $ 0.00 $ 0.00 $ 0.00 $0.00 $13.22 15.86%
------------- ------------- ------------- --------------- --------------- ------------
06/30/1999 0.00 (0.47) (0.47) 0.00 11.41 (14.99)
------------- ------------- ------------- --------------- --------------- ------------
06/30/1998 (1.88) 0.00 (1.88) 0.00 14.01 19.33
------------- ------------- ------------- --------------- --------------- ------------
06/30/1997 (10.59) 0.00 (10.59) 0.00 13.40 22.82
------------- ------------- ------------- --------------- --------------- ------------
11/01/1995-06/30/1996 (1.60) 0.00 (1.60) 0.00 20.83 7.22
------------- ------------- ------------- --------------- --------------- ------------
Administrative Class
06/30/2000 0.00 0.00 0.00 0.00 13.12 15.70
------------- ------------- ------------- --------------- --------------- ------------
06/30/1999 0.00 (0.47) (0.47) 0.00 11.34 (15.26)
------------- ------------- ------------- --------------- --------------- ------------
06/30/1998 (1.88) 0.00 (1.88) 0.00 13.97 18.90
------------- ------------- ------------- --------------- --------------- ------------
06/30/1997 (10.59) 0.00 (10.59) 0.00 13.41 23.12
------------- ------------- ------------- --------------- --------------- ------------
11/01/1995-06/30/1996 (1.60) 0.00 (1.60) 0.00 20.82 7.18
------------- ------------- ------------- --------------- --------------- ------------
MICRO-CAP FUND
Institutional Class
06/30/2000 $ 0.00 $ 0.00 $ 0.00 $0.00 $25.12 25.60%
------------- ------------- ------------- --------------- --------------- ------------
06/30/1999 0.00 (0.63) (0.63) 0.00 20.00 (12.66)
------------- ------------- ------------- --------------- --------------- ------------
06/30/1998 (2.62) 0.00 (2.62) 0.00 23.66 33.95
------------- ------------- ------------- --------------- --------------- ------------
06/30/1997 (2.03) 0.00 (2.03) 0.00 19.85 20.05
------------- ------------- ------------- --------------- --------------- ------------
11/01/1995-06/30/1996 (0.34) 0.00 (0.34) 0.00 18.47 22.64
------------- ------------- ------------- --------------- --------------- ------------
Administrative Class
06/30/2000 0.00 0.00 0.00 0.00 24.83 25.28
------------- ------------- ------------- --------------- --------------- ------------
06/30/1999 0.00 (0.63) (0.63) 0.00 19.82 (12.91)
------------- ------------- ------------- --------------- --------------- ------------
06/30/1998 (2.62) 0.00 (2.62) 0.00 23.52 33.70
------------- ------------- ------------- --------------- --------------- ------------
06/30/1997 (2.03) 0.00 (2.03) 0.00 19.78 19.72
------------- ------------- ------------- --------------- --------------- ------------
04/01/1996-06/30/1996 0.00 0.00 0.00 0.00 18.46 10.34
------------- ------------- ------------- --------------- --------------- ------------
SMALL-CAP VALUE FUND
Institutional Class
06/30/2000 $ 0.00 $ 0.00 $ (0.34) $0.00 $14.26 (8.88)%
------------- ------------- ------------- --------------- --------------- ------------
06/30/1999 0.00 (0.45) (0.66) 0.00 16.05 (5.11)
------------- ------------- ------------- --------------- --------------- ------------
06/30/1998 (0.76) 0.00 (0.89) 0.00 17.68 17.77
------------- ------------- ------------- --------------- --------------- ------------
06/30/1997 (2.38) 0.00 (2.51) 0.00 15.78 31.99
------------- ------------- ------------- --------------- --------------- ------------
11/01/1995-06/30/1996 (0.74) 0.00 (0.95) 0.00 14.20 16.35
------------- ------------- ------------- --------------- --------------- ------------
Administrative Class
06/30/2000 0.00 0.00 (0.31) 0.00 14.19 (9.12)
------------- ------------- ------------- --------------- --------------- ------------
06/30/1999 0.00 (0.45) (0.65) 0.00 15.97 (5.40)
------------- ------------- ------------- --------------- --------------- ------------
06/30/1998 (0.76) 0.00 (0.87) 0.00 17.63 17.41
------------- ------------- ------------- --------------- --------------- ------------
06/30/1997 (2.38) 0.00 (2.50) 0.00 15.76 31.70
------------- ------------- ------------- --------------- --------------- ------------
11/01/1995-06/30/1996 (0.74) 0.00 (0.93) 0.00 14.20 15.64
------------- ------------- ------------- --------------- --------------- ------------
</TABLE>
<TABLE>
<CAPTION>
RATIO OF NET
SELECTED PER SHARE RATIO OF INVESTMENT
DATA FOR THE EXPENSES TO INCOME (LOSS) PORTFOLIO
YEAR OR PERIOD ENDED: NET ASSETS END AVERAGE NET TO AVERAGE TURNOVER
OF PERIOD (000S) ASSETS NET ASSETS RATE
---------------- ------------ ------------- --------
<S> <C> <C> <C> <C>
MID-CAP FUND
Institutional Class
06/30/2000 $ 582,715 0.71% 0.35% 164%
---------------- ------------ ------------- --------
06/30/1999 581,544 0.70 0.54 85
---------------- ------------ ------------- --------
06/30/1998 437,985 0.71 0.46 66
---------------- ------------ ------------- --------
06/30/1997 291,374 0.71 0.53 82
---------------- ------------ ------------- --------
11/01/1995-06/30/1996 231,011 0.70* 1.11* 79
---------------- ------------ ------------- --------
Administrative Class
06/30/2000 142,986 0.96 0.10 164
---------------- ------------ ------------- --------
06/30/1999 104,337 0.95 0.30 85
---------------- ------------ ------------- --------
06/30/1998 73,614 0.95 0.22 66
---------------- ------------ ------------- --------
06/30/1997 2,066 0.96 0.28 82
---------------- ------------ ------------- --------
11/01/1995-06/30/1996 1,071 0.95* 0.89* 79
---------------- ------------ ------------- --------
SMALL-CAP FUND
Institutional Class
06/30/2000 $ 34,338 1.26% (0.45)% 149%
---------------- ------------ ------------- --------
06/30/1999 66,393 1.25 (0.09) 94
---------------- ------------ ------------- --------
06/30/1998 47,641 1.26 (0.20) 77
---------------- ------------ ------------- --------
06/30/1997 33,390 1.32 (0.05) 129
---------------- ------------ ------------- --------
11/01/1995-06/30/1996 32,954 1.25* (0.20)* 59
---------------- ------------ ------------- --------
Administrative Class
06/30/2000 2,688 1.51 (0.67) 149
---------------- ------------ ------------- --------
06/30/1999 2,229 1.50 (0.33) 94
---------------- ------------ ------------- --------
06/30/1998 981 1.49 (0.51) 77
---------------- ------------ ------------- --------
06/30/1997 1 1.54 (0.36) 129
---------------- ------------ ------------- --------
11/01/1995-06/30/1996 112 1.50* (0.41)* 59
---------------- ------------ ------------- --------
MICRO-CAP FUND
Institutional Class
06/30/2000 $ 231,579 1.51% (0.90)% 85%
---------------- ------------ ------------- --------
06/30/1999 234,439 1.50 (0.71) 73
---------------- ------------ ------------- --------
06/30/1998 257,842 1.51 (0.50) 72
---------------- ------------ ------------- --------
06/30/1997 164,139 1.52 (0.49) 84
---------------- ------------ ------------- --------
11/01/1995-06/30/1996 83,973 1.50* (0.45)* 54
---------------- ------------ ------------- --------
Administrative Class
06/30/2000 7,208 1.76 (1.19) 85
---------------- ------------ ------------- --------
06/30/1999 3,000 1.75 (0.97) 73
---------------- ------------ ------------- --------
06/30/1998 4,779 1.76 (0.74) 72
---------------- ------------ ------------- --------
06/30/1997 2,116 1.77 (0.74) 84
---------------- ------------ ------------- --------
04/01/1996-06/30/1996 566 1.73* (0.74)* 54
---------------- ------------ ------------- --------
SMALL-CAP VALUE FUND
Institutional Class
06/30/2000 $ 30,059 0.86% 2.57% 55%
---------------- ------------ ------------- --------
06/30/1999 59,132 0.85 2.12 60
---------------- ------------ ------------- --------
06/30/1998 47,432 0.85 1.65 41
---------------- ------------ ------------- --------
06/30/1997 34,639 0.90 1.92 48
---------------- ------------ ------------- --------
11/01/1995-06/30/1996 29,017 0.85* 2.12* 35
---------------- ------------ ------------- --------
Administrative Class
06/30/2000 15,313 1.11 2.38 55
---------------- ------------ ------------- --------
06/30/1999 21,022 1.10 1.92 60
---------------- ------------ ------------- --------
06/30/1998 10,751 1.10 1.39 41
---------------- ------------ ------------- --------
06/30/1997 5,916 1.16 1.68 48
---------------- ------------ ------------- --------
11/01/1995-06/30/1996 4,433 1.10* 1.86* 35
---------------- ------------ ------------- --------
</TABLE>
SEE ACCOMPANYING NOTES 35
<PAGE>
FINANCIAL HIGHLIGHTS --
INSTITUTIONAL AND ADMINISTRATIVE CLASSES (CONT.)
<TABLE>
<CAPTION>
NET ASSET NET REALIZED/ TOTAL DIVIDENDS DIVIDENDS IN
VALUE UNREALIZED INCOME FROM FROM NET EXCESS OF NET
BEGINNING NET INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT INVESTMENT
OF PERIOD INCOME (LOSS) INVESTMENTS OPERATIONS INCOME INCOME
--------- -------------- -------------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
ENHANCED EQUITY FUND
Institutional Class
06/30/2000 $12.96 $0.07(a) $0.49(a) $0.56 $(0.07) $0.00
------------------------------------------- --------- -------------- -------------- ----------- ---------- -------------
06/30/1999 12.64 0.08(a) 1.91(a) 1.99 (0.06) 0.00
------------------------------------------- --------- -------------- -------------- ----------- ---------- -------------
06/30/1998 16.46 0.11(a) 3.91(a) 4.02 (0.11) 0.00
------------------------------------------- --------- -------------- -------------- ----------- ---------- -------------
06/30/1997 15.91 1.18 3.10 4.28 (0.10) 0.00
------------------------------------------- --------- -------------- -------------- ----------- ---------- -------------
11/01/1995-06/30/1996 14.44 0.34 1.67 2.01 (0.16) 0.00
------------------------------------------- --------- -------------- -------------- ----------- ---------- -------------
Administrative Class
06/30/2000 12.87 0.03(a) 0.53(a) 0.56 (0.05) 0.00
------------------------------------------- --------- -------------- -------------- ----------- ---------- -------------
06/30/1999 12.59 0.05(a) 1.90(a) 1.95 (0.06) 0.00
------------------------------------------- --------- -------------- -------------- ----------- ---------- -------------
08/21/1997-06/30/1998 17.53 0.05(a) 2.85(a) 2.90 (0.11) 0.00
------------------------------------------- --------- -------------- -------------- ----------- ---------- -------------
TAX-EFFICIENT EQUITY FUND
Institutional Class
07/02/1999 - 06/30/2000 $11.79 $0.05(a) $0.47(a) $(0.52) $0.00 $0.00
------------------------------------------- --------- -------------- -------------- ----------- ---------- -------------
Administrative Class
06/30/2000 11.61 0.02(a) 0.65(a) 0.67 0.00 0.00
------------------------------------------- --------- -------------- -------------- ----------- ---------- -------------
09/30/1998 - 06/30/1999 8.65 0.03(a) 2.93(a) 2.96 0.00 0.00
------------------------------------------- --------- -------------- -------------- ----------- ---------- -------------
STRUCTURED EMERGING MARKETS FUND
Institutional Class
06/30/2000 $12.42 $0.05(a) $0.81(a) $0.86 $(0.07) $0.00
------------------------------------------- --------- -------------- -------------- ----------- ---------- -------------
06/30/1999 10.00 0.15(a) 2.57(a) 2.72 (0.07) 0.00
------------------------------------------- --------- -------------- -------------- ----------- ---------- -------------
TAX-EFFICIENT STRUCTURED EMERGING MARKETS FUND
Institutional Class
06/30/2000 $13.25 $0.09(a) $0.89(a) $0.98 $(0.12) $0.00
------------------------------------------- --------- -------------- -------------- ----------- ---------- -------------
06/30/1999 10.00 0.16(a) 3.10(a) 3.26 (0.06) 0.00
------------------------------------------- --------- -------------- -------------- ----------- ---------- -------------
INTERNATIONAL FUND
Institutional Class
06/30/2000 $11.62 $0.08(a) $1.24(a) $1.32 $0.00 $0.00
------------------------------------------- --------- -------------- -------------- ----------- ---------- -------------
09/30/1998-06/30/1999 10.47 0.14(a) 2.16(a) 2.30 0.00 0.00
------------------------------------------- --------- -------------- -------------- ----------- ---------- -------------
Administrative Class
06/30/2000 11.56 0.04(a) 1.24(a) 1.28 0.00 0.00
------------------------------------------- --------- -------------- -------------- ----------- ---------- -------------
09/30/1998 - 06/30/1999 10.47 0.09(a) 2.15(a) 2.24 0.00 0.00
------------------------------------------- --------- -------------- -------------- ----------- ---------- -------------
NFJ EQUITY INCOME FUND
Institutional Class
05/08/2000 - 06/30/2000 $10.51 $0.06(a) $(0.66)(a) $(0.60) $(0.03) $0.00
------------------------------------------- --------- -------------- -------------- ----------- ---------- -------------
Administrative Class
05/08/2000 - 06/30/2000 10.50 0.07(a) (0.68)(a) (0.61) (0.02) 0.00
------------------------------------------- --------- -------------- -------------- ----------- ---------- -------------
NFJ VALUE FUND
Institutional Class
05/08/2000 - 06/30/2000 $11.22 $0.07(a) $(0.39)(a) $(0.32) $(0.05) $0.00
------------------------------------------- --------- -------------- -------------- ----------- ---------- -------------
</TABLE>
* Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
(b) Ratio of expenses to average net assets excluding tax and interest expense
is 0.95%.
(c) Ratio of expenses to average net assets excluding interest expense is 1.05%.
(d) Ratio of expenses to average net assets excluding interest expense is 1.30%.
36 SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS FUND NET ASSET
FROM NET IN EXCESS OF REIMBURSEMENT VALUE
REALIZED NET REALIZED TOTAL FEE ADDED TO END OF
CAPITAL GAINS CAPITAL GAINS DISTRIBUTIONS PAID-IN-CAPITAL PERIOD
------------- ------------- ------------- --------------- ---------
<S> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
ENHANCED EQUITY FUND
Institutional Class
06/30/2000 $(0.47) $0.00 $(0.54) $0.00 $12.98
----------------------------------------------------- ------------- ------------- ------------- --------------- ---------
06/30/1999 (1.61) 0.00 (1.67) 0.00 12.96
----------------------------------------------------- ------------- ------------- ------------- --------------- ---------
06/30/1998 (7.73) 0.00 (7.84) 0.00 12.64
----------------------------------------------------- ------------- ------------- ------------- --------------- ---------
06/30/1997 (3.63) 0.00 (3.73) 0.00 16.46
----------------------------------------------------- ------------- ------------- ------------- --------------- ---------
11/01/1995-06/30/1996 (0.38) 0.00 (0.54) 0.00 15.91
----------------------------------------------------- ------------- ------------- ------------- --------------- ---------
Administrative Class
06/30/2000 (0.47) 0.00 (0.52) 0.00 12.91
----------------------------------------------------- ------------- ------------- ------------- --------------- ---------
06/30/1999 (1.61) 0.00 (1.67) 0.00 12.87
----------------------------------------------------- ------------- ------------- ------------- --------------- ---------
08/21/1997-06/30/1998 (7.73) 0.00 (7.84) 0.00 12.59
----------------------------------------------------- ------------- ------------- ------------- --------------- ---------
TAX-EFFICIENT EQUITY FUND
Institutional Class
07/02/1999 - 06/30/2000 $0.00 $0.00 $0.00 $0.00 $12.31
----------------------------------------------------- ------------- ------------- ------------- --------------- ---------
Administrative Class
06/30/2000 0.00 0.00 0.00 0.00 12.28
----------------------------------------------------- ------------- ------------- ------------- --------------- ---------
09/30/1998 - 06/30/1999 0.00 0.00 0.00 0.00 11.61
----------------------------------------------------- ------------- ------------- ------------- --------------- ---------
STRUCTURED EMERGING MARKETS FUND
Institutional Class
06/30/2000 $(0.79) $0.00 $(0.86) $0.01(a) $12.43
----------------------------------------------------- ------------- ------------- ------------- --------------- ---------
06/30/1999 (0.28) 0.00 (0.35) 0.05(a) 12.42
----------------------------------------------------- ------------- ------------- ------------- --------------- ---------
TAX-EFFICIENT STRUCTURED EMERGING MARKETS FUND
Institutional Class
06/30/2000 $0.00 $0.00 $(0.12) $0.03(a) $14.14
----------------------------------------------------- ------------- ------------- ------------- --------------- ---------
06/30/1999 0.00 0.00 (0.06) 0.05(a) 13.25
----------------------------------------------------- ------------- ------------- ------------- --------------- ---------
INTERNATIONAL FUND
Institutional Class
06/30/2000 $(1.74) $0.00 $(1.74) $0.00 $11.20
----------------------------------------------------- ------------- ------------- ------------- --------------- ---------
09/30/1998-06/30/1999 (1.15) 0.00 (1.15) 0.00 11.62
----------------------------------------------------- ------------- ------------- ------------- --------------- ---------
Administrative Class
06/30/2000 (1.74) 0.00 (1.74) 0.00 11.10
----------------------------------------------------- ------------- ------------- ------------- --------------- ---------
09/30/1998 - 06/30/1999 (1.15) 0.00 (1.15) 0.00 11.56
----------------------------------------------------- ------------- ------------- ------------- --------------- ---------
NFJ EQUITY INCOME FUND
Institutional Class
05/08/2000 - 06/30/2000 $0.00 $0.00 $(0.03) $0.00 $9.88
----------------------------------------------------- ------------- ------------- ------------- --------------- ---------
Administrative Class
05/08/2000 - 06/30/2000 0.00 0.00 (0.02) 0.00 9.87
----------------------------------------------------- ------------- ------------- ------------- --------------- ---------
NFJ VALUE FUND
Institutional Class
05/08/2000 - 06/30/2000 $0.00 $0.00 $(0.05) $0.00 $10.85
----------------------------------------------------- ------------- ------------- ------------- --------------- ---------
<CAPTION>
RATIO OF NET
NET ASSETS RATIO OF INVESTMENT
END OF EXPENSES INCOME (LOSS) PORTFOLIO
TOTAL PERIOD TO AVERAGE TO AVERAGE TURNOVER
RETURN (000S) NET ASSETS NET ASSETS RATE
------ ---------- ---------- ------------- ---------
<S> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED:
ENHANCED EQUITY FUND
Institutional Class
06/30/2000 4.45% $20,338 0.71% 0.54% 20%
----------------------------------------------------- ------ ---------- ---------- ------------- ---------
06/30/1999 17.95 42,619 0.71 0.66 34
----------------------------------------------------- ------ ---------- ---------- ------------- ---------
06/30/1998 32.33 36,584 0.71 0.63 65
----------------------------------------------------- ------ ---------- ---------- ------------- ---------
06/30/1997 31.45 44,838 0.74 1.31 91
----------------------------------------------------- ------ ---------- ---------- ------------- ---------
11/01/1995-06/30/1996 14.21 83,425 0.70* 1.58* 53
----------------------------------------------------- ------ ---------- ---------- ------------- ---------
Administrative Class
06/30/2000 4.47 27,954 0.96 0.27 20
----------------------------------------------------- ------ ---------- ---------- ------------- ---------
06/30/1999 17.63 24,015 0.96 0.41 34
----------------------------------------------------- ------ ---------- ---------- ------------- ---------
08/21/1997-06/30/1998 23.85 10,409 0.95* 0.47* 65
----------------------------------------------------- ------ ---------- ---------- ------------- ---------
TAX-EFFICIENT EQUITY FUND
Institutional Class
07/02/1999 - 06/30/2000 4.41% $1,172 0.71%* 0.42%* 32%
----------------------------------------------------- ------ ---------- ---------- ------------- ---------
Administrative Class
06/30/2000 5.77 19,953 0.96 0.19 32
----------------------------------------------------- ------ ---------- ---------- ------------- ---------
09/30/1998 - 06/30/1999 34.28 3,391 0.92* 0.31* 13
----------------------------------------------------- ------ ---------- ---------- ------------- ---------
STRUCTURED EMERGING MARKETS FUND
Institutional Class
06/30/2000 6.64% $35,376 1.25%(b) 0.36% 24%
----------------------------------------------------- ------ ---------- ---------- ------------- ---------
06/30/1999 29.21 46,577 0.95 1.56 30
----------------------------------------------------- ------ ---------- ---------- ------------- ---------
TAX-EFFICIENT STRUCTURED EMERGING MARKETS FUND
Institutional Class
06/30/2000 7.55% $86,973 1.00%(b) 0.64% 24%
----------------------------------------------------- ------ ---------- ---------- ------------- ---------
06/30/1999 33.39 72,509 0.95 1.57 28
----------------------------------------------------- ------ ---------- ---------- ------------- ---------
INTERNATIONAL FUND
Institutional Class
06/30/2000 11.10% $6,463 1.13%(c) 0.66% 58%
----------------------------------------------------- ------ ---------- ---------- ------------- ---------
09/30/1998-06/30/1999 23.07 3,627 1.09* 1.70* 55
----------------------------------------------------- ------ ---------- ---------- ------------- ---------
Administrative Class
06/30/2000 10.78 18,059 1.38 (d) 0.34 58
----------------------------------------------------- ------ ---------- ---------- ------------- ---------
09/30/1998 - 06/30/1999 22.47 15,797 1.34* 1.06* 55
----------------------------------------------------- ------ ---------- ---------- ------------- ---------
NFJ EQUITY INCOME FUND
Institutional Class
05/08/2000 - 06/30/2000 (5.73)% $24,888 0.70%* 3.81%* 3%
----------------------------------------------------- ------ ---------- ---------- ------------- ---------
Administrative Class
05/08/2000 - 06/30/2000 (5.78) 4,638 0.95* 4.74* 3
----------------------------------------------------- ------ ---------- ---------- ------------- ---------
NFJ VALUE FUND
Institutional Class
05/08/2000 - 06/30/2000 (2.90)% $911 0.70%* 3.94%* 5%
----------------------------------------------------- ------ ---------- ---------- ------------- ---------
</TABLE>
SEE ACCOMPANYING NOTES 37
<PAGE>
Statements of Assets and Liabilities
June 30, 2000
<TABLE>
<CAPTION>
Amounts in thousands, EQUITY INCOME VALUE RENAISSANCE GROWTH SELECT GROWTH TARGET MID-CAP
except per share amounts FUND FUND FUND FUND FUND FUND EQUITY FUND
------------- ----------- ----------- ----------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value $ 69,612 $ 162,484 $ 476,042 $ 2,915,435 $ 16,975 $ 2,235,279 $ 4,912
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
Cash and foreign currency 0 855 0 449 1 1 0
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
Receivable for investments sold
and forward foreign currency
contracts 14,238 7,228 11,130 1,808 0 1,344 0
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
Receivable for Fund shares sold 230 143 389 13,661 656 18,800 0
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
Variation margin receivable 0 0 0 0 0 0 0
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
Interest and dividends receivable 166 415 1,700 316 1 227 6
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
Manager reimbursement receivable 0 0 0 0 0 0 0
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
Other assets 0 0 0 0 3 0 0
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
84,246 171,125 489,261 2,931,669 17,636 2,255,651 4,918
================================== =============== =========== =========== =========== ========= =========== ===========
LIABILITIES:
Payable for investments purchased
and forward foreign currency
contracts $ 0 $ 4,066 $ 6,251 $ 440 $ 722 $ 14,261 $ 0
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
Due to Custodian 13,997 0 0 0 0 0 0
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
Payable for Fund shares redeemed 245 683 3,214 8,545 14 7,160 0
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
Dividends payable 0 0 0 0 0 0 0
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
Accrued investment advisory fee 40 68 262 1,260 7 1,035 3
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
Accrued administration fee 28 52 174 997 5 750 1
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
Accrued distribution fee 18 55 274 1,703 3 1,205 0
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
Accrued servicing fee 9 28 109 626 3 468 0
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
Other liabilities 0 0 771 0 0 0 0
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
14,337 4,952 11,055 13,571 754 24,879 4
================================== =============== =========== =========== =========== ========= =========== ===========
NET ASSETS $ 69,909 $ 166,173 $ 478,206 $ 2,918,098 $ 16,882 $ 2,230,772 $ 4,914
================================== =============== =========== =========== =========== ========= =========== ===========
NET ASSETS CONSIST OF:
Paid in capital $ 89,276 $ 187,022 $ 473,353 $ 1,631,648 $ 15,879 $ 999,648 $ 2,677
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
Undistributed (overdistributed)
net investment income 41 94 24,138 0 0 200,449 1,352
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
Accumulated undistributed net
realized gain (loss) (20,959) (19,964) (12,862) 172,794 (162) 67,219 (27)
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
Net unrealized appreciation
(depreciation) 1,551 (979) (6,423) 1,113,656 1,165 963,456 912
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
$ 69,909 $ 166,173 $ 478,206 $ 2,918,098 $ 16,882 $ 2,230,772 $ 4,914
================================== =============== =========== =========== =========== ========= =========== ===========
NET ASSETS:
Institutional Class $ 28,812 $ 41,996 $ 6,394 $ 17,533 $ 2,613 $ 18,436 $ 4,914
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
Administrative Class 2,827 24,380 953 15,116 49 6,699 0
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
Other Classes 38,270 99,797 470,859 2,885,449 14,220 2,205,637 0
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
SHARES ISSUED AND OUTSTANDING:
Institutional Class 2,739 3,678 427 499 109 593 379
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
Administrative Class 268 2,147 64 432 2 214 0
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE (NET ASSETS
PER SHARE OUTSTANDING)
Institutional Class $ 10.54 $ 11.42 $ 14.97 $ 35.17 $ 24.02 $ 31.10 $ 12.98
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
Administrative Class 10.55 11.35 14.93 34.95 23.66 31.29 0
---------------------------------- --------------- ----------- ----------- ----------- --------- ----------- -----------
COST OF INVESTMENTS OWNED $ 68,061 $ 163,463 $ 482,466 $ 1,801,779 $ 15,811 $ 1,271,822 $ 4,000
================================== =============== =========== =========== =========== ========= =========== ===========
COST OF FOREIGN CURRENCY HELD $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
================================== =============== =========== =========== =========== ========= =========== ===========
</TABLE>
38 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
GLOBAL CAPITAL
Amounts in thousands, OPPORTUNITY INNOVATION INNOVATION INTERNATIONAL MEGA-CAP APPRECIATION MID-CAP
except per share amounts FUND FUND FUND GROWTH FUND FUND FUND FUND
----------- ----------- ---------- ------------- -------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value $ 630,937 $ 5,509,148 $ 105,626 $ 10,600 $ 4,090 $ 797,602 $ 1,082,233
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
Cash and foreign currency 1,364 2,127 1 0 1 3 1
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
Receivable for investments sold
and forward foreign currency
contracts 14,602 48,797 1,549 0 0 6,063 5,036
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
Receivable for Fund shares sold 7,519 29,514 3,208 0 0 400 5,544
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
Variation margin receivable 0 0 0 0 0 0 0
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
Interest and dividends receivable 53 175 4 19 1 444 618
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
Manager reimbursement receivable 0 0 13 0 16 0 0
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
Other assets 0 0 0 0 0 0 0
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
654,475 5,589,761 110,401 10,619 4,108 804,512 1,093,432
================================== =========== ============ ========== ============= ======== ============ ===========
LIABILITIES:
Payable for investments purchased
and forward foreign currency
contracts $ 28,745 $ 90,546 $ 5,399 $ 0 $ 89 $ 8,297 $ 14,258
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
Due to Custodian 0 0 0 66 0 0 0
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
Payable for Fund shares redeemed 5,792 11,780 60 0 0 1,693 2,074
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
Dividends payable 0 0 0 0 0 0 0
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
Accrued investment advisory fee 332 2,951 76 7 1 320 417
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
Accrued administration fee 200 1,731 45 5 1 209 279
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
Accrued distribution fee 266 2,468 39 0 0 96 125
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
Accrued servicing fee 121 1,129 19 0 0 87 103
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
Other liabilities 0 0 15 0 8 0 0
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
35,456 110,605 5,653 78 99 10,702 17,256
================================== =========== ============ ========== ============= ======== ============ ===========
NET ASSETS $ 619,019 $ 5,479,156 $ 104,748 $ 10,541 $ 4,009 $ 793,810 $ 1,076,176
================================== =========== ============ ========== ============= ======== ============ ===========
NET ASSETS CONSIST OF:
Paid in capital $ 399,557 $ 3,572,912 $ 94,489 $ 5,026 $ 3,001 $ 436,815 $ 629,783
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
Undistributed (overdistributed)
net investment income 101,853 170,220 522 2,569 162 125,087 174,578
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
Accumulated undistributed net
realized gain (loss) 4,947 50,831 (839) 509 (25) 67,446 85,334
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
Net unrealized appreciation
(depreciation) 112,662 1,685,193 10,576 2,437 871 164,462 186,481
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
$ 619,019 $ 5,479,156 $ 104,748 $ 10,541 $ 4,009 $ 793,810 $ 1,076,176
================================== =========== ============ ========== ============= ======== ============ ===========
NET ASSETS:
Institutional Class $ 39,205 $ 28,334 $ 403 $ 10,541 $ 4,009 $ 372,028 $ 582,715
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
Administrative Class 8,486 668 0 0 0 180,423 142,986
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
Other Classes 571,328 5,450,154 104,345 0 0 241,359 350,475
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
SHARES ISSUED AND OUTSTANDING:
Institutional Class 1,429 391 21 515 300 13,732 18,871
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
Administrative Class 309 9 0 0 0 6,722 4,657
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE (NET ASSETS
PER SHARE OUTSTANDING)
Institutional Class $ 27.43 $ 72.54 $ 18.96 $ 20.46 $ 13.35 $ 27.10 $ 30.88
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
Administrative Class 27.44 72.33 0.00 0.00 0.00 26.85 30.70
---------------------------------- ----------- ----------- ---------- ------------- -------- ------------ -----------
COST OF INVESTMENTS OWNED $ 518,275 $ 3,823,955 $ 95,050 $ 8,162 $ 3,219 $ 633,140 $ 895,751
================================== =========== ============ ========== ============= ======== ============ ===========
COST OF FOREIGN CURRENCY HELD $ 0 $ 0 $ 0 $ 6 $ 0 $ 0 $ 0
================================== =========== ============ ========== ============= ======== ============ ===========
<CAPTION>
Amounts in thousands, SMALL-CAP MICRO-CAP SMALL-CAP
except per share amounts FUND FUND VALUE FUND
--------- ---------- ---------
<S> <C> <C> <C>
ASSETS:
Investments, at value $ 37,807 $ 238,086 $282,407
---------------------------------- --------- ---------- ---------
Cash and foreign currency 0 1 121
---------------------------------- --------- ---------- ---------
Receivable for investments sold
and forward foreign currency
contracts 548 635 4,456
---------------------------------- --------- ---------- ---------
Receivable for Fund shares sold 0 278 666
---------------------------------- --------- ---------- ---------
Variation margin receivable 0 0 0
---------------------------------- --------- ---------- ---------
Interest and dividends receivable 24 91 917
---------------------------------- --------- ---------- ---------
Manager reimbursement receivable 0 0 0
---------------------------------- --------- ---------- ---------
Other assets 0 0 0
---------------------------------- --------- ---------- ---------
38,379 239,091 288,567
================================== ========= ========== =========
LIABILITIES:
Payable for investments purchased
and forward foreign currency
contracts $ 1,305 $ 0 $ 1,851
---------------------------------- --------- ---------- ---------
Due to Custodian 0 0 0
---------------------------------- --------- ---------- ---------
Payable for Fund shares redeemed 8 2 1,362
---------------------------------- --------- ---------- ---------
Dividends payable 0 0 0
---------------------------------- --------- ---------- ---------
Accrued investment advisory fee 31 251 155
---------------------------------- --------- ---------- ---------
Accrued administration fee 8 50 96
---------------------------------- --------- ---------- ---------
Accrued distribution fee 0 0 84
---------------------------------- --------- ---------- ---------
Accrued servicing fee 1 1 57
---------------------------------- --------- ---------- ---------
Other liabilities 0 0 0
---------------------------------- --------- ---------- ---------
1,353 304 3,605
================================== ========= ========== =========
NET ASSETS $ 37,026 $ 238,787 $284,962
================================== ========= ========== =========
NET ASSETS CONSIST OF:
Paid in capital $ 29,026 $ 146,992 $350,266
---------------------------------- --------- ---------- ---------
Undistributed (overdistributed)
net investment income 1,003 0 3,998
---------------------------------- --------- ---------- ---------
Accumulated undistributed net
realized gain (loss) 1,006 16,203 (10,644)
---------------------------------- --------- ---------- ---------
Net unrealized appreciation
(depreciation) 5,991 75,592 (58,658)
---------------------------------- --------- ---------- ---------
$ 37,026 $ 238,787 $284,962
================================== ========= ========== =========
NET ASSETS:
Institutional Class $ 34,338 $ 231,579 $30,059
---------------------------------- --------- ---------- ---------
Administrative Class 2,688 7,208 15,313
---------------------------------- --------- ---------- ---------
Other Classes 0 0 239,590
---------------------------------- --------- ---------- ---------
SHARES ISSUED AND OUTSTANDING:
Institutional Class 2,597 9,221 2,109
---------------------------------- --------- ---------- ---------
Administrative Class 205 290 1,079
---------------------------------- --------- ---------- ---------
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE (NET ASSETS
PER SHARE OUTSTANDING)
Institutional Class $ 13.22 $ 25.12 $14.26
---------------------------------- --------- ---------- ---------
Administrative Class 13.12 24.83 14.19
---------------------------------- --------- ---------- ---------
COST OF INVESTMENTS OWNED $ 31,816 $ 162,494 $341,065
================================== ========= ========== =========
COST OF FOREIGN CURRENCY HELD $ 0 $ 0 $ 0
================================== ========= ========== =========
</TABLE>
SEE ACCOMPANYING NOTES 39
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES (CONT.)
JUNE 30, 2000
<TABLE>
<CAPTION>
STRUCTURED TAX-EFFICIENT
ENHANCED TAX-EFFICIENT EMERGING STRUCTURED NFJ EQUITY
Amounts in thousands, EQUITY EQUITY MARKETS EMERGING INTERNATIONAL INCOME NFJ VALUE
except per share amounts FUND FUND FUND MARKETS FUND FUND FUND FUND
--------- ------------- ---------- ------------ ----------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value $ 48,298 $ 56,844 $ 35,054 $ 85,889 $ 136,414 $ 30,051 $ 895
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
Cash and foreign currency 1 1 293 1,106 721 1 5
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
Receivable for investments sold
and forward foreign currency contracts 0 0 74 191 1,290 0 32
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
Receivable for Fund shares sold 0 35 0 0 1,064 1 0
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
Variation margin receivable 0 0 0 0 67 0 0
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
Interest and dividends receivable 29 37 88 193 268 42 2
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
Manager reimbursement receivable 0 0 0 0 0 0 0
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
Other assets 0 0 0 0 40 0 0
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
48,328 56,917 35,509 87,379 139,864 30,095 934
==================================================================================================================================
LIABILITIES:
Payable for investments purchased
and forward foreign currency contracts $ 0 $ 0 $ 25 $ 205 $ 0 $ 555 $ 23
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
Due to Custodian 0 0 0 0 0 0 0
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
Payable for Fund shares redeemed 1 42 0 0 240 0 0
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
Dividends payable 0 0 0 0 0 0 0
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
Accrued investment advisory fee 19 22 14 35 68 8 0
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
Accrued administration fee 10 17 16 38 77 4 0
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
Accrued distribution fee 0 17 0 0 69 0 0
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
Accrued servicing fee 6 12 0 0 29 2 0
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
Other liabilities 0 0 78 128 11 0 0
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
36 110 133 406 494 569 23
=========================================== ========= ========= ========= ========= ========= ========= ========
NET ASSETS $ 48,292 $ 56,807 $ 35,376 $ 86,973 $ 139,370 $ 29,526 $ 911
=========================================== ========= ========= ========= ========= ========= ========= ========
NET ASSETS CONSIST OF:
Paid in capital $ 28,632 $ 50,323 $ 26,528 $ 94,423 $ 110,463 $ 31,509 $ 946
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
Undistributed (overdistributed)
net investment income 88 0 92 77 2,305 19 19
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
Accumulated undistributed net
realized gain (loss) 6,325 (4,080) 4,999 (16,528) 8,485 (35) 0
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
Net unrealized appreciation (depreciation) 13,247 10,564 3,757 9,001 18,117 (1,967) (54)
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
$ 48,292 $ 56,807 $ 35,376 $ 86,973 $ 139,370 $ 29,526 $ 911
=========================================== ========= ========= ========= ========= ========= ========= ========
NET ASSETS:
Institutional Class $ 20,338 $ 1,172 $ 35,376 $ 86,973 $ 6,463 $ 24,888 $ 911
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
Administrative Class 27,954 19,953 0 0 18,059 4,638 0
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
Other Classes 0 35,682 0 0 114,848 0 0
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
SHARES ISSUED AND OUTSTANDING:
Institutional Class 1,567 95 2,846 6,151 577 2,520 84
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
Administrative Class 2,165 1,625 0 0 1,627 470 0
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE (NET ASSETS PER SHARE OUTSTANDING)
Institutional Class $ 12.98 $ 12.31 $ 12.43 $ 14.14 $ 11.20 $ 9.88 $ 10.85
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
Administrative Class 12.91 12.28 0.00 0.00 11.10 9.87 0.00
------------------------------------------- --------- --------- --------- --------- --------- --------- --------
COST OF INVESTMENTS OWNED $ 35,051 $ 46,280 $ 31,229 $ 76,782 $ 118,150 $ 32,018 $ 949
=========================================== ========= ========= ========= ========= ========= ========= ========
COST OF FOREIGN CURRENCY HELD $ 0 $ 0 $ 49 $ 833 $ 0 $ 0 $ 0
=========================================== ========= ========= ========= ========= ========= ========= ========
</TABLE>
40 SEE ACCOMPANYING NOTES
<PAGE>
STATEMENTS OF OPERATIONS
FOR THE YEAR OR PERIOD ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
EQUITY SELECT MID-CAP
INCOME VALUE RENAISSANCE GROWTH GROWTH TARGET EQUITY
Amounts in thousands FUND FUND FUND FUND FUND FUND FUND
---------- ---------- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends, net of foreign taxes $ 5,956 $ 5,492 $ 7,624 $ 9,034 $ 13 $ 1,148 $ 19
---------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Interest and other income 130 373 983 1,165 26 3,681 10
---------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Total Income 6,086 5,865 8,607 10,199 39 4,829 29
================================== ========== ========== ========== ========== ========== ========== =========
EXPENSES:
Investment advisory fees 699 909 3,279 13,318 20 9,096 32
---------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Administration fees 463 678 2,185 10,492 11 6,594 13
---------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Distribution and/or servicing
fees - Administrative Class 25 56 2 33 0 17 0
---------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Distribution and/or servicing
fees - Other Classes 393 1,008 4,886 24,568 10 14,680 0
---------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Trustees' fees 11 14 38 174 0 99 0
---------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Organization costs 0 0 0 0 0 0 0
---------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Interest expense 28 9 30 309 1 78 7
---------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Total Expenses 1,619 2,674 10,420 48,894 42 30,564 52
---------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Reimbursement by manager 0 0 0 0 0 0 0
---------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Net Expenses 1,619 2,674 10,420 48,894 42 30,564 52
---------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
NET INVESTMENT INCOME (LOSS) 4,467 3,191 (1,813) (38,695) (3) (25,735) (23)
================================== ========== ========== ========== ========== ========== ========== =========
NET REALIZED AND UNREALIZED
GAIN (LOSS):
Net realized gain (loss)
on investments (14,073) (4,356) 30,824 200,296 11 303,095 2,580
---------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Net realized gain (loss) on
foreign currency transactions 0 0 8 0 0 0 0
---------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Net change in unrealized
appreciation (depreciation) on
investments (17,836) (19,409) (29,437) 540,201 989 731,179 (469)
---------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Net change in unrealized
appreciation (depreciation) on
futures contracts and written
options 0 0 0 0 0 0 0
---------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Net change in unrealized
appreciation (depreciation) on
translation of assets and
liabilities denominated in
foreign currencies 0 0 2 0 0 0 0
---------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Net Gain (Loss) (31,909) (23,765) 1,397 740,497 1,000 1,034,274 2,111
---------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
NET INCREASE (DECREASE) IN ASSETS
RESULTING FROM OPERATIONS $ (27,442) $ (20,574) $ (416) $ 701,802 $ 997 $1,008,539 $ 2,088
================================== ========== ========== ========== ========== ========== ========== =========
</TABLE>
SEE ACCOMPANYING NOTES 41
<PAGE>
STATEMENTS OF OPERATIONS (CONT.)
FOR THE YEAR OR PERIOD ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
GLOBAL INTERNATIONAL CAPITAL
OPPORTUNITY INNOVATION INNOVATION GROWTH MEGA-CAP APPRECIATION MID-CAP
Amounts in thousands FUND FUND FUND FUND FUND FUND FUND
---------- ---------- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends, net of foreign taxes $ 1,018 $ 859 $ 4 $ 102 $ 14 $ 7,801 $ 8,527
----------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Interest and other income 1,646 11,772 159 33 8 1,518 2,298
----------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Total Income 2,664 12,631 163 135 22 9,319 10,825
=================================== ========== ========== ========== ========== ========== ========== =========
EXPENSES:
Investment advisory fees 3,486 21,684 158 97 13 4,181 4,609
----------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Administration fees 2,117 12,860 100 58 8 2,654 3,041
----------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Distribution and/or servicing
fees - Administrative Class 19 0 0 0 0 514 292
----------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Distribution and/or servicing
fees - Other Classes 4,165 26,637 116 0 0 1,574 2,163
----------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Trustees' fees 34 180 0 1 0 65 67
----------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Organization costs 0 0 15 0 16 0 0
----------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Tax expense 0 0 0 2 0 0 0
----------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Interest expense 32 82 0 2 0 32 18
----------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Total Expenses 9,853 61,443 389 160 37 9,020 10,190
----------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Reimbursement by manager 0 0 (13) 0 (16) 0 0
----------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Net Expenses 9,853 61,443 376 160 21 9,020 10,190
----------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
NET INVESTMENT INCOME (LOSS) (7,189) (48,812) (213) (25) 1 299 635
=================================== ========== ========== ========== ========== ========== ========== =========
NET REALIZED AND UNREALIZED
GAIN (LOSS):
Net realized gain (loss)
on investments 153,791 503,921 (104) 3,522 137 238,387 263,486
----------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Net realized gain (loss) on
foreign currency transactions 0 0 0 1 0 0 0
----------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Net change in unrealized
appreciation (depreciation) on
investments 55,969 1,278,026 10,576 1,078 871 (57,892) 39,729
----------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Net change in unrealized
appreciation (depreciation) on
futures contracts and written
options 0 0 0 0 0 0 0
----------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Net change in unrealized
appreciation (depreciation) on
translation of assets and
liabilities denominated in
foreign currencies 0 0 0 1 0 0 0
----------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Net Gain (Loss) 209,760 1,781,947 10,472 4,602 1,008 180,495 303,215
----------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
NET INCREASE (DECREASE) IN ASSETS
RESULTING FROM OPERATIONS $ 202,571 $1,733,135 $ 10,259 $ 4,577 $ 1,009 $ 180,794 $ 303,850
=================================== ========== ========== ========== ========== ========== ========== =========
42 SEE ACCOMPANYING NOTES
<PAGE>
<CAPTION>
SMALL-CAP MICRO-CAP SMALL-CAP ENHANCED TAX-EFFICIENT
Amounts in thousands FUND FUND VALUE FUND EQUITY FUND EQUITY FUND
----------- ----------- ---------- ----------- --------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends, net of foreign taxes $ 326 $ 855 $ 11,104 $ 744 $ 551
-------------------------------------- ----------- ----------- ---------- ----------- -----------
Interest and other income 142 516 408 19 22
-------------------------------------- ----------- ----------- ---------- ----------- -----------
Total Income 468 1,371 11,512 763 573
====================================== =========== =========== ========== =========== ===========
EXPENSES:
Investment advisory fees 578 2,796 1,978 276 227
-------------------------------------- ----------- ----------- ---------- ----------- -----------
Administration fees 145 559 1,233 153 174
-------------------------------------- ----------- ----------- ---------- ----------- -----------
Distribution and/or servicing
fees - Administrative Class 6 11 42 67 43
-------------------------------------- ----------- ----------- ---------- ----------- -----------
Distribution and/or servicing
fees - Other Classes 0 0 1,878 0 260
-------------------------------------- ----------- ----------- ---------- ----------- -----------
Trustees' fees 4 15 23 4 3
-------------------------------------- ----------- ----------- ---------- ----------- -----------
Organization costs 0 0 0 0 0
-------------------------------------- ----------- ----------- ---------- ----------- -----------
Tax expense 0 0 0 0 0
-------------------------------------- ----------- ----------- ---------- ----------- -----------
Interest expense 1 10 9 3 3
-------------------------------------- ----------- ----------- ---------- ----------- -----------
Total Expenses 734 3,391 5,163 503 710
-------------------------------------- ----------- ----------- ---------- ----------- -----------
Reimbursement by manager 0 0 0 0 0
-------------------------------------- ----------- ----------- ---------- ----------- -----------
Net Expenses 734 3,391 5,163 503 710
-------------------------------------- ----------- ----------- ---------- ----------- -----------
NET INVESTMENT INCOME (LOSS) (266) (2,020) 6,349 260 (137)
====================================== =========== =========== ========== =========== ===========
NET REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized gain (loss) on
investments 12,400 25,525 1,428 6,329 (3,852)
-------------------------------------- ----------- ----------- ---------- ----------- -----------
Net realized gain (loss) on
foreign currency transactions 0 0 0 0 0
-------------------------------------- ----------- ----------- ---------- ----------- -----------
Net change in unrealized
appreciation (depreciation) on
investments (4,835) 27,726 (50,343) (5,070) 7,274
-------------------------------------- ----------- ----------- ---------- ----------- -----------
Net change in unrealized
appreciation (depreciation) on
futures contracts and written
options 0 0 0 0 0
-------------------------------------- ----------- ----------- ---------- ----------- -----------
Net change in unrealized
appreciation (depreciation) on
translation of assets and
liabilities denominated in
foreign currencies 0 0 0 0 0
-------------------------------------- ----------- ----------- ---------- ----------- -----------
Net Gain (Loss) 7,565 53,251 (48,915) 1,259 3,422
-------------------------------------- ----------- ----------- ---------- ----------- -----------
NET INCREASE (DECREASE) IN ASSETS
RESULTING FROM OPERATIONS $ 7,299 $ 51,231 $ (42,566) $ 1,519 $ 3,285
====================================== =========== =========== ========== =========== ===========
<CAPTION>
TAX-EFFICIENT
STRUCTURED STRUCTURED
EMERGING EMERGING INTERNATIONAL NFJ EQUITY NFJ VALUE
Amounts in thousands MARKETS FUND MARKETS FUND FUND INCOME FUND FUND
------------ ------------- ------------- ----------- ---------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends, net of foreign taxes $ 728 $ 1,399 $ 1,744 $ 92 $ 5
-------------------------------------- ----------- ----------- ----------- ----------- -----------
Interest and other income 21 50 603 29 1
-------------------------------------- ----------- ----------- ----------- ----------- -----------
Total Income 749 1,449 2,347 121 6
====================================== =========== =========== =========== =========== ===========
EXPENSES:
Investment advisory fees 210 399 812 11 1
-------------------------------------- ----------- ----------- ----------- ----------- -----------
Administration fees 234 444 927 6 0
-------------------------------------- ----------- ----------- ----------- ----------- -----------
Distribution and/or servicing
fees - Administrative Class 0 0 42 2 0
-------------------------------------- ----------- ----------- ----------- ----------- -----------
Distribution and/or servicing
fees - Other Classes 0 0 1,145 0 0
-------------------------------------- ----------- ----------- ----------- ----------- -----------
Trustees' fees 13 6 10 0 0
-------------------------------------- ----------- ----------- ----------- ----------- -----------
Organization costs 0 0 0 0 0
-------------------------------------- ----------- ----------- ----------- ----------- -----------
Tax expense 110 28 0 0 0
-------------------------------------- ----------- ----------- ----------- ----------- -----------
Interest expense 14 8 114 0 0
-------------------------------------- ----------- ----------- ----------- ----------- -----------
Total Expenses 581 885 3,050 19 1
-------------------------------------- ----------- ----------- ----------- ----------- -----------
Reimbursement by manager 0 0 0 0 0
-------------------------------------- ----------- ----------- ----------- ----------- -----------
Net Expenses 581 885 3,050 19 1
-------------------------------------- ----------- ----------- ----------- ----------- -----------
NET INVESTMENT INCOME (LOSS) 168 564 (703) 102 5
====================================== =========== =========== =========== =========== ===========
NET REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized gain (loss) on
investments 7,052 (6,140) 18,635 (35) 18
-------------------------------------- ----------- ----------- ----------- ----------- -----------
Net realized gain (loss) on
foreign currency transactions (106) (78) (476) 0 0
-------------------------------------- ----------- ----------- ----------- ----------- -----------
Net change in unrealized
appreciation (depreciation) on
investments (1,580) 10,663 3,260 (1,967) (54)
-------------------------------------- ----------- ----------- ----------- ----------- -----------
Net change in unrealized
appreciation (depreciation) on
futures contracts and written
options 0 0 (60) 0 0
-------------------------------------- ----------- ----------- ----------- ----------- -----------
Net change in unrealized
appreciation (depreciation) on
translation of assets and
liabilities denominated in
foreign currencies 1 1 149 0 0
-------------------------------------- ----------- ----------- ----------- ----------- -----------
Net Gain (Loss) 5,367 4,446 21,508 (2,002) (36)
-------------------------------------- ----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN ASSETS
RESULTING FROM OPERATIONS $ 5,535 $ 5,010 $ 20,805 $ (1,900) $ (31)
====================================== =========== =========== =========== =========== ===========
</TABLE>
SEE ACCOMPANYING NOTES 43
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
EQUITY INCOME FUND VALUE FUND RENAISSANCE FUND
---------------------------- ---------------------------- ----------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
Amounts in thousands June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income (loss) $ 4,467 $ 5,424 $ 3,191 $ 3,245 $ (1,813) $ (4,312)
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Net realized gain (loss) (14,073) 28,130 (4,356) 29,420 30,832 100,928
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Net change in unrealized appreciation
(depreciation) (17,836) (8,864) (19,409) (6,992) (29,435) (42,518)
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Net increase (decrease) resulting from
operations (27,442) 24,690 (20,574) 25,673 (416) 54,098
======================================== ========= ========= ========= ========= ========== =========
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Institutional Class (3,008) (3,796) (1,501) (1,539) 0 0
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Administrative Class (290) (331) (493) (310) 0 0
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Other Classes (1,272) (1,192) (1,286) (1,228) 0 0
---------------------------------------- --------- --------- --------- --------- ---------- ---------
In excess of net investment income
Institutional Class 0 0 0 0 0 0
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Administrative Class 0 0 0 0 0 0
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Other Classes 0 0 0 0 0 0
---------------------------------------- --------- --------- --------- --------- ---------- ---------
From net realized capital gains
Institutional Class (3,494) (15,114) (3,045) (9,693) (20) (11)
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Administrative Class (401) (1,194) (836) (1,646) (98) (25)
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Other Classes (1,877) (6,359) (4,750) (14,992) (84,101) (80,825)
---------------------------------------- --------- --------- --------- --------- ---------- ---------
In excess of net realized capital gains
Institutional Class (15,594) 0 (10,628) 0 (6) 0
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Administrative Class (1,789) 0 (2,918) 0 (33) 0
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Other Classes (8,379) 0 (16,578) 0 (28,140) 0
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Tax basis return of capital
Institutional Class 0 0 0 0 0 0
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Administrative Class 0 0 0 0 0 0
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Other Classes 0 0 0 0 0 0
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Total Distributions (36,104) (27,986) (42,035) (29,408) (112,398) (80,861)
======================================== ========= ========= ========= ========= ========== =========
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Institutional Class 12,519 28,202 33,916 19,355 8,314 105
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Administrative Class 2,575 7,079 14,601 14,684 869 1,000
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Other Classes 17,019 38,810 50,168 65,101 212,839 305,834
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Issued in reorganization
Institutional Class 0 0 0 0 0 0
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Other Classes 0 0 1,373 0 0 0
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Issued as reinvestment of distributions
Institutional Class 21,995 18,538 14,905 11,141 25 0
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Administrative Class 2,476 1,521 4,210 1,950 131 25
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Other Classes 10,793 7,112 20,851 14,980 103,507 74,634
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Cost of shares redeemed
Institutional Class (90,772) (59,589) (52,577) (43,290) (1,924) (744)
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Administrative Class (11,529) (6,530) (12,122) (4,695) (372) (634)
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Other Classes (33,626) (31,549) (78,181) (83,212) (392,194) (350,656)
---------------------------------------- --------- --------- --------- --------- ---------- ---------
Net increase (decrease) resulting from
Fund share transactions (68,550) 3,594 (2,856) (3,986) (68,805) 29,564
---------------------------------------- --------- --------- --------- --------- ---------- ---------
FUND REIMBURSEMENT FEE: 0 0 0 0 0 0
======================================== ========= ========= ========= ========= ========== =========
TOTAL INCREASE (DECREASE) IN NET ASSETS (132,096) 298 (65,465) (7,721) (181,619) 2,801
======================================== ========= ========= ========= ========= ========== =========
NET ASSETS:
Beginning of period 202,005 201,707 231,638 239,359 659,825 657,024
---------------------------------------- --------- --------- --------- --------- ---------- ---------
End of period * $ 69,909 $ 202,005 $ 166,173 $ 231,638 $ 478,206 $ 659,825
---------------------------------------- --------- --------- --------- --------- ---------- ---------
*Including net undistributed
(overdistributed) investment income of: $ 41 $ 4,946 $ 94 $ 10,727 $ 24,138 $ 41,268
---------------------------------------- --------- --------- --------- --------- ---------- ---------
</TABLE>
44 SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
GROWTH FUND SELECT GROWTH FUND TARGET FUND
---------------------------- ---------------------------- ----------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
Amounts in thousands June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income (loss) $ (38,695) $ (24,048) $ (3) $ (125) $ (25,735) $ (12,880)
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Net realized gain (loss) 200,296 413,535 11 47,076 303,095 124,994
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Net change in unrealized appreciation
(depreciation) 540,201 (30,494) 989 (29,090) 731,179 38,44
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Net increase (decrease) resulting from
operations 701,802 358,993 997 17,861 1,008,539 150,558
======================================== ========== ========== ========== ========== ========== ===========
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Institutional Class 0 0 0 0 0 0
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Administrative Class 0 0 0 0 0 0
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Other Classes 0 0 0 0 0 0
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
In excess of net investment income
Institutional Class 0 0 (1) 0 0 0
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Administrative Class 0 0 0 0 0 0
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Other Classes 0 0 0 0 0 0
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
From net realized capital gains
Institutional Class (553) 0 (138) (59) (319) 0
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Administrative Class (2,231) 0 (3) (5,514) (555) 0
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Other Classes (399,708) (263,490) 0 0 (120,196) (68,199)
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
In excess of net realized capital gains
Institutional Class 0 0 0 0 0 0
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Administrative Class 0 0 0 0 0 0
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Other Classes 0 0 0 0 0 0
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Tax basis return of capital
Institutional Class 0 0 (66) 0 0 0
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Administrative Class 0 0 (3) 0 0 0
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Other Classes 0 0 0 0 0 0
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Total Distributions (402,492) (263,490) (211) (5,573) (121,070) (68,199)
======================================== ========== ========== ========== ========== ========== ===========
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Institutional Class 17,297 1,212 2,457 1,782 16,723 1,265
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Administrative Class 11,200 6,217 47 34,758 2,172 5,508
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Other Classes 1,549,439 1,197,934 13,646 0 2,464,150 1,337,208
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Issued in reorganization
Institutional Class 0 0 0 0 0 0
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Other Classes 0 0 0 0 0 0
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Issued as reinvestment of distributions
Institutional Class 553 0 193 57 319 0
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Administrative Class 2,231 0 3 5,514 555 0
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Other Classes 371,315 246,482 0 0 110,776 64,479
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Cost of shares redeemed
Institutional Class (1,353) (268) (1,304) (2,912) (2,721) (36)
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Administrative Class (6,359) (288) (14) (180,869) (5,556) (275)
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Other Classes (1,758,585) (1,227,582) (131) 0 (2,409,356) (1,510,466
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
Net increase (decrease) resulting from
Fund share transactions 185,738 223,707 14,897 (141,670) 177,062 (102,317)
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
FUND REIMBURSEMENT FEE: 0 0 0 0 0 0
======================================== ========== ========== ========== ========== ========== ===========
TOTAL INCREASE (DECREASE) IN NET ASSETS 485,048 319,210 15,683 (129,382) 1,064,531 (19,958)
======================================== ========== ========== ========== ========== ========== ===========
NET ASSETS:
Beginning of period 2,433,050 2,113,840 1,199 130,581 1,166,241 1,186,199
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
End of period * $2,918,098 $2,433,050 $ 16,882 $ 1,199 $2,230,772 $ 1,166,241
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
*Including net undistributed
(overdistributed) investment income of: $ 0 $ 1 $ 0 $ 0 $ 200,449 $ 67,742
---------------------------------------- ---------- ---------- ---------- ---------- ---------- -----------
<CAPTION>
MID-CAP EQUITY FUND OPPORTUNITY FUND
---------------------------- ----------------------------
Year Ended Year Ended Year Ended Year Ended
Amounts in thousands June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income (loss) $ (23) $ (33) $ (7,189) $ (6,871)
---------------------------------------- ---------- ---------- --------- ----------
Net realized gain (loss) 2,580 2,964 153,791 92,947
---------------------------------------- ---------- ---------- --------- ----------
Net change in unrealized appreciation
(depreciation) (469) (130) 55,969 (86,017)
---------------------------------------- ---------- ---------- --------- ----------
Net increase (decrease) resulting from
operations 2,088 2,801 202,571 59
======================================== ========== ========== ========= ==========
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Institutional Class 0 0 0 0
---------------------------------------- ---------- ---------- --------- ----------
Administrative Class 0 0 0 0
---------------------------------------- ---------- ---------- --------- ----------
Other Classes 0 0 0 0
---------------------------------------- ---------- ---------- --------- ----------
In excess of net investment income
Institutional Class 0 0 0 0
---------------------------------------- ---------- ---------- --------- ----------
Administrative Class 0 0 0 0
---------------------------------------- ---------- ---------- --------- ----------
Other Classes 0 0 0 0
---------------------------------------- ---------- ---------- --------- ----------
From net realized capital gains
Institutional Class (2,734) (425) (1,540) 0
---------------------------------------- ---------- ---------- --------- ----------
Administrative Class 0 (168) (1,965) 0
---------------------------------------- ---------- ---------- --------- ----------
Other Classes 0 0 (122,163) (88,374)
---------------------------------------- ---------- ---------- --------- ----------
In excess of net realized capital gains
Institutional Class (142) 0 0 0
---------------------------------------- ---------- ---------- --------- ----------
Administrative Class 0 0 0 0
---------------------------------------- ---------- ---------- --------- ----------
Other Classes 0 0 0 0
---------------------------------------- ---------- ---------- --------- ----------
Tax basis return of capital
Institutional Class 0 0 0 0
---------------------------------------- ---------- ---------- --------- ----------
Administrative Class 0 0 0 0
---------------------------------------- ---------- ---------- --------- ----------
Other Classes 0 0 0 0
---------------------------------------- ---------- ---------- --------- ----------
Total Distributions (2,876) (593) (125,668) (88,374)
======================================== ========== ========== ========= ==========
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Institutional Class 2,235 1,457 37,684 428
---------------------------------------- ---------- ---------- --------- ----------
Administrative Class 0 2,607 6,173 1,990
---------------------------------------- ---------- ---------- --------- ----------
Other Classes 0 0 700,026 1,722,778
---------------------------------------- ---------- ---------- --------- ----------
Issued in reorganization
Institutional Class 0 0 0 0
---------------------------------------- ---------- ---------- --------- ----------
Other Classes 0 0 0 0
---------------------------------------- ---------- ---------- --------- ----------
Issued as reinvestment of distributions
Institutional Class 1,370 184 1,540 0
---------------------------------------- ---------- ---------- --------- ----------
Administrative Class 0 168 1,964 0
---------------------------------------- ---------- ---------- --------- ----------
Other Classes 0 0 113,143 81,564
---------------------------------------- ---------- ---------- --------- ----------
Cost of shares redeemed
Institutional Class (5,302) (4,344) (608) (38)
---------------------------------------- ---------- ---------- --------- ----------
Administrative Class 0 (5,740) (2,767) (101)
---------------------------------------- ---------- ---------- --------- ----------
Other Classes 0 0 (748,101) (1,986,190)
---------------------------------------- ---------- ---------- --------- ----------
Net increase (decrease) resulting from
Fund share transactions (1,697) (5,668) 109,054 (179,569)
---------------------------------------- ---------- ---------- --------- ----------
FUND REIMBURSEMENT FEE: 0 0 0 0
======================================== ========== ========== ========= ==========
TOTAL INCREASE (DECREASE) IN NET ASSETS (2,485) (3,460) 185,957 (267,884)
======================================== ========== ========== ========= ==========
NET ASSETS:
Beginning of period 7,399 10,859 433,062 700,946
---------------------------------------- ---------- ---------- --------- ----------
End of period * $ 4,914 $ 7,399 $ 619,019 $ 433,062
---------------------------------------- ---------- ---------- --------- ----------
*Including net undistributed
(overdistributed) investment income of: $ 1,352 $ 2,766 $ 101,853 $ 12,827
---------------------------------------- ---------- ---------- --------- ----------
</TABLE>
SEE ACCOMPANYING NOTES 45
<PAGE>
Statements of Changes in Net Assets (Cont.)
<TABLE>
<CAPTION>
GLOBAL
INNOVATION MEGA-CAP
Amounts in thousands INNOVATION FUND FUND INTERNATIONAL GROWTH FUND FUND
----------------------------- ----------------- ----------------------------- ----------------
Period from Period from
INCREASE (DECREASE) Year Ended Year Ended December 31, 1999 Year Ended Year Ended August 31, 1999
IN NET ASSETS FROM: June 30, 2000 June 30, 1999 to June 30, 2000 June 30, 2000 June 30, 1999 to June 30, 2000
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss) $(48,812) $(10,056) $(213) $(25) $(10) $1
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
Net realized gain (loss) 503,921 82,075 (104) 3,523 1,916 137
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
Net change in unrealized
appreciation (depreciation) 1,278,026 250,804 10,576 1,079 (119) 871
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
Net increase (decrease)
resulting from operations 1,733,135 322,823 10,259 4,577 1,787 1,009
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
Institutional Class 0 0 0 0 (8) (1)
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
Administrative Class 0 0 0 0 0 0
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
Other Classes 0 0 0 0 0 0
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
In excess of net investment
income
Institutional Class 0 0 0 0 0 0
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
Administrative Class 0 0 0 0 0 0
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
Other Classes 0 0 0 0 0 0
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
From net realized capital
gains
Institutional Class (736) 0 0 (2,103) (519) 0
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
Administrative Class 0 0 0 0 0 0
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
Other Classes (291,843) (23,554) 0 0 0 0
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
In excess of net realized
capital gains
Institutional Class 0 0 0 0 0 0
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
Administrative Class 0 0 0 0 0 0
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
Other Classes 0 0 0 0 0 0
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
Total Distributions (292,579) (23,554) 0 (2,103) (527) (1)
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Institutional Class 32,792 895 391 12,739 355 3,000
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
Administrative Class 807 0 0 0 0 0
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
Other Classes 4,811,154 1,310,384 100,247 0 0 0
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
Issued in reorganization
Institutional Class 0 0 0 0 0 0
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
Other Classes 0 0 0 0 0 0
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
Issued as reinvestment of
distributions
Institutional Class 582 0 0 1,831 2 1
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
Administrative Class 0 0 0 0 0 0
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
Other Classes 273,164 22,135 0 0 0 0
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
Cost of shares redeemed
Institutional Class (5,053) (505) (8) (14,911) (31) 0
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
Administrative Class (163) 0 0 0 0 0
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
Other Classes (2,339,586) (753,602) (6,141) 0 0 0
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
Net increase (decrease)
resulting from Fund
share transactions 2,773,697 579,307 94,489 (341) 326 3,001
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
FUND REIMBURSEMENT FEE: 0 0 0 0 0 0
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
TOTAL INCREASE (DECREASE) IN
NET ASSETS 4,214,253 878,576 104,748 2,133 1,586 4,009
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
NET ASSETS:
Beginning of period 1,264,903 386,327 0 8,408 6,822 0
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
End of period * $5,479,156 $1,264,903 $104,748 $10,541 $8,408 $4,009
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
*Including net undistributed
(overdistributed) investment
income of: $170,220 $0 $522 $2,569 $1,459 $162
---------------------------- ----------------------------- ----------------- ----------------------------- ----------------
</TABLE>
46 SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
Amounts in thousands CAPITAL APPRECIATION FUND MID-CAP FUND SMALL-CAP FUND
------------------------- ----------------------- -----------------------
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
INCREASE (DECREASE) June 30, June 30, June 30, June 30, June 30, June 30,
IN NET ASSETS FROM: 2000 1999 2000 1999 2000 1999
<S> <S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss) $299 $4,855 $635 $1,713 $(266) $(53)
---------------------------- ------------------------- ----------------------- ----------------------
Net realized gain (loss) 238,387 127,483 263,486 867 12,400 (9,957)
---------------------------- ------------------------- ----------------------- ----------------------
Net change in unrealized
appreciation (depreciation) (57,892) (27,333) 39,729 7,029 (4,835) 799
---------------------------- ------------------------- ----------------------- ----------------------
Net increase (decrease)
resulting from operations 180,794 105,005 303,850 9,609 7,299 (9,211)
---------------------------- ------------------------- ----------------------- ----------------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
Institutional Class (1,531) (4,163) (1,686) (342) 0 0
---------------------------- ------------------------- ----------------------- ----------------------
Administrative Class (247) (1,045) (128) (48) 0 0
---------------------------- ------------------------- ----------------------- ----------------------
Other Classes (49) (398) (133) (33) 0 0
---------------------------- ------------------------- ----------------------- ----------------------
In excess of net investment
income
Institutional Class (842) 0 (1,018) 0 0 0
---------------------------- ------------------------- ----------------------- ----------------------
Administrative Class (136) 0 (77) 0 0 0
---------------------------- ------------------------- ----------------------- ----------------------
Other Classes (26) 0 (80) 0 0 0
---------------------------- ------------------------- ----------------------- ----------------------
From net realized capital
gains
Institutional Class (91,584) (43,876) (426) (21,475) 0 0
---------------------------- ------------------------- ----------------------- ----------------------
Administrative Class (39,815) (12,574) (75) (4,502) 0 0
---------------------------- ------------------------- ----------------------- ----------------------
Other Classes (37,105) (14,257) (216) (15,306) 0 0
---------------------------- ------------------------- ----------------------- ----------------------
In excess of net realized
capital gains
Institutional Class 0 0 0 0 0 (2,229)
---------------------------- ------------------------- ----------------------- ----------------------
Administrative Class 0 0 0 0 0 (52)
---------------------------- ------------------------- ----------------------- ----------------------
Other Classes 0 0 0 0 0 0
---------------------------- ------------------------- ----------------------- ----------------------
Total Distributions (171,335) (76,313) (3,839) (41,706) 0 (2,281)
---------------------------- ------------------------- ----------------------- ----------------------
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Institutional Class 316,049 439,612 579,389 640,912 11,696 36,581
---------------------------- ------------------------- ----------------------- ----------------------
Administrative Class 60,068 152,828 78,391 104,472 1,215 1,691
---------------------------- ------------------------- ----------------------- ----------------------
Other Classes 94,043 98,940 189,893 199,882 0 0
---------------------------- ------------------------- ----------------------- ----------------------
Issued in reorganization
Institutional Class 0 0 0 0 0 0
---------------------------- ------------------------- ----------------------- ----------------------
Other Classes 0 0 0 0 0 0
---------------------------- ------------------------- ----------------------- ----------------------
Issued as reinvestment of
distributions
Institutional Class 79,661 35,601 2,801 19,896 0 2,229
---------------------------- ------------------------- ----------------------- ----------------------
Administrative Class 40,183 13,612 280 4,543 0 52
---------------------------- ------------------------- ----------------------- ----------------------
Other Classes 35,616 13,712 414 14,079 0 0
---------------------------- ------------------------- ----------------------- ----------------------
Cost of shares redeemed
Institutional Class (672,004) (649,159) (759,314) (505,497) (50,657) (8,682)
---------------------------- ------------------------- ----------------------- ----------------------
Administrative Class (150,725) (76,012) (73,751) (74,169) (1,149) (379)
---------------------------- ------------------------- ----------------------- ----------------------
Other Classes (122,166) (77,743) (250,063) (157,774) 0 0
---------------------------- ------------------------- ----------------------- ----------------------
Net increase (decrease)
resulting from Fund
share transactions (319,275) (48,609) (231,960) 246,344 (38,895) 31,492
---------------------------- ------------------------- ----------------------- ----------------------
FUND REIMBURSEMENT FEE: 0 0 0 0 0 0
---------------------------- ------------------------- ----------------------- ----------------------
TOTAL INCREASE (DECREASE) IN
NET ASSETS (309,816) (19,917) 68,051 214,247 (31,596) 20,000
---------------------------- ------------------------- ----------------------- ----------------------
NET ASSETS:
Beginning of period 1,103,626 1,123,543 1,008,125 793,878 68,622 48,622
---------------------------- ------------------------- ----------------------- ----------------------
End of period * $793,810 $1,103,626 $1,076,176 $1,008,125 $37,026 $68,622
---------------------------- ------------------------- ----------------------- ----------------------
*Including net undistributed
(overdistributed) investment
income of: $125,087 $1,527 $174,578 $1,312 $1,003 $12
---------------------------- ------------------------- ----------------------- ----------------------
<CAPTION>
Amounts in thousands MICRO-CAP FUND SMALL-CAP VALUE FUND FUND
----------------------- -------------------------
Year Ended Year Ended Year Ended Year Ended
INCREASE (DECREASE) June 30, June 30, June 30, June 30,
IN NET ASSETS FROM: 2000 1999 2000 1999
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss) $(2,020) $(1,742) $6,349 $5,018
---------------------------- --------------------- ------------------------
Net realized gain (loss) 25,525 (9,322) 1,428 (11,944)
---------------------------- --------------------- ------------------------
Net change in unrealized
appreciation (depreciation) 27,726 (26,056) (50,343) (15,379)
---------------------------- --------------------- ------------------------
Net increase (decrease)
resulting from operations 51,231 (37,120) (42,566) (22,305)
---------------------------- --------------------- ------------------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
Institutional Class 0 0 (937) (796)
---------------------------- --------------------- ------------------------
Administrative Class 0 0 (331) (247)
---------------------------- --------------------- ------------------------
Other Classes 0 0 (4,386) (1,810)
---------------------------- --------------------- ------------------------
In excess of net investment
income
Institutional Class 0 0 0 0
---------------------------- --------------------- ------------------------
Administrative Class 0 0 0 0
---------------------------- --------------------- ------------------------
Other Classes 0 0 0 0
---------------------------- --------------------- ------------------------
From net realized capital
gains
Institutional Class 0 0 0 0
---------------------------- --------------------- ------------------------
Administrative Class 0 0 0 0
---------------------------- --------------------- ------------------------
Other Classes 0 0 0 0
---------------------------- --------------------- ------------------------
In excess of net realized
capital gains
Institutional Class 0 (7,982) 0 (1,632)
---------------------------- --------------------- ------------------------
Administrative Class 0 (83) 0 (543)
---------------------------- --------------------- ------------------------
Other Classes 0 0 0 (9,214)
---------------------------- --------------------- ------------------------
Total Distributions 0 (8,065) (5,654) (14,242)
---------------------------- --------------------- ------------------------
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Institutional Class 46,143 98,906 24,902 37,773
---------------------------- --------------------- ------------------------
Administrative Class 4,998 2,225 10,894 22,238
---------------------------- --------------------- ------------------------
Other Classes 0 0 158,475 183,088
---------------------------- --------------------- ------------------------
Issued in reorganization
Institutional Class 0 0 0 0
---------------------------- --------------------- ------------------------
Other Classes 0 0 0 0
---------------------------- --------------------- ------------------------
Issued as reinvestment of
distributions
Institutional Class 0 6,383 797 2,202
---------------------------- --------------------- ------------------------
Administrative Class 0 83 324 790
---------------------------- --------------------- ------------------------
Other Classes 0 0 4,109 10,426
---------------------------- --------------------- ------------------------
Cost of shares redeemed
Institutional Class (99,032) (84,282) (47,564) (24,130)
---------------------------- --------------------- ------------------------
Administrative Class (1,992) (3,312) (14,401) (12,454)
---------------------------- --------------------- ------------------------
Other Classes 0 0 (201,997) (160,295)
---------------------------- --------------------- ------------------------
Net increase (decrease)
resulting from Fund
share transactions (49,883) 20,003 (64,461) 59,638
---------------------------- --------------------- ------------------------
FUND REIMBURSEMENT FEE: 0 0 0 0
---------------------------- --------------------- ------------------------
TOTAL INCREASE (DECREASE) IN
NET ASSETS 1,348 (25,182) (112,681) 23,091
---------------------------- --------------------- ------------------------
NET ASSETS:
Beginning of period 237,439 262,621 397,643 374,552
---------------------------- --------------------- ------------------------
End of period * $238,787 $237,439 $284,962 $397,643
---------------------------- --------------------- ------------------------
*Including net undistributed
(overdistributed) investment
income of: $0 $0 $3,998 $3,303
---------------------------- --------------------- ------------------------
</TABLE>
SEE ACCOMPANYING NOTES 47
<PAGE>
Statements of Changes in Net Assets (Cont.)
<TABLE>
<CAPTION>
STRUCTURED EMERGING
Amounts in thousands ENHANCED EQUITY FUND TAX-EFFICIENT EQUITY FUND MARKETS FUND
----------------------------- ---------------------------------- -----------------------------
Period from
INCREASE (DECREASE) IN NET Year Ended Year Ended Year Ended September 30, 1998 Year Ended Year Ended
ASSETS FROM: June 30, 2000 June 30, 1999 June 30, 2000 to June 30, 1999 June 30, 2000 June 30, 1999
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 260 $ 310 $ (137) $ (27) $ 168 $ 546
------------------------------- ----------------------------- ---------------------------------- -----------------------------
Net realized gain (loss) 6,329 3,923 (3,852) (228) 6,946 1,917
------------------------------- ----------------------------- ---------------------------------- -----------------------------
Net change in unrealized
appreciation (depreciation) (5,070) 5,764 7,274 3,290 (1,579) 7,959
------------------------------- ----------------------------- ---------------------------------- -----------------------------
Net increase (decrease)
resulting from operations 1,519 9,997 3,285 3,035 5,535 10,422
------------------------------- ----------------------------- ---------------------------------- -----------------------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Institutional Class (231) (201) 0 0 (284) (252)
------------------------------- ----------------------------- ---------------------------------- -----------------------------
Administrative Class (108) (83) 0 0 0 0
------------------------------- ----------------------------- ---------------------------------- -----------------------------
Other Classes 0 0 0 0 0 0
------------------------------- ----------------------------- ---------------------------------- -----------------------------
In excess of net investment
income
Institutional Class 0 0 0 0 0 0
------------------------------- ----------------------------- ---------------------------------- -----------------------------
Administrative Class 0 0 0 0 0 0
------------------------------- ----------------------------- ---------------------------------- -----------------------------
Other Classes 0 0 0 0 0 0
------------------------------- ----------------------------- ---------------------------------- -----------------------------
From net realized capital gains
Institutional Class (1,500) (4,601) 0 0 (2,972) (980)
------------------------------- ----------------------------- ---------------------------------- -----------------------------
Administrative Class (952) (1,928) 0 0 0 0
------------------------------- ----------------------------- ---------------------------------- -----------------------------
Other Classes 0 0 0 0 0 0
------------------------------- ----------------------------- ---------------------------------- -----------------------------
In excess of net realized
capital gains
Institutional Class 0 0 0 0 0 0
------------------------------- ----------------------------- ---------------------------------- -----------------------------
Administrative Class 0 0 0 0 0 0
------------------------------- ----------------------------- ---------------------------------- -----------------------------
Other Classes 0 0 0 0 0 0
------------------------------- ----------------------------- ---------------------------------- -----------------------------
Total Distributions (2,791) (6,813) 0 0 (3,256) (1,232)
------------------------------- ----------------------------- ---------------------------------- -----------------------------
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Institutional Class 6,548 8,851 1,085 0 1,761 2,664
------------------------------- ----------------------------- ---------------------------------- -----------------------------
Administrative Class 12,786 15,340 20,566 3,320 0 0
------------------------------- ----------------------------- ---------------------------------- -----------------------------
Other Classes 0 0 19,459 26,786 0 0
------------------------------- ----------------------------- ---------------------------------- -----------------------------
Issued in reorganization
Institutional Class 0 0 0 0 0 0
------------------------------- ----------------------------- ---------------------------------- -----------------------------
Other Classes 0 0 0 0 0 35,582
------------------------------- ----------------------------- ---------------------------------- -----------------------------
Issued as reinvestment of
distributions
Institutional Class 1,712 4,790 0 0 3,230 1,209
------------------------------- ----------------------------- ---------------------------------- -----------------------------
Administrative Class 1,059 2,005 0 0 0 0
------------------------------- ----------------------------- ---------------------------------- -----------------------------
Other Classes 0 0 0 0 0 0
------------------------------- ----------------------------- ---------------------------------- -----------------------------
Cost of shares redeemed
Institutional Class (28,964) (9,355) (8) 0 (18,490) (2,261)
------------------------------- ----------------------------- ---------------------------------- -----------------------------
Administrative Class (10,211) (5,174) (5,427) (158) 0 0
------------------------------- ----------------------------- ---------------------------------- -----------------------------
Other Classes 0 0 (10,104) (5,032) 0 0
------------------------------- ----------------------------- ---------------------------------- -----------------------------
Net increase (decrease)
resulting from Fund
share transactions (17,070) 16,457 25,571 24,916 (13,499) 37,194
------------------------------- ----------------------------- ---------------------------------- -----------------------------
FUND REIMBURSEMENT FEE: 0 0 0 0 19 193
------------------------------- ----------------------------- ---------------------------------- -----------------------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS (18,342) 19,641 28,856 27,951 (11,201) 46,577
------------------------------- ----------------------------- ---------------------------------- -----------------------------
NET ASSETS:
Beginning of period 66,634 46,993 27,951 0 46,577 0
------------------------------- ----------------------------- ---------------------------------- -----------------------------
End of period * $ 48,292 $ 66,634 $ 56,807 $ 27,951 $ 35,376 $ 46,577
------------------------------- ----------------------------- ---------------------------------- -----------------------------
*Including net undistributed
(overdistributed) investment
income of: $ 88 $ 321 $ 0 $ (5) $ 92 $ 967
------------------------------- ----------------------------- ---------------------------------- -----------------------------
</TABLE>
48 SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
TAX-EFFICIENT STRUCTURED NFJ EQUITY
Amounts in thousands EMERGING MARKETS FUND INTERNATIONAL FUND INCOME FUND
------------------------------- ------------------------------- ----------------
Period from
INCREASE (DECREASE) IN NET Year Ended Year Ended Year Ended Year Ended May 8, 2000
ASSETS FROM: June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999 to June 30, 2000
<S> <S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 564 $ 739 $ (703) $ (761) $ 102
------------------------------- ------------------------------- -------------------------------- ----------------
Net realized gain (loss) (6,218) (10,520) 18,159 16,040 (35)
------------------------------- ------------------------------- -------------------------------- ----------------
Net change in unrealized
appreciation (depreciation) 10,664 27,046 3,349 (16,663) (1,967)
------------------------------- ------------------------------- -------------------------------- ----------------
Net increase (decrease)
resulting from operations 5,010 17,265 20,805 (1,384) (1,900)
------------------------------- ------------------------------- -------------------------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Institutional Class (716) (300) 0 0 (72)
------------------------------- ------------------------------- -------------------------------- ----------------
Administrative Class 0 0 0 0 (11)
------------------------------- ------------------------------- -------------------------------- ----------------
Other Classes 0 0 0 0 0
------------------------------- ------------------------------- -------------------------------- ----------------
In excess of net investment
income
Institutional Class 0 0 0 0 0
------------------------------- ------------------------------- -------------------------------- ----------------
Administrative Class 0 0 0 0 0
------------------------------- ------------------------------- -------------------------------- ----------------
Other Classes 0 0 0 0 0
------------------------------- ------------------------------- -------------------------------- ----------------
From net realized capital gains
Institutional Class 0 0 (651) (67) 0
------------------------------- ------------------------------- -------------------------------- ----------------
Administrative Class 0 0 (2,285) (129) 0
------------------------------- ------------------------------- -------------------------------- ----------------
Other Classes 0 0 (16,473) (11,816) 0
------------------------------- ------------------------------- -------------------------------- ----------------
In excess of net realized
capital gains
Institutional Class 0 0 0 0 0
------------------------------- ------------------------------- -------------------------------- ----------------
Administrative Class 0 0 0 0 0
------------------------------- ------------------------------- -------------------------------- ----------------
Other Classes 0 0 0 0 0
------------------------------- ------------------------------- -------------------------------- ----------------
Total Distributions (716) (300) (19,409) (12,012) (83)
------------------------------- ------------------------------- -------------------------------- ----------------
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Institutional Class 16,041 12,518 3,806 5,567 26,504
------------------------------- ------------------------------- -------------------------------- ----------------
Administrative Class 0 0 9,021 16,127 5,045
------------------------------- ------------------------------- -------------------------------- ----------------
Other Classes 0 0 864,448 736,111 0
------------------------------- ------------------------------- -------------------------------- ----------------
Issued in reorganization
Institutional Class 0 0 0 0 0
------------------------------- ------------------------------- -------------------------------- ----------------
Other Classes 0 44,157 0 0 0
------------------------------- ------------------------------- -------------------------------- ----------------
Issued as reinvestment of
distributions
Institutional Class 574 300 652 67 70
------------------------------- ------------------------------- -------------------------------- ----------------
Administrative Class 0 0 2,286 129 11
------------------------------- ------------------------------- -------------------------------- ----------------
Other Classes 0 0 15,118 11,029 0
------------------------------- ------------------------------- -------------------------------- ----------------
Cost of shares redeemed
Institutional Class (6,600) (1,678) (1,128) (2,213) 0
------------------------------- ------------------------------- -------------------------------- ----------------
Administrative Class 0 0 (8,442) (1,579) (121)
------------------------------- ------------------------------- -------------------------------- ----------------
Other Classes 0 0 (896,874) (757,207) 0
------------------------------- ------------------------------- -------------------------------- ----------------
Net increase (decrease)
resulting from Fund
share transactions 10,015 55,297 (11,113) 8,031 31,509
------------------------------- ------------------------------- -------------------------------- ----------------
FUND REIMBURSEMENT FEE: 155 247 0 0 0
------------------------------- ------------------------------- -------------------------------- ----------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS 14,464 72,509 (9,717) (5,365) 29,526
------------------------------- ------------------------------- -------------------------------- ----------------
NET ASSETS:
Beginning of period 72,509 0 149,087 154,452 0
------------------------------- ------------------------------- -------------------------------- ----------------
End of period * $ 86,973 $ 72,509 $ 139,370 $ 149,087 $ 29,526
------------------------------- ------------------------------- -------------------------------- ----------------
*Including net undistributed
(overdistributed) investment
income of: $ 77 $ 307 $ 2,305 $ (1,499) $ 19
------------------------------- ------------------------------- -------------------------------- ----------------
<CAPTION>
NFJ VALUE
Amounts in thousands FUND
----------------
Period from
INCREASE (DECREASE) IN NET May 8, 2000
ASSETS FROM: to June 30, 2000
<S> <C>
OPERATIONS:
Net investment income (loss) $ 5
------------------------------- ----------------
Net realized gain (loss) 18
------------------------------- ----------------
Net change in unrealized
appreciation (depreciation) (54)
------------------------------- ----------------
Net increase (decrease)
resulting from operations (31)
------------------------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Institutional Class (4)
------------------------------- ----------------
Administrative Class 0
------------------------------- ----------------
Other Classes 0
------------------------------- ----------------
In excess of net investment
income
Institutional Class 0
------------------------------- ----------------
Administrative Class 0
------------------------------- ----------------
Other Classes 0
------------------------------- ----------------
From net realized capital gains
Institutional Class 0
------------------------------- ----------------
Administrative Class 0
------------------------------- ----------------
Other Classes 0
------------------------------- ----------------
In excess of net realized
capital gains
Institutional Class 0
------------------------------- ----------------
Administrative Class 0
------------------------------- ----------------
Other Classes 0
------------------------------- ----------------
Total Distributions (4)
------------------------------- ----------------
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Institutional Class 942
------------------------------- ----------------
Administrative Class 0
------------------------------- ----------------
Other Classes 0
------------------------------- ----------------
Issued in reorganization
Institutional Class 0
------------------------------- ----------------
Other Classes 0
------------------------------- ----------------
Issued as reinvestment of
distributions
Institutional Class 4
------------------------------- ----------------
Administrative Class 0
------------------------------- ----------------
Other Classes 0
------------------------------- ----------------
Cost of shares redeemed
Institutional Class 0
------------------------------- ----------------
Administrative Class 0
------------------------------- ----------------
Other Classes 0
------------------------------- ----------------
Net increase (decrease)
resulting from Fund
share transactions 946
------------------------------- ----------------
FUND REIMBURSEMENT FEE: 0
------------------------------- ----------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS 911
------------------------------- ----------------
NET ASSETS:
Beginning of period 0
------------------------------- ----------------
End of period * $ 911
------------------------------- ----------------
*Including net undistributed
(overdistributed) investment
income of: $ 19
------------------------------- ----------------
</TABLE>
SEE ACCOMPANYING NOTES 49
<PAGE>
SCHEDULE OF INVESTMENTS
EQUITY INCOME FUND
JUNE 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
----------------------------------------------------------------------------------
COMMON STOCKS 96.7%
----------------------------------------------------------------------------------
<S> <C> <C>
CAPITAL GOODS 7.7%
Tyco International Ltd. 45,000 $ 2,132
General Electric Co. 35,000 1,855
Weatherford International, Inc.(b) 35,000 1,393
---------------
5,380
COMMUNICATIONS 10.6%
Cox Communications, Inc. 35,000 2,150
Nokia Corp. SP - ADR 35,000 1,748
GTE Corp. 20,000 1,245
SBC Communications, Inc. 28,000 1,211
Vodafone Group PLC SP - ADR 25,000 1,036
---------------
7,390
CONSUMER DISCRETIONARY 4.8%
General Motors Corp. `H' 25,000 2,194
Wal-Mart Stores, Inc. 20,000 1,152
---------------
3,346
ENERGY 16.9%
Utilicorp United 90,000 2,138
Enron Corp. 30,000 1,935
EL Paso Energy Corp. 35,000 1,783
Peco Energy Co. 40,000 1,613
Exxon Mobil Corp. 20,000 1,570
Schlumberger Ltd. 20,000 1,493
Cooper Cameron Corp.(b) 20,000 1,320
---------------
11,852
FINANCIAL & BUSINESS SERVICES 19.4%
Citigroup, Inc. 40,000 2,410
Spieker Properties, Inc. 42,000 1,932
Boston Properties, Inc. 50,000 1,931
Morgan Stanley, Dean Witter, Discover and Co. 20,000 1,665
American International Group, Inc. 14,000 1,645
Omnicom Group 18,000 1,603
American Express 30,000 1,564
Federal National Mortgage Association 15,000 783
---------------
13,533
HEALTH CARE 11.1%
Schering-Plough Corp. 35,000 1,767
Johnson & Johnson 17,000 1,732
Merck & Co., Inc. 20,000 1,532
American Home Products Corp. 25,000 1,469
Medtronic, Inc. 25,000 1,245
---------------
7,745
TECHNOLOGY 19.8%
EMC Corp.(b) 40,000 3,077
Jabil Circuit, Inc.(b) 40,000 1,985
Hewlett Packard Co. 15,000 1,873
Scientific-Atlanta, Inc. 25,000 1,863
Flextronics International Ltd.(b) 25,000 1,717
Nortel Networks Corp. 25,000 1,706
Intel Corp. 12,000 1,604
---------------
13,825
UTILITIES 6.4%
Calpine Capital Trust II-144A 35,000 2,538
Duke Energy Corp. 35,000 1,973
---------------
4,511
---------------
Total Common Stocks 67,582
(Cost $66,147) ===============
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000s) (000s)
----------------------------------------------------------------------------------
CONVERTIBLE BONDS & NOTES 2.9%
----------------------------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY 2.9%
Nextel Communications
5.250% due 01/15/2010 $ 2,000 $ 2,030
---------------
Total Convertible Bonds & Notes 2,030
(Cost $1,914) ===============
TOTAL INVESTMENTS(a) 99.6% $ 69,612
(Cost $68,061)
OTHER ASSETS AND LIABILITIES (NET) 0.4% 297
---------------
NET ASSETS 100.0% $ 69,909
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $68,096 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 3,889
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (2,373)
---------------
Unrealized appreciation-net $ 1,516
===============
</TABLE>
(b) Non-income producing security.
50 SEE ACCOMPANYING NOTES
<PAGE>
SCHEDULE OF INVESTMENTS
VALUE FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
----------------------------------------------------------------------------------
COMMON STOCKS 94.0%
----------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE 8.5%
Raytheon Co. `B' 305,500 $ 5,881
Boeing Co. 116,000 4,850
Northrop Grumman Corp. 50,000 3,313
---------------
14,044
CAPITAL GOODS 4.9%
Deere & Co. 220,500 8,159
---------------
COMMUNICATIONS 8.0%
MCI WorldCom, Inc.(b) 129,300 5,931
GTE Corp. 70,000 4,358
AT&T Corp. 95,000 3,003
---------------
13,292
CONSUMER DISCRETIONARY 3.1%
Eastman Kodak Co. 70,000 4,165
Tupperware Corp. 41,000 902
---------------
5,067
CONSUMER SERVICES 1.5%
Waste Management, Inc. 113,800 2,162
Central Newspapers, Inc. `A' 6,000 380
---------------
2,542
CONSUMER STAPLES 10.9%
Philip Morris Cos., Inc. 141,600 3,761
Kroger Co.(b) 146,100 3,223
Pepsi Bottling Group, Inc. 100,000 2,919
SUPERVALU, Inc. 145,000 2,764
Sara Lee Corp. 120,200 2,321
Archer-Daniels-Midland Co. 195,000 1,913
ConAgra, Inc. 61,900 1,180
---------------
18,081
ENERGY 9.9%
Petroleo Brasileiro SA 170,000 5,136
R & B Falcon Corp.(b) 252,000 5,938
Diamond Offshore Drilling, Inc. 140,000 4,918
Ultramar Diamond Shamrock Corp. 20,000 496
---------------
16,488
FINANCIAL & BUSINESS SERVICES 29.1%
Washington Mutual, Inc. 309,600 8,940
Ace Ltd. 298,400 8,355
XL Capital Ltd. 130,500 7,063
Federal Home Loan Mortgage Corp. 138,800 5,621
Aon Corp. 170,000 5,281
Loews Corp. 85,000 5,100
UnumProvident Corp. 171,300 3,437
Allstate Corp. 120,000 2,670
AmSouth Bancorp 63,600 1,002
St. Paul Cos., Inc. 25,000 853
---------------
48,322
HEALTH CARE 6.6%
Tenet Healthcare Corp.(b) 265,000 7,155
Aetna, Inc. 60,000 3,851
---------------
11,006
MATERIALS & PROCESSING 0.5%
International Paper Co. 28,000 835
---------------
TECHNOLOGY 2.9%
Xerox Corp. 130,000 2,698
Compaq Computer Corp. 82,400 2,106
---------------
4,804
TRANSPORTATION 2.0%
CSX Corp. 160,000 3,390
---------------
UTILITIES 6.1%
PG&E Corp. 195,000 4,802
Public Service Enterprise Group, Inc. 100,000 3,463
DTE Energy Co. 60,000 1,834
---------------
10,099
---------------
Total Common Stocks 156,129
(Cost $157,108) ===============
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000s) (000s)
----------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 3.8%
----------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT 3.8%
State Street Bank
5.850% due 07/03/2000 $ 6,355 $ 6,355
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
6.100% due 09/14/2001 valued at $6,484.
Repurchase proceeds are $6,358.)
---------------
Total Short-Term Instruments 6,355
(Cost $6,355) ===============
TOTAL INVESTMENTS(a) 97.8% $ 162,484
(Cost $163,463)
OTHER ASSETS AND LIABILITIES (NET) 2.2% 3,689
---------------
NET ASSETS 100.0% $ 166,173
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $163,839 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 7,458
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (8,813)
---------------
Unrealized depreciation-net $ (1,355)
===============
</TABLE>
(b) Non-income producing security.
SEE ACCOMPANYING NOTES 51
<PAGE>
SCHEDULE OF INVESTMENTS
RENAISSANCE FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
----------------------------------------------------------------------------------
COMMON STOCKS 94.9%
----------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE 6.3%
Orbital Sciences Corp.(b) 890,400 $ 10,852
Raytheon Co. `B' 480,000 9,240
Litton Industries, Inc.(b) 131,700 5,531
Raytheon Co. `A' 230,000 4,470
---------------
30,093
CAPITAL GOODS 5.6%
CNH Global NV 2,016,800 18,655
Metso OYJ 665,400 8,004
---------------
26,659
COMMUNICATIONS 1.8%
Loral Space & Communications Ltd.(b) 839,500 5,824
MCI WorldCom, Inc.(b) 60,000 2,753
---------------
8,577
CONSUMER DISCRETIONARY 5.2%
Tupperware Corp. 937,000 20,614
American Greetings Corp. `A' 230,000 4,370
---------------
24,984
CONSUMER STAPLES 12.4%
Suiza Foods Corp.(b) 253,400 12,385
Tate & Lyle PLC 2,215,387 11,062
Tyson Foods, Inc. 1,191,200 10,423
Great Atlantic & Pacific Tea Co., Inc. 568,700 9,454
Philip Morris Cos., Inc. 260,000 6,906
Corn Products International, Inc. 191,400 5,072
Dean Foods Co. 103,900 3,292
Universal Foods 20,000 386
---------------
58,980
ENERGY 8.5%
R & B Falcon Corp.(b) 661,000 15,575
Petroleo Brasileiro SA 330,000 9,970
Diamond Offshore Drilling, Inc. 200,000 7,025
Ultramar Diamond Shamrock Corp. 203,500 5,049
Tidewater, Inc. 85,000 3,060
---------------
40,679
ENVIRONMENTAL SERVICES 0.9%
Republic Services, Inc.(b) 283,100 4,530
---------------
FINANCIAL & BUSINESS SERVICES 21.7%
Ace Ltd. 924,500 25,886
Washington Mutual, Inc. 790,000 22,811
Everest Re Group Ltd. 338,200 11,118
Loews Corp. 157,000 9,420
UnumProvident Corp. 380,000 7,624
Federal Home Loan Mortgage Corp. 140,000 5,670
Aon Corp. 142,700 4,433
Sovereign Bancorp, Inc. 600,000 4,219
XL Capital Ltd. 74,300 4,021
St. Paul Cos., Inc. 85,800 2,928
Pacific Century Financial Corp. 185,300 2,710
AmeriCredit Corp.(b) 130,700 2,222
Fremont General Corp. 257,000 1,012
---------------
104,074
HEALTH CARE 11.6%
Foundation Health Systems, Inc. `A'(b) 2,109,100 27,418
Aetna, Inc. 252,600 16,214
Tenet Healthcare Corp.(b) 436,900 11,796
---------------
55,428
MATERIALS & PROCESSING 7.9%
IMC Global, Inc. 834,000 10,842
Ispat International NV 782,800 7,437
Gaylord Container Corp. `A'(b) 2,194,200 5,897
Ucar International, Inc(b) 416,600 5,442
Mercer International, Inc. 496,800 4,130
Buenaventura SA 126,500 2,190
Crompton Corp. 138,800 1,700
---------------
37,638
TECHNOLOGY 3.1%
Arrow Electronics, Inc.(b) 412,600 12,791
Fluor Corp. 34,800 1,100
Xerox Corp. 39,900 828
---------------
14,719
TRANSPORTATION 1.2%
CSX Corp. 276,500 5,858
---------------
UTILITIES 8.7%
Niagara Mohawk Holdings, Inc.(b) 1,380,200 $ 19,236
Western Resources, Inc. 618,500 9,587
PG&E Corp. 150,000 3,694
Entergy Corp. 120,000 3,263
Edison International 150,000 3,075
CMS Energy Corp. 122,500 2,710
---------------
41,565
---------------
Total Common Stocks 453,784
(Cost $459,783) ===============
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
(000s)
----------------------------------------------------------------------------------
CONVERTIBLE BONDS & NOTES 0.9%
----------------------------------------------------------------------------------
<S> <C> <C>
CONVERTIBLE BONDS & NOTES 0.9%
APP Finance VI Mauritius Ltd.
0.000% due 11/18/2012 $ 18,000 3,038
3.500% due 04/30/2003 1,000 734
APP Global Finance Ltd.
2.000% due 07/25/2000 500 611
---------------
Total Convertible Bonds & Notes 4,383
(Cost $4,808) ===============
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000s) (000s)
----------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 3.7%
----------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT 3.7%
State Street Bank
5.850% due 07/03/2000 17,875 17,875
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
6.100% due 09/14/2001 valued at $18,236.
Repurchase proceeds are $17,884.)
---------------
Total Short-Term Instruments 17,875
(Cost $17,875) ===============
TOTAL INVESTMENTS(a) 99.5% $ 476,042
(Cost $482,466)
OTHER ASSETS AND LIABILITIES (NET) 0.5% 2,164
---------------
NET ASSETS 100.0% $ 478,206
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $494,049 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
overtax cost. $ 50,385
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (68,392)
---------------
Unrealized depreciation-net $ (18,007)
===============
</TABLE>
(b) Non-income producing security.
52 SEE ACCOMPANYING NOTES
<PAGE>
SCHEDULE OF INVESTMENTS
GROWTH FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
----------------------------------------------------------------------------------
COMMON STOCKS 98.9%
----------------------------------------------------------------------------------
<S> <C> <C>
CAPITAL GOODS 3.9%
General Electric Co. 1,500,000 $ 79,500
Tyco International Ltd. 750,000 35,531
---------------
115,031
COMMUNICATIONS 8.8%
Nokia Corp. SP - ADR 3,500,000 174,781
Telefonaktiebolaget LM Ericsson SP - ADR 2,500,000 50,000
AT&T Corp. - Liberty Media Group `A'(b) 1,300,000 31,525
---------------
256,306
CONSUMER DISCRETIONARY 7.5%
Wal-Mart Stores, Inc. 1,500,000 86,438
Home Depot, Inc. 1,000,000 49,937
Kohls Corp.(b) 800,000 44,500
Clear Channel Communications(b) 500,000 37,500
---------------
218,375
ENERGY 4.3%
Enron Corp. 1,500,000 96,750
AES Corp.(b) 600,000 27,375
---------------
124,125
FINANCIAL & BUSINESS SERVICES 18.7%
Morgan Stanley, Dean Witter, Discover and Co. 1,500,000 124,875
Citigroup, Inc. 1,750,000 105,438
Omnicom Group 1,000,000 89,062
American International Group, Inc. 750,000 88,125
American Express 1,500,000 78,187
Northern Trust Corp. 500,000 32,531
Federal National Mortgage Association 500,000 26,094
---------------
544,312
HEALTH CARE 12.1%
Genentech, Inc.(b) 500,000 86,000
Johnson & Johnson 800,000 81,500
Amgen, Inc.(b) 1,000,000 70,250
Pfizer, Inc. 1,000,000 48,000
Schering-Plough Corp. 750,000 37,875
Medtronic, Inc. 600,000 29,887
---------------
353,512
TECHNOLOGY 43.6%
EMC Corp.(b) 3,000,000 230,812
Cisco Systems, Inc.(b) 2,500,000 158,906
Nortel Networks Corp. 2,000,000 136,500
JDS Uniphase Corp.(b) 1,000,000 119,875
Sun Microsystems, Inc.(b) 1,000,000 90,938
Texas Instruments, Inc. 1,000,000 68,688
Corning, Inc. 250,000 67,469
Oracle Corp.(b) 800,000 67,250
Intel Corp. 400,000 53,475
Comverse Technology, Inc.(b) 500,000 46,500
Applied Materials, Inc.(b) 500,000 45,313
Broadcom Corp.(b) 200,000 43,788
SDL, Inc.(b) 150,000 42,778
Applied Micro Circuits Corp.(b) 350,000 34,563
Flextronics International Ltd.(b) 500,000 34,344
Network Appliance, Inc.(b) 400,000 32,200
---------------
1,273,399
---------------
Total Common Stocks 2,885,060
(Cost $1,771,224) ===============
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000s) (000s)
----------------------------------------------------------------------------------
CORPORATE BONDS & NOTES 0.0%
----------------------------------------------------------------------------------
<S> <C> <C>
INDUSTRIALS 0.0%
Cabbell Financial Grantor Trust(c)
7.187% due 12/31/2002 $ 363 $ 181
---------------
Total Corporate Bonds & Notes 181
(Cost $361) ===============
----------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 1.0%
----------------------------------------------------------------------------------
REPURCHASE AGREEMENT 1.0%
State Street Bank
5.850% due 07/03/2000 30,194 30,194
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
5.125% due 02/13/2004 valued at $30,800.
Repurchase proceeds are $30,209.)
---------------
Total Short-Term Instruments 30,194
(Cost $30,194) ===============
TOTAL INVESTMENTS(a) 99.9% $ 2,915,435
(Cost $1,801,779)
OTHER ASSETS AND LIABILITIES (NET) 0.1% 2,663
---------------
NET ASSETS 100.0% $ 2,918,098
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $1,803,018 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 1,135,113
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value. (22,696)
---------------
Unrealized appreciation-net $ 1,112,417
===============
</TABLE>
(b) Non-income producing security.
(c) Illiquid securities.
SEE ACCOMPANYING NOTES 53
<PAGE>
SCHEDULE OF INVESTMENTS
SELECT GROWTH FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
----------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS 91.1%
----------------------------------------------------------------------------------
COMMUNICATIONS 4.5%
Nokia Corp. SP - ADR 15,000 $ 749
---------------
CONSUMER DISCRETIONARY 5.1%
Wal-Mart Stores, Inc. 15,000 864
---------------
ENERGY 3.8%
Enron Corp. 10,000 645
---------------
FINANCIAL & BUSINESS SERVICES 17.2%
American International Group, Inc. 10,000 1,175
Citigroup, Inc. 15,000 904
Morgan Stanley, Dean Witter, Discover and Co. 10,000 833
---------------
2,912
HEALTH CARE 13.7%
Genentech, Inc.(b) 7,500 1,290
Johnson & Johnson 10,000 1,019
---------------
2,309
TECHNOLOGY 46.8%
Corning, Inc. 5,000 1,349
EMC Corp.(b) 15,000 1,154
Nortel Networks Corp. 15,000 1,024
Cisco Systems, Inc.(b) 15,000 953
Comverse Technology, Inc.(b) 10,000 930
Sun Microsystems, Inc.(b) 10,000 909
JDS Uniphase Corp.(b) 7,500 899
Texas Instruments, Inc. 10,000 687
---------------
7,905
---------------
Total Common Stocks 15,384
(Cost $14,220) ===============
</TABLE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 9.4%
----------------------------------------------------------------------------------
Principal
Amount
(000s)
<S> <C> <C>
REPURCHASE AGREEMENT 9.4%
State Street Bank
5.850% due 07/03/2000 $ 1,591 1,591
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
6.100% due 09/14/2001 valued at $1,626.
Repurchase proceeds are $1,592.)
---------------
Total Short-Term Instruments 1,591
(Cost $1,591) ===============
TOTAL INVESTMENTS(a) 100.5% $ 16,975
(Cost $15,811)
OTHER ASSETS AND LIABILITIES (NET) (0.5%) (93)
---------------
NET ASSETS 100.0% $ 16,882
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $15,814 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 1,405
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value. (244)
---------------
Unrealized appreciation-net $ 1,161
===============
(b) Non-income producing security.
</TABLE>
54 SEE ACCOMPANYING NOTES
<PAGE>
SCHEDULE OF INVESTMENTS
TARGET FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
----------------------------------------------------------------------------------
COMMON STOCKS 94.6%
---------------------------------------------------------------------------------
CAPITAL GOODS 4.3%
Waters Corp.(b) 400,000 $ 49,925
Millipore Corp. 400,000 30,150
Weatherford International, Inc.(b) 400,000 15,925
---------------
96,000
COMMUNICATIONS 5.5%
WinStar Communications, Inc.(b) 1,100,000 37,263
Echostar Communications Corp. `A'(b) 900,000 29,798
Nextlink Communications, Inc. `A'(b) 550,000 20,866
Worldgate Communications, Inc.(b) 1,000,000 17,750
Pinnacle Holdings, Inc.(b) 325,000 17,550
---------------
123,227
CONSUMER DISCRETIONARY 5.5%
Emmis Broadcasting Corp. `A'(b) 750,000 31,031
Concord EFS, Inc.(b) 1,000,000 26,000
B.J.'s Wholesale Club, Inc.(b) 700,000 23,100
Harley-Davidson, Inc. 600,000 23,100
Tiffany & Co. 300,000 20,250
---------------
123,481
CONSUMER SERVICES 1.3%
Pegasus Communications Corp.(b) 600,000 29,438
---------------
ENERGY 1.3%
Cooper Cameron Corp.(b) 300,000 19,800
Grant Prideco, Inc.(b) 400,000 10,000
---------------
29,800
FINANCIAL & BUSINESS SERVICES 3.5%
Young & Rubicam, Inc. 500,000 28,594
Robert Half International, Inc.(b) 1,000,000 28,500
Ace Ltd. 750,000 21,000
---------------
78,094
HEALTH CARE 14.0%
Minimed, Inc.(b) 600,000 70,800
MedImmune, Inc.(b) 720,000 53,280
Cytyc Corp.(b) 800,000 42,700
Allergan, Inc. 450,000 33,525
Alkermes, Inc.(b) 700,000 32,988
Immunex Corp.(b) 500,000 24,719
Biogen, Inc.(b) 300,000 19,350
Sepracor, Inc.(b) 150,000 18,094
Shire Pharmaceuticals PLC SP - ADR(b) 325,000 16,859
---------------
312,315
TECHNOLOGY 53.6%
SDL, Inc.(b) 500,000 142,594
Comverse Technology, Inc.(b) 1,100,000 102,300
Sanmina Corp.(b) 1,000,000 85,500
Jabil Circuit, Inc.(b) 1,600,000 79,400
E-Tek Dynamics, Inc.(b) 225,000 59,358
PMC - Sierra, Inc.(b) 300,000 53,306
Ciena Corp.(b) 300,000 50,006
Network Appliance, Inc.(b) 600,000 48,300
JDS Uniphase Corp.(b) 350,000 41,956
Amdocs Ltd.(b) 525,000 40,294
RF Micro Devices, Inc.(b) 450,000 39,431
Rational Software Corp.(b) 400,000 37,175
Altera Corp.(b) 350,000 35,678
Redback Networks, INC.(b) 200,000 35,600
Maxim Integrated Products, Inc.(b) 500,000 33,969
Applied Micro Circuits Corp.(b) 300,000 29,625
Teradyne, Inc.(b) 400,000 29,400
CommScope, Inc.(b) 700,000 28,700
LSI Logic Corp.(b) 500,000 27,063
Scientific-Atlanta, Inc. 350,000 26,075
Metromedia Fiber Network, Inc. `A'(b) 650,000 25,797
American Tower Corp. `A'(b) 550,000 22,928
Cree, Inc.(b) 150,000 20,025
TranSwitch Corp.(b) 250,000 19,297
ANTEC Corp.(b) 400,000 16,625
Sirius Satellite Radio, Inc.(b) 350,000 15,509
Gilat Satellite Networks Ltd.(b) 200,000 13,875
Ulticom, Inc.(b) 500,000 12,008
Digital Lightwave, Inc.(b) 100,000 10,050
Fairchild Semiconductor International, Inc. `A'(b) 175,000 7,088
Exfo Electro Optical Engineering, Inc.(b) 125,000 5.484
---------------
1,194,416
TRANSPORTATION 1.2%
Kansas City Southern Industries, Inc. 300,000 26,606
---------------
UTILITIES 4.4%
Calpine Corp.(b) 1,200,000 78,900
Avista Corp. 1,025,000 17,872
---------------
96,772
---------------
Total Common Stocks 2,110,149
(Cost $$1,146,692) ===============
</TABLE>
-------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 5.6%
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000s)
<S> <C> <C>
REPURCHASE AGREEMENT 5.6%
State Street Bank
5.850% due 07/03/2000 $ 125,130 125,130
(Dated 06/30/2000. Collateralized by
Federal Home Loan Mortgage Corporation
6.680% due 12/28/2001 valued at $51,003.
Federal Home Loan Mortgage Corporation
6.680% due 12/28/2001 valued at $51,003, and
Federal Home Loan Bank
7.620% due 01/12/2010 valued at $25,634.
Repurchase proceeds are $125,190.)
---------------
Total Short-Term Instruments 125,130
(Cost $$125,130) ===============
TOTAL INVESTMENTS(a) 100.2% $ 2,235,279
(Cost $$1,271,822)
OTHER ASSETS AND LIABILITIES (NET) (0.2%) (4,507)
---------------
NET ASSETS 100.0% $ 2,230,772
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $1,274,653 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 1,005,376
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (44,750)
---------------
Unrealized appreciation-net $ 960,626
===============
</TABLE>
(b) Non-income producing security.
SEE ACCOMPANYING NOTES 55
<PAGE>
SCHEDULE OF INVESTMENTS
MID-CAP EQUITY FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
----------------------------------------------------------------------------------
COMMON STOCKS 89.7%
----------------------------------------------------------------------------------
CAPITAL GOODS 8.7%
General Electric Co. 3,000 $ 159
Tyco International Ltd. 3,000 142
Waters Corp.(b) 1,000 125
---------------
426
COMMUNICATIONS 2.9%
WinStar Communications, Inc.(b) 2,700 91
Echostar Communications Corp.(b) 1,600 53
---------------
144
ENERGY 16.4%
EL Paso Energy Corp. 4,000 204
Valero Energy Corp. 5,500 174
Nabors Industries, Inc.(b) 3,800 158
Rowan Cos., Inc.(b) 3,800 115
Exxon Mobil Corp. 1,000 79
Gulf Canada Resources Ltd.(b) 15,600 75
---------------
805
FINANCIAL & BUSINESS SERVICES 17.1%
Ace Ltd. 5,800 162
Boston Properties, Inc. 3,500 135
Citigroup, Inc. 2,000 121
American International Group, Inc. 1,000 118
Young & Rubicam, Inc 1,500 86
Everest Re Group Ltd. 2,600 85
St. Paul Cos., Inc. 2,000 68
Simon Property Group, Inc. 3,000 67
---------------
842
HEALTH CARE 14.9%
Johnson & Johnson 2,000 203
Minimed, Inc.(b) 1,600 189
American Home Products Corp. 2,000 118
MedImmune, Inc.(b) 1,500 111
Tenet Healthcare Corp.(b) 4,100 111
---------------
732
MATERIALS & PROCESSING 1.5%
Ucar International, Inc.(b) 5,500 72
---------------
TECHNOLOGY 25.3%
Comverse Technology, Inc.(b) 2,000 186
PMC - Sierra, Inc.(b) 1,000 178
SDL, Inc.(b) 500 143
Arrow Electronics, Inc.(b) 4,000 124
JDS Uniphase Corp.(b) 1,000 120
Jabil Circuit, Inc.(b) 2,400 119
EMC Corp.(b) 1,500 115
RF Micro Devices, Inc.(b) 1,200 105
Teradyne, Inc.(b) 1,200 88
LSI Logic Corp.(b) 1,200 65
---------------
1,243
UTILITIES 2.9%
Duke Energy Corp. 2,500 141
---------------
Total Common Stocks 4,405
(Cost $3,493) ===============
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000s) (000s)
----------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 10.3%
----------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT 10.3%
State Street Bank
5.850% due 07/03/2000 $ 507 $ 507
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
6.250% due 11/20/2001 valued at $519.
Repurchase proceeds are $507.)
---------------
Total Short-Term Instruments 507
(Cost $507) ===============
TOTAL INVESTMENTS(a) 100.0% $4,912
(Cost $$4,000)
OTHER ASSETS AND LIABILITIES (NET) 0.0% 2
---------------
NET ASSETS 100.0% $ 4,914
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $4,000 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 1,080
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (168)
---------------
Unrealized appreciation-net $ 912
===============
</TABLE>
(b) Non-income producing security.
56 SEE ACCOMPANYING NOTES
<PAGE>
SCHEDULE OF INVESTMENTS
OPPORTUNITY FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
----------------------------------------------------------------------------------
COMMON STOCKS 96.3%
----------------------------------------------------------------------------------
COMMUNICATIONS 5.8%
WinStar Communications, Inc.(b) 454,550 $ 15,398
True North Communications 239,200 10,525
Worldgate Communications, Inc.(b) 214,600 3,809
Millicom International Cellular SA(b) 92,300 3,231
Pinnacle Holdings, Inc.(b) 51,100 2,759
---------------
35,722
CONSUMER DISCRETIONARY 5.1%
Whitehall Jewellers, Inc.(b) 298,000 5,550
Ann Taylor Stores Corp.(b) 160,100 5,303
B.J.'s Wholesale Club, Inc.(b) 155,300 5,125
International Game Technology(b) 175,600 4,653
Linens`n Things, Inc.(b) 148,300 4,023
MSC Industrial Direct Co., Inc. 188,500 3,947
Ultimate Electronics, Inc.(b) 123,400 3,307
---------------
31,908
CONSUMER SERVICES 4.6%
Avis Rent-A-Car, Inc.(b) 626,975 11,755
SFX Entertainment, Inc. `A'(b) 192,450 8,720
Corporate Executive Board Co.(b) 137,600 8,239
---------------
28,714
ENERGY 8.6%
Newpark Resources, Inc.(b) 1,095,600 10,340
Veritas DGC, Inc.(b) 320,300 8,328
Grey Wolf, Inc.(b) 1,375,000 6,875
Grant Prideco, Inc.(b) 260,300 6,508
Ocean Energy, Inc.(b) 422,700 5,997
Key Energy Group, Inc.(b) 552,600 5,319
NATCO Group, Inc.(b) 551,200 5,202
Core Laboratories N.V.(b) 164,000 4,756
---------------
53,325
ENVIRONMENTAL SERVICES 2.0%
Waste Connections, Inc.(b) 383,000 7,564
Syntroleum Corp.(b) 267,500 4,581
---------------
12,145
FINANCIAL & BUSINESS SERVICES 7.0%
Meristar Hospitality Corp. 365,600 7,678
Korn/Ferry International(b) 222,100 7,038
Golden State Bancorp, Inc.(b) 369,200 6,646
Modem Media Poppe Tyson, Inc.(b) 426,200 5,301
Teletech Holdings, Inc.(b) 164,100 5,097
Bank United Corp. `A' 128,700 4,529
Rare Medium Group, Inc.(b) 220,800 3,491
Metris Companies, Inc. 134,950 3,391
---------------
43,171
HEALTH CARE 10.9%
Alpharma, Inc. 142,200 8,852
Medicis Pharmaceutical `A'(b) 154,800 8,824
Renal Care Group, Inc.(b) 338,400 8,275
Cell Therapeutics, Inc.(b) 240,467 7,364
Alkermes, Inc.(b) 151,300 7,130
INAMED Corp.(b) 158,000 5,787
Health Management Associates, Inc. `A'(b) 427,200 5,580
Noven Pharmaceuticals, Inc.(b) 163,300 4,909
Cytyc Corp.(b) 78,800 4,206
Province Healthcare Co.(b) 92,700 3,349
Medarex, Inc.(b) 37,300 3,152
---------------
67,428
TECHNOLOGY 52.3%
Art Technology Group, Inc.(b) 121,300 12,244
Netro Corp.(b) 210,300 12,066
Aeroflex, Inc.(b) 232,750 11,565
TranSwitch Corp.(b) 149,250 11,520
Kana Communications, Inc.(b) 185,900 11,503
Varian Semiconductor Equipment(b) 176,700 11,099
Digital Microwave Corp.(b) 284,900 10,862
Informatica Corp.(b) 132,300 10,840
Active Software, Inc.(b) 136,900 10,634
Motient Corp.(b) 631,200 9,902
Getty Images, Inc.(b) 254,000 9,414
Optimal Robotics Corp.(b) 242,800 9,317
DDI Corp.(b) 315,700 8,997
Documentum, Inc.(b) 97,300 8,696
L-3 Communications Holdings, Inc.(b) 150,200 8,571
Telcom Semiconductor, Inc.(b) 209,000 8,438
Mercury Interactive Corp.(b) 86,000 8,321
Advanced Energy Industries(b) 139,800 8,239
Sirius Satellite Radio, Inc.(b) 183,400 8,127
Packeteer, Inc.(b) 270,700 7,884
Fairchild Semiconductor International, Inc.(b) 192,200 7,784
Espeed, Inc.(b) 171,700 7,458
Bookham Technology PLC(b) 119,900 7,104
Digene Corp.(b) 171,500 6,924
FuelCell Energy, Inc.(b) 98,100 6,775
Trimble Navigation Ltd.(b) 120,900 5,901
Ulticom, Inc.(b) 234,900 5,641
iBEAM Broadcasting Corp.(b) 305,000 5,490
Network Plus Corp.(b) 376,400 5,340
MKS Instruments, Inc.(b) 134,800 5,274
GetThere.com, Inc.(b) 495,900 5,238
Exfo Electro Optical Engineering, Inc.(b) 115,100 5,050
CBT Group PLC SP - ADR(b) 95,600 4,588
Zixit Corp. 98,400 4,533
Electro Scientific Industries, Inc.(b) 100,400 4,421
Elantec Semiconductor, Inc.(b) 62,000 4,317
Lam Research Corp.(b) 114,700 4,301
Capstone Turbine Corp.(b) 89,700 4,042
Cysive, Inc.(b) 156,000 3,725
Be Free, Inc.(b) 376,100 3,385
SCG Holding Corp.(b) 154,100 3,371
Westell Technologies, Inc.(b) 198,500 2,978
Repligen Corp.(b) 347,826 2,185
Discovery Laboratories, Inc.(b) 461,538 2,077
Charles River Laboratories International, Inc.(b) 67,800 1,504
Eloyalty Corp.(b) 113,300 1,445
Precise Software Solutions Ltd.(b) 59,600 1,430
Stratos Lightwave, Inc.(b) 46,300 1,291
StorageNetworks, Inc.(b) 11,100 1,002
Virage, Inc.(b) 50,700 916
---------------
323,729
---------------
Total Common Stocks 596,142
(Cost $483,480) ===============
</TABLE>
-------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 5.6%
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000s)
<S> <C> <C>
REPURCHASE AGREEMENT 5.6%
State Street Bank
5.850% due 07/03/2000 $ 34,795 34,795
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
5.125% due 02/13/2004 valued at $35,493.
Repurchase proceeds are $34,812.)
---------------
Total Short-Term Instruments 34,795
(Cost $34,795)
TOTAL INVESTMENTS(a) 101.9% $ 630,937
(Cost $518,275)
OTHER ASSETS AND LIABILITIES (NET) (1.9%) (11,918)
---------------
NET ASSETS 100.0% $ 619,019
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $522,688 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 136,475
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value. (28,226)
---------------
Unrealized appreciation-net $ 108,249
===============
</TABLE>
(b) Non-income producing security.
SEE ACCOMPANYING NOTES 57
<PAGE>
SCHEDULE OF INVESTMENTS
INNOVATION FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
----------------------------------------------------------------------------------
COMMON STOCKS 98.5%
----------------------------------------------------------------------------------
COMMUNICATIONS 9.3%
Nokia Corp. SP - ADR 3,148,000 $ 157,203
Telefonaktiebolaget LM Ericsson SP - ADR 6,850,000 137,000
ADC Telecommunication, Inc.(b) 1,075,000 90,166
Next Level Communications, Inc.(b) 772,500 66,242
Alcatel Alsthom SP - ADR 850,000 56,525
---------------
507,136
CONSUMER DISCRETIONARY 4.0%
Gemstar International Group Ltd.(b) 2,746,000 168,750
General Motors Corp. `H' 560,000 49,140
---------------
217,890
HEALTH CARE 4.3%
MedImmune, Inc.(b) 1,350,000 99,900
Forest Laboratories `A'(b) 909,000 91,809
IDEC Pharmaceuticals Corp.(b) 392,800 46,080
---------------
237,789
TECHNOLOGY 80.9%
Micron Technology, Inc.(b) 2,610,000 229,843
Siebel Systems, Inc.(b) 1,305,200 213,482
Intel Corp. 1,480,000 197,858
Cisco Systems, Inc.(b) 3,040,000 193,230
E-Tek Dynamics, Inc.(b) 706,300 186,331
Ciena Corp.(b) 1,085,000 180,856
Oracle Corp.(b) 2,019,000 169,722
Juniper Networks, Inc.(b) 1,126,200 163,932
Nortel Networks Corp. 2,400,000 163,800
Redback Networks, Inc.(b) 910,400 162,051
Brocade Communications Systems, Inc.(b) 867,200 159,118
Xilinx, Inc.(b) 1,830,000 151,089
Applied Materials, Inc.(b) 1,571,600 142,426
ASM Lithography Holding(b) 3,179,100 140,278
Veritas Software Corp.(b) 1,148,450 129,793
Dell Computer Corp.(b) 2,450,000 120,816
Sycamore Networks, Inc.(b) 1,085,000 119,757
Tibco Software, Inc.(b) 1,020,600 109,443
Vignette Corp.(b) 2,050,000 106,632
Check Point Software Technologies Ltd.(b) 500,000 105,875
National Semiconductor Corp.(b) 1,810,000 102,718
Rational Software Corp.(b) 1,061,500 98,653
I2 Technologies, Inc.(b) 920,200 95,945
Portal Software, Inc.(b) 1,465,000 93,577
Broadvision, Inc.(b) 1,771,100 89,994
Network Appliance, Inc.(b) 1,100,000 88,550
Texas Instruments, Inc. 1,240,000 85,173
JDS Uniphase Corp.(b) 618,000 74,083
SDL, Inc.(b) 250,000 71,297
Ariba, Inc.(b) 589,600 57,808
Sun Microsystems, Inc.(b) 628,400 57,145
RF Micro Devices, Inc.(b) 627,500 54,985
EMC Corp.(b) 670,000 51,548
Extreme Networks, Inc.(b) 397,500 41,936
Infospace, Inc.(b) 700,000 38,675
Phone.com, Inc.(b) 547,300 35,643
Analog Devices, Inc.(b) 410,000 31,160
Vitesse Semiconductor Co.(b) 400,000 29,425
Foundry Networks, Inc.(b) 260,000 28,730
PE Corp.-PE Biosystems Group 380,000 25,032
Flextronics International Ltd.(b) 275,000 18,889
Digital Microwave Corp.(b) 400,000 15,250
---------------
4,432,548
---------------
Total Common Stocks 5,395,363
(Cost $3,710,170) ===============
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000s) (000s)
----------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 2.1%
----------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT 2.1%
State Street Bank
5.850% due 07/03/2000 $ 113,785 $ 113,785
(Dated 06/30/2000. Collateralized by
Federal Home Loan Corporation
6.390% due 10/01/2008 valued at $51,000.
Federal Home Loan Bank
5.823% due 05/06/2009 valued at $51,000, and
Federal Home Loan Bank
7.620% due 01/12/2010 valued at $14,064.
Repurchase proceeds are $113,840.)
---------------
Total Short-Term Instruments 113,785
(Cost $113,785) ===============
TOTAL INVESTMENTS(a) 100.6% $ 5,509,148
(Cost $3,823,955)
OTHER ASSETS AND LIABILITIES (NET) (0.6%) (29,992)
---------------
NET ASSETS 100.0% $ 5,479,156
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $3,914,225 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 1,746,367
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (151,444)
---------------
Unrealized appreciation-net $ 1,594,923
===============
</TABLE>
(b) Non-income producing security.
58 SEE ACCOMPANYING NOTES
<PAGE>
SCHEDULE OF INVESTMENTS
GLOBAL INNOVATION FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
----------------------------------------------------------------------------------
COMMON STOCKS 93.2%
----------------------------------------------------------------------------------
CAPITAL GOODS 1.2%
Waters Corp.(b) 10,000 $ 1,248
---------------
COMMUNICATIONS 7.3%
Nokia Corp. SP - ADR 40,000 1,998
Alcatel Alsthom SP - ADR 29,000 1,929
ADC Telecommunication, Inc.(b) 18,000 1,510
Telefonaktiebolaget LM Ericsson SP - ADR 70,000 1,400
SK Telecom Co. Ltd. SP - ADR 21,000 763
---------------
7,600
HEALTH CARE 10.3%
IDEC Pharmaceuticals Corp.(b) 19,000 2,229
Elan Corp. PLC(b) 42,000 2,034
Genentech, Inc.(b) 11,000 1,892
Ivax Corp.(b) 36,000 1,494
Teva Pharmaceutical Industries Ltd. 20,000 1,109
QLT Phototherapeutics, Inc.(b) 13,600 1,051
COR Therapeutics, Inc.(b) 12,000 1,024
---------------
10,833
TECHNOLOGY 74.4%
Juniper Networks, Inc.(b) 23,800 3,464
Nortel Networks Corp. 45,000 3,071
Intel Corp. 20,400 2,727
EMC Corp.(b) 32,000 2,462
Cisco Systems, Inc.(b) 38,100 2,422
Redback Networks, Inc.(b) 13,000 2,314
I2 Technologies, Inc.(b) 22,000 2,294
BEA Systems, Inc.(b) 46,000 2,274
Dell Computer Corp.(b) 46,000 2,268
Veritas Software Corp.(b) 20,000 2,260
E-Tek Dynamics, Inc.(b) 8,500 2,242
Extreme Networks, Inc.(b) 21,000 2,216
Brocade Communications Systems, Inc.(b) 11,700 2,147
Flextronics International Ltd.(b) 28,500 1,958
Applied Micro Circuits Corp.(b) 19,000 1,876
Sycamore Networks, Inc. 17,000 1,876
Oracle Corp.(b) 22,000 1,849
Micron Technology, Inc.(b) 21,000 1,849
Bookham Technology PLC(b) 31,000 1,837
Tibco Software, Inc.(b) 17,000 1,823
Micromuse, Inc.(b) 11,000 1,820
Siebel Systems, Inc.(b) 11,100 1,816
Rational Software Corp.(b) 19,000 1,766
Broadcom Corp.(b) 7,500 1,642
Aether Systems, Inc.(b) 8,000 1,640
Sun Microsystems, Inc.(b) 18,000 1,637
Altera Corp.(b) 15,200 1,548
Applied Materials, Inc.(b) 16,900 1,532
Scientific-Atlanta, Inc. 20,000 1,490
SDL, Inc.(b) 5,000 1,426
Texas Instruments, Inc. 20,000 1,374
Teradyne, Inc.(b) 18,500 1,360
ASM Lithography Holding(b) 30,000 1,324
Dialog Semiconductor Ltd.(b) 25,000 1,256
China Telecom (Hong Kong) Ltd.(b) 7,000 1,245
Proxim, Inc.(b) 12,000 1,188
Inktomi Corp.(b) 9,500 1,123
QLogic Corp.(b) 15,500 1,024
Maxim Integrated Products, Inc.(b) 14,100 958
PE Corp.-Celera Genomics Group(b) 10,000 935
Integrated Device Technology, Inc.(b) 15,000 898
Yahoo, Inc.(b) 7,000 867
Comverse Technology, Inc.(b) 9,000 837
Apple Computer, Inc.(b) 15,000 786
Broadvision, Inc.(b) 15,000 762
Interwoven, Inc.(b) 3,000 329
StorageNetworks, Inc.(b) 1,900 171
---------------
77,983
---------------
Total Common Stocks 97,664
(Cost $87,088) ===============
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000s) (000s)
----------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 7.6%
----------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT 7.6%
State Street Bank
5.850% due 07/03/2000 $ 7,962 $ 7,962
(Dated 06/30/2000. Collateralized by
Federal Home Loan Bank
7.620% due 01/12/2010 valued at $8,125.
Repurchase proceeds are $7,966.)
---------------
Total Short-Term Instruments 7,962
(Cost $7,962) ===============
TOTAL INVESTMENTS(a) 100.8% $ 105,626
(Cost $95,050)
OTHER ASSETS AND LIABILITIES (NET) (0.8%) (878)
---------------
NET ASSETS 100.0% $ 104,748
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $95,889 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 12,532
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (2,795)
---------------
Unrealized appreciation-net $ 9,737
===============
</TABLE>
(b) Non-income producing security.
SEE ACCOMPANYING NOTES 59
<PAGE>
SCHEDULE OF INVESTMENTS
INTERNATIONAL GROWTH FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
----------------------------------------------------------------------------------
COMMON STOCKS 100.6%
----------------------------------------------------------------------------------
AUSTRALIA 2.4%
Woodside Petroleum Ltd. 11,000 $ 86
Broken Hill Proprietary Co. Ltd. SP - ADR 3,400 81
M.I.M. Holdings Ltd. 80,000 43
Telstra Corporation Ltd. - ADR 2,000 41
---------------
251
CANADA 4.5%
Talisman Energy, Inc.(b) 6,000 199
Rogers Communications 'B'(b) 6,800 194
Research In Motion Ltd.(b) 1,700 77
---------------
470
CHINA 2.9%
SGS Holdings SA 400 168
UBS AG 930 136
---------------
304
DENMARK 1.9%
Novo-Nordisk AS SP - ADR(b) 1,600 135
Kamps AG 2,000 64
---------------
199
ESTONIA 1.3%
TPI Telef Pub Info 15,000 142
FINLAND 2.5%
Nokia Corp. SP - ADR 5,200 260
---------------
FRANCE 7.4%
PSA Peugeot Citroen 2,200 441
Total Fina Elf SA 1,444 221
Coflexip SA - ADR 2,000 121
---------------
783
GERMANY 9.0%
Siemens AG 4,100 618
Deutsche Bank AG 2,300 189
PrimaCom AG SP - ADR(b) 4,000 95
Fresenius Medical Care AG 1,800 47
---------------
949
GREECE 1.7%
Hellenic Telecommunications Organization SA 15,000 183
---------------
HONG KONG 2.2%
Cathay Pacific Airways 90,000 166
Giordano International Ltd. 40,000 61
---------------
227
IRELAND 0.5%
CRH PLC 3,063 55
---------------
ITALY 4.0%
Mediaset SpA 15,700 240
Gruppo Editoriale L'Espresso SpA 14,912 177
---------------
417
JAPAN 22.7%
Oracle Corp. - Japan 900 326
NTT Data Corp. 30 308
Yamanouchi Pharmaceutical 5,000 273
NTT Mobile Communication Network, Inc. 10 270
Nikko Securities Co. Ltd. 25,000 247
Takeda Chemical Industries Ltd. 3,000 197
Softbank Corp. 1,200 163
Fuji Bank Ltd. 21,000 160
Murata Manufacturing Co. Ltd. 1,000 143
Kyocera Corp. 600 102
Enix Corp. 1,500 87
Eisai Co. Ltd. 2,000 64
Banyu Pharmaceutical Co. Ltd. 2,000 49
---------------
2,389
MEXICO 1.9%
Grupo Televisa SA SP - GDR(b) 2,000 138
Telefonos de Mexico SP - ADR 1,000 57
---------------
195
NETHERLANDS 8.5%
Koninklijke Philips Electronics NV SP - ADR(b) 9,136 $ 434
STMicroelectronics NV 4,200 270
ASM Lithography Holding(b) 2,820 124
ING Groep NV 1,037 70
---------------
898
PORTUGAL 0.5%
PT Multimedia.com(b) 500 25
Telecel Communications(b) 1,500 23
Multimedia Communication(b) 500 4
---------------
52
SINGAPORE 0.4%
DBS Group Holdings Ltd. 3,489 45
---------------
SOUTH KOREA 0.6%
Samsung Electronics SP - GDR 144A 196 38
Korea Telecom Corp. SP - ADR 500 24
---------------
62
SPAIN 0.6%
Amadeus Global Travel Distribution SA(b) 5,500 63
---------------
SWEDEN 2.7%
Telefonaktiebolaget LM Ericsson SP - ADR `B' 7,500 150
Icon Medialab International AB 11,000 138
---------------
288
SWITZERLAND 2.7%
Disetronic Holding AG(b) 26 174
Holderbank Financiere Glarus AG 93 114
---------------
288
UNITED KINGDOM 19.7%
Lasmo PLC 210,000 446
Pace Micro Technology PLC 20,000 288
WPP Group PLC - ADR 3,400 247
Wilson Connolly Holdings PLC 100,000 215
Vodafone Group PLC SP - ADR 5,000 207
Logica PLC 7,000 166
AstraZeneca PLC SP - ADR(b) 3,000 140
BP AMOCO PLC SP - ADR 2,050 116
Stagecoach Holdings PLC 90,000 99
Royal Bank of Scotland Group PLC 5,800 97
Allied Zurich PLC 5,000 59
---------------
2,080
---------------
Total Common Stocks 10,600
(Cost $8,162) ===============
TOTAL INVESTMENTS(a) 100.6% $ 10,600
(Cost $8,162)
OTHER ASSETS AND LIABILITIES (NET) (0.6)% (59)
---------------
NET ASSETS 100.0% $ 10,541
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $8,162 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 3,039
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value. (601)
---------------
Unrealized appreciation-net $ 2,438
===============
</TABLE>
(b) Non-income producing security.
60 SEE ACCOMPANYING NOTES
<PAGE>
SCHEDULE OF INVESTMENTS
MEGA-CAP FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
----------------------------------------------------------------------------------
COMMON STOCKS 97.7%
----------------------------------------------------------------------------------
CAPITAL GOODS 6.2%
General Electric Co. 2,700 $ 143
Tyco International Ltd. 2,200 104
---------------
247
CONSUMER DISCRETIONARY 5.4%
Gemstar International Group Ltd.(b) 1,600 98
Wal-Mart Stores, Inc. 1,500 86
Kohls Corp.(b) 600 33
---------------
217
CONSUMER STAPLES 6.0%
Anheuser Busch Cos., Inc. 1,100 82
Safeway, Inc.(b) 1,800 81
Sysco Corp. 1,900 80
---------------
243
ENERGY 8.3%
Enron Corp. 1,100 71
Apache Corp. 1,200 71
Nabors Industries, Inc.(b) 1,600 67
Devon Energy Corp. 1,100 62
Dynegy, Inc. `A' 900 61
---------------
332
FINANCIAL & BUSINESS SERVICES 5.1%
Citigroup, Inc. 1,000 60
VeriSign, Inc.(b) 300 53
Capital One Financial Corp. 1,100 49
Paychex, Inc. 1,000 42
---------------
204
HEALTH CARE 12.7%
Pfizer, Inc. 3,025 145
Genentech, Inc.(b) 600 103
Immunex Corp.(b) 2,000 99
Merck & Co., Inc. 1,100 84
Pharmacia Corp. 1,500 78
---------------
509
TECHNOLOGY 52.0%
Corning, Inc. 600 162
Redback Networks, Inc.(b) 900 160
Intel Corp. 1,000 134
Cisco Systems, Inc.(b) 2,100 134
Nortel Networks Corp. 1,600 109
EMC Corp.(b) 1,400 108
Micron Technology, Inc.(b) 1,200 106
Siebel Systems, Inc.(b) 600 98
JDS Uniphase Corp.(b) 800 96
Oracle Corp.(b) 1,100 93
Compaq Computer Corp. 3,500 89
Broadcom Corp. `A'(b) 400 88
Ciena Corp.(b) 500 83
Sun Microsystems, Inc.(b) 900 82
Applied Materials, Inc.(b) 900 82
Veritas Software Corp.(b) 700 79
I2 Technologies, Inc.(b) 700 73
Texas Instruments, Inc. 1,000 69
Linear Technology Corp. 1,000 64
America Online, Inc.(b) 1,200 63
Teradyne, Inc.(b) 800 59
Network Appliance, Inc.(b) 700 56
---------------
2,087
UTILITIES 2.0%
Calpine Corp.(b) 1,200 79
---------------
Total Common Stocks 3,918
(Cost $3,047) ===============
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000s) (000s)
----------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 4.3%
----------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT 4.3%
State Street Bank
5.850% due 07/03/2000 $ 172 $ 172
(Dated 06/30/2000. Collateralized by
Federal Home Loan Mortgage Corporation
5.960% due 03/30/2002 valued at $179.
Repurchase proceeds are $172.)
---------------
Total Short-Term Instruments 172
(Cost $172) ===============
TOTAL INVESTMENTS(a) 102.0% $ 4,090
(Cost $3,219)
OTHER ASSETS AND LIABILITIES (NET) (2.0%) (81)
---------------
NET ASSETS 100.0% $ 4,009
---------------
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $3,244 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 955
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (109)
---------------
Unrealized appreciation-net $ 846
===============
</TABLE>
(b) Non-income producing security.
SEE ACCOMPANYING NOTES 61
<PAGE>
SCHEDULE OF INVESTMENTS
CAPITAL APPRECIATION FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
----------------------------------------------------------------------------------
COMMON STOCKS 93.3%
----------------------------------------------------------------------------------
AEROSPACE 0.0%
Honeywell International, Inc. 1 $ 0
---------------
CAPITAL GOODS 6.5%
General Electric Co. 365,900 19,393
Tyco International Ltd. 259,300 12,284
Waters Corp.(b) 74,800 9,336
United Technologies Corp. 125,400 7,383
Dover Corp. 77,800 3,156
---------------
51,552
COMMUNICATIONS 2.2%
ADC Telecommunication, Inc.(b) 122,800 10,300
ALLTEL Corp. 110,800 6,863
SBC Communications, Inc. 1 0
---------------
17,163
CONSUMER DISCRETIONARY 7.1%
Wal-Mart Stores, Inc. 197,100 11,358
CVS Corp. 274,600 10,984
Gemstar International Group Ltd.(b) 129,400 7,952
McGraw-Hill Companies, Inc. 137,500 7,425
Harley-Davidson, Inc. 173,300 6,672
Home Depot, Inc. 82,450 4,117
Sears Roebuck & Co. 123,900 4,042
Kohls Corp.(b) 71,500 3,977
Delphi Automotive Systems 1 0
---------------
56,527
CONSUMER SERVICES 3.2%
Viacom, Inc. `B'(b) 196,763 13,417
New York Times Co. 161,300 6,371
Gannett, Inc. 100,400 6,005
---------------
25,793
CONSUMER STAPLES 5.2%
Safeway, Inc.(b) 252,700 11,403
Kroger Co.(b) 487,400 10,753
Anheuser Busch Cos., Inc. 139,800 10,441
Quaker Oats Co. 108,600 8,159
Sysco Corp. 7,500 316
---------------
41,072
ENERGY 17.1%
Exxon Mobil Corp 210,000 16,485
Anadarko Petroleum Corp. 213,400 10,523
Baker Hughes, Inc. 285,900 9,149
Burlington Resources, Inc. 232,300 8,885
Royal Dutch Petroleum Co. 139,100 8,563
EOG Resources, Inc. 252,900 8,472
Apache Corp. 143,800 8,457
USX Marathon Group 330,600 8,286
Devon Energy Corp. 141,100 7,928
BP Amoco PLC SP - ADR 136,744 7,735
Conoco, Inc. 307,600 7,555
Amerada Hess Corp. 121,300 7,490
Peco Energy Co. 183,800 7,409
Chevron Corp. 86,300 7,319
Dynegy, Inc. 103,600 7,077
Texaco, Inc. 75,900 4,042
Nabors Industries, Inc.(b) 6,400 266
Enron Corp. 4,000 258
---------------
135,899
FINANCIAL & BUSINESS SERVICES 10.6%
Citigroup, Inc. 184,750 11,131
MGIC Investment Corp. 204,100 9,287
American Express 163,600 8,528
Hartford Financial Services Group, Inc. 145,400 8,133
MBNA Corp. 286,800 7,779
AFLAC, Inc. 168,300 7,731
Capital One Financial Corp. 172,600 7,703
Fleet Boston Financial Corp. 205,100 6,973
Marsh & McLennan Cos 66,500 6,945
Firstar Corp. 292,600 6,164
Federal National Mortgage Association 61,900 3,230
VeriSign, Inc.(b) 1,100 194
Paychex, Inc. 3,800 160
---------------
83,958
HEALTH CARE 10.0%
Pfizer, Inc. 329,925 15,836
Immunex Corp.(b) 244,600 12,092
Allergan, Inc. 162,200 12,084
Schering-Plough Corp. 227,300 11,479
Merck & Co., Inc. 140,500 $ 10,766
Genentech, Inc.(b) 55,300 9,512
Pharmacia Corp. 152,600 7,888
---------------
79,657
TECHNOLOGY 29.0%
Corning, Inc. 59,900 16,166
Intel Corp. 112,400 15,026
Nortel Networks Corp. 200,400 13,677
Cisco Systems, Inc.(b) 212,000 13,475
SDL, Inc.(b) 46,200 13,176
Ciena Corp.(b) 79,000 13,168
Amdocs Ltd.(b) 145,800 11,190
Scientific-Atlanta, Inc. 149,600 11,145
JDS Uniphase Corp.(b) 86,000 10,309
Micron Technology, Inc. 112,100 9,873
Altera Corp.(b) 96,500 9,837
Compaq Computer Corp. 381,600 9,755
Siebel Systems, Inc.(b) 58,400 9,552
EMC Corp.(b) 123,500 9,502
Analog Devices, Inc.(b) 118,100 8,976
Sun Microsystems, Inc.(b) 96,400 8,767
Oracle Corp.(b) 103,100 8,668
Applied Materials, Inc.(b) 91,800 8,319
Veritas Software Corp.(b) 73,025 8,253
Texas Instruments, Inc. 115,500 7,933
Teradyne, Inc.(b) 86,000 6,321
Computer Associates International, Inc. 102,200 5,231
Redback Networks, Inc.(b) 3,100 552
Broadcom Corp.(b) 1,600 350
I2 Technologies, Inc.(b) 2,800 292
America Online, Inc.(b) 4,700 248
Linear Technology Corp. 3,800 243
Network Appliance, Inc.(b) 2,800 225
---------------
230,229
UTILITIES 2.4%
Coastal Corp. 158,600 9,655
Calpine Corp.(b) 140,400 9,231
---------------
18,886
---------------
Total Common Stocks 740,736
(Cost $576,274) ===============
</TABLE>
-------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 7.2%
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000s)
<S> <C> <C>
REPURCHASE AGREEMENT 7.2%
State Street Bank
5.850% due 07/03/2000 $ 56,866 56,866
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
6.400% due 12/21/2001 valued at $51,004 and
Federal Home Loan Bank
7.620% due 01/12/2010 valued at $7,004.
Repurchase proceeds are $56,893.)
---------------
Total Short-Term Instruments 56,866
(Cost $56,866) ===============
TOTAL INVESTMENTS(a) 100.5% $ 797,602
---------------
OTHER ASSETS AND LIABILITIES (NET) (0.5%) (3,792)
NET ASSETS 100.0% $ 793,810
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $637,056 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 178,851
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (18,305)
---------------
Unrealized appreciation-net $ 160,546
===============
</TABLE>
(b) Non-income producing security.
62 SEE ACCOMPANYING NOTES
<PAGE>
SCHEDULE OF INVESTMENTS
MID-CAP FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
----------------------------------------------------------------------------------
COMMON STOCKS 94.3%
----------------------------------------------------------------------------------
AEROSPACE 0.4%
Northrop Grumman Corp. 69,000 $ 4,571
---------------
BUILDING 1.0%
Lennar Corp. 549,100 11,119
---------------
CAPITAL GOODS 3.0%
Waters Corp.(b) 153,500 19,159
Millipore Corp. 173,100 13,047
---------------
32,206
COMMUNICATIONS 2.8%
ADC Telecommunication, Inc.(b) 205,300 17,220
Westwood One, Inc.(b) 389,800 13,302
---------------
30,522
CONSUMER DISCRETIONARY 5.0%
---------------
CDW Computer Centers, Inc.(b) 206,400 12,900
Bed, Bath & Beyond, Inc.(b) 292,900 10,618
Dollar Tree Stores, Inc.(b) 265,650 10,510
Intimate Brands, Inc. `A' 523,380 10,337
B.J.'s Wholesale Club, Inc.(b) 300,300 9,910
---------------
54,275
CONSUMER SERVICES 2.5%
Reader's Digest Assn., Inc. `A' 363,600 14,453
Brinker International, Inc.(b) 412,800 12,074
---------------
26,527
CONSUMER STAPLES 4.7%
Pepsi Bottling Group, Inc. 482,100 14,071
SUPERVALU, Inc. 662,300 12,625
McCormick & Co. 379,500 12,334
Keebler Foods Co. 321,400 11,932
---------------
50,962
ENERGY 16.8%
Apache Corp. 288,900 16,991
Anadarko Petroleum Corp. 328,300 16,189
Devon Energy Corp. 278,700 15,659
EOG Resources, Inc. 464,700 15,568
Kerr McGee Corp. 250,200 14,747
Murphy Oil Corp. 236,400 14,051
Nabors Industries, Inc.(b) 336,500 13,986
USX Marathon Group 511,000 12,807
Ocean Energy, Inc.(b) 866,500 12,293
Dynegy, Inc. `A' 166,369 11,365
ENSCO International, Inc. 306,100 10,962
Noble Drilling Corp.(b) 257,600 10,610
Cooper Cameron Corp.(b) 158,200 10,441
BJ Services Co.(b) 79,600 4,975
---------------
180,644
FINANCIAL & BUSINESS SERVICES 17.1%
Apartment Investment & Management Co. `A' 375,700 16,249
Liberty Property Trust 582,500 15,109
Ace Ltd. 528,100 14,787
Federated Investors, Inc. `B' 418,400 14,670
Valassis Communications, Inc.(b) 379,850 14,482
Duke-Weeks Realty Corp. 636,100 14,233
Ambac Financial Group, Inc. 238,700 13,084
Golden West Financial Corp. 316,800 12,929
Waddell & Reed Financial, Inc. `A' 390,350 12,808
Lincoln National Corp. 353,200 12,759
Providian Financial Corp. 138,950 12,506
Capital One Financial Corp. 272,900 12,179
PMI Group, Inc. 253,500 12,041
Banknorth Group, Inc. 412,500 6,316
---------------
184,152
HEALTH CARE 5.9%
Allergan, Inc. 280,500 20,897
IDEC Pharmaceuticals Corp.(b) 147,700 17,327
Forest Laboratories `A'(b) 138,300 13,968
Invitrogen Corp.(b) 149,400 11,235
---------------
63,427
MATERIALS & PROCESSING 0.8%
Martin Marietta Materials, Inc. 222,000 8,977
---------------
TECHNOLOGY 31.7%
Integrated Device Technology, Inc.(b) 322,100 $ 19,286
Tektronix, Inc. 259,700 19,218
Brocade Communications Systems, Inc.(b) 101,700 18,660
Ciena Corp.(b) 104,200 17,369
Dendrite International, Inc.(b) 510,250 16,998
Microchip Technology, Inc.(b) 275,000 16,023
Scientific-Atlanta, Inc. 213,600 15,913
Amdocs Ltd.(b) 200,600 15,396
Symbol Technologies, Inc. 279,500 15,093
Credence Systems Corp.(b) 273,400 15,088
Copper Mountain Networks(b) 169,800 14,964
Novellus Systems, Inc.(b) 262,900 14,870
Veritas Software Corp.(b) 123,325 13,938
ISS Group, Inc.(b) 129,900 12,826
Comverse Technology, Inc.(b) 135,800 12,629
CSG Systems International, Inc.(b) 221,600 12,423
SDL, Inc.(b) 41,900 11,949
RF Micro Devices, Inc.(b) 133,500 11,698
Network Associates, Inc.(b) 548,700 11,180
SanDisk Corp.(b) 181,000 11,075
PerkinElmer, Inc. 163,400 10,805
Cypress Semiconductor Corp.(b) 252,800 10,681
Scient Corp.(b) 227,300 10,030
JDS Uniphase Corp.(b) 61,000 7,312
LSI Logic Corp.(b) 109,400 5,921
---------------
341,345
UTILITIES 2.4%
Entergy Corp. 477,500 12,982
Florida Progress Corp. 266,300 12,483
---------------
25,465
---------------
Total Common Stocks 1,014,192
(Cost $827,710) ===============
</TABLE>
-------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 6.3%
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000s)
<S> <C> <C>
REPURCHASE AGREEMENT 6.3%
State Street Bank
5.850% due 07/03/2000 $68,041 68,041
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
6.350% due 06/22/2001 valued at $51,002 and
Federal National Mortgage Association
6.350% due 06/22/2001 valued at $18,404.
Repurchase proceeds are $68,074.)
---------------
Total Short-Term Instruments 68,041
(Cost $68,041) ===============
TOTAL INVESTMENTS(a) 100.6% $ 1,082,233
(Cost $895,751)
OTHER ASSETS AND LIABILITIES (NET) (0.6%) (6,057)
---------------
NET ASSETS 100.0% $ 1,076,176
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $900,208 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 203,233
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value. (21,208)
----------------
Unrealized appreciation-net $ 182,025
===============
</TABLE>
(b) Non-income producing security.
SEE ACCOMPANYING NOTES 63
<PAGE>
SCHEDULE OF INVESTMENTS
SMALL-CAP FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
----------------------------------------------------------------------------------
COMMON STOCKS 99.2%
----------------------------------------------------------------------------------
BUILDING 1.7%
Kaufman & Broad Home Corp. 21,200 $ 420
D.R. Horton, Inc. 16,900 229
---------------
649
CAPITAL GOODS 5.6%
Power-One, Inc.(b) 6,600 752
Oshkosh Truck Corp. `B' 13,500 483
Manitowoc Co., Inc. 12,150 325
Asyst Technologies, Inc.(b) 8,500 291
Astec Industries, Inc.(b) 8,900 226
---------------
2,077
COMMUNICATIONS 2.4%
Westwood One, Inc.(b) 13,600 464
Aspect Communications Corp.(b) 11,000 432
---------------
896
CONSUMER DISCRETIONARY 8.1%
Canandaigua Wine Co. `A'(b) 9,000 454
Jack in the Box, Inc.(b) 15,400 379
Callaway Golf Co. 22,000 359
CEC Entertainment, Inc.(b) 13,900 356
Russell Corp. 16,600 332
Pier 1 Imports, Inc. 30,100 293
Argosy Gaming Co.(b) 18,500 266
Salton, Inc.(b) 5,600 207
Emmis Communications Corp. `A'(b) 4,400 182
Guess ?, Inc.(b) 11,600 162
---------------
2,990
CONSUMER SERVICES 5.1%
Central Newspapers, Inc. `A' 12,000 759
Ruby Tuesday, Inc. 35,500 446
Macrovision Corp.(b) 5,900 377
Learning Tree International(b) 4,800 294
---------------
1,876
ENERGY 15.8%
Mitchell Energy & Development Corp. `A' 25,700 826
Houston Exploration Co.(b) 24,700 621
Patterson Energy, Inc.(b) 19,900 567
Triton Energy Ltd.(b) 13,400 527
St. Mary Land & Exploration 12,400 522
Louis Dreyfus Natural Gas(b) 16,200 507
Ocean Energy, Inc.(b) 35,300 501
HS Resources, Inc.(b) 16,500 495
Vintage Petroleum, Inc. 21,200 478
Barrett Resources Corp.(b) 13,800 420
Cross Timbers Oil Co. 17,300 383
---------------
5,847
FINANCIAL & BUSINESS SERVICES 11.7%
Federated Investors, Inc. `B' 18,700 656
Parkway Properties, Inc. 16,200 494
SEI Investments Co. 12,300 490
Radian Group, Inc. 8,400 435
Hudson United Bancorp 17,869 401
Westamerica BanCorp 14,100 368
Metris Companies, Inc. 14,550 366
AmeriCredit Corp.(b) 20,300 345
Banknorth Group, Inc. 18,700 286
Prentiss Properties Trust 11,500 276
Bank United Corp. `A' 5,700 201
---------------
4,318
HEALTH CARE 7.6%
Invitrogen Corp.(b) 9,000 677
IDEC Pharmaceuticals Corp.(b) 5,100 598
Triad Hospitals, Inc.(b) 21,500 520
Celgene Corp.(b) 8,800 518
Quest Diagnostics, Inc.(b) 7,200 515
---------------
2,828
MATERIALS & PROCESSING 3.4%
Florida Rock Industries, Inc. 13,000 463
Shaw Group, Inc. (The)(b) 9,200 434
Martin Marietta Materials, Inc. 8,800 356
---------------
1,253
TECHNOLOGY 35.9%
Quanta Services, Inc.(b) 13,900 765
Dendrite International, Inc.(b) 21,400 713
Varian, Inc.(b) 15,300 706
PerkinElmer, Inc. 9,800 $ 648
Tektronix, Inc. 8,600 636
Burr-Brown Corp.(b) 7,100 615
Photon Dynamics, Inc.(b) 8,100 605
Micromuse, Inc.(b) 3,400 563
Radiant Systems, Inc.(b) 23,000 552
Polycom, Inc.(b) 5,500 518
WebTrends Corp.(b) 12,600 487
Serena Software, Inc.(b) 10,600 481
Varian Semiconductor Equipment(b) 7,600 477
Integrated Device Technology, Inc.(b) 7,600 455
Anadigics, Inc.(b) 13,250 451
TranSwitch Corp.(b) 5,800 448
Symantec Corp.(b) 8,300 448
ISS Group, Inc.(b) 4,500 444
Cree, Inc.(b) 3,200 427
Sandisk Corp.(b) 6,700 410
Powerwave Technologies, Inc.(b) 8,100 356
Cybex Computer Products(b) 7,400 318
Nvidia Corp.(b) 4,800 305
Cypress Semiconductor Corp.(b) 6,900 292
Cognizant Technology Solutions Corp.(b) 8,500 282
Electro Scientific Industries, Inc.(b) 6,300 276
Hyperion Solutions Corp.(b) 7,200 234
Advanced Energy Industries(b) 3,700 218
Helix Technology Corp. 4,400 172
---------------
13,302
TRANSPORTATION 1.9%
Forward Air Corp.(b) 10,600 424
Landstar System, Inc.(b) 4,700 280
---------------
704
---------------
Total Common Stocks 36,740
(Cost $30,749) ===============
</TABLE>
-------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 2.9%
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000s)
<S> <C> <C>
REPURCHASE AGREEMENT 2.9%
State Street Bank
5.850% due 07/03/2000 $ 1,067 1,067
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
6.350% due 06/22/2001 valued at $1,092.
Repurchase proceeds are $1,068.)
---------------
Total Short-Term Instruments 1,067
(Cost $1,067) ===============
TOTAL INVESTMENTS(a) 102.1% $ 37,807
(Cost $31,816)
OTHER ASSETS AND LIABILITIES (NET) (2.1%) (781)
---------------
NET ASSETS 100.0% $ 37,026
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $32,793 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 7,024
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value. (2,010)
---------------
Unrealized appreciation-net $ 5,014
===============
</TABLE>
(b) Non-income producing security.
64 SEE ACCOMPANYING NOTES
<PAGE>
SCHEDULE OF INVESTMENTS
MICRO-CAP FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
----------------------------------------------------------------------------------
COMMON STOCKS 92.4%
----------------------------------------------------------------------------------
BUILDING 0.9%
Dal-Tile International, Inc.(b) 269,700 $ 2,225
---------------
CAPITAL GOODS 5.8%
Quixote Corp. 332,700 4,991
Semitool, Inc.(b) 200,000 3,462
Primex Technologies, Inc. 150,900 3,320
Astec Industries, Inc.(b) 85,000 2,157
---------------
13,930
CONSUMER DISCRETIONARY 11.9%
Braun's Fashions Corp.(b) 250,000 9,172
Chico's Fas, Inc.(b) 300,000 6,000
Rare Hospitality International, Inc.(b) 140,000 3,955
Koala Corp.(b) 226,600 3,201
Stanley Furniture CO, Inc.(b) 138,000 3,036
Haverty Furniture Cos., Inc. 184,000 1,564
Guess ?, Inc.(b) 100,800 1,411
---------------
28,339
CONSUMER SERVICES 0.4%
ICT Group, Inc.(b) 100,000 956
---------------
CONSUMER STAPLES 1.5%
Hain Celestial Group, Inc.(b) 96,400 3,537
---------------
ENERGY 19.7%
Prima Energy Corp.(b) 150,000 8,025
St. Mary Land & Exploration 175,000 7,361
Patina Oil & Gas Corp. 325,000 6,744
Cross Timbers Oil Co. 300,000 6,637
Swift Energy Co.(b) 200,000 5,675
Ocean Energy, Inc.(b) 300,000 4,256
Forest Oil Corp. 200,000 3,188
HS Resources, Inc.(b) 93,800 2,814
Chesapeake Energy Corp. 300,000 2,325
---------------
47,025
FINANCIAL & BUSINESS SERVICES 4.7%
Hall, Kinion & Associates, Inc.(b) 123,200 4,104
WFS Financial, Inc.(b) 168,900 2,913
Westcorp 128,700 1,536
John Nuveen Co. `A' 28,400 1,191
Alabama National Bancorp 50,000 991
AG Services of America, Inc.(b) 27,000 412
---------------
11,147
HEALTH CARE 0.8%
Candela Corp.(b) 216,150 1,972
---------------
MATERIALS & PROCESSING 0.9%
Albemarle Corp. 57,100 1,128
Arch Chemicals, Inc. 48,600 1,063
---------------
2,191
TECHNOLOGY 45.1%
Telcom Semiconductor, Inc.(b) 220,000 8,882
Merix Corp.(b) 166,700 7,835
Photon Dynamics, Inc.(b) 100,000 7,469
Cybex Computer Products(b) 173,500 7,460
Radiant Systems, Inc.(b) 300,000 7,200
Corsair Communications, Inc.(b) 222,500 6,397
Herley Industries, Inc.(b) 241,700 4,562
Three-Five Systems, Inc.(b) 75,001 4,425
Seachange International, Inc.(b) 150,000 4,331
Loronix Information Systems, Inc.(b) 118,700 4,266
Pericom Semiconductor Corp.(b) 60,000 4,080
Webmethods, Inc.(b) 25,000 3,930
Zoran Corp.(b) 55,000 3,627
OAK Technology, Inc.(b) 145,419 3,136
Dendrite International, Inc.(b) 88,200 2,938
Lightbridge, Inc.(b) 110,000 2,626
Mattson Technology, Inc.(b) 73,000 2,372
Brooktrout, Inc.(b) 100,000 2,181
Witness Systems, Inc.(b) 85,000 2,072
INTT Intest Corp.(b) 131,900 1,962
Unigraphics Solutions, Inc. `A'(b) 97,600 1,903
Choice One Communications, Inc. `A'(b) 40,000 1,633
Bookham Technology PLC SP - ADR(b) 25,000 1,481
Inforte Corp.(b) 40,000 1,440
Apropos Technology, Inc(b) 70,000 1,391
Diversa Corp.(b) 40,000 1,325
FLAG Telecom Holdings Ltd.(b) 85,000 1,264
Lante Corp.(b) 60,000 1,226
Delano Technology Corp.(b) 100,000 1,213
Via Net.Works, Inc.(b) 70,000 1,081
Eloquent, Inc.(b) 120,000 1,080
Audiovox Corp. `A'(b) 40,000 883
---------------
107,671
TRANSPORTATION 0.7%
Providence & Worcester Railroad Co. 210,100 1,602
---------------
Total Common Stocks 220,595
(Cost $145,003) ===============
</TABLE>
--------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 7.3%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000s)
<S> <C> <C>
REPURCHASE AGREEMENT 7.3%
State Street Bank
5.850% due 07/03/2000 $ 17,491 17,491
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
6.000% due 11/15/2001 valued at $17,845.
Repurchase proceeds are $17,500.)
---------------
Total Short-Term Instruments 17,491
(Cost $17,491) ===============
TOTAL INVESTMENTS(a) 99.7% $ 238,086
(Cost $162,494)
OTHER ASSETS AND LIABILITIES (NET) 0.3% 701
---------------
NET ASSETS 100.0% $ 238,787
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $162,496 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 83,240
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (7,650)
---------------
Unrealized appreciation-net $ 75,590
===============
</TABLE>
(b) Non-income producing security.
SEE ACCOMPANYING NOTES 65
<PAGE>
SCHEDULE OF INVESTMENTS
SMALL-CAP VALUE FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
----------------------------------------------------------------------------------
COMMON STOCKS 98.4%
----------------------------------------------------------------------------------
AEROSPACE 2.2%
Newport News Shipbuilding, Inc. 95,000 $ 3,491
Kaman Corp. 259,000 2,768
---------------
6,259
BUILDING 4.0%
MDC Holdings, Inc. 187,000 3,483
Hughes Supply, Inc. 137,000 2,706
Centex Construction Products, Inc. 115,000 2,609
Butler Manufacturing Co. 151,000 2,567
---------------
11,365
CAPITAL GOODS 10.4%
Primex Technologies, Inc. 145,000 3,190
Barnes Group, Inc. 174,000 2,838
Borg-Warner, Inc. 80,000 2,810
GenCorp, Inc. 347,000 2,776
Precision Castparts Corp. 58,000 2,624
Regal-Beloit Corp. 160,000 2,570
Trinity Industries, Inc. 136,000 2,516
Arvin Industries, Inc. 140,000 2,432
Tecumseh Products Co. `A' 59,300 2,265
MTS Systems Corp. 340,600 2,129
Meritor Automotive, Inc. 170,000 1,870
Intermet Corp. 250,000 1,719
---------------
29,739
CONSUMER DISCRETIONARY 12.7%
Ennis Business Forms 410,000 3,280
Claire's Stores, Inc. 162,800 3,134
Harman International Industries, Inc. 48,000 2,928
Russ Berrie & Co., Inc. 150,000 2,888
Tupperware Corp. 129,500 2,849
Sturm Ruger & Co., Inc. 320,000 2,840
Banta Corp. 148,000 2,803
Haverty Furniture Cos., Inc. 317,000 2,694
Kimball International `B' 180,000 2,655
Lancaster Colony Corp. 136,000 2,609
Brown Shoe Co., Inc. 200,000 2,600
Burlington Coat Factory Warehouse Corp. 205,000 2,217
Enesco Group, Inc. 351,000 1,667
Kellwood Co. 48,300 1,020
---------------
36,184
CONSUMER SERVICES 1.9%
Lubys Cafeterias, Inc. 358,000 2,864
Chemed Corp. 96,000 2,706
---------------
5,570
CONSUMER STAPLES 5.7%
Dean Foods Co. 101,800 3,226
Universal Foods 160,000 2,960
Corn Products International, Inc. 110,000 2,915
Michael Foods, Inc. 116,000 2,842
Universal Corp. 127,000 2,683
Nash Finch Co. 190,500 1,572
---------------
16,198
ENERGY 8.8%
St. Mary Land & Exploration 84,000 3,533
Cross Timbers Oil Co. 155,000 3,429
World Fuel Services Corp. 385,100 3,321
Berry Petroleum Co. 185,000 3,145
Mitchell Energy & Development Corp. `A' 97,800 3,142
UGI Corp. 142,900 2,929
Cabot Oil & Gas Corp. 134,000 2,839
Northwest Natural Gas Co. 120,800 2,703
---------------
25,041
FINANCIAL & BUSINESS SERVICES 22.3%
Selective Insurance Group 176,000 3,344
Washington Federal, Inc. 175,000 3,194
Raymond James Financial, Inc. 140,000 3,150
McGrath Rentcorp 185,000 3,145
United Dominion Realty Trust 285,000 3,135
Glimcher Realty Trust 210,000 3,019
Hudson United Bancorp 134,000 3,007
Susquehanna Bancshares, Inc. 206,400 2,941
Innkeepers USA Trust 310,000 2,829
Health Care Property Investors, Inc. 103,000 2,807
AmerUs Life Holdings, Inc. `A' 136,000 2,805
Cabot Industrial Trust 141,000 2,776
Kelly Services, Inc. `A' 120,000 2,775
Franchise Finance Corp. of America 120,000 2,760
National Golf Properties, Inc. 130,000 2,746
Shurgard Storage Centers, Inc. 120,000 2,700
Commercial Federal Corp. 172,000 2,677
Rollins Truck Leasing Co. 372,000 2,581
Pacific Century Financial Corp. 170,000 2,486
Wallace Computer Services, Inc. 250,000 2,469
Presidential Life Corp. 171,000 2,373
New Plan Excel Realty Trust 176,000 2,288
BankAtlantic Bancorp, Inc. `A' 423,400 1,588
---------------
63,595
HEALTH CARE 5.9%
Owens & Minor, Inc. 245,000 4,211
Dentsply International, Inc. 108,000 3,328
Bindley Western Industries, Inc. 125,000 3,305
Arrow International, Inc. 89,000 2,981
Invacare Corp. 112,000 2,940
---------------
16,765
MATERIALS & PROCESSING 9.4%
CLARCOR, Inc. 160,000 3,180
Commercial Metals Co. 107,000 2,942
Pope & Talbot, Inc. 180,000 2,880
Cleveland-Cliffs, Inc. 110,000 2,839
Omnova Solutions, Inc. 450,000 2,812
Universal Forest Products, Inc. 200,000 2,750
Caraustar Industries, Inc. 174,000 2,632
Hanna (M.A.) Co. 278,000 2,502
Wausau-Mosinee Paper Corp. 291,100 2,493
Ethyl Corp. 704,000 1,760
---------------
26,790
MISCELLANEOUS 1.0%
Midas, Inc. 142,000 2,840
---------------
TECHNOLOGY 0.9%
WABTEC 245,000 2,542
---------------
TRANSPORTATION 2.9%
Wabash National Corp. 236,000 2,817
Sea Containers Ltd. `A' 132,000 2,788
USFreightways Corp. 103,000 2,530
---------------
8,135
UTILITIES 10.3%
Energen Corp. 167,000 3,643
National Fuel Gas Co. 67,000 3,266
RGS Energy Group, Inc. 140,000 3,115
United Illuminating Co. 69,000 3,019
Peoples Energy Corp. 93,000 3,011
OGE Energy Corp. 150,000 2,775
CMP Group, Inc. 93,000 2,726
Washington Gas Light Co. 110,000 2,647
Hawaiian Electric Industries, Inc. 80,000 2,625
Public Service Co. of New Mexico 170,000 2,624
---------------
29,451
---------------
Total Common Stocks 280,474
(Cost $$339,132) ===============
</TABLE>
66 SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000s) (000s)
----------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.7%
----------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT 0.7%
STATE STREET BANK
5.850% due 07/03/2000 $ 1,933 $ 1,933
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
5.125% due 02/13/2004 valued at $1,975 and
Federal National Mortgage Association
6.000% due 11/15/2001 valued at $5.
Repurchase proceeds are $1,938.)
---------------
Total Short-Term Instruments 1,933
(Cost $1,933) ===============
TOTAL INVESTMENTS (a) 99.1% $ 282,407
(Cost $341,065)
OTHER ASSETS AND LIABILITIES (NET) 0.9% 2,555
---------------
NET ASSETS 100.0% $ 284,962
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $342,457 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 16,703
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (76,753)
---------------
Unrealized depreciation-net $ (60,050)
===============
</TABLE>
SEE ACCOMPANYING NOTES 67
<PAGE>
SCHEDULE OF INVESTMENTS (CONT.)
ENHANCED EQUITY FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
----------------------------------------------------------------------------------
COMMON STOCKS 99.2%
----------------------------------------------------------------------------------
AEROSPACE 1.0%
Boeing Co. 5,000 $ 209
Northrop Grumman Corp. 2,000 133
General Dynamics Corp. 2,400 125
---------------
467
CAPITAL GOODS 7.3%
General Electric Co. 37,300 1,977
Tyco International Ltd. 6,900 327
United Technologies Corp. 4,300 253
Millipore Corp. 2,000 151
Ingersoll-Rand Co. 3,400 137
Minnesota Mining & Manufacturing Co. 1,500 124
Johnson Controls, Inc. 2,400 123
Paccar, Inc. 3,100 123
ITT Industries, Inc. 3,000 91
Navistar International Corp.(b) 2,400 75
Parker Hannifin Corp. 1,500 51
Briggs & Stratton 1,000 34
Cummins Engine Co., Inc. 1,200 33
Visteon Corp. 1,649 20
---------------
3,519
COMMUNICATIONS 7.6%
BellSouth Corp. 16,640 709
MCI WorldCom, Inc.(b) 12,700 583
SBC Communications, Inc. 13,071 565
Verizon Communications 8,518 433
U.S. West, Inc. 5,000 429
MediaOne Group, Inc.(b) 3,600 238
Qualcomm, Inc.(b) 3,800 228
AT&T Corp. 7,000 221
ADC Telecommunication, Inc.(b) 2,000 168
Sprint Corp. (FON Group) 1,800 92
---------------
3,666
CONSUMER DISCRETIONARY 7.2%
Wal-Mart Stores, Inc. 13,700 789
Ford Motor Co. 12,600 542
Time Warner, Inc. 6,100 464
Home Depot, Inc. 7,050 352
Federated Department Stores, Inc.(b) 5,900 199
Target Corp. 3,300 191
Whirlpool Corp. 3,000 140
Lowe's Cos., Inc. 3,300 136
General Motors Corp. 1,600 93
Liz Claiborne, Inc. 2,600 92
Black & Decker Corp. 2,300 90
Limited, Inc. 4,000 86
Gap, Inc. 2,350 73
Circuit City Stores 2,000 66
Tupperware Corp. 3,000 66
RadioShack Corp. 1,000 47
Brunswick Corp. 2,500 41
---------------
3,467
CONSUMER SERVICES 3.2%
Viacom, Inc. `B'(b) 9,673 660
Darden Restaurants, Inc. 14,800 240
Gannett, Inc. 3,100 185
New York Times Co. 4,500 178
Comcast Corp. Special `A' 3,500 142
Knight-Ridder, Inc. 2,300 122
---------------
1,527
CONSUMER STAPLES 5.3%
Pepsico, Inc. 8,000 355
Coca-Cola Co. 5,900 339
Quaker Oats Co. 4,100 308
Anheuser Busch Cos., Inc. 4,000 299
ConAgra, Inc. 13,300 254
Procter & Gamble Co. 4,200 240
Safeway, Inc. (b) 2,900 131
Alberto-Culver Co. 4,000 122
SUPERVALU, Inc. 6,400 122
Adolph Coors Co. `B' 1,300 79
Philip Morris Cos., Inc. 2,900 77
Sara Lee Corp. 3,700 71
Sysco Corp. 1,600 67
Ralston-Ralston Purina Group 2,700 54
Colgate-Palmolive Co. 800 48
---------------
2,566
===============
ENERGY 5.7%
Exxon Corp. 14,565 1,143
Chevron Corp. 6,000 509
Royal Dutch Petroleum Co. 5,400 332
Kerr McGee Corp. 4,500 265
Apache Corp. 4,000 235
Amerada Hess Corp. 2,000 124
USX Marathon Group 4,700 118
Unicom Corp. 1,000 39
---------------
2,765
FINANCIAL & BUSINESS SERVICES 12.8%
Citigroup, Inc. 19,010 1,145
Chase Manhattan Corp. 14,187 653
Morgan Stanley, Dean Witter, Discover and Co. 6,360 529
BankAmerica Corp. 11,274 485
Merrill Lynch & Co. 3,200 368
Federal National Mortgage Association 6,300 329
Fleet Boston Financial Corp. 7,658 260
State Street Corp. 2,000 212
MGIC Investment Corp. 4,200 191
Paychex, Inc. 4,500 189
Sun Trust Banks, Inc. 4,000 183
PaineWebber Group, Inc. 4,000 182
Lincoln National Corp. 5,000 181
Lehman Brothers Holdings, Inc. 1,800 170
Bear Stearns Co., Inc. 3,534 147
American International Group, Inc. 1,212 142
PNC Bank Corp. 2,800 131
Morgan, J.P. & Co., Inc. 1,000 110
First Union Corp. 3,730 93
Providian Financial Corp. 1,000 90
MBNA Corp. 3,200 87
Household International, Inc. 2,000 83
Wells Fargo Co. 1,700 66
Mellon Financial Corp. 1,800 66
AFLAC, Inc. 1,400 64
H&R Block, Inc. 1,100 36
---------------
6,192
HEALTH CARE 12.1%
Pfizer, Inc. 30,750 1,476
Merck & Co., Inc. 11,500 881
Johnson & Johnson 7,400 754
Amgen, Inc.(b) 6,200 436
United Healthcare Corp. 4,300 369
Schering-Plough Corp. 7,200 364
Bristol-Myers Squibb Co. 6,100 355
Abbott Laboratories 7,400 330
Bausch & Lomb, Inc. 3,100 240
CIGNA Corp. 2,000 187
Allergan, Inc. 2,300 171
HCA - The Healthcare Co. 3,600 109
Mallinckrodt, Inc. 2,000 87
Cardinal Health, Inc. 1,050 78
Edwards Lifesciences Corp.(b) 240 5
---------------
5,842
MATERIALS & PROCESSING 2.8%
Dow Chemical CO 8,100 245
Engelhard Corp. 10,100 172
Georgia-Pacific Corp. 6,200 163
Placer Dome, Inc. 15,800 151
W.R. Grace & Co.(b) 11,600 141
Ball Corp. 3,500 113
Temple-Inland, Inc. 2,500 105
E.I. Du Pont de Nemours, Inc. 1,800 79
Alcoa, Inc. 2,000 58
Worthington Industries, Inc. 5,000 53
Inco Ltd. 2,500 38
International Paper Co. 1,200 36
---------------
1,354
68 SEE ACCOMPANYING NOTES
<PAGE>
<CAPTION>
Value
Shares (000s)
----------------------------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY 31.4%
Intel Corp. 15,800 $ 2,112
Cisco Systems, Inc.(b) 30,800 1,958
Microsoft Corp.(b) 22,900 1,832
Oracle Corp.(b) 12,700 1,068
Sun Microsystems, Inc.(b) 11,700 1,064
Nortel Networks Corp. 11,400 778
International Business Machines Corp. 7,100 778
EMC Corp.(b) 8,400 646
Applied Materials, Inc.(b) 6,000 544
America Online, Inc.(b) 8,300 438
Lucent Technologies, Inc. 6,700 397
Texas Instruments, Inc. 5,600 385
Dell Computer Corp.(b) 7,600 375
Yahoo, Inc.(b) 2,600 322
Comverse Technology, Inc.(b) 2,800 260
Motorola, Inc. 8,325 242
Sprint Corp. (PCS Group)(b) 4,000 238
Xilinx, Inc.(b) 2,800 231
Hewlett Packard Co. 1,800 225
Computer Associates International, Inc. 4,300 220
Apple Computer, Inc. 3,400 178
Scientific-Atlanta, Inc. 2,000 149
Adobe Systems, Inc. 1,100 143
Analog Devices, Inc.(b) 1,600 122
Veritas Software Corp.(b) 1,000 113
Teradyne, Inc.(b) 1,400 103
National Semiconductor Corp.(b) 1,000 57
LSI Logic Corp.(b) 1,000 54
Agilent Technologies, Inc.(b) 686 51
Advanced Micro Devices, Inc.(b) 600 46
Adaptec, Inc.(b) 1,800 41
IMS Health, Inc. 800 14
---------------
15,184
TRANSPORTATION 0.6%
Union Pacific Corp. 4,200 156
Kansas City Southern Industries, Inc. 1,000 89
FDX Corp.(b) 1,500 57
---------------
302
UTILITIES 2.2%
FPL Group, Inc. 5,000 247
Reliant Energy, Inc. 5,000 148
DTE Energy Co. 4,800 147
Duke Energy Corp. 2,200 124
FirstEnergy Corp. 4,000 93
Edison International 4,200 86
Sempra Energy 5,000 85
Public Service Enterprise Group, Inc. 2,000 69
Entergy Corp. 2,500 68
---------------
1,067
---------------
Total Common Stocks 47,918
(Cost $34,671) ===============
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000s) (000s)
----------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.8%
----------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT 0.8%
State Street Bank
5.850% due 07/03/2000 $ 380 $ 380
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
6.000% due 11/15/2001 valued at $388.
Repurchase proceeds are $380.)
---------------
Total Short-Term Instruments 380
(Cost $380) ===============
TOTAL INVESTMENTS (a) 100.0% $ 48,298
(Cost $35,051)
OTHER ASSETS AND LIABILITIES (NET) (0.0%) (6)
---------------
NET ASSETS 100.0% $ 48,292
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $35,053 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 15,502
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value. (2,257)
---------------
Unrealized appreciation-net $ 13,245
===============
</TABLE>
(b) Non-income producing security.
SEE ACCOMPANYING NOTES 69
<PAGE>
SCHEDULE OF INVESTMENTS
TAX-EFFICIENT EQUITY FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
----------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS 99.7%
AEROSPACE 0.5%
Honeywell International, Inc. 4,175 $ 141
Lockheed Martin Corp. 3,700 92
General Dynamics Corp. 900 47
Raytheon Co. `B' 1,500 29
---------------
309
BUILDING 0.0%
Centex Corp. 500 12
---------------
CAPITAL GOODS 6.5%
General Electric Co. 47,910 2,539
Tyco International Ltd. 5,200 246
United Technologies Corp. 3,800 224
Avery Dennison Corp. 1,300 87
Illinois Tool Works, Inc. 1,400 80
PPG Industries, Inc. 1,800 80
ITT Industries, Inc. 1,900 57
Navistar International Corp.(b) 1,700 53
Cooper Industries, Inc. 1,391 45
Deere & Co. 1,200 44
TRW, Inc. 1,000 43
Paccar, Inc. 1,000 40
Ingersoll-Rand Co. 900 36
Textron, Inc. 400 22
Briggs & Stratton 604 21
Johnson Controls, Inc. 400 21
Dover Corp. 400 16
Millipore Corp. 200 15
Caterpillar, Inc. 400 14
Visteon Corp.(b) 720 9
Minnesota Mining & Manufacturing Co. 100 8
Parker Hannifin Corp. 100 3
Timken Co. 100 2
---------------
3,705
COMMUNICATIONS 6.4%
SBC Communications, Inc. 14,801 640
AT&T Corp. 16,350 517
Verizon Communications 7,300 371
MCI WorldCom, Inc.(b) 8,000 367
BellSouth Corp. 8,200 350
Nextel Communications, Inc. `A'(b) 5,000 306
GTE Corp. 4,500 280
U.S. West, Inc. 2,400 206
MediaOne Group, Inc.(b) 3,000 198
Sprint Corp. (FON Group) 2,700 138
ADC Telecommunication, Inc.(b) 1,100 92
Vodafone Group PLC SP - ADR 2,000 83
ALLTEL Corp. 1,000 62
CenturyTel, Inc. 500 14
---------------
3,624
CONSUMER DISCRETIONARY 8.9%
Wal-Mart Stores, Inc. 20,700 1,193
Home Depot, Inc. 11,300 564
Time Warner, Inc. 6,800 517
General Motors Corp. 4,900 285
Eastman Kodak Co. 4,100 244
Ford Motor Co. 5,500 237
UST, Inc. 13,688 201
Wm. Wrigley Jr. Co. 2,500 200
Walgreen Co. 5,900 190
Gap, Inc. 5,875 184
Target Corp. 1,900 110
Jostens, Inc. 3,698 93
Newell Rubbermaid, Inc. 2,900 75
Liz Claiborne, Inc. 2,100 74
CVS Corp. 1,800 72
Dollar General Corp. 3,632 71
McGraw-Hill Companies, Inc. 1,300 70
Costco Wholesale Corp. 1,800 59
Whirlpool Corp. 1,200 56
Sears Roebuck & Co. 1,700 55
Circuit City Stores 1,600 53
Best Buy Co., Inc.(b) 800 51
Avon Products, Inc. 1,100 49
Maytag Corp. 1,287 47
Lowe's Cos., Inc. 1,100 45
Toys R US, Inc.(b) 3,000 44
Federated Department Stores, Inc.(b) 1,200 41
Mattel, Inc. 2,426 32
RadioShack Corp. 600 28
Cendant Corp.(b) 1,995 28
TJX Cos., Inc. 1,336 25
K Mart Corp.(b) 3,500 24
Black & Decker Corp. 580 23
Hasbro, Inc. 900 14
Tupperware Corp. 300 7
Consolidated Stores Corp.(b) 500 6
Brunswick Corp. 300 5
---------------
5,072
CONSUMER SERVICES 3.2%
Viacom, Inc. `B'(b) 10,176 694
Disney (Walt) Co. 5,800 225
Tribune Co. 5,500 193
McDonald's Corp. 5,500 181
Interpublic Group of Companies, Inc. 3,400 146
Gannett, Inc. 1,600 96
Waste Management, Inc. 3,800 72
Knight-Ridder, Inc. 1,300 69
Harrah's Entertainment, Inc.(b) 2,100 44
Hilton Hotels Corp. 4,005 38
New York Times Co. 600 24
Darden Restaurants, Inc. 400 7
---------------
1,789
CONSUMER STAPLES 6.5%
Coca-Cola Co. 6,177 355
Kimberly-Clark Corp. 5,900 339
Pepsico, Inc. 6,600 293
Philip Morris Cos., Inc. 10,700 284
H.J. Heinz Co. 5,000 219
General Mills, Inc. 5,700 218
Procter & Gamble Co. 3,700 212
Seagram Co. Ltd. 3,300 191
Gillette Co. 4,800 168
Bestfoods 2,300 159
Colgate-Palmolive Co. 2,600 156
Unilever NV - NY 2,600 112
Kroger Co. 4,800 106
Anheuser Busch Cos., Inc. 1,400 105
Sara Lee Corp. 4,900 95
Alberto-Culver Co. 2,500 76
Safeway, Inc.(b) 1,600 72
Campbell Soup Co. 2,400 70
Sysco Corp. 1,600 67
Albertson's, Inc. 1,900 63
Kellogg Co. 1,800 54
Clorox Co. 1,100 49
Quaker Oats Co. 600 45
ConAgra, Inc. 2,200 42
Nabisco Group Holdings Corp. 1,500 39
Adolph Coors Co. `B' 500 30
Hershey Foods Corp. 600 29
Ralston-Ralston Purina Group 1,400 28
Archer-Daniels-Midland Co. 2,800 27
---------------
3,703
ENERGY 6.0%
Exxon Mobil Corp. 19,519 1,532
Royal Dutch Petroleum Co. 8,645 532
AES Corp.(b) 4,700 214
Peco Energy Co. 4,800 194
Chevron Corp. 1,900 161
Rowan Cos., Inc.(b) 4,800 146
Helmerich & Payne, Inc. 3,500 131
BP Amoco PLC SP - ADR 1,640 93
Tosco Corp. 2,500 71
Conoco, Inc. 2,823 69
Amerada Hess Corp. 1,000 62
Phillips Petroleum Co. 1,200 61
Enron Corp. 650 42
70 SEE ACCOMPANYING NOTES
<PAGE>
<CAPTION>
Value
Shares (000s)
----------------------------------------------------------------------------------
<S> <C> <C>
Texaco, Inc. 700 $ 37
Halliburton Co. 695 33
Sunoco, Inc. 700 21
---------------
3,399
ENVIRONMENTAL SERVICES 0.3%
Allied Waste Industries, Inc.(b) 16,300 163
Service Corp. International(b) 3,000 10
---------------
173
FINANCIAL & BUSINESS SERVICES 13.6%
Citigroup, Inc. 18,300 1,103
Morgan Stanley, Dean Witter, Discover and Co. 7,400 616
American International Group, Inc. 5,091 598
Chase Manhattan Corp. 10,350 477
State Street Corp. 3,700 392
Wells Fargo Co. 9,300 360
KeyCorp 17,667 311
American Express 5,700 297
Bank of New York 6,200 288
Charles Schwab Corp. 7,800 262
Merrill Lynch & Co. 2,000 230
MBNA Corp. 8,200 222
Paychex, Inc. 5,250 221
BankAmerica Corp. 3,411 147
Federal National Mortgage Association 2,700 141
Marsh & McLennan Cos. 1,300 136
Household International, Inc. 2,700 112
Comerica, Inc. 2,500 112
MGIC Investment Corp. 2,366 108
Mellon Financial Corp. 2,900 106
Northern Trust Corp. 1,600 104
Automatic Data Processing, Inc. 1,800 96
Omnicom Group 1,000 89
Golden West Financial Corp. 2,100 86
Allstate Corp. 3,600 80
Bank One Corp. 3,000 80
Equifax, Inc. 2,900 76
Lehman Brothers Holdings, Inc. 800 76
Sun Trust Banks, Inc. 1,500 69
Washington Mutual, Inc. 2,350 68
Providian Financial Corp. 700 63
SLM Holding Corp. 1,700 63
First Union Corp. 2,300 57
Firstar Corp. 2,728 56
Bear Stearns Co., Inc. 1,127 47
Associates First Capital Corp. 1,800 40
Aon Corp. 1,200 37
AFLAC, Inc. 800 37
American General Corp. 600 37
Lincoln National Corp. 880 32
Dow Jones & Co., Inc. 400 29
Fleet Boston Financial Corp. 829 28
PNC Bank Corp. 600 28
Capital One Financial Corp. 600 27
Progressive Corp. 300 22
Young & Rubicam, Inc. 300 17
Federal Home Loan Mortgage Corp. 310 13
Morgan, J.P. & Co., Inc. 100 11
Sabre Holdings Corp.(b) 361 10
MBIA, Inc. 200 10
Franklin Resources, Inc. 200 6
---------------
7,733
HEALTH CARE 11.7%
Pfizer, Inc. 24,613 1,181
Merck & Co., Inc. 10,400 797
Amgen, Inc.(b) 8,983 631
Bristol-Myers Squibb Co. 9,000 524
Eli Lilly & Co. 5,200 519
Johnson & Johnson 5,000 509
American Home Products Corp. 5,900 347
Schering-Plough Corp. 6,363 321
Abbott Laboratories 6,600 294
Medtronic, Inc. 5,700 284
Pharmacia Corp. 4,109 212
United Healthcare Corp. 1,900 163
Wellpoint Health Networks, Inc.(b) 2,000 145
Becton Dickinson & Co. 4,600 132
CIGNA Corp. 1,300 122
Baxter International, Inc. 1,700 120
Guidant Corp. 1,700 84
Biomet, Inc. 2,000 76
Boston Scientific Corp.(b) 3,000 65
Aetna, Inc. 600 39
International Flavors & Fragrances 1,112 34
St. Jude Medical, Inc. 600 28
Edwards Lifesciences Corp.(b) 340 7
---------------
6,634
MATERIALS & PROCESSING 1.8%
Rohm & Haas Co. 6,900 238
Alcoa, Inc. 5,400 157
E.I. Du Pont de Nemours, Inc. 2,868 125
International Paper Co. 3,300 98
Freeport-McMoran Copper & Gold, Inc.(b) 8,900 82
Sealed Air Corp.(b) 1,500 79
Barrick Gold Corp. 2,500 45
Engelhard Corp. 2,600 44
W.R. Grace & Co.(b) 2,912 35
Air Products & Chemicals 1,000 31
Praxair, Inc. 700 26
Fort James Corp. 900 21
Sherwin-Williams Co. 700 15
Nucor Corp. 400 13
FMC Corp.(b) 100 6
Ball Corp. 100 3
---------------
1,018
TECHNOLOGY 31.8%
Intel Corp. 18,365 2,455
Cisco Systems, Inc.(b) 31,400 1,996
Microsoft Corp.(b) 24,400 1,952
Oracle Corp.(b) 15,870 1,334
Lucent Technologies, Inc. 15,400 912
International Business Machines Corp. 8,158 894
Sun Microsystems, Inc.(b) 8,800 800
EMC Corp.(b) 10,400 800
Dell Computer Corp.(b) 15,900 784
Nortel Networks Corp. 10,200 696
Hewlett Packard Co. 5,200 649
Texas Instruments, Inc.(b) 8,000 550
Applied Materials, Inc.(b) 5,932 538
America Online, Inc.(b) 9,000 475
Motorola, Inc. 10,200 296
Network Appliance, Inc.(b) 3,400 274
Yahoo, Inc.(b) 2,200 273
Tellabs, Inc.(b) 3,700 253
Qualcomm, Inc.(b) 3,200 192
Computer Sciences Corp.(b) 2,000 149
Agilent Technologies, Inc.(b) 1,983 146
3Com Corp.(b) 2,500 144
Danaher Corp. 2,800 138
Corning, Inc. 500 135
Solectron Corp.(b) 3,200 134
Sprint Corp. (PCS Group)(b) 2,168 129
Gateway, Inc.(b) 2,200 125
Computer Associates International, Inc. 2,000 102
Micron Technology, Inc.(b) 1,040 92
Electronic Data Systems Corp. 2,000 83
Compaq Computer Corp. 3,220 82
Veritas Software Corp.(b) 600 68
BMC Software, Inc.(b) 1,500 54
Global Crossing Ltd.(b) 1,900 50
PerkinElmer, Inc. 600 40
Adobe Systems, Inc. 280 36
Lexmark International Group, Inc. `A'(b) 500 34
Siebel Systems, Inc.(b) 200 33
American Power Conversion Corp.(b) 700 29
Comverse Technology, Inc.(b) 300 28
IMS Health, Inc.(b) 800 14
Energizer Holdings, Inc.(b) 466 9
Xilinx, Inc.(b) 100 8
Analog Devices, Inc.(b) 100 8
Teradyne, Inc.(b) 100 7
Maxim Integrated Products, Inc.(b) 100 7
PE Corp.-PE Biosystems Group 100 7
Parametric Technology Corp.(b) 594 7
SEE ACCOMPANYING NOTES 71
<PAGE>
SCHEDULE OF INVESTMENTS (CONT.)
TAX-EFFICIENT EQUITY FUND
June 30, 2000
<CAPTION>
Value
Shares (000s)
----------------------------------------------------------------------------------
<S> <C> <C>
Xerox Corp. 290 $ 6
Compuware Corp.(b) 411 4
Citrix Systems, Inc.(b) 100 2
Unisys Corp.(b) 100 1
---------------
18,034
TRANSPORTATION 1.0%
Kansas City Southern Industries, Inc. 3,100 275
Ryder System, Inc. 8,100 153
Delta Air Lines, Inc. 1,500 76
FDX Corp.(b) 1,200 46
Southwest Airlines Co. 1,600 30
---------------
580
UTILITIES 1.5%
Coastal Corp. 4,700 286
Northern States Power-Mn 10,200 206
Columbia Gas Systems, Inc. 1,800 118
Duke Energy Corp. 1,000 56
FirstEnergy Corp.(b) 2,116 49
PG&E Corp. 1,700 42
Texas Utilities Co. 1,300 38
DTE Energy Co. 1,100 34
Constellation Energy Group, Inc. 400 13
---------------
842
---------------
Total Common Stocks 56,627
(Cost $46,063) ===============
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000s) (000s)
----------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.4%
----------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT 0.4%
State Street Bank
5.850% due 07/03/2000 $ 217 217
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
6.000% due 11/15/2001 valued at $224.
Repurchase proceeds are $217.)
---------------
Total Short-Term Instruments 217
(Cost $217) ===============
TOTAL INVESTMENTS(a) 100.1% $ 56,844
(Cost $46,280)
OTHER ASSETS AND LIABILITIES (NET) (0.1%) (37)
---------------
NET ASSETS 100.0% $ 56,807
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $46,808 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 12,663
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (2,627)
---------------
Unrealized appreciation-net $ 10,036
===============
</TABLE>
(b) Non-income producing security.
72 SEE ACCOMPANYING NOTES
<PAGE>
SCHEDULE OF INVESTMENTS
STRUCTURED EMERGING MARKETS FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
----------------------------------------------------------------------------------
COMMON STOCKS 99.0%
----------------------------------------------------------------------------------
ARGENTINA 3.6%
PC Holdings(b) 105,289 $ 193
Telefonica de Argentina SA 56,714 184
Molinos Rio de la Plata SA 87,457 166
Telecom Argentina SA `B' 27,499 152
Siderca SA `A' 61,050 140
Banco de Galicia y Buenos Aires SA de CV `B' 31,680 119
Banco Frances SA 14,442 105
Astra Cia Argentina de Petroleo SA(b) 36,210 93
Renault Argentina 120,653 81
Sociedad Comercial Del Plata SA 335,780 41
---------------
1,274
BALTIC NATIONS 2.5%
Baltic Fund `A' 7,116 733
AS Eesti Telekom 7,000 141
---------------
874
BOTSWANA 1.4%
Standard Chart Bank Botswana 339,460 291
Sechaba Breweries Ltd. 181,100 151
Sefalana Holding Co. Ltd. 80,500 69
---------------
511
BRAZIL 4.7%
Telecomunicacoes Brasileiras SA SP - ADR 3,500 340
Companhia Cervejaria Brahma 334,531 284
Petroleo Brasileiro SA 8,750 259
Itausa-Investimentos Itau SA 140,300 136
Companhia Suzano de Papel e Celulose 46,000 115
Banco Estado de Sao Paul 2,410,000 71
Companhia Vidraria Santa Marina 48,000 65
Telecomunicacoes de Sao Paulo SA 3,500 65
Banco Bradesco SA 7,300,000 64
Embratel Participacoes SA 2,600 61
Banco Do Brasil SA 10,300,000 52
Mahle Cofap Aneis(b) 22,047 41
Telecomunicacoes de Sao Paulo 2,104,594 40
Telesp Celular Participacoes SA(b) 1,795,712 32
Tele Sudeste Celular Participacoes SA(b) 700 21
Tele Norte Leste Participacoes SA 409 10
Petroleo Brasileiro SA 5 0
---------------
1,656
BULGARIA 0.3%
Framlington Bulgaria Fund(b) 33,920 110
---------------
CHILE 3.4%
Masisa SA SP - ADR 16,600 196
Banco Santiago SA SP - ADR 10,000 179
Cristalerias de Chile SP - ADR 8,300 137
Enersis SA SP - ADR 6,214 124
Administradora de Fondos
de Pensiones Provida SA SP - ADR 4,700 100
Sociedad Quimica y Minera de Chile SA SP - ADR 4,000 89
Laboratorio Chile SA SP - ADR 4,600 88
Madeco SA SP - ADR 10,300 79
Empresa Nacional de Electricidad SA SP - ADR 5,159 57
Compania Cervecerias Unidas SA SP - ADR 2,500 57
Embotelladora Andina SA SP - ADR `A' 3,500 41
Embotelladora Andina SA SP - ADR `B' 4,300 41
Quimica Y Minera de Chile 731 17
Compania de Telecomunicaciones de Chile SA SP - ADR 45 1
---------------
1,206
CHINA 4.6%
China Mobile (Hong Kong) Ltd.(b) 97,000 855
China Merchants Shekou Port Service Co. Ltd. 293,000 141
Yizheng Chemical Fibre Co. Ltd. `H' 578,000 115
Shanghai Petrochemical Co. Ltd. `H' 813,000 111
Legend Holdings Ltd. 100,000 97
China Resources Enterprise Ltd. 68,000 82
Shanghai Dazhong Taxi Co. `B' 125,788 68
Shanghai Diesel Engine Co. Ltd. `B' 231,000 57
Maanshan Iron & Steel Co. `H' 1,044,000 52
Chinadotcom Corp. `A'(b) 2,000 41
Guangdong Investment Ltd. 1,000 0
China Overseas Land & Investment 1,000 0
---------------
1,619
COLOMBIA 0.4%
Bancolombia SA SP - ADR(b) 29,400 62
Carulla y Compania SA SP - ADR 34,700 27
Banco Ganadero SA SP - ADR 4,966 20
Cadena Almacenes SP - ADR 31,040 15
Cementos Diamante SA SP - GDR 144A 5,800 5
Cementos Diamante SA SP - GDR 2,300 2
---------------
131
CROATIA 0.8%
Pliva D.D 27,390 283
---------------
CZECH REPUBLIC 1.5%
Cesky Telecom AS(b) 7,500 126
SPT Telecom AS 6,893 117
Komercni Banka AS 5,351 108
Ceske Radiokomunikace(b) 1,800 80
Ceska Pojistovna 529 34
ZDB(b) 10,273 21
Vodni Stavby Praha AS 10,580 19
Synthesia AS 15,050 19
Aliachem AS(b) 85,472 11
---------------
535
EGYPT 1.9%
Mobinil-Egyptian Mobile Network(b) 7,141 232
Al Ahram Beverages(b) 9,700 173
Commercial International Bank 12,041 128
Suez Cement Co. 11,566 121
Paints & Chemical Industries Co. SAE 3,008 18
Egyptian Financial & Industrial Co. 1,716 14
---------------
686
GHANA 0.5%
Social Security Bank Ltd.(b) 137,600 51
Unilever Ghana Ltd.(b) 113,960 39
Ashanti Goldfields Co. Ltd. SP - GDR 21,434 38
Mobil Oil Ghana Ltd.(b) 8,631 28
Standard Chartered Bank Ghana Ltd. 4,700 19
Aluworks Ghana Ltd.(b) 32,200 16
---------------
191
GREECE 4.1%
National Bank of Greece SP-ADR 25,480 199
Intracom SA 3,740 137
Panafon Hellenic Telecommunications Co. SA 11,800 134
Hellenic Telecommunication Organization SA 5,239 128
J. Boutaris & Son Holdings 18,990 118
National Bank of Greece SA 2,833 111
Alpha Credit Bank 2,502 99
Titan Cement Co. SA 2,060 78
Commercial Bank of Greece SA 1,760 76
General Construction SA 5,156 74
Aluminium of Greece SA 1,630 61
Elais Co. SA 2,170 49
Alpha Leasing SA 3,018 42
Ergo Bank SA 1,578 30
Aegek SA 3,550 29
EFG Eurobank(b) 1,080 29
Hellenic Bottling Co. SA 1,780 28
Attica Enterprises SA 1,386 15
Naoussa Spinning Mills SA 1,160 10
Radio Athinai 4 0
---------------
1,447
HUNGARY 3.6%
OTP Bank Rt. 5,541 289
Antenna Hungaria Rt.(b) 6,178 179
Magyar Tavkozlesi Rt. SP - ADR 4,800 165
Gedeon Richter Rt. 2,852 154
BorsodChem Rt.(b) 3,381 104
Inter-Europa Bank Rt. 1,942 82
MOL Magyar Olaj-es Gazipari Rt. 5,630 78
Pick Szeged Rt. 1,900 70
Demasz Rt. 1,200 69
Pannonplast Rt. 2,360 51
Danubius Hotel and Spa Rt. 1,890 36
---------------
1,277
SEE ACCOMPANYING NOTES 73
<PAGE>
SCHEDULE OF INVESTMENTS (CONT.)
STRUCTURED EMERGING MARKETS FUND
June 30, 2000
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
----------------------------------------------------------------------------------
INDIA 3.6%
UTI India IT Fund(b) 6,000 $ 429
The India Fund, Inc. 23,000 326
Reliance Industries SP - GDR 4,608 97
Hindalco Industries Ltd. SP - GDR 4,800 94
State Bank of India SP - GDR 7,800 77
Indo Gulf Corp. Ltd. SP - GDR 66,300 63
I.T.C. Limited SP - GDR 3,100 60
CESC Ltd. SP - GDR 88,000 35
Tata Engineering and Locomotive Co. Ltd. SP - GDR 7,950 22
Mahindra & Mahindra Ltd. SP - GDR 4,029 19
Ranbaxy Laboratories Ltd. SP - GDR(b) 1,100 18
Bajaj Auto Ltd. SP - GDR 1,902 17
Grasim Industries SP - GDR 1,500 13
Tata Electric Cos. SP - GDR 10 1
---------------
1,271
INDONESIA 2.8%
PT Gudang Garam 127,500 206
PT Astra International, Inc. 514,000 161
PT Telekomunikasi Indonesia 407,080 143
PT Indocement Tunggal Prakarsa 329,500 121
PT Indah Kiat Pulp & Paper Corp. 597,000 121
PT Hanjaya Mandala Sampoerna 68,500 99
PT Indofood Sukses Makmur 130,000 71
PT Indosat (Persero) 44,500 52
---------------
974
ISRAEL 4.3%
Teva Pharmaceutical Industries Ltd. 6,591 358
Bezek Israeli Telecommunication Corp. 51,695 288
Israel Chemicals Ltd. 161,074 197
Bank Hapoalim Ltd. 50,080 145
Nice Systems Ltd. 1,749 136
Koor Industries Ltd. 1,051 113
Discount Investment Corp. 1,694 96
Bank Leumi Le-Israel 34,395 71
Industrial Buildings Corp. 36,596 54
Leumi Insurance Holdings(b) 49,005 51
---------------
1,509
KENYA 0.7%
Uchumi Supermarket Ltd. 132,100 73
Firestone East Africa Ltd. 303,150 50
Kenya Airways Ltd. 364,500 38
Sasini Tea & Coffee Ltd. 43,600 20
National Industrial Credit Bank 63,460 17
Kenya Power & Lighting Co. Ltd. 25,050 17
Athi River Mining Ltd. 256,800 15
Kenya Commercial Bank Ltd. 28,451 10
---------------
240
MALAYSIA 3.6%
Malayan Banking Bhd. 55,900 227
Sime Darby Bhd. 110,700 142
Edaran Otomobil Nasional Bhd. 39,000 123
United Engineers (Malaysia) Bhd. 58,900 120
Leader Universal Holdings Bhd. 367,000 109
Telekom Malaysia Bhd. 26,000 90
Genting Bhd. 24,300 90
Technology Resources Industries Bhd. 56,000 60
Malaysia Internation Shipping Bhd. 33,000 55
Tenaga Nasional Bhd. 16,000 52
Commerce Asset-Holding Bhd. 16,950 49
Aokam Perdana Bhd. 30,166 38
Nestle Malaysia Bhd. 8,000 37
Magnum Corp. Bhd. 47,000 28
Rashid Hussain Bhd. 33,000 28
United Engineers Bhd. - Warrant(b) 13,440 12
---------------
1,260
MAURITIUS ISLAND 0.9%
New Mauritius Hotels Ltd. 31,515 49
State Bank of Mauritius Ltd. 63,350 42
The United Basalt Products 39,500 41
Sun Resorts Ltd. 20,969 39
Shell Mauritius Ltd.(b) 26,979 32
Mauritius Commercial Bank(b) 9,034 31
Air Mauritius Ltd. 38,200 25
Mon Tresor & Mon Desert Ltd.(b) 23,449 25
Ireland Blyth Ltd.(b) 29,400 25
Rogers & Co. Ltd. 6,455 23
---------------
332
MEXICO 6.8%
Carso Global Telecom `A1' 163,000 465
Grupo Financiero Banamex Accival SA 85,000 357
Grupo Financiero Bancomer SA 530,000 269
Grupo Televisa SA `CPO' 63,000 216
Telefonos de Mexico SA(b) 72,400 207
Cemex SA de CV 34,630 162
Grupo Carso SA de CV `A1'(b) 42,000 149
Coca-Cola Femsa SA `L' 78,000 147
Cifra SA de CV `V' 56,569 133
Alfa SA de CV `A' 39,572 90
Grupo Mexico SA `B' 28,000 79
Grupo Industrial Bimbo SA de CV `A' 41,000 65
Kimberly-Clark de Mexico SA de CV `A' 15,000 43
Industrias Penoles SA `CP'(b) 16,000 26
Grupo Situr SA de CV `B' 641,000 0
---------------
2,408
MOROCCO 1.8%
Omnium Nord Africain SA 1,348 149
Cie Transports LN 3,121 109
Samir(b) 1,510 104
Banque Commercial du Maroc 684 62
Wafabank 674 62
Lesieur Cristal 414 50
Ciments du Maroc 648 49
Brasseries du Nord Marocain 259 40
---------------
625
PERU 3.7%
Telefonica del Peru SA `B' 250,949 361
Cerveceria Backus & Johnston SA `T' 697,309 200
Banco Wiese Ltd. 747,299 199
Credicorp Ltd. 15,737 142
Compania de Minas Buenaventura SA `B' 16,157 141
Ferreyros SA 424,666 135
Cementos Lima SA 7,317 90
Southern Peru Copper Corp. 10,834 39
---------------
1,307
PHILIPPINES 3.4%
San Miguel Corp. `B' 245,900 304
Philippine Long Distance Telephone Co. 13,300 238
ABS-CBN Holdings Corp. 86,469 107
Manila Electric Co. `B' 69,956 103
Benpres Holdings Corp.(b) 942,500 90
Petron Corp. 2,727,623 90
Ayala Corp. 451,100 83
Metro Bank Trust Co. 9,650 45
SM Prime Holdings, Inc. 369,000 44
Ayala Land, Inc. 303,560 39
International Container Term Services, Inc. 634,000 19
First Philippine Holdings Corp. 28,520 15
Fortune Cement Corp. 1,022,250 9
Metropolitan Bank and Trust Co.(b) 965 1
---------------
1,187
POLAND 3.8%
Telekomunikacja Polska SA 24,900 178
Bank Rozwoju Eksportu SA 4,860 151
KGHM Polska Miedz SA 18,650 140
Prokom Software SA 2,562 134
Wielkopolski Bank Kredytowy SA 21,628 126
Bank Handlowy W. Warszawie 7,285 115
Elektrim Spolka Akcyjna SA 9,925 114
Zaklady Piwowarskie W Zywcu SA 1,600 110
Bank Slaski SA W Katowicach 1,865 100
Netia Holdings SA(b) 2,900 81
Zaklady Metali Lekkich Kety(b) 3,845 55
Fabryka Kotlow Rafako SA 27,790 44
Mostostal Export SA 7,305 8
---------------
1,356
ROMANIA 1.0%
Society Generale Romania Fund 3,096 163
Romanian Investment Fund 402 161
Romanian Growth Fund 24,300 21
---------------
345
</TABLE>
74 SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
Value
Shares (000s)
----------------------------------------------------------------------------------
<S> <C> <C>
RUSSIA 2.7%
Surgutneftegaz 11,500 $ 153
LUKoil Holding SP - ADR 2,500 128
Unified Energy System SP - ADR 9,530 110
Omz Gruppor Uralmash-Izhora(b) 67,000 107
Baltika Brewery(b) 300 96
Varyeganneftegaz 59,285 89
Rao Gazprom SP - ADR 11,000 74
Vimpel-Communications SP - ADR(b) 1,900 42
Samson(b) 25,791 39
Uralmash-Zavody SP - ADR(b) 13,000 24
Rostelecom SP - ADR 1,666 23
Avtovaz 500 21
Rao Gazprom SP - ADR 3,100 21
Mosk Gorod Tel(b) 2,500 19
Mosenergo SP - ADR 4,101 16
---------------
962
SAUDI ARABIA 1.1%
Saudi Arabian Investment Fund 36,200 396
---------------
SOUTH AFRICA 4.4%
Impala Platinum Holdings Ltd. 7,970 296
Sasol Ltd. 32,836 220
Nedcor Ltd. 8,900 187
Liberty Group Ltd. 12,916 123
Anglo American PLC 2,568 122
De Beers Centenary 4,640 113
Dimension Data Holding(b) 12,050 100
Barlow Ltd. 16,400 98
FirstRand Ltd. 83,460 86
South African Breweries PLC(b) 9,865 72
DataTec Ltd.(b) 8,200 57
Comparex Holdings Ltd. 24,100 42
Pepkor Ltd. 7,540 27
Wooltru Ltd. `N' 18,500 21
---------------
1,564
SOUTH KOREA 5.0%
Samsung Electronics 940 311
SK Telekom Co. 840 275
Hite Brewery Co. Ltd. 6,120 269
LG Electronics 6,550 183
Trigem Computer, Inc. 6,372 128
SK Corp. 6,250 115
Pohang Iron & Steel Co. Ltd. 1,220 104
Korea Telecom 1,050 92
Shinhan Bank 8,674 82
Samsung Fire & Marine Insurance 2,494 69
Korea Electric Power Corp. 2,120 66
Hanvit Bank(b) 11,500 58
Daewoo Securities Co. 1,771 9
Korean Air 603 5
---------------
1,766
TAIWAN 4.4%
R.O.C. Taiwan Fund 63,310 550
Taiwan Fund, Inc. 27,335 523
Acer, Inc.(b) 14,198 133
Macronix International Co. Ltd. SP - ADR 3,573 91
Walsin Lihwa Corp. SP - GDR(b) 11,856 89
China Steel Corp. SP - GDR 4,485 61
Asia Cement Corp. SP - GDR 8,757 57
Yang Ming Marine Transport SP - GDR(b) 5,186 41
Systex Corp.(b) 1,850 20
Teco Electric & Machinery SP - GDR 40 0
---------------
1,565
THAILAND 3.7%
Hana Microelectronics Public Co. Ltd. 31,400 246
BEC World Public Co. Ltd. 29,600 180
Advanced Info Service Public Co. Ltd. 13,400 167
Thai Euro Fund(b) 27,500 154
TelecomAsia Corp. Public Co. Ltd.(b) 98,700 110
Siam Cement Public Co. Ltd. 9,700 107
PTT Exploration & Production 20,750 101
Thai Farmers Bank Public Co. Ltd. 115,500 97
United Communication Industries 102,000 88
Bangkok Bank Public Co. 27,900 34
Telecomasia(b) 31,168 18
---------------
1,302
TURKEY 3.5%
Turk Hava Yollari Anonim Ortakligi 9,606,132 $ 178
Yapi ve Kredi Bankasi AS 12,939,190 144
Dogan Sirketler Grubu Holding AS 5,746,424 139
Migros Turk TAS 602,868 112
Haci Omer Sabanci Holding AS 9,406,800 111
Koc Holding AS 1,469,168 104
Akbank TAS 12,910,504 100
Tupras-Turkiye Petrol AS 1,600,000 84
Netas Northern Electric Telekomunikasyon AS 649,800 72
Eregli Demir Ve Celik Fabrikalari TAS 1,482,609 60
Vestel Elektronik Sanayi 185,000 56
Erciyas Biracilik ve Malt Sanayii AS 968,713 45
Petrol Ofisi AS(b) 469,585 23
Aktas Elektrik(b) 82,000 20
---------------
1,248
VENEZUELA 3.1%
Electridad de Caracas SP - ADR 21,400 540
Compania Anonima Nacional Telefonos
de Venezuela SP - ADR 14,000 381
Banco Venezolano de Creditio SP - ADR 30,573 104
Mantex S.A.C.A. SP - ADR 8,800 62
International Briquettes Holding, Inc. 6,667 18
---------------
1,105
ZIMBABWE 1.4%
Barclays Bank of Zimbabwe 561,400 245
Delta Corp. Ltd. 447,038 122
Interfresh Ltd. 1,829,700 65
Wankie Colliery Co. Ltd. 1,364,428 53
---------------
485
---------------
Total Common Stocks 35,007
(Cost $31,182) ===============
</TABLE>
-------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.1%
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000s)
<S> <C> <C>
REPURCHASE AGREEMENTS 0.1%
State Street Bank
5.850% DUE 2000/07/03 $ 47 47
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
6.000% due 07/16/2001 valued at $51.
Repurchase proceeds are $47.)
---------------
Total Short-Term Instruments 47
(Cost $47) ===============
TOTAL INVESTMENTS(a) 99.1% $ 35,054
(Cost $31,229) ===============
OTHER ASSETS AND LIABILITIES (NET) 0.9% 322
---------------
NET ASSETS 100.0% $ 35,376
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $31,542 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 10,117
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value. (6,605)
---------------
Unrealized appreciation-net $ 3,512
===============
</TABLE>
(b) Non-income producing security.
SEE ACCOMPANYING NOTES 75
<PAGE>
SCHEDULE OF INVESTMENTS
TAX-EFFICIENT STRUCTURED EMERGING MARKETS FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
----------------------------------------------------------------------------------
COMMON STOCKS 98.6%
----------------------------------------------------------------------------------
ARGENTINA 4.1%
PC Holdings(b) 412,737 $ 756
Telecom Argentina SA `B' 81,039 448
Telefonica de Argentina SA 133,634 435
Siderca SA `A' 170,989 393
Banco Frances SA 43,102 317
Argentina Fund(b) 28,800 295
Banco de Galicia y Buenos Aires SA de CV `B' 77,829 292
Astra Cia Argentina de Petro SA 105,540 272
Renault Argentina 241,431 162
Molinos Rio de la Plata SA 74,161 141
Sociedad Comercial Del Plata SA 813,560 100
---------------
3,611
BALTIC NATIONS 1.3%
Baltic Fund `A' 9,107 938
Eesti Telekom(b) 9,000 181
---------------
1,119
BOTSWANA 0.9%
Standard Chart Bank Botswana 403,350 345
Sechaba Breweries Ltd. 382,400 319
Sefalana Holding Co. Ltd. 93,100 80
---------------
744
BRAZIL 6.8%
Petroleo Brasileiro SA 86,900 2,574
Telecomunicacoes Brasileiras SA SP - ADR 22,080 2,145
Telecomunicacoes de Sao Paulo SA 22,080 408
Companhia Cervejaria Brahma 277,000 235
Itausa-Investimentos Itau SA 147,500 143
Tele Sudeste Celular Participacoes SA(b) 4,416 135
Banco Estado de Sao Paul 2,800,457 84
Tele Norte Leste Participacoes SA(b) 2,585 61
Telecomunicacoes de Sao Paulo 2,424,254 46
Telesp Celular(b) 2,165,657 39
Mahle Cofap Aneis 18,777 35
Banco Do Brasil SA 300 0
---------------
5,905
BULGARIA 0.2%
Framlington Bulgaria Fund(b) 44,260 144
---------------
CHILE 3.5%
Enersis SA SP - ADR 17,416 347
Empresa Nacional de Electricidad SA SP - ADR 31,288 346
Masisa SA SP - ADR 27,900 330
Banco Santiago SA SP - ADR 17,200 307
Laboratorio Chile SA SP - ADR 13,600 261
Madeco SA SP - ADR 32,600 249
Administradora de Fondos
de Pensiones Provida SA SP - ADR 10,600 225
Cristalerias de Chile SP - ADR 13,100 216
Compania de Telecomunicaciones de Chile SA SP - ADR 10,796 196
Compania Cervecerias Unidas SA SP - ADR 7,800 177
Sociedad Quimica y Minera de Chile SA SP - ADR 6,300 140
Embotelladora Andina SA SP - ADR `B' 8,700 83
Gener SA SP - ADR 5,500 81
Embotelladora Andina SA SP - ADR `A' 4,200 49
Quimica Y Minera de Chile 1,264 29
---------------
3,036
CHINA 4.5%
China Telecom Ltd.(b) 223,000 1,967
Shanghai New Asia Group Co. Ltd. `B' 1,067,500 314
Shanghai Diesel Engine Co. Ltd. `B' 923,000 229
China Merchants Shekou Port Service Co. Ltd. 463,518 223
Shanghai Dazhong Taxi Co. `B' 331,000 179
China Resources Enterprise Ltd. 122,000 146
Jilin Chemical Industrial Co. Ltd. 2,354,000 143
Maanshan Iron & Steel Co. `H' 2,866,000 142
Shanghai Petrochemical Co. Ltd. `H' 962,000 131
China Travel International Investment Hong Kong Ltd. 800,000 130
Guangdong Investment Ltd. 631,800 85
Chinadotcom Corp. `A'(b) 3,600 74
China Overseas Land & Investment 762,000 72
Harbin Power Equipment Co. Ltd. `H' 1,170,000 56
Legend Holdings(b) 36,000 35
---------------
3,926
COLOMBIA 0.4%
Bancolombia SP - ADR(b) 73,400 $ 156
Banco Ganadero SA SP - ADR 14,600 57
Cadena Almacenes SP - ADR 118,100 57
Carulla y Compania SP - ADR 41,200 32
Cementos Diamante SA SP - GDR 144A 6,900 5
Cementos Diamante SA SP - GDR 2,800 2
---------------
309
CROATIA 0.6%
Pliva D.D 52,250 539
---------------
CZECH REPUBLIC 1.4%
Cesky Telecom AS(b) 26,100 438
SPT Telecom AS 15,730 266
Ceske Radiokomunikace(b) 5,700 253
Komercni Banka AS 8,337 169
Ceska Pojistovna 1,255 81
ZDB(b) 12,178 25
Aliachem AS 101,312 14
Synthesia AS 10,433 13
---------------
1,259
EGYPT 1.8%
Mobinil-Egyptian Mobile Network(b) 15,900 517
Eastern Co. for Tobacco & Cigarettes 10,000 218
Al Ahram Beverages(b) 9,300 165
Commercial International Bank 14,833 158
Orascom Construction(b) 13,768 158
Oriental Weavers Co. 9,070 144
SUEZ CEMENT CO 9,695 101
Alexandria National Iron & Steel Co.(b) 2,546 87
Egyptian International Pharmaceutical Industries Co. 660 29
---------------
1,577
GHANA 0.3%
Ashanti Goldfields Co. Ltd. SP - GDR 60,366 106
Unilever Ghana Ltd.(b) 135,040 46
Mobil Oil Ghana Ltd.(b) 10,174 33
Standard Chartered Bank Ghana Ltd. 5,500 22
Aluworks Ghana Ltd.(b) 38,100 18
Social Security Bank Ltd.(b) 47,400 17
---------------
242
GREECE 3.8%
Hellenic Telecommunication Organization SA 19,60 480
Intracom SA 12,058 441
Alpha Credit Bank 6,672 263
Alpha Leasing SA 16,912 233
General Construction SA 15,918 227
Titan Cement Co. SA 5,130 195
Commercial Bank of Greece SA 4,370 189
Hellenic Bottling Co. SA 10,110 161
Aegek SA 18,140 147
Aluminium of Greece SA 3,900 146
Panafon Hellenic Telecommunications Co. SA 11,800 134
J. Boutaris & Son Holdings 20,910 131
EFG Eurobank(b) 4,160 110
National Bank of Greece SA 2,632 104
Elais Co. SA 4,280 97
National Bank of Greece ADR(b) 11,900 93
Ergo Bank SA 3,702 71
Heracles General Cement SA 2,790 59
Attica Enterprises SA 2,310 25
---------------
3,306
HUNGARY 4.2%
Magyar Tavkozlesi Rt. SP - ADR 29,000 999
OTP Bank Rt 9,171 478
Gedeon Richter Rt 8,300 447
Antenna Hungaria Rt.(b) 13,970 405
Graboplast Rt 25,772 260
BorsodChem Rt.(b) 6,964 215
Pick Szeged Rt 5,790 214
MOL Magyar Olaj-es Gazipari Rt 15,475 213
Demasz Rt 2,700 155
Danubius Hotel and Spa Rt 7,558 146
Inter-Europa Bank Rt 2,390 101
---------------
3,633
76 SEE ACCOMPANYING NOTES
<PAGE>
<CAPTION>
Value
Shares (000s)
----------------------------------------------------------------------------------
<S> <C> <C>
INDIA 4.1%
The India Fund, Inc. 107,200 $ 1,521
Reliance Industries SP - GDR 24,000 504
UTI India IT Fund(b) 5,600 400
Morgan Stanley India Investment Fund(b) 30,000 360
I.T.C. Limited SP - GDR 16,533 318
Hindalco Industries Ltd. SP - GDR 7,067 138
Indo Gulf Corp. Ltd. SP - GDR 138,300 131
Mahindra & Mahindra Ltd. SP - GDR 15,490 73
Bajaj Auto Ltd. SP - GDR 6,775 62
CESC Ltd. SP - GDR 109,800 44
Ranbaxy Laboratories Ltd. SP - GDR 2,400 39
Tata Electric Cos. SP - GDR 100 13
Tata Engineering and Locomotive Co. Ltd. SP - GDR 2,400 7
---------------
3,610
INDONESIA 3.2%
PT Astra International, Inc. 1,963,000 617
PT Hanjaya Mandala Sampoerna 422,000 612
PT Telekomunikasi Indonesia 1,197,320 421
PT Gudang Garam 216,000 349
PT Indofood Sukses Makmur 589,000 321
PT Indah Kiat Pulp & Paper Corp. 1,322,721 268
PT Indocement Tunggal Prakarsa 486,500 179
PT Mayora Indah 553,000 33
---------------
2,800
ISRAEL 4.4%
Teva Pharmaceutical Industries Ltd. 15,320 833
Nice Systems Ltd. 10,356 806
Bezek Israeli Telecommunication Corp. Ltd. 108,053 602
Leumi Insurance Holdings(b) 414,644 434
Israel Chemicals Ltd. 319,714 391
Bank Hapoalim Ltd. 131,022 380
Bank Leumi Le-Israel 143,110 295
Blue Square Chain Investments and Properties Ltd (b) 8,150 112
---------------
3,853
KENYA 0.4%
Uchumi Supermarket Ltd. 156,500 86
Firestone East Africa Ltd. 359,250 60
Kenya Power & Lighting Co. Ltd. 87,600 58
Kenya Airways Ltd. 432,000 44
Sasini Tea & Coffee Ltd. 51,620 24
National Industrial Credit Bank 83,660 23
Athi River Mining Ltd. 304,400 18
Kenya Commercial Bank Ltd. 33,755 12
---------------
325
MALAYSIA 4.1%
United Engineers (Malaysia) Bhd 396,800 809
Commerce Asset-Holding Bhd 257,000 744
Telekom Malaysia Bhd 124,000 427
Malayan Banking Bhd 90,400 366
Sime Darby Bhd 263,000 338
Genting Bhd 70,400 259
Tenaga Nasional Bhd 75,000 245
Leader Universal Holdings Bhd 712,000 212
United Engineers Bhd. - Warrant(b) 79,360 73
Magnum Corp. Bhd 100,000 59
Aokam Perdana Bhd 35,733 45
---------------
3,577
MAURITIUS ISLAND 0.7%
State Bank of Mauritius Ltd.(b) 257,549 169
Mauritius Commercial Bank 40,685 139
New Mauritius Hotels Ltd. 37,200 58
The United Basalt Products 46,900 49
Sun Resorts Ltd. 24,761 46
Shell Mauritius Ltd. 32,000 38
Mon Tresor & Mon Desert Ltd.(b) 27,800 30
Air Mauritius Ltd. 45,200 30
Ireland Blyth Ltd.(b) 34,809 30
Rogers & Co. Ltd. 7,600 27
---------------
616
MEXICO 5.0%
Grupo Financiero Banamex Accival SA 167,000 702
Telefonos de Mexico SA(b) 226,780 647
Carso Global Telecom `A1' 184,000 525
Grupo Financiero Bancomer SA 948,000 481
Cifra SA de CV `V' 155,741 365
Grupo Televisa SA `CPO' 100,000 343
Cemex SA de CV 55,136 258
Grupo Carso SA de CV `A1'(b) 64,000 227
Alfa SA de CV `A' 78,000 178
Coca-Cola Femsa SA `L' 93,000 175
Grupo Mexico SA `B' 55,369 156
Grupo Industrial Bimbo SA de CV `A' 75,777 119
Kimberly-Clark de Mexico SA de CV `A' 28,000 80
Industrias Penoles SA `CP' 43,000 69
Grupo Situr SA de CV `B' 759,751 0
---------------
4,325
MOROCCO 1.5%
Omnium Nord Africain SA 3,131 345
Ciments du Maroc 2,335 178
Cie Transports LN 4,961 174
Brasseries du Nord Marocain 1,007 156
Banque Commercial du Maroc 1,652 150
Samir(b) 1,790 123
Wafabank 1,242 113
Lesieur Cristal 491 60
---------------
1,299
PERU 4.0%
Buenaventura SA 37,042 641
Telefonica Del Peru SA 51,500 586
Credicorp Ltd. 45,132 406
Telefonica del Peru SA `B' 268,617 387
Cementos Lima SA 23,313 287
Banco Wiese Ltd. 1,067,395 285
Compania de Minas Buenaventura SA `B' 24,428 213
BCO Continental 436,467 209
Ferreyros SA 544,170 173
Cerveceria Backus & Johnston SA `T' 450,146 129
Southern Peru Copper Corp. 32,448 116
Credicorp Ltd. 7,300 66
---------------
3,498
PHILIPPINES 3.7%
San Miguel Corp. `B' 634,400 785
Philippine Long Distance Telephone Co. 29,750 533
Manila Electric Co. `B' 243,165 357
ABS CBN Holdings Corp.(b) 218,031 270
Ayala Corp. 1,373,320 254
Petron Corp. 6,599,500 217
Benpres Holdings Corp.(b) 1,701,000 163
Metro Pacific Corp.(b) 9,891,900 144
Metro Bank Trust Co. 28,500 133
Ayala Land, Inc. 988,740 126
Equitable Banking Corp. 78,100 79
SM Prime Holdings, Inc. 643,000 77
International Container Term Services, Inc. 1,198,000 35
Metropolitan Bank and Trust Co.(b) 2,850 3
---------------
3,176
POLAND 4.2%
Telekomunikacja Polska 128,200 885
Prokom Software SA 9,649 505
KGHM Polska Miedz SA 67,440 505
Elektrim Spolka Akcyjna SA 23,940 275
Telekomunikacja Polska SA(b) 35,400 254
Bank Handlowy W. Warszawie 14,870 235
Zaklady Piwowarskie W Zywcu SA 2,820 194
Bank Rozwoju Eksportu SA 5,760 179
KGHM Polska Miedz SA 11,300 168
Bank Slaski SA W Katowicach 3,050 164
Netia Holdings SA(b) 5,400 150
Wielkopolski Bank Kredytowy SA 25,638 150
---------------
3,664
ROMANIA 0.6%
Society Generale Romania Fund(b) 5,212 274
Romanian Investment Fund 513 205
Romanian Growth Fund 28,700 25
---------------
504
RUSSIA 2.6%
LUKoil Holding SP - ADR 13,050 667
Unified Energy System SP - ADR 50,700 583
Surgutneftegaz 18,200 243
Uralmash-Zavody SP - ADR(b) 94,000 175
SEE ACCOMPANYING NOTES 77
<PAGE>
SCHEDULE OF INVESTMENTS
TAX-EFFICIENT STRUCTURED EMERGING MARKETS FUND (CONT)
June 30, 2000
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
----------------------------------------------------------------------------------
Vimpel-Communications SP - ADR(b) 5,180 $ 115
Mosenergo SP - ADR 27,100 106
Varyeganneftegas(b) 59,285 89
Samson(b) 60,400 91
Irkutskenergo SP - ADR 23,300 81
Baltika Brewery(b) 250 80
Rostelecom SP - ADR 3,333 45
Avtovaz 500 21
Trading House TSUM SP - ADR 3,800 11
---------------
2,307
SAUDI ARABIA 0.8%
Saudi Arabia Investment Fund 64,500 706
---------------
SOUTH AFRICA 4.5%
Sasol Ltd. 112,510 754
Impala Platinum Holdings Ltd. 12,601 468
Dimension Data Holding(b) 50,620 419
De Beers Centenary 16,791 408
FirstRand Ltd. 318,000 328
Nedcor Investment Bank Holdings Ltd. 544,183 257
Nedcor Ltd. 10,583 222
Anglo American PLC 3,900 185
Datatec Ltd.(b) 26,000 179
Liberty Life Association of Africa Ltd. 15,330 146
Barlow Ltd. 19,375 116
Pepkor Ltd. 26,323 95
South African Breweries PLC 12,000 89
Wooltru Ltd. `N' 55,000 64
Edgars Consolidated Stores 6,438 62
Comparex Holdings Ltd. 28,500 50
Wooltru Ltd. 22,298 26
---------------
3,868
SOUTH KOREA 4.3%
Trigem Computer, Inc. 75,402 1,511
Samsung Electronics 1,578 522
Korea Telecom 4,550 401
Samsung Fire & Marine Insurance 7,612 212
Pohang Iron & Steel Co. Ltd. 2,020 171
Shinhan Bank 18,106 171
Korea Asia Fund(b) 100 171
LG Electronics 4,463 125
SK Telekom Co. 370 121
Korean Air 11,477 95
Hite Brewery Co. Ltd. 1,950 86
SK Telecom Co. Ltd. SP - ADR 2,250 82
Daewoo Securities Co. 14,727 79
Korea Electric Power Corp. 930 29
---------------
3,776
TAIWAN 3.8%
Taiwan Fund, Inc. 48,503 929
R.O.C. Taiwan Fund 72,795 632
Macronix International Co. Ltd. SP - ADR 13,490 345
Acer, Inc. 28,118 264
China Steel Corp. SP - GDR 17,330 234
Walsin Lihwa Corp. SP - GDR(b) 30,178 226
President Enterprise Corp. SP - GDR(b) 17,730 135
Yang Ming Marine Transport SP - GDR(b) 17,066 134
Asia Cement Corp. SP - GDR 16,010 104
Yageo Corp. SP - GDR(b) 12,276 101
Teco Electric & Machinery SP - GDR(b) 9,513 95
Tuntex Distinct Corp. SP - GDR 52,304 71
Systex Corp.(b) 3,680 39
---------------
3,309
THAILAND 4.1%
Krung Thai Bank Public Co. Ltd. 1,203,000 407
Advanced Info Service Public Co. Ltd. 29,100 362
BEC World Public Co. Ltd. 59,300 360
TelecomAsia Corp. Public Co. Ltd.(b) 305,100 339
Shinawatra Computer Co. Ltd. 56,000 294
PTT Exploration & Production 58,600 284
Thai Euro Fund(b) 48,750 273
Thai Farmers Bank Public Co. Ltd. 275,300 232
Land & Houses Public Co. Ltd. 414,400 217
Delta Electronics 24,970 168
United Communication Industries 143,300 123
Thai Telephone & Telecom 576,500 97
Thai International Fund 15 91
Siam Makro Public Co. 73,900 91
Banpu Public Co. Ltd. 169,800 82
Hana Microelectronics Public Co. Ltd. 7,800 61
Telecomasia(b) 96,347 56
---------------
3,537
TURKEY 5.0%
Dogan Sirketler Grubu Holding AS 40,891,200 989
Turk Hava Yollari Anonim Ortakligi(b) 26,364,738 489
Eregli Demir Ve Celik Fabrikalari TAS 11,642,000 469
Migros Turk TAS 2,501,250 464
Netas Northern Electric Telekomunikasyon AS 3,930,000 437
Koc Holding AS 4,095,912 290
Yapi ve Kredi Bankasi AS 25,080,000 279
Vestel Elektronik Sanayi 875,000 264
Arcelik AS 4,641,600 228
Erciyas Biracilik ve Malt Sanayii AS 4,426,000 207
Tupras-Turkiye Petrol AS 2,222,000 116
Aktas Elektrik 198,000 48
Petrol Ofisi AS(b) 797,650 39
Akbank TAS 592,530 5
---------------
4,324
VENEZUELA 2.7%
Electridad de Caracas SP - ADR 43,300 1,093
Compania Anonima Nacional
Telefonos de Venezuela SP - ADR 32,900 894
Mavesa SA SP - ADR 57,900 182
Mantex S.A.C.A. SP - ADR 15,033 106
Siderurgica Venezolana Sivensa SP - ADR 26,067 62
---------------
2,337
ZIMBABWE 1.1%
Barclays Bank of Zimbabwe 1,105,400 483
Interfresh Ltd. 5,547,900 197
Delta Corp. Ltd. 710,684 195
Wankie Colliery Co. Ltd. 2,199,200 86
---------------
961
---------------
Total Common Stocks 85,722
(Cost $76,615) ===============
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.2%
---------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENTS 0.2%
State Street Bank
5.850% due 07/03/2000 $ 167 167
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Assocation
6.375% due 01/16/2002 valued at $173.
Repurchase proceeds are $167.)
---------------
Total Short-Term Instruments 167
(Cost $167) ===============
TOTAL INVESTMENTS(a) 98.8% $ 85,889
(Cost $76,782)
OTHER ASSETS AND LIABILITIES (NET) 1.2% 1,084
---------------
NET ASSETS 100.0% $ 86,973
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $77,883 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 23,290
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (15,284)
---------------
Unrealized appreciation-net $ 8,006
===============
</TABLE>
(b) Non-income producing security.
78 SEE ACCOMPANYING NOTES
<PAGE>
SCHEDULE OF INVESTMENTS
INTERNATIONAL FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
----------------------------------------------------------------------------------
COMMON STOCKS 90.7%
----------------------------------------------------------------------------------
BRAZIL 1.0%
Telecomunicacoes Brasileiras SA SP - ADR 3,850 $ 374
Petroleo Brasileiro SA 8,240 249
Centrais Electricas Brasileiras SA `B' 6,513,000 144
Cia Vale Do Rio(b) 5,100 144
Telecomunicacoes de Sao Paulo SA(b) 4,600 85
Companhia Cervejaria Brahma 80,000 68
Banco Itau SA 730,000 64
Banco Bradesco SA 7,276,037 63
Companhia Energetica de Minas Gerais 2,940,800 51
Companhia Siderurgica Nacional(b) 1,360,000 43
Aracruz Celulose SA `B' 21,000 40
Tele Sudeste Celular Participacoes SA(b) 920 28
Tele Norte Leste Participacoes SA 133,204 16
Telesp Celular(b) 76 0
---------------
1,369
CHILE 1.1%
Compania de Telecomunicaciones de Chile SA SP - ADR 20,855 378
Banco Santander Chile SP - ADR 15,850 254
Enersis SA SP - ADR 12,122 242
Empresa Nacional de Electricidad SA SP - ADR 16,367 181
Gener SA SP - ADR 10,633 156
Compania Cervecerias Unidas SA SP - ADR 4,300 98
Sociedad Quimica y Minera de Chile SA SP - ADR 3,000 67
Masisa SA SP - ADR 3,900 46
Madeco SA SP - ADR(b) 4,342 33
Quimica Y Minera de Chile 531 12
---------------
1,467
CHINA 0.7%
China Telecom Ltd.(b) 82,000 723
Huaneng Power International, Inc. 399,000 131
Yizheng Chemical Fibre Co. Ltd. `H' 514,000 102
Guangshen Railway Co. Ltd. `H' 668,000 68
---------------
1,024
FINLAND 4.4%
Nokia Corp. 94,208 4,807
Sonera Group OYJ 9,520 434
Sanoma WSOY 13,520 225
Yit-Yhtyma OY 12,184 161
Talentum 13,630 126
Hartwall OY AB 4,700 94
Jot Automation Group OYJ 10,500 70
UPM-Kymmene Corp. 2,746 68
Kemira OYJ 12,050 59
Okobank 2,564 26
Rautaruukki OY 4,895 23
Viking Line AB 880 21
---------------
6,114
FRANCE 8.4%
France Telecom SA 10,641 1,487
Total SA 9,032 1,385
Vivendi (Ex-Generale Des Eaux) 12,158 1,073
AXA 6,348 1,000
Banque National de Paris 9,050 871
Alcatel Telecommunications 12,890 845
Carrefour Supermarche 8,580 586
Legrand SA 2,500 561
Cap Gemini SA 2,900 511
Hermes International 3,115 421
Suez Lyonnaise des Eaux 2,310 405
L'OREAL 460 398
Lafarge SA 4,801 373
Castorama Dubois 1,470 364
Sodexho Alliance SA 1,750 318
Groupe GTM 2,870 269
Groupe Danone 1,960 260
Renault SA 5,140 234
Schneider SA 2,801 195
Societe BIC SA 2,680 131
Vivendi Warrants(b) 2,750 9
---------------
11,696
GERMANY 10.2%
Deutsche Telekom 40,332 2,303
Allianz AG 5,397 1,939
Siemens AG 8,793 1,326
SAP AG 6,180 1,139
E On AG 20,468 987
DaimlerChrysler AG 17,819 929
Muenchener Rueckversicherungs-Gesellschaft AG 2,590 814
Bayer AG 20,600 804
BASF AG 17,900 719
Bayerische Hypo Vereinsbank AG 10,500 678
Dresdner Bank AG 16,120 663
Bayerische Motoren Werke AG 20,420 617
MAN AG 17,000 514
Commerzbank AG 11,500 412
Metro AG 6,800 240
---------------
14,084
HONG KONG 0.4%
Citic Pacific Ltd. 42,000 220
Legend Holdings 216,000 209
Cosco Pacific Ltd. 228,000 180
---------------
609
---------------
HUNGARY 3.2%
Magyar Tavkozlesi Rt 395,300 2,749
OTP Bank Rt 13,010 678
MOL Magyar Olaj-es Gazipari Rt 33,500 462
Gedeon Richter Rt 7,945 428
Danubius Hotel and Spa Rt 7,490 144
Pick Szeged Rt 1,090 40
---------------
4,501
INDIA 0.6%
Mahanagar Telephone Nigam Ltd.(b) 20,200 206
Videsh Sanchar Nigam Ltd. 10,000 156
I.T.C. Limited SP - GDR(b) 6,900 133
State Bank of India SP - GDR 11,700 116
BSES Ltd. - GDR 5,400 100
Larsen & Toubro Ltd. 8,600 96
---------------
807
IRELAND 1.0%
CRH PLC 21,866 395
Allied Irish Banks PLC 35,100 314
Eircom PLC 100,300 268
Kerry Group PLC 10,700 140
Jefferson Smurfit Group PLC 70,900 122
Irish Life & Permanent PLC 9,141 77
Bank of Ireland 9,200 58
---------------
1,374
ITALY 2.2%
Telecom Italia Mobile SpA 50,200 513
Telecom Italia SpA 31,865 438
ENI SpA 69,900 404
Istituto Bancario San Paolo di Torino 20,757 368
Assicuazioni Generali 9,135 313
Enel SpA 45,800 203
Fiat SpA 6,540 170
Benetton Group SpA 75,700 158
Banca Popolare di Milano 19,200 138
RAS AG 12,300 135
Banca Intesa SpA 21,885 98
Telecom Italia SpA 13,400 89
Olivetti SpA 18,200 66
Beni Stabili SpA 20,757 11
Banca Intesa SpA 3,486 5
---------------
3,109
JAPAN 20.6%
Nippon Telegraph & Telephone 158 2,100
Fanuc 16,300 1,658
Murata Manufacturing Co. 11,000 1,578
Toyota Motor Corp. 33,000 1,502
Bank of Tokyo-Mitsubishi Ltd. 115,000 1,388
Matsushita Electric Industrial Co. Ltd. 49,000 1,270
Fuji Photo Film 31,000 1,268
Fujisawa Pharmaceutical 30,000 1,213
Sharp Corp. 67,000 1,184
NEC Corp. 35,000 1,098
Kirin Brewery Co. Ltd. 83,000 1,036
Sony Corp. 11,000 1,026
Mitsubishi Estate 86,000 1,012
Sumitomo Bank Ltd. 81,000 992
Canon, Inc. 18,000 896
Asahi Chemical Industry Co. Ltd. 118,000 834
Secom 11,000 $ 803
</TABLE>
SEE ACCOMPANYING NOTES 79
<PAGE>
SCHEDULE OF INVESTMENTS (Cont.)
INTERNATIONAL FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
----------------------------------------------------------------------------------
<S> <C> <C>
DAI Nippon Printing Co. Ltd. 45,000 793
Nomura Securities Co. Ltd. 31,000 758
Hitachi Ltd. 52,000 750
Tokyo Electric Power 28,300 689
Honda Motor Co. Ltd. 20,000 680
Yamanouchi Pharm 12,000 655
Ito-Yokado Co. Ltd. 10,000 601
Mitsubishi Heavy Industries Ltd. 131,000 580
Nippon Steel Corp. 257,000 540
Tokio Marine & Fire Insurance Co. 46,000 531
Mitsubishi Corp. 55,000 497
Bridgestone Corp. 19,000 402
Nissan Motor Co. Ltd.(b) 63,000 371
---------------
28,705
MALAYSIA 1.6%
Tenaga Nasional Bhd 185,000 604
Malayan Banking Bhd 122,000 494
Telekom Malaysia Bhd 106,000 366
Malaysia International Shipping Bhd 137,000 227
Public Bank Bhd 216,000 216
Commerce Asset-Holding Bhd 49,000 142
RHB Capital 102,000 111
Resorts World Bhd 37,000 101
---------------
2,261
NETHERLANDS 3.2%
Royal Dutch Petroleum Co. 20,370 1,266
Philips Electronics(b) 11,200 528
ING Groep NV 7,585 513
Koninklijke KPN NV 7,940 355
ABN AMRO Mortgage Corp. 13,600 333
Aegon NV 8,400 299
Fortis NL 7,960 232
Unilever NV 4,953 227
Verernigde Nederlandse Uitgeversbedrijven Bezit 4,380 226
Heineken NV 3,100 189
Akzo Noble NV 3,980 169
Koninklijke Ahold NV 4,700 138
---------------
4,475
NEW ZEALAND 0.8%
Telecom Corp. of New Zealand Ltd. 159,200 556
Fletcher Challenge Energy 52,800 172
Lion Nathan Ltd. 59,600 133
Carter Holt Harvey Ltd. 147,500 128
Brierley Investments Ltd. 566,000 88
Fisher & Paykel Industries Ltd. 21,200 67
---------------
1,144
NORWAY 2.3%
Norsk Hydro ASA 28,470 1,194
Orkla ASA 20,800 395
Christiania Bank Og Kreditkasse 53,900 290
Storebrand ASA 37,700 272
Den Norske Bank ASA 61,060 253
Petroleum Geo-Services(b) 14,100 241
Tomra Systems ASA 6,400 170
Norske Skogindustrier ASA 5,600 134
Merkantildata ASA(b) 17,900 92
Hafslund ASA `B' 20,200 66
Tandberg Television ASA(b) 8,500 49
Unitor ASA 4,000 29
---------------
3,185
POLAND 2.1%
Telekomunikacja Polska SA 151,900 1,049
Polski Koncern Naftowy 57,153 537
Bank Slaski SA W Katowicach 4,840 261
Elektrim Spolka Akcyjna SA 16,280 187
Bank Pekao(b) 14,400 173
Prokom Software SA 2,820 148
Wielkopolski Bank Kredytowy SA 19,590 114
Bank Rozwoju Eksportu SA 3,100 96
Stomil Olsztyn SA 14,500 95
Big Bank Gdanski SA 42,500 86
Softbank SA 1,440 75
Debica SA 4,930 41
Bank Handlowy W. Warszawie 2,509 40
---------------
2,902
RUSSIA 1.9%
LUKoil Holding SP - ADR 21,000 $ 1,074
Surgutneftegaz 59,900 798
Unified Energy System SP - ADR 43,300 498
Rostelecom SP - ADR 17,000 232
Mosenergo SP - ADR 12,800 50
---------------
2,652
SINGAPORE 0.9%
Singapore Press Holdings 20,000 313
DBS Group Holdings Ltd. 21,000 270
Singapore Tech Engineering Ltd. 165,000 243
City Developments Ltd. 47,000 182
Overseas Union Bank 47,000 182
DBS Land 102,000 132
---------------
1,322
SOUTH KOREA 1.9%
Samsung Electronics(b) 2,000 662
Korea Electric Power Corp. 14,000 434
Korea Fund, Inc.(b) 17,000 239
SK Telecom Co.(b) 600 196
Korea Telecom 2,000 176
Kookmin Bank 11,000 140
Samsung Electro-Mechanics 2,000 125
Pohang Iron & Steel Co. 5,000 120
Hyundai Motor Co. Ltd. 8,000 103
L.G. Chemical Ltd. 5,000 100
Samsung Display Devices Co. 2,000 96
SK Corp. 4,000 73
Shinhan Bank 7,000 66
Samsung Heavy Industries 14,000 65
---------------
2,595
SPAIN 3.0%
Telefonica SA 61,940 1,331
Banco Bilbao Vizcaya International 61,220 915
Banco Santander Central Hispano SA 55,060 581
Endesa SA 25,780 499
Repsol SA 17,420 347
Fomento de Contrucciones y Contratas SA 9,220 174
Iberdrola SA 8,750 113
Sogecable SA(b) 2,700 96
Autopistas Concesionaria Espanola SA 5,900 51
Gas Natural 2,560 46
Union Electric Fenosa 2,330 42
Autopistas, Concesionaria Espanola SA warrants(b 5,900 3
---------------
4,198
SWEDEN 2.1%
MSCI Sweden Opal Series B(b) 7,660 2,966
SWITZERLAND 4.6% ---------------
Novartis AG 884 1,400
Roche Holding AG 116 1,129
Nestle SA 458 917
Credit Suisse Group 4,185 832
UBS AG 5,360 785
New ABB Ltd. 2,873 344
Zurich Allied AG 675 334
Swisscom AG 880 305
Holderbank Financiere Glarus AG 146 179
Schindler Holding AG 99 152
Givaudan AG(b) 116 35
---------------
6,412
TAIWAN 2.9%
Taiwan Fund, Inc. 56,300 1,077
Winbond Electronics Corp.(b) 27,994 805
Asustek Computer, Inc.(b) 57,120 524
Taiwan Semiconductor Manufacturing Co. Ltd.(b) 11,392 441
China Steel Corp. SP - GDR(b) 29,900 404
Evergreen Marine Corp. 31,320 302
Asia Cement Corp. SP - GDR(b) 37,817 246
Advanced Semiconductor Engineering SP - GDR(b) 14,391 245
Standard Foods Taiwan Ltd.(b) 4,269 12
---------------
4,056
80 SEE ACCOMPANYING NOTES
<PAGE>
TURKEY 3.8%
Turkiye Is Bankasi `C' 61,608,800 $ 1,316
Yapi ve Kredi Bankasi AS 73,768,334 821
Turkiye Garanti Bankasi AS(b) 50,552,200 611
Arcelik AS 9,553,500 470
Migros Turk TAS 1,784,700 331
Eregli Demir Ve Celik Fabrikalari TAS 7,059,300 284
Ege Biracilik ve Malt Sanayii AS 3,326,100 217
Vestel Elektronik Sanayi 696,000 210
Trakya Cam Sanayii AS 15,181,104 174
Dogan Sirketler Grubu Holding AS 7,162,000 173
Netas Northern Electric Telekomunikasyon AS 1,200,600 134
Brisa Bridgestone Sabanci Lastik San. Ve Tic AS 1,976,000 123
Aygaz AS 2,790,000 111
Adana Cimento Sanayii `A' 6,439,845 99
Haci Omer Sabanci Holding AS 7,941,600 93
Akbank TAS 11,765,498 91
---------------
5,258
UNITED KINGDOM 5.8%
Morgan Stanley Capital LLC 17,000 4,635
MSCI World Equity Benchmark Shares
United Kingdom Index IOPV 181,000 3,450
---------------
8,085
---------------
Total Common Stocks 126,370
(Cost $108,106) ===============
</TABLE>
--------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 7.2%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000s)
<S> <C> <C>
REPURCHASE AGREEMENTS 2.0%
State Street Bank
5.850% due 07/03/2000 $ 2,823 2,823
(Dated 06/30/2000. Collateralized by -------------
Federal National Mortgage Association
6.100% due 09/14/2001 valued at $2,884.
Repurchase proceeds are $2,824.)
TIME DEPOSITS(c) 5.2%
State Street Bank
5.000% due 07/03/2000 BP 3,700 5,598
4.350% due 07/03/2000 EC 1,700 1,623
---------------
7,221
---------------
Total Short-Term Instruments 10,044
===============
(Cost $10,044)
TOTAL INVESTMENTS(a) 97.9% $ 136,414
(Cost $118,150)
OTHER ASSETS AND LIABILITIES (NET) 2.1% 2,956
---------------
NET ASSETS 100.0% $ 139,370
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation (depreciation) of
investments based on cost for federal income tax purposes of $118,561 was as
follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 26,110
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value. (8,257)
---------------
Unrealized appreciation-net $17,853
===============
</TABLE>
(b) Non-income producing security.
(c) Assets with an aggregate market value of $5,582 have been segregated with
the custodian to cover margin requirements for the following open futures
contracts at June 30, 2000
<TABLE>
<CAPTION>
# of Unrealized
Type Contracts (Depreciation)
-----------------------------------------------------------------------------------
<S> <C> <C>
GBP 100 Index Futures (09/2000) 58 $ (147)
</TABLE>
SEE ACCOMPANYING NOTES 81
<PAGE>
SCHEDULE OF INVESTMENTS
NFJ EQUITY INCOME FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
----------------------------------------------------------------------------------
COMMON STOCKS 92.0%
----------------------------------------------------------------------------------
AEROSPACE 3.7%
BF Goodrich Co. 16,400 $ 559
Northrop Grumman Corp. 8,200 543
---------------
1,102
BUILDING 1.8%
Armstrong Holdings, Inc. 34,300 525
---------------
CAPITAL GOODS 6.3%
GATX Corp. 16,300 554
Hubbell, Inc. `B' 21,600 551
Dana Corp. 25,900 549
Tenneco Automotive, Inc. 38,200 201
Visteon Corp.(b) 1,637 20
---------------
1,875
COMMUNICATIONS 5.3%
U.S. West, Inc. 6,600 566
GTE Corp. 8,100 504
Verizon Communications 9,800 498
---------------
1,568
CONSUMER DISCRETIONARY 15.5%
Thomas & Betts Corp. 39,600 757
J.C. Penney Co. 32,300 596
Ford Motor Co. 13,000 559
UST, Inc. 37,100 545
Brunswick Corp. 32,800 543
Eastman Kodak Co. 9,100 541
Springs Industries, Inc. `A' 16,500 531
Whirlpool Corp. 10,900 508
---------------
4,580
CONSUMER STAPLES 8.2%
SUPERVALU, Inc. 28,800 549
Fortune Brands, Inc. 23,700 547
Brown-Forman Corp. `B' 10,100 543
RJ Reynolds Tobacco Holdings, Inc. 19,200 536
Pactiv Corp.(b) 30,900 243
---------------
2,418
ENERGY 13.1%
Ultramar Diamond Shamrock Corp. 42,700 1,059
Repsol SA SP - ADR 28,700 569
Kerr McGee Corp. 9,600 566
Conoco, Inc. `B' 22,700 558
KeySpan Corp. 18,100 557
USX Marathon Group 22,200 556
---------------
3,865
FINANCIAL & BUSINESS SERVICES 18.3%
Deluxe Corp. 46,500 1,096
Union Planters Corp. 38,200 1,067
Edwards (A.G.), Inc. 14,200 554
HRPT Properties Trust 78,400 544
Morgan, J.P. & Co., Inc. 4,900 540
PNC Bank Corp. 11,500 539
KeyCorp 30,100 531
BankAmerica Corp. 12,100 520
---------------
5,391
HEALTH CARE 3.0%
Mallinckrodt, Inc. 20,100 873
---------------
MATERIALS & PROCESSING 7.5%
USX-U.S. Steel Group, Inc. 59,700 1,108
Westvaco Corp. 22,400 556
Georgia-Pacific Corp. (Timber Group) 25,000 541
---------------
2,205
UTILITIES 9.3%
NICOR, Inc. 17,300 564
Public Service Enterprise Group, Inc. 16,100 557
American Electric Power, Inc. 18,500 548
New Century Energies, Inc. 18,200 546
DTE Energy Co. 17,700 541
---------------
2,756
---------------
Total Common Stocks 27,158
(Cost $29,125) ===============
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000s) (000s)
----------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 9.8%
----------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT 9.8%
State Street Bank
5.850% due 07/03/2000 $ 2,893 $ 2,893
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
5.940% due 09/04/2001 valued at $2,956.
Repurchase proceeds are $2,894.)
---------------
Total Short-Term Instruments 2,893
(Cost $2,893) ===============
TOTAL INVESTMENTS(a) 101.8% $ 30,051
(Cost $32,018)
OTHER ASSETS AND LIABILITIES (NET) (1.8%) (525)
---------------
NET ASSETS 100.0% $ 29,526
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation (depreciation) of
investments based on cost for federal income tax purposes of $32,018 was as
follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 438
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value. (2,405)
---------------
Unrealized depreciation-net $ (1,967)
===============
</TABLE>
(b) Non-income producing security.
82 SEE ACCOMPANYING NOTES
<PAGE>
SCHEDULE OF INVESTMENTS
NFJ VALUE FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
----------------------------------------------------------------------------------
COMMON STOCKS 93.6%
----------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE 2.2%
NORTHROP GRUMMAN CORP 300 $ 20
---------------
BUILDING 0.4%
American Standard Companies(b) 100 4
---------------
CAPITAL GOODS 3.7%
Parker Hannifin Corp. 500 17
Dana Corp. 800 17
---------------
34
COMMUNICATIONS 8.9%
GTE Corp. 500 31
Verizon Communications 600 31
AT&T Corp. 600 19
---------------
81
CONSUMER DISCRETIONARY 11.7%
Whirlpool Corp. 600 28
Tupperware Corp. 900 20
Brunswick Corp. 1,100 18
Liz Claiborne, Inc. 500 18
UST, Inc. 900 13
Thomas & Betts Corp. 500 10
---------------
107
CONSUMER SERVICES 2.1%
Manpower, Inc. 600 19
---------------
CONSUMER STAPLES 9.9%
Brown-Forman Corp. 600 32
Pepsi Bottling Group, Inc. 700 20
SUPERVALU, Inc. 1,000 19
Fortune Brands, Inc. 800 19
---------------
90
ENERGY 13.9%
Ultramar Diamond Shamrock Corp. 1,500 37
Kerr McGee Corp. 600 35
Repsol SA SP - ADR 1,000 20
Apache Corp. 300 18
Conoco, Inc. 700 17
---------------
127
FINANCIAL & BUSINESS SERVICES 13.2%
Morgan, J.P. & Co., Inc. 300 33
Bear Stearns Co., Inc. 500 21
Deluxe Corp 800 19
PNC Bank Corp. 400 19
Union Planters Corp. 500 14
MGIC Investment Corp. 300 14
---------------
120
HEALTH CARE 6.6%
Mallinckrodt, Inc. 700 30
Tenet Healthcare Corp.(b) 700 19
Mylan Laboratories, Inc. 600 11
---------------
60
MATERIALS & PROCESSING 6.9%
Westvaco Corp. 1,500 37
USX-U.S. Steel Group, Inc. 1,400 26
---------------
63
TECHNOLOGY 6.3%
American Power Conversion Corp.(b) 500 20
Computer Associates International, Inc. 300 15
Intel Corp. 100 13
Unisys Corp.(b) 600 9
---------------
57
UTILITIES 7.8%
NICOR, Inc. 1,100 36
DTE Energy Co. 600 18
Public Service Enterprise Group, Inc. 500 17
---------------
71
---------------
Total Common Stocks 853
(Cost $907) ===============
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000s) (000s)
----------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 4.6%
----------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT 4.6%
State Street Bank
5.850% due 07/03/2000 $ 42 $ 42
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
6.000% due 11/15/2001 valued at $45.
Repurchase proceeds are $42.)
---------------
Total Short-Term Instruments 42
(Cost $42) ===============
TOTAL INVESTMENTS(a) 98.2% $ 895
(Cost $949)
OTHER ASSETS AND LIABILITIES (NET) 1.8% 16
---------------
NET ASSETS 100.0% $ 911
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation (depreciation) of
investments based on cost for federal income tax purposes of $949 was as
follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 29
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (83)
---------------
Unrealized depreciation-net $ (54)
===============
</TABLE>
(b) Non-income producing security.
SEE ACCOMPANYING NOTES 83
<PAGE>
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
1. ORGANIZATION
PIMCO Funds: Multi-Manager Series (the "Trust") is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company organized as a Massachusetts business trust. The Trust currently
consists of thirty-two separate investment funds (the "Funds"). The Trust may
offer up to six classes of shares: Institutional, Administrative, A, B, C and D.
Each share class has identical voting rights (except shareholders of a class
that have exclusive voting rights regarding any matter relating solely to that
class of shares). Information presented in these financial statements pertains
to the Institutional and Administrative Classes (the "Institutional Classes") of
the Trust. Certain detailed financial information for the A, B, C and D Classes
(the "Other Classes") is provided separately and is available upon request.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements in
conformity with generally accepted accounting principles. The preparation of
financial statements in accordance with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could differ
from those estimates.
SECURITY VALUATION. Portfolio securities and other financial instruments for
which market quotations are readily available are stated at market value. Market
value is determined on the basis of last reported sales prices, or if no sales
are reported, as is the case for most securities traded over-the-counter, the
mean between representative bid and asked quotations obtained from a quotation
reporting system or from established market makers. Short-term investments
having a maturity of 60 days or less are valued at amortized cost, which
approximates market value. Certain fixed income securities for which daily
market quotations are not readily available may be valued, pursuant to
guidelines established by the Board of Trustees, with reference to fixed income
securities whose prices are more readily obtainable.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
recorded as of the trade date. Securities purchased or sold on a when-issued or
delayed delivery basis may be settled a month or more after the trade date.
Realized gains and losses from securities sold are recorded on the identified
cost basis. Dividend income is recorded on the ex-dividend date, except certain
dividends from foreign securities where the ex-dividend date may have passed,
are recorded as soon as the Fund is informed of the ex-dividend date. Interest
income, adjusted for the accretion of discounts and amortization of premiums, is
recorded on the accrual basis.
FOREIGN CURRENCY. Foreign currencies, investments, and other assets and
liabilities are translated into U.S. dollars at the exchange rates prevailing at
the end of the period. Fluctuations in the value of these assets and liabilities
resulting from changes in exchange rates are recorded as unrealized foreign
currency gains (losses). Realized gains (losses) and unrealized appreciation
(depreciation) on investment securities and income and expenses are translated
on the respective dates of such transactions. The effect of changes in foreign
currency exchange rates on investments in securities are not segregated in the
Statements 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 and Value 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 at least 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.
FOREIGN TAXES ON DIVIDENDS. Dividend income in the statements of operations is
shown net of foreign taxes withheld on dividends from foreign securities.
Foreign taxes withheld were as follows: Equity Income Fund - $3,238; Value Fund
- $4,122; Renaissance Fund - $277,154; Growth Fund - $159,737; Select Growth
Fund - $105; Mid-Cap Equity Fund - $1,059; Innovation Fund - $70,327; Global
Innovation Fund - $516; International Growth Fund - $20,103; Mega-Cap Fund - $9;
Capital Appreciation Fund - $68,867; Mid-Cap Fund - $6,012; Tax-Efficient Equity
Fund - $2,525; Structured Emerging Markets Fund - $81,022; Tax-Efficient
Structured Emerging Markets Fund - $143,171; and International Fund - $234,085.
84
<PAGE>
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.
DELAYED DELIVERY TRANSACTIONS. A Fund may purchase or sell securities on a
when-issued or delayed delivery basis. These transactions involve a commitment
by a Fund to purchase or sell securities for a predetermined price or yield,
with payment and delivery taking place beyond the customary settlement period.
When delayed delivery purchases are outstanding, a Fund will set aside and
maintain until the settlement date in a segregated account, liquid assets in an
amount sufficient to meet the purchase price. When purchasing a security on a
delayed delivery basis, a Fund assumes the rights and risks of ownership of the
security, including the risk of price and yield fluctuations, and takes such
fluctuations into account when determining its net asset value. A Fund may
dispose of or renegotiate a delayed delivery transaction after it is entered
into, and may sell when-issued securities before they are delivered, which may
result in a capital gain or loss. When the Fund has sold a security on a delayed
delivery basis, the Fund does not participate in future gains and losses with
respect to the security. Forward sales commitments are accounted for by the Fund
in the same manner as forward currency contracts discussed above.
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 Fund; 0.55% for the International and Target Funds; 0.60% for the
Renaissance, Select Growth, and Small-Cap Value Funds; 0.63% for the Mid-Cap
Equity Fund; 0.65% for the Opportunity and Innovation Funds; 0.75% for the
International Growth Fund; 1.00% for the Global Innovation and Small-Cap
Funds; 1.25% for the Micro-Cap Fund; and 0.45% for all other Funds. Each of
the Funds also has a sub-advisor which, under the supervision of PIMCO
Advisors, directs the investments of the Fund's assets. Other than the
sub-advisor of the International 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.
NEW ADVISORY FEE STRUCTURE. Effective April 1, 2000, PIMCO Core Equity Fund
changed its name to PIMCO Select Growth Fund and increased its advisory fee from
0.57% to 0.60%. International Growth Fund has lowered the advisory fee from
0.85% to 0.75% effective May 8, 2000.
ADMINISTRATION FEE. PIMCO Advisors provides administrative services to the Trust
for which it receives from each Fund a monthly administrative fee based on each
share class' average daily net assets. The Administration Fee for the
Institutional and Administrative Classes is charged at the annual rate of 0.40%
for the Global Innovation Fund; 0.50% for the International, International
Growth, Structured Emerging Markets, and Tax-Efficient Structured Emerging
Markets Funds; and 0.25% for all other Funds. The Administration Fee for the A,
B and C Classes is charged at the annual rate of 0.60% for Global Innovation
Fund, 0.65% for the International Fund, and 0.40% for all other Funds. The
Administration Fee for Class D is charged at the annual rate of 0.60% for the
Global Innovation Fund and 0.40% for all other Funds.
85
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Cont.)
June 30, 2000
FUND REIMBURSEMENT FEE. Investors in Institutional Class and Administrative
Class shares of the Structured Emerging Markets and Tax-Efficient Structured
Emerging Markets Funds are subject to a fee ("Fund Reimbursement Fee"), both at
the time of purchase and at the time of redemption, equal to 1.00% of the net
asset value of the shares purchased or redeemed. Fund Reimbursement Fee, which
are retained by each respective fund, are accounted for as an addition to paid
in capital. Any shares of these Funds acquired through June 30, 1998 will not be
subject to Fund Reimbursement Fees upon the subsequent redemption (including any
redemption in connection with an exchange).
DISTRIBUTION AND SERVICING FEES. PIMCO Funds Distributors LLC ("PFD"), a
wholly-owned subsidiary of PIMCO Advisors L.P., serves as the distributor of the
Trust's shares.
The Trust is permitted to reimburse out of the Administrative Class assets
of each Fund, in an amount up to 0.25% on an annual basis of the average daily
net assets of that class, financial intermediaries that provide services in
connection with the distribution of shares or administration of plans or
programs that use Fund shares as their funding medium. The effective rate paid
to PFD was 0.25% during the current fiscal year.
Pursuant to the Distribution and Servicing Plans adopted by the A, B, C and
D Classes of the Trust, the Trust compensates PFD or an affiliate with respect
to Class D for services provided and expenses incurred in connection with
assistance rendered in the sale of shares and services rendered to shareholders
and for maintenance of shareholder accounts of the A, B, C and D Classes. The
Trust paid PFD distribution and servicing fees at an effective rate as set forth
below (calculated as a percentage of each Fund's average daily net assets
attributable to each class):
<TABLE>
<CAPTION>
Distribution Fee (%) Servicing Fee (%)
----------------------------------------------------------------
<S> <C> <C>
CLASS A
ALL FUNDS -- 0.25
CLASS B
ALL FUNDS 0.75 0.25
CLASS C
ALL FUNDS 0.75 0.25
CLASS D
ALL FUNDS -- 0.25
</TABLE>
PFD also receives the proceeds of the initial sales charges paid by the
shareholders upon the purchase of Class A shares and the contingent deferred
sales charges paid by the shareholders upon certain redemptions of Class A, B
and C shares. For the period ended June 30, 2000, PFD received $19,231,147
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) organization expenses; and (viii) any expenses
allocated or allocable to a specific class of shares, which include service fees
payable with respect to the Administrative Class shares and may include certain
other expenses as permitted by the Trust's Multiple Class Plan adopted pursuant
to Rule 18f-3 under the Investment Company Act of 1940 and subject to review and
approval by the Trustees. The ratio of expenses to average net assets, as
disclosed in the Financial Highlights, may differ from the annual fund operating
expenses as disclosed in the Prospectus for the reasons set forth above. PIMCO
has agreed to waive a portion of the Global Innovation and Mega-Cap Funds'
administrative fees to the extent that the payment of each Fund's pro rata share
of Trustee fees and organizational expenses cause the actual expense ratios to
rise above the rates disclosed in the then-current prospectus (as set forth
below) plus 0.49 basis points (calculated as a percentage of each Fund's average
daily net assets attributable to each class):
<TABLE>
<CAPTION>
Inst'l Class Admn. Class Class A Class B Class C Class D
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
GLOBAL INNOVATION FUND 1.40% 1.65% 1.85% 2.60% 2.60% 1.85%
MEGA-CAP FUND 0.70% 0.95% -- -- -- --
</TABLE>
PIMCO Advisors may be reimbursed for these waived amounts in future periods.
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 an 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.
86
<PAGE>
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding short-term investments) for the
period ended June 30, 2000 were as follows (amounts in thousands):
<TABLE>
<CAPTION>
Non - U.S. Government/Agency
----------------------------
Purchases Sales
------------------------------------------------------------------------
<S> <C> <C>
EQUITY INCOME FUND $ 170,958 $ 268,838
VALUE FUND 377,222 414,717
RENAISSANCE FUND 705,776 881,016
GROWTH FUND 1,880,500 2,085,744
SELECT GROWTH FUND 19,188 5,846
TARGET FUND 1,578,298 1,590,309
MID-CAP EQUITY FUND 9,880 16,467
OPPORTUNITY FUND 1,219,231 1,243,563
INNOVATION FUND 8,262,248 5,850,236
GLOBAL INNOVATION FUND 129,259 42,067
INTERNATIONAL GROWTH FUND 6,724 8,660
MEGA-CAP FUND 8,076 5,166
CAPITAL APPRECIATION FUND 1,055,304 1,609,185
MID-CAP FUND 1,607,227 1,882,039
SMALL-CAP FUND 81,050 120,948
MICRO-CAP FUND 180,462 237,360
SMALL-CAP VALUE FUND 176,319 221,533
ENHANCED EQUITY FUND 12,204 32,108
TAX-EFFICIENT EQUITY FUND 41,160 15,783
STRUCTURED EMERGING MARKETS FUND 10,978 28,083
TAX-EFFICIENT STRUCTURED EMERGING MARKETS FUND 29,213 20,318
INTERNATIONAL FUND 77,301 106,095
NFJ EQUITY INCOME FUND 29,649 489
NFJ VALUE FUND 929 40
</TABLE>
5. LINE OF CREDIT
Effective December 14, 1999, the Funds entered into an unsecured $350,000,000
syndicated bank line of credit agreement with Citicorp USA, Inc. Under this
syndicated agreement, Citicorp USA, Inc. will fund $150,000,000 and both Bank
of New York and State Street Bank & Trust Company will each fund
$100,000,000. Borrowings under the agreement bear interest at the Fed Funds
plus 50 basis points or the Base Rate, which is typically the Prime Rate. The
Funds may borrow money solely for temporary purposes to fund shareholder
redemptions. The Funds did not borrow from the line during the period
December 14, 1999 through June 30, 2000.
6. IN-KIND TRANSACTIONS
For the period ended June 30, 2000, the following fund incurred realized gains
from in-kind redemptions of approximately (amount in thousands):
<TABLE>
<CAPTION>
June 30, 2000
---------------------------------------------------------------
<S> <C>
MID-CAP FUND $2,322
</TABLE>
7. FEDERAL INCOME TAX MATTERS
As of June 30, 2000, the Fund listed in the table below had remaining capital
loss carryforwards that were realized in current and prior years. In addition,
as part of the transaction described in Note 10, the Value Fund acquired a
capital loss carryforward from the Value 25 Fund. Use of the acquired capital
loss carryforward may be limited under current tax laws. Additionally, the
Equity Income Fund, Value Fund, Renaissance Fund, Select Growth Fund, Mid-Cap
Equity Fund, Capital Appreciation Fund, Tax-Efficient Equity Fund, Structured
Emerging Markets Fund, Tax-Efficient Structured Emerging Markets Fund,
International Fund and NFJ Equity Income Fund realized capital losses and/or
foreign currency losses during the period November 1, 1999 through June 30,
2000, which the Funds elected to defer to the following fiscal year pursuant to
income tax regulations. The amounts are $21,246,345, $19,204,542, $1,586,042,
$158,434, $26,977, $20, $2,191,620, $79,435, $7,171,054, $537,614, and $34,841
respectively.
The Fund will resume capital gain distributions in the future to the extent
gains are realized in excess of the available carryforwards.
<TABLE>
<CAPTION>
Capital Loss Carryforwards
-------------------------------------
Realized Acquired
Losses Losses Expiration
---------------------------------------------------------------------
<S> <C> <C> <C>
VALUE FUND $ -- $384,037 6/30/2005
SMALL-CAP VALUE FUND 8,531,912 -- 6/30/2007
TAX-EFFICIENT EQUITY FUND 27,778 -- 6/30/2007
1,332,594 -- 6/30/2008
TAX-EFFICIENT STRUCTURED
EMERGING MARKETS FUND 1,625,269 -- 6/30/2007
7,893,990 -- 6/30/2008
</TABLE>
8. ACQUISITION BY ALLIANZ AG
On May 5, 2000, Allianz AG completed the acquisition of approximately 70% of
the outstanding partnership interests in PIMCO Advisors L.P. ("PIMCO
Advisors"), of which PIMCO is a subsidiary partnership. As a result of this
transaction, PIMCO Advisors, and its subsidiaries, are now controlled by
Allianz AG, a leading provider of financial services, particularly in Europe.
PIMCO remains operationally independent, continues to operate under its
existing name, and now leads the global fixed income efforts of Allianz AG.
Key employees at each PIMCO Advisors' investment units, including PIMCO's
Bill Gross, have signed long-term employment contracts and have significant
profit-sharing and retention arrangements to ensure continuity of the
investment process and staff. With the addition of PIMCO Advisors, the
Allianz Group manages assets of approximately US $650 billion, including more
than 300 mutual funds for retail and institutional clients around the world.
87
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Cont.)
June 30, 2000
9. 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 VALUE FUND
-------------------------------------------- ---------------------------------------------
Year Ended 06/30/2000 Year Ended 06/30/1999 Year Ended 06/30/2000 Year Ended 06/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
-------------------------------------------- ---------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Institutional Class 1,137 $ 12,519 1,941 $ 28,202 2,656 $ 33,916 1,320 $ 19,355
---------------------------------------- -------------------------------------------- ---------------------------------------------
Administrative Class 217 2,575 495 7,079 1,188 14,601 1,038 14,684
---------------------------------------- -------------------------------------------- ---------------------------------------------
Other Classes 1,440 17,019 2,630 38,810 4,011 50,168 4,533 65,101
---------------------------------------- -------------------------------------------- ---------------------------------------------
SHARES ISSUED IN REORGANIZATION
Institutional Class 0 0 0 0 0 0 0 0
---------------------------------------- -------------------------------------------- ---------------------------------------------
Administrative Class 0 0 0 0 0 0 0 0
---------------------------------------- -------------------------------------------- ---------------------------------------------
Other Classes 0 0 0 0 137 1,373 0 0
---------------------------------------- -------------------------------------------- ---------------------------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Institutional Class 2,051 21,995 1,311 18,538 1,294 14,905 822 11,141
---------------------------------------- -------------------------------------------- ---------------------------------------------
Administrative Class 231 2,476 108 1,521 368 4,210 144 1,950
---------------------------------------- -------------------------------------------- ---------------------------------------------
Other Classes 1,016 10,793 506 7,112 1,823 20,851 1,111 14,980
---------------------------------------- -------------------------------------------- ---------------------------------------------
COST OF SHARES REDEEMED
Institutional Class (8,323) (90,772) (3,994) (59,589) (4,792) (52,577) (2,937) (43,290)
---------------------------------------- -------------------------------------------- ---------------------------------------------
Administrative Class (1,064) (11,529) (447) (6,530) (927) (12,122) (325) (4,695)
---------------------------------------- -------------------------------------------- ---------------------------------------------
Other Classes (2,988) (33,626) (2,146) (31,549) (6,315) (78,181) (5,849) (83,212)
---------------------------------------- -------------------------------------------- ---------------------------------------------
NET INCREASE (DECREASE) RESULTING FROM
FUND SHARE TRANSACTIONS (6,283) $ (68,550) 404 $ 3,594 (557) $ (2,856) (143) $ (3,986)
======================================== ============================================ ============================================
<CAPTION>
RENAISSANCE FUND
------------------------------------------------
Year Ended 06/30/2000 Year Ended 06/30/1999
Shares Amount Shares Amount
------------------------------------------------
<S> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Institutional Class 542 $ 8,314 6 $ 105
---------------------------------------- -------------------------------------------------
Administrative Class 56 869 58 1,000
---------------------------------------- -------------------------------------------------
Other Classes 14,286 212,839 17,896 305,834
---------------------------------------- -------------------------------------------------
SHARES ISSUED IN REORGANIZATION
Institutional Class 0 0 0 0
---------------------------------------- -------------------------------------------------
Administrative Class 0 0 0 0
---------------------------------------- -------------------------------------------------
Other Classes 0 0 0 0
---------------------------------------- -------------------------------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Institutional Class 2 25 0 0
---------------------------------------- -------------------------------------------------
Administrative Class 10 131 2 25
---------------------------------------- -------------------------------------------------
Other Classes 7,934 103,507 4,947 74,634
---------------------------------------- -------------------------------------------------
COST OF SHARES REDEEMED
Institutional Class (124) (1,924) (43) (744)
---------------------------------------- -------------------------------------------------
Administrative Class (25) (372) (37) (634)
---------------------------------------- -------------------------------------------------
Other Classes (26,644) (392,194) (20,668) (350,656)
---------------------------------------- -------------------------------------------------
NET INCREASE (DECREASE) RESULTING FROM
FUND SHARE TRANSACTIONS (3,963) $ (68,805) 2,161 $ 29,564
======================================== =================================================
<CAPTION>
OPPORTUNITY FUND
--------------------------------------------------------
Year Ended 06/30/2000 Year Ended 06/30/1999
Shares Amount Shares Amount
--------------------------------------------------------
<S> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Institutional Class 1,369 $ 37,684 19 $ 428
--------------------------------------- ---------------------------------------------------------
Administrative Class 246 6,173 87 1,990
--------------------------------------- ---------------------------------------------------------
Other Classes 22,983 700,026 71,407 1,722,778
--------------------------------------- ---------------------------------------------------------
SHARES ISSUED IN REORGANIZATION
Institutional Class 0 0 0 0
--------------------------------------- ---------------------------------------------------------
Administrative Class 0 0 0 0
--------------------------------------- ---------------------------------------------------------
Other Classes 0 0 0 0
--------------------------------------- ---------------------------------------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Institutional Class 64 1,540 0 0
--------------------------------------- ---------------------------------------------------------
Administrative Class 82 1,964 0 0
--------------------------------------- ---------------------------------------------------------
Other Classes 4,619 113,143 3,979 81,564
--------------------------------------- ---------------------------------------------------------
COST OF SHARES REDEEMED
Institutional Class (21) (608) (2) (38)
--------------------------------------- ---------------------------------------------------------
Administrative Class (102) (2,767) (4) (101)
--------------------------------------- ---------------------------------------------------------
Other Classes (24,615) (748,101) (81,838) (1,986,190)
--------------------------------------- ---------------------------------------------------------
NET INCREASE (DECREASE) RESULTING FROM
FUND SHARE TRANSACTIONS 4,625 $ 109,054 (6,352) $ (179,569)
======================================= =========================================================
<CAPTION>
INNOVATION FUND
--------------------------------------------------------
Year Ended 06/30/2000 Year Ended 06/30/1999
Shares Amount Shares Amount
--------------------------------------------------------
<S> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Institutional Class 442 $ 32,792 27 $ 895
--------------------------------------- ---------------------------------------------------------
Administrative Class 11 807 0 0
--------------------------------------- ---------------------------------------------------------
Other Classes 77,474 4,811,154 43,277 1,310,384
--------------------------------------- ---------------------------------------------------------
SHARES ISSUED IN REORGANIZATION
Institutional Class 0 0 0 0
--------------------------------------- ---------------------------------------------------------
Administrative Class 0 0 0 0
--------------------------------------- ---------------------------------------------------------
Other Classes 0 0 0 0
--------------------------------------- ---------------------------------------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Institutional Class 10 582 0 0
--------------------------------------- ---------------------------------------------------------
Administrative Class 0 0 0 0
--------------------------------------- ---------------------------------------------------------
Other Classes 5,044 273,164 829 22,135
--------------------------------------- ---------------------------------------------------------
COST OF SHARES REDEEMED
Institutional Class (73) (5,053) (15) (505)
--------------------------------------- ---------------------------------------------------------
Administrative Class (2) (163) 0 0
--------------------------------------- ---------------------------------------------------------
Other Classes (39,281) (2,339,586) (25,673) (753,602)
--------------------------------------- ---------------------------------------------------------
NET INCREASE (DECREASE) RESULTING FROM
FUND SHARE TRANSACTIONS 43,625 $ 2,773,697 18,445 $ 579,307
======================================= =========================================================
<CAPTION>
GLOBAL INNOVATION
FUND
---------------------------
Period from 12/31/1999
to 06/30/2000
Shares Amount
---------------------------
<S> <C> <C>
RECEIPTS FOR SHARES SOLD
Institutional Class 21 $ 391
--------------------------------------- ---------------------------
Administrative Class 0 0
--------------------------------------- ---------------------------
Other Classes 5,890 100,247
--------------------------------------- ---------------------------
SHARES ISSUED IN REORGANIZATION
Institutional Class 0 0
--------------------------------------- ---------------------------
Administrative Class 0 0
--------------------------------------- ---------------------------
Other Classes 0 0
--------------------------------------- ---------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Institutional Class 0 0
--------------------------------------- ---------------------------
Administrative Class 0 0
--------------------------------------- ---------------------------
Other Classes 0 0
--------------------------------------- ---------------------------
COST OF SHARES REDEEMED
Institutional Class 0 (8)
--------------------------------------- ---------------------------
Administrative Class 0 0
--------------------------------------- ---------------------------
Other Classes (373) (6,141)
--------------------------------------- ---------------------------
NET INCREASE (DECREASE) RESULTING FROM
FUND SHARE TRANSACTIONS 5,538 $ 94,489
======================================= ===========================
88
<PAGE>
<CAPTION>
GROWTH FUND
--------------------------------------------------------
Year Ended 06/30/2000 Year Ended 06/30/1999
Shares Amount Shares Amount
--------------------------------------------------------
<S> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Institutional Class 490 $ 17,297 39 $ 1,212
---------------------------------------- --------------------------------------------------------
Administrative Class 358 11,200 207 6,217
---------------------------------------- --------------------------------------------------------
Other Classes 43,516 1,549,439 39,459 1,197,934
---------------------------------------- --------------------------------------------------------
SHARES ISSUED IN REORGANIZATION
Institutional Class 0 0 0 0
---------------------------------------- --------------------------------------------------------
Administrative Class 0 0 0 0
---------------------------------------- --------------------------------------------------------
Other Classes 0 0 0 0
---------------------------------------- --------------------------------------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Institutional Class 17 553 0 0
---------------------------------------- --------------------------------------------------------
Administrative Class 70 2,231 0 0
---------------------------------------- --------------------------------------------------------
Other Classes 11,710 371,315 9,157 246,482
---------------------------------------- --------------------------------------------------------
COST OF SHARES REDEEMED
Institutional Class (38) (1,353) (9) (268)
---------------------------------------- --------------------------------------------------------
Administrative Class (193) (6,359) (10) (288)
---------------------------------------- --------------------------------------------------------
Other Classes (50,030) (1,758,585) (40,642) (1,227,582)
---------------------------------------- --------------------------------------------------------
NET INCREASE (DECREASE) RESULTING FROM
FUND SHARE TRANSACTIONS 5,900 $ 185,738 8,201 $ 223,707
======================================== ========================================================
<CAPTION>
SELECT GROWTH FUND
---------------------------------------------------------
Year Ended 06/30/2000 Year Ended 06/30/1999
Shares Amount Shares Amount
---------------------------------------------------------
<S> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Institutional Class 109 $ 2,457 77 $ 1,782
---------------------------------------- ---------------------------------------------------------
Administrative Class 2 47 1,822 34,758
---------------------------------------- ---------------------------------------------------------
Other Classes 599 13,646 0 0
---------------------------------------- ---------------------------------------------------------
SHARES ISSUED IN REORGANIZATION
Institutional Class 0 0 0 0
---------------------------------------- ---------------------------------------------------------
Administrative Class 0 0 0 0
---------------------------------------- ---------------------------------------------------------
Other Classes 0 0 0 0
---------------------------------------- ---------------------------------------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Institutional Class 9 193 3 57
---------------------------------------- ---------------------------------------------------------
Administrative Class 0 3 275 5,514
---------------------------------------- ---------------------------------------------------------
Other Classes 0 0 0 0
---------------------------------------- ---------------------------------------------------------
COST OF SHARES REDEEMED
Institutional Class (57) (1,304) (126) (2,915)
---------------------------------------- ---------------------------------------------------------
Administrative Class (1) (14) (8,430) (180,866)
---------------------------------------- ---------------------------------------------------------
Other Classes (6) (131) 0 0
---------------------------------------- ---------------------------------------------------------
NET INCREASE (DECREASE) RESULTING FROM
FUND SHARE TRANSACTIONS 655 $ 14,897 (6,379) $ (141,670)
======================================== =========================================================
<CAPTION>
TARGET FUND
---------------------------------------------------------
Year Ended 06/30/2000 Year Ended 06/30/1999
Shares Amount Shares Amount
---------------------------------------------------------
<S> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Institutional Class 598 $ 16,723 75 $ 1,265
---------------------------------------- --------------------------------------------------------
Administrative Class 99 2,172 327 5,508
---------------------------------------- --------------------------------------------------------
Other Classes 101,496 2,464,150 87,501 1,337,208
---------------------------------------- --------------------------------------------------------
SHARES ISSUED IN REORGANIZATION
Institutional Class 0 0 0 0
---------------------------------------- --------------------------------------------------------
Administrative Class 0 0 0 0
---------------------------------------- --------------------------------------------------------
Other Classes 0 0 0 0
---------------------------------------- --------------------------------------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Institutional Class 15 319 0 0
---------------------------------------- --------------------------------------------------------
Administrative Class 26 555 0 0
---------------------------------------- --------------------------------------------------------
Other Classes 5,515 110,776 4,745 64,479
---------------------------------------- --------------------------------------------------------
COST OF SHARES REDEEMED
Institutional Class (93) (2,721) (2) (36)
---------------------------------------- --------------------------------------------------------
Administrative Class (222) (5,556) (16) (275)
---------------------------------------- --------------------------------------------------------
Other Classes (100,546) (2,409,356) (99,140) (1,510,466)
---------------------------------------- --------------------------------------------------------
NET INCREASE (DECREASE) RESULTING FROM
FUND SHARE TRANSACTIONS 6,888 $ 177,062 (6,510) $ (102,317)
======================================== ========================================================
<CAPTION>
MID-CAP EQUITY FUND
---------------------------------------------------------
Year Ended 06/30/2000 Year Ended 06/30/1999
Shares Amount Shares Amount
---------------------------------------------------------
<S> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Institutional Class 159 $ 2,235 110 $ 1,457
---------------------------------------- ---------------------------------------------------------
Administrative Class 0 0 198 2,607
---------------------------------------- ---------------------------------------------------------
Other Classes 0 0 0 0
---------------------------------------- ---------------------------------------------------------
SHARES ISSUED IN REORGANIZATION
Institutional Class 0 0 0 0
---------------------------------------- ---------------------------------------------------------
Administrative Class 0 0 0 0
---------------------------------------- ---------------------------------------------------------
Other Classes 0 0 0 0
---------------------------------------- ---------------------------------------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Institutional Class 131 1,370 15 184
---------------------------------------- ---------------------------------------------------------
Administrative Class 0 0 14 168
---------------------------------------- ---------------------------------------------------------
Other Classes 0 0 0 0
---------------------------------------- ---------------------------------------------------------
COST OF SHARES REDEEMED
Institutional Class (378) (5,302) (285) (4,344)
---------------------------------------- ---------------------------------------------------------
Administrative Class 0 0 (388) (5,740)
---------------------------------------- ---------------------------------------------------------
Other Classes 0 0 0 0
---------------------------------------- ---------------------------------------------------------
NET INCREASE (DECREASE) RESULTING FROM
FUND SHARE TRANSACTIONS (88) $ (1,697) (336) $ (5,668)
======================================== =========================================================
<CAPTION>
INTERNATIONAL GROWTH FUND MEGA-CAP FUND
---------------------------------------------------- -----------------------
Period from 12/31/1999
Year Ended 06/30/2000 Year Ended 06/30/1999 to 06/30/2000
Shares Amount Shares Amount Shares Amount
---------------------------------------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Institutional Class 675 $ 12,739 22 $ 355 300 $ 3,000
--------------------------------------- ------------------------------------------------------ -----------------------
Administrative Class 0 0 0 0 0 0
--------------------------------------- ------------------------------------------------------ -----------------------
Other Classes 0 0 0 0 0 0
--------------------------------------- ------------------------------------------------------ -----------------------
SHARES ISSUED IN REORGANIZATION
Institutional Class 0 0 0 0 0 0
--------------------------------------- ------------------------------------------------------ -----------------------
Administrative Class 0 0 0 0 0 0
--------------------------------------- ------------------------------------------------------ -----------------------
Other Classes 0 0 0 0 0 0
--------------------------------------- ------------------------------------------------------ -----------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Institutional Class 93 1,831 0 2 0 1
--------------------------------------- ------------------------------------------------------ -----------------------
Administrative Class 0 0 0 0 0 0
--------------------------------------- ------------------------------------------------------ -----------------------
Other Classes 0 0 0 0 0 0
--------------------------------------- ------------------------------------------------------ -----------------------
COST OF SHARES REDEEMED
Institutional Class (777) (14,911) (2) (31) 0 0
--------------------------------------- ------------------------------------------------------ -----------------------
Administrative Class 0 0 0 0 0 0
--------------------------------------- ------------------------------------------------------ -----------------------
Other Classes 0 0 0 0 0 0
--------------------------------------- ------------------------------------------------------ -----------------------
NET INCREASE (DECREASE) RESULTING FROM
FUND SHARE TRANSACTIONS (9) $ (341) 20 $ 326 300 $ 3,001
======================================= ====================================================== =======================
<CAPTION>
CAPITAL APPRECIATION FUND MID-CAP FUND
-------------------------------------------- ---------------------------------------------
Year Ended 06/30/2000 Year Ended 06/30/1999 Year Ended 06/30/2000 Year Ended 06/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
-------------------------------------------- ---------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Institutional Class 12,277 $ 316,049 17,583 $ 439,612 23,444 $ 579,389 29,207 $ 640,912
--------------------------------------- -------------------------------------------- ---------------------------------------------
Administrative Class 2,324 60,068 6,022 152,828 2,875 78,391 4,726 104,472
--------------------------------------- -------------------------------------------- ---------------------------------------------
Other Classes 3,652 94,043 4,010 98,940 6,995 189,893 9,113 199,882
--------------------------------------- -------------------------------------------- ---------------------------------------------
SHARES ISSUED IN REORGANIZATION
Institutional Class 0 0 0 0 0 0 0 0
--------------------------------------- -------------------------------------------- ---------------------------------------------
Administrative Class 0 0 0 0 0 0 0 0
--------------------------------------- -------------------------------------------- ---------------------------------------------
Other Classes 0 0 0 0 0 0 0 0
--------------------------------------- -------------------------------------------- ---------------------------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Institutional Class 3,357 79,661 1,505 35,601 113 2,801 925 19,896
--------------------------------------- -------------------------------------------- ---------------------------------------------
Administrative Class 1,712 40,183 579 13,612 11 280 213 4,543
--------------------------------------- -------------------------------------------- ---------------------------------------------
Other Classes 1,538 35,616 590 13,712 17 414 665 14,079
--------------------------------------- -------------------------------------------- ---------------------------------------------
COST OF SHARES REDEEMED
Institutional Class (25,969) (672,004) (25,867) (649,159) (29,964 (759,314) (23,032) (505,497)
--------------------------------------- -------------------------------------------- ---------------------------------------------
Administrative Class (5,941) (150,725) (3,068) (76,012) (2,788) (73,751) (3,452) (74,169)
--------------------------------------- -------------------------------------------- ---------------------------------------------
Other Classes (4,714) (122,166) (3,149) (77,743) (9,669) (250,063) (7,361) (157,774)
--------------------------------------- -------------------------------------------- ---------------------------------------------
NET INCREASE (DECREASE) RESULTING FROM
FUND SHARE TRANSACTIONS (11,764) $(319,275) (1,795) $ (48,609) (8,966) $(231,960) 11,004 $ 246,344
======================================= ============================================ =============================================
</TABLE>
89
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Cont.)
June 30, 2000
9. SHARES OF BENEFICIAL INTEREST (CONT.)
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>
SMALL-CAP FUND MICRO-CAP FUND
-------------------------------------------- ---------------------------------------------
Year Ended 06/30/2000 Year Ended 06/30/1999 Year Ended 06/30/2000 Year Ended 06/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
-------------------------------------------- ---------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Institutional Class 978 $ 11,696 3,014 $ 36,581 2,107 $ 46,143 4,984 $ 98,906
---------------------------------------- -------------------------------------------- ---------------------------------------------
Administrative Class 105 1,215 157 1,691 231 4,998 115 2,225
---------------------------------------- -------------------------------------------- ---------------------------------------------
Other Classes 0 0 0 0 0 0 0 0
---------------------------------------- -------------------------------------------- ---------------------------------------------
SHARES ISSUED IN REORGANIZATION
Institutional Class 0 0 0 0 0 0 0 0
---------------------------------------- -------------------------------------------- ---------------------------------------------
Administrative Class 0 0 0 0 0 0 0 0
---------------------------------------- -------------------------------------------- ---------------------------------------------
Other Classes 0 0 0 0 0 0 0 0
---------------------------------------- -------------------------------------------- ---------------------------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Institutional Class 0 0 206 2,229 0 0 339 6,383
---------------------------------------- -------------------------------------------- ---------------------------------------------
Administrative Class 0 0 5 52 0 0 4 83
---------------------------------------- -------------------------------------------- ---------------------------------------------
Other Classes 0 0 0 0 0 0 0 0
---------------------------------------- -------------------------------------------- ---------------------------------------------
COST OF SHARES REDEEMED
Institutional Class (4,201) (50,657) (800) (8,682) (4,611) (99,032) (4,495) (84,282)
---------------------------------------- -------------------------------------------- ---------------------------------------------
Administrative Class (97) (1,149) (35) (379) (92) (1,992) (171) (3,312)
---------------------------------------- -------------------------------------------- ---------------------------------------------
Other Classes 0 0 0 0 0 0 0 0
---------------------------------------- -------------------------------------------- ---------------------------------------------
NET INCREASE (DECREASE) RESULTING FROM
FUND SHARE TRANSACTIONS (3,215) $ (38,895) 2,547 $ 31,492 (2,365) $ (49,883) 776 $ 20,003
======================================== ============================================ =============================================
<CAPTION>
SMALL-CAP VALUE FUND INTERNATIONAL FUND
--------------------------------------------- --------------------------------------------
Year Ended 06/30/2000 Year Ended 06/30/1999 Year Ended 06/30/2000 Year Ended 06/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
--------------------------------------------- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Institutional Class 1,752 $ 24,902 2,479 $ 37,773 304 $ 3,806 495 $ 5,567
---------------------------------------- -------------------------------------------- ---------------------------------------------
Administrative Class 768 10,894 1,502 22,238 771 9,021 1,494 16,127
---------------------------------------- -------------------------------------------- ---------------------------------------------
Other Classes 11,210 158,475 12,114 183,088 70,129 864,448 61,433 736,111
---------------------------------------- -------------------------------------------- ---------------------------------------------
SHARES ISSUED IN REORGANIZATION
Institutional Class 0 0 0 0 0 0 0 0
---------------------------------------- -------------------------------------------- ---------------------------------------------
Administrative Class 0 0 0 0 0 0 0 0
---------------------------------------- -------------------------------------------- ---------------------------------------------
Other Classes 0 0 0 0 0 0 0 0
---------------------------------------- -------------------------------------------- ---------------------------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Institutional Class 59 797 149 2,202 57 652 6 67
---------------------------------------- -------------------------------------------- ---------------------------------------------
Administrative Class 24 324 54 790 202 2,286 13 129
---------------------------------------- -------------------------------------------- ---------------------------------------------
Other Classes 307 4,109 716 10,426 1,342 15,118 1,045 11,029
---------------------------------------- -------------------------------------------- ---------------------------------------------
COST OF SHARES REDEEMED
Institutional Class (3,387) (47,564) (1,625) (24,130) (96) (1,128) (189) (2,213)
---------------------------------------- -------------------------------------------- ---------------------------------------------
Administrative Class (1,029) (14,401) (850) (12,454) (713) (8,442) (140) (1,579)
---------------------------------------- -------------------------------------------- ---------------------------------------------
Other Classes (14,537) (201,997) (10,906) (160,295) (72,239) (896,874) (62,751) (757,207)
---------------------------------------- -------------------------------------------- ---------------------------------------------
NET INCREASE (DECREASE) RESULTING FROM
FUND SHARE TRANSACTIONS (4,833) $ (64,461) 3,633 $ 59,638 (243) $ (11,113) 1,406 $ 8,031
======================================== ============================================ =============================================
<CAPTION>
NFJ EQUITY INCOME NFJ VALUE
FUND FUND
--------------------------- ---------------------------
Period from 05/08/2000 Period from 05/08/2000
to 06/30/2000 to 06/30/2000
Shares Amount Shares Amount
--------------------------- ---------------------------
<S> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Institutional Class 2,513 $ 26,504 84 $ 942
---------------------------------------- --------------------------- ---------------------------
Administrative Class 480 5,045 0 0
---------------------------------------- --------------------------- ---------------------------
Other Classes 0 0 0 0
---------------------------------------- --------------------------- ---------------------------
SHARES ISSUED IN REORGANIZATION
Institutional Class 0 0 0 0
---------------------------------------- --------------------------- ---------------------------
Administrative Class 0 0 0 0
---------------------------------------- --------------------------- ---------------------------
Other Classes 0 0 0 0
---------------------------------------- --------------------------- ---------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Institutional Class 7 70 0 4
---------------------------------------- --------------------------- ---------------------------
Administrative Class 1 11 0 0
---------------------------------------- --------------------------- ---------------------------
Other Classes 0 0 0 0
---------------------------------------- --------------------------- ---------------------------
COST OF SHARES REDEEMED
Institutional Class 0 0 0 0
---------------------------------------- --------------------------- ---------------------------
Administrative Class (11) (121) 0 0
---------------------------------------- --------------------------- ---------------------------
Other Classes 0 0 0 0
---------------------------------------- --------------------------- ---------------------------
NET INCREASE (DECREASE) RESULTING FROM
FUND SHARE TRANSACTIONS 2,990 $ 31,509 84 $ 946
======================================== =========================== ===========================
90
<PAGE>
<CAPTION>
ENHANCED EQUITY FUND TAX-EFFICIENT EQUITY FUND
--------------------------------------------- --------------------------------------------
Period from 07/10/1998
Year Ended 06/30/2000 Year Ended 06/30/1999 Year Ended 06/30/2000 to 06/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
-------------------------------------------- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Institutional Class 518 $ 6,548 725 $ 8,851 96 $ 1,085 0 $ 0
--------------------------------------- -------------------------------------------- --------------------------------------------
Administrative Class 1,020 12,786 1,282 15,340 1,799 20,566 307 3,320
--------------------------------------- -------------------------------------------- --------------------------------------------
Other Classes 0 0 0 0 1,692 19,459 2,619 26,786
--------------------------------------- -------------------------------------------- --------------------------------------------
SHARES ISSUED IN REORGANIZATION
Institutional Class 0 0 0 0 0 0 0 0
--------------------------------------- -------------------------------------------- --------------------------------------------
Administrative Class 0 0 0 0 0 0 0 0
--------------------------------------- -------------------------------------------- --------------------------------------------
Other Classes 0 0 0 0 0 0 0 0
--------------------------------------- -------------------------------------------- --------------------------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Institutional Class 134 1,712 429 4,790 0 0 0 0
--------------------------------------- -------------------------------------------- --------------------------------------------
Administrative Class 84 1,059 181 2,005 0 0 0 0
--------------------------------------- -------------------------------------------- --------------------------------------------
Other Classes 0 0 0 0 0 0 0 0
--------------------------------------- -------------------------------------------- --------------------------------------------
COST OF SHARES REDEEMED
Institutional Class (2,374) (28,964) (759) (9,355) (1) (8) 0 0
--------------------------------------- -------------------------------------------- --------------------------------------------
Administrative Class (804) (10,211) (424) (5,174) (466) (5,427) (15) (158)
--------------------------------------- -------------------------------------------- --------------------------------------------
Other Classes 0 0 0 0 (873) (10,104) (490) (5,032)
--------------------------------------- -------------------------------------------- --------------------------------------------
NET INCREASE (DECREASE) RESULTING FROM
FUND SHARE TRANSACTIONS (1,422) $(17,070) 1,434 $ 16,457 2,247 $ 25,571 2,421 $ 24,916
======================================= ============================================ ============================================
<CAPTION>
TAX-EFFICIENT STRUCTURED
STRUCTURED EMERGING MARKETS FUND EMERGING MARKETS FUND
--------------------------------------------- --------------------------------------------
Year Ended 06/30/2000 Year Ended 06/30/1999 Year Ended 06/30/2000 Year Ended 06/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
--------------------------------------------- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Institutional Class 143 $ 1,761 290 $ 2,664 1,090 $ 16,041 1,210 $ 12,518
--------------------------------------- --------------------------------------------- --------------------------------------------
Administrative Class 0 0 0 0 0 0 0 0
--------------------------------------- --------------------------------------------- --------------------------------------------
Other Classes 0 0 0 0 0 0 0 0
--------------------------------------- --------------------------------------------- --------------------------------------------
SHARES ISSUED IN REORGANIZATION
Institutional Class 0 0 0 0 0 0 0 0
--------------------------------------- --------------------------------------------- --------------------------------------------
Administrative Class 0 0 0 0 0 0 0 0
--------------------------------------- --------------------------------------------- --------------------------------------------
Other Classes 0 0 3,558 35,582 0 0 4,416 44,157
--------------------------------------- --------------------------------------------- --------------------------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Institutional Class 250 3,230 135 1,209 37 574 32 300
--------------------------------------- --------------------------------------------- --------------------------------------------
Administrative Class 0 0 0 0 0 0 0 0
--------------------------------------- --------------------------------------------- --------------------------------------------
Other Classes 0 0 0 0 0 0 0 0
--------------------------------------- --------------------------------------------- --------------------------------------------
COST OF SHARES REDEEMED
Institutional Class (1,297) (18,490) (233) (2,261) (450) (6,600) (184) (1,678)
--------------------------------------- --------------------------------------------- --------------------------------------------
Administrative Class 0 0 0 0 0 0 0 0
--------------------------------------- --------------------------------------------- --------------------------------------------
Other Classes 0 0 0 0 0 0 0 0
--------------------------------------- --------------------------------------------- --------------------------------------------
NET INCREASE (DECREASE) RESULTING FROM
FUND SHARE TRANSACTIONS (904) $(13,499) 3,750 $ 37,194 677 $ 10,015 5,474 $ 55,297
======================================= ============================================= ============================================
</TABLE>
10. REORGANIZATION
On July 1, 1998, the Structured Emerging Markets and Tax-Efficient Structured
Emerging Markets Funds commenced investment operations immediately following a
transaction (the "Transition") in which each Fund issued Institutional Class
shares to unit holders of the Parametric Portfolio Associates Emerging Markets
Trust (the "E.M. Trust") a separate account managed by Parametric, in a tax free
exchange for the E.M. Trust's assets. Assets in the E.M. Trust are transferred
in exchange for shares to the Structured Emerging Markets and Tax-Efficient
Structured Emerging Markets Funds as follows (shares and amounts in thousands):
<TABLE>
<CAPTION>
Value of Fund's
Shares Shares Total Net Unrealized
Fund Issued Issued Assets Depreciation
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
STRUCTURED EMERGING 3,558 $ 35,582 $ 35,582 $ (2,621)
MARKETS FUND
TAX-EFFICIENT 4,416 $ 44,157 $ 44,157 $ (28,709)
STRUCTURED
EMERGING
MARKETS FUND
</TABLE>
The Acquiring Fund, as listed below, acquired the assets and certain liabilities
of the Acquired Fund, also listed below, in a tax-free exchange for shares of
the Acquiring Fund, pursuant to a plan of reorganization approved by the
Acquired Fund's shareholders (amounts in thousands):
<TABLE>
<CAPTION>
Value of Total Net
Shares Shares Total Net Total Net Assets of Acquired
Issued by Issued by Assets of Assets of Acquiring Fund's
Acquiring Acquiring Acquired Acquiring Fund After Unrealized
Acquiring Fund Acquired Fund Date Fund Fund Fund Fund Acquisition (Depreciation)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PIMCO PIMCO
VALUE FUND Value 25 Fund March 3, 2000 137 $ 1,373 $ 1,373 $ 163,988 $165,361 $ (419)
</TABLE>
91
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE TRUSTEES AND INSTITUTIONAL AND ADMINISTRATIVE CLASS SHAREHOLDERS OF THE
PIMCO FUNDS: MULTI-MANAGER SERIES
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations, of
changes in net assets and the financial highlights for the Institutional and
Administrative share classes present fairly, in all material respects, the
financial position of the Equity Income Fund, Value Fund, Renaissance Fund,
Growth Fund, Select Growth Fund, Target Fund, Mid-Cap Equity Fund, Opportunity
Fund, Innovation Fund, Global Innovation Fund, International Growth Fund,
Mega-Cap Fund, Capital Appreciation Fund, Mid-Cap Fund, Small-Cap Fund,
Micro-Cap Fund, Small-Cap Value Fund, Enhanced Equity Fund, Tax-Efficient Equity
Fund, Structured Emerging Markets Fund, Tax-Efficient Structured Emerging
Markets Fund, International Fund, NFJ Equity Income Fund, and NFJ Value Fund
(hereafter referred to as the "Funds") at June 30, 2000, the results of each of
their operations, the changes in each of their net assets and the financial
highlights for the Institutional and Administrative share classes for each of
the periods indicated, in conformity with accounting principles generally
accepted in the United States. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at June 30,
2000 by correspondence with the custodians and brokers, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Kansas City, Missouri
August 21, 2000>
92
<PAGE>
FEDERAL INCOME TAX INFORMATION
(unaudited)
As required by the Internal Revenue Code regulations, shareholders must be
notified within 60 days of the Trust's fiscal year end (June 30, 2000) regarding
the status of the distributions made to the shareholders
DIVIDEND RECEIVED DEDUCTION. For the benefit of corporate shareholders only, the
portion of dividends paid out of ordinary income earned during certain Funds'
fiscal years ended June 30, 2000 which qualify for the corporate
dividend-received deduction are as follows:
<TABLE>
<S> <C>
EQUITY INCOME FUND 63.95%
VALUE FUND 38.57%
RENAISSANCE FUND 14.42%
SELECT GROWTH FUND 12.01%
TARGET FUND 5.12%
MID-CAP EQUITY FUND 0.99%
OPPORTUNITY FUND 1.66%
INNOVATION FUND 0.15%
MEGA-CAP FUND 6.94%
CAPITAL APPRECIATION 58.39%
MID-CAP FUND 40.50%
SMALL-CAP VALUE FUND 100.00%
ENHANCED EQUITY FUND 100.00%
STRUCTURED EMERGING MARKETS FUND 0.32%
TAX-EFFICIENT STRUCTURED EMERGING MARKETS FUND 0.70%
NFJ EQUITY INCOME FUND 80.65%
NFJ VALUE FUND 19.39%
</TABLE>
CAPITAL GAIN DISTRIBUTIONS. Capital gains distributions paid for all classes of
shares during the fiscal year ended June 30, 2000, were in the amounts as
follows:
<TABLE>
Per Share Per Share
Long-Term Short-Term
Capital Gains Capital Gains
----------------------------------------------------------------------------------------------------------
<S> <C> <C>
EQUITY INCOME FUND 1.85496 0.78284
VALUE FUND 1.11374 1.45284
RENAISSANCE FUND 1.79690 0.00190
GROWTH FUND 5.66485 0
SELECT GROWTH FUND 0.67098 3.04478
TARGET FUND 0.79431 1.00897
MID-CAP EQUITY FUND 0.31283 8.28772
OPPORTUNITY FUND 5.06114 2.82008
INNOVATION FUND 3.85703 2.53396
INTERNATIONAL GROWTH FUND 0.59336 3.83458
CAPITAL APPRECIATION FUND 4.99628 0
MID-CAP FUND 0.01720 0
ENHANCED EQUITY FUND 0.44261 0.02981
STRUCTURED EMERGING MARKETS FUND 0.51059 0.28109
INTERNATIONAL FUND 1.73874 0
</TABLE>
Shareholders are advised to consult their own tax advisor with respect to the
tax consequences of their investment in the Trust. However, income received by
tax-exempt recipients need not be reported as taxable income. In January 2001,
you will be advised on IRS form 1099-DIV as to the federal tax status of the
dividends and distributions received by you in calendar year 2000.
93
<PAGE>
FEDERAL INCOME TAX INFORMATION (Cont.)
(unaudited)
FOREIGN TAX CREDIT. The folowing Funds have elected to pass through the credit
for taxes paid in foreign countries The foreign income and foreign tax per share
outstanding on June 30, 2000 are as follows:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
International Structured Emerging Tax-Efficient Structured
Growth Fund Markets Fund Emerging Markets Fund
------------------------------------------------------------------------------------------
Gross Foreign Foreign Gross Foreign Foreign Gross Foreign Foreign
Country Dividends Tax Dividends Tax Dividends Tax
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Argentina 0 0 0.01683 0 0.01447 0
Australia 0.00955 0.00025 0 0 0 0
Botswana 0 0 0.01642 0.00114 0.01274 0.00062
Brazil 0 0 0.02424 0.00282 0.02016 0.00254
Chile 0 0 0.01595 0.00451 0.01346 0.00378
China 0 0 0.00525 0.00010 0.00699 0.00005
Columbia 0 0 0.00647 0.00028 0.00815 0.00016
Denmark 0.00193 0.00029 0 0 0 0
Egypt 0 0 0.00866 0 0.00916 0
Estonia 0 0 0.00171 0.00044 0.00102 0.00026
Finland 0.00213 0.00032 0 0 0 0
France 0.07619 0.01406 0 0 0 0
Germany 0.01672 0.00165 0 0 0 0
Ghana 0 0 0.00815 0.00093 0.00439 0.00050
Greece 0.01123 0 0.00664 0 0.00687 0
Hong Kong 0.00762 0 0.00324 0 0.00747 0.00008
Hungary 0 0 0.00632 0.00137 0.00612 0.00129
India 0 0 0.01085 0.00100 0.00445 0.00046
Indonesia 0 0 0.00228 0.00034 0.00333 0.00050
Ireland 0.00441 0.00167 0 0 0 0
Israel 0 0 0.02261 0.00563 0.02194 0.00546
Italy 0.02337 0.00160 0 0 0 0
Japan 0.02322 0.00348 0 0 0 0
Kenya 0 0 0.00579 0.00058 0.00409 0.00043
Malaysia 0 0 0.00868 0.00146 0.00688 0.00108
Mauritius Islands 0 0 0.00687 0 0.00491 0
Mexico 0.00210 0.00016 0.00790 0.00060 0.00625 0.00048
Morocco 0 0 0.00591 0.00059 0.00495 0.00050
Netherlands 0.00985 0.00172 0 0 0 0
Peru 0 0 0.01344 0 0.01237 0
Philippines 0 0 0.00481 0.00114 0.00479 0.00111
Poland 0 0 0.00679 0.00101 0.00383 0.00057
Portugal 0 0 0 0 0.00008 0.00001
Russia 0.00098 0.00028 0.00047 0.00028 0.00089 0.00005
Singapore 0.00323 0.00078 0 0 0 0
South Africa 0 0 0.01795 0 0.01648 0
South Korea 0.00063 0.00010 0.01006 0.00166 0.06270 0.00104
Spain 0.00603 0.00090 0 0 0 0
Sweden 0.00058 0.00009 0 0 0 0
Switzerland 0.00989 0.00148 0 0 0 0
Taiwan 0 0 0.00569 0.00063 0.00467 0.00060
Thailand 0 0 0.00400 0.00019 0.00492 0.00025
Turkey 0 0 0.00170 0 0.00174 0
United Kingdom 0.05295 0.00509 0.00158 0.00003 0.00094 0
Venezuela 0 0 0.01904 0.00064 0.01760 0.00055
Zimbabwe 0 0 0.00661 0.00099 0.00568 0.00085
</TABLE>
The pass-through of foreign tax credit will affect only shareholders on the
dividend record date in December 1999. Shareholders will receive more detailed
information along with their Form 1099-DIV in January 2001.
94
<PAGE>
PIMCO Advisors Holdings L.P. is one of the largest investment management
companies in the United States with assets under management of more than $264
billion as of June 30, 2000. PIMCO Advisors is a member of the Allianz Group of
companies. Allianz AG is a European based multi-national insurance and financial
services holding company. PIMCO Advisors offers institutional and individual
investors domestically and abroad a diverse range of fixed income and equity
advisory styles and services including mutual funds and institutional separate
account management. PIMCO Global Advisors, the international unit, offers
investment services worldwide through offices in London, Tokyo, Singapore and
Sydney.
PIMCO Advisors investment firms are:
Pacific Investment Management Company LLC/Newport Beach, California
Oppenheimer Capital/New York, New York
Cadence Capital Management/Boston, Massachusetts
NFJ Investment Group/Dallas, Texas
Parametric Portfolio Associates/Seattle, Washington
PIMCO Equity Advisors/New York, New York a division of PIMCO Advisors L.P.
PIMCO/Allianz International Advisors LLC/New York, New York
TRUSTEES AND OFFICERS
Stephen J. Treadway,
PRESIDENT, CHIEF EXECUTIVE OFFICER
AND TRUSTEE
E. Philip Cannon, TRUSTEE
Donald P. Carter, TRUSTEE
Gary A. Childress, TRUSTEE
Richard L. Nelson, TRUSTEE
Kenneth M. Poovey, TRUSTEE
Lyman W. Porter, TRUSTEE
Alan Richards, TRUSTEE
W. Bryant Stooks, TRUSTEE
Gerald M. Thorne, TRUSTEE
Newton B. Schott, Jr., SECRETARY
John P. Hardaway, TREASURER
INVESTMENT ADVISER AND ADMINISTRATOR
PIMCO Advisors L.P.
800 Newport Center Drive, Suite 600
Newport Beach, California 92660
<PAGE>
PIMCO FUNDS: ACCESS TO THE HIGHEST STANDARD
PIMCO Funds offers unique access to the investment expertise of PIMCO Advisors
L.P. PIMCO Advisors manages approximately $264 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.
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Newport Beach, CA 92660
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DISTRIBUTOR PIMCO Funds Distributors LLC, 2187 Atlantic Street,
Stamford, CT 06902-6896
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SERVICING AGENT Kansas City, MO 64105
AND TRANSFER
AGENT
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ACCOUNTANT Kansas City, MO 64105
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<PAGE>
PIMCO Funds Shareholder Update
and 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.
JUNE 30, 2000
MULTI-MANAGER SERIES
Share Classes
A B C
Capital Appreciation
Equity Income
Global Innovation
Growth
Innovation
International
Mid-Cap
Opportunity
Renaissance
Select Growth
Small-Cap Value
Target
Tax-Efficient Equity
Value
[GRAPHIC]
ARE MARKET MOVEMENTS TAKING YOU OFF COURSE? TRY A MORE OBJECTIVE APPROACH TO
INVESTING. STORY ON PAGE 2.
PAGE 2 TODAY'S INVESTOR
Taking the Emotion Out of Investing
PAGE 4 MANAGER Q & A
Growth, Value or Blend? A Roundtable Discussion
PAGE 6 FUND SPOTLIGHT
PAGE 7 TECH UPDATE
The Technology Sector Stages a Recovery
PAGE 8 SERVICE UPDATE
Introducing the New PIMCO Funds Web Site
PAGE 9 IN THE NEWS
PAGE 10 OVERVIEW: COMPREHENSIVE FUND FAMILY
PAGE 11 PIMCO FUNDS: MULTI-MANAGER SERIES
ANNUAL REPORT
[PIMCO FUNDS LOGO]
<PAGE>
TODAY'S
INVESTOR TAKING THE EMOTION OUT OF INVESTING
[GRAPHIC]
Staying completely objective about your investments is nearly impossible. After
all, your money isn't just money. It represents important goals, like buying a
house, living a comfortable retirement or funding your childrens' educations. So
if recent stock market volatility has caused you to lose sleep or tempted you to
cash out some of your holdings, you're not alone.
Still, getting too emotional about your investments isn't healthy--for you or
your portfolio. It can cause you undue stress, prompt you to sell during
unfavorable conditions and otherwise distract you from your long-term strategy.
To let reason rule, you need a plan that provides a logical framework for your
financial decisions and that anticipates market turbulence. Here are three
simple steps you can follow to get you on your way.
1. REMEMBER THE BIG PICTURE
If you become too focused on the here and now, you're much more prone to
emotional investment decisions--buying a security based solely on recent
performance or selling one prematurely, for example. To broaden your
perspective, try the following.
- REVIEW YOUR GOALS AND RISK
TOLERANCE. It's always a good idea to work with your financial advisor to
determine your risk tolerance and financial goals and make sure your asset
allocation is in sync with them. These factors should be top of mind whenever
you make an investment decision.
- TAKE A LOOK AT HISTORY. A look back at the financial markets can help you
be more realistic about potential returns. For example, the average annual
return of the S&P 500, a benchmark that is representative of the overall
stock market, has been about 13% over the past 30 years (assuming
reinvestment of dividends). Also, while the Dow Jones Industrial Average
has had five down years in the last 25, it has always recovered--even if it
took a few years. This serves as a good reminder to ride out corrections
and maintain a long-term view.
2. USE A SYSTEMATIC APPROACH
You may find it easier to stay on track with your goals if you organize certain
aspects of the investment process. Here are a few approaches that you may want
to consider.
- REVIEW YOUR LONG-TERM HOLDINGS AT SPECIFIC INTERVALS.
Online services have made it convenient for investors to check up on their
portfolios. But if you're a long-term investor, keeping too close an eye on your
holdings may only cause you unnecessary anxiety. Over time, daily price
fluctuations lose importance. That said, try reviewing your portfolio no more
than once a month or quarter.
A CASE FOR LONG-TERM INVESTING
A historical look at the Dow Jones Industrial Average (DJIA) can remind you to
ride out corrections and keep a long-term view. In the past 25 years, the DJIA
has had five down years, but eventually recovered each time.
<TABLE>
<S> <C>
12/74 616
12/75 852
12/76 1004
12/77 831
12/78 805
12/79 838
12/80 963
12/81 875
12/82 1046
12/83 1258
12/84 1211
12/85 1546
12/86 1895
12/87 1938
12/88 2168
12/89 2753
12/90 2633
12/91 3168
12/92 3301
12/93 3754
12/94 3834
12/95 5117
12/96 6448
12/97 7908
12/98 9181
12/99 11497
</TABLE>
Source: Dow Jones & Company. Past performance is no guarantee of future results.
This chart does not represent the past or future performance of any PIMCO Fund.
2
<PAGE>
THE BENEFITS OF DOLLAR COST AVERAGING
In this example, a monthly systematic investment of $500 purchased more shares
at a lower average price than a $2000 lump sum investment during the four month
period.
<TABLE>
<CAPTION>
Date of Purchase Jan 15 Feb 15 Mar 15 Apr 15
Share Price $11 $8 $10 $14 TOTAL
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DOLLAR COST AVERAGING
Shares Acquired 45.5 62.5 50.0 35.7 193.7
Investment $500 $500 $500 $500 $2,000
Average Share Price: $10.33
-----------------------------------------------------------------------
LUMP SUM INVESTMENT
Shares Acquired 181.8 0 0 0 181.8
Investment $2,000 0 0 0 $2,000
Average Share Price: $11.00
</TABLE>
This plan involves continuous investment in securities regardless of fluctuating
prices.The investor should consider his/her financial ability to continue
investing through periods of low price levels.
- CONSIDER DOLLAR COST AVERAGING. A plan that regularly invests a fixed amount
of money in a specific investment imposes a disciplined approach to investing.
This can be a particularly good strategy during volatile markets, since
systematic investing carries the benefit of dollar cost averaging. Dollar cost
averaging takes advantage of price fluctuations by buying more shares when an
investment's price declines and fewer shares when it rises. The chart above
illustrates this point.
- ESTABLISH GUIDELINES FOR SELLING AN INVESTMENT. If you contemplate selling an
investment each time its price retreats, you may want to establish some clearer
guidelines. One idea is to form a checklist of key questions that can help you
make a more objective evaluation. For example:
- Have there been any negative fundamental changes in the investment?
- What are experts saying about the asset class or sector?
- How would selling the investment affect my asset allocation?
- Has the investment consistently underperformed its benchmark?
- Would another opportunity provide better risk/return characteristics?
Remember that the theory of asset allocation holds that different investments
will outperform and underperform the market at different times. This year's
laggards could be next year's leaders. So you may not want to sell an investment
just because it's trailing the overall stock market. Your financial advisor can
provide additional insight and help you determine if it's better to sell or hold
on for a while.
3. MANAGE RISK (OR IT WILL MANAGE YOU)
In today's technology-driven bull market, risk management is one area that many
investors have neglected. Yet it's unrealistic to think that double and triple
digit equity returns will go on forever. Here are a few tactics that may help
you weather future market volatility and protect your hard-earned assets.
- DON'T PUT TOO MUCH AT STAKE. If you're seeking the potential for higher
returns, allocate a specific percentage of your portfolio to riskier
investments, such as tech stocks, then periodically rebalance. To reduce risk,
you might consider investing through a technology fund, which offers a
diversified approach and may be less volatile than owning individual stocks.
- ALLOCATE PART OF YOUR PORTFOLIO TO BONDS. If a review of your asset allocation
determines you've taken on too much risk, you might shift some of your holdings
into bonds. Their income and relative price stability can provide a cushion
against stock volatility. Investing in a diversified bond fund is one simple way
to balance out your equity holdings.
- KEEP AN EMERGENCY FUND. As a rule of thumb, it's a good idea to keep a
percentage of your annual income in an emergency fund. There are a number of
good alternatives for investing this cash. For example, you might consider a
short-term bond fund. While the value of your investment will fluctuate slightly
and there's no repayment guarantee, you could be rewarded with a yield and total
return that's considerably higher than other cash investments.
These are just a few suggestions that can help you keep a more objective mindset
and prepare your portfolio for future market volatility. As always, your
financial advisor can help you decide if any of these approaches might fit into
your comprehensive financial plan.
PAST PERFORMANCE IS NO GUARANTEE 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. There can be no guarantee that
these investment strategies will work in every economic environment.
The S&P Index is an unmanaged index considered to be representative of the stock
market as a whole. It is not possible to invest directly in such an index.
3
<PAGE>
MANAGER
Q & A GROWTH, VALUE OR BLEND? A ROUNDTABLE DISCUSSION
KEN CORBA IS PIMCO'S LEADING GROWTH INVESTMENT EXPERT AND THE MANAGER OF PIMCO
GROWTH, SELECT GROWTH AND GROWTH AND INCOME (FORMERLY THE MID-CAP EQUITY FUND)
FUNDS. HE HAS MORE THAN 15 YEARS OF GROWTH INVESTMENT EXPERIENCE. JOHN SCHNEIDER
MANAGES PIMCO RENAISSANCE AND VALUE FUNDS AND HAS MORE THAN 12 YEARS OF VALUE
INVESTING EXPERIENCE. DAVE BREED MANAGES PIMCO CAPITAL APPRECIATION AND MID-CAP
FUNDS AND HAS MORE THAN 30 YEARS OF EXPERIENCE, SPECIALIZING IN
GROWTH-AT-A-REASONABLE-PRICE, A TYPE OF BLEND INVESTING.
Q: EACH OF YOU IS A STRONG BELIEVER IN YOUR OWN PARTICULAR INVESTMENT STYLE. CAN
YOU EXPLAIN WHY AN INVESTOR SHOULD HAVE EXPOSURE TO IT?
KC: While it's true that different investment styles outperform at
various times, I believe growth stock investing offers the greatest potential
for capital appreciation over the long term. For the last several years, growth
stocks have dominated the stock market in terms of both performance and earnings
growth--and I think this trend is likely to continue.
JS: I think it's prudent to have exposure to value stocks. Although they've
underperformed in recent years, history has shown that different investment
styles fall in and out of favor, so it makes sense to have exposure to various
investment styles. In addition, stock valuations are at historically high
levels, which I do not believe are sustainable. I would not be surprised to see
a rotation towards lower valuation issues in the near term.
DB: Growth-at-a-reasonable-price (GARP) investing represents what I believe to
be the best of both worlds for investors. It provides access to growth potential
but it also places importance on reasonable valuation. While investors are
certainly enamored with growth stocks right now, I believe they are becoming
more price sensitive, which usually happens during periods of rising interest
rates. GARP investing is the often-overlooked alternative to growth and value
investing.
Q: CAN YOU GIVE US AN EXAMPLE OF ONE OF YOUR BEST PERFORMING HOLDINGS THAT
EXEMPLIFIES YOUR INVESTMENT STYLE?
KC: One of our best performing holdings is JDS Uniphase, which makes fiber optic
components. Fiber optic telecommunications equipment is one of the
fastest-growing industries right now, and JDS Uniphase is the leader in this
area. The company has a very successful acquisition strategy, which has enabled
it to gain market share and complement its existing product line. It's one of
the great wealth-creating companies of our time--and just the kind of stock we
like to own.
JS: Ace Limited, a property and casualty insurance (P&C) company, has nearly
doubled since we added it to the portfolio. For more than a decade, property and
casualty insurance companies performed poorly because the industry suffered from
too much competition. However, we anticipated that the industry would lose its
weakest players, which would enable it to gain pricing power and increase
extremely narrow profit margins. As a result, we added fundamentally strong P&C
insurers, such as Ace, that we expected would benefit from the industry
consolidation. Ace, which boasts a strong balance sheet and an exceptional
management team, did indeed outperform.
DB: Corning, a fiber optic telecommunications equipment maker, has turned in a
strong performance for the Fund. We were attracted to the company last year
because of its relatively low valuation in such a high-growth industry. Its
stock price has risen as a result of several strategic acquisitions and plant
expansions that would increase capacity, as well as general investor enthusiasm
for this industry.
Q: WHAT AREAS OF TECHNOLOGY DO YOUR RESPECTIVE PORTFOLIOS HAVE EXPOSURE TO? HOW
DO THESE FIT WITH YOUR RESPECTIVE INVESTMENT STYLES?
KC: Because technology is such an important part of the stock market in
general--it now comprises 34% of the S&P 500 Index--and growth investing in
particular, we have significant exposure to this sector. We are invested in many
high-growth industries within technology, such as networking, fiber optics and
wireless telecommunications. We own many of the premier, blue chip tech
companies, including Cisco Systems, EMC and Nokia.
JS: We limit our exposure in the technology sector to companies we understand
and can value--typically commodity technology companies, such as semiconductor
manufacturers. They are cyclical companies, and we like to purchase them at the
time in their business cycle when they are undervalued and offer upside
potential. While we had a lot of exposure to commodity technology last year
(chip maker Micron was our largest holding for much of the year), we don't have
much exposure right now because we believe these stocks are near the peak of
their business cycle and are relatively overvalued.
4
<PAGE>
[PHOTO] [PHOTO] [PHOTO]
KEN CORBA
JOHN SCHNEIDER
DAVID BREED
DB: We own a number of different technology companies, such as chip maker Intel
and networking giant Cisco Systems. Because our goal is to offer investors an
overall portfolio that is growth-oriented but reasonably valued, we are able to
own these higher growth tech names and balance them out with companies, such as
Tyco and General Electric, that offer low relative valuations.
Q: TO WHAT DO YOU ATTRIBUTE THE RECENT VOLATILITY IN THE MARKET?
KC: I think when you see the kind of huge appreciation that we've experienced in
the past year, it only makes sense that the market would experience a
correction. I welcomed this correction, because I felt it was needed. And it
proved to be just the kind of correction that usually is best for the
market--deep, hard, frightening and short. A lot of the excesses were shaken out
of the stock market, which was healthy, and now the stock market appears to be
resuming its ascent.
JS: I attribute the volatility to the shift from institutional investors
dominating the stock market to individual investors, especially day traders,
comprising the majority of stock market investors. This has resulted in a
dramatic shortening of investors' time horizons as well as a dramatic increase
in investors' expectations. In addition, individual investors are much more
likely to adopt a herd mentality, resulting in mass exoduses from particular
stocks and sectors.
DB: I agree with both Ken and John. Certainly the en masse addition of day
traders and do-it-yourself investors to the stock market has changed the
environment and contributed to recent volatility. However, I believe a
correction was virtually inevitable after such a huge rise in the stock market
over a relatively short period of time.
Q: WHAT IS YOUR OUTLOOK FOR THE STOCK MARKET IN THE COMING MONTHS?
KC: I think the volatility is behind us, and the stock market should
outperform in the second half of the year for several reasons. First of
all, the Federal Reserve is almost finished tightening the money supply--if
it hasn't already. And growth stocks have historically performed best in
periods of economic deceleration with declining interest rates. In
addition, we think the political backdrop is also positive for the stock
market. Proposed tax cuts, such as the elimination of the estate tax,
should stimulate the economy and the stock market. And, of course,
corporate fundamentals remain very strong, which should augur well for
equities.
JS: I don't think the volatility is necessarily behind us, and I think the stock
market may turn in a lackluster performance in the coming months. I believe
there is still a good chance that the domestic economy could plunge into a
recession and take the stock market down with it. However, I'm confident that
many value stocks have such low valuations that they can withstand a recession.
DB: I am optimistic about the stock market for the second half of the year. I
agree with Ken that corporate fundamentals are strong and that the economic
backdrop should be positive for equities. However, I believe that we still have
the specter of rising inflation, as gas prices show no signs of dropping soon. I
think that, in this environment, investors will become increasingly concerned
about valuations and, while they will not abandon growth stocks, they will flock
to those growth stocks that have reasonable prices.
PAST PERFORMANCE IS NO GUARANTEE 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. This article is distributed for
educational purposes and the opinions of the managers should not be considered
investment advice. Equity funds are subject to the basic stock market risk that
a particular security or securities, in general, may decrease in value. All
holdings are as of 6/30/00. PIMCO Growth Fund held JDS Uniphase (4.11%), Cisco
Systems (5.45%), EMC (7.92%) and Nokia (5.99%) in its portfolio. PIMCO Select
Growth Fund held JDS Uniphase (5.30%), Cisco Systems (5.61%), EMC (6.80%), and
Nokia (4.41%) in its portfolio. PIMCO Growth & Income (formerly the Mid-Cap
Equity Fund) Fund held EMC (2.34%) in its portfolio. PIMCO Renaissance Fund held
Ace Limited (5.44%) in its portfolio, as did PIMCO Value Fund (5.14% of its
portfolio). PIMCO Capital Appreciation Fund held Corning (2.03%), Intel (1.88%),
Cisco Systems (1.69%), Tyco (1.54%) and General Electric (2.43%) in its
portfolio.
The S&P 500 Index is an unmanaged index. It is not possible to invest directly
in an unmanaged index.
5
<PAGE>
FUND SPOTLIGHT
INTRODUCING TWO NEW ADDITIONS TO OUR PIMCO FAMILY OF STOCK FUNDS
PIMCO GLOBAL INNOVATION & SELECT GROWTH FUNDS
PIMCO GLOBAL INNOVATION FUND
Building on the strength of PIMCO Innovation Fund and its impressive short- and
long-term performance, PIMCO has launched the Global Innovation Fund to
capitalize on the exciting opportunities that exist in technology around the
world. Like its forerunner, Global Innovation is a diversified technology fund
that invests in a broad range of tech companies and non-tech innovators.
International exposure adds an additional level of diversification to the mix.
UNTAPPED POTENTIAL OF GLOBAL TECHNOLOGY Because many countries are only now
beginning to adopt new technologies, the growth potential is enormous. For
example, only 7% of China's 1.2 billion population and 2% of India's 984
million people now have telephones. This represents a vast, untapped market
for cell phones, the infrastructure for which is far cheaper to build than
traditional phone lines. And that's just one industry within this dynamic
sector.
PROVEN TECHNOLOGY EXPERTISE The Fund is managed by Dennis McKechnie, portfolio
manager of PIMCO Innovation Fund. He brings a unique blend of tech and
investment expertise to the job and is a frequent guest on CNN and CNBC.
Co-manager Jiyoung Kim joined PIMCO last year as a senior research analyst on
the Innovation Fund. She has a BS in biochemistry from Harvard and over six
years of aggressive growth stock investment experience.
TOP TEN HOLDINGS
(as of 6/30/00)
56 holdings representing 24.3% of total portfolio
-----------------------------------------------------------------
Juniper Networks Inc. (JNPR) 3.3%
NETWORKING SYSTEMS
-------------------------------------
Nortel Networks Corp. (NT) 2.9%
TELECOM EQUIPMENT
-------------------------------------
Intel Corp. (INTC) 2.6%
SEMICONDUCTORS & RELATED
-------------------------------------
EMC Corp. (EMC) 2.3%
COMPUTER STORAGE PRDCTS
-------------------------------------
Cisco Systems Inc. (CSCO) 2.3%
COMPUTER NETWORK PRDCTS
--------------------------------------
Redback Networks Inc. (RBAK) 2.2%
NETWORKING SYSTEMS
--------------------------------------
i2 Technologies Inc. (ITWO) 2.2%
B-TO-b SOFTWARE
--------------------------------------
BEA Systems Inc. (BEAS) 2.2%
E-COMMERCE SOFTWARE
--------------------------------------
Dell Computer Corp. (DELL) 2.2%
COMPUTERS & PERIPHERALS
-------------------------------------
Veritas Software Corp. (VRTS) 2.1%
STORAGE MGMT. SOFTWARE
---------------------------------------
[PHOTO]
DENNIS MCKECHNIE, CFA
Co-Manager,
PIMCO Global
Innovation Fund
[PHOTO]
JIYOUNG KIM, CFA
Co-Manager,
PIMCO Global Innovation Fund
[PHOTO]
KEN CORBA, CFA
Portfolio Manager,
PIMCO Select
Growth Fund
PIMCO SELECT GROWTH FUND
Ken Corba guided PIMCO Growth Fund to exceptional performance in 1999, nearly
doubling the return of the S&P 500. Which holdings were key to such impressive
results? The answer to that question essentially makes up the list of holdings
in the new PIMCO Select Growth Fund--a focused portfolio of 15 to 25 growth
stocks.
TODAY'S LEADING WEALTH-CREATORS The Fund invests in market leaders--large-cap
companies Mr. Corba believes will create wealth for investors, now and for years
to come. These are companies with household names like Johnson & Johnson and
Citigroup, as well as emerging tech power-houses like JDS Uniphase. Together,
they make up a portfolio geared for long-term capital appreciation.
AN ACCOMPLISHED FUND MANAGER Ken Corba, PIMCO's leading growth expert, brings
over 15 years of experience to the job. In pursuit of the world's greatest
businesses, Mr. Corba follows a proven buy-and-sell process, analyzing each
company on its own merits and concentrating on what he considers the best
opportunities.
A CORE PORTFOLIO HOLDING Large-cap growth companies offer the kind of stability
and capital appreciation potential that form the foundation of a solid
investment portfolio. A concentrated list of such companies offers you the
opportunity to capitalize on the potential rewards of owning a small number of
high-quality companies. That, combined with a low turnover rate, makes the Fund
an attractive core holding for almost any investment portfolio.
For more information, talk to your financial advisor, or call PIMCO at
1-800-426-0107.
SELECT GROWTH HOLDINGS (as of 6/30/00)
--------------------------------------
Corning (GLW) 8.0%
FIBER OPTIC TELECOM EQUIPMENT
--------------------------------------
Genentech Inc. (DNA) 7.6%
BIOTECHNOLOGY
--------------------------------------
American International Group (AIG)6.9%
INSURANCE/FINANCIAL SERVICES
--------------------------------------
EMC Corp. (EMC) 6.8%
COMPUTER STORAGE PRODUCTS
--------------------------------------
Nortel Networks Corp. (NT) 6.0%
TELECOMMUNICATIONS EQUIPMENT
--------------------------------------
Johnson & Johnson (JNJ) 6.0%
PHARMACEUTICALS
--------------------------------------
Cisco Systems Inc. (CSCO) 5.6%
NETWORKING SYSTEMS
--------------------------------------
Comverse Technology (CMVT) 5.5%
TELECOMMUNICATIONS EQUIPMENT
--------------------------------------
Sun Microsystems Inc. (SUNW) 5.4%
NETWORKING EQUIPMENT
---------------------------------------
Citigroup Inc. (C) 5.3%
FINANCIAL SERVICES
---------------------------------------
JDS Uniphase Corp. (JDSU) 5.3%
FIBER OPTIC TELECOM EQUIPMENT
---------------------------------------
Wal-Mart Stores Inc. (WMT) 5.1%
DISCOUNT RETAILER
---------------------------------------
Morgan Stanley Dean Witter (MWD) 4.9%
FINANCIAL SERVICES
---------------------------------------
Nokia Corp. (NOK) 4.4%
WIRELESS COMMUNICATIONS EQUIPMENT
---------------------------------------
Texas Instruments Inc. (TXN) 4.1%
SEMICONDUCTORS, ELECTRONIC EQUIPMENT
---------------------------------------
Enron Corp. (ENE) 3.8%
ENERGY
---------------------------------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Please see pages 15 and 22
for more detailed information about the Funds' performance and more complete
disclosure. All holdings are subject to change.
6
<PAGE>
TECH
UPDATE
THE TECHNOLOGY SECTOR STAGES A RECOVERY
A REGULAR TECHNOLOGY SECTOR REVIEW AND OUTLOOK FROM DENNIS MCKECHNIE, MANAGER OF
PIMCO INNOVATION AND GLOBAL INNOVATION FUNDS. WITH A DEGREE IN ELECTRICAL
ENGINEERING AND AN MBA FROM THE COLUMBIA BUSINESS SCHOOL, MR. MCKECHNIE IS
EQUALLY AT HOME IN BOTH THE INVESTMENT AND HIGH TECH WORLDS AND IS MUCH
SOUGHT-AFTER AS A TECHNOLOGY COMMENTATOR BY THE FINANCIAL MEDIA.
[GRAPHICS]
The technology sector peaked on March 10, with the NASDAQ Composite Index well
above 5000, and then proceeded to tumble for the next two months. A variety of
factors that were relatively short-term in nature contributed to this drop,
including rising interest rates and stock selling to pay April tax bills. Then,
during the pullback, many investors were forced to sell stock in order to meet
margin calls, which exacerbated the sell-off. Despite pundits' concerns that the
correction would be long term, we started to see a significant
fundamentals-driven recovery in late May.
DON'T MISS A MONTH OF INNOVATION!
Have Dennis McKechnie's monthly tech newsletter delivered to your desktop. To
find out how, see the box at right.
Technology stocks turned in a strong performance in June, solidifying and
building on the recovery made in May. In the third month within a fiscal
quarter, there are not a lot of public announcements made by companies, except
for early confessions of missed profits. This absence of news flow always makes
month three of a quarter a quietly tenuous period. However, June proved to be
positive for the tech sector because it had the backdrop of an improving
economic picture, as the data and commentary suggest that the odds of a
well-engineered economic deceleration without contraction are increasing.
In the second quarter, we noticed that stocks with varying risk profiles behaved
differently. During the market rout, large, well-known stocks with strong,
stable, dependable growth, withstood the turbulence slightly better than
aggressive, smaller-cap stocks with rapid growth. In late May, when the recovery
began, these larger companies experienced more of a bounce back. However, we
were encouraged to see that, in June, the smaller-cap tech stocks received a
stronger lift. In other words, the move off the bottom broadened. In true
capitalist form, as investors became comfortable that the marginally better news
on the economic front compensated for the additional risk, they increased their
exposure to more aggressive, smaller-cap issues.
Cell phone stocks and semiconductors were strong performers during the quarter.
These stocks weathered the March-May sell-off the best, in some cases pushing to
new highs. However, neither industry received much of a boost in June, as
investors took profits and migrated to "fresher" situations. And economic data
indicating that the long-awaited economic deceleration has become a reality has
caused many investors to view these industries' strong performance in the fourth
and first quarters as a peak. In addition, both industries suffer from supply
and demand questions as capacity continues to be added.
We are pleased to see the broadening of the tech sector, as tech stocks of all
ages and sizes are participating in the recovery. The external factors which had
bogged down tech stocks from March to May appear to have dissipated somewhat,
and tech could resume its outperformance, as it flaunts growth rates that are
5-10 times higher than the broad economy. These periods of recognition of
fundamental strength are our favorite periods, and the greatest endorsement for
hands-on tech stock management.
Our outlook for the technology sector for the second half of the year remains
very positive. While we expect the summer doldrums to take hold of the market in
July and early August, we expect a number of buying catalysts will push the
sector higher as we move into the fourth quarter. In addition, we anticipate a
favorable economic backdrop, with the economy decelerating slowly, which should
bode well for tech stocks in the coming six months.
--------------------------------------------------------------------------------
SIGN UP FOR INNOVATION ONLINE
To receive PIMCO's INNOVATION newsletter online, simply click on "Registration"
at the top of our home page at www.pimcofunds.com and fill in the form. Already
registered? Just click on "Preferences" to sign up. We'll send you an e-mail
linking you directly to each new issue as soon as it's available.
--------------------------------------------------------------------------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The NASDAQ Composite Index
is an unmanaged index and it is not possible to invest directly in an unmanaged
index. Small company stocks generally entail greater risk than larger company
stocks, including higher volatility. The views expressed in this article are the
current opinions of the manager and do not represent the past or future
performance of any PIMCO Fund.
7
<PAGE>
SERVICE
UPDATE
INTRODUCING THE NEW PIMCO FUNDS WEB SITE AT www.pimcofunds.com
As part of our ongoing commitment to provide you with products and services that
meet the highest standard, we're pleased to introduce our revamped PIMCO Funds
Web site. You'll still find us at the same address--www.pimcofunds.com--but
you'll notice a new, more user-friendly look and feel.
[GRAPHICS]
You'll find all the content you've come to rely on at
www.pimcofunds.com... and more.
The site has been redesigned to make navigation easier, with intuitive labeling
and graphics that load more quickly. You'll now find it faster to locate exactly
the information you're after.
ENHANCED FUND INFORMATION
Getting the facts you need about any PIMCO Fund is faster and easier than ever.
Now, everything relating to a Fund is conveniently organized in one place:
- Performance--Class specific, in-depth performance data, including daily price
and performance, month-end numbers and average annual returns.
- Fund Overviews--Highlighting the unique advantages each Fund offers.
- Statistics at a Glance--Including objective, primary portfolio and assets
under management.
- Ratings/Rankings--Current Morningstar ratings and Lipper rankings.
- Portfolio Analysis--Breakdown of Fund holdings, updated monthly.
- Manager Commentary--Managers' investment insight and market analysis.
- Investment Process--Step-by-step explanations of each manager's investment
strategy.
- Media Highlights--Articles and television clips featuring PIMCO Funds,
managers and related topics.
- Literature--Categorized by Fund, to download or order by mail.
TECH INVESTORS TAKE NOTE!
The all-new PIMCO Funds Innovation Center is open for business at
www.pimcofunds.com/innovationcenter. An invaluable resource designed for tech
investors and those contemplating an investment in this complex, fast-moving
sector. For details, turn to the back cover.
A UNIQUE BOND INVESTING RESOURCE
Look to the PIMCO Funds Bond Center for the latest information about bonds and
bond investing and for analysis of the economy and the bond markets. It's all
provided by PIMCO's renowned team of fixed-income experts, led by Bill Gross.
Regular features include:
- Bill Gross's INVESTMENT OUTLOOK-- A monthly newsletter on economic and
interest rate trends and their affect on the bond markets.
- Manager Commentary--Timely investment insight from PIMCO's bond fund managers.
- Sector Strategy White Papers-- In-depth examination of fund managers'
investment strategies.
--------------------------------------------------------------------------------
IMPORTANT: ACCOUNT ACCESS SECURITY UPDATE
In order to enhance the already stringent security measures we employ at
www.pimcofunds.com, as of September 1st you will be required to use a browser
that supports 128-bit encryption to access your PIMCO Funds account.
This step is added insurance that your personal information remains secure and
confidential. According to RSA Data Security, the leading name in Internet
security, "it would take a hacker a trillion x a trillion years to break 128-bit
encryption using current technology."
Most new browsers come in versions that support 128-bit encryption. Older
browsers use 40-bit encryption, but you can upgrade simply and easily via the
Internet. Here's how to get your free update:
For Microsoft Internet Explorer users, go to:
http://microsoft.com/downloads/default.asp
For Netscape Navigator/Communicator users, go to:
http://www.netscape.com/computing/download/index.html
--------------------------------------------------------------------------------
8
<PAGE>
IN THE
NEWS
BLOOMBERG PROFILES PIMCO AND FINDS IT...
A FUND COMPANY ON THE RISE
Traditionally, leading mutual fund firms are recognized for strength in
either the equity market or the bond market. It is relatively rare to find
diversified success that includes both stocks and fixed income. However, in
the April 2000 issue of BLOOMBERG PERSONAL FINANCE, PIMCO Funds was the topic
of a lengthy feature article that detailed its achievements in the overall
mutual fund marketplace.
In this article, entitled "PIMCO Rising," PIMCO's move into the ranks of the
preeminent mutual fund firms is accredited to three main points: continual
strength in fixed income, outstanding short- and long-term equity returns, and a
successful business strategy that has enabled investors to choose from a
--------------------------------------------------------------------------------
"THE HOUSE THAT GROSS BUILT ISN'T JUST ABOUT BONDS ANYMORE. WITH $264 BILLION IN
ASSETS AND A SLEW OF NEW EQUITY FUNDS, PIMCO IS GIVING FIDELITY AND JANUS A RUN
FOR THEIR MONEY."
--------------------------------------------------------------------------------
family of diverse, style-specific products. "We believe PIMCO to be probably the
premier mutual fund company in the world today," one financial advisor says in
the article.
Bond manager Bill Gross is featured not only as a founder of PIMCO, but also for
his fixed-income performance. "He has done very well through a variety of
different types of bond markets without taking on a lot of risk," Sarah Bush of
Morningstar said of Mr. Gross. Equity portfolio managers Dennis McKechnie and
Ken Corba are also singled out for their outstanding performance and solid
investment strategies. In particular, PIMCO Growth, Target and Innovation Funds
were noted for their strength within their respective investment categories.
If you would like to receive a reprint of "PIMCO Rising" please call us at
1-800-426-0107.
<TABLE>
<CAPTION>
==================================================================================================================
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 JUNE 30, 2000.
<S> <C> <C> <C> <C>
PIMCO STOCK FUNDS OVERALL 3 YEAR 5 YEAR 10 YEAR
------------------------------------------------------------------------------------------------------------------
INNOVATION ***** 5 5 -
------------------------------------------------------------------------------------------------------------------
TARGET ***** 5 5 -
------------------------------------------------------------------------------------------------------------------
GROWTH **** 4 4 4
------------------------------------------------------------------------------------------------------------------
CAPITAL APPRECIATION **** 4 4 -
------------------------------------------------------------------------------------------------------------------
SELECT GROWTH **** 4 4 -
------------------------------------------------------------------------------------------------------------------
STOCKSPLUS **** 4 4 -
------------------------------------------------------------------------------------------------------------------
MID-CAP **** 3 4 -
------------------------------------------------------------------------------------------------------------------
PIMCO BOND FUNDS OVERALL 3 YEAR 5 YEAR 10 YEAR
------------------------------------------------------------------------------------------------------------------
LOW DURATION ***** 5 5 5
------------------------------------------------------------------------------------------------------------------
SHORT-TERM ***** 5 5 5
------------------------------------------------------------------------------------------------------------------
TOTAL RETURN ***** 5 4 5
------------------------------------------------------------------------------------------------------------------
FOREIGN BOND ***** 5 5 -
------------------------------------------------------------------------------------------------------------------
REAL RETURN ***** 5 - -
------------------------------------------------------------------------------------------------------------------
HIGH YIELD **** 3 5 -
==================================================================================================================
</TABLE>
THE CHART ABOVE IS BASED ON JUNE 30, 2000 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 3,642, 2,328 AND 783 DOMESTIC
EQUITY FUNDS AND 1,684, 1,287 AND 381 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 INNOVATION,
TARGET, GROWTH AND REAL RETURN (BASED ON CLASS C SHARES) 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. Ratings for other share classes may vary.
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.
9
<PAGE>
<TABLE>
<CAPTION>
THE PIMCO FUNDS FAMILY
FUND NAME OBJECTIVE PRIMARY PORTFOLIO COMPOSITION
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GROWTH GROWTH Long-term growth of capital Stocks of larger-capitalized companies
STOCK FUNDS ---------------------------------------------------------------------------------------------------------------
SELECT GROWTH Long-term growth of capital Stocks of larger-capitalized companies
---------------------------------------------------------------------------------------------------------------
TARGET Capital appreciation Stocks of medium-capitalized companies
---------------------------------------------------------------------------------------------------------------
OPPORTUNITY Capital appreciation Stocks of smaller-capitalized companies
-----------------------------------------------------------------------------------------------------------------------------------
BLEND CAPITAL APPRECIATION Growth of capital Stocks of larger-capitalized companies the
STOCK FUNDS manager believes are reasonably valued
---------------------------------------------------------------------------------------------------------------
MID-CAP Growth of capital Stocks of medium-capitalized companies the
manager believes are reasonably valued
-----------------------------------------------------------------------------------------------------------------------------------
VALUE EQUITY INCOME Current income and long-term growth Stocks of companies with below-average P/Es
STOCK FUNDS and above-average dividends
---------------------------------------------------------------------------------------------------------------
RENAISSANCE Long-term growth of capital and income Stocks with below-average valuations
---------------------------------------------------------------------------------------------------------------
VALUE Long-term growth of capital and income Stocks of larger-capitalized companies with
below-average P/Es
---------------------------------------------------------------------------------------------------------------
SMALL-CAP VALUE Long-term growth of capital and income Stocks of smaller-capitalized companies
with below-average P/Es
-----------------------------------------------------------------------------------------------------------------------------------
ENHANCED INDEX TAX-EFFICIENT EQUITY Maximum after-tax growth of capital Stocks of larger-capitalized companies
STOCK FUNDS ---------------------------------------------------------------------------------------------------------------
STOCKSPLUS Total return exceeding the S&P 500 stock index futures backed by a
S&P 500 Index portfolio of short-term, fixed-income
securities
-----------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL INTERNATIONAL Capital appreciation Stocks of non-U.S. companies in developed
STOCK FUNDS and emerging markets
-----------------------------------------------------------------------------------------------------------------------------------
SECTOR RELATED INNOVATION Capital appreciation Stocks of technology-related companies
STOCK FUNDS ---------------------------------------------------------------------------------------------------------------
GLOBAL INNOVATION Capital appreciation Stocks of U.S. and non-U.S. technology
related companies
-----------------------------------------------------------------------------------------------------------------------------------
SHORT DURATION MONEY MARKET Maximum current income, consistent Money market securities (= 90 days)
BOND FUNDS with preservation of capital and
daily liquidity
---------------------------------------------------------------------------------------------------------------
SHORT-TERM Maximum current income consistent Money market securities and short-term
with preservation of capital and bonds (up to 1 year duration)
daily liquidity
---------------------------------------------------------------------------------------------------------------
LOW DURATION Maximum total return Short maturity fixed income securities
(1-3 year duration)
-----------------------------------------------------------------------------------------------------------------------------------
INTERMEDIATE TOTAL RETURN Maximum total return Intermediate maturity fixed income
DURATION BOND FUNDS securities (3-6 year duration)
---------------------------------------------------------------------------------------------------------------
TOTAL RETURN MORTGAGE Maximum total return Intermediate maturity mortgage-related
fixed income securities (2-6 year duration)
-----------------------------------------------------------------------------------------------------------------------------------
LONG DURATION LONG-TERM U.S. Maximum total return Long-term maturity fixed income securities
BOND FUNDS GOVERNMENT (8+ year duration)
-----------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL GLOBAL BOND II Maximum total return U.S. and hedged non-U.S. intermediate
BOND FUNDS maturity fixed income securities
(3-7 year duration)
---------------------------------------------------------------------------------------------------------------
FOREIGN BOND Maximum total return Intermediate maturity hedged non-U.S. fixed
income securities (3-7 year duration)
---------------------------------------------------------------------------------------------------------------
EMERGING MARKETS BOND Maximum total return Emerging market fixed income securities
(0-8 year duration)
-----------------------------------------------------------------------------------------------------------------------------------
HIGH YIELD BOND HIGH YIELD Maximum total return Higher yielding fixed income securities
FUND (2-6 year duration)
-----------------------------------------------------------------------------------------------------------------------------------
INFLATION-INDEXED REAL RETURN BOND Maximum real return Inflation-indexed fixed income securities
BOND FUND
-----------------------------------------------------------------------------------------------------------------------------------
CONVERTIBLE CONVERTIBLE Maximum total return Convertible securities
BOND FUND
-----------------------------------------------------------------------------------------------------------------------------------
TAX EXEMPT MUNICIPAL BOND High current income exempt from Intermediate to long-term maturity
BOND FUNDS federal taxes, preservation of municipal securities, federal
capital income tax (3-10 year duration)
---------------------------------------------------------------------------------------------------------------
CALIFORNIA High current income exempt from federal Intermediate to long-term maturity
MUNICIPAL BOND and California income tax municipal securities (3-12 year duration)
---------------------------------------------------------------------------------------------------------------
CALIFORNIA INTERMEDIATE High current income exempt from federal Intermediate maturity municipal securities
MUNICIPAL BOND and California income tax (3-7 year duration)
---------------------------------------------------------------------------------------------------------------
NEW YORK High current income exempt from Intermediate to long-term maturity
MUNICIPAL BOND federal and New York income tax municipal securities (3-12 year duration)
-----------------------------------------------------------------------------------------------------------------------------------
STOCK AND BOND STRATEGIC BALANCED Maximum total return Intermediate maturity fixed-income
FUNDS securities and S&P 500 stock index
derivatives (0-6 years duration)
---------------------------------------------------------------------------------------------------------------
90/10 PORTFOLIO Long-term capital appreciation 90% in PIMCOStock Funds and 10% in
PIMCO Bond Funds
---------------------------------------------------------------------------------------------------------------
60/40 PORTFOLIO Long-term capital appreciation 60% in PIMCOStock Funds and 40% in
and current income PIMCO Bond Funds
---------------------------------------------------------------------------------------------------------------
30/70 PORTFOLIO Current income, with long-term capital 30% in PIMCOStock Funds and 70% in
appreciation as a secondary objective PIMCO Bond Funds
For more information on the risks associated with these Funds, see page 27.
</TABLE>
10
<PAGE>
MULTI-MANAGER
SERIES
PIMCO FUNDS ANNUAL REPORT
Dear Shareholder:
The first half of 2000 could serve as a textbook illustration of stock market
volatility. After reaching record highs in the first quarter, both the Dow Jones
and the tech-focused NASDAQ swooned and then stumbled through the second
quarter, before starting to recover lost ground as the quarter ended. And in the
bond market things were almost as bumpy.
This unprecedented volatility has presented a challenge for many investors, some
of whom may have lost sight of the stock market's inherent risks, especially in
the context of the longest bull market in history. In times like these that try
investors' souls--and patience--it's more important than ever to remember a few
time-honored principles...
Maintain a diversified investment portfolio. Have a healthy respect for risk.
Keep your focus on the long term. Or as Bill Gross--PIMCO's oft-quoted bond
chief--has said, "Set your sights on a horizon and sail until you get there."
Those who can stick with these precepts will be able to ride out short-term
market gyrations and ultimately reach their investment goals. And at PIMCO,
we're committed to providing investors with the kind of high quality investment
vehicles that can help them get there.
How have our Funds fared during these volatile times? Well, I'm pleased to
report that they have weathered the storms well, overcoming the extreme market
fluctuations to report strong relative performance over the last six months. You
see, our Fund Managers keep their sights firmly planted on the horizon too.
I encourage you to review the fund information and commentary on the
following pages carefully. And once again, I'd like to thank you for the trust
you've placed in us. If you have any questions regarding your investment,
contact your financial advisor, or call us at 1-800-426-0107. Or you can visit
our Web site at www.pimcofunds.com.
Sincerely,
/s/ Stephen Treadway
Stephen Treadway
President
July 31, 2000
--------------------------------------------------------------------------------
OF INTEREST On May 5, 2000, Allianz AG completed the acquisition of
approximately 70% of the outstanding partnership interests in PIMCO Advisors
L.P. ("PIMCO Advisors"), of which PIMCO is a subsidiary partnership. As a result
of this transaction, PIMCO Advisors, and its subsidiaries, are now controlled by
Allianz AG, a leading provider of financial services, particularly in Europe.
PIMCO remains operationally independent, continues to operate under its existing
name, and now leads the global fixed-income investment efforts of Allianz AG.
Key employees at each of PIMCO Advisors' investment units, including PIMCO's
Bill Gross, have signed long-term employment contracts and have significant
profit-sharing and retention arrangements to ensure continuity of the investment
process and staff. With the addition of PIMCO Advisors, the Allianz Group
manages assets of approximately $650 billion, including more than 300 mutual
funds for retail and institutional clients around the world.
--------------------------------------------------------------------------------
11
<PAGE>
PIMCO FUNDS FINANCIAL INFORMATION
We are pleased to present an in-depth review of the PIMCO Multi-Manager Series
Funds as of June 30, 2000. 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 13-26 FUND SUMMARIES*
A summary of a Fund's performance record and portfolio composition, and a review
from the Fund's investment manager.
Pages 28-47 SCHEDULE OF INVESTMENTS*
The Schedule of Investments includes a listing of securities in the Fund's
portfolio as of June 30, 2000, including the number of shares or principal
amount and value as of that date.
<TABLE>
<CAPTION>
SCHEDULE OF
FUND NAME FUND SUMMARY INVESTMENTS
<S> <C> <C>
Capital Appreciation Fund Page 13 Page 28
Equity Income Fund Page 14 Page 29
Global Innovation Page 15 Page 30
Growth Fund Page 16 Page 31
Innovation Fund Page 17 Page 32
International Fund Page 18 Page 33
Mid-Cap Fund Page 19 Page 36
Opportunity Fund Page 20 Page 37
Renaissance Fund Page 21 Page 39
Select Growth Page 22 Page 40
Small-Cap Value Fund Page 23 Page 41
Target Fund Page 24 Page 43
Tax-Efficient Equity Fund Page 25 Page 44
Value Fund Page 26 Page 47
</TABLE>
Pages 48-55 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 56-57 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 58-59 STATEMENTS OF OPERATIONS
This statement lists a Fund's income, expenses, and gains and losses on
securities and currency transactions, as well as appreciation or depreciation
from portfolio holdings.
Pages 60-63 STATEMENTS OF CHANGES IN NET ASSETS
This statement 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 64-69 NOTES TO FINANCIAL STATEMENTS
A description of the significant accounting policies of the Fund, and more
detailed information about the schedules and tables that appear in the report.
*The Fund Summaries and Schedule of Investments for many Funds include a summary
of the Fund's allocation of investments to certain "Related Industries,"such as
"Technology," "Communication," "Financial & Business Services," and "Health
Care." These Related Industries represent broad groupings of loosely-associated
industries and sectors developed by PIMCO Advisors for informational purposes,
and are not intended to show a Fund's investment allocation to (or concentration
in) a particular industry. (Individual industries are normally classified for
these purposes by reference to Standard Industrial Classification (SIC) codes
developed by the U.S. Office of Management and Budget.) Funds that invest a
substantial portion of their assets in Related Industries (such as "Technology")
may be subject to greater levels of risk and volatility because companies in
Related Industries are often subject to similar business risks and regulatory
burdens, and their securities may react similarly to economic, market, political
and other developments.
12
<PAGE>
PIMCO CAPITAL APPRECIATION FUND
June 30, 2000
OBJECTIVE
Growth of capital
PORTFOLIO
Primarily common stocks of
companies with market
capitalizations of at least $1
billion that have improving
fundamentals and whose stock
is reasonably valued by
the market
FUND INCEPTION DATE
3/8/91
TOTAL NET ASSETS
$793.8 million
NUMBER OF SECURITIES
IN THE PORTFOLIO
94 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital Management
--------------------------------------------------------------------------------
PERFORMANCE*
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
A SHARES B SHARES C SHARES Lipper Multi-
S&P 500 Cap. Core
Adjusted Adjusted Adjusted Index Fund Avg.
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 YEAR 22.73% 15.98% 21.79% 16.79% 20.85% 7.25% 11.54%
3 YEARS 21.41% 19.14% 20.52% 19.82% 20.52% 19.67% 16.27%
5 YEARS 23.84% 22.45% 22.94% 22.76% 22.94% 23.80% 19.33%
INCEPTION 19.43% 18.71% 18.76% 18.76% 18.56% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO Capital PIMCO Capital PIMCO Capital S&P 500 Index
Appreciation A Appreciation B Appreciation C
================ ================ ================ ================
<S> <C> <C> <C> <C>
03/31/1991 9,450 10,000 10,000 10,000
04/30/1991 9,172 9,699 9,699 10,024
05/31/1991 9,622 10,169 10,169 10,457
06/30/1991 9,101 9,612 9,612 9,978
07/31/1991 9,749 10,290 10,290 10,443
08/31/1991 10,051 10,603 10,603 10,691
09/30/1991 9,909 10,447 10,447 10,512
10/31/1991 10,245 10,794 10,794 10,653
11/30/1991 9,944 10,471 10,471 10,224
12/31/1991 11,323 11,915 11,915 11,393
01/31/1992 11,211 11,790 11,790 11,181
02/29/1992 11,328 11,907 11,907 11,327
03/31/1992 10,952 11,504 11,504 11,106
04/30/1992 10,925 11,468 11,468 11,432
05/31/1992 10,968 11,506 11,506 11,488
06/30/1992 10,619 11,133 11,133 11,317
07/31/1992 10,925 11,446 11,446 11,780
08/31/1992 10,650 11,151 11,151 11,539
09/30/1992 10,927 11,434 11,434 11,674
10/31/1992 11,304 11,822 11,822 11,714
11/30/1992 11,962 12,503 12,503 12,113
12/31/1992 12,124 12,664 12,664 12,262
01/31/1993 12,532 13,082 13,082 12,364
02/28/1993 12,378 12,913 12,913 12,533
03/31/1993 12,946 13,498 13,498 12,797
04/30/1993 12,624 13,155 13,155 12,488
05/31/1993 13,193 13,739 13,739 12,822
06/30/1993 13,400 13,945 13,945 12,860
07/31/1993 13,206 13,735 13,735 12,808
08/31/1993 13,684 14,224 14,224 13,294
09/30/1993 14,082 14,629 14,629 13,192
10/31/1993 14,113 14,651 14,651 13,465
11/30/1993 13,826 14,344 14,344 13,337
12/31/1993 14,215 14,738 14,738 13,498
01/31/1994 14,711 15,243 15,243 13,957
02/28/1994 14,507 15,023 15,023 13,578
03/31/1994 13,778 14,259 14,259 12,986
04/30/1994 13,826 14,300 14,300 13,152
05/31/1994 13,811 14,275 14,275 13,368
06/30/1994 13,418 13,860 13,860 13,041
07/31/1994 13,741 14,185 14,185 13,469
08/31/1994 14,147 14,595 14,595 14,021
09/30/1994 13,764 14,190 14,190 13,678
10/31/1994 14,075 14,503 14,503 13,986
11/30/1994 13,427 13,826 13,826 13,476
12/31/1994 13,555 13,949 13,949 13,676
01/31/1995 13,543 13,926 13,926 14,031
02/28/1995 14,215 14,610 14,610 14,578
03/31/1995 14,834 15,237 15,237 15,008
04/30/1995 15,339 15,747 15,747 15,450
05/31/1995 15,896 16,308 16,308 16,067
06/30/1995 16,579 16,999 16,999 16,440
07/31/1995 17,494 17,926 17,926 16,986
08/31/1995 17,658 18,083 18,083 17,028
09/30/1995 18,353 18,783 18,783 17,747
10/31/1995 18,003 18,414 18,414 17,683
11/30/1995 18,550 18,962 18,962 18,460
12/31/1995 18,518 18,917 18,917 18,815
01/31/1996 19,135 19,535 19,535 19,456
02/29/1996 19,854 20,257 20,257 19,636
03/31/1996 19,885 20,276 20,276 19,825
04/30/1996 20,128 20,512 20,512 20,117
05/31/1996 20,632 21,012 21,012 20,636
06/30/1996 20,587 20,953 20,953 20,715
07/31/1996 19,545 19,879 19,879 19,800
08/31/1996 20,379 20,716 20,716 20,217
09/30/1996 21,623 21,967 21,967 21,355
10/31/1996 22,161 22,499 22,499 21,944
11/30/1996 23,767 24,116 24,116 23,603
12/31/1996 23,387 23,715 23,715 23,135
01/31/1997 24,752 25,086 25,086 24,581
02/28/1997 24,484 24,815 24,802 24,773
03/31/1997 23,592 23,884 23,884 23,756
04/30/1997 24,331 24,621 24,621 25,174
05/31/1997 25,874 26,172 26,172 26,706
06/30/1997 26,983 27,270 27,270 27,903
07/31/1997 29,891 30,178 30,178 30,123
08/31/1997 28,756 29,015 29,015 28,436
09/30/1997 30,490 30,760 30,760 29,993
10/31/1997 29,930 30,165 30,165 28,991
11/30/1997 30,682 30,902 30,902 30,333
12/31/1997 31,275 31,489 31,482 30,854
01/31/1998 30,780 30,960 30,968 31,195
02/28/1998 33,033 33,214 33,205 33,445
03/31/1998 34,860 35,023 35,027 35,158
04/30/1998 34,873 35,037 35,013 35,511
05/31/1998 34,269 34,430 34,401 34,901
06/30/1998 35,725 35,893 35,833 36,319
07/31/1998 34,696 34,859 34,776 35,932
08/31/1998 29,023 29,160 29,076 30,737
09/30/1998 30,643 30,787 30,675 32,706
10/31/1998 32,043 32,194 32,049 35,366
11/30/1998 34,104 34,264 34,107 37,510
12/31/1998 36,648 36,820 36,617 39,671
01/31/1999 37,828 38,006 37,778 41,330
02/28/1999 36,307 36,478 36,244 40,045
03/31/1999 37,179 37,353 37,078 41,648
04/30/1999 38,450 38,631 38,327 43,261
05/31/1999 37,120 37,294 36,971 42,239
06/30/1999 39,351 39,535 39,174 44,584
07/31/1999 37,887 38,065 37,701 43,192
08/31/1999 37,133 37,307 36,928 42,977
09/30/1999 36,186 36,356 35,976 41,800
10/31/1999 38,712 38,893 38,447 44,445
11/30/1999 40,558 40,749 40,266 45,349
12/31/1999 44,776 44,987 44,421 48,020
01/31/2000 43,540 43,745 43,173 45,608
02/29/2000 46,980 47,201 46,562 44,744
03/31/2000 49,221 49,452 48,755 49,121
04/30/2000 47,050 47,271 46,580 47,643
05/31/2000 46,368 46,586 45,854 46,665
06/30/2000 48,288 48,515 47,738 47,816
</TABLE>
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.The adjusted returns include
the effect of the applicable sales charges. Excluding the 6-month, 1- & 3-year
returns, these returns represent the blended performance of the Fund's retail
class shares and the prior performance of the Fund's institutional shares,
adjusted, as necessary, to reflect retail share current sales charge and
different operating expenses. The retail shares were first offered in January
1997. Equity funds are subject to the basic stock market risk that a particular
security or securities, in general, may decrease in value. SEE PAGE 27 FOR
FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
--------------------------------------------------------------------------------
<S> <C>
GENERAL ELECTRIC CO. 2.4%
Capital Goods
--------------------------------------------------------------------------------
EXXON MOBIL CORP. 2.1%
Energy
--------------------------------------------------------------------------------
CORNING, INC. 2.0%
Technology
--------------------------------------------------------------------------------
PFIZER, INC. 2.0%
Health Care
--------------------------------------------------------------------------------
INTEL CORP. 1.9%
Technology
--------------------------------------------------------------------------------
NORTEL NETWORKS CORP. 1.7%
Technology
--------------------------------------------------------------------------------
CISCO SYSTEMS, INC. 1.7%
Technology
--------------------------------------------------------------------------------
VIACOM, INC. `B' 1.7%
Consumer Services
--------------------------------------------------------------------------------
SDL, INC. 1.7%
Technology
--------------------------------------------------------------------------------
CIENA CORP. 1.7%
Technology
--------------------------------------------------------------------------------
TOP TEN TOTAL 18.9%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
--------------------------------------------------------------------------------
<S> <C>
TECHNOLOGY 28.9%
--------------------------------------------------------------------------------
ENERGY 17.0%
--------------------------------------------------------------------------------
FINANCIAL & BUSINESS SERVICES 10.5%
--------------------------------------------------------------------------------
HEALTH CARE 10.0%
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY 7.1%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<S> <C>
COMMON STOCK 92.9%
--------------------------------------------------------------------------------
CASH EQUIVALENTS 7.1%
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
--------------------------------------------------------------------------------
PIMCO Capital Appreciation Fund posted strong returns for the twelve months
ended June 30, 2000. The Fund's A shares returned 22.73% during this period,
outpacing the S&P 500 Index return of 7.25%, as well as its Lipper Average
return of 11.54% for the same period.
The technology sector greatly contributed to the Fund's performance. These
stocks dominated the market in the past year, due to an increase in corporate
spending as companies realized technology's ability to boost profit margins.
Tech proved extremely attractive to investors because it offered the greatest
earnings growth potential of any sector. Many areas of technology benefited from
this surge in investment. For instance, Intel, a leading maker of chips for PCs,
posted returns of more than 100% over the past year. The company benefited from
a continuation of the global economic recovery, which fueled demand for
semiconductors, as well as greater pricing power for the entire industry.
Another positive contributor to the Fund's performance was Cisco Systems, the
networking giant. Cisco is one of the greatest beneficiaries of the Internet
explosion, and as companies rush to participate in Web commerce, strong demand
for Internet infrastructure and optical networking capabilities will benefit
Cisco. As the largest supplier of networking solutions, Cisco remains the market
leader in this industry.
The Fund's exposure to the energy sector also boosted its performance this
year. The Fund's second largest holding, Exxon Mobil, posted strong returns. The
company benefited from significantly higher prices for oil and gas. It announced
in May that it had completed the sale of it's California refinery and fuels
terminal and the assignment of California supply arrangements to Valero Energy
Corporation. This sale, coupled with the high demand for oil, helped Exxon's
stock price appreciate over the past year.
One disappointment for the Fund this year was the retail industry. Rising
interest rates and a general lack of enthusiasm on the part of investors hurt
this sector. The Fund's exposure to this area remains small, however, as
concerns about a slowing economy should continue to weaken retail sales in the
coming months.
Looking ahead, the manager is optimistic that the Fund is positioned to
continue its strong performance. The manager is confident that, in a rising
interest rate environment, investors will place more emphasis on valuations. In
such a climate, the manager's philosophy of purchasing growing but reasonably
priced stocks should bode well for the Fund.
13
<PAGE>
PIMCO EQUITY INCOME FUND
June 30, 2000
OBJECTIVE
Current income as a primary
objective and long-term growth
of capital as a secondary
objective
PORTFOLIO
Income-producing common stocks
of companies with market
capitalizations of more
than $2 billion
FUND INCEPTION DATE
3/8/91
TOTAL NET ASSETS
$69.9 million
NUMBER OF SECURITIES
IN THE PORTFOLIO
40 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
(as of 5/8/00)
--------------------------------------------------------------------------------
PERFORMANCE*
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
A SHARES B SHARES C SHARES Lipper
S&P 500 Equity Inc.
Adjusted Adjusted Adjusted Index Fund Avg.
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 YEAR -13.17% -17.95% -13.79% -17.15% -14.45% 7.25% -6.71%
3 YEARS 5.76% 3.78% 4.97% 4.35% 4.96% 19.67% 7.07%
5 YEARS 13.34% 12.07% 12.51% 12.31% 12.50% 23.80% 13.58%
INCEPTION 12.83% 12.15% 12.20% 12.20% 12.00% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO Equity Income PIMCO Equity Income PIMCO Equity Income S&P 500
A B C Index
================ ================ ================ ================
<S> <C> <C> <C> <C>
03/31/1991 9,450 10,000 10,000 10,000
04/30/1991 9,512 10,060 10,060 10,024
05/31/1991 10,048 10,619 10,619 10,457
06/30/1991 9,695 10,240 10,240 9,978
07/31/1991 10,234 10,803 10,803 10,443
08/31/1991 10,383 10,954 10,954 10,691
09/30/1991 10,437 11,004 11,004 10,512
10/31/1991 10,507 11,070 11,070 10,653
11/30/1991 10,084 10,618 10,618 10,224
12/31/1991 10,968 11,543 11,543 11,393
01/31/1992 11,237 11,818 11,818 11,181
02/29/1992 11,519 12,107 12,107 11,327
03/31/1992 11,328 11,899 11,899 11,106
04/30/1992 11,528 12,102 12,102 11,432
05/31/1992 11,544 12,111 12,111 11,488
06/30/1992 11,550 12,110 12,110 11,317
07/31/1992 12,063 12,640 12,640 11,780
08/31/1992 11,709 12,261 12,261 11,539
09/30/1992 11,805 12,354 12,354 11,674
10/31/1992 11,817 12,358 12,358 11,714
11/30/1992 12,170 12,720 12,720 12,113
12/31/1992 12,536 13,095 13,095 12,262
01/31/1993 12,596 13,149 13,149 12,364
02/28/1993 12,854 13,411 13,411 12,533
03/31/1993 13,144 13,705 13,705 12,797
04/30/1993 12,883 13,424 13,424 12,488
05/31/1993 12,977 13,514 13,514 12,822
06/30/1993 13,204 13,741 13,741 12,860
07/31/1993 13,178 13,706 13,706 12,808
08/31/1993 13,638 14,176 14,176 13,294
09/30/1993 13,623 14,151 14,151 13,192
10/31/1993 13,728 14,252 14,252 13,465
11/30/1993 13,586 14,095 14,095 13,337
12/31/1993 13,543 14,042 14,042 13,498
01/31/1994 13,989 14,495 14,495 13,957
02/28/1994 13,682 14,169 14,169 13,578
03/31/1994 13,132 13,590 13,590 12,986
04/30/1994 13,231 13,684 13,684 13,152
05/31/1994 13,308 13,755 13,755 13,368
06/30/1994 13,117 13,548 13,548 13,041
07/31/1994 13,544 13,982 13,982 13,469
08/31/1994 14,095 14,541 14,541 14,021
09/30/1994 13,830 14,259 14,259 13,678
10/31/1994 13,990 14,415 14,415 13,986
11/30/1994 13,235 13,628 13,628 13,476
12/31/1994 13,273 13,658 13,658 13,676
01/31/1995 13,701 14,090 14,090 14,031
02/28/1995 14,143 14,537 14,537 14,578
03/31/1995 14,547 14,942 14,942 15,008
04/30/1995 14,920 15,316 15,316 15,450
05/31/1995 15,464 15,866 15,866 16,067
06/30/1995 15,509 15,902 15,902 16,440
07/31/1995 16,047 16,444 16,444 16,986
08/31/1995 16,268 16,660 16,660 17,028
09/30/1995 16,691 17,083 17,083 17,747
10/31/1995 16,621 17,000 17,000 17,683
11/30/1995 17,187 17,568 17,568 18,460
12/31/1995 17,645 18,025 18,025 18,815
01/31/1996 17,904 18,278 18,278 19,456
02/29/1996 18,136 18,504 18,504 19,636
03/31/1996 18,493 18,857 18,857 19,825
04/30/1996 18,953 19,314 19,314 20,117
05/31/1996 19,253 19,607 19,607 20,636
06/30/1996 19,289 19,631 19,631 20,715
07/31/1996 18,396 18,709 18,709 19,800
08/31/1996 19,021 19,333 19,333 20,217
09/30/1996 19,671 19,981 19,981 21,355
10/31/1996 20,111 20,416 20,416 21,944
11/30/1996 21,620 21,935 21,935 23,603
12/31/1996 21,351 21,648 21,648 23,135
01/31/1997 21,819 22,115 22,115 24,581
02/28/1997 22,433 22,722 22,722 24,773
03/31/1997 21,681 21,951 21,946 23,756
04/30/1997 22,473 22,721 22,732 25,174
05/31/1997 23,867 24,117 24,128 26,706
06/30/1997 24,529 24,791 24,784 27,903
07/31/1997 26,075 26,339 26,332 30,123
08/31/1997 25,485 25,710 25,719 28,436
09/30/1997 27,068 27,286 27,287 29,993
10/31/1997 26,219 26,428 26,429 28,991
11/30/1997 27,293 27,497 27,498 30,333
12/31/1997 27,944 28,126 28,121 30,854
01/31/1998 28,036 28,219 28,214 31,195
02/28/1998 29,691 29,853 29,846 33,445
03/31/1998 31,074 31,212 31,216 35,158
04/30/1998 30,612 30,749 30,733 35,511
05/31/1998 30,427 30,563 30,528 34,901
06/30/1998 29,767 29,900 29,867 36,319
07/31/1998 28,597 28,725 28,655 35,932
08/31/1998 24,682 24,792 24,718 30,737
09/30/1998 26,499 26,617 26,515 32,706
10/31/1998 28,160 28,286 28,164 35,366
11/30/1998 30,084 30,218 30,076 37,510
12/31/1998 30,189 30,324 30,172 39,671
01/31/1999 29,534 29,666 29,493 41,330
02/28/1999 28,559 28,687 28,497 40,045
03/31/1999 28,808 28,936 28,730 41,648
04/30/1999 32,023 32,166 31,905 43,261
05/31/1999 32,705 32,851 32,588 42,239
06/30/1999 33,418 33,567 33,239 44,584
07/31/1999 32,238 32,382 32,063 43,192
08/31/1999 31,339 31,478 31,162 42,977
09/30/1999 30,345 30,481 30,130 41,800
10/31/1999 30,066 30,200 29,850 44,445
11/30/1999 29,161 29,291 28,904 45,349
12/31/1999 29,499 29,631 29,251 48,020
01/31/2000 27,638 27,761 27,373 45,608
02/29/2000 24,656 24,766 24,403 44,744
03/31/2000 28,110 28,235 27,809 49,121
04/30/2000 28,605 28,732 28,274 47,643
05/31/2000 28,219 28,344 27,892 46,665
06/30/2000 29,020 29,149 28,656 47,816
</TABLE>
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The adjusted returns
include the effect of the applicable sales charges. Excluding the 6-month, 1- &
3-year returns, these returns represent the blended performance of the Fund's
retail class shares and the prior performance of the Fund's institutional
shares, adjusted, as necessary, to reflect retail share current sales charge
and different operating expenses. The retail shares were first offered in
January 1997. The Fund may invest up to 15% in foreign securities, which may
entail greater risk due to foreign economic and political developments. SEE
PAGE 27 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
--------------------------------------------------------------------------------
<S> <C>
EMC CORP. 4.4%
Technology
--------------------------------------------------------------------------------
CALPINE CAPITAL TRUST II 3.7%
Utilities
--------------------------------------------------------------------------------
CITIGROUP, INC. 3.5%
Financial & Business Services
--------------------------------------------------------------------------------
GENERAL MOTORS CORP. `H' 3.2%
Consumer Discretionary
--------------------------------------------------------------------------------
COX COMMUNICATIONS, INC. 3.1%
Communications
--------------------------------------------------------------------------------
UTILICORP UNITED 3.1%
Energy
--------------------------------------------------------------------------------
TYCO INTERNATIONAL LTD. 3.1%
Capital Goods
--------------------------------------------------------------------------------
NEXTEL COMM. 2.9%
(5.250% due 01/15/2010)
Technology
--------------------------------------------------------------------------------
JABIL CIRCUIT, INC. 2.9%
Technology
--------------------------------------------------------------------------------
DUKE ENERGY CORP. 2.8%
Utilities
--------------------------------------------------------------------------------
TOP TEN TOTAL 32.7%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
--------------------------------------------------------------------------------
<S> <C>
TECHNOLOGY 19.9%
--------------------------------------------------------------------------------
FINANCIAL & BUSINESS SERVICES 19.4%
--------------------------------------------------------------------------------
ENERGY 17.0%
--------------------------------------------------------------------------------
HEALTH CARE 11.1%
--------------------------------------------------------------------------------
COMMUNICATIONS 10.6%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<S> <C>
COMMON STOCK 97.1%
--------------------------------------------------------------------------------
CONVERTIBLE BONDS & NOTES 2.9%
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
--------------------------------------------------------------------------------
For the one-year period ended June 30, 2000, PIMCO Equity Income Fund posted a
return of -13.17% for Class A shares.
With investors yearning for high earnings growth, the technology sector
dominated the market dramatically this year to the exclusion of virtually all
other sectors. Prior to its management change in May, the Fund had very little
exposure to the tech sector, which hurt the Fund's performance. However, recent
additions to the portfolio in this sector have helped boost performance. For
instance, EMC, the leading provider of data storage solutions, benefited from
increased corporate demand for computing storage due to greater data traffic and
Internet use.
The Fund's exposure to the energy sector contributed to its performance.
Energy stocks benefited from significantly higher prices for oil and gas.
Ultramar Diamond Shamrock, an independent petroleum refining company and one of
the Fund's top ten holdings, reported strong results this year. This news, along
with the ever-increasing demand for power generation, helped advance the stock's
price significantly.
The financial services sector also helped the Fund's performance, despite the
rising interest rate environment. Morgan Stanley Dean Witter, the financial
services giant, experienced strong earnings growth in the second half of the
year, benefiting from an increase in equity underwriting and merger activity.
The company also benefited from dynamic growth in its global business.
One disappointment for the Fund was Fortune Brands, a holding company
involved in a variety of businesses including home products, golf products,
liquor and office products. As concern about rising interest rates and a slowing
economy increased, investors shied away from retailers, and the company's
performance suffered. Fortune Brands has since been removed from the portfolio.
The manager's outlook for the Fund is optimistic. While the Fund's philosophy
of investing in dividend-paying, reasonably valued securities remains intact,
the Fund's increased exposure to technology issues could contribute positively
to the Fund's performance going forward.
14
<PAGE>
PIMCO GLOBAL INNOVATION FUND
June 30, 2000
OBJECTIVE
Capital
appreciation;
no consideration given to income
PORTFOLIO
Common stocks of
U.S. and non-U.S. technology-related
companies with market capitalizations
of more than $200 million
FUND INCEPTION DATE
12/31/99
TOTAL NET ASSETS
$104.7 million
NUMBER OF SECURITIES
IN THE
PORTFOLIO
60 (not including
short-term
investments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
--------------------------------------------------------------------------------
PERFORMANCE*
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
A SHARES B SHARES C SHARES
NASDAQ
Adjusted Adjusted Adjusted Composite Index
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCEPTION 89.30% 78.89% 89.10% 84.10% 88.10%
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO PIMCO PIMCO
Global Innovation Global Innovation Global Innovation NASDAQ Composite
A B C Index
================ ================ ================ ================
<S> <C> <C> <C> <C>
12/31/1999 9,450 10,000 10,000 10,000
01/31/2000 10,319 10,920 10,920 9,683
02/29/2000 18,144 19,200 19,200 11,541
03/31/2000 19,060 20,169 20,169 11,236
04/30/2000 16,491 17,450 17,450 9,487
05/31/2000 15,178 16,051 16,051 8,357
06/30/2000 17,890 18,410 18,810 9,746
</TABLE>
The portfolio had a substantial exposure to technology, which greatly
contributed to the Fund's performance for the inception period ended 6/30/00.
During this time the technology market produced historically high returns. *PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The adjusted returns include the
effect of the applicable sales charges. The Fund is less than 1-year old;
therefore the return was cummulative. Because this fund concentrates on
investments in the technology sector it may be subject to additional risk
compared to a diversified equity fund. The Fund also normally invests a
substantial portion of its assets in foreign securities, including emerging
markets securities, which may entail greater risk and volatility than U.S.
securities due to foreign economic and political developments, foreign currency
risk and other factors. Equity funds are subject to the basic stock market risk
that a particular security or securities, in general, may decrease in value. SEE
ADDITIONAL RISK DISCLOSURE ON PAGE 27.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
--------------------------------------------------------------------------------
<S> <C>
JUNIPER NETWORKS, INC. 3.3%
Technology
--------------------------------------------------------------------------------
NORTEL NETWORKS CORP. 2.9%
Technology
--------------------------------------------------------------------------------
INTEL CORP. 2.6%
Technology
--------------------------------------------------------------------------------
EMC CORP. 2.3%
Technology
--------------------------------------------------------------------------------
CISCO SYSTEMS, INC. 2.3%
Technology
--------------------------------------------------------------------------------
REDBACK NETWORKS, INC. 2.2%
Technology
--------------------------------------------------------------------------------
i2 TECHNOLOGIES, INC. 2.2%
Technology
--------------------------------------------------------------------------------
BEA SYSTEMS, INC. 2.2%
Technology
--------------------------------------------------------------------------------
DELL COMPUTER CORP. 2.2%
Technology
--------------------------------------------------------------------------------
VERITAS SOFTWARE CORP. 2.1%
Technology
--------------------------------------------------------------------------------
TOP TEN TOTAL 24.3%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 4 RELATED
INDUSTRIES % of Total Investments
--------------------------------------------------------------------------------
<S> <C>
TECHNOLOGY 73.8%
--------------------------------------------------------------------------------
HEALTH CARE 10.3%
--------------------------------------------------------------------------------
COMMUNICATIONS 7.2%
--------------------------------------------------------------------------------
CAPITAL GOODS 1.2%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<S> <C>
COMMON STOCK 92.5%
--------------------------------------------------------------------------------
CASH EQUIVALENTS 7.5%
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
--------------------------------------------------------------------------------
PIMCO Global Innovation Fund was seeded on December 31, 1999. The Fund has
turned in a stellar performance for the six-month period ended June 30, 2000,
returning 89.30%.
A continuation of the global economic recovery fueled the demand for
semiconductors and other technological commodities. Applied Materials, a
semiconductor manufacturer, experienced revenue growth as a result of increased
global demand. The semiconductor industry finally achieved some pricing power
after several years of extreme pricing pressure, and consequently, Applied
Materials' stock price rose significantly over the past year.
Bookham Technology, a British manufacturer of fiber optic components that
increase the capacity of fiber optic cables to transport voice and data, also
contributed to the Fund's performance. The company benefited from the explosion
in demand for telecommunications capabilities. Investors were attracted to
Bookham because it has the potential to revolutionize the fiber optics industry
because its silicon-based products offer significant advantages over the
competition. Deregulation in Europe should encourage the build-out of
fiber-optics-based networks by new competitive local exchange carriers (CLECs)
and Bookham could experience high growth as a result.
Another standout performer for the Fund was Cisco Systems, a top ten holding
in the Fund. As the number of companies engaging in commerce via the Internet
increases, Cisco will benefit from the strong demand for its Internet
infrastructure equipment and its optical networking capabilities. As the leader
in networking solutions for the Internet, Cisco should continue to see its
earnings grow as the Internet grows.
The Fund's exposure to biotechnology also enhanced its performance during
this year, as investors have been attracted to their robust product pipelines.
For instance, Teva Pharmaceuticals, the largest producer of branded and generic
pharmaceuticals in Israel, saw its stock price propelled upward as a result of
higher sales. It also recently acquired a Dutch pharmaceutical company, which
allowed it to substantially increase its presence in Europe. With product
offerings in all major therapeutic categories and a greater presence globally,
Teva is poised to continue its rapid growth.
Looking ahead, the manager is optimistic that the Fund will continue its
outperformance. The manager believes that technology could turn in a strong
performance in the second half of the year, fueled by strong corporate
fundamentals and a favorable economic environment.
15
<PAGE>
PIMCO GROWTH FUND
June 30, 2000
OBJECTIVE
Long-term growth of capital;
income is incidental
PORTFOLIO
Primarily common stocks of
companies with market
capitalizations of at
least $5 billion
FUND INCEPTION DATE
2/24/84
TOTAL NET ASSETS
$2.9 billion
NUMBER OF SECURITIES
IN THE
PORTFOLIO
41 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity
Advisors
--------------------------------------------------------------------------------
PERFORMANCE*
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
A SHARES B SHARES C SHARES Lipper Lg.-
S&P 500 Cap Growth
Adjusted Adjusted Adjusted Index Fund Avg.
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 YEAR 32.49% 25.20% 31.31% 26.31% 30.31% 7.25% 26.43%
5 YEARS 26.06% 24.64% 25.08% 24.91% 25.08% 23.80% 25.59%
10 YEARS 18.81% 18.14% 18.21% 18.21% 17.92% 17.80% 18.47%
INCEPTION 19.58% 19.17% 19.21% 19.21% 18.69% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO Growth PIMCO Growth PIMCO Growth S&P 500
A B C Index
================ ================ ================ ================
<S> <C> <C> <C> <C>
02/29/1984 9,450 10,000 10,000 10,000
03/31/1984 9,693 10,250 10,250 10,180
04/30/1984 9,756 10,310 10,310 10,251
05/31/1984 9,421 9,950 9,950 9,708
06/30/1984 9,645 10,180 10,180 9,912
07/31/1984 9,718 10,251 10,251 9,763
08/31/1984 10,499 11,067 11,067 10,866
09/30/1984 10,428 10,986 10,986 10,877
10/31/1984 10,522 11,078 11,078 10,910
11/30/1984 10,449 10,994 10,994 10,801
12/31/1984 10,662 11,211 11,211 11,082
01/31/1985 11,422 12,003 12,003 11,947
02/28/1985 11,517 12,097 12,097 12,095
03/31/1985 11,564 12,138 12,138 12,104
04/30/1985 11,511 12,075 12,075 12,093
05/31/1985 12,129 12,716 12,716 12,790
06/30/1985 12,478 13,073 13,073 12,976
07/31/1985 12,495 13,083 13,083 12,958
08/31/1985 12,432 13,009 13,009 12,848
09/30/1985 12,075 12,628 12,628 12,449
10/31/1985 12,573 13,140 13,140 13,022
11/30/1985 13,267 13,857 13,857 13,920
12/31/1985 14,018 14,632 14,632 14,588
01/31/1986 14,349 14,969 14,969 14,670
02/28/1986 15,509 16,170 16,170 15,768
03/31/1986 16,235 16,917 16,917 16,647
04/30/1986 16,256 16,928 16,928 16,459
05/31/1986 16,954 17,644 17,644 17,335
06/30/1986 17,257 17,949 17,949 17,628
07/31/1986 16,874 17,539 17,539 16,642
08/31/1986 17,838 18,529 18,529 17,877
09/30/1986 16,770 17,409 17,409 16,399
10/31/1986 17,584 18,243 18,243 17,345
11/30/1986 17,896 18,555 18,555 17,767
12/31/1986 17,397 18,026 18,026 17,313
01/31/1987 19,737 20,439 20,439 19,646
02/28/1987 21,026 21,762 21,762 20,422
03/31/1987 21,435 22,171 22,171 21,012
04/30/1987 21,395 22,117 22,117 20,825
05/31/1987 21,607 22,321 22,321 21,006
06/30/1987 22,545 23,276 23,276 22,067
07/31/1987 23,339 24,082 24,082 23,186
08/31/1987 24,015 24,763 24,763 24,050
09/30/1987 23,910 24,640 24,640 23,524
10/31/1987 18,490 19,040 19,040 18,457
11/30/1987 17,227 17,728 17,728 16,936
12/31/1987 18,859 19,396 19,396 18,225
01/31/1988 18,651 19,171 19,171 18,992
02/29/1988 19,819 20,359 20,359 19,877
03/31/1988 19,553 20,073 20,073 19,263
04/30/1988 19,727 20,239 20,239 19,477
05/31/1988 19,901 20,405 20,405 19,646
06/30/1988 21,087 21,608 21,608 20,548
07/31/1988 20,704 21,202 21,202 20,470
08/31/1988 19,628 20,087 20,087 19,774
09/30/1988 20,539 21,007 21,007 20,616
10/31/1988 20,685 21,143 21,143 21,189
11/30/1988 20,314 20,751 20,751 20,886
12/31/1988 20,781 21,214 21,214 21,252
01/31/1989 22,156 22,605 22,605 22,807
02/28/1989 21,739 22,166 22,166 22,239
03/31/1989 22,673 23,104 23,104 22,758
04/30/1989 24,319 24,767 24,767 23,939
05/31/1989 26,132 26,597 26,597 24,908
06/30/1989 25,803 26,246 26,246 24,766
07/31/1989 28,027 28,492 28,492 27,003
08/31/1989 28,881 29,341 29,341 27,532
09/30/1989 29,451 29,902 29,902 27,419
10/31/1989 28,559 28,977 28,977 26,783
11/30/1989 29,144 29,553 29,553 27,329
12/31/1989 28,774 29,160 29,160 27,985
01/31/1990 26,670 27,010 27,010 26,107
02/28/1990 27,340 27,672 27,672 26,444
03/31/1990 28,029 28,351 28,351 27,145
04/30/1990 27,870 28,174 28,174 26,466
05/31/1990 30,830 31,147 31,147 29,047
06/30/1990 31,364 31,667 31,667 28,849
07/31/1990 30,804 31,082 31,082 28,757
08/31/1990 28,537 28,775 28,775 26,157
09/30/1990 27,298 27,507 27,507 24,883
10/31/1990 27,248 27,442 27,442 24,776
11/30/1990 28,619 28,824 28,824 26,377
12/31/1990 29,058 29,246 29,246 27,113
01/31/1991 30,457 30,653 30,653 28,295
02/28/1991 32,753 32,926 32,926 30,318
03/31/1991 33,686 33,864 33,846 31,052
04/30/1991 33,363 33,539 33,504 31,126
05/31/1991 35,174 35,360 35,326 32,471
06/30/1991 33,431 33,608 33,556 30,984
07/31/1991 35,715 35,904 35,817 32,428
08/31/1991 37,513 37,711 37,589 33,196
09/30/1991 37,100 37,296 37,155 32,642
10/31/1991 38,323 38,525 38,366 33,079
11/30/1991 36,830 37,024 36,847 31,746
12/31/1991 41,485 41,704 41,492 35,378
01/31/1992 40,523 40,737 40,491 34,720
02/29/1992 40,811 41,027 40,761 35,171
03/31/1992 39,907 40,118 39,837 34,485
04/30/1992 39,695 39,905 39,587 35,499
05/31/1992 40,311 40,524 40,183 35,673
06/30/1992 39,061 39,267 38,913 35,142
07/31/1992 40,273 40,486 40,106 36,578
08/31/1992 38,772 38,977 38,567 35,829
09/30/1992 39,946 40,157 39,721 36,250
10/31/1992 40,600 40,815 40,338 36,375
11/30/1992 42,409 42,633 42,108 37,614
12/31/1992 42,695 42,920 42,356 38,075
01/31/1993 43,759 43,990 43,400 38,394
02/28/1993 42,853 43,079 42,474 38,917
03/31/1993 43,838 44,070 43,420 39,738
04/30/1993 41,887 42,109 41,469 38,778
05/31/1993 44,055 44,288 43,578 39,815
06/30/1993 44,430 44,665 43,933 39,932
07/31/1993 44,489 44,724 43,952 39,771
08/31/1993 45,986 46,230 45,411 41,280
09/30/1993 47,030 47,278 46,416 40,963
10/31/1993 46,890 47,138 46,257 41,811
11/30/1993 46,115 46,359 45,441 41,412
12/31/1993 46,997 47,245 46,303 41,913
01/31/1994 49,247 49,508 48,471 43,338
02/28/1994 48,339 48,595 47,561 42,162
03/31/1994 46,154 46,398 45,393 40,324
04/30/1994 45,526 45,767 44,742 40,841
05/31/1994 46,327 46,572 45,501 41,511
06/30/1994 45,180 45,419 44,353 40,493
07/31/1994 46,305 46,550 45,415 41,823
08/31/1994 48,599 48,856 47,648 43,538
09/30/1994 47,626 47,878 46,651 42,474
10/31/1994 49,379 49,640 48,341 43,428
11/30/1994 47,063 47,312 46,022 41,846
12/31/1994 47,001 47,250 45,958 42,467
01/31/1995 47,344 47,595 46,257 43,568
02/28/1995 48,764 49,022 47,611 45,266
03/31/1995 49,862 50,126 48,645 46,602
04/30/1995 51,488 51,760 50,206 47,974
05/31/1995 53,090 53,371 51,745 49,892
06/30/1995 55,219 55,512 53,789 51,051
07/31/1995 57,142 57,444 55,627 52,743
08/31/1995 57,646 57,950 56,086 52,876
09/30/1995 58,905 59,216 57,280 55,107
10/31/1995 59,133 59,446 57,441 54,910
11/30/1995 60,622 60,943 58,865 57,321
12/31/1995 60,368 60,687 58,582 58,425
01/31/1996 63,096 63,429 61,200 60,414
02/29/1996 64,279 64,619 62,289 60,974
03/31/1996 64,356 64,697 62,341 61,561
04/30/1996 65,180 65,525 63,093 62,468
05/31/1996 66,673 67,025 64,493 64,079
06/30/1996 65,797 66,145 63,612 64,324
07/31/1996 61,989 62,316 59,880 61,482
08/31/1996 63,584 63,920 61,383 62,778
09/30/1996 68,395 68,757 65,997 66,312
10/31/1996 69,501 69,869 67,034 68,140
11/30/1996 73,540 73,929 70,871 73,291
12/31/1996 71,490 71,868 68,849 71,839
01/31/1997 74,922 75,318 72,121 76,328
02/28/1997 72,868 73,253 70,098 76,926
03/31/1997 68,967 69,332 66,292 73,765
04/30/1997 71,871 72,251 69,057 78,169
05/31/1997 77,122 77,529 74,053 82,928
06/30/1997 79,292 79,711 76,076 86,643
07/31/1997 87,682 88,145 84,076 93,537
08/31/1997 82,167 82,601 78,752 88,297
09/30/1997 87,507 87,970 83,807 93,133
10/31/1997 85,013 85,462 81,368 90,023
11/30/1997 85,747 86,201 82,023 94,190
12/31/1997 87,761 88,225 83,882 95,807
01/31/1998 89,716 90,191 85,709 96,867
02/28/1998 96,539 97,050 92,170 103,853
03/31/1998 103,052 103,597 98,349 109,171
04/30/1998 105,075 105,631 100,176 110,269
05/31/1998 103,634 104,182 98,772 108,374
06/30/1998 111,828 112,420 106,496 112,776
07/31/1998 109,838 110,419 104,526 111,575
08/31/1998 89,957 90,433 85,565 95,444
09/30/1998 97,945 98,463 93,112 101,558
10/31/1998 101,922 102,461 96,836 109,818
11/30/1998 109,637 110,217 104,099 116,474
12/31/1998 122,816 123,465 116,497 123,186
01/31/1999 132,310 133,009 125,432 128,337
02/28/1999 126,779 127,450 120,114 124,349
03/31/1999 132,928 133,631 125,867 129,324
04/30/1999 129,578 130,263 122,607 134,332
05/31/1999 122,853 123,503 116,171 131,161
06/30/1999 132,693 133,395 125,383 138,440
07/31/1999 127,134 127,806 120,029 134,118
08/31/1999 127,401 128,074 120,233 133,450
09/30/1999 127,057 127,729 119,584 129,796
10/31/1999 137,437 138,164 129,282 138,010
11/30/1999 146,659 147,435 137,892 140,816
12/31/1999 173,292 174,209 162,878 149,110
01/31/2000 166,118 166,997 155,989 141,621
02/29/2000 183,228 184,197 171,946 138,938
03/31/2000 191,767 192,781 179,873 152,530
04/30/2000 174,527 175,450 163,630 147,940
05/31/2000 159,989 160,835 149,853 144,904
06/30/2000 175,844 176,774 164,628 148,476
</TABLE>
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The adjusted returns
include the effect of the applicable sales charges. The Fund's class A & B
shares commenced operation after the inception date shown. Total return for the
10-year & since inception periods (period beginning before the inception of
Class A & B shares) reflects the total return for the Fund's oldest class of
shares (Class C), adjusted to reflect any current sales charges and any
different operating expenses associated with those shares. Had Class A shares
return been adjusted to reflect the different sales charges, but without regard
to lower operating expenses of Class A shares, the total return figure would
have been lower than that shown, namely 18.11% & 18.81%, respectively. The Fund
may invest up to 15% in foreign securities, which may entail greater risk due
to foreign economic and political developments. SEE PAGE 27 FOR FOOTNOTES,
WHICH INCLUDE ADDITIONAL DETAILS.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
--------------------------------------------------------------------------------
<S> <C>
EMC CORP. 7.9%
Technology
--------------------------------------------------------------------------------
NOKIA CORP. SP- ADR 6.0%
Communications
--------------------------------------------------------------------------------
CISCO SYSTEMS, INC. 5.5%
Technology
--------------------------------------------------------------------------------
NORTEL NETWORKS CORP. 4.7%
Technology
--------------------------------------------------------------------------------
MORGAN STANLEY, DEAN WITTER,
DISCOVER AND CO. 4.3%
Financial & Business Services
--------------------------------------------------------------------------------
JDS UNIPHASE CORP. 4.1%
Technology
--------------------------------------------------------------------------------
CITIGROUP, INC. 3.6%
Financial & Business Services
--------------------------------------------------------------------------------
ENRON CORP. 3.3%
Energy
--------------------------------------------------------------------------------
SUN MICROSYSTEMS, INC. 3.1%
Technology
--------------------------------------------------------------------------------
OMNICOM GROUP 3.1%
Financial & Business Services
--------------------------------------------------------------------------------
TOP TEN TOTAL 45.6%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
--------------------------------------------------------------------------------
<S> <C>
TECHNOLOGY 43.7%
--------------------------------------------------------------------------------
FINANCIAL & BUSINESS SERVICES 18.7%
--------------------------------------------------------------------------------
HEALTH CARE 12.1%
--------------------------------------------------------------------------------
COMMUNICATIONS 8.8%
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY 7.5%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<S> <C>
COMMON STOCK 98.9%
--------------------------------------------------------------------------------
CASH EQUIVALENTS 1.1%
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
--------------------------------------------------------------------------------
PIMCO Growth Fund posted stellar returns for the one-year period ended June 30,
2000. The Fund's Class A shares returned 32.49%, significantly outpacing both
the S&P 500 Index's return of 7.25% and its Lipper Average return of 26.43%.
Technology was the best performing sector for the Fund over the past year.
Although this sector began to turn downwards in the second quarter, it dominated
the market for the previous three quarters and overwhelmingly outperformed all
other sectors over the past year. In particular, fiber optics and wireless
telecommunications saw explosive growth during this period. For example, JDS
Uniphase, a maker of fiber optic components for telecom networks, experienced an
enormous growth over the past year. The rush to add public network bandwidth to
handle growing Internet and data traffic has spawned rapid development of
optical networking technology, which in turn has driven demand for optical
components to dramatic proportions. As the largest independent supplier of this
equipment, JDS Uniphase has benefited enormously from this increased demand.
Another standout for the Fund was Cisco Systems, a company that creates
hardware and software solutions for engaging in networking on the Internet. As
the information superhighway grows faster than ever, and companies run to
participate in commerce over the Internet, Cisco benefits from this strong
demand for its Internet infrastructure equipment and its optical networking
capabilities. As the largest supplier of these products, Cisco exhibits major
market dominance in this industry.
The Fund also benefited from its exposure to the financial industry.
Citigroup, the banking and financial services company, contributed to the
Fund's performance despite the rising interest rate environment. The stock's
price increased over 33% since June of last year while its net revenue and
income increased significantly as well. These results reflect volume-related
growth in commissions and higher income at subsidiary Salomon Smith Barney,
which accounts for more than a quarter of the company's earnings.
Looking ahead, the manager believes the economic climate will be positive for
growth stocks, as inflation appears to be under control and there is a strong
possibility of significant tax cuts in the near future. The manager is
optimistic that PIMCO Growth Fund is poised to continue its outperformance in
this environment.
16
<PAGE>
PIMCO INNOVATION FUND
June 30, 2000
OBJECTIVE
Capital
appreciation;
no consideration given to income
PORTFOLIO
Common stocks
of technology-related companies
with market capitalizations of
more than $200 million
FUND INCEPTION DATE
12/22/94
TOTAL NET ASSETS
$5.5 billion
NUMBER OF SECURITIES
IN THE
PORTFOLIO
52 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity
Advisors
--------------------------------------------------------------------------------
PERFORMANCE*
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
A SHARES B SHARES C SHARES Lipper
S&P 500 Sc. & Tech.
Adjusted Adjusted Adjusted Index Fund Avg.
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 YEAR 115.04% 103.21% 114.17% 109.17% 113.17% 7.25% 84.03%
3 YEARS 72.57% 69.35% 71.46% 71.12% 71.48% 19.67% 53.47%
5 YEARS 48.51% 46.84% 47.50% 47.42% 47.49% 23.80% 35.99%
INCEPTION 49.77% 48.24% 48.74% 48.71% 48.73% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO Innovation PIMCO Innovation PIMCO Innovation S&P 500
A B C Index
================ ================ ================ ================
<S> <C> <C> <C> <C>
12/31/1994 9,450 10,000 10,000 10,000
01/31/1995 9,374 9,910 9,910 10,259
02/28/1995 9,971 10,541 10,541 10,659
03/31/1995 10,274 10,852 10,852 10,974
04/30/1995 10,719 11,313 11,313 11,297
05/31/1995 10,974 11,573 11,573 11,748
06/30/1995 12,186 12,846 12,846 12,021
07/31/1995 13,323 14,038 14,038 12,420
08/31/1995 13,635 14,359 14,349 12,451
09/30/1995 13,957 14,689 14,679 12,977
10/31/1995 13,787 14,499 14,499 12,930
11/30/1995 14,165 14,890 14,890 13,498
12/31/1995 13,733 14,433 14,422 13,758
01/31/1996 13,549 14,228 14,228 14,226
02/29/1996 14,208 14,915 14,915 14,358
03/31/1996 14,092 14,782 14,782 14,496
04/30/1996 15,594 16,341 16,341 14,710
05/31/1996 16,864 17,664 17,664 15,089
06/30/1996 16,176 16,925 16,925 15,147
07/31/1996 13,879 14,525 14,515 14,478
08/31/1996 14,722 15,387 15,387 14,783
09/30/1996 16,728 17,479 17,479 15,615
10/31/1996 16,612 17,336 17,336 16,046
11/30/1996 17,610 18,372 18,372 17,258
12/31/1996 16,974 17,699 17,699 16,917
01/31/1997 17,908 18,656 18,656 17,974
02/28/1997 15,884 16,533 16,534 18,114
03/31/1997 14,842 15,441 15,441 17,370
04/30/1997 15,077 15,680 15,680 18,407
05/31/1997 16,974 17,636 17,636 19,528
06/30/1997 17,132 17,792 17,782 20,403
07/31/1997 19,667 20,415 20,404 22,026
08/31/1997 19,196 19,915 19,905 20,792
09/30/1997 20,621 21,372 21,372 21,931
10/31/1997 19,294 19,988 19,988 21,198
11/30/1997 19,205 19,884 19,884 22,180
12/31/1997 18,507 19,144 19,133 22,560
01/31/1998 19,238 19,886 19,886 22,810
02/28/1998 21,600 22,312 22,301 24,455
03/31/1998 22,415 23,143 23,143 25,707
04/30/1998 24,034 24,793 24,794 25,966
05/31/1998 22,508 23,209 23,199 25,520
06/30/1998 25,372 26,145 26,134 26,556
07/31/1998 25,519 26,279 26,267 26,273
08/31/1998 20,420 21,018 21,017 22,475
09/30/1998 24,204 24,895 24,884 23,915
10/31/1998 25,114 25,814 25,814 25,860
11/30/1998 27,937 28,695 28,682 27,427
12/31/1998 33,208 34,084 34,080 29,008
01/31/1999 39,176 40,199 40,184 30,221
02/28/1999 34,871 35,753 35,752 29,281
03/31/1999 37,821 38,759 38,744 30,453
04/30/1999 37,352 38,248 38,233 31,632
05/31/1999 36,433 37,284 37,269 30,885
06/30/1999 40,947 41,881 41,865 32,600
07/31/1999 40,554 41,462 41,433 31,582
08/31/1999 43,668 44,617 44,591 31,425
09/30/1999 44,140 45,211 45,184 30,564
10/31/1999 50,284 51,464 51,437 32,498
11/30/1999 59,039 60,387 60,361 33,159
12/31/1999 79,507 81,287 81,258 35,112
01/31/2000 79,006 80,726 80,698 33,349
02/29/2000 110,364 112,694 112,646 32,717
03/31/2000 100,387 102,450 102,406 35,917
04/30/2000 84,596 86,294 86,257 34,837
05/31/2000 73,353 74,774 74,742 34,122
06/30/2000 88,053 89,589 89,660 34,963
</TABLE>
The portfolio had a substantial exposure to technology, which greatly
contributed to the Fund's performance for the inception period ended 6/30/00.
During this time the technology market produced historically high returns.
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The adjusted returns
include the effect of 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, adjusted to reflect any current sales charges
and any different operating expenses for those shares. Because this fund
concentrates on investments in the technology sector it may be subject to
additional risk compared to a diversified equity fund. Equity funds are
subject to the basic stock market risk that a particular security or
securities, in general, may decrease in value. SEE ADDITIONAL RISK DISCLOSURE
ON PAGE 27.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
--------------------------------------------------------------------------------
<S> <C>
MICRON TECHNOLOGY, INC. 4.2%
Technology
--------------------------------------------------------------------------------
SIEBEL SYSTEMS, INC. 3.9%
Technology
--------------------------------------------------------------------------------
INTEL CORP. 3.6%
Technology
--------------------------------------------------------------------------------
CISCO SYSTEMS, INC. 3.5%
Technology
--------------------------------------------------------------------------------
E-TEK DYNAMICS, INC. 3.4%
Technology
--------------------------------------------------------------------------------
CIENA CORP. 3.3%
Technology
--------------------------------------------------------------------------------
ORACLE CORP. 3.1%
Technology
--------------------------------------------------------------------------------
GEMSTAR INTERNATIONAL GROUP LTD. 3.1%
Consumer discretionary
--------------------------------------------------------------------------------
JUNIPER NETWORKS, INC. 3.0%
Technology
--------------------------------------------------------------------------------
NORTEL NETWORKS CORP. 3.0%
Technology
--------------------------------------------------------------------------------
TOP TEN TOTAL 34.1%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 4 RELATED
INDUSTRIES % of Total Investments
--------------------------------------------------------------------------------
<S> <C>
TECHNOLOGY 80.5%
--------------------------------------------------------------------------------
COMMUNICATIONS 9.2%
--------------------------------------------------------------------------------
HEALTH CARE 4.3%
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY 4.0%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<S> <C>
COMMON STOCK 97.9%
--------------------------------------------------------------------------------
CASH EQUIVALENTS 2.1%
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
--------------------------------------------------------------------------------
PIMCO Innovation Fund posted stellar results for the one-year period ended June
30, 2000, with Class A shares returning 115.04%. The Fund was able to
significantly outperform both the S&P 500 Index and its Lipper Average return
during this period.
The technology sector continued to lead the stock market, pushing the Fund's
performance higher this year. It led the market because it offered investors the
greatest earnings growth potential of any sector. A variety of areas within
technology showed tremendous strength, including telecommunications and
software. Ericsson, a manufacturer of advanced systems and products for wired
and mobile communications, is the largest provider of wireless infrastructure in
the world. Its stock rose over 140% this year due to the increase in cell phone
demand and subscriptions stimulated by "one rate" plans. Furthermore, it has
benefited from recent technological advances in cell phone handset technology,
which has shortened upgrade cycles for cell phones.
Another standout performer for the Fund was Veritas Software, a company that
makes enterprise data storage management software. Veritas' products are in
great demand as companies seek effective, economical ways to store larger
amounts of data. The company experienced a surge in sales growth in the past
year as corporate Internet use and the need for data storage increased.
The biotechnology sector also enhanced the Fund's performance during this
year. Investors showed renewed interest in this area because of its exciting
product offerings. For example, MedImmune is a company that is focused on using
advances in immunology and other biological sciences to develop important new
products that address significant medical needs. It benefited from
better-than-expected prescription trends for its products over the past year. As
a result, the company saw its stock price rise more than 200% since last June.
Its most important drug, Synagis, is used for the treatment of respiratory
problems in premature infants. The market opportunity and growth potential for
this company are huge, because we believe that biotech companies have strong
product pipelines which will boost their prices in the years to come.
The manager's outlook for the technology sector for the second half of the
year remains very positive, as he anticipates that the favorable economic
backdrop will remain in place and corporate fundamentals should continue to be
robust.
17
<PAGE>
PIMCO INTERNATIONAL FUND
June 30, 2000
OBJECTIVE
Capital appreciation; income is incidental
PORTFOLIO
Primarily common stocks of foreign
(non-U.S.) issuers with market
capitalizations of more than $500 million
FUND INCEPTION DATE
8/25/86
TOTAL NET ASSETS
$139.4 million
NUMBER OF SECURITIES
IN THE
PORTFOLIO
271 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Blairlogie Capital Management
(an independent sub-advisor not owned by PIMCO Advisors L.P.)
--------------------------------------------------------------------------------
PERFORMANCE*
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
A SHARES B SHARES C SHARES MSCI Lipper
EAFE International
Adjusted Adjusted Adjusted Index Fund Avg.
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 YEAR 11.85% 5.70% 10.00% 5.24% 8.96% 17.46% 24.46%
5 YEARS 8.32% 7.10% 7.30% 7.01% 7.29% 11.64% 13.15%
10 YEARS 6.15% 5.55% 5.61% 5.61% 5.25% 8.28% 9.19%
INCEPTION 7.66% 7.22% 7.25% 7.25% 6.77% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO International PIMCO International PIMCO International MSCI
A B C EAFE
Index
================ ================ ================ ================
<S> <C> <C> <C> <C>
08/31/1986 9,450 10,000 10,000 10,000
09/30/1986 9,163 9,690 9,690 9,897
10/31/1986 8,848 9,351 9,351 9,236
11/30/1986 9,307 9,830 9,830 9,768
12/31/1986 9,389 9,910 9,910 10,286
01/31/1987 10,332 10,899 10,899 11,378
02/28/1987 10,858 11,449 11,449 11,719
03/31/1987 11,273 11,878 11,878 12,680
04/30/1987 11,678 12,298 12,298 14,022
05/31/1987 11,742 12,358 12,358 14,022
06/30/1987 11,493 12,088 12,088 13,578
07/31/1987 11,709 12,308 12,308 13,556
08/31/1987 12,287 12,907 12,907 14,576
09/30/1987 12,247 12,857 12,857 14,349
10/31/1987 9,437 9,900 9,900 12,341
11/30/1987 9,224 9,670 9,670 12,465
12/31/1987 10,018 10,497 10,497 12,839
01/31/1988 9,804 10,266 10,266 13,071
02/29/1988 10,324 10,804 10,804 13,945
03/31/1988 10,572 11,057 11,057 14,805
04/30/1988 10,757 11,243 11,243 15,023
05/31/1988 10,617 11,090 11,090 14,545
06/30/1988 10,917 11,397 11,397 14,165
07/31/1988 10,809 11,276 11,276 14,612
08/31/1988 10,205 10,640 10,640 13,665
09/30/1988 10,612 11,057 11,057 14,265
10/31/1988 10,903 11,353 11,353 15,489
11/30/1988 10,963 11,408 11,408 16,414
12/31/1988 11,159 11,606 11,606 16,509
01/31/1989 11,652 12,111 12,111 16,803
02/28/1989 11,500 11,946 11,946 16,892
03/31/1989 11,645 12,089 12,089 16,564
04/30/1989 12,245 12,704 12,704 16,721
05/31/1989 12,623 13,088 13,088 15,814
06/30/1989 12,366 12,814 12,814 15,551
07/31/1989 13,698 14,186 14,186 17,508
08/31/1989 13,792 14,274 14,274 16,723
09/30/1989 14,151 14,636 14,636 17,488
10/31/1989 13,703 14,164 14,164 16,789
11/30/1989 14,126 14,592 14,592 17,636
12/31/1989 14,447 14,914 14,914 18,291
01/31/1990 13,756 14,192 14,192 17,615
02/28/1990 13,414 13,831 13,831 16,389
03/31/1990 13,096 13,494 13,494 14,685
04/30/1990 12,964 13,350 13,350 14,572
05/31/1990 14,130 14,541 14,541 16,240
06/30/1990 14,431 14,842 14,842 16,100
07/31/1990 14,850 15,263 15,263 16,331
08/31/1990 13,255 13,614 13,614 14,750
09/30/1990 11,774 12,085 12,085 12,698
10/31/1990 12,685 13,012 13,012 14,681
11/30/1990 12,388 12,699 12,699 13,819
12/31/1990 12,301 12,602 12,602 14,049
01/31/1991 12,615 12,916 12,916 14,507
02/28/1991 13,613 13,938 13,938 16,066
03/31/1991 13,240 13,543 13,543 15,106
04/30/1991 13,227 13,515 13,515 15,259
05/31/1991 13,467 13,761 13,761 15,422
06/30/1991 12,881 13,147 13,147 14,293
07/31/1991 13,600 13,883 13,883 14,999
08/31/1991 13,853 14,115 14,115 14,698
09/30/1991 14,025 14,292 14,292 15,531
10/31/1991 14,238 14,496 14,496 15,755
11/30/1991 13,480 13,720 13,720 15,024
12/31/1991 14,840 15,113 15,113 15,804
01/31/1992 14,678 14,946 14,946 15,471
02/29/1992 14,475 14,724 14,724 14,922
03/31/1992 13,879 14,100 14,100 13,941
04/30/1992 13,947 14,170 14,170 14,011
05/31/1992 14,326 14,530 14,530 14,953
06/30/1992 13,798 13,989 13,989 14,249
07/31/1992 13,865 14,045 14,045 13,889
08/31/1992 13,852 14,031 14,031 14,764
09/30/1992 13,594 13,754 13,754 14,477
10/31/1992 13,906 14,059 14,059 13,722
11/30/1992 14,068 14,211 14,211 13,856
12/31/1992 14,101 14,229 14,229 13,932
01/31/1993 14,130 14,259 14,259 13,934
02/28/1993 14,319 14,438 14,438 14,359
03/31/1993 15,455 15,573 15,573 15,615
04/30/1993 16,446 16,573 16,573 17,101
05/31/1993 16,708 16,827 16,827 17,467
06/30/1993 16,213 16,320 16,320 17,198
07/31/1993 16,796 16,887 16,887 17,804
08/31/1993 17,815 17,902 17,902 18,769
09/30/1993 17,728 17,814 17,798 18,351
10/31/1993 18,165 18,253 18,216 18,920
11/30/1993 17,349 17,434 17,395 17,270
12/31/1993 18,958 19,050 18,992 18,521
01/31/1994 19,863 19,960 19,890 20,091
02/28/1994 19,492 19,587 19,509 20,040
03/31/1994 18,185 18,274 18,185 19,181
04/30/1994 18,675 18,767 18,672 19,999
05/31/1994 18,779 18,871 18,748 19,889
06/30/1994 18,438 18,528 18,414 20,174
07/31/1994 19,031 19,124 18,977 20,373
08/31/1994 19,566 19,661 19,509 20,859
09/30/1994 19,180 19,274 19,114 20,207
10/31/1994 19,492 19,587 19,403 20,885
11/30/1994 18,230 18,319 18,140 19,885
12/31/1994 17,546 17,631 17,438 20,015
01/31/1995 16,546 16,626 16,444 19,250
02/28/1995 16,288 16,368 16,180 19,200
03/31/1995 17,061 17,144 16,941 20,403
04/30/1995 17,743 17,829 17,594 21,176
05/31/1995 17,818 17,905 17,656 20,929
06/30/1995 17,576 17,662 17,407 20,567
07/31/1995 18,667 18,758 18,480 21,854
08/31/1995 18,273 18,362 18,076 21,025
09/30/1995 18,470 18,560 18,262 21,441
10/31/1995 17,743 17,829 17,532 20,870
11/30/1995 18,106 18,195 17,889 21,457
12/31/1995 18,682 18,773 18,448 22,327
01/31/1996 19,349 19,443 19,086 22,424
02/29/1996 19,258 19,352 18,977 22,505
03/31/1996 19,591 19,687 19,303 22,989
04/30/1996 20,349 20,448 20,034 23,663
05/31/1996 20,046 20,144 19,738 23,233
06/30/1996 20,228 20,326 19,894 23,369
07/31/1996 19,243 19,337 18,915 22,692
08/31/1996 19,379 19,474 19,039 22,748
09/30/1996 19,743 19,839 19,381 23,358
10/31/1996 19,515 19,611 19,132 23,125
11/30/1996 19,985 20,083 19,598 24,051
12/31/1996 19,915 20,012 19,511 23,747
01/31/1997 20,118 20,216 19,687 22,921
02/28/1997 20,415 20,515 19,976 23,302
03/31/1997 20,165 20,264 19,719 23,392
04/30/1997 20,227 20,326 19,768 23,522
05/31/1997 21,290 21,394 20,795 25,058
06/30/1997 22,274 22,383 21,741 26,446
07/31/1997 22,649 22,759 22,094 26,879
08/31/1997 20,634 20,735 20,121 24,876
09/30/1997 21,993 22,100 21,420 26,274
10/31/1997 20,150 20,248 19,623 24,262
11/30/1997 19,900 19,997 19,366 24,019
12/31/1997 20,440 20,540 19,873 24,235
01/31/1998 20,713 20,815 20,137 25,350
02/28/1998 22,183 22,292 21,549 26,983
03/31/1998 23,807 23,923 23,120 27,819
04/30/1998 24,508 24,627 23,791 28,045
05/31/1998 24,439 24,559 23,702 27,916
06/30/1998 24,491 24,610 23,738 28,133
07/31/1998 25,380 25,504 24,602 28,426
08/31/1998 20,080 20,178 19,448 24,910
09/30/1998 19,106 19,200 18,477 24,152
10/31/1998 20,524 20,624 19,835 26,676
11/30/1998 21,721 21,827 20,964 28,050
12/31/1998 22,342 22,451 21,513 29,164
01/31/1999 22,342 22,451 21,513 29,085
02/28/1999 21,703 21,809 20,887 28,399
03/31/1999 22,625 22,736 21,768 29,591
04/30/1999 23,453 23,568 22,552 30,796
05/31/1999 22,569 22,679 21,691 29,216
06/30/1999 23,436 23,550 22,513 30,361
07/31/1999 23,926 24,043 22,963 31,272
08/31/1999 23,624 23,740 22,690 31,394
09/30/1999 23,435 23,550 22,474 31,717
10/31/1999 24,281 24,400 23,277 32,913
11/30/1999 25,240 25,364 24,177 34,065
12/31/1999 28,512 28,651 27,323 37,127
01/31/2000 27,009 27,141 25,831 34,774
02/29/2000 27,482 27,616 26,260 35,716
03/31/2000 28,147 28,284 26,803 37,109
04/30/2000 26,514 26,644 25,219 35,164
05/31/2000 25,655 25,780 24,382 34,313
06/30/2000 26,214 26,342 24,743 35,662
</TABLE>
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The adjusted returns
include the effect of the applicable sales charges. The Fund's class A & B
shares commenced operation after the inception date shown. Total return for the
10-year & since inception periods (period beginning before the inception of
Class A & B shares) reflects the total return for the Fund's oldest class of
shares (Class C), adjusted to reflect any current sales charges and any
different operating expenses associated with those shares. Had Class A shares
return been adjusted to reflect the different sales charges, but without regard
to lower operating expenses of Class A shares, the total return figure would
have been lower than that shown, namely 5.50% & 6.96%, respectively. The Fund
invests in smaller companies, which may entail greater risk than larger
companies, including higher volatility. The Fund may invest a substantial
portion of its assets in foreign securities, which may entail greater risk due
to foreign economic and political developments. SEE PAGE 27 FOR FOOTNOTES,
WHICH INCLUDE ADDITIONAL DETAILS.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
--------------------------------------------------------------------------------
<S> <C>
FINLAND/Nokia Corp. 3.5%
--------------------------------------------------------------------------------
UNITED KINGDOM/ 3.4%
Morgan Stanley Capital LLC
--------------------------------------------------------------------------------
UNITED KINGDOM/MSCI World Equity 2.5%
Benchmark Shares
--------------------------------------------------------------------------------
SWEDEN/MSCI Sweden Opal Series B 2.2%
--------------------------------------------------------------------------------
HUNGARY/Magyar Tavkozlesi Rt. 2.0%
--------------------------------------------------------------------------------
GERMANY/Deutsche Telekom 1.7%
--------------------------------------------------------------------------------
JAPAN/Nippon T&T 1.5%
--------------------------------------------------------------------------------
GERMANY/Allianz AG 1.4%
--------------------------------------------------------------------------------
JAPAN/Fanuc 1.2%
--------------------------------------------------------------------------------
JAPAN/Murata Manufacturing Co. 1.2%
--------------------------------------------------------------------------------
TOP TEN TOTAL 20.6%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 COUNTRIES % of Total Investments
--------------------------------------------------------------------------------
<S> <C>
JAPAN 21.0%
--------------------------------------------------------------------------------
GERMANY 10.3%
--------------------------------------------------------------------------------
FRANCE 8.6%
--------------------------------------------------------------------------------
UNITED KINGDOM 5.8%
--------------------------------------------------------------------------------
FINLAND 4.4%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
REGIONAL BREAKDOWN
--------------------------------------------------------------------------------
<S> <C>
EUROPE 56.4%
--------------------------------------------------------------------------------
ASIA 34.2%
--------------------------------------------------------------------------------
LATIN AMERICA 2.1%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<S> <C>
COMMON STOCK 92.6%
--------------------------------------------------------------------------------
CASH EQUIVALENTS 7.4%
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
--------------------------------------------------------------------------------
PIMCO International Fund returned 11.85% for the one-year period ended June 30,
2000 for Class A shares.
The global economic recovery that began in the second half of 1999 proved to
be positive for the Fund this year. Many emerging markets countries made
significant comebacks during the year, and a number of developed countries also
posted solid returns.
However, the Fund's underweight position within these rebounding emerging
market regions proved to be harmful and resulted in its underperformance when
compared to its peers. As evidenced by our Top 10 holdings, we had a greater
exposure to more established names in overseas areas, and although this approach
is beneficial to the Fund's stability, it detracted from returns.
In the technology sector, the upsurge in telecommunications positively
contributed to the Fund's performance. One of the Fund's top ten holdings,
Nokia, posted strong gains. The Finnish cell phone handset maker benefited from
an increase in first-time cell phone subscriptions, stimulated by the
introduction of affordable "one rate" plans. Nokia's performance was also
boosted by shorter upgrade cycles for cell phone handsets, which resulted from
technological advances such as longer battery life and the switch from analog to
digital technology. Nokia should continue to perform well, as many less
developed countries build out their wireless infrastructure.
Another contributor to the Fund from the telecommunications sector was
Deutsche Telekom. The German telecommunications giant benefited from Germany's
significant economic recovery after a serious recession in 1998. Furthermore,
the explosive growth in cell phone handset subscriptions boosted the company's
stock price this year.
The Fund's exposure to Sony also enhanced its performance. Sony, the world's
leading consumer electronics company, benefited from the worldwide increase in
Internet usage. Investors bid up shares of the company, as Sony is attempting to
leverage its strong music and movie franchises in order to capture interactive
media opportunities on the Internet. As the number of Internet subscribers
grows, the company could see its business increase significantly.
Looking ahead, the manager is cautiously optimistic about the prospects for
international stocks. Given the slowing economy in the United States, the
manager believes international stocks could outperform in the coming year.
18
<PAGE>
PIMCO MID-CAP FUND
June 30, 2000
OBJECTIVE
Growth of capital
PORTFOLIO
Primarily common stocks of companies
with market capitalizations of more
than $500 million (excluding the
largest 200 companies) that have
improving fundamentals and whose
stock is reasonably valued
FUND INCEPTION DATE
8/26/91
TOTAL NET ASSETS
$1.1 billion
NUMBER OF SECURITIES
IN THE
PORTFOLIO
77 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital Management
--------------------------------------------------------------------------------
PERFORMANCE*
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
A SHARES B SHARES C SHARES
Russell 2000 Lipper Mid-Cap
Adjusted Adjusted Adjusted Mid-Cap Index Core Fund Avg.
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 YEAR 34.28% 26.89% 33.27% 28.27% 32.25% 12.65% 37.60%
3 YEARS 19.01% 16.79% 18.13% 17.41% 18.12% 16.16% 20.94%
5 YEARS 21.56% 20.20% 20.66% 20.47% 20.67% 18.74% 20.59%
INCEPTION 18.33% 17.58% 17.64% 17.64% 17.46% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO Mid-Cap PIMCO Mid-Cap PIMCO Mid-Cap Russell 2000 Mid-Cap
A B C Index
================ ================ ================ ================
<S> <C> <C> <C> <C>
08/31/1991 9,450 10,000 10,000 10,000
09/30/1991 9,400 9,940 9,940 9,942
10/31/1991 9,741 10,295 10,295 10,145
11/30/1991 9,463 9,995 9,995 9,726
12/31/1991 10,694 11,288 11,288 10,816
01/31/1992 10,702 11,290 11,290 11,019
02/29/1992 10,803 11,390 11,390 11,272
03/31/1992 10,477 11,038 11,038 10,984
04/30/1992 10,404 10,955 10,955 11,070
05/31/1992 10,410 10,954 10,954 11,142
06/30/1992 10,131 10,654 10,654 10,961
07/31/1992 10,406 10,936 10,936 11,419
08/31/1992 10,098 10,606 10,606 11,156
09/30/1992 10,428 10,946 10,946 11,388
10/31/1992 10,765 11,293 11,293 11,666
11/30/1992 11,410 11,962 11,962 12,254
12/31/1992 11,629 12,184 12,184 12,583
01/31/1993 12,056 12,624 12,624 12,835
02/28/1993 11,680 12,223 12,223 12,849
03/31/1993 12,153 12,710 12,710 13,267
04/30/1993 11,816 12,350 12,350 12,916
05/31/1993 12,318 12,867 12,867 13,326
06/30/1993 12,695 13,253 13,253 13,476
07/31/1993 12,535 13,077 13,077 13,541
08/31/1993 13,151 13,712 13,712 14,143
09/30/1993 13,500 14,067 14,067 14,198
10/31/1993 13,359 13,911 13,911 14,209
11/30/1993 12,981 13,510 13,510 13,880
12/31/1993 13,410 13,947 13,947 14,383
01/31/1994 13,683 14,222 14,222 14,779
02/28/1994 13,660 14,190 14,190 14,578
03/31/1994 13,157 13,659 13,659 13,957
04/30/1994 13,201 13,695 13,695 14,053
05/31/1994 12,957 13,434 13,434 14,072
06/30/1994 12,522 12,974 12,974 13,656
07/31/1994 12,801 13,255 13,255 14,124
08/31/1994 13,467 13,936 13,936 14,794
09/30/1994 13,118 13,567 13,567 14,432
10/31/1994 13,378 13,827 13,827 14,543
11/30/1994 12,742 13,161 13,161 13,901
12/31/1994 13,041 13,461 13,461 14,082
01/31/1995 12,912 13,320 13,320 14,371
02/28/1995 13,693 14,118 14,118 15,115
03/31/1995 14,129 14,558 14,558 15,547
04/30/1995 14,443 14,873 14,873 15,782
05/31/1995 14,936 15,372 15,372 16,300
06/30/1995 15,812 16,264 16,264 16,848
07/31/1995 17,299 17,782 17,782 17,666
08/31/1995 17,427 17,903 17,903 17,937
09/30/1995 17,670 18,142 18,142 18,342
10/31/1995 17,393 17,846 17,846 17,932
11/30/1995 17,723 18,173 18,173 18,824
12/31/1995 17,834 18,275 18,275 18,933
01/31/1996 18,181 18,619 18,619 19,332
02/29/1996 18,616 19,054 19,054 19,786
03/31/1996 18,844 19,274 19,274 20,073
04/30/1996 19,231 19,659 19,659 20,641
05/31/1996 19,550 19,972 19,972 20,953
06/30/1996 19,146 19,547 19,547 20,638
07/31/1996 18,224 18,593 18,593 19,361
08/31/1996 19,212 19,589 19,589 20,283
09/30/1996 20,554 20,945 20,945 21,285
10/31/1996 20,685 21,065 21,065 21,455
11/30/1996 21,937 22,327 22,327 22,762
12/31/1996 21,914 22,289 22,289 22,530
01/31/1997 22,809 23,183 23,196 23,373
02/28/1997 22,416 22,783 22,783 23,338
03/31/1997 21,776 22,108 22,107 22,346
04/30/1997 22,231 22,558 22,558 22,902
05/31/1997 23,756 24,097 24,097 24,573
06/30/1997 24,901 25,235 25,248 25,377
07/31/1997 27,201 27,563 27,562 27,494
08/31/1997 27,164 27,500 27,500 27,194
09/30/1997 29,059 29,402 29,402 28,747
10/31/1997 28,444 28,752 28,751 27,628
11/30/1997 28,629 28,927 28,938 28,286
12/31/1997 29,283 29,577 29,576 29,067
01/31/1998 28,761 29,021 29,020 28,520
02/28/1998 30,443 30,703 30,702 30,750
03/31/1998 31,369 31,617 31,616 32,208
04/30/1998 31,812 32,041 32,054 32,289
05/31/1998 30,716 30,929 30,928 31,291
06/30/1998 31,303 31,485 31,484 31,724
07/31/1998 30,389 30,560 30,559 30,211
08/31/1998 24,965 25,089 25,089 25,377
09/30/1998 26,765 26,898 26,878 27,019
10/31/1998 27,496 27,633 27,592 28,862
11/30/1998 29,008 29,152 29,091 30,227
12/31/1998 31,468 31,625 31,552 31,998
01/31/1999 30,111 30,262 30,160 31,944
02/28/1999 28,467 28,609 28,505 30,880
03/31/1999 28,604 28,747 28,630 31,847
04/30/1999 30,071 30,221 30,076 34,200
05/31/1999 30,002 30,152 29,980 34,101
06/30/1999 31,262 31,418 31,233 35,305
07/31/1999 30,399 30,551 30,343 34,334
08/31/1999 29,372 29,518 29,299 33,445
09/30/1999 28,811 28,955 28,727 32,267
10/31/1999 29,785 29,933 29,675 33,797
11/30/1999 31,482 31,639 31,346 34,770
12/31/1999 35,415 35,591 35,243 37,830
01/31/2000 34,565 34,737 34,365 36,578
02/29/2000 42,062 42,271 41,805 39,391
03/31/2000 43,791 44,009 43,490 41,648
04/30/2000 41,071 41,276 40,772 39,678
05/31/2000 40,180 40,380 39,854 38,626
06/30/2000 41,980 42,189 41,624 39,770
</TABLE>
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The adjusted returns
include the effect of the applicable sales charges. Excluding the 6-month, 1- &
3-year returns, these returns represent the blended performance of the Fund's
retail class shares and the prior performance of the Fund's institutional
shares, adjusted, as necessary, to reflect retail share current sales charge
and different operating expenses. The retail shares were first offered in
January 1997. The Fund invests in medium companies, which may entail greater
risk than larger companies, including higher volatility. SEE PAGE 27 FOR
FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
--------------------------------------------------------------------------------
<S> <C>
ALLERGAN, INC. 1.9%
Health Care
--------------------------------------------------------------------------------
INTEGRATED DEVICE TECHNOLOGY, INC. 1.8%
Technology
--------------------------------------------------------------------------------
TEKTRONIX, INC. 1.8%
Technology
--------------------------------------------------------------------------------
WATERS CORP. 1.8%
Capital Goods
--------------------------------------------------------------------------------
BROCADE COMM. SYSTEMS, INC. 1.7%
Technology
--------------------------------------------------------------------------------
CIENA CORP. 1.6%
Technology
--------------------------------------------------------------------------------
IDEC PHARMACEUTICALS CORP. 1.6%
Health Care
--------------------------------------------------------------------------------
ADC TELECOMMUNICATION, INC. 1.6%
Communications
--------------------------------------------------------------------------------
DENDRITE INTERNATIONAL, INC. 1.6%
Technology
--------------------------------------------------------------------------------
APACHE CORP. 1.6%
Energy
--------------------------------------------------------------------------------
TOP TEN TOTAL 17.0%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
--------------------------------------------------------------------------------
<S> <C>
TECHNOLOGY 31.5%
--------------------------------------------------------------------------------
FINANCIAL & BUSINESS SERVICES 17.0%
--------------------------------------------------------------------------------
ENERGY 16.7%
--------------------------------------------------------------------------------
HEALTH CARE 5.9%
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY 5.0%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<S> <C>
COMMON STOCK 93.7%
--------------------------------------------------------------------------------
CASH EQUIVALENTS 6.3%
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
--------------------------------------------------------------------------------
For the one-year period ended June 30, 2000, PIMCO Mid-Cap Fund posted a return
of 34.28%, significantly outperforming the Russell 2000 Mid-Cap Index.
The technology sector contributed to the Fund's strong performance, proving
extremely attractive to investors because of its high earnings growth and solid
fundamentals. A variety of areas within technology showed strength at different
times during the year, including semiconductor manufacturers,
business-to-business Internet companies, telecommunications providers and
software companies.
The energy sector also contributed to the Fund's performance over the past
year. Apache, an independent gas and oil exploration company, saw its stock
price soar over the past year, benefiting from rising oil and gas prices. And,
as a result of a recent acquisition, the company was able to increase its oil
and gas production to meet greater demand. With energy prices showing no signs
of retreating, this company should continue to perform well in the coming
months.
The biotechnology sector also enhanced the Fund's performance during this
period. Investors were attracted to biotech companies because of their strong
product pipelines. In addition, the industry is benefiting from a strong
demographic trend--the aging of Baby Boomers--that has increased demand for
pharmaceutical products. Allergan, the Fund's largest holding and a provider of
eye care and specialty pharmaceutical products, benefited from having a large
share of a growing market--ocular pharmaceuticals. Fourth-largest holding Waters
Corporation also had a substantial impact on the Fund's performance. The
company, which manufactures equipment for the biotechnology industry, enjoyed
higher revenues as a result of increased sales of its equipment, as
biotechnological research continues to expand to new frontiers.
One disappointment for the Fund this year was the retail industry. Rising
interest rates and a general lack of enthusiasm on the part of investors hurt
this sector. The Fund's exposure to this area remains small, however, as
concerns about a slowing economy should continue to weaken retail sales in the
coming months.
Looking ahead, the manager believes that investors will pay more attention to
valuation as a result of the recent market correction and rising interest rates.
In addition, the manager is optimistic that mid-cap stocks in general and PIMCO
Mid-Cap Fund in particular will continue to outperform the stock market given
the positive economic climate.
19
<PAGE>
PIMCO OPPORTUNITY FUND
June 30, 2000
OBJECTIVE
Capital
appreciation;
no consideration given to income
PORTFOLIO
Common stocks of companies with
market capitalizations of
between $100 million and
$2 billion
FUND INCEPTION DATE
2/24/84
TOTAL NET ASSETS
$619.0 million
NUMBER OF SECURITIES
IN THE
PORTFOLIO
94 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity
Advisors
--------------------------------------------------------------------------------
PERFORMANCE*
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
A SHARES B SHARES C SHARES Lipper Sm.
Russell 2000 Cap. Growth
Adjusted Adjusted Adjusted Index Fund Avg.
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 YEAR 50.77% 42.48% 49.78% 44.78% 48.88% 14.31% 57.71%
5 YEARS 16.57% 15.26% 15.73% 15.54% 15.73% 14.27% 21.89%
10 YEARS 20.91% 20.23% 20.30% 20.30% 20.05% 13.56% 18.29%
INCEPTION 19.32% 18.91% 18.93% 18.93% 18.45% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO Opportunity PIMCO Opportunity PIMCO Opportunity Russell 2000
A B C Index
================ ================ ================ ================
<S> <C> <C> <C> <C>
02/29/1984 9,450 10,000 10,000 10,000
03/31/1984 9,087 9,610 9,610 10,059
04/30/1984 9,246 9,771 9,771 10,004
05/31/1984 8,981 9,486 9,486 9,485
06/30/1984 9,275 9,791 9,790 9,757
07/31/1984 9,046 9,542 9,542 9,281
08/31/1984 10,520 11,091 11,091 10,373
09/30/1984 10,136 10,679 10,680 10,293
10/31/1984 10,034 10,564 10,564 10,104
11/30/1984 9,642 10,144 10,145 9,835
12/31/1984 10,143 10,665 10,666 9,995
01/31/1985 11,884 12,489 12,490 11,320
02/28/1985 12,135 12,745 12,746 11,624
03/31/1985 11,570 12,143 12,145 11,386
04/30/1985 11,361 11,916 11,918 11,245
05/31/1985 11,829 12,399 12,401 11,658
06/30/1985 12,100 12,675 12,677 11,790
07/31/1985 12,380 12,960 12,963 12,120
08/31/1985 12,030 12,586 12,588 12,004
09/30/1985 11,350 11,866 11,869 11,278
10/31/1985 11,700 12,224 12,227 11,706
11/30/1985 12,565 13,120 13,123 12,549
12/31/1985 13,269 13,847 13,850 13,101
01/31/1986 13,338 13,911 13,914 13,308
02/28/1986 14,194 14,795 14,799 14,264
03/31/1986 14,850 15,470 15,474 14,956
04/30/1986 15,325 15,954 15,959 15,177
05/31/1986 16,068 16,718 16,723 15,701
06/30/1986 16,322 16,971 16,976 15,682
07/31/1986 14,515 15,082 15,086 14,215
08/31/1986 14,646 15,209 15,213 14,668
09/30/1986 13,405 13,910 13,914 13,763
10/31/1986 13,840 14,352 14,357 14,309
11/30/1986 14,096 14,609 14,613 14,260
12/31/1986 13,970 14,469 14,473 13,848
01/31/1987 15,566 16,113 16,118 15,450
02/28/1987 17,050 17,640 17,645 16,750
03/31/1987 17,726 18,328 18,333 17,200
04/30/1987 17,286 17,862 17,867 16,703
05/31/1987 17,105 17,664 17,669 16,650
06/30/1987 17,398 17,956 17,960 17,076
07/31/1987 18,053 18,620 18,625 17,607
08/31/1987 19,037 19,622 19,628 18,125
09/30/1987 18,935 19,506 19,511 17,791
10/31/1987 14,011 14,423 14,427 12,344
11/30/1987 13,170 13,549 13,552 11,682
12/31/1987 14,975 15,397 15,400 12,621
01/31/1988 14,883 15,292 15,295 13,169
02/29/1988 16,044 16,476 16,480 14,354
03/31/1988 16,682 17,120 17,125 15,028
04/30/1988 17,160 17,599 17,605 15,368
05/31/1988 16,513 16,925 16,930 14,951
06/30/1988 18,103 18,545 18,549 16,018
07/31/1988 17,207 17,616 17,620 15,865
08/31/1988 16,734 17,121 17,125 15,459
09/30/1988 17,360 17,751 17,755 15,867
10/31/1988 16,932 17,302 17,305 15,691
11/30/1988 16,634 16,987 16,990 15,168
12/31/1988 17,202 17,556 17,559 15,762
01/31/1989 18,183 18,546 18,549 16,465
02/28/1989 17,973 18,322 18,324 16,586
03/31/1989 18,705 19,056 19,059 16,977
04/30/1989 20,026 20,390 20,394 17,717
05/31/1989 21,453 21,830 21,833 18,479
06/30/1989 20,729 21,081 21,083 18,058
07/31/1989 22,379 22,747 22,748 18,760
08/31/1989 23,101 23,465 23,468 19,217
09/30/1989 23,307 23,660 23,663 19,277
10/31/1989 21,949 22,267 22,268 18,134
11/30/1989 22,406 22,716 22,718 18,250
12/31/1989 22,641 22,941 22,942 18,323
01/31/1990 20,588 20,847 20,848 16,722
02/28/1990 21,251 21,505 21,506 17,241
03/31/1990 22,133 22,385 22,385 17,918
04/30/1990 21,662 21,895 21,895 17,332
05/31/1990 23,681 23,922 23,922 18,560
06/30/1990 24,181 24,413 24,412 18,609
07/31/1990 23,979 24,193 24,192 17,793
08/31/1990 21,164 21,338 21,337 15,413
09/30/1990 20,004 20,156 20,155 14,043
10/31/1990 19,330 19,463 19,462 13,185
11/30/1990 20,835 20,967 20,966 14,191
12/31/1990 21,150 21,259 21,257 14,748
01/31/1991 23,175 23,278 23,277 16,077
02/28/1991 24,750 24,845 24,844 17,880
03/31/1991 27,260 27,364 27,351 19,134
04/30/1991 26,637 26,738 26,724 19,085
05/31/1991 29,302 29,414 29,405 19,994
06/30/1991 26,515 26,617 26,585 18,838
07/31/1991 28,800 28,910 28,866 19,497
08/31/1991 30,392 30,508 30,450 20,216
09/30/1991 31,067 31,186 31,112 20,374
10/31/1991 32,850 32,976 32,871 20,912
11/30/1991 30,652 30,769 30,660 19,944
12/31/1991 35,710 35,847 35,732 21,540
01/31/1992 38,434 38,581 38,415 23,287
02/29/1992 39,805 39,957 39,757 23,967
03/31/1992 38,453 38,600 38,396 23,156
04/30/1992 36,338 36,477 36,249 22,343
05/31/1992 36,681 36,822 36,575 22,640
06/30/1992 35,824 35,961 35,693 21,576
07/31/1992 37,252 37,395 37,074 22,326
08/31/1992 35,748 35,885 35,559 21,695
09/30/1992 37,786 37,931 37,571 22,195
10/31/1992 39,843 39,995 39,584 22,895
11/30/1992 43,157 43,322 42,842 24,648
12/31/1992 46,271 46,448 45,900 25,506
01/31/1993 49,141 49,329 48,711 26,369
02/28/1993 46,541 46,719 46,133 25,761
03/31/1993 49,912 50,102 49,429 26,596
04/30/1993 48,236 48,421 47,743 25,865
05/31/1993 52,472 52,673 51,930 27,009
06/30/1993 55,245 55,456 54,624 27,177
07/31/1993 57,227 57,446 56,542 27,552
08/31/1993 61,097 61,331 60,342 28,742
09/30/1993 64,371 64,617 63,520 29,553
10/31/1993 63,966 64,210 63,094 30,314
11/30/1993 60,653 60,885 59,799 29,327
12/31/1993 63,452 63,695 62,499 30,329
01/31/1994 65,907 66,159 64,890 31,279
02/28/1994 64,327 64,573 63,296 31,165
03/31/1994 59,376 59,604 58,366 29,524
04/30/1994 59,419 59,646 58,387 29,699
05/31/1994 56,319 56,534 55,302 29,365
06/30/1994 51,429 51,626 50,456 28,374
07/31/1994 54,571 54,779 53,518 28,841
08/31/1994 58,835 59,060 57,651 30,447
09/30/1994 60,063 60,293 58,826 30,344
10/31/1994 63,205 63,447 61,867 30,221
11/30/1994 59,813 60,042 58,511 29,000
12/31/1994 60,895 61,128 59,538 29,776
01/31/1995 58,942 59,168 57,566 29,400
02/28/1995 62,206 62,444 60,729 30,624
03/31/1995 65,383 65,633 63,805 31,149
04/30/1995 67,272 67,530 65,604 31,841
05/31/1995 68,624 68,887 66,860 32,388
06/30/1995 75,042 75,329 73,077 34,069
07/31/1995 82,125 82,439 79,945 36,031
08/31/1995 81,223 81,534 79,012 36,777
09/30/1995 83,885 84,206 81,548 37,433
10/31/1995 81,182 81,492 78,860 35,759
11/30/1995 84,917 85,241 82,436 37,262
12/31/1995 86,817 87,149 84,261 38,245
01/31/1996 82,750 83,067 80,227 38,203
02/29/1996 86,630 86,962 83,965 39,394
03/31/1996 90,138 90,483 87,323 40,196
04/30/1996 99,173 99,552 95,989 42,345
05/31/1996 105,868 106,273 102,407 44,014
06/30/1996 100,021 100,403 96,693 42,207
07/31/1996 87,822 88,158 84,859 38,520
08/31/1996 92,339 92,692 89,164 40,757
09/30/1996 99,274 99,654 95,797 42,350
10/31/1996 93,137 93,494 89,814 41,697
11/30/1996 93,776 94,135 90,357 43,415
12/31/1996 97,593 97,966 93,990 44,553
01/31/1997 94,018 94,378 90,472 45,443
02/28/1997 84,524 84,847 81,311 44,341
03/31/1997 77,712 78,010 74,685 42,249
04/30/1997 76,017 76,308 73,006 42,366
05/31/1997 87,239 87,573 83,753 47,080
06/30/1997 90,477 90,823 86,796 49,098
07/31/1997 93,591 93,949 89,744 51,382
08/31/1997 97,383 97,755 93,294 52,559
09/30/1997 104,598 104,998 100,173 56,406
10/31/1997 96,674 97,043 92,502 53,930
11/30/1997 93,068 93,424 89,015 53,579
12/31/1997 93,658 94,016 89,526 54,517
01/31/1998 92,078 92,431 87,929 53,656
02/28/1998 101,581 101,970 96,970 57,626
03/31/1998 105,199 105,601 100,336 60,000
04/30/1998 104,706 105,107 99,825 60,332
05/31/1998 98,524 98,901 93,876 57,080
06/30/1998 103,029 103,424 98,091 57,200
07/31/1998 94,179 94,540 89,626 52,567
08/31/1998 70,964 71,236 67,497 42,358
09/30/1998 76,584 76,877 72,796 45,675
10/31/1998 79,908 80,214 75,890 47,539
11/30/1998 86,453 86,783 82,075 50,030
12/31/1998 95,522 95,887 90,676 53,126
01/31/1999 100,087 100,470 94,983 53,833
02/28/1999 88,447 88,786 83,851 49,472
03/31/1999 94,524 94,885 89,545 50,244
04/30/1999 100,923 101,309 95,526 54,746
05/31/1999 99,530 99,911 94,189 55,545
06/30/1999 107,114 107,524 101,215 58,056
07/31/1999 107,746 108,159 101,803 56,465
08/31/1999 105,602 106,006 99,756 54,376
09/30/1999 108,147 108,561 102,061 54,387
10/31/1999 112,679 113,110 106,286 54,605
11/30/1999 126,899 127,384 119,593 57,864
12/31/1999 157,659 158,262 148,702 64,415
01/31/2000 158,684 159,291 149,535 63,378
02/29/2000 203,781 204,561 191,943 73,841
03/31/2000 190,128 190,855 178,910 68,975
04/30/2000 155,145 155,738 145,972 64,823
05/31/2000 139,909 140,445 131,477 61,044
06/30/2000 161,483 162,101 151,712 66,367
</TABLE>
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The adjusted returns
include the effect of the applicable sales charges. The Fund's class A & B
shares commenced operation after the inception date shown. Total return for the
10-year & since inception periods (period beginning before the inception of
Class A & B shares) reflects the total return for the Fund's oldest class of
shares (Class C), adjusted to reflect any current sales charges and any
different operating expenses associated with those shares. Had Class A shares
return been adjusted to reflect the different sales charges, but without regard
to lower operating expenses of Class A shares, the total return figure would
have been lower than that shown, namely 20.19% & 18.54%, respectively. The Fund
may invest up to 15% in foreign securities, which may entail greater risk due
to foreign economic and political developments. This Fund may also invest in
technology, which may entail greater risk due to volatility of the technology
market in general. SEE PAGE 27 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
--------------------------------------------------------------------------------
<S> <C>
WINSTAR COMMUNICATIONS, INC. 2.4%
Communications
--------------------------------------------------------------------------------
ART TECHNOLOGY GROUP, INC. 1.9%
Technology
--------------------------------------------------------------------------------
NETRO CORP. 1.9%
Technology
--------------------------------------------------------------------------------
AVIS RENT A CAR, INC. 1.9%
Consumer Services
--------------------------------------------------------------------------------
AEROFLEX, INC. 1.8%
Technology
--------------------------------------------------------------------------------
TRANSWITCH CORP. 1.8%
Technology
--------------------------------------------------------------------------------
KANA COMMUNICATIONS, INC. 1.8%
Technology
--------------------------------------------------------------------------------
VARIAN SEMICONDUCTOR EQUIPMENT 1.8%
Technology
--------------------------------------------------------------------------------
DIGITAL MICROWAVE CORP. 1.7%
Technology
--------------------------------------------------------------------------------
INFORMATICA CORP. 1.7%
Technology
--------------------------------------------------------------------------------
TOP TEN TOTAL 18.7%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
--------------------------------------------------------------------------------
<S> <C>
TECHNOLOGY 51.3%
--------------------------------------------------------------------------------
HEALTH CARE 10.7%
--------------------------------------------------------------------------------
ENERGY 8.5%
--------------------------------------------------------------------------------
FINANCIAL & BUSINESS SERVICES 6.8%
--------------------------------------------------------------------------------
COMMUNICATIONS 5.7%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<S> <C>
COMMON STOCK 94.5%
--------------------------------------------------------------------------------
CASH EQUIVALENTS 5.5%
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
--------------------------------------------------------------------------------
For the twelve-month period ended June 30, 2000, PIMCO Opportunity Fund Class A
shares returned 50.77%, significantly outperforming the Russell 2000 Index's
return of 14.31% for the same period.
The Fund's best performance in the past year was delivered by the technology
sector. This sector benefited from an increase in corporate spending as
companies recognized technology's ability to boost profit margins. Many areas
within technology showed incredible strength, including semiconductors.
Fairchild Semiconductor, a company that designs and develops memory
semiconductors, aided the Fund's performance. It benefited from greater demand
for semiconductors, fueled by the global economic recovery, as well as general
investor interest in technology stocks.
Another stellar performer for the Fund was True North Communications, the
sixth largest advertising agency in the world, and the fifth largest holding of
the Fund. It benefited from the booming domestic economy, which has caused an
increase in corporate advertising expenditures. Furthermore, the massive
increase in Internet advertising has helped True North considerably, as it
owns a significant share of an Internet advertising agency.
The biotechnology industry also enhanced the Fund's performance during the
past year. Medicis Pharmaceutical, a company that offers prescription and
over-the-counter products to treat a number of dermatological conditions, showed
tremendous strength. Aside from announcing record earnings in 1999, the company
recently introduced Plexion, a new prescription cleanser specifically designed
for the treatment of the acne rosacea--the only one of its kind. This news
propelled the stock's price more than 125% in the past year.
The manager believes that the economy has slowed, and that the Fed is nearing
the end of the rate hike cycle, which should bode well for a market rebound over
the next six months. While the manager expects continued volatility, he is
optimistic that small-caps can perform well if the economy does not enter a
recession and interest rates don't rise significantly.
20
<PAGE>
PIMCO RENAISSANCE FUND
June 30, 2000
OBJECTIVE
Long-term
growth of capital
and income
PORTFOLIO
Primarily common stocks of
companies with below-average
valuations whose business
fundamentals are expected to improve
FUND INCEPTION DATE
4/18/88
TOTAL NET ASSETS
$478.2 million
NUMBER OF SECURITIES
IN THE PORTFOLIO
60 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
--------------------------------------------------------------------------------
PERFORMANCE*
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
A SHARES B SHARES C SHARES Lipper Multi-
Russell 1000 Cap Value
Adjusted Adjusted Adjusted Value Index Value Index
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 YEAR 3.36% -2.33% 2.59% -1.47% 1.79% -8.92% -3.99%
5 YEARS 20.56% 19.20% 19.63% 19.43% 19.67% 17.79% 14.20%
10 YEARS 15.07% 14.43% 14.48% 14.48% 14.21% 15.24% 12.90%
INCEPTION 13.82% 13.29% 13.33% 13.33% 12.97% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO Renaissance PIMCO Renaissance PIMCO Renaissance Russell 1000
A B C Value
================ ================ ================ ================
<S> <C> <C> <C> <C>
04/30/1988 9,450 10,000 10,000 10,000
05/31/1988 9,460 10,000 10,000 10,145
06/30/1988 9,671 10,220 10,220 10,625
07/31/1988 9,652 10,190 10,190 10,628
08/31/1988 9,516 10,038 10,038 10,419
09/30/1988 9,652 10,180 10,180 10,758
10/31/1988 9,770 10,291 10,291 11,002
11/30/1988 9,711 10,230 10,230 10,868
12/31/1988 10,030 10,561 10,561 11,000
01/31/1989 10,340 10,872 10,872 11,754
02/28/1989 10,280 10,810 10,810 11,568
03/31/1989 10,380 10,904 10,904 11,822
04/30/1989 10,653 11,187 11,187 12,307
05/31/1989 10,956 11,501 11,501 12,797
06/30/1989 11,036 11,574 11,574 12,748
07/31/1989 11,251 11,797 11,797 13,608
08/31/1989 11,599 12,148 12,148 13,945
09/30/1989 11,465 11,998 11,998 13,812
10/31/1989 11,258 11,772 11,772 13,319
11/30/1989 11,237 11,751 11,751 13,472
12/31/1989 11,240 11,741 11,741 13,770
01/31/1990 10,690 11,160 11,160 12,912
02/28/1990 10,690 11,160 11,160 13,238
03/31/1990 10,967 11,435 11,435 13,373
04/30/1990 10,638 11,082 11,082 12,852
05/31/1990 11,296 11,765 11,765 13,919
06/30/1990 11,249 11,705 11,705 13,603
07/31/1990 10,947 11,383 11,383 13,484
08/31/1990 10,199 10,596 10,596 12,298
09/30/1990 9,478 9,837 9,837 11,703
10/31/1990 9,093 9,427 9,427 11,543
11/30/1990 9,396 9,741 9,741 12,343
12/31/1990 9,575 9,926 9,926 12,657
01/31/1991 9,883 10,232 10,232 13,227
02/28/1991 10,485 10,844 10,844 14,106
03/31/1991 10,729 11,096 11,096 14,315
04/30/1991 10,848 11,207 11,207 14,421
05/31/1991 11,408 11,787 11,787 14,959
06/30/1991 11,013 11,365 11,365 14,329
07/31/1991 11,422 11,776 11,776 14,929
08/31/1991 11,891 12,249 12,249 15,201
09/30/1991 12,075 12,439 12,439 15,089
10/31/1991 12,331 12,690 12,690 15,339
11/30/1991 11,941 12,288 12,288 14,552
12/31/1991 12,864 13,226 13,226 15,771
01/31/1992 13,086 13,454 13,454 15,796
02/29/1992 13,358 13,709 13,709 16,183
03/31/1992 13,098 13,435 13,435 15,948
04/30/1992 13,111 13,448 13,448 16,635
05/31/1992 13,248 13,576 13,576 16,718
06/30/1992 13,097 13,415 13,415 16,614
07/31/1992 13,410 13,723 13,723 17,255
08/31/1992 13,235 13,531 13,531 16,728
09/30/1992 13,369 13,665 13,665 16,959
10/31/1992 13,331 13,626 13,626 16,975
11/30/1992 13,685 13,975 13,975 17,532
12/31/1992 13,979 14,254 14,254 17,949
01/31/1993 14,183 14,463 14,463 18,471
02/28/1993 14,056 14,332 14,332 19,121
03/31/1993 14,606 14,874 14,874 19,685
04/30/1993 14,490 14,743 14,743 19,432
05/31/1993 14,837 15,084 15,084 19,823
06/30/1993 15,134 15,380 15,380 20,260
07/31/1993 15,471 15,722 15,722 20,487
08/31/1993 16,480 16,723 16,723 21,226
09/30/1993 16,753 16,994 16,994 21,260
10/31/1993 16,987 17,232 17,232 21,246
11/30/1993 16,571 16,783 16,783 20,807
12/31/1993 17,069 17,281 17,281 21,202
01/31/1994 17,563 17,768 17,768 22,005
02/28/1994 17,376 17,565 17,565 21,252
03/31/1994 16,422 16,593 16,593 20,462
04/30/1994 16,314 16,470 16,470 20,854
05/31/1994 16,234 16,389 16,389 21,094
06/30/1994 15,856 16,000 16,000 20,589
07/31/1994 16,248 16,382 16,382 21,230
08/31/1994 17,032 17,148 17,148 21,839
09/30/1994 16,993 17,114 17,114 21,115
10/31/1994 16,952 17,059 17,059 21,409
11/30/1994 16,258 16,346 16,346 20,544
12/31/1994 16,326 16,408 16,408 20,781
01/31/1995 16,367 16,436 16,436 21,420
02/28/1995 16,738 16,795 16,795 22,267
03/31/1995 17,191 17,244 17,244 22,756
04/30/1995 17,494 17,549 17,549 23,475
05/31/1995 17,550 17,604 17,577 24,463
06/30/1995 17,991 18,048 18,014 24,794
07/31/1995 18,880 18,939 18,892 25,658
08/31/1995 19,102 19,162 19,101 26,020
09/30/1995 19,727 19,789 19,707 26,961
10/31/1995 19,769 19,831 19,749 26,693
11/30/1995 20,732 20,796 20,686 28,045
12/31/1995 20,993 21,058 20,938 28,750
01/31/1996 21,705 21,773 21,635 29,646
02/29/1996 22,002 22,071 21,917 29,870
03/31/1996 22,180 22,249 22,078 30,378
04/30/1996 22,537 22,608 22,435 30,494
05/31/1996 23,073 23,146 22,940 30,876
06/30/1996 23,134 23,206 22,988 30,901
07/31/1996 22,132 22,201 21,990 29,733
08/31/1996 23,014 23,086 22,839 30,584
09/30/1996 24,140 24,215 23,947 31,799
10/31/1996 24,966 25,044 24,753 33,029
11/30/1996 26,241 26,323 26,006 35,424
12/31/1996 26,312 26,394 26,046 34,972
01/31/1997 27,263 27,348 26,972 36,667
02/28/1997 27,125 27,210 26,818 37,206
03/31/1997 26,438 26,521 26,126 35,868
04/30/1997 27,547 27,633 27,208 37,374
05/31/1997 29,245 29,336 28,872 39,464
06/30/1997 30,785 30,881 30,380 41,157
07/31/1997 33,528 33,633 33,042 44,253
08/31/1997 32,712 32,815 32,218 42,678
09/30/1997 35,095 35,205 34,550 45,255
10/31/1997 33,477 33,582 32,936 43,993
11/30/1997 34,800 34,908 34,207 45,937
12/31/1997 35,764 35,876 35,135 47,278
01/31/1998 35,785 35,897 35,135 46,612
02/28/1998 38,509 38,629 37,781 49,749
03/31/1998 39,966 40,091 39,218 52,793
04/30/1998 40,852 40,980 40,051 53,147
05/31/1998 40,008 40,133 39,197 52,360
06/30/1998 40,325 40,451 39,489 53,031
07/31/1998 39,502 39,625 38,636 52,098
08/31/1998 32,490 32,592 31,762 44,346
09/30/1998 33,631 33,736 32,868 46,891
10/31/1998 35,087 35,197 34,265 50,525
11/30/1998 37,305 37,421 36,410 52,880
12/31/1998 39,879 40,003 38,904 54,678
01/31/1999 42,411 42,543 41,335 55,115
02/28/1999 40,341 40,467 39,289 54,338
03/31/1999 42,144 42,276 41,022 55,463
04/30/1999 44,285 44,424 43,089 60,643
05/31/1999 42,970 43,104 41,766 59,976
06/30/1999 44,332 44,471 43,090 61,715
07/31/1999 44,549 44,689 43,284 59,907
08/31/1999 43,137 43,272 41,890 57,684
09/30/1999 39,898 40,022 38,715 55,665
10/31/1999 39,654 39,778 38,452 58,872
11/30/1999 41,066 41,194 39,798 58,413
12/31/1999 43,793 43,930 42,416 58,693
01/31/2000 41,923 42,054 40,559 56,780
02/29/2000 39,257 39,379 37,971 52,561
03/31/2000 44,222 44,361 42,721 58,973
04/30/2000 45,784 45,927 44,242 58,289
05/31/2000 47,285 47,433 45,671 58,901
06/30/2000 45,815 45,958 44,210 56,209
</TABLE>
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The adjusted returns
include the effect of the applicable sales charges. The Fund's class A & B
shares commenced operation after the inception date shown. Total return for the
10-year & since inception periods (period beginning before the inception of
Class A & B shares) reflects the total return for the Fund's oldest class of
shares (Class C), adjusted to reflect any current sales charges and any
different operating expenses associated with those shares. Had Class A shares
return been adjusted to reflect the different sales charges, but without regard
to lower operating expenses of Class A shares, the total return figure would
have been lower than that shown, namely 14.37% & 13.10%, respectively. The Fund
may invest up to 15% in foreign securities, which may entail greater risk due
to foreign economic and political developments. SEE PAGE 27 FOR FOOTNOTES,
WHICH INCLUDE ADDITIONAL DETAILS.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
-------------------------------------------------------------------------------
<S> <C>
FOUNDATION HEALTH SYSTEMS, INC. `A' 5.8%
Health Care
-------------------------------------------------------------------------------
ACE LTD. 5.4%
Financial & Business Services
-------------------------------------------------------------------------------
WASHINGTON MUTUAL, INC. 4.8%
Financial & Business Services
-------------------------------------------------------------------------------
TUPPERWARE CORP. 4.3%
Consumer Discretionary
-------------------------------------------------------------------------------
NIAGARA MOHAWK HOLDINGS, INC. 4.0%
Utilities
-------------------------------------------------------------------------------
CNH GLOBAL NV 3.9%
Capital Goods
-------------------------------------------------------------------------------
AETNA, INC. 3.4%
Health Care & Business Services
-------------------------------------------------------------------------------
R & B FALCON CORP. 3.3%
Energy
-------------------------------------------------------------------------------
ARROW ELECTRONICS, INC. 2.7%
Technology
-------------------------------------------------------------------------------
SUIZA FOODS CORP. 2.6%
Consumer Staples
-------------------------------------------------------------------------------
TOP TEN TOTAL 40.2%
-------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
-------------------------------------------------------------------------------
<S> <C>
FINANCIAL & BUSINESS SERVICES 21.9%
-------------------------------------------------------------------------------
CONSUMER STAPLES 12.4%
-------------------------------------------------------------------------------
HEALTH CARE 11.6%
-------------------------------------------------------------------------------
UTILITIES 8.7%
-------------------------------------------------------------------------------
ENERGY 8.5%
-------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-------------------------------------------------------------------------------
<S> <C>
COMMON STOCK 95.3%
-------------------------------------------------------------------------------
CASH EQUIVALENTS 3.8%
-------------------------------------------------------------------------------
CONVERTIBLE BONDS & NOTES 0.9%
-------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
--------------------------------------------------------------------------------
PIMCO Renaissance Fund posted strong relative returns for the one-year period
ended June 30, 2000. The Fund's Class A shares returned 3.36%, outperforming the
Russell 1000 Value Index return of -8.92% and the Lipper Multi-Cap Value Fund
Average return of -3.99% for the same period.
The technology sector contributed to the Fund's performance. The Fund
invested in a number of cyclical technology companies, such as semiconductor
manufacturers and electronics distributors, that exhibited low valuations early
in this period. Micron Technology, a leading maker of chips for PCs, has
contributed to the Fund's performance for much of the year, as the demand for
semiconductors has outpaced supply. Arrow Electronics, the world's largest
distributor of electronic components and computer products to industrial and
commercial customers, was another standout performer. It benefited from the
global economic recovery, which boosted demand for its products. The company's
global distribution network spans the world's three dominant electronic
markets--North America, Europe, and the Asia/Pacific region.
Furthermore, it is poised to continue its growth given the strong global
economy.
The property and casualty (P&C) industry also boosted the Fund's returns. The
industry was finally able to gain pricing power in the past year, as it shed its
weakest players and finally increased its extremely narrow profit margins. As a
result, we added fundamentally strong P&C insurers, such as Ace Limited, that we
expected would benefit from the industry consolidation. Ace, which boasts a
strong balance sheet and an exceptional management team, outperformed.
The financial services sector was a disappointment but the fund's
underweighting in this area benefited its performance. Companies such as Federal
Home Loan Management mostly underperformed in the first half of 2000 as a result
of rising interest rates and signs that the economy is slowing. With profit
margins being squeezed and fewer home mortgage originations, these companies
proved unattractive to investors.
Looking ahead, the manager is optimistic that PIMCO Renaissance Fund will
continue its relative outperformance, given the positioning of its portfolio and
its philosophy of investing in low valuation stocks with a catalyst for positive
price appreciation. In addition, the manager is hopeful that, in the coming
months, investors will once again favor value stocks.
21
<PAGE>
PIMCO SELECT GROWTH FUND
June 30, 2000
OBJECTIVE
Long-term growth
of capital; income
is incidental
PORTFOLIO
Common stocks of
companies with
market capitalizations
of at least
$10 billion
FUND INCEPTION DATE
12/28/94
TOTAL NET ASSETS
$16.9 million
NUMBER OF SECURITIES
IN THE PORTFOLIO
16 (not including
short-term
instruments)
PIMCO ADVISORS
INSTITUTIONAL
MANAGER
PIMCO Equity
Advisors
--------------------------------------------------------------------------------
PERFORMANCE*
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
A SHARES B SHARES C SHARES Lipper Large-
S&P 500 Cap Growth
Adjusted Adjusted Adjusted Index Fund Avg.
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 YEAR 12.63% 6.43% 11.86% 7.08% 10.90% 7.25% 26.43%
3 YEARS 26.04% 23.69% 25.14% 24.50% 25.14% 19.67% 27.69%
5 YEARS 23.31% 21.92% 22.42% 22.24% 22.42% 23.80% 25.59%
INCEPTION 24.72% 23.44% 23.81% 23.74% 23.81% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO Select Growth PIMCO Select Growth PIMCO Select Growth S&P 500
A B C Index
================ ================ ================ ================
<S> <C> <C> <C> <C>
12/31/1994 9,450 10,000 10,000 10,000
01/31/1995 9,513 10,060 10,060 10,259
02/28/1995 9,803 10,361 10,361 10,659
03/31/1995 10,082 10,650 10,650 10,974
04/30/1995 10,467 11,050 11,050 11,297
05/31/1995 10,823 11,418 11,418 11,748
06/30/1995 11,169 11,777 11,777 12,021
07/31/1995 11,656 12,283 12,283 12,420
08/31/1995 11,775 12,401 12,401 12,451
09/30/1995 12,101 12,737 12,737 12,977
10/31/1995 12,031 12,656 12,656 12,930
11/30/1995 12,244 12,872 12,872 13,498
12/31/1995 12,043 12,652 12,652 13,758
01/31/1996 12,503 13,128 13,128 14,226
02/29/1996 12,790 13,420 13,420 14,358
03/31/1996 12,736 13,356 13,356 14,496
04/30/1996 12,926 13,547 13,547 14,710
05/31/1996 13,357 13,990 13,990 15,089
06/30/1996 13,128 13,741 13,741 15,147
07/31/1996 12,232 12,794 12,794 14,478
08/31/1996 12,693 13,268 13,268 14,783
09/30/1996 13,560 14,166 14,166 15,615
10/31/1996 13,760 14,364 14,364 16,046
11/30/1996 14,587 15,219 15,219 17,258
12/31/1996 14,149 14,753 14,753 16,917
01/31/1997 14,841 15,466 15,466 17,974
02/28/1997 14,488 15,090 15,090 18,114
03/31/1997 13,726 14,286 14,286 17,370
04/30/1997 14,284 14,858 14,858 18,407
05/31/1997 15,436 16,047 16,047 19,528
06/30/1997 15,902 16,521 16,521 20,403
07/31/1997 17,451 18,120 18,120 22,026
08/31/1997 16,362 16,976 16,976 20,792
09/30/1997 17,430 18,073 18,073 21,931
10/31/1997 16,944 17,558 17,558 21,198
11/30/1997 17,163 17,774 17,774 22,180
12/31/1997 17,664 18,280 18,280 22,560
01/31/1998 18,066 18,684 18,684 22,810
02/28/1998 19,463 20,118 20,118 24,455
03/31/1998 20,769 21,455 21,455 25,707
04/30/1998 21,180 21,867 21,867 25,966
05/31/1998 20,896 21,561 21,561 25,520
06/30/1998 22,466 23,167 23,167 26,556
07/31/1998 22,117 22,792 22,792 26,273
08/31/1998 18,331 18,876 18,876 22,475
09/30/1998 19,889 20,468 20,468 23,915
10/31/1998 20,696 21,286 21,286 25,860
11/30/1998 22,240 22,862 22,862 27,427
12/31/1998 24,818 25,495 25,495 29,008
01/31/1999 27,067 27,787 27,787 30,221
02/28/1999 25,851 26,523 26,523 29,281
03/31/1999 27,356 28,051 28,051 30,453
04/30/1999 27,337 28,011 28,011 31,632
05/31/1999 26,189 26,818 26,818 30,885
06/30/1999 28,273 28,937 28,937 32,600
07/31/1999 27,787 28,419 28,419 31,582
08/31/1999 27,654 28,263 28,263 31,425
09/30/1999 26,063 26,620 26,620 30,564
10/31/1999 27,088 27,651 27,651 32,498
11/30/1999 28,407 28,981 28,981 33,159
12/31/1999 30,719 31,319 31,319 35,112
01/31/2000 29,312 29,866 29,866 33,349
02/29/2000 30,285 30,840 30,840 32,717
03/31/2000 30,861 31,404 31,404 35,917
04/30/2000 31,006 31,539 31,539 34,837
05/31/2000 28,696 29,177 29,177 34,122
06/30/2000 31,841 32,275 32,366 34,963
</TABLE>
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The adjusted returns
include the effect of the applicable sales charges. The Fund's retail shares
commenced operations after the inception date shown. These returns represent
the blended performance of the Fund's retail class shares and the prior
performance of the Fund's institutional shares, adjusted, as necessary, to
reflect retail share current sales charge and different operating expenses.
The retail shares were first offered in April 2000. Select Growth concentrates
its portfolio holdings and therefore may entail greater risk than a fully
diversified stock fund and should be considered as only part of a diversified
portfolio. The Fund may invest up to 25% in foreign securities, which may
entail greater risk due to foreign economic and political developments. SEE
PAGE 27 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
-------------------------------------------------------------------------------
<S> <C>
CORNING, INC. 8.0%
Technology
-------------------------------------------------------------------------------
GENENTECH, INC. 7.6%
Health Care
-------------------------------------------------------------------------------
AMERICAN INTERNATIONAL GROUP, INC. 6.9%
Financial & Business Services
-------------------------------------------------------------------------------
EMC CORP. 6.8%
Technology
-------------------------------------------------------------------------------
NORTEL NETWORKS CORP. 6.0%
Technology
-------------------------------------------------------------------------------
JOHNSON & JOHNSON 6.0%
Health Care
-------------------------------------------------------------------------------
CISCO SYSTEMS, INC. 5.6%
Technology
-------------------------------------------------------------------------------
COMVERSE TECHNOLOGY, INC. 5.5%
Technology
-------------------------------------------------------------------------------
SUN MICROSYSTEMS, INC. 5.4%
Technology
-------------------------------------------------------------------------------
CITIGROUP, INC. 5.3%
Financial & Business Services
-------------------------------------------------------------------------------
TOP TEN TOTAL 63.1%
-------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
-------------------------------------------------------------------------------
<S> <C>
TECHNOLOGY 46.6%
-------------------------------------------------------------------------------
FINANCIAL & BUSINESS SERVICES 17.2%
-------------------------------------------------------------------------------
HEALTH CARE 13.6%
-------------------------------------------------------------------------------
CONSUMER DISCRETIONARY 5.1%
-------------------------------------------------------------------------------
COMMUNICATIONS 4.4%
-------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-------------------------------------------------------------------------------
<S> <C>
COMMON STOCK 90.6%
-------------------------------------------------------------------------------
CASH EQUIVALENTS 9.4%
-------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
--------------------------------------------------------------------------------
PIMCO Select Growth Fund, which was the PIMCO Core Equity Fund prior to April 3,
2000, posted strong returns for its first quarter in existence. As a result of
its prior weighting in value securities, the Fund posted a relatively weak
one-year return of 12.63%.
The Fund greatly benefited from its exposure to the technology sector, which
performed extremely well over the past year. Tech stocks offered investors the
greatest earnings growth potential of any sector due to an increase in corporate
spending, as companies realized technology's ability to boost profit margins. A
standout performer within technology was EMC, the data storage company.
Corporate demand for data storage continued to grow at a fast pace in the second
half of the year. EMC is the greatest beneficiary of this greater demand,
increasing its already dominant market share. As the capabilities of computers
and networks continue to increase, the need for data storage will grow even
further.
Another strong area for the Fund was telecommunications, which has seen
tremendous growth recently. Comverse Technology, the eighth largest holding in
the Fund, benefited from this trend. It is the leading provider of voicemail
systems to digital wireless carriers, deriving approximately 65% of its business
from this activity. A shortening of cell phone handset upgrade cycles and an
increase in cell phone subscriptions were also key to Comverse's growth.
The financial services sector also helped the Fund, despite the rising
interest rate environment. Morgan Stanley Dean Witter, the sixth largest holding
of the Fund, experienced strong earnings growth in the second half of the year.
It benefited from an increase in equity underwriting and merger activity, as
well as dynamic growth in its global business.
Looking ahead, the manager is optimistic that the economic climate will be
positive for growth stocks. Inflation appears to be under control and there is a
strong possibility of significant tax cuts in the near future, which should
augur well for PIMCO Select Growth Fund.
22
<PAGE>
PIMCO SMALL-CAP VALUE FUND
June 30, 2000
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 the market and
their industry
groups
FUND INCEPTION DATE
10/1/91
TOTAL NET ASSETS
$285.0 million
NUMBER OF SECURITIES
IN THE PORTFOLIO
101 (not including
short-term
instruments)
PIMCO ADVISORS
INSTITUTIONAL
MANAGER
NFJInvestment
Group
--------------------------------------------------------------------------------
PERFORMANCE*
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
A SHARES B SHARES C SHARES Lipper Sm.-
Russell Cap Value
Adjusted Adjusted Adjusted 2000 Index Fund Avg.
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 YEAR -9.26% -14.25% -9.94% -14.38% -10.84% 14.31% 6.40%
3 YEARS 0.20% -1.67% -0.57% -1.48% -0.56% 10.57% 4.95%
5 YEARS 9.95% 8.71% 9.14% 8.85% 9.14% 14.27% 13.14%
INCEPTION 11.05% 10.33% 10.39% 10.39% 10.23% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO Small-Cap PIMCO Small-Cap PIMCO Small-Cap Russell 2000
Value Value Value Index
A B C
================ ================ ================ ================
<S> <C> <C> <C> <C>
09/30/1991 9,450 10,000 10,000 10,000
10/31/1991 9,556 10,106 10,106 10,264
11/30/1991 9,335 9,866 9,866 9,789
12/31/1991 10,022 10,586 10,586 10,573
01/31/1992 10,701 11,297 11,297 11,430
02/29/1992 11,060 11,669 11,669 11,764
03/31/1992 10,961 11,557 11,557 11,366
04/30/1992 10,734 11,310 11,310 10,967
05/31/1992 10,740 11,309 11,309 11,113
06/30/1992 10,393 10,937 10,937 10,590
07/31/1992 10,706 11,259 11,259 10,958
08/31/1992 10,540 11,077 11,077 10,649
09/30/1992 10,641 11,177 11,177 10,894
10/31/1992 10,832 11,370 11,370 11,238
11/30/1992 11,598 12,167 12,167 12,098
12/31/1992 11,852 12,427 12,427 12,519
01/31/1993 12,374 12,965 12,965 12,943
02/28/1993 12,310 12,892 12,892 12,644
03/31/1993 12,623 13,211 13,211 13,054
04/30/1993 12,287 12,851 12,851 12,696
05/31/1993 12,492 13,057 13,057 13,257
06/30/1993 12,518 13,076 13,076 13,339
07/31/1993 12,557 13,109 13,109 13,524
08/31/1993 12,972 13,533 13,533 14,108
09/30/1993 13,087 13,645 13,645 14,506
10/31/1993 13,332 13,892 13,892 14,879
11/30/1993 13,089 13,630 13,630 14,394
12/31/1993 13,439 13,986 13,986 14,886
01/31/1994 13,938 14,496 14,496 15,353
02/28/1994 13,913 14,462 14,462 15,297
03/31/1994 13,287 13,802 13,802 14,491
04/30/1994 13,328 13,836 13,836 14,577
05/31/1994 13,006 13,493 13,493 14,413
06/30/1994 12,769 13,239 13,239 13,927
07/31/1994 12,964 13,433 13,433 14,156
08/31/1994 13,481 13,959 13,959 14,944
09/30/1994 13,147 13,605 13,605 14,894
10/31/1994 12,898 13,339 13,339 14,834
11/30/1994 12,595 13,017 13,017 14,234
12/31/1994 12,892 13,316 13,316 14,615
01/31/1995 12,958 13,376 13,376 14,431
02/28/1995 13,534 13,963 13,963 15,031
03/31/1995 13,611 14,033 14,033 15,289
04/30/1995 13,924 14,347 14,347 15,629
05/31/1995 14,258 14,682 14,682 15,897
06/30/1995 14,708 15,136 15,136 16,722
07/31/1995 15,434 15,874 15,874 17,685
08/31/1995 15,733 16,172 16,172 18,051
09/30/1995 16,033 16,469 16,469 18,374
10/31/1995 15,401 15,810 15,810 17,552
11/30/1995 16,030 16,446 16,446 18,289
12/31/1995 16,112 16,520 16,520 18,772
01/31/1996 16,032 16,427 16,427 18,751
02/29/1996 16,376 16,770 16,770 19,336
03/31/1996 16,871 17,265 17,265 19,729
04/30/1996 17,441 17,838 17,838 20,784
05/31/1996 17,999 18,397 18,397 21,603
06/30/1996 17,872 18,256 18,256 20,716
07/31/1996 16,884 17,235 17,235 18,907
08/31/1996 17,683 18,040 18,040 20,005
09/30/1996 18,218 18,575 18,575 20,787
10/31/1996 18,564 18,916 18,916 20,466
11/30/1996 19,790 20,153 20,153 21,309
12/31/1996 20,498 20,861 20,861 21,868
01/31/1997 21,166 21,533 21,533 22,305
02/28/1997 21,240 21,594 21,594 21,764
03/31/1997 20,435 20,759 20,759 20,737
04/30/1997 20,629 20,956 20,956 20,795
05/31/1997 22,404 22,732 22,732 23,108
06/30/1997 23,493 23,840 23,840 24,099
07/31/1997 24,701 25,039 25,039 25,220
08/31/1997 25,342 25,676 25,676 25,798
09/30/1997 27,207 27,558 27,543 27,686
10/31/1997 26,745 27,057 27,057 26,471
11/30/1997 27,043 27,345 27,345 26,298
12/31/1997 27,563 27,845 27,851 26,759
01/31/1998 27,093 27,367 27,357 26,336
02/28/1998 28,786 29,055 29,044 28,285
03/31/1998 29,899 30,169 30,158 29,450
04/30/1998 29,805 30,042 30,047 29,613
05/31/1998 28,441 28,657 28,646 28,017
06/30/1998 27,563 27,749 27,755 28,076
07/31/1998 25,540 25,713 25,701 25,802
08/31/1998 21,778 21,907 21,897 20,791
09/30/1998 22,405 22,527 22,517 22,419
10/31/1998 23,283 23,410 23,377 23,333
11/30/1998 24,098 24,230 24,172 24,556
12/31/1998 24,951 25,087 25,008 26,076
01/31/1999 23,953 24,084 24,006 26,423
02/28/1999 22,727 22,851 22,772 24,283
03/31/1999 22,399 22,522 22,426 24,662
04/30/1999 24,312 24,445 24,318 26,871
05/31/1999 25,129 25,266 25,126 27,264
06/30/1999 26,044 26,186 26,030 28,496
07/31/1999 25,718 25,859 25,684 27,715
08/31/1999 24,769 24,905 24,729 26,690
09/30/1999 23,707 23,836 23,643 26,695
10/31/1999 23,560 23,688 23,478 26,802
11/30/1999 23,364 23,492 23,280 28,402
12/31/1999 23,247 23,374 23,136 31,617
01/31/2000 22,025 22,145 21,903 31,108
02/29/2000 21,588 21,706 21,469 36,244
03/31/2000 22,761 22,885 22,620 33,855
04/30/2000 23,464 23,592 23,303 31,817
05/31/2000 23,849 23,979 23,669 29,962
06/30/2000 23,632 23,761 23,435 32,575
</TABLE>
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The adjusted returns
include the effect of the applicable sales charges. Excluding the 6-month, 1- &
3-year returns, these returns represent the blended performance of the Fund's
retail class shares and the prior performance of the Fund's institutional
shares, adjusted, as necessary, to reflect retail share current sales charge
and different operating expenses. The retail shares were first offered in
January 1997. The Fund invests in smaller companies, which may entail greater
risk than larger companies, including higher volatility. SEE PAGE 27 FOR
FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
--------------------------------------------------------------------------------
<S> <C>
OWENS & MINOR, INC. 1.5%
Health Care
--------------------------------------------------------------------------------
ENERGEN CORP. 1.3%
Utilities
--------------------------------------------------------------------------------
ST. MARY LAND & EXPLORATION 1.3%
Energy
--------------------------------------------------------------------------------
NEWPORT NEWS SHIPBUILDING, INC. 1.2%
Aerospace
--------------------------------------------------------------------------------
MDC HOLDINGS, INC. 1.2%
Building
--------------------------------------------------------------------------------
CROSS TIMBERS OIL CO. 1.2%
Energy
--------------------------------------------------------------------------------
SELECTIVE INSURANCE GROUP 1.2%
Financial & Business Services
--------------------------------------------------------------------------------
DENTSPLY INTERNATIONAL, INC. 1.2%
Health Care
--------------------------------------------------------------------------------
WORLD FUEL SERVICES CORP. 1.2%
Energy
--------------------------------------------------------------------------------
BINDLEY WESTERN INDUSTRIES, INC. 1.2%
Health Care
--------------------------------------------------------------------------------
TOP TEN TOTAL 12.5%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
--------------------------------------------------------------------------------
<S> <C>
FINANCIAL & BUSINESS SERVICES 22.5%
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY 12.8%
--------------------------------------------------------------------------------
CAPITAL GOODS 10.5%
--------------------------------------------------------------------------------
UTILITIES 10.4%
--------------------------------------------------------------------------------
MATERIALS & PROCESSING 9.5%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<S> <C>
COMMON STOCK 99.3%
--------------------------------------------------------------------------------
CASH EQUIVALENTS 0.7%
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
--------------------------------------------------------------------------------
PIMCO Small-Cap Value Fund returned -9.26% for the twelve-month period ended
June 30, 2000.
The past year proved to be a very difficult one for the value investor. Due
to the complete dominance of high valuation technology stocks over all other
sectors, value funds suffered. PIMCO Small-Cap Value Fund is a style-pure,
small-cap value fund that focuses on dividend-yielding stocks with low
fundamental valuations. As a result, it had little exposure to the technology
sector and therefore did not reap the strong returns.
The Fund's exposure to the energy sector helped its performance during this
year. The sector benefited from significantly higher prices for oil, gas and
natural gas liquids. Energen Corp., the Fund's second largest holding, saw its
net income rise significantly this year due to higher production, realized
commodity prices and property sales gains. A second energy holding of the Fund,
National Fuel Gas Company, also performed well as a result of increased oil
production from a 95-well drilling program it had completed. We anticipate a
positive outlook for the company, as consumption of natural gas for power
generation should increase due to rising demands for electric power, growing
concerns about air quality and the environmental impact of using coal and oil.
This increase will lead to higher prices, ultimately benefiting the energy
sector.
The healthcare sector also aided the Fund's performance, particularly in the
pharmaceutical area. Bindley Western Industries, Inc. a wholesale distributor of
pharmaceuticals and related health care products, saw its stock price rise
significantly during the year. Its announced purchase of Premier Pharmacy
Services, an Indianapolis-based pharmacy, should accelerate Bindley's growth
projections and offer it the opportunity to operate in a large market.
Furthermore, the company recently posted its twelfth consecutive quarter in
which net earnings increased at least 25%. These results reflect increased
direct store delivery sales.
The financial services sector was disappointing for the Fund. Companies such
as Pacific Century Financial Corporation and Washington Federal, Inc. have
suffered since last June. These companies, along with many other banks,
witnessed a drop in their respective stock prices as a result of the climbing
interest-rate environment, despite their solid fundamentals.
Looking ahead, the manager remains optimistic that the market will
broaden--as it did in the second quarter of 2000--as investors become more
price-sensitive. The manager remains committed to a style-pure investment
philosophy, which should bode well for the Fund over the long term.
23
<PAGE>
PIMCO TARGET FUND
June 30, 2000
OBJECTIVE
Capital
appreciation;
no consideration
given to income
PORTFOLIO
Common stocks of
companies with
market capitalizations
of between
$1 billion and $10
billion
FUND INCEPTION DATE
12/17/92
TOTAL NET ASSETS
$2.2 billion
NUMBER OF SECURITIES
IN THE PORTFOLIO
63 (not including
short-term
instruments)
PIMCO ADVISORS
INSTITUTIONAL
MANAGER
PIMCO Equity
Advisors
--------------------------------------------------------------------------------
PERFORMANCE*
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
A SHARES B SHARES C SHARES S&P Lipper Multi-
Mid-Cap Cap Growth
Adjusted Adjusted Adjusted 400 Index Fund Avg.
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 YEAR 90.36% 79.89% 89.74% 84.74% 88.79% 17.09% 45.76%
3 YEARS 41.07% 38.44% 40.23% 39.72% 40.24% 20.38% 30.19%
5 YEARS 31.76% 30.28% 30.90% 30.76% 30.89% 21.20% 26.00%
INCEPTION 27.12% 26.17% 26.23% 26.23% 26.24% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO Target PIMCO Target PIMCO Target S&P Mid-Cap
A B C 400 Index
================ ================ ================ ================
<S> <C> <C> <C> <C>
12/31/1992 9,450 10,000 10,000 10,000
01/31/1993 9,572 10,119 10,119 10,125
02/28/1993 9,515 10,049 10,049 9,983
03/31/1993 9,983 10,544 10,544 10,328
04/30/1993 9,749 10,287 10,287 10,058
05/31/1993 10,375 10,950 10,950 10,516
06/30/1993 10,674 11,256 11,256 10,569
07/31/1993 10,964 11,543 11,543 10,548
08/31/1993 11,759 12,374 12,374 10,984
09/30/1993 11,890 12,512 12,512 11,100
10/31/1993 11,983 12,591 12,591 11,136
11/30/1993 11,403 11,978 11,978 10,890
12/31/1993 11,860 12,452 12,452 11,396
01/31/1994 12,162 12,762 12,762 11,661
02/28/1994 11,945 12,522 12,522 11,495
03/31/1994 11,568 12,123 12,123 10,963
04/30/1994 11,842 12,402 12,402 11,044
05/31/1994 11,606 12,142 12,142 10,940
06/30/1994 11,181 11,693 11,693 10,563
07/31/1994 11,870 12,412 12,412 10,921
08/31/1994 12,540 13,101 13,101 11,493
09/30/1994 12,389 12,931 12,931 11,278
10/31/1994 12,634 13,181 13,181 11,401
11/30/1994 12,181 12,702 12,702 10,887
12/31/1994 12,318 12,837 12,837 10,987
01/31/1995 12,080 12,584 12,584 11,101
02/28/1995 12,777 13,292 13,292 11,684
03/31/1995 13,226 13,758 13,758 11,887
04/30/1995 13,379 13,909 13,909 12,125
05/31/1995 13,341 13,859 13,859 12,418
06/30/1995 14,354 14,901 14,901 12,923
07/31/1995 15,291 15,872 15,872 13,598
08/31/1995 15,252 15,811 15,811 13,849
09/30/1995 15,673 16,246 16,236 14,185
10/31/1995 15,893 16,459 16,459 13,820
11/30/1995 16,065 16,621 16,621 14,423
12/31/1995 16,167 16,728 16,728 14,387
01/31/1996 16,007 16,547 16,547 14,596
02/29/1996 16,540 17,090 17,090 15,092
03/31/1996 17,020 17,566 17,566 15,273
04/30/1996 17,789 18,359 18,347 15,740
05/31/1996 18,706 19,299 19,287 15,952
06/30/1996 18,354 18,914 18,914 15,713
07/31/1996 16,295 16,785 16,784 14,650
08/31/1996 17,117 17,611 17,611 15,495
09/30/1996 18,258 18,778 18,778 16,171
10/31/1996 18,280 18,789 18,778 16,218
11/30/1996 19,016 19,525 19,525 17,131
12/31/1996 18,853 19,350 19,350 17,150
01/31/1997 19,457 19,955 19,955 17,794
02/28/1997 18,624 19,093 19,093 17,648
03/31/1997 17,936 18,385 18,372 16,895
04/30/1997 18,141 18,578 18,565 17,333
05/31/1997 19,650 20,109 20,109 18,849
06/30/1997 20,302 20,765 20,753 19,378
07/31/1997 21,702 22,181 22,181 21,297
08/31/1997 22,172 22,644 22,631 21,271
09/30/1997 23,416 23,905 23,892 22,495
10/31/1997 22,136 22,580 22,579 21,516
11/30/1997 22,100 22,528 22,528 21,834
12/31/1997 21,941 22,338 22,338 22,682
01/31/1998 21,450 21,842 21,825 22,251
02/28/1998 23,270 23,673 23,673 24,093
03/31/1998 24,521 24,923 24,923 25,180
04/30/1998 25,328 25,745 25,744 25,640
05/31/1998 24,204 24,581 24,580 24,487
06/30/1998 25,882 26,258 26,258 24,641
07/31/1998 24,995 25,350 25,349 23,685
08/31/1998 20,546 20,814 20,814 19,277
09/30/1998 22,477 22,784 22,767 21,076
10/31/1998 22,587 22,852 22,853 22,960
11/30/1998 23,949 24,221 24,222 24,106
12/31/1998 27,237 27,537 27,538 27,017
01/31/1999 27,643 27,941 27,943 25,966
02/28/1999 26,106 26,363 26,344 24,606
03/31/1999 27,610 27,868 27,867 25,295
04/30/1999 28,405 28,640 28,639 27,288
05/31/1999 27,610 27,832 27,814 27,408
06/30/1999 29,943 30,181 30,165 28,872
07/31/1999 29,487 29,686 29,688 28,260
08/31/1999 29,944 30,146 30,148 27,293
09/30/1999 29,588 29,761 29,762 26,450
10/31/1999 32,361 32,531 32,515 27,799
11/30/1999 37,127 37,287 37,289 29,258
12/31/1999 45,288 45,453 45,455 30,996
01/31/2000 46,533 46,703 46,696 30,122
02/29/2000 63,504 63,736 63,674 32,231
03/31/2000 61,180 61,403 61,293 34,928
04/30/2000 55,209 55,410 55,525 33,709
05/31/2000 50,212 50,396 50,478 33,291
06/30/2000 57,001 57,209 57,247 33,807
</TABLE>
The portfolio had a substantial exposure to technology, which greatly
contributed to the funds performance for the Inception period ended 6/30/00.
During this time the technology market produced historically high returns.
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The adjusted returns
include the effect of 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 the Fund's
oldest share class, adjusted to reflect any current sales charges and any
different operating ex-penses for those shares. The fund may invest up to 15%
in foreign securities, which may entail greater risk due to foreign economic
and political developments. The Fund invests in medium sized companies, which
may entail greater risk than larger companies, including higher volatility. SEE
PAGE 27 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
--------------------------------------------------------------------------------
<S> <C>
SDL, INC. 6.4%
Technology
--------------------------------------------------------------------------------
COMVERSE TECHNOLOGY, INC. 4.6%
Technology
--------------------------------------------------------------------------------
SANMINA CORP. 3.8%
Technology
--------------------------------------------------------------------------------
JABIL CIRCUIT, INC. 3.6%
Technology
--------------------------------------------------------------------------------
CALPINE CORP. 3.5%
Utilities
--------------------------------------------------------------------------------
MINIMED, INC. 3.2%
Health Care
--------------------------------------------------------------------------------
E-TEK DYNAMICS, INC. 2.7%
Technology
--------------------------------------------------------------------------------
PMC - SIERRA, INC. 2.4%
Technology
--------------------------------------------------------------------------------
MEDIMMUNE, INC. 2.4%
Health Care
--------------------------------------------------------------------------------
CIENA CORP. 2.2%
Technology
--------------------------------------------------------------------------------
TOP TEN TOTAL 34.8%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
--------------------------------------------------------------------------------
<S> <C>
TECHNOLOGY 53.4%
--------------------------------------------------------------------------------
HEALTH CARE 14.0%
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY 5.5%
--------------------------------------------------------------------------------
COMMUNICATIONS 5.5%
--------------------------------------------------------------------------------
UTILITIES 4.3%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<S> <C>
COMMON STOCK 94.4%
--------------------------------------------------------------------------------
CASH EQUIVALENTS 5.6%
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
--------------------------------------------------------------------------------
PIMCO Target Fund posted stellar results for the one-year period ended June 30,
2000, with its Class A shares returning 90.36%. These results dramatically
outperformed those of the S&P Mid-Cap Index, which returned 17.09%, as well as
its Lipper Average, which returned 45.76% for the same period.
The technology sector dominated the market dramatically in the first three
quarters of the fiscal year. Although the last quarter brought about a slight
downturn because of rising interest rates, the technology sector performed
extremely well overall. One of the strongest areas of technology was
telecommunications, which has seen huge growth over the past year. In
particular, Spectra Diode Laboratories (SDL) helped the Fund's performance. SDL
provides products that power the transmission of data, voice and Internet
information over fiber optic networks. The Company's products enable customers
to meet the need for increasing bandwidth by expanding their fiber optic
communication networks more quickly and efficiently than by using conventional
electronic and optical technologies. Due to rapidly growing demand in this area,
SDL's stock rocketed higher in the past year.
Another holding that benefited from the growth in technology was Jabil
Circuit, a company that designs and manufactures electronic circuit board
assemblies and systems for major original equipment manufacturers. Due to the
explosive growth in telecommunications, personal computers and computer
peripherals, Jabil grew enormously as a major supplier for these industries,
with its stock price rising more than 100% since last June.
The biotechnology sector also enhanced the Fund's performance during the
year. Investors showed renewed interest in this area because of its exciting
product offerings. For example, MedImmune is a company that is focused on using
advances in immunology and other biological sciences to develop important new
products that address significant medical needs. It benefited from sales of
Synagis, which is used for the treatment of respiratory problems in premature
infants. The market opportunity for this drug is huge because it addresses an
area of healthcare that is both sensitive and growing.
The manager's outlook for mid-caps remains positive. The manager believes
that, if the Federal Reserve is able to negotiate a soft landing for the
economy, mid-caps could continue to see strong earnings growth and significantly
outperform.
24
<PAGE>
PIMCO TAX-EFFICIENT EQUITY FUND
June 30, 2000
OBJECTIVE
Maximum after-
tax growth of
capital
PORTFOLIO
Broadly diversified
portfolio of at least
200 common stocks
of companies represented
in the
S&P 500 Index with
market capitalizations
of more than
$5 billion
FUND INCEPTION DATE
7/10/98
TOTAL NET ASSETS
$56.8 million
NUMBER OF SECURITIES
IN THE PORTFOLIO
294 (not including
short-term
instruments)
PIMCO ADVISORS
INSTITUTIONAL
MANAGER
Parametric
Portfolio
Associates
--------------------------------------------------------------------------------
PERFORMANCE*
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
A SHARES B SHARES C SHARES Lipper
S&P 500 Lg.-Cap Core
Adjusted Adjusted Adjusted Index Fund Avg.
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 YEAR 5.61% -0.16% 4.78% -0.22% 3.78% 7.25% 11.37%
INCEPTION 10.79% 7.67% 9.96% 8.10% 9.96% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO Tax-Efficient Equity PIMCO Tax-Efficient Equity PIMCO Tax-Efficient Equity S&P 500
A B C Index
================ ================ ================ ================
<S> <C> <C> <C> <C>
07/31/1998 9,450 10,000 10,000 10,000
08/31/1998 8,093 8,554 8,563 8,554
09/30/1998 8,506 8,991 9,001 9,102
10/31/1998 9,302 9,824 9,834 9,843
11/30/1998 9,784 10,313 10,334 10,439
12/31/1998 10,356 10,916 10,928 11,041
01/31/1999 10,691 11,270 11,282 11,502
02/28/1999 10,337 10,884 10,896 11,145
03/31/1999 10,711 11,270 11,282 11,591
04/30/1999 11,094 11,665 11,678 12,040
05/31/1999 10,769 11,322 11,334 11,755
06/30/1999 11,398 11,978 11,991 12,408
07/31/1999 11,044 11,593 11,606 12,020
08/31/1999 10,935 11,468 11,480 11,961
09/30/1999 10,571 11,083 11,095 11,633
10/31/1999 11,200 11,739 11,751 12,369
11/30/1999 11,387 11,927 11,939 12,621
12/31/1999 12,155 12,718 12,731 13,364
01/31/2000 11,496 12,031 12,044 12,693
02/29/2000 11,418 11,926 11,939 12,452
03/31/2000 12,401 12,957 12,970 13,671
04/30/2000 11,938 12,467 12,480 13,259
05/31/2000 11,673 12,186 12,199 12,987
06/30/2000 12,038 12,150 12,564 13,307
</TABLE>
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The adjusted returns
include the effect of the applicable sales charges. Equity funds are subject to
the basic stock market risk that a particular security or securities, in
general, may decrease in value. The Fund may realize gains and shareholders
will incur a tax liability from time to time. Income from the Fund is subject
to state and local taxes & may at times be subject to the alternative minimum
tax. SEE PAGE 27 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
--------------------------------------------------------------------------------
<S> <C>
GENERAL ELECTRIC CO. 4.5%
Capital Goods
--------------------------------------------------------------------------------
INTEL CORP. 4.3%
Technology
--------------------------------------------------------------------------------
CISCO SYSTEMS, INC. 3.5%
Technology
--------------------------------------------------------------------------------
MICROSOFT CORP. 3.4%
Technology
--------------------------------------------------------------------------------
EXXON MOBIL CORP. 2.7%
Energy
--------------------------------------------------------------------------------
ORACLE CORP. 2.3%
Technology
--------------------------------------------------------------------------------
WAL-MART STORES, INC. 2.1%
Consumer Discretionary
--------------------------------------------------------------------------------
PFIZER, INC. 2.1%
Health Care
--------------------------------------------------------------------------------
CITIGROUP, INC. 1.9%
Financial & Business Services
--------------------------------------------------------------------------------
LUCENT TECHNOLOGIES, INC. 1.6%
Technology
--------------------------------------------------------------------------------
TOP TEN TOTAL 28.4%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
--------------------------------------------------------------------------------
<S> <C>
TECHNOLOGY 31.7%
--------------------------------------------------------------------------------
FINANCIAL & BUSINESS SERVICES 13.6%
--------------------------------------------------------------------------------
HEALTH CARE 11.7%
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY 8.9%
--------------------------------------------------------------------------------
CONSUMER STAPLES 6.5%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<S> <C>
COMMON STOCK 99.6%
--------------------------------------------------------------------------------
CASH EQUIVALENTS 0.4%
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
--------------------------------------------------------------------------------
PIMCO Tax-Efficient Fund posted a return of 5.61% for the one-year period ended
June 30, 2000.
The Fund's performance suffered because of the importance its investment
process places on earnings, since many of the stocks that performed well during
this period had no earnings. Investors were more concerned about future earnings
growth and less interested in strong fundamentals and current earnings, which
did not augur well for the Fund.
Exposure to the technology sector enhanced the Fund's performance. Cisco
Systems, a company that creates hardware and software solutions for engaging in
networking on the Internet, was one positive contributor to the Fund's
performance. As Internet use grows and companies race to participate in commerce
on the Web, increased demand for Internet infrastructure and optical networking
capabilities will benefit Cisco. As the largest supplier of this product, Cisco
exhibits major market dominance in this industry. Its stock soared almost 100%
since last June.
Another area of technology that benefited the Fund was semiconductors. Intel,
a semiconductor chip maker, saw impressive returns over the past year. In the
latter half of 1999, a continuation of the global economic recovery sparked
demand for semiconductors, and this industry finally achieved some pricing power
after several years of pricing pressure. Accompanied by the high demand for
personal computers, this trend boosted Intel's stock price during this period.
The Fund also benefited from its exposure to the financial services industry.
Citigroup, the banking and financial services company, contributed to the Fund's
performance despite rising interest rates. The company experienced growth in its
global business units, including asset management and other services.
During the first half of 2000, rising interest rates caused concern that the
economy would slow. This resulted in fears of a decline in spending by consumers
and manufacturers, which hurt cyclical stocks. Consumer durables, raw materials,
capital goods, business equipment and services, and new home building all
declined.
Looking ahead, the manager remains cautiously optimistic about the economy
and the stock market. Going forward, the manager expects that the Fund's
fundamentals-based, disciplined stock selection process could outperform, as
investors choose companies that deliver profits and not just promises.
25
<PAGE>
PIMCO VALUE FUND
June 30, 2000
--------------------------------------------------------------------------------
OBJECTIVE
Long-term growth
of capital and
income
PORTFOLIO
Primarily
common stocks of
companies with
market capitalizations
of more than
$10 billion and
below-average
valuations whose
business fundamentals
are expected to
improve
FUND INCEPTION DATE
12/30/91
TOTAL NET ASSETS
$166.2 million
NUMBER OF SECURITIES
IN THE PORTFOLIO
41 (not including
short-term
instruments)
PIMCO ADVISORS
INSTITUTIONAL
MANAGER
PIMCO Equity
Advisors
(as of 5/8/00)
--------------------------------------------------------------------------------
PERFORMANCE*
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
A SHARES B SHARES C SHARES Lipper Multi-
S&P 500 Cap Value
Adjusted Adjusted Adjusted Index Fund Avg.
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 YEAR -7.11% -12.22% -7.77% -11.49% -8.55% 7.25% -3.99%
3 YEARS 7.31% 5.31% 6.51% 5.83% 6.49% 19.67% 7.78%
5 YEARS 14.43% 13.14% 13.59% 13.36% 13.58% 23.80% 14.20%
INCEPTION 13.55% 12.80% 12.86% 12.86% 12.71% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO Value PIMCO Value PIMCO Value S&P 500
A B C Index
================ ================ ================ ===============
<S> <C> <C> <C> <C>
12/31/1991 9,450 10,000 10,000 10,000
01/31/1992 9,720 10,279 10,279 9,814
02/29/1992 10,046 10,618 10,618 9,942
03/31/1992 9,817 10,369 10,369 9,748
04/30/1992 9,858 10,406 10,406 10,034
05/31/1992 9,770 10,306 10,306 10,083
06/30/1992 9,558 10,077 10,077 9,933
07/31/1992 9,894 10,425 10,425 10,339
08/31/1992 9,605 10,114 10,114 10,128
09/30/1992 9,735 10,244 10,244 10,247
10/31/1992 9,794 10,300 10,300 10,282
11/30/1992 10,317 10,843 10,843 10,632
12/31/1992 10,650 11,186 11,186 10,762
01/31/1993 10,871 11,411 11,411 10,852
02/28/1993 10,985 11,524 11,524 11,000
03/31/1993 11,324 11,873 11,873 11,232
04/30/1993 11,123 11,655 11,655 10,961
05/31/1993 11,277 11,808 11,808 11,254
06/30/1993 11,352 11,879 11,879 11,287
07/31/1993 11,294 11,811 11,811 11,242
08/31/1993 11,904 12,442 12,442 11,668
09/30/1993 11,930 12,461 12,461 11,579
10/31/1993 12,340 12,881 12,881 11,818
11/30/1993 12,211 12,739 12,739 11,706
12/31/1993 12,348 12,874 12,874 11,847
01/31/1994 12,916 13,458 13,458 12,250
02/28/1994 12,703 13,228 13,228 11,918
03/31/1994 12,017 12,505 12,505 11,398
04/30/1994 11,867 12,342 12,342 11,544
05/31/1994 11,863 12,330 12,330 11,734
06/30/1994 11,587 12,035 12,035 11,446
07/31/1994 12,067 12,526 12,526 11,822
08/31/1994 12,572 13,042 13,042 12,307
09/30/1994 12,187 12,634 12,634 12,006
10/31/1994 12,312 12,757 12,757 12,275
11/30/1994 11,690 12,104 12,104 11,828
12/31/1994 11,798 12,208 12,208 12,004
01/31/1995 12,115 12,528 12,528 12,315
02/28/1995 12,653 13,078 13,078 12,795
03/31/1995 12,998 13,426 13,426 13,173
04/30/1995 13,346 13,776 13,776 13,560
05/31/1995 13,850 14,288 14,288 14,102
06/30/1995 14,087 14,524 14,524 14,430
07/31/1995 14,704 15,150 15,150 14,909
08/31/1995 14,881 15,324 15,324 14,946
09/30/1995 15,290 15,735 15,735 15,577
10/31/1995 15,330 15,766 15,766 15,521
11/30/1995 15,985 16,430 16,430 16,202
12/31/1995 16,325 16,769 16,769 16,515
01/31/1996 16,787 17,233 17,233 17,077
02/29/1996 17,150 17,595 17,595 17,235
03/31/1996 17,285 17,722 17,722 17,401
04/30/1996 17,507 17,939 17,939 17,657
05/31/1996 17,856 18,286 18,286 18,113
06/30/1996 17,773 18,190 18,189 18,182
07/31/1996 16,811 17,194 17,194 17,379
08/31/1996 17,461 17,848 17,847 17,745
09/30/1996 17,934 18,320 18,320 18,744
10/31/1996 18,186 18,565 18,565 19,261
11/30/1996 19,741 20,141 20,141 20,717
12/31/1996 19,568 19,952 19,952 20,306
01/31/1997 20,226 20,618 20,618 21,575
02/28/1997 20,571 20,955 20,955 21,744
03/31/1997 19,841 20,200 20,199 20,851
04/30/1997 20,609 20,966 20,965 22,095
05/31/1997 21,829 22,192 22,191 23,441
06/30/1997 22,367 22,731 22,732 24,491
07/31/1997 23,848 24,221 24,222 26,439
08/31/1997 23,349 23,684 23,685 24,958
09/30/1997 24,735 25,083 25,083 26,325
10/31/1997 23,493 23,806 23,807 25,446
11/30/1997 24,068 24,375 24,376 26,624
12/31/1997 24,598 24,902 24,887 27,081
01/31/1998 24,700 24,970 24,973 27,381
02/28/1998 26,154 26,444 26,430 29,355
03/31/1998 27,196 27,490 27,475 30,859
04/30/1998 26,670 26,924 26,927 31,169
05/31/1998 26,552 26,787 26,790 30,633
06/30/1998 26,584 26,818 26,820 31,878
07/31/1998 25,462 25,668 25,669 31,538
08/31/1998 21,808 21,961 21,963 26,978
09/30/1998 23,056 23,215 23,215 28,707
10/31/1998 25,087 25,244 25,243 31,041
11/30/1998 26,520 26,671 26,670 32,923
12/31/1998 27,000 27,129 27,128 34,820
01/31/1999 26,344 26,470 26,448 36,276
02/28/1999 25,340 25,462 25,437 35,149
03/31/1999 25,274 25,395 25,341 36,555
04/30/1999 27,928 28,062 27,986 37,971
05/31/1999 28,682 28,820 28,725 37,074
06/30/1999 29,754 29,898 29,776 39,132
07/31/1999 29,424 29,566 29,425 37,910
08/31/1999 29,133 29,273 29,134 37,721
09/30/1999 28,294 28,430 28,277 36,689
10/31/1999 28,353 28,490 28,317 39,010
11/30/1999 27,905 28,039 27,849 39,803
12/31/1999 28,028 28,163 27,958 42,148
01/31/2000 26,341 26,467 26,247 40,031
02/29/2000 23,807 23,921 23,717 39,272
03/31/2000 27,456 27,588 27,329 43,114
04/30/2000 27,382 27,514 27,255 41,817
05/31/2000 28,593 28,730 28,413 40,959
06/30/2000 27,640 27,773 27,453 41,969
</TABLE>
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The adjusted returns
include the effect of the applicable sales charges. Excluding the 6-month, 1- &
3-year returns, these returns represent the blended performance of the Fund's
retail class shares and the prior performance of the Fund's institutional
shares, adjusted, as necessary, to reflect retail share current sales charge
and different operating expenses. The retail shares were first offered in
January 1997. The Fund may invest up to 15% in foreign securities, which may
entail greater risk due to foreign economic and political developments. SEE
PAGE 27 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
--------------------------------------------------------------------------------
<S> <C>
WASHINGTON MUTUAL, INC. 5.5%
Financial & Business Services
--------------------------------------------------------------------------------
ACE LTD. 5.1%
Financial & Business Services
--------------------------------------------------------------------------------
DEERE & CO. 5.0%
Capital Goods
--------------------------------------------------------------------------------
TENET HEALTHCARE CORP. 4.4%
Health Care
--------------------------------------------------------------------------------
XL CAPITAL LTD. 4.3%
Financial & Business Services
--------------------------------------------------------------------------------
R & B FALCON CORP. 3.7%
Energy
--------------------------------------------------------------------------------
RAYTHEON CO. `B' 3.6%
Aerospace
--------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORP. 3.5%
Financial & Business Services
--------------------------------------------------------------------------------
AON CORP. 3.3%
Financial & Business Services
--------------------------------------------------------------------------------
PETROLEO BRASILEIRO SA 3.2%
Energy
--------------------------------------------------------------------------------
TOP TEN TOTAL 41.6%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
--------------------------------------------------------------------------------
<S> <C>
FINANCIAL & BUSINESS SERVICES 29.7%
--------------------------------------------------------------------------------
CONSUMER STAPLES 11.1%
--------------------------------------------------------------------------------
ENERGY 10.1%
--------------------------------------------------------------------------------
AEROSPACE 8.6%
--------------------------------------------------------------------------------
COMMUNICATIONS 8.2%
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<S> <C>
COMMON STOCK 96.1%
--------------------------------------------------------------------------------
CASH EQUIVALENTS 3.9%
--------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
--------------------------------------------------------------------------------
PIMCO Value Fund Class A shares returned -7.11% for the twelve-month period
ended June 30, 2000.
Management of PIMCO Value Fund was shifted from NFJ Investment Group to PIMCO
Equity Advisors on May 8, 2000. The new manager will continue to focus on low
valuation stocks, but will purchase only those issues in that universe that show
a strong catalyst for change.
The Fund's exposure to the energy sector, which benefited from significantly
higher prices for oil, gas and natural gas liquids, helped its performance
during this year. Ultramar Diamond Shamrock, an independent petroleum refining
company, reported strong revenues as a result of higher profit margins and
increased demand. The company recently announced the completion of the Colorado
Springs pipeline expansion project, which should help its efforts to grow
earnings and returns through integrated operations. This news, accompanied with
the ever-increasing demand for power generation, helped boost the stock's price
significantly this year.
The financial services sector posted lackluster returns during this period.
As a result of rising interest rates, J.P. Morgan, Federal Home Loan Management
and Washington Mutual all suffered. These companies witnessed a drop in their
respective stock prices as profit margins narrowed because of the hike in
interest rates. In addition, indications of a slowing economy in the first half
of 2000 caused financial services companies to be unpopular with investors.
The Fund's performance was hurt by its exposure to the health care sector. In
particular, the HMO industry was punished by investors for much of the year,
despite exceeding earnings expectations. The area was unpopular with investors
in the second half of 1999 because of external problems, such as class-action
lawsuits and federal attempts at HMO legislation, which received much attention
from the press. Aetna, one of the Fund's largest holdings, saw its profits
squeezed by rising medical costs.
Looking ahead, the manager is optimistic that value stocks will once again
return to favor. The manager believes the Fund's philosophy of investing in low
valuation stocks with a catalyst should bode well for PIMCO Value Fund.
26
<PAGE>
June 30, 2000
--------------------------------------------------------------------------------
FOOTNOTES
--------------------------------------------------------------------------------
A few notes and definitions are needed for a complete understanding of the
performance figures.
PAST PERFORMANCE IS NO GUARANTEE 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. All holdings are subject to change. Portfolio Insights represent the
current opinion of the manager's and are subject to change.
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.
All equity funds are subject to the basic stock market risk that a particular
security or securities, in general, may decrease in value.
PIMCO Innovation, Global Innovation, Target and Opportunity Funds had
substantial exposure to technology, which greatly contributed to their
performance for the inception periods ended 6/30/00. During this time the
technology market produced historically high returns. PIMCO Innovation and
Global Innovation Funds concentrate on investments in the technology sector and
therefore may be subject to additional risk compared to a diversified equity
fund because (i) technology-related securities have tended to be more volatile
than the overall stock market and (ii) these Funds can invest in stocks of
smaller and/or unseasoned companies, which tend to be riskier, less liquid and
more volatile than securities of larger, more seasoned companies. The Funds may
also invest a substantial portion of their assets in foreign securities,
including emerging markets securities, which may entail greater risk and
volatility than U.S. securities due to foreign economic and political
developments, foreign currency risk and other factors.
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 400 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. Russell Mid-Cap
2000 and Russell 1000 Value are indices representative of the mid-cap market and
large-cap stocks, respectively. Growth of $10,000 does take into account sales
charges on class A Shares but not B or C Shares.
Lipper averages are calculated by Lipper, 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 fund classification 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 06902-6896, 1-800-426-0107, www.pimcofunds.com.
Please read the prospectus carefully before you invest or send money.
27
\
<PAGE>
SCHEDULE OF INVESTMENTS
CAPITAL APPRECIATION FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
------------------------------------------------------------------------------
COMMON STOCKS 93.3%
------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE 0.0%
Honeywell International, Inc. 1 $ 0
----------
CAPITAL GOODS 6.5%
General Electric Co. 365,900 19,393
Tyco International Ltd. 259,300 12,284
Waters Corp. (b) 74,800 9,336
United Technologies Corp. 125,400 7,383
Dover Corp. 77,800 3,156
----------
51,552
COMMUNICATIONS 2.2%
ADC Telecommunication, Inc. (b) 122,800 10,300
ALLTEL Corp. 110,800 6,863
SBC Communications, Inc. 1 0
----------
17,163
CONSUMER DISCRETIONARY 7.1%
Wal-Mart Stores, Inc. 197,100 11,358
CVS Corp. 274,600 10,984
Gemstar International Group Ltd. (b) 129,400 7,952
McGraw-Hill Companies, Inc. 137,500 7,425
Harley-Davidson, Inc. 173,300 6,672
Home Depot, Inc. 82,450 4,117
Sears Roebuck & Co. 123,900 4,042
Kohls Corp. (b) 71,500 3,977
Delphi Automotive Systems 1 0
----------
56,527
CONSUMER SERVICES 3.2%
Viacom, Inc. `B' (b) 196,763 13,417
New York Times Co. 161,300 6,371
Gannett, Inc. 100,400 6,005
----------
25,793
CONSUMER STAPLES 5.2%
Safeway, Inc. (b) 252,700 11,403
Kroger Co. (b) 487,400 10,753
Anheuser Busch Cos., Inc. 139,800 10,441
Quaker Oats Co. 108,600 8,159
Sysco Corp. 7,500 316
----------
41,072
ENERGY 17.1%
Exxon Mobil Corp. 210,000 16,485
Anadarko Petroleum Corp. 213,400 10,523
Baker Hughes, Inc. 285,900 9,149
Burlington Resources, Inc. 232,300 8,885
Royal Dutch Petroleum Co. 139,100 8,563
EOG Resources, Inc. 252,900 8,472
Apache Corp. 143,800 8,457
USX Marathon Group 330,600 8,286
Devon Energy Corp. 141,100 7,928
BP Amoco PLC SP - ADR 136,744 7,735
Conoco, Inc. 307,600 7,555
Amerada Hess Corp. 121,300 7,490
Peco Energy Co. 183,800 7,409
Chevron Corp. 86,300 7,319
Dynegy, Inc. 103,600 7,077
Texaco, Inc. 75,900 4,042
Nabors Industries, Inc. (b) 6,400 266
Enron Corp. 4,000 258
----------
135,899
FINANCIAL & BUSINESS SERVICES 10.6%
Citigroup, Inc. 184,750 11,131
MGIC Investment Corp. 204,100 9,287
American Express 163,600 8,528
Hartford Financial Services Group, Inc. 145,400 8,133
MBNA Corp. 286,800 7,779
AFLAC, Inc. 168,300 7,731
Capital One Financial Corp. 172,600 7,703
Fleet Boston Financial Corp. 205,100 6,973
Marsh & McLennan Cos. 66,500 6,945
Firstar Corp. 292,600 6,164
Federal National Mortgage Association 61,900 3,230
VeriSign, Inc. (b) 1,100 194
Paychex, Inc. 3,800 160
----------
83,958
HEALTH CARE 10.0%
Pfizer, Inc. 329,925 15,836
Immunex Corp. (b) 244,600 12,092
Allergan, Inc. 162,200 12,084
Schering-Plough Corp. 227,300 11,479
<CAPTION>
Value
Shares (000s)
------------------------------------------------------------------------------
<S> <C> <C>
Merck & Co., Inc. 140,500 $ 10,766
Genentech, Inc. (b) 55,300 9,512
Pharmacia Corp. 152,600 7,888
----------
79,657
TECHNOLOGY 29.0%
Corning, Inc. 59,900 16,166
Intel Corp. 112,400 15,026
Nortel Networks Corp. 200,400 13,677
Cisco Systems, Inc. (b) 212,000 13,475
SDL, Inc. (b) 46,200 13,176
Ciena Corp. (b) 79,000 13,168
Amdocs Ltd. (b) 145,800 11,190
Scientific-Atlanta, Inc. 149,600 11,145
JDS Uniphase Corp. (b) 86,000 10,309
Micron Technology, Inc. 112,100 9,873
Altera Corp. (b) 96,500 9,837
Compaq Computer Corp. 381,600 9,755
Siebel Systems, Inc. (b) 58,400 9,552
EMC Corp. (b) 123,500 9,502
Analog Devices, Inc. (b) 118,100 8,976
Sun Microsystems, Inc. (b) 96,400 8,767
Oracle Corp. (b) 103,100 8,668
Applied Materials, Inc. (b) 91,800 8,319
Veritas Software Corp. (b) 73,025 8,253
Texas Instruments, Inc. 115,500 7,933
Teradyne, Inc. (b) 86,000 6,321
Computer Associates International, Inc. 102,200 5,231
Redback Networks, Inc. (b) 3,100 552
Broadcom Corp. (b) 1,600 350
I2 Technologies, Inc. (b) 2,800 292
America Online, Inc. (b) 4,700 248
Linear Technology Corp. 3,800 243
Network Appliance, Inc. (b) 2,800 225
----------
230,229
UTILITIES 2.4%
Coastal Corp. 158,600 9,655
Calpine Corp. (b) 140,400 9,231
----------
18,886
----------
Total Common Stocks 740,736
(Cost $576,274) ==========
------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 7.2%
------------------------------------------------------------------------------
<CAPTION>
Principal
Amount
(000s)
<S> <C> <C>
REPURCHASE AGREEMENT 7.2%
State Street Bank
5.850% due 07/03/2000 $ 56,866 56,866
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
6.400% due 12/21/2001 valued at $51,004 and
Federal Home Loan Bank
7.620% due 01/12/2010 valued at $7,004.
Repurchase proceeds are $56,893.)
----------
Total Short-Term Instruments 56,866
(Cost $56,866) ==========
TOTAL INVESTMENTS (a) 100.5% $ 797,602
(Cost $633,140)
OTHER ASSETS AND LIABILITIES (NET) (0.5%) (3,792)
----------
NET ASSETS 100.0% $ 793,810
==========
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $637,056 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 178,851
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (18,305)
----------
Unrealized appreciation-net $ 160,546
==========
</TABLE>
(b) Non-income producing security.
28 SEE ACCOMPANYING NOTES
<PAGE>
SCHEDULE OF INVESTMENTS
EQUITY INCOME FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
------------------------------------------------------------------------------
COMMON STOCKS 96.7%
------------------------------------------------------------------------------
<S> <C> <C>
CAPITAL GOODS 7.7%
Tyco International Ltd. 45,000 $ 2,132
General Electric Co. 35,000 1,855
Weatherford International, Inc. (b) 35,000 1,393
----------
5,380
COMMUNICATIONS 10.6%
Cox Communications, Inc. 35,000 2,150
Nokia Corp. SP - ADR 35,000 1,748
GTE Corp. 20,000 1,245
SBC Communications, Inc. 28,000 1,211
Vodafone Group PLC SP - ADR 25,000 1,036
----------
7,390
CONSUMER DISCRETIONARY 4.8%
General Motors Corp. `H' 25,000 2,194
Wal-Mart Stores, Inc. 20,000 1,152
----------
3,346
ENERGY 16.9%
Utilicorp United 90,000 2,138
Enron Corp. 30,000 1,935
EL Paso Energy Corp. 35,000 1,783
Peco Energy Co. 40,000 1,613
Exxon Mobil Corp. 20,000 1,570
Schlumberger Ltd. 20,000 1,493
Cooper Cameron Corp. (b) 20,000 1,320
----------
11,852
FINANCIAL & BUSINESS SERVICES 19.4%
Citigroup, Inc. 40,000 2,410
Spieker Properties, Inc. 42,000 1,932
Boston Properties, Inc. 50,000 1,931
Morgan Stanley, Dean Witter, Discover and Co. 20,000 1,665
American International Group, Inc. 14,000 1,645
Omnicom Group 18,000 1,603
American Express 30,000 1,564
Federal National Mortgage Association 15,000 783
----------
13,533
HEALTH CARE 11.1%
Schering-Plough Corp. 35,000 1,767
Johnson & Johnson 17,000 1,732
Merck & Co., Inc. 20,000 1,532
American Home Products Corp. 25,000 1,469
Medtronic, Inc. 25,000 1,245
----------
7,745
TECHNOLOGY 19.8%
EMC Corp. (b) 40,000 3,077
Jabil Circuit, Inc. (b) 40,000 1,985
Hewlett Packard Co. 15,000 1,873
Scientific-Atlanta, Inc. 25,000 1,863
Flextronics International Ltd. (b) 25,000 1,717
Nortel Networks Corp. 25,000 1,706
Intel Corp. 12,000 1,604
----------
13,825
UTILITIES 6.4%
Calpine Capital Trust II-144A 35,000 2,538
Duke Energy Corp. 35,000 1,973
----------
4,511
----------
Total Common Stocks 67,582
(Cost $66,147) ==========
------------------------------------------------------------------------------
CONVERTIBLE BONDS & NOTES 2.9%
------------------------------------------------------------------------------
<CAPTION>
Principal
Amount Value
(000s) (000s)
<S> <C> <C>
TECHNOLOGY 2.9%
Nextel Communications
5.250% due 01/15/2010 $ 2,000 $ 2,030
----------
Total Convertible Bonds & Notes 2,030
(Cost $1,914) ==========
TOTAL INVESTMENTS (a) 99.6% $ 69,612
(Cost $68,061)
OTHER ASSETS AND LIABILITIES (NET) 0.4% 297
----------
NET ASSETS 100.0% $ 69,909
==========
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $68,096 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 3,889
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (2,373)
----------
Unrealized appreciation-net $ 1,516
==========
</TABLE>
(b) Non-income producing security.
SEE ACCOMPANYING NOTES 29
<PAGE>
SCHEDULE OF INVESTMENTS
GLOBAL INNOVATION FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
------------------------------------------------------------------------------
COMMON STOCKS 93.2%
------------------------------------------------------------------------------
<S> <C> <C>
CAPITAL GOODS 1.2%
Waters Corp. (b) 10,000 $ 1,248
----------
COMMUNICATIONS 7.3%
Nokia Corp. SP - ADR 40,000 1,998
Alcatel Alsthom SP - ADR 29,000 1,929
ADC Telecommunication, Inc. (b) 18,000 1,510
Telefonaktiebolaget LM Ericsson SP - ADR 70,000 1,400
SK Telecom Co. Ltd. SP - ADR 21,000 763
----------
7,600
HEALTH CARE 10.3%
IDEC Pharmaceuticals Corp. (b) 19,000 2,229
Elan Corp. PLC (b) 42,000 2,034
Genentech, Inc. (b) 11,000 1,892
Ivax Corp. (b) 36,000 1,494
Teva Pharmaceutical Industries Ltd. 20,000 1,109
QLT Phototherapeutics, Inc. (b) 13,600 1,051
COR Therapeutics, Inc. (b) 12,000 1,024
----------
10,833
TECHNOLOGY 74.4%
Juniper Networks, Inc. (b) 23,800 3,464
Nortel Networks Corp. 45,000 3,071
Intel Corp. 20,400 2,727
EMC Corp. (b) 32,000 2,462
Cisco Systems, Inc. (b) 38,100 2,422
Redback Networks, Inc. (b) 13,000 2,314
I2 Technologies, Inc. (b) 22,000 2,294
BEA Systems, Inc. (b) 46,000 2,274
Dell Computer Corp. (b) 46,000 2,268
Veritas Software Corp. (b) 20,000 2,260
E-Tek Dynamics, Inc. (b) 8,500 2,242
Extreme Networks, Inc. (b) 21,000 2,216
Brocade Communications Systems, Inc. (b) 11,700 2,147
Flextronics International Ltd. (b) 28,500 1,958
Applied Micro Circuits Corp. (b) 19,000 1,876
Sycamore Networks, Inc. 17,000 1,876
Oracle Corp. (b) 22,000 1,849
Micron Technology, Inc. (b) 21,000 1,849
Bookham Technology PLC (b) 31,000 1,837
Tibco Software, Inc. (b) 17,000 1,823
Micromuse, Inc. (b) 11,000 1,820
Siebel Systems, Inc. (b) 11,100 1,816
Rational Software Corp. (b) 19,000 1,766
Broadcom Corp. (b) 7,500 1,642
Aether Systems, Inc. (b) 8,000 1,640
Sun Microsystems, Inc. (b) 18,000 1,637
Altera Corp. (b) 15,200 1,548
Applied Materials, Inc. (b) 16,900 1,532
Scientific-Atlanta, Inc. 20,000 1,490
SDL, Inc. (b) 5,000 1,426
Texas Instruments, Inc. 20,000 1,374
Teradyne, Inc. (b) 18,500 1,360
ASM Lithography Holding (b) 30,000 1,324
Dialog Semiconductor Ltd. (b) 25,000 1,256
China Telecom (Hong Kong) Ltd. (b) 7,000 1,245
Proxim, Inc. (b) 12,000 1,188
Inktomi Corp. (b) 9,500 1,123
QLogic Corp. (b) 15,500 1,024
Maxim Integrated Products, Inc. (b) 14,100 958
PE Corp.-Celera Genomics Group (b) 10,000 935
Integrated Device Technology, Inc. (b) 15,000 898
Yahoo, Inc. (b) 7,000 867
Comverse Technology, Inc. (b) 9,000 837
Apple Computer, Inc. (b) 15,000 786
Broadvision, Inc. (b) 15,000 762
Interwoven, Inc. (b) 3,000 329
StorageNetworks, Inc. (b) 1,900 171
----------
77,983
----------
Total Common Stocks 97,664
(Cost $87,088) ==========
<CAPTION>
Principal
Amount Value
(000s) (000s)
------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 7.6%
------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT 7.6%
State Street Bank
5.850% due 07/03/2000 $ 7,962 $ 7,962
(Dated 06/30/2000. Collateralized by
Federal Home Loan Bank
7.620% due 01/12/2010 valued at $8,125.
Repurchase proceeds are $7,966.)
----------
Total Short-Term Instruments 7,962
(Cost $7,962) ==========
TOTAL INVESTMENTS (a) 100.8% $ 105,626
(Cost $95,050)
Other Assets and Liabilities (Net) (0.8%) (878)
----------
NET ASSETS 100.0% $ 104,748
==========
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $95,889 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 12,532
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (2,795)
----------
Unrealized appreciation-net $ 9,737
==========
</TABLE>
(b) Non-income producing security.
30 SEE ACCOMPANYING NOTES
<PAGE>
SCHEDULE OF INVESTMENTS
GROWTH FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
------------------------------------------------------------------------------
COMMON STOCKS 98.9%
------------------------------------------------------------------------------
<S> <C> <C>
CAPITAL GOODS 3.9%
General Electric Co. 1,500,000 $ 79,500
Tyco International Ltd. 750,000 35,531
----------
115,031
COMMUNICATIONS 8.8%
Nokia Corp. SP - ADR 3,500,000 174,781
Telefonaktiebolaget LM Ericsson SP - ADR 2,500,000 50,000
AT&T Corp. - Liberty Media Group `A' (b) 1,300,000 31,525
----------
256,306
CONSUMER DISCRETIONARY 7.5%
Wal-Mart Stores, Inc. 1,500,000 86,438
Home Depot, Inc. 1,000,000 49,937
Kohls Corp. (b) 800,000 44,500
Clear Channel Communications (b) 500,000 37,500
----------
218,375
ENERGY 4.3%
Enron Corp. 1,500,000 96,750
AES Corp. (b) 600,000 27,375
----------
124,125
FINANCIAL & BUSINESS SERVICES 18.7%
Morgan Stanley, Dean Witter, Discover and Co. 1,500,000 124,875
Citigroup, Inc. 1,750,000 105,438
Omnicom Group 1,000,000 89,062
American International Group, Inc. 750,000 88,125
American Express 1,500,000 78,187
Northern Trust Corp. 500,000 32,531
Federal National Mortgage Association 500,000 26,094
----------
544,312
HEALTH CARE 12.1%
Genentech, Inc. (b) 500,000 86,000
Johnson & Johnson 800,000 81,500
Amgen, Inc. (b) 1,000,000 70,250
Pfizer, Inc. 1,000,000 48,000
Schering-Plough Corp. 750,000 37,875
Medtronic, Inc. 600,000 29,887
----------
353,512
TECHNOLOGY 43.6%
EMC Corp. (b) 3,000,000 230,812
Cisco Systems, Inc. (b) 2,500,000 158,906
Nortel Networks Corp. 2,000,000 136,500
JDS Uniphase Corp. (b) 1,000,000 119,875
Sun Microsystems, Inc. (b) 1,000,000 90,938
Texas Instruments, Inc. 1,000,000 68,688
Corning, Inc. 250,000 67,469
Oracle Corp. (b) 800,000 67,250
Intel Corp. 400,000 53,475
Comverse Technology, Inc. (b) 500,000 46,500
Applied Materials, Inc. (b) 500,000 45,313
Broadcom Corp. (b) 200,000 43,788
SDL, Inc. (b) 150,000 42,778
Applied Micro Circuits Corp. (b) 350,000 34,563
Flextronics International Ltd. (b) 500,000 34,344
Network Appliance, Inc. (b) 400,000 32,200
----------
1,273,399
----------
Total Common Stocks 2,885,060
(Cost $1,771,224) ==========
<CAPTION>
Principal
Amount Value
(000s) (000s)
------------------------------------------------------------------------------
CORPORATE BONDS & NOTES 0.0%
------------------------------------------------------------------------------
<S> <C> <C>
INDUSTRIALS 0.0%
Cabbell Financial Grantor Trust (c)
7.187% due 12/31/2002 $ 363 $ 181
----------
Total Corporate Bonds & Notes 181
(Cost $361) ==========
<CAPTION>
------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 1.0%
------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT 1.0%
State Street Bank
5.850% due 07/03/2000 30,194 30,194
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
5.125% due 02/13/2004 valued at $30,800.
Repurchase proceeds are $30,209.)
----------
Total Short-Term Instruments 30,194
(Cost $30,194) ==========
TOTAL INVESTMENTS (a) 99.9% $2,915,435
(Cost $1,801,779)
OTHER ASSETS AND LIABILITIES (NET) 0.1% 2,663
----------
Net Assets 100.0% $2,918,098
==========
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $1,803,018 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $1,135,113
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value. (22,696)
----------
Unrealized appreciation-net $1,112,417
==========
</TABLE>
(b) Non-income producing security.
(c) Illiquid securities.
SEE ACCOMPANYING NOTES 31
<PAGE>
SCHEDULE OF INVESTMENTS
INNOVATION FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
------------------------------------------------------------------------------
COMMON STOCKS 98.5%
------------------------------------------------------------------------------
<S> <C> <C>
COMMUNICATIONS 9.3%
Nokia Corp. SP - ADR 3,148,000 $ 157,203
Telefonaktiebolaget LM Ericsson SP - ADR 6,850,000 137,000
ADC Telecommunication, Inc. (b) 1,075,000 90,166
Next Level Communications, Inc. (b) 772,500 66,242
Alcatel Alsthom SP - ADR 850,000 56,525
----------
507,136
CONSUMER DISCRETIONARY 4.0%
Gemstar International Group Ltd. (b) 2,746,000 168,750
General Motors Corp. `H' 560,000 49,140
----------
217,890
HEALTH CARE 4.3%
MedImmune, Inc. (b) 1,350,000 99,900
Forest Laboratories `A' (b) 909,000 91,809
IDEC Pharmaceuticals Corp. (b) 392,800 46,080
----------
237,789
TECHNOLOGY 80.9%
Micron Technology, Inc. (b) 2,610,000 229,843
Siebel Systems, Inc. (b) 1,305,200 213,482
Intel Corp. 1,480,000 197,858
Cisco Systems, Inc. (b) 3,040,000 193,230
E-Tek Dynamics, Inc. (b) 706,300 186,331
Ciena Corp. (b) 1,085,000 180,856
Oracle Corp. (b) 2,019,000 169,722
Juniper Networks, Inc. (b) 1,126,200 163,932
Nortel Networks Corp. 2,400,000 163,800
Redback Networks, Inc. (b) 910,400 162,051
Brocade Communications Systems, Inc. (b) 867,200 159,118
Xilinx, Inc. (b) 1,830,000 151,089
Applied Materials, Inc. (b) 1,571,600 142,426
ASM Lithography Holding (b) 3,179,100 140,278
Veritas Software Corp. (b) 1,148,450 129,793
Dell Computer Corp. (b) 2,450,000 120,816
Sycamore Networks, Inc. (b) 1,085,000 119,757
Tibco Software, Inc. (b) 1,020,600 109,443
Vignette Corp. (b) 2,050,000 106,632
Check Point Software Technologies Ltd. (b) 500,000 105,875
National Semiconductor Corp. (b) 1,810,000 102,718
Rational Software Corp. (b) 1,061,500 98,653
I2 Technologies, Inc. (b) 920,200 95,945
Portal Software, Inc. (b) 1,465,000 93,577
Broadvision, Inc. (b) 1,771,100 89,994
Network Appliance, Inc. (b) 1,100,000 88,550
Texas Instruments, Inc. 1,240,000 85,173
JDS Uniphase Corp. (b) 618,000 74,083
SDL, Inc. (b) 250,000 71,297
Ariba, Inc. (b) 589,600 57,808
Sun Microsystems, Inc. (b) 628,400 57,145
RF Micro Devices, Inc. (b) 627,500 54,985
EMC Corp. (b) 670,000 51,548
Extreme Networks, Inc. (b) 397,500 41,936
Infospace, Inc. (b) 700,000 38,675
Phone.com, Inc. (b) 547,300 35,643
Analog Devices, Inc. (b) 410,000 31,160
Vitesse Semiconductor Co. (b) 400,000 29,425
Foundry Networks, Inc. (b) 260,000 28,730
PE Corp.-PE Biosystems Group 380,000 25,032
Flextronics International Ltd. (b) 275,000 18,889
Digital Microwave Corp. (b) 400,000 15,250
----------
4,432,548
----------
Total Common Stocks 5,395,363
(Cost $3,710,170) ==========
<CAPTION>
Principal
Amount Value
(000s) (000s)
------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 2.1%
------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT 2.1%
State Street Bank
5.850% due 07/03/2000 $113,785 $ 113,785
(Dated 06/30/2000. Collateralized by
Federal Home Loan Corporation
6.390% due 10/01/2008 valued at $51,000,
Federal Home Loan Bank
5.823% due 05/06/2009 valued at $51,000, and
Federal Home Loan Bank
7.620% due 01/12/2010 valued at $14,064.
Repurchase proceeds are $113,840.)
----------
Total Short-Term Instruments 113,785
(Cost $113,785) ==========
TOTAL INVESTMENTS (a) 100.6% $5,509,148
(Cost $3,823,955)
OTHER ASSETS AND LIABILITIES (NET) (0.6%) (29,992)
----------
Net Assets 100.0% $5,479,156
==========
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $3,914,225 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $1,746,367
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (151,444)
----------
Unrealized appreciation-net $1,594,923
==========
</TABLE>
(b) Non-income producing security.
32 SEE ACCOMPANYING NOTES
<PAGE>
SCHEDULE OF INVESTMENTS
INTERNATIONAL FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
------------------------------------------------------------------------------
COMMON STOCKS 90.7%
------------------------------------------------------------------------------
<S> <C> <C>
BRAZIL 1.0%
Telecomunicacoes Brasileiras SA SP - ADR 3,850 $ 374
Petroleo Brasileiro SA 8,240 249
Centrais Electricas Brasileiras SA `B' 6,513,000 144
Cia Vale Do Rio (b) 5,100 144
Telecomunicacoes de Sao Paulo SA (b) 4,600 85
Companhia Cervejaria Brahma 80,000 68
Banco Itau SA 730,000 64
Banco Bradesco SA 7,276,037 63
Companhia Energetica de Minas Gerais 2,940,800 51
Companhia Siderurgica Nacional (b) 1,360,000 43
Aracruz Celulose SA `B' 21,000 40
Tele Sudeste Celular Participacoes SA (b) 920 28
Tele Norte Leste Participacoes SA 133,204 16
Telesp Celular (b) 76 0
----------
1,369
CHILE 1.1%
Compania de Telecomunicaciones de Chile SA SP - ADR 20,855 378
Banco Santander Chile SP - ADR 15,850 254
Enersis SA SP - ADR 12,122 242
Empresa Nacional de Electricidad SA SP - ADR 16,367 181
Gener SA SP - ADR 10,633 156
Compania Cervecerias Unidas SA SP - ADR 4,300 98
Sociedad Quimica y Minera de Chile SA SP - ADR 3,000 67
Masisa SA SP - ADR 3,900 46
Madeco SA SP - ADR (b) 4,342 33
Quimica Y Minera de Chile 531 12
----------
1,467
CHINA 0.7%
China Telecom Ltd. (b) 82,000 723
Huaneng Power International, Inc. 399,000 131
Yizheng Chemical Fibre Co. Ltd. `H' 514,000 102
Guangshen Railway Co. Ltd. `H' 668,000 68
----------
1,024
FINLAND 4.4%
Nokia Corp. 94,208 4,807
Sonera Group OYJ 9,520 434
Sanoma WSOY 13,520 225
Yit-Yhtyma OY 12,184 161
Talentum 13,630 126
Hartwall OY AB 4,700 94
Jot Automation Group OYJ 10,500 70
UPM-Kymmene Corp. 2,746 68
Kemira OYJ 12,050 59
Okobank 2,564 26
Rautaruukki OY 4,895 23
Viking Line AB 880 21
----------
6,114
FRANCE 8.4%
France Telecom SA 10,641 1,487
Total SA 9,032 1,385
Vivendi (Ex-Generale Des Eaux) 12,158 1,073
AXA 6,348 1,000
Banque National de Paris 9,050 871
Alcatel Telecommunications 12,890 845
Carrefour Supermarche 8,580 586
Legrand SA 2,500 561
Cap Gemini SA 2,900 511
Hermes International 3,115 421
Suez Lyonnaise des Eaux 2,310 405
L'OREAL 460 398
Lafarge SA 4,801 373
Castorama Dubois 1,470 364
Sodexho Alliance SA 1,750 318
Groupe GTM 2,870 269
Groupe Danone 1,960 260
Renault SA 5,140 234
Schneider SA 2,801 195
Societe BIC SA 2,680 131
Vivendi Warrants (b) 2,750 9
----------
11,696
GERMANY 10.2%
Allianz AG 5,397 1,939
Siemens AG 8,793 1,326
SAP AG 6,180 1,139
E On AG 20,468 987
DaimlerChrysler AG 17,819 929
<CAPTION>
Value
Shares (000s)
------------------------------------------------------------------------------
<S> <C> <C>
Deutsche Telekom 40,332 $ 2,303
Muenchener Rueckversicherungs-Gesellschaft AG 2,590 814
Bayer AG 20,600 804
BASF AG 17,900 719
Bayerische Hypo Vereinsbank AG 10,500 678
Dresdner Bank AG 16,120 663
Bayerische Motoren Werke AG 20,420 617
MAN AG 17,000 514
Commerzbank AG 11,500 412
Metro AG 6,800 240
----------
14,084
HONG KONG 0.4%
Citic Pacific Ltd. 42,000 220
Legend Holdings 216,000 209
Cosco Pacific Ltd. 228,000 180
----------
609
HUNGARY 3.2%
Magyar Tavkozlesi Rt. 395,300 2,749
OTP Bank Rt. 13,010 678
MOL Magyar Olaj-es Gazipari Rt. 33,500 462
Gedeon Richter Rt. 7,945 428
Danubius Hotel and Spa Rt. 7,490 144
Pick Szeged Rt. 1,090 40
----------
4,501
INDIA 0.6%
Mahanagar Telephone Nigam Ltd. (b) 20,200 206
Videsh Sanchar Nigam Ltd. 10,000 156
I.T.C. Limited SP - GDR (b) 6,900 133
State Bank of India SP - GDR 11,700 116
BSES Ltd. - GDR 5,400 100
Larsen & Toubro Ltd. 8,600 96
----------
807
IRELAND 1.0%
CRH PLC 21,866 395
Allied Irish Banks PLC 35,100 314
Eircom PLC 100,300 268
Kerry Group PLC 10,700 140
Jefferson Smurfit Group PLC 70,900 122
Irish Life & Permanent PLC 9,141 77
Bank of Ireland 9,200 58
----------
1,374
ITALY 2.2%
Telecom Italia Mobile SpA 50,200 513
Telecom Italia SpA 31,865 438
ENI SpA 69,900 404
Istituto Bancario San Paolo di Torino 20,757 368
Assicuazioni Generali 9,135 313
Enel SpA 45,800 203
Fiat SpA 6,540 170
Benetton Group SpA 75,700 158
Banca Popolare di Milano 19,200 138
RAS AG 12,300 135
Banca Intesa SpA 21,885 98
Telecom Italia SpA 13,400 89
Olivetti SpA 18,200 66
Beni Stabili SpA 20,757 11
Banca Intesa SpA 3,486 5
----------
3,109
JAPAN 20.6%
Nippon Telegraph & Telephone 158 2,100
Fanuc 16,300 1,658
Murata Manufacturing Co. 11,000 1,578
Toyota Motor Corp. 33,000 1,502
Bank of Tokyo-Mitsubishi Ltd. 115,000 1,388
Matsushita Electric Industrial Co. Ltd. 49,000 1,270
Fuji Photo Film 31,000 1,268
Fujisawa Pharmaceutical 30,000 1,213
Sharp Corp. 67,000 1,184
NEC Corp. 35,000 1,098
Kirin Brewery Co. Ltd. 83,000 1,036
Sony Corp. 11,000 1,026
Mitsubishi Estate 86,000 1,012
Sumitomo Bank Ltd. 81,000 992
Canon, Inc. 18,000 896
Asahi Chemical Industry Co. Ltd. 118,000 834
</TABLE>
SEE ACCOMPANYING NOTES 33
<PAGE>
SCHEDULE OF INVESTMENTS (CONT.)
INTERNATIONAL FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
------------------------------------------------------------------------------
<S> <C> <C>
Secom 11,000 $ 803
DAI Nippon Printing Co. Ltd. 45,000 793
Nomura Securities Co. Ltd. 31,000 758
Hitachi Ltd. 52,000 750
Tokyo Electric Power 28,300 689
Honda Motor Co. Ltd. 20,000 680
Yamanouchi Pharm 12,000 655
Ito-Yokado Co. Ltd. 10,000 601
Mitsubishi Heavy Industries Ltd. 131,000 580
Nippon Steel Corp. 257,000 540
Tokio Marine & Fire Insurance Co. 46,000 531
Mitsubishi Corp. 55,000 497
Bridgestone Corp. 19,000 402
Nissan Motor Co. Ltd. (b) 63,000 371
----------
28,705
MALAYSIA 1.6%
Tenaga Nasional Bhd. 185,000 604
Malayan Banking Bhd. 122,000 494
Telekom Malaysia Bhd. 106,000 366
Malaysia International Shipping Bhd. 137,000 227
Public Bank Bhd. 216,000 216
Commerce Asset-Holding Bhd. 49,000 142
RHB Capital 102,000 111
Resorts World Bhd. 37,000 101
----------
2,261
NETHERLANDS 3.2%
Royal Dutch Petroleum Co. 20,370 1,266
Philips Electronics (b) 11,200 528
ING Groep NV 7,585 513
Koninklijke KPN NV 7,940 355
ABN AMRO Mortgage Corp. 13,600 333
Aegon NV 8,400 299
Fortis NL 7,960 232
Unilever NV 4,953 227
Verernigde Nederlandse Uitgeversbedrijven Bezit 4,380 226
Heineken NV 3,100 189
Akzo Noble NV 3,980 169
Koninklijke Ahold NV 4,700 138
----------
4,475
NEW ZEALAND 0.8%
Telecom Corp. of New Zealand Ltd. 159,200 556
Fletcher Challenge Energy 52,800 172
Lion Nathan Ltd. 59,600 133
Carter Holt Harvey Ltd. 147,500 128
Brierley Investments Ltd. 566,000 88
Fisher & Paykel Industries Ltd. 21,200 67
----------
1,144
NORWAY 2.3%
Norsk Hydro ASA 28,470 1,194
Orkla ASA 20,800 395
Christiania Bank Og Kreditkasse 53,900 290
Storebrand ASA 37,700 272
Den Norske Bank ASA 61,060 253
Petroleum Geo-Services (b) 14,100 241
Tomra Systems ASA 6,400 170
Norske Skogindustrier ASA 5,600 134
Merkantildata ASA (b) 17,900 92
Hafslund ASA `B' 20,200 66
Tandberg Television ASA (b) 8,500 49
Unitor ASA 4,000 29
----------
3,185
POLAND 2.1%
Telekomunikacja Polska SA 151,900 1,049
Polski Koncern Naftowy 57,153 537
Bank Slaski SA W Katowicach 4,840 261
Elektrim Spolka Akcyjna SA 16,280 187
Bank Pekao (b) 14,400 173
Prokom Software SA 2,820 148
Wielkopolski Bank Kredytowy SA 19,590 114
Bank Rozwoju Eksportu SA 3,100 96
Stomil Olsztyn SA 14,500 95
Big Bank Gdanski SA 42,500 86
Softbank SA 1,440 75
Debica SA 4,930 41
Bank Handlowy W. Warszawie 2,509 40
----------
2,902
RUSSIA 1.9%
LUKoil Holding SP - ADR 21,000 1,074
Surgutneftegaz 59,900 798
Unified Energy System SP - ADR 43,300 498
Rostelecom SP - ADR 17,000 232
Mosenergo SP - ADR 12,800 50
----------
2,652
SINGAPORE 0.9%
Singapore Press Holdings 20,000 313
DBS Group Holdings Ltd. 21,000 270
Singapore Tech Engineering Ltd. 165,000 243
City Developments Ltd. 47,000 182
Overseas Union Bank 47,000 182
DBS Land 102,000 132
----------
1,322
SOUTH KOREA 1.9%
Samsung Electronics (b) 2,000 662
Korea Electric Power Corp. 14,000 434
Korea Fund, Inc. (b) 17,000 239
SK Telecom Co. (b) 600 196
Korea Telecom 2,000 176
Kookmin Bank 11,000 140
Samsung Electro-Mechanics 2,000 125
Pohang Iron & Steel Co. 5,000 120
Hyundai Motor Co. Ltd. 8,000 103
L.G. Chemical Ltd. 5,000 100
Samsung Display Devices Co. 2,000 96
SK Corp. 4,000 73
Shinhan Bank 7,000 66
Samsung Heavy Industries 14,000 65
----------
2,595
SPAIN 3.0%
Telefonica SA 61,940 1,331
Banco Bilbao Vizcaya International 61,220 915
Banco Santander Central Hispano 55,060 581
Endesa SA 25,780 499
Repsol SA 17,420 347
Fomento de Contrucciones y Contratas SA 9,220 174
Iberdrola SA 8,750 113
Sogecable SA (b) 2,700 96
Autopistas Concesionaria Espanola SA 5,900 51
Gas Natural 2,560 46
Union Electric Fenosa 2,330 42
Autopistas, Concesionaria Espanola SA warrants (b) 5,900 3
----------
4,198
SWEDEN 2.1%
MSCI Sweden Opal Series B (b) 7,660 2,966
----------
SWITZERLAND 4.6%
Novartis AG 884 1,400
Roche Holding AG 116 1,129
Nestle SA 458 917
Credit Suisse Group 4,185 832
UBS AG 5,360 785
New ABB Ltd. 2,873 344
Zurich Allied AG 675 334
Swisscom AG 880 305
Holderbank Financiere Glarus AG 146 179
Schindler Holding AG 99 152
Givaudan AG (b) 116 35
----------
6,412
TAIWAN 2.9%
Taiwan Fund, Inc. 56,300 1,077
Winbond Electronics Corp. (b) 27,994 805
Asustek Computer, Inc. (b) 57,120 524
Taiwan Semiconductor Manufacturing Co. Ltd. (b) 11,392 441
China Steel Corp. SP - GDR (b) 29,900 404
Evergreen Marine Corp. 31,320 302
Asia Cement Corp. SP - GDR (b) 37,817 246
Advanced Semiconductor Engineering SP - GDR (b) 14,391 245
Standard Foods Taiwan Ltd. (b) 4,269 12
----------
4,056
</TABLE>
34 SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
Value
Shares (000s)
------------------------------------------------------------------------------
<S> <C> <C>
TURKEY 3.8%
Turkiye Is Bankasi `C' 61,608,800 $ 1,316
Yapi ve Kredi Bankasi AS 73,768,334 821
Turkiye Garanti Bankasi AS (b) 50,552,200 611
Arcelik AS 9,553,500 470
Migros Turk TAS 1,784,700 331
Eregli Demir Ve Celik Fabrikalari TAS 7,059,300 284
Ege Biracilik ve Malt Sanayii AS 3,326,100 217
Vestel Elektronik Sanayi 696,000 210
Trakya Cam Sanayii AS 15,181,104 174
Dogan Sirketler Grubu Holding AS 7,162,000 173
Netas Northern Electric Telekomunikasyon AS 1,200,600 134
Brisa Bridgestone Sabanci Lastik San. Ve Tic AS 1,976,000 123
Aygaz AS 2,790,000 111
Adana Cimento Sanayii `A' 6,439,845 99
Haci Omer Sabanci Holding AS 7,941,600 93
Akbank TAS 11,765,498 91
----------
5,258
UNITED KINGDOM 5.8%
Morgan Stanley Capital LLC 17,000 4,635
MSCI World Equity Benchmark Shares
United Kingdom Index IOPV 181,000 3,450
----------
8,085
----------
Total Common Stocks 126,370
(Cost $108,106) ==========
<CAPTION>
------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 7.2%
------------------------------------------------------------------------------
Principal
Amount
(000s)
<S> <C> <C>
REPURCHASE AGREEMENTS 2.0%
State Street Bank
5.850% due 07/03/2000 $ 2,823 2,823
(Dated 06/30/2000. Collateralized by ----------
Federal National Mortgage Association
6.100% due 09/14/2001 valued at $2,884.
Repurchase proceeds are $2,824.)
TIME DEPOSITS (c) 5.2%
State Street Bank
5.000% due 07/03/2000 BP 3,700 5,598
4.350% due 07/03/2000 EC 1,700 1,623
----------
7,221
----------
Total Short-Term Instruments 10,044
(Cost $10,044) ==========
TOTAL INVESTMENTS (a) 97.9% $ 136,414
(Cost $118,150)
OTHER ASSETS AND LIABILITIES (NET) 2.1% 2,956
----------
NET ASSETS 100.0% $ 139,370
==========
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $118,561 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 26,110
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value. (8,257)
----------
Unrealized appreciation-net $ 17,853
==========
</TABLE>
(b) Non-income producing security.
(c) Assets with an aggregate market value of $5,582 have been segregated with
the custodian to cover margin requirements for the following open futures
contracts at June 30, 2000
<TABLE>
<CAPTION>
# of Unrealized
Type Contracts (Depreciation)
-------------------------------------------------------------------------------
<S> <C> <C>
GBP 100 Index Futures (09/2000) 58 $ (147)
</TABLE>
SEE ACCOMPANYING NOTES 35
<PAGE>
SCHEDULE OF INVESTMENTS
MID-CAP FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
------------------------------------------------------------------------------
COMMON STOCKS 94.3%
------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE 0.4%
Northrop Grumman Corp. 69,000 $ 4,571
----------
BUILDING 1.0%
Lennar Corp. 549,100 11,119
----------
CAPITAL GOODS 3.0%
Waters Corp. (b) 153,500 19,159
Millipore Corp. 173,100 13,047
----------
32,206
COMMUNICATIONS 2.8%
ADC Telecommunication, Inc. (b) 205,300 17,220
Westwood One, Inc. (b) 389,800 13,302
----------
30,522
CONSUMER DISCRETIONARY 5.0%
CDW Computer Centers, Inc. (b) 206,400 12,900
Bed, Bath & Beyond, Inc. (b) 292,900 10,618
Dollar Tree Stores, Inc. (b) 265,650 10,510
Intimate Brands, Inc. `A' 523,380 10,337
B.J.'s Wholesale Club, Inc. (b) 300,300 9,910
----------
54,275
CONSUMER SERVICES 2.5%
Reader's Digest Assn., Inc. `A' 363,600 14,453
Brinker International, Inc. (b) 412,800 12,074
----------
26,527
CONSUMER STAPLES 4.7%
Pepsi Bottling Group, Inc. 482,100 14,071
SUPERVALU, Inc. 662,300 12,625
McCormick & Co. 379,500 12,334
Keebler Foods Co. 321,400 11,932
----------
50,962
ENERGY 16.8%
Apache Corp. 288,900 16,991
Anadarko Petroleum Corp. 328,300 16,189
Devon Energy Corp. 278,700 15,659
EOG Resources, Inc. 464,700 15,568
Kerr McGee Corp. 250,200 14,747
Murphy Oil Corp. 236,400 14,051
Nabors Industries, Inc. (b) 336,500 13,986
USX Marathon Group 511,000 12,807
Ocean Energy, Inc. (b) 866,500 12,293
Dynegy, Inc. `A' 166,369 11,365
ENSCO International, Inc. 306,100 10,962
Noble Drilling Corp. (b) 257,600 10,610
Cooper Cameron Corp. (b) 158,200 10,441
BJ Services Co. (b) 79,600 4,975
----------
180,644
FINANCIAL & BUSINESS SERVICES 17.1%
Apartment Investment & Management Co. `A' 375,700 16,249
Liberty Property Trust 582,500 15,109
Ace Ltd. 528,100 14,787
Federated Investors, Inc. `B' 418,400 14,670
Valassis Communications, Inc. (b) 379,850 14,482
Duke-Weeks Realty Corp. 636,100 14,233
Ambac Financial Group, Inc. 238,700 13,084
Golden West Financial Corp. 316,800 12,929
Waddell & Reed Financial, Inc. `A' 390,350 12,808
Lincoln National Corp. 353,200 12,759
Providian Financial Corp. 138,950 12,506
Capital One Financial Corp. 272,900 12,179
PMI Group, Inc. 253,500 12,041
Banknorth Group, Inc. 412,500 6,316
----------
184,152
HEALTH CARE 5.9%
Allergan, Inc. 280,500 20,897
IDEC Pharmaceuticals Corp. (b) 147,700 17,327
Forest Laboratories `A' (b) 138,300 13,968
Invitrogen Corp. (b) 149,400 11,235
----------
63,427
MATERIALS & PROCESSING 0.8%
Martin Marietta Materials, Inc. 222,000 8,977
----------
<CAPTION>
Value
Shares (000s)
------------------------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY 31.7%
Integrated Device Technology, Inc. (b) 322,100 $ 19,286
Tektronix, Inc. 259,700 19,218
Brocade Communications Systems, Inc. (b) 101,700 18,660
Ciena Corp. (b) 104,200 17,369
Dendrite International, Inc. (b) 510,250 16,998
Microchip Technology, Inc. (b) 275,000 16,023
Scientific-Atlanta, Inc. 213,600 15,913
Amdocs Ltd. (b) 200,600 15,396
Symbol Technologies, Inc. 279,500 15,093
Credence Systems Corp. (b) 273,400 15,088
Copper Mountain Networks (b) 169,800 14,964
Novellus Systems, Inc. (b) 262,900 14,870
Veritas Software Corp. (b) 123,325 13,938
ISS Group, Inc. (b) 129,900 12,826
Comverse Technology, Inc. (b) 135,800 12,629
CSG Systems International, Inc. (b) 221,600 12,423
SDL, Inc. (b) 41,900 11,949
RF Micro Devices, Inc. (b) 133,500 11,698
Network Associates, Inc. (b) 548,700 11,180
SanDisk Corp. (b) 181,000 11,075
PerkinElmer, Inc. 163,400 10,805
Cypress Semiconductor Corp. (b) 252,800 10,681
Scient Corp. (b) 227,300 10,030
JDS Uniphase Corp. (b) 61,000 7,312
LSI Logic Corp. (b) 109,400 5,921
----------
341,345
UTILITIES 2.4%
Entergy Corp. 477,500 12,982
Florida Progress Corp. 266,300 12,483
----------
25,465
----------
Total Common Stocks 1,014,192
(Cost $827,710) ==========
<CAPTION>
------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 6.3%
------------------------------------------------------------------------------
Principal
Amount
(000s)
<S> <C> <C>
REPURCHASE AGREEMENT 6.3%
State Street Bank
5.850% due 07/03/2000 $68,041 68,041
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
6.350% due 06/22/2001 valued at $51,002 and
Federal National Mortgage Association
6.350% due 06/22/2001 valued at $18,404.
Repurchase proceeds are $68,074.)
----------
Total Short-Term Instruments 68,041
(Cost $68,041) ==========
TOTAL INVESTMENTS (a) 100.6% $1,082,233
(Cost $895,751)
OTHER ASSETS AND LIABILITIES (NET) (0.6%) (6,057)
----------
NET ASSETS 100.0% $1,076,176
==========
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $900,208 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 203,233
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value. (21,208)
----------
Unrealized appreciation-net $ 182,025
==========
</TABLE>
(b) Non-income producing security.
36 SEE ACCOMPANYING NOTES
<PAGE>
SCHEDULE OF INVESTMENTS
OPPORTUNITY FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
------------------------------------------------------------------------------
COMMON STOCKS 96.3%
------------------------------------------------------------------------------
<S> <C> <C>
COMMUNICATIONS 5.8%
WinStar Communications, Inc. (b) 454,550 $ 15,398
True North Communications 239,200 10,525
Worldgate Communications, Inc. (b) 214,600 3,809
Millicom International Cellular SA (b) 92,300 3,231
Pinnacle Holdings, Inc. (b) 51,100 2,759
----------
35,722
CONSUMER DISCRETIONARY 5.1%
Whitehall Jewellers, Inc. (b) 298,000 5,550
Ann Taylor Stores Corp. (b) 160,100 5,303
B.J.'s Wholesale Club, Inc. (b) 155,300 5,125
International Game Technology (b) 175,600 4,653
Linens`n Things, Inc. (b) 148,300 4,023
MSC Industrial Direct Co., Inc. 188,500 3,947
Ultimate Electronics, Inc. (b) 123,400 3,307
----------
31,908
CONSUMER SERVICES 4.6%
Avis Rent-A-Car, Inc. (b) 626,975 11,755
SFX Entertainment, Inc. `A' (b) 192,450 8,720
Corporate Executive Board Co. (b) 137,600 8,239
----------
28,714
ENERGY 8.6%
Newpark Resources, Inc. (b) 1,095,600 10,340
Veritas DGC, Inc. (b) 320,300 8,328
Grey Wolf, Inc. (b) 1,375,000 6,875
Grant Prideco, Inc. (b) 260,300 6,508
Ocean Energy, Inc. (b) 422,700 5,997
Key Energy Group, Inc. (b) 552,600 5,319
NATCO Group, Inc. (b) 551,200 5,202
Core Laboratories N.V. (b) 164,000 4,756
----------
53,325
ENVIRONMENTAL SERVICES 2.0%
Waste Connections, Inc. (b) 383,000 7,564
Syntroleum Corp. (b) 267,500 4,581
----------
12,145
FINANCIAL & BUSINESS SERVICES 7.0%
Meristar Hospitality Corp. 365,600 7,678
Korn/Ferry International (b) 222,100 7,038
Golden State Bancorp, Inc. (b) 369,200 6,646
Modem Media Poppe Tyson, Inc. (b) 426,200 5,301
Teletech Holdings, Inc. (b) 164,100 5,097
Bank United Corp. `A' 128,700 4,529
Rare Medium Group, Inc. (b) 220,800 3,491
Metris Companies, Inc. 134,950 3,391
----------
43,171
HEALTH CARE 10.9%
Alpharma, Inc. 142,200 8,852
Medicis Pharmaceutical `A' (b) 154,800 8,824
Renal Care Group, Inc. (b) 338,400 8,275
Cell Therapeutics, Inc. (b) 240,467 7,364
Alkermes, Inc. (b) 151,300 7,130
INAMED Corp. (b) 158,000 5,787
Health Management Associates, Inc. `A' (b) 427,200 5,580
Noven Pharmaceuticals, Inc. (b) 163,300 4,909
Cytyc Corp. (b) 78,800 4,206
Province Healthcare Co. (b) 92,700 3,349
Medarex, Inc. (b) 37,300 3,152
----------
67,428
TECHNOLOGY 52.3%
Art Technology Group, Inc. (b) 121,300 12,244
Netro Corp. (b) 210,300 12,066
Aeroflex, Inc. (b) 232,750 11,565
TranSwitch Corp. (b) 149,250 11,520
Kana Communications, Inc. (b) 185,900 11,503
Varian Semiconductor Equipment (b) 176,700 11,099
Digital Microwave Corp. (b) 284,900 10,862
Informatica Corp. (b) 132,300 10,840
Active Software, Inc. (b) 136,900 10,634
Motient Corp. (b) 631,200 9,902
Getty Images, Inc. (b) 254,000 9,414
<CAPTION>
Value
Shares (000s)
------------------------------------------------------------------------------
<S> <C> <C>
Optimal Robotics Corp. (b) 242,800 $ 9,317
DDI Corp. (b) 315,700 8,997
Documentum, Inc. (b) 97,300 8,696
L-3 Communications Holdings, Inc. (b) 150,200 8,571
Telcom Semiconductor, Inc. (b) 209,000 8,438
Mercury Interactive Corp. (b) 86,000 8,321
Advanced Energy Industries (b) 139,800 8,239
Sirius Satellite Radio, Inc. (b) 183,400 8,127
Packeteer, Inc. (b) 270,700 7,884
Fairchild Semiconductor International, Inc. (b) 192,200 7,784
Espeed, Inc. (b) 171,700 7,458
Bookham Technology PLC (b) 119,900 7,104
Digene Corp. (b) 171,500 6,924
FuelCell Energy, Inc. (b) 98,100 6,775
Trimble Navigation Ltd. (b) 120,900 5,901
Ulticom, Inc. (b) 234,900 5,641
iBEAM Broadcasting Corp. (b) 305,000 5,490
Network Plus Corp. (b) 376,400 5,340
MKS Instruments, Inc. (b) 134,800 5,274
GetThere.com, Inc. (b) 495,900 5,238
Exfo Electro Optical Engineering, Inc. (b) 115,100 5,050
CBT Group PLC SP - ADR (b) 95,600 4,588
Zixit Corp. 98,400 4,533
Electro Scientific Industries, Inc. (b) 100,400 4,421
Elantec Semiconductor, Inc. (b) 62,000 4,317
Lam Research Corp. (b) 114,700 4,301
Capstone Turbine Corp. (b) 89,700 4,042
Cysive, Inc. (b) 156,000 3,725
Be Free, Inc. (b) 376,100 3,385
SCG Holding Corp. (b) 154,100 3,371
Westell Technologies, Inc. (b) 198,500 2,978
Repligen Corp. (b) 347,826 2,185
Discovery Laboratories, Inc. (b) 461,538 2,077
Charles River Laboratories International, Inc. (b) 67,800 1,504
Eloyalty Corp. (b) 113,300 1,445
Precise Software Solutions Ltd. (b) 59,600 1,430
Stratos Lightwave, Inc. (b) 46,300 1,291
StorageNetworks, Inc. (b) 11,100 1,002
Virage, Inc. (b) 50,700 916
----------
323,729
----------
Total Common Stocks 596,142
(Cost $483,480) ==========
<CAPTION>
------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 5.6%
------------------------------------------------------------------------------
Principal
Amount
(000s)
<S> <C> <C>
REPURCHASE AGREEMENT 5.6%
State Street Bank
5.850% due 07/03/2000 $ 34,795 34,795
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
5.125% due 02/13/2004 valued at $35,493.
Repurchase proceeds are $34,812.)
----------
Total Short-Term Instruments 34,795
(Cost $34,795) ==========
TOTAL INVESTMENTS (a) 101.9% $ 630,937
(COST $518,275)
OTHER ASSETS AND LIABILITIES (NET) (1.9%) (11,918)
----------
NET ASSETS 100.0% $ 619,019
==========
</TABLE>
SEE ACCOMPANYING NOTES 37
<PAGE>
SCHEDULE OF INVESTMENTS (CONT.)
OPPORTUNITY FUND
June 30, 2000
<TABLE>
<S> <C> <C>
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $522,688 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 136,475
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value. (28,226)
----------
Unrealized appreciation-net $ 108,249
==========
</TABLE>
(b) Non-income producing security.
38 SEE ACCOMPANYING NOTES
<PAGE>
SCHEDULE OF INVESTMENTS
RENAISSANCE FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
------------------------------------------------------------------------------
COMMON STOCKS 94.9%
------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE 6.3%
Orbital Sciences Corp. (b) 890,400 $ 10,852
Raytheon Co. `B' 480,000 9,240
Litton Industries, Inc. (b) 131,700 5,531
Raytheon Co. `A' 230,000 4,470
----------
30,093
CAPITAL GOODS 5.6%
CNH Global NV 2,016,800 18,655
Metso OYJ 665,400 8,004
----------
26,659
COMMUNICATIONS 1.8%
Loral Space & Communications Ltd. (b) 839,500 5,824
MCI WorldCom, Inc. (b) 60,000 2,753
----------
8,577
CONSUMER DISCRETIONARY 5.2%
Tupperware Corp. 937,000 20,614
American Greetings Corp. `A' 230,000 4,370
----------
24,984
CONSUMER STAPLES 12.4%
Suiza Foods Corp. (b) 253,400 12,385
Tate & Lyle PLC 2,215,387 11,062
Tyson Foods, Inc. 1,191,200 10,423
Great Atlantic & Pacific Tea Co., Inc. 568,700 9,454
Philip Morris Cos., Inc. 260,000 6,906
Corn Products International, Inc. 191,400 5,072
Dean Foods Co. 103,900 3,292
Universal Foods 20,000 386
----------
58,980
ENERGY 8.5%
R & B Falcon Corp. (b) 661,000 15,575
Petroleo Brasileiro SA 330,000 9,970
Diamond Offshore Drilling, Inc. 200,000 7,025
Ultramar Diamond Shamrock Corp. 203,500 5,049
Tidewater, Inc. 85,000 3,060
----------
40,679
ENVIRONMENTAL SERVICES 0.9%
Republic Services, Inc. (b) 283,100 4,530
----------
FINANCIAL & BUSINESS SERVICES 21.7%
Ace Ltd. 924,500 25,886
Washington Mutual, Inc. 790,000 22,811
Everest Re Group Ltd. 338,200 11,118
Loews Corp. 157,000 9,420
UnumProvident Corp. 380,000 7,624
Federal Home Loan Mortgage Corp. 140,000 5,670
Aon Corp. 142,700 4,433
Sovereign Bancorp, Inc. 600,000 4,219
XL Capital Ltd. 74,300 4,021
St. Paul Cos., Inc. 85,800 2,928
Pacific Century Financial Corp. 185,300 2,710
AmeriCredit Corp. (b) 130,700 2,222
Fremont General Corp. 257,000 1,012
----------
104,074
HEALTH CARE 11.6%
Foundation Health Systems, Inc. `A' (b) 2,109,100 27,418
Aetna, Inc. 252,600 16,214
Tenet Healthcare Corp. (b) 436,900 11,796
----------
55,428
MATERIALS & PROCESSING 7.9%
IMC Global, Inc. 834,000 10,842
Ispat International NV 782,800 7,437
Gaylord Container Corp. `A' (b) 2,194,200 5,897
Ucar International, Inc (b) 416,600 5,442
Mercer International, Inc. 496,800 4,130
Buenaventura SA 126,500 2,190
Crompton Corp. 138,800 1,700
----------
37,638
TECHNOLOGY 3.1%
Arrow Electronics, Inc. (b) 412,600 12,791
Fluor Corp. 34,800 1,100
Xerox Corp. 39,900 828
----------
14,719
TRANSPORTATION 1.2%
CSX Corp. 276,500 5,858
----------
<CAPTION>
Value
Shares (000s)
------------------------------------------------------------------------------
<S> <C> <C>
UTILITIES 8.7%
Niagara Mohawk Holdings, Inc. (b) 1,380,200 $ 19,236
Western Resources, Inc. 618,500 9,587
PG&E Corp. 150,000 3,694
Entergy Corp. 120,000 3,263
Edison International 150,000 3,075
CMS Energy Corp. 122,500 2,710
----------
41,565
----------
Total Common Stocks 453,784
(Cost $459,783) ==========
------------------------------------------------------------------------------
CONVERTIBLE BONDS & NOTES 0.9%
------------------------------------------------------------------------------
<CAPTION>
Principal
Amount
(000s)
<S> <C> <C>
CONVERTIBLE BONDS & NOTES 0.9%
APP Finance VI Mauritius Ltd.
0.000% due 11/18/2012 $ 18,000 3,038
3.500% due 04/30/2003 1,000 734
APP Global Finance Ltd.
2.000% due 07/25/2000 500 611
----------
Total Convertible Bonds & Notes 4,383
(Cost $4,808) ==========
------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 3.7%
------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
REPURCHASE AGREEMENT 3.7%
State Street Bank
5.850% due 07/03/2000 17,875 17,875
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
6.100% due 09/14/2001 valued at $18,236.
Repurchase proceeds are $17,884.)
----------
Total Short-Term Instruments 17,875
(Cost $17,875) ==========
TOTAL INVESTMENTS (a) 99.5% $ 476,042
(COST $482,466)
OTHER ASSETS AND LIABILITIES (NET) 0.5% 2,164
----------
NET ASSETS 100.0% $ 478,206
==========
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $494,049 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
overtax cost. $ 50,385
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (68,392)
----------
Unrealized depreciation-net $ (18,007)
==========
</TABLE>
(b) Non-income producing security.
SEE ACCOMPANYING NOTES 39
<PAGE>
SCHEDULE OF INVESTMENTS
SELECT GROWTH FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
------------------------------------------------------------------------------
COMMON STOCKS 91.1%
------------------------------------------------------------------------------
<S> <C> <C>
COMMUNICATIONS 4.5%
Nokia Corp. SP - ADR 15,000 $ 749
----------
CONSUMER DISCRETIONARY 5.1%
Wal-Mart Stores, Inc. 15,000 864
----------
ENERGY 3.8%
Enron Corp. 10,000 645
----------
FINANCIAL & BUSINESS SERVICES 17.2%
American International Group, Inc. 10,000 1,175
Citigroup, Inc. 15,000 904
Morgan Stanley, Dean Witter, Discover and Co. 10,000 833
----------
2,912
HEALTH CARE 13.7%
Genentech, Inc. (b) 7,500 1,290
Johnson & Johnson 10,000 1,019
----------
2,309
TECHNOLOGY 46.8%
Corning, Inc. 5,000 1,349
EMC Corp. (b) 15,000 1,154
Nortel Networks Corp. 15,000 1,024
Cisco Systems, Inc. (b) 15,000 953
Comverse Technology, Inc. (b) 10,000 930
Sun Microsystems, Inc. (b) 10,000 909
JDS Uniphase Corp. (b) 7,500 899
Texas Instruments, Inc. 10,000 687
----------
7,905
----------
Total Common Stocks 15,384
(Cost $14,220) ==========
<CAPTION>
------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 9.4%
------------------------------------------------------------------------------
Principal
Amount
(000s)
<S> <C> <C>
REPURCHASE AGREEMENT 9.4%
State Street Bank
5.850% due 07/03/2000 $1,591 1,591
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
6.100% due 09/14/2001 valued at $1,626.
Repurchase proceeds are $1,592.)
----------
Total Short-Term Instruments 1,591
(Cost $1,591) ==========
TOTAL INVESTMENTS (a) 100.5% $ 16,975
(COST $15,811)
OTHER ASSETS AND LIABILITIES (NET) (0.5%) (93)
NET ASSETS 100.0% $ 16,882
----------
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $15,814 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 1,405
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value. (244)
----------
Unrealized appreciation-net $ 1,161
==========
</TABLE>
(b) Non-income producing security.
40 SEE ACCOMPANYING NOTES
<PAGE>
SCHEDULE OF INVESTMENTS
SMALL-CAP VALUE FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
------------------------------------------------------------------------------
COMMON STOCKS 98.4%
------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE 2.2%
Newport News Shipbuilding, Inc. 95,000 $ 3,491
Kaman Corp. 259,000 2,768
----------
6,259
BUILDING 4.0%
MDC Holdings, Inc. 187,000 3,483
Hughes Supply, Inc. 137,000 2,706
Centex Construction Products, Inc. 115,000 2,609
Butler Manufacturing Co. 151,000 2,567
----------
11,365
CAPITAL GOODS 10.4%
Primex Technologies, Inc. 145,000 3,190
Barnes Group, Inc. 174,000 2,838
Borg-Warner, Inc. 80,000 2,810
GenCorp, Inc. 347,000 2,776
Precision Castparts Corp. 58,000 2,624
Regal-Beloit Corp. 160,000 2,570
Trinity Industries, Inc. 136,000 2,516
Arvin Industries, Inc. 140,000 2,432
Tecumseh Products Co. `A' 59,300 2,265
MTS Systems Corp. 340,600 2,129
Meritor Automotive, Inc. 170,000 1,870
Intermet Corp. 250,000 1,719
----------
29,739
CONSUMER DISCRETIONARY 12.7%
Ennis Business Forms 410,000 3,280
Claire's Stores, Inc. 162,800 3,134
Harman International Industries, Inc. 48,000 2,928
Russ Berrie & Co., Inc. 150,000 2,888
Tupperware Corp. 129,500 2,849
Sturm Ruger & Co., Inc. 320,000 2,840
Banta Corp. 148,000 2,803
Haverty Furniture Cos., Inc. 317,000 2,694
Kimball International `B' 180,000 2,655
Lancaster Colony Corp. 136,000 2,609
Brown Shoe Co., Inc. 200,000 2,600
Burlington Coat Factory Warehouse Corp. 205,000 2,217
Enesco Group, Inc. 351,000 1,667
Kellwood Co. 48,300 1,020
----------
36,184
CONSUMER SERVICES 1.9%
Lubys Cafeterias, Inc. 358,000 2,864
Chemed Corp. 96,000 2,706
----------
5,570
CONSUMER STAPLES 5.7%
Dean Foods Co. 101,800 3,226
Universal Foods 160,000 2,960
Corn Products International, Inc. 110,000 2,915
Michael Foods, Inc. 116,000 2,842
Universal Corp. 127,000 2,683
Nash Finch Co. 190,500 1,572
----------
16,198
ENERGY 8.8%
St. Mary Land & Exploration 84,000 3,533
Cross Timbers Oil Co. 155,000 3,429
World Fuel Services Corp. 385,100 3,321
Berry Petroleum Co. 185,000 3,145
Mitchell Energy & Development Corp. `A' 97,800 3,142
UGI Corp. 142,900 2,929
Cabot Oil & Gas Corp. 134,000 2,839
Northwest Natural Gas Co. 120,800 2,703
----------
25,041
<CAPTION>
Value
Shares (000s)
------------------------------------------------------------------------------
<S> <C> <C>
FINANCIAL & BUSINESS SERVICES 22.3%
Selective Insurance Group 176,000 $ 3,344
Washington Federal, Inc. 175,000 3,194
Raymond James Financial, Inc. 140,000 3,150
McGrath Rentcorp 185,000 3,145
United Dominion Realty Trust 285,000 3,135
Glimcher Realty Trust 210,000 3,019
Hudson United Bancorp 134,000 3,007
Susquehanna Bancshares, Inc. 206,400 2,941
Innkeepers USA Trust 310,000 2,829
Health Care Property Investors, Inc. 103,000 2,807
AmerUs Life Holdings, Inc. `A' 136,000 2,805
Cabot Industrial Trust 141,000 2,776
Kelly Services, Inc. `A' 120,000 2,775
Franchise Finance Corp. of America 120,000 2,760
National Golf Properties, Inc. 130,000 2,746
Shurgard Storage Centers, Inc. 120,000 2,700
Commercial Federal Corp. 172,000 2,677
Rollins Truck Leasing Co. 372,000 2,581
Pacific Century Financial Corp. 170,000 2,486
Wallace Computer Services, Inc. 250,000 2,469
Presidential Life Corp. 171,000 2,373
New Plan Excel Realty Trust 176,000 2,288
BankAtlantic Bancorp, Inc. `A' 423,400 1,588
----------
63,595
HEALTH CARE 5.9%
Owens & Minor, Inc. 245,000 4,211
Dentsply International, Inc. 108,000 3,328
Bindley Western Industries, Inc. 125,000 3,305
Arrow International, Inc. 89,000 2,981
Invacare Corp. 112,000 2,940
----------
16,765
MATERIALS & PROCESSING 9.4%
CLARCOR, Inc. 160,000 3,180
Commercial Metals Co. 107,000 2,942
Pope & Talbot, Inc. 180,000 2,880
Cleveland-Cliffs, Inc. 110,000 2,839
Omnova Solutions, Inc. 450,000 2,812
Universal Forest Products, Inc. 200,000 2,750
Caraustar Industries, Inc. 174,000 2,632
Hanna (M.A.) Co. 278,000 2,502
Wausau-Mosinee Paper Corp. 291,100 2,493
Ethyl Corp. 704,000 1,760
----------
26,790
MISCELLANEOUS 1.0%
Midas, Inc. 142,000 2,840
----------
TECHNOLOGY 0.9%
WABTEC 245,000 2,542
----------
TRANSPORTATION 2.9%
Wabash National Corp. 236,000 2,817
Sea Containers Ltd. `A' 132,000 2,788
USFreightways Corp. 103,000 2,530
----------
8,135
UTILITIES 10.3%
Energen Corp. 167,000 3,643
National Fuel Gas Co. 67,000 3,266
RGS Energy Group, Inc. 140,000 3,115
United Illuminating Co. 69,000 3,019
Peoples Energy Corp. 93,000 3,011
OGE Energy Corp. 150,000 2,775
CMP Group, Inc. 93,000 2,726
Washington Gas Light Co. 110,000 2,647
Hawaiian Electric Industries, Inc. 80,000 2,625
Public Service Co. of New Mexico 170,000 2,624
----------
29,451
----------
Total Common Stocks 280,474
(Cost $339,132) ==========
</TABLE>
SEE ACCOMPANYING NOTES 41
<PAGE>
SCHEDULE OF INVESTMENTS (CONT.)
SMALL-CAP VALUE FUND
June 30, 2000
<TABLE>
<CAPTION>
Principal
Amount Value
(000s) (000s)
------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.7%
------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT 0.7%
State Street Bank
5.850% due 07/03/2000 $ 1,933 $ 1,933
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
5.125% due 02/13/2004 valued at $1,975 and
Federal National Mortgage Association
6.000% due 11/15/2001 valued at $5.
Repurchase proceeds are $1,938.)
----------
Total Short-Term Instruments 1,933
(Cost $1,933) ==========
TOTAL INVESTMENTS (a) 99.1% $ 282,407
(Cost $341,065)
OTHER ASSETS AND LIABILITIES (NET) 0.9% 2,555
----------
NET ASSETS 100.0% $ 284,962
==========
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $342,457 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 16,703
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (76,753)
----------
Unrealized depreciation-net $ (60,050)
==========
</TABLE>
42 SEE ACCOMPANYING NOTES
<PAGE>
SCHEDULE OF INVESTMENTS
TARGET FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
------------------------------------------------------------------------------
COMMON STOCKS 94.6%
------------------------------------------------------------------------------
<S> <C> <C>
CAPITAL GOODS 4.3%
Waters Corp. (b) 400,000 $ 49,925
Millipore Corp. 400,000 30,150
Weatherford International, Inc. (b) 400,000 15,925
----------
96,000
COMMUNICATIONS 5.5%
WinStar Communications, Inc. (b) 1,100,000 37,263
Echostar Communications Corp. `A' (b) 900,000 29,798
Nextlink Communications, Inc. `A' (b) 550,000 20,866
Worldgate Communications, Inc. (b) 1,000,000 17,750
Pinnacle Holdings, Inc. (b) 325,000 17,550
----------
123,227
CONSUMER DISCRETIONARY 5.5%
Emmis Broadcasting Corp. `A' (b) 750,000 31,031
Concord EFS, Inc. (b) 1,000,000 26,000
B.J.'s Wholesale Club, Inc. (b) 700,000 23,100
Harley-Davidson, Inc. 600,000 23,100
Tiffany & Co. 300,000 20,250
----------
123,481
CONSUMER SERVICES 1.3%
Pegasus Communications Corp. (b) 600,000 29,438
----------
ENERGY 1.3%
Cooper Cameron Corp. (b) 300,000 19,800
Grant Prideco, Inc. (b) 400,000 10,000
----------
29,800
FINANCIAL & BUSINESS SERVICES 3.5%
Young & Rubicam, Inc. 500,000 28,594
Robert Half International, Inc. (b) 1,000,000 28,500
Ace Ltd. 750,000 21,000
----------
78,094
HEALTH CARE 14.0%
Minimed, Inc. (b) 600,000 70,800
MedImmune, Inc. (b) 720,000 53,280
Cytyc Corp. (b) 800,000 42,700
Allergan, Inc. 450,000 33,525
Alkermes, Inc. (b) 700,000 32,988
Immunex Corp. (b) 500,000 24,719
Biogen, Inc. (b) 300,000 19,350
Sepracor, Inc. (b) 150,000 18,094
Shire Pharmaceuticals PLC SP - ADR (b) 325,000 16,859
----------
312,315
TECHNOLOGY 53.6%
SDL, Inc. (b) 500,000 142,594
Comverse Technology, Inc. (b) 1,100,000 102,300
Sanmina Corp. (b) 1,000,000 85,500
Jabil Circuit, Inc. (b) 1,600,000 79,400
E-Tek Dynamics, Inc. (b) 225,000 59,358
PMC - Sierra, Inc. (b) 300,000 53,306
Ciena Corp. (b) 300,000 50,006
Network Appliance, Inc. (b) 600,000 48,300
JDS Uniphase Corp. (b) 350,000 41,956
Amdocs Ltd. (b) 525,000 40,294
RF Micro Devices, Inc. (b) 450,000 39,431
Rational Software Corp. (b) 400,000 37,175
Altera Corp. (b) 350,000 35,678
Redback Networks, Inc. (b) 200,000 35,600
Maxim Integrated Products, Inc. (b) 500,000 33,969
Applied Micro Circuits Corp. (b) 300,000 29,625
Teradyne, Inc. (b) 400,000 29,400
CommScope, Inc. (b) 700,000 28,700
LSI Logic Corp. (b) 500,000 27,063
Scientific-Atlanta, Inc. 350,000 26,075
Metromedia Fiber Network, Inc. `A' (b) 650,000 25,797
American Tower Corp. `A' (b) 550,000 22,928
Cree, Inc. (b) 150,000 20,025
TranSwitch Corp. (b) 250,000 19,297
ANTEC Corp. (b) 400,000 16,625
Sirius Satellite Radio, Inc. (b) 350,000 15,509
Gilat Satellite Networks Ltd. (b) 200,000 13,875
Ulticom, Inc. (b) 500,000 12,008
Digital Lightwave, Inc. (b) 100,000 10,050
<CAPTION>
Value
Shares (000s)
------------------------------------------------------------------------------
<S> <C> <C>
Fairchild Semiconductor International, Inc. `A' (b) 175,000 $ 7,088
Exfo Electro Optical Engineering, Inc. (b) 125,000 5,484
----------
1,194,416
TRANSPORTATION 1.2%
Kansas City Southern Industries, Inc. 300,000 26,606
----------
UTILITIES 4.4%
Calpine Corp. (b) 1,200,000 78,900
Avista Corp. 1,025,000 17,872
----------
96,772
----------
Total Common Stocks 2,110,149
(Cost $1,146,692) ==========
<CAPTION>
------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 5.6%
------------------------------------------------------------------------------
Principal
Amount
(000s)
<S> <C> <C>
REPURCHASE AGREEMENT 5.6%
State Street Bank
5.850% due 07/03/2000 $ 125,130 125,130
(Dated 06/30/2000. Collateralized by
Federal Home Loan Mortgage Corporation
6.680% due 12/28/2001 valued at $51,003,
Federal Home Loan Mortgage Corporation
6.680% due 12/28/2001 valued at $51,003, and
Federal Home Loan Bank
7.620% due 01/12/2010 valued at $25,634.
Repurchase proceeds are $125,190.)
----------
Total Short-Term Instruments 125,130
(Cost $125,130) ==========
TOTAL INVESTMENTS (a) 100.2% $2,235,279
(Cost $1,271,822)
OTHER ASSETS AND LIABILITIES (NET) (0.2%) (4,507)
----------
NET ASSETS 100.0% $2,230,772
==========
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $1,274,653 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $1,005,376
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (44,750)
----------
Unrealized appreciation-net $ 960,626
==========
</TABLE>
(b) Non-income producing security.
SEE ACCOMPANYING NOTES 43
<PAGE>
SCHEDULE OF INVESTMENTS
TAX-EFFICIENT EQUITY FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
------------------------------------------------------------------------------
COMMON STOCKS 99.7%
------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE 0.5%
Honeywell International, Inc. 4,175 $ 141
Lockheed Martin Corp. 3,700 92
General Dynamics Corp. 900 47
Raytheon Co. `B' 1,500 29
----------
309
BUILDING 0.0%
Centex Corp. 500 12
----------
CAPITAL GOODS 6.5%
General Electric Co. 47,910 2,539
Tyco International Ltd. 5,200 246
United Technologies Corp. 3,800 224
Avery Dennison Corp. 1,300 87
Illinois Tool Works, Inc. 1,400 80
PPG Industries, Inc. 1,800 80
ITT Industries, Inc. 1,900 57
Navistar International Corp. (b) 1,700 53
Cooper Industries, Inc. 1,391 45
Deere & Co. 1,200 44
TRW, Inc. 1,000 43
Paccar, Inc. 1,000 40
Ingersoll-Rand Co. 900 36
Textron, Inc. 400 22
Briggs & Stratton 604 21
Johnson Controls, Inc. 400 21
Dover Corp. 400 16
Millipore Corp. 200 15
Caterpillar, Inc. 400 14
Visteon Corp. (b) 720 9
Minnesota Mining & Manufacturing Co. 100 8
Parker Hannifin Corp. 100 3
Timken Co. 100 2
----------
3,705
COMMUNICATIONS 6.4%
SBC Communications, Inc. 14,801 640
AT&T Corp. 16,350 517
Verizon Communications 7,300 371
MCI WorldCom, Inc. (b) 8,000 367
BellSouth Corp. 8,200 350
Nextel Communications, Inc. `A' (b) 5,000 306
GTE Corp. 4,500 280
U.S. West, Inc. 2,400 206
MediaOne Group, Inc. (b) 3,000 198
Sprint Corp. (FON Group) 2,700 138
ADC Telecommunication, Inc. (b) 1,100 92
Vodafone Group PLC SP - ADR 2,000 83
ALLTEL Corp. 1,000 62
CenturyTel, Inc. 500 14
----------
3,624
CONSUMER DISCRETIONARY 8.9%
Wal-Mart Stores, Inc. 20,700 1,193
Home Depot, Inc. 11,300 564
Time Warner, Inc. 6,800 517
General Motors Corp. 4,900 285
Eastman Kodak Co. 4,100 244
Ford Motor Co. 5,500 237
UST, Inc. 13,688 201
Wm. Wrigley Jr. Co. 2,500 200
Walgreen Co. 5,900 190
Gap, Inc. 5,875 184
Target Corp. 1,900 110
Jostens, Inc. 3,698 93
Newell Rubbermaid, Inc. 2,900 75
Liz Claiborne, Inc. 2,100 74
CVS Corp. 1,800 72
Dollar General Corp. 3,632 71
McGraw-Hill Companies, Inc. 1,300 70
Costco Wholesale Corp. 1,800 59
Whirlpool Corp. 1,200 56
Sears Roebuck & Co. 1,700 55
Circuit City Stores 1,600 53
Best Buy Co., Inc. (b) 800 51
<CAPTION>
Value
Shares (000s)
------------------------------------------------------------------------------
<S> <C> <C>
Avon Products, Inc. 1,100 $ 49
Maytag Corp. 1,287 47
Lowe's Cos., Inc. 1,100 45
Toys R US, Inc. (b) 3,000 44
Federated Department Stores, Inc. (b) 1,200 41
Mattel, Inc. 2,426 32
RadioShack Corp. 600 28
Cendant Corp. (b) 1,995 28
TJX Cos., Inc. 1,336 25
K Mart Corp. (b) 3,500 24
Black & Decker Corp. 580 23
Hasbro, Inc. 900 14
Tupperware Corp. 300 7
Consolidated Stores Corp. (b) 500 6
Brunswick Corp. 300 5
----------
5,072
CONSUMER SERVICES 3.2%
Viacom, Inc. `B' (b) 10,176 694
Disney (Walt) Co. 5,800 225
Tribune Co. 5,500 193
McDonald's Corp. 5,500 181
Interpublic Group of Companies, Inc. 3,400 146
Gannett, Inc. 1,600 96
Waste Management, Inc. 3,800 72
Knight-Ridder, Inc. 1,300 69
Harrah's Entertainment, Inc. (b) 2,100 44
Hilton Hotels Corp. 4,005 38
New York Times Co. 600 24
Darden Restaurants, Inc. 400 7
----------
1,789
CONSUMER STAPLES 6.5%
Coca-Cola Co. 6,177 355
Kimberly-Clark Corp. 5,900 339
Pepsico, Inc. 6,600 293
Philip Morris Cos., Inc. 10,700 284
H.J. Heinz Co. 5,000 219
General Mills, Inc. 5,700 218
Procter & Gamble Co. 3,700 212
Seagram Co. Ltd. 3,300 191
Gillette Co. 4,800 168
Bestfoods 2,300 159
Colgate-Palmolive Co. 2,600 156
Unilever NV - NY 2,600 112
Kroger Co. 4,800 106
Anheuser Busch Cos., Inc. 1,400 105
Sara Lee Corp. 4,900 95
Alberto-Culver Co. 2,500 76
Safeway, Inc. (b) 1,600 72
Campbell Soup Co. 2,400 70
Sysco Corp. 1,600 67
Albertson's, Inc. 1,900 63
Kellogg Co. 1,800 54
Clorox Co. 1,100 49
Quaker Oats Co. 600 45
ConAgra, Inc. 2,200 42
Nabisco Group Holdings Corp. 1,500 39
Adolph Coors Co. `B' 500 30
Hershey Foods Corp. 600 29
Ralston-Ralston Purina Group 1,400 28
Archer-Daniels-Midland Co. 2,800 27
----------
3,703
ENERGY 6.0%
Exxon Mobil Corp. 19,519 1,532
Royal Dutch Petroleum Co. 8,645 532
AES Corp. (b) 4,700 214
Peco Energy Co. 4,800 194
Chevron Corp. 1,900 161
Rowan Cos., Inc. (b) 4,800 146
Helmerich & Payne, Inc. 3,500 131
BP Amoco PLC SP - ADR 1,640 93
Tosco Corp. 2,500 71
Conoco, Inc. 2,823 69
Amerada Hess Corp. 1,000 62
Phillips Petroleum Co. 1,200 61
Enron Corp. 650 42
</TABLE>
44 SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
------------------------------------------------------------------------------
Texaco, Inc. 700 $ 37
Halliburton Co. 695 33
Sunoco, Inc. 700 21
----------
3,399
ENVIRONMENTAL SERVICES 0.3%
Allied Waste Industries, Inc. (b) 16,300 163
Service Corp. International (b) 3,000 10
----------
173
FINANCIAL & BUSINESS SERVICES 13.6%
Citigroup, Inc. 18,300 1,103
Morgan Stanley, Dean Witter, Discover and Co. 7,400 616
American International Group, Inc. 5,091 598
Chase Manhattan Corp. 10,350 477
State Street Corp. 3,700 392
Wells Fargo Co. 9,300 360
KeyCorp 17,667 311
American Express 5,700 297
Bank of New York 6,200 288
Charles Schwab Corp. 7,800 262
Merrill Lynch & Co. 2,000 230
MBNA Corp. 8,200 222
Paychex, Inc. 5,250 221
BankAmerica Corp. 3,411 147
Federal National Mortgage Association 2,700 141
Marsh & McLennan Cos. 1,300 136
Household International, Inc. 2,700 112
Comerica, Inc. 2,500 112
MGIC Investment Corp. 2,366 108
Mellon Financial Corp. 2,900 106
Northern Trust Corp. 1,600 104
Automatic Data Processing, Inc. 1,800 96
Omnicom Group 1,000 89
Golden West Financial Corp. 2,100 86
Allstate Corp. 3,600 80
Bank One Corp. 3,000 80
Equifax, Inc. 2,900 76
Lehman Brothers Holdings, Inc. 800 76
Sun Trust Banks, Inc. 1,500 69
Washington Mutual, Inc. 2,350 68
Providian Financial Corp. 700 63
SLM Holding Corp. 1,700 63
First Union Corp. 2,300 57
Firstar Corp. 2,728 56
Bear Stearns Co., Inc. 1,127 47
Associates First Capital Corp. 1,800 40
Aon Corp. 1,200 37
AFLAC, Inc. 800 37
American General Corp. 600 37
Lincoln National Corp. 880 32
Dow Jones & Co., Inc. 400 29
Fleet Boston Financial Corp. 829 28
PNC Bank Corp. 600 28
Capital One Financial Corp. 600 27
Progressive Corp. 300 22
Young & Rubicam, Inc. 300 17
Federal Home Loan Mortgage Corp. 310 13
Morgan, J.P. & Co., Inc. 100 11
Sabre Holdings Corp. (b) 361 10
MBIA, Inc. 200 10
Franklin Resources, Inc. 200 6
----------
7,733
HEALTH CARE 11.7%
Pfizer, Inc. 24,613 1,181
Merck & Co., Inc. 10,400 797
Amgen, Inc. (b) 8,983 631
Bristol-Myers Squibb Co. 9,000 524
Eli Lilly & Co. 5,200 519
Johnson & Johnson 5,000 509
American Home Products Corp. 5,900 347
Schering-Plough Corp. 6,363 321
Abbott Laboratories 6,600 294
Medtronic, Inc. 5,700 284
Pharmacia Corp. 4,109 212
United Healthcare Corp. 1,900 163
Wellpoint Health Networks, Inc. (b) 2,000 145
Becton Dickinson & Co. 4,600 132
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
------------------------------------------------------------------------------
CIGNA Corp. 1,300 $ 122
Baxter International, Inc. 1,700 120
Guidant Corp. 1,700 84
Biomet, Inc. 2,000 76
Boston Scientific Corp. (b) 3,000 65
Aetna, Inc. 600 39
International Flavors & Fragrances 1,112 34
St. Jude Medical, Inc. 600 28
Edwards Lifesciences Corp. (b) 340 7
----------
6,634
MATERIALS & PROCESSING 1.8%
Rohm & Haas Co. 6,900 238
Alcoa, Inc. 5,400 157
E.I. Du Pont de Nemours, Inc. 2,868 125
International Paper Co. 3,300 98
Freeport-McMoran Copper & Gold, Inc. (b) 8,900 82
Sealed Air Corp. (b) 1,500 79
Barrick Gold Corp. 2,500 45
Engelhard Corp. 2,600 44
W.R. Grace & Co. (b) 2,912 35
Air Products & Chemicals 1,000 31
Praxair, Inc. 700 26
Fort James Corp. 900 21
Sherwin-Williams Co. 700 15
Nucor Corp. 400 13
FMC Corp. (b) 100 6
Ball Corp. 100 3
----------
1,018
TECHNOLOGY 31.8%
Intel Corp. 18,365 2,455
Cisco Systems, Inc. (b) 31,400 1,996
Microsoft Corp. (b) 24,400 1,952
Oracle Corp. (b) 15,870 1,334
Lucent Technologies, Inc. 15,400 912
International Business Machines Corp. 8,158 894
Sun Microsystems, Inc. (b) 8,800 800
EMC Corp. (b) 10,400 800
Dell Computer Corp. (b) 15,900 784
Nortel Networks Corp. 10,200 696
Hewlett Packard Co. 5,200 649
Texas Instruments, Inc. (b) 8,000 550
Applied Materials, Inc. (b) 5,932 538
America Online, Inc. (b) 9,000 475
Motorola, Inc. 10,200 296
Network Appliance, Inc. (b) 3,400 274
Yahoo, Inc. (b) 2,200 273
Tellabs, Inc. (b) 3,700 253
Qualcomm, Inc. (b) 3,200 192
Computer Sciences Corp. (b) 2,000 149
Agilent Technologies, Inc. (b) 1,983 146
3Com Corp. (b) 2,500 144
Danaher Corp. 2,800 138
Corning, Inc. 500 135
Solectron Corp. (b) 3,200 134
Sprint Corp. (PCS Group) (b) 2,168 129
Gateway, Inc. (b) 2,200 125
Computer Associates International, Inc. 2,000 102
Micron Technology, Inc. (b) 1,040 92
Electronic Data Systems Corp. 2,000 83
Compaq Computer Corp. 3,220 82
Veritas Software Corp. (b) 600 68
BMC Software, Inc. (b) 1,500 54
Global Crossing Ltd. (b) 1,900 50
PerkinElmer, Inc. 600 40
Adobe Systems, Inc. 280 36
Lexmark International Group, Inc. `A' (b) 500 34
Siebel Systems, Inc. (b) 200 33
American Power Conversion Corp. (b) 700 29
Comverse Technology, Inc. (b) 300 28
IMS Health, Inc. (b) 800 14
Energizer Holdings, Inc. (b) 466 9
Xilinx, Inc. (b) 100 8
Analog Devices, Inc. (b) 100 8
Teradyne, Inc. (b) 100 7
Maxim Integrated Products, Inc. (b) 100 7
PE Corp.-PE Biosystems Group 100 7
Parametric Technology Corp. (b) 594 7
</TABLE>
SEE ACCOMPANYING NOTES 45
<PAGE>
SCHEDULE OF INVESTMENTS (CONT.)
TAX-EFFICIENT EQUITY FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
------------------------------------------------------------------------------
Xerox Corp. 290 $ 6
Compuware Corp. (b) 411 4
Citrix Systems, Inc. (b) 100 2
Unisys Corp. (b) 100 1
----------
18,034
TRANSPORTATION 1.0%
Kansas City Southern Industries, Inc. 3,100 275
Ryder System, Inc. 8,100 153
Delta Air Lines, Inc. 1,500 76
FDX Corp. (b) 1,200 46
Southwest Airlines Co. 1,600 30
----------
580
UTILITIES 1.5%
Coastal Corp. 4,700 286
Northern States Power-Mn 10,200 206
Columbia Gas Systems, Inc. 1,800 118
Duke Energy Corp. 1,000 56
FirstEnergy Corp. (b) 2,116 49
PG&E Corp. 1,700 42
Texas Utilities Co. 1,300 38
DTE Energy Co. 1,100 34
Constellation Energy Group, Inc. 400 13
----------
842
----------
Total Common Stocks 56,627
(Cost $46,063) ==========
<CAPTION>
------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.4%
------------------------------------------------------------------------------
Principal
Amount
(000s)
<S> <C>
REPURCHASE AGREEMENT 0.4%
State Street Bank
5.850% due 07/03/2000 $ 217 217
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
6.000% due 11/15/2001 valued at $224.
Repurchase proceeds are $217.)
----------
Total Short-Term Instruments 217
(Cost $217) ==========
TOTAL INVESTMENTS (a) 100.1% $ 56,844
(Cost $46,280)
OTHER ASSETS AND LIABILITIES (NET) (0.1%) (37)
----------
NET ASSETS 100.0% $ 56,807
==========
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $46,808 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 12,663
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (2,627)
----------
Unrealized appreciation-net $ 10,036
==========
</TABLE>
(b) Non-income producing security.
46 SEE ACCOMPANYING NOTES
<PAGE>
SCHEDULE OF INVESTMENTS
VALUE FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
------------------------------------------------------------------------------
COMMON STOCKS 94.0%
------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE 8.5%
Raytheon Co. `B' 305,500 $ 5,881
Boeing Co. 116,000 4,850
Northrop Grumman Corp. 50,000 3,313
----------
14,044
CAPITAL GOODS 4.9%
Deere & Co. 220,500 8,159
----------
COMMUNICATIONS 8.0%
MCI WorldCom, Inc. (b) 129,300 5,931
GTE Corp. 70,000 4,358
AT&T Corp. 95,000 3,003
----------
13,292
CONSUMER DISCRETIONARY 3.1%
Eastman Kodak Co. 70,000 4,165
Tupperware Corp. 41,000 902
----------
5,067
CONSUMER SERVICES 1.5%
Waste Management, Inc. 113,800 2,162
Central Newspapers, Inc. `A' 6,000 380
----------
2,542
CONSUMER STAPLES 10.9%
Philip Morris Cos., Inc. 141,600 3,761
Kroger Co. (b) 146,100 3,223
Pepsi Bottling Group, Inc. 100,000 2,919
SUPERVALU, Inc. 145,000 2,764
Sara Lee Corp. 120,200 2,321
Archer-Daniels-Midland Co. 195,000 1,913
ConAgra, Inc. 61,900 1,180
----------
18,081
ENERGY 9.9%
Petroleo Brasileiro SA 170,000 5,136
R & B Falcon Corp. (b) 252,000 5,938
Diamond Offshore Drilling, Inc. 140,000 4,918
Ultramar Diamond Shamrock Corp. 20,000 496
----------
16,488
FINANCIAL & BUSINESS SERVICES 29.1%
Washington Mutual, Inc. 309,600 8,940
Ace Ltd. 298,400 8,355
XL Capital Ltd. 130,500 7,063
Federal Home Loan Mortgage Corp. 138,800 5,621
Aon Corp. 170,000 5,281
Loews Corp. 85,000 5,100
UnumProvident Corp. 171,300 3,437
Allstate Corp. 120,000 2,670
AmSouth Bancorp. 63,600 1,002
St. Paul Cos., Inc. 25,000 853
----------
48,322
HEALTH CARE 6.6%
Tenet Healthcare Corp. (b) 265,000 7,155
Aetna, Inc. 60,000 3,851
----------
11,006
MATERIALS & PROCESSING 0.5%
International Paper Co. 28,000 835
----------
TECHNOLOGY 2.9%
Xerox Corp. 130,000 2,698
Compaq Computer Corp. 82,400 2,106
----------
4,804
TRANSPORTATION 2.0%
CSX Corp. 160,000 3,390
----------
UTILITIES 6.1%
PG&E Corp. 195,000 4,802
Public Service Enterprise Group, Inc. 100,000 3,463
DTE Energy Co. 60,000 1,834
----------
10,099
----------
Total Common Stocks 156,129
(Cost $157,108) ==========
<CAPTION>
------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 3.8%
------------------------------------------------------------------------------
Principal
Amount Value
(000s) (000s)
<S> <C> <C>
REPURCHASE AGREEMENT 3.8%
State Street Bank
5.850% due 07/03/2000 $ 6,355 $ 6,355
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
6.100% due 09/14/2001 valued at $6,484.
Repurchase proceeds are $6,358.)
----------
Total Short-Term Instruments 6,355
(Cost $6,355) ==========
TOTAL INVESTMENTS (a) 97.8% $ 162,484
(Cost $163,463)
OTHER ASSETS AND LIABILITIES (NET) 2.2% 3,689
----------
NET ASSETS 100.0% $ 166,173
==========
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $163,839 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 7,458
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (8,813)
----------
Unrealized depreciation-net $ (1,355)
==========
</TABLE>
(b) Non-income producing security.
SEE ACCOMPANYING NOTES 47
<PAGE>
FINANCIAL HIGHLIGHTS - A, B AND C CLASSES
<TABLE>
<CAPTION>
NET ASSET NET REALIZED /
VALUE UNREALIZED GAIN TOTAL INCOME FROM
BEGINNING NET INVESTMENT (LOSS) ON INVESTMENT
OF PERIOD INCOME (LOSS) INVESTMENTS OPERATIONS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED: --------- -------------- --------------- -----------------
<S> <C> <C> <C> <C>
CAPITAL APPRECIATION FUND
Class A
06/30/2000 $ 26.65 $ (0.03)(a) $ 5.34 (a) $ 5.31
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 26.01 0.06 (a) 2.33 (a) 2.39
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 21.16 0.07 (a) 6.55 (a) 6.62
----------------------------------------------------- --------- -------------- --------------- -----------------
01/20/1997-06/30/1997 19.31 0.09 1.76 1.85
----------------------------------------------------- --------- -------------- --------------- -----------------
Class B
06/30/2000 26.29 (0.22)(a) 5.23 (a) 5.01
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 25.75 (0.13)(a) 2.32 (a) 2.19
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 21.10 (0.11)(a) 6.51 (a) 6.40
----------------------------------------------------- --------- -------------- --------------- -----------------
01/20/1997-06/30/1997 19.31 0.01 1.78 1.79
----------------------------------------------------- --------- -------------- --------------- -----------------
Class C
06/30/2000 26.31 (0.22)(a) 5.25 (a) 5.03
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 25.78 (0.13)(a) 2.31 (a) 2.18
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 21.10 (0.12)(a) 6.53 (a) 6.41
----------------------------------------------------- --------- -------------- --------------- -----------------
01/20/1997-06/30/1997 19.31 0.02 1.77 1.79
----------------------------------------------------- --------- -------------- --------------- -----------------
EQUITY INCOME FUND
Class A
06/30/2000 $ 15.58 $ 0.33 (a) $ (2.42)(a) $ (2.09)
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 16.04 0.39 (a) 1.29 (a) 1.68
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 15.39 0.39 (a) 2.73 (a) 3.12
----------------------------------------------------- --------- -------------- --------------- -----------------
01/20/1997-06/30/1997 13.94 0.15 1.48 1.63
----------------------------------------------------- --------- -------------- --------------- -----------------
Class B
06/30/2000 15.50 0.24 (a) (2.40)(a) (2.16)
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 15.99 0.28 (a) 1.27 (a) 1.55
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 15.37 0.26 (a) 2.73 (a) 2.99
----------------------------------------------------- --------- -------------- --------------- -----------------
01/20/1997-06/30/1997 13.94 0.11 1.48 1.59
----------------------------------------------------- --------- -------------- --------------- -----------------
Class C
06/30/2000 15.52 0.24 (a) (2.40)(a) (2.16)
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 16.01 0.27 (a) 1.27 (a) 1.54
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 15.37 0.26 (a) 2.74 (a) 3.00
----------------------------------------------------- --------- -------------- --------------- -----------------
01/20/1997-06/30/1997 13.94 0.11 1.48 1.59
----------------------------------------------------- --------- -------------- --------------- -----------------
GLOBAL INNOVATION FUND
Class A
12/31/1999 - 06/30/2000 $ 10.00 $ (0.03)(a) $ 8.96 (a) $ 8.93
----------------------------------------------------- --------- -------------- --------------- -----------------
Class B
03/31/2000 - 06/30/2000 20.17 (0.07)(a) (1.19)(a) (1.26)
----------------------------------------------------- --------- -------------- --------------- -----------------
Class C
03/31/2000 - 06/30/2000 20.17 (0.07)(a) (1.19)(a) (1.26)
----------------------------------------------------- --------- -------------- --------------- -----------------
GROWTH FUND
Class A
06/30/2000 $ 34.12 $ (0.29)(a) $ 10.77 (a) $ 10.48
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 32.62 (0.14)(a) 5.56 (a) 5.42
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 27.03 (0.08)(a) 9.99 (a) 9.91
----------------------------------------------------- --------- -------------- --------------- -----------------
10/01/1996-06/30/1997 26.58 0.69 3.27 3.96
----------------------------------------------------- --------- -------------- --------------- -----------------
09/30/1996 25.73 0.06 3.72 3.78
----------------------------------------------------- --------- -------------- --------------- -----------------
Class B
06/30/2000 31.15 (0.51)(a) 9.68 (a) 9.17
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 30.34 (0.35)(a) 5.08 (a) 4.73
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 25.59 (0.28)(a) 9.35 (a) 9.07
----------------------------------------------------- --------- -------------- --------------- -----------------
10/01/1996-06/30/1997 25.46 0.35 3.29 3.64
----------------------------------------------------- --------- -------------- --------------- -----------------
09/30/1996 24.94 (0.07) 3.52 3.45
----------------------------------------------------- --------- -------------- --------------- -----------------
Class C
06/30/2000 31.15 (0.51)(a) 9.68 (a) 9.17
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 30.33 (0.35)(a) 5.09 (a) 4.74
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 25.58 (0.28)(a) 9.35 (a) 9.07
----------------------------------------------------- --------- -------------- --------------- -----------------
10/01/1996-06/30/1997 25.46 0.45 3.18 3.63
----------------------------------------------------- --------- -------------- --------------- -----------------
09/30/1996 24.94 (0.12) 3.57 3.45
----------------------------------------------------- --------- -------------- --------------- -----------------
<CAPTION>
DIVIDENDS DIVIDENDS IN
FROM NET EXCESS OF NET
INVESTMENT INVESTMENT
INCOME INCOME
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED: ---------- -------------
<S> <C> <C>
CAPITAL APPRECIATION FUND
Class A
06/30/2000 $ (0.01) $ (0.01)
------------------------------------------------------ ---------- -------------
06/30/1999 (0.10) 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 (0.09) 0.00
------------------------------------------------------ ---------- -------------
01/20/1997-06/30/1997 0.00 0.00
------------------------------------------------------ ---------- -------------
Class B
06/30/2000 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1999 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 (0.07) 0.00
------------------------------------------------------ ---------- -------------
01/20/1997-06/30/1997 0.00 0.00
------------------------------------------------------ ---------- -------------
Class C
06/30/2000 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1999 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 (0.05) 0.00
------------------------------------------------------ ---------- -------------
01/20/1997-06/30/1997 0.00 0.00
------------------------------------------------------ ---------- -------------
EQUITY INCOME FUND
Class A
06/30/2000 $ (0.36) $ 0.00
------------------------------------------------------ ---------- -------------
06/30/1999 (0.38) 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 (0.38) 0.00
------------------------------------------------------ ---------- -------------
01/20/1997-06/30/1997 (0.18) 0.00
------------------------------------------------------ ---------- -------------
Class B
06/30/2000 (0.27) 0.00
------------------------------------------------------ ---------- -------------
06/30/1999 (0.28) 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 (0.28) 0.00
------------------------------------------------------ ---------- -------------
01/20/1997-06/30/1997 (0.16) 0.00
------------------------------------------------------ ---------- -------------
Class C
06/30/2000 (0.27) 0.00
------------------------------------------------------ ---------- -------------
06/30/1999 (0.27) 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 (0.27) 0.00
------------------------------------------------------ ---------- -------------
01/20/1997-06/30/1997 (0.16) 0.00
------------------------------------------------------ ---------- -------------
GLOBAL INNOVATION FUND
Class A
12/31/1999 - 06/30/2000 $ 0.00 $ 0.00
------------------------------------------------------ ---------- -------------
Class B
03/31/2000 - 06/30/2000 0.00 0.00
------------------------------------------------------ ---------- -------------
Class C
03/31/2000 - 06/30/2000 0.00 0.00
------------------------------------------------------ ---------- -------------
GROWTH FUND
Class A
------------------------------------------------------ ---------- -------------
06/30/2000 $ 0.00 $ 0.00
------------------------------------------------------ ---------- -------------
06/30/1999 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 0.00 0.00
------------------------------------------------------ ---------- -------------
10/01/1996-06/30/1997 0.00 0.00
------------------------------------------------------ ---------- -------------
09/30/1996 0.00 0.00
------------------------------------------------------ ---------- -------------
Class B
06/30/2000 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1999 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 0.00 0.00
------------------------------------------------------ ---------- -------------
10/01/1996-06/30/1997 0.00 0.00
------------------------------------------------------ ---------- -------------
09/30/1996 0.00 0.00
------------------------------------------------------ ---------- -------------
Class C
06/30/2000 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1999 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 0.00 0.00
------------------------------------------------------ ---------- -------------
10/01/1996-06/30/1997 0.00 0.00
------------------------------------------------------ ---------- -------------
09/30/1996 0.00 0.00
------------------------------------------------------ ---------- -------------
</TABLE>
*Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
(b) If the investment manager had not reimbursed expenses, the ratio of
operating expenses to average net assets would have been 1.67% for the period
ended June 30, 2000.
(c) If the investment manager had not reimbursed expenses, the ratio of
operating expenses to average net assets would have been 2.70% for the period
ended June 30, 2000.
48 SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
DISTRIBUTIONS
DISTRIBUTIONS IN EXCESS OF
FROM OF NET NET ASSET
NET REALIZED REALIZED VALUE
CAPITAL CAPITAL TOTAL END OF
GAINS GAINS DISTRIBUTIONS PERIOD
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED: --------------------- ------------- ------------- ---------
<S> <S> <C> <C> <C>
CAPITAL APPRECIATION FUND
Class A
06/30/2000 $ (5.00) $ 0.00 $ (5.02) $ 26.94
----------------------------------------------------- --------------------- ------------- ------------- ---------
06/30/1999 (1.65) 0.00 (1.75) 26.65
----------------------------------------------------- --------------------- ------------- ------------- ---------
06/30/1998 (1.68) 0.00 (1.77) 26.01
----------------------------------------------------- --------------------- ------------- ------------- ---------
01/20/1997-06/30/1997 0.00 0.00 0.00 21.16
----------------------------------------------------- --------------------- ------------- ------------- ---------
Class B
06/30/2000 (5.00) 0.00 (5.00) 26.30
----------------------------------------------------- --------------------- ------------- ------------- ---------
06/30/1999 (1.65) 0.00 (1.65) 26.29
----------------------------------------------------- --------------------- ------------- ------------- ---------
06/30/1998 (1.68) 0.00 (1.75) 25.75
----------------------------------------------------- --------------------- ------------- ------------- ---------
01/20/1997-06/30/1997 0.00 0.00 0.00 21.10
----------------------------------------------------- --------------------- ------------- ------------- ---------
Class C
06/30/2000 (5.00) 0.00 (5.00) 26.34
----------------------------------------------------- --------------------- ------------- ------------- ---------
06/30/1999 (1.65) 0.00 (1.65) 26.31
----------------------------------------------------- --------------------- ------------- ------------- ---------
06/30/1998 (1.68) 0.00 (1.73) 25.78
----------------------------------------------------- --------------------- ------------- ------------- ---------
01/20/1997-06/30/1997 0.00 0.00 0.00 21.10
----------------------------------------------------- --------------------- ------------- ------------- ---------
EQUITY INCOME FUND
Class A
06/30/2000 $ (0.48) $ (2.16) $ (3.00) $ 10.49
----------------------------------------------------- --------------------- ------------- ------------- ---------
06/30/1999 (1.76) 0.00 (2.14) 15.58
----------------------------------------------------- --------------------- ------------- ------------- ---------
06/30/1998 (2.09) 0.00 (2.47) 16.04
----------------------------------------------------- --------------------- ------------- ------------- ---------
01/20/1997-06/30/1997 0.00 0.00 (0.18) 15.39
----------------------------------------------------- --------------------- ------------- ------------- ---------
Class B
06/30/2000 (0.48) (2.16) (2.91) 10.43
----------------------------------------------------- --------------------- ------------- ------------- ---------
06/30/1999 (1.76) 0.00 (2.04) 15.50
----------------------------------------------------- --------------------- ------------- ------------- ---------
06/30/1998 (2.09) 0.00 (2.37) 15.99
----------------------------------------------------- --------------------- ------------- ------------- ---------
01/20/1997-06/30/1997 0.00 0.00 (0.16) 15.37
----------------------------------------------------- --------------------- ------------- ------------- ---------
Class C
06/30/2000 (0.48) (2.16) (2.91) 10.45
----------------------------------------------------- --------------------- ------------- ------------- ---------
06/30/1999 (1.76) 0.00 (2.03) 15.52
----------------------------------------------------- --------------------- ------------- ------------- ---------
06/30/1998 (2.09) 0.00 (2.36) 16.01
----------------------------------------------------- --------------------- ------------- ------------- ---------
01/20/1997-06/30/1997 0.00 0.00 (0.16) 15.37
----------------------------------------------------- --------------------- ------------- ------------- ---------
GLOBAL INNOVATION FUND
Class A
12/31/1999 - 06/30/2000 $ 0.00 $ 0.00 $ 0.00 $ 18.93
----------------------------------------------------- --------------------- ------------- ------------- ---------
Class B
03/31/2000 - 06/30/2000 0.00 0.00 0.00 18.91
----------------------------------------------------- --------------------- ------------- ------------- ---------
Class C
03/31/2000 - 06/30/2000 0.00 0.00 0.00 18.91
----------------------------------------------------- --------------------- ------------- ------------- ---------
GROWTH FUND
Class A
06/30/2000 $ (5.66) $ 0.00 $ (5.66) $ 38.94
----------------------------------------------------- --------------------- ------------- ------------- ---------
06/30/1999 (3.92) 0.00 (3.92) 34.12
----------------------------------------------------- --------------------- ------------- ------------- ---------
06/30/1998 (4.32) 0.00 (4.32) 32.62
----------------------------------------------------- --------------------- ------------- ------------- ---------
10/01/1996-06/30/1997 (3.51) 0.00 (3.51) 27.03
----------------------------------------------------- --------------------- ------------- ------------- ---------
09/30/1996 (2.93) 0.00 (2.93) 26.58
----------------------------------------------------- --------------------- ------------- ------------- ---------
Class B
06/30/2000 (5.66) 0.00 (5.66) 34.66
----------------------------------------------------- --------------------- ------------- ------------- ---------
06/30/1999 (3.92) 0.00 (3.92) 31.15
----------------------------------------------------- --------------------- ------------- ------------- ---------
06/30/1998 (4.32) 0.00 (4.32) 30.34
----------------------------------------------------- --------------------- ------------- ------------- ---------
10/01/1996-06/30/1997 (3.51) 0.00 (3.51) 25.59
----------------------------------------------------- --------------------- ------------- ------------- ---------
09/30/1996 (2.93) 0.00 (2.93) 25.46
----------------------------------------------------- --------------------- ------------- ------------- ---------
Class C
06/30/2000 (5.66) 0.00 (5.66) 34.66
----------------------------------------------------- --------------------- ------------- ------------- ---------
06/30/1999 (3.92) 0.00 (3.92) 31.15
----------------------------------------------------- --------------------- ------------- ------------- ---------
06/30/1998 (4.32) 0.00 (4.32) 30.33
----------------------------------------------------- --------------------- ------------- ------------- ---------
10/01/1996-06/30/1997 (3.51) 0.00 (3.51) 25.58
----------------------------------------------------- --------------------- ------------- ------------- ---------
09/30/1996 (2.93) 0.00 (2.93) 25.46
----------------------------------------------------- --------------------- ------------- ------------- ---------
<CAPTION>
RATIO OF RATIO OF NET
NET ASSETS EXPENSES INVESTMENT
END OF TO AVERAGE INCOME (LOSS) PORTFOLIO
TOTAL PERIOD NET TO AVERAGE TURNOVER
RETURN (000S) ASSETS NET ASSETS RATE
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED: -------- ---------- ---------- ------------- ---------
<S> <C> <C> <C> <C> <C>
CAPITAL APPRECIATION FUND
Class A
06/30/2000 22.73% $ 91,927 1.11% (0.10)% 119%
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
06/30/1999 10.14 91,296 1.10 0.24 120
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
06/30/1998 32.39 72,803 1.10 0.27 75
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
01/20/1997-06/30/1997 9.58 6,534 1.11* 0.59* 87
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
Class B
06/30/2000 21.79 66,044 1.86 (0.86) 119
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
06/30/1999 9.39 55,094 1.85 (0.52) 120
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
06/30/1998 31.39 40,901 1.85 (0.47) 75
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
01/20/1997-06/30/1997 9.27 3,022 1.85* (0.26)* 87
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
Class C
06/30/2000 21.85 82,864 1.86 (0.86) 119
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
06/30/1999 9.34 81,097 1.85 (0.52) 120
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
06/30/1998 31.40 71,481 1.85 (0.49) 75
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
01/20/1997-06/30/1997 9.27 13,093 1.86* (0.23)* 87
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
EQUITY INCOME FUND
Class A
06/30/2000 (13.17)% $ 11,434 1.12% 2.77% 114%
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
06/30/1999 12.26 17,342 1.10 2.64 76
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
06/30/1998 21.35 12,954 1.11 2.39 45
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
01/20/1997-06/30/1997 11.77 1,756 1.13* 2.85* 45
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
Class B
06/30/2000 (13.79) 12,903 1.87 2.01 114
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
06/30/1999 11.35 21,732 1.85 1.89 76
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
06/30/1998 20.47 15,178 1.85 1.63 45
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
01/20/1997-06/30/1997 11.45 2,561 1.87* 2.11* 45
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
Class C
06/30/2000 (13.78) 13,929 1.87 1.99 114
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
06/30/1999 11.28 26,016 1.85 1.86 76
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
06/30/1998 20.51 23,122 1.85 1.60 45
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
01/20/1997-06/30/1997 11.42 6,624 1.87* 2.15* 45
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
GLOBAL INNOVATION FUND
Class A
12/31/1999 - 06/30/2000 89.30% $ 31,998 1.61%(b)* (0.58)%* 131%
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
Class B
03/31/2000 - 06/30/2000 (6.25) 25,375 2.60(c)* (1.70)* 131
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
Class C
03/31/2000 - 06/30/2000 (6.25) 46,826 2.60(c)* (1.70)* 131
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
GROWTH FUND
Class A
06/30/2000 32.49% $ 255,744 1.16% (0.78)% 72%
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
06/30/1999 18.65 227,638 1.16 (0.44) 131
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
06/30/1998 41.03 180,119 1.16 (0.27) 123
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
10/01/1996-06/30/1997 15.93 147,276 1.11* 0.13* 94
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
09/30/1996 16.11 151,103 1.11 0.24 104
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
Class B
06/30/2000 31.31 213,627 1.91 (1.53) 72
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
06/30/1999 17.72 133,850 1.90 (1.19) 131
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
06/30/1998 39.97 80,719 1.91 (1.02) 123
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
10/01/1996-06/30/1997 15.32 55,626 1.86* (0.62)* 94
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
09/30/1996 15.22 37,256 1.86 (0.51) 104
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
Class C
06/30/2000 31.31 2,416,067 1.91 (1.53) 72
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
06/30/1999 17.76 2,064,450 1.90 (1.18) 131
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
06/30/1998 39.99 1,853,002 1.91 (1.02) 123
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
10/01/1996-06/30/1997 15.27 1,514,432 1.86* (0.61)* 94
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
09/30/1996 15.22 1,450,216 1.86 (0.51) 104
----------------------------------------------------- -------- ---------- ---------- ------------- ---------
</TABLE>
SEE ACCCOMPANYING NOTES 49
<PAGE>
FINANCIAL HIGHLIGHTS - A, B AND C CLASSES (CONT.)
<TABLE>
<CAPTION>
NET ASSET NET REALIZED /
VALUE UNREALIZED GAIN TOTAL INCOME FROM
BEGINNING NET INVESTMENT (LOSS) ON INVESTMENT
OF PERIOD INCOME (LOSS) INVESTMENTS OPERATIONS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED: --------- -------------- --------------- -----------------
<S> <C> <C> <C> <C>
INNOVATION FUND
Class A
06/30/2000 $ 37.46 $ (0.58)(a) $ 41.80 (a) $ 41.22
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 24.28 (0.28)(a) 14.72 (a) 14.44
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 17.43 (0.19)(a) 8.21 (a) 8.02
----------------------------------------------------- --------- -------------- --------------- -----------------
10/01/1996-06/30/1997 17.26 0.07 0.36 0.43
----------------------------------------------------- --------- -------------- --------------- -----------------
09/30/1996 14.74 (0.07) 2.94 2.87
----------------------------------------------------- --------- -------------- --------------- -----------------
Class B
06/30/2000 36.09 (1.01)(a) 40.37 (a) 39.36
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 23.60 (0.49)(a) 14.24 (a) 13.75
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 17.10 (0.33)(a) 8.00 (a) 7.67
----------------------------------------------------- --------- -------------- --------------- -----------------
10/01/1996-06/30/1997 17.04 (0.03) 0.35 0.32
----------------------------------------------------- --------- -------------- --------------- -----------------
09/30/1996 14.66 (0.11) 2.84 2.73
----------------------------------------------------- --------- -------------- --------------- -----------------
Class C
06/30/2000 36.08 (1.00)(a) 40.35 (a) 39.35
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 23.59 (0.48)(a) 14.23 (a) 13.75
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 17.09 (0.33)(a) 8.00 (a) 7.67
----------------------------------------------------- --------- -------------- --------------- -----------------
10/01/1996-06/30/1997 17.04 (0.02) 0.33 0.31
----------------------------------------------------- --------- -------------- --------------- -----------------
09/30/1996 14.65 (0.15) 2.89 2.74
----------------------------------------------------- --------- -------------- --------------- -----------------
INTERNATIONAL FUND
Class A
06/30/2000 $ 12.45 $ 0.03 (a) $ 1.46 (a) $ 1.49
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 14.33 0.01 (a) (0.74)(a) (0.73)
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 14.26 0.06 (a) 1.13 (a) 1.19
----------------------------------------------------- --------- -------------- --------------- -----------------
10/01/1996-06/30/1997 13.03 0.29 1.33 1.62
----------------------------------------------------- --------- -------------- --------------- -----------------
09/30/1996 12.19 0.07 0.77 0.84
----------------------------------------------------- --------- -------------- --------------- -----------------
Class B
06/30/2000 11.51 (0.06)(a) 1.25 (a) 1.19
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 13.46 (0.08)(a) (0.72)(a) (0.80)
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 13.56 (0.05)(a) 1.07 (a) 1.02
----------------------------------------------------- --------- -------------- --------------- -----------------
10/01/1996-06/30/1997 12.48 0.16 1.31 1.47
----------------------------------------------------- --------- -------------- --------------- -----------------
09/30/1996 11.75 0.00 (a) 0.73 (a) 0.73
----------------------------------------------------- --------- -------------- --------------- -----------------
Class C
06/30/2000 11.50 (0.09)(a) 1.27 (a) 1.18
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 13.45 (0.09)(a) (0.71)(a) (0.80)
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 13.55 (0.06)(a) 1.08 (a) 1.02
----------------------------------------------------- --------- -------------- --------------- -----------------
10/01/1996-06/30/1997 12.47 0.18 1.29 1.47
----------------------------------------------------- --------- -------------- --------------- -----------------
09/30/1996 11.75 (0.05) 0.77 0.72
----------------------------------------------------- --------- -------------- --------------- -----------------
MID-CAP FUND
Class A
06/30/2000 $ 22.82 $ (0.01)(a) $ 7.82 (a) $ 7.81
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 24.00 0.03 (a) (0.13)(a) (0.10)
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 20.24 0.02 (a) 5.11 (a) 5.13
----------------------------------------------------- --------- -------------- --------------- -----------------
01/13/1997-06/30/1997 18.14 (0.04) 2.14 2.10
----------------------------------------------------- --------- -------------- --------------- -----------------
Class B
06/30/2000 22.43 (0.20)(a) 7.66 (a) 7.46
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 23.77 (0.13)(a) (0.14)(a) (0.27)
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 20.17 (0.16)(a) 5.09 (a) 4.93
----------------------------------------------------- --------- -------------- --------------- -----------------
01/13/1997-06/30/1997 18.14 (0.11) 2.14 2.03
----------------------------------------------------- --------- -------------- --------------- -----------------
Class C
06/30/2000 22.44 (0.20)(a) 7.66 (a) 7.46
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 23.77 (0.13)(a) (0.13)(a) (0.26)
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 20.18 (0.16)(a) 5.08 (a) 4.92
----------------------------------------------------- --------- -------------- --------------- -----------------
01/13/1997-06/30/1997 18.14 (0.10) 2.14 2.04
----------------------------------------------------- --------- -------------- --------------- -----------------
<CAPTION>
DIVIDENDS DIVIDENDS IN
FROM NET EXCESS OF NET
INVESTMENT INVESTMENT
INCOME INCOME
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED: ---------- -------------
<S> <C> <C>
INNOVATION FUND
Class A
06/30/2000 $ 0.00 $ 0.00
------------------------------------------------------ ---------- -------------
06/30/1999 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 0.00 0.00
------------------------------------------------------ ---------- -------------
10/01/1996-06/30/1997 0.00 0.00
------------------------------------------------------ ---------- -------------
09/30/1996 0.00 0.00
------------------------------------------------------ ---------- -------------
Class B
06/30/2000 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1999 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 0.00 0.00
------------------------------------------------------ ---------- -------------
10/01/1996-06/30/1997 0.00 0.00
------------------------------------------------------ ---------- -------------
09/30/1996 0.00 0.00
------------------------------------------------------ ---------- -------------
Class C
06/30/2000 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1999 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 0.00 0.00
------------------------------------------------------ ---------- -------------
10/01/1996-06/30/1997 0.00 0.00
------------------------------------------------------ ---------- -------------
09/30/1996 0.00 0.00
------------------------------------------------------ ---------- -------------
INTERNATIONAL FUND
Class A
06/30/2000 $ 0.00 $ 0.00
------------------------------------------------------ ---------- -------------
06/30/1999 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 0.00 0.00
------------------------------------------------------ ---------- -------------
10/01/1996-06/30/1997 0.00 0.00
------------------------------------------------------ ---------- -------------
09/30/1996 0.00 0.00
------------------------------------------------------ ---------- -------------
Class B
06/30/2000 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1999 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 0.00 0.00
------------------------------------------------------ ---------- -------------
10/01/1996-06/30/1997 0.00 0.00
------------------------------------------------------ ---------- -------------
09/30/1996 0.00 0.00
------------------------------------------------------ ---------- -------------
Class C
06/30/2000 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1999 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 0.00 0.00
------------------------------------------------------ ---------- -------------
10/01/1996-06/30/1997 0.00 0.00
------------------------------------------------------ ---------- -------------
09/30/1996 0.00 0.00
------------------------------------------------------ ---------- -------------
MID-CAP FUND
Class A
06/30/2000 $ (0.02) $ (0.02)
------------------------------------------------------ ---------- -------------
06/30/1999 (0.01) 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 (0.04) 0.00
------------------------------------------------------ ---------- -------------
01/13/1997-06/30/1997 0.00 0.00
------------------------------------------------------ ---------- -------------
Class B
06/30/2000 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1999 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 0.00 0.00
------------------------------------------------------ ---------- -------------
01/13/1997-06/30/1997 0.00 0.00
------------------------------------------------------ ---------- -------------
Class C
06/30/2000 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1999 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 0.00 0.00
------------------------------------------------------ ---------- -------------
01/13/1997-06/30/1997 0.00 0.00
------------------------------------------------------ ---------- -------------
</TABLE>
*Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
(b) Ratio of expenses to average net assets excluding interest expense is 1.46%.
(c) Ratio of expenses to average net assets excluding interest expense is 2.21%.
50 SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
DISTRIBUTIONS
IN
DISTRIBUTIONS EXCESS OF
FROM NET NET ASSET
NET REALIZED REALIZED VALUE
CAPITAL CAPITAL TOTAL END OF
GAINS GAINS DISTRIBUTIONS PERIOD
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED: --------------------- ------------- ------------- ---------
<S> <S> <C> <C> <C>
INNOVATION FUND
Class A
06/30/2000 $ $ (6.39) $ 0.00 $ (6.39) $ 72.29
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1999 (1.26) 0.00 (1.26) 37.46
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1998 (0.99) (0.18) (1.17) 24.28
------------------------------------------------------ --------------------- ------------- ------------- ---------
10/01/1996-06/30/1997 (0.26) 0.00 (0.26) 17.43
------------------------------------------------------ --------------------- ------------- ------------- ---------
09/30/1996 (0.35) 0.00 (0.35) 17.26
------------------------------------------------------ --------------------- ------------- ------------- ---------
Class B
06/30/2000 (6.39) 0.00 (6.39) 69.06
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1999 (1.26) 0.00 (1.26) 36.09
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1998 (0.99) (0.18) (1.17) 23.60
------------------------------------------------------ --------------------- ------------- ------------- ---------
10/01/1996-06/30/1997 (0.26) 0.00 (0.26) 17.10
------------------------------------------------------ --------------------- ------------- ------------- ---------
09/30/1996 (0.35) 0.00 (0.35) 17.04
------------------------------------------------------ --------------------- ------------- ------------- ---------
Class C
06/30/2000 (6.39) 0.00 (6.39) 69.04
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1999 (1.26) 0.00 (1.26) 36.08
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1998 (0.99) (0.18) (1.17) 23.59
------------------------------------------------------ --------------------- ------------- ------------- ---------
10/01/1996-06/30/1997 (0.26) 0.00 (0.26) 17.09
------------------------------------------------------ --------------------- ------------- ------------- ---------
09/30/1996 (0.35) 0.00 (0.35) 17.04
------------------------------------------------------ --------------------- ------------- ------------- ---------
INTERNATIONAL FUND
Class A
06/30/2000 $ (1.74) $ 0.00 $ (1.74) $ 12.20
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1999 (1.15) 0.00 (1.15) 12.45
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1998 (0.82) (0.30) (1.12) 14.33
------------------------------------------------------ --------------------- ------------- ------------- ---------
10/01/1996-06/30/1997 (0.39) 0.00 (0.39) 14.26
------------------------------------------------------ --------------------- ------------- ------------- ---------
09/30/1996 0.00 0.00 0.00 13.03
------------------------------------------------------ --------------------- ------------- ------------- ---------
Class B
06/30/2000 (1.74) 0.00 (1.74) 10.96
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1999 (1.15) 0.00 (1.15) 11.51
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1998 (0.82) (0.30) (1.12) 13.46
------------------------------------------------------ --------------------- ------------- ------------- ---------
10/01/1996-06/30/1997 (0.39) 0.00 (0.39) 13.56
------------------------------------------------------ --------------------- ------------- ------------- ---------
09/30/1996 0.00 0.00 0.00 12.48
------------------------------------------------------ --------------------- ------------- ------------- ---------
Class C
06/30/2000 (1.74) 0.00 (1.74) 10.94
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1999 (1.15) 0.00 (1.15) 11.50
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1998 (0.82) (0.30) (1.12) 13.45
------------------------------------------------------ --------------------- ------------- ------------- ---------
10/01/1996-06/30/1997 (0.39) 0.00 (0.39) 13.55
------------------------------------------------------ --------------------- ------------- ------------- ---------
09/30/1996 0.00 0.00 0.00 12.47
------------------------------------------------------ --------------------- ------------- ------------- ---------
MID-CAP FUND
Class A
06/30/2000 $ (0.02) $ 0.00 $ (0.06) $ 30.57
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1999 (1.07) 0.00 (1.08) 22.82
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1998 (1.33) 0.00 (1.37) 24.00
------------------------------------------------------ --------------------- ------------- ------------- ---------
01/13/1997-06/30/1997 0.00 0.00 0.00 20.24
------------------------------------------------------ --------------------- ------------- ------------- ---------
Class B
06/30/2000 (0.02) 0.00 (0.02) 29.87
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1999 (1.07) 0.00 (1.07) 22.43
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1998 (1.33) 0.00 (1.33) 23.77
------------------------------------------------------ --------------------- ------------- ------------- ---------
01/13/1997-06/30/1997 0.00 0.00 0.00 20.17
------------------------------------------------------ --------------------- ------------- ------------- ---------
Class C
06/30/2000 (0.02) 0.00 (0.02) 29.88
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1999 (1.07) 0.00 (1.07) 22.44
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1998 (1.33) 0.00 (1.33) 23.77
------------------------------------------------------ --------------------- ------------- ------------- ---------
01/13/1997-06/30/1997 0.00 0.00 0.00 20.18
------------------------------------------------------ --------------------- ------------- ------------- ---------
<CAPTION>
RATIO OF RATIO OF NET
NET ASSETS EXPENSES INVESTMENT
END OF TO AVERAGE INCOME (LOSS) PORTFOLIO
TOTAL PERIOD NET TO AVERAGE TURNOVER
RETURN (000S) ASSETS NET ASSETS RATE
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED: -------- ---------- ---------- ------------- ---------
<S> <C> <C> <C> <C> <C>
INNOVATION FUND
Class A
06/30/2000 115.04% $1,408,455 1.30% (0.91)% 186%
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1999 61.36 313,946 1.30 (0.90) 119
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1998 48.10 85,800 1.31 (0.94) 100
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
10/01/1996-06/30/1997 2.41 56,215 1.28* (0.68)* 80
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
09/30/1996 19.86 50,067 1.31 (0.61) 123
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
Class B
06/30/2000 114.17 1,680,792 2.05 (1.66) 186
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1999 60.17 351,876 2.05 (1.64) 119
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1998 46.95 81,130 2.06 (1.69) 100
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
10/01/1996-06/30/1997 1.79 51,472 2.03* (1.43)* 80
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
09/30/1996 18.99 33,778 2.06 (1.36) 123
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
Class C
06/30/2000 114.17 2,275,811 2.05 (1.66) 186
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1999 60.20 580,251 2.05 (1.65) 119
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1998 46.97 219,258 2.06 (1.69) 100
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
10/01/1996-06/30/1997 1.73 162,889 2.03* (1.43)* 80
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
09/30/1996 19.08 137,752 2.06 (1.36) 123
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
INTERNATIONAL FUND
Class A
06/30/2000 11.85% $ 12,452 1.52%(b) 0.26% 58%
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1999 (4.31) 18,865 1.55(b) 0.05 55
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1998 9.95 12,510 1.48 0.41 60
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
10/01/1996-06/30/1997 12.82 18,287 1.51* 0.58* 59
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
09/30/1996 6.89 20,056 1.41 0.49 110
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
Class B
06/30/2000 10.00 10,176 2.28(c) (0.55) 58
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1999 (5.15) 9,478 2.29(c) (0.67) 55
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1998 9.17 8,956 2.22 (0.37) 60
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
10/01/1996-06/30/1997 12.17 8,676 2.26* 0.18* 59
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
09/30/1996 6.21 5,893 2.16 (0.26) 110
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
Class C
06/30/2000 9.91 92,220 2.28(c) (0.77) 58
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1999 (5.15) 101,320 2.30(c) (0.75) 55
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1998 9.18 132,986 2.22 (0.43) 60
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
10/01/1996-06/30/1997 12.18 168,446 2.25* (0.25)* 59
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
09/30/1996 6.13 203,544 2.16 (0.26) 110
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
MID-CAP FUND
Class A
06/30/2000 34.28% $ 156,949 1.11% (0.05)% 164%
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1999 (0.13) 124,680 1.10 0.15 85
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1998 25.71 57,164 1.11 0.07 66
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
01/13/1997-06/30/1997 11.58 12,184 1.11* 0.17* 82
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
Class B
06/30/2000 33.27 88,648 1.86 (0.80) 164
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1999 (0.86) 84,698 1.85 (0.62) 85
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1998 24.76 84,535 1.86 (0.68) 66
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
01/13/1997-06/30/1997 11.19 28,259 1.85* (0.58)* 82
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
Class C
06/30/2000 33.25 104,082 1.86 (0.80) 164
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1999 (0.82) 112,507 1.85 (0.63) 85
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1998 24.70 140,438 1.86 (0.68) 66
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
01/13/1997-06/30/1997 11.25 53,686 1.86* (0.58)* 82
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
</TABLE>
SEE ACCOMPANYING NOTES 51
<PAGE>
FINANCIAL HIGHLIGHTS - A, B AND C CLASSES (CONT.)
<TABLE>
<CAPTION>
NET ASSET NET REALIZED /
VALUE UNREALIZED GAIN TOTAL INCOME FROM
BEGINNING NET INVESTMENT (LOSS) ON INVESTMENT
OF PERIOD INCOME (LOSS) INVESTMENTS OPERATIONS
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED: --------- -------------- --------------- -----------------
<S> <C> <C> <C> <C>
OPPORTUNITY FUND
Class A
06/30/2000 $ 26.96 $ (0.25)(a) $ 12.75 (a) $ 12.50
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 31.33 (0.21)(a) 0.46 (a) 0.25
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 29.35 (0.27)(a) 4.19 (a) 3.92
----------------------------------------------------- --------- -------------- --------------- -----------------
10/01/1996-06/30/1997 37.36 0.00 (3.10) (3.10)
----------------------------------------------------- --------- -------------- --------------- -----------------
09/30/1996 39.08 (0.11) 6.12 6.01
----------------------------------------------------- --------- -------------- --------------- -----------------
Class B
06/30/2000 24.20 (0.43)(a) 11.32 (a) 10.89
----------------------------------------------------- --------- -------------- --------------- -----------------
03/31/1999-06/30/1999 21.40 (0.09) 2.89 2.80
----------------------------------------------------- --------- -------------- --------------- -----------------
Class C
06/30/2000 24.19 (0.42)(a) 11.33 (a) 10.91
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 28.86 (0.37)(a) 0.32 (a) (0.05)
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 27.38 (0.46)(a) 3.88 (a) 3.42
----------------------------------------------------- --------- -------------- --------------- -----------------
10/01/1996-06/30/1997 35.38 (0.04) (3.05) (3.09)
----------------------------------------------------- --------- -------------- --------------- -----------------
09/30/1996 37.64 (0.35) 5.82 5.47
----------------------------------------------------- --------- -------------- --------------- -----------------
RENAISSANCE FUND
Class A
06/30/2000 $ 18.21 $ 0.06 (a) $ 0.13 (a) $ 0.19
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 19.10 (0.01)(a) 1.45 (a) 1.44
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 17.73 0.07 (a) 4.91 (a) 4.98
----------------------------------------------------- --------- -------------- --------------- -----------------
10/01/1996-06/30/1997 16.08 0.12 (a) 3.90 (a) 4.02
----------------------------------------------------- --------- -------------- --------------- -----------------
09/30/1996 14.14 0.23 2.79 3.02
----------------------------------------------------- --------- -------------- --------------- -----------------
Class B
06/30/2000 17.99 (0.07)(a) 0.13 (a) 0.06
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 19.06 (0.13)(a) 1.39 (a) 1.26
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 17.77 (0.07)(a) 4.91 (a) 4.84
----------------------------------------------------- --------- -------------- --------------- -----------------
10/01/1996-06/30/1997 16.12 0.03 (a) 3.92 (a) 3.95
----------------------------------------------------- --------- -------------- --------------- -----------------
09/30/1996 14.13 0.09 2.83 2.92
----------------------------------------------------- --------- -------------- --------------- -----------------
Class C
06/30/2000 17.91 (0.07)(a) 0.13 (a) 0.06
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 18.96 (0.13)(a) 1.41 (a) 1.28
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 17.69 (0.07)(a) 4.88 (a) 4.81
----------------------------------------------------- --------- -------------- --------------- -----------------
10/01/1996-06/30/1997 16.05 0.03 (a) 3.90 (a) 3.93
----------------------------------------------------- --------- -------------- --------------- -----------------
09/30/1996 14.09 0.12 2.78 2.90
----------------------------------------------------- --------- -------------- --------------- -----------------
SELECT GROWTH FUND
Class A
03/31/2000 - 06/30/2000 $ 23.25 $ 0.00 (a) $ 0.74 (a) $ 0.74
----------------------------------------------------- --------- -------------- --------------- -----------------
Class B
03/31/2000 - 06/30/2000 23.25 (0.06)(a) 0.77 (a) 0.71
----------------------------------------------------- --------- -------------- --------------- -----------------
Class C
03/31/2000 - 06/30/2000 23.25 (0.05)(a) 0.76 (a) 0.71
----------------------------------------------------- --------- -------------- --------------- -----------------
SMALL-CAP VALUE FUND
Class A
06/30/2000 $ 15.93 $ 0.32 (a) $ (1.81)(a) $ (1.49)
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 17.58 0.26 (a) (1.29)(a) (1.03)
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 15.75 0.23 (a) 2.49 (a) 2.72
----------------------------------------------------- --------- -------------- --------------- -----------------
01/20/1997-06/30/1997 14.02 0.10 1.63 1.73
----------------------------------------------------- --------- -------------- --------------- -----------------
Class B
06/30/2000 15.79 0.21 (a) (1.79)(a) (1.58)
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 17.43 0.14 (a) (1.27)(a) (1.13)
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 15.71 0.09 (a) 2.48 (a) 2.57
----------------------------------------------------- --------- -------------- --------------- -----------------
01/20/1997-06/30/1997 14.02 0.08 1.61 1.69
----------------------------------------------------- --------- -------------- --------------- -----------------
Class C
06/30/2000 15.82 0.21 (a) (1.79)(a) (1.58)
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1999 17.44 0.14 (a) (1.27)(a) (1.13)
----------------------------------------------------- --------- -------------- --------------- -----------------
06/30/1998 15.71 0.09 (a) 2.49 (a) 2.58
----------------------------------------------------- --------- -------------- --------------- -----------------
01/20/1997-06/30/1997 14.02 0.08 1.61 1.69
----------------------------------------------------- --------- -------------- --------------- -----------------
<CAPTION>
DIVIDENDS DIVIDENDS IN
FROM NET EXCESS OF NET
INVESTMENT INVESTMENT
INCOME INCOME
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED: ---------- -------------
<S> <C> <C>
OPPORTUNITY FUND
Class A
06/30/2000 $ 0.00 $ 0.00
------------------------------------------------------ ---------- -------------
06/30/1999 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 0.00 0.00
------------------------------------------------------ ---------- -------------
10/01/1996-06/30/1997 0.00 0.00
------------------------------------------------------ ---------- -------------
09/30/1996 0.00 0.00
------------------------------------------------------ ---------- -------------
Class B
06/30/2000 0.00 0.00
------------------------------------------------------ ---------- -------------
03/31/1999-06/30/1999 0.00 0.00
------------------------------------------------------ ---------- -------------
Class C
06/30/2000 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1999 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 0.00 0.00
------------------------------------------------------ ---------- -------------
10/01/1996-06/30/1997 0.00 0.00
------------------------------------------------------ ---------- -------------
09/30/1996 0.00 0.00
------------------------------------------------------ ---------- -------------
RENAISSANCE FUND
Class A
06/30/2000 $ 0.00 $ 0.00
------------------------------------------------------ ---------- -------------
06/30/1999 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 (0.08) 0.00
------------------------------------------------------ ---------- -------------
10/01/1996-06/30/1997 (0.12) 0.00
------------------------------------------------------ ---------- -------------
09/30/1996 (0.23) (0.07)
------------------------------------------------------ ---------- -------------
Class B
06/30/2000 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1999 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 (0.02) 0.00
------------------------------------------------------ ---------- -------------
10/01/1996-06/30/1997 (0.05) 0.00
------------------------------------------------------ ---------- -------------
09/30/1996 (0.11) (0.04)
------------------------------------------------------ ---------- -------------
Class C
06/30/2000 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1999 0.00 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 (0.01) 0.00
------------------------------------------------------ ---------- -------------
10/01/1996-06/30/1997 (0.04) 0.00
------------------------------------------------------ ---------- -------------
09/30/1996 (0.13) (0.03)
------------------------------------------------------ ---------- -------------
SELECT GROWTH FUND
Class A
03/31/2000 - 06/30/2000 $ 0.00 $ 0.00
------------------------------------------------------ ---------- -------------
Class B
03/31/2000 - 06/30/2000 0.00 0.00
------------------------------------------------------ ---------- -------------
Class C
03/31/2000 - 06/30/2000 0.00 0.00
------------------------------------------------------ ---------- -------------
SMALL-CAP VALUE FUND
Class A
06/30/2000 $ (0.32) $ 0.00
------------------------------------------------------ ---------- -------------
06/30/1999 (0.17) 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 (0.13) 0.00
------------------------------------------------------ ---------- -------------
01/20/1997-06/30/1997 0.00 0.00
------------------------------------------------------ ---------- -------------
Class B
06/30/2000 (0.17) 0.00
------------------------------------------------------ ---------- -------------
06/30/1999 (0.06) 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 (0.09) 0.00
------------------------------------------------------ ---------- -------------
01/20/1997-06/30/1997 0.00 0.00
------------------------------------------------------ ---------- -------------
Class C
06/30/2000 (0.18) 0.00
------------------------------------------------------ ---------- -------------
06/30/1999 (0.04) 0.00
------------------------------------------------------ ---------- -------------
06/30/1998 (0.09) 0.00
------------------------------------------------------ ---------- -------------
01/20/1997-06/30/1997 0.00 0.00
------------------------------------------------------ ---------- -------------
</TABLE>
*Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
52 SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
DISTRIBUTIONS
IN
DISTRIBUTIONS EXCESS OF
FROM NET NET ASSET
NET REALIZED REALIZED VALUE
CAPITAL CAPITAL TOTAL END OF
GAINS GAINS DISTRIBUTIONS PERIOD
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED: --------------------- ------------- ------------- ---------
<S> <S> <C> <C> <C>
OPPORTUNITY FUND
Class A
06/30/2000 $ (7.88) $ 0.00 $ (7.88) $ 31.58
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1999 (4.62) 0.00 (4.62) 26.96
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1998 (1.94) 0.00 (1.94) 31.33
------------------------------------------------------ --------------------- ------------- ------------- ---------
10/01/1996-06/30/1997 (4.91) 0.00 (4.91) 29.35
------------------------------------------------------ --------------------- ------------- ------------- ---------
09/30/1996 (7.73) 0.00 (7.73) 37.36
------------------------------------------------------ --------------------- ------------- ------------- ---------
Class B
06/30/2000 (7.88) 0.00 (7.88) 27.21
------------------------------------------------------ --------------------- ------------- ------------- ---------
03/31/1999-06/30/1999 0.00 0.00 0.00 24.20
------------------------------------------------------ --------------------- ------------- ------------- ---------
Class C
06/30/2000 (7.88) 0.00 (7.88) 27.22
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1999 (4.62) 0.00 (4.62) 24.19
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1998 (1.94) 0.00 (1.94) 28.86
------------------------------------------------------ --------------------- ------------- ------------- ---------
10/01/1996-06/30/1997 (4.91) 0.00 (4.91) 27.38
------------------------------------------------------ --------------------- ------------- ------------- ---------
09/30/1996 (7.73) 0.00 (7.73) 35.38
------------------------------------------------------ --------------------- ------------- ------------- ---------
RENAISSANCE FUND
Class A
06/30/2000 $ (2.59) $ (0.86) $ (3.45) $ 14.95
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1999 (2.33) 0.00 (2.33) 18.21
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1998 (3.53) 0.00 (3.61) 19.10
------------------------------------------------------ --------------------- ------------- ------------- ---------
10/01/1996-06/30/1997 (2.25) 0.00 (2.37) 17.73
------------------------------------------------------ --------------------- ------------- ------------- ---------
09/30/1996 (0.78) 0.00 (1.08) 16.08
------------------------------------------------------ --------------------- ------------- ------------- ---------
Class B
06/30/2000 (2.59) (0.86) (3.45) 14.60
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1999 (2.33) 0.00 (2.33) 17.99
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1998 (3.53) 0.00 (3.55) 19.06
------------------------------------------------------ --------------------- ------------- ------------- ---------
10/01/1996-06/30/1997 (2.25) 0.00 (2.30) 17.77
------------------------------------------------------ --------------------- ------------- ------------- ---------
09/30/1996 (0.78) 0.00 (0.93) 16.12
------------------------------------------------------ --------------------- ------------- ------------- ---------
Class C
06/30/2000 (2.59) (0.86) (3.45) 14.52
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1999 (2.33) 0.00 (2.33) 17.91
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1998 (3.53) 0.00 (3.54) 18.96
------------------------------------------------------ --------------------- ------------- ------------- ---------
10/01/1996-06/30/1997 (2.25) 0.00 (2.29) 17.69
------------------------------------------------------ --------------------- ------------- ------------- ---------
09/30/1996 (0.78) 0.00 (0.94) 16.05
------------------------------------------------------ --------------------- ------------- ------------- ---------
SELECT GROWTH FUND
Class A
03/31/2000 - 06/30/2000 $ 0.00 $ 0.00 $ 0.00 $ 23.99
------------------------------------------------------ --------------------- ------------- ------------- ---------
Class B
03/31/2000 - 06/30/2000 0.00 0.00 0.00 23.96
------------------------------------------------------ --------------------- ------------- ------------- ---------
Class C
03/31/2000 - 06/30/2000 0.00 0.00 0.00 23.96
------------------------------------------------------ --------------------- ------------- ------------- ---------
SMALL-CAP VALUE FUND
Class A
06/30/2000 $ 0.00 $ 0.00 $ (0.32) $ 14.12
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1999 0.00 (0.45) (0.62) 15.93
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1998 (0.76) 0.00 (0.89) 17.58
------------------------------------------------------ --------------------- ------------- ------------- ---------
01/20/1997-06/30/1997 0.00 0.00 0.00 15.75
------------------------------------------------------ --------------------- ------------- ------------- ---------
Class B
06/30/2000 0.00 0.00 (0.17) 14.04
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1999 0.00 (0.45) (0.51) 15.79
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1998 (0.76) 0.00 (0.85) 17.43
------------------------------------------------------ --------------------- ------------- ------------- ---------
01/20/1997-06/30/1997 0.00 0.00 0.00 15.71
------------------------------------------------------ --------------------- ------------- ------------- ---------
Class C
06/30/2000 0.00 0.00 (0.18) 14.06
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1999 0.00 (0.45) (0.49) 15.82
------------------------------------------------------ --------------------- ------------- ------------- ---------
06/30/1998 (0.76) 0.00 (0.85) 17.44
------------------------------------------------------ --------------------- ------------- ------------- ---------
01/20/1997-06/30/1997 0.00 0.00 0.00 15.71
------------------------------------------------------ --------------------- ------------- ------------- ---------
<CAPTION>
RATIO OF RATIO OF NET
NET ASSETS EXPENSES INVESTMENT
END OF TO AVERAGE INCOME (LOSS) PORTFOLIO
TOTAL PERIOD NET TO AVERAGE TURNOVER
RETURN (000S) ASSETS NET ASSETS RATE
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED: -------- ---------- ---------- ------------- ---------
<S> <C> <C> <C> <C> <C>
OPPORTUNITY FUND
Class A
06/30/2000 50.77% $ 142,064 1.31% (0.81)% 254%
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1999 3.98 121,507 1.31 (0.86) 175
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1998 13.87 200,935 1.31 (0.88) 86
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
10/01/1996-06/30/1997 0.00 213,484 1.25* (0.12)* 69
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
09/30/1996 18.35 134,859 1.13 (0.32) 91
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
Class B
06/30/2000 49.78 28,145 2.06 (1.57) 254
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
03/31/1999-06/30/1999 13.08 251 2.03* (1.65)* 175
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
Class C
06/30/2000 49.88 401,118 2.06 (1.57) 254
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1999 3.20 308,877 2.06 (1.62) 175
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1998 13.01 500,011 2.06 (1.63) 86
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
10/01/1996-06/30/1997 (9.40) 629,446 1.97* (0.95)* 69
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
09/30/1996 17.47 800,250 1.88 (1.07) 91
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
RENAISSANCE FUND
Class A
06/30/2000 3.36% $ 68,433 1.25% 0.36% 133%
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1999 9.94 90,445 1.26 (0.04) 221
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1998 30.98 85,562 1.26 0.35 192
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
10/01/1996-06/30/1997 27.53 33,606 1.23* 0.95* 131
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
09/30/1996 22.37 20,631 1.25 1.60 203
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
Class B
06/30/2000 2.59 89,621 2.00 (0.45) 133
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1999 8.94 126,576 2.00 (0.78) 221
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1998 29.99 100,688 2.01 (0.39) 192
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
10/01/1996-06/30/1997 26.88 37,253 1.97* 0.20* 131
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
09/30/1996 21.54 15,693 2.00 0.85 203
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
Class C
06/30/2000 2.60 311,519 2.00 (0.45) 133
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1999 9.12 442,049 2.00 (0.79) 221
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1998 29.98 469,797 2.01 (0.37) 192
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
10/01/1996-06/30/1997 26.86 313,226 1.97* 0.21* 131
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
09/30/1996 21.52 230,058 2.00 0.85 203
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
SELECT GROWTH FUND
Class A
03/31/2000 - 06/30/2000 3.18% $ 7,841 1.25%* (0.01)%* 170%
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
Class B
03/31/2000 - 06/30/2000 3.05 2,173 2.00* (0.96)* 170
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
Class C
03/31/2000 - 06/30/2000 3.05 4,196 2.00* (0.90)* 170
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
SMALL-CAP VALUE FUND
Class A
06/30/2000 (9.26)% $ 114,347 1.26% 2.28% 55%
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1999 (5.50) 107,569 1.25 1.74 60
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1998 17.33 75,070 1.25 1.27 41
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
01/20/1997-06/30/1997 12.34 6,563 1.30* 1.94* 48
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
Class B
06/30/2000 (9.94) 55,435 2.01 1.46 55
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1999 (6.22) 96,994 2.00 0.95 60
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1998 16.40 110,833 2.00 0.53 41
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
01/20/1997-06/30/1997 12.05 11,077 2.04* 1.23* 48
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
Class C
06/30/2000 (9.95) 69,808 2.01 1.46 55
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1999 (6.21) 112,926 2.00 0.95 60
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
06/30/1998 16.42 130,466 2.00 0.52 41
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
01/20/1997-06/30/1997 12.05 20,637 2.05* 1.13* 48
------------------------------------------------------ -------- ---------- ---------- ------------- ---------
</TABLE>
SEE ACCOMPANYING NOTES 53
<PAGE>
FINANCIAL HIGHLIGHTS - A, B AND C CLASSES (CONT.)
<TABLE>
<CAPTION>
NET ASSET NET REALIZED/
VALUE UNREALIZED GAIN
BEGINNING NET INVESTMENT (LOSS) ON
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED: OF PERIOD INCOME (LOSS) INVESTMENTS
----------------- ----------------- -----------------
<S> <C> <C> <C>
TARGET FUND
Class A
06/30/2000 $ 17.72 $ (0.23)(a) $ 15.45 (a)
------------------------------------------------------- ----------------- ----------------- -----------------
03/31/1999-06/30/1999 16.35 (0.09)(a) 2.44 (a)
------------------------------------------------------- ----------------- ----------------- -----------------
06/30/1998 16.82 (0.08)(a) 4.06 (a)
------------------------------------------------------- ----------------- ----------------- -----------------
10/01/1996-06/30/1997 17.11 (0.04)(a) 1.82 (a)
------------------------------------------------------- ----------------- ----------------- -----------------
09/30/1996 16.40 (0.05) 2.54
------------------------------------------------------- ----------------- ----------------- -----------------
Class B
06/30/2000 16.44 (0.39)(a) 14.35 (a)
------------------------------------------------------- ----------------- ----------------- -----------------
06/30/1999 15.34 (0.19)(a) 2.27 (a)
------------------------------------------------------- ----------------- ----------------- -----------------
06/30/1998 16.14 (0.19)(a) 3.84 (a)
------------------------------------------------------- ----------------- ----------------- -----------------
10/01/1996-06/30/1997 16.58 (0.12)(a) 1.75 (a)
------------------------------------------------------- ----------------- ----------------- -----------------
09/30/1996 16.06 (0.09) 2.39
------------------------------------------------------- ----------------- ----------------- -----------------
Class C
06/30/2000 16.43 (0.38)(a) 14.34 (a)
------------------------------------------------------- ----------------- ----------------- -----------------
06/30/1999 15.34 (0.19)(a) 2.26 (a)
------------------------------------------------------- ----------------- ----------------- -----------------
06/30/1998 16.13 (0.19)(a) 3.85 (a)
------------------------------------------------------- ----------------- ----------------- -----------------
10/01/1996-06/30/1997 16.58 (0.12)(a) 1.74 (a)
------------------------------------------------------- ----------------- ----------------- -----------------
09/30/1996 16.05 (0.16) 2.47
------------------------------------------------------- ----------------- ----------------- -----------------
TAX-EFFICIENT EQUITY FUND
Class A
06/30/2000 $ 11.59 $ 0.00 (a) $ 0.65 (a)
------------------------------------------------------- ----------------- ----------------- -----------------
07/10/1998 - 06/30/1999 10.00 0.03 (a) 1.56 (a)
------------------------------------------------------- ----------------- ----------------- -----------------
Class B
06/30/2000 11.51 (0.09)(a) 0.64 (a)
------------------------------------------------------- ----------------- ----------------- -----------------
07/10/1998 - 06/30/1999 10.00 (0.05)(a) 1.56 (a)
------------------------------------------------------- ----------------- ----------------- -----------------
Class C
06/30/2000 11.51 (0.09)(a) 0.64 (a)
------------------------------------------------------- ----------------- ----------------- -----------------
07/10/1998 - 06/30/1999 10.00 (0.05)(a) 1.56 (a)
------------------------------------------------------- ----------------- ----------------- -----------------
VALUE FUND
Class A
06/30/2000 $ 15.29 $ 0.22 (a) $ (1.33)(a)
------------------------------------------------------- ----------------- ----------------- -----------------
06/30/1999 15.64 0.24 (a) 1.35 (a)
------------------------------------------------------- ----------------- ----------------- -----------------
06/30/1998 14.80 0.19 (a) 2.46 (a)
------------------------------------------------------- ----------------- ----------------- -----------------
01/13/1997-06/30/1997 13.17 0.47 1.26
------------------------------------------------------- ----------------- ----------------- -----------------
Class B
06/30/2000 15.26 0.13 (a) (1.33)(a)
------------------------------------------------------- ----------------- ----------------- -----------------
06/30/1999 15.63 0.12 (a) 1.35 (a)
------------------------------------------------------- ----------------- ----------------- -----------------
06/30/1998 14.80 0.07 (a) 2.46 (a)
------------------------------------------------------- ----------------- ----------------- -----------------
01/13/1997-06/30/1997 13.16 0.44 1.26
------------------------------------------------------- ----------------- ----------------- -----------------
Class C
06/30/2000 15.26 0.13 (a) (1.33)(a)
------------------------------------------------------- ----------------- ----------------- -----------------
06/30/1999 15.63 0.12 (a) 1.35 (a)
------------------------------------------------------- ----------------- ----------------- -----------------
06/30/1998 14.80 0.07 (a) 2.46 (a)
------------------------------------------------------- ----------------- ----------------- -----------------
01/13/1997-06/30/1997 13.15 0.43 1.28
------------------------------------------------------- ----------------- ----------------- -----------------
<CAPTION>
DIVIDENDS DIVIDENDS IN
TOTAL INCOME FROM NET EXCESS OF NET
FROM INVESTMENT INVESTMENT INVESTMENT
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED: OPERATIONS INCOME INCOME
----------------- ----------------- -----------------
<S> <C> <C> <C>
TARGET FUND
Class A
06/30/2000 $ 15.22 $ 0.00 $ 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
03/31/1999-06/30/1999 2.35 0.00 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
06/30/1998 3.98 0.00 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
10/01/1996-06/30/1997 1.78 0.00 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
09/30/1996 2.49 0.00 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
Class B
06/30/2000 13.96 0.00 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
06/30/1999 2.08 0.00 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
06/30/1998 3.65 0.00 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
10/01/1996-06/30/1997 1.63 0.00 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
09/30/1996 2.30 0.00 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
Class C
06/30/2000 13.96 0.00 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
06/30/1999 2.07 0.00 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
06/30/1998 3.66 0.00 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
10/01/1996-06/30/1997 1.62 0.00 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
09/30/1996 2.31 0.00 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
TAX-EFFICIENT EQUITY FUND
Class A
06/30/2000 $ 0.65 $ 0.00 $ 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
07/10/1998 - 06/30/1999 1.59 0.00 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
Class B
06/30/2000 0.55 0.00 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
07/10/1998 - 06/30/1999 1.51 0.00 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
Class C
06/30/2000 0.55 0.00 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
07/10/1998 - 06/30/1999 1.51 0.00 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
VALUE FUND
Class A
06/30/2000 $ (1.11) $ (0.23) $ 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
06/30/1999 1.59 (0.22) 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
06/30/1998 2.65 (0.18) 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
01/13/1997-06/30/1997 1.73 (0.10) 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
Class B
06/30/2000 (1.20) (0.13) 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
06/30/1999 1.47 (0.12) 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
06/30/1998 2.53 (0.07) 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
01/13/1997-06/30/1997 1.70 (0.06) 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
Class C
06/30/2000 (1.20) (0.13) 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
06/30/1999 1.47 (0.12) 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
06/30/1998 2.53 (0.07) 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
01/13/1997-06/30/1997 1.71 (0.06) 0.00
------------------------------------------------------- ----------------- ----------------- -----------------
</TABLE>
*Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
54 SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
DISTRIBUTIONS IN
DISTRIBUTIONS EXCESS OF NET
FROM NET REALIZED REALIZED CAPITAL
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED: CAPITAL GAINS GAINS TOTAL DISTRIBUTIONS
----------------- ----------------- -------------------
<S> <C> <C> <C>
TARGET FUND
Class A
06/30/2000 $ (1.80) $ 0.00 $ (1.80)
------------------------------------------------------- ----------------- ----------------- -------------------
03/31/1999-06/30/1999 (0.98) 0.00 (0.98)
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1998 (4.45) 0.00 (4.45)
------------------------------------------------------- ----------------- ----------------- -------------------
10/01/1996-06/30/1997 (2.07) 0.00 (2.07)
------------------------------------------------------- ----------------- ----------------- -------------------
09/30/1996 (1.78) 0.00 (1.78)
------------------------------------------------------- ----------------- ----------------- -------------------
Class B
06/30/2000 (1.80) 0.00 (1.80)
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1999 (0.98) 0.00 (0.98)
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1998 (4.45) 0.00 (4.45)
------------------------------------------------------- ----------------- ----------------- -------------------
10/01/1996-06/30/1997 (2.07) 0.00 (2.07)
------------------------------------------------------- ----------------- ----------------- -------------------
09/30/1996 (1.78) 0.00 (1.78)
------------------------------------------------------- ----------------- ----------------- -------------------
Class C
06/30/2000 (1.80) 0.00 (1.80)
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1999 (0.98) 0.00 (0.98)
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1998 (4.45) 0.00 (4.45)
------------------------------------------------------- ----------------- ----------------- -------------------
10/01/1996-06/30/1997 (2.07) 0.00 (2.07)
------------------------------------------------------- ----------------- ----------------- -------------------
09/30/1996 (1.78) 0.00 (1.78)
------------------------------------------------------- ----------------- ----------------- -------------------
TAX-EFFICIENT EQUITY FUND
Class A
06/30/2000 $ 0.00 $ 0.00 $ 0.00
------------------------------------------------------- ----------------- ----------------- -------------------
07/10/1998 - 06/30/1999 0.00 0.00 0.00
------------------------------------------------------- ----------------- ----------------- -------------------
Class B
06/30/2000 0.00 0.00 0.00
------------------------------------------------------- ----------------- ----------------- -------------------
07/10/1998 - 06/30/1999 0.00 0.00 0.00
------------------------------------------------------- ----------------- ----------------- -------------------
Class C
06/30/2000 0.00 0.00 0.00
------------------------------------------------------- ----------------- ----------------- -------------------
07/10/1998 - 06/30/1999 0.00 0.00 0.00
------------------------------------------------------- ----------------- ----------------- -------------------
VALUE FUND
Class A
06/30/2000 $ (0.57) $ (2.00) $ (2.80)
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1999 (1.72) 0.00 (1.94)
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1998 (1.63) 0.00 (1.81)
------------------------------------------------------- ----------------- ----------------- -------------------
01/13/1997-06/30/1997 0.00 0.00 (0.10)
------------------------------------------------------- ----------------- ----------------- -------------------
Class B
06/30/2000 (0.57) (2.00) (2.70)
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1999 (1.72) 0.00 (1.84)
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1998 (1.63) 0.00 (1.70)
------------------------------------------------------- ----------------- ----------------- -------------------
01/13/1997-06/30/1997 0.00 0.00 (0.06)
------------------------------------------------------- ----------------- ----------------- -------------------
Class C
06/30/2000 (0.57) (2.00) (2.70)
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1999 (1.72) 0.00 (1.84)
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1998 (1.63) 0.00 (1.70)
------------------------------------------------------- ----------------- ----------------- -------------------
01/13/1997-06/30/1997 0.00 0.00 (0.06)
------------------------------------------------------- ----------------- ----------------- -------------------
<CAPTION>
NET ASSET VALUE NET ASSETS END
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED: END OF PERIOD TOTAL RETURN OF PERIOD (000S)
----------------- ----------------- -------------------
<S> <C> <C> <C>
TARGET FUND
Class A
06/30/2000 $ 31.14 90.36% $ 305,304
------------------------------------------------------- ----------------- ----------------- -------------------
03/31/1999-06/30/1999 17.72 15.69 170,277
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1998 16.35 27.49 157,277
------------------------------------------------------- ----------------- ----------------- -------------------
10/01/1996-06/30/1997 16.82 11.19 150,689
------------------------------------------------------- ----------------- ----------------- -------------------
09/30/1996 17.11 16.50 156,027
------------------------------------------------------- ----------------- ----------------- -------------------
Class B
06/30/2000 28.60 89.74 223,939
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1999 16.44 14.93 78,659
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1998 15.34 26.45 76,194
------------------------------------------------------- ----------------- ----------------- -------------------
10/01/1996-06/30/1997 16.14 10.58 67,531
------------------------------------------------------- ----------------- ----------------- -------------------
09/30/1996 16.58 15.58 49,851
------------------------------------------------------- ----------------- ----------------- -------------------
Class C
06/30/2000 28.59 89.79 1,676,384
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1999 16.43 14.86 910,494
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1998 15.34 26.53 952,728
------------------------------------------------------- ----------------- ----------------- -------------------
10/01/1996-06/30/1997 16.13 10.52 969,317
------------------------------------------------------- ----------------- ----------------- -------------------
09/30/1996 16.58 15.66 974,948
------------------------------------------------------- ----------------- ----------------- -------------------
TAX-EFFICIENT EQUITY FUND
Class A
06/30/2000 $ 12.24 5.61% $ 9,226
------------------------------------------------------- ----------------- ----------------- -------------------
07/10/1998 - 06/30/1999 11.59 15.90 6,579
------------------------------------------------------- ----------------- ----------------- -------------------
Class B
06/30/2000 12.06 4.78 10,794
------------------------------------------------------- ----------------- ----------------- -------------------
07/10/1998 - 06/30/1999 11.51 15.10 6,370
------------------------------------------------------- ----------------- ----------------- -------------------
Class C
06/30/2000 12.06 4.78 15,651
------------------------------------------------------- ----------------- ----------------- -------------------
07/10/1998 - 06/30/1999 11.51 15.10 10,742
------------------------------------------------------- ----------------- ----------------- -------------------
VALUE FUND
Class A
06/30/2000 $ 11.38 (7.11)% $ 19,087
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1999 15.29 11.93 22,267
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1998 15.64 18.86 21,742
------------------------------------------------------- ----------------- ----------------- -------------------
01/13/1997-06/30/1997 14.80 13.19 15,648
------------------------------------------------------- ----------------- ----------------- -------------------
Class B
06/30/2000 11.36 (7.77) 26,908
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1999 15.26 11.05 36,314
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1998 15.63 17.98 35,716
------------------------------------------------------- ----------------- ----------------- -------------------
01/13/1997-06/30/1997 14.80 12.93 25,433
------------------------------------------------------- ----------------- ----------------- -------------------
Class C
06/30/2000 11.36 (7.81) 53,756
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1999 15.26 11.04 80,594
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1998 15.63 17.98 88,235
------------------------------------------------------- ----------------- ----------------- -------------------
01/13/1997-06/30/1997 14.80 13.02 64,110
------------------------------------------------------- ----------------- ----------------- -------------------
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES INCOME (LOSS)
TO AVERAGE TO AVERAGE PORTFOLIO
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED: NET ASSETS NET ASSETS TURNOVER RATE
----------------- ----------------- -------------------
<S> <C> <C> <C>
TARGET FUND
Class A
06/30/2000 1.21% (0.91)% 99%
------------------------------------------------------- ----------------- ----------------- -------------------
03/31/1999-06/30/1999 1.21 (0.57) 229
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1998 1.22 (0.49) 226
------------------------------------------------------- ----------------- ----------------- -------------------
10/01/1996-06/30/1997 1.20* (0.31)* 145
------------------------------------------------------- ----------------- ----------------- -------------------
09/30/1996 1.18 (0.34) 141
------------------------------------------------------- ----------------- ----------------- -------------------
Class B
06/30/2000 1.96 (1.66) 99
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1999 1.95 (1.31) 229
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1998 1.96 (1.24) 226
------------------------------------------------------- ----------------- ----------------- -------------------
10/01/1996-06/30/1997 1.94* (1.05)* 145
------------------------------------------------------- ----------------- ----------------- -------------------
09/30/1996 1.93 (1.09) 141
------------------------------------------------------- ----------------- ----------------- -------------------
Class C
06/30/2000 1.96 (1.67) 99
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1999 1.95 (1.31) 229
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1998 1.96 (1.24) 226
------------------------------------------------------- ----------------- ----------------- -------------------
10/01/1996-06/30/1997 1.94* (1.06)* 145
------------------------------------------------------- ----------------- ----------------- -------------------
09/30/1996 1.93 (1.09) 141
------------------------------------------------------- ----------------- ----------------- -------------------
TAX-EFFICIENT EQUITY FUND
Class A
06/30/2000 1.11% 0.02% 32%
------------------------------------------------------- ----------------- ----------------- -------------------
07/10/1998 - 06/30/1999 1.11* 0.25* 13
------------------------------------------------------- ----------------- ----------------- -------------------
Class B
06/30/2000 1.86 (0.74) 32
------------------------------------------------------- ----------------- ----------------- -------------------
07/10/1998 - 06/30/1999 1.85* (0.50)* 13
------------------------------------------------------- ----------------- ----------------- -------------------
Class C
06/30/2000 1.86 (0.73) 32
------------------------------------------------------- ----------------- ----------------- -------------------
07/10/1998 - 06/30/1999 1.84* (0.52)* 13
------------------------------------------------------- ----------------- ----------------- -------------------
VALUE FUND
Class A
06/30/2000 1.11% 1.76% 196%
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1999 1.11 1.68 101
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1998 1.11 1.19 77
------------------------------------------------------- ----------------- ----------------- -------------------
01/13/1997-06/30/1997 1.11* 1.71* 71
------------------------------------------------------- ----------------- ----------------- -------------------
Class B
06/30/2000 1.86 1.02 196
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1999 1.85 0.85 101
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1998 1.86 0.45 77
------------------------------------------------------- ----------------- ----------------- -------------------
01/13/1997-06/30/1997 1.86* 0.96* 71
------------------------------------------------------- ----------------- ----------------- -------------------
Class C
06/30/2000 1.86 1.02 196
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1999 1.85 0.83 101
------------------------------------------------------- ----------------- ----------------- -------------------
06/30/1998 1.86 0.45 77
------------------------------------------------------- ----------------- ----------------- -------------------
01/13/1997-06/30/1997 1.86* 0.97* 71
------------------------------------------------------- ----------------- ----------------- -------------------
</TABLE>
SEE ACCOMPANYING NOTES 55
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 2000
<TABLE>
<CAPTION>
CAPITAL GLOBAL
APPRECIATION EQUITY INCOME INNOVATION
Amounts in thousands, except per share amounts FUND FUND FUND GROWTH FUND
------------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value $ 797,602 $ 69,612 $ 105,626 $ 2,915,435
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Cash and foreign currency 3 0 1 449
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Receivable for investments sold and forward foreign currency contracts 6,063 14,238 1,549 1,808
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Receivable for Fund shares sold 400 230 3,208 13,661
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Interest and dividends receivable 444 166 4 316
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Variation margin receivable 0 0 0 0
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Manager reimbursement receivable 0 0 13 0
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Other assets 0 0 0 0
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
804,512 84,246 110,401 2,931,669
======================================================================== ============= ============== =========== ============
LIABILITIES:
Payable for investments purchased and forward foreign currency contracts $ 8,297 $ 0 $ 5,399 $ 440
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Due to Custodian 0 13,997 0 0
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Payable for Fund shares redeemed 1,693 245 60 8,545
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Dividends payable 0 0 0 0
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Accrued investment advisory fee 320 40 76 1,260
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Accrued administration fee 209 28 45 997
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Accrued distribution fee 96 18 39 1,703
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Accrued servicing fee 87 9 19 626
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Other liabilities 0 0 15 0
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
10,702 14,337 5,653 13,571
======================================================================== ============= ============== =========== ============
NET ASSETS $ 793,810 $ 69,909 $ 104,748 $ 2,918,098
======================================================================== ============= ============== =========== ============
NET ASSETS CONSIST OF:
Paid in capital $ 436,815 $ 89,276 $ 94,489 $ 1,631,648
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Undistributed (overdistributed) net investment income 125,087 41 522 0
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Accumulated undistributed net realized gain (loss) 66,446 (20,959) (839) 172,794
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Net unrealized appreciation (depreciation) 164,462 1,551 10,576 1,113,656
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
$ 793,810 $ 69,909 $ 104,748 $ 2,918,098
======================================================================== ============= ============== =========== ============
NET ASSETS:
Class A $ 91,927 $ 11,434 $ 31,998 $ 255,744
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Class B 66,044 12,903 25,375 213,627
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Class C 82,864 13,929 46,826 2,416,067
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Other Classes 552,975 31,643 549 32,660
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
SHARES ISSUED AND OUTSTANDING:
Class A 3,413 1,092 1,690 6,568
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Class B 2,512 1,239 1,342 6,164
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Class C 3,147 1,335 2,477 69,714
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
NET ASSET VALUE AND REDEMPTION PRICE* PER SHARE
(NET ASSETS PER SHARE OUTSTANDING)
Class A $ 26.94 $ 10.49 $ 18.93 $ 38.94
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Class B 26.30 10.43 18.91 34.66
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Class C 26.34 10.45 18.91 34.66
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
COST OF INVESTMENTS OWNED $ 633,140 $ 68,061 $ 95,050 $ 1,801,779
======================================================================== ============= ============== =========== ============
COST OF FOREIGN CURRENCY HELD $ 0 $ 0 $ 0 $ 0
======================================================================== ============= ============== =========== ============
</TABLE>
*With respect to the Retail Classes, the redemption price varies by the length
of time the shares are held.
56 SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
INNOVATION INTERNATIONAL MID-CAP OPPORTUNITY
Amounts in thousands, except per share amounts FUND FUND FUND FUND
------------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value $ 5,509,148 $ 136,414 $1,082,233 $ 630,937
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Cash and foreign currency 2,127 721 1 1,364
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Receivable for investments sold and forward foreign currency contracts 48,797 1,290 5,036 14,602
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Receivable for Fund shares sold 29,514 1,064 5,544 7,519
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Interest and dividends receivable 175 268 618 53
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Variation margin receivable 0 67 0 0
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Manager reimbursement receivable 0 0 0 0
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Other assets 0 40 0 0
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
5,589,761 139,864 1,093,432 654,475
======================================================================== ============= ============== =========== ============
LIABILITIES:
Payable for investments purchased and forward foreign currency contracts $ 90,546 $ 0 $ 14,258 $ 28,745
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Due to Custodian 0 0 0 0
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Payable for Fund shares redeemed 11,780 240 2,074 5,792
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Dividends payable 0 0 0 0
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Accrued investment advisory fee 2,951 68 417 332
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Accrued administration fee 1,731 77 279 200
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Accrued distribution fee 2,468 69 125 266
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Accrued servicing fee 1,129 29 103 121
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Other liabilities 0 11 0 0
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
110,605 494 17,256 35,456
======================================================================== ============= ============== =========== ============
NET ASSETS $ 5,479,156 $ 139,370 $1,076,176 $ 619,019
======================================================================== ============= ============== =========== ============
NET ASSETS CONSIST OF:
Paid in capital $ 3,572,912 $ 110,463 $ 629,783 $ 399,557
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Undistributed (overdistributed) net investment income 170,220 2,305 174,578 101,853
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Accumulated undistributed net realized gain (loss) 50,831 8,485 85,334 4,947
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Net unrealized appreciation (depreciation) 1,685,193 18,117 186,481 112,662
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
$ 5,479,156 $ 139,370 $1,076,176 $ 619,019
======================================================================== ============= ============== =========== ============
NET ASSETS:
Class A $ 1,408,455 $ 12,452 $ 156,949 $ 142,064
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Class B 1,680,792 10,176 88,648 28,145
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Class C 2,275,811 92,220 104,082 401,119
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Other Classes 114,098 24,522 726,497 47,691
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
SHARES ISSUED AND OUTSTANDING:
Class A 19,480 1,020 5,134 4,499
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Class B 24,333 929 2,967 1,034
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Class C 32,958 8,434 3,484 14,737
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
NET ASSET VALUE AND REDEMPTION PRICE* PER SHARE
(NET ASSETS PER SHARE OUTSTANDING)
Class A $ 72.29 $ 12.20 $ 30.57 $ 31.58
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Class B 69.06 10.96 29.87 27.21
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Class C 69.04 10.94 29.88 27.22
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
COST OF INVESTMENTS OWNED $ 3,823,955 $ 118,150 $ 895,751 $ 518,275
======================================================================== ============= ============== =========== ============
COST OF FOREIGN CURRENCY HELD $ 0 $ 0 $ 0 $ 0
======================================================================== ============= ============== =========== ============
<CAPTION>
RENAISSANCE SELECT SMALL-CAP
Amounts in thousands, except per share amounts FUND GROWTH FUND VALUE FUND TARGET FUND
------------- -------------- ----------- ------------
ASSETS:
Investments, at value $ 476,042 $ 16,975 $ 282,407 $2,235,279
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Cash and foreign currency 0 1 121 1
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Receivable for investments sold and forward foreign currency contracts 11,130 0 4,456 1,344
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Receivable for Fund shares sold 389 656 666 18,800
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Interest and dividends receivable 1,700 1 917 227
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Variation margin receivable 0 0 0 0
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Manager reimbursement receivable 0 0 0 0
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Other assets 0 3 0 0
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
489,261 17,636 288,567 2,255,651
======================================================================== ============= ============== =========== ============
LIABILITIES:
Payable for investments purchased and forward foreign currency contracts $ 6,251 $ 722 $ 1,851 $ 14,261
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Due to Custodian 0 0 0 0
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Payable for Fund shares redeemed 3,214 14 1,362 7,160
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Dividends payable 0 0 0 0
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Accrued investment advisory fee 262 7 155 1,035
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Accrued administration fee 174 5 96 750
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Accrued distribution fee 274 3 84 1,205
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Accrued servicing fee 109 3 57 468
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Other liabilities 771 0 0 0
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
11,055 754 3,605 24,879
======================================================================== ============= ============== =========== ============
NET ASSETS $ 478,206 $ 16,882 $ 284,962 $2,230,772
======================================================================== ============= ============== =========== ============
NET ASSETS CONSIST OF:
Paid in capital $ 473,353 $ 15,879 $ 350,266 $ 999,648
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Undistributed (overdistributed) net investment income 24,138 0 3,998 200,449
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Accumulated undistributed net realized gain (loss) (12,862) (162) (10,644) 67,219
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Net unrealized appreciation (depreciation) (6,423) 1,165 (58,658) 963,456
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
$ 478,206 $ 16,882 $ 284,962 $2,230,772
======================================================================== ============= ============== =========== ============
NET ASSETS:
Class A $ 68,433 $ 7,841 $ 114,347 $ 305,304
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Class B 89,621 2,173 55,435 223,939
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Class C 311,519 4,196 69,808 1,676,384
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Other Classes 8,633 2,672 45,372 25,145
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
SHARES ISSUED AND OUTSTANDING:
Class A 4,578 327 8,101 9,805
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Class B 6,142 91 3,948 7,831
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Class C 21,462 175 4,967 58,629
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
NET ASSET VALUE AND REDEMPTION PRICE* PER SHARE
(NET ASSETS PER SHARE OUTSTANDING)
Class A $ 14.95 $ 23.99 $ 14.12 $ 31.14
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Class B 14.60 23.96 14.04 28.60
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
Class C 14.52 23.96 14.06 28.59
------------------------------------------------------------------------ ------------- -------------- ----------- ------------
COST OF INVESTMENTS OWNED $ 482,466 $ 15,811 $ 341,065 $1,271,822
======================================================================== ============= ============== =========== ============
COST OF FOREIGN CURRENCY HELD $ 0 $ 0 $ 0 $ 0
======================================================================== ============= ============== =========== ============
<CAPTION>
TAX-EFFICIENT
Amounts in thousands, except per share amounts EQUITY FUND VALUE FUND
---------------- --------------
<S> <C> <C>
ASSETS:
Investments, at value $ 56,844 $ 162,484
------------------------------------------------------------------------ ---------------- --------------
Cash and foreign currency 1 855
------------------------------------------------------------------------ ---------------- --------------
Receivable for investments sold and forward foreign currency contracts 0 7,228
------------------------------------------------------------------------ ---------------- --------------
Receivable for Fund shares sold 35 143
------------------------------------------------------------------------ ---------------- --------------
Interest and dividends receivable 37 415
------------------------------------------------------------------------ ---------------- --------------
Variation margin receivable 0 0
------------------------------------------------------------------------ ---------------- --------------
Manager reimbursement receivable 0 0
------------------------------------------------------------------------ ---------------- --------------
Other assets 0 0
------------------------------------------------------------------------ ---------------- --------------
56,917 171,125
======================================================================== ================ ==============
LIABILITIES:
Payable for investments purchased and forward foreign currency contracts $ 0 $ 4,066
------------------------------------------------------------------------ ---------------- --------------
Due to Custodian 0 0
------------------------------------------------------------------------ ---------------- --------------
Payable for Fund shares redeemed 42 683
------------------------------------------------------------------------ ---------------- --------------
Dividends payable 0 0
------------------------------------------------------------------------ ---------------- --------------
Accrued investment advisory fee 22 68
------------------------------------------------------------------------ ---------------- --------------
Accrued administration fee 17 52
------------------------------------------------------------------------ ---------------- --------------
Accrued distribution fee 17 55
------------------------------------------------------------------------ ---------------- --------------
Accrued servicing fee 12 28
------------------------------------------------------------------------ ---------------- --------------
Other liabilities 0 0
------------------------------------------------------------------------ ---------------- --------------
110 4,952
======================================================================== ================ ==============
NET ASSETS $ 56,807 $ 166,173
======================================================================== ================ ==============
NET ASSETS CONSIST OF:
Paid in capital $ 50,323 $ 187,022
------------------------------------------------------------------------ ---------------- --------------
Undistributed (overdistributed) net investment income 0 94
------------------------------------------------------------------------ ---------------- --------------
Accumulated undistributed net realized gain (loss) (4,080) (19,964)
------------------------------------------------------------------------ ---------------- --------------
Net unrealized appreciation (depreciation) 10,564 (979)
------------------------------------------------------------------------ ---------------- --------------
$ 56,807 $ 166,173
======================================================================== ================ ==============
NET ASSETS:
Class A $ 9,226 $ 19,087
------------------------------------------------------------------------ ---------------- --------------
Class B 10,794 26,908
------------------------------------------------------------------------ ---------------- --------------
Class C 15,651 53,756
------------------------------------------------------------------------ ---------------- --------------
Other Classes 21,136 66,422
------------------------------------------------------------------------ ---------------- --------------
SHARES ISSUED AND OUTSTANDING:
Class A 754 1,677
------------------------------------------------------------------------ ---------------- --------------
Class B 895 2,368
------------------------------------------------------------------------ ---------------- --------------
Class C 1,298 4,729
------------------------------------------------------------------------ ---------------- --------------
NET ASSET VALUE AND REDEMPTION PRICE* PER SHARE
(NET ASSETS PER SHARE OUTSTANDING)
Class A $ 12.24 $ 11.38
------------------------------------------------------------------------ ---------------- --------------
Class B 12.06 11.36
------------------------------------------------------------------------ ---------------- --------------
Class C 12.06 11.36
------------------------------------------------------------------------ ---------------- --------------
COST OF INVESTMENTS OWNED $ 46,280 $ 163,463
======================================================================== ================ ==============
COST OF FOREIGN CURRENCY HELD $ 0 $ 0
======================================================================== ================ ==============
</TABLE>
SEE ACCOMPANYING NOTES 57
<PAGE>
STATEMENTS OF OPERATIONS
For the year or period ended June 30, 2000
<TABLE>
<CAPTION>
CAPITAL GLOBAL
APPRECIATION EQUITY INCOME INNOVATION
Amounts in thousands FUND FUND FUND GROWTH FUND
------------- -------------- ------------- ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends, net of foreign taxes $ 7,801 $ 5,956 $ 4 $ 9,034
----------------------------------------------------------------------- ------------- -------------- ------------- ------------
Interest and other income 1,518 130 159 1,165
----------------------------------------------------------------------- ------------- -------------- ------------- ------------
Total Income 9,319 6,086 163 10,199
======================================================================= ============= ============== ============= ============
EXPENSES:
Investment advisory fees 4,181 699 158 13,318
----------------------------------------------------------------------- ------------- -------------- ------------- ------------
Administration fees 2,654 463 100 10,492
----------------------------------------------------------------------- ------------- -------------- ------------- ------------
Distribution fees - Class B 436 128 26 1,263
----------------------------------------------------------------------- ------------- -------------- ------------- ------------
Distribution fees - Class C 585 140 50 16,725
----------------------------------------------------------------------- ------------- -------------- ------------- ------------
Servicing fees - Class A 212 35 14 584
----------------------------------------------------------------------- ------------- -------------- ------------- ------------
Servicing fees - Class B 145 43 9 421
----------------------------------------------------------------------- ------------- -------------- ------------- ------------
Servicing fees - Class C 195 47 17 5,575
----------------------------------------------------------------------- ------------- -------------- ------------- ------------
Distribution and/or servicing fees - Other Classes 515 25 0 33
----------------------------------------------------------------------- ------------- -------------- ------------- ------------
Trustees' fees 65 11 0 174
----------------------------------------------------------------------- ------------- -------------- ------------- ------------
Organization costs 0 0 15 0
----------------------------------------------------------------------- ------------- -------------- ------------- ------------
Registration fees 0 0 0 0
----------------------------------------------------------------------- ------------- -------------- ------------- ------------
Interest expense 32 28 0 309
----------------------------------------------------------------------- ------------- -------------- ------------- ------------
Total Expenses 9,020 1,619 389 48,894
----------------------------------------------------------------------- ------------- -------------- ------------- ------------
Reimbursement by manager 0 0 (13) 0
----------------------------------------------------------------------- ------------- -------------- ------------- ------------
Net Expenses 9,020 1,619 376 48,894
----------------------------------------------------------------------- ------------- -------------- ------------- ------------
NET INVESTMENT INCOME (LOSS) 299 4,467 (213) (38,695)
======================================================================= ============= ============== ============= ============
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on investments 238,387 (14,073) (104) 200,296
----------------------------------------------------------------------- ------------- -------------- ------------- ------------
Net realized gain (loss) on foreign currency transactions 0 0 0 0
----------------------------------------------------------------------- ------------- -------------- ------------- ------------
Net change in unrealized appreciation (depreciation) on investments (57,892) (17,836) 10,576 540,201
----------------------------------------------------------------------- ------------- -------------- ------------- ------------
Net change in unrealized appreciation (depreciation)
on futures contracts and written options 0 0 0 0
----------------------------------------------------------------------- ------------- -------------- ------------- ------------
Net change in unrealized appreciation (depreciation)
on translation of assets and liabilities denominated in foreign
currencies 0 0 0 0
----------------------------------------------------------------------- ------------- -------------- ------------- ------------
Net Gain (Loss) 180,495 (31,909) 10,472 740,497
----------------------------------------------------------------------- ------------- -------------- ------------- ------------
NET INCREASE (DECREASE) IN ASSETS RESULTING FROM OPERATIONS $ 180,794 $ (27,442) $ 10,259 $ 701,802
======================================================================= ============= ============== ============= ============
</TABLE>
58 SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
INNOVATION INTERNATIONAL MID-CAP
Amounts in thousands FUND FUND FUND
----------- -------------- ---------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends, net of foreign taxes $ 859 $ 1,744 $ 8,527
---------------------------------------------------------------------------- ----------- -------------- ---------
Interest and other income 11,772 603 2,298
---------------------------------------------------------------------------- ----------- -------------- ---------
Total Income 12,631 2,347 10,825
============================================================================ =========== ============== =========
EXPENSES:
Investment advisory fees 21,684 812 4,609
---------------------------------------------------------------------------- ----------- -------------- ---------
Administration fees 12,860 927 3,041
---------------------------------------------------------------------------- ----------- -------------- ---------
Distribution fees - Class B 7,546 72 613
---------------------------------------------------------------------------- ----------- -------------- ---------
Distribution fees - Class C 10,780 758 750
---------------------------------------------------------------------------- ----------- -------------- ---------
Servicing fees - Class A 2,087 38 345
---------------------------------------------------------------------------- ----------- -------------- ---------
Servicing fees - Class B 2,515 24 204
---------------------------------------------------------------------------- ----------- -------------- ---------
Servicing fees - Class C 3,593 253 250
---------------------------------------------------------------------------- ----------- -------------- ---------
Distribution and/or servicing fees - Other Classes 116 42 293
---------------------------------------------------------------------------- ----------- -------------- ---------
Trustees' fees 180 10 67
---------------------------------------------------------------------------- ----------- -------------- ---------
Organization costs 0 0 0
---------------------------------------------------------------------------- ----------- -------------- ---------
Registration fees 0 0 0
---------------------------------------------------------------------------- ----------- -------------- ---------
Interest expense 82 114 18
---------------------------------------------------------------------------- ----------- -------------- ---------
Total Expenses 61,443 3,050 10,190
---------------------------------------------------------------------------- ----------- -------------- ---------
Reimbursement by manager 0 0 0
---------------------------------------------------------------------------- ----------- -------------- ---------
Net Expenses 61,443 3,050 10,190
---------------------------------------------------------------------------- ----------- -------------- ---------
NET INVESTMENT INCOME (LOSS) (48,812) (703) 635
============================================================================ =========== ============== =========
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on investments 503,921 18,635 263,486
---------------------------------------------------------------------------- ----------- -------------- ---------
Net realized gain (loss) on foreign currency transactions 0 (476) 0
---------------------------------------------------------------------------- ----------- -------------- ---------
Net change in unrealized appreciation (depreciation) on investments 1,278,026 3,260 39,729
---------------------------------------------------------------------------- ----------- -------------- ---------
Net change in unrealized appreciation (depreciation)
on futures contracts and written options 0 (60) 0
---------------------------------------------------------------------------- ----------- -------------- ---------
Net change in unrealized appreciation (depreciation)
on translation of assets and liabilities denominated in foreign
currencies 0 149 0
---------------------------------------------------------------------------- ----------- -------------- ---------
Net Gain (Loss) 1,781,947 21,508 303,215
---------------------------------------------------------------------------- ----------- -------------- ---------
NET INCREASE (DECREASE) IN ASSETS RESULTING FROM OPERATIONS $1,733,135 $ 20,805 $303,850
============================================================================ =========== ============== =========
<CAPTION>
OPPORTUNITY RENAISSANCE SELECT SMALL-CAP
Amounts in thousands FUND FUND GROWTH FUND VALUE FUND
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends, net of foreign taxes $ 1,018 $ 7,624 $ 13 $ 11,104
---------------------------------------------------------------------------- ------------ ------------ ------------ -----------
Interest and other income 1,646 983 26 408
---------------------------------------------------------------------------- ------------ ------------ ------------ -----------
Total Income 2,664 8,607 39 11,512
============================================================================ ============ ============ ============ ===========
EXPENSES:
Investment advisory fees 3,486 3,279 20 1,978
---------------------------------------------------------------------------- ------------ ------------ ------------ -----------
Administration fees 2,117 2,185 11 1,233
---------------------------------------------------------------------------- ------------ ------------ ------------ -----------
Distribution fees - Class B 105 793 2 546
---------------------------------------------------------------------------- ------------ ------------ ------------ -----------
Distribution fees - Class C 2,767 2,729 3 651
---------------------------------------------------------------------------- ------------ ------------ ------------ -----------
Servicing fees - Class A 336 189 3 282
---------------------------------------------------------------------------- ------------ ------------ ------------ -----------
Servicing fees - Class B 35 264 1 182
---------------------------------------------------------------------------- ------------ ------------ ------------ -----------
Servicing fees - Class C 922 910 1 217
---------------------------------------------------------------------------- ------------ ------------ ------------ -----------
Distribution and/or servicing fees - Other Classes 19 3 0 42
---------------------------------------------------------------------------- ------------ ------------ ------------ -----------
Trustees' fees 34 38 0 23
---------------------------------------------------------------------------- ------------ ------------ ------------ -----------
Organization costs 0 0 0 0
---------------------------------------------------------------------------- ------------ ------------ ------------ -----------
Registration fees 0 0 0 0
---------------------------------------------------------------------------- ------------ ------------ ------------ -----------
Interest expense 32 30 1 9
---------------------------------------------------------------------------- ------------ ------------ ------------ -----------
Total Expenses 9,853 10,420 42 5,163
---------------------------------------------------------------------------- ------------ ------------ ------------ -----------
Reimbursement by manager 0 0 0 0
---------------------------------------------------------------------------- ------------ ------------ ------------ -----------
Net Expenses 9,853 10,420 42 5,163
---------------------------------------------------------------------------- ------------ ------------ ------------ -----------
NET INVESTMENT INCOME (LOSS) (7,189) (1,813) (3) 6,349
============================================================================ ============ ============ ============ ===========
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on investments 153,791 30,824 11 1,428
---------------------------------------------------------------------------- ------------ ------------ ------------ -----------
Net realized gain (loss) on foreign currency transactions 0 8 0 0
---------------------------------------------------------------------------- ------------ ------------ ------------ -----------
Net change in unrealized appreciation (depreciation) on investments 55,969 (29,437) 989 (50,343)
---------------------------------------------------------------------------- ------------ ------------ ------------ -----------
Net change in unrealized appreciation (depreciation)
on futures contracts and written options 0 0 0 0
---------------------------------------------------------------------------- ------------ ------------ ------------ -----------
Net change in unrealized appreciation (depreciation)
on translation of assets and liabilities denominated in foreign
currencies 0 2 0 0
---------------------------------------------------------------------------- ------------ ------------ ------------ -----------
Net Gain (Loss) 209,760 1,397 1,000 (48,915)
---------------------------------------------------------------------------- ------------ ------------ ------------ -----------
NET INCREASE (DECREASE) IN ASSETS RESULTING FROM OPERATIONS $ 202,571 $ (416) $ 997 $ (42,566)
============================================================================ ============ ============ ============ ===========
<CAPTION>
TAX-EFFICIENT
Amounts in thousands TARGET FUND EQUITY FUND VALUE FUND
------------ -------------- -----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends, net of foreign taxes $ 1,148 $ 551 $ 5,492
----------------------------------------------------------------------------- ------------ -------------- -----------
Interest and other income 3,681 22 373
----------------------------------------------------------------------------- ------------ -------------- -----------
Total Income 4,829 573 5,865
============================================================================= ============ ============== ===========
EXPENSES:
Investment advisory fees 9,096 227 909
----------------------------------------------------------------------------- ------------ -------------- -----------
Administration fees 6,594 174 678
----------------------------------------------------------------------------- ------------ -------------- -----------
Distribution fees - Class B 1,000 72 233
----------------------------------------------------------------------------- ------------ -------------- -----------
Distribution fees - Class C 9,579 107 487
----------------------------------------------------------------------------- ------------ -------------- -----------
Servicing fees - Class A 575 20 48
----------------------------------------------------------------------------- ------------ -------------- -----------
Servicing fees - Class B 333 24 78
----------------------------------------------------------------------------- ------------ -------------- -----------
Servicing fees - Class C 3,193 36 162
----------------------------------------------------------------------------- ------------ -------------- -----------
Distribution and/or servicing fees - Other Classes 17 44 56
----------------------------------------------------------------------------- ------------ -------------- -----------
Trustees' fees 99 3 14
----------------------------------------------------------------------------- ------------ -------------- -----------
Organization costs 0 0 0
----------------------------------------------------------------------------- ------------ -------------- -----------
Registration fees 0 0 0
----------------------------------------------------------------------------- ------------ -------------- -----------
Interest expense 78 3 9
----------------------------------------------------------------------------- ------------ -------------- -----------
Total Expenses 30,564 710 2,674
----------------------------------------------------------------------------- ------------ -------------- -----------
Reimbursement by manager 0 0 0
----------------------------------------------------------------------------- ------------ -------------- -----------
Net Expenses 30,564 710 2,674
----------------------------------------------------------------------------- ------------ -------------- -----------
NET INVESTMENT INCOME (LOSS) (25,735) (137) 3,191
============================================================================= ============ ============== ===========
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on investments 303,095 (3,852) (4,356)
----------------------------------------------------------------------------- ------------ -------------- -----------
Net realized gain (loss) on foreign currency transactions 0 0 0
----------------------------------------------------------------------------- ------------ -------------- -----------
Net change in unrealized appreciation (depreciation) on investments 731,179 7,274 (19,409)
----------------------------------------------------------------------------- ------------ -------------- -----------
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) 1,034,274 3,422 (23,765)
----------------------------------------------------------------------------- ------------ -------------- -----------
NET INCREASE (DECREASE) IN ASSETS RESULTING FROM OPERATIONS $ 1,008,539 $ 3,285 $ (20,574)
============================================================================= ============ ============== ===========
</TABLE>
SEE ACCOMPANYING NOTES 59
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Amounts in thousands CAPITAL APPRECIATION FUND EQUITY INCOME FUND
------------------------------ ------------------------------
Year Ended Year Ended Year Ended Year Ended
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
INCREASE (DECREASE) IN NET ASSETS FROM:
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 299 $ 4,855 $ 4,467 $ 5,424
------------------------------------------------------------------ ------------------------------ ------------------------------
Net realized gain (loss) 238,387 127,483 (14,073) 28,130
------------------------------------------------------------------ ------------------------------ ------------------------------
Net change in unrealized appreciation (depreciation) (57,892) (27,333) (17,836) (8,864)
------------------------------------------------------------------ ------------------------------ ------------------------------
Net increase (decrease) resulting from operations 180,794 105,005 (27,442) 24,690
================================================================== ============================== ==============================
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (48) (397) (439) (395)
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 0 0 (403) (354)
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 0 0 (427) (440)
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes (1,779) (5,209) (3,301) (4,130)
------------------------------------------------------------------ ------------------------------ ------------------------------
In excess of net investment income
Class A (26) 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes (978) 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
From net realized capital gains
Class A (13,464) (6,025) (523) (1,680)
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B (10,054) (3,186) (664) (1,999)
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C (13,520) (5,032) (686) (2,668)
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes (131,466) (56,464) (3,899) (16,320)
------------------------------------------------------------------ ------------------------------ ------------------------------
In excess of net realized capital gains
Class A 0 0 (2,334) 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 0 0 (2,964) 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 0 0 (3,063) 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes 0 0 (17,401) 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Total Distributions (171,335) (76,313) (36,104) (27,986)
================================================================== ============================== ==============================
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Class A 58,177 43,847 4,899 8,352
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 15,491 21,095 5,343 9,636
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 20,199 33,638 6,749 20,733
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes 376,293 592,800 15,122 35,370
------------------------------------------------------------------ ------------------------------ ------------------------------
Issued in reorganization
Class A 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Issued as reinvestment of distributions
Class A 13,231 5,855 3,151 1,967
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 9,321 3,012 3,638 2,148
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 12,996 4,830 3,979 2,982
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes 119,912 49,228 24,496 20,074
------------------------------------------------------------------ ------------------------------ ------------------------------
Cost of shares redeemed
Class A (73,946) (34,758) (8,151) (5,776)
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B (15,271) (11,806) (10,403) (5,140)
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C (32,887) (31,014) (14,958) (20,521)
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes (822,791) (725,336) (102,415) (66,231)
------------------------------------------------------------------ ------------------------------ ------------------------------
Net increase (decrease) resulting from Fund share transactions (319,275) (48,609) (68,550) 3,594
------------------------------------------------------------------ ------------------------------ ------------------------------
Total Increase (Decrease) in Net Assets (309,816) (19,917) (132,096) 298
================================================================== ============================== ==============================
NET ASSETS:
Beginning of period 1,103,626 1,123,543 202,005 201,707
------------------------------------------------------------------ ------------------------------ ------------------------------
End of period * $ 793,810 $ 1,103,626 $ 69,909 $ 202,005
------------------------------------------------------------------ ------------------------------ ------------------------------
*Including net undistributed (overdistributed) investment
income of: $ 125,087 $ 1,527 $ 41 $ 4,946
------------------------------------------------------------------ ------------------------------ ------------------------------
<CAPTION>
GROWTH
INNOVATION
Amounts in thousands FUND
------------------
Period from
December 31, 1999
INCREASE (DECREASE) IN NET ASSETS FROM: to June 30, 2000
OPERATIONS:
<S> <C>
Net investment income (loss) $ (213)
------------------------------------------------------------------------- -------------------
Net realized gain (loss) (104)
------------------------------------------------------------------------- -------------------
Net change in unrealized appreciation (depreciation) 10,576
------------------------------------------------------------------------- -------------------
Net increase (decrease) resulting from operations 10,259
========================================================================= ===================
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A 0
------------------------------------------------------------------------- -------------------
Class B 0
------------------------------------------------------------------------- -------------------
Class C 0
------------------------------------------------------------------------- -------------------
Other Classes 0
------------------------------------------------------------------------- -------------------
In excess of net investment income
Class A 0
------------------------------------------------------------------------- -------------------
Class B 0
------------------------------------------------------------------------- -------------------
Class C 0
------------------------------------------------------------------------- -------------------
Other Classes 0
------------------------------------------------------------------------- -------------------
From net realized capital gains
Class A 0
------------------------------------------------------------------------- -------------------
Class B 0
------------------------------------------------------------------------- -------------------
Class C 0
------------------------------------------------------------------------- -------------------
Other Classes 0
------------------------------------------------------------------------- -------------------
In excess of net realized capital gains
Class A 0
------------------------------------------------------------------------- -------------------
Class B 0
------------------------------------------------------------------------- -------------------
Class C 0
------------------------------------------------------------------------- -------------------
Other Classes 0
------------------------------------------------------------------------- -------------------
Total Distributions 0
========================================================================= ===================
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Class A 33,319
------------------------------------------------------------------------- -------------------
Class B 23,487
------------------------------------------------------------------------- -------------------
Class C 43,294
------------------------------------------------------------------------- -------------------
Other Classes 538
------------------------------------------------------------------------- -------------------
Issued in reorganization
Class A 0
------------------------------------------------------------------------- -------------------
Class B 0
------------------------------------------------------------------------- -------------------
Class C 0
------------------------------------------------------------------------- -------------------
Other Classes 0
------------------------------------------------------------------------- -------------------
Issued as reinvestment of distributions
Class A 0
------------------------------------------------------------------------- -------------------
Class B 0
------------------------------------------------------------------------- -------------------
Class C 0
------------------------------------------------------------------------- -------------------
Other Classes 0
------------------------------------------------------------------------- -------------------
Cost of shares redeemed
Class A (5,627)
------------------------------------------------------------------------- -------------------
Class B (134)
------------------------------------------------------------------------- -------------------
Class C (372)
------------------------------------------------------------------------- -------------------
Other Classes (16)
------------------------------------------------------------------------- -------------------
Net increase (decrease) resulting from Fund share transactions 94,489
------------------------------------------------------------------------- -------------------
Total Increase (Decrease) in Net Assets 104,748
========================================================================= ===================
NET ASSETS:
Beginning of period 0
------------------------------------------------------------------------- -------------------
End of period * $ 104,748
------------------------------------------------------------------------- -------------------
*Including net undistributed (overdistributed) investment
income of: $ 522
------------------------------------------------------------------------- -------------------
</TABLE>
60 SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
Amounts in thousands GROWTH FUND INNOVATION FUND
------------------------------ ------------------------------
Year Ended Year Ended Year Ended Year Ended
INCREASE (DECREASE) IN NET ASSETS FROM: June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ (38,695) $ (24,048) $ (48,812) $ (10,056)
------------------------------------------------------------------ ------------------------------ ------------------------------
Net realized gain (loss) 200,296 413,535 503,921 82,075
------------------------------------------------------------------ ------------------------------ ------------------------------
Net change in unrealized appreciation (depreciation) 540,201 (30,494) 1,278,026 250,804
------------------------------------------------------------------ ------------------------------ ------------------------------
Net increase (decrease) resulting from operations 701,802 358,993 1,733,135 322,823
================================================================== ============================== ==============================
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
In excess of net investment income
Class A 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
From net realized capital gains
Class A (30,753) (21,401) (69,915) (4,919)
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B (24,820) (11,617) (89,355) (5,496)
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C (344,135) (230,472) (128,949) (12,996)
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes (2,784) 0 (4,360) (143)
------------------------------------------------------------------ ------------------------------ ------------------------------
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 (402,492) (263,490) (292,579) (23,554)
================================================================== ============================== ==============================
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Class A 1,093,441 592,678 2,311,596 670,706
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 87,164 68,949 996,786 222,514
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 368,824 536,307 1,434,945 386,283
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes 28,507 7,429 101,426 31,776
------------------------------------------------------------------ ------------------------------ ------------------------------
Issued in reorganization
Class A 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Issued as reinvestment of distributions
Class A 28,673 20,136 64,329 4,539
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 22,706 10,649 83,032 5,125
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 319,936 215,697 122,191 12,329
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes 2,784 0 4,194 142
------------------------------------------------------------------ ------------------------------ ------------------------------
Cost of shares redeemed
Class A (1,127,925) (577,520) (1,630,787) (517,708)
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B (47,670) (31,680) (191,561) (31,174)
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C (582,990) (618,382) (494,923) (188,880)
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes (7,712) (556) (27,531) (16,345)
------------------------------------------------------------------ ------------------------------ ------------------------------
Net increase (decrease) resulting from Fund share transactions 185,738 223,707 2,773,697 579,307
------------------------------------------------------------------ ------------------------------ ------------------------------
Total Increase (Decrease) in Net Assets 485,048 319,210 4,214,253 878,576
================================================================== ============================== ==============================
NET ASSETS:
Beginning of period 2,433,050 2,113,840 1,264,903 386,327
------------------------------------------------------------------ ------------------------------ ------------------------------
End of period * $ 2,918,098 $ 2,433,050 $ 5,479,156 $ 1,264,903
------------------------------------------------------------------ ------------------------------ ------------------------------
*Including net undistributed (overdistributed) investment
income of: $ 0 $ 1 $ 170,220 $ 0
================================================================== ============================== ==============================
<CAPTION>
Amounts in thousands INTERNATIONAL FUND MID-CAP FUND
------------------------------ ------------------------------
Year Ended Year Ended Year Ended Year Ended
INCREASE (DECREASE) IN NET ASSETS FROM: June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income (loss) $ (703) $ (761) $ 635 $ 1,713
------------------------------------------------------------------ ------------------------------ ------------------------------
Net realized gain (loss) 18,159 16,040 263,486 867
------------------------------------------------------------------ ------------------------------ ------------------------------
Net change in unrealized appreciation (depreciation) 3,349 (16,663) 39,729 7,029
------------------------------------------------------------------ ------------------------------ ------------------------------
Net increase (decrease) resulting from operations 20,805 (1,384) 303,850 9,609
================================================================== ============================== ==============================
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A 0 0 (133) (33)
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes 0 0 (1,814) (390)
------------------------------------------------------------------ ------------------------------ ------------------------------
In excess of net investment income
Class A 0 0 (80) 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes 0 0 (1,095) 0
------------------------------------------------------------------ ------------------------------ ------------------------------
From net realized capital gains
Class A (1,384) (772) (92) (4,870)
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B (1,275) (789) (56) (4,178)
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C (13,814) (10,255) (68) (6,249)
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes (2,936) (196) (501) (25,986)
------------------------------------------------------------------ ------------------------------ ------------------------------
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 (19,409) (12,012) (3,839) (41,706)
================================================================== ============================== ==============================
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Class A 585,738 387,777 159,997 138,060
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 33,023 36,095 11,044 27,453
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 245,687 312,239 17,711 33,931
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes 12,827 21,694 658,921 745,822
------------------------------------------------------------------ ------------------------------ ------------------------------
Issued in reorganization
Class A 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Issued as reinvestment of distributions
Class A 1,120 724 299 4,388
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 1,085 714 51 3,823
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 12,913 9,591 64 5,858
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes 2,938 196 3,081 24,449
------------------------------------------------------------------ ------------------------------ ------------------------------
Cost of shares redeemed
Class A (598,345) (384,482) (166,620) (73,016)
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B (33,145) (35,264) (29,696) (25,970)
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C (265,384) (337,461) (52,980) (58,559)
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes (9,570) (3,792) (833,832) (579,895)
------------------------------------------------------------------ ------------------------------ ------------------------------
Net increase (decrease) resulting from Fund share transactions (11,113) 8,031 (231,960) 246,344
------------------------------------------------------------------ ------------------------------ ------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (9,717) (5,365) 68,051 214,247
================================================================== ============================== ==============================
NET ASSETS:
Beginning of period 149,087 154,452 1,008,125 793,878
------------------------------------------------------------------ ------------------------------ ------------------------------
End of period * $ 139,370 $ 149,087 $ 1,076,176 $ 1,008,125
------------------------------------------------------------------ ------------------------------ ------------------------------
*Including net undistributed (overdistributed) investment
income of: $ 2,305 $ (1,499) $ 174,578 $ 1,312
------------------------------------------------------------------ ------------------------------ ------------------------------
<CAPTION>
Amounts in thousands OPPORTUNITY FUND
------------------------------
Year Ended Year Ended
INCREASE (DECREASE) IN NET ASSETS FROM: June 30, 2000 June 30, 1999
OPERATIONS:
<S> <C> <C>
Net investment income (loss) $ (7,189) $ (6,871)
------------------------------------------------------------------ ------------------------------
Net realized gain (loss) 153,791 92,947
------------------------------------------------------------------ ------------------------------
Net change in unrealized appreciation (depreciation) 55,969 (86,017)
------------------------------------------------------------------ ------------------------------
Net increase (decrease) resulting from operations 202,571 59
================================================================== ==============================
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A 0 0
------------------------------------------------------------------ ------------------------------
Class B 0 0
------------------------------------------------------------------ ------------------------------
Class C 0 0
------------------------------------------------------------------ ------------------------------
Other Classes 0 0
------------------------------------------------------------------ ------------------------------
In excess of 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 (27,707) (21,702)
------------------------------------------------------------------ ------------------------------
Class B (2,803) 0
------------------------------------------------------------------ ------------------------------
Class C (91,653) (66,672)
------------------------------------------------------------------ ------------------------------
Other Classes (3,505) 0
------------------------------------------------------------------ ------------------------------
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 (125,668) (88,374)
================================================================== ==============================
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Class A 598,089 1,327,819
------------------------------------------------------------------ ------------------------------
Class B 26,138 599
------------------------------------------------------------------ ------------------------------
Class C 75,799 394,360
------------------------------------------------------------------ ------------------------------
Other Classes 43,857 2,418
------------------------------------------------------------------ ------------------------------
Issued in reorganization
Class A 0 0
------------------------------------------------------------------ ------------------------------
Class B 0 0
------------------------------------------------------------------ ------------------------------
Class C 0 0
------------------------------------------------------------------ ------------------------------
Other Classes 0 0
------------------------------------------------------------------ ------------------------------
Issued as reinvestment of distributions
Class A 25,804 19,986
------------------------------------------------------------------ ------------------------------
Class B 2,792 0
------------------------------------------------------------------ ------------------------------
Class C 84,547 61,578
------------------------------------------------------------------ ------------------------------
Other Classes 3,504 0
------------------------------------------------------------------ ------------------------------
Cost of shares redeemed
Class A (630,445) (1,413,716)
------------------------------------------------------------------ ------------------------------
Class B (1,136) (534)
------------------------------------------------------------------ ------------------------------
Class C (116,520) (571,940)
------------------------------------------------------------------ ------------------------------
Other Classes (3,375) (139)
------------------------------------------------------------------ ------------------------------
Net increase (decrease) resulting from Fund share transactions 109,054 (179,569)
------------------------------------------------------------------ ------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 185,957 (267,884)
================================================================== ==============================
NET ASSETS:
Beginning of period 433,062 700,946
------------------------------------------------------------------ ------------------------------
End of period * $ 619,019 $ 433,062
------------------------------------------------------------------ ------------------------------
*Including net undistributed (overdistributed) investment
income of: $ 101,853 $ 12,827
================================================================== ==============================
</TABLE>
SEE ACCOMPANYING NOTES 61
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (Cont.)
<TABLE>
<CAPTION>
Amounts in thousands RENAISSANCE FUND SELECT GROWTH FUND
------------------------------ ------------------------------
Year Ended Year Ended Year Ended Year Ended
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
INCREASE (DECREASE) IN NET ASSETS FROM:
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ (1,813) $ (4,312) $ (3) $ (125)
------------------------------------------------------------------ ------------------------------ ------------------------------
Net realized gain (loss) 30,832 100,928 11 47,076
------------------------------------------------------------------ ------------------------------ ------------------------------
Net change in unrealized appreciation (depreciation) (29,435) (42,518) 989 (29,090)
------------------------------------------------------------------ ------------------------------ ------------------------------
Net increase (decrease) resulting from operations (416) 54,098 997 17,861
================================================================== ============================== ==============================
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
In excess of net investment income
Class A 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes 0 0 (1) 0
------------------------------------------------------------------ ------------------------------ ------------------------------
From net realized capital gains
Class A (10,867) (10,816) 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B (16,870) (14,778) 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C (56,355) (55,218) 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes (127) (49) (141) (5,573)
------------------------------------------------------------------ ------------------------------ ------------------------------
In excess of net realized capital gains
Class A (3,636) 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B (5,645) 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C (18,856) 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes (42) 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Tax Basis Return of Capital
Other Classes 0 0 (69) 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Total Distributions (112,398) (80,861) (211) (5,573)
================================================================== ============================== ==============================
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Class A 80,275 158,557 7,523 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 20,127 45,572 2,061 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 105,254 101,621 4,052 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes 16,366 1,189 2,514 36,540
------------------------------------------------------------------ ------------------------------ ------------------------------
Issued in reorganization
Class A 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Issued as reinvestment of distributions
Class A 13,699 9,525 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 20,292 13,419 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 69,505 51,677 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes 167 38 196 5,571
------------------------------------------------------------------ ------------------------------ ------------------------------
Cost of shares redeemed
Class A (102,130) (161,529) (91) 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B (54,590) (29,608) (19) 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C (229,477) (159,492) (21) 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes (8,293) (1,405) (1,318) (183,781)
------------------------------------------------------------------ ------------------------------ ------------------------------
Net increase (decrease) resulting from Fund share transactions (68,805) 29,564 14,897 (141,670)
------------------------------------------------------------------ ------------------------------ ------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (181,619) 2,801 15,683 (129,382)
================================================================== ============================== ==============================
NET ASSETS:
Beginning of period 659,825 657,024 1,199 130,581
------------------------------------------------------------------ ------------------------------ ------------------------------
End of period * $ 478,206 $ 659,825 $ 16,882 $ 1,199
------------------------------------------------------------------ ------------------------------ ------------------------------
*Including net undistributed (overdistributed) investment
income of: $ 24,138 $ 41,268 $ 0 $ 0
------------------------------------------------------------------ ------------------------------ ------------------------------
<CAPTION>
Amounts in thousands SMALL-CAP VALUE FUND
------------------------------
Year Ended Year Ended
INCREASE (DECREASE) IN NET ASSETS FROM: June 30, 2000 June 30, 1999
OPERATIONS:
<S> <C> <C>
Net investment income (loss) $ 6,349 $ 5,018
------------------------------------------------------------------ ------------------------------
Net realized gain (loss) 1,428 (11,944)
------------------------------------------------------------------ ------------------------------
Net change in unrealized appreciation (depreciation) (50,343) (15,379)
------------------------------------------------------------------ ------------------------------
Net increase (decrease) resulting from operations (42,566) (22,305)
================================================================== ==============================
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (2,407) (1,065)
------------------------------------------------------------------ ------------------------------
Class B (899) (416)
------------------------------------------------------------------ ------------------------------
Class C (1,080) (329)
------------------------------------------------------------------ ------------------------------
Other Classes (1,268) (1,043)
------------------------------------------------------------------ ------------------------------
In excess of 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 0 0
------------------------------------------------------------------ ------------------------------
Class B 0 0
------------------------------------------------------------------ ------------------------------
Class C 0 0
------------------------------------------------------------------ ------------------------------
Other Classes 0 0
------------------------------------------------------------------ ------------------------------
In excess of net realized capital gains
Class A 0 (2,675)
------------------------------------------------------------------ ------------------------------
Class B 0 (3,114)
------------------------------------------------------------------ ------------------------------
Class C 0 (3,425)
------------------------------------------------------------------ ------------------------------
Other Classes 0 (2,175)
------------------------------------------------------------------ ------------------------------
Tax Basis Return of Capital
Other Classes 0 0
------------------------------------------------------------------ ------------------------------
Total Distributions (5,654) (14,242)
------------------------------------------------------------------ ------------------------------
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Class A 121,717 89,486
------------------------------------------------------------------ ------------------------------
Class B 8,724 36,302
------------------------------------------------------------------ ------------------------------
Class C 28,034 57,300
------------------------------------------------------------------ ------------------------------
Other Classes 35,796 60,011
------------------------------------------------------------------ ------------------------------
Issued in reorganization
Class A 0 0
------------------------------------------------------------------ ------------------------------
Class B 0 0
------------------------------------------------------------------ ------------------------------
Class C 0 0
------------------------------------------------------------------ ------------------------------
Other Classes 0 0
------------------------------------------------------------------ ------------------------------
Issued as reinvestment of distributions
Class A 2,271 3,546
------------------------------------------------------------------ ------------------------------
Class B 820 3,299
------------------------------------------------------------------ ------------------------------
Class C 1,018 3,581
------------------------------------------------------------------ ------------------------------
Other Classes 1,121 2,992
------------------------------------------------------------------ ------------------------------
Cost of shares redeemed
Class A (103,087) (53,980)
------------------------------------------------------------------ ------------------------------
Class B (39,789) (41,495)
------------------------------------------------------------------ ------------------------------
Class C (59,121) (64,820)
------------------------------------------------------------------ ------------------------------
Other Classes (61,965) (36,584)
------------------------------------------------------------------ ------------------------------
Net increase (decrease) resulting from Fund share transactions (64,461) 59,638
------------------------------------------------------------------ ------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (112,681) 23,091
================================================================== ==============================
NET ASSETS:
Beginning of period 397,643 374,552
------------------------------------------------------------------ ------------------------------
End of period* $ 284,962 $ 397,643
------------------------------------------------------------------ ------------------------------
*Including net undistributed (overdistributed) investment
income of: $ 3,998 $ 3,303
------------------------------------------------------------------ ------------------------------
</TABLE>
62 SEE ACCOMPANYING NOTES
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (Cont.)
<TABLE>
<CAPTION>
Amounts in thousands TARGET FUND TAX-EFFICIENT EQUITY FUND
------------------------------ ------------------------------
Year Ended Year Ended Year Ended Period from
June 30, 2000 June 30, 1999 June 30, 2000 July 10, 1998
to June 30, 1999
INCREASE (DECREASE) IN NET ASSETS FROM:
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ (25,735) $ (12,880) $ (137) $ (27)
------------------------------------------------------------------ ------------------------------ ------------------------------
Net realized gain (loss) 303,095 124,994 (3,852) (228)
------------------------------------------------------------------ ------------------------------ ------------------------------
Net change in unrealized appreciation (depreciation) 731,179 38,444 7,274 3,290
------------------------------------------------------------------ ------------------------------ ------------------------------
Net increase (decrease) resulting from operations 1,008,539 150,558 3,285 3,035
================================================================== ============================== ==============================
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
In excess of net investment income
Class A 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
From net realized capital gains
Class A (16,039) (7,963) 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B (8,779) (4,561) 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C (95,378) (55,675) 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes (874) 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
------------------------------------------------------------------ ------------------------------ ------------------------------
Tax Basis Return of Capital
Other Classes 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Total Distributions (121,070) (68,199) 0 0
================================================================== ============================== ==============================
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Class A 1,988,170 1,155,256 4,162 7,152
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 117,373 17,814 6,968 7,039
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 358,597 164,138 8,329 11,845
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes 18,905 6,773 21,651 4,070
------------------------------------------------------------------ ------------------------------ ------------------------------
Issued in reorganization
Class A 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes 0 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Issued as reinvestment of distributions
Class A 13,199 7,489 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B 8,050 4,207 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C 89,527 52,783 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes 874 0 0 0
------------------------------------------------------------------ ------------------------------ ------------------------------
Cost of shares redeemed
Class A (2,000,798) (1,168,422) (2,015) (1,370)
------------------------------------------------------------------ ------------------------------ ------------------------------
Class B (44,428) (24,745) (3,114) (1,299)
------------------------------------------------------------------ ------------------------------ ------------------------------
Class C (364,130) (317,299) (4,181) (2,363)
------------------------------------------------------------------ ------------------------------ ------------------------------
Other Classes (8,277) (311) (6,229) (158)
------------------------------------------------------------------ ------------------------------ ------------------------------
Net increase (decrease) resulting from Fund share transactions 177,062 (102,317) 25,571 24,916
------------------------------------------------------------------ ------------------------------ ------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 1,064,531 (19,958) 28,856 27,951
================================================================== ============================== ==============================
NET ASSETS:
Beginning of period 1,166,241 1,186,199 27,951 0
------------------------------------------------------------------ ------------------------------ ------------------------------
End of period * $ 2,230,772 $ 1,166,241 $ 56,807 $ 27,951
------------------------------------------------------------------ ------------------------------ ------------------------------
*Including net undistributed (overdistributed) investment
income of: $ 200,449 $ 67,742 $ 0 $ (5)
------------------------------------------------------------------ ------------------------------ ------------------------------
<CAPTION>
Amounts in thousands VALUE FUND
------------------------------
Year Ended Year Ended
INCREASE (DECREASE) IN NET ASSETS FROM: June 30, 2000 June 30, 1999
OPERATIONS:
<S> <C> <C>
Net investment income (loss) $ 3,191 $ 3,245
------------------------------------------------------------------ ------------------------------
Net realized gain (loss) (4,356) 29,420
------------------------------------------------------------------ ------------------------------
Net change in unrealized appreciation (depreciation) (19,409) (6,992)
------------------------------------------------------------------ ------------------------------
Net increase (decrease) resulting from operations (20,574) 25,673
================================================================== ==============================
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (402) (297)
------------------------------------------------------------------ ------------------------------
Class B (428) (285)
------------------------------------------------------------------ ------------------------------
Class C (453) (644)
------------------------------------------------------------------ ------------------------------
Other Classes (1,997) (1,851)
------------------------------------------------------------------ ------------------------------
In excess of 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 (810) (2,116)
------------------------------------------------------------------ ------------------------------
Class B (1,282) (3,839)
------------------------------------------------------------------ ------------------------------
Class C (2,657) (9,026)
------------------------------------------------------------------ ------------------------------
Other Classes (3,882) (11,350)
------------------------------------------------------------------ ------------------------------
In excess of net realized capital gains
Class A (2,826) 0
------------------------------------------------------------------ ------------------------------
Class B (4,474) 0
------------------------------------------------------------------ ------------------------------
Class C (9,274) 0
------------------------------------------------------------------ ------------------------------
Other Classes (13,550) 0
------------------------------------------------------------------ ------------------------------
Tax Basis Return of Capital
Other Classes 0 0
------------------------------------------------------------------ ------------------------------
Total Distributions (42,035) (29,408)
================================================================== ==============================
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Class A 25,447 40,949
------------------------------------------------------------------ ------------------------------
Class B 7,075 6,401
------------------------------------------------------------------ ------------------------------
Class C 17,510 17,743
------------------------------------------------------------------ ------------------------------
Other Classes 48,653 34,047
------------------------------------------------------------------ ------------------------------
Issued in reorganization
Class A 172 0
------------------------------------------------------------------ ------------------------------
Class B 654 0
------------------------------------------------------------------ ------------------------------
Class C 547 0
------------------------------------------------------------------ ------------------------------
Other Classes 0 0
------------------------------------------------------------------ ------------------------------
Issued as reinvestment of distributions
Class A 3,697 2,146
------------------------------------------------------------------ ------------------------------
Class B 5,252 3,688
------------------------------------------------------------------ ------------------------------
Class C 11,896 9,133
------------------------------------------------------------------ ------------------------------
Other Classes 19,121 13,104
------------------------------------------------------------------ ------------------------------
Cost of shares redeemed
Class A (26,888) (42,344)
------------------------------------------------------------------ ------------------------------
Class B (13,452) (8,734)
------------------------------------------------------------------ ------------------------------
Class C (37,639) (32,134)
------------------------------------------------------------------ ------------------------------
Other Classes (64,901) (47,985)
------------------------------------------------------------------ ------------------------------
Net increase (decrease) resulting from Fund share transactions (2,856) (3,986)
------------------------------------------------------------------ ------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (65,465) (7,721)
================================================================== ==============================
NET ASSETS:
Beginning of period 231,638 239,359
------------------------------------------------------------------ ------------------------------
End of period * $ 166,173 $ 231,638
------------------------------------------------------------------ ------------------------------
*Including net undistributed (overdistributed) investment
income of: $ 94 $ 10,727
------------------------------------------------------------------ ------------------------------
</TABLE>
See accompanying notes 63
<PAGE>
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
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 thirty-two 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 Statements 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 and Value 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 at least 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.
FOREIGN TAXES ON DIVIDENDS. Dividend income in the statements of operations
is shown net of foreign taxes withheld on dividends from foreign securities.
Foreign taxes withheld were as follows: Capital Appreciation Fund - $68,867;
Equity Income Fund - $3,238; Global Innovation Fund - $516; Growth Fund
-$159,737; Innovation Fund - $70,327; International Fund - $234,085; Mid-Cap
Fund - $6,012; Renaissance Fund - $277,154; Select Growth Fund - $105;
Tax-Efficient Equity Fund - $2,525; and Value Fund - $4,122.
64
<PAGE>
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.
DELAYED DELIVERY TRANSACTIONS. A Fund may purchase or sell securities on a
when-issued or delayed delivery basis. These transactions involve a
commitment by a Fund to purchase or sell securities for a predetermined price
or yield, with payment and delivery taking place beyond the customary
settlement period. When delayed delivery purchases are outstanding, a Fund
will set aside and maintain until the settlement date in a segregated
account, liquid assets in an amount sufficient to meet the purchase price.
When purchasing a security on a delayed delivery basis, a Fund assumes the
rights and risks of ownership of the security, including the risk of price
and yield fluctuations, and takes such fluctuations into account when
determining its net asset value. A Fund may dispose of or renegotiate a
delayed delivery transaction after it is entered into, and may sell
when-issued securities before they are delivered, which may result in a
capital gain or loss. When the Fund has sold a security on a delayed delivery
basis, the Fund does not participate in future gains and losses with respect
to the security. Forward sales commitments are accounted for by the Fund in
the same manner as forward currency contracts discussed above.
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 Fund; 0.55% for the Target and International Funds; 0.60% for the
Renaissance, Small-Cap Value and Select Growth Funds; 0.65% for the
Opportunity and Innovation Funds; 1.00% for the Global Innovation Fund; and
0.45% for all other Funds. Each of the Funds also has a sub-advisor which,
under the supervision of PIMCO Advisors, directs the investments of the
Fund's assets. Other than the sub-advisor of the International 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.
NEW ADVISORY FEE STRUCTURE. Effective April 1, 2000, PIMCO Core Equity Fund
changed its name to PIMCO Select Growth Fund and increased its advisory fee
from 0.57% to 0.60%.
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' average daily net assets. The Administration Fee for the Retail
Classes is charged at the annual rate of 0.60% for the Global Innovation
Fund, 0.65% for the International Fund, and 0.40% for all other Funds. The
Administration Fee for the Institutional and Administrative Classes is
charged at the annual rate of 0.40% for Global Innovation Fund; 0.50% for the
International, International Growth, Structured Emerging Markets, and
Tax-Efficient Structured Emerging Markets Funds; and 0.25% for all other
Funds. The Administration Fee for Class D is charged at the annual rate of
0.60% for the Global Innovation Fund, and 0.40% for all other Funds.
65
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONT.)
June 30, 2000
DISTRIBUTION AND SERVICING FEES. PIMCO Funds Distributors LLC ("PFD"), 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):
<TABLE>
<CAPTION>
Distribution Fee (%) Servicing Fee (%)
----------------------------------------------------------------------------
<S> <C> <C>
CLASS A
ALL FUNDS -- 0.25
CLASS B
ALL FUNDS 0.75 0.25
CLASS C
ALL FUNDS 0.75 0.25
CLASS D
ALL FUNDS -- 0.25
</TABLE>
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 June 30, 2000, PFD received $24,801,447
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)
organization expense; 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.
PIMCO Advisors has agreed to waive a portion of Global Innovation Fund's
administrative fees to the extent that the payment of the Fund's pro rata
share of Trustee fees and organizational expenses cause the actual expense
ratios to rise above the rates disclosed in the then-current prospectus plus
0.49 basis points as set forth below (calculated as a percentage of each
Fund's average daily net assets attributable to each class):
<TABLE>
<CAPTION>
Inst'l Class Admn. Class Class A Class B Class C Class D
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
GLOBAL INNOVATION FUND 1.40% 1.65% 1.85% 2.60% 2.60% 1.85%
</TABLE>
PIMCO Advisors may be reimbursed for these waived amounts in future periods.
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.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding short-term investments) for the
period ended June 30, 2000 were as follows (amounts in thousands):
<TABLE>
<CAPTION>
Non - U.S. Government/Agency
------------------------------
Purchases Sales
--------------------------------------------------------------
<S> <C> <C>
CAPITAL APPRECIATION FUND $ 1,055,304 $ 1,609,185
EQUITY INCOME FUND 170,958 268,838
GLOBAL INNOVATION FUND 129,259 42,067
GROWTH FUND 1,880,500 2,085,744
INNOVATION FUND 8,262,248 5,850,236
INTERNATIONAL FUND 77,301 106,095
MID-CAP FUND 1,607,227 1,882,039
OPPORTUNITY FUND 1,219,231 1,243,563
RENAISSANCE FUND 705,776 881,016
SELECT GROWTH FUND 19,188 5,846
SMALL-CAP VALUE FUND 176,319 221,533
TARGET FUND 1,578,298 1,590,309
TAX-EFFICIENT EQUITY FUND 41,160 15,783
VALUE FUND 377,222 414,717
</TABLE>
66
<PAGE>
5. FEDERAL INCOME TAX MATTERS
As of June 30, 2000, the Fund listed in the table below had remaining capital
loss carryforwards that were realized in current and prior years. In
addition, as part of the transaction described in Note 6, the Value Fund
acquired a capital loss carryforward from the Value 25 Fund. Use of the
acquired capital loss carryforward may be limited under current tax laws.
Additionally, the Capital Appreciation Fund, Equity Income Fund,
International Fund, Renaissance Fund, Select Growth Fund, Tax-Efficient
Equity Fund, and Value Fund realized capital losses and/or foreign currency
losses during the period November 1, 1999 through June 30, 2000, which the
Funds elected to defer to the following fiscal year pursuant to income tax
regulations. The amounts are $20, $21,246,345, $537,614, $1,586,042,
$158,434, $2,191,620, $19,204,542, respectively. The Fund will resume capital
gain distributions in the future to the extent gains are realized in excess
of the available carryforwards.
<TABLE>
<CAPTION>
Capital Loss Carryforwards
----------------------------------------
Realized Acquired
Losses Losses Expiration
--------------------------------------------------------------------
<S> <C> <C> <C>
SMALL-CAP VALUE FUND $ 8,531,912 $ -- 6/30/2007
TAX-EFFICIENT EQUITY FUND 27,778 -- 6/30/2007
1,332,594 -- 6/30/2008
VALUE FUND -- 384,037 6/30/2005
</TABLE>
6. LINE OF CREDIT
Effective December 14, 1999, the Funds entered into an unsecured $350,000,000
syndicated bank line of credit agreement with Citicorp USA, Inc. Under this
syndicated agreement, Citicorp USA, Inc. will fund $150,000,000 and both Bank
of New York and State Street Bank & Trust Company will each fund
$100,000,000. Borrowings under the agreement bear interest at the Fed Funds
plus 50 basis points or the Base Rate, which is typically the Prime Rate. The
Funds may borrow money solely for temporary purposes to fund shareholder
redemptions. The Funds did not borrow from the line during the period
December 14, 1999 through June 30, 2000.
7. REORGANIZATION
The Acquiring Fund, as listed below, acquired the assets and certain
liabilities of the Acquired Fund, also listed below, in a tax-free exchange
for shares of the Acquiring Fund, pursuant to a plan of reorganization
approved by the Acquired Fund's shareholders (amounts in thousands):
<TABLE>
<CAPTION>
Value of Total Net
Shares Shares Total Net Total Net Assets of Acquired
Issued by Issued by Assets of Assets of Acquiring Fund's
Acquiring Acquiring Acquired Acquiring Fund After Unrealized
Acquiring Fund Acquired Fund Date Fund Fund Fund Fund Acquisition (Depreciation)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PIMCO PIMCO
VALUE FUND Value 25 Fund March 3, 2000 137 $1,373 $1,373 $163,988 $165,361 $(419)
</TABLE>
8. IN-KIND TRANSACTIONS
For the period ended June 30, 2000, the following fund incurred realized
gains from in-kind redemptions of approximately (amount in thousands):
<TABLE>
<CAPTION>
June 30, 2000
---------------------------------------------------------------
<S> <C>
Mid-Cap Fund $2,322
</TABLE>
9. ACQUISITION BY ALLIANZ AG
On May 5, 2000, Allianz AG completed the acquisition of approximately 70% of
the outstanding partnership interests in PIMCO Advisors L.P. ("PIMCO
Advisors"), of which PIMCO is a subsidiary partnership. As a result of this
transaction, PIMCO Advisors, and its subsidiaries, are now controlled by
Allianz AG, a leading provider of financial services, particularly in Europe.
PIMCO remains operationally independent, continues to operate under its
existing name, and now leads the global fixed income efforts of Allianz AG.
Key employees at each PIMCO Advisors' investment units, including PIMCO's
Bill Gross, have signed long-term employment contracts and have significant
profit-sharing and retention arrangements to ensure continuity of the
investment process and staff. With the addition of PIMCO Advisors, the
Allianz Group manages assets of approximately US$650 billion, including more
than 300 mutual funds for retail and institutional clients around the world.
67
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONT.)
June 30, 2000
10. SHARES OF BENEFICIAL
Interest The Trust may issue an unlimited number of shares of beneficial
interest with a $.0001 par value. Changes in shares of beneficial interest
were as follows (amounts in thousands):
<TABLE>
<CAPTION>
GLOBAL
INNOVATION
CAPITAL APPRECIATION FUND EQUITY INCOME FUND FUND
--------------------------------------- ------------------------------------ ---------------
Period From
Year Ended Year Ended Year Ended Year Ended 12/31/1999
06/30/2000 06/30/1999 06/30/2000 06/30/1999 to 06/30/2000
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount
-------------------------------- --------------------------------------- ------------------------------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Class A 2,242 $ 58,177 1,753 $ 43,847 412 $ 4,899 558 $ 8,352 2,033 $33,319
-------------------------------- --------------------------------------- ------------------------------------ --------------
Class B 611 15,491 863 21,095 432 5,343 658 9,636 1,350 23,487
-------------------------------- --------------------------------------- ------------------------------------ --------------
Class C 792 20,199 1,380 33,638 594 6,749 1,408 20,733 2,499 43,294
-------------------------------- --------------------------------------- ------------------------------------ --------------
Other Classes 14,608 376,293 23,619 592,800 1,356 15,122 2,442 35,370 29 538
-------------------------------- --------------------------------------- ------------------------------------ --------------
SHARES ISSUED IN REORGANIZATION
Class A 0 0 0 0 0 0 0 0 0 0
-------------------------------- --------------------------------------- ------------------------------------ --------------
Class B 0 0 0 0 0 0 0 0 0 0
-------------------------------- --------------------------------------- ------------------------------------ --------------
Class C 0 0 0 0 0 0 0 0 0 0
-------------------------------- --------------------------------------- ------------------------------------ --------------
Other Classes 0 0 0 0 0 0 0 0 0 0
-------------------------------- --------------------------------------- ------------------------------------ --------------
ISSUED AS REINVESTMENT OF
DISTRIBUTIONS
Class A 564 13,231 249 5,855 295 3,151 140 1,967 0 0
-------------------------------- --------------------------------------- ------------------------------------ --------------
Class B 406 9,321 131 3,012 344 3,638 153 2,148 0 0
-------------------------------- --------------------------------------- ------------------------------------ --------------
Class C 565 12,996 209 4,830 375 3,979 212 2,982 0 0
-------------------------------- --------------------------------------- ------------------------------------ --------------
Other Classes 5,072 119,912 2,085 49,228 2,284 24,496 1,420 20,074 0 0
-------------------------------- --------------------------------------- ------------------------------------ --------------
COST OF SHARES REDEEMED
Class A (2,818) (73,946) (1,376) (34,758) (728) (8,151) (392) (5,776) (343) (5,627)
-------------------------------- --------------------------------------- ------------------------------------ --------------
Class B (601) (15,271) (486) (11,806) (939) (10,403) (358) (5,140) (8) (134)
-------------------------------- --------------------------------------- ------------------------------------ --------------
Class C (1,292) (32,887) (1,280) (31,014) (1,310) (14,958) (1,389) (20,521) (22) (372)
-------------------------------- --------------------------------------- ------------------------------------ --------------
Other Classes (31,913) (822,791) (28,942) (725,336) (9,398) (102,415) (4,448) (66,231) 0 (16)
-------------------------------- --------------------------------------- ------------------------------------ --------------
NET INCREASE (DECREASE)
RESULTING FROM FUND
SHARE TRANSACTIONS (11,764) $(319,275) (1,795) $ (48,609) (6,283) $ (68,550) 404 $ 3,594 5,538 $94,489
================================ ======================================= ==================================== ==============
</TABLE>
<TABLE>
<CAPTION>
Opportunity Fund Renaissance Fund Select Growth Fund
---------------------------------------- -------------------------------------- --------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
06/30/2000 06/30/1999 06/30/2000 06/30/1999 06/30/2000 06/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Receipts for
shares sold
Class A 19,248 $ 598,089 53,826 $1,327,819 5,445 $ 80,275 9,334 $ 158,557 331 $ 7,523 0 $ 0
---------------- ---------------------------------------- -------------------------------------- --------------------------------
Class B 947 26,138 19 599 1,319 20,127 2,613 45,572 92 2,061 0 0
---------------- ---------------------------------------- -------------------------------------- --------------------------------
Class C 2,788 75,799 17,562 394,360 7,060 105,254 5,944 101,621 176 4,052 0 0
---------------- ---------------------------------------- -------------------------------------- --------------------------------
Other Classes 1,615 43,857 106 2,418 1,060 16,366 69 1,189 111 2,514 1,899 36,540
---------------- ---------------------------------------- -------------------------------------- --------------------------------
Shares issued in
reorganization
Class A 0 0 0 0 0 0 0 0 0 0 0 0
---------------- ---------------------------------------- -------------------------------------- --------------------------------
Class B 0 0 0 0 0 0 0 0 0 0 0 0
---------------- ---------------------------------------- -------------------------------------- --------------------------------
Class C 0 0 0 0 0 0 0 0 0 0 0 0
---------------- ---------------------------------------- -------------------------------------- --------------------------------
Other Classes 0 0 0 0 0 0 0 0 0 0 0 0
---------------- ---------------------------------------- -------------------------------------- --------------------------------
Issued as
reinvestment of
distributions
Class A 940 25,804 900 19,986 1,028 13,699 625 9,525 0 0 0 0
---------------- ---------------------------------------- -------------------------------------- --------------------------------
Class B 118 2,792 0 0 1,554 20,292 887 13,419 0 0 0 0
---------------- ---------------------------------------- -------------------------------------- --------------------------------
Class C 3,561 84,547 3,079 61,578 5,351 69,505 3,434 51,677 0 0 0 0
---------------- ---------------------------------------- -------------------------------------- --------------------------------
Other Classes 146 3,504 0 0 13 167 3 38 9 196 278 5,571
---------------- ---------------------------------------- -------------------------------------- --------------------------------
Cost of shares
redeemed
Class A (20,196) (630,445) (56,632) (1,413,716) (6,861) (102,130) (9,467) (161,529) (4) (91) 0 0
---------------- ---------------------------------------- -------------------------------------- --------------------------------
Class B (42) (1,136) (8) (534) (3,766) (54,590) (1,743) (29,608) (1) (19) 0 0
---------------- ---------------------------------------- -------------------------------------- --------------------------------
Class C (4,377) (116,520) (25,198) (571,940) (15,629) (229,477) (9,456) (159,492) (1) (21) 0 0
---------------- ---------------------------------------- -------------------------------------- --------------------------------
Other Classes (123) (3,375) (6) (139) (537) (8,293) (82) (1,405) (58) (1,318) (8,556) (183,781)
---------------- ---------------------------------------- -------------------------------------- --------------------------------
Net increase
(decrease)
resulting from
Fund share
transactions 4,625 $ 109,054 (6,352) $(179,569) (3,963) $ (68,805) 2,161 $ 29,564 655 $14,897 (6,379) $(141,670)
================ ======================================== ====================================== ================================
</TABLE>
68
<PAGE>
<TABLE>
<CAPTION>
GROWTH FUND INNOVATION FUND
----------------------------------------------- ---------------------------------------------------
Year Ended 06/30/2000 Year Ended 06/30/1999 Year Ended 06/30/2000 Year Ended 06/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
----------------------------------------------- ---------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
29,718 $ 1,093,441 18,586 $ 592,678 37,533 $ 2,311,596 22,267 $ 670,706
----------------------------------------------- ---------------------------------------------------
2,612 87,164 2,319 68,949 16,067 996,786 7,203 222,514
----------------------------------------------- ---------------------------------------------------
11,186 368,824 18,554 536,307 22,893 1,434,945 12,856 386,283
----------------------------------------------- ---------------------------------------------------
848 28,507 246 7,429 1,434 101,426 978 31,776
----------------------------------------------- ---------------------------------------------------
0 0 0 0 0 0 0 0
----------------------------------------------- ---------------------------------------------------
0 0 0 0 0 0 0 0
----------------------------------------------- ---------------------------------------------------
0 0 0 0 0 0 0 0
----------------------------------------------- ---------------------------------------------------
0 0 0 0 0 0 0 0
----------------------------------------------- ---------------------------------------------------
815 28,673 690 20,136 1,151 64,329 166 4,539
----------------------------------------------- ---------------------------------------------------
722 22,706 398 10,649 1,549 83,032 193 5,125
----------------------------------------------- ---------------------------------------------------
10,173 319,936 8,069 215,697 2,280 122,191 465 12,329
----------------------------------------------- ---------------------------------------------------
87 2,784 0 0 74 4,194 5 142
----------------------------------------------- ---------------------------------------------------
(30,636) (1,127,925) (18,127) (577,520) (27,586) (1,630,787) (17,585) (517,708)
----------------------------------------------- ---------------------------------------------------
(1,467) (47,670) (1,081) (31,680) (3,033) (191,561) (1,084) (31,174)
----------------------------------------------- ---------------------------------------------------
(17,927) (582,990) (21,434) (618,382) (8,297) (494,923) (6,532) (188,880)
----------------------------------------------- ---------------------------------------------------
(231) (7,712) (19) (556) (440) (27,531) (487) (16,345)
----------------------------------------------- ---------------------------------------------------
5,900 $ 185,738 8,201 $ 223,707 43,625 $ 2,773,697 18,445 $ 579,307
=============================================== ===================================================
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL FUND MID-CAP FUND
------------------------------------------------- ---------------------------------------------------
Year Ended 06/30/2000 Year Ended 06/30/1999 Year Ended 06/30/2000 Year Ended 06/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------- ---------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
46,090 $ 585,738 31,483 $ 387,777 5,855 $ 159,997 6,247 $ 138,060
------------------------------------------------- ---------------------------------------------------
2,840 33,023 3,192 36,095 426 11,044 1,268 27,453
------------------------------------------------- ---------------------------------------------------
21,199 245,687 26,758 312,239 675 17,711 1,578 33,931
------------------------------------------------- ---------------------------------------------------
1,075 12,827 1,989 21,694 26,358 658,921 33,953 745,822
------------------------------------------------- ---------------------------------------------------
0 0 0 0 0 0 0 0
------------------------------------------------- ---------------------------------------------------
0 0 0 0 0 0 0 0
------------------------------------------------- ---------------------------------------------------
0 0 0 0 0 0 0 0
------------------------------------------------- ---------------------------------------------------
0 0 0 0 0 0 0 0
------------------------------------------------- ---------------------------------------------------
91 1,120 64 724 12 299 206 4,388
------------------------------------------------- ---------------------------------------------------
97 1,085 68 714 2 51 181 3,823
------------------------------------------------- ---------------------------------------------------
1,154 12,913 913 9,591 3 64 278 5,858
------------------------------------------------- ---------------------------------------------------
259 2,938 19 196 124 3,081 1,138 24,449
------------------------------------------------- ---------------------------------------------------
(46,677) (598,345) (30,904) (384,482) (6,196) (166,620) (3,372) (73,016)
------------------------------------------------- ---------------------------------------------------
(2,832) (33,145) (3,101) (35,264) (1,236) (29,696) (1,230) (25,970)
------------------------------------------------- ---------------------------------------------------
(22,730) (265,384) (28,746) (337,461) (2,208) (52,980) (2,749) (58,559)
------------------------------------------------- ---------------------------------------------------
(809) (9,570) (329) (3,792) (32,781) (833,832) (26,494) (579,895)
------------------------------------------------- ---------------------------------------------------
(243) $ (11,113) 1,406 $ 8,031 (8,966) $(231,960) 11,004 $ 246,344
================================================= ===================================================
</TABLE>
<TABLE>
<CAPTION>
SMALL-CAP VALUE FUND TARGET FUND
------------------------------------------------- ---------------------------------------------------
Year Ended 06/30/2000 Year Ended 06/30/1999 Year Ended 06/30/2000 Year Ended 06/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------- ---------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
8,600 $ 121,717 5,904 $ 89,486 81,921 $ 1,988,170 74,975 $ 1,155,256
------------------------------------------------- ---------------------------------------------------
615 8,724 2,397 36,302 4,633 117,373 1,206 17,814
------------------------------------------------- ---------------------------------------------------
1,995 28,034 3,813 57,300 14,942 358,597 11,320 164,138
------------------------------------------------- ---------------------------------------------------
2,520 35,796 3,981 60,011 697 18,905 402 6,773
------------------------------------------------- ---------------------------------------------------
0 0 0 0 0 0 0 0
------------------------------------------------- ---------------------------------------------------
0 0 0 0 0 0 0 0
------------------------------------------------- ---------------------------------------------------
0 0 0 0 0 0 0 0
------------------------------------------------- ---------------------------------------------------
0 0 0 0 0 0 0 0
------------------------------------------------- ---------------------------------------------------
170 2,271 241 3,546 609 13,199 517 7,489
------------------------------------------------- ---------------------------------------------------
61 820 228 3,299 405 8,050 312 4,207
------------------------------------------------- ---------------------------------------------------
76 1,018 247 3,581 4,501 89,527 3,916 52,783
------------------------------------------------- ---------------------------------------------------
83 1,121 203 2,992 41 874 0 0
------------------------------------------------- ---------------------------------------------------
(7,422) (103,087) (3,663) (53,980) (82,333) (2,000,798) (75,504) (1,168,422)
------------------------------------------------- ---------------------------------------------------
(2,870) (39,789) (2,841) (41,495) (1,993) (44,428) (1,698) (24,745)
------------------------------------------------- ---------------------------------------------------
(4,245) (59,121) (4,402) (64,820) (16,220) (364,130) (21,938) (317,299)
------------------------------------------------- ---------------------------------------------------
(4,416) (61,965) (2,475) (36,584) (315) (8,277) (18) (311)
------------------------------------------------- ---------------------------------------------------
(4,833) $ (64,461) 3,633 $ 59,638 6,888 $ 177,062 (6,510) $ (102,317)
================================================= ===================================================
</TABLE>
<TABLE>
<CAPTION>
TAX-EFFICIENT EQUITY FUND VALUE FUND
------------------------------------------------- ---------------------------------------------------
Year Ended 06/30/2000 Year Ended 06/30/1999 Year Ended 06/30/2000 Year Ended 06/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------- ---------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
359 $ 4,162 699 $ 7,152 2,019 $ 25,447 2,834 $ 40,949
------------------------------------------------- ---------------------------------------------------
609 6,968 682 7,039 587 7,075 445 6,401
------------------------------------------------- ---------------------------------------------------
724 8,329 1,163 11,845 1,395 17,510 1,253 17,743
------------------------------------------------- ---------------------------------------------------
1,895 21,651 382 4,070 3,854 48,653 2,359 34,047
------------------------------------------------- ---------------------------------------------------
0 0 0 0 17 172 0 0
------------------------------------------------- ---------------------------------------------------
0 0 0 0 65 654 0 0
------------------------------------------------- ---------------------------------------------------
0 0 0 0 55 547 0 0
------------------------------------------------- ---------------------------------------------------
0 0 0 0 0 0 0 0
------------------------------------------------- ---------------------------------------------------
0 0 0 0 322 3,697 158 2,146
------------------------------------------------- ---------------------------------------------------
0 0 0 0 460 5,252 274 3,688
------------------------------------------------- ---------------------------------------------------
0 0 0 0 1,041 11,896 678 9,133
------------------------------------------------- ---------------------------------------------------
0 0 0 0 1,662 19,121 967 13,104
------------------------------------------------- ---------------------------------------------------
(172) (2,015) (132) (1,370) (2,137) (26,888) (2,926) (42,344)
------------------------------------------------- ---------------------------------------------------
(268) (3,114) (128) (1,299) (1,123) (13,452) (625) (8,734)
------------------------------------------------- ---------------------------------------------------
(359) (4,181) (230) (2,363) (3,041) (37,639) (2,298) (32,134)
------------------------------------------------- ---------------------------------------------------
(541) (6,229) (15) (158) (5,733) (64,901) (3,262) (47,985)
------------------------------------------------- ---------------------------------------------------
2,247 $25,571 2,421 $24,916 (557) $ (2,856) (143) $ (3,986)
================================================= ===================================================
</TABLE>
69
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Class A, B and C Shareholders of the PIMCO Funds:
Multi-Manager Series
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets and the financial highlights for the
Class A, B and C share classes present fairly, in all material respects, the
financial position of the Capital Appreciation Fund, Equity Income Fund,
Global Innovation Fund, Growth Fund, Innovation Fund, International Fund,
Mid-Cap Fund, Opportunity Fund, Renaissance Fund, Select Growth Fund,
Small-Cap Value Fund, Target Fund, Tax-Efficient Equity Fund and Value Fund
(hereafter referred to as the "Funds") at June 30, 2000, the results of each
of their operations, the changes in each of their net assets and the
financial highlights of the Class A, B and C share classes for each of the
periods indicated, in conformity with accounting principles generally
accepted in the United States. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at June 30, 2000 by correspondence with the
custodians and brokers, provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
Kansas City, Missouri
August 21, 2000
70
<PAGE>
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
As required by the Internal Revenue Code regulations, shareholders must be
notified within 60 days of the Trust's fiscal year end (June 30, 2000)
regarding the status of the distributions made to the shareholders
DIVIDEND RECEIVED DEDUCTION. For the benefit of corporate shareholders only,
the portion of dividends paid out of ordinary income earned during certain
Funds' fiscal years ended June 30, 2000 which qualify for the corporate
dividend-received deduction are as follows:
<TABLE>
<S> <C>
CAPITAL APPRECIATION FUND 58.39%
EQUITY INCOME FUND 63.95%
INNOVATION FUND 0.15%
MID-CAP FUND 40.50%
OPPORTUNITY FUND 1.66%
RENAISSANCE FUND 14.42%
SELECT GROWTH FUND 12.01%
SMALL-CAP VALUE FUND 100.00%
TARGET FUND 5.12%
VALUE FUND 38.57%
</TABLE>
CAPITAL GAIN DISTRIBUTIONS. Capital gains distributions paid for all classes
of shares during the fiscal year ended June 30, 2000, were in the amounts as
follows:
<TABLE>
<CAPTION>
Per Share Per Share
Long-Term Short-Term
Capital Gains Capital Gains
----------------------------------------------------------------
<S> <C> <C>
CAPITAL APPRECIATION FUND 4.99628 -
EQUITY INCOME FUND 1.85496 0.78284
GROWTH FUND 5.66485 -
INNOVATION FUND 3.85703 2.53396
INTERNATIONAL FUND 1.73874 -
MID-CAP FUND 0.01720 -
OPPORTUNITY FUND 5.06114 2.82008
RENAISSANCE FUND 1.79690 1.65234
SELECT GROWTH FUND 0.67098 3.04478
TARGET FUND 0.79431 1.00897
VALUE FUND 1.11374 1.45284
</TABLE>
Shareholders are advised to consult their own tax advisor with respect to the
tax consequences of their investment in the Trust. However, income received
by tax-exempt recipients need not be reported as taxable income. In January
2001, you will be advised on IRS form 1099-DIV as to the federal tax status
of the dividends and distributions received by you in calendar year 2000.
71
<PAGE>
Visit the PIMCO Funds Innovation Center
at www.pimcofunds.com
When you're investing in a volatile sector like technology, incisive,
accurate information could be your best ally. That's why we've created
the PIMCO Funds Innovation Center at www.pimcofunds.com. Look to it for
up-to-date market intelligence and commentary on the tech sector and
PIMCO's tech-related funds. Highlights include:
/ / INNOVATION NEWSLETTER An online version of
our popular technology investing newsletter.
Each monthly issue includes a market review
and outlook from PIMCO Innovation and Global
Innovation Fund portfolio manager, Dennis
McKechnie.
/ / TIMELY MARKET COMMENTARY PIMCO's analysis
of unfolding market events.
[GRAPHIC] / / MANAGER INTERVIEWS Find out what PIMCO"s
technology investment professionals have to
say about market trends, global
opportunities and fund-specific strategies.
/ / THEME ANALYSIS The PIMCO "Innovation"
investment approach focuses on eight
industries or "themes" that drive the tech
sector. Read our manager assessments of
each.
/ / MEDIA HIGHLIGHTS Media coverage of PIMCO's
technology-based funds and managers.
The PIMCO Funds Innovation Center offers you a unique, balanced
perspective on the tech sector and technology investing.
HOW TO GET THERE
To visit the Innovation Center, go to the PIMCO Funds
home page at www.pimcofunds.com and click on
"Innovation Center". Or simply point your browser to
www.pimcofunds.com/innovationcenter.
PZ004.8/00
PIMCO FUNDS (logo)
PIMCO FUNDS
DISTRIBUTORS LLC
2187 Atlantic Street
Stamford, CT 06902-6896
<PAGE>
PIMCO FUNDS: MULTI-MANAGER SERIES
<TABLE>
<S> <C>
-------------------------------------------------------------------------------------------------------
MANAGER PIMCO Advisors L.P., 800 Newport Center Drive, Newport Beach, CA 92660
------------------------------------------------------------------------------------------------------
DISTRIBUTOR PIMCO Funds Distributors LLC, 2187 Atlantic Street, Stamford, CT 06902-6896
------------------------------------------------------------------------------------------------------
CUSTODIAN Investors Fiduciary Trust Company, 801 Pennsylvania, Kansas City, MO 64105
------------------------------------------------------------------------------------------------------
SHAREHOLDER PFPC Global Fund Services, Inc., P.O. Box 9688,
SERVICING AGENT AND 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 financial advisor, or if
INFORMATION 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. Or visit our Web site,
www.pimcofunds.com.
</TABLE>
<PAGE>
VISIT THE PIMCO FUNDS INNOVATION CENTER
AT www.pimcofunds.com
When you're investing in a volatile sector like technology, incisive, accurate
information could be your best ally. That's why we've created the PIMCO Funds
Innovation Center at www.pimcofunds.com. Look to it for up-to-date market
intelligence and commentary on the tech sector and PIMCO's tech-related funds.
Highlights include:
[GRAPHIC]
The PIMCO Funds Innovation Center offers you a unique, balanced perspective on
the tech sector and technology investing.
- INNOVATION NEWSLETTER An online version of our popular technology investing
newsletter. Each monthly issue includes a market review and outlook from PIMCO
Innovation and Global Innovation Fund portfolio manager, Dennis McKechnie.
- TIMELY MARKET COMMENTARY PIMCO's analysis of unfolding market events.
- MANAGER INTERVIEWS Find out what PIMCO's technology investment professionals
have to say about market trends, global opportunities and fund-specific
strategies.
- THEME ANALYSIS The PIMCO "Innovation" investment approach focuses on eight
industries or "themes" that drive the tech sector. Read our manager
assessments of each.
- MEDIA HIGHLIGHTS Media coverage of PIMCO's technology-based funds and
managers.
HOW TO GET THERE
To visit the Innovation Center, go to the PIMCO Funds home page at
www.pimcofunds.com and click on "Innovation Center". Or simply point your
browser to www.pimcofunds.com/innovationcenter.
PZ004.8/00
PIMCO FUNDS --------------
BULK RATE
U.S. POSTAGE
PAID
SMITHTOWN, NY
PERMIT NO. 700
--------------
PIMCO FUNDS
DISTRIBUTORS LLC
2187 Atlantic Street
Stamford, CT 06902-6896
<PAGE>
PIMCO FUNDS SHAREHOLDER UPDATE
AND 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.
JUNE 30, 2000
MULTI-MANAGER SERIES
Share Class
/D/
Capital Appreciation
Equity Income
Global Innovation
Growth
Innovation
Mid-Cap
Renaissance
Select Growth
Target
Tax-Efficient Equity
Value
ARE MARKET MOVEMENTS TAKING YOU OFF COURSE? TRY A MORE OBJECTIVE APPROACH TO
INVESTING. STORY ON PAGE 2.
PAGE 2 TODAY'S INVESTOR
Taking the Emotion Out of Investing
PAGE 4 MANAGER Q & A
Growth, Value or Blend? A Roundtable Discussion
PAGE 6 FUND SPOTLIGHT
PAGE 7 TECH UPDATE
The Technology Sector Stages a Recovery
PAGE 8 SERVICE UPDATE
Introducing the New PIMCO Funds Web Site
PAGE 9 IN THE NEWS
PAGE 10 OVERVIEW: COMPREHENSIVE FUND FAMILY
PAGE 11 PIMCO FUNDS: MULTI-MANAGER SERIES
Annual Report
PIMCO
FUNDS
<PAGE>
TODAY'S
INVESTOR
Taking the Emotion Out of Investing
Staying completely objective about your investments is nearly impossible. After
all, your money isn't just money. It represents important goals, like buying a
house, living a comfortable retirement or funding your childrens' educations. So
if recent stock market volatility has caused you to lose sleep or tempted you to
cash out some of your holdings, you're not alone.
[Graphic]
Still, getting too emotional about your investments isn't healthy--for you or
your portfolio. It can cause you undue stress, prompt you to sell during
unfavorable conditions and otherwise distract you from your long-term
strategy. To let reason rule, you need a plan that provides a logical
framework for your financial decisions and that anticipates market
turbulence. Here are three simple steps you can follow to get you on your way.
1. REMEMBER THE BIG PICTURE
If you become too focused on the here and now, you're much more prone to
emotional investment decisions--buying a security based solely on recent
performance or selling one prematurely, for example. To broaden your
perspective, try the following.
- REVIEW YOUR GOALS AND RISK TOLERANCE. It's important to have a clear
understanding of your risk tolerance and financial goals and to make sure
your asset allocation is in sync with them. These factors should be top of
mind whenever you make an investment decision.
- TAKE A LOOK AT HISTORY. A look back at the financial markets can help you
be more realistic about potential returns. For example, the average annual
return of the S&P 500, a benchmark that is representative of the overall
stock market, has been about 13% over the past 30 years (assuming
reinvestment of dividends). Also, while the Dow Jones Industrial Average has
had five down years in the last 25, it has always recovered--even if it took
a few years. This serves as a good reminder to ride out corrections and
maintain a long-term view.
2. USE A SYSTEMATIC APPROACH
You may find it easier to stay on track with your goals if you organize
certain aspects of the investment process. Here are a few approaches that you
may want to consider.
- REVIEW YOUR LONG-TERM HOLDINGS AT SPECIFIC INTERVALS. Online services have
made it convenient for investors to check up on their portfolios. But if
you're a long-term investor, keeping too close an eye on your holdings may
only cause you unnecessary anxiety. Over time, daily price fluctuations lose
importance. That said, try reviewing your portfolio no more than once a month
or quarter.
A CASE FOR LONG-TERM INVESTING
A historical look at the Dow Jones Industrial Average (DJIA) can remind you to
ride out corrections and keep a long-term view. In the past 25 years, the DJIA
has had five down years, but eventually recovered each time.
[GRAPH]
Dow Jones Industrial Average (historical)
<TABLE>
<S> <C>
Dec-74 616
Dec-75 852
Dec-76 1004
Dec-77 831
Dec-78 805
Dec-79 838
Dec-80 963
Dec-81 875
Dec-82 1046
Dec-83 1258
Dec-84 1211
Dec-85 1546
Dec-86 1895
Dec-87 1938
Dec-88 2168
Dec-89 2753
Dec-90 2633
Dec-91 3168
Dec-92 3301
Dec-93 3754
Dec-94 3834
Dec-95 5117
Dec-96 6448
Dec-97 7908
Dec-98 9181
Dec-99 11497
</TABLE>
Source: Dow Jones & Company. Past performance is no guarantee of future
results. This chart does not represent the past or future performance of any
PIMCO Fund.
2
<PAGE>
THE BENEFITS OF DOLLAR COST AVERAGING
In this example, a monthly systematic investment of $500 purchased more
shares at a lower average price than a $2,000 lump sum investment during the
four month period.
Date of Purchase Jan 15 Feb 15 Mar 15 Apr 15
Share Price $11 $8 $10 $14 TOTAL
-------------------------------------------------------------------------------
DOLLAR COST AVERAGING
Shares Acquired 45.5 62.5 50.0 35.7 193.7
Investment $500 $500 $500 $500 $2,000
Average Share Price: $10.33
-------------------------------------------------------------------------------
LUMP SUM INVESTMENT
Shares Acquired 181.8 0 0 0 181.8
Investment $2,000 0 0 0 $2,000
Average Share Price: $11.00
This plan involves continuous investment in securities regardless of fluctuating
prices. The investor should consider his/her financial ability to continue
investing through periods of low price levels.
- CONSIDER DOLLAR COST AVERAGING. A plan that regularly invests a fixed amount
of money in a specific investment imposes a disciplined approach to investing.
This can be a particularly good strategy during volatile markets, since
systematic investing carries the benefit of dollar cost averaging. Dollar cost
averaging takes advantage of price fluctuations by buying more shares when an
investment's price declines and fewer shares when it rises. The chart above
illustrates this point.
- ESTABLISH GUIDELINES FOR SELLING AN INVESTMENT. If you
contemplate selling an investment each time its price retreats, you may want to
establish some clearer guidelines. One idea is to form a checklist of key
questions that can help you make a more objective evaluation. For example:
- Have there been any negative fundamental changes in the investment?
- What are experts saying about the asset class or sector?
- How would selling the investment affect my asset allocation?
- Has the investment consistently underperformed its benchmark?
- Would another opportunity provide better risk/return characteristics?
Remember that the theory of asset allocation holds that different investments
will outperform and underperform the market at different times. This year's
laggards could be next year's leaders. So you may not want to sell an
investment just because it's trailing the overall stock market.
3. MANAGE RISK (OR IT WILL MANAGE YOU)
In today's technology-driven bull market, risk management is one area that
many investors have neglected. Yet it's unrealistic to think that double and
triple digit equity returns will go on forever. Here are a few tactics that
may help you weather future market volatility and protect your hard-earned
assets.
- DON'T PUT TOO MUCH AT STAKE. If you're seeking the potential for higher
returns, allocate a specific percentage of your portfolio to riskier
investments, such as tech stocks, then periodically rebalance. To reduce
risk, you might consider investing through a technology fund, which offers a
diversified approach and may be less volatile than owning individual stocks.
- ALLOCATE PART OF YOUR PORTFOLIO TO BONDS. If a review of your asset
allocation determines you've taken on too much risk, you might shift some of
your holdings into bonds. Their income and relative price stability can
provide a cushion against stock volatility. Investing in a diversified bond
fund is one simple way to balance out your equity holdings.
- KEEP AN EMERGENCY FUND. As a rule of thumb, it's a good idea to keep a
percentage of your annual income in an emergency fund. There are a number of
good alternatives for investing this cash. For example, you might consider a
short-term bond fund. While the value of your investment will fluctuate slightly
and there's no repayment guarantee, you could be rewarded with a yield and total
return that's considerably higher than other cash investments.
These are just a few suggestions that can help you keep a more objective
mindset and prepare your portfolio for future market volatility. As always,
you should consider how any of these approaches might fit into your
comprehensive financial plan.
PAST PERFORMANCE IS NO GUARANTEE 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. There can be no guarantee that
these investment strategies will work in every economic environment.
The S&P Index is an unmanaged index considered to be representative of the
stock market as a whole. It is not possible to invest directly in such an
index.
3
<PAGE>
MANAGER
Q & A
Growth, Value or Blend? A Roundtable Discussion
KEN CORBA IS PIMCO'S LEADING GROWTH INVESTMENT EXPERT AND THE MANAGER OF PIMCO
GROWTH AND SELECT GROWTH FUNDS. HE HAS MORE THAN 15 YEARS OF GROWTH INVESTMENT
EXPERIENCE. JOHN SCHNEIDER MANAGES PIMCO RENAISSANCE AND VALUE FUNDS, AND HAS
MORE THAN 12 YEARS OF VALUE INVESTING EXPERIENCE. DAVE BREED MANAGES PIMCO
CAPITAL APPRECIATION AND MID-CAP FUNDS, AND HAS MORE THAN 30 YEARS OF
EXPERIENCE, SPECIALIZING IN GROWTH-AT-A-REASONABLE-PRICE, A TYPE OF BLEND
INVESTING.
Q: EACH OF YOU IS A STRONG BELIEVER IN YOUR OWN PARTICULAR INVESTMENT STYLE.
CAN YOU EXPLAIN WHY AN INVESTOR SHOULD HAVE EXPOSURE TO IT?
KC: While it's true that different investment styles outperform at various
times, I believe growth stock investing offers the greatest potential for
capital appreciation over the long term. For the last several years, growth
stocks have dominated the stock market in terms of both performance and
earnings growth--and I think this trend is likely to continue.
JS: I think it's prudent to have exposure to value stocks. Although they've
underperformed in recent years, history has shown that different investment
styles fall in and out of favor, so it makes sense to have exposure to
various investment styles. In addition, stock valuations are at historically
high levels, which I do not believe are sustainable. I would not be surprised
to see a rotation towards lower valuation issues in the near term.
DB: Growth-at-a-reasonable-price (GARP) investing represents what I believe
to be the best of both worlds for investors. It provides access to growth
potential but it also places importance on reasonable valuation. While
investors are certainly enamored with growth stocks right now, I believe they
are becoming more price sensitive, which usually happens during periods of
rising interest rates. GARP investing is the often-overlooked alternative to
growth and value investing.
Q: CAN YOU GIVE US AN EXAMPLE OF ONE OF YOUR BEST PERFORMING HOLDINGS THAT
EXEMPLIFIES YOUR INVESTMENT STYLE?
KC: One of our best performing holdings is JDS Uniphase, which makes fiber
optic components. Fiber optic telecommunications equipment is one of the
fastest-growing industries right now, and JDS Uniphase is the leader in this
area. The company has a very successful acquisition strategy, which has
enabled it to gain market share and complement its existing product line.
It's one of the great wealth-creating companies of our time--and just the
kind of stock we like to own.
JS: Ace Limited, a property and casualty insurance (P&C) company, has nearly
doubled since we added it to the portfolio. For more than a decade, property
and casualty insurance companies performed poorly because the industry
suffered from too much competition. However, we anticipated that the industry
would lose its weakest players, which would enable it to gain pricing power
and increase extremely narrow profit margins. As a result, we added
fundamentally strong P&C insurers, such as Ace, that we expected would
benefit from the industry consolidation. Ace Ltd., which boasts a strong
balance sheet and an exceptional management team, did indeed outperform.
DB: Corning Inc., a fiber optic telecommunications equipment maker, has
turned in a strong performance for the Fund. We were attracted to the company
last year because of its relatively low valuation in such a high-growth
industry. Its stock price has risen as a result of several strategic
acquisitions and plant expansions that would increase capacity, as well as
general investor enthusiasm for this industry.
Q: WHAT AREAS OF TECHNOLOGY DO YOUR RESPECTIVE PORTFOLIOS HAVE EXPOSURE TO?
HOW DO THESE FIT WITH YOUR RESPECTIVE INVESTMENT STYLES?
KC: Because technology is such an important part of the stock market in
general--it now comprises 34% of the S&P 500 Index--and growth investing in
particular, we have significant exposure to this sector. We are invested in
many high-growth industries within technology, such as networking, fiber
optics and wireless telecommunications. We own many of the premier, blue chip
tech companies, including Cisco Systems, EMC and Nokia.
JS: We limit our exposure in the technology sector to companies we understand
and can value--typically commodity technology companies, such as
semiconductor manufacturers. They are cyclical companies, and we like to
purchase them at the time in their business cycle when they are undervalued
and offer upside potential. While we had a lot of exposure to commodity
technology last year (chip maker Micron Corp. was our largest holding for
much of the year), we don't have much exposure right now because we believe
these stocks are near the peak of their business cycle and are relatively
overvalued.
4
<PAGE>
[PHOTO] [PHOTO] [PHOTO]
KEN CORBA JOHN SCHNEIDER DAVID BREED
DB: We own a number of different technology companies, such as chip maker Intel
and networking giant Cisco Systems. Because our goal is to offer investors an
overall portfolio that is growth-oriented but reasonably valued, we are able to
own these higher growth tech names and balance them out with companies, such as
Tyco International and General Electric, that offer low relative valuations.
Q: TO WHAT DO YOU ATTRIBUTE THE RECENT VOLATILITY IN THE MARKET?
KC: I think when you see the kind of huge appreciation that we've experienced
in the past year, it only makes sense that the market would experience a
correction. I welcomed this correction, because I felt it was needed. And it
proved to be just the kind of correction that usually is best for the
market--deep, hard, frightening and short. A lot of the excesses were shaken
out of the stock market, which was healthy, and now the stock market appears
to be resuming its ascent.
JS: I attribute the volatility to the shift from institutional investors
dominating the stock market to individual investors, especially day traders,
comprising the majority of stock market investors. This has resulted in a
dramatic shortening of investors' time horizons as well as a dramatic
increase in investors' expectations. In addition, individual investors are
much more likely to adopt a herd mentality, resulting in mass exoduses from
particular stocks and sectors.
DB: I agree with both Ken and John. Certainly the en masse addition of day
traders and do-it-yourself investors to the stock market has changed the
environment and contributed to recent volatility. However, I believe a
correction was virtually inevitable after such a huge rise in the stock market
over a relatively short period of time.
Q: WHAT IS YOUR OUTLOOK FOR THE STOCK MARKET IN THE COMING MONTHS?
KC: I think the volatility is behind us, and the stock market should
outperform in the second half of the year for several reasons. First of all,
the Federal Reserve is almost finished tightening the money supply--if it
hasn't already. And growth stocks have historically performed best in periods
of economic deceleration with declining interest rates. In addition, we think
the political backdrop is also positive for the stock market. Proposed tax
cuts, such as the elimination of the estate tax, should stimulate the economy
and the stock market. And, of course, corporate fundamentals remain very
strong, which should augur well for equities.
JS: I don't think the volatility is necessarily behind us, and I think the
stock market may turn in a lackluster performance in the coming months. I
believe there is still a good chance that the domestic economy could plunge
into a recession and take the stock market down with it. However, I'm
confident that many value stocks have such low valuations that they can
withstand a recession.
DB: I am optimistic about the stock market for the second half of the year. I
agree with Ken that corporate fundamentals are strong and that the economic
backdrop should be positive for equities. However, I believe that we still
have the specter of rising inflation, as gas prices show no signs of dropping
soon. I think that, in this environment, investors will become increasingly
concerned about valuations and, while they will not abandon growth stocks,
they will flock to those growth stocks that have reasonable prices.
PAST PERFORMANCE IS NO GUARANTEE 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. This article is
distributed for educational purposes and the opinions of the managers should
not be considered investment advice. Equity funds are subject to the basic
stock market risk that a particular security or securities, in general, may
decrease in value. All holdings are as of 6/30/00. PIMCO Growth Fund held JDS
Uniphase (4.11%), Cisco Systems (5.45%), EMC (7.92%) and Nokia (5.99%) in its
portfolio. PIMCO Select Growth Fund held JDS Uniphase (5.30%), Cisco Systems
(5.61%), EMC (6.80%), and Nokia (4.41%) in its portfolio. PIMCO Mid-Cap
Equity Fund held EMC (2.34%) in is portfolio. PIMCO Renaissance Fund held Ace
Limited (5.44%) in its portfolio, as did PIMCO Value Fund (5.14% of its
portfolio). PIMCO Capital Appreciation Fund held Corning (2.03%), Intel
(1.88%), Cisco Systems (1.69%), Tyco (1.54%) and General Electric (2.43%) in
its portfolio.
The S&P 500 Index is an unmanaged index. It is not possible to invest
directly in an unmanaged index.
5
<PAGE>
FUND
SPOTLIGHT
INTRODUCING TWO NEW ADDITIONS TO OUR PIMCO FAMILY OF STOCK FUNDS
PIMCO Global Innovation & Select Growth Funds
[PHOTO]
DENNIS MCKECHNIE, CFA
Co-Manager, PIMCO Global Innovation Fund
[PHOTO]
JIYOUNG KIM, CFA
Co-Manager, PIMCO Global Innovation Fund
[PHOTO]
KEN CORBA, CFA
Portfolio Manager, PIMCO Select Growth Fund
PIMCO GLOBAL INNOVATION FUND
Building on the strength of PIMCO Innovation Fund and its impressive short-
and long-term performance, PIMCO has launched the Global Innovation Fund to
capitalize on the exciting opportunities that exist in technology around the
world. Like its forerunner, Global Innovation is a diversified technology
fund that invests in a broad range of tech companies and non-tech innovators.
International exposure adds an additional level of diversification to the mix.
UNTAPPED POTENTIAL OF GLOBAL TECHNOLOGY Because many countries are only now
beginning to adopt new technologies, the growth potential is enormous. For
example, only 7% of China's 1.2 billion population and 2% of India's 984
million people now have telephones. This represents a vast, untapped market
for cell phones, the infrastructure for which is far cheaper to build than
traditional phone lines. And that's just one industry within this dynamic
sector.
PROVEN TECHNOLOGY EXPERTISE The Fund is managed by Dennis McKechnie,
portfolio manager of PIMCO Innovation Fund. He brings a unique blend of tech
and investment expertise to the job and is a frequent guest on CNN and CNBC.
Co-manager Jiyoung Kim joined PIMCO last year as a senior research analyst on
the Innovation Fund. She has a BS in biochemistry from Harvard and over six
years of aggressive growth stock investment experience. DENNIS MCKECHNIE, CFA
Co-Manager, PIMCO Global Innovation Fund JIYOUNG KIM, CFA Co-Manager, PIMCO
Global Innovation Fund
<TABLE>
<CAPTION>
TOP TEN HOLDINGS (as of 6/30/00)
10 holdings representing 24.3% of total portfolio
-------------------------------------------------
<S> <C>
Juniper Networks Inc. (JNPR) 3.3%
NETWORKING SYSTEMS
-------------------------------------------------
Nortel Networks Corp. (NT) 2.9%
TELECOM EQUIPMENT
-------------------------------------------------
Intel Corp. (INTC) 2.6%
SEMICONDUCTORS & RELATED
-------------------------------------------------
EMC Corp. (EMC) 2.3%
COMPUTER STORAGE PRDCTS
-------------------------------------------------
Cisco Systems Inc. (CSCO) 2.3%
COMPUTER NETWORK PRDCTS
-------------------------------------------------
Redback Networks Inc. (RBAK) 2.2%
NETWORKING SYSTEMS
-------------------------------------------------
i2 Technologies Inc. (ITWO) 2.2%
B-TO-b SOFTWARE
-------------------------------------------------
BEA Systems Inc. (BEAS) 2.2%
E-COMMERCE SOFTWARE
-------------------------------------------------
Dell Computer Corp. (DELL) 2.2%
COMPUTERS & PERIPHERALS
-------------------------------------------------
Veritas Software Corp. (VRTS) 2.1%
STORAGE MGMT. SOFTWARE
-------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
PIMCO SELECT GROWTH FUND
Ken Corba guided PIMCO Growth Fund to exceptional performance in 1999, nearly
doubling the return of the S&P 500. Which holdings were key to such impressive
results? The answer to that question essentially makes up the list of holdings
in the new PIMCO Select Growth Fund--a focused portfolio of 15 to 25 growth
stocks.
TODAY'S LEADING WEALTH-CREATORS The Fund invests in market leaders--large-cap
companies Mr. Corba believes will create wealth for investors, now and for
years to come. These are companies with household names like Johnson &
Johnson and Citigroup, as well as emerging tech power-houses like JDS
Uniphase. Together, they make up a portfolio geared for long-term capital
appreciation.
AN ACCOMPLISHED FUND MANAGER Ken Corba, PIMCO's leading growth expert, brings
over 15 years of experience to the job. In pursuit of the world's greatest
businesses, Mr. Corba follows a proven buy-and-sell process, analyzing each
company on its own merits and concentrating on what he considers the best
opportunities.
A CORE PORTFOLIO HOLDING Large-cap growth companies offer the kind of
stability and capital appreciation potential that form the foundation of a
solid investment portfolio. A concentrated list of such companies offers you
the opportunity to capitalize on the potential rewards of owning a small
number of high-quality companies. That, combined with a low turnover rate,
makes the Fund an attractive core holding for almost any investment portfolio.
For more information, call PIMCO at 1-800-426-0107.
<TABLE>
<CAPTION>
SELECT GROWTH HOLDINGS (as of 6/30/00)
<S> <C>
Corning (GLW) 8.0%
FIBER OPTIC TELECOM EQUIPMENT
---------------------------------------
Genentech Inc. (DNA) 7.6%
BIOTECHNOLOGY
---------------------------------------
American International Group (AIG) 6.9%
INSURANCE/FINANCIAL SERVICES
---------------------------------------
EMC Corp. (EMC) 6.8%
COMPUTER STORAGE PRODUCTS
---------------------------------------
Nortel Networks Corp. (NT) 6.0%
TELECOMMUNICATIONS EQUIPMENT
---------------------------------------
Johnson & Johnson (JNJ) 6.0%
PHARMACEUTICALS
---------------------------------------
Cisco Systems Inc. (CSCO) 5.6%
NETWORKING SYSTEMS
---------------------------------------
Comverse Technology (CMVT) 5.5%
TELECOMMUNICATIONS EQUIPMENT
---------------------------------------
Sun Microsystems Inc. (SUNW) 5.4%
NETWORKING EQUIPMENT
---------------------------------------
Citigroup Inc. (C) 5.3%
FINANCIAL SERVICES
---------------------------------------
JDS Uniphase Corp. (JDSU) 5.3%
FIBER OPTIC TELECOM EQUIPMENT
---------------------------------------
Wal-Mart Stores Inc. (WMT) 5.1%
DISCOUNT RETAILER
---------------------------------------
Morgan Stanley Dean Witter (MWD) 4.9%
FINANCIAL SERVICES
---------------------------------------
Nokia Corp. (NOK) 4.4%
WIRELESS COMMUNICATIONS EQUIPMENT
---------------------------------------
Texas Instruments Inc. (TXN) 4.1%
SEMICONDUCTORS, ELECTRONIC EQUIPMENT
---------------------------------------
Enron Corp. (ENE) 3.8%
ENERGY
---------------------------------------
</TABLE>
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Please see pages 15 and
22 for more detailed information about the Funds' performance and more
complete disclosure. All holdings are subject to change.
6
<PAGE>
TECH
UPDATE
The Technology Sector Stages a Recovery
A REGULAR TECHNOLOGY SECTOR REVIEW AND OUTLOOK FROM DENNIS MCKECHNIE, MANAGER OF
PIMCO INNOVATION AND GLOBAL INNOVATION FUNDS. WITH A DEGREE IN ELECTRICAL
ENGINEERING AND AN MBA FROM THE COLUMBIA BUSINESS SCHOOL, MR. MCKECHNIE IS
EQUALLY AT HOME IN BOTH THE INVESTMENT AND HIGH TECH WORLDS, AND IS MUCH
SOUGHT-AFTER AS A TECHNOLOGY COMMENTATOR BY THE FINANCIAL MEDIA.
[GRAPHIC]
DON'T MISS A MONTH OF INNOVATION!
Have Dennis McKechnie's monthly tech newsletter delivered to your desktop. To
find out how, see the box at right.
The technology sector peaked on March 10, with the NASDAQ Composite Index
well above 5000, and then proceeded to tumble for the next two months. A
variety of factors that were relatively short-term in nature contributed to
this drop, including rising interest rates and stock selling to pay April tax
bills. Then, during the pullback, many investors were forced to sell stock in
order to meet margin calls, which exacerbated the sell-off. Despite pundits'
concerns that the correction would be long term, we started to see a
significant fundamentals-driven recovery in late May.
Technology stocks turned in a strong performance in June, solidifying and
building on the recovery made in May. In the third month within a fiscal
quarter, there are not a lot of public announcements made by companies,
except for early confessions of missed profits. This absence of news flow
always makes month three of a quarter a quietly tenuous period. However, June
proved to be positive for the tech sector because it had the backdrop of an
improving economic picture, as the data and commentary suggest that the odds
of a well-engineered economic deceleration without contraction are increasing.
In the second quarter, we noticed that stocks with varying risk profiles
behaved differently. During the market rout, large, well-known stocks with
strong, stable, dependable growth, withstood the turbulence slightly better
than aggressive, smaller-cap stocks with rapid growth. In late May, when the
recovery began, these larger companies experienced more of a bounce back.
However, we were encouraged to see that, in June, the smaller-cap tech stocks
received a stronger lift. In other words, the move off the bottom broadened.
In true capitalist form, as investors became comfortable that the marginally
better news on the economic front compensated for the additional risk, they
increased their exposure to more aggressive, smaller-cap issues.
Cell phone stocks and semiconductors were strong performers during the
quarter. These stocks weathered the March-May sell-off the best, in some
cases pushing to new highs. However, neither industry received much of a
boost in June, as investors took profits and migrated to "fresher"
situations. And economic data indicating that the long-awaited economic
deceleration has become a reality has caused many investors to view these
industries' strong performance in the fourth and first quarters as a peak. In
addition, both industries suffer from supply and demand questions as capacity
continues to be added.
We are pleased to see the broadening of the tech sector, as tech stocks of
all ages and sizes are participating in the recovery. The external factors
which had bogged down tech stocks from March to May appear to have dissipated
somewhat, and tech could resume its outperformance, as it flaunts growth
rates that are 5-10 times higher than the broad economy. These periods of
recognition of fundamental strength are our favorite periods, and the
greatest endorsement for hands-on tech stock management.
Our outlook for the technology sector for the second half of the year remains
very positive. While we expect the summer doldrums to take hold of the market
in July and early August, we expect a number of buying catalysts will push
the sector higher as we move into the fourth quarter. In addition, we
anticipate a favorable economic backdrop, with the economy decelerating
slowly, which should bode well for tech stocks in the coming six months.
SIGN UP FOR INNOVATION ONLINE
To receive PIMCO's INNOVATION newsletter online, simply click on "Registration"
at the top of our home page at www.pimcofunds.com and fill in the form. Already
registered? Just click on "Preferences" to sign up. We'll send you an e-mail
linking you directly to each new issue as soon as it's available.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The NASDAQ Composite
Index is an unmanaged index and it is not possible to invest directly in an
unmanaged index. Small company stocks generally entail greater risk than
larger company stocks, including higher volatility. The views expressed in
this article are the current opinions of the manager and do not represent the
past or future performance of any PIMCO Fund.
7
<PAGE>
SERVICE
UPDATE
Introducing the New Pimco Funds Web Site
at www.pimcofunds.com
As part of our ongoing commitment to provide you with products and services
that meet the highest standard, we're pleased to introduce our revamped PIMCO
Funds Web site. You'll still find us at the same
address--www.pimcofunds.com--but you'll notice a new, more user-friendly look
and feel.
[GRAPHIC]
You'll find all the content you've come to rely on at www.pimcofunds.com...
and more.
The site has been redesigned to make navigation easier, with intuitive
labeling and graphics that load more quickly. You'll now find it faster to
locate exactly the information you're after.
ENHANCED FUND INFORMATION
Getting the facts you need about any PIMCO Fund is faster and easier than
ever. Now, everything relating to a Fund is conveniently organized in one
place:
- Performance--Class specific, in-depth performance data, including daily
price and performance, month-end numbers and average annual returns.
- Fund Overviews--Highlighting the unique advantages each Fund offers.
- Statistics at a Glance--Including objective, primary portfolio and assets
under management.
- Ratings/Rankings--Current Morningstar ratings and Lipper rankings.
- Portfolio Analysis--Breakdown of Fund holdings, updated monthly.
- Manager Commentary--Managers' investment insight and market analysis.
- Investment Process--Step-by-step explanations of each manager's investment
strategy.
- Media Highlights--Articles and television clips featuring PIMCO Funds,
managers and related topics.
- Literature--Categorized by Fund, to download or order by mail.
TECH INVESTORS TAKE NOTE!
The all-new PIMCO Funds Innovation Center is open for
business at www.pimcofunds.com/
innovationcenter. An invaluable resource designed for tech investors and those
contemplating an investment in this complex, fast-moving sector. For details,
turn to the back cover.
A UNIQUE BOND INVESTING RESOURCE
Look to the PIMCO Funds Bond Center for the latest information about bonds
and bond investing and for analysis of the economy and the bond markets. It's
all provided by PIMCO's renowned team of fixed-income experts, led by Bill
Gross. Regular features include:
- Bill Gross's INVESTMENT OUTLOOK--A monthly newsletter on economic and
interest rate trends and their affect on the bond markets.
-Manager Commentary--Timely investment insight from PIMCO's bond fund managers.
- Sector Strategy White Papers-- In-depth examination of fund managers'
investment strategies.
[GRAPHIC]
Now you can go directly to the Fund facts you need with a few simple clicks
of the mouse.
8
<PAGE>
IN THE
NEWS
BLOOMBERG PROFILES PIMCO AND FINDS IT ...
A Fund Company on the Rise
Traditionally, leading mutual fund firms are recognized for strength in either
the equity market or the bond market. It is relatively rare to find diversified
success that includes both stocks and fixed income. However, in the April 2000
issue of BLOOMBERG PERSONAL FINANCE, PIMCO Funds was the topic of a lengthy
feature article that detailed its achievements in the overall mutual fund
marketplace.
In this article, entitled "PIMCO Rising," PIMCO's move into the ranks of the
preeminent mutual fund firms is accredited to three main points: continual
strength in fixed income, outstanding short- and long-term equity returns,
and a successful business strategy that has enabled investors to choose from
a family of diverse, style-specific products. "We believe PIMCO to be
probably the premier mutual fund company in the world today," one financial
advisor says in the article.
Bond manager Bill Gross is featured not only as a founder of PIMCO, but also for
his fixed-income performance. "He has done very well through a variety of
different types of bond markets without taking on a lot of risk," Sarah Bush of
Morningstar said of Mr. Gross. Equity portfolio managers Dennis McKechnie and
Ken Corba are also singled out for their outstanding performance and solid
investment strategies. In particular, PIMCO Growth, Target and Innovation Funds
were noted for their strength within their respective investment categories. If
you would like to receive a reprint of "PIMCO Rising" please call us at
1-800-426-0107.
"The house that Gross built isn't just about bonds anymore. With $264 billion in
assets and a slew of new equity funds, PIMCO is giving Fidelity and Janus a run
for their money."
-------------------------------------------------------------------------------
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
JUNE 30, 2000.
<TABLE>
<CAPTION>
PIMCO STOCK FUNDS OVERALL 3 YEAR 5 YEAR 10 YEAR
<S> <C> <C> <C> <C>
INNOVATION ***** 5 5 -
TARGET ***** 5 5 -
GROWTH **** 4 4 4
CAPITAL APPRECIATION **** 4 4 -
SELECT GROWTH **** 4 4 -
STOCKSPLUS **** 4 4 -
MID-CAP **** 3 4 -
<CAPTION>
PIMCO BOND FUNDS OVERALL 3 YEAR 5 YEAR 10 YEAR
<S> <C> <C> <C> <C>
LOW DURATION ***** 5 5 5
SHORT-TERM ***** 5 5 5
TOTAL RETURN ***** 5 4 5
FOREIGN BOND ***** 5 5 -
REAL RETURN ***** 5 - -
HIGH YIELD **** 3 5 -
</TABLE>
THE CHART ABOVE IS BASED ON JUNE 30, 2000 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 3,642, 2,328 AND 783 DOMESTIC
EQUITY FUNDS AND 1,684, 1,287 AND 381 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 INNOVATION,
TARGET, GROWTH AND REAL RETURN (BASED ON CLASS C SHARES) 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. Ratings for other share classes may vary.
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.
9
<PAGE>
THE PIMCO FUNDS FAMILY
<TABLE>
<CAPTION>
FUND NAME OBJECTIVE PRIMARY PORTFOLIO COMPOSITION
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GROWTH GROWTH Long-term growth of capital Stocks of larger-capitalized companies
STOCK FUNDS -------------------------------------------------------------------------------------------------
SELECT GROWTH Long-term growth of capital Stocks of larger-capitalized companies
-------------------------------------------------------------------------------------------------
TARGET Capital appreciation Stocks of medium-capitalized companies
-----------------------------------------------------------------------------------------------------------------------
BLEND GROWTH & INCOME Long-term growth of capital, Stocks of larger-capitalized companies
STOCK FUNDS FUND with current income as a
secondary objective
-------------------------------------------------------------------------------------------------
CAPITAL APPRECIATION Growth of capital Stocks of larger-capitalized companies
the manager believes are reasonably
valued
-------------------------------------------------------------------------------------------------
MID-CAP Growth of capital Stocks of medium-capitalized companies
the managerbelieves are reasonably
valued
-----------------------------------------------------------------------------------------------------------------------
VALUE EQUITY INCOME Current income and long-term Stocks of companies with below-average
STOCK FUNDS growth P/Es and above-average dividends
-------------------------------------------------------------------------------------------------
RENAISSANCE Long-term growth of capital Stocks with below-average valuations
and income
-------------------------------------------------------------------------------------------------
VALUE Long-term growth of capital Stocks of larger-capitalized
and income companies with below-average P/Es
-----------------------------------------------------------------------------------------------------------------------
ENHANCED INDEX TAX-EFFICIENT EQUITY Maximum after-tax growth of Stocks of larger-capitalized companies
STOCK FUNDS capital
-------------------------------------------------------------------------------------------------
STOCKSPLUS Total return exceeding the S&P 500 stock index futures backed
S&P 500 Index by a portfolio of short-term,
fixed-income securities
-----------------------------------------------------------------------------------------------------------------------
SECTOR RELATED INNOVATION Capital appreciation Stocks of technology-related companies
STOCK FUNDS -------------------------------------------------------------------------------------------------
GLOBAL INNOVATION Capital appreciation Stocks of U.S. and non-U.S. technology
related companies
-----------------------------------------------------------------------------------------------------------------------
SHORT DURATION SHORT-TERM Maximum current income consistent Money market securities and short-term
BOND FUNDS with preservation of capital and bonds (up to 1 year duration)
daily liquidity
-------------------------------------------------------------------------------------------------
LOW DURATION Maximum total return Short maturity fixed income securities
(1-3 year duration)
-----------------------------------------------------------------------------------------------------------------------
INTERMEDIATE DURATION TOTAL RETURN Maximum total return Intermediate maturity fixed income
BOND FUNDS securities (3-6 year duration)
-------------------------------------------------------------------------------------------------
TOTAL RETURN MORTGAGE Maximum total return Intermediate maturity mortgage-related
fixed income securities (2-6 year
duration)
-----------------------------------------------------------------------------------------------------------------------
INTERNATIONAL FOREIGN BOND Maximum total return Intermediate maturity hedged non-U.S.
BOND FUNDS fixed income securities
(3-7 year duration)
-------------------------------------------------------------------------------------------------
EMERGING MARKETS BOND Maximum total return Emerging market fixed income
securities (0-8 year duration)
-----------------------------------------------------------------------------------------------------------------------
HIGH YIELD BOND FUND HIGH YIELD Maximum total return Higher yielding fixed income securities
(2-6 year duration)
-----------------------------------------------------------------------------------------------------------------------
INFLATION-INDEXED REAL RETURN BOND Maximum real return Inflation-indexed fixed income
BOND FUND securities
-----------------------------------------------------------------------------------------------------------------------
TAX EXEMPT SHORT DURATION High current income exempt Short and intermediate maturity
BOND FUNDS MUNICIPAL INCOME FUND from federal taxes, municipal securities, exempt
preservation of capital federal income tax (0-2 year duration)
-------------------------------------------------------------------------------------------------
MUNICIPAL BOND High current income exempt from Intermediate to long-term maturity
federal taxes, preservation of exempt from federal income tax
capital (3-10 year duration)
-------------------------------------------------------------------------------------------------
CALIFORNIA High current income exempt from Intermediate to long-term
MUNICIPAL BOND federal and California income tax maturity municipal securities
(3-12 year duration)
-------------------------------------------------------------------------------------------------
CALIFORNIA INTERMEDIATE High current income exempt Intermediate matuity municipal
MUNICIPAL BOND from federal and California securities (3-7 year duration)
income tax
-------------------------------------------------------------------------------------------------
NEW YORK High current income exempt Intermediate to long-term maturity
MUNICIPAL BOND from federal and New York income municipal securities (3-12 years)
tax
-----------------------------------------------------------------------------------------------------------------------
STOCK AND BOND FUNDS STRATEGIC BALANCED Maximum total return Intermediate maturity fixed-income
securities and S&P 500 stock index
derivatives (0-6 years duration)
-------------------------------------------------------------------------------------------------
</TABLE>
10 For more information on the risks associated with these Funds, see page 24.
<PAGE>
PIMCO FUNDS ANNUAL REPORT
MULTI-MANAGER
SERIES
Dear Shareholder:
The first half of 2000 could serve as a textbook illustration of stock market
volatility. After reaching record highs in the first quarter, both the Dow
Jones and the tech-focused NASDAQ swooned and then stumbled through the
second quarter, before starting to recover lost ground as the quarter ended.
In the bond market things were almost as bumpy.
This unprecedented volatility has presented a challenge for many investors,
some of whom may have lost sight of the stock market's inherent risks,
especially in the context of the longest bull market in history. In times
like these that try investors' souls--and patience--it's more important
than ever to remember a few time-honored principles...
Maintain a diversified investment portfolio. Have a healthy respect for risk.
Keep your focus on the long term. Or as Bill Gross--PIMCO's oft-quoted bond
chief--has said "Set your sights on a horizon and sail until you get there."
Those who can stick with these precepts will be able to ride out short-term
market gyrations and ultimately reach their investment goals. And at PIMCO,
we're committed to providing investors with the kind of high quality
investment vehicles that can help them get there.
How have our Funds fared during these volatile times? Well, I'm pleased to
report that they have weathered the storms well, overcoming the extreme
market fluctuations to report strong relative performance over the last six
months. You see, our Fund Managers keep their sights firmly planted on the
horizon too.
I encourage you to review the fund information and commentary on the
following pages carefully. And once again, I'd like to thank you for the
trust you've placed in us. If you have any questions regarding your
investment, call us at 1-800-426-0107. Or you can visit our Web site at
www.pimcofunds.com.
Sincerely,
/s/ Stephen Treadway
Stephen Treadway
President
July 31, 2000
OF INTEREST On May 5, 2000, Allianz AG completed the acquisition of
approximately 70% of the outstanding partnership interests in PIMCO Advisors
L.P. ("PIMCO Advisors"), of which PIMCO is a subsidiary partnership. As a
result of this transaction, PIMCO Advisors, and its subsidiaries, are now
controlled by Allianz AG, a leading provider of financial services,
particularly in Europe. PIMCO remains operationally independent, continues
to operate under its existing name, and now leads the global fixed-income
investment efforts of Allianz AG. Key employees at each of PIMCO Advisors'
investment units, including PIMCO's Bill Gross, have signed long-term
employment contracts and have significant profit-sharing and retention
arrangements to ensure continuity of the investment process and staff. With
the addition of PIMCO Advisors, the Allianz Group manages assets of
approximately $650 billion, including more than 300 mutual funds for retail
and institutional clients around the world.
11
<PAGE>
PIMCO FUNDS FINANCIAL INFORMATION
We are pleased to present an in-depth review of the PIMCO Multi-Manager
Series Funds as of June 30, 2000. 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 13-23 FUND SUMMARIES*
A summary of a Fund's performance record and portfolio composition, and a
review from the Fund's investment manager.
PAGES 25-37 SCHEDULE OF INVESTMENTS*
The Schedule of Investments includes a listing of securities in the Fund's
portfolio as of June 30, 2000, including the number of shares or principal
amount and value as of that date.
<TABLE>
<CAPTION>
SCHEDULE OF
FUND NAME FUND SUMMARY INVESTMENTS
<S> <C> <C>
Capital Appreciation Fund Page 13 Page 25
Equity Income Fund Page 14 Page 26
Global Innovation Page 15 Page 27
Growth Fund Page 16 Page 28
Innovation Fund Page 17 Page 29
Mid-Cap Fund Page 18 Page 30
Renaissance Fund Page 19 Page 31
Select Growth Page 20 Page 32
Target Fund Page 21 Page 33
Tax-Efficient Equity Fund Page 22 Page 34
Value Fund Page 23 Page 37
</TABLE>
PAGES 38-39 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 40-41 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 42-43 STATEMENTS OF OPERATIONS
This statement lists a Fund's income, expenses, and gains and losses on
securities and currency transactions, as well as appreciation or
depreciation from portfolio holdings.
PAGES 44-46 STATEMENTS OF CHANGES IN NET ASSETS
This statement 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 47-51 NOTES TO FINANCIAL STATEMENTS
A description of the significant accounting policies of the Fund, and more
detailed information about the schedules and tables that appear in the report.
*The Fund Summaries and Schedule of Investments for many Funds include a summary
of the Fund's allocation of investments to certain "Related Industries,"such as
"Technology," "Communication," "Financial & Business Services," and "Health
Care." These Related Industries represent broad groupings of loosely-associated
industries and sectors developed by PIMCO Advisors for informational purposes,
and are not intended to show a Fund's investment allocation to (or concentration
in) a particular industry. (Individual industries are normally classified for
these purposes by reference to Standard Industrial Classification (SIC) codes
developed by the U.S. Office of Management and Budget.) Funds that invest a
substantial portion of their assets in Related Industries (such as "Technology")
may be subject to greater levels of risk and volatility because companies in
Related Industries are often subject to similar business risks and regulatory
burdens, and their securities may react similarly to economic, market, political
and other developments.
12
<PAGE>
PIMCO CAPITAL APPRECIATION FUND
June 30, 2000
OBJECTIVE
Growth of capital
PORTFOLIO
Primarily common stocks of companies
with market capitalizations of
at least $1 billion that have improving
fundamentals and whose stock
is reasonably valued by the market
FUND INCEPTION DATE
3/8/91
TOTAL NET ASSETS
$793.8 million
NUMBER OF SECURITIES
IN THE PORTFOLIO
94 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital Management
-------------------------------------------------------------------------------
PERFORMANCE*
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
D SHARES Lipper
S&P 500 Multi-Cap
Index Core Fund Avg.
-------------------------------------------------------------
<S> <C> <C> <C>
1 YEAR 22.84% 7.25% 11.54%
3 YEARS 21.45% 19.67% 16.27%
5 YEARS 23.85% 23.80% 19.33%
INCEPTION 19.44% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
[GRAPHICS]
<TABLE>
<CAPTION>
Pimco Capital Appreciation D S&P 500 Index
<S> <C> <C>
03/31/1991 10,000 10,000
04/30/1991 9,705 10,024
05/31/1991 10,182 10,457
06/30/1991 9,630 9,978
07/31/1991 10,316 10,443
08/31/1991 10,636 10,691
09/30/1991 10,486 10,512
10/31/1991 10,842 10,653
11/30/1991 10,523 10,224
12/31/1991 11,982 11,393
01/31/1992 11,863 11,181
02/29/1992 11,988 11,327
03/31/1992 11,590 11,106
04/30/1992 11,561 11,432
05/31/1992 11,606 11,488
06/30/1992 11,237 11,317
07/31/1992 11,561 11,780
08/31/1992 11,270 11,539
09/30/1992 11,563 11,674
10/31/1992 11,962 11,714
11/30/1992 12,659 12,113
12/31/1992 12,831 12,262
01/31/1993 13,263 12,364
02/28/1993 13,099 12,533
03/31/1993 13,700 12,797
04/30/1993 13,360 12,488
05/31/1993 13,962 12,822
06/30/1993 14,181 12,860
07/31/1993 13,975 12,808
08/31/1993 14,482 13,294
09/30/1993 14,903 13,192
10/31/1993 14,935 13,465
11/30/1993 14,632 13,337
12/31/1993 15,043 13,498
01/31/1994 15,568 13,957
02/28/1994 15,352 13,578
03/31/1994 14,581 12,986
04/30/1994 14,631 13,152
05/31/1994 14,615 13,368
06/30/1994 14,199 13,041
07/31/1994 14,541 13,469
08/31/1994 14,971 14,021
09/30/1994 14,565 13,678
10/31/1994 14,895 13,986
11/30/1994 14,209 13,476
12/31/1994 14,345 13,676
01/31/1995 14,331 14,031
02/28/1995 15,042 14,578
03/31/1995 15,697 15,008
04/30/1995 16,232 15,450
05/31/1995 16,821 16,067
06/30/1995 17,544 16,440
07/31/1995 18,512 16,986
08/31/1995 18,686 17,028
09/30/1995 19,421 17,747
10/31/1995 19,052 17,683
11/30/1995 19,631 18,460
12/31/1995 19,596 18,815
01/31/1996 20,249 19,456
02/29/1996 21,010 19,636
03/31/1996 21,043 19,825
04/30/1996 21,301 20,117
05/31/1996 21,833 20,636
06/30/1996 21,786 20,715
07/31/1996 20,683 19,800
08/31/1996 21,567 20,217
09/30/1996 22,883 21,355
10/31/1996 23,452 21,944
11/30/1996 25,151 23,603
12/31/1996 24,750 23,135
01/31/1997 26,185 24,581
02/28/1997 25,907 24,773
03/31/1997 24,954 23,756
04/30/1997 25,742 25,174
05/31/1997 27,377 26,706
06/30/1997 28,540 27,903
07/31/1997 31,615 30,123
08/31/1997 30,420 28,436
09/30/1997 32,254 29,993
10/31/1997 31,664 28,991
11/30/1997 32,461 30,333
12/31/1997 33,091 30,854
01/31/1998 32,558 31,195
02/28/1998 34,939 33,445
03/31/1998 36,868 35,158
04/30/1998 36,865 35,511
05/31/1998 36,240 34,901
06/30/1998 37,780 36,319
07/31/1998 36,692 35,932
08/31/1998 30,693 30,737
09/30/1998 32,405 32,706
10/31/1998 33,886 35,366
11/30/1998 36,065 37,510
12/31/1998 38,763 39,671
01/31/1999 40,015 41,330
02/28/1999 38,406 40,045
03/31/1999 39,328 41,648
04/30/1999 40,673 43,261
05/31/1999 39,266 42,239
06/30/1999 41,626 44,584
07/31/1999 40,077 43,192
08/31/1999 39,280 42,977
09/30/1999 38,278 41,800
10/31/1999 40,950 44,445
11/30/1999 42,903 45,349
12/31/1999 47,382 48,020
01/31/2000 46,070 45,608
02/29/2000 49,723 44,744
03/31/2000 52,120 49,121
04/30/2000 49,816 47,643
05/31/2000 49,074 46,665
06/30/2000 51,130 47,816
</TABLE>
* PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. These returns represent
the blended performance of the Fund's Class D shares (for the period from
4/8/98) and the prior performance of the Fund's institutional shares (for
the period from 3/8/91), adjusted, as necessary, to reflect Class D shares
different operating expenses. Equity funds are subject to the basic stock
market risk that a particular security or securities, in general, may
decrease in value. SEE PAGE 24 FOR FOOTNOTES, WHICH WILL INCLUDE ADDITIONAL
DETAILS.
-------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
---------------------------------------------------------
<S> <C>
GENERAL ELECTRIC CO. 2.4%
Capital Goods
---------------------------------------------------------
EXXON MOBIL CORP. 2.1%
Energy
---------------------------------------------------------
CORNING, INC. 2.0%
Technology
---------------------------------------------------------
PFIZER, INC. 2.0%
Health Care
---------------------------------------------------------
INTEL CORP. 1.9%
Technology
---------------------------------------------------------
NORTEL NETWORKS CORP. 1.7%
Technology
---------------------------------------------------------
CISCO SYSTEMS, INC. 1.7%
Technology
---------------------------------------------------------
VIACOM, INC. `B' 1.7%
Consumer Services
---------------------------------------------------------
SDL, INC. 1.7%
Technology
---------------------------------------------------------
CIENA CORP. 1.7%
Technology
---------------------------------------------------------
TOP TEN TOTAL 18.9%
---------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
----------------------------------------------------------
<S> <C>
TECHNOLOGY 28.9%
----------------------------------------------------------
ENERGY 17.0%
----------------------------------------------------------
FINANCIAL & BUSINESS SERVICES 10.5%
----------------------------------------------------------
HEALTH CARE 10.0%
----------------------------------------------------------
CONSUMER DISCRETIONARY 7.1%
----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
----------------------------------------------------------
<S> <C>
COMMON STOCK 92.9%
----------------------------------------------------------
CASH EQUIVALENTS 7.1%
----------------------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
-------------------------------------------------------------------------------
PIMCO Capital Appreciation Fund posted strong returns for the twelve months
ended June 30, 2000. The Fund's Class D shares returned 22.84% during this
period, outpacing the S&P 500 Index return of 7.25%, as well as its Lipper
Average return of 11.54% for the same period.
The technology sector greatly contributed to the Fund's performance. These
stocks dominated the market in the past year, due to an increase in corporate
spending as companies realized technology's ability to boost profit margins.
The technology sector proved extremely attractive to investors because it
offered the greatest earnings growth potential compared to other sectors.
Many areas of technology benefited from this surge in investment. For
instance, Intel Corp., a leading maker of chips for PCs, posted returns of
more than 100% over the past year. The company benefited from a continuation
of the global economic recovery, which fueled demand for semiconductors, as
well as greater pricing power for the entire industry.
Another positive contributor to the Fund's performance was Cisco Systems, the
networking giant. Cisco is one of the greatest beneficiaries of the Internet
explosion, and as companies rush to participate in Web commerce, strong
demand for Internet infrastructure and optical networking capabilities will
benefit Cisco. As the largest supplier of networking solutions, Cisco remains
the market leader in this industry.
The Fund's exposure to the energy sector also boosted its performance this
year. The Fund's second largest holding, Exxon Mobil, posted strong returns.
The company benefited from significantly higher prices for oil and gas. It
announced in May that it had completed the sale of it's California refinery
and fuels terminal and the assignment of California supply arrangements to
Valero Energy Corporation. This sale, coupled with the high demand for oil,
helped appreciate Exxon's stock price over the past year.
One disappointment for the Fund this year was the retail industry. Rising
interest rates and a general lack of enthusiasm on the part of investors hurt
this sector. The Fund's exposure to this area remains small, however, as
concerns about a slowing economy should continue to weaken retail sales in
the coming months.
Looking ahead, the manager is optimistic that the Fund is positioned to
continue its strong performance. The manager is confident that, in a rising
interest rate environment, investors will place more emphasis on valuations.
In such a climate, the manager's philosophy of purchasing growing but
reasonably priced stocks should bode well for the Fund.
13
<PAGE>
PIMCO EQUITY INCOME FUND
June 30, 2000
OBJECTIVE
Current income as a primary
objective and long-term growth
of capital as a secondary
objective
PORTFOLIO
Income-producing common stocks of
companies with market capitalizations
of more than $2 billion
FUND INCEPTION DATE
3/8/91
TOTAL NET ASSETS
$69.9 million
NUMBER OF SECURITIES IN THE PORTFOLIO
40 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors (as of 5/8/00)
-------------------------------------------------------------------------------
PERFORMANCE*
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
D SHARES Lipper
S&P 500 Equity Inc.
Index Fund Avg.
----------------------------------------------------------
<S> <C> <C> <C>
1 YEAR -13.15% 7.25% -6.71%
3 YEARS 5.76% 19.67% 7.07%
5 YEARS 13.35% 23.80% 13.58%
INCEPTION 12.84% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO Equity Income D S&P 500 Index
<S> <C> <C>
03/31/1991 10,000 10,000
04/30/1991 10,066 10,024
05/31/1991 10,632 10,457
06/30/1991 10,259 9,978
07/31/1991 10,830 10,443
08/31/1991 10,987 10,691
09/30/1991 11,044 10,512
10/31/1991 11,118 10,653
11/30/1991 10,671 10,224
12/31/1991 11,607 11,393
01/31/1992 11,891 11,181
02/29/1992 12,189 11,327
03/31/1992 11,987 11,106
04/30/1992 12,199 11,432
05/31/1992 12,216 11,488
06/30/1992 12,223 11,317
08/31/1992 12,391 11,539
09/30/1992 12,493 11,674
10/31/1992 12,505 11,714
11/30/1992 12,879 12,113
12/31/1992 13,266 12,262
01/31/1993 13,330 12,364
02/28/1993 13,603 12,533
03/31/1993 13,910 12,797
04/30/1993 13,633 12,488
05/31/1993 13,733 12,822
06/30/1993 13,972 12,860
07/31/1993 13,945 12,808
08/31/1993 14,432 13,294
09/30/1993 14,416 13,192
10/31/1993 14,528 13,465
11/30/1993 14,377 13,337
12/31/1993 14,332 13,498
01/31/1994 14,803 13,957
02/28/1994 14,479 13,578
03/31/1994 13,896 12,986
04/30/1994 14,001 13,152
05/31/1994 14,083 13,368
06/30/1994 13,880 13,041
07/31/1994 14,333 13,469
08/31/1994 14,915 14,021
09/30/1994 14,636 13,678
10/31/1994 14,804 13,986
11/30/1994 14,006 13,476
12/31/1994 14,045 13,676
01/31/1995 14,499 14,031
02/28/1995 14,967 14,578
03/31/1995 15,394 15,008
04/30/1995 15,788 15,450
05/31/1995 16,364 16,067
06/30/1995 16,412 16,440
07/31/1995 16,981 16,986
08/31/1995 17,215 17,028
09/30/1995 17,663 17,747
10/31/1995 17,589 17,683
11/30/1995 18,187 18,460
12/31/1995 18,672 18,815
01/31/1996 18,946 19,456
02/29/1996 19,192 19,636
03/31/1996 19,570 19,825
04/30/1996 20,057 20,117
05/31/1996 20,374 20,636
06/30/1996 20,411 20,715
07/31/1996 19,466 19,800
08/31/1996 20,127 20,217
09/30/1996 20,815 21,355
10/31/1996 21,281 21,944
11/30/1996 22,878 23,603
12/31/1996 22,593 23,135
01/31/1997 23,085 24,581
02/28/1997 23,744 24,773
03/31/1997 22,942 23,756
04/30/1997 23,772 25,174
05/31/1997 25,254 26,706
06/30/1997 25,958 27,903
07/31/1997 27,600 30,123
08/31/1997 26,968 28,436
09/30/1997 28,641 29,993
10/31/1997 27,751 28,991
11/30/1997 28,893 30,333
12/31/1997 29,567 30,854
01/31/1998 29,673 31,195
02/28/1998 31,411 33,445
03/31/1998 32,884 35,158
04/30/1998 32,393 35,511
05/31/1998 32,198 34,901
06/30/1998 31,509 36,319
07/31/1998 30,252 35,932
08/31/1998 26,126 30,737
09/30/1998 28,046 32,706
10/31/1998 29,804 35,366
11/30/1998 31,840 37,510
12/31/1998 31,951 39,671
01/31/1999 31,258 41,330
02/28/1999 30,226 40,045
03/31/1999 30,480 41,648
04/30/1999 33,885 43,261
05/31/1999 34,607 42,239
06/30/1999 35,354 44,584
07/31/1999 34,106 43,192
08/31/1999 33,175 42,977
09/30/1999 32,107 41,800
10/31/1999 31,834 44,445
11/30/1999 30,854 45,349
12/31/1999 31,242 48,020
01/31/2000 29,246 45,608
02/29/2000 26,093 44,744
03/31/2000 29,749 49,121
04/30/2000 30,272 47,643
05/31/2000 29,867 46,665
06/30/2000 30,709 47,816
</TABLE>
* PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. These returns represent
the blended performance of the Fund's Class D shares (for the period from
4/8/98) and the prior performance of the Fund's institutional shares (for
the period from 3/8/91), adjusted, as necessary, to reflect Class D shares
different operating expenses. The Fund may invest up to 15% in foreign
securities, which may entail greater risk due to foreign economic and
political developments. SEE PAGE 24 FOR FOOTNOTES, WHICH WILL INCLUDE
ADDITIONAL DETAILS.
-------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
--------------------------------------------------
<S> <C>
EMC CORP. 4.4%
Technology
--------------------------------------------------
CALPINE CAPITAL TRUST II 3.7%
Utilities
--------------------------------------------------
CITIGROUP, INC. 3.5%
Financial & Business Services
--------------------------------------------------
GENERAL MOTORS CORP. `H' 3.2%
Consumer Discretionary
--------------------------------------------------
COX COMMUNICATIONS, INC. 3.1%
Communications
--------------------------------------------------
UTILICORP UNITED 3.1%
Energy
--------------------------------------------------
TYCO INTERNATIONAL LTD. 3.1%
Capital Goods
--------------------------------------------------
NEXTEL COMM. 2.9%
(5.250% due 01/15/2010)
Technology
--------------------------------------------------
JABIL CIRCUIT, INC. 2.9%
Technology
--------------------------------------------------
DUKE ENERGY CORP. 2.8%
Utilities
--------------------------------------------------
TOP TEN TOTAL 32.7%
--------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
--------------------------------------------------
<S> <C>
TECHNOLOGY 19.9%
--------------------------------------------------
FINANCIAL & BUSINESS SERVICES 19.4%
--------------------------------------------------
ENERGY 17.0%
--------------------------------------------------
HEALTH CARE 11.1%
--------------------------------------------------
COMMUNICATIONS 10.6%
--------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
--------------------------------------------------
<S> <C>
COMMON STOCK 97.1%
--------------------------------------------------
CONVERTIBLE BONDS & NOTES 2.9%
--------------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
-------------------------------------------------------------------------------
For the one-year period ended June 30, 2000, PIMCO Equity Income Fund posted
a return of -13.15% for Class D shares.
With investors yearning for high earnings growth, the technology sector
dominated the market dramatically this year to the exclusion of virtually all
other sectors. Prior to its management change in May, the Fund had very
little exposure to the tech sector, which hurts the Fund's performance.
However, recent additions to the portfolio in this sector did help to boost
performance. For instance, EMC Corp., the leading provider of data storage
solutions, benefited from increased corporate demand for computing storage
due to greater data traffic and Internet use.
The Fund's exposure to the energy sector contributed to its performance.
Energy stocks benefited from significantly higher prices for oil and gas.
Ultramar Diamond Shamrock, an independent petroleum refining company and one
of the Fund's top ten holdings, reported strong results this year. This news,
along with the ever-increasing demand for power generation, helped advance
the stock's price significantly.
The financial services sector also helped the Fund's performance, despite
the rising interest rate environment. Morgan Stanley Dean Witter, the
financial services giant, experienced strong earnings growth in the second
half of the year, benefiting from an increase in equity underwriting and
merger activity. The company also benefited from dynamic growth in its global
business.
One disappointment for the Fund this year was Fortune Brands, a holding
company involved in a variety of businesses including home products, golf
products, liquor and office products. As concern about rising interest rates
and a slowing economy increased, investors shied away from retailers, and
the company's performance suffered. Fortune Brands has since been removed
from the portfolio.
The manager's outlook for the Fund is optimistic. While the Fund's
philosophy of investing in dividend-paying, reasonably valued securities
remains intact, the Fund's increased exposure to technology issues could
contribute positively to the Fund's performance going forward.
14
<PAGE>
PIMCO GLOBAL INNOVATION FUND
June 30, 2000
OBJECTIVE
Capital appreciation; no consideration
given to income
PORTFOLIO
Common stocks of U.S. and non-U.S.
technology-related companies with
market capitalizations of more than
$200 million
FUND INCEPTION DATE
12/31/99
TOTAL NET ASSETS
$104.7 million
NUMBER OF SECURITIES
IN THE PORTFOLIO
60 (not including short-term instruments)
PIMCO ADVISORS
INSTITUTIONAL MANAGER
PIMCO Equity Advisors
-------------------------------------------------------------------------------
PERFORMANCE*
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
D SHARES
NASDAQ Composite
Index
------------------------------------------------------------------------------
<S> <C> <C>
INCEPTION 89.40% --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
[GRAPHICS]
<TABLE>
<CAPTION>
PIMCO Global Innovation A NASDAQ Composite
<S> <C> <C>
12/31/1999 10,000 10,000
01/31/2000 10,920 9,498
02/29/2000 19,200 9,318
03/31/2000 20,169 10,229
04/30/2000 17,458 9,922
05/31/2000 16,069 9,718
06/30/2000 18,939 9,958
</TABLE>
* PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The adjusted returns
above include the effect of paying the applicable sales charges. The Fund
may invest up to 15% in foreign securities, which may entail greater risk
due to foreign economic and political developments. The portfolio had a
substantial exposure to technology, which greatly contributed to the funds
performance for the Inception period ended 6/30/00. During this time the
technology market produced historically high returns. The Fund is less than
1-year old; therefore the return was cumulative. All equity funds are
subject to the basic risks that the equity securities in their portfolios
will decline in value due to factors effecting equity markets generally or
particular industries or issuers represented in the respective portfolio.
Because this Fund concentrates on investments in the technology sector this
fund may be subject to additional risk and additional volatility compared
to a diversified equity fund. SEE PAGE 24 FOR FOOTNOTES, WHICH INCLUDE
ADDITIONAL DETAILS.
-------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
--------------------------------------------------
<S> <C>
JUNIPER NETWORKS, INC. 3.3%
Technology
--------------------------------------------------
NORTEL NETWORKS CORP. 2.9%
Technology
--------------------------------------------------
INTEL CORP. 2.6%
Technology
-------------------------------------------------
EMC CORP. 2.3%
Technology
--------------------------------------------------
CISCO SYSTEMS, INC. 2.3%
Technology
--------------------------------------------------
REDBACK NETWORKS, INC. 2.2%
Technology
--------------------------------------------------
I2 TECHNOLOGIES, INC. 2.2%
Technology
--------------------------------------------------
BEA SYSTEMS, INC. 2.2%
Technology
--------------------------------------------------
DELL COMPUTER CORP. 2.2%
Technology
--------------------------------------------------
VERITAS SOFTWARE CORP. 2.1%
Technology
--------------------------------------------------
TOP TEN TOTAL 24.3%
--------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 4 RELATED
INDUSTRIES % of Total Investments
--------------------------------------------------
<S> <C>
TECHNOLOGY 73.8%
--------------------------------------------------
HEALTH CARE 10.3%
--------------------------------------------------
COMMUNICATIONS 7.2%
--------------------------------------------------
CAPITAL GOODS 1.2%
--------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-------------------------------------------------
<S> <C>
COMMON STOCK 92.5%
-------------------------------------------------
CASH EQUIVALENTS 7.5%
-------------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
-------------------------------------------------------------------------------
PIMCO Global Innovation Fund was seeded on December 31, 1999. The Fund has
turned in a stellar performance for the six-month period ended June 30, 2000,
returning 89.40% for Class D shares.
A continuation of the global economic recovery fueled the demand for
semiconductors and other technological commodities. Applied Materials, a
semiconductor manufacturer, experienced revenue growth as a function of
increased global demand. The semiconductor industry finally achieved some
pricing power after several years of extreme pricing pressure, and as a
result, Applied Materials' stock price rose significantly over the past
year.
Bookham Technology, a British manufacturer of fiber optic components that
increase the capacity of fiber optic cables to transport voice and data, also
contributed to the Fund's performance. The company benefited from the
explosion in demand for telecommunications capabilities. Investors were
attracted to Bookham because it has the potential to revolutionize the fiber
optics industry since its silicon-based products offer significant advantages
over the competition. Deregulation in Europe should encourage the build-out
of fiber-optics-based networks by new competitive local exchange carriers
(CLECs) and Bookham could experience high growth as a result.
The Fund's exposure to biotechnology also enhanced its performance during the
year, as investors have been attracted to their robust product pipelines. For
instance, Teva Pharmaceuticals, the largest producer of branded and generic
pharmaceuticals in Israel, saw its stock price propelled upward as a result
of higher sales. It also recently acquired a Dutch pharmaceutical company,
which allowed it to substantially increase its presence in Europe. With
product offerings in all major therapeutic categories and a greater presence
globally, Teva is poised to continue its rapid growth.
Looking ahead, the manager is optimistic that the Fund will continue its
outperformance. The manager believes that technology could turn in a strong
performance in the second half of the year, fueled by strong corporate
fundamentals and a favorable economic environment.
15
<PAGE>
PIMCO GROWTH FUND
June 30, 2000
OBJECTIVE
Long-term growth of capital;
income is incidental
PORTFOLIO
Common stocks of companies
with market capitalizations
of at least $5 billion
FUND INCEPTION DATE
2/24/84
TOTAL NET ASSETS
$2.9 billion
NUMBER OF SECURITIES
IN THE PORTFOLIO
41 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
-------------------------------------------------------------------------------
PERFORMANCE*
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
D SHARES Lipper
S&P 500 Large-Cap Growth
Index Fund Avg.
--------------------------------------------------------------
<S> <C> <C> <C>
1 YEAR 32.26% 7.25% 26.43%
5 YEARS 26.00% 23.80% 25.59%
10 YEARS 18.80% 17.80% 18.47%
INCEPTION 19.57% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
[GRAPHICS]
<TABLE>
<CAPTION>
PIMCO Growth D S&P 500 Index
<S> <C> <C>
02/29/1984 10,000 10,000
03/31/1984 10,257 10,180
04/30/1984 10,324 10,251
05/31/1984 9,970 9,708
06/30/1984 10,207 9,912
07/31/1984 10,284 9,763
08/31/1984 11,110 10,866
09/30/1984 11,036 10,877
10/31/1984 11,134 10,910
11/30/1984 11,057 10,801
12/31/1984 11,283 11,082
01/31/1985 12,087 11,947
02/28/1985 12,189 12,095
03/31/1985 12,239 12,104
04/30/1985 12,182 12,093
05/31/1985 12,837 12,790
07/31/1985 13,224 12,958
08/31/1985 13,157 12,848
09/30/1985 12,780 12,449
10/31/1985 13,306 13,022
11/30/1985 14,041 13,920
12/31/1985 14,836 14,588
01/31/1986 15,186 14,670
02/28/1986 16,414 15,768
03/31/1986 17,182 16,647
04/30/1986 17,205 16,459
05/31/1986 17,943 17,335
06/30/1986 18,264 17,628
07/31/1986 17,859 16,642
08/31/1986 18,878 17,877
09/30/1986 17,747 16,399
10/31/1986 18,608 17,345
11/30/1986 18,938 17,767
12/31/1986 18,409 17,313
01/31/1987 20,885 19,646
02/28/1987 22,249 20,422
03/31/1987 22,683 21,012
04/30/1987 22,642 20,825
05/31/1987 22,866 21,006
06/30/1987 23,859 22,067
07/31/1987 24,698 23,186
08/31/1987 25,415 24,050
09/30/1987 25,305 23,524
10/31/1987 19,569 18,457
11/30/1987 18,232 16,936
12/31/1987 19,959 18,225
01/31/1988 19,739 18,992
02/29/1988 20,975 19,877
03/31/1988 20,694 19,263
04/30/1988 20,878 19,477
05/31/1988 21,062 19,646
06/30/1988 22,317 20,548
07/31/1988 21,911 20,470
08/31/1988 20,771 19,774
09/30/1988 21,735 20,616
10/31/1988 21,890 21,189
11/30/1988 21,498 20,886
12/31/1988 21,992 21,252
01/31/1989 23,448 22,807
02/28/1989 23,007 22,239
03/31/1989 23,994 22,758
04/30/1989 25,736 23,939
05/31/1989 27,654 24,908
06/30/1989 27,305 24,766
07/31/1989 29,659 27,003
08/31/1989 30,563 27,532
09/30/1989 31,166 27,419
10/31/1989 30,221 26,783
11/30/1989 30,841 27,329
12/31/1989 30,449 27,985
01/31/1990 28,223 26,107
02/28/1990 28,932 26,444
03/31/1990 29,661 27,145
04/30/1990 29,492 26,466
05/31/1990 32,624 29,047
06/30/1990 33,188 28,849
07/31/1990 32,597 28,757
08/31/1990 30,198 26,157
09/30/1990 28,888 24,883
10/31/1990 28,838 24,776
11/30/1990 30,306 26,377
12/31/1990 30,770 27,113
01/31/1991 32,272 28,295
02/28/1991 34,682 30,318
03/31/1991 35,674 31,052
04/30/1991 35,335 31,126
05/31/1991 37,279 32,471
06/30/1991 35,433 30,984
07/31/1991 37,843 32,428
08/31/1991 39,739 33,196
09/30/1991 39,306 32,642
10/31/1991 40,615 33,079
11/30/1991 39,031 31,746
12/31/1991 43,976 35,378
01/31/1992 42,942 34,720
02/29/1992 43,251 35,171
03/31/1992 42,300 34,485
04/30/1992 42,059 35,499
05/31/1992 42,719 35,673
06/30/1992 41,395 35,142
07/31/1992 42,691 36,578
08/31/1992 41,081 35,829
09/30/1992 42,338 36,250
10/31/1992 43,020 36,375
11/30/1992 44,934 37,614
12/31/1992 45,226 38,075
01/31/1993 46,371 38,394
02/28/1993 45,406 38,917
03/31/1993 46,446 39,738
04/30/1993 44,388 38,778
05/31/1993 46,674 39,815
06/30/1993 47,085 39,932
07/31/1993 47,137 39,771
08/31/1993 48,730 41,280
09/30/1993 49,836 40,963
10/31/1993 49,697 41,811
11/30/1993 48,852 41,412
12/31/1993 49,809 41,913
01/31/1994 52,170 43,338
02/28/1994 51,221 42,162
03/31/1994 48,921 40,324
04/30/1994 48,251 40,841
05/31/1994 49,100 41,511
06/30/1994 47,892 40,493
07/31/1994 49,070 41,823
08/31/1994 51,514 43,538
09/30/1994 50,468 42,474
10/31/1994 52,330 43,428
11/30/1994 49,850 41,846
12/31/1994 49,810 42,467
01/31/1995 50,164 43,568
02/28/1995 51,664 45,266
03/31/1995 52,816 46,602
04/30/1995 54,543 47,974
05/31/1995 56,250 49,892
06/30/1995 58,506 51,051
07/31/1995 60,542 52,743
08/31/1995 61,080 52,876
09/30/1995 62,418 55,107
10/31/1995 62,637 54,910
11/30/1995 64,228 57,321
12/31/1995 63,958 58,425
01/31/1996 66,855 60,414
02/29/1996 68,085 60,974
03/31/1996 68,187 61,561
04/30/1996 69,053 62,468
05/31/1996 70,628 64,079
06/30/1996 69,710 64,324
07/31/1996 65,659 61,482
08/31/1996 67,347 62,778
09/30/1996 72,452 66,312
10/31/1996 73,640 68,140
11/30/1996 77,896 73,291
12/31/1996 75,723 71,839
01/31/1997 79,373 76,328
02/28/1997 77,190 76,926
03/31/1997 73,045 73,765
04/30/1997 76,135 78,169
05/31/1997 81,693 82,928
06/30/1997 83,972 86,643
07/31/1997 92,856 93,537
08/31/1997 87,034 88,297
09/30/1997 92,674 93,133
10/31/1997 90,033 90,023
11/30/1997 90,816 94,190
12/31/1997 92,932 95,807
01/31/1998 95,014 96,867
02/28/1998 102,235 103,853
03/31/1998 109,156 109,171
04/30/1998 111,252 110,269
05/31/1998 109,761 108,374
06/30/1998 118,410 112,776
07/31/1998 116,303 111,575
08/31/1998 95,287 95,444
09/30/1998 103,748 101,558
10/31/1998 107,960 109,818
11/30/1998 116,133 116,474
12/31/1998 130,046 123,186
01/31/1999 140,111 128,337
02/28/1999 134,254 124,349
03/31/1999 140,779 129,324
04/30/1999 137,218 134,332
05/31/1999 130,096 131,161
06/30/1999 140,504 138,440
07/31/1999 134,588 134,118
08/31/1999 134,898 133,450
09/30/1999 134,264 129,796
10/31/1999 145,247 138,010
11/30/1999 155,007 140,816
12/31/1999 183,188 149,110
01/31/2000 175,549 141,621
02/29/2000 193,613 138,938
03/31/2000 202,693 152,530
04/30/2000 184,471 147,940
05/31/2000 169,068 144,904
06/30/2000 185,805 148,476
</TABLE>
* PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Class D shares commenced
operations after the inception date shown (11/99). The total return for the
periods shown (period beginning before the inception of Class D shares)
reflects the total return of the Fund's oldest class of shares (Class C),
restated to reflect the operating expenses for Class D shares. The Fund may
invest up to 15% in foreign securities, which may entail greater risk due to
foreign economic and political developments. SEE PAGE 24 FOR FOOTNOTES,
WHICH INCLUDE ADDITIONAL DETAILS.
-------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
--------------------------------------------------
<S> <C>
EMC CORP. 7.9%
Technology
--------------------------------------------------
NOKIA CORP. SP- ADR 6.0%
Communications
-------------------------------------------------
CISCO SYSTEMS, INC. 5.5%
Technology
-------------------------------------------------
NORTEL NETWORKS CORP. 4.7%
Technology
-------------------------------------------------
MORGAN STANLEY, DEAN WITTER,
DISCOVER AND CO. 4.3%
Financial & Business Services
-------------------------------------------------
JDS UNIPHASE CORP. 4.1%
Technology
-------------------------------------------------
CITIGROUP, INC. 3.6%
Financial & Business Services
-------------------------------------------------
ENRON CORP. 3.3%
Energy
-------------------------------------------------
SUN MICROSYSTEMS, INC. 3.1%
Technology
-------------------------------------------------
OMNICOM GROUP 3.1%
Financial & Business Services
-------------------------------------------------
TOP TEN TOTAL 45.6%
-------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
--------------------------------------------------
<S> <C>
TECHNOLOGY 43.7%
--------------------------------------------------
FINANCIAL & BUSINESS SERVICES 18.7%
--------------------------------------------------
HEALTH CARE 12.1%
--------------------------------------------------
COMMUNICATIONS 8.8%
--------------------------------------------------
CONSUMER DISCRETIONARY 7.5%
--------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-------------------------------------------------
<S> <C>
COMMON STOCK 98.9%
-------------------------------------------------
CASH EQUIVALENTS 1.1%
-------------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
-------------------------------------------------------------------------------
PIMCO Growth Fund posted stellar returns for the one-year period ended June 30,
2000. The Fund's Class D shares returned 32.26%, significantly outpacing both
the S&P 500 Index's return of 7.25% and its Lipper Average return of 26.43%.
Technology was the best performing sector for the Fund over the past year.
Although this sector began to turn downwards in the second calendar quarter, it
dominated the market for the previous three quarters. The high-growth technology
sector overwhelmingly outperformed all other sectors over the past year. In
particular, fiber optics and wireless telecommunications saw explosive growth
during this period. For example, JDS Uniphase, a maker of fiber optic components
for telecom networks, experienced a 460% growth since June 30 of last year. The
rush to add public network bandwidth to handle growing Internet and data traffic
has spawned rapid development of optical networking technology, which in turn
has driven demand for optical components to dramatic proportions. As the largest
independent supplier of this equipment, JDS Uniphase has benefited enormously
from this increased demand.
Another standout for the Fund was Cisco Systems, a company that creates
hardware and software solutions for engaging in networking on the Internet. As
the information superhighway grows faster than ever, and companies race to
participate in commerce over the Internet, Cisco benefits from this strong
demand for its Internet infrastructure equipment and its optical networking
capabilities. Being the largest supplier of this product, Cisco exhibits major
market dominance in this industry.
The Fund also benefited from its exposure to the financial industry.
Citigroup Corp., the banking and financial services company, contributed to the
Fund's performance despite the rising interest rate environment. The stock's
price increased over 33% since June of last year while its net revenue and
income increased significantly as well. These results reflect volume-related
growth in commissions and higher income at Salomon Smith Barney, who accounts
for around 26% of the company's earnings.
Looking ahead, the manager believes the economic climate will be positive
for growth stocks, as inflation appears to be under control and there is a
strong possibility of significant tax cuts in the near future. The manager is
optimistic that PIMCO Growth Fund is poised to continue its outperformance in
this environment.
16
<PAGE>
PIMCO INNOVATION FUND
June 30,2000
OBJECTIVE
Capital appreciation; no
consideration given to income
PORTFOLIO
Common stocks of technology-related
companies with market capitalizations
of more than $200 million
FUND INCEPTION DATE
12/22/94
TOTAL NET ASSETS
$5.5 billion
NUMBER OF SECURITIES IN THE PORTFOLIO
52 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
-------------------------------------------------------------------------------
PERFORMANCE*
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
D SHARES Lipper
S&P 500 Science & Tech.
Index Fund Avg.
------------------------------------------------------------
<S> <C> <C> <C>
1 YEAR 115.85% 7.25% 84.03%
3 YEARS 72.88% 19.67% 53.47%
5 YEARS 48.67% 23.80% 35.99%
INCEPTION 49.91% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
[GRAPHICS]
<TABLE>
<CAPTION>
PIMCO Innovation D S&P 500 Index
<S> <C> <C>
12/31/1994 10,000 10,000
01/31/1995 9,920 10,259
02/28/1995 10,551 10,659
03/31/1995 10,872 10,974
04/30/1995 11,343 11,297
05/31/1995 11,613 11,748
06/30/1995 12,896 12,021
07/31/1995 14,098 12,420
08/31/1995 14,429 12,451
09/30/1995 14,769 12,977
10/31/1995 14,589 12,930
11/30/1995 14,990 13,498
12/31/1995 14,533 13,758
01/31/1996 14,338 14,226
02/29/1996 15,035 14,358
03/31/1996 14,912 14,496
05/31/1996 17,846 15,089
06/30/1996 17,117 15,147
07/31/1996 14,687 14,478
08/31/1996 15,579 14,783
09/30/1996 17,702 15,615
10/31/1996 17,579 16,046
11/30/1996 18,635 17,258
12/31/1996 17,962 16,917
01/31/1997 18,950 17,974
02/28/1997 16,808 18,114
03/31/1997 15,705 17,370
04/30/1997 15,955 18,407
05/31/1997 17,962 19,528
06/30/1997 18,129 20,403
07/31/1997 20,812 22,026
08/31/1997 20,313 20,792
09/30/1997 21,821 21,931
10/31/1997 20,417 21,198
11/30/1997 20,323 22,180
12/31/1997 19,584 22,560
01/31/1998 20,358 22,810
02/28/1998 22,857 24,455
03/31/1998 23,719 25,707
04/30/1998 25,433 25,966
05/31/1998 23,819 25,520
06/30/1998 26,848 26,556
07/31/1998 27,004 26,273
08/31/1998 21,619 22,475
09/30/1998 25,612 23,915
10/31/1998 26,586 25,860
11/30/1998 29,561 27,427
12/31/1998 35,183 29,008
01/31/1999 41,520 30,221
02/28/1999 36,952 29,281
03/31/1999 40,075 30,453
04/30/1999 39,578 31,632
05/31/1999 38,608 30,885
06/30/1999 43,396 32,600
07/31/1999 42,979 31,582
08/31/1999 46,276 31,425
09/30/1999 46,937 30,564
10/31/1999 53,462 32,498
11/30/1999 62,785 33,159
12/31/1999 84,597 35,112
01/31/2000 84,056 33,349
02/29/2000 117,409 32,717
03/31/2000 106,807 35,917
04/30/2000 90,006 34,837
05/31/2000 78,035 34,122
06/30/2000 93,674 34,963
</TABLE>
* PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Class D shares commenced
operations after the inception date shown (12/94). The total return for the
periods shown (period beginning before the inception of Class D shares)
reflects the total return of the Fund's oldest class of shares (Class C),
restated to reflect the operating expenses for Class D shares. The portfolio
had a substantial exposure to technology, which greatly contributed to the
funds performance for the Inception period ended 6/30/00. During this time
the technology market produced historically high returns. Equity funds are
subject to the basic stock market risk that a particular security or
securities, in general, may decrease in value. Because this Fund concentrates
on investments in the technology sector this Fund may be subject to
additional risk and additional volatility compared to a diversified equity
fund. SEE PAGE 24 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS.
-------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
---------------------------------------------------
<S> <C>
MICRON TECHNOLOGY, INC. 4.2%
Technology
---------------------------------------------------
SIEBEL SYSTEMS, INC. 3.9%
Technology
---------------------------------------------------
INTEL CORP. 3.6%
Technology
---------------------------------------------------
CISCO SYSTEMS, INC. 3.5%
Technology
---------------------------------------------------
E-TEK DYNAMICS, INC. 3.4%
Technology
---------------------------------------------------
CIENA CORP. 3.3%
Technology
---------------------------------------------------
ORACLE CORP. 3.1%
Technology
---------------------------------------------------
GEMSTAR INTERNATIONAL GROUP LTD. 3.1%
Consumer Discretionary
---------------------------------------------------
JUNIPER NETWORKS, INC. 3.0%
Technology
---------------------------------------------------
NORTEL NETWORKS CORP. 3.0%
Technology
---------------------------------------------------
TOP TEN TOTAL 34.1%
---------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 4 RELATED
INDUSTRIES % of Total Investments
--------------------------------------------------
<S> <C>
TECHNOLOGY 80.5%
--------------------------------------------------
COMMUNICATIONS 9.2%
--------------------------------------------------
HEALTH CARE 4.3%
--------------------------------------------------
CONSUMER DISCRETIONARY 4.0%
--------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
--------------------------------------------------
<S> <C>
COMMON STOCK 97.9%
--------------------------------------------------
CASH EQUIVALENTS 2.1%
--------------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
-------------------------------------------------------------------------------
PIMCO Innovation Fund posted stellar results for the one-year period ended June
30, 2000, with Class D shares returning 115.85%. The Fund was able to
significantly outperform both the S&P 500 Index and its Lipper Average return
during this period.
The technology sector continued to lead the stock market, pushing the
Fund's performance higher this year. It led the market because it offered
investors the greatest earnings growth potential than any other sector. A
variety of areas within technology showed tremendous strength, including
telecommunications and software. Ericsson, a manufacturer of advanced systems
and products for wired and mobile communications, is the number one provider
of wireless infrastructure in the world. Its stock rose over 140% this year
due to the increase in cell phone demand and subscriptions stimulated by
cheaper service. Furthermore, it has benefited from recent technological
advances in cell phone handset technology, which has shortened upgrade cycles
for cell phones.
Another standout performer for the Fund was Veritas Software, a company
that makes software to provide enterprise data storage management solutions.
Rising over 400% since last June, Veritas Software is a product in great demand
as companies seek effective, economical ways to store greater amounts of data.
The company experienced a surge in sales growth in the past year as corporate
Internet use and the need for data storage increased.
The biotechnology sector also enhanced the Fund's performance during
this year. Investors showed renewed interest in this area because of its
exciting product offerings. For example, MedImmune is a company that is focused
on using advances in immunology and other biological sciences to develop
important new products that address significant medical needs. It benefited from
better-than-expected prescription trends for its products over the past year. As
a result, the company saw its stock price rise over 200% since last June. Its
most important drug, Synagis, is used for the treatment of respiratory problems
in premature infants. The market opportunity and growth potential for this
company are huge, because we believe that biotech companies have strong product
pipelines which will boost their prices in the years to come.
The manager's outlook for the technology sector for the second half of the
year remains very positive, as he anticipates that the favorable economic
backdrop will remain in place and corporate fundamentals should continue to
be robust.
17
<PAGE>
PIMCO MID-CAP FUND
June 30, 2000
OBJECTIVE
Growth of capital
PORTFOLIO
Primarily common stocks of
companies with market
capitalizations of more than
$500 million (excluding the
largest 200 companies) that
have improving fundamentals
and whose stock is reasonably
valued by the market
FUND INCEPTION DATE
8/26/91
TOTAL NET ASSETS
$1.1 billion
NUMBER OF SECURITIES IN THE PORTFOLIO
77 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital Management
-------------------------------------------------------------------------------
PERFORMANCE*
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
D SHARES Russell Lipper
Mid-Cap Mid-Cap Core
Index Fund Avg.
--------------------------------------------------------------------------------
<S> <C> <C> <C>
1 YEAR 34.24% 12.65% 37.60%
3 YEARS 19.13% 16.16% 20.94%
5 YEARS 21.64% 18.74% 20.59%
INCEPTION 18.37% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
[GRAPHICS]
<TABLE>
<CAPTION>
PIMCO Mid-Cap D Russell Mid-Cap Index
<S> <C> <C>
10/31/1991 10,307 10,145
11/30/1991 10,013 9,726
12/31/1991 11,316 10,816
01/31/1992 11,325 11,019
02/29/1992 11,432 11,272
03/31/1992 11,086 10,984
04/30/1992 11,009 11,070
05/31/1992 11,016 11,142
06/30/1992 10,721 10,961
07/31/1992 11,012 11,419
08/31/1992 10,686 11,156
09/30/1992 11,035 11,388
10/31/1992 11,392 11,666
11/30/1992 12,074 12,254
12/31/1992 12,306 12,583
01/31/1993 12,758 12,835
03/31/1993 12,860 13,267
04/30/1993 12,504 12,916
05/31/1993 13,035 13,326
06/30/1993 13,434 13,476
07/31/1993 13,265 13,541
08/31/1993 13,917 14,143
09/30/1993 14,286 14,198
10/31/1993 14,136 14,209
11/30/1993 13,737 13,880
12/31/1993 14,191 14,383
01/31/1994 14,480 14,779
02/28/1994 14,455 14,578
03/31/1994 13,924 13,957
04/30/1994 13,970 14,053
05/31/1994 13,712 14,072
06/30/1994 13,251 13,656
07/31/1994 13,546 14,124
08/31/1994 14,251 14,794
09/30/1994 13,882 14,432
10/31/1994 14,157 14,543
11/30/1994 13,483 13,901
12/31/1994 13,800 14,082
01/31/1995 13,663 14,371
02/28/1995 14,490 15,115
03/31/1995 14,951 15,547
04/30/1995 15,284 15,782
05/31/1995 15,806 16,300
06/30/1995 16,733 16,848
07/31/1995 18,306 17,666
08/31/1995 18,442 17,937
09/30/1995 18,699 18,342
10/31/1995 18,407 17,932
11/30/1995 18,755 18,824
12/31/1995 18,873 18,933
01/31/1996 19,240 19,332
02/29/1996 19,701 19,786
03/31/1996 19,941 20,073
04/30/1996 20,351 20,641
05/31/1996 20,688 20,953
06/30/1996 20,261 20,638
07/31/1996 19,285 19,361
08/31/1996 20,331 20,283
09/30/1996 21,751 21,285
10/31/1996 21,889 21,455
11/30/1996 23,214 22,762
12/31/1996 23,189 22,530
01/31/1997 24,132 23,373
02/28/1997 23,721 23,338
03/31/1997 23,036 22,346
04/30/1997 23,522 22,902
05/31/1997 25,140 24,573
06/30/1997 26,353 25,377
07/31/1997 28,787 27,494
08/31/1997 28,738 27,194
09/30/1997 30,755 28,747
10/31/1997 30,095 27,628
11/30/1997 30,294 28,286
12/31/1997 30,992 29,067
01/31/1998 30,430 28,520
02/28/1998 32,211 30,750
03/31/1998 33,191 32,208
04/30/1998 33,661 32,289
05/31/1998 32,501 31,291
06/30/1998 33,109 31,724
07/31/1998 32,155 30,211
08/31/1998 26,415 25,377
09/30/1998 28,320 27,019
10/31/1998 29,093 28,862
11/30/1998 30,693 30,227
12/31/1998 33,410 31,998
01/31/1999 31,960 31,944
02/28/1999 30,221 30,880
03/31/1999 30,366 31,847
04/30/1999 31,918 34,200
05/31/1999 31,844 34,101
06/30/1999 33,191 35,305
07/31/1999 32,262 34,334
08/31/1999 31,175 33,445
09/30/1999 30,579 32,267
10/31/1999 31,607 33,797
11/30/1999 33,418 34,770
12/31/1999 37,585 37,830
01/31/2000 36,672 36,578
02/29/2000 44,637 39,391
03/31/2000 46,462 41,648
04/30/2000 43,577 39,678
05/31/2000 42,636 38,626
06/30/2000 44,550 39,770
</TABLE>
* PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. These returns represent
the blended performance of the Fund's Class D shares (for the period from
4/8/98) and the prior performance of the Fund's institutional shares (for
the period from 3/8/91), adjusted, as necessary, to reflect Class D shares
different operating expenses. The Fund invests in medium companies, which
may entail greater risk than larger companies, including higher volatility.
SEE PAGE 24 FOR FOOTNOTES, WHICH WILL INCLUDE ADDITIONAL DETAILS.
-------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
-------------------------------------------------------------
<S> <C>
ALLERGAN, INC. 1.9%
Health Care
-------------------------------------------------------------
INTEGRATED DEVICE TECHNOLOGY, INC. 1.8%
Technology
-------------------------------------------------------------
TEKTRONIX, INC. 1.8%
Technology
-------------------------------------------------------------
WATERS CORP. 1.8%
Capital Goods
-------------------------------------------------------------
BROCADE COMM. SYSTEMS, INC. 1.7%
Technology
-------------------------------------------------------------
CIENA CORP. 1.6%
Technology
-------------------------------------------------------------
IDEC PHARMACEUTICALS CORP. 1.6%
Health Care
-------------------------------------------------------------
ADC TELECOMMUNICATION, INC. 1.6%
Communications
-------------------------------------------------------------
DENDRITE INTERNATIONAL, INC. 1.6%
Technology
-------------------------------------------------------------
APACHE CORP. 1.6%
Energy
-------------------------------------------------------------
TOP TEN TOTAL 17.0%
-------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
------------------------------------------------------------
<S> <C>
TECHNOLOGY 31.5%
------------------------------------------------------------
FINANCIAL & BUSINESS SERVICES 17.0%
------------------------------------------------------------
ENERGY 16.7%
------------------------------------------------------------
HEALTH CARE 5.9%
------------------------------------------------------------
CONSUMER DISCRETIONARY 5.0%
------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-----------------------------------------------------------
<S> <C>
COMMON STOCK 93.7%
-----------------------------------------------------------
CASH EQUIVALENTS 6.3%
-----------------------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
-------------------------------------------------------------------------------
For the one-year period ended June 30, 2000, PIMCO Mid-Cap Fund posted a
return of 34.24%, significantly outperforming the Russell Mid-Cap Index.
The technology sector contributed to the Fund's strong performance. This
sector proved extremely attractive to investors because of its high earnings
growth and solid fundamentals. A variety of areas within technology showed
strength at different times during the year, including semiconductor
manufacturers, business-to-business Internet companies, telecommunications
providers and software companies.
The energy sector also contributed to the Fund's performance over the past
year. Apache Corp., an independent gas and oil exploration company, saw its
stock price soar over the past year, benefiting from rising oil and gas
prices. As a result of a recent acquisition, the company was able to increase
its oil and gas production to meet greater demand. With energy prices showing
no signs of retreating, this company should continue to perform well in the
coming months.
The biotechnology sector also enhanced the Fund's performance during
this period. Investors were attracted to biotech companies because of their
strong product pipelines. In addition, the industry is benefiting from a strong
demographic trend--the aging of Baby Boomers--which has increased demand for
pharmaceutical products. Allergan Inc., the Fund's largest holding and a
provider of eye care and specialty pharmaceutical products, benefited from
having a large share of a growing market--ocular pharmaceuticals.
Fourth-largest holding Waters Corporation also had a substantial impact on the
Fund's performance. The company, which manufactures equipment for the
biotechnology industry, enjoyed higher revenues as a result of increased sales
of its equipment, as biotechnological research continues to expand to new
frontiers.
One disappointment for the Fund this year was the retail industry.
Rising interest rates and a general lack of enthusiasm on the part of investors
hurt this sector. The Fund's exposure to this area remains small, however, as
concerns about a slowing economy should continue to weaken retail sales in the
coming months.
Looking ahead, the manager believes that investors will pay more
attention to valuation as a result of the recent market correction and rising
interest rates. In addition, the manager is optimistic that mid-cap stocks in
general and PIMCO Mid-Cap Fund in particular will continue to outperform the
stock market given the positive economic climate.
18
<PAGE>
PIMCO RENAISSANCE FUND
June 30, 2000
OBJECTIVE
Long-term growth of capital and income
PORTFOLIO
Primarily common stocks of companies
with below-average valuations
whose business fundamentals
are expected to improve
FUND INCEPTION DATE
4/18/88
TOTAL NET ASSETS
$478.2 million
NUMBER OF SECURITIES
IN THE PORTFOLIO
60 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
-------------------------------------------------------------------------------
PERFORMANCE*
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
D SHARES Lipper Multi-
Russell 1000 Cap Value
Value Index Fund Avg.
----------------------------------------------------------------
<S> <C> <C> <C>
1 YEAR 3.56% -8.92% -3.99%
5 YEARS 20.63% 17.79% 14.20%
10 YEARS 15.10% 15.24% 12.90%
INCEPTION 13.84% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
[GRAPHICS]
<TABLE>
<CAPTION>
PIMCO Renaissance D Russell 1000 Value Index
<S> <C> <C>
04/30/1988 10,000 10,000
05/31/1988 10,000 10,145
06/30/1988 10,232 10,625
07/31/1988 10,200 10,628
08/31/1988 10,062 10,419
10/31/1988 10,329 11,002
11/30/1988 10,275 10,868
12/31/1988 10,614 11,000
01/31/1989 10,932 11,754
02/28/1989 10,877 11,568
03/31/1989 10,976 11,822
04/30/1989 11,264 12,307
05/31/1989 11,586 12,797
06/30/1989 11,674 12,748
07/31/1989 11,898 13,608
09/30/1989 12,122 13,812
10/31/1989 11,895 13,319
11/30/1989 11,883 13,472
12/31/1989 11,886 13,770
01/31/1990 11,304 12,912
02/28/1990 11,304 13,238
03/31/1990 11,597 13,373
04/30/1990 11,247 12,852
05/31/1990 11,948 13,919
06/30/1990 11,896 13,603
07/31/1990 11,567 13,484
08/31/1990 10,780 12,298
09/30/1990 10,011 11,703
10/31/1990 9,600 11,543
11/30/1990 9,934 12,343
12/31/1990 10,118 12,657
01/31/1991 10,444 13,227
02/28/1991 11,070 14,106
03/31/1991 11,338 14,315
04/30/1991 11,457 14,421
05/31/1991 12,062 14,959
06/30/1991 11,639 14,329
07/31/1991 12,064 14,929
08/31/1991 12,555 15,201
09/30/1991 12,757 15,089
10/31/1991 13,025 15,339
11/30/1991 12,623 14,552
12/31/1991 13,583 15,771
01/31/1992 13,827 15,796
02/29/1992 14,098 16,183
03/31/1992 13,833 15,948
04/30/1992 13,847 16,635
05/31/1992 13,997 16,718
06/30/1992 13,839 16,614
07/31/1992 14,154 17,255
08/31/1992 13,976 16,728
09/30/1992 14,120 16,959
10/31/1992 14,092 16,975
11/30/1992 14,451 17,532
12/31/1992 14,749 17,949
01/31/1993 14,985 18,471
02/28/1993 14,860 19,121
03/31/1993 15,425 19,685
04/30/1993 15,299 19,432
05/31/1993 15,663 19,823
06/30/1993 15,979 20,260
07/31/1993 16,345 20,487
08/31/1993 17,400 21,226
09/30/1993 17,690 21,260
10/31/1993 17,944 21,246
11/30/1993 17,492 20,807
12/31/1993 18,024 21,202
01/31/1994 18,545 22,005
02/28/1994 18,342 21,252
03/31/1994 17,332 20,462
04/30/1994 17,215 20,854
05/31/1994 17,143 21,094
06/30/1994 16,742 20,589
07/31/1994 17,165 21,230
08/31/1994 17,969 21,839
09/30/1994 17,948 21,115
10/31/1994 17,904 21,409
11/30/1994 17,170 20,544
12/31/1994 17,237 20,781
01/31/1995 17,281 21,420
02/28/1995 17,665 22,267
03/31/1995 18,145 22,756
04/30/1995 18,486 23,475
05/31/1995 18,531 24,463
06/30/1995 18,998 24,794
07/31/1995 19,937 25,658
08/31/1995 20,160 26,020
09/30/1995 20,813 26,961
10/31/1995 20,873 26,693
11/30/1995 21,874 28,045
12/31/1995 22,144 28,750
01/31/1996 22,905 29,646
02/29/1996 23,206 29,870
03/31/1996 23,395 30,378
04/30/1996 23,792 30,494
05/31/1996 24,348 30,876
06/30/1996 24,400 30,901
07/31/1996 23,364 29,733
08/31/1996 24,272 30,584
09/30/1996 25,474 31,799
10/31/1996 26,352 33,029
11/30/1996 27,692 35,424
12/31/1996 27,753 34,972
01/31/1997 28,763 36,667
02/28/1997 28,616 37,206
03/31/1997 27,894 35,868
04/30/1997 29,070 37,374
05/31/1997 30,871 39,464
06/30/1997 32,485 41,157
07/31/1997 35,353 44,253
08/31/1997 34,507 42,678
09/30/1997 37,023 45,255
10/31/1997 35,313 43,993
11/30/1997 36,692 45,937
12/31/1997 37,726 47,278
01/31/1998 37,749 46,612
02/28/1998 40,601 49,749
03/31/1998 42,184 52,793
04/30/1998 43,142 53,147
05/31/1998 42,250 52,360
06/30/1998 42,563 53,031
07/31/1998 41,694 52,098
08/31/1998 34,294 44,346
09/30/1998 35,497 46,891
10/31/1998 37,034 50,525
11/30/1998 39,375 52,880
12/31/1998 42,115 54,678
01/31/1999 44,760 55,115
02/28/1999 42,576 54,338
03/31/1999 44,505 55,463
04/30/1999 46,765 60,643
05/31/1999 45,353 59,976
06/30/1999 46,818 61,715
07/31/1999 47,047 59,907
08/31/1999 45,556 57,684
09/30/1999 42,139 55,665
10/31/1999 41,882 58,872
11/30/1999 43,373 58,413
12/31/1999 46,284 58,693
01/31/2000 44,312 56,780
02/29/2000 41,498 52,561
03/31/2000 46,739 58,973
04/30/2000 48,422 58,289
05/31/2000 50,005 58,901
06/30/2000 48,485 56,209
</TABLE>
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Class D shares commenced
operations after the inception date shown (4/88). The total return for the
periods shown (period beginning before the inception of Class D shares)
reflects the total return of the Fund's oldest class of shares (Class C),
restated to reflect the operating expenses for Class D shares. The Fund may
invest up to 15% in foreign securities, which may entail greater risk due to
foreign economic and political developments. SEE PAGE 24 FOR FOOTNOTES,
WHICH WILL INCLUDE ADDITIONAL DETAILS.
-------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
----------------------------------------------------------
<S> <C>
FOUNDATION HEALTH SYSTEMS, INC. `A' 5.8%
Health Care
----------------------------------------------------------
ACE LTD. 5.4%
Financial & Business Services
----------------------------------------------------------
WASHINGTON MUTUAL, INC. 4.8%
Financial & Business Services
----------------------------------------------------------
TUPPERWARE CORP. 4.3%
Consumer Discretionary
----------------------------------------------------------
NIAGARA MOHAWK HOLDINGS, INC. 4.0%
Utilities
----------------------------------------------------------
CNH GLOBAL NV 3.9%
Capital Goods
----------------------------------------------------------
AETNA, INC. 3.4%
Health Care & Business Services
----------------------------------------------------------
R & B FALCON CORP. 3.3%
Energy
----------------------------------------------------------
ARROW ELECTRONICS, INC. 2.7%
Technology
----------------------------------------------------------
SUIZA FOODS CORP. 2.6%
Consumer Staples
----------------------------------------------------------
TOP TEN TOTAL 40.2%
----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
---------------------------------------------------------
<S> <C>
FINANCIAL & BUSINESS SERVICES 21.9%
---------------------------------------------------------
CONSUMER STAPLES 12.4%
---------------------------------------------------------
HEALTH CARE 11.6%
---------------------------------------------------------
UTILITIES 8.7%
---------------------------------------------------------
ENERGY 8.5%
---------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
--------------------------------------------------------
<S> <C>
COMMON STOCK 95.3%
--------------------------------------------------------
CASH EQUIVALENTS 3.8%
--------------------------------------------------------
CONVERTIBLE BONDS & NOTES 0.9%
--------------------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
-------------------------------------------------------------------------------
PIMCO Renaissance Fund posted strong relative returns for the one-year period
ended June 30, 2000. The Fund's Class D shares returned 3.56%, outperforming
the Russell 1000 Value Index return of -8.92% and the Lipper Multi-Cap Value
Fund Average return of -3.99% for the same period.
The technology sector contributed to the Fund's performance this year. The
Fund investing in a number of cyclical technology companies, such as
semiconductor manufacturers and electronics distributors, that exhibited low
valuations early in this period. Micron Technology, a leading maker of chips
for PCs, contributed to the Fund's performance for much of the year, as the
demand for semiconductors outpaced supply. Arrow Electronics, the world's
largest distributor of electronic components and computer products to
industrial and commercial customers, was another standout performer. It
benefited from the global economic recovery, which boosted demand for its
products. The company's global distribution network spans the world's three
dominant electronic markets--North America, Europe, and the Asia/Pacific
region. Furthermore, it is poised to continue its growth given the strong
global economy.
The property and casualty (P&C) industry also boosted the Fund's returns.
The industry was finally able to gain pricing power in the past year, as it
shed its weakest players and finally increased its extremely narrow profit
margins. As a result, we added fundamentally strong P&C insurers, such as Ace
Ltd., that we expected would benefit from the industry consolidation. Ace,
which boasts a strong balance sheet and an exceptional management team,
outperformed.
The financial services sector was a disappointment for the Fund. Companies
such as Washington Mutual and Federal Home Loan Management suffered in the
first half of 2000 as a result of rising interest rates and signs that the
economy was slowing. With profit margins being squeezed and fewer home
mortgage originations, these companies proved unattractive to investors.
Looking ahead, the manager is optimistic that PIMCO Renaissance Fund will
continue its relative outperformance, given the positioning of its portfolio
and its philosophy of investing in low valuation stocks with an expectation
for positive price appreciation. In addition, the manager is hopeful that, in
the coming months, investors will once again favor value stocks.
19
<PAGE>
PIMCO SELECT GROWTH FUND
June 30, 2000
OBJECTIVE
Long-term growth of capital;
income is incidental
PORTFOLIO
Common stocks of companies with market
capitalizations of at least $10 billion
FUND INCEPTION DATE
12/28/94
TOTAL NET ASSETS
$16.9 million
NUMBER OF SECURITIES
IN THE PORTFOLIO
16 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
-------------------------------------------------------------------------------
PERFORMANCE*
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
D SHARES Lipper
S&P 500 Large-Cap
Index Growth Fund Avg.
---------------------------------------------------------------
<S> <C> <C> <C>
1 YEAR 12.68% 7.25% 26.43%
3 YEARS 26.06% 19.67% 27.69%
5 YEARS 23.32% 23.80% 25.59%
INCEPTION 24.73% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
[GRAPHICS]
<TABLE>
<CAPTION>
PIMCO Select Growth D S&P 500 Index
<S> <C> <C>
12/31/1994 10,000 10,000
01/31/1995 10,067 10,259
02/28/1995 10,373 10,659
03/31/1995 10,669 10,974
04/30/1995 11,076 11,297
06/30/1995 11,819 12,021
07/31/1995 12,335 12,420
08/31/1995 12,460 12,451
09/30/1995 12,806 12,977
10/31/1995 12,731 12,930
11/30/1995 12,957 13,498
12/31/1995 12,744 13,758
01/31/1996 13,231 14,226
02/29/1996 13,534 14,358
03/31/1996 13,477 14,496
05/31/1996 14,135 15,089
06/30/1996 13,892 15,147
07/31/1996 12,944 14,478
08/31/1996 13,432 14,783
09/30/1996 14,350 15,615
10/31/1996 14,561 16,046
11/30/1996 15,436 17,258
12/31/1996 14,973 16,917
01/31/1997 15,705 17,974
02/28/1997 15,331 18,114
03/31/1997 14,525 17,370
04/30/1997 15,116 18,407
05/31/1997 16,334 19,528
06/30/1997 16,827 20,403
07/31/1997 18,466 22,026
08/31/1997 17,314 20,792
09/30/1997 18,445 21,931
10/31/1997 17,930 21,198
11/30/1997 18,161 22,180
12/31/1997 18,692 22,560
01/31/1998 19,118 22,810
02/28/1998 20,596 24,455
03/31/1998 21,978 25,707
04/30/1998 22,413 25,966
05/31/1998 22,112 25,520
06/30/1998 23,773 26,556
07/31/1998 23,405 26,273
08/31/1998 19,398 22,475
09/30/1998 21,047 23,915
10/31/1998 21,901 25,860
11/30/1998 23,535 27,427
12/31/1998 26,263 29,008
01/31/1999 28,642 30,221
02/28/1999 27,356 29,281
03/31/1999 28,948 30,453
04/30/1999 28,928 31,632
05/31/1999 27,713 30,885
06/30/1999 29,919 32,600
07/31/1999 29,404 31,582
08/31/1999 29,263 31,425
09/30/1999 27,580 30,564
10/31/1999 28,664 32,498
11/30/1999 30,060 33,159
12/31/1999 32,507 35,112
01/31/2000 31,018 33,349
02/29/2000 32,048 32,717
03/31/2000 32,657 35,917
04/30/2000 32,811 34,837
05/31/2000 30,366 34,122
06/30/2000 33,709 34,963
</TABLE>
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. These returns represent
the blended performance of the Fund's Class D shares (for the period from
4/1/00) and the prior performance of the Fund's institutional shares (for
the period from 12/28/94), adjusted, as necessary, to reflect Class D shares
different operating expenses. The Fund concentrates its portfolio holdings
and therefore may entail greater risk than a fully diversified stock fund
and should be considered as only part of a diversified portfolio. The Fund
may invest up to 25% in foreign securities, which may entail greater risk
due to foreign economic and political developments. SEE PAGE 24 FOR
FOOTNOTES, WHICH INCLUDE ADDITIONAL DETAILS.
-------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
--------------------------------------------------------
<S> <C>
CORNING, INC. 8.0%
Technology
--------------------------------------------------------
GENENTECH, INC. 7.6%
Health Care
--------------------------------------------------------
AMERICAN INTERNATIONAL GROUP, INC. 6.9%
Financial & Business Services
--------------------------------------------------------
EMC CORP. 6.8%
Technology
--------------------------------------------------------
NORTEL NETWORKS CORP. 6.0%
Technology
--------------------------------------------------------
JOHNSON & JOHNSON 6.0%
Health Care
--------------------------------------------------------
CISCO SYSTEMS, INC. 5.6%
Technology
--------------------------------------------------------
COMVERSE TECHNOLOGY, INC. 5.5%
Technology
--------------------------------------------------------
SUN MICROSYSTEMS, INC. 5.4%
Technology
--------------------------------------------------------
CITIGROUP, INC. 5.3%
Financial & Business Services
--------------------------------------------------------
TOP TEN TOTAL 63.1%
--------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
----------------------------------------------------
<S> <C>
TECHNOLOGY 46.6%
----------------------------------------------------
FINANCIAL & BUSINESS SERVICES 17.2%
----------------------------------------------------
HEALTH CARE 13.6%
----------------------------------------------------
CONSUMER DISCRETIONARY 5.1%
----------------------------------------------------
COMMUNICATIONS 4.4%
----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-------------------------------------------------
<S> <C>
COMMON STOCK 90.6%
-------------------------------------------------
CASH EQUIVALENTS 9.4%
-------------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
-------------------------------------------------------------------------------
PIMCO Select Growth Fund, which was the PIMCO Core Equity Fund prior to April
3, 2000, posted strong returns for its first quarter in existence. Because it
was a core fund for much of the year, the Fund's Class D shares posted a
weaker one-year return of 12.68%, for the period ended June 30, 2000.
The Fund greatly benefited from its exposure to the technology sector,
which performed extremely well over the past year. It offered investors the
greatest earnings growth potential of any sector due to an increase in
corporate spending, as companies realized technology's ability to boost
profit margins. A standout performer within technology was EMC Corp. the data
storage company. Corporate demand for data storage continued to grow at a
fast pace in the second half of the year. Having approximately 85% of the
market share in this sector, EMC is the greatest beneficiary of this
increased demand. As the capabilities of computers and networks continue to
increase, the need for data storage will grow even further.
Another strong area for the Fund was telecommunications, which has seen
tremendous growth recently. A holding that benefited from the growth in
telecom was Comverse Technology, the eighth largest holding in the Fund. It
is the leading provider of voicemail systems to digital wireless carriers
and derives approximately 65% of its business from providing voice mail for
cell phones. A shortening of cell phone handset upgrade cycles, as well as an
increase in cell phone subscriptions were also key to Comverse's growth.
The financial services sector also helped the Fund, despite the rising
interest rate environment. Morgan Stanley Dean Witter, the sixth largest
holding of the Fund, experienced strong earnings growth in the second half of
the year. It benefited from an increase in equity underwriting and merger
activity, as well as dynamic growth in its global business.
Looking ahead, the manager is optimistic that the economic climate will be
positive for growth stocks, as inflation appears to be under control and
there is a strong possibility of significant tax cuts in the near future,
all of which should augur well for PIMCO Select Growth Fund.
20
<PAGE>
PIMCO TARGET FUND
June 30, 2000
OBJECTIVE
Capital appreciation; no
consideration given to income
PORTFOLIO
Common stocks of companies with
market capitalizations of
between $1 billion and $10 billion
FUND INCEPTION DATE
12/17/92
TOTAL NET ASSETS
$2.2 billion
NUMBER OF SECURITIES
IN THE PORTFOLIO
63 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
-------------------------------------------------------------------------------
PERFORMANCE*
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
D SHARES Lipper
S&P Mid-Cap Mid-Cap Growth
400 Index Fund Avg.
----------------------------------------------------------------
<S> <C> <C> <C>
1 YEAR 90.36% 17.09% 45.76%
3 YEARS 41.07% 20.38% 30.19%
5 YEARS 31.76% 21.20% 26.00%
INCEPTION 27.12% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
[GRAPHICS]
<TABLE>
<CAPTION>
PIMCO Target Fund D S&P Mid-Cap 400 Index
<S> <C> <C>
12/31/1992 10,000 10,000
01/31/1993 10,129 10,125
02/28/1993 10,069 9,983
03/31/1993 10,564 10,328
04/30/1993 10,316 10,058
06/30/1993 11,295 10,569
07/31/1993 11,601 10,548
08/31/1993 12,442 10,984
09/30/1993 12,580 11,100
10/31/1993 12,680 11,136
11/30/1993 12,066 10,890
12/31/1993 12,550 11,396
01/31/1994 12,870 11,661
02/28/1994 12,641 11,495
03/31/1994 12,241 10,963
05/31/1994 12,282 10,940
06/30/1994 11,832 10,563
07/31/1994 12,561 10,921
08/31/1994 13,270 11,493
09/30/1994 13,111 11,278
10/31/1994 13,370 11,401
11/30/1994 12,892 10,887
12/31/1994 13,037 10,987
01/31/1995 12,784 11,101
02/28/1995 13,523 11,684
03/31/1995 13,998 11,887
04/30/1995 14,160 12,125
05/31/1995 14,119 12,418
06/30/1995 15,191 12,923
07/31/1995 16,181 13,598
08/31/1995 16,141 13,849
09/30/1995 16,586 14,185
10/31/1995 16,819 13,820
11/30/1995 17,000 14,423
12/31/1995 17,107 14,387
01/31/1996 16,938 14,596
02/29/1996 17,502 15,092
03/31/1996 18,009 15,273
04/30/1996 18,822 15,740
05/31/1996 19,793 15,952
06/30/1996 19,421 15,713
07/31/1996 17,242 14,650
08/31/1996 18,111 15,495
09/30/1996 19,319 16,171
10/31/1996 19,342 16,218
11/30/1996 20,121 17,131
12/31/1996 19,948 17,150
01/31/1997 20,587 17,794
02/28/1997 19,706 17,648
03/31/1997 18,978 16,895
04/30/1997 19,195 17,333
05/31/1997 20,792 18,849
06/30/1997 21,482 19,378
07/31/1997 22,964 21,297
08/31/1997 23,463 21,271
09/30/1997 24,779 22,495
10/31/1997 23,426 21,516
11/30/1997 23,389 21,834
12/31/1997 23,220 22,682
01/31/1998 22,700 22,251
02/28/1998 24,627 24,093
03/31/1998 25,950 25,180
04/30/1998 26,803 25,640
05/31/1998 25,613 24,487
06/30/1998 27,388 24,641
07/31/1998 26,449 23,685
08/31/1998 21,741 19,277
09/30/1998 23,785 21,076
10/31/1998 23,901 22,960
11/30/1998 25,343 24,106
12/31/1998 28,822 27,017
01/31/1999 29,252 25,966
02/28/1999 27,625 24,606
03/31/1999 29,216 25,295
04/30/1999 30,058 27,288
05/31/1999 29,216 27,408
06/30/1999 31,685 28,872
07/31/1999 31,203 28,260
08/31/1999 31,687 27,293
09/30/1999 31,310 26,450
10/31/1999 34,244 27,799
11/30/1999 39,288 29,258
12/31/1999 47,923 30,996
01/31/2000 49,241 30,122
02/29/2000 67,199 32,231
03/31/2000 64,740 34,928
04/30/2000 58,421 33,709
05/31/2000 53,134 33,291
06/30/2000 60,318 33,807
</TABLE>
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Class D shares commenced
operations after the inception date shown (12/92). The total return for the
periods shown (period beginning before the inception of Class D shares)
reflects the total return of the Fund's oldest class of shares (Class A),
restated to reflect the operating expenses for Class D shares. The portfolio
had a substantial exposure to technology, which greatly contributed to the
funds performance for the Inception period ended 6/30/00. During this time
the technology market produced historically high returns. The Fund may
invest up to 15% in foreign securities, which may entail greater risk due to
foreign economic and political developments. The Fund invests in medium
sized companies, which may entail greater risk than larger companies,
including higher volatility. SEE PAGE 24 FOR FOOTNOTES, WHICH INCLUDE
ADDITIONAL DETAILS.
-------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
---------------------------------------------------
<S> <C>
SDL, INC. 6.4%
Technology
---------------------------------------------------
COMVERSE TECHNOLOGY, INC. 4.6%
Technology
---------------------------------------------------
SANMINA CORP. 3.8%
Technology
---------------------------------------------------
JABIL CIRCUIT, INC. 3.6%
Technology
---------------------------------------------------
CALPINE CORP. 3.5%
Utilities
---------------------------------------------------
MINIMED, INC. 3.2%
Health Care
---------------------------------------------------
E-TEK DYNAMICS, INC. 2.7%
Technology
---------------------------------------------------
PMC - SIERRA, INC. 2.4%
Technology
---------------------------------------------------
MEDIMMUNE, INC. 2.4%
Health Care
---------------------------------------------------
CIENA CORP. 2.2%
Technology
---------------------------------------------------
TOP TEN TOTAL 34.8%
---------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
---------------------------------------------------
<S> <C>
TECHNOLOGY 53.4%
---------------------------------------------------
HEALTH CARE 14.0%
---------------------------------------------------
CONSUMER DISCRETIONARY 5.5%
---------------------------------------------------
COMMUNICATIONS 5.5%
---------------------------------------------------
UTILITIES 4.3%
---------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
--------------------------------------------------
<S> <C>
COMMON STOCK 94.4%
--------------------------------------------------
CASH EQUIVALENTS 5.6%
--------------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
-------------------------------------------------------------------------------
PIMCO Target Fund posted stellar results for the one-year period ended June 30,
2000, with its Class D shares returning 90.36%. These results dramatically
outperformed those of the S&P Mid-Cap 400 Index, which returned 17.09%, as well
as its Lipper Average, which returned 45.76% for the same period.
The technology sector dominated the market dramatically in the first three
quarters of the fiscal year. Although the last quarter brought about a slight
downturn because of rising interest rates, the technology sector performed
extremely well overall for the year as a whole. One of the strongest areas of
technology was telecommunications, which has seen huge growth over the past
year. In particular, Spectra Diode Laboratories helped the Fund's
performance. SDL is a provider of solutions for optical communications,
providing products to power the transmission of data, voice, and Internet
information over fiber optic networks. The company's products enable
customers to meet the need for increasing bandwidth by expanding their fiber
optic communication networks more quickly and efficiently than by using
conventional electronic and optical technologies. Due to the increased
requirement of optical components to handle the increased demand for more
bandwidth, SDL's stock price grew over 100% as of June 30, 1999.
Another holding that benefited from the growth in technology was Jabil
Circuit, a company that designs and manufactures electronic circuit board
assemblies and systems for major original equipment manufacturers. Due to the
explosive growth in telecommunications, personal computers, and computer
peripherals, Jabil Circuit grew enormously as a major supplier for these
industries. Their stock price grew over 100% since last June as demand
increased for their products in all the growing technology sectors.
The biotechnology sector also enhanced the Fund's performance during this
year. Investors showed renewed interest in this area because of its exciting
product offerings.
For example, MedImmune is a company that is focused on using advances in
immunology and other biological sciences to develop important new products
that address significant medical needs. This Company saw its stock price rise
over 200% since last June. Its most important drug, Synagis, is used for the
treatment of respiratory problems in premature infants. The market
opportunity for this drug is huge because it addresses an area of healthcare
that is both sensitive and growing.
The manager's outlook for mid-cap stocks remains positive. The manager
believes that, if the Federal Reserve is able to negotiate a soft landing for
the economy, mid-caps could continue to see strong earnings growth and
significantly outperform.
21
<PAGE>
PIMCO TAX-EFFICIENT EQUITY FUND
June 30, 2000
OBJECTIVE
Maximum after-tax
growth of capital
PORTFOLIO
Broadly diversified portfolio
of at least 200 common stocks of
companies represented in the S&P 500 Index
with market capitalizations of
more than $5 billion
FUND INCEPTION DATE
7/10/98
TOTAL NET ASSETS
$56.8 million
NUMBER OF SECURITIES
IN THE PORTFOLIO
294 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Parametric Portfolio Associates
-------------------------------------------------------------------------------
PERFORMANCE*
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
D SHARES Lipper Large-
S&P 500 Cap Core
Index Fund Avg.
----------------------------------------------------------
<S> <C> <C> <C>
1 YEAR 5.44% 7.25% 11.37%
INCEPTION 10.70% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
[GRAPHICS]
<TABLE>
<CAPTION>
PIMCO Tax-Efficient Equity D S&P 500 Index
<S> <C> <C>
07/31/1998 10,000 10,000
08/31/1998 8,564 8,554
09/30/1998 9,001 9,102
10/31/1998 9,843 9,843
11/30/1998 10,342 10,439
01/31/1999 11,311 11,502
02/28/1999 10,936 11,145
03/31/1999 11,332 11,591
04/30/1999 11,738 12,040
05/31/1999 11,394 11,755
06/30/1999 12,059 12,408
07/31/1999 11,684 12,020
08/31/1999 11,559 11,961
09/30/1999 11,174 11,633
10/31/1999 11,830 12,369
12/31/1999 12,840 13,364
01/31/2000 12,142 12,693
02/29/2000 12,059 12,452
03/31/2000 13,099 13,671
04/30/2000 12,611 13,259
05/31/2000 12,340 12,987
06/30/2000 12,715 13,307
</TABLE>
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The adjusted returns
above include the effect of paying the applicable sales charges. Equity
funds are subject to the basic stock market risk that a particular security
or securities, in general, may decrease in value. The Fund may realize gains
and shareholders will incur a tax liability from time to time. Income from
the Fund is subject to state and local taxes & may at times be subject to
the alternative minimum tax. SEE PAGE 24 FOR FOOTNOTES, WHICH INCLUDE
ADDITIONAL DETAILS.
-------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
--------------------------------------------------
<S> <C>
GENERAL ELECTRIC CO. 4.5%
Capital Goods
--------------------------------------------------
INTEL CORP. 4.3%
Technology
--------------------------------------------------
CISCO SYSTEMS, INC. 3.5%
Technology
--------------------------------------------------
MICROSOFT CORP. 3.4%
Technology
--------------------------------------------------
EXXON MOBIL CORP. 2.7%
Energy
--------------------------------------------------
ORACLE CORP. 2.3%
Technology
--------------------------------------------------
WAL-MART STORES, INC. 2.1%
Consumer Discretionary
--------------------------------------------------
PFIZER, INC. 2.1%
Health Care
--------------------------------------------------
CITIGROUP, INC. 1.9%
Financial & Business Services
--------------------------------------------------
LUCENT TECHNOLOGIES, INC. 1.6%
Technology
--------------------------------------------------
TOP TEN TOTAL 28.4%
--------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
--------------------------------------------------
<S> <C>
TECHNOLOGY 31.7%
--------------------------------------------------
FINANCIAL & BUSINESS SERVICES 13.6%
--------------------------------------------------
HEALTH CARE 11.7%
--------------------------------------------------
CONSUMER DISCRETIONARY 8.9%
--------------------------------------------------
CONSUMER STAPLES 6.5%
--------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-------------------------------------------------
<S> <C>
COMMON STOCK 99.6%
-------------------------------------------------
CASH EQUIVALENTS 0.4%
-------------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
-------------------------------------------------------------------------------
The PIMCO Tax-Efficient Equity Fund Class D shares posted a return of 5.44% for
the one-year period ended June 30, 2000.
The Fund's performance suffered because of the importance its investment
process places on earnings, as many of the stocks that performed well during
this period had no earnings. Investors were more concerned about future earnings
growth, and were less interested in strong fundamentals and current earnings,
which did not augur well for the Fund.
Exposure to the technology sector enhanced the Fund's performance. In
particular, Internet hardware performed well due to the continued growth of
Internet use. Cisco Systems, a company that creates hardware and software
solutions for engaging in networking on the Internet, was one positive
contributor to the Fund's performance. As the Internet grows rampantly, and
companies run to participate in commerce on the Web, increased demand for
Internet infrastructure and optical networking capabilities will benefit Cisco.
As the largest supplier of this product, Cisco exhibits major market dominance
in this industry. Its stock soared almost 100% since last June.
Another area of technology that benefited the Fund was semiconductors.
Intel Corp., a semiconductor chip maker, saw incredible returns over the past
year. In the latter half of 1999, a continuation of the global economic
recovery sparked the demand for semiconductors, and this industry finally
achieved some pricing power after several years of struggle. Accompanied by
the high demand for personal computers, this semiconductor explosion boosted
Intel's stock price up over 100% in the past year.
The Fund also benefited from its exposure to the financial services
industry. Citigroup Corp., the banking and financial services company,
contributed to the Fund's performance despite rising interest rates. The
company benefited from growth of its global business, including asset
management and other services.
During the first half of 2000, rising interest rates caused concern that
the economy would slow. This resulted in fears of a decline in spending by
consumers and manufacturers, which hurt cyclical stocks. Consumer durables,
raw materials, capital goods, business equipment and services, and home
building all fell.
Looking ahead, the manager remains cautiously optimistic about the economy
and the stock market. Going forward, the manager expects that the Fund's
fundamental-based, disciplined stock selection process could outperform, as
investors choose companies that deliver profits and not just promises.
22
<PAGE>
PIMCO VALUE FUND
June 30, 2000
OBJECTIVE
Long-term growth of
capital and income
PORTFOLIO
Primarily common stocks of companies
with market capitalizations of more
than $10 billion and below-average
valuations whose business
fundamentals are expected to improve
FUND INCEPTION DATE
12/30/91
TOTAL NET ASSETS
$166.2 million
NUMBER OF SECURITIES
IN THE PORTFOLIO
41 (not including short-term
instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
-------------------------------------------------------------------------------
PERFORMANCE*
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN For periods ended 6/30/00
D SHARES S&P 500 Lipper Multi-Cap
Index Value Fund Avg.
-------------------------------------------------------------
<S> <C> <C> <C>
1 YEAR -7.07% 7.25% -3.99%
3 YEARS 7.36% 19.67% 7.78%
5 YEARS 14.47% 23.80% 14.20%
INCEPTION 13.57% -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
[GRAPHICS]
<TABLE>
<CAPTION>
PIMCO Value D S&P 500 Index
<S> <C> <C>
12/31/91 10,000 10,000
1/31/92 10,286 9,814
2/29/92 10,630 9,942
3/31/92 10,388 9,748
5/31/92 10,338 10,083
6/30/92 10,115 9,933
7/31/92 10,470 10,339
8/31/92 10,164 10,128
9/30/92 10,302 10,247
10/31/92 10,364 10,282
11/30/92 10,918 10,632
12/31/92 11,269 10,762
1/31/93 11,503 10,852
2/28/93 11,624 11,000
3/31/93 11,983 11,232
4/30/93 11,770 10,961
5/31/93 11,933 11,254
6/30/93 12,012 11,287
7/31/93 11,951 11,242
8/31/93 12,596 11,668
9/30/93 12,624 11,579
10/31/93 13,057 11,818
11/30/93 12,921 11,706
12/31/93 13,066 11,847
1/31/94 13,668 12,250
2/28/94 13,442 11,918
3/31/94 12,716 11,398
4/30/94 12,558 11,544
5/31/94 12,553 11,734
6/30/94 12,261 11,446
7/31/94 12,769 11,822
8/31/94 13,304 12,307
9/30/94 12,895 12,006
10/31/94 13,029 12,275
11/30/94 12,370 11,828
12/31/94 12,484 12,004
1/31/95 12,820 12,315
2/28/95 13,389 12,795
3/31/95 13,754 13,173
4/30/95 14,122 13,560
5/31/95 14,655 14,102
6/30/95 14,907 14,430
7/31/95 15,559 14,909
8/31/95 15,747 14,946
9/30/95 16,179 15,577
10/31/95 16,221 15,521
11/30/95 16,915 16,202
12/31/95 17,273 16,515
1/31/96 17,762 17,077
2/29/96 18,147 17,235
3/31/96 18,289 17,401
4/30/96 18,524 17,657
5/31/96 18,894 18,113
6/30/96 18,806 18,182
7/31/96 17,789 17,379
8/31/96 18,477 17,745
9/30/96 18,977 18,744
10/31/96 19,243 19,261
11/30/96 20,889 20,717
12/31/96 20,706 20,306
1/31/97 21,397 21,575
2/28/97 21,756 21,744
3/31/97 20,989 20,851
4/30/97 21,811 22,095
5/31/97 23,093 23,441
6/30/97 23,674 24,491
7/31/97 25,233 26,439
8/31/97 24,697 24,958
9/30/97 26,177 26,325
10/31/97 24,853 25,446
11/30/97 25,454 26,624
12/31/97 26,030 27,081
1/31/98 26,129 27,381
2/28/98 27,676 29,355
3/31/98 28,792 30,859
4/30/98 28,234 31,169
5/31/98 28,108 30,633
6/30/98 28,151 31,878
7/31/98 26,963 31,538
8/31/98 23,094 26,978
9/30/98 24,417 28,707
10/31/98 26,568 31,041
11/30/98 28,085 32,923
12/31/98 28,596 34,820
1/31/99 27,901 36,276
2/28/99 26,838 35,149
3/31/99 26,774 36,555
4/30/99 29,585 37,971
5/31/99 30,384 37,074
6/30/99 31,526 39,132
7/31/99 31,176 37,910
8/31/99 30,868 37,721
9/30/99 29,973 36,689
10/31/99 30,056 39,010
11/30/99 29,582 39,803
12/31/99 29,706 42,148
1/31/00 27,918 40,031
2/29/00 25,235 39,272
3/31/00 29,103 43,114
4/30/00 29,027 41,817
5/31/00 30,284 40,959
6/30/00 29,297 41,969
</TABLE>
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. These returns represent
the blended performance of the Fund's Class D shares (for the period from
4/8/98) and the prior performance of the Fund's institutional shares (for
the period from 12/30/91), adjusted, as necessary, to reflect Class D shares
different operating expenses. The Fund may invest up to 15% in foreign
securities, which may entail greater risk due to foreign economic and
political developments. SEE PAGE 24 FOR FOOTNOTES, WHICH WILL INCLUDE
ADDITIONAL DETAILS.
-------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % of Total Investments
-------------------------------------------------------
<S> <C>
WASHINGTON MUTUAL, INC. 5.5%
Financial & Business Services
-------------------------------------------------------
ACE LTD. 5.1%
Financial & Business Services
-------------------------------------------------------
DEERE & CO. 5.0%
Capital Goods
-------------------------------------------------------
TENET HEALTHCARE CORP. 4.4%
Health Care
-------------------------------------------------------
XL CAPITAL LTD. 4.3%
Financial & Business Services
-------------------------------------------------------
R & B FALCON CORP. 3.7%
Energy
-------------------------------------------------------
RAYTHEON CO. `B' 3.6%
Aerospace
-------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORP. 3.5%
Financial & Business Services
-------------------------------------------------------
AON CORP. 3.3%
Financial & Business Services
-------------------------------------------------------
PETROLEO BRASILEIRO SA 3.2%
Energy
-------------------------------------------------------
TOP TEN TOTAL 41.6%
-------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOP 5 RELATED
INDUSTRIES % of Total Investments
------------------------------------------------------
<S> <C>
FINANCIAL & BUSINESS SERVICES 29.7%
------------------------------------------------------
CONSUMER STAPLES 11.1%
------------------------------------------------------
ENERGY 10.1%
------------------------------------------------------
AEROSPACE 8.6%
------------------------------------------------------
COMMUNICATIONS 8.2%
------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION
-----------------------------------------
<S> <C>
COMMON STOCK 96.1%
-----------------------------------------
CASH EQUIVALENTS 3.9%
-----------------------------------------
</TABLE>
-------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
-------------------------------------------------------------------------------
PIMCO Value Fund Class D shares returned -7.07% for the twelve-month period
ended June 30, 2000.
Management of PIMCO Value Fund was shifted from NFJ Investment Group to
PIMCO Equity Advisors on May 8, 2000. The new manager will continue to focus
on low valuation stocks, but will purchase only those issues in that universe
that show a strong catalyst for change.
The Fund's exposure to the energy sector, which benefited from
significantly higher prices for oil, gas and natural gas liquids, helped its
performance during this year. Ultramar Diamond Shamrock, an independent
petroleum refining company, reported strong revenues as a result of higher
profit margins and increased demand. The company recently announced the
completion of the Colorado Springs pipeline expansion project, which should
help its efforts to grow earnings and returns through integrated operations.
This news, accompanied with the ever-increasing demand for power generation,
helped boost the stock's price significantly this year.
The financial services sector posted lackluster returns during this
period. As a result of the rising interest rates, J.P. Morgan, Federal Home
Loan Management and Washington Mutual all suffered. These companies witnessed
a drop in their respective stock prices as profit margins narrowed because of
the hike in interest rates. In addition, indications of a slowing economy in
the first half of 2000 caused financial services companies to be unpopular
with investors.
The Fund's performance was hurt by its exposure to the health care sector.
In particular, the HMO industry was punished by investors for much of the
year, despite exceeding its earnings expectations.
The area was unpopular with investors in the second half of 1999 because of
external problems, such as class-action lawsuits and federal attempts at HMO
legislation, which received much attention from the press. Aetna, one of the
Fund's largest holdings, saw its profits squeezed by rising medical costs.
Looking ahead, the manager is optimistic that value stocks will once again
return to favor. The manager believes the Fund's philosophy of investing in
low valuation stocks with a catalyst should bode well for PIMCO Value Fund.
23
<PAGE>
June 30, 2000
FOOTNOTES
--------------------------------------------------------------------------------
A few notes and definitions are needed for a complete understanding of the
performance figures.
PAST PERFORMANCE IS NO GUARANTEE 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. Average Annual return
measures performance, assuming that all dividends and capital gains
distributions were reinvested.
The PIMCO stock funds can invest a portion of their assets in foreign
securities, which can involve special risks due to foreign economic and
political developments. All holdings are subject to change. Both Global
Innovation and Innovation Funds invest a substantial portion of their assets
in related technology industries, which may be subject to additional risk and
volatility, in part, because (i) technology-related securities have tended to
be more volatile than the overall stock market and (ii) these Funds can
invest in stocks of smaller and/or unseasoned companies; which tend to be
riskier, less liquid and more volatile than securities of larger, more
seasoned companies. The Funds also normally invest a substantial portion of
their assets in foreign securities, including emerging markets securities,
which may entail greater risk and volatility than U.S. securities due to
foreign economic and political developments, foreign currency risk and other
factors.
Line graphs have been included so an investor can compare a Fund's historical
performance to that of an appropriate broad-based index. Growth of $10,000
investment does not take into account any sales charges or expenses. 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 400 are indices of stocks of companies with larger-and
medium-sized capitalizations, respectively. Russell 2000 Mid-Cap Index and
Russell 1000 Value Index are indices representative of a mid-cap market and
large-cap stocks with less than average growth orientation, respectively.
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. Lipper rankings are based on
total returns and not are adjusted for sales charges.
FOR ADDITIONAL DETAILS ON THE PIMCO 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 06902-6896, 1-800-426-0107,
www.pimcofunds.com. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST OR
SEND MONEY.
24
<PAGE>
SCHEDULE OF INVESTMENTS
CAPITAL APPRECIATION FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
-------------------------------------------------------------------------------------------------------------------
COMMON STOCKS 93.3%
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE 0.0%
Honeywell International, Inc. 1 $ 0
-------
CAPITAL GOODS 6.5%
General Electric Co. 365,900 19,393
Tyco International Ltd. 259,300 12,284
Waters Corp. (b) 74,800 9,336
United Technologies Corp. 125,400 7,383
Dover Corp. 77,800 3,156
-------
51,552
COMMUNICATIONS 2.2%
ADC Telecommunication, Inc. (b) 122,800 10,300
ALLTEL Corp. 110,800 6,863
SBC Communications, Inc. 1 0
-------
17,163
CONSUMER DISCRETIONARY 7.1%
Wal-Mart Stores, Inc. 197,100 11,358
CVS Corp. 274,600 10,984
Gemstar International Group Ltd. (b) 129,400 7,952
McGraw-Hill Companies, Inc. 137,500 7,425
Harley-Davidson, Inc. 173,300 6,672
Home Depot, Inc. 82,450 4,117
Sears Roebuck & Co. 123,900 4,042
Kohls Corp. (b) 71,500 3,977
Delphi Automotive Systems 1 0
-------
56,527
CONSUMER SERVICES 3.2%
Viacom, Inc. `B' (b) 196,763 13,417
New York Times Co. 161,300 6,371
Gannett, Inc. 100,400 6,005
-------
25,793
CONSUMER STAPLES 5.2%
Safeway, Inc. (b) 252,700 11,403
Kroger Co. (b) 487,400 10,753
Anheuser Busch Cos., Inc. 139,800 10,441
Quaker Oats Co. 108,600 8,159
Sysco Corp. 7,500 316
-------
41,072
ENERGY 17.1%
Exxon Mobil Corp. 210,000 16,485
Anadarko Petroleum Corp. 213,400 10,523
Baker Hughes, Inc. 285,900 9,149
Burlington Resources, Inc. 232,300 8,885
Royal Dutch Petroleum Co. 139,100 8,563
EOG Resources, Inc. 252,900 8,472
Apache Corp. 143,800 8,457
USX Marathon Group 330,600 8,286
Devon Energy Corp. 141,100 7,928
BP Amoco PLC SP - ADR 136,744 7,735
Conoco, Inc. 307,600 7,555
Amerada Hess Corp. 121,300 7,490
Peco Energy Co. 183,800 7,409
Chevron Corp. 86,300 7,319
Dynegy, Inc. 103,600 7,077
Texaco, Inc. 75,900 4,042
Nabors Industries, Inc. (b) 6,400 266
Enron Corp. 4,000 258
-------
135,899
FINANCIAL & BUSINESS SERVICES 10.6%
Citigroup, Inc. 184,750 11,131
MGIC Investment Corp. 204,100 9,287
American Express 163,600 8,528
Hartford Financial Services Group, Inc. 145,400 8,133
MBNA Corp. 286,800 7,779
AFLAC, Inc. 168,300 7,731
Capital One Financial Corp. 172,600 7,703
Fleet Boston Financial Corp. 205,100 6,973
Marsh & McLennan Cos. 66,500 6,945
Firstar Corp. 292,600 6,164
Federal National Mortgage Association 61,900 3,230
VeriSign, Inc. (b) 1,100 194
Paychex, Inc. 3,800 160
-------
83,958
HEALTH CARE 10.0%
Pfizer, Inc. 329,925 15,836
Immunex Corp. (b) 244,600 12,092
Allergan, Inc. 162,200 12,084
Schering-Plough Corp. 227,300 11,479
<CAPTION>
Value
Shares (000s)
--------------------------------------------------------------------------
<S> <C> <C>
Merck & Co., Inc. 140,500 $ 10,766
Genentech, Inc. (b) 55,300 9,512
Pharmacia Corp. 152,600 7,888
-------
79,657
TECHNOLOGY 29.0%
Corning, Inc. 59,900 16,166
Intel Corp. 112,400 15,026
Nortel Networks Corp. 200,400 13,677
Cisco Systems, Inc. (b) 212,000 13,475
SDL, Inc. (b) 46,200 13,176
Ciena Corp. (b) 79,000 13,168
Amdocs Ltd. (b) 145,800 11,190
Scientific-Atlanta, Inc. 149,600 11,145
JDS Uniphase Corp. (b) 86,000 10,309
Micron Technology, Inc. 112,100 9,873
Altera Corp. (b) 96,500 9,837
Compaq Computer Corp. 381,600 9,755
Siebel Systems, Inc. (b) 58,400 9,552
EMC Corp. (b) 123,500 9,502
Analog Devices, Inc. (b) 118,100 8,976
Sun Microsystems, Inc. (b) 96,400 8,767
Oracle Corp. (b) 103,100 8,668
Applied Materials, Inc. (b) 91,800 8,319
Veritas Software Corp. (b) 73,025 8,253
Texas Instruments, Inc. 115,500 7,933
Teradyne, Inc. (b) 86,000 6,321
Computer Associates International, Inc. 102,200 5,231
Redback Networks, Inc. (b) 3,100 552
Broadcom Corp. (b) 1,600 350
I2 Technologies, Inc. (b) 2,800 292
America Online, Inc. (b) 4,700 248
Linear Technology Corp. 3,800 243
Network Appliance, Inc. (b) 2,800 225
-------
230,229
UTILITIES 2.4%
Coastal Corp. 158,600 9,655
Calpine Corp. (b) 140,400 9,231
-------
18,886
-------
Total Common Stocks 740,736
(Cost $576,274) =======
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 7.2%
-------------------------------------------------------------------------------------------------------------------
Principal
Amount
(000s)
<S> <C> <C>
REPURCHASE AGREEMENT 7.2%
State Street Bank
5.850% due 07/03/2000 $ 56,866 56,866
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
6.400% due 12/21/2001 valued at $51,004 and
Federal Home Loan Bank
7.620% due 01/12/2010 valued at $7,004.
Repurchase proceeds are $56,893.)
-------
Total Short-Term Instruments 56,866
(Cost $56,866) -------
TOTAL INVESTMENTS (a) 100.5% $797,602
(Cost $633,140)
OTHER ASSETS AND LIABILITIES (NET) (0.5%) (3,792)
-------
NET ASSETS 100.0% $793,810
=======
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $637,056 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $178,851
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (18,305)
-------
Unrealized appreciation-net $160,546
=======
</TABLE>
(b) Non-income producing security.
SEE ACCOMPANYING NOTES 25
<PAGE>
SCHEDULE OF INVESTMENTS
EQUITY INCOME FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
-------------------------------------------------------------------------------------------------------------------
COMMON STOCKS 96.7%
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CAPITAL GOODS 7.7%
Tyco International Ltd. 45,000 $ 2,132
General Electric Co. 35,000 1,855
Weatherford International, Inc. (b) 35,000 1,393
------
5,380
COMMUNICATIONS 10.6%
Cox Communications, Inc. 35,000 2,150
Nokia Corp. SP - ADR 35,000 1,748
GTE Corp. 20,000 1,245
SBC Communications, Inc. 28,000 1,211
Vodafone Group PLC SP - ADR 25,000 1,036
------
7,390
CONSUMER DISCRETIONARY 4.8%
General Motors Corp. `H' 25,000 2,194
Wal-Mart Stores, Inc. 20,000 1,152
------
3,346
ENERGY 16.9%
Utilicorp United 90,000 2,138
Enron Corp. 30,000 1,935
EL Paso Energy Corp. 35,000 1,783
Peco Energy Co. 40,000 1,613
Exxon Mobil Corp. 20,000 1,570
Schlumberger Ltd. 20,000 1,493
Cooper Cameron Corp.(b) 20,000 1,320
------
11,852
FINANCIAL & BUSINESS SERVICES 19.4%
Citigroup, Inc. 40,000 2,410
Spieker Properties, Inc. 42,000 1,932
Boston Properties, Inc. 50,000 1,931
Morgan Stanley, Dean Witter, Discover and Co. 20,000 1,665
American International Group, Inc. 14,000 1,645
Omnicom Group 18,000 1,603
American Express 30,000 1,564
Federal National Mortgage Association 15,000 783
------
13,533
HEALTH CARE 11.1%
Schering-Plough Corp. 35,000 1,767
Johnson & Johnson 17,000 1,732
Merck & Co., Inc. 20,000 1,532
American Home Products Corp. 25,000 1,469
Medtronic, Inc. 25,000 1,245
------
7,745
TECHNOLOGY 19.8%
EMC Corp. (b) 40,000 3,077
Jabil Circuit, Inc. (b) 40,000 1,985
Hewlett Packard Co. 15,000 1,873
Scientific-Atlanta, Inc. 25,000 1,863
Flextronics International Ltd. (b) 25,000 1,717
Nortel Networks Corp. 25,000 1,706
Intel Corp. 12,000 1,604
------
13,825
UTILITIES 6.4%
Calpine Capital Trust II-144A 35,000 2,538
Duke Energy Corp. 35,000 1,973
------
4,511
------
Total Common Stocks 67,582
(Cost $66,147) ======
<CAPTION>
Principal
Amount Value
(000s) (000s)
-------------------------------------------------------------------------------------------------------------------
CONVERTIBLE BONDS & NOTES 2.9%
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY 2.9%
Nextel Communications
5.250% due 01/15/2010 $2,000 $ 2,030
------
Total Convertible Bonds & Notes 2,030
------
(Cost $1,914)
TOTAL INVESTMENTS (a) 99.6% $69,612
(Cost $68,061)
OTHER ASSETS AND LIABILITIES (NET) 0.4% 297
------
NET ASSETS 100.0% $69,909
======
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $68,096 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 3,889
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (2,373)
------
Unrealized appreciation-net $ 1,516
======
</TABLE>
(b) Non-income producing security.
26 SEE ACCOMPANYING NOTES
<PAGE>
SCHEDULE OF INVESTMENTS
GLOBAL INNOVATION FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
-------------------------------------------------------------------------------------------------------------------
COMMON STOCKS 93.2%
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CAPITAL GOODS 1.2%
Waters Corp. (b) 10,000 $ 1,248
------
COMMUNICATIONS 7.3%
Nokia Corp. SP - ADR 40,000 1,998
Alcatel Alsthom SP - ADR 29,000 1,929
ADC Telecommunication, Inc. (b) 18,000 1,510
Telefonaktiebolaget LM Ericsson SP - ADR 70,000 1,400
SK Telecom Co. Ltd. SP - ADR 21,000 763
------
7,600
HEALTH CARE 10.3%
IDEC Pharmaceuticals Corp. (b) 19,000 2,229
Elan Corp. PLC (b) 42,000 2,034
Genentech, Inc. (b) 11,000 1,892
Ivax Corp. (b) 36,000 1,494
Teva Pharmaceutical Industries Ltd. 20,000 1,109
QLT Phototherapeutics, Inc. (b) 13,600 1,051
COR Therapeutics, Inc. (b) 12,000 1,024
------
10,833
TECHNOLOGY 74.4%
Juniper Networks, Inc. (b) 23,800 3,464
Nortel Networks Corp. 45,000 3,071
Intel Corp. 20,400 2,727
EMC Corp. (b) 32,000 2,462
Cisco Systems, Inc. (b) 38,100 2,422
Redback Networks, Inc. (b) 13,000 2,314
I2 Technologies, Inc. (b) 22,000 2,294
BEA Systems, Inc. (b) 46,000 2,274
Dell Computer Corp. (b) 46,000 2,268
Veritas Software Corp. (b) 20,000 2,260
E-Tek Dynamics, Inc. (b) 8,500 2,242
Extreme Networks, Inc. (b) 21,000 2,216
Brocade Communications Systems, Inc. (b) 11,700 2,147
Flextronics International Ltd. (b) 28,500 1,958
Applied Micro Circuits Corp. (b) 19,000 1,876
Sycamore Networks, Inc. 17,000 1,876
Oracle Corp. (b) 22,000 1,849
Micron Technology, Inc. (b) 21,000 1,849
Bookham Technology PLC (b) 31,000 1,837
Tibco Software, Inc. (b) 17,000 1,823
Micromuse, Inc. (b) 11,000 1,820
Siebel Systems, Inc. (b) 11,100 1,816
Rational Software Corp. (b) 19,000 1,766
Broadcom Corp. (b) 7,500 1,642
Aether Systems, Inc. (b) 8,000 1,640
Sun Microsystems, Inc. (b) 18,000 1,637
Altera Corp. (b) 15,200 1,548
Applied Materials, Inc. (b) 16,900 1,532
Scientific-Atlanta, Inc. 20,000 1,490
SDL, Inc. (b) 5,000 1,426
Texas Instruments, Inc. 20,000 1,374
Teradyne, Inc. (b) 18,500 1,360
ASM Lithography Holding (b) 30,000 1,324
Dialog Semiconductor Ltd. (b) 25,000 1,256
China Telecom (Hong Kong) Ltd. (b) 7,000 1,245
Proxim, Inc. (b) 12,000 1,188
Inktomi Corp. (b) 9,500 1,123
QLogic Corp. (b) 15,500 1,024
Maxim Integrated Products, Inc. (b) 14,100 958
PE Corp.-Celera Genomics Group (b) 10,000 935
Integrated Device Technology, Inc. (b) 15,000 898
Yahoo, Inc. (b) 7,000 867
Comverse Technology, Inc. (b) 9,000 837
Apple Computer, Inc. (b) 15,000 786
Broadvision, Inc. (b) 15,000 762
Interwoven, Inc. (b) 3,000 329
StorageNetworks, Inc. (b) 1,900 171
------
77,983
------
Total Common Stocks 97,664
(Cost $87,088) ======
<CAPTION>
Principal
Amount Value
(000s) (000s)
-------------------------------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 7.6%
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT 7.6%
State Street Bank
5.850% due 07/03/2000 $7,962 $ 7,962
(Dated 06/30/2000. Collateralized by
Federal Home Loan Bank
7.620% due 01/12/2010 valued at $8,125.
Repurchase proceeds are $7,966.)
-------
Total Short-Term Instruments 7,962
=======
(Cost $7,962)
TOTAL INVESTMENTS (a) 100.8% $105,626
(Cost $95,050)
OTHER ASSETS AND LIABILITIES (NET) (0.8%) (878)
-------
NET ASSETS 100.0% $104,748
=======
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $95,889 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 12,532
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (2,795)
-------
Unrealized appreciation-net $9,737
=======
</TABLE>
(b) Non-income producing security.
SEE ACCOMPANYING NOTES 27
<PAGE>
SCHEDULE OF INVESTMENTS
GROWTH FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
--------------------------------------------------------------------------------------------
COMMON STOCKS 98.9%
--------------------------------------------------------------------------------------------
<S> <C> <C>
CAPITAL GOODS 3.9%
General Electric Co. 1,500,000 $ 79,500
Tyco International Ltd. 750,000 35,531
---------------
115,031
COMMUNICATIONS 8.8%
Nokia Corp. SP - ADR 3,500,000 174,781
Telefonaktiebolaget LM Ericsson SP - ADR 2,500,000 50,000
AT&T Corp. - Liberty Media Group `A' (b) 1,300,000 31,525
---------------
256,306
CONSUMER DISCRETIONARY 7.5%
Wal-Mart Stores, Inc. 1,500,000 86,438
Home Depot, Inc. 1,000,000 49,937
Kohls Corp. (b) 800,000 44,500
Clear Channel Communications (b) 500,000 37,500
---------------
218,375
ENERGY 4.3%
Enron Corp. 1,500,000 96,750
AES Corp. (b) 600,000 27,375
---------------
124,125
FINANCIAL & BUSINESS SERVICES 18.7%
Morgan Stanley, Dean Witter, Discover and Co. 1,500,000 124,875
Citigroup, Inc. 1,750,000 105,438
Omnicom Group 1,000,000 89,062
American International Group, Inc. 750,000 88,125
American Express 1,500,000 78,187
Northern Trust Corp. 500,000 32,531
Federal National Mortgage Association 500,000 26,094
---------------
544,312
HEALTH CARE 12.1%
Genentech, Inc. (b) 500,000 86,000
Johnson & Johnson 800,000 81,500
Amgen, Inc. (b) 1,000,000 70,250
Pfizer, Inc. 1,000,000 48,000
Schering-Plough Corp. 750,000 37,875
Medtronic, Inc. 600,000 29,887
---------------
353,512
TECHNOLOGY 43.6%
EMC Corp. (b) 3,000,000 230,812
Cisco Systems, Inc. (b) 2,500,000 158,906
Nortel Networks Corp. 2,000,000 136,500
JDS Uniphase Corp. (b) 1,000,000 119,875
Sun Microsystems, Inc. (b) 1,000,000 90,938
Texas Instruments, Inc. 1,000,000 68,688
Corning, Inc. 250,000 67,469
Oracle Corp. (b) 800,000 67,250
Intel Corp. 400,000 53,475
Comverse Technology, Inc. (b) 500,000 46,500
Applied Materials, Inc. (b) 500,000 45,313
Broadcom Corp. (b) 200,000 43,788
SDL, Inc. (b) 150,000 42,778
Applied Micro Circuits Corp. (b) 350,000 34,563
Flextronics International Ltd. (b) 500,000 34,344
Network Appliance, Inc. (b) 400,000 32,200
---------------
1,273,399
---------------
Total Common Stocks 2,885,060
(Cost $1,771,224) ===============
<CAPTION>
Principal
Amount Value
(000s) (000s)
--------------------------------------------------------------------------------------------
CORPORATE BONDS & NOTES 0.0%
--------------------------------------------------------------------------------------------
<S> <C> <C>
INDUSTRIALS 0.0%
Cabbell Financial Grantor Trust (c)
7.187% due 12/31/2002 $ 363 $ 181
---------------
Total Corporate Bonds & Notes 181
(Cost $361) ===============
<CAPTION>
--------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 1.0%
--------------------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT 1.0%
State Street Bank
5.850% due 07/03/2000 30,194 30,194
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
5.125% due 02/13/2004 valued at $30,800.
Repurchase proceeds are $30,209.)
---------------
Total Short-Term Instruments 30,194
===============
(Cost $30,194)
TOTAL INVESTMENTS (a) 99.9% $ 2,915,435
(Cost $1,801,779)
OTHER ASSETS AND LIABILITIES (NET) 0.1% 2,663
---------------
NET ASSETS 100.0% $ 2,918,098
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $1,803,018 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 1,135,113
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value. (22,696)
---------------
Unrealized appreciation-net $ 1,112,417
===============
</TABLE>
(b) Non-income producing security.
(c) Illiquid securities.
28 SEE ACCOMPANYING NOTES
<PAGE>
SCHEDULE OF INVESTMENTS
INNOVATION FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
--------------------------------------------------------------------------------------------
COMMON STOCKS 98.5%
--------------------------------------------------------------------------------------------
<S> <C> <C>
COMMUNICATIONS 9.3%
Nokia Corp. SP - ADR 3,148,000 $ 157,203
Telefonaktiebolaget LM Ericsson SP - ADR 6,850,000 137,000
ADC Telecommunication, Inc. (b) 1,075,000 90,166
Next Level Communications, Inc. (b) 772,500 66,242
Alcatel Alsthom SP - ADR 850,000 56,525
---------------
507,136
CONSUMER DISCRETIONARY 4.0%
Gemstar International Group Ltd. (b) 2,746,000 168,750
General Motors Corp. `H' 560,000 49,140
---------------
217,890
HEALTH CARE 4.3%
MedImmune, Inc. (b) 1,350,000 99,900
Forest Laboratories `A' (b) 909,000 91,809
IDEC Pharmaceuticals Corp. (b) 392,800 46,080
---------------
237,789
TECHNOLOGY 80.9%
Micron Technology, Inc. (b) 2,610,000 229,843
Siebel Systems, Inc. (b) 1,305,200 213,482
Intel Corp. 1,480,000 197,858
Cisco Systems, Inc. (b) 3,040,000 193,230
E-Tek Dynamics, Inc. (b) 706,300 186,331
Ciena Corp. (b) 1,085,000 180,856
Oracle Corp. (b) 2,019,000 169,722
Juniper Networks, Inc. (b) 1,126,200 163,932
Nortel Networks Corp. 2,400,000 163,800
Redback Networks, Inc. (b) 910,400 162,051
Brocade Communications Systems, Inc. (b) 867,200 159,118
Xilinx, Inc. (b) 1,830,000 151,089
Applied Materials, Inc. (b) 1,571,600 142,426
ASM Lithography Holding (b) 3,179,100 140,278
Veritas Software Corp. (b) 1,148,450 129,793
Dell Computer Corp. (b) 2,450,000 120,816
Sycamore Networks, Inc. (b) 1,085,000 119,757
Tibco Software, Inc. (b) 1,020,600 109,443
Vignette Corp. (b) 2,050,000 106,632
Check Point Software Technologies Ltd. (b) 500,000 105,875
National Semiconductor Corp. (b) 1,810,000 102,718
Rational Software Corp. (b) 1,061,500 98,653
I2 Technologies, Inc. (b) 920,200 95,945
Portal Software, Inc. (b) 1,465,000 93,577
Broadvision, Inc. (b) 1,771,100 89,994
Network Appliance, Inc. (b) 1,100,000 88,550
Texas Instruments, Inc. 1,240,000 85,173
JDS Uniphase Corp. (b) 618,000 74,083
SDL, Inc. (b) 250,000 71,297
Ariba, Inc. (b) 589,600 57,808
Sun Microsystems, Inc. (b) 628,400 57,145
RF Micro Devices, Inc. (b) 627,500 54,985
EMC Corp. (b) 670,000 51,548
Extreme Networks, Inc. (b) 397,500 41,936
Infospace, Inc. (b) 700,000 38,675
Phone.com, Inc. (b) 547,300 35,643
Analog Devices, Inc. (b) 410,000 31,160
Vitesse Semiconductor Co. (b) 400,000 29,425
Foundry Networks, Inc. (b) 260,000 28,730
PE Corp.-PE Biosystems Group 380,000 25,032
Flextronics International Ltd. (b) 275,000 18,889
Digital Microwave Corp. (b) 400,000 15,250
---------------
4,432,548
---------------
Total Common Stocks 5,395,363
(Cost $3,710,170) ===============
<CAPTION>
Principal
Amount Value
(000s) (000s)
--------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 2.1%
--------------------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT 2.1%
State Street Bank
5.850% due 07/03/2000 $ 113,785 $113,785
(Dated 06/30/2000. Collateralized by
Federal Home Loan Corporation
6.390% due 10/01/2008 valued at $51,000,
Federal Home Loan Bank
5.823% due 05/06/2009 valued at $51,000, and
Federal Home Loan Bank
7.620% due 01/12/2010 valued at $14,064.
Repurchase proceeds are $113,840.)
---------------
Total Short-Term Instruments 113,785
(Cost $113,785) ===============
TOTAL INVESTMENTS (a) 100.6% $ 5,509,148
(Cost $3,823,955)
OTHER ASSETS AND LIABILITIES (NET) (0.6%) (29,992)
---------------
NET ASSETS 100.0% $ 5,479,156
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $3,914,225 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 1,746,367
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (151,444)
---------------
Unrealized appreciation-net $ 1,594,923
===============
</TABLE>
(b) Non-income producing security.
SEE ACCOMPANYING NOTES 29
<PAGE>
SCHEDULE OF INVESTMENTS
MID-CAP FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
--------------------------------------------------------------------------------------------
COMMON STOCKS 94.3%
--------------------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE 0.4%
Northrop Grumman Corp. 69,000 $ 4,571
---------------
BUILDING 1.0%
Lennar Corp. 549,100 11,119
---------------
CAPITAL GOODS 3.0%
Waters Corp. (b) 153,500 19,159
Millipore Corp. 173,100 13,047
---------------
32,206
COMMUNICATIONS 2.8%
ADC Telecommunication, Inc. (b) 205,300 17,220
Westwood One, Inc. (b) 389,800 13,302
---------------
30,522
CONSUMER DISCRETIONARY 5.0%
CDW Computer Centers, Inc. (b) 206,400 12,900
Bed, Bath & Beyond, Inc. (b) 292,900 10,618
Dollar Tree Stores, Inc. (b) 265,650 10,510
Intimate Brands, Inc. 523,380 10,337
B.J.'s Wholesale Club, Inc. (b) 300,300 9,910
---------------
54,275
CONSUMER SERVICES 2.5%
Reader's Digest Assn., Inc. `A' 363,600 14,453
Brinker International, Inc. (b) 412,800 12,074
---------------
26,527
CONSUMER STAPLES 4.7%
Pepsi Bottling Group, Inc. 482,100 14,071
SUPERVALU, Inc. 662,300 12,625
McCormick & Co. 379,500 12,334
Keebler Foods Co. 321,400 11,932
---------------
50,962
ENERGY 16.8%
Apache Corp. 288,900 16,991
Anadarko Petroleum Corp. 328,300 16,189
Devon Energy Corp. 278,700 15,659
EOG Resources, Inc. 464,700 15,568
Kerr McGee Corp. 250,200 14,747
Murphy Oil Corp. 236,400 14,051
Nabors Industries, Inc. (b) 336,500 13,986
USX Marathon Group 511,000 12,807
Ocean Energy, Inc. (b) 866,500 12,293
Dynegy, Inc. 166,369 11,365
ENSCO International, Inc. 306,100 10,962
Noble Drilling Corp. (b) 257,600 10,610
Cooper Cameron Corp. (b) 158,200 10,441
BJ Services Co. (b) 79,600 4,975
---------------
180,644
FINANCIAL & BUSINESS SERVICES 17.1%
Apartment Investment & Management Co. `A' 375,700 16,249
Liberty Property Trust 582,500 15,109
Ace Ltd. 528,100 14,787
Federated Investors, Inc. `B' 418,400 14,670
Valassis Communications, Inc. (b) 379,850 14,482
Duke-Weeks Realty Corp. 636,100 14,233
Ambac Financial Group, Inc. 238,700 13,084
Golden West Financial Corp. 316,800 12,929
Waddell & Reed Financial, Inc. `A' 390,350 12,808
Lincoln National Corp. 353,200 12,759
Providian Financial Corp. 138,950 12,506
Capital One Financial Corp. 272,900 12,179
PMI Group, Inc. 253,500 12,041
Banknorth Group, Inc. 412,500 6,316
---------------
184,152
HEALTH CARE 5.9%
Allergan, Inc. 280,500 20,897
IDEC Pharmaceuticals Corp. (b) 147,700 17,327
Forest Laboratories `A' (b) 138,300 13,968
Invitrogen Corp. (b) 149,400 11,235
---------------
63,427
MATERIALS & PROCESSING 0.8%
Martin Marietta Materials, Inc. 222,000 8,977
---------------
<CAPTION>
Value
Shares (000s)
--------------------------------------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY 31.7%
Integrated Device Technology, Inc. (b) 322,100 $ 19,286
Tektronix, Inc. 259,700 19,218
Brocade Communications Systems, Inc. (b) 101,700 18,660
Ciena Corp. (b) 104,200 17,369
Dendrite International, Inc. (b) 510,250 16,998
Microchip Technology, Inc. (b) 275,000 16,023
Scientific-Atlanta, Inc. 213,600 15,913
Amdocs Ltd. (b) 200,600 15,396
Symbol Technologies, Inc. 279,500 15,093
Credence Systems Corp. (b) 273,400 15,088
Copper Mountain Networks (b) 169,800 14,964
Novellus Systems, Inc. (b) 262,900 14,870
Veritas Software Corp. (b) 123,325 13,938
ISS Group, Inc. (b) 129,900 12,826
Comverse Technology, Inc. (b) 135,800 12,629
CSG Systems International, Inc. (b) 221,600 12,423
SDL, Inc. (b) 41,900 11,949
RF Micro Devices, Inc. (b) 133,500 11,698
Network Associates, Inc. (b) 548,700 11,180
SanDisk Corp. (b) 181,000 11,075
PerkinElmer, Inc. 163,400 10,805
Cypress Semiconductor Corp. (b) 252,800 10,681
Scient Corp. (b) 227,300 10,030
JDS Uniphase Corp. (b) 61,000 7,312
LSI Logic Corp. (b) 109,400 5,921
---------------
341,345
UTILITIES 2.4%
Entergy Corp. 477,500 12,982
Florida Progress Corp. 266,300 12,483
---------------
25,465
---------------
Total Common Stocks 1,014,192
(Cost $827,710) ===============
<CAPTION>
Principal
Amount
(000s)
--------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 6.3%
--------------------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT 6.3%
State Street Bank
5.850% due 07/03/2000 $ 68,041 68,041
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
6.350% due 06/22/2001 valued at $51,002 and
Federal National Mortgage Association
6.350% due 06/22/2001 valued at $18,404.
Repurchase proceeds are $68,074.)
---------------
Total Short-Term Instruments 68,041
(Cost $68,041) ===============
TOTAL INVESTMENTS (a) 100.6% $ 1,082,233
(Cost $895,751)
OTHER ASSETS AND LIABILITIES (NET) (0.6%) (6,057)
---------------
NET ASSETS 100.0% $ 1,076,176
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
incPome tax purposes of $900,208 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 203,233
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value. (21,208)
---------------
Unrealized appreciation-net $ 182,025
===============
</TABLE>
(b) Non-income producing security.
30 SEE ACCOMPANYING NOTES
<PAGE>
SCHEDULE OF INVESTMENTS
RENAISSANCE FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
--------------------------------------------------------------------------------------------
COMMON STOCKS 94.9%
--------------------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE 6.3%
Orbital Sciences Corp. (b) 890,400 $ 10,852
Raytheon Co. `B' 480,000 9,240
Litton Industries, Inc. (b) 131,700 5,531
Raytheon Co. `A' 230,000 4,470
---------------
30,093
CAPITAL GOODS 5.6%
CNH Global NV 2,016,800 18,655
Metso OYJ 665,400 8,004
---------------
26,659
COMMUNICATIONS 1.8%
Loral Space & Communications Ltd. (b) 839,500 5,824
MCI WorldCom, Inc. (b) 60,000 2,753
---------------
8,577
CONSUMER DISCRETIONARY 5.2%
Tupperware Corp. 937,000 20,614
American Greetings Corp. `A' 230,000 4,370
---------------
24,984
CONSUMER STAPLES 12.4%
Suiza Foods Corp. (b) 253,400 12,385
Tate & Lyle PLC 2,215,387 11,062
Tyson Foods, Inc. 1,191,200 10,423
Great Atlantic & Pacific Tea Co., Inc. 568,700 9,454
Philip Morris Cos., Inc. 260,000 6,906
Corn Products International, Inc. 191,400 5,072
Dean Foods Co. 103,900 3,292
Universal Foods 20,000 386
---------------
58,980
ENERGY 8.5%
R & B Falcon Corp. (b) 661,000 15,575
Petroleo Brasileiro SA 330,000 9,970
Diamond Offshore Drilling, Inc. 200,000 7,025
Ultramar Diamond Shamrock Corp. 203,500 5,049
Tidewater, Inc. 85,000 3,060
---------------
40,679
ENVIRONMENTAL SERVICES 0.9%
Republic Services, Inc. (b) 283,100 4,530
---------------
FINANCIAL & BUSINESS SERVICES 21.7%
Ace Ltd. 924,500 25,886
Washington Mutual, Inc. 790,000 22,811
Everest Re Group Ltd. 338,200 11,118
Loews Corp. 157,000 9,420
UnumProvident Corp. 380,000 7,624
Federal Home Loan Mortgage Corp. 140,000 5,670
Aon Corp. 142,700 4,433
Sovereign Bancorp, Inc. 600,000 4,219
XL Capital Ltd. 74,300 4,021
St. Paul Cos., Inc. 85,800 2,928
Pacific Century Financial Corp. 185,300 2,710
AmeriCredit Corp. (b) 130,700 2,222
Fremont General Corp. 257,000 1,012
---------------
104,074
HEALTH CARE 11.6%
Foundation Health Systems, Inc. `A' (b) 2,109,100 27,418
Aetna, Inc. 252,600 16,214
Tenet Healthcare Corp. (b) 436,900 11,796
---------------
55,428
MATERIALS & PROCESSING 7.9%
IMC Global, Inc. 834,000 10,842
Ispat International NV 782,800 7,437
Gaylord Container Corp. `A' (b) 2,194,200 5,897
Ucar International, Inc (b) 416,600 5,442
Mercer International, Inc. 496,800 4,130
Buenaventura SA 126,500 2,190
Crompton Corp. 138,800 1,700
---------------
37,638
TECHNOLOGY 3.1%
Arrow Electronics, Inc. (b) 412,600 12,791
Fluor Corp. 34,800 1,100
Xerox Corp. 39,900 828
---------------
14,719
TRANSPORTATION 1.2%
CSX Corp. 276,500 5,858
---------------
<CAPTION>
Value
Shares (000s)
--------------------------------------------------------------------------------------------
<S> <C> <C>
UTILITIES 8.7%
Niagara Mohawk Holdings, Inc. (b) 1,380,200 $ 19,236
Western Resources, Inc. 618,500 9,587
PG&E Corp. 150,000 3,694
Entergy Corp. 120,000 3,263
Edison International 150,000 3,075
CMS Energy Corp. 122,500 2,710
---------------
41,565
---------------
Total Common Stocks 453,784
(Cost $459,783) ===============
<CAPTION>
--------------------------------------------------------------------------------------------
CONVERTIBLE BONDS & NOTES 0.9%
--------------------------------------------------------------------------------------------
Principal
Amount
(000s)
<S> <C> <C>
CONVERTIBLE BONDS & NOTES 0.9%
APP Finance VI Mauritius Ltd.
0.000% due 11/18/2012 $ 18,000 3,038
3.500% due 04/30/2003 1,000 734
APP Global Finance Ltd.
2.000% due 07/25/2000 500 611
---------------
Total Convertible Bonds & Notes 4,383
(Cost $4,808) ===============
<CAPTION>
--------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 3.7%
--------------------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT 3.7%
State Street Bank
5.850% due 07/03/2000 17,875 17,875
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
6.100% due 09/14/2001 valued at $18,236.
Repurchase proceeds are $17,884.)
---------------
Total Short-Term Instruments 17,875
(Cost $17,875) ===============
TOTAL INVESTMENTS (a) 99.5% $ 476,042
(Cost $482,466)
OTHER ASSETS AND LIABILITIES (NET) 0.5% 2,164
---------------
NET ASSETS 100.0% $ 478,206
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $494,049 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
overtax cost. $ 50,385
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (68,392)
---------------
Unrealized depreciation-net $ (18,007)
===============
</TABLE>
(b) Non-income producing security.
SEE ACCOMPANYING NOTES 31
<PAGE>
SCHEDULE OF INVESTMENTS
SELECT GROWTH FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
--------------------------------------------------------------------------------------------
COMMON STOCKS 91.1%
--------------------------------------------------------------------------------------------
<S> <C> <C>
COMMUNICATIONS 4.5%
Nokia Corp. SP - ADR 15,000 $ 749
---------------
CONSUMER DISCRETIONARY 5.1%
Wal-Mart Stores, Inc. 15,000 864
---------------
ENERGY 3.8%
Enron Corp. 10,000 645
---------------
FINANCIAL & BUSINESS SERVICES 17.2%
American International Group, Inc. 10,000 1,175
Citigroup, Inc. 15,000 904
Morgan Stanley, Dean Witter, Discover and Co. 10,000 833
---------------
2,912
HEALTH CARE 13.7%
Genentech, Inc. (b) 7,500 1,290
Johnson & Johnson 10,000 1,019
---------------
2,309
TECHNOLOGY 46.8%
Corning, Inc. 5,000 1,349
EMC Corp. (b) 15,000 1,154
Nortel Networks Corp. 15,000 1,024
Cisco Systems, Inc. (b) 15,000 953
Comverse Technology, Inc. (b) 10,000 930
Sun Microsystems, Inc. (b) 10,000 909
JDS Uniphase Corp. (b) 7,500 899
Texas Instruments, Inc. 10,000 687
---------------
7,905
---------------
Total Common Stocks 15,384
(Cost $14,220) ===============
<CAPTION>
--------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 9.4%
--------------------------------------------------------------------------------------------
Principal
Amount
(000s)
<S> <C> <C>
REPURCHASE AGREEMENT 9.4%
State Street Bank
5.850% due 07/03/2000 $ 1,591 1,591
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
6.100% due 09/14/2001 valued at $1,626.
Repurchase proceeds are $1,592.)
---------------
Total Short-Term Instruments 1,591
(Cost $1,591) ===============
TOTAL INVESTMENTS (a) 100.5% $ 16,975
(Cost $15,811)
OTHER ASSETS AND LIABILITIES (NET) (0.5%) (93)
---------------
NET ASSETS 100.0% $ 16,882
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $15,814 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 1,405
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value. (244)
---------------
Unrealized appreciation-net $ 1,161
===============
</TABLE>
(b) Non-income producing security.
32 SEE ACCOMPANYING NOTES
<PAGE>
Schedule of Investments
TARGET FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
--------------------------------------------------------------------------------------------
COMMON STOCKS 94.6%
--------------------------------------------------------------------------------------------
<S> <C> <C>
CAPITAL GOODS 4.3%
Waters Corp. (b) 400,000 $ 49,925
Millipore Corp. 400,000 30,150
Weatherford International, Inc. (b) 400,000 15,925
---------------
96,000
COMMUNICATIONS 5.5%
WinStar Communications, Inc. (b) 1,100,000 37,263
Echostar Communications Corp. `A' (b) 900,000 29,798
Nextlink Communications, Inc. `A' (b) 550,000 20,866
Worldgate Communications, Inc. (b) 1,000,000 17,750
Pinnacle Holdings, Inc. (b) 325,000 17,550
---------------
123,227
CONSUMER DISCRETIONARY 5.5%
Emmis Broadcasting Corp. `A' (b) 750,000 31,031
Concord EFS, Inc. (b) 1,000,000 26,000
B.J.'s Wholesale Club, Inc. (b) 700,000 23,100
Harley-Davidson, Inc. 600,000 23,100
Tiffany & Co. 300,000 20,250
---------------
123,481
CONSUMER SERVICES 1.3%
Pegasus Communications Corp. (b) 600,000 29,438
---------------
ENERGY 1.3%
Cooper Cameron Corp. (b) 300,000 19,800
Grant Prideco, Inc. (b) 400,000 10,000
---------------
29,800
FINANCIAL & BUSINESS SERVICES 3.5%
Young & Rubicam, Inc. 500,000 28,594
Robert Half International, Inc. (b) 1,000,000 28,500
Ace Ltd. 750,000 21,000
---------------
78,094
HEALTH CARE 14.0%
Minimed, Inc. (b) 600,000 70,800
MedImmune, Inc. (b) 720,000 53,280
Cytyc Corp. (b) 800,000 42,700
Allergan, Inc. 450,000 33,525
Alkermes, Inc. (b) 700,000 32,988
Immunex Corp. (b) 500,000 24,719
Biogen, Inc. (b) 300,000 19,350
Sepracor, Inc. (b) 150,000 18,094
Shire Pharmaceuticals PLC SP - ADR (b) 325,000 16,859
---------------
312,315
TECHNOLOGY 53.6%
SDL, Inc. (b) 500,000 142,594
Comverse Technology, Inc. (b) 1,100,000 102,300
Sanmina Corp. (b) 1,000,000 85,500
Jabil Circuit, Inc. (b) 1,600,000 79,400
E-Tek Dynamics, Inc. (b) 225,000 59,358
PMC - Sierra, Inc. (b) 300,000 53,306
Ciena Corp. (b) 300,000 50,006
Network Appliance, Inc. (b) 600,000 48,300
JDS Uniphase Corp. (b) 350,000 41,956
Amdocs Ltd. (b) 525,000 40,294
RF Micro Devices, Inc. (b) 450,000 39,431
Rational Software Corp. (b) 400,000 37,175
Altera Corp. (b) 350,000 35,678
Redback Networks, Inc. (b) 200,000 35,600
Maxim Integrated Products, Inc. (b) 500,000 33,969
Applied Micro Circuits Corp. (b) 300,000 29,625
Teradyne, Inc. (b) 400,000 29,400
CommScope, Inc. (b) 700,000 28,700
LSI Logic Corp. (b) 500,000 27,063
Scientific-Atlanta, Inc. 350,000 26,075
Metromedia Fiber Network, Inc. `A' (b) 650,000 25,797
American Tower Corp. `A' (b) 550,000 22,928
Cree, Inc. (b) 150,000 20,025
TranSwitch Corp. (b) 250,000 19,297
ANTEC Corp. (b) 400,000 16,625
Sirius Satellite Radio, Inc. (b) 350,000 15,509
Gilat Satellite Networks Ltd. (b) 200,000 13,875
Ulticom, Inc. (b) 500,000 12,008
Digital Lightwave, Inc. (b) 100,000 10,050
<CAPTION>
Value
Shares (000s)
--------------------------------------------------------------------------------------------
<S> <C> <C>
Fairchild Semiconductor International, Inc. `A' (b) 175,000 $ 7,088
Exfo Electro Optical Engineering, Inc. (b) 125,000 5,484
---------------
1,194,416
TRANSPORTATION 1.2%
Kansas City Southern Industries, Inc. 300,000 26,606
---------------
UTILITIES 4.4%
Calpine Corp. (b) 1,200,000 78,900
Avista Corp. 1,025,000 17,872
---------------
96,772
---------------
Total Common Stocks 2,110,149
(Cost $1,146,692) ===============
<CAPTION>
--------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 5.6%
--------------------------------------------------------------------------------------------
Principal
Amount
(000s)
<S> <C> <C>
REPURCHASE AGREEMENT 5.6%
State Street Bank
5.850% due 07/03/2000 $ 125,130 125,130
(Dated 06/30/2000. Collateralized by
Federal Home Loan Mortgage Corporation
6.680% due 12/28/2001 valued at $51,003,
Federal Home Loan Mortgage Corporation
6.680% due 12/28/2001 valued at $51,003, and
Federal Home Loan Bank
7.620% due 01/12/2010 valued at $25,634.
Repurchase proceeds are $125,190.)
---------------
Total Short-Term Instruments 125,130
(Cost $125,130) ===============
TOTAL INVESTMENTS (a) 100.2% $ 2,235,279
(Cost $1,271,822)
OTHER ASSETS AND LIABILITIES (NET) (0.2%) (4,507)
---------------
NET ASSETS 100.0% $ 2,230,772
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $1,274,653 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 1,005,376
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (44,750)
---------------
Unrealized appreciation-net $ 960,626
===============
</TABLE>
(b) Non-income producing security.
SEE ACCOMPANYING NOTES 33
<PAGE>
SCHEDULE OF INVESTMENTS
TAX-EFFICIENT EQUITY FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
--------------------------------------------------------------------------------------------
COMMON STOCKS 99.7%
--------------------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE 0.5%
Honeywell International, Inc. 4,175 $ 141
Lockheed Martin Corp. 3,700 92
General Dynamics Corp. 900 47
Raytheon Co. `B' 1,500 29
---------------
309
BUILDING 0.0%
Centex Corp. 500 12
---------------
CAPITAL GOODS 6.5%
General Electric Co. 47,910 2,539
Tyco International Ltd. 5,200 246
United Technologies Corp. 3,800 224
Avery Dennison Corp. 1,300 87
Illinois Tool Works, Inc. 1,400 80
PPG Industries, Inc. 1,800 80
ITT Industries, Inc. 1,900 57
Navistar International Corp. (b) 1,700 53
Cooper Industries, Inc. 1,391 45
Deere & Co. 1,200 44
TRW, Inc. 1,000 43
Paccar, Inc. 1,000 40
Ingersoll-Rand Co. 900 36
Textron, Inc. 400 22
Briggs & Stratton 604 21
Johnson Controls, Inc. 400 21
Dover Corp. 400 16
Millipore Corp. 200 15
Caterpillar, Inc. 400 14
Visteon Corp. (b) 720 9
Minnesota Mining & Manufacturing Co. 100 8
Parker Hannifin Corp. 100 3
Timken Co. 100 2
---------------
3,705
COMMUNICATIONS 6.4%
SBC Communications, Inc. 14,801 640
AT&T Corp. 16,350 517
Verizon Communications 7,300 371
MCI WorldCom, Inc. (b) 8,000 367
BellSouth Corp. 8,200 350
Nextel Communications, Inc. `A' (b) 5,000 306
GTE Corp. 4,500 280
U.S. West, Inc. 2,400 206
MediaOne Group, Inc. (b) 3,000 198
Sprint Corp. (FONGroup) 2,700 138
ADC Telecommunication, Inc. (b) 1,100 92
Vodafone Group PLC SP - ADR 2,000 83
ALLTEL Corp. 1,000 62
CenturyTel, Inc. 500 14
---------------
3,624
CONSUMER DISCRETIONARY 8.9%
Wal-Mart Stores, Inc. 20,700 1,193
Home Depot, Inc. 11,300 564
Time Warner, Inc. 6,800 517
General Motors Corp. 4,900 285
Eastman Kodak Co. 4,100 244
Ford Motor Co. 5,500 237
UST, Inc. 13,688 201
Wm. Wrigley Jr. Co. 2,500 200
Walgreen Co. 5,900 190
Gap, Inc. 5,875 184
Target Corp. 1,900 110
Jostens, Inc. 3,698 93
Newell Rubbermaid, Inc. 2,900 75
Liz Claiborne, Inc. 2,100 74
CVS Corp. 1,800 72
Dollar General Corp. 3,632 71
McGraw-Hill Companies, Inc. 1,300 70
Costco Wholesale Corp. 1,800 59
Whirlpool Corp. 1,200 56
Sears Roebuck & Co. 1,700 55
Circuit City Stores 1,600 53
Best Buy Co., Inc. (b) 800 51
<CAPTION>
Value
Shares (000s)
--------------------------------------------------------------------------------------------
<S> <C> <C>
Avon Products, Inc. 1,100 $ 49
Maytag Corp. 1,287 47
Lowe's Cos., Inc. 1,100 45
Toys R US, Inc. (b) 3,000 44
Federated Department Stores, Inc. (b) 1,200 41
Mattel, Inc. 2,426 32
RadioShack Corp. 600 28
Cendant Corp. (b) 1,995 28
TJX Cos., Inc. 1,336 25
K Mart Corp. (b) 3,500 24
Black & Decker Corp. 580 23
Hasbro, Inc. 900 14
Tupperware Corp. 300 7
Consolidated Stores Corp. (b) 500 6
Brunswick Corp. 300 5
---------------
5,072
CONSUMER SERVICES 3.2%
Viacom, Inc. `B' (b) 10,176 694
Disney (Walt) Co. 5,800 225
Tribune Co. 5,500 193
McDonald's Corp. 5,500 181
Interpublic Group of Companies, Inc. 3,400 146
Gannett, Inc. 1,600 96
Waste Management, Inc. 3,800 72
Knight-Ridder, Inc. 1,300 69
Harrah's Entertainment, Inc. (b) 2,100 44
Hilton Hotels Corp. 4,005 38
New York Times Co. 600 24
Darden Restaurants, Inc. 400 7
---------------
1,789
CONSUMER STAPLES 6.5%
Coca-Cola Co. 6,177 355
Kimberly-Clark Corp. 5,900 339
Pepsico, Inc. 6,600 293
Philip Morris Cos., Inc. 10,700 284
H.J. Heinz Co. 5,000 219
General Mills, Inc. 5,700 218
Procter & Gamble Co. 3,700 212
Seagram Co. Ltd. 3,300 191
Gillette Co. 4,800 168
Bestfoods 2,300 159
Colgate-Palmolive Co. 2,600 156
Unilever NV - NY 2,600 112
Kroger Co. 4,800 106
Anheuser Busch Cos., Inc. 1,400 105
Sara Lee Corp. 4,900 95
Alberto-Culver Co. 2,500 76
Safeway, Inc. (b) 1,600 72
Campbell Soup Co. 2,400 70
Sysco Corp. 1,600 67
Albertson's, Inc. 1,900 63
Kellogg Co. 1,800 54
Clorox Co. 1,100 49
Quaker Oats Co. 600 45
ConAgra, Inc. 2,200 42
Nabisco Group Holdings Corp. 1,500 39
Adolph Coors Co. `B' 500 30
Hershey Foods Corp. 600 29
Ralston-Ralston Purina Group 1,400 28
Archer-Daniels-Midland Co. 2,800 27
---------------
3,703
ENERGY 6.0%
Exxon Mobil Corp. 19,519 1,532
Royal Dutch Petroleum Co. 8,645 532
AES Corp. (b) 4,700 214
Peco Energy Co. 4,800 194
Chevron Corp. 1,900 161
Rowan Cos., Inc. (b) 4,800 146
Helmerich & Payne, Inc. 3,500 131
BP Amoco PLC SP - ADR 1,640 93
Tosco Corp. 2,500 71
Conoco, Inc. 2,823 69
Amerada Hess Corp. 1,000 62
Phillips Petroleum Co. 1,200 61
Enron Corp. 650 42
</TABLE>
34 SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
Value
Shares (000s)
--------------------------------------------------------------------------------------------
<S> <C> <C>
Texaco, Inc. 700 $ 37
Halliburton Co. 695 33
Sunoco, Inc. 700 21
---------------
3,399
ENVIRONMENTAL SERVICES 0.3%
Allied Waste Industries, Inc. (b) 16,300 163
Service Corp. International (b) 3,000 10
---------------
173
FINANCIAL & BUSINESS SERVICES 13.6%
Citigroup, Inc. 18,300 1,103
Morgan Stanley, Dean Witter, Discover and Co. 7,400 616
American International Group, Inc. 5,091 598
Chase Manhattan Corp. 10,350 477
State Street Corp. 3,700 392
Wells Fargo Co. 9,300 360
KeyCorp 17,667 311
American Express 5,700 297
Bank of New York 6,200 288
Charles Schwab Corp. 7,800 262
Merrill Lynch & Co. 2,000 230
MBNA Corp. 8,200 222
Paychex, Inc. 5,250 221
BankAmerica Corp. 3,411 147
Federal National Mortgage Association 2,700 141
Marsh & McLennan Cos. 1,300 136
Household International, Inc. 2,700 112
Comerica, Inc. 2,500 112
MGIC Investment Corp. 2,366 108
Mellon Financial Corp. 2,900 106
Northern Trust Corp. 1,600 104
Automatic Data Processing, Inc. 1,800 96
Omnicom Group 1,000 89
Golden West Financial Corp. 2,100 86
Allstate Corp. 3,600 80
Bank One Corp. 3,000 80
Equifax, Inc. 2,900 76
Lehman Brothers Holdings, Inc. 800 76
Sun Trust Banks, Inc. 1,500 69
Washington Mutual, Inc. 2,350 68
Providian Financial Corp. 700 63
SLM Holding Corp. 1,700 63
First Union Corp. 2,300 57
Firstar Corp. 2,728 56
Bear Stearns Co., Inc. 1,127 47
Associates First Capital Corp. 1,800 40
Aon Corp. 1,200 37
AFLAC, Inc. 800 37
American General Corp. 600 37
Lincoln National Corp. 880 32
Dow Jones & Co., Inc. 400 29
Fleet Boston Financial Corp. 829 28
PNC Bank Corp. 600 28
Capital One Financial Corp. 600 27
Progressive Corp. 300 22
Young & Rubicam, Inc. 300 17
Federal Home Loan Mortgage Corp. 310 13
Morgan, J.P. & Co., Inc. 100 11
Sabre Holdings Corp. (b) 361 10
MBIA, Inc. 200 10
Franklin Resources, Inc. 200 6
---------------
7,733
HEALTH CARE 11.7%
Pfizer, Inc. 24,613 1,181
Merck & Co., Inc. 10,400 797
Amgen, Inc. (b) 8,983 631
Bristol-Myers Squibb Co. 9,000 524
Eli Lilly & Co. 5,200 519
Johnson & Johnson 5,000 509
American Home Products Corp. 5,900 347
Schering-Plough Corp. 6,363 321
Abbott Laboratories 6,600 294
Medtronic, Inc. 5,700 284
Pharmacia Corp. 4,109 212
United Healthcare Corp. 1,900 163
Wellpoint Health Networks, Inc. (b) 2,000 145
Becton Dickinson & Co. 4,600 132
<CAPTION>
Value
Shares (000s)
--------------------------------------------------------------------------------------------
<S> <C> <C>
CIGNA Corp. 1,300 $ 122
Baxter International, Inc. 1,700 120
Guidant Corp. 1,700 84
Biomet, Inc. 2,000 76
Boston Scientific Corp. (b) 3,000 65
Aetna, Inc. 600 39
International Flavors & Fragrances 1,112 34
St. Jude Medical, Inc. 600 28
Edwards Lifesciences Corp. (b) 340 7
---------------
6,634
MATERIALS & PROCESSING 1.8%
Rohm & Haas Co. 6,900 238
Alcoa, Inc. 5,400 157
E.I. Du Pont de Nemours, Inc. 2,868 125
International Paper Co. 3,300 98
Freeport-McMoran Copper & Gold, Inc. (b) 8,900 82
Sealed Air Corp. (b) 1,500 79
Barrick Gold Corp. 2,500 45
Engelhard Corp. 2,600 44
W.R. Grace & Co. (b) 2,912 35
Air Products & Chemicals 1,000 31
Praxair, Inc. 700 26
Fort James Corp. 900 21
Sherwin-Williams Co. 700 15
Nucor Corp. 400 13
FMC Corp. (b) 100 6
Ball Corp. 100 3
---------------
1,018
TECHNOLOGY 31.8%
Intel Corp. 18,365 2,455
Cisco Systems, Inc. (b) 31,400 1,996
Microsoft Corp. (b) 24,400 1,952
Oracle Corp. (b) 15,870 1,334
Lucent Technologies, Inc. 15,400 912
International Business Machines Corp. 8,158 894
Sun Microsystems, Inc. (b) 8,800 800
EMC Corp. (b) 10,400 800
Dell Computer Corp. (b) 15,900 784
Nortel Networks Corp. 10,200 696
Hewlett Packard Co. 5,200 649
Texas Instruments, Inc. (b) 8,000 550
Applied Materials, Inc. (b) 5,932 538
America Online, Inc. (b) 9,000 475
Motorola, Inc. 10,200 296
Network Appliance, Inc. (b) 3,400 274
Yahoo, Inc. (b) 2,200 273
Tellabs, Inc. (b) 3,700 253
Qualcomm, Inc. (b) 3,200 192
Computer Sciences Corp. (b) 2,000 149
Agilent Technologies, Inc. (b) 1,983 146
3Com Corp. (b) 2,500 144
Danaher Corp. 2,800 138
Corning, Inc. 500 135
Solectron Corp. (b) 3,200 134
Sprint Corp. (PCS Group) (b) 2,168 129
Gateway, Inc. (b) 2,200 125
Computer Associates International, Inc. 2,000 102
Micron Technology, Inc. (b) 1,040 92
Electronic Data Systems Corp. 2,000 83
Compaq Computer Corp. 3,220 82
Veritas Software Corp. (b) 600 68
BMC Software, Inc. (b) 1,500 54
Global Crossing Ltd. (b) 1,900 50
PerkinElmer, Inc. 600 40
Adobe Systems, Inc. 280 36
Lexmark International Group, Inc. `A' (b) 500 34
Siebel Systems, Inc. (b) 200 33
American Power Conversion Corp. (b) 700 29
Comverse Technology, Inc. (b) 300 28
IMS Health, Inc. (b) 800 14
Energizer Holdings, Inc. (b) 466 9
Xilinx, Inc. (b) 100 8
Analog Devices, Inc. (b) 100 8
Teradyne, Inc. (b) 100 7
Maxim Integrated Products, Inc. (b) 100 7
PE Corp.-PE Biosystems Group 100 7
Parametric Technology Corp. (b) 594 7
</TABLE>
SEE ACCOMPANYING NOTES 35
<PAGE>
SCHEDULE OF INVESTMENTS (CONT.)
TAX-EFFICIENT EQUITY FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
--------------------------------------------------------------------------------------------
<S> <C> <C>
Xerox Corp. 290 $ 6
Compuware Corp. (b) 411 4
Citrix Systems, Inc. (b) 100 2
Unisys Corp. (b) 100 1
---------------
18,034
TRANSPORTATION 1.0%
Kansas City Southern Industries, Inc. 3,100 275
Ryder System, Inc. 8,100 153
Delta Air Lines, Inc. 1,500 76
FDX Corp. (b) 1,200 46
Southwest Airlines Co. 1,600 30
---------------
580
UTILITIES 1.5%
Coastal Corp. 4,700 286
Northern States Power-Mn 10,200 206
Columbia Gas Systems, Inc. 1,800 118
Duke Energy Corp. 1,000 56
FirstEnergy Corp. (b) 2,116 49
PG&E Corp. 1,700 42
Texas Utilities Co. 1,300 38
DTE Energy Co. 1,100 34
Constellation Energy Group, Inc. 400 13
---------------
842
---------------
Total Common Stocks 56,627
(Cost $46,063) ===============
<CAPTION>
--------------------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.4%
--------------------------------------------------------------------------------------------
Principal
Amount
(000s)
<S> <C> <C>
REPURCHASE AGREEMENT 0.4%
State Street Bank
5.850% due 07/03/2000 $ 217 217
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
6.000% due 11/15/2001 valued at $224.
Repurchase proceeds are $217.)
---------------
Total Short-Term Instruments 217
(Cost $217) ===============
TOTAL INVESTMENTS (a) 100.1% $ 56,844
(Cost $46,280)
OTHER ASSETS AND LIABILITIES (NET) (0.1%) (37)
---------------
NET ASSETS 100.0% $ 56,807
===============
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $46,808 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 12,663
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (2,627)
---------------
Unrealized appreciation-net $ 10,036
===============
</TABLE>
(b) Non-income producing security.
36 SEE ACCOMPANYING NOTES
<PAGE>
SCHEDULE OF INVESTMENTS
VALUE FUND
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
-------------------------------------------------------------------------------
COMMON STOCKS 94.0%
-------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE 8.5%
Raytheon Co. `B' 305,500 $ 5,881
Boeing Co. 116,000 4,850
Northrop Grumman Corp. 50,000 3,313
-------
14,044
CAPITAL GOODS 4.9%
Deere & Co. 220,500 8,159
------
COMMUNICATIONS 8.0%
MCI WorldCom, Inc. (b) 129,300 5,931
GTE Corp. 70,000 4,358
AT&T Corp. 95,000 3,003
------
13,292
CONSUMER DISCRETIONARY 3.1%
Eastman Kodak Co. 70,000 4,165
Tupperware Corp. 41,000 902
------
5,067
CONSUMER SERVICES 1.5%
Waste Management, Inc. 113,800 2,162
Central Newspapers, Inc. `A' 6,000 380
------
2,542
CONSUMER STAPLES 10.9%
Philip Morris Cos., Inc. 141,600 3,761
Kroger Co. (b) 146,100 3,223
Pepsi Bottling Group, Inc. 100,000 2,919
SUPERVALU, Inc. 145,000 2,764
Sara Lee Corp. 120,200 2,321
Archer-Daniels-Midland Co. 195,000 1,913
ConAgra, Inc. 61,900 1,180
------
18,081
ENERGY 9.9%
Petroleo Brasileiro SA 170,000 5,136
R & B Falcon Corp. (b) 252,000 5,938
Diamond Offshore Drilling, Inc. 140,000 4,918
Ultramar Diamond Shamrock Corp. 20,000 496
------
16,488
FINANCIAL & BUSINESS SERVICES 29.1%
Washington Mutual, Inc. 309,600 8,940
Ace Ltd. 298,400 8,355
XL Capital Ltd. 130,500 7,063
Federal Home Loan Mortgage Corp. 138,800 5,621
Aon Corp. 170,000 5,281
Loews Corp. 85,000 5,100
UnumProvident Corp. 171,300 3,437
Allstate Corp. 120,000 2,670
AmSouth Bancorp. 63,600 1,002
St. Paul Cos., Inc. 25,000 853
------
48,322
HEALTH CARE 6.6%
Tenet Healthcare Corp. (b) 265,000 7,155
Aetna, Inc. 60,000 3,851
------
11,006
MATERIALS & PROCESSING 0.5%
International Paper Co. 28,000 835
------
TECHNOLOGY 2.9%
Xerox Corp. 130,000 2,698
Compaq Computer Corp. 82,400 2,106
------
4,804
TRANSPORTATION 2.0%
CSX Corp. 160,000 3,390
------
UTILITIES 6.1%
PG&E Corp. 195,000 4,802
Public Service Enterprise Group, Inc. 100,000 3,463
DTE Energy Co. 60,000 1,834
-------
10,099
Total Common Stocks 156,129
(Cost $157,108) =======
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
(000s) (000s)
-------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 3.8%
-------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT 3.8%
State Street Bank
5.850% due 07/03/2000 $ 6,355 $ 6,355
(Dated 06/30/2000. Collateralized by
Federal National Mortgage Association
6.100% due 09/14/2001 valued at $6,484.
Repurchase proceeds are $6,358.)
--------
Total Short-Term Instruments 6,355
(Cost $6,355) ========
TOTAL INVESTMENTS (a) 97.8% $162,484
(Cost $163,463)
OTHER ASSETS AND LIABILITIES (NET) 2.2% 3,689
--------
NET ASSETS 100.0% $166,173
========
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation (depreciation)
of investments based on cost for federal income tax purposes of $163,839
was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost. $ 7,458
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (8,813)
---------
Unrealized depreciation-net $ (1,355)
=========
(b) Non-income producing security.
</TABLE>
SEE ACCOMPANYING NOTES 37
<PAGE>
FINANCIAL HIGHLIGHTS - CLASS D
<TABLE>
<CAPTION>
NET ASSET NET REALIZED/ DIVIDENDS DIVIDENDS IN
VALUE UNREALIZED GAIN TOTAL INCOME FROM FROM NET EXCESS OF NET
SELECTED PER SHARE DATA BEGINNING NET INVESTMENT (LOSS) ON INVESTMENT INVESTMENT INVESTMENT
FOR THE YEAR OR PERIOD ENDED: OF PERIOD INCOME (LOSS) INVESTMENTS OPERATIONS INCOME INCOME
---------- ---------------- -------------- ------------------ ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL APPRECIATION FUND
06/30/2000 $ 26.63 $ (0.03)(a) $ 5.36 (a) $ 5.33 $ (0.05) $ (0.03)
----------------------------- ---------- ---------------- -------------- ------------------ ---------- ---------------
06/30/1999 26.01 0.06 (a) 2.34 (a) 2.40 (0.13) 0.00
----------------------------- ---------- ---------------- -------------- ------------------ ---------- ---------------
04/08/1998-06/30/1998 25.41 0.02 (a) 0.58 (a) 0.60 0.00 0.00
----------------------------- ---------- ---------------- -------------- ------------------ ---------- ---------------
EQUITY INCOME FUND
06/30/2000 $ 15.59 $ 0.35 (a) $ (2.44)(a) $ (2.09) $ (0.29) $ 0.00
----------------------------- ---------- ---------------- -------------- ------------------ ---------- ---------------
06/30/1999 16.04 0.40 (a) 1.27 (a) 1.67 (0.36) 0.00
----------------------------- ---------- ---------------- -------------- ------------------ ---------- ---------------
04/08/1998-06/30/1998 16.71 0.09 (a) (0.66)(a) (0.57) (0.10) 0.00
----------------------------- ---------- ---------------- -------------- ------------------ ---------- ---------------
GLOBAL INNOVATION FUND
03/31/2000 - 06/30/2000 $ 20.17 $ (0.04)(a) $ (1.19)(a) $ (1.23) $ 0.00 $ 0.00
----------------------------- ---------- ---------------- -------------- ------------------ ---------- ---------------
GROWTH FUND
01/31/2000-06/30/2000 $ 32.84 $ (0.11) $ 2.03 $ 1.92 $ 0.00 $ 0.00
----------------------------- ---------- ---------------- -------------- ------------------ ---------- ---------------
INNOVATION FUND
06/30/2000 $ 37.52 $ (0.59)(a) $ 42.18 (a) $ 41.59 $ 0.00 $ 0.00
----------------------------- ---------- ---------------- -------------- ------------------ ---------- ---------------
06/30/1999 24.28 (0.29)(a) 14.79 (a) 14.50 0.00 0.00
----------------------------- ---------- ---------------- -------------- ------------------ ---------- ---------------
04/08/1998-06/30/1998 21.50 (0.05)(a) 2.83 (a) 2.78 0.00 0.00
----------------------------- ---------- ---------------- -------------- ------------------ ---------- ---------------
MID-CAP FUND
06/30/2000 $ 22.90 $ (0.01)(a) $ 7.85 (a) $ 7.84 $ (0.01) $ 0.00
----------------------------- ---------- ---------------- -------------- ------------------ ---------- ---------------
06/30/1999 23.99 0.03 (a) (0.04)(a) (0.01) (0.01) 0.00
----------------------------- ---------- ---------------- -------------- ------------------ ---------- ---------------
04/08/1998-06/30/1998 23.97 0.00 (a) 0.02 (a) 0.02 0.00 0.00
----------------------------- ---------- ---------------- -------------- ------------------ ---------- ---------------
RENAISSANCE FUND
06/30/2000 $ 18.22 $ 0.35 (a) $ (0.13)(a) $ 0.22 $ 0.00 $ 0.00
----------------------------- ---------- ---------------- -------------- ------------------ ---------- ---------------
06/30/1999 19.10 0.00 (a) 1.45 (a) 1.45 0.00 0.00
----------------------------- ---------- ---------------- -------------- ------------------ ---------- ---------------
04/08/1998-06/30/1998 18.99 0.01 (a) 0.10 (a) 0.11 0.00 0.00
----------------------------- ---------- ---------------- -------------- ------------------ ---------- ---------------
SELECT GROWTH FUND
03/31/2000 - 06/30/2000 $ 23.25 $ 0.01 (a) $ 0.74 (a) $ 0.75 $ 0.00 $ 0.00
----------------------------- ---------- ---------------- -------------- ------------------ ---------- ---------------
TARGET FUND
06/09/2000 - 06/30/2000 $ 30.46 $ (0.01)(a) $ 0.69 (a) $ 0.68 $ 0.00 $ 0.00
----------------------------- ---------- ---------------- -------------- ------------------ ---------- ---------------
TAX-EFFICIENT EQUITY FUND
06/30/2000 $ 11.59 $ 0.02 (a) $ 0.61 (a) $ 0.63 $ 0.00 $ 0.00
----------------------------- ---------- ---------------- -------------- ------------------ ---------- ---------------
07/10/1998 - 06/30/1999 10.00 0.03 (a) 1.56 (a) 1.59 0.00 0.00
----------------------------- ---------- ---------------- -------------- ------------------ ---------- ---------------
VALUE FUND
06/30/2000 $ 15.29 $ 0.23 (a) $ (1.34)(a) $ (1.11) $ (0.24) $ 0.00
----------------------------- ---------- ---------------- -------------- ------------------ ---------- ---------------
06/30/1999 15.64 0.23 (a) 1.37 (a) 1.60 (0.23) 0.00
----------------------------- ---------- ---------------- -------------- ------------------ ---------- ---------------
04/08/1998-06/30/1998 15.99 0.04 (a) (0.34)(a) (0.30) (0.05) 0.00
----------------------------- ---------- ---------------- -------------- ------------------ ---------- ---------------
</TABLE>
*Annualized
(a)Per share amounts based on average number of shares outstanding during
the period.
(b)If the investment manager had not reimbursed expenses, the ratio of
operating expenses to average net assets would have been 1.94% for the
period ended June 30, 2000.
38 SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
DISTRIBUTIONS IN
DISTRIBUTIONS FROM EXCESS OF NET
SELECTED PER SHARE DATA NET REALIZED REALIZED CAPITAL NET ASSET VALUE
FOR THE YEAR OR PERIOD ENDED: CAPITAL GAINS GAINS TOTAL DISTRIBUTIONS END OF PERIOD TOTAL RETURN
------------------- ------------------ --------------------- ----------------- --------------
<S> <S> <C> <C> <C> <C>
CAPITAL APPRECIATION FUND
06/30/2000 $ (5.00) $ 0.00 $ (5.08) $ 26.88 22.84%
----------------------------- ------------------- ------------------ --------------------- ----------------- --------------
06/30/1999 (1.65) 0.00 (1.78) 26.63 10.17
----------------------------- ------------------- ------------------ --------------------- ----------------- --------------
04/08/1998-06/30/1998 0.00 0.00 0.00 26.01 2.36
----------------------------- ------------------- ------------------ --------------------- ----------------- --------------
EQUITY INCOME FUND
06/30/2000 $ (0.48) $ (2.16) $ (2.93) $ 10.57 (13.15)%
----------------------------- ------------------- ------------------ --------------------- ----------------- --------------
06/30/1999 (1.76) 0.00 (2.12) 15.59 12.21
----------------------------- ------------------- ------------------ --------------------- ----------------- --------------
04/08/1998-06/30/1998 0.00 0.00 (0.10) 16.04 (3.43)
----------------------------- ------------------- ------------------ --------------------- ----------------- --------------
GLOBAL INNOVATION FUND
03/31/2000 - 06/30/2000 $ 0.00 $ 0.00 $ 0.00 $ 18.94 (6.10)%
----------------------------- ------------------- ------------------ --------------------- ----------------- --------------
GROWTH FUND
01/31/2000-06/30/2000 $ 0.00 $ 0.00 $ 0.00 $ 34.76 5.85%
----------------------------- ------------------- ------------------ --------------------- ----------------- --------------
INNOVATION FUND
06/30/2000 $ (6.39) $ 0.00 $ (6.39) $ 72.72 115.85%
----------------------------- ------------------- ------------------ --------------------- ----------------- --------------
06/30/1999 (1.26) 0.00 (1.26) 37.52 61.62
----------------------------- ------------------- ------------------ --------------------- ----------------- --------------
04/08/1998-06/30/1998 0.00 0.00 0.00 24.28 12.93
----------------------------- ------------------- ------------------ --------------------- ----------------- --------------
MID-CAP FUND
06/30/2000 $ (0.02) $ 0.00 $ (0.03) $ 30.71 34.24%
----------------------------- ------------------- ------------------ --------------------- ----------------- --------------
06/30/1999 (1.07) 0.00 (1.08) 22.90 0.25
----------------------------- ------------------- ------------------ --------------------- ----------------- --------------
04/08/1998-06/30/1998 0.00 0.00 0.00 23.99 0.08
----------------------------- ------------------- ------------------ --------------------- ----------------- --------------
RENAISSANCE FUND
06/30/2000 $ (2.59) $ (0.86) $ (3.45) $ 14.99 3.56%
----------------------------- ------------------- ------------------ --------------------- ----------------- --------------
06/30/1999 (2.33) 0.00 (2.33) 18.22 10.01
----------------------------- ------------------- ------------------ --------------------- ----------------- --------------
04/08/1998-06/30/1998 0.00 0.00 0.00 19.10 0.58
----------------------------- ------------------- ------------------ --------------------- ----------------- --------------
SELECT GROWTH FUND
03/31/2000 - 06/30/2000 $ 0.00 $ 0.00 $ 0.00 $ 24.00 3.23%
----------------------------- ------------------- ------------------ --------------------- ----------------- --------------
TARGET FUND
06/09/2000 - 06/30/2000 $ 0.00 $ 0.00 $ 0.00 $ 31.14 2.23%
----------------------------- ------------------- ------------------ --------------------- ----------------- --------------
TAX-EFFICIENT EQUITY FUND
06/30/2000 $ 0.00 $ 0.00 $ 0.00 $ 12.22 5.44%
----------------------------- ------------------- ------------------ --------------------- ----------------- --------------
07/10/1998 - 06/30/1999 0.00 0.00 0.00 11.59 15.90
----------------------------- ------------------- ------------------ --------------------- ----------------- --------------
VALUE FUND
06/30/2000 $ (0.57) $ (2.00) $ (2.81) $ 11.37 (7.07)%
----------------------------- ------------------- ------------------ --------------------- ----------------- --------------
06/30/1999 (1.72) 0.00 (1.95) 15.29 12.00
----------------------------- ------------------- ------------------ --------------------- ----------------- --------------
04/08/1998-06/30/1998 0.00 0.00 (0.05) 15.64 (1.85)
----------------------------- ------------------- ------------------ --------------------- ----------------- --------------
<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> <S> <C> <C> <C>
CAPITAL APPRECIATION FUND
06/30/2000 $ 524 1.11% (0.10)% 119%
----------------------------- ----------------- ------------ -------------- ---------------
06/30/1999 339 1.10 0.24 120
----------------------------- ----------------- ------------ -------------- ---------------
04/08/1998-06/30/1998 118 1.10* 0.27* 75
----------------------------- ----------------- ------------ -------------- ---------------
EQUITY INCOME FUND
06/30/2000 $ 4 1.12% 2.93% 114%
----------------------------- ----------------- ------------ -------------- ---------------
06/30/1999 106 1.10 2.73 76
----------------------------- ----------------- ------------ -------------- ---------------
04/08/1998-06/30/1998 104 1.10* 2.23* 45
----------------------------- ----------------- ------------ -------------- ---------------
GLOBAL INNOVATION FUND
03/31/2000 - 06/30/2000 $ 146 1.85%(b)* (0.90)%* 131%
----------------------------- ----------------- ------------ -------------- ---------------
GROWTH FUND
01/31/2000-06/30/2000 $ 11 1.16%* (0.78)%* 72%
----------------------------- ----------------- ------------ -------------- ---------------
INNOVATION FUND
06/30/2000 $ 85,096 1.30% (0.93)% 186%
----------------------------- ----------------- ------------ -------------- ---------------
06/30/1999 18,366 1.30 (0.89) 119
----------------------------- ----------------- ------------ -------------- ---------------
04/08/1998-06/30/1998 139 1.30* (0.99)* 100
----------------------------- ----------------- ------------ -------------- ---------------
MID-CAP FUND
06/30/2000 $ 796 1.11% (0.05)% 164%
----------------------------- ----------------- ------------ -------------- ---------------
06/30/1999 359 1.10 0.16 85
----------------------------- ----------------- ------------ -------------- ---------------
04/08/1998-06/30/1998 142 1.10* 0.03* 66
----------------------------- ----------------- ------------ -------------- ---------------
RENAISSANCE FUND
06/30/2000 $ 1,286 1.25% 2.21% 133%
----------------------------- ----------------- ------------ -------------- ---------------
06/30/1999 192 1.25 (0.02) 221
----------------------------- ----------------- ------------ -------------- ---------------
04/08/1998-06/30/1998 126 1.25* 0.21* 192
----------------------------- ----------------- ------------ -------------- ---------------
SELECT GROWTH FUND
03/31/2000 - 06/30/2000 $ 10 1.25% 0.11% 170%
----------------------------- ----------------- ------------ -------------- ---------------
TARGET FUND
06/09/2000 - 06/30/2000 $ 10 1.20%* (0.69)%* 99%
----------------------------- ----------------- ------------ -------------- ---------------
TAX-EFFICIENT EQUITY FUND
06/30/2000 $ 11 1.11% 0.16% 32%
----------------------------- ----------------- ------------ -------------- ---------------
07/10/1998 - 06/30/1999 869 1.11* 0.30* 13
----------------------------- ----------------- ------------ -------------- ---------------
VALUE FUND
06/30/2000 $ 46 1.11% 1.71% 196%
----------------------------- ----------------- ------------ -------------- ---------------
06/30/1999 118 1.10 1.61 101
----------------------------- ----------------- ------------ -------------- ---------------
04/08/1998-06/30/1998 98 1.10* 1.23* 77
----------------------------- ----------------- ------------ -------------- ---------------
</TABLE>
SEE ACCOMPANYING NOTES 39
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 2000
<TABLE>
<CAPTION>
CAPITAL APPRECIATION
Amounts in thousands, except per share amounts FUND EQUITY INCOME FUND GLOBAL INNOVATION FUND GROWTH FUND
--------------------- -------------------- ------------------------ -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value $ 797,602 $ 69,612 $ 105,626 $ 2,915,435
------------------------------------------------- --------------------- -------------------- ------------------------ -------------
Cash and foreign currency 3 0 1 449
------------------------------------------------- --------------------- -------------------- ------------------------ -------------
Receivable for investments sold and forward
foreign currency contracts 6,063 14,238 1,549 1,808
------------------------------------------------- --------------------- -------------------- ------------------------ -------------
Receivable for Fund shares sold 400 230 3,208 13,661
------------------------------------------------- --------------------- -------------------- ------------------------ -------------
Interest and dividends receivable 444 166 4 316
------------------------------------------------- --------------------- -------------------- ------------------------ -------------
Manager reimbursement receivable 0 0 13 0
------------------------------------------------- --------------------- -------------------- ------------------------ -------------
Other assets 0 0 0 0
------------------------------------------------- --------------------- -------------------- ------------------------ -------------
804,512 84,246 110,401 2,931,669
================================================= ===================== ==================== ======================== =============
LIABILITIES:
Payable for investments purchased and forward
foreign currency contracts $ 8,297 $ 0 $ 5,399 $ 440
------------------------------------------------- --------------------- -------------------- ------------------------ -------------
Due to Custodian 0 13,997 0 0
------------------------------------------------- --------------------- -------------------- ------------------------ -------------
Payable for Fund shares redeemed 1,693 245 60 8,545
------------------------------------------------- --------------------- -------------------- ------------------------ -------------
Dividends payable 0 0 0 0
------------------------------------------------- --------------------- -------------------- ------------------------ -------------
Accrued investment advisory fee 320 40 76 1,260
------------------------------------------------- --------------------- -------------------- ------------------------ -------------
Accrued administration fee 209 28 45 997
------------------------------------------------- --------------------- -------------------- ------------------------ -------------
Accrued distribution fee 96 18 39 1,703
------------------------------------------------- --------------------- -------------------- ------------------------ -------------
Accrued servicing fee 87 9 19 626
------------------------------------------------- --------------------- -------------------- ------------------------ -------------
Other liabilities 0 0 15 0
------------------------------------------------- --------------------- -------------------- ------------------------ -------------
10,702 14,337 5,653 13,571
================================================= ===================== ==================== ======================== =============
NET ASSETS $ 793,810 $ 69,909 $ 104,748 $ 2,918,098
================================================= ===================== ==================== ======================== =============
NET ASSETS CONSIST OF:
Paid in capital $ 436,815 $ 89,276 $ 94,489 $ 1,631,648
------------------------------------------------- --------------------- -------------------- ------------------------ -------------
Undistributed (overdistributed) net
investment income 125,087 41 522 0
------------------------------------------------- --------------------- -------------------- ------------------------ -------------
Accumulated undistributed net realized gain (loss) 67,446 (20,959) (839) 172,794
------------------------------------------------- --------------------- -------------------- ------------------------ -------------
Net unrealized appreciation (depreciation) 164,462 1,551 10,576 1,113,656
------------------------------------------------- --------------------- -------------------- ------------------------ -------------
$ 793,810 $ 69,909 $ 104,748 $ 2,918,098
================================================= ===================== ==================== ======================== =============
NET ASSETS:
Class D $ 524 $ 4 $ 146 $ 11
------------------------------------------------- --------------------- -------------------- ------------------------ -------------
Other Classes 793,286 69,905 104,602 2,918,087
------------------------------------------------- --------------------- -------------------- ------------------------ -------------
SHARES ISSUED AND OUTSTANDING:
Class D 20 0 8 0
------------------------------------------------- --------------------- -------------------- ------------------------ -------------
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
(NET ASSETS PER SHARE OUTSTANDING)
Class D $ 26.88 $ 10.57 $ 18.94 $ 34.76
------------------------------------------------- --------------------- -------------------- ------------------------ -------------
COST OF INVESTMENTS OWNED $ 633,140 $ 68,061 $ 95,050 $ 1,801,779
================================================= ===================== ==================== ======================== =============
COST OF FOREIGN CURRENCY HELD $ 0 $ 0 $ 0 $ 0
================================================= ===================== ==================== ======================== =============
</TABLE>
40 SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
Amounts in thousands, except per share amounts INNOVATION FUND MID-CAP FUND RENAISSANCE FUND SELECT GROWTH FUND
----------------- -------------- ------------------ --------------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value $ 5,509,148 $ 1,082,233 $ 476,042 $ 16,975
------------------------------------------------- ----------------- -------------- ------------------ --------------------
Cash and foreign currency 2,127 1 0 1
------------------------------------------------- ----------------- -------------- ------------------ --------------------
Receivable for investments sold and forward
foreign currency contracts 48,797 5,036 11,130 0
------------------------------------------------- ----------------- -------------- ------------------ --------------------
Receivable for Fund shares sold 29,514 5,544 389 656
------------------------------------------------- ----------------- -------------- ------------------ --------------------
Interest and dividends receivable 175 618 1,700 1
------------------------------------------------- ----------------- -------------- ------------------ --------------------
Manager reimbursement receivable 0 0 0 0
------------------------------------------------- ----------------- -------------- ------------------ --------------------
Other assets 0 0 0 3
------------------------------------------------- ----------------- -------------- ------------------ --------------------
5,589,761 1,093,432 489,261 17,636
================================================= ================= ============== ================== ====================
LIABILITIES:
Payable for investments purchased and forward
foreign currency contracts $ 90,546 $ 14,258 $ 6,251 $ 722
------------------------------------------------- ----------------- -------------- ------------------ --------------------
Due to Custodian 0 0 0 0
------------------------------------------------- ----------------- -------------- ------------------ --------------------
Payable for Fund shares redeemed 11,780 2,074 3,214 14
------------------------------------------------- ----------------- -------------- ------------------ --------------------
Dividends payable 0 0 0 0
------------------------------------------------- ----------------- -------------- ------------------ --------------------
Accrued investment advisory fee 2,951 417 262 7
------------------------------------------------- ----------------- -------------- ------------------ --------------------
Accrued administration fee 1,731 279 174 5
------------------------------------------------- ----------------- -------------- ------------------ --------------------
Accrued distribution fee 2,468 125 274 3
------------------------------------------------- ----------------- -------------- ------------------ --------------------
Accrued servicing fee 1,129 103 109 3
------------------------------------------------- ----------------- -------------- ------------------ --------------------
Other liabilities 0 0 771 0
------------------------------------------------- ----------------- -------------- ------------------ --------------------
110,605 17,256 11,055 754
================================================= ================= ============== ================== ====================
NET ASSETS $ 5,479,156 $ 1,076,176 $ 478,206 $ 16,882
================================================= ================= ============== ================== ====================
NET ASSETS CONSIST OF:
Paid in capital $ 3,572,912 $ 629,783 $ 473,353 $ 15,879
------------------------------------------------- ----------------- -------------- ------------------ --------------------
Undistributed (overdistributed) net
investment income 170,220 174,578 24,138 0
------------------------------------------------- ----------------- -------------- ------------------ --------------------
Accumulated undistributed net realized gain (loss) 50,831 85,334 (12,862) (162)
------------------------------------------------- ----------------- -------------- ------------------ --------------------
Net unrealized appreciation (depreciation) 1,685,193 186,481 (6,423) 1,165
------------------------------------------------- ----------------- -------------- ------------------ --------------------
$ 5,479,156 $ 1,076,176 $ 478,206 $ 16,882
================================================= ================= ============== ================== ====================
NET ASSETS:
Class D $ 85,096 $ 796 $ 1,286 $ 10
------------------------------------------------- ----------------- -------------- ------------------ --------------------
Other Classes 5,394,060 1,075,380 476,920 16,872
------------------------------------------------- ----------------- -------------- ------------------ --------------------
SHARES ISSUED AND OUTSTANDING:
Class D 1,170 26 86 0
------------------------------------------------- ----------------- -------------- ------------------ --------------------
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
(NET ASSETS PER SHARE OUTSTANDING)
Class D $ 72.72 $ 30.71 $ 14.99 $ 24.00
------------------------------------------------- ----------------- -------------- ------------------ --------------------
COST OF INVESTMENTS OWNED $ 3,823,955 $ 895,751 $ 482,466 $ 15,811
================================================= ================= ============== ================== ====================
COST OF FOREIGN CURRENCY HELD $ 0 $ 0 $ 0 $ 0
================================================= ================= ============== ================== ====================
<CAPTION>
TAX-EFFICIENT EQUITY
Amounts in thousands, except per share amounts TARGET FUND FUND VALUE FUND
------------- ---------------------- ----------------
<S> <C> <C> <C>
ASSETS:
Investments, at value $ 2,235,279 $ 56,844 $ 162,484
------------------------------------------------- ------------- ---------------------- ----------------
Cash and foreign currency 1 1 855
------------------------------------------------- ------------- ---------------------- ----------------
Receivable for investments sold and forward
foreign currency contracts 1,344 0 7,228
------------------------------------------------- ------------- ---------------------- ----------------
Receivable for Fund shares sold 18,800 35 143
------------------------------------------------- ------------- ---------------------- ----------------
Interest and dividends receivable 227 37 415
------------------------------------------------- ------------- ---------------------- ----------------
Manager reimbursement receivable 0 0 0
------------------------------------------------- ------------- ---------------------- ----------------
Other assets 0 0 0
------------------------------------------------- ------------- ---------------------- ----------------
2,255,651 56,917 171,125
================================================= ============= ====================== ================
LIABILITIES:
Payable for investments purchased and forward
foreign currency contracts $ 14,261 $ 0 $ 4,066
------------------------------------------------- ------------- ---------------------- ----------------
Due to Custodian 0 0 0
------------------------------------------------- ------------- ---------------------- ----------------
Payable for Fund shares redeemed 7,160 42 683
------------------------------------------------- ------------- ---------------------- ----------------
Dividends payable 0 0 0
------------------------------------------------- ------------- ---------------------- ----------------
Accrued investment advisory fee 1,035 22 68
------------------------------------------------- ------------- ---------------------- ----------------
Accrued administration fee 750 17 52
------------------------------------------------- ------------- ---------------------- ----------------
Accrued distribution fee 1,205 17 55
------------------------------------------------- ------------- ---------------------- ----------------
Accrued servicing fee 468 12 28
------------------------------------------------- ------------- ---------------------- ----------------
Other liabilities 0 0 0
------------------------------------------------- ------------- ---------------------- ----------------
24,879 110 4,952
================================================= ============= ====================== ================
NET ASSETS $ 2,230,772 $ 56,807 $ 166,173
================================================= ============= ====================== ================
NET ASSETS CONSIST OF:
Paid in capital $ 999,648 $ 50,323 $ 187,022
------------------------------------------------- ------------- ---------------------- ----------------
Undistributed (overdistributed) net
investment income 200,449 0 94
------------------------------------------------- ------------- ---------------------- ----------------
Accumulated undistributed net realized gain (loss) 67,219 (4,080) (19,964)
------------------------------------------------- ------------- ---------------------- ----------------
Net unrealized appreciation (depreciation) 963,456 10,564 (979)
------------------------------------------------- ------------- ---------------------- ----------------
$ 2,230,772 $ 56,807 $ 166,173
================================================= ============= ====================== ================
NET ASSETS:
Class D $ 10 $ 11 $ 46
------------------------------------------------- ------------- ---------------------- ----------------
Other Classes 2,230,762 56,796 166,127
------------------------------------------------- ------------- ---------------------- ----------------
SHARES ISSUED AND OUTSTANDING:
Class D 0 1 4
------------------------------------------------- ------------- ---------------------- ----------------
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
(NET ASSETS PER SHARE OUTSTANDING)
Class D $ 31.14 $ 12.22 $ 11.37
------------------------------------------------- ------------- ---------------------- ----------------
COST OF INVESTMENTS OWNED $ 1,271,822 $ 46,280 $ 163,463
================================================= ============= ====================== ================
COST OF FOREIGN CURRENCY HELD $ 0 $ 0 $ 0
================================================= ============= ====================== ================
</TABLE>
SEE ACCOMPANYING NOTES 41
<PAGE>
STATEMENTS OF OPERATIONS
For the year or period ended June 30, 2000
<TABLE>
<CAPTION>
CAPITAL APPRECIATION
Amounts in thousands FUND EQUITY INCOME FUND GLOBAL INNOVATION FUND GROWTH FUND
-------------------- ------------------ ---------------------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends, net of foreign taxes $ 7,801 $ 5,956 $ 4 $ 9,034
-------------------------------------- -------------------- ------------------ ---------------------- -----------
Interest and other income 1,518 130 159 1,165
-------------------------------------- -------------------- ------------------ ---------------------- -----------
Total Income 9,319 6,086 163 10,199
====================================== ==================== ================== ====================== ===========
EXPENSES:
Investment advisory fees 4,181 699 158 13,318
-------------------------------------- -------------------- ------------------ ---------------------- -----------
Administration fees 2,654 463 100 10,492
-------------------------------------- -------------------- ------------------ ---------------------- -----------
Servicing fees - Class D 1 0 0 0
-------------------------------------- -------------------- ------------------ ---------------------- -----------
Distribution and/or servicing fees -
Other Classes 2,087 418 116 24,601
-------------------------------------- -------------------- ------------------ ---------------------- -----------
Trustees' fees 65 11 0 174
-------------------------------------- -------------------- ------------------ ---------------------- -----------
Organization costs 0 0 15 0
-------------------------------------- -------------------- ------------------ ---------------------- -----------
Interest expense 32 28 0 309
-------------------------------------- -------------------- ------------------ ---------------------- -----------
Total Expenses 9,020 1,619 389 48,894
-------------------------------------- -------------------- ------------------ ---------------------- -----------
Reimbursement by manager 0 0 (13) 0
-------------------------------------- -------------------- ------------------ ---------------------- -----------
Net Expenses 9,020 1,619 376 48,894
-------------------------------------- -------------------- ------------------ ---------------------- -----------
NET INVESTMENT INCOME (LOSS) 299 4,467 (213) (38,695)
====================================== ==================== ================== ====================== ===========
NET REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized gain (loss) on
investments 238,387 (14,073) (104) 200,296
-------------------------------------- -------------------- ------------------ ---------------------- -----------
Net realized gain (loss) on foreign
currency transactions 0 0 0 0
-------------------------------------- -------------------- ------------------ ---------------------- -----------
Net change in unrealized appreciation
(depreciation) on investments (57,892) (17,836) 10,576 540,201
-------------------------------------- -------------------- ------------------ ---------------------- -----------
Net change in unrealized appreciation
(depreciation) on futures contracts
and written options 0 0 0 0
-------------------------------------- -------------------- ------------------ ---------------------- -----------
Net change in unrealized appreciation
(depreciation) on translation of
assets and liabilities denominated
in foreign currencies 0 0 0 0
-------------------------------------- -------------------- ------------------ ---------------------- -----------
Net Gain (Loss) 180,495 (31,909) 10,472 740,497
-------------------------------------- -------------------- ------------------ ---------------------- -----------
NET INCREASE (DECREASE) IN ASSETS
RESULTING FROM OPERATIONS $ 180,794 $ (27,442) $ 10,259 $ 701,802
====================================== ==================== ================== ====================== ===========
</TABLE>
42 SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
RENAISSANCE SELECT TAX-EFFICIENT
INNOVATION FUND MID-CAP FUND FUND GROWTH FUND TARGET FUND EQUITY FUND VALUE FUND
--------------- ------------ ----------- ----------- ----------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends, net of foreign taxes $ 859 $ 8,527 $ 7,624 $ 13 $ 1,148 $ 551 $ 5,492
---------------------------------- --------------- ------------ ----------- ----------- ----------- ------------- ----------
Interest and other income 11,772 2,298 983 26 3,681 22 373
---------------------------------- --------------- ------------ ----------- ----------- ----------- ------------- ----------
Total Income 12,631 10,825 8,607 39 4,829 573 5,865
================================== =============== ============ =========== =========== =========== ============= ==========
EXPENSES:
Investment advisory fees 21,684 4,609 3,279 20 9,096 227 909
---------------------------------- --------------- ------------ ----------- ----------- ----------- ------------- ----------
Administration fees 12,860 3,041 2,185 11 6,594 174 678
---------------------------------- --------------- ------------ ----------- ----------- ----------- ------------- ----------
Servicing fees - Class D 116 1 1 0 0 1 0
---------------------------------- --------------- ------------ ----------- ----------- ----------- ------------- ----------
Distribution and/or servicing
fees - Other Classes 26,521 2,454 4,887 10 14,697 302 1,064
---------------------------------- --------------- ------------ ----------- ----------- ----------- ------------- ----------
Trustees' fees 180 67 38 0 99 3 14
---------------------------------- --------------- ------------ ----------- ----------- ----------- ------------- ----------
Organization costs 0 0 0 0 0 0 0
---------------------------------- --------------- ------------ ----------- ----------- ----------- ------------- ----------
Interest expense 82 18 30 1 78 3 9
---------------------------------- --------------- ------------ ----------- ----------- ----------- ------------- ----------
Total Expenses 61,443 10,190 10,420 42 30,564 710 2,674
---------------------------------- --------------- ------------ ----------- ----------- ----------- ------------- ----------
Reimbursement by manager 0 0 0 0 0 0 0
---------------------------------- --------------- ------------ ----------- ----------- ----------- ------------- ----------
Net Expenses 61,443 10,190 10,420 42 30,564 710 2,674
---------------------------------- --------------- ------------ ----------- ----------- ----------- ------------- ----------
NET INVESTMENT INCOME (LOSS) (48,812) 635 (1,813) (3) (25,735) (137) 3,191
================================== =============== ============ =========== =========== =========== ============= ==========
NET REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized gain (loss) on
investments 503,921 263,486 30,824 11 303,095 (3,852) (4,356)
---------------------------------- --------------- ------------ ----------- ----------- ----------- ------------- ----------
Net realized gain (loss) on
foreign currency transactions 0 0 8 0 0 0 0
---------------------------------- --------------- ------------ ----------- ----------- ----------- ------------- ----------
Net change in unrealized
appreciation (depreciation) on
investments 1,278,026 39,729 (29,437) 989 731,179 7,274 (19,409)
---------------------------------- --------------- ------------ ----------- ----------- ----------- ------------- ----------
Net change in unrealized
appreciation (depreciation) on
futures contracts and written
options 0 0 0 0 0 0 0
---------------------------------- --------------- ------------ ----------- ----------- ----------- ------------- ----------
Net change in unrealized
appreciation (depreciation) on
translation of assets and
liabilities denominated in
foreign currencies 0 0 2 0 0 0 0
---------------------------------- --------------- ------------ ----------- ----------- ----------- ------------- ----------
Net Gain (Loss) 1,781,947 303,215 1,397 1,000 1,034,274 3,422 (23,765)
---------------------------------- --------------- ------------ ----------- ----------- ----------- ------------- ----------
NET INCREASE (DECREASE) IN ASSETS
RESULTING FROM OPERATIONS $ 1,733,135 $ 303,850 $ (416) $ 997 $ 1,008,539 $ 3,285 $ (20,574)
================================== =============== ============ =========== =========== =========== ============= ==========
</TABLE>
SEE ACCOMPANYING NOTES 43
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GLOBAL
INNOVATION
Amounts in thousands CAPITAL APPRECIATION FUND EQUITY INCOME FUND FUND
---------------------------- ---------------------------- -----------------
Year Ended Year Ended Year Ended Year Ended Period from
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999 December 31, 1999
to June 30, 2000
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income (loss) $ 299 $ 4,855 $ 4,467 $ 5,424 $ (213)
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
Net realized gain (loss) 238,387 127,483 (14,073) 28,130 (104)
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
Net change in unrealized appreciation (depreciation) (57,892) (27,333) (17,836) (8,864) 10,576
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
Net increase (decrease) resulting from operations 180,794 105,005 (27,442) 24,690 10,259
==================================================== ============================ ============================ =================
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class D (1) (1) (3) (3) 0
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
Other Classes (1,826) (5,605) (4,567) (5,316) 0
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
In excess of net investment income
Class D 0 0 0 0 0
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
Other Classes (1,004) 0 0 0 0
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
From net realized capital gains
Class D (67) (14) (4) (12) 0
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
Other Classes (168,437) (70,693) (5,768) (22,655) 0
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
In excess of net realized capital gains
Class D 0 0 (18) 0 0
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
Other Classes 0 0 (25,744) 0 0
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
Tax Basis Return of Capital
Class D 0 0 0 0 0
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
Other Classes 0 0 0 0 0
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
Total Distributions (171,335) (76,313) (36,104) (27,986) 0
==================================================== ============================ ============================ =================
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Class D 176 360 28 89 147
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
Other Classes 469,984 691,020 32,085 74,002 100,491
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
Issued in reorganization
Class D 0 0 0 0 0
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
Other Classes 0 0 0 0 0
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
Issued as reinvestment of distributions
Class D 68 15 25 15 0
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
Other Classes 155,392 62,910 35,239 27,156 0
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
Cost of shares redeemed
Class D (62) (165) (114) (112) (8)
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
Other Classes (944,833) (802,749) (135,813) (97,556) (6,141)
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
Net increase (decrease) resulting from Fund share
transactions (319,275) (48,609) (68,550) 3,594 94,489
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
FUND REIMBURSEMENT FEE: 0 0 0 0 0
==================================================== ============================ ============================ =================
TOTAL INCREASE (DECREASE) IN NET ASSETS (309,816) (19,917) (132,096) 298 104,748
==================================================== ============================ ============================ =================
NET ASSETS:
Beginning of period 1,103,626 1,123,543 202,005 201,707 0
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
End of period * $ 793,810 $ 1,103,626 $ 69,909 $ 202,005 $ 104,748
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
*Including net undistributed (overdistributed)
investment income of: $ 125,087 $ 1,527 $ 41 $ 4,946 $ 522
---------------------------------------------------- ---------------------------- ---------------------------- -----------------
</TABLE>
44 SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
GROWTH FUND INNOVATION FUND MID-CAP FUND
---------------------------- ---------------------------- ----------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM:
OPERATIONS:
Net investment income (loss) $ (38,695) $ (24,048) $ (48,812) $ (10,056) $ 635 $ 1,713
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
Net realized gain (loss) 200,296 413,535 503,921 82,075 263,486 867
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
Net change in unrealized appreciation
(depreciation) 540,201 (30,494) 1,278,026 250,804 39,729 7,029
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
Net increase (decrease) resulting from
operations 701,802 358,993 1,733,135 322,823 303,850 9,609
======================================= ============================ ============================= ============================
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class D 0 0 0 0 0 0
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
Other Classes 0 0 0 0 (3,122) (423)
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
In excess of net investment income
Class D 0 0 0 0 0 0
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
Other Classes 0 0 0 0 0 0
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
From net realized capital gains
Class D 0 0 (3,624) (143) 0 (9)
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
Other Classes (402,492) (263,490) (288,955) (23,411) (717) (41,274)
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
In excess of net realized capital
gains
Class D 0 0 0 0 0 0
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
Other Classes 0 0 0 0 0 0
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
Tax Basis Return of Capital
Class D 0 0 0 0 0 0
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
Other Classes 0 0 0 0 0 0
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
Total Distributions (402,492) (263,490) (292,579) (23,554) (3,839) (41,706)
======================================= ============================ ============================= ============================
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Class D 10 0 67,827 30,881 1,141 438
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
Other Classes 1,577,926 1,205,363 4,776,926 1,280,398 846,532 944,828
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
Issued in reorganization
Class D 0 0 0 0 0 0
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
Other Classes 0 0 0 0 0 0
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
Issued as reinvestment of distributions
Class D 0 0 3,612 142 0 10
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
Other Classes 374,099 246,482 270,134 21,993 3,495 38,508
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
Cost of shares redeemed
Class D 0 0 (22,315) (15,840) (767) (229)
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
Other Classes (1,766,297) (1,228,138) (2,322,487) (738,267) (1,082,361) (737,211)
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
Net increase (decrease) resulting from
Fund share transactions 185,738 223,707 2,773,697 579,307 (231,960) 246,344
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
FUND REIMBURSEMENT FEE: 0 0 0 0 0 0
======================================= ============================ ============================= ============================
TOTAL INCREASE (DECREASE) IN NET ASSETS 485,048 319,210 4,214,253 878,576 68,051 214,247
======================================= ============================ ============================= ============================
NET ASSETS:
Beginning of period 2,433,050 2,113,840 1,264,903 386,327 1,008,125 793,878
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
End of period * $ 2,918,098 $ 2,433,050 $ 5,479,156 $ 1,264,903 $ 1,076,176 $ 1,008,125
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
*Including net undistributed
(overdistributed) investment income
of: $ 0 $ 1 $ 170,220 $ 0 $ 174,578 $ 1,312
--------------------------------------- ---------------------------- ----------------------------- ----------------------------
<CAPTION>
RENAISSANCE FUND SELECT GROWTH FUND
---------------------------- ----------------------------
Year Ended Year Ended Year Ended Year Ended
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM:
OPERATIONS:
Net investment income (loss) $ (1,813) $ (4,312) $ (3) $ (125)
--------------------------------------- ---------------------------- ----------------------------
Net realized gain (loss) 30,832 100,928 11 47,076
--------------------------------------- ---------------------------- ----------------------------
Net change in unrealized appreciation
(depreciation) (29,435) (42,518) 989 (29,090)
--------------------------------------- ---------------------------- ----------------------------
Net increase (decrease) resulting from
operations (416) 54,098 997 17,861
======================================= ============================ ============================
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class D 0 0 0 0
--------------------------------------- ---------------------------- ----------------------------
Other Classes 0 0 0 0
--------------------------------------- ---------------------------- ----------------------------
In excess of net investment income
Class D 0 0 0 0
--------------------------------------- ---------------------------- ----------------------------
Other Classes 0 0 (1) 0
--------------------------------------- ---------------------------- ----------------------------
From net realized capital gains
Class D (9) (13) 0 0
--------------------------------------- ---------------------------- ----------------------------
Other Classes (84,210) (80,848) (141) (5,573)
--------------------------------------- ---------------------------- ----------------------------
In excess of net realized capital
gains
Class D (3) 0 0 0
--------------------------------------- ---------------------------- ----------------------------
Other Classes (28,176) 0 0 0
--------------------------------------- ---------------------------- ----------------------------
Tax Basis Return of Capital
Class D 0 0 0 0
--------------------------------------- ---------------------------- ----------------------------
Other Classes 0 0 (69) 0
--------------------------------------- ---------------------------- ----------------------------
Total Distributions (112,398) (80,861) (211) (5,573)
======================================= ============================ ============================
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Class D 7,183 84 10 0
--------------------------------------- ---------------------------- ----------------------------
Other Classes 214,839 306,855 16,140 36,540
--------------------------------------- ---------------------------- ----------------------------
Issued in reorganization
Class D 0 0 0 0
--------------------------------------- ---------------------------- ----------------------------
Other Classes 0 0 0 0
--------------------------------------- ---------------------------- ----------------------------
Issued as reinvestment of distributions
Class D 11 13 0 0
--------------------------------------- ---------------------------- ----------------------------
Other Classes 103,652 74,646 196 5,571
--------------------------------------- ---------------------------- ----------------------------
Cost of shares redeemed
Class D (5,997) (27) 0 0
--------------------------------------- ---------------------------- ----------------------------
Other Classes (388,493) (352,007) (1,449) (183,781)
--------------------------------------- ---------------------------- ----------------------------
Net increase (decrease) resulting from
Fund share transactions (68,805) 29,564 14,897 (141,670)
--------------------------------------- ---------------------------- ----------------------------
FUND REIMBURSEMENT FEE: 0 0 0 0
======================================= ============================ ============================
TOTAL INCREASE (DECREASE) IN NET ASSETS 181,619 2,801 15,683 (129,382)
======================================= ============================ ============================
NET ASSETS:
Beginning of period 659,825 657,024 1,199 130,581
--------------------------------------- ---------------------------- ----------------------------
End of period * $ 478,206 $ 659,825 $ 16,882 $ 1,199
--------------------------------------- ---------------------------- ----------------------------
*Including net undistributed
(overdistributed) investment income
of: $ 24,138 $ 41,268 $ 0 $ 0
--------------------------------------- ---------------------------- ----------------------------
</TABLE>
SEE ACCOMPANYING NOTES 45
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (CONT.)
<TABLE>
<CAPTION>
TARGET FUND TAX-EFFICIENT EQUITY FUND VALUE FUND
---------------------------- ------------------------------- ----------------------------
Year Ended Year Ended Year Ended Period from Year Ended Year Ended
Amounts in thousands June 30, 2000 June 30, 1999 June 30, 2000 July 10, 1998 June 30, 2000 June 30, 1999
to June 30, 1999
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM:
OPERATIONS:
Net investment income (loss) $ (25,735) $ (12,880) $ (137) $ (27) $ 3,191 $ 3,245
------------------------------------- ------------- ------------- ------------- ---------------- ------------- -------------
Net realized gain (loss) 303,095 124,994 (3,852) (228) (4,356) 29,420
------------------------------------- ------------- ------------- ------------- ---------------- ------------- -------------
Net change in unrealized appreciation
(depreciation) 731,179 38,444 7,274 3,290 (19,409) (6,992)
------------------------------------- ------------- ------------- ------------- ---------------- ------------- -------------
Net increase (decrease) resulting
from operations 1,008,539 150,558 3,285 3,035 (20,574) 25,673
------------------------------------- ------------- ------------- ------------- ---------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class D 0 0 0 0 (3) (2)
------------------------------------- ------------- ------------- ------------- ---------------- ------------- -------------
Other Classes 0 0 0 0 (3,277) (3,075)
------------------------------------- ------------- ------------- ------------- ---------------- ------------- -------------
In excess of net investment income
Class D 0 0 0 0 0 0
------------------------------------- ------------- ------------- ------------- ---------------- ------------- -------------
Other Classes 0 0 0 0 0 0
------------------------------------- ------------- ------------- ------------- ---------------- ------------- -------------
From net realized capital gains
Class D 0 0 0 0 (1) (11)
------------------------------------- ------------- ------------- ------------- ---------------- ------------- -------------
Other Classes (121,070) (68,199) 0 0 (8,630) (26,320)
------------------------------------- ------------- ------------- ------------- ---------------- ------------- -------------
In excess of net realized capital
gains
Class D 0 0 0 0 (4) 0
------------------------------------- ------------- ------------- ------------- ---------------- ------------- -------------
Other Classes 0 0 0 0 (30,120) 0
------------------------------------- ------------- ------------- ------------- ---------------- ------------- -------------
Total Distributions (121,070) (68,199) 0 0 (42,035) (29,408)
===================================== ============= ============= ============= ================ ============= =============
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Class D 10 0 0 750 136 8
------------------------------------- ------------- ------------- ------------- ---------------- ------------- -------------
Other Classes 2,483,035 1,343,981 41,110 29,356 98,549 99,132
------------------------------------- ------------- ------------- ------------- ---------------- ------------- -------------
Issued in reorganization
Class D 0 0 0 0 0 0
------------------------------------- ------------- ------------- ------------- ---------------- ------------- -------------
Other Classes 0 0 0 0 1,373 0
------------------------------------- ------------- ------------- ------------- ---------------- ------------- -------------
Issued as reinvestment of
distributions
Class D 0 0 0 0 6 13
------------------------------------- ------------- ------------- ------------- ---------------- ------------- -------------
Other Classes 111,650 64,479 0 0 39,960 28,058
------------------------------------- ------------- ------------- ------------- ---------------- ------------- -------------
Cost of shares redeemed
Class D 0 0 (794) 0 (202) 0
------------------------------------- ------------- ------------- ------------- ---------------- ------------- -------------
Other Classes (2,417,633) (1,510,777) (14,745) (5,190) (142,678) (131,197)
------------------------------------- ------------- ------------- ------------- ---------------- ------------- -------------
Net increase (decrease) resulting
from Fund share transactions 177,062 (102,317) 25,571 24,916 (2,856) (3,986)
------------------------------------- ------------- ------------- ------------- ---------------- ------------- -------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS 1,064,531 (19,958) 28,856 27,951 (65,465) (7,721)
===================================== ============= ============= ============= ================ ============= =============
NET ASSETS:
Beginning of period 1,166,241 1,186,199 27,951 0 231,638 239,359
------------------------------------- ------------- ------------- ------------- ---------------- ------------- -------------
End of period * $ 2,230,772 $ 1,166,241 $ 56,807 $ 27,951 $ 166,173 $ 231,638
------------------------------------- ------------- ------------- ------------- ---------------- ------------- -------------
*Including net undistributed
(overdistributed) investment income
of: $ 200,449 $ 67,742 $ 0 $ (5) $ 94 $ 10,727
------------------------------------- ------------- ------------- ------------- ---------------- ------------- -------------
</TABLE>
46 SEE ACCOMPANYING NOTES
<PAGE>
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
1. ORGANIZATION
PIMCO Funds: Multi-Manager Series (the "Trust") is registered under the
Investment Company Act of 1940, as amended as an open-end management investment
company organized as a Massachusetts business trust. The Trust currently
consists of thirty-two 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 Class D shares of the Trust. Certain detailed financial information for
the Institutional, Administrative, A, B and C 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
Statements 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, Value and Renaissance 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 at least 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.
FOREIGN TAXES ON DIVIDENDS. Dividend income in the statements of operations is
shown net of foreign taxes withheld on dividends from foreign securities.
Foreign taxes withheld were as follows: Capital Appreciation - $68,867; Equity
Income Fund - $3,238; Global Innovation Fund - $516; Growth Fund - $159,737;
Innovation Fund - $70,327; Mid-Cap Fund - $6,012; Renaissance Fund - $277,154;
Select Growth Fund - $105; Tax-Efficient Equity Fund - $2,525; and Value Fund -
$4,122.
47
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONT.)
June 30, 2000
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.
DELAYED DELIVERY TRANSACTIONS. A Fund may purchase or sell securities on a
when-issued or delayed delivery basis. These transactions involve a commitment
by a Fund to purchase or sell securities for a predetermined price or yield,
with payment and delivery taking place beyond the customary settlement period.
When delayed delivery purchases are outstanding, a Fund will set aside and
maintain until the settlement date in a segregated account, liquid assets in an
amount sufficient to meet the purchase price. When purchasing a security on a
delayed delivery basis, a Fund assumes the rights and risks of ownership of the
security, including the risk of price and yield fluctuations, and takes such
fluctuations into account when determining its net asset value. A Fund may
dispose of or renegotiate a delayed delivery transaction after it is entered
into, and may sell when-issued securities before they are delivered, which may
result in a capital gain or loss. When the Fund has sold a security on a delayed
delivery basis, the Fund does not participate in future gains and losses with
respect to the security. Forward sales commitments are accounted for by the Fund
in the same manner as forward currency contracts discussed above.
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 Fund;
0.55% for the Target Fund; 0.60% for the Renaissance and Select Growth Funds;
0.65% for the Innovation Fund; 1.00% for the Global Innovation Fund, and 0.45%
for all other Funds. Each of the Funds also has a sub-advisor which, under the
supervision of PIMCO Advisors, directs the investments of the Fund's assets. All
of the sub-advisors are affiliates of PIMCO Advisors. The advisory fees received
by PIMCO Advisors are paid in all or in part to each of the sub-advisors in
accordance with the portfolio management agreements.
NEW ADVISORY FEE STRUCTURE. Effective April 1, 2000, PIMCO Core Equity Fund
changed its name to PIMCO Select Growth Fund and increased its advisory fee from
0.57% to 0.60%.
ADMINISTRATION FEE. PIMCO Advisors provides administrative services to the Trust
for which it receives from each Fund a monthly administrative fee based on each
share class' average daily net assets. The Administration Fee for Class D is
charged at the annual rate of 0.60% for the Global Innovation Fund, and 0.40%
for all other Funds. The Administration Fee for the Institutional and
Administrative Classes is charged at the annual rate of 0.40% for the Global
Innovation Fund and 0.25% for all other Funds. The Administration Fee for the A,
B and C Classes is charged at the annual rate of 0.60% for the Global Innovation
Fund, and 0.40% for all other Funds.
DISTRIBUTION AND SERVICING FEES. PIMCO Funds Distributors LLC ("PFD"), a
wholly-owned subsidiary of PIMCO Advisors L.P., serves as the distributor of the
Trust's shares.
The Trust is permitted to reimburse out of the Administrative Class assets
of each Fund, in an amount up to 0.25% on an annual basis of the average daily
net assets of that class, financial intermediaries that provide services in
connection with the distribution of shares or administration of plans or
programs that use Fund shares as their funding medium. The effective rate paid
to PFD was 0.25% during the current fiscal year.
Pursuant to the Distribution and Servicing Plans adopted by the A, B, C and
D Classes of the Trust, the Trust compensates PFD or an affiliate with respect
to Class D for services provided and expenses incurred in connection with
assistance rendered in the sale of shares and services rendered to shareholders
and for maintenance of shareholder accounts of the A, B, C and D Classes. The
Trust paid PFD distribution and servicing fees at an effective rate as set forth
below
48
<PAGE>
(calculated as a percentage of each Fund's average daily net assets attributable
to each class):
<TABLE>
<CAPTION>
Distribution Fee(%) Servicing Fee(%)
--------------------------------------------------------------------------------
<S> <C> <C>
CLASS A
ALL FUNDS -- 0.25
CLASS B
ALL FUNDS 0.75 0.25
CLASS C
ALL FUNDS 0.75 0.25
CLASS D
ALL FUNDS -- 0.25
</TABLE>
PFD also receives the proceeds of the initial sales charges paid by the
shareholders upon the purchase of Class A shares and the contingent deferred
sales charges paid by the shareholders upon certain redemptions of Class A, B
and C shares. For the period ended June 30, 2000, PFD received $22,843,040
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) organization expense; and (viii) any expenses
allocated or allocable to a specific class of shares, which include service fees
payable with respect to the Administrative Class shares and may include certain
other expenses as permitted by the Trust's Multiple Class Plan adopted pursuant
to Rule 18f-3 under the Investment Company Act of 1940 and subject to review and
approval by the Trustees. The ratio of expenses to average net assets, as
disclosed in the Financial Highlights, may differ from the annual fund operating
expenses per share class as disclosed in the Prospectus for the reasons set
forth above.
PIMCO has agreed to waive a portion of Global Innovation Fund's
administrative fees to the extent that the payment of each fund's pro rata share
of Trustee fees and organizational expenses cause the actual expense ratios to
rise above the rates disclosed in the then-current prospectus plus 0.49 basis
points as set forth below (calculated as a percentage of the Fund's average
daily net assets attributable to each class):
<TABLE>
<CAPTION>
Inst'l Class Admn. Class Class A Class B Class C Class D
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
GLOBAL INNOVATION FUND 1.40% 1.65% 1.85% 2.60% 2.60% 1.85%
</TABLE>
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.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding short-term investments) for the
period ended June 30, 2000 were as follows (amounts in thousands):
<TABLE>
<CAPTION>
Non - U.S. Government/Agency
-------------------------------------
Purchases Sales
-------------------------------------------------------------------
<S> <C> <C>
CAPITAL APPRECIATION FUND $ 1,055,304 $ 1,609,185
EQUITY INCOME FUND 170,958 268,838
GLOBAL INNOVATION FUND 129,259 42,067
GROWTH FUND 1,880,500 2,085,744
INNOVATION FUND 8,262,248 5,850,236
MID-CAP FUND 1,607,227 1,882,039
RENAISSANCE FUND 705,776 881,016
SELECT GROWTH FUND 19,188 5,846
TARGET FUND 1,578,298 1,590,309
TAX EFFICIENT EQUITY FUND 41,160 15,783
VALUE FUND 377,222 414,717
</TABLE>
5. LINE OF CREDIT
Effective December 14, 1999, the funds entered into an unsecured $350,000,000
syndicated bank line of credit agreement with Citicorp USA, Inc. Under this
syndicated agreement, Citicorp USA, Inc. will fund $150,000,000 and both Bank of
New York and State Street Bank & Trust Company will each fund $100,000,000.
Borrowings under the agreement bear interest at the Fed Funds rate plus 50 basis
points or the Base Rate, which is typically the Prime Rate. The funds may borrow
money solely for temporary purposes to fund shareholder redemptions. The funds
did not borrow from the line during the period December 14, 1999 through June
30, 2000.
6. IN-KIND TRANSACTIONS
For the period ended June 30, 2000, the following fund incurred realized gains
from in-kind redemptions of approximately (amount in thousands):
<TABLE>
<CAPTION>
June 30, 2000
---------------------------------------------------------------
<S> <C>
MID-CAP FUND $ 2,322
</TABLE>
7. ACQUISITION BY ALLIANZ AG
On May 5, 2000, Allianz AG completed the acquisition of approximately 70% of the
outstanding partnership interests in PIMCO Advisors L.P. ("PIMCO Advisors"), of
which PIMCO is a subsidiary partnership. As a result of this transaction, PIMCO
Advisors, and its subsidiaries, are now controlled by Allianz AG, a leading
provider of financial services, particularly in Europe. PIMCO remains
operationally independent, continues to operate under its existing name, and now
leads the global fixed income efforts of Allianz AG. Key employees at each PIMCO
Advisors' investment units, including PIMCO's Bill Gross, have signed long-term
employment contracts and have significant profit-sharing and retention
arrangements to ensure continuity of the investment process and staff. With the
addition of PIMCO Advisors, the Allianz Group manages assets of approximately
US$650 billion, including more than 300 mutual funds for retail and
institutional clients around the world.
49
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONT.)
June 30, 2000
8. 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>
CAPITAL APPRECIATION FUND
----------------------------------------------------
Year Ended 06/30/2000 Year Ended 06/30/1999
Shares Amount Shares Amount
----------------------------------------------------
<S> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Class D 7 $ 176 14 $ 360
---------------------------------------------- ----------------------------------------------------
Other classes 18,246 469,984 27,601 691,020
---------------------------------------------- ----------------------------------------------------
SHARES ISSUED IN REORGANIZATION
Class D 0 0 0 0
---------------------------------------------- ----------------------------------------------------
Other classes 0 0 0 0
---------------------------------------------- ----------------------------------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Class D 3 68 1 15
---------------------------------------------- ----------------------------------------------------
Other classes 6,604 155,392 2,673 62,910
---------------------------------------------- ----------------------------------------------------
COST OF SHARES REDEEMED
Class D (3) (62) (7) (165)
---------------------------------------------- ----------------------------------------------------
Other classes (36,621) (944,833) (32,077) (802,749)
---------------------------------------------- ----------------------------------------------------
NET (DECREASE) INCREASE RESULTING FROM
FUND SHARE TRANSACTIONS (11,764) $ (319,275) (1,795) $ (48,609)
============================================== ====================================================
<CAPTION>
GLOBAL INNOVATION
EQUITY INCOME FUND FUND
--------------------------------------------------- ------------------------
Period From 12/31/1999
Year Ended 06/30/2000 Year Ended 06/30/1999 to 06/30/2000
Shares Amount Shares Amount Shares Amount
--------------------------------------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Class D 2 $ 28 6 $ 89 8 $ 147
---------------------------------------------- --------------------------------------------------- ------------------------
Other classes 2,792 32,085 5,060 74,002 5,903 100,491
---------------------------------------------- --------------------------------------------------- ------------------------
SHARES ISSUED IN REORGANIZATION
Class D 0 0 0 0 0 0
---------------------------------------------- --------------------------------------------------- ------------------------
Other classes 0 0 0 0 0 0
---------------------------------------------- --------------------------------------------------- ------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Class D 2 25 1 15 0 0
---------------------------------------------- --------------------------------------------------- ------------------------
Other classes 3,296 35,239 1,924 27,156 0 0
---------------------------------------------- --------------------------------------------------- ------------------------
COST OF SHARES REDEEMED
Class D (11) (114) (7) (112) 0 (8)
---------------------------------------------- --------------------------------------------------- ------------------------
Other classes (12,364) (135,813) (6,580) (97,556) (373) (6,141)
---------------------------------------------- --------------------------------------------------- ------------------------
NET (DECREASE) INCREASE RESULTING FROM
FUND SHARE TRANSACTIONS (6,283) $ (68,550) 404 $ 3,594 5,538 $ 94,489
============================================== =================================================== ========================
</TABLE>
<TABLE>
<CAPTION>
SELECT GROWTH FUND
----------------------------------------------------
Year Ended 06/30/2000 Year Ended 06/30/1999
Shares Amount Shares Amount
----------------------------------------------------
<S> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Class D 0 $ 10 0 $ 0
---------------------------------------------- ----------------------------------------------------
Other classes 710 16,140 1,899 36,540
---------------------------------------------- ----------------------------------------------------
SHARES ISSUED IN REORGANIZATION
Class D 0 0 0 0
---------------------------------------------- ----------------------------------------------------
Other classes 0 0 0 0
---------------------------------------------- ----------------------------------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Class D 0 0 0 0
---------------------------------------------- ----------------------------------------------------
Other classes 9 196 278 5,571
---------------------------------------------- ----------------------------------------------------
COST OF SHARES REDEEMED
Class D 0 0 0 0
---------------------------------------------- ----------------------------------------------------
Other classes (64) (1,449) (8,556) (183,781)
---------------------------------------------- ----------------------------------------------------
NET (DECREASE) INCREASE RESULTING FROM
FUND SHARE TRANSACTIONS 655 $ 14,897 (6,379) $ (141,670)
============================================== ====================================================
<CAPTION>
TARGET FUND
---------------------------------------------------
Year Ended 06/30/2000 Year Ended 06/30/1999
Shares Amount Shares Amount
---------------------------------------------------
<S> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Class D 0 $ 10 0 $ 0
---------------------------------------------- ---------------------------------------------------
Other classes 102,193 2,483,035 87,903 1,343,981
---------------------------------------------- ---------------------------------------------------
SHARES ISSUED IN REORGANIZATION
Class D 0 0 0 0
---------------------------------------------- ---------------------------------------------------
Other classes 0 0 0 0
---------------------------------------------- ---------------------------------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Class D 0 0 0 0
---------------------------------------------- ---------------------------------------------------
Other classes 5,556 111,650 4,745 64,479
---------------------------------------------- ---------------------------------------------------
COST OF SHARES REDEEMED
Class D 0 0 0 0
---------------------------------------------- ---------------------------------------------------
Other classes (100,861) (2,417,633) (99,158) (1,510,777)
---------------------------------------------- ---------------------------------------------------
NET (DECREASE) INCREASE RESULTING FROM
FUND SHARE TRANSACTIONS 6,888 $ 177,062 (6,510) $ (102,317)
============================================== ===================================================
</TABLE>
9. REORGANIZATION
The Acquiring Fund, as listed below, acquired the assets and certain liabilities
of the Acquired Fund, also listed below, in a tax-free exchange for shares of
the Acquiring Fund, pursuant to a plan of reorganization approved by the
Acquired Fund's shareholders (amounts in thousands):
<TABLE>
<CAPTION>
Value of Total Net
Shares Shares Total Net Total Net Assets of Acquired
Issued by Issued by Assets of Assets of Acquiring Fund's
Acquiring Acquiring Acquired Acquiring Fund After Unrealized
Acquiring Fund Acquired Fund Date Fund Fund Fund Fund Acquisition (Depreciation)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PIMCO PIMCO
VALUE FUND Value 25 Fund March 3, 2000 137 $ 1,373 $ 1,373 $163,988 $165,361 $ (419)
</TABLE>
50
<PAGE>
<TABLE>
<CAPTION>
GROWTH FUND INNOVATION FUND
---------------------------------------------- ---------------------------------------------
Year Ended 06/30/2000 Year Ended 06/30/1999 Year Ended 06/30/2000 Year Ended 06/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
---------------------------------------------- ---------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Class D 0 $ 10 0 $ 0 981 $ 67,827 951 $ 30,881
--------------------------------------- ---------------------------------------------- ---------------------------------------------
Other classes 44,364 1,577,926 39,705 1,205,363 76,946 4,776,926 42,353 1,280,398
--------------------------------------- ---------------------------------------------- ---------------------------------------------
SHARES ISSUED IN REORGANIZATION
Class D 0 0 0 0 0 0 0 0
--------------------------------------- ---------------------------------------------- ---------------------------------------------
Other classes 0 0 0 0 0 0 0 0
--------------------------------------- ---------------------------------------------- ---------------------------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Class D 0 0 0 0 64 3,612 5 142
--------------------------------------- ---------------------------------------------- ---------------------------------------------
Other classes 11,797 374,099 9,157 246,482 4,990 270,134 824 21,993
--------------------------------------- ---------------------------------------------- ---------------------------------------------
COST OF SHARES REDEEMED
Class D 0 0 0 0 (365) (22,315) (472) (15,840)
--------------------------------------- ---------------------------------------------- ---------------------------------------------
Other classes (50,261) (1,766,297) (40,661) (1,228,138) (38,991) (2,322,487) (25,216) (738,267)
--------------------------------------- ---------------------------------------------- --------------------------------------------
NET (DECREASE) INCREASE RESULTING FROM
FUND SHARE TRANSACTIONS 5,900 $ 185,738 8,201 $ 223,707 43,625 $2,773,697 18,445 $ 579,307
======================================= ============================================== =============================================
<CAPTION>
MID-CAP FUND RENAISSANCE FUND
--------------------------------------------- ---------------------------------------------
Year Ended 06/30/2000 Year Ended 06/30/1999 Year Ended 06/30/2000 Year Ended 06/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
--------------------------------------------- ---------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Class D 39 $ 1,141 20 $ 438 462 $ 7,183 5 $ 84
------------------------------------------------------------------------------------- --------------------------------------------
Other classes 33,275 846,532 43,026 944,828 14,422 214,839 17,955 306,855
------------------------------------------------------------------------------------- --------------------------------------------
SHARES ISSUED IN REORGANIZATION
Class D 0 0 0 0 0 0 0 0
------------------------------------------------------------------------------------- --------------------------------------------
Other classes 0 0 0 0 0 0 0 0
------------------------------------------------------------------------------------- --------------------------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Class D 0 0 0 10 1 11 1 13
------------------------------------------------------------------------------------- --------------------------------------------
Other classes 141 3,495 1,803 38,508 7,945 103,652 4,948 74,646
------------------------------------------------------------------------------------- --------------------------------------------
COST OF SHARES REDEEMED
Class D (29) (767) (10) (229) (388) (5,997) (2) (27)
------------------------------------------------------------------------------------- --------------------------------------------
Other classes (42,392) (1,082,361) (33,835) (737,211) (26,405) (388,493) (20,746) (352,007)
------------------------------------------------------------------------------------- --------------------------------------------
NET (DECREASE) INCREASE RESULTING FROM
FUND SHARE TRANSACTIONS (8,966) $ (231,960) 11,004 $ 246,344 (3,963) $ (68,805) 2,161 $ 29,564
===================================================================================== ============================================
<CAPTION>
TAX-EFFICIENT EQUITY FUND VALUE FUND
--------------------------------------------- ---------------------------------------------
Period from 07/10/1998
Year Ended 06/30/2000 to 06/30/1999 Year Ended 06/30/2000 Year Ended 06/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
<S> --------------------------------------------- ---------------------------------------------
RECEIPTS FOR SHARES SOLD <C> <C> <C> <C> <C> <C> <C> <C>
Class D 0 $ 0 75 $ 750 10 $ 136 1 $ 8
--------------------------------------- --------------------------------------------- ---------------------------------------------
Other classes 3,587 41,110 2,851 29,356 7,845 98,549 6,890 99,132
--------------------------------------- --------------------------------------------- ---------------------------------------------
SHARES ISSUED IN REORGANIZATION
Class D 0 0 0 0 0 0 0 0
--------------------------------------- --------------------------------------------- ---------------------------------------------
Other classes 0 0 0 0 137 1,373 0 0
--------------------------------------- --------------------------------------------- ---------------------------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Class D 0 0 0 0 0 6 1 13
--------------------------------------- --------------------------------------------- ---------------------------------------------
Other classes 0 0 0 0 3,485 39,960 2,076 28,058
--------------------------------------- --------------------------------------------- ---------------------------------------------
COST OF SHARES REDEEMED
Class D (74) (794) 0 0 (14) (202) 0 0
--------------------------------------- --------------------------------------------- ---------------------------------------------
Other classes (1,266) (14,745) (505) (5,190) (12,020) (142,678) (9,111) (131,197)
--------------------------------------- --------------------------------------------- ---------------------------------------------
NET (DECREASE) INCREASE RESULTING FROM
FUND SHARE TRANSACTIONS 2,247 $ 25,571 2,421 $ 24,916 (557) $ (2,856) (143) $ (3,986)
======================================= ============================================= =============================================
</TABLE>
10. FEDERAL INCOME TAX MATTERS
As of June 30, 2000, the Fund listed in the table below had remaining capital
loss carryforwards that were realized in current and prior years. In addition,
as part of the transaction described in Note 9, the Value Fund acquired a
capital loss carryforward from the Value 25 Fund. Use of the acquired capital
loss carryforward may be limited under current tax laws. Additionally, the
Capital Appreciation Fund, Equity Income Fund, Renaissance Fund, Select Growth
Fund, Tax-Efficient Equity Fund, and Value Fund realized capital losses, in the
amount of $20, $21,246,345, $1,586,042, $158,434, $2,191,620, $19,204,542,
respectively, during the period November 1, 1999 through June 30, 2000, which
the Fund elected to defer to the following fiscal year pursuant to income tax
regulations. The Fund will resume capital gain distributions in the future to
the extent gains are realized in excess of the available carryforwards.
<TABLE>
<CAPTION>
Capital Loss Carryforwards
--------------------------------------------
Realized Acquired
Losses Losses Expiration
---------------------------------------------------------------------------
<S> <C> <C> <C>
TAX-EFFICIENT EQUITY FUND $ 27,778 $ -- 6/30/2007
1,332,594 -- 6/30/2008
VALUE FUND -- 384,037 6/30/2005
</TABLE>
51
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and the Class D Shareholders of the PIMCO Funds:
Multi-Manager Series
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations, of
changes in net assets and the financial highlights for the Class D shares
present fairly, in all material respects, the financial position of the Capital
Appreciation Fund, Equity Income Fund, Global Innovation Fund, Growth Fund,
Innovation Fund, Mid-Cap Fund, Renaissance Fund, Select Growth Fund, Target
Fund, Tax-Efficient Equity Fund and Value Fund (hereafter referred to as the
"Funds") at June 30, 2000, the results of each of their operations, the changes
in each of their net assets and the financial highlights for the Class D shares
for each of the periods indicated, in conformity with accounting principles
generally accepted in the United States. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at June 30,
2000 by correspondence with the custodians and brokers, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Kansas City, Missouri
August 21, 2000
52
<PAGE>
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
As required by the Internal Revenue Code regulations, shareholders must be
notified within 60 days of the Trust's fiscal year end (June 30, 2000) regarding
the status of the distributions made to the shareholders.
DIVIDEND RECEIVED DEDUCTION. For the benefit of corporate shareholders only, the
portion of dividends paid out of ordinary income earned during certain Funds'
fiscal years ended June 30, 2000 which qualify for the corporate
dividend-received deduction are as follows:
<TABLE>
<S> <C>
CAPITAL APPRECIATION FUND 58.39%
EQUITY INCOME FUND 63.95%
INNOVATION FUND 0.15%
MID-CAP FUND 40.50%
RENAISSANCE FUND 14.42%
SELECT GROWTH FUND 12.01%
TARGET FUND 5.12%
VALUE FUND 38.57%
</TABLE>
CAPITAL GAIN DISTRIBUTIONS. Capital gains distributions paid for all classes of
shares during the fiscal year ended June 30, 2000, were in the amounts as
follows:
<TABLE>
<CAPTION>
Per Share Per Share
Long-Term Short-Term
Capital Gains Capital Gains
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CAPITAL APPRECIATION FUND 4.99628 --
EQUITY INCOME FUND 1.85496 0.78284
GROWTH FUND 5.66485 --
INNOVATION FUND 3.85703 2.53396
MID-CAP FUND 0.01720 --
RENAISSANCE FUND 1.79690 1.65234
SELECT GROWTH FUND 0.67098 3.04478
TARGET FUND 0.79431 1.00897
VALUE FUND 1.11374 1.45284
</TABLE>
Shareholders are advised to consult their own tax advisor with respect to the
tax consequences of their investment in the Trust. However, income received by
tax-exempt recipients need not be reported as taxable income. In January 2001,
you will be advised on IRS form 1099-DIV as to the federal tax status of the
dividends and distributions received by you in calendar year 2000.
53
<PAGE>
PIMCO FUNDS: MULTI-MANAGER SERIES
--------------------------------------------------------------------------------
MANAGER PIMCO Advisors L.P., 800 Newport Center Drive,
Newport Beach, CA 92660
--------------------------------------------------------------------------------
DISTRIBUTOR PIMCO Funds Distributors LLC, 2187 Atlantic Street,
Stamford, CT 06902-6896
--------------------------------------------------------------------------------
CUSTODIAN State Street Bank and Trust Company, 801 Pennsylvania,
Kansas City, MO 64105
--------------------------------------------------------------------------------
SHAREHOLDER PFPC Global Fund Services, Inc., P.O. Box 9688,
SERVICING AGENT AND 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. Or visit
our Web site, www.pimcofunds.com
<PAGE>
Visit the PIMCO Funds Innovation Center
at www.pimcofunds.com
When you're investing in a volatile sector like technology, incisive,
accurate information could be your best ally. That's why we've created
the PIMCO Funds Innovation Center at www.pimcofunds.com. Look to it for
up-to-date market intelligence and commentary on the tech sector and
PIMCO's tech-related funds. Highlights include:
/ / INNOVATION NEWSLETTER An online version of
our popular technology investing newsletter.
Each monthly issue includes a market review
and outlook from PIMCO Innovation and Global
Innovation Fund portfolio manager, Dennis
McKechnie.
/ / TIMELY MARKET COMMENTARY PIMCO's analysis
of unfolding market events.
[GRAPHIC] / / MANAGER INTERVIEWS Find out what PIMCO"s
technology investment professionals have to
say about market trends, global
opportunities and fund-specific strategies.
/ / THEME ANALYSIS The PIMCO "Innovation"
investment approach focuses on eight
industries or "themes" that drive the tech
sector. Read our manager assessments of
each.
/ / MEDIA HIGHLIGHTS Media coverage of PIMCO's
technology-based funds and managers.
The PIMCO Funds Innovation Center offers you a unique, balanced
perspective on the tech sector and technology investing.
HOW TO GET THERE
To visit the Innovation Center, go to the PIMCO Funds
home page at www.pimcofunds.com and click on
"Innovation Center". Or simply point your browser to
www.pimcofunds.com/innovationcenter.
PZ032.8/00
-----------------
Bulk Rate
U.S. Postage
Paid
[LOGO] Smithtown, NY
Permit NO. 700
-----------------
PIMCO FUNDS
DISTRIBUTORS LLC
2187 Atlantic Street
Stamford, CT 06902-6896
<PAGE>
[LOGO] PIMCO FUNDS
ASSET ALLOCATION SERIES
INSTITUTIONAL & ADMINISTRATIVE CLASS
-------------
ANNUAL REPORT
June 30, 2000
<PAGE>
<TABLE>
<CAPTION>
CONTENTS
<S> <C> <C>
President's Message ............................... 1
Manager Roundtable ................................ 2
Financial Highlights .............................. 7
Statements of Assets and Liabilities .............. 8
Statements of Operations .......................... 9
Statements of Changes in Net Assets ...............10
Notes to Financial Statements .....................12
FUND SCHEDULE OF
SUMMARY INVESTMENTS
90/10 Portfolio ................................... 4 11
60/40 Portfolio ................................... 5 11
30/70 Portfolio ................................... 6 11
</TABLE>
<PAGE>
PRESIDENT'S LETTER
DEAR PIMCO FUNDS SHAREHOLDER:
The first half of 2000 could serve as a textbook illustration of U.S. stock
market volatility. After reaching record highs in the first quarter, both the
Dow Jones Industrial Average and the tech-focused NASDAQ Composite Index tumbled
during the second quarter, before starting to recover lost ground as the quarter
ended. And in the bond market things were almost as bumpy.
This unprecedented volatility has presented a challenge for many investors, some
of whom may have lost sight of the stock market's inherent risks, especially in
the context of the longest bull market in history. In times like these that try
investors' souls--and patience--it's more important than ever to remember a few
time-honored principles...
Maintain a diversified investment portfolio. Have a healthy respect for risk.
Keep your focus on the long term. Or as Bill Gross--PIMCO's oft-quoted bond
chief--has said, "Set your sights on a horizon and sail until you get there."
Those who can stick with these precepts will be able to ride out short-term
market gyrations and ultimately reach their investment goals. At PIMCO, we're
committed to providing investors with the kind of high quality investment
vehicles that can help them get there.
How have our Funds fared during these volatile times? Well, I'm pleased to
report that they have weathered the storms well, overcoming the extreme market
fluctuations to report strong relative performance over the past six months. You
see, our Fund Managers keep their sights firmly planted on the horizon too.
On the following pages you will find a more complete review of each Fund in
light of financial market activities as well as specific details about the total
return investment performance. We appreciate the trust you have placed in us,
and we will continue to focus our efforts to meet your investment needs.
If you have any questions regarding your investment, contact your financial
adviser, or call us at 1-888-87-PIMCO. Or you can visit our Web site at
www.pimcofunds.com.
--------------------------------------------------------------------------------
OF INTEREST
ON MAY 5, 2000, ALLIANZ AG COMPLETED THE ACQUISITION OF APPROXIMATELY 70% OF THE
OUTSTANDING PARTNERSHIP INTERESTS IN PIMCO ADVISORS L.P. ("PIMCO ADVISORS"), OF
WHICH PIMCO IS A SUBSIDIARY PARTNERSHIP. AS A RESULT OF THIS TRANSACTION, PIMCO
ADVISORS, AND ITS SUBSIDIARIES, ARE NOW CONTROLLED BY ALLIANZ AG, A LEADING
PROVIDER OF FINANCIAL SERVICES, PARTICULARLY IN EUROPE. PIMCO REMAINS
OPERATIONALLY INDEPENDENT, CONTINUES TO OPERATE UNDER ITS EXISTING NAME, AND NOW
LEADS THE GLOBAL FIXED-INCOME INVESTMENT EFFORTS OF ALLIANZ AG. KEY EMPLOYEES AT
EACH OF PIMCO ADVISORS' INVESTMENT UNITS, INCLUDING PIMCO'S BILL GROSS, HAVE
SIGNED LONG-TERM EMPLOYMENT CONTRACTS AND HAVE SIGNIFICANT PROFIT-SHARING AND
RETENTION ARRANGEMENTS TO ENSURE CONTINUITY OF THE INVESTMENT PROCESS AND STAFF.
WITH THE ADDITION OF PIMCO ADVISORS, THE ALLIANZ GROUP MANAGES ASSETS OF
APPROXIMATELY $650 BILLION, INCLUDING MORE THAN 300 MUTUAL FUNDS FOR RETAIL AND
INSTITUTIONAL CLIENTS AROUND THE WORLD.
--------------------------------------------------------------------------------
Sincerely,
/s/Stephen J. Treadway
Stephen J. Treadway
President
July 31, 2000
2000 Annual Report 1
<PAGE>
MANAGER ROUNDTABLE
PORTFOLIO MANAGERS: KEN CORBA, JOHN SCHNEIDER AND DAVE BREED
GROWTH, VALUE OR BLEND? A ROUNDTABLE DISCUSSION
KEN CORBA IS PIMCO'S LEADING GROWTH INVESTMENT EXPERT AND THE MANAGER OF PIMCO
GROWTH, SELECT GROWTH AND GROWTH AND INCOME (FORMERLY THE MID-CAP EQUITY) FUNDS.
HE HAS MORE THAN 15 YEARS OF GROWTH INVESTMENT EXPERIENCE. JOHN SCHNEIDER
MANAGES PIMCO RENAISSANCE AND VALUE FUNDS, AND HAS MORE THAN 12 YEARS OF VALUE
INVESTING EXPERIENCE. DAVE BREED MANAGES PIMCO CAPITAL APPRECIATION AND MID-CAP
FUNDS, AND HAS MORE THAN 30 YEARS OF EXPERIENCE, SPECIALIZING IN
GROWTH-AT-A-REASONABLE-PRICE, A TYPE OF BLEND INVESTING.
Q: EACH OF YOU IS A STRONG BELIEVER IN YOUR OWN PARTICULAR INVESTMENT STYLE.
CAN YOU EXPLAIN WHY AN INVESTOR SHOULD HAVE EXPOSURE TO IT?
KC: While it's true that different investment styles outperform at various
times, I believe growth stock investing offers the greatest potential for
capital appreciation over the long term. For the last several years, growth
stocks have dominated the stock market in terms of both performance and
earnings growth-- and I think this trend is likely to continue.
JS: I think it's prudent to have exposure to value stocks. Although they've
underperformed in recent years, history has shown that different investment
styles fall in and out of favor, so it makes sense to have exposure to
various investment styles. In addition, stock valuations are at
historically high levels, which I do not believe are sustainable. I would
not be surprised to see a rotation towards lower valuation issues in the
near term.
DB: Growth-at-a-reasonable-price (GARP) investing represents what I believe to
be the best of both worlds for investors. It provides access to growth
potential but it also places importance on reasonable valuation. While
investors are certainly enamored with growth stocks right now, I believe
they are becoming more price sensitive, which usually happens during
periods of rising interest rates. GARP investing is the often-overlooked
alternative to growth and value investing.
Q: CAN YOU GIVE US AN EXAMPLE OF ONE OF YOUR BEST PERFORMING HOLDINGS THAT
EXEMPLIFIES YOUR INVESTMENT STYLE?
KC: One of our best performing holdings is JDS Uniphase, which makes fiber
opticcomponents. Fiber optic telecommunications equipment is one of the
fastest-growing industries right now, and JDS Uniphase is the leader in
this area. The company has a very successful acquisition strategy, which
has enabled it to gain market share and complement its existing product
line. It's one of the great wealth-creating companies of our time--and just
the kind of stock we like to own.
JS: Ace Limited, a property and casualty insurance (P&C) company, has nearly
doubled since we added it to the portfolio. For more than a decade,
property and casualty insurance companies performed poorly because the
industry suffered from too much competition. However, we anticipated that
the industry would lose its weakest players, which would enable it to gain
pricing power and increase extremely narrow profit margins. As a result, we
added fundamentally strong P&C insurers, such as Ace, that we expected
would benefit from the industry consolidation. Ace, which boasts a strong
balance sheet and an exceptional management team, did indeed outperform.
DB: Corning, a fiber optic telecommunications equipment maker, has turned in a
strong performance for the Fund. We were attracted to the company last year
because of its relatively low valuation in such a high-growth industry. Its
stock price has risen as a result of several strategic acquisitions and
plant expansions that would increase capacity, as well as general investor
enthusiasm for this industry.
Q: WHAT AREAS OF TECHNOLOGY DO YOUR RESPECTIVE PORTFOLIOS HAVE EXPOSURE TO?
HOW DO THESE FIT WITH YOUR RESPECTIVE INVESTMENT STYLES?
KC: Because technology is such an important part of the stock market in
general--it now comprises 34% of the S&P 500 Index--and growth investing in
particular, we have significant exposure to this sector. We are invested in
many high-growth industries within technology, such as networking, fiber
optics and wireless telecommunications. We own many of the premier, blue
chip tech companies, including Cisco Systems, EMC and Nokia.
2 2000 Annual Report
<PAGE>
JS: We limit our exposure in the technology sector to companies we understand
and can value--typically commodity technology companies, such as
semiconductor manufacturers. They are cyclical companies, and we like to
purchase them at the time in their business cycle when they are undervalued
and offer upside potential. While we had a lot of exposure to commodity
technology last year (chip maker Micron was our largest holding for much of
the year), we don't have much exposure right now because we believe these
stocks are near the peak of their business cycle and are relatively
overvalued.
DB: We own a number of different technology companies, such
as chip maker Intel and networking giant Cisco Systems. Because our goal is
to offer investors an overall portfolio that is growth-oriented but
reasonably valued, we are able to own these higher growth tech names and
balance them out with companies, such as Tyco and General Electric, that
offer low relative valuations.
Q: TO WHAT DO YOU ATTRIBUTE THE RECENT VOLATILITY IN THE MARKET?
KC: I think when you see the kind of huge appreciation that we've experienced
in the past year, it only makes sense that the market would experience a
correction. I welcomed this correction, because I felt it was needed. And
it proved to be just the kind of correction that usually is best for the
market--deep, hard, frightening and short. A lot of the excesses were
shaken out of the stock market, which was healthy, and now the stock market
appears to be resuming its ascent.
JS: I attribute the volatility to the shift from institutional investors
dominating the stock market to individual investors, especially day
traders, comprising the majority of stock market investors. This has
resulted in a dramatic shortening of investors' time horizons as well as a
dramatic increase in investors' expectations. In addition, individual
investors are much more likely to adopt a herd mentality, resulting in mass
exoduses from particular stocks and sectors.
DB: I agree with both Ken and John. Certainly the en masse addition of day
traders and do-it-yourself investors to the stock market has changed the
environment and contributed to recent volatility. However, I believe a
correction was virtually inevitable after such a huge rise in the stock
market over a relatively short period of time.
Q: WHAT IS YOUR OUTLOOK FOR THE STOCK MARKET IN THE COMING MONTHS?
KC: I think the volatility is behind us, and the stock market should outperform
in the second half of the year for several reasons. First of all, the
Federal Reserve is almost finished tightening the money supply--if it
hasn't already. And growth stocks have historically performed best in
periods of economic deceleration with declining interest rates. In
addition, we think the political backdrop is also positive for the stock
market. Proposed tax cuts, such as the elimination of the estate tax,
should stimulate the economy and the stock market. And, of course,
corporate fundamentals remain very strong, which should augur well for
equities.
JS: I don't think the volatility is necessarily behind us, and I think the
stock market may turn in a lackluster performance in the coming months. I
believe there is still a good chance that the domestic economy could plunge
into a recession and take the stock market down with it. However, I'm
confident that many value stocks have such low valuations that they can
withstand a recession.
DB: I am optimistic about the stock market for the second half of the year. I
agree with Ken that corporate fundamentals are strong and that the economic
backdrop should be positive for equities. However, I believe that we still
have the specter of rising inflation, as gas prices show no signs of
dropping soon. I think that in this environment investors will become
increasingly concerned about valuations and, while they will not abandon
growth stocks, they will flock to those growth stocks that have reasonable
prices.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The views of the
manager are not indicative of the future performance of any PIMCO Fund.
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.
This article is distributed for educational purposes and the opinions of
the managers should not be considered investment advice. Equity funds are
subject to the basic stock market risk that a particular security or
securities, in general, may decrease in value. All holdings are as of
6/30/00. PIMCO Growth Fund held JDS Uniphase (4.11%), Cisco Systems
(5.45%), EMC (7.92%) and Nokia (5.99%) in its portfolio. PIMCO Select
Growth Fund held JDS Uniphase (5.84%), Cisco Systems (5.65%), EMC (6.83%),
and Nokia (4.87%) in its portfolio. PIMCO Growth & Income Fund held EMC
(5.53%) in its portfolio. PIMCO Renaissance Fund held Ace Limited (5.44%)
in its portfolio, as did PIMCO Value Fund (5.12% of its portfolio). PIMCO
Capital Appreciation Fund held Corning (2.03%), Intel (1.88%), Cisco
Systems (1.69%), Tyco (1.60%) and General Electric (2.43%) in its
portfolio.
The S&P 500 Index is an unmanaged index. It is not possible to invest
directly in an unmanaged index.
2000 Annual Report 3
<PAGE>
90/10 PORTFOLIO
----------------------------------------
PORTFOLIO CHARACTERISTICS
----------------------------------------
OBJECTIVE:
Long-term capital appreciation
PORTFOLIO:
80-100% PIMCO Stock Funds
0-20% PIMCO Bond Funds
TOTAL NET ASSETS:
$19.6 million
----------------------------------------
PIMCO STOCK FUNDS
----------------------------------------
<TABLE>
<CAPTION>
GROWTH:
<S> <C>
Enhanced Equity Fund 11.8%
----------------------------------------
Target Fund 5.9%
----------------------------------------
Growth Fund 5.0%
----------------------------------------
Opportunity Fund 3.6%
----------------------------------------
BLEND:
StocksPLUS Fund 11.7%
----------------------------------------
Mid-Cap Fund 5.4%
----------------------------------------
Capital Appreciation Fund 4.9%
----------------------------------------
VALUE:
Value Fund 19.0%
----------------------------------------
Small-Cap Value Fund 3.2%
----------------------------------------
INTERNATIONAL:
International Fund 19.6%
----------------------------------------
TOTAL STOCK FUNDS: 90.1%
----------------------------------------
</TABLE>
----------------------------------------
PIMCO BOND FUNDS
----------------------------------------
<TABLE>
<CAPTION>
INTERMEDIATE DURATION:
<S> <C>
Total Return Fund 8.4%
----------------------------------------
HIGH YIELD:
High Yield Fund 1.0%
----------------------------------------
INTERNATIONAL:
Foreign Bond Fund 0.5%
----------------------------------------
TOTAL BOND FUNDS: 9.9%
----------------------------------------
</TABLE>
--------------------------------------------------------------------------------
PERFORMANCE
--------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended June 30, 2000
<TABLE>
<CAPTION>
INST'L ADMIN. Russell 72% Russell 3000 Index Lipper Multi-Cap
CLASS CLASS 3000 18% MSCI All Country World Core Fund
(Incep. 2/26/99) (Incep. 2/26/99) Index ex-U.S. 10% LBAG Index Average
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 YEAR 12.20% 11.91% 9.59% 10.75% 11.54%
SINCE INCEPTION* 18.47% 18.18% -- -- --
</TABLE>
*ANNUALIZED
CUMULATIVE RETURNS THROUGH JUNE 30, 2000
$10,000 invested at inception
[GRAPH]
<TABLE>
<CAPTION>
Month PIMCO 90/10 Russell 3000 72% Russell 3000 Index
Portfolio Index 18% MSCI World
ex-U.S.
10% LBAG Index
==================================================================================
<S> <C> <C> <C>
2/28/1999 10,000 10,000 10,000
3/31/1999 10,257 10,367 10,359
4/30/1999 10,788 10,835 10,793
5/31/1999 10,651 10,629 10,548
6/30/1999 11,173 11,165 11,020
7/31/1999 11,027 10,827 10,817
8/31/1999 10,926 10,704 10,739
9/30/1999 10,761 10,430 10,564
10/31/1999 11,137 11,084 11,117
11/30/1999 11,439 11,394 11,420
12/31/1999 12,331 12,121 12,136
1/31/2000 11,825 11,646 11,679
2/29/2000 12,302 11,754 11,827
3/31/2000 12,975 12,674 12,589
4/30/2000 12,448 12,228 12,138
5/31/2000 12,234 11,885 11,838
6/30/2000 12,536 12,236 12,205
</TABLE>
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT PORTFOLIO SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE LINE GRAPH ABOVE ASSUMES THE
INVESTMENT OF $10,000 ON 3/01/99, THE FIRST FULL MONTH FOLLOWING THE PORTFOLIO'S
INSTITUTIONAL CLASS INCEPTION ON 2/26/99, COMPARED TO (I) A STATIC 72%/18%/10%
BLEND OF THE RUSSELL 3000 INDEX, MSCI ALL COUNTRY WORLD EX-U.S. AND LEHMAN
BROTHERS AGGREGATE BOND INDEX AND (II) THE RUSSELL 3000 INDEX, EACH UNMANAGED
MARKET INDEXES. THE PERFORMANCE OF THE ADMINISTRATIVE CLASS (SHOWN ABOVE)
REFLECTS THE PAYMENT OF A SERVICE FEE IN AN AMOUNT NOT TO EXCEED 0.25% ON AN
ANNUALIZED BASIS. THE ADMINISTRATIVE CLASS COMMENCED OPERATIONS ON 2/26/99.
FOREIGN INVESTING INVOLVES POTENTIALLY HIGHER RISKS INCLUDING FOREIGN CURRENCY
FLUCTUATIONS AND POLITICAL OR ECONOMIC UNCERTAINTY. THESE RISKS CAN BE ENHANCED
WHEN INVESTING IN EMERGING MARKETS.
--------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
--------------------------------------------------------------------------------
- The 90/10 Portfolio seeks long-term capital appreciation. The Portfolio's
strategic target allocation is 90% stock funds and 10% bond funds. As of
June 30, 2000, the Portfolio's actual allocation matched its strategic
allocation. This compares to an allocation of 84% stock funds and 16% bond
funds on June 30, 1999. For the 12-month period ended June 30, 2000, the
Portfolio's Institutional Class returned 12.20%.
- Over the past year, the Portfolio has been brought back to a neutral
position from an underweight equity position. This allocation enhanced
returns as equities continued to perform well, particularly in the fourth
quarter of last year and the first quarter of this year. The decision to
move to a more neutral stance reflected changes in our proprietary asset
allocation models, which continued to favor equities over fixed income.
- Within the equity portion of the Portfolio, we increased our stake in
international holdings substantially from a year ago, moving from an
underweight in non-U.S. equities to an overweight in this area. This was
positive for performance over the past year despite a slowdown in the
second quarter of 2000. We remain optimistic in the international arena as
the European and Asian markets are set to take advantage of the economic
benefits of globalization.
- The Portfolio also maintained a solid position in growth-oriented stocks,
including overweights in PIMCO's Growth, Opportunity and Target Funds.
- The bond market suffered for much of the past year as the Fed raised
interest rates six times. However, the situation for higher-quality bonds
improved toward the end of the period, as it appeared that Fed policy was
capping inflation. The Portfolio benefited from its exposure to the Total
Return Fund.
- Recent volatility within the equity markets has increased as has our
concern regarding short-term stock market performance. As a result, we
expect to maintain a near neutral position as we anticipate that equity
returns will return to historical norms. However, within our equity
investments, we anticipate continuing to favor growth over value and
non-U.S. equities over U.S. equities.
4 2000 Annual Report
<PAGE>
60/40 PORTFOLIO
------------------------------------------
PORTFOLIO CHARACTERISTICS
------------------------------------------
OBJECTIVE:
Long-term capital appreciation and
current income
PORTFOLIO:
50-70% PIMCO Stock Funds
30-50% PIMCO Bond Funds
TOTAL NET ASSETS:
$17.0 million
------------------------------------------
PIMCO STOCK FUNDS
------------------------------------------
<TABLE>
<CAPTION>
GROWTH:
<S> <C>
Enhanced Equity Fund 7.6%
------------------------------------------
Growth Fund 3.8%
------------------------------------------
Target Fund 3.7%
------------------------------------------
Opportunity Fund 2.6%
------------------------------------------
BLEND:
StocksPLUS Fund 7.6%
------------------------------------------
Mid-Cap Fund 4.4%
------------------------------------------
Capital Appreciation Fund 2.9%
------------------------------------------
VALUE:
Value Fund 12.5%
------------------------------------------
Small-Cap Value Fund 2.2%
------------------------------------------
INTERNATIONAL:
International Fund 12.7%
------------------------------------------
TOTAL STOCK FUNDS: 60.0%
------------------------------------------
</TABLE>
------------------------------------------
PIMCO BOND FUNDS
------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
SHORT DURATION:
Money Market Fund 0.1%
------------------------------------------
INTERMEDIATE DURATION:
Total Return Fund 34.2%
------------------------------------------
HIGH YIELD:
High Yield Fund 3.8%
------------------------------------------
INTERNATIONAL:
Foreign Bond Fund 1.9%
------------------------------------------
TOTAL BOND FUNDS: 40.0%
------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
PERFORMANCE
--------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended June 30, 2000
<TABLE>
<CAPTION>
INST'L ADMIN. Russell Lehman Brothers 48% Russell 3000 Index Lipper
CLASS CLASS 3000 Aggregate Bond 12% MSCI All Country World Balanced
(Incep.2/26/99) (Incep. 2/26/99) Index Index ex-U.S. 40% LBAG Index Fund Average
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 YEAR 9.90% 9.63% 9.59% 4.56% 8.81% 4.43%
SINCE INCEPTION *13.55% 13.27% -- -- -- --
</TABLE>
*ANNUALIZED
CUMULATIVE RETURNS THROUGH JUNE 30, 2000
$10,000 invested at inception
[GRAPH]
<TABLE>
<CAPTION>
Month PIMCO 60/40 Russell 3000 Lehman Brothers 48% Russell 3000 Index
Portfolio Index Aggregate Bond 12% MSCI World
Index ex-U.S.
40% LBAG Index
======================================================================================================
<S> <C> <C> <C> <C>
2/28/1999 10,000 10,000 10,000 10,000
3/31/1999 10,192 10,367 10,055 10,257
4/30/1999 10,573 10,835 10,087 10,555
5/31/1999 10,440 10,629 9,999 10,365
6/30/1999 10,780 11,165 9,967 10,663
7/31/1999 10,665 10,827 9,925 10,517
8/31/1999 10,608 10,704 9,920 10,464
9/30/1999 10,534 10,430 10,035 10,391
10/31/1999 10,785 11,084 10,072 10,766
11/30/1999 10,997 11,394 10,071 10,962
12/31/1999 11,549 12,121 10,022 11,403
1/31/2000 11,224 11,646 9,990 11,104
2/29/2000 11,579 11,754 10,110 11,243
3/31/2000 12,059 12,674 10,244 11,775
4/30/2000 11,711 12,228 10,214 11,482
5/31/2000 11,578 11,885 10,210 11,291
6/30/2000 11,847 12,236 10,422 11,603
</TABLE>
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT PORTFOLIO SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE LINE GRAPH ABOVE ASSUMES
THE INVESTMENT OF $10,000 ON 3/01/99, THE FIRST FULL MONTH FOLLOWING THE
PORTFOLIO'S INSTITUTIONAL CLASS INCEPTION ON 2/26/99, COMPARED TO (i) A STATIC
48%/12%/40% BLEND OF THE RUSSELL 3000 INDEX, MSCI ALL COUNTRY WORLD EX-U.S. AND
LEHMAN BROTHERS AGGREGATE BOND INDEX, (ii) THE RUSSELL 3000 INDEX AND (iii)
LEHMAN BROTHERS AGGREGATE BOND INDEX, EACH UNMANAGED MARKET INDEXES. THE
PERFORMANCE OF THE ADMINISTRATIVE CLASS (SHOWN ABOVE) REFLECTS THE PAYMENT OF A
SERVICE FEE IN AN AMOUNT NOT TO EXCEED 0.25% ON AN ANNUALIZED BASIS. THE
ADMINISTRATIVE CLASS COMMENCED OPERATIONS ON 2/26/99. FOREIGN INVESTING INVOLVES
POTENTIALLY HIGHER RISKS INCLUDING FOREIGN CURRENCY FLUCTUATIONS AND POLITICAL
OR ECONOMIC UNCERTAINTY. THESE RISKS CAN BE ENHANCED WHEN INVESTING IN EMERGING
MARKETS.
--------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
--------------------------------------------------------------------------------
- The 60/40 Portfolio seeks long-term capital appreciation and current
income. The Portfolio's strategic target allocation is 60% stock funds and
40% bond funds. As of June 30, 2000, the Portfolio's actual allocation
matched its strategic allocation. This compares to an allocation of 56%
stock funds and 44% bond funds on June 30, 1999. For the 12-month period
ended June 30, 2000, the Portfolio's returned 9.90%.
- Over the past year, the Portfolio has been brought back to a neutral
position from an underweight equity position. This allocation enhanced
returns as equities continued to perform well, particularly in the fourth
quarter of last year and the first quarter of this year. The decision to
move to a more neutral stance reflected changes in our proprietary asset
allocation models, which continued to favor equities over fixed income.
- Within the equity portion, we have increased our weighting in international
stocks over the past year, adding to returns due to strong performance in
the sector during the second half of 1999. Despite the recent downturn in
overseas markets, we believe that international stocks are poised to take
advantage of increased economic globalization, particularly in Eastern
Europe and Asia. Overweight positions in the large- and mid-capitalization
growth sectors boosted performance for the Portfolio over the past year, as
these stocks continued to outperform the rest of the market.
- The bond market suffered for much of the past year as the Fed raised
interest rates six times. However, the situation for higher-quality bonds,
such as Treasuries and mortgage-backed securities, improved toward the end
of the period, as it appeared that Fed policy was capping inflation. The
Portfolio benefited from its exposure to the Total Return Fund, which built
an overweight position in mortgages to take advantage of their attractive
yields.
- Recent volatility within the equity markets has increased as has our
concern regarding short-term stock market performance. As a result, we
expect to maintain a near neutral position as we anticipate that equity
returns will revert to historical norms. However, within our equity
investments, we anticipate continuing to favor growth over value and
non-U.S. equities over U.S. equities.
2000 Annual Report 5
<PAGE>
30/70 PORTFOLIO
----------------------------------------
PORTFOLIO CHARACTERISTICS
----------------------------------------
OBJECTIVE:
Current income with long-term
capital appreciation as a secondary objective
PORTFOLIO:
25-35% PIMCO Stock Funds
65-75% PIMCO Bond Funds
TOTAL NET ASSETS:
$5.7 million
----------------------------------------
PIMCO STOCK FUNDS
----------------------------------------
<TABLE>
<CAPTION>
GROWTH:
<S> <C>
Enhanced Equity Fund 4.0%
----------------------------------------
Target Fund 1.9%
----------------------------------------
Growth Fund 1.4%
----------------------------------------
Opportunity Fund 1.2%
----------------------------------------
BLEND:
StocksPLUS Fund 4.0%
----------------------------------------
Mid-Cap Fund 1.9%
Capital Appreciation Fund 1.6%
----------------------------------------
VALUE:
Value Fund 6.6%
----------------------------------------
Small-Cap Value Fund 0.9%
INTERNATIONAL:
International Fund 6.8%
----------------------------------------
TOTAL STOCK FUNDS: 30.3%
----------------------------------------
</TABLE>
----------------------------------------
PIMCO BONDS FUND
----------------------------------------
<TABLE>
<CAPTION>
SHORT DURATION:
<S> <C>
Money Market Fund 0.1%
----------------------------------------
INTERMEDIATE DURATION:
Total Return Fund 59.3%
----------------------------------------
HIGH YIELD:
High Yield Fund 6.7%
----------------------------------------
INTERNATIONAL:
Foreign Bond Fund 3.6%
----------------------------------------
TOTAL BOND FUNDS: 69.7%
----------------------------------------
</TABLE>
--------------------------------------------------------------------------------
PERFORMANCE
--------------------------------------------------------------------------------
TOTAL RETURN INVESTMENT PERFORMANCE For the Period Ended June 30, 2000
<TABLE>
<CAPTION>
INST'L ADMIN. Lehman Brothers 24% Russell 3000 Index Lipper General
CLASS CLASS Aggregate 6% MSCI All Country World Bond Fund
(Incep. 2/26/99) (Incep. 2/26/99) Bond Index ex-U.S. 70% LBAG Index Average
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 YEAR 7.47% 7.21% 4.56% 6.75% 3.72%
SINCE INCEPTION* 8.53% 8.26% -- -- --
</TABLE>
*ANNUALIZED
CUMULATIVE RETURNS THROUGH JUNE 30, 2000
[GRAPH]
<TABLE>
<CAPTION>
Month PIMCO 30/70 Lehman Brothers
Portfolio Aggregate Bond 24% Russell 3000 Index
Index 6% MSCI World ex-U.S.
70% LBAG Index
====================================================================================
<S> <C> <C> <C>
2/28/1999 10,000 10,000 10,000
3/31/1999 10,134 10,055 10,156
4/30/1999 10,353 10,087 10,320
5/31/1999 10,225 9,999 10,182
6/30/1999 10,378 9,967 10,312
7/31/1999 10,313 9,925 10,219
8/31/1999 10,284 9,920 10,191
9/30/1999 10,295 10,035 10,215
10/31/1999 10,425 10,072 10,418
11/30/1999 10,552 10,071 10,512
12/31/1999 10,799 10,022 10,698
1/31/2000 10,609 9,990 10,540
2/29/2000 10,825 10,110 10,670
3/31/2000 11,136 10,244 10,993
4/30/2000 10,987 10,214 10,841
5/31/2000 10,922 10,210 10,748
6/30/2000 11,154 10,422 11,008
</TABLE>
$10,000 invested at inception
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT PORTFOLIO SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE LINE GRAPH ABOVE ASSUMES
THE INVESTMENT OF $10,000 ON 3/01/99, THE FIRST FULL MONTH FOLLOWING THE
PORTFOLIO'S INSTITUTIONAL CLASS INCEPTION ON 2/26/99, COMPARED TO (i) A STATIC
48%/12%/40% BLEND OF THE RUSSELL 3000 INDEX, MSCI ALL COUNTRY WORLD EX-U.S. AND
LEHMAN BROTHERS AGGREGATE BOND INDEX AND (ii) LEHMAN BROTHERS AGGREGATE BOND
INDEX, EACH UNMANAGED MARKET INDEXES. THE PERFORMANCE OF THE ADMINISTRATIVE
CLASS (SHOWN ABOVE) REFLECTS THE PAYMENT OF A SERVICE FEE IN AN AMOUNT NOT TO
EXCEED 0.25% ON AN ANNUALIZED BASIS. THE ADMINISTRATIVE CLASS COMMENCED
OPERATIONS ON 2/26/99. FOREIGN INVESTING INVOLVES POTENTIALLY HIGHER RISKS
INCLUDING FOREIGN CURRENCY FLUCTUATIONS AND POLITICAL OR ECONOMIC UNCERTAINTY.
THESE RISKS CAN BE ENHANCED WHEN INVESTING IN EMERGING MARKETS.
--------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
--------------------------------------------------------------------------------
- The 30/70 Portfolio seeks current income with long-term capital
appreciation as a secondary consideration. The Portfolio's strategic target
allocation is 30% stock funds and 70% bond funds. As of June 30, 2000, the
Portfolio's actual allocation was 30.3% stock funds and 69.7% bond funds.
This compares to an allocation of 28% stock funds and 72% bond funds on
June 30, 1999. For the 12-month period ended June 30, 2000, the Portfolio's
returned 7.47%.
- Over the past year, the Portfolio has been brought back to roughly a
neutral position from an under weight equity position. This allocation
enhanced returns as equities continued to perform well, particularly in the
fourth quarter of last year and the first quarter of this year. The
decision to move to a more neutral stance reflected changes in our
proprietary asset allocation models, which continued to favor equities over
fixed income.
- The bond market suffered for much of the past year as the Fed raised
interest rates six times. However, the situation for higher-quality bonds,
such as Treasuries and mortgage-backed securities, improved toward the end
of the period, as it appeared that Fed policy was capping inflation.
- The Portfolio benefited from its exposure to the Total Return Fund, which
built an overweight position in mortgages to take advantage of their
attractive yields and high credit quality. High yield exposure was reduced
as we remained concerned that credit sensitive issues would underperform in
an environment of a slowing economy and rising default rates.
- Within the equity portion of the Portfolio, we have increased our
international weighting over the past year. Despite a recent downturn in
the overseas markets, our overweight in international stocks proved
beneficial for returns thanks to superior performance in late 1999.
Maintenance of an underweight in value stocks was also beneficial for
performance.
- Recent volatility within the equity markets has increased as has our
concern regarding short-term stock market performance. As a result, we
expect to maintain a near neutral position as we anticipate that equity
returns will return to historical norms. While our outlook is bullish for
bonds, we remain cautious over the short term as Fed policy will remain
restrictive until more definite signs of a moderating economy emerge.
6 2000 Annual Report
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SELECTED PER SHARE DATA FOR THE YEAR OR PERIOD ENDED: 90/10 PORTFOLIO
------------------------- --------------------------
Institutional Class Administrative Class
06/30/2000 06/30/1999(b) 06/30/2000 06/30/1999 (b)
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 12.19 $ 10.91 $ 12.18 $ 10.91
---------------------------------------------------------- ------------------------- --------------------------
Net Investment Income (a) 0.59 0.05 0.56 0.04
---------------------------------------------------------- ------------------------- --------------------------
Net Realized / Unrealized Gain on Investments (a) 0.86 1.23 0.85 1.23
---------------------------------------------------------- ------------------------- --------------------------
Total Income from Investment Operations 1.45 1.28 1.41 1.27
---------------------------------------------------------- ------------------------- --------------------------
Dividends from Net Investment Income (0.19) 0.00 (0.17) 0.00
---------------------------------------------------------- ------------------------- --------------------------
Distributions from Net Realized Capital Gains (0.59) 0.00 (0.59) 0.00
---------------------------------------------------------- ------------------------- --------------------------
Total Distributions (0.78) 0.00 (0.76) 0.00
---------------------------------------------------------- ------------------------- --------------------------
Net Asset Value End of Period 12.86 12.19 12.83 12.18
---------------------------------------------------------- ------------------------- --------------------------
Total Return (%) 12.20 11.73 11.91 11.64
---------------------------------------------------------- ------------------------- --------------------------
Net Assets End of Period (000s) $ 13 $ 11 $ 12 $ 11
---------------------------------------------------------- ------------------------- --------------------------
Ratio of Expenses to Average Net Assets (%) 0.10 0.10* 0.35 0.35*
---------------------------------------------------------- ------------------------- --------------------------
Ratio of Net Investment Income to Average Net Assets (%) 4.71 1.17* 4.46 0.95*
---------------------------------------------------------- ------------------------- --------------------------
Portfolio Turnover Rate (%) 18 48 18 48
---------------------------------------------------------- ------------------------- --------------------------
</TABLE>
<TABLE>
<CAPTION>
60/40 PORTFOLIO
------------------------- --------------------------
Institutional Class Administrative Class
06/30/2000 06/30/1999(b) 06/30/2000 06/30/1999 (b)
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 11.27 $ 10.55 $ 11.27 $ 10.55
---------------------------------------------------------- ------------------------- --------------------------
Net Investment Income (a) 0.63 0.09 0.60 0.09
---------------------------------------------------------- ------------------------- --------------------------
Net Realized / Unrealized Gain on Investments (a) 0.45 0.73 0.45 0.72
---------------------------------------------------------- ------------------------- --------------------------
Total Income from Investment Operations 1.08 0.82 1.05 0.81
---------------------------------------------------------- ------------------------- --------------------------
Dividends from Net Investment Income (0.41) (0.10) (0.38) (0.09)
---------------------------------------------------------- ------------------------- --------------------------
Distributions from Net Realized Capital Gains (0.44) 0.00 (0.44) 0.00
---------------------------------------------------------- ------------------------- --------------------------
Total Distributions (0.85) (0.10) (0.82) (0.09)
---------------------------------------------------------- ------------------------- --------------------------
Net Asset Value End of Period 11.50 11.27 11.50 11.27
---------------------------------------------------------- ------------------------- --------------------------
Total Return (%) 9.90 7.80 9.63 7.71
---------------------------------------------------------- ------------------------- --------------------------
Net Assets End of Period (000s) $ 57 $ 11 $ 12 $ 11
---------------------------------------------------------- ------------------------- --------------------------
Ratio of Expenses to Average Net Assets (%) 0.10 0.10* 0.35 0.35*
---------------------------------------------------------- ------------------------- --------------------------
Ratio of Net Investment Income to Average Net Assets (%) 5.51 2.52* 5.26 2.44*
---------------------------------------------------------- ------------------------- --------------------------
Portfolio Turnover Rate (%) 44 39 44 39
---------------------------------------------------------- ------------------------- --------------------------
</TABLE>
<TABLE>
<CAPTION>
30/70 PORTFOLIO
------------------------- --------------------------
Institutional Class Administrative Class
06/30/2000 06/30/1999(b) 06/30/2000 06/30/1999 (b)
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 10.33 $ 10.09 $ 10.33 $ 10.09
---------------------------------------------------------- ------------------------- --------------------------
Net Investment Income (a) 0.64 0.15 0.61 0.14
---------------------------------------------------------- ------------------------- --------------------------
Net Realized / Unrealized Gain on Investments (a) 0.11 0.23 0.11 0.23
---------------------------------------------------------- ------------------------- --------------------------
Total Income from Investment Operations 0.75 0.38 0.72 0.37
---------------------------------------------------------- ------------------------- --------------------------
Dividends from Net Investment Income (0.53) (0.14) (0.50) (0.13)
---------------------------------------------------------- ------------------------- --------------------------
Distributions from Net Realized Capital Gains (0.19) 0.00 (0.19) 0.00
---------------------------------------------------------- ------------------------- --------------------------
Total Distributions (0.72) (0.14) (0.69) (0.13)
---------------------------------------------------------- ------------------------- --------------------------
Net Asset Value End of Period 10.36 10.33 10.36 10.33
---------------------------------------------------------- ------------------------- --------------------------
Total Return (%) 7.47 3.78 7.21 3.70
---------------------------------------------------------- ------------------------- --------------------------
Net Assets End of Period (000s) $ 11 $ 10 $ 11 $ 10
---------------------------------------------------------- ------------------------- --------------------------
Ratio of Expenses to Average Net Assets (%) 0.10 0.10* 0.35 0.35*
---------------------------------------------------------- ------------------------- --------------------------
Ratio of Net Investment Income to Average Net Assets (%) 6.19 4.20* 5.95 4.03*
---------------------------------------------------------- ------------------------- --------------------------
Portfolio Turnover Rate (%) 52 37 52 37
---------------------------------------------------------- ------------------------- --------------------------
</TABLE>
* Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
(b) Commenced operations on February 26, 1999
2000 Annual Report SEE ACCOMPANYING NOTES 7
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 2000
<TABLE>
<CAPTION>
Amounts in thousands, except per share amounts 90/10 PORTFOLIO 60/40 PORTFOLIO 30/70 PORTFOLIO
--------------- --------------- ---------------
<S> <C> <C> <C>
ASSETS:
Investments, at value $ 19,870 $ 17,146 $ 5,659
------------------------------------------------------------------------ --------------- --------------- ---------------
Receivable for investments sold and forward foreign currency contracts 0 0 0
------------------------------------------------------------------------ --------------- --------------- ---------------
Receivable for Portfolio shares sold 29 8 7
------------------------------------------------------------------------ --------------- --------------- ---------------
Interest and dividends receivable 10 36 21
------------------------------------------------------------------------ --------------- --------------- ---------------
19,909 17,190 5,687
======================================================================== =============== =============== ===============
LIABILITIES:
Payable for investments purchased and forward foreign currency contracts $ 1 $ 0 $ 0
------------------------------------------------------------------------ --------------- --------------- ---------------
Payable for Portfolio shares redeemed 242 64 1
------------------------------------------------------------------------ --------------- --------------- ---------------
Dividends payable 0 76 19
------------------------------------------------------------------------ --------------- --------------- ---------------
Accrued investment advisory fee 0 0 0
------------------------------------------------------------------------ --------------- --------------- ---------------
Accrued administration fee 7 6 2
------------------------------------------------------------------------ --------------- --------------- ---------------
Accrued distribution fee 12 10 4
------------------------------------------------------------------------ --------------- --------------- ---------------
Accrued servicing fee 5 4 1
------------------------------------------------------------------------ --------------- --------------- ---------------
267 160 27
======================================================================== =============== =============== ===============
NET ASSETS $ 19,642 $ 17,030 $ 5,660
======================================================================== =============== =============== ===============
NET ASSETS CONSIST OF:
Paid in capital $ 18,114 $ 16,006 $ 5,646
------------------------------------------------------------------------ --------------- --------------- ---------------
Undistributed net investment income 205 315 105
------------------------------------------------------------------------ --------------- --------------- ---------------
Accumulated undistributed net realized (loss) 908 625 (12)
------------------------------------------------------------------------ --------------- --------------- ---------------
Net unrealized appreciation (depreciation) 415 84 (79)
------------------------------------------------------------------------ --------------- --------------- ---------------
$ 19,642 $ 17,030 $ 5,660
======================================================================== =============== =============== ===============
NET ASSETS:
Institutional Class $ 13 $ 57 $ 11
------------------------------------------------------------------------ --------------- --------------- ---------------
Administrative Class 12 12 11
------------------------------------------------------------------------ --------------- --------------- ---------------
Other Classes 19,617 16,961 5,638
------------------------------------------------------------------------ --------------- --------------- ---------------
SHARES ISSUED AND OUTSTANDING:
Institutional Class 1 5 1
------------------------------------------------------------------------ --------------- --------------- ---------------
Administrative Class 1 1 1
------------------------------------------------------------------------ --------------- --------------- ---------------
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
(NET ASSETS PER SHARE OUTSTANDING)
Institutional Class $ 12.86 $ 11.50 $ 10.36
------------------------------------------------------------------------ --------------- --------------- ---------------
Administrative Class 12.83 11.50 10.36
------------------------------------------------------------------------ --------------- --------------- ---------------
COST OF INVESTMENTS OWNED $ 19,455 $ 17,062 $ 5,738
======================================================================== =============== =============== ===============
</TABLE>
8 SEE ACCOMPANYING NOTES
<PAGE>
STATEMENTS OF OPERATIONS
For the year ended June 30, 2000
<TABLE>
<CAPTION>
Amounts in thousands 90/10 PORTFOLIO 60/40 PORTFOLIO 30/70 PORTFOLIO
--------------- --------------- ---------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 724 $ 923 $ 460
------------------------------------------------------------------------ --------------- --------------- ---------------
Interest 1 1 1
------------------------------------------------------------------------ --------------- --------------- ---------------
Total Income 725 924 461
======================================================================== =============== =============== ===============
EXPENSES:
Administration fees 60 66 29
------------------------------------------------------------------------ --------------- --------------- ---------------
Distribution and/or servicing fees - Other Classes 143 145 70
------------------------------------------------------------------------ --------------- --------------- ---------------
Trustees' fees 1 1 1
------------------------------------------------------------------------ --------------- --------------- ---------------
Total expenses 204 212 100
------------------------------------------------------------------------ --------------- --------------- ---------------
NET INVESTMENT INCOME 521 712 361
======================================================================== =============== =============== ===============
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on investments 199 190 (67)
------------------------------------------------------------------------ --------------- --------------- ---------------
Net capital gain distributions received from underlying funds 933 789 190
------------------------------------------------------------------------ --------------- --------------- ---------------
Net change in unrealized appreciation (depreciation) on investments (121) (284) (66)
------------------------------------------------------------------------ --------------- --------------- ---------------
Net Gain (Loss) 1,011 695 57
------------------------------------------------------------------------ --------------- --------------- ---------------
NET INCREASE IN ASSETS RESULTING FROM OPERATIONS $ 1,532 $ 1,407 $ 418
======================================================================== =============== =============== ===============
</TABLE>
2000 Annual Report SEE ACCOMPANYING NOTES 9
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
June 30, 2000
<TABLE>
<CAPTION>
Amounts in thousands 90/10 PORTFOLIO 60/40 PORTFOLIO
------------------------------------- ---------------------------------
INCREASE (DECREASE) IN NET ASSETS FROM: Period from Period from
Year Ended September 30, 1998 Year Ended September 30, 1998
June 30, 2000 to June 30, 1999 June 30, 2000 to June 30, 1999
------------------------------------- ---------------------------------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income $ 521 $ 38 $ 712 $ 115
------------------------------------------------------- ------------------------------------- ---------------------------------
Net realized gain (loss) 199 160 190 140
------------------------------------------------------- ------------------------------------- ---------------------------------
Net capital gain distributions
received from underlying funds 933 113 789 94
------------------------------------------------------- ------------------------------------- ---------------------------------
Net change in unrealized appreciation (depreciation) (121) 536 (284) 368
------------------------------------------------------- ------------------------------------- ---------------------------------
Net increase (decrease) resulting from operations 1,532 847 1,407 717
======================================================= ===================================== =================================
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Institutional Class 0 0 (1) 0
------------------------------------------------------- ------------------------------------- ---------------------------------
Administrative Class 0 0 0 0
------------------------------------------------------- ------------------------------------- ---------------------------------
Other Classes (139) (38) (396) (109)
------------------------------------------------------- ------------------------------------- ---------------------------------
In excess of net investment income
Institutional Class 0 0 0 0
------------------------------------------------------- ------------------------------------- ---------------------------------
Administrative Class 0 0 0 0
------------------------------------------------------- ------------------------------------- ---------------------------------
Other Classes 0 (8) 0 0
------------------------------------------------------- ------------------------------------- ---------------------------------
From net realized capital gains
Institutional Class (1) 0 (1) 0
------------------------------------------------------- ------------------------------------- ---------------------------------
Administrative Class (1) 0 0 0
------------------------------------------------------- ------------------------------------- ---------------------------------
Other Classes (664) 0 (593) 0
------------------------------------------------------- ------------------------------------- ---------------------------------
Total Distributions (805) (46) (991) (109)
======================================================= ===================================== =================================
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Institutional Class 0 10 44 10
------------------------------------------------------- ------------------------------------- ---------------------------------
Administrative Class 0 10 0 10
------------------------------------------------------- ------------------------------------- ---------------------------------
Other Classes 11,958 10,508 8,765 16,555
------------------------------------------------------- ------------------------------------- ---------------------------------
Issued as reinvestment of distributions
Institutional Class 1 0 1 0
------------------------------------------------------- ------------------------------------- ---------------------------------
Administrative Class 1 0 1 0
------------------------------------------------------- ------------------------------------- ---------------------------------
Other Classes 779 45 914 62
------------------------------------------------------- ------------------------------------- ---------------------------------
Cost of shares redeemed
Institutional Class 0 0 (1) 0
------------------------------------------------------- ------------------------------------- ---------------------------------
Administrative Class 0 0 0 0
------------------------------------------------------- ------------------------------------- ---------------------------------
Other Classes (4,382) (816) (8,807) (1,548)
------------------------------------------------------- ------------------------------------- ---------------------------------
Net increase (decrease) resulting
from Fund share transactions 8,357 9,757 917 15,089
------------------------------------------------------- ------------------------------------- ---------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 9,084 10,558 1,333 15,697
======================================================= ===================================== =================================
NET ASSETS:
Beginning of period 10,558 0 15,697 0
------------------------------------------------------- ------------------------------------- ---------------------------------
End of period * $ 19,642 $ 10,558 $ 17,030 $ 15,697
------------------------------------------------------- ------------------------------------- ---------------------------------
*Including net undistributed investment income of: $ 205 $ 169 $ 315 $ 173
------------------------------------------------------- ------------------------------------- ---------------------------------
<CAPTION>
Amounts in thousands 30/70 PORTFOLIO
-------------------------------------
INCREASE (DECREASE) IN NET ASSETS FROM: Period from
Year Ended September 30, 1998
June 30, 2000 to June 30, 1999
-------------------------------------
OPERATIONS:
<S> <C> <C>
Net investment income $ 361 $ 101
------------------------------------------------------- -------------------------------------
Net realized gain (loss) (67) 15
------------------------------------------------------- -------------------------------------
Net capital gain distributions
received from underlying funds 190 37
------------------------------------------------------- -------------------------------------
Net change in unrealized appreciation (depreciation) (66) (13)
------------------------------------------------------- -------------------------------------
Net increase (decrease) resulting from operations 418 140
======================================================= =====================================
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Institutional Class (1) 0
------------------------------------------------------- -------------------------------------
Administrative Class (1) 0
------------------------------------------------------- -------------------------------------
Other Classes (278) (101)
------------------------------------------------------- -------------------------------------
In excess of net investment income
Institutional Class 0 0
------------------------------------------------------- -------------------------------------
Administrative Class 0 0
------------------------------------------------------- -------------------------------------
Other Classes 0 0
------------------------------------------------------- -------------------------------------
From net realized capital gains
Institutional Class 0 0
------------------------------------------------------- -------------------------------------
Administrative Class 0 0
------------------------------------------------------- -------------------------------------
Other Classes (163) 0
------------------------------------------------------- -------------------------------------
Total Distributions (443) (101)
======================================================= =====================================
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Institutional Class 0 10
------------------------------------------------------- -------------------------------------
Administrative Class 0 10
------------------------------------------------------- -------------------------------------
Other Classes 3,322 7,664
------------------------------------------------------- -------------------------------------
Issued as reinvestment of distributions
Institutional Class 1 0
------------------------------------------------------- -------------------------------------
Administrative Class 1 0
------------------------------------------------------- -------------------------------------
Other Classes 400 71
------------------------------------------------------- -------------------------------------
Cost of shares redeemed
Institutional Class 0 0
------------------------------------------------------- -------------------------------------
Administrative Class 0 0
------------------------------------------------------- -------------------------------------
Other Classes (5,173) (660)
------------------------------------------------------- -------------------------------------
Net increase (decrease) resulting
from Fund share transactions (1,449) 7,095
------------------------------------------------------- -------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (1,474) 7,134
======================================================= =====================================
NET ASSETS:
Beginning of period 7,134 0
------------------------------------------------------- -------------------------------------
End of period * $ 5,660 $ 7,134
------------------------------------------------------- -------------------------------------
*Including net undistributed investment income of: $ 105 $ 49
------------------------------------------------------- -------------------------------------
</TABLE>
10 SEE ACCOMPANYING NOTES
<PAGE>
SCHEDULE OF INVESTMENTS
June 30, 2000
<TABLE>
<CAPTION>
Value
90/10 PORTFOLIO Shares (000s)
---------------------------------------------------------------------
PIMCO FUNDS (b)
---------------------------------------------------------------------
<S> <C> <C>
International 348,068 $ 3,898
Value 330,572 3,775
Enhanced Equity 180,078 2,338
StocksPLUS 170,127 2,321
Total Return 168,148 1,677
Target 37,730 1,173
Mid-Cap 34,878 1,077
Growth 28,217 992
Capital Appreciation 36,253 982
Opportunity 25,823 708
Small-Cap Value 44,789 639
High Yield 18,664 189
Foreign Bond 9,948 100
Small-Cap 9 1
---------
TOTAL INVESTMENTS (a) 101.2% $ 19,870
=========
(Cost $19,455)
OTHER ASSETS AND LIABILITIES (NET) (1.2%) (228)
---------
NET ASSETS 100.0% $ 19,642
=========
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation (depreciation) of
investments based on cost for federal income tax purposes of $19,537 was as
follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost $ 1,035
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (702)
---------
Unrealized appreciation-net $ 333
=========
</TABLE>
(b) Institutional Class shares of each PIMCO Fund.
60/40 PORTFOLIO
---------------------------------------------------------------------
PIMCO FUNDS (b)
---------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Total Return 588,849 $ 5,871
International 194,923 2,183
Value 188,251 2,150
StocksPLUS 96,130 1,311
Enhanced Equity 100,054 1,299
Mid-Cap 24,230 748
High Yield 63,650 646
Growth 18,278 643
Target 20,279 631
Capital Appreciation 18,309 496
Opportunity 16,183 444
Small-Cap Value 26,531 378
Foreign Bond 32,237 324
Money Market 21,342 21
Small-Cap 50 1
---------
TOTAL INVESTMENTS (a) 100.7% $ 17,146
=========
(Cost $17,062)
OTHER ASSETS AND LIABILITIES (NET) (0.7%) (116)
---------
NET ASSETS 100.0% $ 17,030
=========
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation (depreciation) of
investments based on cost for federal income tax purposes of $17,249 was as
follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 632
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (735)
---------
Unrealized appreciation-net $ (103)
=========
</TABLE>
(b) Institutional Class shares of each PIMCO Fund.
Value
30/70 PORTFOLIO Shares (000s)
---------------------------------------------------------------------
PIMCO FUNDS (b)
---------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Total Return 336,744 $ 3,357
International 34,202 383
High Yield 37,300 379
Value 32,587 372
StocksPLUS 16,798 229
Enhanced Equity 17,492 227
Foreign Bond 20,214 203
Mid-Cap 3,440 107
Target 3,369 105
Capital Appreciation 3,438 93
Growth 2,261 80
Opportunity 2,592 71
Small-Cap Value 3,440 49
Money Market 4,178 4
Small-Cap 25 0
---------
TOTAL INVESTMENTS (a) 100.0% $ 5,659
=========
(Cost $5,738)
OTHER ASSETS AND LIABILITIES (NET) 0.0% 1
---------
NET ASSETS 100.0% $ 5,660
=========
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation (depreciation) of
investments based on cost for federal income tax purposes of $5,869 was as
follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 73
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (283)
---------
Unrealized depreciation-net $ (210)
=========
</TABLE>
(b) Institutional Class shares of each PIMCO Fund.
2000 Annual Report SEE ACCOMPANYING NOTES 11
<PAGE>
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
1. ORGANIZATION
PIMCO Funds: Multi-Manager Series (the "Trust"), is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company organized as a Massachusetts business trust. The Trust currently
consists of thirty-two funds. Information presented in these financial
statements pertains to the Asset Allocation Series of the Trust which is
comprised of the 90/10 Portfolio, 60/40 Portfolio, and 30/70 Portfolio,
collectively referred to as (the "Portfolios"). The Portfolios are a
professionally-managed series of the Trust designed to take advantage of the
benefits of asset allocation. Each Portfolio seeks to achieve its particular
investment objective by investing within specified equity and fixed income
ranges among a number of other mutual funds in the PIMCO Fund family (the
"Underlying Funds"). The Portfolios may offer up to five classes of shares:
Institutional, Administrative, A, B and C. Each share class has identical voting
rights (except shareholders of a class that have exclusive voting rights
regarding any matter relating solely to that class of shares). Information
presented in these financial statements pertains to the Institutional and
Administrative Classes (the "Institutional Classes") of the Trust. Certain
detailed financial information for the A, B, and C 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. Investments in the Underlying Funds are valued at the price
of each Institutional share class of the respective Underlying Fund determined
as of the close of the New York Stock Exchange or the valuation date.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
recorded as of the trade date. Realized gains and losses from securities sold
are recorded on the identified cost basis. Distributions from the Underlying
Funds are recorded on the ex-dividend date.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends from net investment
income, if any, are declared and paid to shareholders of record at least monthly
by the 30/70 Portfolio, at least quarterly by 60/40 Portfolio and at least
annually by the 90/10 Portfolio. Net long-term capital gains earned by a
Portfolio, if any, will be distributed at least 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.
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 Portfolio 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.
3. FEES, EXPENSES, AND RELATED PARTY TRANSACTIONS
ADMINISTRATION FEE. PIMCO Advisors L.P. ("PIMCO Advisors") provides
administrative services to the Trust for which it receives monthly
administrative fees based on each share class' average daily net assets. The
Administration Fee for the Institutional Classes is charged at the annual rate
of 0.15%. PIMCO Advisors has voluntarily undertaken to waive a portion of the
administrative fee it is entitled to receive for Institutional Classes of each
Portfolio until further notice. As a result, during the period of the waiver,
each Portfolio will pay administrative fees to the Administrator at the annual
rate of 0.10%. The Administration Fee for the Other Classes is charged at the
annual rate of 0.40% on the first $2.5 billion of net assets and 0.35% based on
such net assets in excess of $2.5 billion. In addition, the Portfolios
indirectly bear their pro-rata share of expenses of the underlying funds.
EXPENSES. Under the terms of the Administrative Agreement PIMCO Advisors has
agreed to bear any and all fees and expenses of the Portfolio (other than the
administrative fee payable under the agreement), except for (i) salaries and
other compensation of any of the Trust's executive officers and employees who
are not officers, directors, stockholders or employees of PIMCO Advisors, PIMCO,
or 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 Adviser, any Portfolio
Manager, or the Trust, and any counsel retained exclusively for their benefit;
(vi) extraordinary expenses, including costs of
12
<PAGE>
litigation and indemnification expenses; (vii) any expenses allocated or
allocable to a specific class of shares, which include distribution and/or
service fees payable 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.
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 member 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 Portfolios and to the Funds of the
Trust according to their respective net assets.
DISTRIBUTION AND SERVICING FEES. PIMCO Funds Distributors LLC ("PFD"), a
wholly-owned subsidiary of PIMCO Advisors L.P., and serves as the distributor of
the Trust's shares.
The Trust is permitted to reimburse out of the Administrative Class assets
of each Portfolio, 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 Portfolio shares as their funding medium. The effective rate
paid to PFD was 0.25% during the current fiscal year.
Pursuant to the Distribution and Servicing Plans adopted by the A, B and C
Classes of the Trust, the Trust compensates PFD 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 Class A, Class B and Class C. The Trust paid PFD distribution
and servicing fees at an effective rate as set forth below (calculated as a
percentage of each Portfolio's average daily net assets attributable to each
class):
<TABLE>
<CAPTION>
Distribution Fee (%) Servicing Fee (%)
--------------------------------------------------------------
<S> <C> <C>
CLASS A
ALL PORTFOLIOS -- 0.25
CLASS B
ALL PORTFOLIOS 0.75 0.25
CLASS C
ALL PORTFOLIOS 0.75 0.25
</TABLE>
PFD also receives the proceeds of the initial sales charges paid by the
shareholders upon the purchase of Class A shares and the contingent deferred
sales charges paid by the shareholders upon certain redemptions of Class A, B
and C shares. For the period ended June 30, 2000, PFD received $xx,xxx
representing commissions (sales charges) and contingent deferred sales charges.
4. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities (excluding short-term investments) for the
period ended June 30, 2000 were as follows (amounts in thousands):
<TABLE>
<CAPTION>
Non - U.S. Government/Agency
----------------------------------------
Purchases Sales
--------------------------------------------------------------
<S> <C> <C>
90/10 PORTFOLIO $ 12,128 $ 2,694
60/40 PORTFOLIO 8,694 7,197
30/70 PORTFOLIO 3,742 4,925
</TABLE>
5. RISK FACTORS OF THE FUNDS
Investing in the Underlying Funds through the Portfolios involves certain
additional expenses and tax results that would not be present in a direct
investment in the Underlying Funds. Under certain circumstances, an Underlying
Fund may pay a redemption request by a Portfolio wholly or partly by a
distribution in kind of securities from its portfolio, instead of cash, in
accordance with the rules of the Securities and Exchange Commission. In such
cases, the Portfolios may hold securities distributed by an Underlying Fund
until PIMCO Advisors determines that it is appropriate to dispose of such
securities.
Each of the Underlying Funds may invest in certain specified derivative
securities, including: interest rate swaps, caps and floors for hedging
purposes; exchange-traded options; over-the-counter options executed with
primary dealers, including long calls and puts and covered calls and financial
futures and options. Certain of the Underlying Funds may invest in restricted
securities; instruments issued by trusts, partnerships or other issuers,
including pass-through certificates representing participations in, or debt
instruments backed by, the securities owned by such issuers. These Underlying
Funds also may engage in securities lending, reverse repurchase agreements and
dollar roll transactions. In addition, certain of the Underlying Funds may
invest in below-investment grade debt, debt obligations of foreign issuers and
stocks of foreign corporations, securities in foreign investment funds or
trusts, foreign derivative securities including futures contracts, options,
interest rate and currency swap transactions, and various other investment
vehicles, each with inherent risks.
2000 Annual Report 13
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONT.)
June 30, 2000
The officers and directors of the Trust also serve as officers and
directors/trustees of the Underlying Funds. Conflicts may arise as these
companies seek to fulfill their fiduciary responsibilities to both the
Portfolios and Underlying Funds.
The following schedule shows the number of shareholders each owning 5% or more
of a Fund and the total percentage of the Fund held by such shareholders:
5% or Greater Shareholders
------------------------------------------------------------------
Number % of Fund Held
------------------------------------------------------------------
90/10 PORTFOLIO 1 100%
60/40 PORTFOLIO 2 100%
30/70 PORTFOLIO 1 100%
6. SHARES OF BENEFICIAL INTEREST
The Trust may issue an unlimited number of shares of beneficial interest with a
$.0001 par value. Changes in shares of beneficial interest were as follows
(shares and amounts in thousands):
<TABLE>
<CAPTION>
90/10 PORTFOLIO
-----------------------------------------------
Year Ended Period from 09/30/1998
06/30/2000 to 06/30/1999
Shares Amount Shares Amount
-----------------------------------------------
<S> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Institutional Class 0 $ 0 1 $ 10
---------------------------------------- -----------------------------------------------
Administrative Class 0 0 1 10
---------------------------------------- -----------------------------------------------
Other Classes 965 11,958 938 10,508
---------------------------------------- -----------------------------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Institutional Class 0 1 0 0
--------------------------------------- -----------------------------------------------
Administrative Class 0 1 0 0
---------------------------------------- -----------------------------------------------
Other Classes 64 779 4 45
--------------------------------------- -----------------------------------------------
COST OF SHARES REDEEMED
Institutional Class 0 0 0 0
--------------------------------------- -----------------------------------------------
Administrative Class 0 0 0 0
--------------------------------------- -----------------------------------------------
Other Classes (350) (4,382) (72) (816)
--------------------------------------- -----------------------------------------------
NET INCREASE (DECREASE) RESULTING FROM
FUND SHARE TRANSACTIONS 679 $ 8,357 872 $ 9,757
---------------------------------------- -----------------------------------------------
60/40 PORTFOLIO
------------------------------------------------
Year Ended Period from 09/30/1998
06/30/2000 to 06/30/1999
Shares Amount Shares Amount
-----------------------------------------------
<S> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Institutional Class 4 $ 44 1 $ 10
---------------------------------------- ------------------------------------------------
Administrative Class 0 0 1 10
---------------------------------------- ------------------------------------------------
Other Classes 774 8,765 1,529 16,555
---------------------------------------- ------------------------------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Institutional Class 0 1 0 0
--------------------------------------- ------------------------------------------------
Administrative Class 0 1 0 0
---------------------------------------- ------------------------------------------------
Other Classes 82 914 6 62
--------------------------------------- ------------------------------------------------
COST OF SHARES REDEEMED
Institutional Class 0 (1) 0 0
--------------------------------------- ------------------------------------------------
Administrative Class 0 0 0 0
--------------------------------------- ------------------------------------------------
Other Classes (771) (8,807) (141) (1,548)
--------------------------------------- ------------------------------------------------
NET INCREASE (DECREASE) RESULTING FROM
FUND SHARE TRANSACTIONS 89 $ 917 1,396 $ 15,089
---------------------------------------- ------------------------------------------------
30/70 PORTFOLIO
---------------------------------------------
Year Ended Period from 09/30/1998
06/30/2000 to 06/30/1999
Shares Amount Shares Amount
-----------------------------------------------
<S> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Institutional Class 0 $ 0 1 $ 10
---------------------------------------- ---------------------------------------------
Administrative Class 0 0 1 10
---------------------------------------- ---------------------------------------------
Other Classes 322 3,322 746 7,664
---------------------------------------- ---------------------------------------------
ISSUED AS REINVESTMENT OF DISTRIBUTIONS
Institutional Class 0 1 0 0
--------------------------------------- ---------------------------------------------
Administrative Class 0 1 0 0
---------------------------------------- ---------------------------------------------
Other Classes 39 400 7 71
--------------------------------------- ---------------------------------------------
COST OF SHARES REDEEMED
Institutional Class 0 0 0 0
--------------------------------------- ---------------------------------------------
Administrative Class 0 0 0 0
--------------------------------------- ---------------------------------------------
Other Classes (505) (5,173) (64) (660)
--------------------------------------- ---------------------------------------------
NET INCREASE (DECREASE) RESULTING FROM
FUND SHARE TRANSACTIONS (144) $ (1,449) 691 $ 7,095
---------------------------------------- ---------------------------------------------
</TABLE>
7. ACQUISITION BY ALLIANZ AG
On May 5, 2000, Allianz AG completed the acquisition of approximately 70% of
the outstanding partnership interests in PIMCO Advisors L.P. ("PIMCO
Advisors"), of which PIMCO is a subsidiary partnership. As a result of this
transaction, PIMCO Advisors, and its subsidiaries, are now controlled by
Allianz AG, a leading provider of financial services, particularly in Europe.
PIMCO remains operationally independent, continues to operate under its
existing name, and now leads the global fixed income efforts of Allianz AG.
Key employees at each PIMCO Advisors' investment units, including PIMCO's
Bill Gross, have signed long-term employment contracts and have significant
profit-sharing and retention arrangements to ensure continuity of the
investment process and staff. With the addition of PIMCO Advisors, the
Allianz Group manages assets of approximately US$650 billion, including more
than 300 mutual funds for retail and institutional clients around the world.
14
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE TRUSTEES AND INSTITUTIONAL AND ADMINISTRATIVE CLASS SHAREHOLDERS OF
THE PIMCO FUNDS:
MULTI-MANAGER SERIES
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations, of changes in net assets and the financial highlights for
the Institutional and Administrative share classes present fairly, in
all material respects, the financial position of the 90/10 Portfolio,
60/40 Portfolio and 30/70 Portfolio (constituting the PIMCO Funds Asset
Allocation Series of PIMCO Funds: Multi-Manager Series, hereafter
referred to as the "Portfolios") at June 30, 2000, the results of each
of their operations, the changes in each of their net assets and the
financial highlights for the Institutional and Administrative share
classes for the periods indicated, in conformity with accounting
principles generally accepted in the United States. These financial
statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Portfolios'
management; our responsibility is to express an opinion on these
financial statements based on our audit. We conducted our audit of
these financial statements in accordance with auditing standards
generally accepted in the United States which require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe
that our audit, which included confirmation of securities at June 30,
2000 by correspondence with the custodian, provides a reasonable basis
for the opinion expressed above.
PricewaterhouseCoopers LLP
Kansas City, Missouri
August 21, 2000
2000 Annual Report 15
<PAGE>
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
As required by the Internal Revenue Code regulations, shareholders
must be notified within 60 days of the Trust's fiscal year end
(June 30, 2000) regarding the status of the distributions made to the
shareholders
DIVIDEND RECEIVED DEDUCTION. For the benefit of corporate
shareholders only, the portion of dividends paid out of ordinary
income earned during certain Funds' fiscal years ended June 30, 2000
which qualify for the corporate dividend-received deduction are as
follows:
<TABLE>
<CAPTION>
<S> <C>
90/10 Portfolio 7.42%
60/40 Portfolio 4.13%
30/70 Portfolio 2.64%
</TABLE>
CAPITAL GAIN DISTRIBUTIONS. Capital gains distributions paid for all
classes of shares during the fiscal year ended June 30, 2000, were in
the amounts as follows:
<TABLE>
<CAPTION>
Per Share Per Share
Long-Term Short-Term
Capital Gains Capital Gains
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
90/10 PORTFOLIO 0.09796 0.49665
60/40 PORTFOLIO 0.06468 0.37391
30/70 PORTFOLIO 0.03718 0.14790
</TABLE>
Shareholders are advised to consult their own tax advisor with respect
to the tax consequences of their investment in the Trust. However,
income received by tax-exempt recipients need not be reported as
taxable income. In January 2001, you will be advised on IRS form
1099-DIV as to the federal tax status of the dividends and
distributions received by you in calendar year 2000.
16
<PAGE>
PIMCO Advisors Holdings L.P. is one of the largest investment management
companies in the United States with assets under management of more than $264
billion as of June 30, 2000. PIMCO Advisors is a member of the Allianz Group
of companies. Allianz AG is a European based multi-national insurance and
financial services holding company. PIMCO Advisors offers institutional and
individual investors domestically and abroad a diverse range of fixed income
and equity advisory styles and services including mutual funds and
institutional separate account management. PIMCO Global Advisors, the
international unit, offers investment services worldwide through offices in
London, Tokyo, Singapore and Sydney.
PIMCO Advisors investment firms are:
Pacific Investment Management Company LLC/Newport Beach, California Oppenheimer
Capital/New York, New York
Cadence Capital Management/Boston, Massachusetts
NFJ Investment Group/Dallas, Texas
Parametric Portfolio Associates/Seattle, Washington
PIMCO Equity Advisors/New York, New York, a division of PIMCO Advisors L.P.
PIMCO/Allianz International Advisors LLC/New York, New York
TRUSTEES AND OFFICERS
Stephen J. Treadway, PRESIDENT, CHIEF EXECUTIVE OFFICER AND TRUSTEE
E. Philip Cannon, TRUSTEE
Donald P. Carter, TRUSTEE
Gary A. Childress, TRUSTEE
Richard L. Nelson, TRUSTEE
Kenneth M. Poovey, TRUSTEE
Lyman W. Porter, TRUSTEE
Alan Richards, TRUSTEE
W. Bryant Stooks, TRUSTEE
Gerald M. Thorne, TRUSTEE
Newton B. Schott, Jr., SECRETARY
John P. Hardaway, TREASURER
INVESTMENT ADVISER AND ADMINISTRATOR
PIMCO Advisors L.P.
800 Newport Center Drive, Suite 600
Newport Beach, California 92660
CUSTODIAN
State Street Bank & Trust Company
801 Pennsylvania
Kansas City, Missouri 64105
TRANSFER AGENT
National Financial Data Services
330 W. 9th Street, 4th Floor
Kansas City, Missouri 64105
COUNSEL
Ropes & Gray
One International Place
Boston, Massachusetts 02110
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1055 Broadway
Kansas City, Missouri 64105
<PAGE>
PIMCO FUNDS DISTRIBUTORS LLC
2187 Atlantic Street, Stamford, CT 06902
This report is submitted for the general information of the shareholders of
the PIMCO Funds. It is not authorized for distribution to prospective
investors unless accompanied or preceded by an effective prospectus for the
PIMCO Funds, which contains information covering its investment policies as
well as other pertinent information.
P I M C O
----------
FUNDS
840 NEWPORT CENTER DRIVE, SUITE 300
NEWPORT BEACH, CA 92660
800.927.4648
www.pimco.com
<PAGE>
PIMCO Funds Shareholder Update
and Annual Report
THIS UPDATE IS PUBLISHED
TWICE A YEAR TO PROVIDE
PIMCO FUNDS ASSET
ALLOCATION SERIES
SHAREHOLDERS WITH GENERAL
MARKET COMMENTARY AND
INVESTMENT INFORMATION. IT
ALSO INCLUDES THE ANNUAL
REPORT FOR THE PIMCO FUNDS
ASSET ALLOCATION SERIES.
[GRAPHIC]
ARE MARKET MOVEMENTS TAKING YOU OFF COURSE? TRY A MORE OBJECTIVE APPROACH TO
INVESTING. STORY ON PAGE 2.
JUNE 30, 2000
ASSET ALLOCATION
SERIES
Share Classes
A B C
90/10 Portfolio
60/40 Portfolio
30/70 Portfolio
PAGE 2 TODAY'S INVESTOR
Taking the Emotion Out of Investing
------------------------------------------------------------------------------
PAGE 4 MANAGER ROUNDTABLE
Ken Corba, John Schneider & David Breed
------------------------------------------------------------------------------
PAGE 6 ASSET ALLOCATION COMMITTEE REPORT
Rapid Expansion Begins To Cool
------------------------------------------------------------------------------
PAGE 7 ASSET ALLOCATION SERIES
PIMCO Funds Semi-Annual Report
------------------------------------------------------------------------------
PAGE 8 PIMCO FUNDS
90/10 Portfolio
------------------------------------------------------------------------------
PAGE 9 PIMCO FUNDS
60/40 Portfolio
------------------------------------------------------------------------------
PAGE 10 PIMCO FUNDS
30/70 Portfolio
------------------------------------------------------------------------------
PAGE 11 UNDERLYING PIMCO FUNDS
P I M C O
F U N D S
<PAGE>
TODAY'S
INVESTOR
TAKING THE EMOTION OUT OF INVESTING
[GRAPHIC]
Staying completely objective about your investments is nearly impossible.
After all, your money isn't just money. It represents important goals, like
buying a house, living a comfortable retirement or funding your childrens'
educations. So if recent stock market volatility has caused you to lose sleep
or tempted you to cash out some of your holdings, you're not alone.
Still, getting too emotional about your investments isn't healthy--for you or
your portfolio. It can cause you undue stress, prompt you to sell during
unfavorable conditions and otherwise distract you from your long-term
strategy. To let reason rule, you need a plan that provides a logical
framework for your financial decisions and that anticipates market
turbulence. Here are three simple steps you can follow to get you on your way.
1. REMEMBER THE BIG PICTURE
If you become too focused on the here and now, you're much more prone to
emotional investment decisions--buying a security based solely on recent
performance or selling one prematurely, for example. To broaden your
perspective, try the following.
- REVIEW YOUR GOALS AND RISK TOLERANCE. It's always a good idea to work with
your financial advisor to determine your risk tolerance and financial goals
and make sure your asset allocation is in sync with them. These factors
should be top of mind whenever you make an investment decision.
- TAKE A LOOK AT HISTORY. A look back at the financial markets can help you be
more realistic about potential returns. For example, the average annual return
of the S&P 500, a benchmark that is representative of the overall stock market,
has been about 13% over the past 30 years (assuming reinvestment of dividends).
Also, while the Dow Jones Industrial Average has had five down years in the last
25, it has always recovered--even if it took a few years. This serves as a good
reminder to ride out corrections and maintain a long-term view.
2. USE A SYSTEMATIC APPROACH
You may find it easier to stay on track with your goals if you organize
certain aspects of the investment process. Here are a few approaches that you
may want to consider.
- REVIEW YOUR LONG-TERM HOLDINGS AT SPECIFIC INTERVALS. Online services have
made it convenient for investors to check up on their portfolios. But if you're
a long-term investor, keeping too close an eye on your holdings may only cause
you unnecessary anxiety. Over time, daily price fluctuations lose importance.
That said, try reviewing your portfolio no more than once a month or quarter.
A CASE FOR LONG-TERM INVESTING
A historical look at the Dow Jones Industrial Average (DJIA) can remind you to
ride out corrections and keep a long-term view. In the past 25 years, the DJIA
has had five down years, but eventually recovered each time.
[CHART]
<TABLE>
<S> <C>
12/74 616
12/75 852
12/76 1004
12/77 831
12/78 805
12/79 838
12/80 963
12/81 875
12/82 1046
12/83 1258
12/84 1211
12/85 1546
12/86 1895
12/87 1938
12/88 2168
12/89 2753
12/90 2633
12/91 3168
12/92 3301
12/93 3754
12/94 3834
12/95 5117
12/96 6448
12/97 7908
12/98 9181
12/99 11497
</TABLE>
Source: Dow Jones & Company. Past performance is no guarantee of future
results. This chart does not represent the past or future performance of any
PIMCO Fund.
2
<PAGE>
THE BENEFITS OF DOLLAR COST AVERAGING
In this example, a monthly systematic investment of $500 purchased more shares
at a lower average price than a $2000 lump sum investment during the four month
period.
<TABLE>
<S> <C> <C> <C> <C> <C>
Date of Purchase Jan 15 Feb 15 Mar 15 Apr 15
Share Price $11 $8 $10 $14 TOTAL
------------------------------------------------------------------------
DOLLAR COST AVERAGING
Shares Acquired 45.5 62.5 50.0 35.7 193.7
Investment $500 $500 $500 $500 $2,000
Average Share Price: $10.33
------------------------------------------------------------------------
LUMP SUM INVESTMENT
Shares Acquired 181.8 0 0 0 181.8
Investment $2,000 0 0 0 $2,000
Average Share Price: $11.00
</TABLE>
This plan involves continuous investment in securities regardless of fluctuating
prices.The investor should consider his/her financial ability to continue
investing through periods of low price levels.
- CONSIDER DOLLAR COST AVERAGING. A plan that regularly invests a fixed amount
of money in a specific investment imposes a disciplined approach to investing.
This can be a particularly good strategy during volatile markets, since
systematic investing carries the benefit of dollar cost averaging. Dollar cost
averaging takes advantage of price fluctuations by buying more shares when an
investment's price declines and fewer shares when it rises. The chart above
illustrates this point.
- ESTABLISH GUIDELINES FOR SELLING AN INVESTMENT. If you contemplate selling an
investment each time its price retreats, you may want to establish some clearer
guidelines. One idea is to form a checklist of key questions that can help you
make a more objective evaluation. For example:
- Have there been any negative fundamental changes in the investment?
- What are experts saying about the asset class or sector?
- How would selling the investment affect my asset allocation?
- Has the investment consistently underperformed its benchmark?
- Would another opportunity provide better risk/return characteristics?
Remember that the theory of asset allocation holds that different investments
will outperform and underperform the market at different times. This year's
laggards could be next year's leaders. So you may not want to sell an investment
just because it's trailing the overall stock market. Your financial advisor can
provide additional insight and help you determine if it's better to sell or hold
on for a while.
3. MANAGE RISK (OR IT WILL MANAGE YOU)
In today's technology-driven bull market, risk management is one area that many
investors have neglected. Yet it's unrealistic to think that double and triple
digit equity returns will go on forever. Here are a few tactics that may help
you weather future market volatility and protect your hard-earned assets.
- DON'T PUT TOO MUCH AT STAKE. If you're seeking the potential for higher
returns, allocate a specific percentage of your portfolio to riskier
investments, such as tech stocks, then periodically rebalance. To reduce risk,
you might consider investing through a technology fund, which offers a
diversified approach and may be less volatile than owning individual stocks.
- ALLOCATE PART OF YOUR PORTFOLIO TO BONDS. If a review of your asset
allocation determines you've taken on too much risk, you might shift some of
your holdings into bonds. Their income and relative price stability can provide
a cushion against stock volatility. Investing in a diversified bond fund is one
simple way to balance out your equity holdings.
- KEEP AN EMERGENCY FUND. As a rule of thumb, it's a good idea to keep a
percentage of your annual income in an emergency fund. There are a number of
good alternatives for investing this cash. For example, you might consider a
short-term bond fund. While the value of your investment will fluctuate slightly
and there's no repayment guarantee, you could be rewarded with a yield and total
return that's considerably higher than other cash investments.
These are just a few suggestions that can help you keep a more objective mindset
and prepare your portfolio for future market volatility. As always, your
financial advisor can help you decide if any of these approaches might fit into
your comprehensive financial plan.
PAST PERFORMANCE IS NO GUARANTEE 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. There can be no guarantee that
these investment strategies will work in every economic environment.
The S&P Index is an unmanaged index considered to be representative of the stock
market as a whole. It is not possible to invest directly in such an index.
3
<PAGE>
MANAGER
ROUNDTABLE
GROWTH, VALUE OR BLEND? A ROUNDTABLE DISCUSSION
KEN CORBA IS PIMCO'S LEADING GROWTH INVESTMENT EXPERT AND THE MANAGER OF PIMCO
GROWTH, SELECT GROWTH AND GROWTH AND INCOME (FORMERLY THE MID-CAP EQUITY) FUNDS.
HE HAS MORE THAN 15 YEARS OF GROWTH INVESTMENT EXPERIENCE. JOHN SCHNEIDER
MANAGES PIMCO RENAISSANCE AND VALUE FUNDS, AND HAS MORE THAN 12 YEARS OF VALUE
INVESTING EXPERIENCE. DAVE BREED MANAGES PIMCO CAPITAL APPRECIATION AND MID-CAP
FUNDS, AND HAS MORE THAN 30 YEARS OF EXPERIENCE, SPECIALIZING IN GROWTH-AT-A-
REASONABLE-PRICE, A TYPE OF BLEND INVESTING.
Q: EACH OF YOU IS A STRONG BELIEVER IN YOUR OWN PARTICULAR INVESTMENT STYLE.
CAN YOU EXPLAIN WHY AN INVESTOR SHOULD HAVE EXPOSURE TO IT?
KC: While it's true that different investment styles outperform at
various times, I believe growth stock investing offers the greatest potential
for capital appreciation over the long term. For the last several years, growth
stocks have dominated the stock market in terms of both performance and earnings
growth-- and I think this trend is likely to continue.
JS: I think it's prudent to have exposure to value stocks. Although they've
underperformed in recent years, history has shown that different investment
styles fall in and out of favor, so it makes sense to have exposure to various
investment styles. In addition, stock valuations are at historically high
levels, which I do not believe are sustainable. I would not be surprised to see
a rotation towards lower valuation issues in the near term.
DB: Growth-at-a-reasonable-price (GARP) investing represents what I believe to
be the best of both worlds for investors. It provides access to growth potential
but it also places importance on reasonable valuation. While investors are
certainly enamored with growth stocks right now, I believe they are becoming
more price sensitive, which usually happens during periods of rising interest
rates. GARP investing is the often-overlooked alternative to growth and value
investing.
Q: CAN YOU GIVE US AN EXAMPLE OF ONE OF YOUR BEST PERFORMING HOLDINGS THAT
EXEMPLIFIES YOUR INVESTMENT STYLE?
KC: One of our best performing holdings is JDS Uniphase, which makes fiber optic
components. Fiber optic telecommunications equipment is one of the
fastest-growing industries right now, and JDS Uniphase is the leader in this
area. The company has a very successful acquisition strategy, which has enabled
it to gain market share and complement its existing product line. It's one of
the great wealth-creating companies of our time--and just the kind of stock we
like to own.
JS: Ace Limited, a property and casualty insurance (P&C) company, has nearly
doubled since we added it to the portfolio. For more than a decade, property and
casualty insurance companies performed poorly because the industry suffered from
too much competition. However, we anticipated that the industry would lose its
weakest players, which would enable it to gain pricing power and increase
extremely narrow profit margins. As a result, we added fundamentally strong P&C
insurers, such as Ace, that we expected would benefit from the industry
consolidation. Ace, which boasts a strong balance sheet and an exceptional
management team, did indeed outperform.
DB: Corning, a fiber optic telecommunications equipment maker, has turned in a
strong performance for the Fund. We were attracted to the company last year
because of its relatively low valuation in such a high-growth industry. Its
stock price has risen as a result of several strategic acquisitions and plant
expansions that would increase capacity, as well as general investor enthusiasm
for this industry.
Q: WHAT AREAS OF TECHNOLOGY DO YOUR RESPECTIVE PORTFOLIOS HAVE EXPOSURE TO?
HOW DO THESE FIT WITH YOUR RESPECTIVE INVESTMENT STYLES?
KC: Because technology is such an important part of the stock market in
general--it now comprises 34% of the S&P 500 Index--and growth investing in
particular, we have significant exposure to this sector. We are invested in many
high-growth industries within technology, such as networking, fiber optics and
wireless telecommunications. We own many of the premier, blue chip tech
companies, including Cisco Systems, EMC and Nokia.
JS: We limit our exposure in the technology sector to companies we understand
and can value--typically commodity technology companies, such as semiconductor
manufacturers. They are cyclical companies, and we like to purchase them at
the time in their business cycle when they are undervalued and offer upside
potential. While we had a lot of exposure to commodity technology last year
(chip maker Micron was our largest holding for much of the year), we don't have
much exposure right now because we believe these stocks are near the peak of
their business cycle and are relatively overvalued.
4
<PAGE>
[PHOTO]
Ken Corba
[PHOTO]
John Schneider
[PHOTO]
David Breed
DB: We own a number of different technology companies, such as chip maker Intel
and networking giant Cisco Systems. Because our goal is to offer investors an
overall portfolio that is growth-oriented but reasonably valued, we are able to
own these higher growth tech names and balance them out with companies, such as
Tyco and General Electric, that offer low relative valuations.
Q: TO WHAT DO YOU ATTRIBUTE THE RECENT VOLATILITY IN THE MARKET?
KC: I think when you see the kind of huge appreciation that we've experienced in
the past year, it only makes sense that the market would experience a
correction. I welcomed this correction, because I felt it was needed. And it
proved to be just the kind of correction that usually is best for the
market--deep, hard, frightening and short. A lot of the excesses were shaken out
of the stock market, which was healthy, and now the stock market appears
to be resuming its ascent.
JS: I attribute the volatility to the shift from institutional investors
dominating the stock market to individual investors, especially day traders,
comprising the majority of stock market investors. This has resulted in a
dramatic shortening of investors' time horizons as well as a dramatic increase
in investors' expectations. In addition, individual investors are much more
likely to adopt a herd mentality, resulting in mass exoduses from particular
stocks and sectors.
DB: I agree with both Ken and John. Certainly the en masse addition of day
traders and do-it-yourself investors to the stock market has changed the
environment and contributed to recent volatility. However, I believe a
correction was virtually inevitable after such a huge rise in the stock market
over a relatively short period of time.
Q: WHAT IS YOUR OUTLOOK FOR THE STOCK MARKET IN THE COMING MONTHS?
KC: I think the volatility is behind us, and the stock market should
outperform in the second half of the year for several reasons. First of all,
the Federal Reserve is almost finished tightening the money supply--if it
hasn't already. And growth stocks have historically performed best in periods
of economic deceleration with declining interest rates. In addition, we think
the political backdrop is also positive for the stock market. Proposed tax
cuts, such as the elimination of the estate tax, should stimulate the economy
and the stock market. And, of course, corporate fundamentals remain very
strong, which should augur well for equities.
JS: I don't think the volatility is necessarily behind us, and I think the stock
market may turn in a lackluster performance in the coming months. I believe
there is still a good chance that the domestic economy could plunge into a
recession and take the stock market down with it. However, I'm confident that
many value stocks have such low valuations that they can withstand a recession.
DB: I am optimistic about the stock market for the second half of the year. I
agree with Ken that corporate fundamentals are strong and that the economic
backdrop should be positive for equities. However, I believe that we still have
the specter of rising inflation, as gas prices show no signs of dropping soon. I
think that, in this environment, investors will become increasingly concerned
about valuations and, while they will not abandon growth stocks, they will flock
to those growth stocks that have reasonable prices.
PAST PERFORMANCE IS NO GUARANTEE 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. This article is
distributed for educational purposes and the opinions of the managers should
not be considered investment advice. Equity funds are subject to the basic
stock market risk that a particular security or securities, in general, may
decrease in value.
The S&P 500 Index is an unmanaged index. It is not possible to invest directly
in an unmanaged index.
5
<PAGE>
ASSET ALLOCATION
COMMITTEE REPORT
RAPID EXPANSION BEGINS TO COOL
STOCKS
The technology sector peaked on March 10, with the NASDAQ Composite Index well
above 5000, and then proceeded to tumble for the next two months - taking the
broad market with it. A variety of factors that were relatively short-term in
nature contributed to this drop, including rising interest rates and stock
selling to pay April tax bills. Then, during the pullback, many investors were
forced to sell stock in order to meet margin calls, which exacerbated the
sell-off. Despite pundits' concerns that the correction would be long-term, we
started to see a significant fundamentals-driven recovery in late May.
Technology stocks then turned in a strong performance in June, solidifying
and building on the recovery made in late May. As the third month within a
fiscal quarter, there were not a lot of earnings announcements made by
companies, except for early confessions of missed profits. This absence of
news flow traditionally makes month three of a quarter a quietly tenuous
period. However, June proved to be positive for the tech sector because it
had the backdrop of an improving economic picture, as the data and commentary
suggest that the odds of a well-engineered economic deceleration without
contraction are increasing.
NASDAQ VOLATILITY INCREASED IN THE FIRST HALF OF 2000 - Technology stocks
fluctuated dramatically so far this year, causing concern among investors.
[GRAPH]
NASDAQ Volatility
<TABLE>
<CAPTION>
Date Price
<S> <C>
12/31/99 4069.31
1/7/00 3882.62
1/14/00 4064.27
1/21/00 4235.4
1/28/00 3887.07
2/4/00 4244.14
2/11/00 4395.45
2/18/00 4411.74
2/25/00 4590.5
3/3/00 4914.79
3/10/00 5048.62
3/17/00 4798.13
3/24/00 4963.03
3/31/00 4572.83
4/7/00 4446.45
4/14/00 3321.29
4/21/00 3643.88
4/28/00 3860.66
5/5/00 3816.82
5/12/00 3529.06
5/19/00 3390.4
5/26/00 3205.11
6/2/00 3813.38
6/9/00 3874.84
6/16/00 3860.56
6/23/00 3845.34
6/30/00 3966.11
</TABLE>
The broad market also staged a recovery in June, albeit less enthusiastically.
Signs of a slowing economy made investors hopeful that the end of interest rate
hikes is near, boosting financial services stocks. Signs the economy will be
able to avoid a recession also lifted consumer stocks.
BONDS
Short/intermediate interest rates fell modestly amid cautious optimism that
Federal Reserve tightening was beginning to cool the economy and contain
inflation. Yields on longer-term Treasuries were little changed. The yield on
the 10-year Treasury bond ended the quarter at 6.02 percent, up one basis point
from the previous quarter.
On May 16 the Fed raised the federal funds rate by 50 basis points to 6.5
percent, the highest level in nine years. It was the central bank's sixth rate
increase since last June. The Fed, however, left rates unchanged in late June
amid signs that higher rates were starting to have the desired effect. Economic
reports in April and May showed the first back-to-back declines in retail sales
in two years, falling employment, reduced new home construction and little
change in consumer prices.
Nevertheless, the Fed said "signs that growth in demand is moving to a
sustainable pace are still tentative and preliminary." The central bank also
warned of "heightened inflation pressures in the foreseeable future," suggesting
that more tightening may be needed.
Overall, our secular outlook is bullish, based on an expectation of slowing U.S.
and global growth to a maximum level of two to three percent over the next
several years. This deceleration will gradually lower interest rates on high
quality bonds by capping inflation near three percent in the U.S. and closer to
two percent in Europe.
PORTFOLIO COMPOSITION
Volatility within the equity markets has increased our concern regarding stock
market performance over the short-term. We have allocated the portfolios
accordingly, positioning them with the belief that equity returns will be in
line with historic norms. This will include a relative overweighting in
value-style securities.
As a result, the fixed-income portion of the portfolios will maintain their
neutral weightings. We continue to believe that increased borrowing costs will
slow consumer spending, keeping bond yields static. In this range-bound type of
environment, yield-enhancing strategies, such as mortgage-backed securities,
will play a more important role.
6
<PAGE>
PIMCO Funds Annual Report
MULTI-MANAGER
SERIES
Dear Shareholder:
The first half of 2000 could serve as a textbook illustration of stock market
volatility. After reaching record highs in the first quarter, both the Dow
Jones and the tech-focused NASDAQ swooned and then stumbled through the
second quarter, before starting to recover lost ground as the quarter ended.
And in the bond market things were almost as bumpy.
This unprecedented volatility has presented a challenge for many investors,
some of whom may have lost sight of the stock market's inherent risks,
especially in the context of the longest bull market in history. In times
like these that try investors' souls--and patience--it's more important than
ever to remember a few time-honored principles...
Maintain a diversified investment portfolio. Have a healthy respect for risk.
Keep your focus on the long term. Or as Bill Gross--PIMCO's oft-quoted bond
chief--has said "Set your sights on a horizon and sail until you get there."
Those who can stick with these precepts will be able to ride out short-term
market gyrations and ultimately reach their investment goals. And at PIMCO,
we're committed to providing investors with the kind of high quality
investment vehicles that can help them get there.
How have our Funds fared during these volatile times? Well, I'm pleased to
report that they have weathered the storms well, overcoming the extreme
market fluctuations to report strong relative performance over the last six
months. You see, our Fund Managers keep their sights firmly planted on the
horizon too.
I encourage you to review the fund information and commentary on the
following pages carefully. And once again, I'd like to thank you for the
trust you've placed in us. If you have any questions regarding your
investment, contact your financial advisor, or call us at 1-800-426-0107. Or
you can visit our Web site at www.pimcofunds.com.
Sincerely,
/s/ Stephen Treadway
Stephen Treadway
President
July 31, 2000
OF INTEREST On May 5, 2000, Allianz AG completed the acquisition of
approximately 70% of the outstanding partnership interests in PIMCO Advisors
L.P. ("PIMCO Advisors"), of which PIMCO is a subsidiary partnership. As a
result of this transaction, PIMCO Advisors, and its subsidiaries, are now
controlled by Allianz AG, a leading provider of financial services,
particularly in Europe. PIMCO remains operationally independent, continues to
operate under its existing name, and now leads the global fixed-income
investment efforts of Allianz AG. Key employees at each of PIMCO Advisors'
investment units, including PIMCO's Bill Gross, have signed long-term
employment contracts and have significant profit-sharing and retention
arrangements to ensure continuity of the investment process and staff. With
the addition of PIMCO Advisors, the Allianz Group manages assets of
approximately $650 billion, including more than 300 mutual funds for retail
and institutional clients around the world.
7
<PAGE>
PIMCO Funds 90/10 Portfolio
June 30, 2000
OBJECTIVE
Long-term capital appreciation
PORTFOLIO
80-100% PIMCO
Stock Funds
0-20% PIMCO
Bond Funds
INCEPTION DATE
9/30/98
DIVIDEND
FREQUENCY
Annually
NET ASSETS
$19.6 million
--------------------------------------------------------------------------------
PERFORMANCE*
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL RETURN For periods ended 6/30/00
A SHARES B SHARES C SHARES
72% Russ. 3000
Lipper Multi- 18% MSCI All
Cap Core Cntry. Wld. Ex US Russell
Adjusted Adjusted Adjusted Fund Avg. 10% LBAG Index 3000 Index
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 year 11.48% 5.33% 10.68% 5.68% 9.58% 11.54% 10.75% 9.59%
Inception 20.18% 16.36% 19.32% 17.30% 19.25% -- -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
[GRAPHICS]
<TABLE>
<CAPTION>
90/10 90/10 90/10 Russell 3000 72% Russ. 3000
Portfolio Portfolio Portfolio Index 18% MSCI All
CLASS A B C Cntry. Wld. Ex US
10% LBAG Index
===============================================================================
<S> <C> <C> <C> <C> <C>
09/29/1994 9,450 10,000 10,000 10,000 10,000
10/30/1994 9,847 10,420 10,420 10,759 10,730
11/29/1994 10,357 10,950 10,950 11,417 11,312
12/30/1994 10,795 11,409 11,409 12,144 11,902
01/30/1995 10,881 11,490 11,490 12,556 12,200
02/27/1995 10,478 11,054 11,054 12,112 11,821
03/30/1995 10,737 11,318 11,318 12,556 12,245
04/29/1995 11,294 11,907 11,907 13,123 12,759
05/30/1995 11,140 11,735 11,735 12,873 12,469
06/29/1995 11,687 12,304 12,304 13,524 13,027
07/30/1995 11,524 12,121 12,121 13,114 12,788
08/30/1995 11,418 11,998 11,998 12,964 12,695
09/29/1995 11,235 11,805 11,805 12,632 12,488
10/30/1995 11,619 12,202 12,202 13,424 13,141
11/29/1995 11,936 12,526 12,526 13,800 13,500
12/30/1995 12,845 13,477 13,464 14,681 14,347
01/30/1996 12,314 12,907 12,906 14,105 13,806
02/28/1996 12,803 13,412 13,400 14,237 13,982
03/30/1996 13,506 14,132 14,132 15,351 14,882
04/29/1996 12,945 13,541 13,539 14,811 14,349
05/30/1996 12,711 13,293 13,281 14,395 13,994
06/29/1996 13,028 13,216 13,604 14,821 14,428
</TABLE>
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The adjusted returns
above include the effect of applicable sales charges. Foreign investing
involves potentially higher risks including foreign currency fluctuations and
political or economic uncertainty. These risks can be enhanced when investing
in emerging markets. SEE PAGE 11 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL
DETAILS.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PIMCO STOCK FUNDS % of
Total Investments
---------------------------------------
<S> <C>
GROWTH
---------------------------------------
Enhanced Equity Fund 11.8%
---------------------------------------
Target Fund 5.9%
---------------------------------------
Growth Fund 5.0%
---------------------------------------
Opportunity Fund 3.6%
---------------------------------------
BLEND
---------------------------------------
StocksPLUS Fund 11.7%
---------------------------------------
Mid-Cap Fund 5.4%
---------------------------------------
Capital Appreciation Fund 4.9%
---------------------------------------
VALUE
---------------------------------------
Value Fund 19.0%
---------------------------------------
Small-Cap Value Fund 3.2%
---------------------------------------
INTERNATIONAL
---------------------------------------
International Fund 19.6%
---------------------------------------
TOTAL STOCK FUNDS 90.1%
---------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PIMCO BOND FUNDS
---------------------------------------
<S> <C>
INTERMEDIATE DURATION
---------------------------------------
Total Return Fund 8.4%
---------------------------------------
HIGH YIELD
---------------------------------------
High Yield Fund 1.0%
---------------------------------------
INTERNATIONAL
---------------------------------------
Foreign Bond Fund 0.5%
---------------------------------------
TOTAL BOND FUNDS 9.9%
---------------------------------------
</TABLE>
--------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
--------------------------------------------------------------------------------
The 90/10 Portfolio seeks long-term capital appreciation. The Fund's
strategic allocation is 90% stock funds and 10% bond funds. As of June 30,
2000, the Fund's actual allocation matched its strategic allocation. This
compares to an allocation of 84% stock funds and 16% bond funds on June 30,
1999. For the 12-month period ended June 30, 2000, the Fund returned 11.48%
for Class A shares.
Over the past year, the Fund has been brought back to a neutral position
from an underweight equity position. This allocation enhanced returns as
equities continued to perform well, particularly in the fourth quarter of
last year and the first quarter of this year. The decision to move to a more
neutral stance reflected changes in our proprietary asset allocation models,
which continued to favor equities over fixed income.
Within the equity portion of the portfolio, we increased our stake in
international holdings substantially from a year ago, moving from an
underweight in non-U.S. equities to an overweight in this area. This was
positive for performance over the past year despite a slowdown in the second
quarter of 2000. We remain optimistic in the international arena as the
European and Asian markets are set to take advantage of the economic benefits
of globalization.
The Fund also maintained a solid position in growth-oriented stocks,
including overweights in PIMCO's Growth, Opportunity and Target Funds.
The bond market suffered for much of the past year as the Fed raised
interest rates six times. However, the situation for higher-quality bonds
improved toward the end of the period, as it appeared that Fed policy was
capping inflation. The Fund benefited from its exposure to the Total Return
Fund.
Recent volatility within the equity markets has increased as has our
concern regarding short-term stock market performance. As a result, we expect
to maintain a near neutral position as we anticipate that equity returns will
return to historical norms. However, within our equity investments, we
anticipate continuing to favor non-U.S. equities over U.S. equities.
8
<PAGE>
PIMCO Funds 60/40 Portfolio
June 30, 2000
OBJECTIVE
Long-term capital
appreciation and
current income
PORTFOLIO
50-70% PIMCO
Stock Funds
30 -50% PIMCO
Bond Funds
INCEPTION DATE
9/30/98
DIVIDEND
FREQUENCY
Quarterly
NET ASSETS
$17.0 million
--------------------------------------------------------------------------------
PERFORMANCE*
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL RETURN For periods ended 6/30/00
A SHARES B SHARES C SHARES
48% Russ. 3000 Lehman
Lipper 12%MSCI All Broth.
Balanced Cntry. Wld. Ex US Russell Agg. Bond
Adjusted Adjusted Adjusted Fund Avg. 40% LBAG Index 3000 Index Index
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 year 9.15% 3.11% 8.36% 3.36% 7.41% 4.43% 8.81% 9.59% 4.56%
Inception 14.17% 10.55% 13.32% 11.22% 13.35% -- -- --
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
[GRAPHICS]
<TABLE>
<CAPTION>
60/40 60/40 60/40 Russell 3000 Lehman Brothers 48% Russ. 3000
Portfolio Portfolio Portfolio Index Aggregate Bond 12% MSCI All
CLASS A B C Index Cntry. Wld. Ex US
40% LBAG Index
====================================================================================
<S> <C> <C> <C> <C> <C> <C>
09/30/1998 9,450 10,000 10,000 10,000 10,000 10,000
10/31/1998 9,724 10,290 10,290 10,759 9,947 10,469
11/30/1998 10,074 10,650 10,650 11,417 10,004 10,867
12/31/1998 10,403 10,994 10,994 12,144 10,034 11,256
01/31/1999 10,460 11,045 11,045 12,556 10,105 11,471
02/28/1999 10,143 10,699 10,699 12,112 9,929 11,167
03/31/1999 10,339 10,899 10,900 12,556 9,984 11,454
04/30/1999 10,715 11,286 11,297 13,123 10,016 11,787
05/31/1999 10,580 11,134 11,144 12,873 9,928 11,574
06/30/1999 10,915 11,483 11,482 13,524 9,896 11,907
07/31/1999 10,790 11,350 11,349 13,114 9,854 11,744
08/31/1999 10,731 11,279 11,277 12,964 9,849 11,685
09/30/1999 10,653 11,184 11,184 12,632 9,963 11,604
10/31/1999 10,897 11,430 11,440 13,424 10,000 12,022
11/30/1999 11,102 11,645 11,645 13,800 9,999 12,241
12/31/1999 11,655 12,214 12,216 14,681 9,951 12,733
01/31/2000 11,316 11,859 11,861 14,105 9,919 12,399
02/29/2000 11,674 12,214 12,217 14,237 10,039 12,554
03/31/2000 12,152 12,713 12,709 15,351 10,171 13,149
04/30/2000 11,791 12,334 12,330 14,811 10,142 12,822
05/31/2000 11,647 12,171 12,168 14,395 10,137 12,609
06/30/2000 11,914 12,043 12,447 14,821 10,348 12,957
</TABLE>
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The adjusted returns
above include the effect of applicable sales charges. Foreign investing
involves potentially higher risks including foreign currency fluctuations and
political or economic uncertainty. These risks can be enhanced when investing
in emerging markets. SEE PAGE 11 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL
DETAILS.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PIMCO STOCK FUNDS % of
Total Investments
---------------------------------------
<S> <C>
GROWTH
---------------------------------------
Enhanced Equity Fund 7.6%
---------------------------------------
Growth Fund 3.8%
---------------------------------------
Target Fund 3.7%
---------------------------------------
Opportunity Fund 2.6%
---------------------------------------
BLEND
---------------------------------------
StocksPLUS Fund 7.6%
---------------------------------------
Mid-Cap Fund 4.4%
---------------------------------------
Capital Appreciation Fund 2.9%
---------------------------------------
VALUE
---------------------------------------
Value Fund 12.5%
---------------------------------------
Small-Cap Value Fund 2.2%
---------------------------------------
INTERNATIONAL
---------------------------------------
International Fund 12.7%
---------------------------------------
TOTAL STOCK FUNDS 60.0%
---------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PIMCO BOND FUNDS
---------------------------------------
<S> <C>
SHORT DURATION
---------------------------------------
Money Market Fund 0.1%
---------------------------------------
INTERMEDIATE DURATION
---------------------------------------
Total Return Fund 34.2%
---------------------------------------
HIGH YIELD
---------------------------------------
High Yield Fund 3.8%
---------------------------------------
INTERNATIONAL
---------------------------------------
Foreign Bond Fund 1.9%
---------------------------------------
TOTAL BOND FUNDS 40.0%
---------------------------------------
</TABLE>
--------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
--------------------------------------------------------------------------------
The 60/40 Portfolio seeks long-term capital appreciation. The Fund's
strategic allocation is 60% stock funds and 40% bond funds. As of June 30,
2000, the Fund's actual allocation matched its strategic allocation. This
compares to an allocation of 56% stock funds and 44% bond funds on June 30,
1999. For the 12-month period ended June 30, 2000 the Fund returned 9.15% for
Class A shares.
Over the past year, the Fund has been brought back to a neutral position
from an underweight equity position. This allocation enhanced returns as
equities continued to perform well, particularly in the fourth quarter of
last year and the first quarter of this year. The decision to move to a more
neutral stance reflected changes in our proprietary asset allocation models,
which continued to favor equities over fixed income.
Within the equity portion, we have increased our weighting in
international stocks over the past year, adding to returns due to strong
performance in the sector during the second half of 1999. Despite the recent
downturn in overseas markets, we believe that international stocks are poised
to take advantage of increased economic globalization, particularly in
Eastern Europe and Asia. Overweight positions in the large- and
mid-capitalization growth sectors boosted performance for the Fund over the
past year, as these stocks continued to outperform the rest of the market.
The bond market suffered for much of the past year as the Fed raised
interest rates six times. However, the situation for higher-quality bonds,
such as Treasuries and mortgage-backed securities, improved toward the end of
the period, as it appeared that Fed policy was capping inflation. The Fund
benefited from its exposure to the Total Return Fund, which built an
overweight position in mortgages to take advantage of their attractive yields.
Recent volatility within the equity markets has increased as has our
concern regarding short-term stock market performance. As a result, we expect
to maintain a near neutral position as we anticipate that equity returns will
revert to historical norms. However, within our equity investments, we
anticipate continuing to favor non-U.S. equities over U.S. equities.
9
<PAGE>
PIMCO Funds 30/70 Portfolio
June 30, 2000
OBJECTIVE
Current income
with long-term
capital appreciation
as a secondary
objective
PORTFOLIO
25-35% PIMCO
Stock Funds
65-75% PIMCO
Bond Funds
INCEPTION DATE
9/30/98
DIVIDEND
FREQUENCY
Monthly
NET ASSETS
$5.7 million
--------------------------------------------------------------------------------
PERFORMANCE*
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL RETURN For periods ended 6/30/00
A SHARES B SHARES C SHARES
24% Russ. 3000
Lipper 6% MCSI All Lehman
General Bond Cntry. Wld. Ex US Broth. Agg.
Adjusted Adjusted Adjusted Fund Avg. 70% LBAG Index Bond Index
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 year 6.79% 1.95% 6.08% 1.08% 5.08% 3.72% 6.75% 4.56%
Inception 7.87% 5.07% 7.11% 4.91% 7.10% -- -- --
----------------------------------------------------------------------------------------------------------
</TABLE>
CHANGE IN VALUE
$10,000 invested at the Fund's inception
[GRAPHICS]
<TABLE>
<CAPTION>
30/70 30/70 30/70 Lehman Brothers 24% Russ. 3000
Portfolio Portfolio Portfolio Aggregate Bond 6% MSCI All
CLASS A B C Index Cntry. Wld. Ex US
70% LBAG Index
=====================================================================
<S> <C> <C> <C> <C> <C>
09/30/1998 9,550 10,000 10,000 10,000 10,000
10/31/1998 9,693 10,146 10,148 9,947 10,208
11/30/1998 9,895 10,341 10,346 10,004 10,431
12/31/1998 10,125 10,581 10,576 10,034 10,634
01/31/1999 10,085 10,533 10,527 10,105 10,773
02/28/1999 9,853 10,286 10,290 9,929 10,536
03/31/1999 9,980 10,412 10,407 9,984 10,701
04/30/1999 10,182 10,626 10,622 10,016 10,873
05/31/1999 10,052 10,484 10,480 9,928 10,727
06/30/1999 10,208 10,631 10,627 9,896 10,865
07/31/1999 10,130 10,552 10,549 9,854 10,767
08/31/1999 10,107 10,511 10,507 9,849 10,738
09/30/1999 10,114 10,511 10,508 9,963 10,762
10/31/1999 10,238 10,644 10,641 10,000 10,976
11/30/1999 10,358 10,751 10,749 9,999 11,076
12/31/1999 10,594 10,989 10,989 9,951 11,272
01/31/2000 10,403 10,794 10,795 9,919 11,106
02/29/2000 10,600 10,992 10,992 10,039 11,242
03/31/2000 10,909 11,295 11,294 10,171 11,582
04/30/2000 10,748 11,132 11,132 10,142 11,422
05/31/2000 10,690 11,055 11,053 10,137 11,324
06/30/2000 10,900 10,876 11,275 10,348 11,598
</TABLE>
*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The adjusted returns
above include the effect of applicable sales charges. Foreign investing
involves potentially higher risks including foreign currency fluctuations and
political or economic uncertainty. These risks can be enhanced when investing
in emerging markets. SEE PAGE 11 FOR FOOTNOTES, WHICH INCLUDE ADDITIONAL
DETAILS.
--------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PIMCO STOCK FUNDS % of
Total Investments
---------------------------------------
<S> <C>
GROWTH
---------------------------------------
Enhanced Equity Fund 4.0%
---------------------------------------
Target Fund 1.9%
---------------------------------------
Growth Fund 1.4%
---------------------------------------
Opportunity Fund 1.2%
---------------------------------------
BLEND
---------------------------------------
StocksPLUS Fund 4.0%
---------------------------------------
Mid-Cap Fund 1.9%
---------------------------------------
Capital Appreciation Fund 1.6%
---------------------------------------
VALUE
---------------------------------------
Value Fund 6.6%
---------------------------------------
Small-Cap Value Fund 0.9%
---------------------------------------
INTERNATIONAL
---------------------------------------
International Fund 6.8%
---------------------------------------
TOTAL STOCK FUNDS 30.3%
---------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PIMCO BOND FUNDS
---------------------------------------
<S> <C>
SHORT DURATION
---------------------------------------
Money Market Fund 0.1%
---------------------------------------
INTERMEDIATE DURATION
---------------------------------------
Total Return Fund 59.3%
---------------------------------------
HIGH YIELD
---------------------------------------
High Yield Fund 6.7%
---------------------------------------
INTERNATIONAL
---------------------------------------
Foreign Bond Fund 3.6%
---------------------------------------
TOTAL BOND FUNDS 69.7%
---------------------------------------
</TABLE>
--------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
--------------------------------------------------------------------------------
The 30/70 Portfolio seeks long-term capital appreciation. The Fund's
strategic allocation is 30% stock funds and 70% bond funds. As of June 30,
2000, the Fund's actual allocation was 30.4% stock funds and 69.6% bond
funds. This compares to an allocation of 28% stock funds and 72% bond funds
on June 30, 1999. For the 12-month period ended June 30, 2000 the Fund
returned 6.79% for Class Ashares.
Over the past year, the Fund has been brought back to roughly a neutral
position from an underweight equity position. This allocation enhanced
returns as equities continued to perform well, particularly in the fourth
quarter of last year and the first quarter of this year. The decision to move
to a more neutral stance reflected changes in our proprietary asset
allocation models, which continued to favor equities over fixed income.
The bond market suffered for much of the past year as the Fed raised
interest rates six times. However, the situation for higher-quality bonds,
such as Treasuries and mortgage-backed securities, improved toward the end of
the period, as it appeared that Fed policy was capping inflation.
The Fund benefited from its exposure to the Total Return Fund, which built
an overweight position in mortgages to take advantage of their attractive
yields and high credit quality. High yield exposure was reduced as we
remained concerned that credit sensitive issues would underperform in an
environment of a slowing economy and rising default rates.
Within the equity portion of the Portfolio, we have increased our
international weighting over the past year. Despite a recent downturn in the
overseas markets, our overweight in international stocks proved beneficial
for returns thanks to superior performance in late 1999. Maintenance of an
underweight in value stocks was also beneficial for performance.
Recent volatility within the equity markets has increased as has our
concern regarding short-term stock market performance. As a result, we expect
to maintain a near neutral position as we anticipate that equity returns will
return to historical norms. While our outlook is bullish for bonds, we remain
cautious over the short term as Fed policy will remain restrictive until more
definite signs of a moderating economy emerge.
10
<PAGE>
PIMCO Funds Asset Allocation Portfolios invest solely in Institutional Class
shares of PIMCO Funds. These Funds are run by PIMCO Advisors'
institutional-quality investment managers. Together, PIMCO manages over $264
billion in assets and boasts an institutional client list that includes 46 of
the 100 largest U.S. corporations. PIMCO's investment managers are dedicated
to specific disciplines, ensuring that each PIMCO Fund consistently adheres to
its stated investment objective and strategy.
The following provides a closer look at each of the PIMCO Funds held in the
PIMCO Funds Asset Allocation Portfolios as of June 30, 2000.
<TABLE>
<CAPTION>
PIMCO STOCK FUNDS
-----------------------------------------------------------------------------------------------------------------------------------
Fund Name Objective Primary Portfolio Composition
<S> <C> <C> <C>
Growth GROWTH Long-term growth of capital Stocks of larger-capitalized companies
TARGET Capital appreciation Stocks of medium-capitalized companies
OPPORTUNITY Capital appreciation Stocks of smaller-capitalized companies
ENHANCED EQUITY Total return exceeding the S&P 500 Index Stocks represented in the S&P 500 Index
Blend 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
MID-CAP Growth of capital Stocks of medium-capitalized companies the
manager believes are reasonably priced
SMALL-CAP Growth of capital Stocks of smaller-capitalized companies the
manager believes are reasonably priced
Value VALUE Long-term growth of capital and income Stocks of companies with below-average P/Es
SMALL-CAP VALUE Long-term growth of capital and income Stocks of smaller-capitalized companies with
below-average P/Es
International INTERNATIONAL Capital appreciation Stocks of non-U.S. companies in developed and
emerging markets
<CAPTION>
PIMCO BOND FUNDS
-----------------------------------------------------------------------------------------------------------------------------------
Fund Name Objective Primary Portfolio Composition
<S> <C> <C> <C>
Short Duration MONEY MARKET Maximum current income, consistent with Money market securities (LESS THAN 90 days
preservation of capital and daily dollar-weighted avg. maturity)
liquidity
Intermediate TOTAL RETURN Maximum total return Intermediate-term, investment-grade bonds (3-6
Duration year duration)
High Yield HIGH YIELD Maximum total return High-yield bonds (2-6 year duration)
International FOREIGN BOND Maximum total return Investment-grade foreign bonds (3-7 year
duration)
</TABLE>
FOOTNOTES
A few notes and definitions are needed for a complete understanding of the
performance figures. PAST PERFORMANCE IS NO GUARANTEE 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 for the 90/10 Portfolio and the 60/40 Portfolio include the
effect of paying the maximum initial sales charge of 5.5%. The adjusted
figures for Class A shares for the 30/70 Portfolio include the effect of
paying the maximum initial sales charge of 4.5%. 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 Fund 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 Small-Cap Value Fund generally invest in small-cap
stocks, which can be riskier than the overall stock market.
Lipper Averages are calculated by Lipper, Inc. It is the total-return
performance average of funds that are tracked by Lipper that have the same
fund classification. Lipper does not take into account sales charge. The
Russell 3000 Index, Lehman Brothers Aggregate Bond Index, MSCI All Country
World -Ex US are all unmanaged indices. It is not possible to invest directly
in an unmanaged index. Russell 3000 is a measure of the 3000 largest
companies. Lehman Brothers Aggregate Bond Index is representative of U.S.
taxable fixed income universe. MSCI All Country World -Ex US is representing
both developed and emerging markets excluding the USA. For additional details
on the underlying PIMCO Funds in the Asset Allocation Series portfolios,
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, 1-888-87-PIMCO,
www.pimcofunds.com. Please read the prospectus carefully before you invest or
send money.
11
<PAGE>
SCHEDULE OF INVESTMENTS
June 30, 2000
<TABLE>
<CAPTION>
Value
Shares (000s)
90/10 PORTFOLIO
PIMCO FUNDS (b) 101.2%
<S> <C> <C>
International 348,068 $ 3,898
Value 330,572 3,775
Enhanced Equity 180,078 2,338
StocksPLUS 170,127 2,321
Total Return 168,148 1,677
Target 37,730 1,173
Mid-Cap 34,878 1,077
Growth 28,217 992
Capital Appreciation 36,253 982
Opportunity 25,823 708
Small-Cap Value 44,789 639
High Yield 18,664 189
Foreign Bond 9,948 100
Small-Cap 9 1
-----------
TOTAL INVESTMENTS (b) 101.2% $ 19,870
(Cost $19,455) ===========
OTHER ASSETS AND LIABILITIES (NET) (1.2%) (228)
-----------
NET ASSETS 100.0% $ 19,642
===========
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of $19,537 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 1,035
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (702)
-----------
Unrealized appreciation-net $ 333
===========
(b) Institutional Class shares of each PIMCO Fund.
60/40 PORTFOLIO
PIMCO FUNDS (b) 100.7%
<S> <C> <C>
Total Return 588,849 $ 5,871
International 194,923 2,183
Value 188,251 2,150
StocksPLUS 96,130 1,311
Enhanced Equity 100,054 1,299
Mid-Cap 24,230 748
High Yield 63,650 646
Growth 18,278 643
Target 20,279 631
Capital Appreciation 18,309 496
Opportunity 16,183 444
Small-Cap Value 26,531 378
Foreign Bond 32,237 324
Money Market 21,342 21
Small-Cap 50 1
-----------
TOTAL INVESTMENTS (a) 100.7% $ 17,146
(Cost $17,062) ===========
OTHER ASSETS AND LIABILITIES (NET) (0.7%) (116)
-----------
NET ASSETS 100.0% $ 17,030
===========
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation (depreciation) of
investments based on cost for federal income tax purposes of $17,249 was as
follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 632
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (735)
-----------
Unrealized appreciation-net $ (103)
===========
(b) Institutional Class shares of each PIMCO Fund.
<CAPTION>
Value
Shares (000s)
30/70 PORTFOLIO
PIMCO FUNDS (b) 100.0%
<S> <C> <C>
Total Return 336,744 $ 3,357
International 34,202 383
High Yield 37,300 379
Value 32,587 372
StocksPLUS 16,798 229
Enhanced Equity 17,492 227
Foreign Bond 20,214 203
Mid-Cap 3,440 107
Target 3,369 105
Capital Appreciation 3,438 93
Growth 2,261 80
Opportunity 2,592 71
Small-Cap Value 3,440 49
Money Market 4,178 4
Small-Cap 25 0
-----------
TOTAL INVESTMENTS (a) 100.0% $ 5,659
(Cost $5,738) ===========
OTHER ASSETS AND LIABILITIES (NET) 0.0% 1
-----------
NET ASSETS 100.0% $ 5,660
===========
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):
(a) At June 30, 2000, the net unrealized appreciation (depreciation) of
investments based on cost for federal income tax purposes of $5,869 was as
follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 73
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (283)
-----------
Unrealized depreciation-net $ (210)
===========
</TABLE>
(b) Institutional Class shares of each PIMCO Fund.
12 SEE ACCOMPANYING NOTES
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SELECTED PER SHARE DATA FOR THE YEAR OR 90/10 PORTFOLIO
PERIOD ENDED: ------------------------- ------------------------- --------------------------
Class A Class B Class C
06/30/2000 06/30/1999(b) 06/30/2000 06/30/1999(b) 06/30/2000 06/30/1999(b)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 12.17 $ 10.00 $ 12.11 $ 10.00 $ 12.11 $ 10.00
Net Investment Income (a) 0.52 0.16 0.42 0.16 0.42 0.07
Net Realized / Unrealized Gain (Loss) on
Investments (a) 0.84 2.19 0.84 2.13 0.83 2.22
Total Income from Investment Operations 1.36 2.35 1.26 2.29 1.25 2.29
Dividends from Net Investment Income (0.16) (0.15) (0.11) (0.15) (0.12) (0.15)
Dividends in Excess of Net Investment Income 0.00 (0.03) 0.00 (0.03) 0.00 (0.03)
Distributions from Net Realized Capital Gains (0.59) 0.00 (0.59) 0.00 (0.59) 0.00
Total Distributions (0.75) (0.18) (0.70) (0.18) (0.71) (0.18)
Net Asset Value End of Period 12.78 12.17 12.67 12.11 12.65 12.11
Total Return (%) 11.48 23.69 10.68 23.03 10.58 23.03
Net Assets End of Period (000s) $ 1,161 $ 647 $ 2,610 $ 1,920 $ 15,846 $ 7,969
Ratio of Expenses to Average Net Assets (%) 0.65 0.65* 1.40 1.40* 1.40 1.40*
Ratio of Net Investment Income to Average
Net Assets (%) 4.16 1.91* 3.41 1.87* 3.41 0.77*
Portfolio Turnover Rate (%) 18 48 18 48 18 48
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
60/40 PORTFOLIO
------------------------- ------------------------- --------------------------
Class A Class B Class C
06/30/2000 06/30/1999(b) 06/30/2000 06/30/1999(b) 06/30/2000 06/30/1999(b)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 11.27 $ 10.00 $ 11.25 $ 10.00 $ 11.24 $ 10.00
Net Investment Income (a) 0.56 0.31 0.48 0.16 0.48 0.18
Net Realized / Unrealized Gain (Loss) on
Investments (a) 0.44 1.23 0.44 1.31 0.44 1.29
Total Income from Investment Operations 1.00 1.54 0.92 1.47 0.92 1.47
Dividends from Net Investment Income (0.35) (0.27) (0.27) (0.22) (0.26) (0.23)
Dividends in Excess of Net Investment Income 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from Net Realized Capital Gains (0.44) 0.00 (0.44) 0.00 (0.44) 0.00
Total Distributions (0.79) (0.27) (0.71) (0.22) (0.70) (0.23)
Net Asset Value End of Period 11.48 11.27 11.46 11.25 11.46 11.24
Total Return (%) 9.15 15.50 8.36 14.83 8.41 14.82
Net Assets End of Period (000s) $ 2,170 $ 2,196 $ 4,415 $ 3,653 $ 10,376 $ 9,826
Ratio of Expenses to Average Net Assets (%) 0.65 0.65* 1.40 1.40* 1.40 1.40*
Ratio of Net Investment Income to Average
Net Assets (%) 4.96 3.76* 4.21 1.92* 4.22 2.14*
Portfolio Turnover Rate (%) 44 39 44 39 44 39
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
30/70 PORTFOLIO
------------------------- ------------------------- --------------------------
Class A Class B Class C
06/30/2000 06/30/1999(b) 06/30/2000 06/30/1999(b) 06/30/2000 06/30/1999(b)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 10.33 $ 10.00 $ 10.32 $ 10.00 $ 10.30 $ 10.00
Net Investment Income (a) 0.58 0.58 0.50 0.32 0.50 0.26
Net Realized / Unrealized Gain (Loss) on
Investments (a) 0.10 0.11 0.11 0.31 0.11 0.36
Total Income from Investment Operations 0.68 0.69 0.61 0.63 0.61 0.62
Dividends from Net Investment Income (0.47) (0.36) (0.39) (0.31) (0.39) (0.32)
Dividends in Excess of Net Investment Income 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from Net Realized Capital Gains (0.19) 0.00 (0.19) 0.00 (0.19) 0.00
Total Distributions (0.66) (0.36) (0.58) (0.31) (0.58) (0.32)
Net Asset Value End of Period 10.35 10.33 10.35 10.32 10.33 10.30
Total Return (%) 6.79 6.91 6.08 6.29 6.08 6.27
Net Assets End of Period (000s) $ 335 $ 407 $ 1,658 $ 1,738 $ 3,645 $ 4,969
Ratio of Expenses to Average Net Assets (%) 0.65 0.65* 1.40 1.40* 1.40 1.40*
Ratio of Net Investment Income to Average
Net Assets (%) 5.65 7.54* 4.90 4.09* 4.90 3.39*
Portfolio Turnover Rate (%) 52 37 52 37 52 37
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized
(a) Per share amounts based on average number of shares outstanding during
the period.
(b) Commenced operations on September 30, 1998
SEE ACCOMPANYING NOTES 13
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 2000
<TABLE>
<CAPTION>
Amounts in thousands, except per share amounts 90/10 PORTFOLIO 60/40 PORTFOLIO 30/70 PORTFOLIO
----------------------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investments, at value $ 19,870 $ 17,146 $ 5,659
-----------------------------------------------------------------------------------------------------------------------------------
Receivable for investments sold and forward foreign currency contracts 0 0 0
-----------------------------------------------------------------------------------------------------------------------------------
Receivable for Portfolio shares sold 29 8 7
-----------------------------------------------------------------------------------------------------------------------------------
Interest and dividends receivable 10 36 21
-----------------------------------------------------------------------------------------------------------------------------------
19,909 17,190 5,687
===================================================================================================================================
LIABILITIES:
Payable for investments purchased and forward foreign currency contracts $ 1 $ 0 $ 0
-----------------------------------------------------------------------------------------------------------------------------------
Payable for Portfolio shares redeemed 242 64 1
-----------------------------------------------------------------------------------------------------------------------------------
Dividends payable 0 76 19
-----------------------------------------------------------------------------------------------------------------------------------
Accrued investment advisory fee 0 0 0
-----------------------------------------------------------------------------------------------------------------------------------
Accrued administration fee 7 6 2
-----------------------------------------------------------------------------------------------------------------------------------
Accrued distribution fee 12 10 4
-----------------------------------------------------------------------------------------------------------------------------------
Accrued servicing fee 5 4 1
-----------------------------------------------------------------------------------------------------------------------------------
267 160 27
===================================================================================================================================
NET ASSETS $ 19,642 $ 17,030 $ 5,660
===================================================================================================================================
NET ASSETS CONSIST OF:
Paid in capital $ 18,114 $ 16,006 $ 5,646
-----------------------------------------------------------------------------------------------------------------------------------
Undistributed net investment income 205 315 105
-----------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net realized (loss) 908 625 (12)
-----------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) 415 84 (79)
-----------------------------------------------------------------------------------------------------------------------------------
$ 19,642 $ 17,030 $ 5,660
===================================================================================================================================
NET ASSETS:
Class A $ 1,161 $ 2,170 $ 335
-----------------------------------------------------------------------------------------------------------------------------------
Class B 2,610 4,415 1,658
-----------------------------------------------------------------------------------------------------------------------------------
Class C 15,846 10,376 3,645
-----------------------------------------------------------------------------------------------------------------------------------
Other Classes 25 69 22
-----------------------------------------------------------------------------------------------------------------------------------
SHARES ISSUED AND OUTSTANDING:
Class A 91 189 32
-----------------------------------------------------------------------------------------------------------------------------------
Class B 206 385 160
-----------------------------------------------------------------------------------------------------------------------------------
Class C 1,252 905 353
-----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE AND REDEMPTION PRICE* PER SHARE
(NET ASSETS PER SHARE OUTSTANDING)
Class A $ 12.78 $ 11.48 $ 10.35
-----------------------------------------------------------------------------------------------------------------------------------
Class B 12.67 11.46 10.35
-----------------------------------------------------------------------------------------------------------------------------------
Class C 12.65 11.46 10.33
-----------------------------------------------------------------------------------------------------------------------------------
COST OF INVESTMENTS OWNED $ 19,455 $ 17,062 $ 5,738
===================================================================================================================================
</TABLE>
*With respect to the Retail Classes, the redemption price varies by the length
of time the shares are held.
14 SEE ACCOMPANYING NOTES
<PAGE>
STATEMENTS OF OPERATIONS
For the year ended June 30, 2000
<TABLE>
<CAPTION>
Amounts in thousands 90/10 PORTFOLIO 60/40 PORTFOLIO 30/70 PORTFOLIO
----------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 724 $ 923 $ 460
-----------------------------------------------------------------------------------------------------------------------------------
Interest 1 1 1
-----------------------------------------------------------------------------------------------------------------------------------
Total Income 725 924 461
===================================================================================================================================
EXPENSES:
Administration fees 60 66 29
-----------------------------------------------------------------------------------------------------------------------------------
Distribution fees - Class B 16 29 13
-----------------------------------------------------------------------------------------------------------------------------------
Distribution fees - Class C 90 75 38
-----------------------------------------------------------------------------------------------------------------------------------
Servicing fees - Class A 2 6 1
-----------------------------------------------------------------------------------------------------------------------------------
Servicing fees - Class B 5 10 5
-----------------------------------------------------------------------------------------------------------------------------------
Servicing fees - Class C 30 25 13
-----------------------------------------------------------------------------------------------------------------------------------
Trustees' fees 1 1 1
-----------------------------------------------------------------------------------------------------------------------------------
Total expenses 204 212 100
-----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 521 712 361
===================================================================================================================================
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on investments 199 190 (67)
-----------------------------------------------------------------------------------------------------------------------------------
Net capital gain distributions received from underlying funds 933 789 190
-----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments (121) (284) (66)
-----------------------------------------------------------------------------------------------------------------------------------
Net Gain (Loss) 1,011 695 57
-----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN ASSETS RESULTING FROM OPERATIONS $ 1,532 $ 1,407 $ 418
===================================================================================================================================
</TABLE>
SEE ACCOMPANYING NOTES 15
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Amounts in thousands 90/10 PORTFOLIO 60/40 PORTFOLIO 30/70 PORTFOLIO
--------------------------------- --------------------------------- ---------------------------------
Year Ended Period from Year Ended Period from Year Ended Period from
June 30, 2000 September 30, 1998 June 30, 2000 September 30, 1998 June 30, 2000 September 30, 1998
to June 30 1999 to June 30 1999 to June 30 1999
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income $ 521 $ 38 $ 712 $ 115 $ 361 $ 101
---------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 199 160 190 140 (67) 15
---------------------------------------------------------------------------------------------------------------------------
Net capital gain distributions
received from underlying funds 933 113 789 94 190 37
---------------------------------------------------------------------------------------------------------------------------
Net change in unrealized
appreciation (depreciation) (121) 536 (284) 368 (66) (13)
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
resulting from operations 1,532 847 1,407 717 418 140
===========================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (13) (2) (82) (16) (20) (7)
---------------------------------------------------------------------------------------------------------------------------
Class B (19) (10) (92) (33) (66) (35)
---------------------------------------------------------------------------------------------------------------------------
Class C (107) (26) (222) (60) (192) (59)
---------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 (1) 0 (2) 0
---------------------------------------------------------------------------------------------------------------------------
In excess of net investment income
Class A 0 (1) 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
Class B 0 (2) 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
Class C 0 (5) 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 0 0 0 0
---------------------------------------------------------------------------------------------------------------------------
From net realized capital gains
Class A (44) 0 (109) 0 (8) 0
---------------------------------------------------------------------------------------------------------------------------
Class B (95) 0 (144) 0 (33) 0
---------------------------------------------------------------------------------------------------------------------------
Class C (525) 0 (340) 0 (122) 0
---------------------------------------------------------------------------------------------------------------------------
Other Classes (2) 0 (1) 0 0 0
---------------------------------------------------------------------------------------------------------------------------
Total Distributions (805) (46) (991) (109) (443) (101)
===========================================================================================================================
FUND SHARE TRANSACTIONS:
Receipts for shares sold
Class A 760 713 1,386 2,249 229 487
---------------------------------------------------------------------------------------------------------------------------
Class B 981 1,910 1,620 4,008 360 1,840
---------------------------------------------------------------------------------------------------------------------------
Class C 10,217 7,885 5,759 10,298 2,733 5,337
---------------------------------------------------------------------------------------------------------------------------
Other Classes 0 20 44 20 0 20
---------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 57 3 164 6 17 3
---------------------------------------------------------------------------------------------------------------------------
Class B 111 12 215 24 93 26
---------------------------------------------------------------------------------------------------------------------------
Class C 611 30 535 32 290 42
---------------------------------------------------------------------------------------------------------------------------
Other Classes 2 0 2 0 2 0
---------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (369) (118) (1,651) (128) (321) (86)
---------------------------------------------------------------------------------------------------------------------------
Class B (493) (164) (1,166) (567) (535) (142)
---------------------------------------------------------------------------------------------------------------------------
Class C (3,520) (534) (5,990) (853) (4,317) (432)
---------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 (1) 0 0 0
---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
resulting from Fund share
transactions 8,357 9,757 917 15,089 (1,449) 7,095
---------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS 9,084 10,558 1,333 15,697 (1,474) 7,134
===========================================================================================================================
NET ASSETS:
Beginning of period 10,558 0 15,697 0 7,134 0
---------------------------------------------------------------------------------------------------------------------------
End of period * $ 19,642 $ 10,558 $ 17,030 $ 15,697 $ 5,660 $ 7,134
---------------------------------------------------------------------------------------------------------------------------
*Including net undistributed
investment income of: $ 205 $ 169 $ 315 $ 173 $ 105 $ 49
===========================================================================================================================
</TABLE>
16 SEE ACCOMPANYING NOTES
<PAGE>
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
1. ORGANIZATION
PIMCO Funds: Multi-Manager Series (the "Trust"), is registered under the
Investment Company Act of 1940, as amended, as an open-end management
investment company organized as a Massachusetts business trust. The Trust
currently consists of thirty-two funds. Information presented in these
financial statements pertains to the Asset Allocation Series of the Trust
which is comprised of the 90/10 Portfolio, 60/40 Portfolio, and 30/70
Portfolio, collectively referred to as ("the Portfolios"). The Portfolios are
professionally-managed series of the Trust designed to take advantage of the
benefits of asset allocation. Each Portfolio seeks to achieve its particular
investment objective by investing within specified equity and fixed income
ranges among a number of other mutual funds in the PIMCO Funds family (the
"Underlying Funds"). The Portfolios may offer up to five classes of shares:
Institutional, Administrative, A, B and C. 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 and Administrative 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. Investments in the Underlying Funds are valued at the
price of each Institutional share class of the respective Underlying Fund
determined as of the close of the New York Stock Exchange or the valuation
date.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
recorded as of the trade date. Realized gains and losses from securities sold
are recorded on the identified cost basis. Distributions from the Underlying
Funds are recorded on the ex-dividend date.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends from net investment
income, if any, are declared and paid to shareholders of record at least
monthly by the 30/70 Portfolio, at least quarterly by 60/40 Portfolio and at
least annually by the 90/10 Portfolio. Net long-term capital gains earned by
a Portfolio, if any, will be distributed at least 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.
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 Portfolio 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.
3. FEES, EXPENSES, AND RELATED PARTY TRANSACTIONS
ADMINISTRATION FEE. PIMCO Advisors L.P. ("PIMCO Advisors") provides
administrative services to the Trust for which it receives monthly
administrative fees based on each share class' average daily net assets. The
Administration Fee for the Retail Classes is charged at the annual rate of
0.40% on the first $2.5 billion of net assets and 0.35% in excess of $2.5
billion. The Administration Fee for Other Classes is charged at the annual
rate of 0.15%. PIMCO Advisors has voluntarily undertaken to waive a portion of
the administrative fee it is entitled to receive for Other Classes of each
Portfolio until further notice. As a result, during the period of the waiver,
each Portfolio will pay administrative fees to the Administrator at the annual
rate of 0.10%. In addition, the Portfolios indirectly bear their pro-rata
share of expenses of the underlying funds.
EXPENSES. Under the terms of the Administrative Agreement PIMCO Advisers has
agreed to bear any and all fees and expenses of the Portfolio (other than the
administrative fee payable under the agreement), except for (i) salaries and
other compensation of any of the Trust's executive officers and employees who
are not officers, directors, stockholders or employees of PIMCO Advisors, PIMCO,
or 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 Adviser, any Portfolio
Manager, or the Trust, and any counsel retained exclusively for their benefit;
(vi) extraordinary expenses, including costs of litigation and indemnification
expenses; (vii) expenses which are capitalized in accordance with generally
accepted accounting principles; and (viii) any expenses allocated or allocable
to a specific class of shares, which include distribution and/or service fees
payable 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.
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
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Cont.)
June 30, 2000
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
Portfolios and to the Funds of the Trust according to their respective net
assets.
DISTRIBUTION AND SERVICING FEES. PIMCO Funds Distributors LLC ("PFD"), a
wholly-owned subsidiary of PIMCO Advisors L.P., serves as the distributor of the
Trust's shares.
Pursuant to the Distribution and Servicing Plans adopted by the A, B and C
Classes of the Trust, the Trust compensates PFD 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 Class A, Class B and Class C. The Trust paid PFD distribution
and servicing fees at an effective rate as set forth below (calculated as a
percentage of each Portfolio's average daily net assets attributable to each
class):
<TABLE>
<CAPTION>
Distribution Fee (%) Servicing Fee (%)
---------------------------------------------------------------
<S> <C> <C>
CLASS A
ALL PORTFOLIOS -- 0.25
CLASS B
ALL PORTFOLIOS 0.75 0.25
CLASS C
ALL PORTFOLIOS 0.75 0.25
</TABLE>
PFD also receives the proceeds of the initial sales charges paid by the
shareholders upon the purchase of Class A shares and the contingent deferred
sales charges paid by the shareholders upon certain redemptions of Class A, B
and C shares. For the period ended June 30, 2000, PFD received $102,281
representing commissions (sales charges) and contingent deferred sales charges.
4. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities (excluding short-term investments) for the
period ended June 30, 2000 were as follows (amounts in thousands):
<TABLE>
<CAPTION>
Non - U.S. Government/Agency
----------------------------
Purchases Sales
------------------------------------------------------------------
<S> <C> <C>
90/10 PORTFOLIO $ 12,128 $ 2,694
60/40 PORTFOLIO 8,694 7,197
30/70 PORTFOLIO 3,742 4,925
</TABLE>
5. RISK FACTORS OF THE FUNDS
Investing in the Underlying Funds through the Portfolios involves certain
additional expenses and tax results that would not be present in a direct
investment in the Underlying Funds. Under certain circumstances, an Underlying
Fund may pay a redemption request by a Portfolio wholly or partly by a
distribution in kind of securities from its portfolio, instead of cash, in
accordance with the rules of the Securities and Exchange Commission. In such
cases, the Portfolios may hold securities distributed by an Underlying Fund
until PIMCO Advisors determines that it is appropriate to dispose of such
securities.
Each of the Underlying Funds may invest in certain specified derivative
securities, including: interest rate swaps, caps and floors for hedging
purposes; exchange-traded options; over-the-counter options executed with
primary dealers, including long calls and puts and covered calls and financial
futures and options. Certain of the Underlying Funds may invest in restricted
securities; instruments issued by trusts, partnerships or other issuers,
including pass-through certificates representing participations in, or debt
instruments backed by, the securities owned by such issuers. These Underlying
Funds also may engage in securities lending, reverse repurchase agreements and
dollar roll transactions. In addition, certain of the Underlying Funds may
invest in below-investment grade debt, debt obligations of foreign issuers and
stocks of foreign corporations, securities in foreign investment funds or
trusts, foreign derivative securities including futures contracts, options,
interest rate and currency swap transactions, and various other investment
vehicles, each with inherent risks.
The officers and directors of the Company also serve as officers and
directors/trustees of the Underlying Funds. Conflicts may arise as these
companies seek to fulfill their fiduciary responsibilities to both the
Portfolios and Underlying Funds.
18
<PAGE>
6. 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>
90/10 PORTFOLIO 60/40 PORTFOLIO 30/70 PORTFOLIO
-------------------------------- -------------------------------- --------------------------------
Period from Period from Period from
Year Ended 09/30/1998 to Year Ended 09/30/1998 to Year Ended 09/30/1998 to
06/30/2000 06/30/1999 06/30/2000 06/30/1999 06/30/2000 06/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount
-------------------------------- -------------------------------- --------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
RECEIPTS FOR SHARES SOLD
Class A 61 $ 760 63 $ 713 122 $ 1,386 206 $ 2,249 22 $ 229 47 $ 487
------------------------- -------------------------------- -------------------------------- --------------------------------
Class B 79 981 172 1,910 144 1,620 374 4,008 35 360 179 1,840
------------------------- -------------------------------- -------------------------------- --------------------------------
Class C 825 10,217 703 7,885 508 5,759 949 10,298 265 2,733 520 5,337
------------------------- -------------------------------- -------------------------------- --------------------------------
Other Classes 0 0 2 20 4 44 2 20 0 0 2 20
------------------------- -------------------------------- -------------------------------- --------------------------------
ISSUED AS REINVESTMENT OF
DISTRIBUTIONS
Class A 5 57 0 3 15 164 1 6 2 17 0 3
------------------------- -------------------------------- -------------------------------- --------------------------------
Class B 9 111 1 12 19 215 2 24 9 93 3 26
------------------------- -------------------------------- -------------------------------- --------------------------------
Class C 50 611 3 30 48 535 3 32 28 290 4 42
------------------------- -------------------------------- -------------------------------- --------------------------------
Other Classes 0 2 0 0 0 2 0 0 0 2 0 0
------------------------- -------------------------------- -------------------------------- --------------------------------
COST OF SHARES REDEEMED
Class A (28) (369) (10) (118) (143) (1,651) (12) (128) (31) (321) (8) (86)
------------------------- -------------------------------- -------------------------------- --------------------------------
Class B (41) (493) (14) (164) (103) (1,166) (51) (567) (52) (535) (14) (142)
------------------------- -------------------------------- -------------------------------- --------------------------------
Class C (281) (3,520) (48) (534) (525) (5,990) (78) (853) (422) (4,317) (42) (432)
------------------------- -------------------------------- -------------------------------- --------------------------------
Other Classes 0 0 0 0 0 (1) 0 0 0 0 0 0
------------------------- -------------------------------- -------------------------------- --------------------------------
NET INCREASE (DECREASE)
RESULTING FROM FUND
SHARE TRANSACTIONS 679 $ 8,357 872 $9,757 89 $ 917 1,396 $15,089 (144) $(1,449) 691 $7,095
========================= ================================ ================================ ================================
</TABLE>
7. ACQUISITION BY ALLIANZ AG
On May 5, 2000, Allianz AG completed the acquisition of approximately 70% of the
outstanding partnership interests in PIMCO Advisors L.P. ("PIMCO Advisors"), of
which PIMCO is a subsidiary partnership. As a result of this transaction, PIMCO
Advisors, and its subsidiaries, are now controlled by Allianz AG, a leading
provider of financial services, particularly in Europe. PIMCO remains
operationally independent, continues to operate under its existing name, and now
leads the global fixed income efforts of Allianz AG. Key employees at each PIMCO
Advisors' investment units, including PIMCO's Bill Gross, have signed long-term
employment contracts and have significant profit-sharing and retention
arrangements to ensure continuity of the investment process and staff. With the
addition of PIMCO Advisors, the Allianz Group manages assets of approximately
US$650 billion, including more than 300 mutual funds for retail and
institutional clients around the world.
19
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
June 30, 2000
To the Trustees and Class A, B and C Shareholders of the PIMCO Funds:
Multi-Manager Series
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations, of
changes in net assets and the financial highlights for the Class A, B and C
share classes present fairly, in all material respects, the financial position
of the 90/10 Portfolio, 60/40 Portfolio and 30/70 Portfolio (constituting the
PIMCO Funds Asset Allocation Series of PIMCO Funds: Multi-Manager Series,
hereafter referred to as the "Portfolios") at June 30, 2000, the results of each
of their operations, the changes in each of their net assets and the financial
highlights for the Class A, B and C share classes for each of the periods
indicated, in conformity with accounting principles generally accepted in the
United States. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Portfolios'
management; our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit of these financial
statements in accordance with auditing standards generally accepted in the
United States which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit, which included confirmation of securities at June 30, 2000 by
correspondence with the custodian, provides a reasonable basis for the opinion
expressed above.
PricewaterhouseCoopers LLP
Kansas City, Missouri
August 21, 2000
20
<PAGE>
FEDERAL INCOME TAX INFORMATION (Unaudited)
June 30, 2000
As required by the Internal Revenue Code regulations, shareholders must be
notified within 60 days of the Trust's fiscal year end (June 30, 2000) regarding
the status of the distributions made to the shareholders
DIVIDEND RECEIVED DEDUCTION. For the benefit of corporate shareholders only, the
portion of dividends paid out of ordinary income earned during certain Funds'
fiscal years ended June 30, 2000 which qualify for the corporate
dividend-received deduction are as follows:
<TABLE>
<S> <C>
90/10 PORTFOLIO 7.42%
60/40 PORTFOLIO 4.13%
30/70 PORTFOLIO 2.64%
</TABLE>
CAPITAL GAIN DISTRIBUTIONS. Capital gains distributions paid for all classes of
shares during the fiscal year ended June 30, 2000, were in the amounts as
follows:
<TABLE>
<CAPTION>
Per Share Per Share
Long-Term Short-Term
Capital Gains Capital Gains
--------------------------------------------------------------------------------
<S> <C> <C>
90/10 PORTFOLIO 0.09796 0.49665
60/40 PORTFOLIO 10.06468 0.37391
30/70 PORTFOLIO 0.03718 0.14790
</TABLE>
Shareholders are advised to consult their own tax advisor with respect to the
tax consequences of their investment in the Trust. However, income received by
tax-exempt recipients need not be reported as taxable income. In January 2001,
you will be advised on IRS form 1099-DIV as to the federal tax status of the
dividends and distributions received by you in calendar year 2000.
21
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE>
PIMCO FUNDS ASSET ALLOCATION SERIES
Actively managed portfolios of select PIMCO Funds
--------------------------------------------------------------------------------
MANAGER PIMCO Advisors L.P., 800 Newport Center Drive,
Newport Beach, CA 92660
--------------------------------------------------------------------------------
DISTRIBUTOR PIMCO Funds Distributors LLC, 2187 Atlantic Street,
Stamford, CT 06902-6896
--------------------------------------------------------------------------------
CUSTODIAN State Street Bank & Trust Company, 801 Pennsylvania,
Kansas City, MO 64105
--------------------------------------------------------------------------------
SHAREHOLDER PFPC, Inc., P.O. Box 9688, Providence, RI 02940-9688
SERVICING AGENT AND
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 Asset Allocation account information
INFORMATION contact your 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.
--------------------------------------------------------------------------------
This is a copy of a report by PIMCO Funds to its Asset Allocation Series
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 Asset Allocation Series 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.
<PAGE>
The Stock Market Headline
Today's Investor
VISIT THE PIMCO FUNDS INNOVATION CENTER
AT www.pimcofunds.com
When you're investing in a volatile sector like technology, incisive,
accurate information could be your best ally. That's why we've created the
PIMCO Funds Innovation Center at www.pimcofunds.com. Look to it for
up-to-date market intelligence and commentary on the tech sector and PIMCO's
tech-related funds. Highlights include:
[GRAPHIC]
The PIMCO Funds Innovation Center offers you a unique, balanced perspective
on the tech sector and technology investing.
- INNOVATION NEWSLETTER An online version of our popular
technology investing newsletter. Each monthly issue
includes a market review and outlook from PIMCO Innovation
and Global Innovation Fund portfolio manager,
Dennis McKechnie.
- TIMELY MARKET COMMENTARY PIMCO's analysis of unfolding
market events.
- MANAGER INTERVIEWS Find out what PIMCO's technology
investment professionals have to say about market trends,
global opportunities and fund-specific strategies.
- THEME ANALYSIS The PIMCO "Innovation" investment approach
focuses on eight industries or "themes" that drive the tech
sector. Read our manager assessments of each.
- MEDIA HIGHLIGHTS Media coverage of PIMCO's technology-based
funds and managers.
HOW TO GET THERE
To visit the Innovation Center, go to the PIMCO Funds home page at
www.pimcofunds.com and click on "Innovation Center". Or simply point your
browser to www.pimcofunds.com/innovationcenter.
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