<PAGE>
PIMCO Funds Semi-Annual Report
Multi-Manager Series
December 31, 1999
Share Classes
Ins Institutional
Adm Administrative
PIMCO EQUITY ADVISORS
Renaissance Fund Mid-Cap Equity Fund
Growth Fund Opportunity Fund
Core Equity Fund Innovation Fund
Target Fund International Growth Fund
CADENCE CAPITAL MANAGEMENT
Mega-Cap Fund Small-Cap Growth Fund
Capital Appreciation Fund Micro-Cap Growth Fund
Mid-Cap Growth Fund
NFJ INVESTMENT GROUP
Equity Income Fund Small-Cap Value Fund
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
[LOGO OF PIMCO FUNDS]
<PAGE>
PIMCO Funds Semi-Annual Report
Dear PIMCO Funds Shareholder:
Last year was a banner year for the stock market--a fitting conclusion to a
century of unprecedented economic expansion.
Despite some dips along the way, all the major stock indexes experienced
exceptional growth in 1999. The Dow Jones Industrial Average was up 27%, the S&P
500 rose 21%, and the NASDAQ Index climbed a stunning 86%--a clear indication of
the dominant role the technology sector has played in the stock market's
tenacious bull run.
For bonds, on the other hand, 1999 was a turbulent time. Most bond sectors
reacted negatively to the continued strength of the economy and to rising
interest rates. In fact, it was the first year since 1994 that the bond market
reported negative returns.
In the first few hours and days of the new millennium there was a giant sigh of
relief as the Y2K bug turned out to be, at most, a minor glitch rather than a
major catastrophe. Here at PIMCO, our Y2K preparations allowed the New Year to
arrive without a hitch.
It was another good year for PIMCO's equity funds as well, as they generally
experienced strong relative performance. Of special note is the market-beating
performance of our four growth-oriented funds. While past performance is no
indication of future results, all four funds--PIMCO Growth, Target, Opportunity
and Innovation Funds--beat the S&P 500 Index by a considerable margin.
On the following pages we present detailed information on all the stock funds in
our Multi-Manager Series. I encourage you to review the information and
commentary carefully. Once again, I'd like to thank you for the trust you've
placed in us through your investment. We will continue to work hard to help you
meet your financial objectives.
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/ William D. Cvengros
William D. Cvengros
Chairman of the Board
January 31, 2000
PIMCO Advisors Holdings L.P. (NYSE:PA), its operating subsidiary PIMCO Advisors
L.P. and Allianz AG (EURO:ALV) announced that they have reached a definitive
agreement for Allianz AG to acquire majority ownership of PIMCO Advisors,
including all of the interests held at PIMCO Advisors Holdings L.P. Under the
terms of the agreement, at the closing the units of PA Holdings will be
exchanged by way of a merger and there will be no further public ownership of
PIMCO Advisors. Additionally, key employees at each of PIMCO Advisors'
investment units, including PIMCO's Bill Gross, have significant profit-sharing
and retention arrangements to ensure continuity of the investment process and
staff.
- --------------------------------------------------------------------------------
We at PIMCO spent significant time and resources preparing for Year 2000. As a
consequence, we are pleased to report that we made it through the Year 2000
transition period successfully, and that all our systems and processes continue
to function normally. While we expect that the great majority of the risk from
this event is now behind us, it is still possible that the "Year 2000 bug" might
result in system failures. In this regard, we would like to remind you that
while we are dedicated to avoiding problems arising from Year 2000, we cannot
guarantee investment performance or that Year 2000 will not result in losses.1
1 This is a Year 2000 Readiness Disclosure dated January 31, 2000.
Semi-Annual Report 3
<PAGE>
Today's
Investor
The Stock Market
The Reign of the Bull Market Continues
The bull market reigned supreme again in 1999, with a variety of indices,
including the NASDAQ Composite Index and the Dow Jones Industrial Average,
reaching record highs.
[GRAPH]
<TABLE>
<CAPTION>
S&P
500
Index
-----
<S> <C>
01/01/1999 1,229
01/08/1999 1,275
01/15/1999 1,243
01/22/1999 1,225
01/29/1999 1,280
02/05/1999 1,239
02/12/1999 1,230
02/19/1999 1,239
02/26/1999 1,238
03/05/1999 1,275
03/12/1999 1,295
03/19/1999 1,299
03/26/1999 1,283
04/02/1999 1,294
04/09/1999 1,348
04/16/1999 1,319
04/23/1999 1,357
04/30/1999 1,335
05/07/1999 1,345
05/14/1999 1,338
05/21/1999 1,330
05/28/1999 1,302
06/04/1999 1,328
06/11/1999 1,294
06/18/1999 1,343
06/25/1999 1,315
07/02/1999 1,391
07/09/1999 1,403
07/16/1999 1,419
07/23/1999 1,357
07/30/1999 1,329
08/06/1999 1,300
08/13/1999 1,328
08/20/1999 1,337
08/27/1999 1,348
09/03/1999 1,357
09/10/1999 1,352
09/17/1999 1,335
09/24/1999 1,277
10/01/1999 1,283
10/08/1999 1,336
10/15/1999 1,247
10/22/1999 1,302
10/29/1999 1,363
11/05/1999 1,370
11/12/1999 1,396
11/19/1999 1,422
11/26/1999 1,417
12/03/1999 1,433
12/10/1999 1,417
12/17/1999 1,421
12/23/1999 1,458
12/31/1999 1,469
</TABLE>
In the first quarter of the year, large-cap growth stocks dominated the market,
as they did for much of 1998. However, in the second quarter, the market rotated
towards smaller-capitalization and lower-valuation issues. Rising interest rates
and a global economic recovery resulted in increased demand for basic materials,
which benefited these stocks.
This rotation was short-lived, however, as growth stocks, and in particular
technology stocks, resumed their lead in the third quarter.
In the fourth quarter, despite monetary tightening by the Federal Reserve, the
market continued to surge ahead. It remained dominated by growth-oriented
stocks, which experienced significant price appreciation during the period. This
outstanding performance was seen across all market capitalizations, with
smaller-capitalization securities showing the greatest strength. In particular,
the market was fueled by the technology sector, which continued to show strong
earnings growth.
Overall, technology powered the market this year, greatly overshadowing the
performance of other sectors. Telecommunications, e-commerce and software were
all areas that grew at a rapid pace and, as a result, their stock prices soared.
We believe this sector will remain attractive, as many areas of technology are
still in the early stages of growth.
The outlook remains positive for the equity market. The Federal Reserve's
tightening policy has helped maintain a low-inflation, high-growth economic
environment that investors believe will sustain the current level of equity
prices. We remain cautiously optimistic that the market will continue its
positive performance, albeit at a slower pace than in 1999.
- --------------------------------------------------------------------------------
The Bond Market
Inflation Expectations on the Rise
Six months ago we suggested the clash between deflationary and inflationary
forces was likely to keep inflation in check, even as the global economy showed
signs of recovery. While this remains likely over the long run, it appears that
several unsustainable forces, including the surging economy, the tight labor
market and rising stock prices, currently have the upper hand. As a result,
inflation fears have flourished and the bond market has suffered.
[GRAPH]
<TABLE>
<CAPTION>
30-Year
Treasury
Yields (%)
----------
<S> <C>
01/01/1999 5.09
01/08/1999 5.27
01/15/1999 5.11
01/22/1999 5.08
01/29/1999 5.09
02/05/1999 5.35
02/12/1999 5.42
02/19/1999 5.39
02/26/1999 5.57
03/05/1999 5.59
03/12/1999 5.52
03/19/1999 5.56
03/26/1999 5.59
04/02/1999 5.59
04/09/1999 5.46
04/16/1999 5.57
04/23/1999 5.60
04/30/1999 5.66
05/07/1999 5.81
05/14/1999 5.92
05/21/1999 5.75
05/28/1999 5.83
06/04/1999 5.96
06/11/1999 6.16
06/18/1999 5.97
06/25/1999 6.15
07/02/1999 6.00
07/09/1999 6.00
07/16/1999 5.88
07/23/1999 6.02
07/30/1999 6.10
08/06/1999 6.17
08/13/1999 6.10
08/20/1999 5.98
08/27/1999 5.98
09/03/1999 6.02
09/10/1999 6.04
09/17/1999 6.06
09/24/1999 5.97
10/01/1999 6.13
10/08/1999 6.19
10/15/1999 6.26
10/22/1999 6.35
10/29/1999 6.16
11/05/1999 6.06
11/12/1999 6.03
11/19/1999 6.16
11/26/1999 6.23
12/03/1999 6.25
12/10/1999 6.17
12/17/1999 6.37
12/23/1999 6.49
12/31/1999 6.48
</TABLE>
The Federal Reserve was active over the past six months. The Fed tightened
monetary policy again in August, and attacked the tight labor market in November
by increasing interest rates for a third time in 1999. However, Y2K concerns
prompted the Fed to flood the system with liquidity at year's end, increasing
the likelihood that further tightening will be necessary early next year.
Bond prices fell in many sectors of the market as interest rates continued to
rise. The benchmark 30-year Treasury yield rose to a 27-month high at 6.49%,
while the Lehman Brothers Aggregate Bond Index had its worst performance since
1994.
A notable exception to the overall poor performance of the market was
convertible bonds, which benefited from the spectacular rise in technology
stocks. Emerging market bonds also performed relatively well as the global
recovery supported this sector. Not surprisingly, inflation-indexed bonds were
aided by the expectation of higher inflation.
Looking ahead, the key to bonds next year is a smooth resolution of the
unsustainable forces currently affecting the market place. We anticipate the
economy will moderate as higher borrowing costs begin to have an impact, pushing
stock market gains back toward long-term historical norms. In our view inflation
will increase over the short term, but remain stable overall. In this
environment, interest rates will likely remain range bound, making strategies
that enhance yield and limit credit risk attractive to bond investors.
4 PIMCO Funds
<PAGE>
Manager
Spotlight
PIMCO Innovation Fund
Dennis McKechnie
Dennis McKechnie is the portfolio manager of PIMCO Innovation Fund and a
managing director of PIMCO Equity Advisors. He has a degree in electrical
engineering and an MBA in finance--a unique blend of expertise that gives him a
distinct advantage in analyzing the technology sector. We talked to him recently
about the sector and the Innovation Fund.
Q: Technology has had a great run in the past two years. What would you say to
investors who are concerned that tech stocks are overvalued and this run-up will
end soon?
[PHOTO]
A: First, we should provide some context to the "great run" of the past two
years. Much of the recent run of technology began only fourteen months ago in
October 1998 with signs that the Asian economic crisis was subsiding. Technology
stocks began that period at very depressed levels, as they had been one of the
areas most negatively affected by the Asian economic meltdown.
Second, technology now has many separate and distinct sub-segments that give its
current fundamental strength additional staying power. All of the eggs are not
in one basket, so to speak. For instance, we are in the early stages of a
semiconductor pricing cycle at the same time the Internet is uncovering the
power of business-to-business marketplaces.
And finally, with regard to valuations, we are believers that the "New Economy"
does change the game. Technology is central. The demand for effective
information and solutions by non-technology companies is nearly frantic because
the penalty for being late or wrong is so severe. This demand is creating an
enormous pull for technology companies that makes their ability to do better
than expected more predictable. Greater predictability has historically driven
higher valuations.
Q: Could you name a few specific stocks that contributed to PIMCO Innovation
Fund's strong performance this year?
A: Qualcomm was a great performer for the Fund. It benefited from a move towards
a more royalty-based business model. Perhaps more importantly, overall cell
phone demand was well above estimates and steps were taken by the industry to
convert to Qualcomm's Code Division Multiple Access (CDMA) digital technology
standard in the future.
Another stellar performer for the Fund was i2Technologies. This company makes
software that coordinates supply chains for manufacturers, which Fortune 500
companies have identified as a key building block for their migration to
e-commerce.
Q: What lasting effect, if any, has Y2K left on the technology sector?
A: Y2K has had a very positive effect on the technology sector. It has drawn
technology decisions up to the highest levels within corporations. This
increased importance has made it a higher priority, which should lead to higher
spending levels in the future. A side effect of the event is that many companies
are moving to outsource their technology to expert companies off-site. This
creates an excited buyer with large budgets and the most advanced systems,
raising the bar for any other companies that want to stay in the game.
Q: Which areas of technology do you believe offer the most growth potential in
2000?
A: There are a number of them. Wireless Internet, broadband data to the home,
business-to-business Internet, higher performance fiber optic components, and
the semiconductor sector are just a few. If I had to pick one, it would be the
evolution of the wireless Internet. Over the next few years, e-mail and Web
sites will likely become accessible through the phone. Screens will be larger,
coverage will be denser, and offerings will become more complex. We are filling
the Fund with beneficiaries of this trend as they gain traction. There will be
lots of new software for applications, operating systems, performance monitoring
and more. We are doing lots of work in this area.
Q: What is your outlook for the technology sector?
A: We believe that the future for technology is quite bright. We are constantly
uncovering new companies with tremendous opportunity. It is our feeling that
most of the sub-segments of technology are in the early stages of multi-year
growth cycles. Technology will continue to take over larger percentages of the
overall economy.
Past performance is no guarantee of future results. The views of Mr. McKechnie
are not indicative of the future performance of any PIMCO Fund. Concentration of
the Fund's assets in one or a few sectors may entail greater risk than a fully
diversified stock fund and should be considered as only part of a diversified
portfolio. The Fund may also invest in foreign securities which may entail
greater risk due to foreign economic and political developments. Please refer to
page 13 for more complete performance information on the Innovation Fund.
Semi-Annual Report 5
<PAGE>
PIMCO Funds Financial Information
We are pleased to present an in-depth review of the PIMCO Multi-Manager Series
Funds as of December 31, 1999. 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 7-27 Fund Summaries
A summary of a Fund's performance record and portfolio composition, and a review
from the Fund's investment manager.
Pages 48-79 Schedule of Investments
The Schedule of Investments includes a listing of securities in the Fund's
portfolio as of June 30, 1999, including the number of shares or principal
amount and value as of that date.
Schedule of
Fund Name Fund Summary Investments
Renaissance Fund Page 7 Page 48
Growth Fund Page 8 Page 49
Core Equity Fund Page 9 Page 50
Target Fund Page 10 Page 51
Mid-Cap Equity Fund Page 11 Page 52
Opportunity Fund Page 12 Page 53
Innovation Fund Page 13 Page 54
International Growth Fund Page 14 Page 55
Mega-Cap Fund Page 15 Page 56
Capital Appreciation Fund Page 16 Page 57
Mid-Cap Growth Fund Page 17 Page 58
Small-Cap Growth Fund Page 18 Page 59
Micro-Cap Growth Fund Page 19 Page 60
Equity Income Fund Page 20 Page 61
Value Fund Page 21 Page 62
Small-Cap Value Fund Page 22 Page 63
Enhanced Equity Fund Page 23 Page 64
Tax-Efficient Equity Fund Page 24 Page 66
Structured Emerging Markets Fund Page 25 Page 69
Tax-Efficient Structured Emerging Markets Fund Page 26 Page 73
International Fund Page 27 Page 77
Pages 28-35 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 36-38 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 39-41 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 42-47 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 80-87 Notes to Financial Statements
A description of the significant accounting policies of the Funds, and more
detailed information about the schedules and tables that appear in the report.
6 PIMCO Funds
<PAGE>
December 31, 1999 PIMCO Renaissance Fund
OBJECTIVE
Long-term growth of capital and income
PORTFOLIO
Primarily common stocks of companies with below-average valuations that have
improving business fundamentals
TOTAL NET ASSETS
$546.0 million
NUMBER OF SECURITIES IN THE PORTFOLIO
63 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
Inst'l Class Admin. Class Russell 1000 S&P 500 Lipper Multi-Cap
(INCEP. 12/30/97) (INCEP. 8/31/98) Value Index Index Value Fund Avg.
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
6 month -1.46% -1.28% -4.90% 7.71% -2.65%
1 year 9.80% 9.77% 7.34% 21.04% 7.78%
Inception 11.26% 24.99% -- -- --
</TABLE>
Change in Value
$5,000,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO
Renaissance Russell
Month Fund 1000 Value Index S&P 500 Index
===== =========== ================ =============
<S> <C> <C> <C>
12/31/1997 5,000,000 5,000,000 5,000,001
01/31/1998 5,005,928 4,929,500 5,055,301
02/28/1998 5,388,263 5,261,255 5,419,889
03/31/1998 5,595,732 5,583,244 5,697,442
04/30/1998 5,723,177 5,620,596 5,754,758
05/31/1998 5,604,624 5,537,411 5,655,834
06/30/1998 5,652,045 5,608,401 5,885,574
07/31/1998 5,536,455 5,509,693 5,822,892
08/31/1998 4,555,424 4,689,851 4,981,019
09/30/1998 4,718,435 4,959,048 5,300,103
10/31/1998 4,922,940 5,343,374 5,731,213
11/30/1998 5,234,143 5,592,376 6,078,582
12/31/1998 5,591,637 5,782,516 6,428,830
01/31/1999 5,947,095 5,828,777 6,697,683
02/28/1999 5,659,994 5,746,591 6,489,520
03/31/1999 5,912,917 5,865,545 6,749,165
04/30/1999 6,217,107 6,413,387 7,010,560
05/31/1999 6,032,542 6,342,840 6,845,041
06/30/1999 6,230,779 6,526,782 7,224,941
07/31/1999 6,261,539 6,335,547 6,999,378
08/31/1999 6,066,721 6,100,499 6,964,514
09/30/1999 5,612,144 5,886,981 6,773,828
10/31/1999 5,577,965 6,226,071 7,202,476
11/30/1999 5,779,620 6,177,508 7,348,902
12/31/1999 6,139,865 6,207,160 7,781,753
</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 S&P 500 Index and the
Russell 1000 Value Index, 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 8/31/98.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Aetna, Inc. 4.6%
Insurance
- --------------------------------------------------------------------------------
Arrow Electronics, Inc. 4.5%
Electronics
- --------------------------------------------------------------------------------
Foundation Health Systems, Inc. 'A' 4.2%
Insurance (HMO)
- --------------------------------------------------------------------------------
Asia Pulp & Paper Co. Ltd. SP-ADR 3.7%
Paper products
- --------------------------------------------------------------------------------
Valero Energy Corp. 3.7%
Petroleum refining
- --------------------------------------------------------------------------------
Ace Ltd. 3.6%
Insurance
- --------------------------------------------------------------------------------
Tenet Healthcare Corp. 3.6%
Heath care services
- --------------------------------------------------------------------------------
Micron Technology, Inc. 3.5%
Semiconductors
- --------------------------------------------------------------------------------
Suiza Foods Corp. 3.5%
Wholesale
- --------------------------------------------------------------------------------
Nabors Industries, Inc. 3.4%
Oil & gas extraction
- --------------------------------------------------------------------------------
Top Ten Total 38.3%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Financial & Business 18.2%
Services
- --------------------------------------------------------------------------------
Materials & Processing 16.0%
- --------------------------------------------------------------------------------
Energy 14.5%
- --------------------------------------------------------------------------------
Technology 11.8%
- --------------------------------------------------------------------------------
Consumer Staples 8.7%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 97.4%
- --------------------------------------------------------------------------------
Convertible Bonds & Notes 0.4%
- --------------------------------------------------------------------------------
Cash Equivalents 2.2%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-month period ended December 31, 1999, PIMCO Renaissance Fund posted
a return of -1.46% for its Institutional Class shares.
The second half of 1999 proved to be a difficult time for value investing.
High valuation growth stocks, particularly in the technology sector,
dominated the market. As a result, lower valuation issues were virtually ignored
by investors.
The Fund's performance was hurt by its exposure to the health care sector.
In particular, the HMO industry was punished by investors in the third quarter,
despite exceeding its earnings expectations. The area was unpopular with
investors because of external problems, such as class action lawsuits against
HMOs and federal attempts at HMO legislation, which received much attention from
the press. However, the outlook remains positive for this industry, as its
fundamentals remain strong and sentiment towards it is changing.
The greatest contributor to the Fund's performance during this period was
the technology sector. A continuation of the global economic recovery in the
second half of 1999 fueled demand for semiconductors and other technological
commodities. The semi-conductor industry, in particular, achieved some pricing
power after several years of extreme pricing pressure. Micron Technology, a
semiconductor company and one of the top ten holdings in the Fund, experienced
revenue growth as a result of increased demand for its DRAM chips--as well as
greater pricing power.
Arrow Electronics, the second largest holding in the Fund, was a standout
performer. The company, the world's largest distributor of electronic components
and computer products to industrial and commercial customers, benefited from the
global economic recovery, which boosted demand for its products. The company's
global distribution network spans the world's three dominant electronics
markets--North America, Europe and the Asia/Pacific region--and it is poised to
continue its growth given the strong global economy.
The manager is optimistic about the Fund's outlook, as he believes stock
prices will ultimately reflect their fundamentals. In addition, he believes the
current environment of rising interest rates should bode well for value stocks
in general and PIMCO Renaissance Fund in particular.
Semi-Annual Report 7
<PAGE>
December 31, 1999 PIMCO Growth Fund
OBJECTIVE
Long-term growth of capital; income is incidental
PORTFOLIO
Primarily common stocks of larger, well established companies
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 12/31/99
<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>
6 month 30.14% 29.95% 7.71% 22.22%
Inception 30.01% 29.79% -- --
</TABLE>
Change in Value
$5,000,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO
Growth S&P 500
Month Fund Index
============== =============== ===============
<S> <C> <C>
03/31/1999 5,000,000 5,000,000
04/30/1999 4,876,879 5,193,650
05/31/1999 4,624,240 5,071,028
06/30/1999 4,995,203 5,352,470
07/31/1999 4,785,737 5,185,366
08/31/1999 4,798,529 5,159,538
09/30/1999 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
</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
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Nokia Corp. SP- ADR 6.6%
Telecommunications
- --------------------------------------------------------------------------------
EMC Corp. 5.7%
Hardware & software products
- --------------------------------------------------------------------------------
Cisco Systems, Inc. 5.6%
Internet networking
- --------------------------------------------------------------------------------
Home Depot, Inc. 4.4%
Retail
- --------------------------------------------------------------------------------
Microsoft Corp. 4.0%
Computer svcs.
- --------------------------------------------------------------------------------
Morgan Stanley, Dean Witter, Discover and Co. 3.7%
Financial svcs.
- --------------------------------------------------------------------------------
Qualcomm, Inc. 3.7%
Wireless communication
- --------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 3.6%
Retail
- --------------------------------------------------------------------------------
Omnicom Group 3.5%
Advertising svcs.
- --------------------------------------------------------------------------------
Citigroup, Inc. 3.4%
Financial svcs.
- --------------------------------------------------------------------------------
Top Ten Total 44.2%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Technology 38.7%
- --------------------------------------------------------------------------------
Communications 17.1%
- --------------------------------------------------------------------------------
Financial & Business Services 16.7%
- --------------------------------------------------------------------------------
Consumer Discretionary 12.8%
- --------------------------------------------------------------------------------
Health Care 7.3%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 98.4%
- --------------------------------------------------------------------------------
Cash Equivalents 1.6%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six months ended December 31, 1999, PIMCO Growth Fund Institutional
Class shares returned 30.14%. These results handily outperformed the S&P 500
Index's return of 7.71% and the Lipper Large-Cap Growth Fund Average return of
22.22%.
Technology was the best performing sector for the Fund during this period.
The sector benefited from an increase in corporate spending, as companies
recognized technology's ability to boost profit margins. Technology, an
important part of the "New Economy," led the market in the second half of 1999,
as it offered investors the greatest earnings growth potential of any sector.
Nokia, the Finnish cell phone equipment maker, was a standout within technology.
The company saw its stock price rise during this period as a result of increased
demand for cell phone handsets, which resulted from new subscription growth as
well as shorter upgrade cycles for current subscribers.
Another standout performer for the Fund was EMC, the data storage company.
Corporate demand for data storage continued to grow at a fast clip in the
second half of the year. With an approximately 85% market share in this area,
EMC is the greatest beneficiary of this trend. As the capabilities of computers
and networks continue to increase, the need for data storage will grow even
further.
The retail sector also positively contributed to the Fund's performance.
Home Depot and Wal-Mart, both leaders in their market category, benefited from a
strong domestic economy that fueled an increase in retail sales.
The Fund was also helped by its exposure to the financial services sector,
despite the rising interest rate environment. Fund holding Morgan Stanley Dean
Witter 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 period was the pharmaceutical
industry. These companies suffered from a thinning product pipeline and an
unfavorable political environment. They were punished by investors, who were
displeased with the sector's slowing growth in the face of rising interest
rates.
Looking ahead, the manager remains cautiously optimistic about the market's
prospects. He expects a slowdown in the market's acceleration in the near term,
but believes that the current environment continues to favor growth
stocks--which should benefit PIMCO Growth Fund.
8 PIMCO Funds
<PAGE>
December 31, 1999 PIMCO Core Equity Fund
OBJECTIVE
Long-term growth of capital, with income as a secondary objective
PORTFOLIO
Common stocks of companies with market capitalizations in excess of $10 billion
TOTAL NET ASSETS
$1.5 million
NUMBER OF SECURITIES IN THE PORTFOLIO
40 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<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>
6 month 8.87% 8.50% 7.71% 22.22%
1 year 24.27% 23.75% 21.04% 38.01%
3 years 29.99% 29.50% 27.56% 33.44%
Inception 27.05% 25.62% -- --
</TABLE>
Change in Value
$5,000,000 invested at the Fund's inception
[GRAPH]
PIMCO
Core Equity S&P 500
Month Fund Index
================== ============= =============
12/31/1994 5,000,000 5,000,000
01/31/1995 5,034,965 5,129,650
02/28/1995 5,189,810 5,329,552
03/31/1995 5,339,660 5,486,828
04/30/1995 5,545,390 5,648,415
05/31/1995 5,735,746 5,874,182
06/30/1995 5,921,094 6,010,639
07/31/1995 6,181,582 6,209,952
08/31/1995 6,246,704 6,225,539
09/30/1995 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
01/31/1996 6,644,715 7,113,052
02/29/1996 6,799,004 7,178,990
03/31/1996 6,772,780 7,248,124
04/30/1996 6,875,788 7,354,962
05/31/1996 7,107,556 7,544,646
06/30/1996 6,987,958 7,573,391
07/31/1996 6,513,499 7,238,799
08/31/1996 6,761,043 7,391,465
09/30/1996 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
01/31/1997 7,917,776 8,986,757
02/28/1997 7,731,989 9,057,213
03/31/1997 7,327,631 8,685,052
04/30/1997 7,628,168 9,203,550
05/31/1997 8,245,634 9,763,862
06/30/1997 8,496,992 10,201,283
07/31/1997 9,327,566 11,012,999
08/31/1997 8,748,350 10,396,051
09/30/1997 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
01/31/1998 9,675,240 11,405,006
02/28/1998 10,425,854 12,227,535
03/31/1998 11,129,186 12,853,707
04/30/1998 11,353,779 12,983,015
05/31/1998 11,206,020 12,759,837
06/30/1998 12,051,200 13,278,142
07/31/1998 11,867,979 13,136,729
08/31/1998 9,840,730 11,237,421
09/30/1998 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
01/31/1999 14,552,263 15,110,301
02/28/1999 13,903,046 14,640,673
03/31/1999 14,717,630 15,226,446
04/30/1999 14,711,505 15,816,166
05/31/1999 14,099,036 15,442,747
06/30/1999 15,225,979 16,299,819
07/31/1999 14,968,742 15,790,939
08/31/1999 14,901,371 15,712,284
09/30/1999 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
*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 500 Index, an
unmanaged market index.
The performance of the Administrative Class (shown above) reflects the payment
of a service fee in an amount not to exceed 0.25% on an annualized basis. The
Administrative Class commenced operations on 5/31/95.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Cisco Systems, Inc. 5.2%
Internet networking
- --------------------------------------------------------------------------------
Nokia Corp. SP - ADR 4.9%
Electronic equip.
- --------------------------------------------------------------------------------
EMC Corp. 4.5%
- --------------------------------------------------------------------------------
Hardware & software products
- --------------------------------------------------------------------------------
Matsushita Electric Industrial Co. 4.4%
Ltd. SP - ADR
Electronic equip.
- --------------------------------------------------------------------------------
Columbia/HCA Healthcare 3.8%
Hospital & healthcare related holding co.
- --------------------------------------------------------------------------------
Aetna, Inc. 3.7%
Health plans & financial services
- --------------------------------------------------------------------------------
Micron Technology, Inc. 3.4%
Semiconductors
- --------------------------------------------------------------------------------
Deere & Co. 3.3%
Construction & agricultural
equip. producer
- --------------------------------------------------------------------------------
Home Depot, Inc. 3.1%
Retail
- --------------------------------------------------------------------------------
Morgan Stanley, Dean 3.0%
Witter, Discover and Co.
Financial svcs.
- --------------------------------------------------------------------------------
Top Ten Total 39.3%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Technology 25.1%
- --------------------------------------------------------------------------------
Financial & Business Services 18.3%
- --------------------------------------------------------------------------------
Consumer Discretionary 10.1%
- --------------------------------------------------------------------------------
Communications 8.6%
- --------------------------------------------------------------------------------
Energy 7.0%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 93.8%
- --------------------------------------------------------------------------------
Cash equivalents 6.2%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-month period ended December 31, 1999, PIMCO Core Equity Fund
Institutional Class shares posted a return of 8.87%.
The Fund invests in approximately 40 common stocks, of which approximately
50% are selected using a "growth" investment style and of which approximately
50% are selected using a "value" investment style.
The technology sectors was, not surprisingly, the greatest contributor to
the Fund's performance. In particular, Cisco Systems, the Fund's largest
holding, was a standout performer during this period. Cisco benefited from its
position as the leading provider of networking for the Internet, as Internet use
continued to grow during this period. In addition, the company's stock price
received a boost from its announced acquisition of the fifth largest supplier of
dense wavelength division multiplexing (DWDM) products, increasing its presence
in the growing area of fiber optical networks.
Another standout for the Fund in the technology sector was Nokia, the
Finnish cell phone handset purchases, which was accelerated by the advent of
affordable `one rate' plans as well as shorter cell phone upgrade cycles. The
outlook continues to be positive for the company, as market penetration in
developing countries has only just begun.
The retail sector, aided by the strong domestic economy, also positively
contributed to the Fund's performance during this period. In particular, Home
Depot experienced a rise in its stock price as a result of the current house
purchasing and home renovation boom.
One disappointment for the Fund was Aetna. The company, along with much of
the HMO industry, was punished by investors in the third quarter despite
exceeding its earnings expectations. Aetna proved unpopular because of external
problems, such as class action lawsuits against it and federal attempts at HMO
legislation, which received much attention from the press. However, the outlook
remains positive for Aetna and this industry, as its fundamentals remain strong
and sentiment towards it appears to be changing.
Looking ahead, the manager is optimistic that, because of the Fund's
exposure to both growth and value stocks, the portfolio is well positioned for a
variety of market environments.
Semi-Annual Report 9
<PAGE>
December 31, 1999 PIMCO Target Fund
OBJECTIVE
Capital appreciation; no consideration given to income
PORTFOLIO
Primarily common stocks of companies with medium-sized capitalizations
TOTAL NET ASSETS
$1.7 billion
NUMBER OF SECURITIES IN THE PORTFOLIO
59 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
Inst'l Class Admin. Class S&P Mid-Cap Lipper Mid-Cap
(INCEP. 3/31/99) (INCEP. 3/31/99) 400 Index Core Fund Average
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6 month 51.15% 51.12% 7.36% 26.47%
Inception 64.10% 63.98% -- --
</TABLE>
Change in Value
$5,000,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO S&P
Target Mid-Cap
Month Fund 400 Index
========== ========= =========
<S> <C> <C>
03/31/1999 5,000,000 5,000,000
04/30/1999 5,143,819 5,394,000
05/31/1999 5,003,060 5,417,734
06/30/1999 5,428,397 5,707,041
07/31/1999 5,345,777 5,586,051
08/31/1999 5,431,457 5,395,008
09/30/1999 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
</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
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Comverse Technology, Inc. 4.7%
Telecomm. & software
- --------------------------------------------------------------------------------
JDS Uniphase Corp. 4.6%
Fiber optics & lasers
- --------------------------------------------------------------------------------
Citrix Systems, Inc. 3.3%
Software
- --------------------------------------------------------------------------------
SDL, Inc. 3.2%
Semiconductors & fiber optics
- --------------------------------------------------------------------------------
Sierra Semiconductor Corp. 3.1%
Semiconductors
- --------------------------------------------------------------------------------
Gemstar International Group Ltd. 2.8%
Electronics
- --------------------------------------------------------------------------------
Medimmune, Inc. 2.7%
Healthcare co.
- --------------------------------------------------------------------------------
Echostar Communications Corp. 2.6%
Satellites & electronics
- --------------------------------------------------------------------------------
Jabil Circuit, Inc. 2.6%
Industrial & commercial mach.
- --------------------------------------------------------------------------------
CMGI, Inc. 2.5%
Internet & direct marketing
- --------------------------------------------------------------------------------
Top Ten Total 32.1%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Technology 57.7%
- --------------------------------------------------------------------------------
Health Care 11.0%
- --------------------------------------------------------------------------------
Consumer Discretionary 9.3%
- --------------------------------------------------------------------------------
Communications 7.4%
- --------------------------------------------------------------------------------
Financial & Business Services 4.2%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 96.8%
- --------------------------------------------------------------------------------
Cash Equivalents 3.2%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-month period ended December 31, 1999, PIMCO Target Fund turned in a
strong performance, returning 51.15% for Institutional Class shares. The Fund
handily outperformed the S&P Mid-Cap 400 Index, which returned 7.36%, as well as
its Lipper Mid-Cap Core Fund Average, which returned 26.47%.
The Fund greatly benefited from its exposure to the technology sector,
which performed extremely well during this period. In particular,
telecommunications performed well due to the explosive growth in need for data
and voice transmissions. JDS Uniphase, a maker of fiber optic components for
telecom networks, benefited from this trend. The company is the largest
independent fiber optic component supplier to large telecom equipment providers
such as Nortel and Lucent, and it experienced a large increase in demand for
telecom components as a result of the rapid build-out of telecom networks.
Another holding that benefited from the growth in telecom needs was
Comverse Technology, the 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 voicemail for cell phones. An increase in cell
phone subscriptions as well as a shortening of cell phone handset upgrade cycles
were also key to Comverse's growth.
The Fund's exposure to biotechnology also enhanced its performance.
Medimmune, a company that develops and markets products for the prevention and
treatment of infectious diseases as well as for the prevention of organ
transplant rejections, showed strength during this period. The company saw its
revenue grow more than 50% in 1999 due to its strong product offerings. Its most
important drug, Synagis, is used for the treatment of respiratory problems in
premature infants. The market opportunity for the drug is tremendous as it
addresses an area of healthcare that is both sensitive and growing.
One disappointment for the Fund during this period was Minimed, the leading
maker of insulin pumps and glucose monitors. The company's stock price suffered
as a result of a recall of its pumps due to software problems. The company has
successfully resolved the situation and we are confident that its fundamentals
will remain strong.
Looking ahead, the Fund manager is optimistic that the market will favor
medium-capitalization issues with greater growth potential, which should bode
well for PIMCO Target Fund. The manager is hopeful that by employing its strong
research capabilities, it can continue to find quality companies with
sustainable and predictable earnings growth, which will enable the Fund to
continue to produce superior relative returns over the long term.
10 PIMCO Funds
<PAGE>
December 31, 1999
PIMCO Mid-Cap Equity Fund
OBJECTIVE
Long-term growth of capital
PORTFOLIO
Common stocks of companies with market capitalizations between $1 billion and
$10 billion
TOTAL NET ASSETS
$5.5 million
NUMBER OF SECURITIES IN THE PORTFOLIO
39 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
Inst'l Class S&P Mid-Cap Lipper Mid-Cap
(INCEP. 12/28/94) 400 Index Core Fund Average
- --------------------------------------------------------------------------------
6 month 33.22% 7.36% 26.47%
1 year 51.81% 14.73% 38.29%
3 years 31.84% 21.81% 21.71%
Inception 28.70% -- --
Change in Value
$5,000,000 invested at the Fund's inception
[GRAPH]
<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
01/31/1995 4,910,000 5,052,050
02/28/1995 5,190,000 5,317,126
03/31/1995 5,370,000 5,409,394
04/30/1995 5,445,000 5,517,999
05/31/1995 5,435,000 5,651,109
06/30/1995 5,850,000 5,881,160
07/31/1995 6,205,000 6,187,969
08/31/1995 6,205,000 6,302,409
09/30/1995 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
01/31/1996 6,539,441 6,642,416
02/29/1996 6,750,557 6,868,179
03/31/1996 7,002,866 6,950,487
04/30/1996 7,389,054 7,162,762
05/31/1996 7,734,048 7,259,631
06/30/1996 7,548,678 7,150,700
07/31/1996 6,704,215 6,666,927
08/31/1996 7,100,701 7,051,429
09/30/1996 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
01/31/1997 7,914,427 8,097,657
02/28/1997 7,578,521 8,031,095
03/31/1997 7,266,187 7,688,729
04/30/1997 7,454,766 7,887,944
05/31/1997 8,073,541 8,577,666
06/30/1997 8,273,906 8,818,698
07/31/1997 8,957,505 9,691,838
08/31/1997 9,122,512 9,680,208
09/30/1997 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
01/31/1998 8,811,246 10,125,849
02/28/1998 9,568,774 10,964,269
03/31/1998 10,055,187 11,458,757
04/30/1998 10,414,016 11,668,453
05/31/1998 10,015,317 11,143,372
06/30/1998 10,788,793 11,213,575
07/31/1998 10,485,782 10,778,489
08/31/1998 8,731,506 8,772,612
09/30/1998 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
01/31/1999 12,056,796 11,816,811
02/28/1999 11,268,112 11,197,610
03/31/1999 12,115,528 11,511,143
04/30/1999 12,753,187 12,418,221
05/31/1999 12,434,358 12,472,861
06/30/1999 13,290,164 13,138,912
07/31/1999 13,105,578 12,860,367
08/31/1999 13,223,041 12,420,542
09/30/1999 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
</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
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
JDS Uniphase Corp. 4.7%
Fiber optics & lasers
- --------------------------------------------------------------------------------
Comverse Technology, Inc. 4.5%
Telecomm. & software
- --------------------------------------------------------------------------------
Nabors Industries, Inc. 4.4%
Oil & gas extraction
- --------------------------------------------------------------------------------
Foundation Health Systems, Inc. 'A' 4.1%
Managed health care co.
- --------------------------------------------------------------------------------
Gemstar International Group Ltd. 3.5%
Business solutions
- --------------------------------------------------------------------------------
Arrow Electronics, Inc. 3.4%
Electronics
- --------------------------------------------------------------------------------
Asia Pulp & Paper Co. Ltd. SP-ADR 3.4%
Paper products
- --------------------------------------------------------------------------------
Jabil Circuit, Inc. 3.4%
Electronics & circuits
- --------------------------------------------------------------------------------
Ispat International NV 3.3%
Steel products mfr.
- --------------------------------------------------------------------------------
Valero Energy Corp. 3.3%
Petroleum refining
- --------------------------------------------------------------------------------
Top Ten Total 38.0%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Technology 30.3%
- --------------------------------------------------------------------------------
Health Care 14.8%
- --------------------------------------------------------------------------------
Materials & Processing 12.5%
- --------------------------------------------------------------------------------
Energy 12.1%
- --------------------------------------------------------------------------------
Communications 7.7%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 97.5%
- --------------------------------------------------------------------------------
Cash Equivalents 2.5%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO Mid-Cap Equity Fund Institutional Class shares returned 33.22% for the
six-month period ended December 31, 1999, handily outperforming the S&P Mid-Cap
400 Index return of 7.36% as well as its Lipper Mid-Cap Core Fund Average return
of 26.47%.
The Fund invests in approximately 40 common stocks, of which approximately
50% are selected using a "growth" investment style and of which approximately
50% are selected using a "value" investment style.
The Fund's exposure to technology was the greatest contributor to its
performance. In particular, JDS Uniphase, the largest holding in the Fund,
experienced strong price appreciation during this period. The company is the
largest independent fiber optic component supplier to large telecom equipment
providers such as Nortel and Lucent, and it experienced a large increase in
demand for telecom components as a result of the rapid build-out of telecom
networks.
Another holding that benefited from the growth in telecom needs was
Comverse Technology. It is the leading provider of voicemail systems to digital
wireless carriers and derives approximately 65% of its business from providing
voicemail for cell phones. An increase in cell phone subscriptions as well as a
shortening of cell phone handset upgrade cycles were also key to Comverse's
growth.
Another standout for the Fund during this period was Gemstar, a specialty
entertainment company that develops, markets and licenses proprietary
technologies and systems such as an interactive television programming guide.
Investors were attracted to this company because of its unique product, which
should enable viewers to surf through and locate television programs more
effectively. The company's outlook remains positive, especially as the
proliferation of cable TV and satellite dishes has resulted in more channels
through which viewers must navigate.
The Fund's performance was hurt by its exposure to the health care sector.
In particular, the HMO industry was punished by investors in the third quarter,
despite exceeding its earnings expectations. The area was unpopular because of
external problems, such as class action lawsuits against HMOs and federal
attempts at HMO legislation, which received much attention from the press.
However, the outlook remains positive for this industry, as its fundamentals
remain strong and sentiment towards it is changing.
Looking ahead, the manager believes that the Fund's exposure to both value
and growth sectors should help to reduce volatility in down markets. The manager
is optimistic that, given the current market environment, the Fund is poised to
continue its strong performance.
Semi-Annual Report 11
<PAGE>
December 31, 1999 PIMCO Opportunity Fund
OBJECTIVE
Capital appreciation; no consideration given to income
PORTFOLIO
Primarily common stocks of small-capitalization companies
TOTAL NET ASSETS
$584.4 million
NUMBER OF SECURITIES IN THE PORTFOLIO
98 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
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>
6 month 46.90% 46.69% 10.95% 44.10%
Inception 66.53% 66.29% -- --
</TABLE>
Change in Value
$5,000,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO
Opportunity Russell 2000
Month Fund Index
========== =========== ============
<S> <C> <C>
03/31/1999 5,000,000 5,000,000
04/30/1999 5,338,785 5,448,000
05/31/1999 5,268,692 5,527,541
06/30/1999 5,668,224 5,777,386
07/31/1999 5,703,271 5,619,085
08/31/1999 5,593,458 5,411,179
09/30/1999 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
</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
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Medicis Pharmaceutical 'A' 2.6%
Pharmaceutical co
- --------------------------------------------------------------------------------
Protein Design Labs, Inc. 1.7%
Genetic engineering
- --------------------------------------------------------------------------------
Rare Medium Group, Inc. 1.7%
Business solutions
- --------------------------------------------------------------------------------
Reckson Service Industries, Inc. 1.7%
Business to business
- --------------------------------------------------------------------------------
WinStar Communications, Inc. 1.6%
Communications
- --------------------------------------------------------------------------------
Xircom, Inc. 1.6%
Mobile communications
- --------------------------------------------------------------------------------
ImageX.com, Inc. 1.5%
Business solutions
- --------------------------------------------------------------------------------
Visual Networks, Inc. 1.5%
Computer software
- --------------------------------------------------------------------------------
Intraware, Inc. 1.5%
Business solutions
- --------------------------------------------------------------------------------
Pinnacle Holdings, Inc. 1.5%
Wireless communications
- --------------------------------------------------------------------------------
Top Ten Total 16.9%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Technology 34.9%
- --------------------------------------------------------------------------------
Health Care 16.4%
- --------------------------------------------------------------------------------
Communications 12.1%
- --------------------------------------------------------------------------------
Financial & Business Services 10.1%
- --------------------------------------------------------------------------------
Consumer Discretionary 7.6%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 95.2%
- --------------------------------------------------------------------------------
Cash Equivalents 4.8%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO Opportunity Fund experienced strong returns for the six-month period ended
December 31, 1999. The Fund's Institutional Class shares returned 46.90%,
greatly outperforming the Russell 2000 Index, which returned 10.95% for the
same period.
The technology sector was the greatest contributor to the Fund's
performance during this period. Technology proved extremely attractive to
investors because of high earnings growth, despite rising interest rates. A
variety of areas within technology showed tremendous strength, including
software, Internet and information technology consulting companies. For
instance, Visual Networks, a top ten holding in the PIMCO Opportunity Fund and
the maker of network management software, benefited from an increase in
corporate need for networking solutions.
The biotechnology sector also enhanced the Fund's performance during this
period. Investors showed renewed interest in this area because of its exciting
product offerings. For instance, Protein Design Labs, the second largest holding
in the Fund, benefited from its strong product pipeline. This specialized
biotech company uses genetic engineering and computer modeling to develop
humanized monoclonal antibodies and other potential drugs to prevent or treat
diseases such as viral infections, autoimmune diseases and certain cancers.
Protein Design Labs experienced an increase in its prescription drug sales
during this six-month period.
One stock that was a standout performer for the Fund this period was True
North Communications. The company, the sixth-largest advertising agency in the
world, benefited from the booming domestic economy, which has caused an increase
in corporate advertising expenditures. True North also benefited from the
increase in Internet advertising, as it owns a significant share of an Internet
advertising agency.
A disappointment for the Fund this period was Furniture Brands, a furniture
manufacturer. The company showed strong revenue growth and exceeded earnings
expectations, but saw its stock price suffer in an environment of rising
interest rates and investor disinterest for small-cap consumer stocks.
Looking ahead, the manager believes small-capitalization stocks will
continue the outperformance they began in the second half of 1999, as their
strong growth potential should remain attractive to investors. The manager
believes the global economy should strengthen in the coming year, while the
domestic economy should slow, and is optimistic that the Fund is well positioned
to benefit from this climate.
12 PIMCO Funds
<PAGE>
December 31, 1999 PIMCO Innovation Fund
OBJECTIVE
Capital appreciation; no consideration given to income
PORTFOLIO
Primarily technology-related stocks of companies of all sizes
TOTAL NET ASSETS
$3.5 billion
NUMBER OF SECURITIES IN THE PORTFOLIO
54 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
Inst'l Class S&P 500 Lipper Science & Tech.
(INCEP. 3/5/99) Index Fund Average
- --------------------------------------------------------------------------------
6 month 94.83% 7.71% 73.24%
Inception 123.22% -- --
Change in Value
$5,000,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO
Innovation S&P 500
Month Fund Index
================== ============= ============
<S> <C> <C>
03/31/1999 5,000,000 5,000,000
04/30/1999 4,939,306 5,193,650
05/31/1999 4,819,364 5,071,028
06/30/1999 5,419,075 5,352,470
07/31/1999 5,369,942 5,185,366
08/31/1999 5,783,237 5,159,538
09/30/1999 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
</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
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Qualcomm, Inc. 4.1%
Wireless communication
- --------------------------------------------------------------------------------
Oracle Corp. 3.9%
Software products
- --------------------------------------------------------------------------------
i2 Technologies, Inc. 3.8%
Software solutions
- --------------------------------------------------------------------------------
Doubleclick, Inc. 3.2%
Internet advertising
- --------------------------------------------------------------------------------
Ariba, Inc. 3.2%
Business to business
- --------------------------------------------------------------------------------
Cisco Systems, Inc. 2.9%
Internet networking
- --------------------------------------------------------------------------------
Gemstar International Group Ltd. 2.6%
Business solutions
- --------------------------------------------------------------------------------
Vignette Corp. 2.5%
Business svcs.
- --------------------------------------------------------------------------------
Siebel Systems, Inc. 2.5%
Business solutions
- --------------------------------------------------------------------------------
QLogic Corp. 2.5%
Semiconductors
- --------------------------------------------------------------------------------
Top Ten Total 31.2%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Technology 66.8%
- --------------------------------------------------------------------------------
Communications 7.9%
- --------------------------------------------------------------------------------
Financial & Business Services 6.5%
- --------------------------------------------------------------------------------
Health Care 6.4%
- --------------------------------------------------------------------------------
Consumer Discretionary 4.8%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 92.5%
- --------------------------------------------------------------------------------
Cash Equivalents 7.5%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO Innovation Fund turned in stellar results for the six-month period ended
December 31, 1999. The Fund's Institutional Class shares returned 94.83%,
handily outperforming the S&P 500 Index return of 7.71% for the same period.
Software was an area of strength for the Fund during this period. Having
completed their spending on Y2K preparedness, companies increased their
expenditures on other areas of information technology that had been neglected,
such as software. In particular, i2 Technologies, a maker of supply-chain
management software, benefited from this trend. Its software, which has
e-commerce applications, is used by companies such as Dell to manage the
ordering, production and shipping of products. The company has seen a rapid
increase in sales of its software and still has substantial growth potential, as
a large untapped market exists. For instance, only about 10% of Fortune 500
companies have Web sites on which business can actually be conducted. This
number is expected to reach nearly 100% in the next 18 months, which should
greatly benefit software companies such as i2.
Another strong area for the Fund was telecommunications, which has seen
tremendous growth recently. Nokia continued to benefit from the increase in
cell phone subscriptions stimulated by `one-rate' plans. In addition, Nokia
benefited from the many recent technological advances in cell phone handset
technology, which has shortened upgrade cycles for cell phones. The explosion in
telecommunications has also benefited companies such as JDS Uniphase, a maker of
fiber-optic components for telecom networks. The company saw its sales rise as a
result of burgeoning demand for faster and more efficient networks.
Although technology led the market during this period, some non-tech
innovators also experienced strong price appreciation. In particular,
biotechnology stocks enhanced the Fund's performance. These companies, which
were funded five to seven years ago, are now bringing exciting products to
market and are showing strong revenues. For instance, Fund holdings Medimmune
and IDEC Pharmaceuticals both benefited from better-than-expected prescription
trends for their key products. We believe this area continues to have growth
potential, as many biotech companies have strong product pipelines.
Looking ahead, the manager's outlook remains positive for technology, as he
believes it is still in the early stages of a multi-year growth cycle. The
market continues to see technology as the sector that will define the economy's
future, and this should bode well for PIMCO Innovation Fund.
Semi-Annual Report 13
<PAGE>
December 31, 1999 PIMCO International Growth Fund
OBJECTIVE
Long-term capital appreciation
PORTFOLIO
Common stocks of foreign (non U.S.) issuers
TOTAL NET ASSETS
$12.6 million
NUMBER OF SECURITIES IN THE PORTFOLIO
71 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
Inst'l Class MSCI Lipper International
(INCEP. 12/31/97) EAFE Index Fund Average
- --------------------------------------------------------------------------------
6 month 67.74% 22.29% 30.84%
1 year 109.71% 27.31% 40.81%
Inception 70.98% -- --
Change in Value
$5,000,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO
International MSCI
Growth EAFE
Month Fund Index
================== ============= =============
<S> <C> <C>
12/31/1997 5,000,000 5,000,000
01/31/1998 5,190,000 5,230,000
02/28/1998 5,595,000 5,566,812
03/31/1998 6,090,000 5,739,383
04/30/1998 6,385,000 5,785,872
05/31/1998 6,635,000 5,759,257
06/30/1998 6,775,000 5,804,179
07/31/1998 7,040,000 5,864,543
08/31/1998 5,940,000 5,139,099
09/30/1998 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
01/31/1999 7,529,624 6,000,514
02/28/1999 7,317,751 5,858,902
03/31/1999 7,801,255 6,104,976
04/30/1999 8,393,412 6,353,448
05/31/1999 8,051,156 6,027,516
06/30/1999 8,713,937 6,263,795
07/31/1999 9,208,306 6,451,709
08/31/1999 9,555,995 6,476,870
09/30/1999 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
</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
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Japan/Softbank Corp. 6.1%
- --------------------------------------------------------------------------------
Japan/Murata Manufacturing Co. 5.6%
- --------------------------------------------------------------------------------
Japan/Oracle Corp. Japan 4.4%
- --------------------------------------------------------------------------------
United Kingdom/Colt Telecom 3.2%
- --------------------------------------------------------------------------------
Group PLC SP - ADR
- --------------------------------------------------------------------------------
Japan/Hikari Tsushin, Inc. 3.2%
- --------------------------------------------------------------------------------
France/PSA Peugeot Citroen 2.9%
- --------------------------------------------------------------------------------
Germany/Siemens AG 2.5%
- --------------------------------------------------------------------------------
Japan/Nikko Securities Co. Ltd. 2.5%
- --------------------------------------------------------------------------------
Sweden/Icon MediaLab AB 2.5%
- --------------------------------------------------------------------------------
United Kingdom/Logica PLC 2.5%
- --------------------------------------------------------------------------------
Top Ten Holdings 35.4%
- --------------------------------------------------------------------------------
Top 5 Countries % of Total Investments
- --------------------------------------------------------------------------------
Japan 28.4%
- --------------------------------------------------------------------------------
United Kingdom 20.6%
- --------------------------------------------------------------------------------
Netherlands 6.7%
- --------------------------------------------------------------------------------
Germany 6.5%
- --------------------------------------------------------------------------------
France 6.1%
- --------------------------------------------------------------------------------
Regional Breakdown
- --------------------------------------------------------------------------------
Europe 59.4%
- --------------------------------------------------------------------------------
Asia 32.9%
- --------------------------------------------------------------------------------
Canada 3.0%
- --------------------------------------------------------------------------------
Australia 2.0%
- --------------------------------------------------------------------------------
Latin America 1.5%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 98.8%
- --------------------------------------------------------------------------------
Cash Equivalents 1.2%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO International Growth Fund Institutional Class shares turned in a stellar
performance for the six-month period ended December 31, 1999, returning 67.74%.
The Fund handily outperformed the MSCI EAFE Index, which returned 22.29%, as
well as its Lipper International Fund Average, which returned 30.84%.
The Fund's exposure to the technology sector greatly contributed to its
performance during this period. In particular, Hikari Tsushin, a Japanese
cellular and Internet company, experienced tremendous stock price appreciation.
The company benefited from the recovery in the Asian economy, which resulted in
increased Japanese demand for cellular phones as well as dramatic growth in
Internet use throughout the Asian region. The outlook remains positive for this
company, which plans to nearly double its cellular phone sales outlets in Japan
while continuing to aggressively invest in Internet businesses throughout Asia.
Another standout performer in the technology sector during this period was
Icon MediaLab, a Swedish Internet consulting firm. The company benefited from
general investor enthusiasm for the technology sector, especially Internet
stocks, as well as a rise in demand for its services by European companies
seeking to participate in e-commerce. As the number of European companies
creating a Web presence continues to grow, Icon MediaLab should perform well.
The Fund also benefited from its exposure to Nokia, the Finnish cell phone
handset manufacturer. The company experienced strong sales growth as a result of
the dramatic increase in demand for cell phones, fueled by the introduction of
affordable `one rate' plans as well as shorter cell phone upgrade cycles. The
outlook remains bright for Nokia, a dominant player in this industry, as it
should benefit from anticipated cellular phone sales penetration in developing
countries.
One disappointment for the Fund during this period was Acom, a Japanese
consumer finance firm. The company's stock price suffered as a result of
allegations of illegal collection practices, which resulted in an investigation
of the industry. Acom, along with other companies in its industry, also suffered
as a result of increased competition from traditional banks.
Looking ahead, the manager is confident that the Fund's 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. In
addition, the manager believes the Fund is poised to benefit from a strong glo-
bal economy in the coming year.
14 PIMCO Funds
<PAGE>
December 31, 1999 PIMCO Mega-Cap Fund
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
$3.7 million
NUMBER OF SECURITIES IN THE PORTFOLIO
39 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital Management
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
Inst'l Class S&P 500 Lipper Multi-Cap
(INCEP. 8/31/99) Index Core Fund Average
- --------------------------------------------------------------------------------
Inception 24.24% -- --
*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 index and it
is not possible to invest in an unmanaged index.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Oracle Corp. 5.7%
Software products
- --------------------------------------------------------------------------------
Cisco Systems, Inc. 4.9%
Internet networking
- --------------------------------------------------------------------------------
Motorola, Inc. 4.0%
Semiconductors/comm. equip.
- --------------------------------------------------------------------------------
Microsoft Corp. 3.8%
Computer services
- --------------------------------------------------------------------------------
JDS Uniphase Corp. 3.5%
Fiber optics & lasers
- --------------------------------------------------------------------------------
Tyco International Ltd. 3.1%
Fire protection sys./cable/solar
- --------------------------------------------------------------------------------
Corning, Inc. 3.1%
Telecom, glass, ceramics
- --------------------------------------------------------------------------------
EMC Corp. 2.9%
Hardware, software products
- --------------------------------------------------------------------------------
Sun Microsystems, Inc. 2.9%
Mkt. networked workstations
- --------------------------------------------------------------------------------
Texas Instruments, Inc. 2.9%
Semiconductors
- --------------------------------------------------------------------------------
Top Ten Total 36.8%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Technology 54.3%
- --------------------------------------------------------------------------------
Financial & Business Services 8.1%
- --------------------------------------------------------------------------------
Consumer Discretionary 7.3%
- --------------------------------------------------------------------------------
Health Care 5.6%
- --------------------------------------------------------------------------------
Capital Goods 5.6%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 97.8%
- --------------------------------------------------------------------------------
Cash Equivalents 2.2%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO Mega-Cap Fund Institutional Class shares returned 24.24% for the period
since inception through December 31, 1999.
PIMCO Mega-Cap Fund was started on August 31, 1999. The Fund invests in
securities of companies with very large capitalizations that also have
improving fundamentals and are reasonably valued. As of December 31, the median
market capitalization for the portfolio was $47.94 billion.
The technology sector turned in an outstanding performance during this
period, greatly contributing to the Fund's return. In particular, Cisco Systems,
the leader in networking systems, experienced strong stock price appreciation
during the period. Cisco, which makes the networking hardware that forms the
backbone of the Internet, benefited from strong demand for its Internet infra-
structure equipment and its optical networking capabilities.
Another standout performer for the Fund was JDS Uniphase, which experienced
strong price appreciation during this period. The company, the largest
independent fiber optic component supplier to large telecom equipment providers
such as Nortel and Lucent, experienced a large increase in demand for telecom
components as a result of the rapid build-out of telecom networks.
The Fund also benefited from its exposure to the consumer discretionary
sector. In particular, Home Depot, the leader in home improvement retailing,
experienced a significant increase in sales due to a strong domestic economy,
which translated into a home buying and home renovating boom.
One disappointment for the Fund was Tyco International, the manufacturing
conglomerate. The company's stock price suffered as a result of concerns over
its accounting practices regarding its acquisitions. However, the manager
believes Tyco's accounting practices are sound and that the company still has
tremendous growth potential.
Looking ahead, the manager is optimistic that large-cap growth stocks
should continue to offer investors strong growth potential with less volatility
than smaller-capitalization issues. The manager believes that its philosophy of
purchasing stocks of growing, profitable companies at sensible prices should
bode well for the Fund, especially as investors realize the importance of
reasonable valuation in growth investing.
Semi-Annual Report 15
<PAGE>
December 31, 1999
PIMCO Capital Appreciation Fund
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
$957.4 million
NUMBER OF SECURITIES IN THE PORTFOLIO
87 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital Management
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
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>
6 month 13.64% 13.45% 7.71% 10.97%
1 year 22.30% 21.92% 21.04% 22.49%
3 years 24.51% 24.20% 27.56% 21.79%
5 years 27.40% -- 28.56% 23.07%
Inception 20.01% 27.47% -- --
</TABLE>
Change in Value
$5,000,000 invested at the Fund's inception
[CHART]
<TABLE>
<CAPTION>
PIMCO
Capital
Appreciation S&P 500
Month Fund Index
================== ============= =============
<S> <C> <C>
03/31/1991 5,000,000 5,000,000
04/30/1991 4,854,350 5,012,000
05/31/1991 5,094,373 5,228,518
06/30/1991 4,820,061 4,989,052
07/31/1991 5,164,862 5,221,542
08/31/1991 5,327,032 5,345,293
09/30/1991 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
01/31/1992 5,951,282 5,590,634
02/29/1992 6,015,540 5,663,312
03/31/1992 5,817,823 5,552,878
04/30/1992 5,805,268 5,716,132
05/31/1992 5,830,077 5,744,142
06/30/1992 5,646,491 5,658,669
07/31/1992 5,811,083 5,889,825
08/31/1992 5,666,801 5,769,261
09/30/1992 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
01/31/1993 6,679,451 6,182,194
02/28/1993 6,599,169 6,266,457
03/31/1993 6,904,241 6,398,680
04/30/1993 6,735,135 6,244,023
05/31/1993 7,040,790 6,411,051
06/30/1993 7,153,400 6,429,835
07/31/1993 7,052,175 6,403,987
08/31/1993 7,310,181 6,646,954
09/30/1993 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
01/31/1994 7,871,521 6,978,365
02/28/1994 7,764,846 6,788,973
03/31/1994 7,377,445 6,492,973
04/30/1994 7,405,400 6,576,213
05/31/1994 7,399,773 6,684,129
06/30/1994 7,191,566 6,520,301
07/31/1994 7,367,360 6,734,427
08/31/1994 7,587,534 7,010,539
09/30/1994 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
01/31/1995 7,275,418 7,015,365
02/28/1995 7,638,905 7,288,754
03/31/1995 7,973,994 7,503,845
04/30/1995 8,248,506 7,724,833
05/31/1995 8,550,420 8,033,595
06/30/1995 8,920,691 8,220,215
07/31/1995 9,416,251 8,492,798
08/31/1995 9,507,671 8,514,115
09/30/1995 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
01/31/1996 10,319,950 9,727,888
02/29/1996 10,710,996 9,818,066
03/31/1996 10,731,348 9,912,614
04/30/1996 10,866,103 10,058,726
05/31/1996 11,141,737 10,318,140
06/30/1996 11,121,089 10,357,452
07/31/1996 10,561,962 9,899,860
08/31/1996 11,016,637 10,108,648
09/30/1996 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
01/31/1997 13,397,357 12,290,387
02/28/1997 13,259,311 12,386,744
03/31/1997 12,776,151 11,877,772
04/30/1997 13,183,386 12,586,875
05/31/1997 14,025,466 13,353,165
06/30/1997 14,625,966 13,951,386
07/31/1997 16,206,592 15,061,498
08/31/1997 15,599,190 14,217,753
09/30/1997 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
01/31/1998 16,723,663 15,597,610
02/28/1998 17,951,702 16,722,510
03/31/1998 18,949,019 17,578,870
04/30/1998 18,963,905 17,755,713
05/31/1998 18,651,313 17,450,492
06/30/1998 19,447,678 18,159,332
07/31/1998 18,889,478 17,965,934
08/31/1998 15,808,216 15,368,420
09/30/1998 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
01/31/1999 20,637,174 20,665,012
02/28/1999 19,812,008 20,022,744
03/31/1999 20,292,687 20,823,854
04/30/1999 20,989,673 21,630,362
05/31/1999 20,268,654 21,119,669
06/30/1999 21,502,398 22,291,811
07/31/1999 20,709,276 21,595,860
08/31/1999 20,300,699 21,488,291
09/30/1999 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
</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
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Cisco Systems, Inc. 2.3%
Internet networking
- --------------------------------------------------------------------------------
General Electric Co. 2.2%
Electronics
- --------------------------------------------------------------------------------
Oracle Corp. 2.1%
Software products
- --------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 2.1%
Retail
- --------------------------------------------------------------------------------
Home Depot, Inc. 1.8%
Retail
- --------------------------------------------------------------------------------
Motorola, Inc. 1.7%
Electronics & software
- --------------------------------------------------------------------------------
Applied Materials, Inc. 1.7%
Semiconductors
- --------------------------------------------------------------------------------
Royal Dutch Petroleum Co. 1.7%
Petroleum refining
- --------------------------------------------------------------------------------
Immunex Corp. 1.7%
Chemical & allied products
- --------------------------------------------------------------------------------
JDS Uniphase Corp. 1.7%
Telecommunications
- --------------------------------------------------------------------------------
Top Ten Total 19.0%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Technology 40.1%
- --------------------------------------------------------------------------------
Financial & Business Services 13.6%
- --------------------------------------------------------------------------------
Consumer Discretionary 10.4%
- --------------------------------------------------------------------------------
Capital Goods 6.7%
- --------------------------------------------------------------------------------
Health Care 6.2%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 99.6%
- --------------------------------------------------------------------------------
Cash Equivalents 0.4%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO Capital Appreciation Fund turned in a solid performance for the six months
ended December 31, 1999. The Fund's Institutional Class shares returned 13.64%,
handily outperforming the S&P 500 Index return of 7.71% for the same period.
The technology sector was the greatest contributor to the Fund's
performance during this period. In particular, companies whose products address
business-to-business e-commerce needs, such as Oracle and Siebel Systems,
experienced strong price appreciation. This area of technology has become
critically important to companies seeking to participate in commerce on the
Internet. Another technology company that proved to be a strong performer for
the Fund was Cisco Systems. Cisco, which makes the networking hardware that
forms the backbone of the Internet, benefited from strong demand for its
Internet infrastructure equipment and its optical networking capabilities.
The healthcare sector also aided the Fund's performance, particularly in
the area of biotechnology. Immunex, the maker of the leading drug used for the
treatment of rheumatoid arthritis, saw its stock experience tremendous price
appreciation due to positive prescription trends as well as strong evidence that
its drug can be used to treat other ailments. Genentech, another biotech
company, turned in a good performance as a result of its strong product
pipeline. In addition, Warner Lambert also posted positive returns, benefiting
from the success of its cholesterol drug, Lipitor.
The Fund also benefited from its exposure to the consumer discretionary
sector. In particular, Home Depot, the leader in home improvement retailing,
experienced a significant increase in sales due to a strong domestic economy,
which translated into a home buying and home renovating boom.
One disappointment for the Fund during this period was Tyco, the
manufacturing conglomerate. The company's stock price suffered as a result of
concerns over its accounting practices regarding its acquisitions. However, the
manager believes Tyco's accounting practices are sound and that the company
still has tremendous growth potential.
Looking ahead, the manager is optimistic that the Fund is poised to
continue its outperformance. The manager believes that its philosophy of
purchasing stocks of growing, profitable companies at sensible prices should
bode well for the Fund, especially as investors realize the importance of
reasonable valuation in growth investing.
16 PIMCO Funds
<PAGE>
December 31, 1999
PIMCO Mid-Cap Growth Fund
OBJECTIVE
Growth of capital
PORTFOLIO
Primarily common stocks of companies with medium capitalizations that have
improving fundamentals and whose stock is reasonably valued
TOTAL NET ASSETS
$1.0 billion
NUMBER OF SECURITIES IN THE PORTFOLIO
84 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital Management
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
Inst'l Class Admin. Class Russell 2000 Lipper Mid-Cap
(INCEP. 8/26/91) (INCEP. 11/30/94) Mid-Cap Index Fund Average
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6 month 13.52% 13.36% 7.15% 26.47%
1 year 12.98% 12.67% 18.23% 38.29%
3 years 17.83% 17.59% 18.86% 21.71%
5 years 22.61% 22.33% 21.85% 21.59%
Inception 17.58% 22.46% -- --
</TABLE>
Change in Value
$5,000,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO
Mid-Cap Russell 2000
Growth Mid-Cap
Month Fund Index
========== ========= ============
<S> <C> <C>
08/31/1991 5,000,000 5,000,000
09/30/1991 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
01/31/1992 5,671,673 5,509,555
02/29/1992 5,727,031 5,636,110
03/31/1992 5,555,924 5,492,107
04/30/1992 5,519,126 5,535,055
05/31/1992 5,524,162 5,570,812
06/30/1992 5,378,127 5,480,453
07/31/1992 5,525,925 5,709,591
08/31/1992 5,364,436 5,578,099
09/30/1992 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
01/31/1993 6,414,599 6,417,263
02/28/1993 6,216,680 6,424,579
03/31/1993 6,470,422 6,633,570
04/30/1993 6,293,134 6,457,781
05/31/1993 6,562,549 6,662,815
06/30/1993 6,765,881 6,738,172
07/31/1993 6,682,647 6,770,650
08/31/1993 7,013,472 7,071,740
09/30/1993 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
01/31/1994 7,309,331 7,389,733
02/28/1994 7,299,101 7,289,232
03/31/1994 7,033,122 6,978,711
04/30/1994 7,058,599 7,026,585
05/31/1994 6,930,633 7,036,141
06/30/1994 6,700,295 6,827,801
07/31/1994 6,851,806 7,062,131
08/31/1994 7,210,540 7,396,947
09/30/1994 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
01/31/1995 6,924,894 7,185,463
02/28/1995 7,346,142 7,557,383
03/31/1995 7,582,451 7,773,675
04/30/1995 7,753,580 7,890,902
05/31/1995 8,020,945 8,150,197
06/30/1995 8,493,975 8,424,125
07/31/1995 9,295,489 8,833,116
08/31/1995 9,367,547 8,968,440
09/30/1995 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
01/31/1996 9,789,114 9,666,181
02/29/1996 10,026,714 9,893,143
03/31/1996 10,152,383 10,036,296
04/30/1996 10,364,554 10,320,625
05/31/1996 10,539,595 10,476,466
06/30/1996 10,325,462 10,319,110
07/31/1996 9,831,497 9,680,460
08/31/1996 10,367,953 10,141,443
09/30/1996 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
01/31/1997 12,326,596 11,686,551
02/28/1997 12,120,488 11,668,787
03/31/1997 11,774,758 11,172,864
04/30/1997 12,027,407 11,450,845
05/31/1997 12,858,488 12,286,299
06/30/1997 13,483,461 12,688,306
07/31/1997 14,733,407 13,746,765
08/31/1997 14,713,461 13,596,925
09/30/1997 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
01/31/1998 15,605,123 14,260,085
02/28/1998 16,523,072 15,375,224
03/31/1998 17,031,474 16,104,009
04/30/1998 17,278,614 16,144,269
05/31/1998 16,692,539 15,645,411
06/30/1998 17,010,291 15,862,100
07/31/1998 16,523,072 15,105,478
08/31/1998 13,578,576 12,688,602
09/30/1998 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
01/31/1999 16,406,007 15,971,939
02/28/1999 15,523,405 15,440,074
03/31/1999 15,597,573 15,923,348
04/30/1999 16,398,590 17,100,083
05/31/1999 16,361,506 17,050,493
06/30/1999 17,066,104 17,652,376
07/31/1999 16,598,844 17,166,935
08/31/1999 16,035,166 16,722,312
09/30/1999 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
</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
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Medimmune, Inc. 2.2%
Chemical & allied products
- --------------------------------------------------------------------------------
Network Appliance, Inc. 2.0%
Electronics, computer networking
- --------------------------------------------------------------------------------
Citrix Systems, Inc. 2.0%
Electronics, computer networking
- --------------------------------------------------------------------------------
BEA Systems, Inc. 2.0%
Business services
- --------------------------------------------------------------------------------
Lam Research Corp. 1.9%
Semiconductors, integrated circuits
- --------------------------------------------------------------------------------
Symbol Technologies, Inc. 1.9%
Barcode equip
- --------------------------------------------------------------------------------
Comverse Technology, Inc. 1.9%
Communications & software
- --------------------------------------------------------------------------------
Veritas Software Corp. 1.9%
Software co
- --------------------------------------------------------------------------------
KLA-Tencor Corp. 1.8%
Business solutions
- --------------------------------------------------------------------------------
IDEC Pharmaceuticals Corp. 1.7%
Chem. & allied products
- --------------------------------------------------------------------------------
Top Ten Total 19.3%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Technology 45.9%
- --------------------------------------------------------------------------------
Financial & Business Services 14.0%
- --------------------------------------------------------------------------------
Consumer Discretionary 8.7%
- --------------------------------------------------------------------------------
Health Care 8.3%
- --------------------------------------------------------------------------------
Materials & Processing 5.7%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 98.6%
- --------------------------------------------------------------------------------
Cash Equivalents 1.4%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-month period ended December 31, 1999, PIMCO Mid-Cap Growth Fund
Institutional Class shares returned 13.52%, outperforming the Russell 2000
Mid-Cap Index return of 7.15%.
The narrow market seen in the first half of 1999 broadened in the second
half of the year, as smaller-capitalization stocks outperformed their
larger-capitalization counterparts. Investors finally recognized the strong
growth potential of smaller companies, and invested accordingly.
The technology sector was a strong contributor to the Fund's performance
during this period. One of the strongest themes within this sector was
business-to-business technology application companies, an area of high growth.
These companies benefited from improved earnings outlooks during this period as
well as a rise in sales that resulted from increased corporate spending. One
example in this area is Citrix Systems, which develops and sells innovative
server-based software to enable more efficient use of Microsoft Windows
operating systems. Citrix's sales received a boost from corporate purchases of
the software, as companies increasingly used technology to maintain or widen
profit margins.
Veritas Software was another strong performer for the Fund. The company
makes software that provides enterprise data storage management solutions - 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
second half of 1999, as corporate Internet use and the need for data storage
increased.
Tiffany's was a standout during this period as well. The company benefited
from a strong domestic economy as well as a recovery in the global economy, both
of which stimulated its sales. In particular, Tiffany's benefited from new store
openings, the successful launch of its Web site and wider profit margins due to
greater sales of its high-end items.
With the exception of Tiffany's, consumer discretionary stocks were a
disappointment for the Fund. Companies such as Abercrombie & Fitch, Lands End
and Tommy Hilfiger all showed earnings disappointments that caused their stock
prices to suffer. However, the manager is optimistic that, in a climate of tight
labor and high income growth, consumer discretionary stocks should perform well.
Looking ahead, the manager is optimistic that medium-capitalization stocks
will continue to perform well in the coming year, as the economic climate should
be favorable to them. The manager is also optimistic that, in a market dominated
by high valuation stocks, investors will be attracted to more reasonable
valuations, which should bode well for PIMCO Mid-Cap Growth Fund.
Semi-Annual Report 17
<PAGE>
December 31, 1999
PIMCO Small-Cap Growth Fund
OBJECTIVE
Growth of capital
PORTFOLIO
Common stocks of companies with market capitalizations of more than $100
million that have improving fundamentals and whose stock is reasonably valued
by the market
TOTAL NET ASSETS
$67.8 million
NUMBER OF SECURITIES IN THE PORTFOLIO
102 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital Management
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
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>
6 month 8.15% 8.02% 10.95% 16.30%
1 year 5.92% 5.69% 21.25% 28.27%
3 years 7.09% 6.96% 13.08% 13.59%
5 years 11.82% -- 16.69% 17.55%
Inception 16.97% 7.82% -- --
</TABLE>
Change in Value
$5,000,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO
Small-Cap
Growth Russell 2000
Month Fund Index
========== ========= ============
<S> <C> <C>
01/31/1991 5,000,000 5,000,000
02/28/1991 5,463,287 5,560,750
03/31/1991 5,843,531 5,950,725
04/30/1991 5,766,171 5,935,373
05/31/1991 6,033,043 6,218,074
06/30/1991 5,766,171 5,858,483
07/31/1991 6,099,236 6,063,471
08/31/1991 6,374,882 6,287,092
09/30/1991 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
01/31/1992 7,323,081 7,242,297
02/29/1992 7,544,456 7,453,699
03/31/1992 7,247,813 7,201,466
04/30/1992 7,066,286 6,948,623
05/31/1992 7,030,866 7,041,039
06/30/1992 6,694,376 6,710,181
07/31/1992 6,951,171 6,943,427
08/31/1992 6,712,086 6,747,067
09/30/1992 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
01/31/1993 8,548,383 8,200,677
02/28/1993 8,456,613 8,011,570
03/31/1993 9,066,884 8,271,465
04/30/1993 8,644,742 8,044,082
05/31/1993 9,154,066 8,399,872
06/30/1993 9,374,314 8,452,035
07/31/1993 9,374,314 8,568,758
08/31/1993 9,934,112 8,938,757
09/30/1993 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
01/31/1994 10,348,945 9,727,682
02/28/1994 10,609,706 9,692,370
03/31/1994 9,979,534 9,181,873
04/30/1994 10,202,267 9,236,321
05/31/1994 9,887,181 9,132,413
06/30/1994 9,631,853 8,824,285
07/31/1994 9,903,478 8,969,356
08/31/1994 10,354,377 9,468,950
09/30/1994 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
01/31/1995 9,843,666 9,143,401
02/28/1995 10,372,895 9,524,041
03/31/1995 10,437,578 9,687,283
04/30/1995 10,502,262 9,902,534
05/31/1995 10,766,877 10,072,759
06/30/1995 11,296,106 10,595,333
07/31/1995 12,824,991 11,205,624
08/31/1995 12,836,751 11,437,469
09/30/1995 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
01/31/1996 12,400,748 11,881,176
02/29/1996 12,807,956 12,251,512
03/31/1996 13,037,010 12,500,831
04/30/1996 13,787,799 13,169,250
05/31/1996 14,144,106 13,688,250
06/30/1996 13,253,339 13,126,211
07/31/1996 12,318,034 11,979,767
08/31/1996 13,132,449 12,675,313
09/30/1996 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
01/31/1997 14,856,225 14,132,700
02/28/1997 14,005,909 13,789,982
03/31/1997 13,738,667 13,139,233
04/30/1997 13,787,257 13,175,891
05/31/1997 15,342,119 14,641,709
06/30/1997 16,277,466 15,269,253
07/31/1997 17,309,992 15,979,731
08/31/1997 17,686,560 16,345,667
09/30/1997 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
01/31/1998 17,857,536 16,686,770
02/28/1998 19,368,772 17,921,591
03/31/1998 20,380,883 18,659,961
04/30/1998 20,699,768 18,763,150
05/31/1998 19,493,552 17,751,816
06/30/1998 19,424,230 17,789,095
07/31/1998 18,231,879 16,348,179
08/31/1998 14,294,347 13,173,362
09/30/1998 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
01/31/1999 15,730,361 16,741,950
02/28/1999 14,456,882 15,385,852
03/31/1999 14,225,341 15,625,871
04/30/1999 15,267,278 17,025,949
05/31/1999 15,542,234 17,274,528
06/30/1999 16,511,815 18,055,336
07/31/1999 15,701,419 17,560,620
08/31/1999 14,992,322 16,910,877
09/30/1999 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
</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.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Power-One, Inc. 2.0%
Mfr. power supp. for electronic
equip. mfrs
- --------------------------------------------------------------------------------
Broadvision, Inc. 2.0%
Business to business tech
- --------------------------------------------------------------------------------
AVT Corp. 1.7%
Software communications
- --------------------------------------------------------------------------------
Symantec Corp. 1.7%
Semiconductors
- --------------------------------------------------------------------------------
Semtech Corp. 1.7%
Mfr. silicon rectifiers
- --------------------------------------------------------------------------------
TranSwitch Corp. 1.7%
Mfr. equip. - semiconductor indstr
- --------------------------------------------------------------------------------
Emulex Corp. 1.7%
Develops software storage products
- --------------------------------------------------------------------------------
Asyst Technologies, Inc. 1.6%
Semiconductors
- --------------------------------------------------------------------------------
Sykes Enterprises, Inc. 1.6%
Info. tech. svcs
- --------------------------------------------------------------------------------
Actuate Corp. 1.6%
Provider of reporting solutions
- --------------------------------------------------------------------------------
Top Ten Total 17.3%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Technology 42.9%
- --------------------------------------------------------------------------------
Financial & Business Services 13.8%
- --------------------------------------------------------------------------------
Consumer Discretionary 11.7%
- --------------------------------------------------------------------------------
Capital Goods 10.3%
- --------------------------------------------------------------------------------
Transportation 4.8%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 99.5%
- --------------------------------------------------------------------------------
Cash Equivalents 0.5%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-month period ended December 31, 1999, PIMCO Small-Cap Growth Fund
Institutional Class shares returned 8.15%.
The technology sector greatly contributed to the Fund's performance in the
second half of 1999, as investors were attracted to the exciting products and
strong growth potential offered by this area. In particular, top ten holding
Broadvision was a strong performer. The company makes an integrated software
application system for interactive marketing on the Internet, which allows
businesses to tailor Web site content to the needs of individual viewers.
Broadvision benefited from higher revenues, which resulted from strong market
acceptance for the company's innovative core technology. The company also
benefited from a decrease in expenses as a percentage of revenues, as well as
general investor enthusiasm for business-to-business Internet stocks. The
outlook for the company remains positive, as the dramatic growth in demand for
business-to-business Internet technology should continue.
Another standout performer for the Fund in the area of technology was
Emulex. The company makes a broad line of fiber channel components that enhance
access to, and storage of, electronic data and applications. The Company's
products, which are based on internally developed technology and are deployable
across a variety of network configurations and operating systems, support
increasing volumes of stored data. Emulex benefited from an explosive rise in
corporate Internet use as well as a general increase in data, which has fueled
increased demand for data storage.
Producer durables also positively contributed to the Fund's performance.
This sector benefited from the global economic recovery, which has stimulated
purchases of electronic and technological commodities. In particular, Semtech,
which makes power supplies for electronic equipment manufacturers, benefited
from increased sales as well as an aggressive acquisition policy. The outlook
remains positive for this company, as many analysts are predicting a strong
global economy in the coming year.
A disappointment for the Fund during this period was the consumer
discretionary sector. Despite a strong economy and solid sales, consumer
discretionary stocks were ignored by investors who eschewed them for the high
growth potential of technology issues.
Looking ahead, the manager is optimistic that the market will broaden to
include more small-cap stocks, especially those that are reasonably priced. The
manager continues to believe that its growth-at-a-price philosophy and its
disciplined focus on specific market cap ranges will bode well for the Fund in
the long term.
18 PIMCO Funds
<PAGE>
December 31, 1999
PIMCO Micro-Cap Growth Fund
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
$219.7 million
NUMBER OF SECURITIES IN THE PORTFOLIO
73 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital Management
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
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>
6 month 4.80% 4.69% 10.95% 16.30%
1 year 5.43% 5.17% 21.25% 28.27%
3 years 11.48% 11.21% 13.08% 13.59%
5 years 18.50% -- 16.69% 17.55%
Inception 16.98% 13.55% -- --
</TABLE>
Change in Value
$5,000,000 invested at the Fund's inception
[CHART]
<TABLE>
<CAPTION>
PIMCO
Micro-Cap
Growth Russell 2000
Month Fund Index
========== ========= ============
<S> <C> <C>
06/30/1993 5,000,000 5,000,000
07/31/1993 5,021,687 5,069,050
08/31/1993 5,277,282 5,287,932
09/30/1993 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
01/31/1994 6,099,194 5,754,639
02/28/1994 6,084,159 5,733,749
03/31/1994 5,763,413 5,431,753
04/30/1994 5,903,739 5,463,963
05/31/1994 5,723,320 5,402,493
06/30/1994 5,487,771 5,220,213
07/31/1994 5,482,760 5,306,033
08/31/1994 5,808,518 5,601,580
09/30/1994 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
01/31/1995 5,803,506 5,408,993
02/28/1995 6,003,973 5,634,170
03/31/1995 6,124,253 5,730,740
04/30/1995 6,389,871 5,858,077
05/31/1995 6,455,022 5,958,777
06/30/1995 6,941,154 6,267,918
07/31/1995 7,472,390 6,628,950
08/31/1995 7,602,693 6,766,103
09/30/1995 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
01/31/1996 7,666,725 7,028,589
02/29/1996 8,040,337 7,247,670
03/31/1996 8,444,657 7,395,160
04/30/1996 9,355,656 7,790,579
05/31/1996 9,729,268 8,097,606
06/30/1996 9,452,898 7,765,118
07/31/1996 8,736,381 7,086,913
08/31/1996 9,268,651 7,498,379
09/30/1996 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
01/31/1997 10,387,828 8,360,531
02/28/1997 10,073,392 8,157,788
03/31/1997 9,581,728 7,772,822
04/30/1997 9,324,462 7,794,508
05/31/1997 10,444,998 8,661,647
06/30/1997 11,348,288 9,032,885
07/31/1997 11,977,160 9,453,185
08/31/1997 12,520,277 9,669,663
09/30/1997 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
01/31/1998 13,453,742 9,871,451
02/28/1998 14,488,151 10,601,938
03/31/1998 15,561,110 11,038,738
04/30/1998 15,708,883 11,099,782
05/31/1998 15,137,066 10,501,504
06/30/1998 15,201,315 10,523,557
07/31/1998 14,237,580 9,671,149
08/31/1998 11,635,495 7,793,012
09/30/1998 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
01/31/1999 13,304,000 9,904,093
02/28/1999 12,374,579 9,101,862
03/31/1999 11,405,325 9,243,851
04/30/1999 12,500,715 10,072,100
05/31/1999 13,025,174 10,219,153
06/30/1999 13,277,445 10,681,058
07/31/1999 13,051,729 10,388,397
08/31/1999 12,573,741 10,004,027
09/30/1999 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
</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
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Radiant Systems, Inc. 3.9%
Business solutions
- --------------------------------------------------------------------------------
Photon Dynamics, Inc. 3.0%
Supplier to flat
panel display industry
- --------------------------------------------------------------------------------
Cybex Computer 2.6%
Products
Dev./mrkt. computer equip
- --------------------------------------------------------------------------------
Arthrocare Corp. 2.5%
Healthcare tech
- --------------------------------------------------------------------------------
Braun's Fashions Corp. 2.5%
Retail - women's apparel
- --------------------------------------------------------------------------------
SeaChange 2.4%
International, Inc.
Digital video pds. software
- --------------------------------------------------------------------------------
Chico's FAS, Inc. 2.3%
Retail private label clothing
- --------------------------------------------------------------------------------
Quixote Corp. 2.3%
Mfr. highway safety products
- --------------------------------------------------------------------------------
TelCom Semiconductor, Inc. 2.3%
Integrated circuits
- --------------------------------------------------------------------------------
AVT Corp. 2.2%
Business solutions
- --------------------------------------------------------------------------------
Top Ten Total 26.0%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Technology 40.5%
- --------------------------------------------------------------------------------
Consumer Discretionary 18.2%
- --------------------------------------------------------------------------------
Financial & Business Services 11.3%
- --------------------------------------------------------------------------------
Capital Goods 9.9%
- --------------------------------------------------------------------------------
Transportation 4.1%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 97.2%
- --------------------------------------------------------------------------------
Cash Equivalents 2.8%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO Micro-Cap Growth Fund Institutional Class shares posted a return of 4.80%
for the six-month period ended December 31, 1999.
The technology sector was a strong performer for the Fund during this
period, as investors were attracted to the strong earnings growth potential
offered by these issues. In particular, Radiant Systems was a strong performer
for the Fund. The company, the largest holding in the Fund, makes customer
service software for use in retail sites such as convenience stores and gas
stations. The company's products enable retailers to interact electronically
with consumers, capture data at the point of sale, manage site operations and
logistics and communicate electronically with their sites, vendors and credit
networks. The company benefited from strong sales, as more consumers demanded
expedience in retail purchasing and more companies required connectivity between
their different retail sites.
Another standout for the Fund was Pericom Semiconductor, a maker of high
performance interface integrated circuits used in advanced electronic systems.
The company benefited from the continuation of the global economic recovery in
the second half of 1999, which fueled demand for semiconductor and electronic
components. Pericom's revenues grew during this period as a result of an
increase in sales of its three different product lines, as well as improved
margins and cost reductions.
The Fund also benefited from its exposure to the materials and processing
sector. In particular, Myr Group, a construction services company, turned in a
stellar performance. The company, which builds infrastructure for electric and
gas utility lines, telecommunications and street lighting, benefited from the
build out in telecommunications as well as the housing boom, both of which
boosted demand for its services. The outlook remains positive for this company,
as the domestic economy remains strong.
An area of disappointment for the Fund was financial services. The sector
came under pressure during this period as a result of rising interest rates,
which especially hurt smaller-capitalization stocks in this sector.
Looking ahead, the manager is optimistic that the market will continue to
broaden and include more small-cap issues, as well as more reasonably priced
issues. The manager remains convinced that its philosophy of buying stocks of
growing, profitable companies at prices that make sense should bode well for
the Fund in the long term.
Semi-Annual Report 19
<PAGE>
December 31, 1999
PIMCO Equity Income Fund
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
$156.1 million
NUMBER OF SECURITIES IN THE PORTFOLIO
48 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
NFJ Investment Group
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<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>
6 month -11.55% -11.73% 7.71% -5.09%
1 year -1.92% -2.22% 21.04% 3.34%
3 years 11.77% 11.47% 27.56% 13.07%
5 years 17.75% 17.47% 28.56% 17.27%
Inception 14.24% 17.19% -- --
</TABLE>
Change in Value $5,000,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO
Equity Income S&P 500
Month Fund Index
================== ============= =============
<S> <C> <C>
03/31/1991 5,000,000 5,000,000
04/30/1991 5,034,636 5,012,000
05/31/1991 5,319,615 5,228,518
06/30/1991 5,134,629 4,989,052
07/31/1991 5,421,923 5,221,542
08/31/1991 5,502,697 5,345,293
09/30/1991 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
01/31/1992 5,965,177 5,590,634
02/29/1992 6,116,657 5,663,312
03/31/1992 6,017,412 5,552,878
04/30/1992 6,125,605 5,716,132
05/31/1992 6,136,148 5,744,142
06/30/1992 6,141,420 5,658,669
07/31/1992 6,416,503 5,889,825
08/31/1992 6,230,286 5,769,261
09/30/1992 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
01/31/1993 6,713,379 6,182,194
02/28/1993 6,852,877 6,266,457
03/31/1993 7,009,814 6,398,680
04/30/1993 6,872,708 6,244,023
05/31/1993 6,925,440 6,411,051
06/30/1993 7,048,480 6,429,835
07/31/1993 7,037,196 6,403,987
08/31/1993 7,285,359 6,646,954
09/30/1993 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
01/31/1994 7,485,093 6,978,365
02/28/1994 7,323,454 6,788,973
03/31/1994 7,031,262 6,492,973
04/30/1994 7,086,480 6,576,213
05/31/1994 7,130,340 6,684,129
06/30/1994 7,030,089 6,520,301
07/31/1994 7,261,756 6,734,427
08/31/1994 7,559,317 7,010,539
09/30/1994 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
01/31/1995 7,360,723 7,015,365
02/28/1995 7,600,312 7,288,754
03/31/1995 7,819,936 7,503,845
04/30/1995 8,022,855 7,724,833
05/31/1995 8,318,505 8,033,595
06/30/1995 8,345,382 8,220,215
07/31/1995 8,637,759 8,492,798
08/31/1995 8,759,800 8,514,115
09/30/1995 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
01/31/1996 9,656,255 9,727,888
02/29/1996 9,784,719 9,818,066
03/31/1996 9,980,549 9,912,614
04/30/1996 10,232,220 10,058,726
05/31/1996 10,397,604 10,318,140
06/30/1996 10,419,988 10,357,452
07/31/1996 9,941,075 9,899,860
08/31/1996 10,282,119 10,108,648
09/30/1996 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
01/31/1997 11,812,152 12,290,387
02/28/1997 12,153,051 12,386,744
03/31/1997 11,746,786 11,877,772
04/30/1997 12,175,500 12,586,875
05/31/1997 12,938,613 13,353,165
06/30/1997 13,303,510 13,951,386
07/31/1997 14,149,548 15,061,498
08/31/1997 13,830,125 14,217,753
09/30/1997 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
01/31/1998 15,242,961 15,597,610
02/28/1998 16,140,192 16,722,510
03/31/1998 16,902,461 17,578,870
04/30/1998 16,662,284 17,755,713
05/31/1998 16,552,203 17,450,492
06/30/1998 16,209,160 18,159,332
07/31/1998 15,574,494 17,965,934
08/31/1998 13,448,868 15,368,420
09/30/1998 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
01/31/1999 16,098,100 20,665,012
02/28/1999 15,580,661 20,022,744
03/31/1999 15,719,974 20,823,854
04/30/1999 17,480,796 21,630,362
05/31/1999 17,863,080 21,119,669
06/30/1999 18,245,156 22,291,811
07/31/1999 17,614,402 21,595,860
08/31/1999 17,135,496 21,488,291
09/30/1999 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
</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
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
USX-U.S. Steel Group, Inc. 4.1%
Steel Mfr
- --------------------------------------------------------------------------------
Harris Corp. 4.1%
Communications, semiconductors
- --------------------------------------------------------------------------------
Deluxe Corp. 4.0%
Printing, publishing & allied
- --------------------------------------------------------------------------------
Morgan, J.P. & Co., Inc. 3.9%
Financial services
- --------------------------------------------------------------------------------
Union Planters Corp. 3.9%
Financial services
- --------------------------------------------------------------------------------
BFGoodrich Co. 2.2%
Aerospace & performance materials
- --------------------------------------------------------------------------------
Ohio Casualty Corp. 2.1%
Insurance carriers
- --------------------------------------------------------------------------------
Edwards (A.G.), Inc. 2.1%
Financial services
- --------------------------------------------------------------------------------
GATX Corp. 2.1%
Transportation services
- --------------------------------------------------------------------------------
Northrop Grumman Corp. 2.1%
Aerospace electronics
- --------------------------------------------------------------------------------
Top Ten Total 30.6%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Financial & Business Services 21.7%
- --------------------------------------------------------------------------------
Consumer Discretionary 16.4%
- --------------------------------------------------------------------------------
Energy 11.9%
- --------------------------------------------------------------------------------
Utilities 10.1%
- --------------------------------------------------------------------------------
Consumer Staples 9.1%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 100.0%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-month period ended December 31, 1999, PIMCO Equity Income Fund
Institutional Class shares returned -11.55%.
The technology sector dominated the market dramatically in the third and
fourth quarters, to the exclusion of virtually all other sectors, which hurt the
performance of PIMCO Equity Income Fund. The Fund, which has an investment
universe that focuses on dividend-yielding stocks with low fundamental
valuations, had virtually no exposure to the sector and therefore did not
participate in its strong returns.
The Fund did benefit from its exposure to basic industries. For instance,
Fund holding Springs Industries, a textile manufacturer, turned in a good
performance during this period. It benefited from a recovery in the global
economy, particularly Asia, which boosted its sales. In addition, the company's
home furnishing division experienced an increase in sales due to the housing
boom.
Another positive sector for the Fund during this period was energy. The
worldwide economic recovery has stimulated commerce, which in turn increased
corporate demand for energy. The sector also benefited from the tightening of
OPEC's oil production, which gave it greater pricing power.
The utility industry underperformed during this period. A historically
interest rate-sensitive sector, utility companies discovered that the second
half of 1999 was no exception. The rise in interest rates during the third and
fourth quarters, which negatively affected corporate borrowing as well as profit
margins, caused investors to punish this industry.
A disappointment for the Fund during this period was J.C. Penney. The
company's stock price suffered as a result of lagging same store sales as well
as a management turnaround plan that included decreasing the dividend paid by
the company to common shareholders. However, the manager remains optimistic
about the company, which has a relatively new e-commerce division that has
already exceeded expectations.
It should be noted that, at or around the time of the closing of the PIMCO
Advisors--Allianz transaction, the day-to-day management of PIMCO Equity Income
Fund will be assumed by PIMCO Equity Advisors. The Fund's philosophy of
investing in dividend-paying, undervalued securities will remain in place.
20 PIMCO Funds
<PAGE>
December 31, 1999
PIMCO Value Fund
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
$212.0 million
NUMBER OF SECURITIES IN THE PORTFOLIO
37 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
NFJ Investment Group
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
Inst'l Class Admin. Class S&P 500 Lipper Multi-Cap
(INCEP. 12/30/91) (INCEP. 8/21/97) Index Value Fund Average
<S> <C> <C> <C> <C>
6 month -5.56% -5.76% 7.71% -2.65%
1 year 4.30% 3.94% 21.04% 7.78%
3 years 13.19% -- 27.56% 13.61%
5 years 19.37% -- 28.56% 18.48%
Inception 15.10% 7.59% -- --
</TABLE>
Change in Value
$5,000,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO
Value S&P 500
Month Fund Index
========== ========= =========
<S> <C> <C>
12/31/1991 5,000,000 5,000,000
01/31/1992 5,144,543 4,907,000
02/29/1992 5,318,513 4,970,791
03/31/1992 5,199,220 4,873,861
04/30/1992 5,222,775 5,017,152
05/31/1992 5,177,665 5,041,736
06/30/1992 5,067,395 4,966,715
07/31/1992 5,247,250 5,169,606
08/31/1992 5,095,741 5,063,784
09/30/1992 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
01/31/1993 5,776,676 5,426,222
02/28/1993 5,839,127 5,500,182
03/31/1993 6,021,274 5,616,236
04/30/1993 5,916,309 5,480,491
05/31/1993 6,000,080 5,627,094
06/30/1993 6,041,965 5,643,582
07/31/1993 6,013,326 5,620,895
08/31/1993 6,340,080 5,834,151
09/30/1993 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
01/31/1994 6,890,617 6,125,037
02/28/1994 6,778,756 5,958,803
03/31/1994 6,415,209 5,698,999
04/30/1994 6,337,376 5,772,060
05/31/1994 6,337,376 5,866,780
06/30/1994 6,191,689 5,722,985
07/31/1994 6,450,687 5,910,928
08/31/1994 6,722,772 6,153,276
09/30/1994 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
01/31/1995 6,489,231 6,157,512
02/28/1995 6,779,505 6,397,470
03/31/1995 6,966,570 6,586,260
04/30/1995 7,155,132 6,780,225
05/31/1995 7,427,832 7,051,231
06/30/1995 7,557,689 7,215,031
07/31/1995 7,890,844 7,454,281
08/31/1995 7,988,826 7,472,991
09/30/1995 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
01/31/1996 9,026,323 8,538,342
02/29/1996 9,224,369 8,617,492
03/31/1996 9,300,160 8,700,479
04/30/1996 9,422,631 8,828,724
05/31/1996 9,613,992 9,056,417
06/30/1996 9,572,367 9,090,922
07/31/1996 9,057,641 8,689,285
08/31/1996 9,411,035 8,872,542
09/30/1996 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
01/31/1997 10,916,251 10,787,494
02/28/1997 11,102,507 10,872,067
03/31/1997 10,714,973 10,425,334
04/30/1997 11,137,719 11,047,727
05/31/1997 11,796,226 11,720,312
06/30/1997 12,097,138 12,245,382
07/31/1997 12,897,623 13,219,747
08/31/1997 12,628,072 12,479,177
09/30/1997 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
01/31/1998 13,382,242 13,690,302
02/28/1998 14,179,131 14,677,647
03/31/1998 14,755,186 15,429,289
04/30/1998 14,461,368 15,584,508
05/31/1998 14,406,277 15,316,610
06/30/1998 14,438,304 15,938,771
07/31/1998 13,829,793 15,769,023
08/31/1998 11,847,523 13,489,138
09/30/1998 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
01/31/1999 14,315,043 18,138,052
02/28/1999 13,790,682 17,574,322
03/31/1999 13,750,211 18,277,470
04/30/1999 15,204,256 18,985,357
05/31/1999 15,615,182 18,537,112
06/30/1999 16,214,406 19,565,922
07/31/1999 16,044,844 18,955,074
08/31/1999 15,896,477 18,860,659
09/30/1999 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
</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
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Conoco, Inc. 4.4%
Petroleum refining
- --------------------------------------------------------------------------------
Kerr-McGee Corp. 4.2%
Petroleum refining
- --------------------------------------------------------------------------------
Westvaco Corp. 4.2%
Paper & allied products
- --------------------------------------------------------------------------------
USX-U.S. Steel Group, Inc. 4.2%
Steel mfr.
- --------------------------------------------------------------------------------
Dana Corp. 4.0%
Mfr. components, transportation
- --------------------------------------------------------------------------------
Public Service Enterprise Group, Inc. 4.0%
Electric & gas
- --------------------------------------------------------------------------------
Ultramar Diamond Shamrock Corp. 4.0%
Petroleum refining
- --------------------------------------------------------------------------------
Morgan, J.P. & Co., Inc. 4.0%
Financial services
- --------------------------------------------------------------------------------
Bell Atlantic Corp. 3.8%
Communications
- --------------------------------------------------------------------------------
GTE Corp. 3.8%
Communications
- --------------------------------------------------------------------------------
Top Ten Total 40.6%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Energy 16.7%
- --------------------------------------------------------------------------------
Consumer Discretionary 15.5%
- --------------------------------------------------------------------------------
Financial & Business Services 12.8%
- --------------------------------------------------------------------------------
Materials & Processing 12.1%
- --------------------------------------------------------------------------------
Utilities 8.0%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 98.3%
- --------------------------------------------------------------------------------
Cash Equivalents 1.7%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO Value Fund Institutional Class shares returned -5.56% for the six-month
period ended December 31, 1999. These returns underperformed its Lipper
Multi-Cap Value Fund Average, which returned -2.65%.
The third and fourth quarters of 1999 proved to be an extremely difficult
period for value stocks. The technology sector, a traditionally high valuation
area, proved extremely popular with investors eager for high earnings growth in
the face of rising interest rates. At the same time, investors eschewed the
strong fundamentals offered by many lower valuation companies, which hurt the
performance of the Fund. Virtually all sectors other than technology were
ignored by investors during this period.
Due, again, to the high valuations, the Fund had a relatively small
exposure to the technology sector, but it was the greatest positive contributor
to the Fund's performance during this period. The Fund held two lower valuation
technology stocks during this period, Intel and Apple Computer, both of which
make commodity technology products. Apple continued to benefit from strong sales
of its popular iMac personal computer. The stock, however, was ultimately sold
from the portfolio when its valuation rose higher than the manager's investment
philosophy allows. Intel aided performance, as the company experienced a surge
in chip sales as a result of the global economic recovery.
J.P. Morgan, the banking and financial services company, contributed to the
Fund's performance during this period. The company benefited from higher
trading revenues. Investors were attracted to its low valuation, and its stock
price moved higher in the fourth quarter, despite rising interest rates.
UST produced disappointing returns for the Fund during this period. The
smokeless tobacco products company was hurt by news of class action lawsuits
against other tobacco companies. However, the outlook for UST is positive, as it
is not the subject of any lawsuits and its fundamentals remain intact.
It should be noted that, at or around the time of the closing of the PIMCO
Advisors-Allianz transaction, the day-to-day management of PIMCO Value Fund
will be assumed by PIMCO Equity Advisors. The Fund's philosophy of investing in
undervalued securities will remain in place.
Semi-Annual Report 21
<PAGE>
December 31, 1999
PIMCO Small-Cap Value Fund
OBJECTIVE
Long-term growth of capital and income
PORTFOLIO
Primarily common stocks of companies with small-sized capitalizations and below-
average price-to-earnings ratios relative to the market and their industry
groups
TOTAL NET ASSETS
$319.3 million
NUMBER OF SECURITIES IN THE PORTFOLIO
101 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
NFJ Investment Group
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
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>
6 month -10.54% -10.66% 10.95% -0.39%
1 year -6.40% -6.68% 21.25% 6.33%
3 years 4.71% 4.44% 13.08% 7.53%
5 years 12.97% -- 16.69% 13.68%
Inception 11.97% 10.42% -- --
</TABLE>
Change in Value
$5,000,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO
Small-Cap
Value Russell 2000
Month Fund Index
========== ========= ============
<S> <C> <C>
09/30/1991 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
01/31/1992 5,669,482 5,715,078
02/29/1992 5,861,326 5,881,901
03/31/1992 5,810,840 5,682,857
04/30/1992 5,692,503 5,483,332
05/31/1992 5,697,568 5,556,260
06/30/1992 5,515,246 5,295,172
07/31/1992 5,683,331 5,479,232
08/31/1992 5,596,835 5,324,279
09/30/1992 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
01/31/1993 6,581,536 6,471,360
02/28/1993 6,549,919 6,322,130
03/31/1993 6,718,541 6,527,220
04/30/1993 6,541,983 6,347,787
05/31/1993 6,653,133 6,628,549
06/30/1993 6,669,012 6,669,713
07/31/1993 6,692,411 6,761,821
08/31/1993 6,915,669 7,053,797
09/30/1993 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
01/31/1994 7,443,124 7,676,357
02/28/1994 7,431,872 7,648,492
03/31/1994 7,099,942 7,245,646
04/30/1994 7,124,167 7,288,612
05/31/1994 6,954,544 7,206,616
06/30/1994 6,830,154 6,963,464
07/31/1994 6,936,926 7,077,944
08/31/1994 7,215,540 7,472,185
09/30/1994 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
01/31/1995 6,947,635 7,215,286
02/28/1995 7,258,630 7,515,659
03/31/1995 7,302,170 7,644,477
04/30/1995 7,472,713 7,814,337
05/31/1995 7,654,211 7,948,666
06/30/1995 7,898,295 8,361,043
07/31/1995 8,291,107 8,842,639
08/31/1995 8,454,664 9,025,593
09/30/1995 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
01/31/1996 8,629,498 9,375,733
02/29/1996 8,817,388 9,667,975
03/31/1996 9,086,486 9,864,718
04/30/1996 9,396,789 10,392,185
05/31/1996 9,700,346 10,801,741
06/30/1996 9,635,021 10,358,221
07/31/1996 9,105,773 9,453,534
08/31/1996 9,540,028 10,002,407
09/30/1996 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
01/31/1997 11,435,630 11,152,467
02/28/1997 11,483,984 10,882,020
03/31/1997 11,048,801 10,368,498
04/30/1997 11,161,626 10,397,426
05/31/1997 12,120,640 11,554,139
06/30/1997 12,717,001 12,049,350
07/31/1997 13,369,775 12,610,006
08/31/1997 13,732,427 12,898,775
09/30/1997 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
01/31/1998 14,696,739 13,167,948
02/28/1998 15,620,050 14,142,376
03/31/1998 16,238,414 14,725,042
04/30/1998 16,187,590 14,806,472
05/31/1998 15,450,635 14,008,403
06/30/1998 14,976,274 14,037,820
07/31/1998 13,892,018 12,900,757
08/31/1998 11,850,569 10,395,430
09/30/1998 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
01/31/1999 13,050,655 13,211,491
02/28/1999 12,386,612 12,141,361
03/31/1999 12,209,534 12,330,766
04/30/1999 13,254,295 13,435,602
05/31/1999 13,705,844 13,631,762
06/30/1999 14,210,516 14,247,918
07/31/1999 14,033,438 13,857,525
08/31/1999 13,528,766 13,344,797
09/30/1999 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
</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
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
UST Corp. 1.3%
Tobacco products
- --------------------------------------------------------------------------------
Raymond James Financial, Inc. 1.2%
Financial services
- --------------------------------------------------------------------------------
Arthur J. Gallagher & Co. 1.1%
Insurance
- --------------------------------------------------------------------------------
C&D Technologies, Inc. 1.1%
Telecomm. & computer equip
- --------------------------------------------------------------------------------
Intermet Corp. 1.1%
Mfr. metal co
- --------------------------------------------------------------------------------
Arrow International, Inc. 1.1%
Electronics
- --------------------------------------------------------------------------------
Hanna (M.A.) Co. 1.1%
Rubber materials mfr.
- --------------------------------------------------------------------------------
CMP Group, Inc. 1.1%
Electric energy supplier
- --------------------------------------------------------------------------------
Shurgard Storage Centers, Inc. 1.1%
Self storage centers
- --------------------------------------------------------------------------------
Rollins Truck Leasing Co. 1.1%
Truck leasing co
- --------------------------------------------------------------------------------
Top Ten Total 11.3%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Financial & Business Services 25.6%
- --------------------------------------------------------------------------------
Capital Goods 13.2%
- --------------------------------------------------------------------------------
Consumer Discretionary 13.0%
- --------------------------------------------------------------------------------
Utilities 10.1%
- --------------------------------------------------------------------------------
Materials & Processing 9.4%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 99.5%
- --------------------------------------------------------------------------------
Cash Equivalents 0.5%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-month period ended December 31, 1999, PIMCO Small-Cap Value Fund
posted a return of -10.54% for Institutional Class shares.
This six-month period proved to be a very difficult one for value
investing. The technology sector dominated the market dramatically in the third
and fourth quarters to the exclusion of virtually all other sectors, which hurt
the performance of PIMCO Small-Cap Value Fund. The Fund, which has an investment
universe that focuses on small-capitalization, dividend-yielding stocks with low
fundamental valuations, had virtually no exposure to the technology sector and
therefore did not participate in its strong returns.
The Fund's exposure to basic industries helped its performance during this
period. The sector benefited from the recovery in the global economy,
particularly in Asia, which stimulated demand for basic materials. For instance,
Gleason Industries, a maker of machine tools, experienced an increase in sales
in the second half of 1999. In addition, its stock price surged in the fourth
quarter on news of a buyout offer at an approximately 31% premium--a sign that
investors had undervalued the stock in the market.
Dallas Semiconductor, the only technology holding in the Fund, aided
performance during this period. The low valuation technology company makes
semiconductor chips for a variety of applications. It benefited from the strong
revival in the semiconductor industry, fueled by the global economic recovery,
as well as general investor interest in technology issues.
Another company that contributed to the Fund's performance was Jostens, a
maker of school yearbooks and class rings. This company experienced a dramatic
rise in its stock price when it announced it would be purchased by another
company, which was attracted to its low valuation and strong fundamentals.
The financial services sector was a disappointment for the Fund. In
particular, BankAtlantic suffered during 1999. The company, like many other
regional banks, saw its stock price punished by investors in a climate of rising
interest rates--despite its solid fundamentals.
Looking ahead, the manager is optimistic that the market will broaden and
that investors will once again find lower valuation companies with strong
fundamentals attractive. The manager remains committed to its low valuation,
high dividend-yielding investment criteria, which should bode well for the Fund
over the long term.
22 PIMCO Funds
<PAGE>
December 31, 1999
PIMCO Enhanced Equity Fund
OBJECTIVE
Total return which equals or exceeds that of the S&P 500 Index
PORTFOLIO
Common stocks represented in the S&P 500 Index with market capitalizations of
more than $5 billion
TOTAL NET ASSETS
$70.7 million
NUMBER OF SECURITIES IN THE PORTFOLIO
199 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Parametric Portfolio Associates
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
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>
6 month 5.98% 6.09% 7.71% 9.94%
1 year 17.49% 17.40% 21.04% 22.31%
3 years 24.82% -- 27.56% 24.78%
5 years 25.93% -- 28.56% 25.53%
Inception 17.39% 20.24% -- --
</TABLE>
Change in Value
$5,000,000 invested at the Fund's inception
[CHART]
<TABLE>
<CAPTION>
PIMCO
Enhanced S&P 500
Month Equity Fund Index
========== =========== =========
<S> <C> <C>
02/28/1991 5,000,000 5,000,000
03/31/1991 5,144,566 5,121,000
04/30/1991 5,115,155 5,133,290
05/31/1991 5,300,523 5,355,049
06/30/1991 5,075,075 5,109,787
07/31/1991 5,333,939 5,347,903
08/31/1991 5,480,005 5,474,649
09/30/1991 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
01/31/1992 5,802,938 5,725,928
02/29/1992 5,823,246 5,800,365
03/31/1992 5,655,707 5,687,258
04/30/1992 5,745,137 5,854,463
05/31/1992 5,780,821 5,883,150
06/30/1992 5,689,062 5,795,608
07/31/1992 5,951,493 6,032,359
08/31/1992 5,890,137 5,908,877
09/30/1992 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
01/31/1993 6,344,518 6,331,803
02/28/1993 6,386,122 6,418,105
03/31/1993 6,490,130 6,553,528
04/30/1993 6,278,351 6,395,129
05/31/1993 6,424,602 6,566,198
06/30/1993 6,393,262 6,585,437
07/31/1993 6,319,865 6,558,964
08/31/1993 6,550,824 6,807,811
09/30/1993 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
01/31/1994 6,709,580 7,147,242
02/28/1994 6,566,472 6,953,266
03/31/1994 6,296,768 6,650,103
04/30/1994 6,377,723 6,735,358
05/31/1994 6,460,694 6,845,885
06/30/1994 6,300,283 6,678,092
07/31/1994 6,508,397 6,897,400
08/31/1994 6,786,534 7,180,194
09/30/1994 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
01/31/1995 6,755,489 7,185,137
02/28/1995 6,989,421 7,465,142
03/31/1995 7,143,473 7,685,438
04/30/1995 7,302,946 7,911,774
05/31/1995 7,589,561 8,228,008
06/30/1995 7,772,994 8,419,145
07/31/1995 8,015,780 8,698,323
08/31/1995 8,056,089 8,720,156
09/30/1995 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
01/31/1996 9,059,190 9,963,303
02/29/1996 9,094,903 10,055,663
03/31/1996 9,156,282 10,152,499
04/30/1996 9,281,710 10,302,147
05/31/1996 9,490,758 10,567,839
06/30/1996 9,538,857 10,608,103
07/31/1996 9,083,198 10,139,437
08/31/1996 9,305,032 10,353,277
09/30/1996 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
01/31/1997 11,388,613 12,587,815
02/28/1997 11,480,027 12,686,503
03/31/1997 10,969,634 12,165,215
04/30/1997 11,441,938 12,891,478
05/31/1997 12,089,451 13,676,311
06/30/1997 12,538,901 14,289,010
07/31/1997 13,712,042 15,425,986
08/31/1997 12,942,644 14,561,822
09/30/1997 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
01/31/1998 14,164,608 15,975,072
02/28/1998 15,241,065 17,127,195
03/31/1998 16,068,100 18,004,278
04/30/1998 16,186,248 18,185,401
05/31/1998 15,910,569 17,872,794
06/30/1998 16,593,201 18,598,787
07/31/1998 16,278,140 18,400,710
08/31/1998 13,692,016 15,740,336
09/30/1998 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
01/31/1999 18,363,348 21,165,105
02/28/1999 17,653,581 20,507,294
03/31/1999 18,242,537 21,327,791
04/30/1999 18,937,203 22,153,816
05/31/1999 18,408,652 21,630,765
06/30/1999 19,571,463 22,831,272
07/31/1999 18,922,101 22,118,480
08/31/1999 18,801,290 22,008,308
09/30/1999 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
</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
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Microsoft Corp. 5.7%
Computer services
- --------------------------------------------------------------------------------
General Electric Co. 4.1%
Electronics
- --------------------------------------------------------------------------------
Intel Corp. 3.0%
Electronics
- --------------------------------------------------------------------------------
Lucent Technologies, Inc. 2.4%
Communications
- --------------------------------------------------------------------------------
Exxon Corp. 2.3%
Petroleum refining
- --------------------------------------------------------------------------------
Sun Microsystems, Inc. 2.3%
Mkt. networked workstations
- --------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 2.2%
General merchandise stores
- --------------------------------------------------------------------------------
Cisco Systems, Inc. 2.2%
Internet networking
- --------------------------------------------------------------------------------
International Business Machines Corp. 1.7%
Business machines manufacturer
- --------------------------------------------------------------------------------
AT&T Corp. 1.6%
Telecom svcs./business sys.
- --------------------------------------------------------------------------------
Top Ten Total 27.5%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Technology 27.5%
- --------------------------------------------------------------------------------
Financial & Business Services 13.4%
- --------------------------------------------------------------------------------
Communications 10.2%
- --------------------------------------------------------------------------------
Consumer Discretionary 9.6%
- --------------------------------------------------------------------------------
Health Care 8.9%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 99.3%
- --------------------------------------------------------------------------------
Cash Equivalents 0.7%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-month period ended December 31, 1999, PIMCO Enhanced Equity Fund
Institutional Class shares returned 5.98%.
The second half of 1999 was a difficult time for fundamentally-oriented
investment strategies, such as the one used to manage this Fund. The second half
of the year continued a trend seen in the first six months of 1999, as
expensive growth stocks rose to record high levels while inexpensive value
stocks remained flat or declined, which resulted in an exceptionally narrow
market for most of the year.
The technology sector drove the market in the second half of the year, as
investors with high growth expectations focused on this area. A narrow group of
Internet- and wireless telecommunications-related issues turned in an
extraordinary performance during this period. For instance, Fund holding and
Internet search engine Yahoo! experienced enormous price appreciation during
the fourth quarter as a result of its inclusion in the S&P 500 Index, which many
investors interpreted as validation of the young company's formidable stature
among the corporate establishment. In addition, the company benefited from
general investor enthusiasm for Internet issues.
Another standout performer in technology was Sun Microsystems, a top ten
holding in the Fund. The company, a leading supplier of enterprise network
computing products, benefited from the dramatic rise in corporate demand for
networking solutions. The company is poised to maintain its strong performance
going forward as companies' needs in the area of computer networking continue to
grow.
The financial services sector also contributed to the Fund's performance
during this period. Despite a rising interest rate environment, the Fund
benefited from its exposure to this area because of strong individual stock
selection. In particular, Morgan Stanley Dean Witter performed extremely well.
The company 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.
A disappointment for the Fund was SBC Communications. This company, one of
the "Baby Bells" created by the government break-up of AT&T in 1984, suffered as
a result of pricing pressure, which arose from an increase in competition, as
well as slower subscription growth than the industry average. However, the
outlook remains positive for this company, as SBC's wireless business has strong
growth potential over the long term. Looking ahead, the manager is optimistic
that the market will broaden and become more concerned with fundamentals, and
that the Fund will resume its outperformance in this environment.
Semi-Annual Report 23
<PAGE>
December 31, 1999
PIMCO Tax-Efficient Equity Fund
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
241 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Parametric Portfolio Associates
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
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>
- --------------------------------------------------------------------------------
6 month -- 6.72% 7.71% 9.94%
1 year -- 17.66% 21.04% 22.31%
Inception 5.26% 33.29% -- --
</TABLE>
Change in Value
$5,000,000 invested at the Fund's inception
[CHART]
<TABLE>
<CAPTION>
Tax-Efficient
Equity Fund S&P 500 Index
<S> <C> <C>
09/30/1998 5,000,000 5,000,000
10/31/1998 5,468,208 5,406,700
11/30/1998 5,745,665 5,734,400
12/31/1998 6,089,290 6,064,816
01/31/1999 6,291,688 6,318,447
02/28/1999 6,077,725 6,122,070
03/31/1999 6,303,254 6,367,014
04/30/1999 6,534,566 6,613,608
05/31/1999 6,343,733 6,457,461
06/30/1999 6,713,833 6,815,850
07/31/1999 6,505,652 6,603,059
08/31/1999 6,436,258 6,570,169
09/30/1999 6,222,295 6,390,280
10/31/1999 6,592,394 6,794,657
11/30/1999 6,708,050 6,932,792
12/31/1999 7,164,891 7,341,134
</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
Administrative 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
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Microsoft Corp. 5.0%
Computer services
- --------------------------------------------------------------------------------
General Electric Co. 4.1%
Electronics
- --------------------------------------------------------------------------------
Cisco Systems, Inc. 3.0%
Internet networking
- --------------------------------------------------------------------------------
Intel Corp. 2.7%
Electronics, computer components
- --------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 2.5%
Retail
- --------------------------------------------------------------------------------
Lucent Technologies, Inc. 2.2%
Communications & software
- --------------------------------------------------------------------------------
SBC Communications, Inc. 2.0%
Communications
- --------------------------------------------------------------------------------
Citigroup, Inc. 1.8%
Financial services
- --------------------------------------------------------------------------------
Oracle Corp. 1.7%
Software
- --------------------------------------------------------------------------------
International Business Machines Corp. 1.6%
Business machines mfr.
- --------------------------------------------------------------------------------
Top Ten Total 26.6%
- --------------------------------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------------------------------
Technology 27.9%
- --------------------------------------------------------------------------------
Financial & Business Services 13.7%
- --------------------------------------------------------------------------------
Consumer Discretionary 10.3%
- --------------------------------------------------------------------------------
Health Care 10.0%
- --------------------------------------------------------------------------------
Communications 9.3%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 99.8%
- --------------------------------------------------------------------------------
Cash Equivalents 0.2%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO Tax-Efficient Equity Fund turned in a solid performance for the six-month
period ended December 31, 1999. Its Institutional Class shares returned 7.08%,
closely tracking the returns of the S&P 500 Index for the same period.
High earnings growth expectations drove the market for much of the past six
months. As a result, the high-growth technology sector overwhelmingly
outperformed all other sectors. In particular, software, Internet and wireless
telecommunications all saw explosive growth during this period. For instance,
Internet search engine Yahoo! experienced enormous price appreciation during the
fourth quarter as a result of its inclusion in the S&P 500 Index, which many
investors interpreted as validation of the young company's formidable stature
among the corporate establishment.
One standout for the Fund was Oracle, the database software management
company. It benefited from increased demand for e-commerce database management
applications, for which it makes software. Oracle also saw its stock price rise
as a result of the deal it signed in November to sell Ford Motor Company supply
chain management software. The outlook remains positive for this company, as
many Wall Street analysts are predicting similar deals for the company in the
coming year.
Another standout for the Fund was Qualcomm, a digital wireless telecom
company. The company experienced increased revenues from royalties received
through the licensing of its Code Division Multiple Access (CDMA) technology.
The firm also benefited from the sale of its cell phone handset division, which
was not profitable. The company should continue to see an increase in revenues
going forward as more cell phone handset makers utilize CDMA technology in their
products.
In keeping with its tax-efficient philosophy, the Fund did not pay a
capital gain for the second year in a row. Using tax management strategies, the
manager was able to use aggregated losses to offset capital gains.
Looking ahead, the manager remains cautiously optimistic about the market's
prospects in the near term. The manager intends to maintain its disciplined,
long-term approach to stock selection based on fundamental valuations and the
principles of portfolio diversification, tax management and risk control, which
should bode well for the Fund in any economic climate.
24 PIMCO Funds
<PAGE>
December 31, 1999
PIMCO Structured Emerging Markets Fund
OBJECTIVE
Long-term growth of capital
PORTFOLIO
Common stocks of companies located in, or whose business relates to emerging
markets
TOTAL NET ASSETS
$56.1 million
NUMBER OF SECURITIES IN THE PORTFOLIO
374 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Parametric Portfolio Associates
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
Inst'l Class IFC Investable Lipper Emerging Mkts.
(INCEP. 6/30/98) Composite Index Fund Average
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
6 month 18.73% 21.75% 27.00%
1 year 65.04% 66.79% 70.77%
Inception 32.91% -- --
</TABLE>
Change in Value
$5,000,000 invested at the Fund's inception
[CHART]
<TABLE>
<CAPTION>
PIMCO
Structured
Emerging IFC Investable
Markets Composite
Month Fund Index
========== ========= =============
<S> <C> <C>
06/30/1998 5,000,000 5,000,000
07/31/1998 5,110,000 5,199,590
08/31/1998 3,870,000 3,737,595
09/30/1998 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
01/31/1999 4,564,852 4,508,451
02/28/1999 4,580,432 4,588,701
03/31/1999 4,917,992 5,117,778
04/30/1999 5,707,364 5,814,820
05/31/1999 5,873,547 5,709,572
06/30/1999 6,460,383 6,331,344
07/31/1999 6,335,745 6,238,906
08/31/1999 6,346,132 6,305,663
09/30/1999 6,226,687 6,130,365
10/31/1999 6,335,745 6,237,033
11/30/1999 6,735,624 6,797,743
12/31/1999 7,670,735 7,708,640
</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
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
Brazil/Petroleo Brasileiro SA 2.3%
- --------------------------------------------------------------------------------
Brazil/Telecomunicacoes Brasileiras SA SP - ADR 1.4%
- --------------------------------------------------------------------------------
China/China Telecom Ltd. 1.3%
- --------------------------------------------------------------------------------
Taiwan/Taiwan Fund, Inc. 1.2%
- --------------------------------------------------------------------------------
Taiwan/R.O.C. Taiwan Fund 1.2%
- --------------------------------------------------------------------------------
Russia/Unified Energy System SP-ADR 1.2%
- --------------------------------------------------------------------------------
Russia/Samson 1.2%
- --------------------------------------------------------------------------------
Turkey/Turk Hava Yollari Anonim Ortakligi 1.1%
- --------------------------------------------------------------------------------
Baltic Nations/Baltic Fund 'A' 1.0%
- --------------------------------------------------------------------------------
Israel/Bezek Israeli Telecommunication Corp. Ltd. 1.0%
- --------------------------------------------------------------------------------
Top Ten Total 12.9%
- --------------------------------------------------------------------------------
Top 5 Countries % of Total Investments
- --------------------------------------------------------------------------------
Turkey 6.4%
- --------------------------------------------------------------------------------
Brazil 6.1%
- --------------------------------------------------------------------------------
Mexico 5.8%
- --------------------------------------------------------------------------------
South Korea 5.5%
- --------------------------------------------------------------------------------
Russia 4.9%
- --------------------------------------------------------------------------------
Regional Breakdown
- --------------------------------------------------------------------------------
Asia 42.8%
- --------------------------------------------------------------------------------
Latin America 19.1%
- --------------------------------------------------------------------------------
Europe 19.9%
- --------------------------------------------------------------------------------
Africa 17.0%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 98.8%
- --------------------------------------------------------------------------------
Cash Equivalents 1.2%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO Structured Emerging Markets Fund Institutional Class shares returned
18.73% for the six-month period ended December 31, 1999.
The technology sector turned in a strong performance for the Fund. In
particular, top ten holding China Telecom experienced exceptional stock price
appreciation during the second half of 1999 due to the Chinese government's
secondary offering of stock in the company. The outlook for China Telecom
remains positive as China is slated to join the World Trade Organization, which
should boost its economy and further increase demand for cellular phones.
Another standout in the area of telecommunications was Telecomunicacoes
Brasileiras, another top ten holding in the Fund. The company, a leading
provider of telecommunications services, benefited from the improving economy,
which stimulated dramatic growth in cellular and wireline phone use. In
addition, the company's stock price rose as a result of general investor
interest in telecommunications, an area of high earnings growth potential.
The Fund's geographic exposure to Turkey also aided its performance, as the
Turkish stock market surged during this period as a result of a decrease in
interest rates. In particular, Netas, a Turkish telecom company, turned in a
strong performance. The company benefited from the anticipated sale of two
additional cellular phone licenses by the Turkish government, which stimulated
investor enthusiasm for this area.
The Fund's performance also received a boost from Matav-Cable Systems
Media, an operator and provider of broadband Cable Television (CATV) services in
Israel. The company benefited from having a significant market share of cable TV
subscriptions as well as ownership of virtually all of the CATV infrastructure
in the country. The outlook for the company remains positive, as cable
television subscriptions in Israel should continue to grow, and Matav appears
poised to gain an even larger market share.
One disappointment for the Fund during this period was Ashanti Goldfields,
a Ghanaian gold mining company. The company was hurt by management's decision to
hedge against drops in the price of gold by borrowing gold and selling forward.
When gold prices soared in September and October, the company suffered financial
problems.
Looking ahead, the manager remains guarded about the prospects for emerging
markets, given expectations of further rate increases by the Federal Reserve and
other central banks. However, the manager is encouraged that, despite realizing
record gains, emerging markets still offer a price-to-earnings ratio nearly
half that of developed markets with higher expected earnings growth than these
developed markets.
Semi-Annual Report 25
<PAGE>
December 31, 1999
PIMCO Tax-Efficient Structured Emerging Markets Fund
OBJECTIVE
Maximum after-tax growth of capital
PORTFOLIO
Common stocks of companies located in, or whose business relates to emerging
markets
TOTAL NET ASSETS
$96.9 million
NUMBER OF SECURITIES IN THE PORTFOLIO
368 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Parametric Portfolio Associates
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
Inst'l Class IFC Investable Lipper Emerging Mkts.
(INCEP. 6/30/98) Composite Index Fund Average
<S> <C> <C> <C>
6 month 22.45% 21.75% 27.00%
1 year 72.61% 66.79% 70.77%
Inception 38.58% -- --
</TABLE>
Change in Value
$5,000,000 invested at the Fund's inception
[CHART]
<TABLE>
<CAPTION>
PIMCO
Tax-Efficient
Structured IFC Investable
Emerging Markets Composite
Month Fund Index
========== ================ ==============
<S> <C> <C>
06/30/1998 5,000,000 5,000,000
07/31/1998 5,100,000 5,199,590
08/31/1998 3,835,000 3,737,595
09/30/1998 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
01/31/1999 4,636,069 4,508,451
02/28/1999 4,681,372 4,588,701
03/31/1999 5,023,666 5,117,778
04/30/1999 5,854,232 5,814,820
05/31/1999 6,045,514 5,709,572
06/30/1999 6,669,697 6,331,344
07/31/1999 6,709,967 6,238,906
08/31/1999 6,709,967 6,305,663
09/30/1999 6,599,225 6,130,365
10/31/1999 6,715,001 6,237,033
11/30/1999 7,163,003 6,797,743
12/31/1999 8,167,343 7,708,640
</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
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
South Korea/Trigem Computer, Inc. 4.3%
- --------------------------------------------------------------------------------
Brazil/Telecomunicacoes 2.9%
Brasileiras SA SP - ADR
- --------------------------------------------------------------------------------
Brazil/Petroleo Brasileiro SA 2.7%
- --------------------------------------------------------------------------------
India/The India Fund, Inc. 1.8%
- --------------------------------------------------------------------------------
China/China Telecom Ltd. 1.4%
- --------------------------------------------------------------------------------
Turkey/Dogan Sirketler Grubu 1.2%
Holding AS
- --------------------------------------------------------------------------------
Indonesia/PT Hanjaya Mandala 1.1%
Sampoerna
- --------------------------------------------------------------------------------
Indonesia/PT Astra International, Inc. 1.1%
- --------------------------------------------------------------------------------
Hungary/Magyar Tavkozlesi Rt. 1.1%
SP - ADR
- --------------------------------------------------------------------------------
Taiwan/Taiwan Fund, Inc. 1.0%
- --------------------------------------------------------------------------------
Top Ten Total 18.6%
- --------------------------------------------------------------------------------
Top 5 Countries % of Total Investments
- --------------------------------------------------------------------------------
Brazil 7.0%
- --------------------------------------------------------------------------------
South Korea 7.0%
- --------------------------------------------------------------------------------
Turkey 6.6%
- --------------------------------------------------------------------------------
Mexico 4.7%
- --------------------------------------------------------------------------------
Thailand 4.6%
- --------------------------------------------------------------------------------
Regional Breakdown
- --------------------------------------------------------------------------------
Asia 38.0%
- --------------------------------------------------------------------------------
Latin America 31.3%
- --------------------------------------------------------------------------------
Europe 18.5%
- --------------------------------------------------------------------------------
Africa 10.8%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 98.6%
- --------------------------------------------------------------------------------
Cash Equivalents 1.4%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO Tax-Efficient Structured Emerging Markets Fund Institutional Class shares
posted a return of 22.45% for the six-month period ended December 31, 1999.
The technology sector turned in a strong performance for the Fund. In
particular, top ten holding China Telecom experienced exceptional stock price
appreciation during the second half of 1999 due to the Chinese government's
secondary offering of stock in the company. The outlook for China Telecom
remains positive as China is slated to join the World Trade Organization, which
should boost its economy and further increase demand for cellular phones.
Another standout in the area of telecommunications was Telecomunicacoes
Brasileiras, another top ten holding in the Fund. The company, a leading
provider of telecommunications services, benefited from the improving economy,
which stimulated dramatic growth in cellular and wireline phone use. In
addition, the company's stock price rose as a result of general investor
interest in telecommunications, an area of high earnings growth potential.
The Fund's geographic exposure to Turkey also aided its performance, as the
Turkish stock market surged during this period as a result of a decrease in
interest rates. In particular, Netas, a Turkish telecom company, turned in a
strong performance. The company benefited from the anticipated sale of two
additional cellular phone licenses by the Turkish government, which stimulated
investor enthusiasm for this area.
One disappointment for the Fund during this period was Ashanti Goldfields,
a Ghanaian gold mining company. The company was hurt by management's decision to
hedge against drops in the price of gold by borrowing gold and selling forward.
When gold prices soared in September and October, the company suffered financial
problems.
Looking ahead, the manager remains guarded about the prospects for emerging
markets, given expectations of further rate increases by the Federal Reserve and
other central banks. However, the manager is encouraged that, despite realizing
record gains, emerging markets still offer a price-to-earnings ratio nearly half
that of developed markets with higher expected earnings growth than these
developed markets. The manager intends to maintain its disciplined, long-term
approach to stock selection based on fundamental valuations and the principles
of portfolio diversification, tax management and risk control, which should bode
well for the Fund in any economic climate.
26 PIMCO Funds
<PAGE>
December 31, 1999
PIMCO International Fund
OBJECTIVE
Capital appreciation; income is incidental
PORTFOLIO
Primarily common stocks of foreign (non-U.S.) issuers with market
capitalizations of more than $500 million
TOTAL NET ASSETS
$153.7 million
NUMBER OF SECURITIES IN THE PORTFOLIO
289 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Blairlogie Capital Management (an independent sub-adviser not owned by PIMCO
Advisors L.P.)
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
Inst'l Class Admin. Class MSCI Lipper International
(INCEP. 9/30/98) (INCEP. 9/30/98) EAFE Index Fund Average
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6 month 21.91% 21.76% 22.29% 30.84%
1 year 28.32% 27.96% 27.31% 40.81%
Inception 38.27% 37.60% -- --
</TABLE>
Change in Value
$5,000,000 invested at the Fund's inception
[CHART]
<TABLE>
<CAPTION>
PIMCO MSCI
International EAFE
Month Fund Index
================== ============= =============
<S> <C> <C>
09/30/1998 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
01/31/1999 5,851,743 6,021,142
02/28/1999 5,687,576 5,879,043
03/31/1999 5,931,178 6,125,963
04/30/1999 6,153,597 6,375,289
05/31/1999 5,925,882 6,048,237
06/30/1999 6,153,597 6,285,328
07/31/1999 6,280,694 6,473,888
08/31/1999 6,211,850 6,499,136
09/30/1999 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
</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 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. 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
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------------------------------
United Kingdom/WEBS Index Fund 3.3%
- --------------------------------------------------------------------------------
Germany/Deutsche Telekom AG 2.7%
- --------------------------------------------------------------------------------
Sweden/MSCI Sweden Opal Series B 2.5%
- --------------------------------------------------------------------------------
Finland/Nokia OYJ 2.3%
- --------------------------------------------------------------------------------
Hungary/Magyar Tavkozlesi Rt 2.0%
- --------------------------------------------------------------------------------
France/France Telecom SA 1.7%
- --------------------------------------------------------------------------------
Japan/Murata Manufacturing Co. 1.7%
- --------------------------------------------------------------------------------
Turkey/Turkiye Is Bankasi 'C' 1.5%
- --------------------------------------------------------------------------------
Japan/Toyota Motor Corp. 1.4%
- --------------------------------------------------------------------------------
Japan/Nippon Telegraph & Telephone 1.4%
- --------------------------------------------------------------------------------
Top Ten Total 20.5%
- --------------------------------------------------------------------------------
Top 5 Countries % of Total Investments
- --------------------------------------------------------------------------------
Japan 18.2%
- --------------------------------------------------------------------------------
Germany 13.3%
- --------------------------------------------------------------------------------
France 10.9%
- --------------------------------------------------------------------------------
Switzerland 5.1%
- --------------------------------------------------------------------------------
Turkey 5.1%
- --------------------------------------------------------------------------------
Regional Breakdown
- --------------------------------------------------------------------------------
Europe 58.1%
- --------------------------------------------------------------------------------
Asia 30.8%
- --------------------------------------------------------------------------------
Latin America 6.1%
- --------------------------------------------------------------------------------
Australia 1.4%
- --------------------------------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------------------------------
Common Stock 96.4%
- --------------------------------------------------------------------------------
Cash Equivalents 3.6%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-month period ended December 31, 1999, PIMCO International Fund
posted a return of 21.91% for Institutional Class shares. These returns
outperformed the MSCI EAFE Index, which returned 22.29% for the same period.
Exposure to Europe positively contributed to the Fund's performance during
this period, as economic growth in this region was strong. Germany, a country in
which the Fund is overweight, experienced a significant recovery in its economy
in 1999 after having flirted with recession in 1998. In particular, top ten
holding Deutsche Telekom, the German telecommunications company, benefited from
the explosive growth in cell phone handset subscriptions as well as
infrastructure buildout.
Nokia, the Finnish cell phone handset maker, also greatly contributed to
the Fund's performance during this period. The company, which is now the largest
capitalized stock in Europe, benefited from an increase in first-time cell phone
subscriptions, stimulated by the introduction of affordable `one rate' plans.
The company'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.
Another geographical area of strength for the Fund was Asia. The Asian
economy's recovery accelerated during this period, as the private sector joined
the government in its economic intervention efforts. Toyota, a large holding in
the Fund, was a beneficiary of this recovery. The largest automaker in Japan,
Toyota saw its sales increase both domestically and internationally. In
particular, the company's luxury car division, Lexus, experienced a surge in its
U.S. sales due to a strong domestic economy and high consumer confidence.
One disappointment for the Fund in the latter half of 1999 was Bank of
Ireland. A leading financial services company, the Bank of Ireland had turned in
a strong performance in 1998 as the result of a strong domestic economy.
However, despite an increase in profits, the company's stock price was pulled
down by Ireland's disappointing economy during this period.
Looking ahead, the manager believes that the global economic recovery will
continue. The manager is optimistic that the Fund is well positioned to benefit
from this positive climate, which should enable it to continue its strong
performance.
Semi-Annual Report 27
<PAGE>
Financial Highlights -
Institutional and Administrative Classes
<TABLE>
<CAPTION>
Net Asset Net Realized/ Total Dividends Dividends in
Value Unrealized Income from from Net Excess of Net
Selected Per Share 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>
Renaissance Fund
Institutional Class
12/31/1999 (a) $ 18.23 $ 0.02 (b) $ (0.52)(b) $ (0.50) $ 0.00 $ 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
06/30/1999 19.07 0.06 (b) 1.43 (b) 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
12/31/1999 (a) 18.18 0.01 (b) (0.48)(b) (0.47) 0.00 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
08/31/1998-06/30/1999 15.37 0.02 (b) 5.12 (b) 5.14 0.00 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Growth Fund
Institutional Class
12/31/1999 (a) $ 31.24 $ (0.07)(b) $ 8.99 (b) $ 8.92 $ 0.00 $ 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
03/31/1999-06/30/1999 31.27 (0.01) (0.02) (0.03) 0.00 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Administrative Class
12/31/1999 (a) 31.23 (0.10)(b) 8.96 (b) 8.86 0.00 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
03/31/1999-06/30/1999 31.27 (0.04) 0.00 (0.04) 0.00 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Core Equity Fund
Institutional Class
12/31/1999 (a) $ 24.86 $ 0.08 (b) $ 1.92 (b) $ 2.00 $ (0.02) $ 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
06/30/1999 20.39 (0.04)(b) 5.24 (b) 5.20 0.00 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
06/30/1998 15.55 0.03 (b) 6.11 (b) 6.14 0.00 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
06/30/1997 13.55 0.03 (b) 2.78 (b) 2.81 (0.02) 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
11/01/1995-06/30/1996 12.72 0.51 0.65 1.16 (0.04) (0.01)
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
12/28/1994-10/31/1995 10.00 0.07 2.71 2.78 (0.06) 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Administrative Class
12/31/1999 (a) 24.67 0.00 (b) 1.89 (b) 1.89 (0.03) 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
06/30/1999 20.32 (0.03)(b) 5.11 (b) 5.08 0.00 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
06/30/1998 15.53 (0.01)(b) 6.10 (b) 6.09 0.00 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
06/30/1997 13.56 0.00 (b) 2.77 (b) 2.77 (0.01) 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
11/01/1995-06/30/1996 12.73 0.49 0.65 1.14 (0.02) (0.01)
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
05/31/1999-10/31/1995 11.45 0.02 1.28 1.30 (0.02) 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Target Fund
Institutional Class
12/31/1999 (a) $ 17.74 $ (0.06)(b) $ 8.88 (b) $ 8.82 $ 0.00 $ 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
03/31/1999-06/30/1999 16.34 (0.02)(b) 1.42 (b) 1.40 0.00 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Administrative Class
12/31/1999 (a) 17.73 (0.08)(b) 8.89 (b) 8.81 0.00 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
03/31/1999-06/30/1999 16.34 (0.03)(b) 1.42 (b) 1.39 0.00 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Mid-Cap Equity Fund
Institutional Class
12/31/1999 (a) $ 15.84 $ (0.05)(b) $ 4.50 (b) $ 4.45 $ (0.11) $ 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
06/30/1999 13.53 (0.03)(b) 2.99 (b) 2.96 0.00 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
06/30/1998 14.04 (0.03)(b) 3.61 (b) 3.58 0.00 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
06/30/1997 14.66 (0.06)(b) 1.31 (b) 1.25 0.00 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
11/01/1995-06/30/1996 12.92 0.49 1.62 2.11 0.00 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
12/28/1994-10/31/1995 10.00 0.02 2.92 2.94 (0.02) 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Opportunity Fund
Institutional Class
12/31/1999 (a) $ 24.26 $ (0.03)(b) $ 10.47 (b) $ 10.44 $ 0.00 $ 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
03/31/1999-06/30/1999 21.40 (0.03)(b) 2.89 (b) 2.86 0.00 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Administrative Class
12/31/1999 (a) 24.26 (0.08)(b) 10.47 (b) 10.39 0.00 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
03/31/1999-06/30/1999 21.40 (0.05)(b) 2.91 (b) 2.86 0.00 0.00
- ------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
* Annualized
(a) Unaudited
(b) Per share amounts based on average number of shares outstanding during the
period.
(c) Ratio of expenses to average net assets excluding interest expense is 0.88%.
28 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Ratio of Net
Distributions Distributions Fund Net Assets Ratio of Investment
from Net in Excess of Reimbursement Net Asset End of Expenses to Income (Loss) Portfolio
Realized Net Realized Total Fee Added to Value End Total Period Average Net to Average Turnover
Capital Gains Capital Gains Distributions Paid-In-Capital of Period Return (000s) Assets Net Assets Rate
- ------------- ------------- ------------- --------------- --------- ------ ---------- ----------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ (3.45) $ 0.00 $ (3.45) $ 0.00 $ 14.28 (1.46)% $ 116 0.85%* 0.29%* 68%
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
(2.33) 0.00 (2.33) 0.00 18.23 10.24 136 0.86 0.38 221
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
0.00 0.00 0.00 0.00 19.07 13.99 851 0.86* 0.55* 192
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
(3.45) 0.00 (3.45) 0.00 14.26 (1.28) 766 1.10* 0.09* 68
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
(2.33) 0.00 (2.33) 0.00 18.18 36.41 427 1.09* 0.13* 221
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
$ (5.66) $ 0.00 $ (5.66) $ 0.00 $ 34.50 30.14% $ 4,001 0.78%* (0.40)%* 35%
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
0.00 0.00 0.00 0.00 31.24 (0.10) 948 0.74* (0.19)* 131
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
(5.66) 0.00 (5.66) 0.00 34.43 29.95 16,091 1.03* (0.61)* 35
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
0.00 0.00 0.00 0.00 31.23 (0.13) 6,164 0.97* (0.53)* 131
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
$ (3.72) $ 0.00 $ (3.74) $ 0.00 $ 23.12 8.87% $ 1,498 0.98%(d)* 0.29%* 142%
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
(0.73) 0.00 (0.73) 0.00 24.86 26.34 1,184 1.01 (d) (0.20) 95
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
(1.30) 0.00 (1.30) 0.00 20.39 41.83 1,915 0.83 0.20 120
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
(0.79) 0.00 (0.81) 0.00 15.55 21.59 6,444 0.87 0.23 139
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
(0.28) 0.00 (0.33) 0.00 13.55 9.41 10,452 0.82* 0.53* 73
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
0.00 0.00 (0.06) 0.00 12.72 27.86 7,791 0.82* 0.79* 123
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
(3.72) 0.00 (3.75) 0.00 22.81 8.50 42 1.23 (e)* 0.06* 142
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
(0.73) 0.00 (0.73) 0.00 24.67 25.84 15 1.08 (0.17) 95
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
(1.30) 0.00 (1.30) 0.00 20.32 41.54 128,666 1.08 (0.07) 120
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
(0.79) 0.00 (0.80) 0.00 15.53 21.20 29,332 1.13 (0.03) 139
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
(0.28) 0.00 (0.31) 0.00 13.56 9.23 33,575 1.07* 0.28* 73
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
0.00 0.00 (0.02) 0.00 12.73 11.34 24,645 1.06* 0.34* 58
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
$ (1.80) $ 0.00 $ (1.80) $ 0.00 $ 24.76 51.15% $ 4,654 0.80%* (0.58)%* 59%
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
0.00 0.00 0.00 0.00 17.74 8.57 1,298 0.79* (0.39)* 229
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
(1.80) 0.00 (1.80) 0.00 24.74 51.12 8,307 1.05* (0.81)* 59
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
0.00 0.00 0.00 0.00 17.73 8.51 5,513 1.02* (0.61)* 229
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
$ (8.60) $ 0.00 $ (8.71) $ 0.00 $ 11.58 33.22% $ 5,455 1.10%(c)* (0.66)%* 123%
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
(0.65) 0.00 (0.65) 0.00 15.84 23.18 7,399 0.89 (0.22) 273
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
(4.09) 0.00 (4.09) 0.00 13.53 30.40 8,488 0.89 (0.25) 268
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
(1.87) 0.00 (1.87) 0.00 14.04 9.61 7,591 1.15 (0.43) 202
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
(0.37) 0.00 (0.37) 0.00 14.66 16.72 8,378 0.88* (0.32)* 97
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
0.00 0.00 (0.02) 0.00 12.92 29.34 8,357 0.88* 0.24* 132
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
$ (7.88) $ 0.00 $ (7.88) $ 0.00 $ 26.82 46.90% $ 6,910 0.92%* (0.27)%* 122%
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
0.00 0.00 0.00 0.00 24.26 13.36 417 0.88* (0.54)* 175
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
(7.88) 0.00 (7.88) 0.00 26.77 46.69 8,918 1.17* (0.60)* 122
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
0.00 0.00 0.00 0.00 24.26 13.36 2,010 1.12* (0.82)* 175
- --------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------
</TABLE>
(d) Ratio of expenses to average net assets excluding interest expense is 0.82%.
(e) Ratio of expenses to average net assets excluding interest expense is 1.07%.
See accompanying notes 29
<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
Selected Per Share 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>
Innovation Fund
Institutional Class
12/31/1999 (a) $ 37.50 $ (0.14)(b) $ 34.66 (b) $ 34.52 $ 0.00 $ 0.00
- ------------------------------- --------- ----------- ----------- --------- --------- ---------
03/05/1999-06/30/1999 32.73 (0.05)(b) 4.82 (b) 4.77 0.00 0.00
- ------------------------------- --------- ----------- ----------- --------- --------- ---------
International Growth Fund
Institutional Class
12/31/1999 (a) $ 16.04 $ (0.07)(b) $ 10.42 (b) $ 10.35 $ 0.00 $ 0.00
- ------------------------------- --------- ----------- ----------- --------- --------- ---------
06/30/1999 13.55 (0.02)(b) 3.56 (b) 3.54 (0.02) 0.00
- ------------------------------- --------- ----------- ----------- --------- --------- ---------
12/31/1997-06/30/1998 10.00 0.00 (b) 3.55 (b) 3.55 0.00 0.00
- ------------------------------- --------- ----------- ----------- --------- --------- ---------
Mega-Cap Fund
Institutional Class
08/31/1999 - 12/31/1999 (a) $ 10.00 $ 0.01 (b) $ 2.41 (b) $ 2.42 $ 0.00 $ 0.00
- ------------------------------- --------- ----------- ----------- --------- --------- ---------
Capital Appreciation Fund
Institutional Class
12/31/1999 (a) $ 26.84 $ 0.05 (b) $ 3.30 (b) $ 3.35 $ (0.11) $ 0.00
- ------------------------------- --------- ----------- ----------- --------- --------- ---------
06/30/1999 26.13 0.16 (b) 2.35 (b) 2.51 (0.15) 0.00
- ------------------------------- --------- ----------- ----------- --------- --------- ---------
06/30/1998 21.19 0.15 (b) 6.59 (b) 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
- ------------------------------- --------- ----------- ----------- --------- --------- ---------
10/31/1995 13.34 0.18 3.60 3.78 (0.18) 0.00
- ------------------------------- --------- ----------- ----------- --------- --------- ---------
Administrative Class
12/31/1999 (a) 26.64 0.01 (b) 3.27 (b) 3.28 (0.05) 0.00
- ------------------------------- --------- ----------- ----------- --------- --------- ---------
06/30/1999 25.99 0.09 (b) 2.34 (b) 2.43 (0.13) 0.00
- ------------------------------- --------- ----------- ----------- --------- --------- ---------
06/30/1998 21.16 0.10 (b) 6.55 (b) 6.65 (0.14) 0.00
- ------------------------------- --------- ----------- ----------- --------- --------- ---------
07/31/1996-06/30/1997 17.19 0.16 6.03 6.19 (0.09) 0.00
- ------------------------------- --------- ----------- ----------- --------- --------- ---------
Mid-Cap Growth Fund
Institutional Class
12/31/1999 (a) $ 23.01 $ 0.05 (b) $ 2.95 (b) $ 3.00 $ 0.00 $ 0.00
- ------------------------------- --------- ----------- ----------- --------- --------- ---------
06/30/1999 24.09 0.12 (b) (0.11)(b) 0.01 (0.02) 0.00
- ------------------------------- --------- ----------- ----------- --------- --------- ---------
06/30/1998 20.28 0.11 (b) 5.11 (b) 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
- ------------------------------- --------- ----------- ----------- --------- --------- ---------
10/31/1995 13.97 0.07 4.19 4.26 (0.07) 0.00
- ------------------------------- --------- ----------- ----------- --------- --------- ---------
Administrative Class
12/31/1999 (a) 22.88 0.02 (b) 2.99 (b) 3.01 0.00 0.00
- ------------------------------- --------- ----------- ----------- --------- --------- ---------
06/30/1999 23.96 0.06 (b) (0.06)(b) 0.00 (0.01) 0.00
- ------------------------------- --------- ----------- ----------- --------- --------- ---------
06/30/1998 20.24 0.05 (b) 5.08 (b) 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
- ------------------------------- --------- ----------- ----------- --------- --------- ---------
11/30/1994-10/31/1995 13.31 0.03 4.85 4.88 (0.02) 0.00
- ------------------------------- --------- ----------- ----------- --------- --------- ---------
</TABLE>
* Annualized
(a) Unaudited
(b) Per share amounts based on average number of shares outstanding during the
period.
30 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Ratio of Net
Distributions Distributions Fund Net Assets Ratio of Investment
from Net in Excess of Reimbursement Net Asset End of Expenses to Income (Loss) Portfolio
Realized Net Realized Total Fee Added to Value End Total Period Average Net to Average Turnover
Capital Gains Capital Gains Distributions Paid-In-Capital of Period Return (000s) Assets Net Assets Rate
- ------------- ------------- ------------- --------------- --------- ------ ---------- ----------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ (6.39) $ 0.00 $ (6.39) $ 0.00 $ 65.63 94.83% $ 8,881 0.90%* (0.53)%* 102%
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
0.00 0.00 0.00 0.00 37.50 14.57 444 0.88* (0.15)* 119
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
$ (4.43) $ 0.00 $ (4.43) $ 0.00 $ 21.96 67.74% $ 12,580 1.37%* (0.71)%* 30%
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
(1.03) 0.00 (1.05) 0.00 16.04 28.62 8,408 1.39 (0.15) 269
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
0.00 0.00 0.00 0.00 13.55 35.50 6,822 1.36* 0.08* 60
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
$ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 12.42 24.24% $ 3,726 0.70%* 0.27%* 66%
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
$ (5.00) $ 0.00 $ (5.11) $ 0.00 $ 25.08 13.64% $ 538,370 0.70%* 0.35%* 52%
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
(1.65) 0.00 (1.80) 0.00 26.84 10.57 645,967 0.71 0.64 120
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
(1.68) 0.00 (1.80) 0.00 26.13 32.97 805,856 0.71 0.64 75
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
(2.13) 0.00 (2.23) 0.00 21.19 31.52 536,187 0.71 1.02 87
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
(1.03) 0.00 (1.18) 0.00 18.10 14.65 348,728 0.70* 1.33* 73
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
0.00 0.00 (0.18) 0.00 16.94 28.47 236,220 0.70 1.22 83
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
(5.00) 0.00 (5.05) 0.00 24.87 13.45 201,117 0.95* 0.09* 52
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
(1.65) 0.00 (1.78) 0.00 26.64 10.30 229,831 0.95 0.38 120
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
(1.68) 0.00 (1.82) 0.00 25.99 32.55 132,384 0.96 0.39 75
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
(2.13) 0.00 (2.22) 0.00 21.16 38.26 3,115 0.96* 0.66* 87
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
$ (0.02) $ 0.00 $ (0.02) $ 0.00 $ 25.99 13.52% $ 602,800 0.70%* 0.44%* 76%
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
(1.07) 0.00 (1.09) 0.00 23.01 0.33 581,544 0.70 0.54 85
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
(1.33) 0.00 (1.41) 0.00 24.09 26.16 437,985 0.71 0.46 66
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
(4.29) 0.00 (4.34) 0.00 20.28 30.58 291,374 0.71 0.53 82
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
(0.43) 0.00 (0.57) 0.00 19.44 10.37 231,011 0.70* 1.11* 79
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
0.00 0.00 (0.07) 0.00 18.16 30.54 189,320 0.70 0.43 78
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
(0.02) 0.00 (0.02) 0.00 25.87 13.36 107,746 0.95* 0.18* 76
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
(1.07) 0.00 (1.08) 0.00 22.88 0.31 104,337 0.95 0.30 85
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
(1.33) 0.00 (1.41) 0.00 23.96 25.75 73,614 0.95 0.22 66
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
(4.29) 0.00 (4.32) 0.00 20.24 30.23 2,066 0.96 0.28 82
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
(0.43) 0.00 (0.54) 0.00 19.44 10.17 1,071 0.95* 0.89* 79
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
0.00 0.00 (0.02) 0.00 18.17 36.64 892 0.94* 0.23* 72
- --------- --------- --------- --------- --------- ------ --------- ------ -------- --------
</TABLE>
See accompanying notes 31
<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
Selected Per Share 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>
Small-Cap Growth Fund
Institutional Class
12/31/1999(a) $ 11.41 $ (0.03)(b) $ 0.96 (b) $ 0.93 $ 0.00 $ 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
06/30/1999 14.01 (0.01)(b) (2.12)(b) (2.13) 0.00 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
06/30/1998 13.40 (0.03)(b) 2.52 (b) 2.49 0.00 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
06/30/1997 20.83 (0.01)(b) 3.17 (b) 3.16 0.00 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
11/01/1995-06/30/1996 21.02 2.02 (0.61) 1.41 0.00 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
10/31/1995 19.38 (0.05) 3.12 3.07 0.00 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
Administrative Class
12/31/1999 (a) 11.34 (0.04)(b) 0.95 (b) 0.91 0.00 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
06/30/1999 13.97 (0.04)(b) (2.12)(b) (2.16) 0.00 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
06/30/1998 13.41 (0.07)(b) 2.51 (b) 2.44 0.00 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
06/30/1997 20.82 (0.06)(b) 3.24 (b) 3.18 0.00 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
11/01/1995-06/30/1996 21.01 2.02 (b) (0.61)(b) 1.41 0.00 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
09/27/1995-10/31/1995 21.90 (0.02) (0.87) (0.89) 0.00 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
Micro-Cap Growth Fund
Institutional Class
12/31/1999 (a) $ 20.00 $ (0.08)(b) $ 1.04 (b) $ 0.96 $ 0.00 $ 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
06/30/1999 23.66 (0.14)(b) (2.89)(b) (3.03) 0.00 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
06/30/1998 19.85 (0.11)(b) 6.54 (b) 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
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
10/31/1995 11.87 (0.04) 3.55 3.51 0.00 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
Administrative Class
12/31/1999 (a) 19.82 (0.10)(b) 1.03 (b) 0.93 0.00 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
06/30/1999 23.52 (0.19)(b) (2.88)(b) (3.07) 0.00 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
06/30/1998 19.78 (0.17)(b) 6.53 (b) 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
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
Equity Income Fund
Institutional Class
12/31/1999 (a) $ 15.62 $ 0.22 (b) $ (2.11)(b) $ (1.89) $ (0.26) $ 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
06/30/1999 16.09 0.44 (b) 1.28 (b) 1.72 (0.43) 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
06/30/1998 15.41 0.44 (b) 2.75 (b) 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
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
10/31/1995 11.75 0.46 1.67 2.13 (0.46) 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
Administrative Class
12/31/1999 (a) 15.61 0.20 (b) (2.11)(b) (1.91) (0.25) 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
06/30/1999 16.08 0.41 (b) 1.28 (b) 1.69 (0.40) 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
06/30/1998 15.40 0.40 (b) 2.75 (b) 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
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
11/30/1994-10/31/1995 11.12 0.39 2.35 2.74 (0.40) 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
Value Fund
Institutional Class
12/31/1999 (a) $ 15.30 $ 0.16 (b) $ (1.07)(b) $ (0.91) $ (0.17) $ 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
06/30/1999 15.66 0.28 (b) 1.36 (b) 1.64 (0.28) 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
06/30/1998 14.81 0.25 (b) 2.47 (b) 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
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
10/31/1995 11.55 0.30 2.18 2.48 (0.30) 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
Administrative Class
12/31/1999 (a) 15.26 0.14 (b) (1.08)(b) (0.94) (0.15) 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
06/30/1999 15.65 0.26 (b) 1.32 (b) 1.58 (0.25) 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
08/21/1997-06/30/1998 15.66 0.19 (b) 1.65 (b) 1.84 (0.22) 0.00
- -------------------------------- -------- ----------- ----------- ----------- ---------- ----------
</TABLE>
* Annualized
(a) Unaudited
(b) Per share amounts based on average number of shares outstanding during the
period.
32 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Ratio of Net
Distributions Distributions Fund Net Assets Ratio of Investment
from Net in Excess of Reimbursement Net Asset End of Expenses to Income (Loss) Portfolio
Realized Net Realized Total Fee Added to Value End Total Period Average Net to Average Turnover
Capital Gains Capital Gains Distributions Paid-In-Capital of Period Return (000s) Assets Net Assets Rate
- ------------- ------------- ------------- --------------- --------- ------ ---------- ----------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 12.34 8.15% $ 65,262 1.25%* (0.47)%* 66%
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
0.00 (0.47) (0.47) 0.00 11.41 (14.99) 66,393 1.25 (0.09) 94
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(1.88) 0.00 (1.88) 0.00 14.01 19.33 47,641 1.26 (0.20) 77
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(10.59) 0.00 (10.59) 0.00 13.40 22.82 33,390 1.32 (0.05) 129
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(1.60) 0.00 (1.60) 0.00 20.83 7.22 32,954 1.25* (0.20)* 59
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(1.43) 0.00 (1.43) 0.00 21.02 17.39 73,977 1.25 (0.27) 86
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
0.00 0.00 0.00 0.00 12.25 8.02 2,575 1.50* (0.74)* 66
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
0.00 (0.47) (0.47) 0.00 11.34 (15.26) 2,229 1.50 (0.33) 94
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(1.88) 0.00 (1.88) 0.00 13.97 18.90 981 1.49 (0.51) 77
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(10.59) 0.00 (10.59) 0.00 13.41 23.12 1 1.54 (0.36) 129
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(1.60) 0.00 (1.60) 0.00 20.82 7.18 112 1.50* (0.41)* 59
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
0.00 0.00 0.00 0.00 21.01 (5.34) 544 1.60* (0.82)* 9
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
$ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 20.96 4.80% $ 215,001 1.50%* (0.79)%* 51%
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
0.00 (0.63) (0.63) 0.00 20.00 (12.66) 234,439 1.50 (0.71) 73
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(2.62) 0.00 (2.62) 0.00 23.66 33.95 257,842 1.51 (0.50) 72
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(2.03) 0.00 (2.03) 0.00 19.85 20.05 164,139 1.52 (0.49) 84
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(0.34) 0.00 (0.34) 0.00 18.47 22.64 83,973 1.50* (0.45)* 54
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
0.00 0.00 0.00 0.00 15.38 29.54 69,775 1.50 (0.37) 87
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
0.00 0.00 0.00 0.00 20.75 4.69 4,683 1.75* (1.08)* 51
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
0.00 (0.63) (0.63) 0.00 19.82 (12.91) 3,000 1.75 (0.97) 73
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(2.62) 0.00 (2.62) 0.00 23.52 33.70 4,779 1.76 (0.74) 72
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(2.03) 0.00 (2.03) 0.00 19.78 19.72 2,116 1.77 (0.74) 84
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
0.00 0.00 0.00 0.00 18.46 10.34 566 1.73* (0.74)* 54
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
$ (2.64) $ 0.00 $ (2.90) $ 0.00 $ 10.83 (11.55)%$ 94,948 0.73%* 3.08%* 26%
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(1.76) 0.00 (2.19) 0.00 15.62 12.56 123,012 0.71 3.00 76
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(2.09) 0.00 (2.51) 0.00 16.09 21.84 138,650 0.71 2.71 45
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(1.97) 0.00 (2.52) 0.00 15.41 27.67 121,138 0.72 3.03 45
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(0.48) 0.00 (0.82) 0.00 14.36 16.35 116,714 0.70* 3.41* 52
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(0.33) 0.00 (0.79) 0.00 13.09 19.36 118,015 0.70 3.83 46
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(2.64) 0.00 (2.89) 0.00 10.81 (11.73) 11,241 0.98* 2.84* 26
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(1.76) 0.00 (2.16) 0.00 15.61 12.31 13,797 0.96 2.80 76
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(2.09) 0.00 (2.47) 0.00 16.08 21.58 11,699 0.96 2.45 45
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(1.97) 0.00 (2.48) 0.00 15.40 27.40 8,145 0.97 2.79 45
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(0.48) 0.00 (0.84) 0.00 14.35 16.08 6,097 0.95* 3.19* 52
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(0.33) 0.00 (0.73) 0.00 13.13 25.69 140 0.95* 3.43* 43
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
$ (2.57) $ 0.00 $ (2.74) $ 0.00 $ 11.65 (5.56)% $ 77,014 0.70%* 2.18%* 65%
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(1.72) 0.00 (2.00) 0.00 15.30 12.30 69,181 0.71 1.99 101
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(1.63) 0.00 (1.87) 0.00 15.66 19.35 83,219 0.71 1.59 77
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(0.50) 0.00 (0.81) 0.00 14.81 26.38 74,613 0.73 2.02 71
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(1.77) 0.00 (1.94) 0.00 12.46 16.24 52,727 0.70* 2.40* 29
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(1.20) 0.00 (1.50) 0.00 12.53 24.98 14,443 0.70 2.50 71
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(2.57) 0.00 (2.72) 0.00 11.60 (5.76) 21,426 0.95* 1.99* 65
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(1.72) 0.00 (1.97) 0.00 15.26 11.91 23,164 0.95 1.81 101
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(1.63) 0.00 (1.85) 0.00 15.65 12.71 10,349 0.96* 1.40* 77
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
</TABLE>
See accompanying notes 33
<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
Selected Per Share 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>
Value 25 Fund
Institutional Class
12/31/1999 (a) $ 8.99 $ 0.10 (b) $ (8.98)(b) $ (8.88) $ (0.11) $ 0.00
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
07/10/1998-06/30/1999 10.00 0.15 (b) (1.10)(b) (0.95) (0.06) 0.00
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
Small-Cap Value Fund
12/31/1999 (a) $ 16.05 $ 0.18 (b) $ (1.89)(b) $ (1.71) $ (0.34) $ 0.00
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
06/30/1999 17.68 0.32 (b) (1.29)(b) (0.97) (0.21) 0.00
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
06/30/1998 15.78 0.29 (b) 2.50 (b) 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
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
10/31/1995 12.07 0.28 1.92 2.20 (0.28) 0.00
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
Administrative Class
12/31/1999 (a) 15.97 0.16 (b) (1.87)(b) (1.71) (0.31) 0.00
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
06/30/1999 17.63 0.29 (b) (1.30)(b) (1.01) (0.20) 0.00
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
06/30/1998 15.76 0.25 (b) 2.49 (b) 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
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
Enhanced Equity Fund
Institutional Class
12/31/1999 (a) $ 12.96 $ 0.04 (b) $ 0.71 (b) $ 0.75 $ (0.07) $ 0.00
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
06/30/1999 12.64 0.08 (b) 1.91 (b) 1.99 (0.06) 0.00
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
06/30/1998 16.46 0.11 (b) 3.91 (b) 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
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
10/31/1995 11.99 0.25 2.62 2.87 (0.25) 0.00
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
Administrative Class
12/31/1999 (a) 12.87 0.02 (b) 0.74 (b) 0.76 (0.05) 0.00
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
06/30/1999 12.59 0.05 (b) 1.90 (b) 1.95 (0.06) 0.00
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
08/21/1997-06/30/1998 17.53 0.05 (b) 2.85 (b) 2.90 (0.11) 0.00
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
Tax-Efficient Equity Fund
Institutional Class
07/02/1999 - 12/31/1999 (a) $ 11.79 $ 0.03 (b) $ 0.59 (b) $ 0.62 $ 0.00 $ 0.00
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
Administrative Class
12/31/1999 (a) 11.61 0.02 (b) 0.76 (b) 0.78 0.00 0.00
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
09/30/1998 - 06/30/1999 8.65 0.03 (b) 2.93 (b) 2.96 0.00 0.00
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
Structured Emerging Markets Fund
Institutional Class
12/31/1999 (a) $ 12.42 $ 0.02 (b) $ 2.26 (b) $ 2.28 $ (0.07) $ 0.00
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
06/30/1999 10.00 0.15 (b) 2.57 (b) 2.72 (0.07) 0.00
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
Tax-Efficient Structured Emerging Markets Fund
Institutional Class
12/31/1999 (a) $ 13.25 $ 0.03 (b) $ 2.94 (b) $ 2.97 $ (0.12) $ 0.00
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
06/30/1999 10.00 0.16 (b) 3.10 (b) 3.26 (0.06) 0.00
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
International Fund
Institutional Class
12/31/1999 (a) $ 11.62 $ 0.02 (b) $ 2.39 (b) $ 2.41 $ 0.00 $ 0.00
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
09/30/1998-06/30/1999 10.47 0.14 (b) 2.16 (b) 2.30 0.00 0.00
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
Administrative Class
12/31/1999 (a) 11.56 0.00 (b) 2.38 (b) 2.38 0.00 0.00
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
09/30/1998 - 06/30/1999 10.47 0.09 (b) 2.15 (b) 2.24 0.00 0.00
- ------------------------------ --------- ----------- ----------- --------- --------- ---------
</TABLE>
* Annualized
(a) Unaudited
(b) Per share amounts based on average number of shares outstanding during the
period.
(c) Ratio of expenses to average net assets excluding interest expense is 0.95%.
34 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Ratio of Net
Distributions Distributions Fund Net Assets Ratio of Investment
from Net in Excess of Reimbursement Net Asset End of Expenses to Income (Loss) Portfolio
Realized Net Realized Total Fee Added to Value End Total Period Average Net to Average Turnover
Capital Gains Capital Gains Distributions Paid-In-Capital of Period Return (000s) Assets Net Assets Rate
- ------------- ------------- ------------- --------------- --------- ------ ---------- ----------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0.00 $ 0.00 $ (0.11) $ 0.00 $ 0.00 0.00% $ 0 0.79%* 2.35%* 94%
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
0.00 0.00 (0.06) 0.00 8.99 (9.48) 229 0.85* 1.89* 182
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
$ 0.00 $ 0.00 $ (0.34) $ 0.00 $ 14.00 (10.54)%$ 38,751 0.85%* 2.36%* 31%
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
0.00 (0.45) (0.66) 0.00 16.05 (5.11) 59,132 0.85 2.12 60
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(0.76) 0.00 (0.89) 0.00 17.68 17.77 47,432 0.85 1.65 41
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(2.38) 0.00 (2.51) 0.00 15.78 31.99 34,639 0.90 1.92 48
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(0.74) 0.00 (0.95) 0.00 14.20 16.35 29,017 0.85* 2.12* 35
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(0.89) 0.00 (1.17) 0.00 13.10 19.88 35,093 0.85 2.25 50
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
0.00 0.00 (0.31) 0.00 13.95 (10.66) 15,296 1.10* 2.15* 31
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
0.00 (0.45) (0.65) 0.00 15.97 (5.40) 21,022 1.10 1.92 60
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(0.76) 0.00 (0.87) 0.00 17.63 17.41 10,751 1.10 1.39 41
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(2.38) 0.00 (2.50) 0.00 15.76 31.70 5,916 1.16 1.68 48
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(0.74) 0.00 (0.93) 0.00 14.20 15.64 4,433 1.10* 1.86* 35
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
$ (0.47) $ 0.00 $ (0.54) $ 0.00 $ 13.17 5.98% $ 2,755 0.70%* 0.56%* 12%
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(1.61) 0.00 (1.67) 0.00 12.96 17.95 42,619 0.71 0.66 34
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(7.73) 0.00 (7.84) 0.00 12.64 32.33 36,584 0.71 0.63 65
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(3.63) 0.00 (3.73) 0.00 16.46 31.45 44,838 0.74 1.31 91
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(0.38) 0.00 (0.54) 0.00 15.91 14.21 83,425 0.70* 1.58* 53
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(0.17) 0.00 (0.42) 0.00 14.44 24.46 73,999 0.70 1.91 21
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(0.47) 0.00 (0.52) 0.00 13.11 6.09 27,954 0.95* 0.31* 12
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(1.61) 0.00 (1.67) 0.00 12.87 17.63 24,015 0.96 0.41 34
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(7.73) 0.00 (7.84) 0.00 12.59 23.85 10,409 0.95* 0.47* 65
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
$ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 12.41 7.08% $ 1,189 0.70%* 0.51%* 14%
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
0.00 0.00 0.00 0.00 12.39 6.72 19,018 0.95* 0.28* 14
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
0.00 0.00 0.00 0.00 11.61 34.28 3,391 0.92* 0.31* 13
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
$ (0.79) $ 0.00 $ (0.86) $ 0.00 $ 13.84 18.73% $ 56,076 1.00%(c)* 0.36%* 14%
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(0.28) 0.00 (0.35) 0.05 12.42 29.21 46,577 0.95* 1.56* 30
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
$ 0.00 $ 0.00 $ (0.12) $ 0.00 $ 16.10 22.45% $ 96,942 0.95%* 0.41%* 12%
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
0.00 0.00 (0.06) 0.05 13.25 33.39 72,509 0.95* 1.57* 28
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
$ (1.74) $ 0.00 $ (1.74) $ 0.00 $ 12.29 21.91% $ 5,045 1.16%(d)* 0.27%* 29%
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(1.15) 0.00 (1.15) 0.00 11.62 23.07 3,627 1.09* 1.70* 55
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(1.74) 0.00 (1.74) 0.00 12.20 21.76 18,871 1.41 (e)* (0.00)* 29
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
(1.15) 0.00 (1.15) 0.00 11.56 22.47 15,797 1.34* 1.06* 55
- --------- --------- --------- --------- --------- ------- --------- --------- --------- ---------
</TABLE>
(d) Ratio of expenses to average net assets excluding interest expense is 1.05%.
(e) Ratio of expenses to average net assets excluding interest expense is 1.30%.
See accompanying notes 35
<PAGE>
Statement of Assets and Liabilities
December 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Renaissance Growth Core Equity Target Mid-Cap Opportunity
Amounts in thousands, except per share amounts Fund Fund Fund Fund Equity Fund Fund
----------- ---------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at value $ 543,672 $2,889,461 $ 1,588 $1,678,572 $ 5,455 $ 587,198
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
Cash and foreign currency 0 158 0 76 0 409
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
Receivable for investments and foreign
currency sold 12,776 0 0 0 0 6,067
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
Receivable for Fund shares sold 1,490 10,229 0 6,342 0 2,566
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
Variation margin receivable 0 0 0 0 0 0
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
Interest and dividends receivable 1,114 566 1 67 4 170
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
Other assets 2 0 3 0 0 2
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
559,054 2,900,414 1,592 1,685,057 5,459 596,412
============================================== =========== ========== =========== ========== =========== ===========
Liabilities:
Payable for investments and foreign
currency purchased $ 8,929 $ 0 $ 51 $ 5,868 $ 0 $ 6,954
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
Payable for Fund shares redeemed 3,243 4,651 0 9,542 0 4,196
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
Dividends payable 0 0 0 0 0 0
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
Accrued investment advisory fee 283 1,190 1 746 3 302
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
Accrued administration fee 189 949 0 541 1 184
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
Accrued distribution fee 307 1,617 0 867 0 250
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
Accrued servicing fee 118 594 0 338 0 115
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
Variation margin payable 0 0 0 0 0 0
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
Other liabilities 25 0 0 0 0 0
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
13,094 9,001 52 17,902 4 12,001
============================================== =========== ========== =========== ========== =========== ===========
Net Assets $ 545,960 $2,891,413 $ 1,540 $1,667,155 $ 5,455 $ 584,411
============================================== =========== ========== =========== ========== =========== ===========
Net Assets Consist of:
Paid in capital $ 556,628 $1,676,013 $ (1,042) $ 874,859 $ 2,428 $ 377,891
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
Undistributed (overdistributed) net
investment income 38,842 (17,502) 0 57,671 2,746 9,978
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
Accumulated undistributed net
realized gain (loss) (39,815) 21,454 2,484 (15,323) (784) 39,508
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
Net unrealized appreciation (depreciation) (9,695) 1,211,448 98 749,948 1,065 157,034
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
$ 545,960 $2,891,413 $ 1,540 $1,667,155 $ 5,455 $ 584,411
============================================== =========== ========== =========== ========== =========== ===========
Net Assets:
Institutional Class $ 116 $ 4,001 $ 1,498 $ 4,654 $ 5,455 $ 6,910
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
Administrative Class 766 16,091 42 8,307 0 8,918
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
Other Classes 545,078 2,871,321 0 1,654,194 0 568,583
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
Shares Issued and Outstanding:
Institutional Class 8 116 65 188 471 257
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
Administrative Class 54 467 2 336 0 333
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
Net Asset Value and Redemption Price Per
Share (Net Assets Per Share Outstanding)
Institutional Class $ 14.28 $ 34.50 $ 23.12 $ 24.76 $ 11.58 $ 26.82
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
Administrative Class 14.26 34.43 22.81 24.74 0.00 26.77
- ---------------------------------------------- ----------- ---------- ----------- ---------- ----------- -----------
Cost of Investments Owned $ 553,369 $1,678,013 $ 1,490 $ 928,624 $ 4,389 $ 430,164
============================================== =========== ========== =========== ========== =========== ===========
</TABLE>
36 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Capital
Innovation International Mega-Cap Appreciation Mid-Cap Small-Cap
Fund Growth Fund Fund Fund Growth Fund Growth Fund
- ----------- ------------- -------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
$ 3,507,284 $ 12,587 $ 3,719 $ 951,427 $ 1,044,508 $ 67,759
- ----------- ------------- -------- ------------ ----------- -----------
0 36 0 28 69 0
- ----------- ------------- -------- ------------ ----------- -----------
38,942 0 0 10,580 12,378 856
- ----------- ------------- -------- ------------ ----------- -----------
44,960 0 0 268 931 0
- ----------- ------------- -------- ------------ ----------- -----------
0 0 0 0 0 0
- ----------- ------------- -------- ------------ ----------- -----------
113 24 2 655 810 24
- ----------- ------------- -------- ------------ ----------- -----------
33 0 7 0 0 0
- ----------- ------------- -------- ------------ ----------- -----------
3,591,332 12,647 3,728 962,958 1,058,696 68,639
=========== ============= ======== ============ =========== ===========
$ 106,373 $ 0 $ 0 $ 4,286 $ 15,084 $ 726
- ----------- ------------- -------- ------------ ----------- -----------
18,101 53 0 444 17,395 3
- ----------- ------------- -------- ------------ ----------- -----------
0 0 0 0 1 0
- ----------- ------------- -------- ------------ ----------- -----------
1,680 9 1 378 410 58
- ----------- ------------- -------- ------------ ----------- -----------
1,033 5 1 238 268 14
- ----------- ------------- -------- ------------ ----------- -----------
1,432 0 0 88 115 0
- ----------- ------------- -------- ------------ ----------- -----------
645 0 0 89 89 1
- ----------- ------------- -------- ------------ ----------- -----------
0 0 0 0 0 0
- ----------- ------------- -------- ------------ ----------- -----------
0 0 0 0 0 0
- ----------- ------------- -------- ------------ ----------- -----------
129,264 67 2 5,523 33,362 802
=========== ============= ======== ============ =========== ===========
$ 3,462,068 $ 12,580 $ 3,726 $ 957,435 $ 1,025,334 $ 67,837
=========== ============= ======== ============ =========== ===========
$ 1,792,055 $ 6,203 $ 3,001 $ 668,510 $ 754,197 $ 62,026
- ----------- ------------- -------- ------------ ----------- -----------
(14,122) 1,401 1 (810) (1,038) (142)
- ----------- ------------- -------- ------------ ----------- -----------
114,988 (629) (111) 39,378 13,056 (8,672)
- ----------- ------------- -------- ------------ ----------- -----------
1,569,147 5,605 835 250,357 259,119 14,625
- ----------- ------------- -------- ------------ ----------- -----------
$ 3,462,068 $ 12,580 $ 3,726 $ 957,435 $ 1,025,334 $ 67,837
=========== ============= ======== ============ =========== ===========
$ 8,881 $ 12,580 $ 3,726 $ 538,370 $ 602,800 $ 65,262
- ----------- ------------- -------- ------------ ----------- -----------
0 0 0 201,117 107,746 2,575
- ----------- ------------- -------- ------------ ----------- -----------
3,453,187 0 0 217,948 314,788 0
- ----------- ------------- -------- ------------ ----------- -----------
135 573 300 21,470 23,193 5,289
- ----------- ------------- -------- ------------ ----------- -----------
0 0 0 8,086 4,165 210
- ----------- ------------- -------- ------------ ----------- -----------
$ 65.63 $ 21.96 $ 12.42 $ 25.08 $ 25.99 $ 12.34
- ----------- ------------- -------- ------------ ----------- -----------
0.00 0.00 0.00 24.87 25.87 12.25
- ----------- ------------- -------- ------------ ----------- -----------
$ 1,938,136 $ 6,981 $ 2,884 $ 701,070 $ 785,389 $ 53,134
=========== ============= ======== ============ =========== ===========
<CAPTION>
Micro-Cap Equity
Growth Fund Income Fund Value Fund
- ----------- ----------- ----------
<S> <C> <C>
$ 218,066 $ 153,954 $ 212,409
- ----------- ----------- ----------
0 0 104
- ----------- ----------- ----------
1,913 2,187 0
- ----------- ----------- ----------
935 180 156
- ----------- ----------- ----------
0 0 0
- ----------- ----------- ----------
82 525 605
- ----------- ----------- ----------
0 0 0
- ----------- ----------- ----------
220,996 156,846 213,274
=========== =========== ==========
$ 931 $ 66 $ 0
- ---------- ----------- ----------
93 575 1,017
- ----------- ----------- ----------
0 0 0
- ----------- ----------- ----------
239 63 85
- ----------- ----------- ----------
48 42 62
- ----------- ----------- ----------
0 24 63
- ----------- ----------- ----------
1 14 30
- ----------- ----------- ----------
0 0 0
- ----------- ----------- ----------
0 0 0
- ----------- ----------- ----------
1,312 784 1,257
=========== =========== ==========
$ 219,684 $ 156,062 $ 212,017
=========== =========== ==========
$ 172,012 $ 170,636 $ 224,128
- ----------- ----------- ----------
(867) 4,081 10,182
- ----------- ----------- ----------
1,262 (3,493) (8,550)
- ----------- ----------- ----------
47,277 (15,162) (13,743)
- ----------- ----------- ----------
$ 219,684 $ 156,062 $ 212,017
=========== =========== ==========
$ 215,001 $ 94,948 $ 77,014
- ----------- ----------- ----------
4,683 11,241 21,426
- ----------- ----------- ----------
0 49,873 113,577
- ----------- ----------- ----------
10,260 8,770 6,611
- ----------- ----------- ----------
226 1,040 1,847
- ----------- ----------- ----------
$ 20.96 $ 10.83 $ 11.65
- ----------- ----------- ----------
20.75 10.81 11.60
- ----------- ----------- ----------
$ 170,788 $ 169,116 $ 226,152
=========== =========== ==========
</TABLE>
See accompanying notes 37
<PAGE>
Statement of Assets and Liabilities (Cont.)
<TABLE>
<CAPTION>
December 31, 1999 (Unaudited)
Tax-Efficient
Structured Structured
Small-Cap Enhanced Tax-Efficient Emerging Emerging International
Amounts in thousands, except per share amounts Value Fund Equity Fund Equity Fund Markets Fund Markets Fund Fund
---------- ----------- ------------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at value $ 317,236 $ 70,672 $ 56,487 $ 56,312 $ 97,810 $ 153,718
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
Cash and foreign currency 0 0 0 0 0 1,171
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
Receivable for investments and foreign
currency sold 2,298 0 0 1 529 0
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
Receivable for Fund shares sold 1,842 24 358 0 0 102
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
Variation margin receivable 0 0 0 0 0 0
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
Interest and dividends receivable 1,086 68 39 23 51 285
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
Other assets 0 0 4 0 0 40
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
322,462 70,764 56,888 56,336 98,390 155,316
================================================ ========= ======== ======== ======== ======== =========
Liabilities:
Payable for investments and foreign
currency purchased $ 109 $ 0 $ 5 $ 63 $ 1,099 $ 0
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
Payable for Fund shares redeemed 2,509 6 54 0 0 1,279
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
Dividends payable 0 0 0 0 0 0
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
Accrued investment advisory fee 172 28 22 21 37 74
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
Accrued administration fee 107 15 17 28 47 85
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
Accrued distribution fee 107 0 18 0 0 76
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
Accrued servicing fee 63 6 12 0 0 33
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
Variation margin payable 0 0 0 0 0 0
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
Other liabilities 0 0 4 148 265 29
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
3,067 55 132 260 1,448 1,576
================================================ ========= ======== ======== ======== ======== =========
Net Assets $ 319,395 $ 70,709 $ 56,756 $ 56,076 $ 96,942 $ 153,740
================================================ ========= ======== ======== ======== ======== =========
Net Assets Consist of:
Paid in capital $ 386,860 $ 48,408 $ 49,699 $ 43,011 $ 91,871 $ 114,885
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
Undistributed (overdistributed) net
investment income 814 141 (50) 653 (703) (1,954)
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
Accumulated undistributed net realized
gain (loss) (24,635) 786 (1,896) 372 (9,271) 4,310
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
Net unrealized appreciation
(depreciation) (43,644) 21,374 9,003 12,040 15,045 36,499
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
$ 319,395 $ 70,709 $ 56,756 $ 56,076 $ 96,942 $ 153,740
================================================ ========= ======== ======== ======== ======== =========
Net Assets:
Institutional Class $ 38,751 $ 42,755 $ 1,189 $ 56,076 $ 96,942 $ 5,045
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
Administrative Class 15,296 27,954 19,018 0 0 18,871
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
Other Classes 265,348 0 36,549 0 0 129,824
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
Shares Issued and Outstanding:
Institutional Class 2,769 3,247 96 4,008 6,022 411
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
Administrative Class 1,097 2,133 1,536 0 0 1,546
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
Net Asset Value and Redemption Price
Per Share
(Net Assets Per Share Outstanding)
Institutional Class $ 14.00 $ 13.17 $ 12.41 $ 13.84 $ 16.10 $ 12.29
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
Administrative Class 13.95 13.11 12.39 0.00 0.00 12.20
- ------------------------------------------------ --------- -------- -------- -------- -------- ---------
Cost of Investments Owned $ 360,880 $ 49,298 $ 47,484 $ 44,272 $ 82,762 $ 117,382
================================================ ========= ======== ======== ======== ======== =========
</TABLE>
38 See accompanying notes
<PAGE>
Statement of Operations
For the six months ended December 31,1999 (Unaudited)
<TABLE>
<CAPTION>
Renaissance Growth Core Equity Target Mid-Cap Opportunity
Amounts in thousands Fund Fund Fund Fund Equity Fund Fund
----------- --------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 3,133 $ 4,485 $ 7 $ 632 $ 11 $ 674
- --------------------------------------------- ----------- --------- ----------- --------- ----------- -----------
Interest 252 494 1 982 4 630
- --------------------------------------------- ----------- --------- ----------- --------- ----------- -----------
Total Income 3,385 4,979 8 1,614 15 1,304
============================================= =========== ========= =========== ========= =========== ===========
Expenses:
Investment advisory fees 1,826 6,103 4 3,465 20 1,454
- --------------------------------------------- ----------- --------- ----------- --------- ----------- -----------
Administration fees 1,217 4,825 2 2,514 8 888
- --------------------------------------------- ----------- --------- ----------- --------- ----------- -----------
Distribution and/or servicing fees - 1 14 0 8 0 8
Administrative Class
- --------------------------------------------- ----------- --------- ----------- --------- ----------- -----------
Distribution and/or servicing fees - 2,729 11,231 0 5,599 0 1,763
Other Classes
- --------------------------------------------- ----------- --------- ----------- --------- ----------- -----------
Trustees' fees 23 88 0 43 0 16
- --------------------------------------------- ----------- --------- ----------- --------- ----------- -----------
Interest Expense 0 0 0 0 0 0
- --------------------------------------------- ----------- --------- ----------- --------- ----------- -----------
Miscellaneous 15 221 1 56 7 24
- --------------------------------------------- ----------- --------- ----------- --------- ----------- -----------
Total Expenses 5,811 22,482 7 11,685 35 4,153
- --------------------------------------------- ----------- --------- ----------- --------- ----------- -----------
Net Investment Income (Loss) (2,426) (17,503) 1 (10,071) (20) (2,849)
- --------------------------------------------- ----------- --------- ----------- --------- ----------- -----------
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments 16,435 48,957 203 62,111 1,938 92,137
- --------------------------------------------- ----------- --------- ----------- --------- ----------- -----------
Net realized gain (loss) on
futures contracts and written options 0 0 0 0 0 0
- --------------------------------------------- ----------- --------- ----------- --------- ----------- -----------
Net realized gain (loss) on
foreign currency transactions 2,761 0 0 0 0 0
- --------------------------------------------- ----------- --------- ----------- --------- ----------- -----------
Net change in unrealized appreciation
(depreciation) on investments (32,710) 637,993 (78) 517,671 (316) 100,341
- --------------------------------------------- ----------- --------- ----------- --------- ----------- -----------
Net change in unrealized appreciation
(depreciation) on futures contracts and
written options 0 0 0 0 0 0
- --------------------------------------------- ----------- --------- ----------- --------- ----------- -----------
Net change in unrealized appreciation
(depreciation) on translation of assets
and liabilities denominated in foreign
currencies 3 0 0 0 0 0
- --------------------------------------------- ----------- --------- ----------- --------- ----------- -----------
Net Gain (Loss) (13,511) 686,950 125 579,782 1,622 192,478
- --------------------------------------------- ----------- --------- ----------- --------- ----------- -----------
Net Increase (Decrease) in Assets
Resulting from Operations $ (15,937) $ 669,447 $ 126 $ 569,711 $ 1,602 $ 189,629
============================================= =========== ========= =========== ========= =========== ===========
</TABLE>
See accompanying notes 39
<PAGE>
Statement of Operations (Cont.)
For the six months ended December 31,1999 (Unaudited)
<TABLE>
<CAPTION>
Capital
Innovation International Mega-Cap Appreciation Mid-Cap Small-Cap
Amounts in thousands Fund Growth Fund Fund Fund Growth Fund Growth Fund
---------- ------------- -------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 155 $ 15 $ 6 $ 4,649 $ 4,686 $ 216
- ----------------------------------------------- ---------- ------------- -------- ----------- --------- ----------
Interest 2,939 12 5 607 1,045 60
- ----------------------------------------------- ---------- ------------- -------- ----------- --------- ----------
Total Income 3,094 27 11 5,256 5,731 276
=============================================== ========== ============= ======== =========== ========= ==========
Expenses:
Investment advisory fees 5,997 44 5 2,257 2,252 338
- ----------------------------------------------- ---------- ------------- -------- ----------- --------- ----------
Administration fees 3,689 26 3 1,415 1,479 85
- ----------------------------------------------- ---------- ------------- -------- ----------- --------- ----------
Distribution and/or servicing fees -
Administrative Class 0 0 0 272 133 3
- ----------------------------------------------- ---------- ------------- -------- ----------- --------- ----------
Distribution and/or servicing fees - Other
Classes 7,419 0 0 756 1,047 0
- ----------------------------------------------- ---------- ------------- -------- ----------- --------- ----------
Trustees' fees 55 0 0 38 36 3
- ----------------------------------------------- ---------- ------------- -------- ----------- --------- ----------
Interest Expense 0 0 0 0 0 0
- ----------------------------------------------- ---------- ------------- -------- ----------- --------- ----------
Miscellaneous 56 15 1 24 12 1
- ----------------------------------------------- ---------- ------------- -------- ----------- --------- ----------
Total Expenses 17,216 85 9 4,762 4,959 430
- ----------------------------------------------- ---------- ------------- -------- ----------- --------- ----------
Net Investment Income (Loss) (14,122) (58) 2 494 772 (154)
=============================================== ========== ============= ======== =========== ========= ==========
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments 349,045 1,216 (111) 84,228 13,132 1,465
- ----------------------------------------------- ---------- ------------- -------- ----------- --------- ----------
Net realized gain (loss) on
futures contracts and written options 0 0 0 0 0 0
- ----------------------------------------------- ---------- ------------- -------- ----------- --------- ----------
Net realized gain (loss) on
foreign currency transactions 0 34 0 0 0 0
- ----------------------------------------------- ---------- ------------- -------- ----------- --------- ----------
Net change in unrealized appreciation
(depreciation) on investments 1,161,980 4,246 835 28,003 112,366 3,799
- ----------------------------------------------- ---------- ------------- -------- ----------- --------- ----------
Net change in unrealized appreciation
(depreciation) on futures contracts and
written options 0 0 0 0 0 0
- ----------------------------------------------- ---------- ------------- -------- ----------- --------- ----------
Net change in unrealized appreciation
(depreciation) on translation of assets and
liabilities denominated in foreign
currencies 0 1 0 0 0 0
- ----------------------------------------------- ---------- ------------- -------- ----------- --------- ----------
Net Gain (Loss) 1,511,025 5,497 724 112,231 125,498 5,264
- ----------------------------------------------- ---------- ------------- -------- ----------- --------- ----------
Net Increase (Decrease) in Assets
Resulting from Operations $1,496,903 $ 5,439 $ 726 $ 112,725 $ 126,270 $ 5,110
=============================================== ========== ============= ======== =========== ========= ==========
</TABLE>
40 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Micro-Cap Equity Small-Cap Enhanced Tax-Efficient
Growth Fund Income Fund Value Fund Value Fund Equity Fund Equity Fund
----------- ----------- ---------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
$ 516 $ 3,438 $ 2,999 $ 5,885 $ 421 $ 263
----------- ----------- ---------- ---------- ----------- -------------
272 70 258 238 11 15
----------- ----------- ---------- ---------- ----------- -------------
788 3,508 3,257 6,123 432 278
=========== =========== ========== ========== =========== =============
1,366 416 502 1,127 153 103
----------- ----------- ---------- ---------- ----------- -------------
273 276 377 699 85 79
----------- ----------- ---------- ---------- ----------- -------------
4 16 26 24 32 20
----------- ----------- ---------- ---------- ----------- -------------
0 236 574 1,088 0 118
----------- ----------- ---------- ---------- ----------- -------------
8 7 8 14 2 2
----------- ----------- ---------- ---------- ----------- -------------
0 0 0 0 0 0
----------- ----------- ---------- ---------- ----------- -------------
4 25 7 4 2 1
----------- ----------- ---------- ---------- ----------- -------------
1,655 976 1,494 2,956 274 323
----------- ----------- ---------- ---------- ----------- -------------
(867) 2,532 1,763 3,167 158 (45)
=========== =========== ========== ========== =========== =============
10,584 8,195 17,218 (12,563) 944 (1,668)
----------- ----------- ---------- ---------- ----------- -------------
0 0 0 0 0 0
----------- ----------- ---------- ---------- ----------- -------------
0 0 0 0 0 0
----------- ----------- ---------- ---------- ----------- -------------
(589) (34,549) (32,592) (35,329) 3,057 5,713
----------- ----------- ---------- ---------- ----------- -------------
0 0 0 0 0 0
----------- ----------- ---------- ---------- ----------- -------------
0 0 0 0 0 0
----------- ----------- ---------- ---------- ----------- -------------
9,995 (26,354) (15,374) (47,892) 4,001 4,045
----------- ----------- ---------- ---------- ----------- -------------
$ 9,128 $ (23,822) $ (13,611) $ (44,725) $ 4,159 $ 4,000
=========== =========== ========== ========== =========== =============
Tax-Efficient
Structured Structured
Emerging Emerging International
Markets Fund Markets Fund Fund
------------ ------------- -------------
<C> <C> <C>
$ 207 $ 311 $ 799
------------ ------------- -------------
12 21 258
------------ ------------- -------------
219 332 1,057
============ ============= =============
107 182 395
------------ ------------- -------------
119 203 452
------------ ------------- -------------
0 0 19
------------ ------------- -------------
0 0 566
------------ ------------- -------------
12 3 5
------------ ------------- -------------
0 0 0
------------ ------------- -------------
11 238 75
------------ ------------- -------------
249 626 1,512
------------ ------------- -------------
(30) (294) (455)
============ ============= =============
3,314 2,981 11,527
------------ ------------- -------------
0 0 0
------------ ------------- -------------
(232) (1,864) (1,996)
------------ ------------- -------------
6,700 16,707 21,323
------------ ------------- -------------
0 0 254
------------ ------------- -------------
2 1 154
------------ ------------- -------------
9,784 17,825 31,262
------------ ------------- -------------
$ 9,754 $ 17,531 $ 30,807
============ ============= =============
</TABLE>
See accompanying notes 41
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Amounts in thousands Renaissance Fund Growth Fund
--------------------------------- ---------------------------------
Increase (Decrease) in Net Assets from: Six Months Ended Year Ended Six Months Ended Year Ended
December 31, 1999 June 30, 1999 December 31, 1999 June 30, 1999
(Unaudited) (Unaudited)
Operations:
<S> <C> <C> <C> <C>
Net investment income (loss) $ (2,426) $ (4,312) $ (17,503) $ (24,048)
- ------------------------------------------------------------ --------------------------------- ---------------------------------
Net realized gain (loss) 19,196 100,928 48,957 413,535
- ------------------------------------------------------------ --------------------------------- ---------------------------------
Net change in unrealized appreciation (depreciation) (32,707) (42,518) 637,993 (30,494)
- ------------------------------------------------------------ --------------------------------- ---------------------------------
Net increase (decrease) resulting from operations (15,937) 54,098 669,447 358,993
============================================================ ================================= =================================
Distributions to Shareholders:
From net investment income
Institutional Class 0 0 0 0
- ------------------------------------------------------------ --------------------------------- ---------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------ --------------------------------- ---------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------ --------------------------------- ---------------------------------
From net realized capital gains
Institutional Class (26) (11) (554) 0
- ------------------------------------------------------------ --------------------------------- ---------------------------------
Administrative Class (131) (25) (2,231) 0
- ------------------------------------------------------------ --------------------------------- ---------------------------------
Other Classes (112,241) (80,825) (399,708) (263,490)
- ------------------------------------------------------------ --------------------------------- ---------------------------------
In excess of net realized capital gains
Institutional Class 0 0 0 0
- ------------------------------------------------------------ --------------------------------- ---------------------------------
Administrative Class 0 0 0 0
- ------------------------------------------------------------ --------------------------------- ---------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------ --------------------------------- ---------------------------------
Total Distributions (112,398) (80,861) (402,493) (263,490)
============================================================ ================================= =================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 0 105 2,576 1,212
- ------------------------------------------------------------ --------------------------------- ---------------------------------
Administrative Class 452 1,000 9,681 6,217
- ------------------------------------------------------------ --------------------------------- ---------------------------------
Other Classes 76,567 305,834 707,350 1,197,934
- ------------------------------------------------------------ --------------------------------- ---------------------------------
Issued in reorganization
Other Classes 0 0 0 0
- ------------------------------------------------------------ --------------------------------- ---------------------------------
Issued as reinvestment of distributions
Institutional Class 25 0 553 0
- ------------------------------------------------------------ --------------------------------- ---------------------------------
Administrative Class 131 25 2,231 0
- ------------------------------------------------------------ --------------------------------- ---------------------------------
Other Classes 103,501 74,634 371,275 246,482
- ------------------------------------------------------------ --------------------------------- ---------------------------------
Cost of shares redeemed
Institutional Class (16) (744) (229) (268)
- ------------------------------------------------------------ --------------------------------- ---------------------------------
Administrative Class (115) (634) (3,645) (288)
- ------------------------------------------------------------ --------------------------------- ---------------------------------
Other Classes (166,075) (350,656) (898,383) (1,227,582)
- ------------------------------------------------------------ --------------------------------- ---------------------------------
Net increase (decrease) resulting from Fund share
transactions 14,470 29,564 191,409 223,707
- ------------------------------------------------------------ --------------------------------- ---------------------------------
Total Increase (Decrease) in Net Assets (113,865) 2,801 458,363 319,210
============================================================ ================================= =================================
Net Assets:
Beginning of period 659,825 657,024 2,433,050 2,113,840
- ------------------------------------------------------------ --------------------------------- ---------------------------------
End of period * $ 545,960 $ 659,825 $ 2,891,413 $ 2,433,050
- ------------------------------------------------------------ --------------------------------- ---------------------------------
*Including net undistributed (overdistributed)
investment income of: $ 38,842 $ 41,268 $ (17,502) $ 1
- ------------------------------------------------------------ --------------------------------- ---------------------------------
<CAPTION>
Amounts in thousands Core Equity Fund
Increase (Decrease) in Net Assets from: Six Months Ended Year Ended
December 31, 1999 June 30, 1999
(Unaudited)
Operations:
<S> <C> <C>
Net investment income (loss) $ 1 $ (125)
- ----------------------------------------------------------- ----------------- ------------
Net realized gain (loss) 203 47,076
- ----------------------------------------------------------- ----------------- ------------
Net change in unrealized appreciation (depreciation) (78) (29,090)
- ----------------------------------------------------------- ----------------- ------------
Net increase (decrease) resulting from operations 126 17,861
=========================================================== ================= ============
Distributions to Shareholders:
From net investment income
Institutional Class (1) 0
- ----------------------------------------------------------- ----------------- ------------
Administrative Class 0 0
- ----------------------------------------------------------- ----------------- ------------
Other Classes 0 0
- ----------------------------------------------------------- ----------------- ------------
From net realized capital gains
Institutional Class (205) (59)
- ----------------------------------------------------------- ----------------- ------------
Administrative Class (6) (5,514)
- ----------------------------------------------------------- ----------------- ------------
Other Classes 0 0
- ----------------------------------------------------------- ----------------- ------------
In excess of net realized capital gains
Institutional Class 0 0
- ----------------------------------------------------------- ----------------- ------------
Administrative Class 0 0
- ----------------------------------------------------------- ----------------- ------------
Other Classes 0 0
- ----------------------------------------------------------- ----------------- ------------
Total Distributions (212) (5,573)
=========================================================== ================= ============
Fund Share Transactions:
Receipts for shares sold
Institutional Class 337 1,782
- ----------------------------------------------------------- ----------------- ------------
Administrative Class 30 34,758
- ----------------------------------------------------------- ----------------- ------------
Other Classes 0 0
- ----------------------------------------------------------- ----------------- ------------
Issued in reorganization
Other Classes 0 0
- ----------------------------------------------------------- ----------------- ------------
Issued as reinvestment of distributions
Institutional Class 194 57
- ----------------------------------------------------------- ----------------- ------------
Administrative Class 3 5,514
- ----------------------------------------------------------- ----------------- ------------
Other Classes 0 0
- ----------------------------------------------------------- ----------------- ------------
Cost of shares redeemed
Institutional Class (135) (2,915)
- ----------------------------------------------------------- ----------------- ------------
Administrative Class (2) (180,866)
- ----------------------------------------------------------- ----------------- ------------
Other Classes 0 0
- ----------------------------------------------------------- ----------------- ------------
Net increase (decrease) resulting from Fund share
transactions 427 (141,670)
- ----------------------------------------------------------- ----------------- ------------
Total Increase (Decrease) in Net Assets 341 (129,382)
=========================================================== ================= ============
Net Assets:
Beginning of period 1,199 130,581
- ----------------------------------------------------------- ----------------- ------------
End of period * $ 1,540 $ 1,199
- ----------------------------------------------------------- ----------------- ------------
*Including net undistributed (overdistributed)
investment income of: $ 0 $ 0
- ----------------------------------------------------------- ----------------- ------------
</TABLE>
+ Share class was redeemed on May 27, 1999.
42 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Target Fund Mid-Cap Equity Fund Opportunity Fund Innovation Fund
- --------------------------------- ---------------------------------- --------------------------------- ------------------
Six Months Ended Year Ended Six Months Ended Year Ended Six Months Ended Year Ended Six Months Ended
December 31, 1999 June 30, 1999 December 31, 1999 June 30, 1999 December 31, 1999 June 30, 1999 December 31, 1999
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
$ (10,071) $ (12,880) $ (20) $ (33) $ (2,849) $ (6,871) $ (14,122)
- --------------------------------- --------------------------------- --------------------------------- -----------------
62,111 124,994 1,938 2,964 92,137 92,947 349,045
- --------------------------------- --------------------------------- --------------------------------- -----------------
517,671 38,444 (316) (130) 100,341 (86,017) 1,161,980
- --------------------------------- --------------------------------- --------------------------------- -----------------
569,711 150,558 1,602 2,801 189,629 59 1,496,903
================================= ================================= ================================= =================
0 0 0 0 0 0 0
- --------------------------------- --------------------------------- --------------------------------- -----------------
0 0 0 0 0 0 0
- --------------------------------- --------------------------------- --------------------------------- -----------------
0 0 0 0 0 0 0
- --------------------------------- --------------------------------- --------------------------------- -----------------
(319) 0 (2,876) (425) (1,540) 0 (736)
- --------------------------------- --------------------------------- --------------------------------- -----------------
(555) 0 0 (168)+ (1,965) 0 0
- --------------------------------- --------------------------------- --------------------------------- -----------------
(120,196) (68,199) 0 0 (122,163) (88,374) (291,842)
- --------------------------------- --------------------------------- --------------------------------- -----------------
0 0 0 0 0 0 0
- --------------------------------- --------------------------------- --------------------------------- -----------------
0 0 0 0 0 0 0
- --------------------------------- --------------------------------- --------------------------------- -----------------
0 0 0 0 0 0 0
- --------------------------------- --------------------------------- --------------------------------- -----------------
(121,070) (68,199) (2,876) (593) (125,668) (88,374) (292,578)
================================= ================================= ================================= ==================
2,357 1,265 1,165 1,457 4,556 428 6,091
- --------------------------------- --------------------------------- --------------------------------- -----------------
1,319 5,508 0 2,607 5,262 1,990 0
- --------------------------------- --------------------------------- --------------------------------- -----------------
955,022 1,337,208 0 0 272,729 1,722,778 1,509,486
- --------------------------------- --------------------------------- --------------------------------- -----------------
0 0 0 0 0 0 0
- --------------------------------- --------------------------------- --------------------------------- -----------------
319 0 1,370 184 1,540 0 582
- --------------------------------- --------------------------------- --------------------------------- -----------------
555 0 0 168 1,964 0 0
- --------------------------------- --------------------------------- --------------------------------- -----------------
110,765 64,479 0 0 113,131 81,564 273,102
- --------------------------------- --------------------------------- --------------------------------- -----------------
(259) (36) (3,205) (4,344) (117) (38) (224)
- --------------------------------- --------------------------------- --------------------------------- -----------------
(1,384) (275) 0 (5,740) (1,162) (101) 0
- --------------------------------- --------------------------------- --------------------------------- -----------------
(1,016,421) (1,510,466) 0 0 (310,515) (1,986,190) (796,197)
- --------------------------------- --------------------------------- --------------------------------- -----------------
52,273 (102,317) (670) (5,668) 87,388 (179,569) 992,840
- --------------------------------- --------------------------------- --------------------------------- -----------------
500,914 (19,958) (1,944) (3,460) 151,349 (267,884) 2,197,165
================================= ================================= ================================= =================
1,166,241 1,186,199 7,399 10,859 433,062 700,946 1,264,903
- --------------------------------- --------------------------------- --------------------------------- -----------------
$ 1,667,155 $ 1,166,241 $ 5,455 $ 7,399 $ 584,411 $ 433,062 $ 3,462,068
- --------------------------------- --------------------------------- --------------------------------- -----------------
$ 57,671 $ 67,742 $ 2,746 $ 2,766 $ 9,978 $ 12,827 $ (14,122)
- --------------------------------- --------------------------------- --------------------------------- -----------------
International Growth Fund
- --------------- ---------------------------------
Year Ended Six Months Ended Year Ended
June 30, 1999 December 31, 1999 June 30, 1999
(Unaudited)
$ (10,056) $ (58) $ (10)
- --------------- ----------------- -------------
82,075 1,250 1,916
- --------------- ----------------- -------------
250,804 4,247 (119)
- --------------- ----------------- -------------
322,823 5,439 1,787
=============== ================= =============
0 0 (8)
- --------------- ----------------- -------------
0 0 0
- --------------- ----------------- -------------
0 0 0
- --------------- ----------------- -------------
0 (2,103) (519)
- --------------- ----------------- -------------
0 0 0
- --------------- ----------------- -------------
(23,554) 0 0
- --------------- ----------------- -------------
0 0 0
- --------------- ----------------- -------------
0 0 0
- --------------- ----------------- -------------
0 0 0
- --------------- ----------------- -------------
(23,554) (2,103) (527)
=============== ================= =============
895 9,153 355
- --------------- ----------------- -------------
0 0 0
- --------------- ----------------- -------------
1,310,384 0 0
- --------------- ----------------- -------------
0 0 0
- --------------- ----------------- -------------
0 1,831 2
- --------------- ----------------- -------------
0 0 0
- --------------- ----------------- -------------
22,135 0 0
- --------------- ----------------- -------------
(505) (10,148) (31)
- --------------- ----------------- -------------
0 0 0
- --------------- ----------------- -------------
(753,602) 0 0
- --------------- ----------------- -------------
579,307 836 326
- --------------- ----------------- -------------
878,576 4,172 1,586
=============== ================= =============
386,327 8,408 6,822
- --------------- ----------------- -------------
$ 1,264,903 $ 12,580 $ 8,408
- --------------- ----------------- -------------
$ 0 $ 1,401 $ 1,459
- --------------- ----------------- -------------
</TABLE>
See accompanying notes 43
<PAGE>
Statement of Changes in Net Assets (Cont.)
<TABLE>
<CAPTION>
Mega-Cap
Amounts in thousands Fund Capital Appreciation Fund
------------------ ---------------------------------
Period from Six Months Ended Year Ended
Increase (Decrease) in Net Assets from: August 31, 1999 to December 31, 1999 June 30, 1999
December 31, 1999 (Unaudited)
(Unaudited)
<S> <C> <C> <C>
Operations:
Net investment income (loss) $ 2 $ 494 $ 4,855
- ------------------------------------------------------------ ------------------ ---------------------------------
Net realized gain (loss) (111) 84,228 127,483
- ------------------------------------------------------------ ------------------ ---------------------------------
Net change in unrealized appreciation (depreciation) 835 28,003 (27,333)
- ------------------------------------------------------------ ------------------ ---------------------------------
Net increase (decrease) resulting from operations 726 112,725 105,005
============================================================ ================== =================================
Distributions to Shareholders:
From net investment income
Institutional Class (1) (2,373) (4,163)
- ------------------------------------------------------------ ------------------ ---------------------------------
Administrative Class 0 (383) (1,045)
- ------------------------------------------------------------ ------------------ ---------------------------------
Other Classes 0 (75) (398)
- ------------------------------------------------------------ ------------------ ---------------------------------
From net realized capital gains
Institutional Class 0 (91,584) (43,876)
- ------------------------------------------------------------ ------------------ ---------------------------------
Administrative Class 0 (39,815) (12,574)
- ------------------------------------------------------------ ------------------ ---------------------------------
Other Classes 0 (37,105) (14,257)
- ------------------------------------------------------------ ------------------ ---------------------------------
In excess of net realized capital gains
Institutional Class 0 0 0
- ------------------------------------------------------------ ------------------ ---------------------------------
Administrative Class 0 0 0
- ------------------------------------------------------------ ------------------ ---------------------------------
Other Classes 0 0 0
- ------------------------------------------------------------ ------------------ ---------------------------------
Total Distributions (1) (171,335) (76,313)
============================================================ ================== =================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 3,000 253,425 439,612
- ------------------------------------------------------------ ------------------ ---------------------------------
Administrative Class 0 19,427 152,828
- ------------------------------------------------------------ ------------------ ---------------------------------
Other Classes 0 22,365 98,940
- ------------------------------------------------------------ ------------------ ---------------------------------
Issued in reorganization
Other Classes 0 0 0
- ------------------------------------------------------------ ------------------ ---------------------------------
Issued as reinvestment of distributions
Institutional Class 1 79,661 35,601
- ------------------------------------------------------------ ------------------ ---------------------------------
Administrative Class 0 40,183 13,612
- ------------------------------------------------------------ ------------------ ---------------------------------
Other Classes 0 35,603 13,712
- ------------------------------------------------------------ ------------------ ---------------------------------
Cost of shares redeemed
Institutional Class 0 (407,182) (649,159)
- ------------------------------------------------------------ ------------------ ---------------------------------
Administrative Class 0 (74,021) (76,012)
- ------------------------------------------------------------ ------------------ ---------------------------------
Other Classes 0 (57,042) (77,743)
- ------------------------------------------------------------ ------------------ ---------------------------------
Net increase (decrease) resulting from Fund share
transactions 3,001 (87,581) (48,609)
- ------------------------------------------------------------ ------------------ ---------------------------------
Total Increase (Decrease) in Net Assets 3,726 (146,191) (19,917)
============================================================ ================== =================================
Net Assets:
Beginning of period 0 1,103,626 1,123,543
- ------------------------------------------------------------ ------------------ ---------------------------------
End of period * $ 3,726 $ 957,435 $ 1,103,626
- ------------------------------------------------------------ ------------------ ---------------------------------
* Including net undistributed (overdistributed) investment
income of: $ 1 $ (810) $ 1,527
- ------------------------------------------------------------ ------------------ ---------------------------------
</TABLE>
<TABLE>
<CAPTION>
Amounts in thousands Mid-Cap Growth Fund
---------------------------------
Six Months Ended Year Ended
Increase (Decrease) in Net Assets from: December 31, 1999 June 30, 1999
(Unaudited)
<S> <C> <C>
Operations:
Net investment income (loss) $ 772 $ 1,713
- -------------------------------------------------------------------- ----------------- ------------
Net realized gain (loss) 13,132 867
- -------------------------------------------------------------------- ----------------- ------------
Net change in unrealized appreciation (depreciation) 112,366 7,029
- -------------------------------------------------------------------- ----------------- ------------
Net increase (decrease) resulting from operations 126,270 9,609
==================================================================== ================= ============
Distributions to Shareholders:
From net investment income
Institutional Class (2,704) (342)
- -------------------------------------------------------------------- ----------------- ------------
Administrative Class (205) (48)
- -------------------------------------------------------------------- ----------------- ------------
Other Classes (213) (33)
- -------------------------------------------------------------------- ----------------- ------------
From net realized capital gains
Institutional Class (426) (21,475)
- -------------------------------------------------------------------- ----------------- ------------
Administrative Class (75) (4,502)
- -------------------------------------------------------------------- ----------------- ------------
Other Classes (215) (15,306)
- -------------------------------------------------------------------- ----------------- ------------
In excess of net realized capital gains
Institutional Class 0 0
- -------------------------------------------------------------------- ----------------- ------------
Administrative Class 0 0
- -------------------------------------------------------------------- ----------------- ------------
Other Classes 0 0
- -------------------------------------------------------------------- ----------------- ------------
Total Distributions (3,838) (41,706)
==================================================================== ================= ============
Fund Share Transactions:
Receipts for shares sold
Institutional Class 338,943 640,912
- -------------------------------------------------------------------- ----------------- ------------
Administrative Class 21,855 104,472
- -------------------------------------------------------------------- ----------------- ------------
Other Classes 57,569 199,882
- -------------------------------------------------------------------- ----------------- ------------
Issued in reorganization
Other Classes 0 0
- -------------------------------------------------------------------- ----------------- ------------
Issued as reinvestment of distributions
Institutional Class 2,801 19,896
- -------------------------------------------------------------------- ----------------- ------------
Administrative Class 280 4,543
- -------------------------------------------------------------------- ----------------- ------------
Other Classes 412 14,079
- -------------------------------------------------------------------- ----------------- ------------
Cost of shares redeemed
Institutional Class (394,850) (505,497)
- -------------------------------------------------------------------- ----------------- ------------
Administrative Class (32,391) (74,169)
- -------------------------------------------------------------------- ----------------- ------------
Other Classes (99,842) (157,774)
- -------------------------------------------------------------------- ----------------- ------------
Net increase (decrease) resulting from Fund share transactions (105,223) 246,344
- -------------------------------------------------------------------- ----------------- ------------
Total Increase (Decrease) in Net Assets 17,209 214,247
==================================================================== ================= ============
Net Assets:
Beginning of period 1,008,125 793,878
- -------------------------------------------------------------------- ----------------- ------------
End of period * $ 1,025,334 $ 1,008,125
- -------------------------------------------------------------------- ----------------- ------------
*Including net undistributed (overdistributed) investment income of: $ (1,038) $ 1,312
- -------------------------------------------------------------------- ----------------- ------------
</TABLE>
44 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Small-Cap Growth Fund Micro-Cap Growth Fund Equity Income Fund Value Fund
- --------------------------------- --------------------------------- --------------------------------- -----------------
Six Months Ended Year Ended Six Months Ended Year Ended Six Months Ended Year Ended Six Months Ended
December 31, 1999 June 30, 1999 December 31, 1999 June 30, 1999 December 31, 1999 June 30, 1999 December 31, 1999
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
$ (154) $ (53) $ (867) $ (1,742) $ 2,532 $ 5,424 $ 1,763
- --------------------------------- --------------------------------- --------------------------------- -----------------
1,465 (9,957) 10,584 (9,322) 8,195 28,130 17,218
- --------------------------------- --------------------------------- --------------------------------- -----------------
3,799 799 (589) (26,056) (34,549) (8,864) (32,592)
- --------------------------------- --------------------------------- --------------------------------- -----------------
5,110 (9,211) 9,128 (37,120) (23,822) 24,690 (13,611)
================================= ================================= ================================= =================
0 0 0 0 (2,189) (3,796) (1,006)
- --------------------------------- --------------------------------- --------------------------------- -----------------
0 0 0 0 (248) (331) (257)
- --------------------------------- --------------------------------- --------------------------------- -----------------
0 0 0 0 (960) (1,192) (1,045)
- --------------------------------- --------------------------------- --------------------------------- -----------------
0 0 0 0 (19,089) (15,114) (13,672)
- --------------------------------- --------------------------------- --------------------------------- -----------------
0 0 0 0 (2,190) (1,194) (3,755)
- --------------------------------- --------------------------------- --------------------------------- -----------------
0 0 0 0 (10,255) (6,359) (21,328)
- --------------------------------- --------------------------------- --------------------------------- -----------------
0 (2,229) 0 (7,982) 0 0 0
- --------------------------------- --------------------------------- --------------------------------- -----------------
0 (52) 0 (83) 0 0 0
- --------------------------------- --------------------------------- --------------------------------- -----------------
0 0 0 0 0 0 0
- --------------------------------- --------------------------------- --------------------------------- -----------------
0 (2,281) 0 (8,065) (34,931) (27,986) (41,063)
================================= ================================= ================================= =================
5,375 36,581 12,292 98,906 4,318 28,202 21,577
- --------------------------------- --------------------------------- --------------------------------- -----------------
703 1,691 2,074 2,225 1,558 7,079 6,878
- --------------------------------- --------------------------------- --------------------------------- -----------------
0 0 0 0 9,192 38,810 24,218
- --------------------------------- --------------------------------- --------------------------------- -----------------
0 0 0 0 0 0 0
- --------------------------------- --------------------------------- --------------------------------- -----------------
0 2,229 0 6,383 21,189 18,538 14,559
- --------------------------------- --------------------------------- --------------------------------- -----------------
0 52 0 83 2,434 1,521 4,004
- --------------------------------- --------------------------------- --------------------------------- -----------------
0 0 0 0 10,550 7,112 20,545
- --------------------------------- --------------------------------- --------------------------------- -----------------
(11,397) (8,682) (40,682) (84,282) (17,939) (59,589) (9,544)
- --------------------------------- --------------------------------- --------------------------------- -----------------
(576) (379) (567) (3,312) (2,498) (6,530) (7,478)
- --------------------------------- --------------------------------- --------------------------------- -----------------
0 0 0 0 (15,994) (31,549) (39,706)
- --------------------------------- --------------------------------- --------------------------------- -----------------
(5,895) 31,492 (26,883) 20,003 12,810 3,594 35,053
- --------------------------------- --------------------------------- --------------------------------- -----------------
(785) 20,000 (17,755) (25,182) (45,943) 298 (19,621)
================================= ================================= ================================= =================
68,622 48,622 237,439 262,621 202,005 201,707 231,638
- --------------------------------- --------------------------------- --------------------------------- -----------------
$ 67,837 $ 68,622 $ 219,684 $ 237,439 $ 156,062 $ 202,005 $ 212,017
- --------------------------------- --------------------------------- --------------------------------- -----------------
$ (142) $ 12 $ (867) $ 0 $ 4,081 $ 4,946 $ 10,182
- --------------------------------- --------------------------------- --------------------------------- -----------------
<CAPTION>
Value 25 Fund
------------------------------------
Year Ended Six Months Ended Period From
June 30, 1999 December 31, 1999 July 10, 1998
(Unaudited) to June 30, 1999
<S> <C> <C>
$ 3,245 $ 23 $ 18
- --------------- ------------------------------------
29,420 (257) (84)
- --------------- ------------------------------------
(6,992) (187) 48
- --------------- ------------------------------------
25,673 (421) (18)
=============== ====================================
(1,539) (3) (1)
- --------------- ------------------------------------
(310) 0 0
- --------------- ------------------------------------
(1,228) (37) (7)
- --------------- ------------------------------------
(9,693) 0 0
- --------------- ------------------------------------
(1,646) 0 0
- --------------- ------------------------------------
(14,992) 0 0
- --------------- ------------------------------------
0 0 0
- --------------- ------------------------------------
0 0 0
- --------------- ------------------------------------
0 0 0
- --------------- ------------------------------------
(29,408) (40) (8)
=============== ====================================
19,355 0 388
- --------------- ------------------------------------
14,684 0 0
- --------------- ------------------------------------
65,101 2,494 3,941
- --------------- ------------------------------------
0 0 0
- --------------- ------------------------------------
11,141 0 1
- --------------- ------------------------------------
1,950 0 0
- --------------- ------------------------------------
14,980 36 6
- --------------- ------------------------------------
(43,290) (184) (149)
- --------------- ------------------------------------
(4,695) 0 0
- --------------- ------------------------------------
(83,212) (1,901) (1,972)
- --------------- ------------------------------------
(3,986) 445 2,215
- --------------- ------------------------------------
(7,721) (16) 2,189
=============== ====================================
239,359 2,189 0
- --------------- ------------------------------------
$ 231,638 $ 2,173 $ 2,189
- --------------- ------------------------------------
$ 10,727 $ (7) $ 10
- --------------- ------------------------------------
</TABLE>
See accompanying notes 45
<PAGE>
Statement of Changes in Net Assets (Cont.)
<TABLE>
<CAPTION>
Amounts in thousands Small-Cap Value Fund Enhanced Equity Fund
--------------------------------- ---------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
Increase (Decrease) in Net Assets from: December 31, 1999 June 30, 1999 December 31, 1999 June 30, 1999
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ 3,167 $ 5,018 $ 158 $ 310
- ------------------------------------------------------------- -------------------------------- ---------------------------------
Net realized gain (loss) (12,563) (11,944) 944 3,923
- ------------------------------------------------------------- -------------------------------- ---------------------------------
Net change in unrealized appreciation (depreciation) (35,329) (15,379) 3,057 5,764
- ------------------------------------------------------------- -------------------------------- ---------------------------------
Net increase (decrease) resulting from operations (44,725) (22,305) 4,159 9,997
============================================================= ================================ =================================
Distributions to Shareholders:
From net investment income
Institutional Class (938) (796) (230) (201)
- ------------------------------------------------------------- -------------------------------- ---------------------------------
Administrative Class (331) (247) (108) (83)
- ------------------------------------------------------------- -------------------------------- ---------------------------------
Other Classes (4,387) (1,810) 0 0
- ------------------------------------------------------------- -------------------------------- ---------------------------------
From net realized capital gains
Institutional Class 0 0 (1,500) (4,601)
- ------------------------------------------------------------- -------------------------------- ---------------------------------
Administrative Class 0 0 (951) (1,928)
- ------------------------------------------------------------- -------------------------------- ---------------------------------
Other Classes 0 0 0 0
- ------------------------------------------------------------- -------------------------------- ---------------------------------
In excess of net realized capital gains
Institutional Class 0 (1,632) 0 0
- ------------------------------------------------------------- -------------------------------- ---------------------------------
Administrative Class 0 (543) 0 0
- ------------------------------------------------------------- -------------------------------- ---------------------------------
Other Classes 0 (9,214) 0 0
- ------------------------------------------------------------- -------------------------------- ---------------------------------
Total Distributions (5,656) (14,242) (2,789) (6,813)
============================================================= ================================ =================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 5,655 37,773 3,877 8,851
- ------------------------------------------------------------- -------------------------------- ---------------------------------
Administrative Class 4,388 22,238 6,748 15,340
- ------------------------------------------------------------- -------------------------------- ---------------------------------
Other Classes 75,900 183,088 0 0
- ------------------------------------------------------------- -------------------------------- ---------------------------------
Issued in reorganization
Other Classes 0 0 0 0
- ------------------------------------------------------------- -------------------------------- ---------------------------------
Issued as reinvestment of distributions
Institutional Class 797 2,202 1,713 4,790
- ------------------------------------------------------------- -------------------------------- ---------------------------------
Administrative Class 324 790 1,060 2,005
- ------------------------------------------------------------- -------------------------------- ---------------------------------
Other Classes 4,107 10,426 0 0
- ------------------------------------------------------------- -------------------------------- ---------------------------------
Cost of shares redeemed
Institutional Class (19,900) (24,130) (6,188) (9,355)
- ------------------------------------------------------------- -------------------------------- ---------------------------------
Administrative Class (7,779) (12,454) (4,505) (5,174)
- ------------------------------------------------------------- -------------------------------- ---------------------------------
Other Classes (91,359) (160,295) 0 0
- ------------------------------------------------------------- -------------------------------- ---------------------------------
Net increase (decrease) resulting from Fund share transactions (27,867) 59,638 2,705 16,457
- ------------------------------------------------------------- -------------------------------- ---------------------------------
Fund Reimbursement Fee: 0 0 0 0
============================================================= ================================ =================================
Total Increase (Decrease) in Net Assets (78,248) 23,091 4,075 19,641
============================================================= ================================ =================================
Net Assets:
Beginning of period 397,643 374,552 66,634 46,993
- ------------------------------------------------------------- -------------------------------- ---------------------------------
End of period * $ 319,395 $ 397,643 $ 70,709 $ 66,634
- ------------------------------------------------------------- -------------------------------- ---------------------------------
* Including net undistributed (overdistributed) investment
income of: $ 814 $ 3,303 $ 141 $ 321
- ------------------------------------------------------------- -------------------------------- ---------------------------------
<CAPTION>
Amounts in thousands Tax-Efficient Equity Fund
-------------------------------------
Six Months Ended Period from
Increase (Decrease) in Net Assets from: December 31, 1999 July 10, 1998 to
(Unaudited) June 30, 1999
Operations:
<S> <C> <C>
Net investment income (loss) $ (45) $ (27)
- ------------------------------------------------------------ ------------------ ----------------
Net realized gain (loss) (1,668) (228)
- ------------------------------------------------------------ ------------------ ----------------
Net change in unrealized appreciation (depreciation) 5,713 3,290
- ------------------------------------------------------------ ------------------ ----------------
Net increase (decrease) resulting from operations 4,000 3,035
============================================================ ================== ================
Distributions to Shareholders:
From net investment income
Institutional Class 0 0
- ------------------------------------------------------------ ------------------ ----------------
Administrative Class 0 0
- ------------------------------------------------------------ ------------------ ----------------
Other Classes 0 0
- ------------------------------------------------------------ ------------------ ----------------
From net realized capital gains
Institutional Class 0 0
- ------------------------------------------------------------ ------------------ ----------------
Administrative Class 0 0
- ------------------------------------------------------------ ------------------ ----------------
Other Classes 0 0
- ------------------------------------------------------------ ------------------ ----------------
In excess of net realized capital gains
Institutional Class 0 0
- ------------------------------------------------------------ ------------------ ----------------
Administrative Class 0 0
- ------------------------------------------------------------ ------------------ ----------------
Other Classes 0 0
- ------------------------------------------------------------ ------------------ ----------------
Total Distributions 0 0
============================================================ ================== ================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 1,085 0
- ------------------------------------------------------------ ------------------ ----------------
Administrative Class 16,927 3,320
- ------------------------------------------------------------ ------------------ ----------------
Other Classes 14,307 26,786
- ------------------------------------------------------------ ------------------ ----------------
Issued in reorganization
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 0
- ------------------------------------------------------------ ------------------ ----------------
Administrative Class (2,921) (158)
- ------------------------------------------------------------ ------------------ ----------------
Other Classes (4,593) (5,032)
- ------------------------------------------------------------ ------------------ ----------------
Net increase (decrease) resulting from Fund share
transactions 24,805 24,916
- ------------------------------------------------------------ ------------------ ----------------
Fund Reimbursement Fee: 0 0
============================================================ ================== ================
Total Increase (Decrease) in Net Assets 28,805 27,951
============================================================ ================== ================
Net Assets:
Beginning of period 27,951 0
- ------------------------------------------------------------ ------------------ ----------------
End of period * $ 56,756 $ 27,951
- ------------------------------------------------------------ ------------------ ----------------
* Including net undistributed (overdistributed) investment
income of: $ (50) $ (5)
- ------------------------------------------------------------ ------------------ ----------------
</TABLE>
46 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Structured Emerging Tax-Efficient Structured
Markets Fund Emerging Markets Fund International Fund
- --------------------------------- --------------------------------- ---------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended Six Months Ended Year Ended
December 31, 1999 June 30, 1999 December 31, 1999 June 30, 1999 December 31, 1999 June 30, 1999
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
$ (30) $ 546 $ (294) $ 739 $ (455) $ (761)
- --------------------------------- --------------------------------- ---------------------------------
3,082 1,917 1,117 (10,520) 9,531 16,040
- --------------------------------- --------------------------------- ---------------------------------
6,702 7,959 16,708 27,046 21,731 (16,663)
- --------------------------------- --------------------------------- ---------------------------------
9,754 10,422 17,531 17,265 30,807 (1,384)
================================= ================================= =================================
(284) (252) (716) (300) 0 0
- --------------------------------- --------------------------------- ---------------------------------
0 0 0 0 0 0
- --------------------------------- --------------------------------- ---------------------------------
0 0 0 0 0 0
- --------------------------------- --------------------------------- ---------------------------------
(2,974) (980) 0 0 (652) (67)
- --------------------------------- --------------------------------- ---------------------------------
0 0 0 0 (2,285) (129)
- --------------------------------- --------------------------------- ---------------------------------
0 0 0 0 (16,526) (11,816)
- --------------------------------- --------------------------------- ---------------------------------
0 0 0 0 0 0
- --------------------------------- --------------------------------- ---------------------------------
0 0 0 0 0 0
- --------------------------------- --------------------------------- ---------------------------------
0 0 0 0 0 0
- --------------------------------- --------------------------------- ---------------------------------
(3,258) (1,232) (716) (300) (19,463) (12,012)
================================= ================================= =================================
1,170 2,664 8,114 12,518 1,133 5,567
- --------------------------------- --------------------------------- ---------------------------------
0 0 0 0 4,884 16,127
- --------------------------------- --------------------------------- ---------------------------------
0 0 0 0 402,023 736,111
- --------------------------------- --------------------------------- ---------------------------------
0 35,582 0 44,157 0 0
- --------------------------------- --------------------------------- ---------------------------------
2,979 1,209 574 300 652 67
- --------------------------------- --------------------------------- ---------------------------------
0 0 0 0 2,285 129
- --------------------------------- --------------------------------- ---------------------------------
0 0 0 0 15,117 11,029
- --------------------------------- --------------------------------- ---------------------------------
(1,146) (2,261) (1,070) (1,678) (649) (2,213)
- --------------------------------- --------------------------------- ---------------------------------
0 0 0 0 (5,216) (1,579)
- --------------------------------- --------------------------------- ---------------------------------
0 0 0 0 (426,920) (757,207)
- --------------------------------- --------------------------------- ---------------------------------
3,003 37,194 7,618 55,297 (6,691) 8,031
- --------------------------------- --------------------------------- ---------------------------------
0 193 0 247 0 0
================================= ================================= =================================
9,499 46,577 24,433 72,509 4,653 (5,365)
================================= ================================= =================================
46,577 0 72,509 0 149,087 154,452
- --------------------------------- --------------------------------- ---------------------------------
$ 56,076 $ 46,577 $ 96,942 $ 72,509 $ 153,740 $ 149,087
- --------------------------------- --------------------------------- ---------------------------------
$ 653 $ 967 $ (703) $ 307 $ (1,954) $ (1,499)
- --------------------------------- --------------------------------- ---------------------------------
</TABLE>
See accompanying notes 47
<PAGE>
Schedule of Investments
Renaissance Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 97.0%
- --------------------------------------------------------------------------------
Aerospace 2.7%
Orbital Sciences Corp. (b) 780,000 $ 14,479
-----------
Capital Goods 4.7%
CNH Global NV 1,081,500 14,397
Metso OYJ 537,000 6,978
McDermott International, Inc. 345,000 3,127
Raytheon Co. 'A' 51,000 1,265
-----------
25,767
Communications 3.3%
Loral Space & Communications Ltd. 609,500 14,818
Comsat Corp. 153,171 3,044
ICO Global Communications (b) 100,000 363
-----------
18,225
Consumer Discretionary 3.7%
Tupperware Corp. 528,000 8,943
Hitachi Ltd. 517,000 8,299
Great Atlantic & Pacific Tea Co., Inc. 110,000 3,066
-----------
20,308
Consumer Services 0.2%
Renaissance Re Holdings Ltd. 23,000 940
-----------
Consumer Staples 8.7%
Suiza Foods Corp. (b) 475,000 18,822
Corn Products International, Inc. 389,000 12,740
Philip Morris Cos., Inc. 260,000 6,029
Tate & Lyle PLC 639,345 4,095
Tyson Foods, Inc. 235,000 3,819
Flowers Industries, Inc. 115,200 1,836
-----------
47,341
Energy 14.4%
Valero Energy Corp. 1,000,900 19,893
Nabors Industries, Inc. (b) 595,600 18,426
R & B Falcon Corp. (b) 891,000 11,806
Rowan Cos., Inc. (b) 446,900 9,692
Union Pacific Resources Group 538,700 6,868
Gulf Canada Resources Ltd. 1,573,700 5,311
Tosco Corp. 137,500 3,738
Ocean Energy, Inc. (b) 380,000 2,945
-----------
78,679
Environmental Services 1.0%
Republic Services, Inc. 360,000 5,175
-----------
Financial & Business Services 18.1%
Aetna, Inc. 452,600 25,261
Ace Ltd. 1,174,800 19,604
Pacific Century Financial Corp. 754,300 14,096
Everest Reinsurance Holdings, Inc. 408,200 9,108
St. Paul Cos., Inc. 235,800 7,944
Conseco, Inc. 300,000 5,362
Washington Mutual, Inc. 190,000 4,940
Fremont General Corp. 667,000 4,919
AmeriCredit Corp. (b) 210,700 3,898
SLM Holding Corp. 57,900 2,446
Aon Corp. 25,000 1,000
IPC Holdings Limited 20,000 298
-----------
98,876
Health Care 7.7%
Foundation Health Systems, Inc. 'A' (b) 2,297,000 22,826
Tenet Healthcare Corp. (b) 821,900 19,315
-----------
42,141
Materials & Processing 15.9%
Asia Pulp & Paper Co. Ltd. SP - ADR 2,535,900 19,970
Ispat International NV 1,005,300 16,210
Smurfit-Stone Container Corp. (b) 588,500 14,418
Gaylord Container Corp. 'A' (b) 2,014,200 13,722
Ucar International, Inc. (b) 675,000 12,023
Buenaventura SA 211,000 3,389
Mercer International, Inc. 561,800 2,598
Eastman Chemical Co. 40,000 1,908
IMC Global, Inc. 100,000 1,638
CK Witco Corp. 83,800 1,121
-----------
86,997
Technology 11.8%
Arrow Electronics, Inc. (b) 957,000 $ 24,284
Micron Technology, Inc. (b) 244,000 18,971
Matsushita Electric Industrial Co. Ltd. 455,000 12,603
Kulicke & Soffa Industries (b) 131,100 5,580
Hutchinson Technology (b) 130,000 2,763
-----------
64,201
Utilities 4.8%
Niagara Mohawk Holdings, Inc. 688,300 9,593
Midamerican Energy Holdings Co. (b) 209,000 7,041
Citizens Utilities Co. 'B' 376,100 5,336
Western Resources, Inc. 255,000 4,335
PG&E Corp. 6,700 137
-----------
26,442
-----------
Total Common Stocks 529,571
-----------
(Cost $539,263)
- --------------------------------------------------------------------------------
CONVERTIBLE BONDS & NOTES 0.4%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Convertible Bonds & Notes 0.4%
APP Finance VI Mauritius Ltd.
0.000% due 11/18/2012 $ 10,000 1,791
APP Global Finance Ltd.
2.000% due 07/25/2000 500 549
-----------
Total Convertible Bonds & Notes 2,340
-----------
(Cost $2,345)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 2.2%
- --------------------------------------------------------------------------------
Repurchase Agreement 2.2%
State Street Bank
4.000% due 01/03/2000 11,761 11,761
(Dated 12/31/1999. Collateralized by
Federal Home Loan Bank 5.400% due
11/17/2003 valued at $11,998.
Repurchase proceeds are $11,795.)
-----------
Total Short-Term Instruments 11,761
-----------
(Cost $11,761)
Total Investments (a) 99.6% $ 543,672
(Cost $553,369)
Other Assets and Liabilities (Net) 0.4% 2,288
-----------
Net Assets 100.0% $ 545,960
-----------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 59,945
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (69,642)
-----------
Unrealized depreciation-net $ (9,697)
-----------
(b) Non-income producing security.
48 See accompanying notes
<PAGE>
Schedule of Investments
Growth Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 98.4%
- --------------------------------------------------------------------------------
Aerospace 1.0%
Honeywell International, Inc. 500,000 $ 28,844
-----------
Capital Goods 2.7%
General Electric Co. 500,000 77,375
-----------
Communications 17.1%
Nokia Corp. SP - ADR 1,000,000 190,000
Qualcomm, Inc. (b) 600,000 105,675
Nortel Networks Corp. 800,000 80,800
MCI WorldCom, Inc. (b) 1,500,000 79,594
AT&T Corp. - Liberty Media Group 'A' (b) 650,000 36,888
-----------
492,957
Consumer Discretionary 12.8%
Home Depot, Inc. 1,875,000 128,555
Wal-Mart Stores, Inc. 1,500,000 103,687
Clear Channel Communications (b) 750,000 66,938
Kohls Corp. (b) 500,000 36,094
Gemstar International Group Ltd. (b) 500,000 35,625
-----------
370,899
Consumer Services 0.6%
United Parcel Service, Inc. 250,000 17,250
-----------
Energy 1.5%
Enron Corp. 1,000,000 44,375
-----------
Financial & Business Services 16.7%
Morgan Stanley, Dean Witter, Discover and Co. 750,000 107,062
Omnicom Group 1,000,000 100,000
Citigroup, Inc. 1,750,000 97,234
American Express Co. 500,000 83,125
American International Group, Inc. 600,000 64,875
Federal National Mortgage Association 500,000 31,219
-----------
483,515
Health Care 7.3%
Amgen, Inc. (b) 1,000,000 60,063
Genentech, Inc. (b) 400,000 53,800
Bristol-Myers Squibb Co. 600,000 38,513
Schering-Plough Corp. 800,000 33,750
Guidant Corp. 550,000 25,850
-----------
211,976
Technology 38.7%
EMC Corp. (b) 1,500,000 163,875
Cisco Systems, Inc. (b) 1,500,000 160,687
Microsoft Corp. (b) 1,000,000 116,750
JDS Uniphase Corp. (b) 500,000 80,656
Sun Microsystems, Inc. (b) 1,000,000 77,437
America Online, Inc. (b) 1,000,000 75,438
Motorola, Inc. 500,000 73,625
Solectron Corp. (b) 750,000 71,344
Broadcom Corp. (b) 250,000 68,094
Telefonaktiebolaget LM Ericsson SP - ADR 1,000,000 65,687
Texas Instruments, Inc. 500,000 48,437
Lucent Technologies, Inc. 500,000 37,406
Comverse Technology, Inc. (b) 250,000 36,187
Intel Corp. 300,000 24,694
Internet Capital Group LLC (b) 100,000 17,000
-----------
1,117,317
-----------
Total Common Stocks 2,844,508
-----------
(Cost $1,632,987)
- --------------------------------------------------------------------------------
CORPORATE BONDS & NOTES 0.0%
- --------------------------------------------------------------------------------
Industrials 0.0%
Cabbell Financial Grantor Trust
7.187% due 12/31/2002 $ 508 $ 432
-----------
Total Corporate Bonds & Notes 432
-----------
(Cost $505)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 1.5%
- --------------------------------------------------------------------------------
Repurchase Agreement 1.5%
State Street Bank
4.000% due 01/03/2000 44,521 44,521
(Dated 12/31/1999. Collateralized by
Federal National Mortgage Association
6.400% due 12/21/2001 valued at $45,413.
Repurchase proceeds are $44,536.)
-----------
Total Short-Term Instruments 44,521
-----------
(Cost $44,521)
Total Investments (a) 99.9% $ 2,889,461
(Cost $1,678,013)
Other Assets and Liabilities 1,952
-----------
(Net) 0.1%
Net Assets 100.0% $ 2,891,413
-----------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 1,222,140
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (10,692)
-----------
Unrealized appreciation-net $ 1,211,448
-----------
(b) Non-income producing security.
See accompanying notes 49
<PAGE>
Schedule of Investments
Core Equity Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 96.7%
- --------------------------------------------------------------------------------
Aerospace 4.2%
Boeing Co. 880 $ 37
Lockheed Martin Corp. 1,290 28
-----------
65
Capital Goods 3.4%
Deere & Co. 1,220 53
-----------
Communications 8.8%
Nokia Corp. SP - ADR 410 78
MCI WorldCom, Inc. (b) 615 33
Nortel Networks Corp. 250 25
-----------
136
Consumer Discretionary 10.5%
Home Depot, Inc. 735 50
Gemstar International Group Ltd. (b) 500 36
Wal-Mart Stores, Inc. 410 28
Federated Department Stores, Inc. (b) 530 27
Clear Channel Communications (b) 220 20
-----------
161
Consumer Services 3.5%
Waste Management, Inc. 1,730 30
McKesson HBOC, Inc. 1,070 24
-----------
54
Consumer Staples 2.0%
Philip Morris Cos., Inc. 1,300 30
-----------
Energy 7.2%
Texaco, Inc. 750 41
Halliburton Co. 980 39
Baker Hughes, Inc. 1,490 31
-----------
111
Financial & Business Services 18.8%
Aetna, Inc. 1,040 58
Morgan Stanley, Dean Witter, Discover and Co. 330 47
Chubb Corp. 820 46
Omnicom Group 400 40
Citigroup, Inc. 570 32
Conseco, Inc. 1,610 29
American International Group, Inc. 190 21
First Union Corp. 510 17
-----------
290
Health Care 6.9%
Columbia/HCA Healthcare 2,050 60
Guidant Corp. 620 29
Schering-Plough Corp. 400 17
-----------
106
Materials & Processing 2.9%
International Paper Co. 780 44
-----------
Technology 25.8%
Cisco Systems, Inc. (b) 770 82
EMC Corp. (b) 660 72
Matsushita Electric Industrial Co. Ltd. SP - ADR 250 70
Micron Technology, Inc. (b) 700 54
Lucent Technologies, Inc. 380 28
Intel Corp. 330 27
Sun Microsystems, Inc. (b) 330 26
Comverse Technology, Inc. (b) 160 23
Telefonaktiebolaget LM Ericsson SP - ADR 250 16
-----------
398
Transportation 0.7%
Burlington Northern Santa Fe Corp. 450 11
-----------
Utilities 2.0%
Edison International 1,170 31
-----------
Total Common Stocks 1,490
-----------
(Cost $1,392)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 6.4%
- --------------------------------------------------------------------------------
Repurchase Agreement 6.4%
State Street Bank
4.000% due 01/03/2000 $ 98 $ 98
(Dated 12/31/1999. Collateralized by
Federal Farm Credit Bank
0.000% due 02/17/2000 valued at $104.
Repurchase proceeds are $98.)
-----------
Total Short-Term Instruments 98
-----------
(Cost $98)
Total Investments (a) 103.1% $ 1,588
(Cost $1,490)
Other Assets and Liabilities (Net) (3.1%) (48)
-----------
Net Assets 100.0% $ 1,540
-----------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 170
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (72)
-----------
Unrealized appreciation-net $ 98
-----------
(b) Non-income producing security.
50 See accompanying notes
<PAGE>
Schedule of Investments
Target Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 97.5%
- --------------------------------------------------------------------------------
Capital Goods 1.9%
Weatherford International, Inc. (b) 400,000 $ 15,975
Waters Corp. (b) 300,000 15,900
-----------
31,875
Communications 7.5%
Echostar Communications Corp. (b) 450,000 43,875
WinStar Communications, Inc. (b) 425,000 31,981
Worldgate Communications, Inc. (b) 542,500 25,803
Nextlink Communications, Inc. 'A' (b) 275,000 22,842
-----------
124,501
Consumer Discretionary 9.4%
Gemstar International Group Ltd. (b) 650,000 46,313
Tiffany & Co. 375,000 33,469
Harley-Davidson, Inc. 300,000 19,219
Bed, Bath & Beyond, Inc. (b) 450,000 15,637
Emmis Broadcasting Corp. 'A' (b) 125,000 15,580
Tandy Corp. 275,000 13,527
Kohls Corp. (b) 175,000 12,633
-----------
156,378
Consumer Services 1.2%
Royal Caribbean Cruises Ltd. 400,000 19,725
-----------
Energy 1.0%
Cooper Cameron Corp. (b) 350,000 17,128
-----------
Financial & Business Services 4.2%
Young & Rubicam, Inc. 500,000 35,375
VeriSign, Inc. (b) 150,000 28,641
E*Trade Group, Inc. (b) 250,000 6,531
-----------
70,547
Health Care 11.1%
Medimmune, Inc. (b) 275,000 45,616
Immunex Corp. (b) 350,000 38,325
Minimed, Inc. (b) 400,000 29,300
Biogen, Inc. (b) 325,000 27,462
Alkermes, Inc. (b) 500,000 24,563
Allergan, Inc. 400,000 19,900
-----------
185,166
Technology 58.1%
Comverse Technology, Inc. (b) 550,000 79,613
JDS Uniphase Corp. (b) 480,000 77,430
Citrix Systems, Inc. (b) 450,000 55,350
SDL, Inc. (b) 250,000 54,500
Sierra Semiconductor Corp. (b) 325,000 52,102
Jabil Circuit, Inc. (b) 600,000 43,800
CMGI, Inc. (b) 150,000 41,531
Sanmina Corp. (b) 400,000 39,950
Network Appliance, Inc. (b) 450,000 37,378
RF Micro Devices, Inc. (b) 500,000 34,219
Gilat Satellite Networks Ltd. (b) 275,000 32,656
E-Tek Dynamics, Inc. (b) 225,000 30,291
Teradyne, Inc. (b) 450,000 29,700
Xircom, Inc. (b) 350,000 26,250
Apple Computer, Inc. 250,000 25,703
Rational Software Corp. (b) 500,000 24,563
CommScope, Inc. (b) 600,000 24,187
Harmonic Lightwaves, Inc. (b) 250,000 23,734
Maxim Integrated Products, Inc. (b) 500,000 23,594
Portal Software, Inc. (b) 225,000 23,147
Lexmark International Group, Inc. 'A' (b) 250,000 22,625
LSI Logic Corp. (b) 300,000 20,250
Psinet, Inc. (b) 300,000 18,525
Redback Networks, Inc. (b) 100,000 17,750
Altera Corp. (b) 350,000 17,346
Ciena Corp. (b) 300,000 17,250
Broadvision, Inc. (b) 100,000 17,006
Juniper Networks, Inc. (b) 50,000 17,000
Amdocs Ltd. (b) 400,000 13,800
Extreme Networks, Inc. (b) 125,000 10,437
Whittman-Hart, Inc. (b) 175,000 9,384
Phone.com, Inc. (b) 60,000 6,956
American Satellite Network, Inc. - Warrant (b) 53,250 0
-----------
968,027
Transportation 1.4%
Kansas City Southern Industries, Inc. 300,000 $ 22,388
-----------
Utilities 1.7%
Calpine Corp. (b) 450,000 28,800
-----------
Total Common Stocks 1,624,535
-----------
(Cost $874,587)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 3.2%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreement 3.2%
State Street Bank
4.000% due 01/03/2000 $ 54,037 54,037
(Dated 12/31/1999. Collateralized by
Federal Home Loan Bank 5.400% due
11/17/2003 valued at $55,122.
Repurchase proceeds are $54,055.)
-----------
Total Short-Term Instruments 54,037
-----------
(Cost $54,037)
Total Investments (a) 100.7% $ 1,678,572
(Cost $928,624)
Other Assets and Liabilities (11,417)
-----------
(Net) (0.7%)
Net Assets 100.0% $ 1,667,155
-----------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 756,883
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (6,935)
-----------
Unrealized appreciation-net $ 749,948
-----------
(b) Non-income producing security.
See accompanying notes 51
<PAGE>
Schedule of Investments
Mid-Cap Equity Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 97.5%
- --------------------------------------------------------------------------------
Aerospace 0.9%
Orbital Sciences Corp. (b) 2,500 $ 46
-----------
Capital Goods 2.1%
CNH Global NV 8,500 113
-----------
Communications 7.7%
Qualcomm, Inc. (b) 1,000 176
WinStar Communications, Inc. (b) 1,800 135
Echostar Communications Corp. (b) 1,100 107
-----------
418
Consumer Discretionary 7.1%
Gemstar International Group Ltd. (b) 2,700 192
Harley-Davidson, Inc. 1,900 122
Tandy Corp. 1,500 74
-----------
388
Consumer Staples 2.1%
Tate & Lyle PLC 2,900 76
Tyson Foods, Inc. 2,500 41
-----------
117
Energy 12.1%
Nabors Industries, Inc. (b) 7,800 241
Valero Energy Corp. 9,000 179
Rowan Cos., Inc. (b) 6,800 147
Gulf Canada Resources Ltd. 27,600 93
-----------
660
Financial & Business Services 6.7%
Young & Rubicam, Inc. 2,000 142
Ace Ltd. 5,800 97
St. Paul Cos., Inc. 2,000 67
Everest Reinsurance Holdings, Inc. 2,600 58
-----------
364
Health Care 14.8%
Foundation Health Systems, Inc. 'A' (b) 22,250 221
Tenet Healthcare Corp. (b) 6,800 160
IDEC Pharmaceuticals Corp. (b) 1,600 157
Minimed, Inc. (b) 1,900 139
Medimmune, Inc. (b) 800 133
-----------
810
Materials & Processing 12.5%
Asia Pulp & Paper Co. Ltd. SP - ADR 23,400 184
Ispat International NV 11,200 181
Smurfit-Stone Container Corp. (b) 6,700 164
Ucar International, Inc. (b) 8,700 155
-----------
684
Technology 30.3%
JDS Uniphase Corp. (b) 1,600 258
Comverse Technology, Inc. (b) 1,700 246
Arrow Electronics, Inc. (b) 7,400 188
Jabil Circuit, Inc. (b) 2,500 183
Sierra Semiconductor Corp. (b) 1,000 160
SDL, Inc. (b) 600 131
RF Micro Devices, Inc. (b) 1,600 110
Portal Software, Inc. (b) 1,000 103
Apple Computer, Inc. (b) 1,000 103
Psinet, Inc. (b) 1,600 99
Phone.com, Inc. (b) 600 69
-----------
1,650
Utilities 1.2%
Citizens Utilities Co. 'B' 4,700 67
-----------
Total Common Stocks 5,317
-----------
(Cost $4,251)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 2,5%
- --------------------------------------------------------------------------------
Repurchase Agreement 2.5%
State Street Bank
4.000% due 01/03/2000 $ 138 $ 138
(Dated 12/31/1999. Collateralized by
Federal Home Loan Mortgage Corporation
6.680% due 12/28/2001 valued at $145.
Repurchase proceeds are $138.)
-----------
Total Short-Term Instruments 138
-----------
(Cost $138)
Total Investments (a) 100.0% $ 5,455
(Cost $4,389)
Other Assets and Liabilities 0
-----------
(Net) 0.0%
Net Assets 100.0% $ 5,455
-----------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 1,452
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (386)
-----------
Unrealized appreciation-net $ 1,066
-----------
(b) Non-income producing security.
52 See accompanying notes
<PAGE>
Schedule of Investments
Opportunity Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 95.6%
- --------------------------------------------------------------------------------
Capital Goods 0.5%
Tower Automotive, Inc. (b) 193,900 $ 2,993
-----------
Communications 12.1%
WinStar Communications, Inc. (b) 128,500 9,670
Pinnacle Holdings, Inc. (b) 203,300 8,615
Millicom International Cellular SA (b) 130,100 8,115
Worldgate Communications, Inc. (b) 157,500 7,491
Citadel Communications Corp. (b) 110,500 7,168
Cumulus Media, Inc. (b) 131,300 6,662
True North Communications 138,600 6,194
Young Broadcasting Corp. (b) 99,550 5,077
ICG Communications, Inc. (b) 269,800 5,059
Orckit Communications Ltd. (b) 104,000 3,569
American Mobile Satellite Corp. (b) 152,800 3,218
-----------
70,838
Consumer Discretionary 7.7%
B.J.'s Wholesale Club, Inc. (b) 168,300 6,143
United Stationers, Inc. 186,700 5,333
Zale Corp. (b) 100,800 4,876
Quiksilver, Inc. (b) 311,500 4,828
Charlotte Russe Holding, Inc. (b) 219,200 4,603
Pacific Sunwear of California (b) 137,250 4,375
Furniture Brands International, Inc. (b) 197,800 4,352
Netratings, Inc. (b) 83,100 3,999
School Specialty, Inc. (b) 227,400 3,439
Station Casinos, Inc. (b) 126,100 2,829
-----------
44,777
Consumer Services 3.5%
The Cheesecake Factory (b) 156,300 5,471
Sotheby's Holdings 'A' 181,700 5,451
SFX Entertainment, Inc. 'A' (b) 142,650 5,162
Avis Rent A Car, Inc. (b) 164,375 4,202
-----------
20,286
Consumer Staples 0.6%
Performance Food Group Co. (b) 156,100 3,805
-----------
Energy 5.5%
UTI Energy Corp. (b) 335,600 7,740
Rowan Cos., Inc. (b) 330,200 7,161
Key Energy Group, Inc. (b) 967,100 5,017
Newpark Resources, Inc. (b) 762,800 4,672
Ocean Energy, Inc. (b) 574,000 4,449
Superior Energy Services (b) 426,600 2,880
-----------
31,919
Environmental Services 0.4%
IT Group, Inc. (b) 283,000 2,600
-----------
Financial & Business Services 10.2%
Rare Medium Group, Inc. (b) 289,300 9,872
Reckson Service Industries, Inc. (b) 156,500 9,762
Modem Media Poppe Tyson, Inc. (b) 85,800 6,038
Precision Response Corp. (b) 218,100 5,289
Charles River Assocaties, Inc. (b) 152,000 5,092
Astoria Financial Corp. 149,200 4,541
Annuity and Life Re 166,800 4,358
Meristar Hospitality Corp. 271,600 4,346
Technology Solutions Co. (b) 118,200 3,871
Allied Capital Corp. Funds 170,300 3,119
Profit Recovery Group International, Inc. (b) 115,300 3,063
-----------
59,351
Health Care 16.5%
Medicis Pharmaceutical 'A' (b) 352,900 15,020
Protein Design Labs, Inc. (b) 145,600 10,192
Arthrocare Corp. (b) 131,200 8,003
INAMED Corp. (b) 176,200 7,731
Renal Care Group, Inc. (b) 308,800 7,218
Progenics Pharmaceuticals, Inc. (b) 144,500 7,062
Health Management Associates, Inc. 'A' (b) 512,100 6,849
Alkermes, Inc. (b) 123,900 6,087
ResMed, Inc. (b) 139,500 5,824
Cyberonics, Inc. (b) 318,100 5,070
Gilead Sciences, Inc. (b) 89,200 4,828
Jones Pharma, Inc. 102,100 $ 4,435
Magellan Health Services (b) 654,000 4,128
MID Atlantic Medical Services (b) 461,600 3,837
-----------
96,284
Materials & Processing 1.6%
Shaw Group Inc. (The) 209,600 5,306
Gaylord Container Corp. 'A' (b) 596,900 4,066
-----------
9,372
Technology 35.1%
Xircom, Inc. (b) 122,600 9,195
ImageX.com, Inc. (b) 214,500 8,982
Visual Networks, Inc. (b) 110,500 8,757
Intraware, Inc. (b) 108,600 8,681
TranSwitch Corp. (b) 118,500 8,599
Fairchild Semiconductor International, Inc. (b) 279,400 8,312
National Information Consortium, Inc. (b) 259,300 8,298
Art Technology Group, Inc. (b) 63,700 8,162
About.com, Inc. (b) 89,400 8,024
The Vialink Co. (b) 207,800 7,559
Getty Images, Inc. (b) 143,500 7,014
nFront, Inc. (b) 318,850 6,377
BindView Development Corp. (b) 127,925 6,356
Whittman-Hart, Inc. (b) 117,700 6,312
Peregrine Systems, Inc. (b) 73,900 6,221
Optimal Robotics Corp. (b) 164,500 6,128
MKS Instruments, Inc. (b) 160,600 5,802
NETIQ Corp. (b) 110,300 5,742
L-3 Communications Holdings, Inc. (b) 135,500 5,640
CuraGen Corp. (b) 72,800 5,078
Maxygen, Inc. (b) 70,800 5,027
Advanced Energy Industries (b) 98,500 4,851
ResourcePhoenix.com, Inc. (b) 231,000 4,562
Westell Technologies, Inc. (b) 420,900 4,525
CBT Group PLC SP - ADR (b) 133,100 4,459
Espeed, Inc. (b) 124,000 4,410
Documentum, Inc. (b) 70,300 4,209
Jupiter Communications, Inc. 138,800 4,199
CSG Systems International, Inc. (b) 102,000 4,067
Critical Path, Inc. (b) 41,500 3,916
Aeroflex, Inc. (b) 365,350 3,791
Helix Technology Corp. (b) 82,500 3,697
Digital Island, Inc. (b) 34,000 3,234
Metron Technology (b) 186,900 3,001
Digital Microwave Corp. (b) 76,400 1,791
-----------
204,978
Transportation 0.7%
Atlantic Coast Airlines Holdings (b) 184,000 4,370
-----------
Utilities 1.2%
Independent Energy Holdings PLC (b) 216,800 7,222
-----------
Total Common Stocks 558,795
-----------
(Cost $401,761)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 4.9%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreement 4.9%
State Street Bank
4.000% due 01/03/2000 $ 28,403 28,403
(Dated 12/31/1999. Collateralized by
Federal National Mortgage Association
6.400% due 09/27/2001 valued at $28,974.
Repurchase proceeds are $28,412.)
-----------
Total Short-Term Instruments 28,403
-----------
(Cost $28,403)
Total Investments (a) 100.5% $ 587,198
(Cost $430,164)
Other Assets and Liabilities (2,787)
-----------
(Net) (0.5%)
Net Assets 100.0% $ 584,411
-----------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 168,951
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (11,917)
-----------
Unrealized appreciation-net $ 157,034
-----------
(b) Non-income producing security.
See accompanying notes 53
<PAGE>
Schedule of Investments
Innovation Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 93.7%
- --------------------------------------------------------------------------------
Communications 8.0%
Qualcomm, Inc. (b) 820,000 $ 144,423
Nokia Corp. SP - ADR 350,000 66,500
General Instrument Corp. (b) 580,000 49,300
Next Level Communications, Inc. (b) 245,000 18,344
-----------
278,567
Consumer Discretionary 4.9%
Gemstar International Group Ltd. (b) 1,296,000 92,340
General Motors Corp. 'H' (b) 810,000 77,760
-----------
170,100
Financial & Business Services 6.6%
DoubleClick, Inc. (b) 450,000 113,878
VeriSign, Inc. (b) 340,000 64,919
Sapient Corp. (b) 345,000 48,623
-----------
227,420
Health Care 6.5%
Medimmune, Inc. (b) 400,000 66,350
Biogen, Inc. (b) 770,000 65,065
IDEC Pharmaceuticals Corp. (b) 640,000 62,880
Immunex Corp. (b) 265,000 29,018
-----------
223,313
Technology 67.7%
Oracle Corp. (b) 1,220,000 136,717
I2 Technologies, Inc. (b) 690,000 134,550
Ariba, Inc. (b) 630,000 111,746
Cisco Systems, Inc. (b) 950,000 101,769
Vignette Corp. (b) 546,000 88,998
Siebel Systems, Inc. (b) 1,040,000 87,360
QLogic Corp. (b) 540,000 86,333
Sun Microsystems, Inc. (b) 1,095,000 84,794
JDS Uniphase Corp. (b) 519,000 83,721
E-Tek Dynamics, Inc. (b) 585,000 78,756
Veritas Software Corp. (b) 527,500 75,498
Redback Networks, Inc. (b) 410,000 72,774
Juniper Networks, Inc. (b) 200,000 68,000
ASM Lithography Holding NV (b) 589,000 66,999
Apple Computer, Inc. 630,000 64,772
Motorola, Inc. 429,900 63,303
Tibco Software, Inc. 404,100 61,827
Applied Materials, Inc. (b) 450,000 57,009
EMC Corp. (b) 510,000 55,718
Applied Micro Circuits Corp. (b) 420,000 53,445
Broadvision, Inc. (b) 304,000 51,699
Broadcom Corp. (b) 185,000 50,389
Ciena Corp. (b) 865,000 49,738
Brocade Communications Systems, Inc. (b) 280,000 49,560
America Online, Inc. (b) 630,000 47,526
Xilinx, Inc. (b) 1,040,000 47,288
Electronics for Imaging, Inc. (b) 735,000 42,722
Internet Capital Group LLC (b) 250,000 42,500
RealNetworks, Inc. (b) 340,000 40,906
Extreme Networks, Inc. (b) 487,500 40,706
Microsoft Corp. (b) 290,000 33,858
Phone.com, Inc. (b) 290,000 33,621
Lucent Technologies, Inc. 380,000 28,429
Sierra Semiconductor Corp. (b) 170,000 27,253
Vitesse Semiconductor Co. (b) 500,000 26,219
Sanmina Corp. (b) 240,000 23,970
Atmel Corp. (b) 680,000 20,103
Texas Instruments, Inc. 200,000 19,374
Research In Motion Ltd. (b) 400,000 18,475
RF Micro Devices, Inc. (b) 222,500 15,227
Indigo NV (b) 102,223 59
-----------
2,343,711
-----------
Total Common Stocks 3,243,111
-----------
(Cost $1,673,963)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 7.6%
- --------------------------------------------------------------------------------
Repurchase Agreement 7.6%
State Street Bank
4.000% due 01/03/2000 $ 264,173 $ 264,173
(Dated 12/31/1999. Collateralized by
Federal National Mortgage Association
6.400% due 09/27/2001 valued at $153,004
and Federal Home Loan Bank 5.400% due
11/17/2003 valued at $116,466.
Repurchase proceeds are $264,261.)
-----------
Total Short-Term Instruments 264,173
-----------
(Cost $264,173)
Total Investments (a) 101.3% $ 3,507,284
(Cost $1,938,136)
Other Assets and Liabilities (45,216)
-----------
(Net) (1.3%)
Net Assets 100.0% $ 3,462,068
-----------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 1,574,471
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (5,323)
-----------
Unrealized appreciation-net $ 1,569,148
-----------
(b) Non-income producing security.
54 See accompanying notes
<PAGE>
Schedule of Investments
International Growth Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 98.9%
- --------------------------------------------------------------------------------
Australia 2.0%
Broken Hill Proprietary Co. Ltd. 3,400 $ 90
M.I.M. Holdings Ltd. 80,000 82
Woodside Petroleum Ltd. 11,000 81
---------
253
Belgium 0.9%
Union Miniere SA 2,850 111
---------
Canada 3.0%
Rogers Cantel Mobile Communications 'B' (b) 5,950 216
Research In Motion Ltd. (b) 3,500 162
---------
378
---------
Finland 2.6%
Nokia Corp. SP- ADR 1,300 247
Jot Automation Group OYJ 8,000 75
---------
322
France 6.1%
PSA Peugeot Citroen 1,600 363
Total SA 1,444 193
Coflexip SA SP - ADR 3,000 114
Bouygues Offshore 2,500 94
Seita 2 0
---------
764
Germany 6.5%
Siemens AG 2,500 318
Deutsche Bank AG 2,300 194
Primacom AG (b) 5,600 183
Karstadt Quelle AG 3,000 120
---------
815
Greece 1.0%
National Bank of Greece SP - ADR (b) 8,690 122
---------
Hong Kong 2.2%
Cathay Pacific Airways 90,000 160
Legend Holdings Ltd. 50,000 124
---------
284
Ireland 1.2%
Jefferson Smurfit Group PLC 29,500 88
CRH PLC 3,063 66
Bank of Ireland 1 0
---------
154
Italy 4.9%
Mediaset SpA 15,700 244
Seat Pagine Gialle SpA 85,000 188
Gruppo Editoriale L'Espresso 15,912 184
---------
616
Japan 28.4%
Softbank Corp. 800 766
Murata Manufacturing Co. 3,000 705
Oracle Corp. Japan 1,200 558
Hikari Tsushin, Inc. 200 401
Nikko Securities Co. Ltd. 25,000 316
TDK Corp. 2,000 276
Fuji Bank Ltd. 20,000 194
Takeda Chemical Industries 3,000 148
Enix Corp. 1,000 109
Acom Co. Ltd. 1,000 98
---------
3,571
Mexico 1.5%
Grupo Televisa SA SP - GDR (b) 2,000 137
Telefonos de Mexico SP - ADR 500 56
---------
193
Netherlands 6.7%
STMicroelectronics NV (b) 1,700 257
United Pan-Europe Communication NV 1,750 223
SP - ADR (b)
Koninklijke Philips Electronics NV 1,284 173
SP - ADR
ASM Lithography Holding NV (b) 940 107
ING Groep NV 1,022 62
Equant (b) 240 27
---------
849
Singapore 1.5%
DBS Group Holdings Ltd. 3,489 57
Asia Pulp & Paper Co. Ltd. SP-ADR 7,000 55
Natsteel Electronics Ltd. 6,200 33
Allgreen Properties Ltd. (b) 25,000 23
Singapore Airlines Ltd. 2,000 23
---------
191
South Korea 0.5%
Korea Telecom Corp. SP - ADR (b) 500 $ 37
Samsung Electronics SP - GDR 196 24
---------
61
Spain 2.9%
Telefonica Publicidad Informacion SA (b) 5,000 243
Altadis (b) 8,227 117
---------
360
Sweden 3.2%
ICON MEDIALAB AB 9,000 313
Telefonaktiebolaget LM Ericsson SP - ADR 1,300 85
---------
398
Switzerland 3.0%
Holderbank Financiere Glarus AG 93 127
UBS AG (b) 465 126
Disetronic Holding AG 26 121
---------
374
Thailand 0.2%
Hana Microelectronics Public Co. Ltd. 6,500 31
---------
United Kingdom 20.6%
Colt Telecom Group PLC SP - ADR (b) 2,000 408
Logica PLC 12,000 310
WPP Group PLC 3,400 283
Pace Micro Technology PLC 30,000 253
LASMO PLC 1 30,000 252
Wilson Connolly Holdings PLC 1 00,000 252
Vodafone Group PLC SP - ADR 5,000 248
Stagecoach Holdings PLC 90,000 232
BP Amoco PLC 2,050 122
Royal Bank of Scotland Group PLC 5,800 103
The Future Network PLC 5,000 69
Allied Zurich PLC 5,000 59
---------
2,591
---------
Total Common Stocks 12,438
---------
(Cost $6,832)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 1.2%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreements 1.2%
State Street Bank
4.000% due 01/03/2000 $ 149 149
(Dated 12/31/1999. Collateralized by
Federal Home Loan Mortgage Corporation
6.680% due 12/28/2001 valued at $155.
Repurchase proceeds are $149.)
---------
Total Short-Term Instruments 149
---------
(Cost $149)
Total Investments (a) 100.1% $ 12,587
(Cost $6,981)
Other Assets and Liabilities (Net) (0.1%) (7)
---------
Net Assets 100.0% $ 12,580
---------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there wasan excess of value over
tax cost. $ 5,825
Aggregate gross unrealized depreciation for all
investments in which there wasan excess of tax cost
over value. (219)
---------
Unrealized appreciation-net $ 5,606
---------
(b) Non-income producing security.
See accompanying notes 56
<PAGE>
Schedule of Investments
Mega-Cap Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 97.7%
- --------------------------------------------------------------------------------
Aerospace 1.9%
Honeywell International, Inc. 1,200 $ 69
---------
Capital Goods 5.6%
Tyco International Ltd. 3,000 117
General Electric Co. 600 93
---------
210
Communications 1.9%
MCI WorldCom, Inc. (b) 1,350 72
---------
Consumer Discretionary 7.3%
Wal-Mart Stores, Inc. 1,500 104
Home Depot, Inc. 1,500 103
Dayton Hudson Corp. 900 66
---------
273
Consumer Services 1.9%
United Parcel Service, Inc. 1,000 69
---------
Consumer Staples 4.2%
Kimberly-Clark Corp. 1,200 78
Anheuser Busch Cos., Inc. 1,100 78
---------
156
Energy 2.0%
AES Corp. (b) 1,000 75
---------
Financial & Business Services 8.1%
Morgan Stanley, Dean Witter, 700 100
Discover and Co.
Providian Financial Corp. 800 73
Citigroup, Inc. 1,300 72
Firstar Corp. 2,700 57
---------
302
Health Care 5.6%
Genentech, Inc. (b) 600 81
Warner-Lambert Co. 800 65
Bristol-Myers Squibb Co. 1,000 64
---------
210
Materials & Processing 5.0%
Alcoa, Inc. 1,200 100
International Paper Co. 1,500 85
---------
185
Technology 54.2%
Oracle Corp. (b) 1,900 213
Cisco Systems, Inc. (b) 1,700 182
Motorola, Inc. 1,000 147
Microsoft Corp. (b) 1,200 140
JDS Uniphase Corp. (b) 800 129
Corning, Inc. 900 116
EMC Corp. (b) 1,000 109
Sun Microsystems, Inc. (b) 1,400 108
Texas Instruments, Inc. 1,100 106
Applied Materials, Inc. (b) 800 101
Computer Associates International, Inc. 1,400 98
America Online, Inc. (b) 1,200 91
Solectron Corp. (b) 900 86
Broadcom Corp. (b) 300 82
Siebel Systems, Inc. (b) 900 76
Lucent Technologies, Inc. 900 67
Conexant Systems, Inc. (b) 1,000 66
Tellabs, Inc. (b) 900 58
Yahoo, Inc. (b) 100 43
---------
2,018
---------
Total Common Stocks 3,639
---------
(Cost $2,804)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 2.1%
- --------------------------------------------------------------------------------
Repurchase Agreement 2.1%
State Street Bank
4.000% due 01/03/2000 $ 80 $ 80
(Dated 12/31/1999. Collateralized by
Federal Home Loan Bank 9.500% due
02/25/2004 valued at $85.
Repurchase proceeds are $80.)
---------
Total Short-Term Instruments 80
---------
(Cost $80)
Total Investments (a) 99.8% $ 3,719
(Cost $2,884)
Other Assets and Liabilities (Net) 0.2% 7
---------
Net Assets 100.0% $ 3,726
---------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 917
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (82)
---------
Unrealized appreciation-net $ 835
---------
(b) Non-income producing security.
56 See accompanying notes
<PAGE>
Schedule of Investments
Capital Appreciation Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 99.0%
- --------------------------------------------------------------------------------
Aerospace 1.5%
Honeywell International, Inc. 242,988 $ 14,017
---------
Capital Goods 6.6%
General Electric Co. 133,100 20,597
Tyco International Ltd. 353,300 13,735
United Technologies Corp. 158,800 10,322
TRW, Inc. 183,800 9,546
Textron, Inc. 122,600 9,402
---------
63,602
Communications 4.0%
ALLTEL Corp. 125,300 10,361
MCI WorldCom, Inc. (b) 179,400 9,519
GTE Corp. 133,100 9,392
AT&T Corp. 183,600 9,318
SBC Communications, Inc. 1 0
---------
38,590
Consumer Discretionary 10.4%
Wal-Mart Stores, Inc. 282,400 19,521
Home Depot, Inc. 256,200 17,566
CVS Corp. 343,300 13,711
Lowe's Cos., Inc. 190,700 11,394
McGraw-Hill Companies, Inc. 166,100 10,236
Dayton Hudson Corp. 138,700 10,186
Harley-Davidson, Inc. 124,100 7,950
Circuit City Stores 109,800 4,948
General Motors Corp. 51,700 3,758
Delphi Automotive Systems (b) 1 0
Mattel, Inc. 1 0
---------
99,270
Consumer Services 4.8%
New York Times Co. 292,500 14,369
CBS Corp. 214,000 13,683
Gannett, Inc. 156,800 12,789
United Parcel Service, Inc. 69,700 4,809
---------
45,650
Consumer Staples 2.3%
Safeway, Inc. (b) 325,500 11,576
Anheuser Busch Cos., Inc. 147,500 10,454
Kimberly-Clark Corp. 4,300 281
---------
22,311
Energy 4.9%
Royal Dutch Petroleum Co. 268,400 16,221
Vastar Resources, Inc. 182,700 10,779
USX Marathon Group 423,500 10,455
Atlantic Richfield Co. 107,100 9,264
AES Corp. (b) 3,900 292
---------
47,011
Financial & Business Services 13.5%
Omnicom Group 143,300 14,330
Marsh & McLennan Cos. 124,600 11,923
Capital One Financial Corp. 245,000 11,806
American Express Co. 70,100 11,654
Morgan Stanley, Dean Witter, 80,900 11,548
Discover and Co.
MGIC Investment Corp. 185,600 11,171
Citigroup, Inc. 200,550 11,143
Firstar Corp. 448,300 9,470
Lehman Brothers Holdings, Inc. 111,100 9,409
Wells Fargo Co. 226,600 9,163
Fleet Boston Financial Corp. 250,200 8,710
Morgan, J.P. & Co., Inc. 66,600 8,433
Providian Financial Corp. 3,000 273
---------
129,033
Health Care 6.2%
Immunex Corp. (b) 147,900 16,195
Genentech, Inc. (b) 91,200 12,266
Warner-Lambert Co. 136,300 11,168
Bristol-Myers Squibb Co. 155,400 9,975
Schering-Plough Corp. 228,700 9,648
---------
59,252
Materials & Processing 4.9%
Alcoa, Inc. 148,900 12,359
Champion International 'C' 198,200 12,276
Weyerhaeuser Co. 165,100 11,856
International Paper Co. 189,700 10,706
---------
47,197
Technology 39.9%
Cisco Systems, Inc. (b) 200,000 $ 21,425
Oracle Corp. (b) 175,800 19,701
Motorola, Inc. 112,300 16,536
Applied Materials, Inc. (b) 128,400 16,267
JDS Uniphase Corp. (b) 98,000 15,809
Teradyne, Inc. (b) 236,600 15,616
Corning, Inc. 116,600 15,034
Conexant Systems, Inc. (b) 223,900 14,861
Veritas Software Corp. (b) 102,950 14,735
Sun Microsystems, Inc. (b) 185,200 14,341
Solectron Corp. (b) 149,600 14,231
Siebel Systems, Inc. (b) 168,400 14,146
Broadcom Corp. (b) 51,600 14,055
BMC Software, Inc. (b) 170,200 13,605
EMC Corp. (b) 124,100 13,558
Compuware Corp. (b) 352,800 13,142
Computer Associates 187,000 13,078
International, Inc.
Texas Instruments, Inc. 122,800 11,896
Amdocs Ltd. (b) 343,800 11,861
Microsoft Corp. (b) 101,500 11,850
Lucent Technologies, Inc. 154,010 11,522
Altera Corp. (b) 216,100 10,710
Tellabs, Inc. (b) 166,500 10,687
Scientific-Atlanta, Inc. 191,100 10,630
Lexmark International Group, 108,400 9,810
Inc. 'A' (b)
Xilinx, Inc. (b) 213,200 9,694
National Semiconductor Corp. (b) 198,200 8,485
Computer Sciences Corp. (b) 76,000 7,192
Citrix Systems, Inc. (b) 54,000 6,642
America Online, Inc. (b) 4,800 362
Yahoo, Inc. (b) 400 173
---------
381,654
---------
Total Common Stocks 947,587
---------
(Cost $697,230)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.4%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreement 0.4%
State Street Bank
4.000% due 01/03/2000 $ 3,840 3,840
(Dated 12/31/1999. Collateralized by
Federal Home Loan Bank 5.400% due
11/17/2003 valued at $3,920.
Repurchase proceeds are $3,841.)
---------
Total Short-Term Instruments 3,840
---------
(Cost $3,840)
Total Investments (a) 99.4% $ 951,427
(Cost $701,070)
Other Assets and Liabilities (Net) 0.6% 6,008
---------
Net Assets 100.0% $ 957,435
---------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 261,248
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (10,891)
---------
Unrealized appreciation-net $ 250,357
---------
(b) Non-income producing security.
See accompanying notes 57
<PAGE>
Schedule of Investments
Mid-Cap Growth Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 100.5%
- --------------------------------------------------------------------------------
Aerospace 1.0%
General Dynamics Corp. 202,000 $ 10,656
----------
Capital Goods 3.9%
Waters Corp. (b) 259,200 13,738
Millipore Corp. 344,700 13,314
TRW, Inc. 240,400 12,486
----------
39,538
Communications 2.4%
CenturyTel, Inc. 280,350 13,282
Westwood One, Inc. 155,800 11,841
----------
25,123
Consumer Discretionary 8.9%
Tiffany & Co. 189,800 16,940
Dollar Tree Stores, Inc. 303,000 14,677
B.J.'s Wholesale Club, Inc. (b) 384,600 14,038
Intimate Brands, Inc. 297,940 12,849
Bed, Bath & Beyond, Inc. (b) 323,500 11,242
Furniture Brands International, 509,500 11,209
Inc. (b)
MGM Grand, Inc. (b) 206,700 10,400
Mattel, Inc. 1 0
----------
91,355
Consumer Services 1.2%
Times Mirror Co. 'A' 181,700 12,174
----------
Consumer Staples 3.3%
Dean Foods Co. 312,000 12,402
SUPERVALU, Inc. 538,200 10,764
McCormick & Co. 342,900 10,201
----------
33,367
Energy 4.0%
Kerr McGee Corp. 208,100 12,902
Dynegy, Inc. 517,900 12,591
Occidental Petroleum Corp. 578,400 12,508
Apache Corp. 45,600 1,684
Anadarko Petroleum Corp. 47,000 1,604
----------
41,289
Financial & Business Services 14.3%
USWeb Corp. 324,100 14,402
Zions Bancorporation 229,400 13,578
Valassis Communications, Inc. (b) 297,050 12,550
Ambac Financial Group, Inc. 231,200 12,066
Providian Financial Corp. 117,850 10,732
Capital One Financial Corp. 222,000 10,698
Apartment Investment & Management 264,500 10,530
Co. 'A' (b)
Liberty Property Trust 431,100 10,454
PMI Group, Inc. 211,000 10,299
Bank United Corp. 'A' 372,800 10,159
Profit Recovery Group 373,700 9,925
International, Inc. (b)
Golden State Bancorp, Inc. (b) 477,600 8,239
Peoples Heritage Financial Group 513,100 7,729
Ace Ltd. 301,200 5,026
----------
146,387
Health Care 8.5%
Medimmune, Inc. (b) 141,000 23,388
IDEC Pharmaceuticals Corp. (b) 181,800 17,862
Allergan, Inc. 273,300 13,596
Bausch & Lomb, Inc. 197,700 13,530
Forest Laboratories 'A' (b) 151,700 9,320
C.R. Bard, Inc. 173,800 9,211
----------
86,907
Materials & Processing 5.8%
Boise Cascade Corp. 332,900 13,482
Willamette Industries 283,900 13,184
Temple-Inland, Inc. 196,300 12,944
Martin Marietta Materials, Inc. 251,900 10,328
Pall Corp. 445,200 9,600
----------
59,538
Technology 46.7%
Network Appliance, Inc. (b) 257,200 21,364
Citrix Systems, Inc. (b) 169,400 20,836
BEA Systems, Inc. (b) 291,400 20,380
Lam Research Corp. (b) 180,900 20,182
Symbol Technologies, Inc. 314,800 20,009
Comverse Technology, Inc. (b) 135,250 19,577
Veritas Software Corp. (b) 135,950 19,458
KLA-Tencor Corp. (b) 171,200 19,067
Sierra Semiconductor Corp. (b) 96,400 15,454
CSG Systems International, Inc. (b) 376,700 15,021
Applied Micro Circuits Corp. (b) 116,500 14,825
CTS Corp. 195,700 14,751
Dendrite International, Inc. (b) 409,550 13,874
ISS Group, Inc. (b) 188,900 13,436
JDS Uniphase Corp. (b) 83,200 13,421
Harmonic Lightwaves, Inc. (b) 140,400 13,329
Adaptec, Inc. (b) 266,000 13,267
Tektronix, Inc. 335,500 13,043
Jabil Circuit, Inc. (b) 177,300 12,943
Amdocs Ltd. (b) 367,800 12,689
Adobe Systems, Inc. 187,900 12,636
Compuware Corp. (b) 335,000 12,479
QLogic Corp. (b) 77,900 12,454
Xilinx, Inc. (b) 262,000 11,913
Entrust Technologies, Inc. (b) 190,100 11,393
Rational Software Corp. (b) 225,800 11,092
Integrated Device Technology, Inc. (b) 380,700 11,040
Network Solutions, Inc. (b) 50,500 10,987
RF Micro Devices, Inc. (b) 153,500 10,505
SDL, Inc. (b) 47,400 10,333
LSI Logic Corp. (b) 146,400 9,882
Legato Systems, Inc. (b) 134,100 9,228
Cypress Semiconductor Corp. (b) 232,900 7,540
Amkor Technology, Inc. (b) 192,500 5,438
Vishay Intertechnology, Inc. (b) 162,100 5,126
----------
478,972
Utilities 0.5%
Florida Progress Corp. 113,200 4,790
----------
Total Common Stocks 1,030,096
----------
(Cost $770,977)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 1.4%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreement 1.4%
State Street Bank
4.000% due 01/04/2000 $ 14,412 14,412
(Dated 12/31/1999. Collateralized by
Federal National Mortgage Association
6.400% due 12/21/2001 valued at $14,702.
Repurchase proceeds are $14,417.)
----------
Total Short-Term Instruments 14,412
----------
(Cost $14,412)
Total Investments (a) 101.9% $1,044,508
(Cost $785,389)
Other Assets and Liabilities (Net) (1.9%) (19,174)
----------
Net Assets 100.0% $1,025,334
----------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 281,274
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (22,155)
----------
Unrealized appreciation-net $ 259,119
----------
(b) Non-income producing security.
58 See accompanying notes
<PAGE>
Schedule of Investments
Small-Cap Growth Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 99.4%
- --------------------------------------------------------------------------------
Aerospace 1.0%
Newport News Shipbuilding, Inc. 25,500 $ 701
---------
Capital Goods 10.3%
Power-One, Inc. 30,000 1,374
Asyst Technologies, Inc. (b) 17,000 1,115
Optical Coating Laboratory 2,900 858
Manitowoc Co., Inc. 23,350 794
JLG Industries, Inc. 43,400 692
Terex Corp. (b) 23,800 660
Oshkosh Truck Corp. 'B' 16,500 484
Astec Industries, Inc. (b) 20,000 376
Dura Automotive Systems, Inc. (b) 20,300 354
US Can Corp. 13,400 266
---------
6,973
Communications 2.4%
Westwood One, Inc. 12,950 984
Talk.com, Inc. (b) 36,500 648
---------
1,632
Consumer Discretionary 11.6%
CEC Entertainment, Inc. (b) 26,600 755
American Eagle Outfitters (b) 16,500 742
Argosy Gaming Co. 42,800 666
Canandaigua Wine Co. 'A' (b) 12,300 627
Station Casinos, Inc. (b) 25,600 574
Talbots, Inc. 12,600 562
Barnes & Noble, Inc. (b) 26,400 544
Ames Department Stores, Inc. (b) 18,800 542
Monaco Coach Corp. (b) 20,500 524
Fossil, Inc. (b) 21,850 505
Jack in the Box, Inc. (b) 23,300 482
Timberland Co. 'A' (b) 6,900 365
AnnTaylor Stores Corp. (b) 10,000 344
Salton, Inc. (b) 10,100 338
Childrens Place (b) 20,000 329
---------
7,899
Consumer Services 2.7%
Central Newspapers, Inc. 'A' 17,500 689
Ruby Tuesday, Inc. 34,300 624
Sunterra Corp. (b) 42,900 493
---------
1,806
Consumer Staples 1.8%
Michael Foods, Inc. 25,900 638
Universal Foods 27,200 554
---------
1,192
Energy 2.1%
Houston Exploration Co. 30,000 594
Mitchell Energy & Development 13,900 300
Corp. 'B'
Mitchell Energy & Development 12,300 271
Corp. 'A'
Triton Energy Ltd. 12,000 248
---------
1,413
Financial & Business Services
13.8%
Hooper Holmes, Inc. 40,000 1,030
SEI Investments Co. 6,400 762
Federated Investors, Inc. 'B' 37,100 744
Hudson United Bancorp 28,369 725
Chittenden Corp. 23,800 705
Blanch (EW) Holdings, Inc. 10,200 625
City National Corp. 18,700 616
Metris Companies 17,200 614
Prentiss Properties Trust 27,400 575
Radian Group, Inc. 12,000 573
Parkway Properties, Inc. 19,300 556
Peoples Heritage Financial Group 34,500 520
Westamerica BanCorp 18,500 517
Colonial BancGroup, Inc. 44,000 457
LNR Property Corp. 16,400 326
---------
9,345
Health Care 3.6%
IDEC Pharmaceuticals Corp. (b) 9,000 884
Invitrogen Corp. 11,900 714
Arthrocare Corp. (b) 10,200 622
Medquist, Inc. (b) 10,000 258
---------
2,478
Materials & Processing 2.4%
Applied Science and Technology, 23,900 794
Inc. (b)
Florida Rock Industries, Inc. 16,100 554
Martin Marietta Materials, Inc. 7,300 299
---------
1,647
Technology 42.9%
Broadvision, Inc. (b) 7,800 1,326
AVT Corp. (b) 25,000 1,175
Symantec Corp. (b) 20,000 1,173
Semtech Corp. (b) 22,000 1,147
TranSwitch Corp. (b) 15,800 1,146
Emulex Corp. (b) 10,000 1,125
Sykes Enterprises, Inc. (b) 25,000 1,097
Actuate Corp. (b) 25,000 1,072
Santa Cruz Operation, Inc. (b) 31,800 966
Helix Technology Corp. (b) 21,400 959
Progress Software Corp. (b) 16,400 931
Power Integrations, Inc. (b) 18,600 892
Serena Software, Inc. (b) 27,900 863
Carrier Access Corp. (b) 12,100 814
Alliance Semiconductor Corp. (b) 47,700 796
Kronos, Inc. (b) 13,200 792
Advanced Energy Industries (b) 15,800 778
NVIDIA Corp. (b) 16,500 774
Polycom, Inc. (b) 12,000 764
Kemet Corp. (b) 16,600 748
Cognizant Technology Solutions 6,700 732
Corp. (b)
ACT Manufacturing, Inc. (b) 19,400 728
Hyperion Solutions Corp. (b) 16,000 696
Dendrite International, Inc. (b) 20,000 678
Cohu, Inc. 21,500 667
BindView Development Corp. (b) 13,400 666
Cybex Computer Products (b) 16,000 648
Photon Dynamics, Inc. (b) 15,600 605
Quanta Services, Inc. (b) 20,700 585
Unify Corp. (b) 20,200 553
Powerwave Technologies, Inc. (b) 9,100 531
Ardent Software, Inc. (b) 11,600 452
Galileo Technology Ltd. (b) 18,100 437
Midway Games, Inc. (b) 18,000 431
Radiant Systems, Inc. (b) 9,500 382
International Rectifier Corp. (b) 14,500 377
Sybase, Inc. (b) 19,700 335
3DO Co. (The) (b) 28,000 255
---------
29,096
Transportation 4.8%
Forward Air Corp. (b) 21,200 920
Eagle USA Airfreight, Inc. (b) 20,000 863
USFreightways Corp. 13,200 632
American Freightways Corp. (b) 31,500 510
Landstar System, Inc. (b) 7,700 330
---------
3,255
---------
Total Common Stocks 67,437
---------
(Cost $52,812)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.5%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreement 0.5%
State Street Bank
4.000% due 01/03/2000 $ 322 322
(Dated 12/31/1999. Collateralized by
Federal National Mortgage Association
0.000% due 01/18/2000 valued at $329.
Repurchase proceeds are $322.)
---------
Total Short-Term Instruments 322
---------
(Cost $322)
Total Investments (a) 99.9% $ 67,759
(Cost $53,134)
Other Assets and Liabilities (Net) 0.1% 78
---------
Net Assets 100.0% $ 67,837
---------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 17,209
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (2,584)
---------
Unrealized appreciation-net $ 14,625
---------
(b) Non-income producing security.
See accompanying notes 59
<PAGE>
Schedule of Investments
Micro-Cap Growth Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 96.5%
- --------------------------------------------------------------------------------
Building 2.6%
Dal-Tile International, Inc. (b) 289,700 $ 2,933
Dayton Superior Corp. 'A' (b) 168,900 2,745
---------
5,678
Capital Goods 9.8%
Quixote Corp. 332,700 5,074
Strattec Strategy Corp. (b) 140,200 4,539
MYR Group, Inc. 119,500 3,510
Primex Technologies, Inc. 150,900 3,131
Astec Industries, Inc. (b) 145,300 2,733
HEICO Corp. 116,500 2,541
---------
21,528
Consumer Discretionary 18.1%
Braun's Fashions Corp. (b) 259,800 5,456
Chico's Fas, Inc. (b) 135,300 5,091
Dover Downs Entertainment, Inc. 231,500 4,341
Brookstone, Inc. (b) 226,000 3,969
Rare Hospitality International, Inc. (b) 158,700 3,434
Koala Corp. (b) 226,600 3,172
Stanley Furniture Co, Inc. (b) 138,000 2,536
Haverty Furniture Cos., Inc. 184,000 2,323
Guess ?, Inc. (b) 100,800 2,192
Rush Enterprises, Inc. (b) 129,700 1,881
The Rowe Companies 205,370 1,733
JAKKS Pacific, Inc. (b) 75,750 1,416
Argosy Gaming Co. 78,700 1,225
Roadhouse Grill, Inc. (b) 230,000 949
---------
39,718
Consumer Services 1.2%
Group 1 Automotive, Inc. (b) 96,800 1,349
ICT Group, Inc. 100,000 1,225
---------
2,574
Consumer Staples 1.4%
Hain Food Group, Inc. (b) 141,100 3,157
---------
Energy 2.8%
St. Mary Land & Exploration 132,100 3,269
Prima Energy Corp. (b) 81,400 1,959
Patina Oil & Gas Corp. 118,100 1,019
---------
6,247
Financial & Business Services 11.2%
Chittenden Corp. 139,743 4,140
Premier National Bancorp, Inc. 179,757 3,314
Hall, Kinion & Associates, Inc. (b) 123,200 2,649
Provident Bankshares Corp. 139,666 2,418
Sterling Bancorp-NY 134,925 2,159
AG Services of America, Inc. (b) 138,000 2,061
Alabama National Bancorp 105,300 1,988
Westcorp 128,700 1,866
Abington Bancorp, Inc. 150,200 1,586
WFS Financial, Inc. (b) 68,200 1,441
John Nuveen Co. 'A' 28,400 1,024
---------
24,646
Health Care 3.8%
Arthrocare Corp. (b) 90,600 5,527
Candela Corp. (b) 144,100 2,684
---------
8,211
Materials & Processing 1.3%
Building Material Holding Corp. (b) 279,100 2,861
---------
Technology 40.2%
Radiant Systems, Inc. (b) 210,100 8,443
Photon Dynamics, Inc. (b) 167,200 6,479
Cybex Computer Products (b) 139,550 5,652
Seachange International, Inc. (b) 150,000 5,306
Telcom Semiconductor, Inc. (b) 238,300 5,004
AVT Corp. (b) 100,400 4,719
Dendrite International, Inc. (b) 130,300 4,414
Lightbridge, Inc. (b) 153,500 4,260
Ardent Software, Inc. (b) 105,400 4,111
Audiovox Corp. 'A' (b) 132,400 4,022
Ansys, Inc. (b) 356,400 3,920
Three-Five Systems, Inc. (b) 65,600 2,690
Gentner Communications Corp. (b) 190,900 2,673
Zoran Corp. (b) 47,000 2,620
Unigraphics Solutions, Inc. (b) 90,800 2,452
Meade Instruments Corp. (b) 85,200 2,428
INTT Intest Corp. (b) 131,900 2,374
Pericom Semiconductor Corp. (b) 87,500 2,302
Tecnomatix Technologies Ltd. (b) 77,800 2,237
Brooktrout, Inc. (b) 118,700 2,203
Printrak International, Inc. (b) 207,300 2,021
Herley Industries, Inc. (b) 121,100 1,839
Merix Corp. (b) 166,700 1,834
Loronix Information Systems, Inc. (b) 85,100 1,681
Xionics Document Technologies, Inc. (b) 148,200 1,547
Corsair Communications, Inc. (b) 143,900 1,169
---------
88,400
Transportation 4.1%
Arkansas Best Corp. (b) 216,900 2,603
Railamerica, Inc. (b) 295,000 2,526
MS Carriers, Inc. (b) 80,600 1,923
Providence & Worcester Railroad Co. 235,100 1,880
Railworks Corp. 10,000 98
---------
9,030
---------
Total Common Stocks 212,050
(Cost $164,772) =========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 2.8%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreement 2.8%
State Street Bank
4.000% due 01/03/2000 $ 6,016 6,016
(Dated 12/31/1999. Collateralized by
Federal Home Loan Bank
5.400% due 11/17/2003 valued at $6,137.
Repurchase proceeds are $6,018.)
---------
Total Short-Term Instruments 6,016
(Cost $6,016) =========
Total Investments (a) 99.3% $ 218,066
(Cost $170,788)
Other Assets and Liabilities (Net) 0.7% 1,618
---------
Net Assets 100.0% $ 219,684
=========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 55,834
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (8,556)
---------
Unrealized appreciation-net $ 47,278
=========
(b) Non-income producing security.
60 See accompanying notes
<PAGE>
Schedule of Investments
Equity Income Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 98.6%
- --------------------------------------------------------------------------------
Aerospace 4.2%
BFGoodrich Co. 125,000 $ 3,438
Northrop Grumman Corp. 59,300 3,206
---------
6,644
Capital Goods 6.3%
GATX Corp. 97,000 3,274
Hubbell, Inc. 'B' 115,000 3,134
Dana Corp. 104,000 3,114
Tenneco Automotive, Inc. 32,800 305
---------
9,827
Communications 5.7%
U.S. West, Inc. 42,500 3,060
GTE Corp. 42,000 2,964
Bell Atlantic Corp. 47,000 2,893
---------
8,917
Consumer Discretionary 16.2%
Ford Motor Co. 59,300 3,169
UST, Inc. 125,100 3,151
Whirlpool Corp. 48,000 3,123
Eastman Kodak Co. 47,000 3,114
Armstrong World Industries 92,000 3,071
Springs Industries, Inc. 'A' 75,000 2,995
Thomas & Betts Corp. 93,600 2,984
J.C. Penney Co. 134,000 2,672
Lanier Worldwide, Inc. 251,000 973
---------
25,252
Consumer Staples 8.9%
SUPERVALU, Inc. 159,000 3,180
Fortune Brands, Inc. 95,300 3,151
RJ Reynolds Tobacco Holdings, Inc. 155,000 2,732
Pactiv Corp. 164,000 1,742
Anheuser Busch Cos., Inc. 22,300 1,580
Brown-Forman Corp. 27,400 1,569
---------
13,954
Energy 11.8%
Kerr McGee Corp. 51,000 3,162
Ultramar Diamond Shamrock Corp. 139,000 3,153
Conoco, Inc. 125,500 3,122
KeySpan Corp. 131,900 3,058
Repsol SA SP - ADR 130,000 3,022
USX Marathon Group 115,000 2,839
---------
18,356
Financial & Business Services 21.4%
Deluxe Corp. 226,000 6,201
Morgan, J.P. & Co., Inc. 47,800 6,053
Union Planters Corp. 153,000 6,034
Edwards (A.G.), Inc. 103,000 3,301
Ohio Casualty Corp. 205,500 3,301
PNC Bank Corp. 70,100 3,119
KeyCorp 140,000 3,098
HRPT Properties Trust 252,600 2,273
---------
33,380
Health Care 2.0%
Mallinckrodt, Inc. 99,000 3,149
---------
Materials & Processing 8.1%
USX-U.S. Steel Group, Inc. 193,000 6,369
Westvaco Corp. 97,000 3,165
Georgia-Pacific Corp. (Timber Group) 126,000 3,103
---------
12,637
Technology 4.1%
Harris Corp. 238,000 6,352
---------
Utilities 9.9%
DTE Energy Co. 101,000 3,168
Central & South West Corp. 157,000 3,140
NICOR, Inc. 96,000 3,120
Public Service Enterprise Group, Inc. 88,500 3,081
New Century Energies, Inc. 98,000 2,977
---------
15,486
---------
Total Common Stocks 153,954
(Cost $169,116) =========
Total Investments (a) 98.6% 153,954
(Cost $169,116)
Other Assets and Liabilities (Net) 1.4% 2,108
---------
Net Assets 100.0% $ 156,062
=========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 10,915
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (26,077)
---------
Unrealized depreciation-net $ (15,162)
=========
See accompanying notes 61
<PAGE>
Schedule of Investments
Value Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCK 98.5%
- --------------------------------------------------------------------------------
Aerospace 2.1%
Northrop Grumman Corp. 82,000 $ 4,433
---------
Capital Goods 6.2%
Dana Corp. 285,000 8,532
Parker Hannifin Corp. 90,000 4,618
---------
13,150
Communications 7.6%
Bell Atlantic Corp. 130,000 8,003
GTE Corp. 113,000 7,974
---------
15,977
Consumer Discretionary 15.5%
Tupperware Corp. 450,000 7,622
Thomas & Betts Corp. 210,000 6,694
Brunswick Corp. 210,000 4,672
Whirlpool Corp. 71,600 4,658
UST, Inc. 180,000 4,534
Liz Claiborne, Inc. 115,000 4,327
Lanier Worldwide, Inc. 122,000 473
---------
32,980
Consumer Services 2.1%
Central Newspapers, Inc. 'A' 116,000 4,567
---------
Consumer Staples 4.2%
SUPERVALU, Inc. 235,000 4,700
Fortune Brands, Inc. 125,000 4,133
---------
8,833
Energy 16.7%
Conoco, Inc. 372,000 9,254
Kerr McGee Corp. 145,000 8,990
Ultramar Diamond Shamrock Corp. 375,000 8,508
Santa Fe International Corp. 175,000 4,528
Repsol SA SP - ADR 180,000 4,185
---------
35,465
Financial & Business Services 12.8%
Morgan, J.P. & Co., Inc. 67,000 8,484
Deluxe Corp. 275,000 7,545
PNC Bank Corp. 100,000 4,450
Union Planters Corp. 105,000 4,141
Conseco, Inc. 139,600 2,495
---------
27,115
Health Care 5.7%
Mallinckrodt, Inc. 250,000 7,953
Abbott Laboratories 115,000 4,176
---------
12,129
Materials & Processing 12.1%
Westvaco Corp. 275,000 8,972
USX-U.S. Steel Group, Inc. 270,000 8,910
USG Corp. (b) 85,000 4,006
IMC Global, Inc. 230,000 3,766
---------
25,654
Technology 5.5%
Intel Corp. 51,000 4,198
Unisys Corp. (b) 130,000 4,152
Harris Corp. 122,000 3,256
---------
11,606
Utilities 8.0%
Public Service Enterprise Group, Inc. 245,000 8,529
DTE Energy Co. 135,000 4,236
NICOR, Inc. 130,000 4,225
---------
16,990
---------
Total Common Stocks 208,899
(Cost $222,642) =========
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 1.7%
- --------------------------------------------------------------------------------
Repurchase Agreement 1.7%
State Street Bank
4.000% due 01/03/2000 $ 3,510 $ 3,510
(Dated 12/31/1999. Collateralized by
Federal National Mortgage Association
0.000% due 01/18/2000 valued at $3,581.
Repurchase proceeds are $3,511.)
---------
Total Short-Term Instruments 3,510
(Cost $3,510) =========
Total Investments (a) 100.2% $ 212,409
(Cost $226,152)
Other Assets and Liabilities (Net) (0.2%) (392)
---------
Net Assets 100.0% $ 212,017
=========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 11,412
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (25,155)
---------
Unrealized depreciation-net $ (13,743)
=========
(b) Non-income producing security.
62 See accompanying notes
<PAGE>
Schedule of Investments
Small-Cap Value Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 98.8%
- --------------------------------------------------------------------------------
Aerospace 4.1%
Cordant Technologies, Inc. 103,000 $ 3,399
Kaman Corp. 259,000 3,334
AAR Corp. 171,000 3,067
Newport News Shipbuilding, Inc. 110,000 3,025
---------
12,825
Building 4.8%
MDC Holdings, Inc. 217,000 3,404
Centex Construction Products, Inc. 83,000 3,237
Butler Manufacturing Co. 133,000 2,968
Hughes Supply, Inc. 137,000 2,954
Hussmann International, Inc. 184,000 2,771
---------
15,334
Capital Goods 13.1%
C&D Technologies, Inc. 85,200 3,621
Intermet Corp. 311,000 3,614
Tecumseh Products Co. 'A' 73,100 3,449
Gleason Corp. 144,000 3,349
Arvin Industries, Inc. 117,800 3,343
Trinity Industries, Inc. 116,000 3,299
Meritor Automotive, Inc. 170,000 3,294
Westinghouse Air Brake Co. 185,000 3,284
Borg-Warner Automotive, Inc. 80,000 3,240
Precision Castparts Corp. 123,000 3,229
GenCorp, Inc. 321,600 3,177
Barnes Group, Inc. 164,000 2,675
MTS Systems Corp. 304,000 2,356
---------
41,930
Consumer Discretionary 12.9%
Harman International Industries, Inc. 63,000 3,535
Claire's Stores, Inc. 154,000 3,446
Burlington Coat Factory Warehouse Corp. 243,000 3,372
Lancaster Colony Corp. 101,000 3,346
Banta Corp. 148,000 3,339
Kimball International 'B' 197,400 3,257
Russ Berrie & Co., Inc. 123,000 3,229
Ennis Business Forms 410,000 3,178
Jostens, Inc. 130,000 3,161
Sturm Ruger & Co., Inc. 334,000 2,964
Enesco Group, Inc. 266,000 2,943
Haverty Furniture Cos., Inc. 218,000 2,751
Brown Shoe Co., Inc. 185,000 2,613
---------
41,134
Consumer Services 2.0%
Chemed Corp. 120,000 3,435
Lubys Cafeterias, Inc. 273,000 3,105
---------
6,540
Consumer Staples 4.4%
Michael Foods, Inc. 139,000 3,423
Corn Products International, Inc. 98,000 3,210
Universal Foods 156,000 3,179
Universal Corp. 137,000 3,125
Nash Finch Co. 190,500 1,214
---------
14,151
Energy 5.6%
Santa Fe Snyder Corp. (b) 390,000 3,120
Mitchell Energy & Development Corp. 'B' 141,000 3,040
UGI Corp. 142,900 2,921
World Fuel Services Corp. 388,000 2,910
Cross Timbers Oil Co. 305,700 2,770
Berry Petroleum Co. 108,100 1,635
St. Mary Land & Exploration 58,200 1,440
---------
17,836
Financial & Business Services 25.4%
UST Corp. 127,000 4,032
Raymond James Financial, Inc. 196,000 3,663
Arthur J. Gallagher & Co. 56,000 3,627
Shurgard Storage Centers, Inc. 153,000 3,548
Rollins Truck Leasing Co. 297,000 3,545
Health Care Property Investors, Inc. 146,640 3,501
Franchise Finance Corp. of America 144,000 3,447
Cabot Industrial Trust 184,400 3,388
Washington Federal, Inc. 167,000 3,298
United Dominion Realty Trust 332,000 3,279
McGrath Rentcorp 187,000 3,273
Innkeepers USA Trust 396,000 3,241
National Golf Properties, Inc. 163,000 3,219
Presidential Life Corp. 171,000 3,142
Kelly Services, Inc. 'A' 125,000 3,141
Selective Insurance Group 182,000 3,128
AmerUs Life Holdings, Inc. 'A' 136,000 3,128
New Plan Excel Realty Trust 196,000 3,099
Commercial Federal Corp. 172,000 3,064
Susquehanna Bancshares, Inc. 191,000 3,032
Dain Rauscher Corp. 65,000 3,023
BankAtlantic Bancorp, Inc. 'A' 724,000 2,987
Hudson United Bancorp 116,000 2,964
Glimcher Realty Trust 229,000 2,949
Wallace Computer Services, Inc. 151,700 2,522
---------
81,240
Health Care 4.1%
Arrow International, Inc. 124,000 3,596
Dentsply International, Inc. 138,000 3,260
Invacare Corp. 158,000 3,169
Owens & Minor, Inc. 351,000 3,137
---------
13,162
Materials & Processing 9.4%
Hanna (M.A.) Co. 328,000 3,588
Commercial Metals Co. 102,000 3,462
Caraustar Industries, Inc. 144,000 3,456
Lincoln Electric Holdings, Inc. 160,000 3,300
Cleveland-Cliffs, Inc. 100,000 3,113
CLARCOR, Inc. 163,800 2,948
Wausau-Mosinee Paper Corp. 244,000 2,852
Ethyl Corp. 704,000 2,772
Universal Forest Products, Inc. 181,000 2,670
Omnova Solutions, Inc. 230,400 1,786
---------
29,947
Technology 1.0%
Dallas Semiconductor Corp. 51,000 3,285
---------
Transportation 1.9%
USFreightways Corp. 71,000 3,399
Sea Containers Ltd. 'A' 104,000 2,769
---------
6,168
Utilities 10.1%
CMP Group, Inc. 130,000 3,583
Energen Corp. 187,000 3,378
Avista Corp. 217,000 3,350
Peoples Energy Corp. 96,000 3,216
United Illuminating Co. 62,000 3,185
Washington Gas Light Co. 115,000 3,163
National Fuel Gas Co. 67,000 3,116
Public Service Co. of New Mexico 190,000 3,088
Hawaiian Electric Industries, Inc. 106,000 3,061
RGS Energy Group, Inc. 148,000 3,043
---------
32,183
---------
Total Common Stocks 315,735
(Cost $359,379) =========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.5%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreement 0.5%
State Street Bank
4.000% due 01/03/2000 $ 1,501 1,501
(Dated 12/31/1999. Collateralized by
Federal Home Loan Bank 5.400% due
11/17/2003 valued at $1,536.
Repurchase proceeds are $1,502.)
---------
Total Short-Term Instruments 1,501
(Cost $1,501) =========
Total Investments (a) 99.3% $ 317,236
(Cost $360,880)
Other Assets and Liabilities (Net) 0.7% 2,159
---------
Net Assets 100.0% $ 319,395
=========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 15,455
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (59,099)
---------
Unrealized depreciation-net $ (43,644)
=========
(b) Non-income producing security.
See accompanying notes 63
<PAGE>
Schedule of Investments
Enhanced Equity Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 99.3%
- --------------------------------------------------------------------------------
Aerospace 1.7%
Honeywell International, Inc. 12,275 $ 708
Boeing Co. 5,000 208
General Dynamics Corp. 2,400 127
Northrop Grumman Corp. 2,000 108
BFGoodrich Co. 2,700 74
---------
1,225
Building 0.4%
Centex Corp. 7,200 178
Owens Corning 4,000 77
Fleetwood Enterprises, Inc. 1,800 37
---------
292
Capital Goods 7.6%
General Electric Co. 18,800 2,909
Tyco International Ltd. 11,200 435
United Technologies Corp. 6,600 429
Navistar International Corp. (b) 6,900 327
Ingersoll-Rand Co. 4,700 259
TRW, Inc. 3,500 182
Paccar, Inc. 3,100 137
Johnson Controls, Inc. 2,400 137
Avery Dennison Corp. 1,700 124
ITT Industries, Inc. 3,000 100
Millipore Corp. 2,000 77
Parker Hannifin Corp. 1,500 77
McDermott International, Inc. 7,200 65
Cummins Engine Co., Inc. 1,200 58
Briggs & Stratton 1,000 54
Dana Corp. 800 24
---------
5,394
Communications 10.2%
AT&T Corp. 23,000 1,166
SBC Communications, Inc. 21,971 1,071
MCI WorldCom, Inc. (b) 19,500 1,035
BellSouth Corp. 17,640 826
Bell Atlantic Corp. 8,518 524
Qualcomm, Inc. (b) 2,800 493
General Instrument Corp. (b) 5,000 425
U.S. West, Inc. 5,600 403
GTE Corp. 5,200 367
Nortel Networks Corp. 3,200 323
ADC Telecommunication, Inc. (b) 4,000 290
MediaOne Group, Inc. (b) 2,600 200
CenturyTel, Inc. 1,500 71
---------
7,194
Consumer Discretionary 9.6%
Wal-Mart Stores, Inc. 22,800 1,576
Ford Motor Co. 12,600 673
Gap, Inc. 12,050 554
Dayton Hudson Corp. 7,300 536
Home Depot, Inc. 5,250 360
Federated Department Stores,
Inc. (b) 5,900 298
Time Warner, Inc. 4,000 290
Costco Wholesale Corp. 3,100 283
TJX Cos., Inc. 13,000 266
Eastman Kodak Co. 3,800 252
General Motors Corp. 3,200 233
Lowe's Cos., Inc. 3,300 197
Whirlpool Corp. 3,000 195
Cendant Corp. (b) 7,300 194
Circuit City Stores 3,700 167
Toys R US, Inc. (b) 11,400 163
Black & Decker Corp. 2,300 120
Liz Claiborne, Inc. 2,600 98
Pitney Bowes, Inc. 1,700 82
Brunswick Corp. 2,500 56
Tupperware Corp. 3,000 51
Tandy Corp. 1,000 49
Cooper Tire & Rubber Co. 3,000 47
Delphi Automotive Systems (b) 2,236 35
---------
6,775
Consumer Services 3.5%
Viacom, Inc. 'B' (b) 9,800 592
CBS Corp. 8,916 570
Gannett, Inc. 3,100 253
New York Times Co. 4,500 221
Carnival Corp. 'A' 4,500 215
Darden Restaurants, Inc. 10,600 192
Harrah's Entertainment, Inc. (b) 6,200 164
Knight-Ridder, Inc. 2,300 137
Times Mirror Co. 'A' 1,000 67
Tricon Global Restaurants, Inc. (b) 1,000 39
---------
2,450
Consumer Staples 6.4%
Procter & Gamble Co. 7,200 789
Coca-Cola Co. 9,400 548
Quaker Oats Co. 6,400 420
Philip Morris Cos., Inc. 16,900 392
ConAgra, Inc. 13,300 300
Anheuser Busch Cos., Inc. 4,000 283
Pepsico, Inc. 8,000 282
Adolph Coors Co. 'B' 5,000 263
General Mills, Inc. 5,800 207
SUPERVALU, Inc. 9,200 184
Sara Lee Corp. 8,200 181
Unilever NV - NY 2,857 156
Fortune Brands, Inc. 4,400 145
Kroger Co. (b) 7,000 132
Alberto-Culver Co. 4,000 103
Safeway, Inc. (b) 1,900 68
Sysco Corp. 1,600 63
---------
4,516
Energy 5.1%
Exxon Corp. 20,265 1,633
Chevron Corp. 6,400 554
Royal Dutch Petroleum Co. 8,100 489
Kerr McGee Corp. 4,500 279
Atlantic Richfield Co. 1,800 156
Apache Corp. 4,000 148
USX Marathon Group 4,700 116
Amerada Hess Corp. 2,000 114
Anadarko Petroleum Corp. 3,000 102
---------
3,591
Financial & Business Services 13.4%
Citigroup, Inc. 18,010 1,001
Chase Manhattan Corp. 12,758 991
Morgan Stanley, Dean Witter,
Discover and Co. 6,430 918
Federal National Mortgage
Association 9,500 593
BankAmerica Corp. 11,274 566
American International Group, Inc. 4,512 488
First Union Corp. 12,430 408
Lehman Brothers Holdings, Inc. 4,000 339
Merrill Lynch & Co. 3,900 326
Sun Trust Banks, Inc. 4,500 310
State Street Corp. 3,800 278
Fleet Boston Financial Corp. 7,658 267
MGIC Investment Corp. 4,200 253
Omnicom Group 2,400 240
Bank One Corp. 7,144 229
Bear Stearns Co., Inc. 5,334 228
Paychex, Inc. 5,000 200
Lincoln National Corp. 5,000 200
Countrywide Credit Industries, Inc. 7,100 179
Golden West Financial Corp. 5,100 171
Aon Corp. 3,900 156
PaineWebber Group, Inc. 4,000 155
PNC Bank Corp. 2,800 125
Southtrust Corp. 3,000 113
Loews Corp. 1,800 109
Donnelley (R.R.) & Sons Co. 4,000 99
Mellon Financial Corp. 2,800 95
Providian Financial Corp. 1,000 91
Aetna, Inc. 1,400 78
Household International, Inc. 2,000 75
Wells Fargo Co. 1,700 69
Republic New York Corp. 900 65
H&R Block, Inc. 1,100 48
Conseco, Inc. 1,800 32
---------
9,495
64 See accompanying notes
<PAGE>
Value
Shares (000s)
- --------------------------------------------------------------------------------
Health Care 8.9%
Bristol-Myers Squibb Co. 14,800 $ 949
Merck & Co., Inc. 13,000 872
Johnson & Johnson 7,400 689
Pfizer, Inc. 19,800 642
Warner-Lambert Co. 7,400 606
Schering-Plough Corp. 10,600 447
Eli Lilly & Co. 5,600 372
Amgen, Inc. (b) 6,200 372
United Healthcare Corp. 4,300 228
Bausch & Lomb, Inc. 3,100 212
C.R. Bard, Inc. 4,000 212
Allergan, Inc. 3,800 189
CIGNA Corp. 2,000 161
Abbott Laboratories 3,000 109
Columbia/HCA Healthcare 3,600 106
Mallinckrodt, Inc. 2,000 64
Cardinal Health, Inc. 1,050 50
---------
6,280
Materials & Processing 2.7%
Dow Chemical Co. 2,700 361
Georgia-Pacific Corp. 6,200 315
Engelhard Corp. 10,100 191
Placer Dome, Inc. 15,800 170
Alcoa, Inc. 2,000 166
Temple-Inland, Inc. 2,500 165
W.R. Grace & Co. (b) 11,600 161
Ball Corp. 3,500 138
FMC Corp. (b) 1,600 92
Worthington Industries, Inc. 5,000 83
Louisiana-Pacific Corp. 5,500 78
---------
1,920
Technology 27.4%
Microsoft Corp. (b) 34,700 4,051
Intel Corp. 26,000 2,140
Lucent Technologies, Inc. 22,400 1,676
Sun Microsystems, Inc. (b) 20,800 1,611
Cisco Systems, Inc. (b) 14,400 1,543
International Business Machines
Corp. 11,400 1,231
Oracle Corp. (b) 9,450 1,059
Dell Computer Corp. (b) 17,400 887
America Online, Inc. (b) 11,000 830
Tellabs, Inc. (b) 8,200 526
EMC Corp. (b) 4,200 459
Unisys Corp. (b) 13,400 428
Applied Materials, Inc. (b) 3,000 380
Yahoo, Inc. (b) 800 346
Computer Associates
International, Inc. 4,300 301
Computer Sciences Corp. (b) 3,000 284
Solectron Corp. (b) 2,900 276
Texas Instruments, Inc. 2,800 271
Comverse Technology, Inc. (b) 1,400 203
Adaptec, Inc. (b) 4,000 200
Apple Computer, Inc. 1,700 175
Xilinx, Inc. (b) 3,200 146
Adobe Systems, Inc. 2,000 134
IMS Health, Inc. (b) 3,300 90
Scientific-Atlanta, Inc. 1,500 83
Analog Devices, Inc. (b) 800 74
---------
19,404
Transportation 0.6%
Union Pacific Corp. 4,200 183
Southwest Airlines Co. 6,475 105
Kansas City Southern Industries,
Inc. 1,000 75
FDX Corp. (b) 1,500 61
---------
424
Utilities 1.8%
FPL Group, Inc. 5,000 214
DTE Energy Co. 5,600 176
Consolidated Edison, Inc. 4,600 159
Texas Utilities Co. 4,100 146
Reliant Energy, Inc. 5,000 114
Edison International 4,200 110
Coastal Corp. 3,000 106
FirstEnergy Corp. (b) 4,000 91
Public Service Enterprise Group,
Inc. 2,000 70
Entergy Corp. 2,500 64
---------
1,250
---------
Total Common Stocks 70,210
(Cost $48,836) =========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.6%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreement 0.6%
State Street Bank
4.000% due 01/03/2000 $ 462 462
(Dated 12/31/1999. Collateralized by
Federal National Mortgage Association
6.400% due 12/21/2001 valued at $474.
Repurchase proceeds are $462.)
---------
Total Short-Term Instruments 462
(Cost $462) =========
Total Investments (a) 99.9% $ 70,672
(Cost $49,298)
Other Assets and Liabilities (Net) 0.1% 37
---------
Net Assets 100.0% $ 70,709
=========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 24,032
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (2,658)
---------
Unrealized appreciation-net $ 21,374
=========
(b) Non-income producing security.
See accompanying notes 65
<PAGE>
Schedule of Investments
Tax-Efficient Equity Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 99.3%
- --------------------------------------------------------------------------------
Aerospace 1.5%
Honeywell International, Inc. 10,225 $ 590
General Dynamics Corp. 3,100 164
Boeing Co. 1,800 75
---------
829
Building 0.2%
Owens Corning 4,000 77
Fleetwood Enterprises, Inc. 2,000 41
Centex Corp. 500 12
---------
130
Capital Goods 6.5%
General Electric Co. 15,100 2,337
United Technologies Corp. 4,100 267
Johnson Controls, Inc. 2,100 119
PPG Industries, Inc. 1,900 119
Tyco International Ltd. 3,000 117
Caterpillar, Inc. 2,300 108
Navistar International Corp. (b) 2,000 95
Avery Dennison Corp. 1,300 94
Paccar, Inc. 1,600 71
Ingersoll-Rand Co. 1,200 66
Textron, Inc. 700 54
Deere & Co. 1,200 52
TRW, Inc. 1,000 52
Briggs & Stratton 900 48
ITT Industries, Inc. 1,300 43
Parker Hannifin Corp. 500 26
Dover Corp. 400 18
Minnesota Mining & Manufacturing
Co. 100 10
Cummins Engine Co., Inc. 200 10
Snap-On, Inc. 100 3
---------
3,709
Communications 9.3%
SBC Communications, Inc. 23,201 1,131
AT&T Corp. 17,100 868
MCI WorldCom, Inc. (b) 13,050 692
Qualcomm, Inc. (b) 3,200 564
Bell Atlantic Corp. 7,300 449
BellSouth Corp. 8,200 383
Nortel Networks Corp. 2,800 283
Nextel Communications, Inc. 'A' (b) 2,100 217
GTE Corp. 2,400 169
MediaOne Group, Inc. (b) 2,000 154
U.S. West, Inc. 1,500 108
Vodafone Group PLC SP - ADR 2,000 99
ALLTEL Corp. 1,000 83
CenturyTel, Inc. 1,200 57
---------
5,257
Consumer Discretionary 10.2%
Wal-Mart Stores, Inc. 20,700 1,431
Home Depot, Inc. 10,500 720
Time Warner, Inc. 6,800 493
General Motors Corp. 4,900 356
Gap, Inc. 5,875 270
Eastman Kodak Co. 3,500 232
UST, Inc. 7,900 199
Walgreen Co. 5,900 173
Ford Motor Co. 3,200 171
MAY Department Stores Co. 4,600 148
Emerson Electric Co. 2,000 115
Dayton Hudson Corp. 1,400 103
TJX Cos., Inc. 4,800 98
Cendant Corp. (b) 3,300 88
Federated Department Stores,
Inc. (b) 1,700 86
Brunswick Corp. 3,800 85
Liz Claiborne, Inc. 2,200 83
Costco Wholesale Corp. 900 82
McGraw-Hill Companies, Inc. 1,300 80
Whirlpool Corp. 1,200 78
Circuit City Stores 1,600 72
Masco Corp. 2,700 69
Pitney Bowes, Inc. 1,400 68
Dollar General Corp. 2,906 66
Lowe's Cos., Inc. 1,100 66
Toys R US, Inc. (b) 4,500 64
Avon Products, Inc. 1,800 58
Nike, Inc. 'B' 900 45
Best Buy Co., Inc. (b) 800 40
Colgate-Palmolive Co. 600 39
American Greetings Corp. 'A' 1,500 35
AutoZone, Inc. (b) 1,000 32
Great Atlantic & Pacific Tea Co.,
Inc. 700 20
Goodyear Tire & Rubber Co. 500 14
VF Corp. 400 12
Office Depot, Inc. 1,000 11
---------
5,802
Consumer Services 3.4%
CBS Corp. 8,799 563
McDonald's Corp. 6,200 250
Interpublic Group of Companies,
Inc. 3,400 196
Carnival Corp. 'A' 3,900 186
Viacom, Inc. 'B' (b) 2,800 169
Gannett, Inc. 1,600 131
Times Mirror Co. 'A' 1,800 121
Disney (Walt) Co. 3,000 88
Harrah's Entertainment, Inc. (b) 3,300 87
Knight-Ridder, Inc. 1,300 77
Tribune Co. 1,000 55
New York Times Co. 600 29
---------
1,952
Consumer Staples 6.4%
Procter & Gamble Co. 6,200 679
Coca-Cola Co. 11,600 676
Kimberly-Clark Corp. 6,100 398
General Mills, Inc. 8,400 300
Quaker Oats Co. 3,800 249
Safeway, Inc. (b) 5,500 196
Anheuser Busch Cos., Inc. 2,600 184
Pepsico, Inc. 4,600 162
Unilever NV - NY Shares 2,800 152
Seagram Co. Ltd. 3,300 148
Fortune Brands, Inc. 3,400 112
Nabisco Group Holdings Corp. 7,000 74
Alberto-Culver Co. 2,500 65
Sysco Corp. 1,600 63
Bestfoods 1,200 62
Adolph Coors Co. 'B' 1,000 53
Sara Lee Corp. 1,900 42
Brown-Forman Corp. 500 29
Kellogg Co. 200 6
---------
3,650
Energy 5.6%
Exxon Corp. 19,556 1,575
Royal Dutch Petroleum Co. 6,100 369
Chevron Corp. 1,900 165
AES Corp. (b) 1,900 142
Phillips Petroleum Co. 3,000 141
Rowan Cos., Inc. (b) 4,800 104
Conoco, Inc. 3,560 89
Atlantic Richfield Co. 1,000 87
Halliburton Co. 2,000 81
Helmerich & Payne, Inc. 3,500 76
Peco Energy Co. 2,100 73
Tosco Corp. 2,500 68
Amerada Hess Corp. 1,000 57
Sunoco, Inc. 2,300 54
Texaco, Inc. 900 49
Enron Corp. 600 27
Union Pacific Resources Group 1,900 24
Southern Co. 1,000 24
---------
3,205
Financial & Business Services 13.6%
Citigroup, Inc. 18,300 1,017
Chase Manhattan Corp. 7,500 583
Morgan Stanley, Dean Witter, 3,700 528
Discover and Co.
Wells Fargo Co. 10,800 437
BankAmerica Corp. 8,000 401
66 See accompanying notes
<PAGE>
Value
Shares (000s)
- --------------------------------------------------------------------------------
American International Group,
Inc. 3,391 $ 367
American Express Co. 1,900 316
Paychex, Inc. 7,000 280
State Street Corp. 3,700 270
Bank of New York 6,200 247
MGIC Investment Corp. 4,000 241
MBNA Corp. 8,600 234
Charles Schwab Corp. 5,400 207
Providian Financial Corp. 2,200 200
Federal National Mortgage
Association 3,100 194
Federal Home Loan Mortgage Corp. 4,000 188
Hartford Financial Services
Group, Inc. 3,800 180
Merrill Lynch & Co. 2,000 167
Sun Trust Banks, Inc. 2,400 165
Comerica, Inc. 3,000 140
Marsh & McLennan Cos. 1,300 124
SLM Holding Corp. 2,900 123
Firstar Corp. 5,200 110
Household International, Inc. 2,700 101
Omnicom Group 1,000 100
Mellon Financial Corp. 2,900 99
Automatic Data Processing, Inc. 1,800 96
Northern Trust Corp. 1,600 85
Golden West Financial Corp. 2,100 70
Lehman Brothers Holdings, Inc. 800 68
Southtrust Corp. 1,500 57
Fleet Boston Financial Corp. 1,421 49
Bear Stearns Co., Inc. 1,165 49
American General Corp. 600 46
Franklin Resources, Inc. 1,300 42
AFLAC, Inc. 800 38
PNC Bank Corp. 700 31
Capital One Financial Corp. 600 29
Lincoln National Corp. 400 16
Republic New York Corp. 200 14
Torchmark Corp. 300 9
---------
7,718
Health Care 10.1%
Bristol-Myers Squibb Co. 12,800 822
Merck & Co., Inc. 10,700 718
Johnson & Johnson 6,200 577
Pfizer, Inc. 17,600 571
Amgen, Inc. (b) 9,000 541
Schering-Plough Corp. 9,900 418
Abbott Laboratories 10,200 370
Eli Lilly & Co. 5,200 346
CIGNA Corp. 2,900 234
Medtronic, Inc. 5,700 208
Warner-Lambert Co. 2,400 197
Wellpoint Health Networks, Inc.
(b) 2,000 132
Becton Dickinson & Co. 4,600 122
United Healthcare Corp. 1,900 101
Guidant Corp. 1,800 85
Biomet, Inc. 2,000 80
Boston Scientific Corp. (b) 3,000 66
Pharmacia & Upjohn, Inc. 1,100 50
St. Jude Medical, Inc. 1,000 31
---------
5,669
Materials & Processing 2.3%
Rohm & Haas Co. 9,100 370
Alcoa, Inc. 2,700 224
E.I. Du Pont de Nemours, Inc. 1,893 125
Engelhard Corp. 5,200 98
W.R. Grace & Co. (b) 6,000 83
Sealed Air Corp. 1,500 78
Praxair, Inc. 1,400 70
National Service Industries, Inc. 2,000 59
Fort James Corp. 1,900 52
Barrick Gold Corp. 2,500 43
Air Products & Chemicals 1,100 37
Hercules, Inc. 1,300 36
Nucor Corp. 400 22
---------
1,297
Technology 27.8%
Microsoft Corp. (b) 24,400 2,849
Cisco Systems, Inc. (b) 15,700 1,682
Intel Corp. 18,400 1,515
Lucent Technologies, Inc. 16,300 1,219
Oracle Corp. (b) 8,400 941
International Business Machines Corp. 8,500 918
Dell Computer Corp. (b) 17,700 903
America Online, Inc. (b) 10,100 762
Sun Microsystems, Inc. (b) 8,800 681
Hewlett Packard Co. 5,200 592
EMC Corp. (b) 5,200 568
Yahoo, Inc. (b) 1,100 476
Texas Instruments, Inc. 4,000 388
Applied Materials, Inc. (b) 3,000 380
Tellabs, Inc. (b) 4,600 295
3Com Corp. (b) 6,100 287
Compuware Corp. (b) 6,900 257
Computer Sciences Corp. (b) 2,400 227
Network Appliance, Inc. (b) 2,400 199
Gateway, Inc. (b) 2,200 159
Solectron Corp. (b) 1,600 152
BMC Software, Inc. (b) 1,500 119
Adaptec, Inc. (b) 1,500 75
Corning, Inc. 500 64
Lexmark International Group, Inc. 'A' (b) 500 45
PerkinElmer, Inc. 600 25
---------
15,778
Transportation 0.8%
Kansas City Southern Industries, Inc. 3,100 231
Delta Air Lines, Inc. 1,500 75
FDX Corp. (b) 1,200 49
AMR Corp. (b) 500 34
Southwest Airlines Co. 1,500 24
Laidlaw, Inc. 3,800 20
---------
433
Utilities 1.6%
Edison International 13,100 343
Coastal Corp. 4,700 167
Columbia Gas Systems, Inc. 1,800 114
DTE Energy Co. 2,600 82
Duke Energy Corp. 1,400 70
Peoples Energy Corp. 1,200 40
Public Service Enterprise Group,
Inc. 1,100 38
Consolidated Edison, Inc. 900 31
Central & South West Corp. 900 18
Constellation Energy Group, Inc. 400 12
Sempra Energy 500 9
---------
924
---------
Total Common Stocks 56,353
(Cost $47,350) =========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.2%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreement 0.2%
State Street Bank
4.000% due 01/03/2000 $ 134 134
(Dated 12/31/1999. Collateralized by
Federal Home Loan Mortgage Corporation
6.680% due 12/28/2001 valued at $140.
Repurchase proceeds are $134.)
---------
Total Short-Term Instruments 134
(Cost $134) =========
Total Investments (a) 99.5% $ 56,487
(Cost $47,484)
Other Assets and Liabilities (Net) 0.5% 269
---------
Net Assets 100.0% $ 56,756
=========
See accompanying notes 67
<PAGE>
Schedule of Investments (Cont.)
Tax-Efficient Equity Fund
December 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 10,658
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (1,655)
---------
Unrealized appreciation-net $ 9,003
=========
(b) Non-income producing security.
68 See accompanying notes
<PAGE>
Schedule of Investments
Structured Emerging Markets Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 99.2%
- --------------------------------------------------------------------------------
Argentina 3.7%
Perez Companc SA 'B' 76,189 $ 390
Acindar Industria Argentina de Aceros SA 'B' 180,041 289
Banco de Galicia y Buenos Aires SA de CV 'B' 53,138 264
Molinos Rio de la Plata SA 84,302 207
Siderca SA 'A' 94,817 199
Telefonica de Argentina SA 63,014 193
Telecom Argentina SA 'B' 24,749 170
Banco Frances SA 18,893 150
Astra Cia Argentina de Petro SA 49,820 107
Nobleza Piccardo SAI.C. y F. 40,467 86
Buenos Aires Embotella 113 1
---------
2,056
Baltic Nations 1.0%
Baltic Fund 'A' 7,116 571
---------
Botswana 1.0%
Standard Chart Bank Botswana 33,946 284
Sechaba Breweries Ltd. 181,100 207
Sefalana Holding Co. Ltd. 80,500 94
---------
585
Brazil 6.1%
Petroleo Brasileiro SA 49,850 1,279
Telecomunicacoes Brasileiras SA SP - ADR 6,300 810
Brasmotor SA (b) 1,270,000 179
Companhia Cervejaria Brahma 234,531 172
Companhia Suzano de Papel e Celulose 46,000 140
Petroleo Brasileiro SA 534,543 136
Itausa-Investimentos Itau SA 123,700 128
Telecomunicacoes Brasileiras SA 971,323 128
Companhia Fabricadora de Pecas 22,047 89
Banco Estado de Sao Paul 2,410,000 85
Banco Do Brasil SA 10,300,000 62
Companhia Vidraria Santa Marina 48,000 58
Centrais Electricas Brasileiras SA 'B' 2,310,490 55
Telecomunicacoes de Sao Paulo 2,104,593 50
Telesp Celular SA 'B' (b) 371,057 29
Light -Servicos de Electricidade SA 174,301 19
Casa Anglo Brasileira SA 4,360,773 0
---------
3,419
Bulgaria 0.2%
Framlington Bulgaria Fund (b) 33,920 119
---------
Chile 3.6%
Masisa SA SP - ADR 18,400 237
Banco Santiago SA SP - ADR 10,000 214
Empresa Nacional de Electricidad SA SP - ADR 12,959 184
Compania Cervecerias Unidas SA SP - ADR 5,600 180
Administradora de Fondos de
Pensiones Provida SA SP - ADR 7,900 170
Enersis SA SP - ADR 7,114 167
Compania de Telecomunicaciones
de Chile SA SP - ADR 8,745 160
Cristalerias de Chile SP - ADR 9,200 132
Madeco SA SP - ADR 11,400 127
Sociedad Quimica y Minera de Chile SA SP - ADR 4,000 126
Laboratorio Chile SA SP - ADR 4,600 84
Embotelladora Andina SA SP - ADR 'B' 4,300 63
Embotelladora Andina SA SP - ADR 'A' 3,500 62
Gener SA SP - ADR 3,900 60
Quimica Y Minera de Chile 731 23
---------
1,989
China 3.4%
China Telecom Ltd. (b) 119,000 742
Yizheng Chemical Fibre Co. Ltd. 'H' 988,000 276
China Merchants Shekou Port Service Co. Ltd. 390,940 179
Shanghai Petrochemical Co. Ltd. 'H' 813,000 128
Shanghai Diesel Engine Co. Ltd. 'B' 592,000 110
China Resources Enterprise Ltd. 68,000 109
China Overseas Land & Investment 595,000 86
Maanshan Iron & Steel Co. 'H' 1,044,000 56
Shanghai Dazhong Taxi Co. 'B' 169,000 55
Guangshen Railway Co. Ltd. 'H' (b) 428,000 48
Guangdong Investment Ltd. 271,000 40
Harbin Power Equipment Co. Ltd. 'H' 600,000 32
Shanghai Dajiang Group Co. Ltd. 'B' 181,200 21
---------
1,882
Colombia 0.4%
Bancolombia SP - ADR 29,400 136
Banco Ganadero SA SP - ADR 4,966 40
Carulla y Compania SP - ADR 34,700 32
Cadena Almacenes SP - ADR 31,040 29
Cementos Diamante SA SP - GDR 144A 5,800 5
Cementos Diamante SA SP - GDR 2,300 2
---------
244
Croatia 0.6%
Pliva D.D. 27,390 351
---------
Czech Republic 2.0%
SPT Telecom AS 13,270 214
SPT Telecom AS SP - GDR (b) 12,100 194
Ceske Radiokomunikace (b) 4,500 165
CEZ 58,432 144
Komercni Banka AS 7,033 114
Ceska Pojistovna 1,058 66
Skoda Plzen AS 19,058 62
ZDB (b) 10,273 58
Vodni Stavby Praha AS 10,580 40
Synthesia AS 16,237 33
Aliachem AS 85,472 17
---------
1,107
Egypt 2.4%
Mobinil-Egyptian Mobile Network (b) 9,880 453
Commercial International Bank 18,818 275
Suez Cement Co. 14,311 238
Al-Ahram Beverages Co. SAE 9,700 191
Egyptian International 1,647 80
Pharmaceutical Industries Co.
Paints & Chemical Industries Co. SAE 3,034 43
Egyptian Financial & Industrial Co. 3,432 30
Heliopolis Housing & Development Co. 778 17
---------
1,327
Ghana 0.5%
Social Security Bank Ltd. (b) 137,600 79
Unilever Ghana Ltd. (b) 113,960 61
Ashanti Goldfields Co. Ltd. SP - GDR 21,434 57
Mobil Oil Ghana Ltd. (b) 8,631 34
Standard Chartered Bank Ghana Ltd. 4,700 26
Aluworks Ghana Ltd. (b) 32,200 23
---------
280
Greece 3.5%
J. Boutaris & Son Holdings 18,990 267
Intracom SA 3,740 171
Panafon Hellenic Telecommunications 11,800 158
Co. SA
National Bank of Greece SA 2,024 149
Commercial Bank of Greece SA 1,760 134
Alpha Credit Bank 1,668 131
Hellenic Telecommunication 5,239 124
Organization SA
Titan Cement Co. SA 2,060 123
General Construction SA 5,156 123
Elais Co. SA 2,170 91
Alpha Leasing SA 2,012 87
Aluminium of Greece SA 1,630 80
Aegek SA 3,550 53
Ergo Bank SA 526 51
National Bank of Greece SP - ADR (b) 3,500 49
EFG Eurobank (b) 1,080 47
Hellenic Bottling Co. SA 1,780 41
Attica Enterprises SA 1,386 27
Naoussa Spinning Mills 1,160 26
Radio Athinai 4 0
---------
1,932
Hungary 3.5%
Gedeon Richter Rt. 3,752 247
BorsodChem Rt. (b) 5,681 233
OTP Bank Rt. 3,841 225
Antenna Hungaria Rt. (b) 11,278 222
Pick Szeged Rt. 3,800 178
Magyar Tavkozlesi Rt. SP - ADR 4,800 173
See accompanying notes 69
<PAGE>
Schedule of Investments (Cont.)
Structured Emerging Markets Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- ------------------------------------------------------------------------------
Demasz Rt. 2,100 160
Danubius Hotel and Spa Rt. 6,990 127
Pannonplast Rt. 4,760 118
MOL Magyar Olaj-es Gazipari Rt. 5,630 117
Graboplast Rt. 11,870 108
Inter-Europa Bank Rt. 2,362 74
---------
1,982
India 4.1%
UTI India IT Fund (b) 6,700 484
The India Fund, Inc. 25,600 429
Indo Gulf Corp. Ltd. SP - GDR 132,600 192
Mahindra & Mahindra Ltd. SP - GDR 13,129 145
Hindalco Industries Ltd. SP - GDR 6,000 141
CESC Ltd. SP - GDR 176,000 128
Grasim Industries SP - GDR 8,600 118
State Bank of India SP - GDR 7,800 95
I.T.C. Limited SP - GDR 4,800 93
Reliance Industries SP - GDR 6,208 89
Tata Engineering and Locomotive Co. Ltd. SP - GDR 15,850 73
Southern Petrochemical SP - GDR 23,200 64
Grasim Industries Ltd. SP - GDR (b) 3,990 55
Bajaj Auto Ltd. SP - GDR 5,702 54
Ranbaxy Laboratories Limited SP - GDR (b) 2,300 51
Tata Electric Cos. SP - GDR 410 47
Indian Rayon & Industries Ltd. SP - GDR 13,300 33
---------
2,291
Indonesia 3.0%
PT Astra International, Inc. 778,000 418
PT Telekomunikasi Indonesia 392,580 223
PT Indofood Sukses Makmur 173,000 217
PT Indah Kiat Pulp & Paper Corp. 534,000 210
PT Hanjaya Mandala Sampoerna 82,500 210
PT Indosat (Persero) 83,500 186
PT Indocement Tunggal Prakarsa 329,500 146
PT Mayora Indah 434,500 59
PT Bank Internasional Indonesia 991,800 21
PT Bank Dagang Nasional Indonesia 'F' 1,022,750 0
---------
1,690
Israel 4.1%
Bezek Israeli Telecommunication Corp. Ltd. 112,579 561
Teva Pharmaceutical Industries Ltd. 5,935 409
Bank Hapoalim Ltd. 82,068 256
Bank Leumi Le-Israel 85,489 180
Israel Chemicals Ltd. 161,074 177
Discount Investment Corp. 3,428 174
Nice Systems Ltd. 3,505 170
Koor Industries Ltd. 1,670 167
Leumi Insurance Holdings (b) 121,262 110
Blue Square Chain Investments and
Properties Ltd. (b) 4,167 63
Industrial Buildings Corp. 36,596 56
---------
2,323
Kenya 0.5%
Uchumi Supermarket Ltd. 132,100 73
Firestone East Africa Ltd. 303,150 67
Kenya Airways Ltd. 364,500 39
Kenya Power & Lighting Co. Ltd. 25,050 33
Sasini Tea & Coffee Ltd. 43,600 27
National Industrial Credit Bank 63,460 24
Athi River Mining Ltd. 256,800 20
Kenya Commercial Bank Ltd. 28,451 12
---------
295
Malaysia 3.9%
Telekom Malaysia Bhd. 72,000 279
Malayan Banking Bhd. 76,400 271
Commerce Asset-Holding Bhd. 93,950 241
Edaran Otomobil Nasional Bhd. 53,000 226
Sime Darby Bhd. 159,700 203
Leader Universal Holdings Bhd. 524,000 168
United Engineers (Malaysia) Bhd. 96,200 153
Malaysia Internation Shipping Bhd. 67,000 110
Genting Bhd. 30,200 107
Magnum Corp. Bhd. 122,000 91
Aokam Perdana Bhd. 30,166 81
Rashid Hussain Bhd. 95,000 79
Technology Resources Industries Bhd. 113,000 70
Nestle Malaysia Bhd. 16,000 69
Tenaga Nasional Bhd. 16,000 41
United Engineers Bhd. - Warrant(b) 13,440 10
---------
2,199
Mauritius Island 0.6%
New Mauritius Hotels Ltd. 31,515 63
State Bank of Mauritius Ltd. (b) 63,350 42
The United Basalt Products 39,500 41
Sun Resorts Ltd. 18,800 38
Mauritius Commercial Bank (b) 9,034 33
Shell Mauritius Ltd. (b) 26,979 32
Mon Tresor & Mon Desert Ltd. (b) 23,449 28
Air Mauritius Ltd. 19,100 25
Rogers & Co. Ltd. (b) 6,455 21
Ireland Blyth Ltd. (b) 29,400 21
---------
344
Mexico 5.8%
Grupo Financiero Banamex Accival SA 127,000 509
Carso Global Telecom 'A1' 41,000 385
Grupo Financiero Bancomer SA 833,000 348
Alfa SA de CV 'A' 58,572 276
Grupo Televisa SA 'CPO' 8,000 270
Grupo Carso SA de CV 'A1' (b) 47,000 234
Cemex SA de CV 41,630 233
Grupo Mexico SA 'B' 41,000 203
Telefonos de Mexico SA (b) 36,200 202
Grupo Industrial Bimbo SA de CV 'A' 64,000 143
Cifra SA de CV 'V' 68,569 138
Coca-Cola Femsa SA 'L' 78,000 136
Industrias Penoles SA 'CP' (b) 32,000 92
Kimberly-Clark de Mexico SA de CV 'A' 23,000 90
Grupo Situr SA de CV 'B' 641,000 0
---------
3,259
Morocco 1.2%
Omnium Nord Africain SA 1,348 157
Cie Transports LN 3,121 121
Samir (b) 1,510 106
Wafabank 674 70
Banque Commercial du Maroc 684 68
Ciments du Maroc 648 57
Lesieur Cristal 414 56
Brasseries du Nord Marocain CV 'A' 259 55
---------
690
Peru 3.9%
Cerveceria Backus & Johnston SA 'T' 877,559 365
Telefonica del Peru SA 'B' 250,949 327
Ferreyros SA 584,488 317
Banco Wiese Ltd. 747,299 256
Credicorp Ltd. 15,737 189
Cementos Lima SA 9,904 163
Alicorp SA (b) 899,556 149
Telefonica Del Peru SA 10,830 145
Compania de Minas Buenaventura SA 'B' 16,157 131
Southern Peru Copper Corp. 27,374 113
Indeco SA Trabajo 457,222 46
Minsur SA 1 0
---------
2,201
Philippines 3.6%
Philippine Long Distance Telephone Co. 10,230 260
Ayala Corp. 871,436 254
San Miguel Corp. 'B' 167,820 237
Ayala Land, Inc. 673,600 176
Aboitiz Equity Ventures, Inc. (b) 3,141,000 171
SM Prime Holdings, Inc. 883,000 167
Manila Electric Co. 'B' 57,580 164
Petron Corp. 2,024,800 161
Metro Bank Trust Co. 20,950 151
Benpres Holdings Corp. (b) 942,500 143
International Container Term Services, Inc. 832,245 75
First Philippine Holdings Corp. 28,520 24
Philex Mining Corp. 'B' 1,689,745 22
Fortune Cement Corp. 1,022,250 20
Sanitary Wares Manufacturing Corp. 589 0
---------
2,025
70 See accompanying notes
<PAGE>
Value
Shares (000s)
- --------------------------------------------------------------------------------
Poland 3.6%
KGHM Polska Miedz SA 41,250 $ 259
Telekomunikacja Polska SA 28,100 184
Elektrim Spolka Akcyjna SA 17,295 171
Zaklady Piwowarskie W Zywcu SA 1,920 169
Bank Rozwoju Eksportu SA 4,860 154
Wielkopolski Bank Kredytowy SA 21,628 146
Telekomunikacja Polska (b) 21,900 141
Bank Slaski SA W Katowicach 1,865 127
Stalexport SA 18,715 124
Bank Handlowy W. Warszawie 7,285 108
Fabryka Kotlow Rafako SA (b) 55,460 88
Prokom Software SA 2,562 79
Mostostal Export SA 53,490 56
Krosnienskie Huty SZKLA SA 6,910 53
Przedsiebiorstwo Farmaceutyczne JELFA SA 6,130 52
Zaklady Metali Lekkich Kety (b) 3,845 51
Huta Szkla Gospodarczego Irena 30,840 43
Agros Holding SA 2,515 17
---------
2,022
Romania 0.7%
Romanian Investment 402 180
Society Generale Romania Fund 3,096 164
Romanian Growth Fund 24,300 30
---------
374
Russia 4.9%
Unified Energy System SP - ADR 55,230 663
Samson 25,791 661
Surgutneftegaz 21,000 368
LUKoil Holding SP - ADR 3,700 192
Rao Gazprom SP - ADR 11,000 93
Uralmash-Zavody SP - ADR (b) 80,000 90
Vimpel-Communications SP - ADR (b) 1,900 85
Baltika Brewery (b) 300 83
Uralmash-Zavody 67,000 76
Mosenergo SP - ADR 16,601 73
Gorkovsky Auto Plant 1,400 46
Orenburgneft 100,000 45
Trade House GUM SP - ADR 44,100 44
Irkutskenergo SP - ADR 11,385 43
Trading House TSUM 263,100 34
LUKoil Holding SP - ADR 2,650 31
Rostelecom SP - ADR 1,666 28
Rao Gazprom SP - ADR 3,100 27
Chernogorneft SP - ADR (b) 12,050 21
Avtovaz 500 20
A.O. Tatneft SP - ADR 1,700 16
Moscow City Telephone 50 5
Trading House TSUM SP - ADR 3,200 4
---------
2,748
Saudi Arabia 0.4%
Saudi Arabian Investment Fund 20,200 202
---------
South Africa 3.9%
Impala Platinum Holdings Ltd. 10,570 428
Sasol Ltd. 32,836 277
Datatec Ltd. (b) 11,500 203
Nedcor Ltd. 8,900 198
Comparex Holdings Ltd. 24,100 169
Anglo American PLC (b) 2,568 165
Liberty Life Association of Africa Ltd. 12,916 149
De Beers Centenary 4,640 135
Barlow Ltd. 16,400 118
South African Breweries PLC 17,667 179
Pepkor Ltd. (b) 13,840 65
Wooltru Ltd. 18,870 38
Wooltru Ltd. 'N' 18,500 37
Nedcor Investment Bank Holdings Ltd. 8,900 6
Edgars Consolidated Stores 285 4
---------
2,171
South Korea 5.6%
Korea Telecom 2,250 355
Trigem Computer, Inc. 3,186 354
SK Telecom Co. Ltd. 94 337
SK Corp. 11,110 337
SK Telecom Co. Ltd. SP-ADR 7,972 306
LG Electronics 6,550 271
Hanwha Chemical Corp. 27,882 245
Hite Brewery Co. Ltd. 6,120 210
Pohang Iron & Steel Co. Ltd. 1,650 182
Korean Air 12,070 137
Korea Electric Power Corp. 3,720 115
Shinhan Bank 8,674 94
Samsung Fire & Marine Insurance 2,730 87
Hanvit Bank 11,500 74
Daewoo Securities Co. 1,771 20
---------
3,124
Taiwan 4.2%
Taiwan Fund, Inc. 34,135 696
R.O.C. Taiwan Fund 79,110 667
Acer, Inc. SP - GDR (b) 17,698 252
China Steel Corp. SP - GDR 10,085 151
Macronix International Co. Ltd. SP - ADR 6,364 122
Walsin Lihwa Corp. SP - GDR (b) 18,856 102
Yang Ming Marine Transport SP - GDR (b) 14,486 92
Asia Cement Corp. SP - GDR 8,757 85
President Enterprise Corp. SP - GDR (b) 7,798 62
Yageo Corp. SP - GDR (b) 10,251 58
Tuntex Distinct Corp. SP - GDR (b) 22,552 39
Teco Electric & Machinery SP - GDR (b) 2,193 18
---------
2,344
Thailand 4.3%
Advanced Info Service Public Co. Ltd. 24,600 413
Hana Microelectronics Public Co. Ltd. 62,800 300
Thai Farmers Bank Public Co. Ltd. 160,900 269
Siam Cement Public Co. Ltd. 'R' 6,600 219
BEC World Public Co. Ltd. 29,600 196
Siam Cement Public Co. Ltd. 9,700 191
PTT Exploration & Production 28,800 177
TelecomAsia Corp. Public Co. Ltd. 132,000 172
Bangkok Bank Public Co. 67,600 171
Land & Houses Public Co. Ltd. 112,000 106
United Communication Industries 102,000 102
Electricity Generating Public Co. Ltd. 65,700 82
Banpu Public Co. Ltd. 35,600 25
---------
2,423
Turkey 6.4%
Turk Hava Yollari Anonim Ortakligi 7,228,044 626
Dogan Sirketler Grubu Holding AS 17,250,424 509
Netas Northern Electric Telekomunikasyon AS 2,596,800 345
Akbank TAS 9,979,252 294
Migros Turk TAS 405,956 262
Eregli Demir Ve Celik Fabrikalari TAS 5,903,609 245
Yapi ve Kredi Bankasi AS 7,772,000 240
Koc Holding AS 1,280,584 236
Cukurova Elektrik AS 168,835 202
Vestel Elektronik Sanayi 740,000 177
Erciyas Biracilik ve Malt Sanayii AS 2,466,713 118
Aksa Akrilik Kimya Sanayii AS 2,410,639 113
Arcelik AS 1,279,348 84
Petrol Ofisi AS 354,202 83
Bursa Cimento Fabrikasi AS 1,600,000 71
---------
3,605
Venezuela 1.6%
Compania Anonima Nacional Telefonos
de Venezuela SP - ADR 16,000 394
Electridad de Caracas (b) 13,300 211
Mavesa SA SP - ADR 32,000 98
Banco Venezolano de Creditio SP - ADR 26,752 79
Mantex S.A.C.A. SP - ADR 8,800 71
Siderurgica Venezolana Sivensa SP - ADR 17,433 38
International Briquettes Holding, Inc. (b) 6,667 29
---------
920
Zimbabwe 1.0%
Barclays Bank of Zimbabwe 561,400 216
Delta Corp. Ltd. 447,038 159
Wankie Colliery Co. Ltd. 1,364,428 111
Interfresh Ltd. 1,829,700 60
---------
546
---------
Total Common Stocks 55,640
(Cost $43,600) =========
See accompanying notes 71
<PAGE>
Schedule of Investments (Cont.)
Structured Emerging Markets Fund
December 31, 1999 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 1.2%
- --------------------------------------------------------------------------------
Repurchase Agreements 1.2%
State Street Bank
4.000% due 01/03/2000 $ 672 $ 672
(Dated 12/31/1999. Collateralized by
Federal Home Loan Mortgage Corporation
6.680% 12/28/2001 valued at $689.
Repurchase proceeds are $672.)
---------
Total Short-Term Instruments
(Cost $672) 672
=========
Total Investments (a) 100.4% $ 56,312
(Cost $44,272)
Other Assets and Liabilities (Net) (0.4%) (236)
---------
Net Assets 100.0% $ 56,076
=========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 19,911
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (7,871)
---------
Unrealized appreciation-net $ 12,040
=========
(b) Non-income producing security.
(c) Foreign forward currency contracts outstanding at December 31, 1999.
Principal
Amount
Covered by Expiration Unrealized
Type Currency Contract Month Appreciation
- --------------------------------------------------------------------------------
Buy BP 1 01/2000 $ 0
(d) Principal amount denoted in indicated currency:
BP - British Pound
72 See accompanying notes
<PAGE>
Schedule of Investments
Tax-Efficient Structured Emerging Markets Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 99.4%
- --------------------------------------------------------------------------------
Argentina 3.4%
Perez Companc SA 'B' 148,179 $ 759
Telecom Argentina SA 'B' 66,499 458
Telefonica de Argentina SA 133,634 410
Acindar Industria Argentina de Aceros SA 'B' 216,373 346
Banco Frances SA 43,102 341
Molinos Rio de la Plata SA 104,162 256
Siderca SA 'A' 119,602 251
Banco de Galicia y Buenos Aires SA de CV 'B' 46,920 233
Astra Cia Argentina de Petro SA 69,210 147
Nobleza Piccardo SAI.C. y F. 49,664 105
Buenos Aires Embotella 134 1
---------
3,307
Baltic Nations 0.8%
Baltic Fund 'A' 9,107 731
---------
Botswana 0.9%
Sechaba Breweries Ltd. 382,400 437
Standard Chart Bank Botswana 40,335 337
Sefalana Holding Co. Ltd. 93,100 108
---------
882
Brazil 7.1%
Telecomunicacoes Brasileiras SA SP - ADR 22,080 2,837
Petroleo Brasileiro SA 101,300 2,598
Companhia Cervejaria Brahma 277,000 202
Companhia Suzano de Papel e Celulose 55,200 168
Petroleo Brasileiro SA 630,000 160
Itausa-Investimentos Itau SA 147,500 153
Brasmotor SA (b) 1,063,000 149
Telecomunicacoes Brasileiras SA 1,068,397 140
Banco Estado de Sao Paul 2,800,457 99
Companhia Fabricadora de Pecas 18,777 76
Banco Do Brasil SA 12,274,300 74
Companhia Vidraria Santa Marina 57,700 70
Centrais Electricas Brasileiras SA 'B' 2,800,000 67
Telecomunicacoes de Sao Paulo 2,538,189 60
Telesp Celular SA 'B' (b) 447,502 35
Light -Servicos de Electricidade SA 20,000 2
Casa Anglo Brasileira SA 5,208,000 0
---------
6,890
Bulgaria 0.2%
Framlington Bulgaria Fund (b) 44,260 156
---------
Chile 3.5%
Empresa Nacional de Electricidad SA SP - ADR 31,288 444
Banco Santiago SA SP - ADR 17,200 369
Madeco SA SP - ADR 32,600 363
Masisa SA SP - ADR 27,900 359
Enersis SA SP - ADR 12,316 289
Compania Cervecerias Unidas SA SP - ADR 7,800 250
Laboratorio Chile SA SP - ADR 13,600 247
Administradora de Fondos de
Pensiones Provida SA SP - ADR 10,600 228
Sociedad Quimica y Minera de Chile SA SP - ADR 6,300 199
Compania de Telecomunicaciones
de Chile SA SP - ADR 10,796 197
Cristalerias de Chile SP - ADR 13,100 188
Embotelladora Andina SA SP - ADR 'B' 6,700 98
Gener SA SP - ADR 5,500 85
Embotelladora Andina SA SP - ADR 'A' 4,200 75
Quimica Y Minera de Chile 1,264 40
---------
3,431
China 3.8%
China Telecom Ltd. (b) 223,000 1,391
Yizheng Chemical Fibre Co. Ltd. 'H' 1,170,000 327
Shanghai Diesel Engine Co. Ltd. 'B' 1,265,120 235
China Merchants Shekou Port Service 463,518 212
Co. Ltd.
China Resources Enterprise Ltd. 122,000 195
Jilin Chemical Industrial Co. Ltd. 2,354,000 182
Shanghai New Asia Group Co. Ltd. 'B' 1,067,500 158
Maanshan Iron & Steel Co. 'H' 2,866,000 155
Shanghai Petrochemical Co. Ltd. 'H' 962,000 151
China Travel International Investment Hong Kong Ltd. 800,000 115
China Overseas Land & Investment 762,000 110
Shanghai Dazhong Taxi Co. 'B' 331,000 109
Guangshen Railway Co. Ltd. 'H' (b) 946,000 106
Guangdong Investment Ltd. 631,800 93
Qingling Motors Co. 'H' 672,000 82
Harbin Power Equipment Co. Ltd. 'H' 1,444,000 78
Shanghai Dajiang Group Co. Ltd. 'B' 214,800 24
---------
3,723
Colombia 0.6%
Bancolombia SP - ADR 73,400 339
Banco Ganadero SA SP - ADR 14,600 116
Cadena Almacenes SP - ADR 118,100 111
Carulla y Compania SP - ADR 41,200 39
Cementos Diamante SA SP - GDR 144A 6,900 6
Cementos Diamante SA SP - GDR 2,800 3
---------
614
Croatia 0.4%
Pliva D.D. 28,050 359
---------
Czech Republic 1.5%
SPT Telecom AS SP - GDR (b) 23,200 372
SPT Telecom AS 15,730 254
Ceske Radiokomunikace (b) 5,700 209
CEZ 69,256 171
Komercni Banka AS 8,337 135
Ceska Pojistovna 1,255 79
Skoda Plzen AS 22,591 73
ZDB (b) 12,178 69
Vodni Stavby Praha AS 12,541 48
Synthesia AS 19,246 40
Aliachem AS 101,312 20
---------
1,470
Egypt 2.1%
Mobinil-Egyptian Mobile Network (b) 15,900 729
Eastern Co. for Tobacco & Cigarettes 10,000 262
Commercial International Bank 14,833 217
Al-Ahram Beverages Co. SAE 9,300 183
Suez Cement Co. 8,814 147
Oriental Weavers Co. 7,470 135
Egyptian International Pharmaceutical Industries Co. 2,613 128
Alexandria National Iron & Steel Co. (b) 2,546 113
Egyptian Financial & Industrial Co. 4,068 36
Paints & Chemical Industries Co. SAE 1,436 21
Heliopolis Housing & Development Co. 922 20
---------
1,991
Ghana 0.4%
Ashanti Goldfields Co. Ltd. SP - GDR 60,366 159
Unilever Ghana Ltd. (b) 135,040 72
Mobil Oil Ghana Ltd. (b) 10,174 41
Standard Chartered Bank Ghana Ltd. 5,500 30
Aluworks Ghana Ltd. (b) 38,100 27
Social Security Bank Ltd. (b) 47,400 27
---------
356
Greece 4.4%
Intracom SA 12,058 552
Alpha Leasing SA 11,275 487
Hellenic Telecommunication Organization SA 19,606 464
General Construction SA 15,918 379
Titan Cement Co. SA 5,130 306
J. Boutaris & Son Holdings 20,910 294
Aegek SA 18,140 272
Commercial Bank of Greece SA 3,120 238
Aluminium of Greece SA 3,900 192
Elais Co. SA 4,280 179
Panafon Hellenic Telecommunications Co. SA 11,800 158
Alpha Credit Bank 1,848 145
National Bank of Greece SA 1,880 139
National Bank of Greece SP - ADR (b) 8,500 120
Ergo Bank SA 1,234 119
Heracles General Cement SA 2,790 89
Hellenic Bottling Co. SA 3,620 83
Attica Enterprises SA 2,310 44
EFG Eurobank (b) 960 42
---------
4,302
See accompanying notes 73
<PAGE>
Schedule of Investments (Cont.)
Tax-Efficient Structured Emerging Markets Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
Hungary 4.2%
Magyar Tavkozlesi Rt. SP - ADR 29,000 $ 1,044
Gedeon Richter Rt. 8,300 546
OTP Bank Rt. 9,171 537
MOL Magyar Olaj-es Gazipari Rt. 15,475 322
BorsodChem Rt. (b) 6,964 285
Antenna Hungaria Rt. (b) 13,970 275
Pick Szeged Rt. 5,790 272
Graboplast Rt. 25,772 235
Demasz Rt. 2,700 206
Pannonplast Rt. 6,800 168
Danubius Hotel and Spa Rt. 7,558 138
Inter-Europa Bank Rt. 2,390 75
---------
4,103
India 4.2%
The India Fund, Inc. 107,200 1,796
Morgan Stanley India Investment Fund 30,000 495
UTI India IT Fund (b) 5,600 405
Reliance Industries SP - GDR 24,000 343
I.T.C. Limited SP - GDR 16,533 322
Indo Gulf Corp. Ltd. SP - GDR 138,300 201
Mahindra & Mahindra Ltd. SP - GDR 15,490 172
Hindalco Industries Ltd. SP - GDR 7,067 167
CESC Ltd. SP - GDR 109,800 80
Bajaj Auto Ltd. SP - GDR 6,775 64
Ranbaxy Laboratories Limited SP - GDR (b) 2,400 53
Tata Electric Cos. SP - GDR 100 12
Tata Engineering and Locomotive Co. Ltd. SP - GDR 2,400 11
---------
4,121
Indonesia 4.1%
PT Hanjaya Mandala Sampoerna 422,000 1,073
PT Astra International, Inc. 1,963,000 1,053
PT Indofood Sukses Makmur 589,000 738
PT Telekomunikasi Indonesia 1,197,320 681
PT Indah Kiat Pulp & Paper Corp. 760,721 299
PT Mayora Indah 553,000 75
PT Bank Internasional Indonesia 1,175,692 25
PT Bank Dagang Nasional Indonesia 'F' 2,067,500 0
---------
3,944
Israel 3.5%
Bezek Israeli Telecommunication Corp. Ltd. 108,053 538
Nice Systems Ltd. 10,356 504
Koor Industries Ltd. 4,180 418
Bank Hapoalim Ltd. 131,022 408
Leumi Insurance Holdings (b) 414,644 376
Bank Leumi Le-Israel 143,110 301
Israel Chemicals Ltd. 273,195 301
Industrial Buildings Corp. 153,418 236
Teva Pharmaceutical Industries Ltd. 2,355 162
Blue Square Chain Investments and Properties Ltd. (b) 8,150 123
---------
3,367
Kenya 0.4%
Kenya Power & Lighting Co. Ltd. 87,600 115
Uchumi Supermarket Ltd. 156,500 86
Firestone East Africa Ltd. 359,250 79
Kenya Airways Ltd. 432,000 47
Sasini Tea & Coffee Ltd. 51,620 32
National Industrial Credit Bank 83,661 31
Athi River Mining Ltd. 304,400 24
Kenya Commercial Bank Ltd. 33,755 15
---------
429
Malaysia 3.9%
Commerce Asset-Holding Bhd. 257,000 659
United Engineers (Malaysia) Bhd. 396,800 632
Telekom Malaysia Bhd. 124,000 480
Sime Darby Bhd. 263,000 334
Malayan Banking Bhd. 90,400 321
Edaran Otomobil Nasional Bhd. 63,000 269
Genting Bhd. 70,400 250
Leader Universal Holdings Bhd. 712,000 229
Tenaga Nasional Bhd. 75,000 193
Malaysia Internation Shipping Bhd. 80,000 132
Aokam Perdana Bhd. 35,733 96
Technology Resources Industries Bhd. 135,000 83
Magnum Corp. Bhd. 100,000 75
United Engineers Bhd. - Warrant 79,360 61
---------
3,814
Mauritius Island 0.7%
State Bank of Mauritius Ltd. (b) 257,549 172
Mauritius Commercial Bank (b) 40,685 150
New Mauritius Hotels Ltd. (b) 37,200 74
The United Basalt Products 46,900 49
Sun Resorts Ltd. Class A 22,200 45
Shell Mauritius Ltd. (b) 32,000 38
Mon Tresor & Mon Desert Ltd. (b) 27,800 33
Air Mauritius Ltd. (b) 22,600 29
Rogers & Co. Ltd. (b) 7,600 25
Ireland Blyth Ltd. (b) 34,809 25
---------
640
Mexico 4.8%
Grupo Financiero Banamex Accival SA 167,000 670
Telefonos de Mexico SA (b) 113,390 634
Carso Global Telecom 'A1' 46,000 432
Grupo Financiero Bancomer SA 948,000 396
Alfa SA de CV 'A' 78,000 366
Grupo Televisa SA 'CPO' 10,000 338
Grupo Carso SA de CV 'A1' (b) 64,000 319
Cifra SA de CV 'V' 155,741 312
Cemex SA de CV 55,136 308
Grupo Mexico SA 'B' 55,369 274
Grupo Industrial Bimbo SA de CV 'A' 75,777 169
Coca-Cola Femsa SA 'L' 93,000 162
Industrias Penoles SA 'CP' (b) 43,000 124
Kimberly-Clark de Mexico SA de CV 'A' 28,000 109
Grupo Situr SA de CV 'B' 759,751 0
---------
4,613
Morocco 1.5%
Omnium Nord Africain SA 3,131 364
Brasseries du Nord Marocain 1,007 215
Ciments du Maroc 2,335 204
Cie Transports LN 4,961 192
Banque Commercial du Maroc 1,652 164
Wafabank 1,242 129
Samir (b) 1,790 125
Lesieur Cristal 491 67
---------
1,460
Peru 3.7%
Credicorp Ltd. 45,132 542
Telefonica Del Peru SA 37,600 503
Banco Wiese Ltd. 1,202,253 411
Telefonica del Peru SA 'B' 268,617 350
Ferreyros SA 544,170 295
Cerveceria Backus & Johnston SA 'T' 694,085 289
Buenaventura SA 16,128 259
Cementos Lima SA 14,532 239
Alicorp SA (b) 1,317,921 218
Compania de Minas Buenaventura SA 'B' 24,428 198
Southern Peru Copper Corp. 32,448 134
Indeco SA Trabajo 917,443 92
Credicorp Ltd. 7,300 87
---------
3,617
Philippines 3.1%
Ayala Corp. 1,871,612 546
San Miguel Corp. 'B' 255,000 361
Philippine Long Distance Telephone Co. 13,780 350
Ayala Land, Inc. 1,251,201 326
Petron Corp. 3,884,200 308
SM Prime Holdings, Inc. 1,286,860 243
Manila Electric Co. 'B' 84,478 241
Aboitiz Equity Ventures, Inc. (b) 3,722,205 203
Benpres Holdings Corp. (b) 1,141,000 173
International Container Term Services, Inc. 1,620,887 147
Sanitary Wares Manufacturing Corp. 2,616,401 35
First Philippine Holdings Corp. 33,792 29
Philex Mining Corp. 'B' 2,003,300 26
Fortune Cement Corp. 1,212,125 23
---------
3,011
74 See accompanying notes
<PAGE>
Value
Shares (000s)
- --------------------------------------------------------------------------------
Poland 3.7%
Telekomunikacja Polska (b) 128,200 $ 827
Prokom Software SA 9,649 299
KGHM Polska Miedz SA 43,640 274
Zaklady Piwowarskie W Zywcu SA 2,820 249
Elektrim Spolka Akcyjna SA 23,940 237
Telekomunikacja Polska SA 35,400 232
Bank Handlowy W. Warszawie 14,870 220
Bank Slaski SA W Katowicach 3,050 207
Bank Rozwoju Eksportu SA 5,760 182
Wielkopolski Bank Kredytowy SA 25,638 174
KGHM Polska Miedz SA 11,300 151
Stalexport SA 22,185 148
Fabryka Kotlow Rafako SA (b) 65,740 104
Mostostal Export SA 63,410 66
Krosnienskie Huty SZKLA SA 8,190 63
Przedsiebiorstwo Farmaceutyczne JELFA SA 7,270 62
Zaklady Metali Lekkich Kety (b) 4,555 61
Huta Szkla Gospodarczego Irena 36,560 51
Agros Holding SA 2,985 20
---------
3,627
Portugal 0.0%
Banco Espirito Santo e Comercial de Lisboa SA 712 20
---------
Romania 0.6%
Society Generale Romania Fund 5,212 276
Romanian Investment 513 229
Romanian Growth Fund 28,700 35
---------
540
Russia 2.7%
LUKoil Holding SP - ADR 13,250 689
Unified Energy System SP - ADR 50,700 608
Surgutneftegaz 18,200 319
Vimpel-Communications SP - ADR (b) 5,180 231
Mosenergo SP - ADR 27,100 119
Uralmash-Zavody SP - ADR (b) 94,000 106
Samson 60,400 91
Irkutskenergo SP - ADR 23,300 87
Gorkovsky Auto Plant 2,600 86
Baltika Brewery (b) 250 69
Rostelecom SP - ADR 3,333 56
Trade House GUM SP - ADR 54,990 56
Trading House TSUM 311,900 40
Chernogorneft SP - ADR (b) 14,200 25
Avtovaz 500 20
Trading House TSUM SP - ADR 3,800 5
Moscow City Telephone 50 5
---------
2,612
Saudi Arabia 0.4%
Saudi Arabian Investment Fund 34,900 349
---------
South Africa 3.9%
Sasol Ltd. 112,510 949
Impala Platinum Holdings Ltd. 12,601 510
FirstRand Ltd. 318,000 455
De Beers Centenary 8,791 256
Anglo American PLC (b) 3,900 251
Datatec Ltd. (b) 13,900 245
Nedcor Ltd. 10,583 236
Comparex Holdings Ltd. 28,500 200
Barlow Ltd. 19,375 139
Liberty Life Association of Africa Ltd. 10,830 125
Pepkor Ltd. (b) 26,323 124
South African Breweries PLC (b) 12,000 122
Wooltru Ltd.- N Shares 55,000 109
Wooltru Ltd. 22,298 45
Nedcor Investment Bank Holdings Ltd. 10,583 7
Edgars Consolidated Stores 438 6
---------
3,779
South Korea 7.0%
Trigem Computer, Inc. 38,050 4,222
Korea Telecom 4,550 717
Hanwha Chemical Corp. 39,466 347
Samsung Fire & Marine Insurance 6,630 211
Shinhan Bank 18,106 196
Korea Asia Fund (b) 100 195
LG Electronics 4,463 185
Samsung Electronics 698 164
SK Telecom Co. Ltd. 37 133
Daewoo Securities Co. 11,698 132
Korean Air 10,930 124
SK Telecom Co. Ltd. SP - ADR 2,318 89
Hite Brewery Co. Ltd. 1,950 67
Korea Electric Power Corp. 930 29
---------
6,811
Taiwan 3.7%
Taiwan Fund, Inc. 48,503 988
R.O.C. Taiwan Fund 110,882 936
Acer, Inc. SP - GDR (b) 28,118 401
China Steel Corp. SP - GDR 17,330 260
Macronix International Co. Ltd. SP - ADR 11,946 228
Walsin Lihwa Corp. SP - GDR (b) 30,178 164
Asia Cement Corp. SP - GDR 16,010 155
President Enterprise Corp. SP - GDR (b) 17,730 140
Yang Ming Marine Transport SP - GDR (b) 17,066 108
Tuntex Distinct Corp. SP - GDR (b) 52,304 90
Yageo Corp. SP - GDR (b) 12,276 69
Teco Electric & Machinery SP - GDR (b) 8,379 69
---------
3,608
Thailand 4.6%
Krung Thai Bank Public Co. Ltd. 1,400,300 734
Shinawatra Computer Co. Ltd. 57,000 539
Advanced Info Service Public Co. Ltd. 29,100 488
Thai Farmers Bank Public Co. Ltd. 262,300 439
Land & Houses Public Co. Ltd. 414,400 393
BEC World Public Co. Ltd. 50,500 335
TelecomAsia Corp. Public Co. Ltd. 238,300 310
Thai Telephone & Telecom 576,500 226
Siam Cement Public Co. Ltd. 11,400 224
Siam Makro Public Co. 124,800 176
Thai International Fund 15 152
United Communication Industries 143,300 143
Electricity Generating Public Co. Ltd. 77,900 97
Banpu Public Co. Ltd. 113,200 160
Hana Microelectronics Public Co. Ltd. 7,800 37
---------
4,453
Turkey 6.7%
Dogan Sirketler Grubu Holding AS 40,891,200 1,206
Turk Hava Yollari Anonim Ortakligi 8,788,246 762
Migros Turk TAS 1,050,750 678
Eregli Demir Ve Celik Fabrikalari TAS 14,182,000 588
Netas Northern Electric Telekomunikasyon AS 4,139,000 549
Arcelik AS 6,688,000 438
Koc Holding AS 2,047,956 378
Yapi ve Kredi Bankasi AS 12,000,000 371
Akbank TAS 12,119,265 358
Bursa Cimento Fabrikasi AS 5,510,000 244
Petrol Ofisi AS 958,168 225
Erciyas Biracilik ve Malt Sanayi AS 4,426,000 212
Vestel Elektronik Sanayi 875,000 210
Cukurova Elektrik AS 133,670 160
Aksa Akrilik Kimya Sanayi AS 1,705,940 80
---------
6,459
Venezuela 1.8%
Compania Anonima Nacional Telefonos
de Venezuela SP - ADR 28,500 703
Electridad de Caracas (b) 35,300 559
Mavesa SA SP - ADR 57,900 177
Mantex S.A.C.A. SP - ADR 15,033 122
Banco Venezolano de Creditio SP - ADR 37,935 111
Siderurgica Venezolana Sivensa SP - ADR 26,067 56
International Briquettes Holding, Inc. (b) 8,000 35
---------
1,763
Zimbabwe 1.1%
Barclays Bank of Zimbabwe 1,105,400 425
Delta Corp. Ltd. 710,684 253
Interfresh Ltd. 5,547,900 183
Wankie Colliery Co. Ltd. 2,199,200 180
---------
1,041
---------
Total Common Stocks 96,393
(Cost $81,345) =========
See accompanying notes 75
<PAGE>
Schedule of Investments (Cont.)
Tax-Efficient Structured Emerging Markets Fund
December 31, 1999 (Unaudited)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 1.5%
- --------------------------------------------------------------------------------
Repurchase Agreements 1.5%
State Street Bank
4.000% due 01/04/2000 $ 1,417 $ 1,417
(Dated 12/31/1999. Collateralized by
Federal Home Loan Mortgage Corporation
6.680% due 12/28/2001 valued at $1,448.
Repurchase proceeds are $1,417.)
---------
Total Short-Term Instruments 1,417
(Cost $1,417) =========
Total Investments (a) 100.9% $ 97,810
(Cost $82,762)
Other Assets and Liabilities (Net) (0.9%) (868)
---------
Net Assets 100.0% $ 96,942
=========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 32,637
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (17,589)
---------
Unrealized appreciation-net $ 15,048
=========
(b) Non-income producing security.
(c) Foreign forward currency contracts outstanding at December 31, 1999.
Principal
Amount
Covered by Expiration Unrealized
Type Currency Contract Month Appreciation
- --------------------------------------------------------------------------------
Buy SR 1,158 01/2000 $ 0
Buy SR 2,092 01/2000 0
(d) Principal amount denoted in indicated currency:
SR - South African Rand
76 See accompanying notes
<PAGE>
Schedule of Investments
International Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCK 96.4%
- --------------------------------------------------------------------------------
Australia 1.4%
Broken Hill Property Co. 29,500 $ 387
National Australia Bank Ltd. 18,600 285
News Corp. Ltd. 28,500 277
Telstra Corp. Ltd. (b) 47,100 256
Westpac Banking Corp. 33,300 230
Rio Tinto Ltd. 9,800 211
Southcorp Ltd. 39,600 140
Foster's Brewing Group Ltd. 44,000 126
Amcor Ltd. 'A' 22,900 107
Tabcorp Holdings Ltd. 15,500 105
Leighton Holdings Ltd. 25,900 100
---------
2,224
Brazil 1.3%
Telecomunicacoes Brasileiras SA SP - ADR 4,600 591
Centrais Electricas Brasileiras SA 'B' 12,565,000 300
Cia Vale De Rio 8,700 241
Petroleo Brasileiro SA 824,000 210
Banco Itau SA 1,500,000 129
Banco Bradesco SA 14,446,000 113
Banco Bradesco SA (b) 938,037 0
Telecomunicacoes Brasileiras SA 1,133,000 97
Companhia Energetica de Minas Gerais 3,842,000 86
Companhia Siderurgica Nacional 2,155,000 84
Companhia Cervejaria Brahma 100,000 73
Souza Cruz SA 7,200 53
Aracruz Celulose SA 'B' 21,000 51
---------
2,028
Chile 2.6%
Compania de Telecomunicaciones de Chile SA SP - ADR 40,855 746
Banco Santander Chile SP - ADR 41,850 638
Enersis SA SP - ADR 24,122 567
Empresa Nacional de Electricidad SA SP - ADR 39,367 559
Compania Cervecerias Unidas SA SP - ADR 11,400 366
Gener SA SP - ADR 20,933 324
Sociedad Quimica y Minera de Chile SA SP - ADR 9,200 290
Masisa SA SP - ADR 21,000 270
Madeco SA SP - ADR 20,742 231
Quimica Y Minera de Chile 531 17
---------
4,008
China 0.5%
Beijing Datang Power Generation Co. Ltd. 1,062,000 176
Jiangsu Expressway Co. Ltd. 918,000 150
Shanghai Petrochemical Co. Ltd. 'H' 778,000 122
Guangshen Railway Co. Ltd. 'H' (b) 874,000 98
Huaneng Power International, Inc. 383,000 91
Qingling Motors Co. 'H' 508,000 62
Yizheng Chemical Fibre Co. Ltd. 'H' 202,000 57
China Southern Airlines Co. Ltd. 258,000 56
---------
812
Finland 3.0%
Nokia OYJ 19,112 3,465
Sonera Group OYJ (b) 5,600 384
UPM-Kymmene Corp. 3,526 142
Kemira OYJ 19,300 118
Sanoma-WSOY OYJ 'B' (b) 2,110 108
Jot Automation Group OYJ 7,600 71
Yit-Yhtyma OY 6,344 70
Hartwall OY AB 4,700 68
Viking Line AB 1,750 65
Rautaruukki OY 8,425 59
Okobank 2,564 29
---------
4,579
France 10.9%
France Telecom SA 19,571 2,589
Total SA 15,032 2,006
Carrefour Supermarche 7,480 1,380
Banque National de Paris 12,820 1,183
L'OREAL 1,390 1,115
AXA-UAP 7,900 1,101
Vivendi (Ex-Generale Des Eaux) 10,938 988
Pinault-Printemps Redout 2,950 779
Hermes International 4,045 610
Lagardere SCA (b) 10,500 571
Alcatel Alsthom 2,470 567
Sanofi-Synthelabo SA (b) 12,860 536
Legrand SA 1,900 452
Castorama Dubois 1,470 447
Credit Lyonnais SA 9,700 444
Renault SA 8,540 412
Lafarge SA 3,501 408
Compagnie de Saint Gobain 1,780 335
Sodexho Alliance SA 1,750 310
Groupe Danone 980 231
Societe BIC SA 3,770 172
Groupe GTM 1,620 157
VIVENDI Warrant (b) 2,750 9
Schneider SA 1 0
---------
16,802
Germany 13.3%
Deutsche Telekom AG 58,832 4,140
Mannesmann AG 8,980 2,167
DaimlerChrysler AG 22,519 1,767
Allianz AG 4,947 1,662
Siemens AG 11,293 1,437
Deutsche Bank AG 15,422 1,303
SAP AG-Vorzug 2,060 1,256
Bayer AG 20,600 979
BASF AG 17,900 936
Dresdner Bank AG 16,120 877
Muenchener Rueckversicherungs-Gesellschaft AG 3,190 813
Bayerische Vereinsbank AG 10,500 717
MAN AG 17,000 639
VEBA AG 11,940 583
Viag AG 21,320 391
Bayerische Motoren Werke AG 12,220 373
Metro AG 6,800 372
---------
20,412
Hong Kong 0.3%
Guangdong Kelon Electric 202,000 153
Zhejiang Expressway Co. 982,000 149
Shenzhen Expressway 600,000 95
---------
397
Hungary 3.6%
Magyar Tavkozlesi Rt. 434,100 3,042
MOL Magyar Olaj-es Gazipari Rt. 41,800 869
OTP Bank Rt. 13,010 762
Gedeon Richter Rt. 9,745 641
Danubius Hotel and Spa Rt. 7,490 136
Pick Szeged Rt. 1,090 51
---------
5,501
Indonesia 0.1%
PT Semen Gresik 85,000 135
PT Telekomunikasi Indonesia 100,880 57
---------
192
Ireland 2.1%
Allied Irish Banks PLC 80,200 915
CRH PLC 35,600 767
Kerry Group PLC 33,800 405
Irish Life & Permanent PLC 34,441 326
Jefferson Smurfit Group PLC 101,200 306
Eircom PLC 52,000 223
Eircom PLC SP-ADR 35,000 143
Bank of Ireland 9,200 73
---------
3,158
Italy 2.2%
Telecom Italia Mobile SpA 65,400 731
ENI SpA 93,000 512
Telecom Italia SpA 31,865 449
Assicuazioni Generali 12,535 414
Istituto Bancario San Paolo di Torino 20,757 282
Fiat SpA 6,540 187
Benetton Group SpA 75,700 174
Banca Popolare di Milano 19,200 150
Banca Commerciale Italiana 20,236 110
Cartiere Burgo SpA 15,100 99
See accompanying notes 77
<PAGE>
Schedule of Investments (Cont.)
International Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
Montedison SpA 97,344 $ 93
Banca Intesa SpA 21,885 89
Enel SpA 9,100 38
Beni Stabili SpA (b) 20,757 7
Banca Intesa SpA 3,486 6
---------
3,341
Japan 18.2%
Murata Manufacturing Co. 11,000 2,584
Toyota Motor Corp. 45,000 2,180
Nippon Telegraph & Telephone 127 2,175
Fanuc 16,300 2,076
Sharp Corp. 67,000 1,715
Sony Corp. 5,500 1,631
Bank of Tokyo-Mitsubishi Ltd. 106,000 1,477
Fujisawa Pharmaceutical 43,000 1,044
Matsushita Electric Industrial Co. Ltd. 36,000 997
Fuji Photo Film 26,000 949
Kirin Brewery Co. Ltd. 83,000 873
Hitachi Ltd. 52,000 835
Tokyo Electric Power 28,300 759
Canon, Inc. 18,000 715
NEC Corp. 27,000 643
Shiseido Co. Ltd. 42,000 613
Asahi Chemical Industry Co. Ltd. 118,000 606
Nomura Securities Co. Ltd. 31,000 560
Sekisui Chemical Co. Ltd. 125,000 554
Tokio Marine & Fire Insurance Co. 46,000 538
Sumitomo Electric Industries 46,000 532
Sumitomo Bank Ltd. 38,000 520
Mitsubishi Heavy Industries Ltd. 131,000 437
Bridgestone Corp. 19,000 418
Aoyama Trading Co. Ltd. 19,000 407
Fujitsu Ltd. 8,000 365
Sankyo Co. Ltd. 17,000 349
DAI Nippon Printing Co. Ltd. 21,000 335
Secom 3,000 330
Nippon Steel Corp. 123,000 288
Nissan Motor Co. Ltd. 63,000 248
Honda Motor Co. Ltd. 6,000 223
---------
27,976
Malaysia 1.5%
Tenaga Nasional Bhd. 185,000 477
Malayan Banking Bhd. 122,000 433
Telekom Malaysia Bhd. 106,000 410
Petronas Gas Berhad 99,000 232
Malaysia Internation Shipping Bhd. 137,000 225
Public Bank Bhd. 216,000 224
Commerce Asset-Holding Bhd. 49,000 126
Resorts World Bhd 37,000 106
Malaysian Airline System Bhd. 115,000 99
---------
2,332
Mexico 2.2%
Telefonos de Mexico SP - ADR 9,870 1,110
Cifra SA de CV 'V' 155,793 312
Cemex SA de CV (b) 10,567 295
Grupo Televisa SA SP - GDR (b) 4,200 287
Grupo Modelo SA de CV 'C' 101,500 279
Grupo Mexico SA 'B' 34,800 172
Grupo Industrial Bimbo SA de CV 'A' 73,540 164
Grupo Carso SA de CV 'A1' (b) 32,850 164
Kimberly-Clark de Mexico SA de CV 'A' 39,350 154
Formento Economico Mexicano SP - ADR 3,140 140
Alfa SA de CV 'A' 21,050 99
Empresas La Moderna SA de CV (b) 15,400 89
TV Azteca SA de CV SP - ADR 4,100 37
Controladora Comercial Mexicana SA de CV 27,000 36
Industrias Penoles SA 'CP' (b) 12,100 35
Desc SA de CV 'B' 37,600 31
Desc SA de CV 'C' 7,835 7
Transport Maritima SP-ADR 750 4
---------
3,415
Netherlands 3.9%
Royal Dutch Petroleum Co. 25,770 1,580
ING Groep NV 10,685 645
Koninklijke KPN NV 5,670 553
Koninklijke Philips Electronics NV 3,900 530
Unilever NV 7,953 439
Aegon NV 4,200 406
ABN-AMRO Holdings 13,600 340
Fortis NL 7,960 287
Verernigde Nederlandse Uitgeversbedrijven
verenigd Bezit 4,380 230
Akzo Noble NV 3,980 200
TNT Post Groep NV (b) 6,340 182
Elsevier NV 14,030 168
Heineken NV 3,100 151
Koninklijke Ahold NV 4,700 139
Wolters Kluwer NV 2,900 98
---------
5,948
New Zealand 0.9%
Telecom Corp. of New Zealand Ltd. 159,200 749
Carter Holt Harvey Ltd. 147,500 193
Lion Nathan Ltd. 59,600 139
Fletcher Challenge Energy 52,800 138
Brierley Investments Ltd. (b) 566,000 118
Fisher & Paykel Industries Ltd. 21,200 81
---------
1,418
Norway 2.2%
Norsk Hydro ASA 28,470 1,195
Orkla ASA 20,800 358
Storebrand ASA 37,700 287
Christiania Bank Og Kreditkasse 53,900 266
Petroleum Geo-Services (b) 14,100 252
Den Norske Bank ASA 61,060 251
Norske Skogindustrier ASA 5,600 236
Merkantildata ASA 17,900 217
Tandberg Television ASA (b) 8,500 118
Tomra Systems ASA (b) 6,400 109
Hafslund ASA 'B' 20,200 78
Unitor ASA 4,000 30
---------
3,397
Poland 1.6%
Telekomunikacja Polska (b) 125,000 806
Bank Slaski SA W Katowicach 3,620 246
Elektrim Spolka Akcyjna SA 21,780 216
Polski Koncern Naftowy 15,553 194
Bank Rozwoju Eksportu SA 5,980 189
Prokom Software SA 5,400 167
Bank Handlowy W. Warszawie 9,470 140
Wielkopolski Bank Kredytowy SA 19,590 133
Big Bank Gdanski SA 42,500 132
Softbank SA 2,860 95
Stomil Olsztyn SA 14,500 90
Debica SA 4,930 52
---------
2,460
Portugal 2.5%
Portugal Telecom SA 101,450 1,113
EDP-Electricidade de Portugal SA 57,000 995
Banco Comercial Portugues-R SA 86,090 478
Banco Espirito Santo e Comercial de Lisboa SA 11,085 312
Jeronimo Martins - SGPS SA 9,500 243
Brisa Auto Estradas de Portugal SA 29,550 227
Sonae Investimentos-Sociedade Gestora
de Participacoes Sociais SA 3,380 178
Cimpor-Cimentos de Portugal SGPS SA 10,495 174
Banco Portugues de Investimento 39,500 168
---------
3,888
Singapore 2.2%
DBS Group Holdings Ltd. 45,423 745
Singapore Press Holdings 27,400 594
Oversea-Chinese Banking Corp. 56,700 521
Singapore Airlines Ltd. 29,000 329
United Overseas Bank 31,574 279
City Developments Ltd. 44,000 258
Singapore Telecommunications 124,000 256
Overseas Union Bank 30,722 180
Singapore Tech Engineering Ltd. 111,000 172
Keppel Corp. Ltd. 46,000 120
---------
3,454
78 See accompanying notes
<PAGE>
Value
Shares (000s)
- --------------------------------------------------------------------------------
South Korea 0.1%
SK Telecom Co. Ltd. 60 $ 215
---------
Sweden 2.5%
MSCI Sweden Opal Series B (b) 10,660 3,853
---------
Switzerland 5.1%
Roche Holding AG 143 1,697
Novartis AG 1,114 1,636
Credit Suisse Group 5,125 1,019
UBS AG (b) 3,550 959
Nestle SA 438 802
Zurich Allied AG 925 527
Swisscom AG 1,150 465
New ABB Ltd. (b) 2,873 351
Schindler Holding AG 119 191
Holderbank Financiere Glarus AG 131 179
---------
7,826
Taiwan 2.7%
Taiwan Fund, Inc. 56,300 1,147
Winbond Electronics Corp. (b) 41,420 958
Asustek Computer, Inc. 42,000 585
China Steel Corp. SP - GDR 29,900 448
Asia Cement Corp. SP - GDR 37,817 365
Advanced Semiconductor Engineering SP - GDR (b) 14,391 282
Evergreen Marine Corp. 31,320 263
Standard Foods Taiwan Ltd. (b) 32,000 132
---------
4,180
Turkey 5.1%
Turkiye Is Bankasi 'C' 48,121,400 2,307
Yapi ve Kredi Bankasi AS 35,295,854 1,090
Turkiye Garanti Bankasi AS 51,210,200 774
Migros Turk TAS 871,200 562
Ege Biracilik ve Malt Sanayi AS 5,793,000 443
Arcelik AS 6,369,000 417
Eregli Demir Ve Celik Fabrikalari TAS 8,214,000 341
Trakya Cam Sanayii AS 23,045,104 293
Dogan Sirketler Grubu Holding AS 9,125,000 269
Akbank TAS 8,374,649 247
Aygaz AS 1,179,000 228
Vestel Elektronik Sanayi 884,000 212
Adana Cimento Sanayi 'A' 5,311,744 191
Haci Omer Sabanci Holding AS 2,868,000 167
Netas Northern Electric Telekomunikasyon AS 1,200,600 159
Brisa Bridgestone Sabanci Lastik San. Ve Tic AS 1,976,000 118
---------
7,818
United Kingdom 4.4%
Morgan Stanley Capital LLC 7,000 1,576
WEBS Index Fund 234,000 5,016
---------
6,592
---------
Total Common Stocks 148,226
(Cost $111,899) =========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 3.6%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Time Deposits 3.6%
State Street Bank (c)
2.500% due 01/04/2000 BP 3,400 5,492
---------
Total Short-Term Instruments 5,492
(Cost $5,483) =========
Total Investments (a) 100.0% $ 153,718
(Cost $117,382)
Other Assets and Liabilities (Net) 0.0% 22
---------
Net Assets 100.0% $ 153,740
=========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 41,749
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (5,413)
---------
Unrealized appreciation-net $ 36,336
=========
(b) Non-income producing security.
(c) Assets with an aggregate market value of $5,492 have been segregated
with the custodian to cover margin requirements for the following open
futures contracts at December 31, 1999:
# of Unrealized
Type Contracts Appreciation
- --------------------------------------------------------------------------------
FTSE 100 Index Futures (03/2000) 61 $ 167
See accompanying notes 79
<PAGE>
Notes to Financial Statements
December 31, 1999 (Unaudited)
1. Organization
PIMCO Funds: Multi-Manager Series (the "Trust") is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company organized as a Massachusetts business trust. The Trust currently
consists of twenty-six 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
Renaissance, Equity Income 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 statement of operations is
shown net of foreign taxes withheld on dividends from foreign securities.
Foreign taxes withheld were as follows: Renaissance Fund - $55,595; Core Equity
Fund - $11; Mid-Cap Equity Fund - $301; International Growth Fund - $ 6,734;
Capital Appreciation - $42,184; Equity Income Fund - $362; Value Fund - $297;
Enhanced Equity Fund - $1,526; Tax-Efficient Equity Fund - $838; Structured
Emerging Markets Fund - $66,263; Tax-Efficient Structured Emerging Markets Fund
- - $166,945; and International Fund - $65,567.
80
<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 and
Value 25 Funds; 0.55% for the International and Target Funds; 0.57% for the Core
Equity Fund; 0.60% for the Renaissance and Small-Cap Value Funds; 0.63% for the
Mid-Cap Equity Fund; 0.65% for the Opportunity and Innovation Funds; 0.85% for
the International Growth Fund; 1.00% for the Small-Cap Growth Fund; 1.25% for
the Micro-Cap Growth Fund; and 0.45% for all other Funds. Each of the Funds also
has a sub-advisor which, under the supervision of PIMCO Advisors, directs the
investments of the Fund's assets. 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.
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
Institutional and Administrative Classes is charged at the annual rate of 0.50%
for the International Growth, Structured Emerging Markets, Tax-Efficient
Structured Emerging Markets and International Funds and 0.25% for all other
Funds. The Administration Fee for the A, B and C Classes is charged at the
annual rate of 0.65% for the International Fund; and 0.40% for all other Funds.
The Administration Fee for Class D is charged at the annual rate of 0.40%.
81
<PAGE>
Notes to Financial Statements (Cont.)
December 31, 1999 (Unaudited)
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):
Distribution Fee (%) Servicing Fee (%)
- --------------------------------------------------------------------------------
Class A
All Funds -- 0.25
Class B
All Funds 0.75 0.25
Class C
All Funds 0.75 0.25
Class D
All Funds -- 0.25
PFD also receives the proceeds of the initial sales charges paid by the
shareholders upon the purchase of Class A shares and the contingent deferred
sales charges paid by the shareholders upon certain redemptions of Class A, B
and C shares. For the period ended December 31, 1999, PFD received $1,362,737
representing commissions (sales charges) and contingent deferred sales charges.
Expenses. The Trust is also responsible for the following expenses: (i) salaries
and other compensation of any of the Trust's executive officers and employees
who are not officers, directors, stockholders or employees of PIMCO Advisors,
PIMCO, or its subsidiaries or affiliates; (ii) taxes and governmental fees;
(iii) brokerage fees and commissions and other portfolio transaction expenses;
(iv) the cost of borrowing money, including interest expenses; (v) fees and
expenses of the Trustees who are not "interested persons" of the Advisor, PIMCO,
Portfolio Managers, or the Trust, and any counsel retained exclusively for their
benefit; (vi) extraordinary expenses, including costs of litigation and
indemnification expenses; (vii) expenses such as organizational expenses, which
are capitalized in accordance with generally accepted accounting principles; and
(viii) any expenses allocated or allocable to a specific class of shares, which
include service fees payable with respect to the Administrative Class shares and
may include certain other expenses as permitted by the Trust's Multiple Class
Plan adopted pursuant to Rule 18f-3 under the Investment Company Act of 1940 and
subject to review and approval by the Trustees. The ratio of expenses to average
net assets, as disclosed in the Financial Highlights, may differ from the annual
fund operating expenses as disclosed in the Prospectus for the reasons set forth
above.
Each unaffiliated Trustee receives an annual retainer of $45,000, plus
$2,000 for each Board of Trustees meeting attended, and $500 for each Audit and
Performance Committee meeting attended, plus reimbursement of related expenses.
Each Audit and Performance Committee receives an additional annual retainer of
$1,000, the Chairman of the Audit 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.
4. Line of Credit
Effective December 14, 1999, the funds, along with certain other funds managed
by PIMCO, entered into an unsecured $350,000,000 bank line of credit agreement
with State Street Bank. 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 December 31, 1999.
82
<PAGE>
5. Purchases and Sales of Securities
Purchases and sales of securities (excluding short-term investments) for the
period ended December 31, 1999 were as follows (amounts in thousands):
U.S. Government/Agency
-------------------------
Purchases Sales
- ------------------------------------------------------------------------
Renaissance Fund $ 399,457 $ 485,913
Growth Fund 831,522 1,023,664
Core Equity Fund 2,121 1,798
Target Fund 711,909 755,821
Mid-Cap Equity Fund 7,537 12,724
Opportunity Fund 457,989 502,575
Innovation Fund 2,343,699 1,813,122
International Growth Fund 2,999 3,944
Mega-Cap Fund 4,934 2,019
Capital Appreciation Fund 494,990 773,759
Mid-Cap Growth Fund 719,963 801,172
Small-Cap Growth Fund 42,558 49,465
Micro-Cap Growth Fund 104,012 126,201
Equity Income Fund 45,905 65,026
Value Fund 145,200 137,644
Value 25 Fund 2,661 2,429
Small-Cap Value Fund 110,894 121,871
Enhanced Equity Fund 8,060 8,414
Tax-Efficient Equity Fund 30,768 6,228
Structured Emerging Markets Fund 6,573 7,128
Tax-Efficient Structured Emerging Markets Fund 16,040 9,506
International Fund 39,500 52,576
6. 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):
Value of Fund's
Shares Shares Total Net Unrealized
Fund Issued Issued Assets Depreciation
- --------------------------------------------------------------------------
Structured Emerging 3,558 $ 35,582 $ 35,582 $ (2,621)
Markets Fund
Tax-Efficient Structured 4,416 44,157 44,157 (28,709)
Emerging Markets Fund
7. Federal Income Tax Matters
As of June 30, 1999, the Fund listed in the table below had remaining capital
loss carryforwards that were realized in current and prior years. Additionally,
the Micro-Cap Growth Fund, Small-Cap Growth Fund, Small Cap-Value Fund, Tax-
Efficient Equity Fund, Tax-Efficient Structured Emerging Markets Fund, Value 25
Fund and International Fund realized capital losses and/or foreign currency
losses during the period November 1, 1998 through June 30, 1999, which the Funds
elected to defer to the following fiscal year pursuant to income tax
regulations. The amounts are $452,591, $5,341,188, $573,480, $174,775,
$8,839,879, $5,496 and $332,309 respectively.
The Fund will resume capital gain distributions in the future to the extent
gains are realized in excess of the available carryforwards.
Capital Loss Carryforwards
---------------------------------
Realized Losses Expiration
- ------------------------------------------------------------------------------
Micro-Cap Growth Fund $ 8,869,703 6/30/2007
Small-Cap Growth Fund 4,673,719 6/30/2007
Small-Cap Value Fund 10,713,421 6/30/2007
Tax-Efficient Equity Fund 27,778 6/30/2007
Tax-Efficient Structured
Emerging Markets Fund 1,625,269 6/30/2007
Value 25 Fund 67,139 6/30/2007
8. In-Kind Transactions
For the period ended December 31, 1999, the following funds realized gains
(losses) from in-kind redemptions of approximately (amounts in thousands):
December 31, 1999 June 30, 1999
- ------------------------------------------------------------------------------
Capital Appreciation Fund $ 0 $ 2,839
Core Equity Fund 0 44,520
Mid-Cap Growth Fund 2,312 0
9. Acquisition by Allianz AG
The Allianz AG acquisition of majority ownership of PIMCO Advisors has been
approved by the Boards of Allianz AG and PIMCO on October 31, 1999, subject to
regulatory review and approval, as well as the vote of the shareholders on March
3, 2000.
83
<PAGE>
Notes to Financial Statements (Cont.)
December 31, 1999 (Unaudited)
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>
Renaissance Fund Growth Fund
--------------------------------------------------- --------------------------------------------------
Period Ended 12/31/1999 Year Ended 6/30/1999 Period Ended 12/31/1999 Year Ended 6/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
--------------------------------------------------- --------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 0 $ 0 6 $ 105 75 $ 2,576 39 $ 1,212
- ------------------------ --------------------------------------------------- -------------------------------------------------
Administrative Class 28 452 58 1,000 314 9,681 207 6,217
- ------------------------ --------------------------------------------------- -------------------------------------------------
Other Classes 4,629 76,567 17,896 305,834 21,158 707,350 39,459 1,197,934
- ------------------------ --------------------------------------------------- -------------------------------------------------
Issued as reinvestment of
distributions
Institutional Class 2 25 0 0 18 553 0 0
- ------------------------ --------------------------------------------------- -------------------------------------------------
Administrative Class 10 131 2 25 70 2,231 0 0
- ------------------------ --------------------------------------------------- -------------------------------------------------
Other Classes 7,933 103,501 4,947 74,634 11,708 371,275 9,157 246,482
- ------------------------ --------------------------------------------------- -------------------------------------------------
Cost of shares redeemed
Institutional Class (1) (16) (43) (744) (7) (229) (9) (268)
- ------------------------ --------------------------------------------------- -------------------------------------------------
Administrative Class (7) (115) (37) (634) (114) (3,645) (10) (288)
- ------------------------ --------------------------------------------------- -------------------------------------------------
Other Classes (10,283) (166,075) (20,668) (350,656) (27,174) (898,383) (40,642) (1,227,582)
- ------------------------ --------------------------------------------------- -------------------------------------------------
Net increase (decrease)
resulting from
Fund share transactions 2,311 $ 14,470 2,161 $ 29,564 6,048 $ 191,409 8,201 $ 223,707
======================== =================================================== =================================================
Core Equity Fund
----------------------------------------------------
Period Ended 12/31/1999 Year Ended 6/30/1999
Shares Amount Shares Amount
----------------------------------------------------
Institutional Class 14 $ 337 77 $ 1,782
- ------------------------ ----------------------------------------------------
Administrative Class 1 30 1,822 34,758
- ------------------------ ----------------------------------------------------
Other Classes 0 0 0 0
- ------------------------ ----------------------------------------------------
Issued as reinvestment of
distributions
Institutional Class 9 194 3 57
----------------------------------------------------
Administrative Class 0 3 275 5,514
- ----------------------- ----------------------------------------------------
Other Classes 0 0 0 0
- ------------------------ ----------------------------------------------------
Cost of shares redeemed
Institutional Class (6) (135) (126) (2,915)
- ----------------------- ----------------------------------------------------
Administrative Class 0 (2) (8,430) (180,866)
- ----------------------- ----------------------------------------------------
Other Classes 0 0 0 0
- ----------------------- ----------------------------------------------------
Net increase (decrease)
resulting from
Fund share transactions 18 $ 427 (6,379) $ (141,670)
- ----------------------- ====================================================
</TABLE>
<TABLE>
<CAPTION>
International Growth Fund Mega-Cap Fund Capital Appreciation Fund
------------------------------- --------------- ------------------------------------------
Period from
Period Ended Year Ended 08/31/1999 Period Ended Year Ended
12/31/1999 6/30/1999 to 12/31/1999 12/31/1999 6/30/1999
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
Institutional Class 508 $ 9,153 22 $ 355 300 $3,000 9,889 $ 253,425 17,583 $ 439,612
- --------------------------------- ------------------------------- -------------- -------------------------------------------
Administrative Class 0 0 0 0 0 0 749 19,427 6,022 152,828
- --------------------------------- ------------------------------- -------------- -------------------------------------------
Other Classes 0 0 0 0 0 0 875 22,365 4,010 98,940
- --------------------------------- ------------------------------- -------------- -------------------------------------------
Issued as reinvestment of
distributions
Institutional Class 93 1,831 0 2 0 1 3,362 79,661 1,505 35,601
- --------------------------------- ------------------------------- -------------- -------------------------------------------
Administrative Class 0 0 0 0 0 0 1,709 40,183 579 13,612
- --------------------------------- ------------------------------- -------------- -------------------------------------------
Other Classes 0 0 0 0 0 0 1,537 35,603 590 13,712
- --------------------------------- ------------------------------- -------------- -------------------------------------------
Cost of shares redeemed
Institutional Class (552) (10,148) (2) (31) 0 0 (15,848) (407,182) (25,867) (649,159)
- --------------------------------- ------------------------------- -------------- -------------------------------------------
Administrative Class 0 0 0 0 0 0 (2,999) (74,021) (3,068) (76,012)
- --------------------------------- ------------------------------- -------------- -------------------------------------------
Other Classes 0 0 0 0 0 0 (2,194) (57,042) (3,149) (77,743)
- --------------------------------- ------------------------------- -------------- -------------------------------------------
Net increase (decrease) resulting
from Fund share transactions 49 $ 836 20 $ 326 300 $3,001 (2,920) $ (87,581) (1,795) $ (48,609)
================================= =============================== ============== ===========================================
</TABLE>
84
<PAGE>
<TABLE>
<CAPTION>
Target Fund Mid-Cap Equity Fund
- -------------------------------------------------------------- ----------------------------------------------------------
Period Ended 12/31/1999 Year Fund 6/30/1999 Period Ended 12/31/1999 Year Ended 6/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
- -------------------------------------------------------------- ----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
112 $ 2,357 75 $ 1,265 76 $ 1,165 110 $ 1,457
- -------------------------------------------------------------- ----------------------------------------------------------
70 1,319 327 5,508 0 0 198 2,607
- -------------------------------------------------------------- ----------------------------------------------------------
50,284 955,022 87,501 1,337,208 0 0 0 0
- -------------------------------------------------------------- ----------------------------------------------------------
15 319 0 0 131 1,370 15 184
- -------------------------------------------------------------- ----------------------------------------------------------
26 555 0 0 0 0 14 168
- -------------------------------------------------------------- ----------------------------------------------------------
5,514 110,765 4,745 64,479 0 0 0 0
- -------------------------------------------------------------- ----------------------------------------------------------
(12) (259) (2) (36) (203) (3,205) (285) (4,344)
- -------------------------------------------------------------- ----------------------------------------------------------
(71) (1,384) (16) (275) 0 0 (388) (5,740)
- -------------------------------------------------------------- ----------------------------------------------------------
(53,539) (1,016,421) (99,140) (1,510,466) 0 0 0 0
- -------------------------------------------------------------- ----------------------------------------------------------
2,399 $ 52,273 (6,510) $ (102,317) 4 $ (670) (336) $ (5,668)
============================================================== ==========================================================
<CAPTION>
Opportunity Fund Innovation Fund
- -------------------------------------------------------------- ----------------------------------------------------------
Period Ended 12/31/1999 Year Ended 6/30/1999 Period Ended 12/31/1999 Year Ended 6/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
- -------------------------------------------------------------- ----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
181 $ 4,556 19 $ 428 117 $ 6,091 27 $ 895
- -------------------------------------------------------------- ----------------------------------------------------------
214 5,262 87 1,990 0 0 0 0
- -------------------------------------------------------------- ----------------------------------------------------------
9,921 272,729 71,407 1,722,778 32,808 1,509,486 43,277 1,310,384
- -------------------------------------------------------------- ----------------------------------------------------------
64 1,540 0 0 10 582 0 0
- -------------------------------------------------------------- ----------------------------------------------------------
82 1,964 0 0 0 0 0 0
- -------------------------------------------------------------- ----------------------------------------------------------
4,619 113,131 3,979 81,564 5,043 273,102 829 22,135
- -------------------------------------------------------------- ----------------------------------------------------------
(5) (117) (2) (38) (4) (224) (15) (505)
- -------------------------------------------------------------- ----------------------------------------------------------
(46) (1,162) (4) (101) 0 0 0 0
- -------------------------------------------------------------- ----------------------------------------------------------
(11,272) (310,515) (81,838) (1,986,190) (17,970) (796,197) (25,673) (753,602)
- -------------------------------------------------------------- ----------------------------------------------------------
3,758 $ 87,388 (6,352) $ (179,569) 20,004 $ 992,840 18,445 $ 579,307
============================================================== ==========================================================
<CAPTION>
Mid-Cap Growth Fund Small-Cap Growth Fund
- -------------------------------------------------------------- ----------------------------------------------------------
Period Ended 12/31/1999 Year Ended 6/30/1999 Period Ended 12/31/1999 Year Ended 6/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
- -------------------------------------------------------------- ----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
15,321 $ 338,943 29,207 $ 640,912 494 $ 5,375 3,014 $ 36,581
- -------------------------------------------------------------- ----------------------------------------------------------
980 21,855 4,726 104,472 65 703 157 1,691
- -------------------------------------------------------------- ----------------------------------------------------------
2,582 57,569 9,113 199,882 0 0 0 0
- -------------------------------------------------------------- ----------------------------------------------------------
112 2,801 925 19,896 0 0 206 2,229
- -------------------------------------------------------------- ----------------------------------------------------------
11 280 213 4,543 0 0 5 52
- -------------------------------------------------------------- ----------------------------------------------------------
17 412 665 14,079 0 0 0 0
- -------------------------------------------------------------- ----------------------------------------------------------
(17,518) (394,850) (23,032) (505,497) (1,025) (11,397) (800) (8,682)
- -------------------------------------------------------------- ----------------------------------------------------------
(1,385) (32,391) (3,452) (74,169) (52) (576) (35) (379)
- -------------------------------------------------------------- ----------------------------------------------------------
(4,527) (99,842) (7,361) (157,774) 0 0 0 0
- -------------------------------------------------------------- ----------------------------------------------------------
(4,407) $(105,223) 11,004 $ 246,344 (518) $ (5,895) 2,547 $ 31,492
============================================================== ==========================================================
<CAPTION>
Micro-Cap Growth Fund Equity Income Fund
- -------------------------------------------------------------- ----------------------------------------------------------
Period Ended 12/31/1999 Year Ended 6/30/1999 Period Ended 12/31/1999 Year Ended 6/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
- -------------------------------------------------------------- ----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
633 $ 12,292 4,984 $ 98,906 323 $ 4,318 1,941 $ 28,202
- -------------------------------------------------------------- ----------------------------------------------------------
104 2,074 115 2,225 113 1,558 495 7,079
- -------------------------------------------------------------- ----------------------------------------------------------
0 0 0 0 661 9,192 2,630 38,810
- -------------------------------------------------------------- ----------------------------------------------------------
0 0 339 6,383 1,972 21,189 1,311 18,538
- -------------------------------------------------------------- ----------------------------------------------------------
0 0 4 83 227 2,434 108 1,521
- -------------------------------------------------------------- ----------------------------------------------------------
0 0 0 0 992 10,550 506 7,112
- -------------------------------------------------------------- ----------------------------------------------------------
(2,098) (40,682) (4,495) (84,282) (1,399) (17,939) (3,994) (59,589)
- -------------------------------------------------------------- ----------------------------------------------------------
(29) (567) (171) (3,312) (184) (2,498) (447) (6,530)
- -------------------------------------------------------------- ----------------------------------------------------------
0 0 0 0 (1,209) (15,994) (2,146) (31,549)
- -------------------------------------------------------------- ----------------------------------------------------------
(1,390) $ (26,883) 776 $ 20,003 1,496 $ 12,810 404 $ 3,594
============================================================== ==========================================================
</TABLE>
85
<PAGE>
Notes to Financial Statements (Cont.)
December 31, 1999 (Unaudited)
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>
Value Fund Value 25 Fund
----------------------------------------------------- ------------------------------------------------
Period from 07/10/1998
Period Ended 12/31/1999 Year Ended 6/30/1999 Period Ended 12/31/1999 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 1,539 $ 21,577 1,320 $ 19,355 0 $ 0 45 $ 388
- ------------------------ ----------------------------------------------------- ------------------------------------------------
Administrative Class 485 6,878 1,038 14,684 0 0 0 0
- ------------------------ ----------------------------------------------------- ------------------------------------------------
Other Classes 1,673 24,218 4,533 65,101 317 2,494 460 3,941
- ------------------------ ----------------------------------------------------- ------------------------------------------------
Issued in Reorganization
Institutional Class 0 0 0 0 0 0 0 0
- ------------------------ ----------------------------------------------------- ------------------------------------------------
Issued as reinvestment of
distributions
Institutional Class 1,264 14,559 822 11,141 0 0 0 1
- ------------------------ ----------------------------------------------------- ------------------------------------------------
Administrative Class 349 4,004 144 1,950 0 0 0 0
- ------------------------ ----------------------------------------------------- ------------------------------------------------
Other Classes 1,797 20,545 1,111 14,980 5 36 0 6
- ------------------------ ----------------------------------------------------- ------------------------------------------------
Cost of shares redeemed
Institutional Class (712) (9,544) (2,937) (43,290) (26) (184) (19) (149)
- ------------------------ ----------------------------------------------------- ------------------------------------------------
Administrative Class (505) (7,478) (325) (4,695) 0 0 0 0
- ------------------------ ----------------------------------------------------- ------------------------------------------------
Other Classes (2,800) (39,706) (5,849) (83,212) (256) (1,901) (241) (1,972)
- ------------------------ ----------------------------------------------------- ------------------------------------------------
Net increase (decrease)
resulting from Fund
share transactions 3,090 $ 35,053 (143) $ (3,986) 40 $ 445 245 $ 2,215
======================== ===================================================== ================================================
<CAPTION>
Small-Cap Value Fund
------------------------------------------------------
Period Ended 12/31/1999 Year Ended 6/30/1999
Shares Amount Shares Amount
------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional Class 382 $ 5,655 2,479 $ 37,773
- ------------------------ ------------------------------------------------------
Administrative Class 293 4,388 1,502 22,238
- ------------------------ ------------------------------------------------------
Other Classes 5,086 75,900 12,114 183,088
- ------------------------ ------------------------------------------------------
Issued in Reorganization
Institutional Class 0 0 0 0
- ------------------------ ------------------------------------------------------
Issued as reinvestment of
distributions
Institutional Class 59 797 149 2,202
- ------------------------ ------------------------------------------------------
Administrative Class 24 324 54 790
- ------------------------ ------------------------------------------------------
Other Classes 307 4,107 716 10,426
- ------------------------ ------------------------------------------------------
Cost of shares redeemed
Institutional Class (1,357) (19,900) (1,625) (24,130)
- ------------------------ ------------------------------------------------------
Administrative Class (536) (7,779) (850) (12,454)
- ------------------------ ------------------------------------------------------
Other Classes (6,308) (91,359) (10,906) (160,295)
- ------------------------ ------------------------------------------------------
Net increase (decrease)
resulting from Fund
share transactions (2,050) $ (27,867) 3,633 $ 59,638
======================== ======================================================
<CAPTION>
International Fund
------------------------------------------------------
Period Ended 12/31/1999 Year Ended 6/30/1999
Shares Amount Shares Amount
------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 95 $ 1,133 495 $ 5,567
- ------------------------ ------------------------------------------------------
Administrative Class 416 4,884 1,494 16,127
- ------------------------ ------------------------------------------------------
Other Classes 32,437 402,023 61,433 736,111
- ------------------------ ------------------------------------------------------
Issued as reinvestment of
distributions
Institutional Class 58 652 6 67
- ------------------------ ------------------------------------------------------
Administrative Class 202 2,285 13 129
- ------------------------ ------------------------------------------------------
Other Classes 1,342 15,117 1,045 11,029
- ------------------------ ------------------------------------------------------
Cost of shares redeemed
Institutional Class (54) (649) (189) (2,213)
- ------------------------ ------------------------------------------------------
Administrative Class (439) (5,216) (140) (1,579)
- ------------------------ ------------------------------------------------------
Other Classes (34,272) (426,920) (62,751) (757,207)
- ------------------------ ------------------------------------------------------
Net increase (decrease)
resulting from
Fund share transactions (215) $ (6,691) 1,406 $ 8,031
======================== ======================================================
</TABLE>
86
<PAGE>
<TABLE>
<CAPTION>
Enhanced Equity Fund Tax-Efficient Equity Fund
- ----------------------------------------------------------------- ----------------------------------------------------------------
Period from 07/10/1998
Period Ended 12/31/1999 Year Ended 6/30/1999 Period Ended 12/31/1999 to 06/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
- ----------------------------------------------------------------- ----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
304 $ 3,877 725 $ 8,851 96 $ 1,085 0 $ 0
- ----------------------------------------------------------------- ----------------------------------------------------------------
537 6,748 1,282 15,340 1,501 16,927 307 3,320
- ----------------------------------------------------------------- ----------------------------------------------------------------
0 0 0 0 1,258 14,307 2,619 26,786
- ----------------------------------------------------------------- ----------------------------------------------------------------
0 0 0 0 0 0 0 0
- ----------------------------------------------------------------- ----------------------------------------------------------------
135 1,713 429 4,790 0 0 0 0
- ----------------------------------------------------------------- ----------------------------------------------------------------
84 1,060 181 2,005 0 0 0 0
- ----------------------------------------------------------------- ----------------------------------------------------------------
0 0 0 0 0 0 0 0
- ----------------------------------------------------------------- ----------------------------------------------------------------
(481) (6,188) (759) (9,355) 0 0 0 0
- ----------------------------------------------------------------- ----------------------------------------------------------------
(353) (4,505) (424) (5,174) (257) (2,921) (15) (158)
- ----------------------------------------------------------------- ----------------------------------------------------------------
0 0 0 0 (405) (4,593) (490) (5,032)
- ----------------------------------------------------------------- ----------------------------------------------------------------
226 $ 2,705 1,434 $ 16,457 2,193 $ 24,805 2,421 $ 24,916
================================================================= ================================================================
<CAPTION>
Tax-Efficient Structured
Structured Emerging Markets Fund Emerging Markets Fund
- ----------------------------------------------------------------- ----------------------------------------------------------------
Period Ended 12/31/1999 Year Ended 6/30/1999 Period Ended 12/31/1999 Year Ended 6/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
- ----------------------------------------------------------------- ----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
97 $ 1,170 290 $ 2,664 589 $ 8,114 1,210 $ 12,518
- ----------------------------------------------------------------- ----------------------------------------------------------------
0 0 0 0 0 0 0 0
- ----------------------------------------------------------------- ----------------------------------------------------------------
0 0 0 0 0 0 0 0
- ----------------------------------------------------------------- ----------------------------------------------------------------
0 0 3,558 35,582 0 0 4,416 44,157
- ----------------------------------------------------------------- ----------------------------------------------------------------
250 2,979 135 1,209 37 574 32 300
- ----------------------------------------------------------------- ----------------------------------------------------------------
0 0 0 0 0 0 0 0
- ----------------------------------------------------------------- ----------------------------------------------------------------
0 0 0 0 0 0 0 0
- ----------------------------------------------------------------- ----------------------------------------------------------------
(89) (1,146) (233) (2,261) (78) (1,070) (184) (1,678)
- ----------------------------------------------------------------- ----------------------------------------------------------------
0 0 0 0 0 0 0 0
- ----------------------------------------------------------------- ----------------------------------------------------------------
0 0 0 0 0 0 0 0
- ----------------------------------------------------------------- ----------------------------------------------------------------
258 $ 3,003 3,750 $ 37,194 548 $ 7,618 5,474 $ 55,297
================================================================= ================================================================
</TABLE>
<PAGE>
PIMCO Advisors Holdings L.P. is the nation's fourth largest publicly traded
investment management firm with assets under management in excess of $260
billion. PIMCO Advisors is recognized for providing consistent performance and
high-quality service to mutual fund and institutional clients worldwide.
Its investment firms are:
Pacific Investment Management Company/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.
Units of PIMCO Advisors Holdings L.P. trade on the New York Stock Exchange under
the ticker symbol "PA."
Trustees and Officers
William D. Cvengros,
Chairman and Trustee
Stephen J. Treadway,
President, Chief Executive Officer
and Trustee
E. Philip Cannon, Trustee
Donald P. Carter, Trustee
Gary A. Childress, Trustee
Richard L. Nelson, Trustee
Lyman W. Porter, Trustee
Alan Richards, Trustee
Dr. Joel Segall, Trustee
W. Bryant Stooks, Trustee
Gerald M. Thorne, Trustee
Newton B. Schott, Jr., Secretary
John P. Hardaway, Treasurer
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 $260 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.
<TABLE>
<CAPTION>
<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 State Street Basnk & Trust Co., 801 Pennsylvania,
Kansas City, MO 64105
Shareholder National Financial Data Services, 330 W. 9th Street, 4th Floor
Servicing Agent and Kansas City, MO 64105
Transfer Agent
Independent PricewaterhouseCoopers LLP, 1055 Broadway,
Accountant Kansas City, MO, 64105
Legal Counsel Ropes & Gray, One International Place,
Boston, MA 02110
For Account For PIMCO Funds account information contact your financial
Information adviser, 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.
</TABLE>
This is a copy of a report by PIMCO Funds to its shareholders. Distribution of
this report to persons other than shareholders of the Trust is authorized only
when accompanied by the Trust's Prospectus. This report does not offer for sale
or solicit orders to buy any securities.
This material is authorized for use only when preceded or accompanied by a
current PIMCO Funds prospectus, which describes in greater detail the investment
policies, management fees and other matters of interest to prospective
investors. Please read the prospectus carefully before you invest or send money.
PY002.2/00
[LOGO OF PIMCO FUNDS]
PIMCO Funds
Distributors LLC
2187 Atlantic Street
Stamford, CT 06902-6896
<PAGE>
PIMCO Funds Shareholder Update and Semi-Annual Report
This Update is published twice a year to provide PIMCO Funds shareholders with
general market commentary and fund information. It also includes the financial
report for the PIMCO Funds Multi-Manager Series.
December 31, 1999
Multi-Manager Series
Share Classes
A B C
Capital Appreciation
Equity Income
Growth
Innovation
International
Mid-Cap Growth
Opportunity
Precious Metals
Renaissance
Small-Cap Value
Target
Tax-Efficient Equity
Value
Value 25
[GRAPHIC]
Wondering how to size up your fund's performance? For some tips on choosing the
right market index benchmark, turn to page 4.
Page 2
PIMCO Growth Funds' Market-Beating
Performance
- --------------------------------------------------------------------------------
Page 4 Today's Investor
Your Fund's Market Index Benchmark
- --------------------------------------------------------------------------------
Page 6 Market Review
- --------------------------------------------------------------------------------
Page 7 Manager Spotlight
Dennis McKechnie
- --------------------------------------------------------------------------------
Page 8 In The News
- --------------------------------------------------------------------------------
Page 9 Service Update
Introducing the PIMCO Funds Innovation Center
- --------------------------------------------------------------------------------
Page 10 Overview: Comprehensive Fund Family
- --------------------------------------------------------------------------------
Page 11 PIMCO Funds Multi-Manager Series
Semi-Annual Report
[LOGO OF PIMCO FUNDS]
<PAGE>
A Look at PIMCO's Market
1999 was a very good year
When 1999's annual returns came in, we expect the
shareholders in our four growth-oriented stock funds had smiles on their faces.
All four--PIMCO Innovation Fund, PIMCO Growth Fund, PIMCO Target Fund and PIMCO
Opportunity Fund--soundly outperformed the S&P 500 Index. And they've all
outperformed the Index for since inception periods too.
What's behind these impressive results? Certainly, the stock market's unflagging
bull run and the formidable strength of the tech sector have helped most
growth-oriented funds. But PIMCO's growth funds offer performance that's not
simply pegged to good times. Underlying each Fund's success is a well-defined
investment process, exhaustive research and analysis, strict style discipline
and, of course, the kind of exceptional fund management you've come to expect
from PIMCO Funds.
PIMCO Innovation Fund--a smart way to participate in the new economy
By any measure, PIMCO Innovation Fund had an exceptional 1999, capping it off by
returning a striking 139.4%.
But as impressive as its short-term results are, it's the Fund's long-term
performance that sets it apart. Many tech funds have produced high-flying
results over the last year or two, but few have 5-year numbers like the
Innovation Fund. The Fund's 5-year average annual return of 53.10% is the third
highest of 31 tech funds ranked by Lipper. Moreover, the Innovation Fund has
outperformed both the S&P 500 and the NASDAQ Indices over the 1-, 3-, 5-year and
since inception periods.
In fact, PIMCO Innovation Fund has been delivering solid returns for its
shareholders for a longer period of time than many technology funds have been in
existence. Most of the Innovation Fund's competitors have track records that are
only half as long--or less. And that's important to know, because when you're
evaluating a technology fund--as with any mutual fund--you'll need to look at
long-term performance, not just recent results.
Behind the Innovation Fund's success is tech-savvy Fund manager Dennis McKechnie
and his broad vision of technology. Mr. McKechnie brings a unique blend of
investment experience and technological expertise to the job, which allows him
to identify promising companies and exciting new areas of growth. And by
investing in market leaders across the full breadth of the sector, Mr. McKechnie
has positioned the portfolio to take advantage of the gains occurring in most
tech industries without exposing the portfolio to the risks of a more highly
focused technology fund.
[PHOTO]
Dennis McKechnie
Portfolio Manager,
PIMCO Innovation Fund
PIMCO Growth Funds Soundly Beat the S&P 500 in 1999
1-year annual returns as of 12/31/99
[GRAPH]
139.40% 66.25% 65.06% 41.09% 21.04%
PIMCO PIMCO PIMCO PIMCO S&P 500
Innovation Target Opportunity Growth Index
Fund Fund Fund Fund
2
<PAGE>
Beating Growth Funds
[PHOTO]
Ken Corba
Portfolio Manager,
PIMCO Growth Fund
PIMCO Growth Fund--never a down calendar year
With fund manager Ken Corba at the helm, the large-cap PIMCO Growth Fund
delivered a 1-year return of 41.09%, nearly doubling that of the S&P 500 Index
and beating its Lipper average too. In fact, since its inception in early 1984,
the Fund has amassed a solid short- and long-term performance record--with not a
single down calendar year.
Ken Corba, a PIMCO Managing Director, is a growth purist with over 14 years of
investment experience. He employs a well-defined, disciplined investment
process, beginning by identifying his investment universe and narrowing the list
through thorough bottom-up analysis. This ensures the Fund remains a pure
large-cap growth fund, which makes it an attractive core stock holding for
almost any investment portfolio.
PIMCO Target Fund--investing in tomorrow's market leaders
PIMCO Target Fund didn't just outperform the S&P 500 Index in 1999, its 66.25%
annual return was more than triple that of the Index. And it handily
outperformed the Lipper Mid-Cap Fund Average of 38.29% for the year as well.
What's more, the Target Fund has beaten both the S&P 500 and its Lipper Average
over all time periods.
Fund manager Jeff Parker employs a strict definition of growth stocks with a
mid-cap orientation. In fact, he maintains a purer mid-cap focus than many of
the Fund's peers. And since the mid-cap sector has proven to be a breeding
ground for tomorrow's large-cap leaders, the companies the Fund invests in hold
considerable growth potential. This, coupled with the fact that mid-cap stocks
tend to be less risky than small-cap issues, makes the Fund a smart complement
to most investors' portfolios.
[PHOTO]
Jeff Parker
Portfolio Manager,
PIMCO Target Fund
[PHOTO]
Michael Gaffney
Portfolio Manager,
PIMCO Opportunity Fund
PIMCO Opportunity Fund--a solid way to add small-cap diversity
Since taking over PIMCO Opportunity Fund early in 1999, fund manager Michael
Gaffney has restored the Fund's solid performance record. Last year, the
Opportunity Fund's impressive 65.06% return was more than triple that of the S&P
500 Index. As for long-term performance, the Fund has decisively outperformed
the small-cap Russell 2000 Index over the 1-, 3-, 5-, 10-year and since
inception periods.
The small-cap sector has been overshadowed by large-cap stocks of late but
continues to be a dynamic area of the market with great opportunity for growth.
And Mr. Gaffney, a small-cap specialist, adheres to a strict policy of style
consistency, ensuring that investors will have a pure small-cap investment to
balance their large-cap holdings.
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. All four of the above-mentioned
funds can invest in foreign securities, which can involve special risks due to
foreign economic and political developments. The Innovation Fund concentrates
its portfolio in one sector, making it more volatile than a more diversified
stock fund, and therefore should be considered as only part of a more
diversified portfolio. The Opportunity Fund invests primarily in small-cap
stocks, which entail special risks due to less liquidity and greater price
volatility. Please refer to the appropriate fund profiles within this report for
detailed performance information.
3
<PAGE>
[GRAPHIC]
A Valuable Point Of Reference
Your Fund's Market Index Benchmark
According to the mutual fund trackers at Morningstar, nearly 300 stock funds
delivered triple digit returns for 1999. Should you quickly sell any funds that
didn't do this well? Not so fast. To get a meaningful assessment of how your
stock funds did this year, you need to compare them to an appropriate benchmark.
The role of the measuring stick
For the sake of discussion, assume you invested in a diversified, large-cap
stock fund that returned 35% in 1999. Is that a good return? The answer depends
to a large extent on what you compare it to.
. Compared to the year's top performing fund return of 494%, 35% does not seem
very good. But then the year's top performing fund invested primarily in
small-cap, technology stocks --a much riskier investment than your diversified,
large-cap fund.
. Compared to the year's worst performing fund return of -80%, 35% seems great.
But the year's worst performing fund employed an advanced investment technique
called "shorting" to bet that small-cap, technology stocks as a group would
fall--hardly an "apples to apples" comparison with a diversified, large-cap
fund.
Obviously, the critical factor in your performance evaluation is your
measuring stick. To get the most valuable comparison, you need to choose a
benchmark that more closely mirrors your fund's objective, risk level and
holdings.
Comparing your fund to its peers
One benchmark for mutual funds is an average of competitive funds. The advantage
of choosing a competitive fund average as a benchmark is that you are comparing
your fund to other actively managed mutual funds. The disadvantage is that the
decision about which funds to include in the average is subjective, and has been
a cause for concern in the past. For example, consider the competitive fund
averages published by Lipper, a mutual fund rating agency. In the past, Lipper
grouped funds according to their stated investment objective.
The word "benchmark" originally referred to the mark a surveyor made on a
permanent object to serve as a reference point for land surveys and tidal
observations. Today, the word has assumed a broader meaning and is used to refer
to any general standard of measurement.
But this method was criticized because funds can, and do, wander far from their
objective. As a result, Lipper recently rolled out a new system that groups
funds according to actual portfolio holdings.
Comparing your fund to a market index
The more commonly employed benchmark for mutual funds is a market index. An
index is a select group of holdings that represent the performance of a larger
market.
There are two principal advantages of choosing a market index as a benchmark:
(1) a market index is unmanaged, so any performance difference from your fund
can be readily attributed to your fund manager's efforts; and (2) index
performance is regularly published in the newspaper for easy reference. The
disadvantage of choosing a market index is that you may not be able to find an
index that closely resembles your fund's make-up. This problem has been remedied
greatly, however, by the introduction of more and more specialized indexes in
recent years. Consider which of the following major market indexes might be
appropriate benchmarks for your stock funds.
Dow Jones Industrial Average (DJIA)
The Dow Jones Industrial Average is probably the best known market index, but is
also probably the least useful as a benchmark. The DJIA is comprised of 30
large-cap companies that are meant to represent the stock market as a whole. But
this small number of mostly blue-chip names no longer accurately depicts today's
broad market.
Standard & Poor's 500 Index (S&P 500)
The Standard & Poor's 500 Index is widely regarded as the benchmark for
large-cap stock funds. The Index includes 500 common stocks with
a heavy concentration of large, well-established companies.
Standard & Poor's MidCap 400 Index (S&P 400)
The S&P 400 Index is one of several market indexes considered an acceptable
benchmark for mid-cap stock funds. The Index is comprised of 400 mid-sized
companies.
4
<PAGE>
Russell 2000 Index
The Russell 2000 Index is an appropriate market index benchmark for small-cap
stock funds. The Index includes 2000 small-cap companies widely distributed
across industry sectors.
NASDAQ Composite Index (The NASDAQ)
The NASDAQ stock market has become the most desirable place for technology
companies to list their stocks. As a result, the NASDAQ Composite Index has come
to be considered an accurate benchmark for technology sector funds. The Index
includes all of the domestic and foreign stocks listed on the NASDAQ stock
market, which means there are currently in excess of 5,300 stocks in the Index.
Of these, approximately 70% are in the technology industry.
MSCI EAFE Index
MSCI EAFE stands for Morgan Stanley Capital International--Europe, Australia,
Far East. This Index of foreign stocks is the appropriate benchmark for
international stock funds. The Index has historically been heavily weighted with
Japanese securities, however, so investors in international funds with limited
Japanese holdings may want to turn instead to the MSCI EAFE-ex-Japan Index.
Taking style into consideration
Some investors may want to take their benchmark search to an even higher level
by taking investment style into consideration. This ensures that if you invest
in a small-cap value fund your benchmark index is not a broad collection of
small-cap stocks, but rather just small-cap value stocks. To meet this more
specialized need, you can refer to any one of several growth and value specific
indexes, including the following from Russell:
For large-cap stock funds-
Russell 1000 Growth Index
Russell 1000 Value Index
For mid-cap stock funds-
Russell Mid-Cap Growth Index
Russell Mid-Cap Value Index
For small-cap stock funds-
Russell 2000 Growth Index
Russell 2000 Value Index
Using a benchmark effectively
Once you've identified your fund's market index benchmark, employ the following
guidelines to make the most of your comparisons.
. Keep a long-term perspective With market index data published regularly, it is
easy to fall into the trap of comparing your fund's performance too often.
Remember that investment decisions shouldn't be based on short-term performance.
A fund that does well in one set of market conditions may not be such a star
when those conditions change. Since you're probably investing for the long haul,
it's long-term performance that's crucial, not day to day fluctuations.
. Compare return and risk In addition to checking performance, look at your
fund's risk exposure relative to its benchmark. If your fund is only slightly
behind the index performance but taking less risk, you may want to hang in
there. On the other hand, if your fund is taking more risks than its benchmark
for no extra return, you may want to rethink your investment.
. Develop a personal benchmark You've selected your funds as part of a larger
portfolio that will meet your personal goals. While it is valuable to know how
your fund is performing compared to its market index benchmark, the ultimate
test is how well the fund is meeting your own investment needs. If your fund is
not matching its benchmark but is still playing its role in your portfolio, it's
probably still a keeper.
There are many standards by which to evaluate a mutual fund's performance. We've
only covered a few. To help you determine which benchmarks are the most
appropriate for your investments, talk to your financial advisor. He or she can
also help you ensure that your portfolio is still on track to meet your own
personal goals.
Specialized Market Indexes As Fund Benchmarks
Specialized market indexes can closely track the composition of your fund's
portfolio, making them an appropriate performance benchmark.
If you invest in a The appropriate index is The index is composed of
- --------------------------------------------------------------------------------
Large-cap fund S&P 500 Index 500 large-cap stocks
- --------------------------------------------------------------------------------
Mid-cap fund S&P MidCap 400 Index 400 mid-cap stocks
- --------------------------------------------------------------------------------
Small-cap fund Russell 2000 Index 2000 small-cap stocks
- --------------------------------------------------------------------------------
Technology fund NASDAQ Composite Index All stocks listed on the
NASDAQ stock market,
heavily weighted to
technology stocks
- --------------------------------------------------------------------------------
International fund MSCI EAFE Index Foreign stocks
- --------------------------------------------------------------------------------
The market indexes listed above are unmanaged, and it is not possible to invest
directly in these indexes.
5
<PAGE>
The Stock Market
The Reign of the Bull Market Continues
Market Review
The bull market reigned supreme again in 1999, with a variety of indices,
including the NASDAQ Composite Index and the Dow Jones Industrial Average,
reaching record highs.
In the first quarter of the year, large-cap growth stocks dominated the market,
as they did for much of 1998. However, in the second quarter, the market rotated
towards smaller-capitalization and lower-valuation issues. Rising interest rates
and a global economic recovery resulted in increased demand for basic materials,
which benefited these stocks.
This rotation was short-lived, however, as growth stocks, and in particular
technology stocks, resumed their lead in the third quarter.
In the fourth quarter, despite monetary tightening by the Federal Reserve, the
market continued to surge ahead. It remained dominated by growth-oriented
stocks, which experienced significant price appreciation during the period. This
outstanding performance was seen across all market capitalizations, with
smaller-capitalization securities showing the greatest strength. In particular,
the market was fueled by the technology sector, which continued to show strong
earnings growth.
Overall, technology powered the market this year, greatly overshadowing the
performance of other sectors. Telecommunications, e-commerce and software were
all areas that grew at a rapid pace and, as a result, their stock prices soared.
We believe this sector will remain attractive, as many areas of technology are
still in the early stages of growth.
The outlook remains positive for the equity market. The Federal Reserve's
tightening policy has helped maintain a low-inflation, high-growth economic
environment that investors believe will sustain the current level of equity
prices. We remain cautiously optimistic that the market will continue its
positive performance, albeit at a slower pace than in 1999.
Stocks ascended, despite rising interest rates.
[GRAPH]
Source: Bloomberg
S&P
500
Index
-----
01/01/1999 1,229
01/08/1999 1,275
01/15/1999 1,243
01/22/1999 1,225
01/29/1999 1,280
02/05/1999 1,239
02/12/1999 1,230
02/19/1999 1,239
02/26/1999 1,238
03/05/1999 1,275
03/12/1999 1,295
03/19/1999 1,299
03/26/1999 1,283
04/02/1999 1,294
04/09/1999 1,348
04/16/1999 1,319
04/23/1999 1,357
04/30/1999 1,335
05/07/1999 1,345
05/14/1999 1,338
05/21/1999 1,330
05/28/1999 1,302
06/04/1999 1,328
06/11/1999 1,294
06/18/1999 1,343
06/25/1999 1,315
07/02/1999 1,391
07/09/1999 1,403
07/16/1999 1,419
07/23/1999 1,357
07/30/1999 1,329
08/06/1999 1,300
08/13/1999 1,328
08/20/1999 1,337
08/27/1999 1,348
09/03/1999 1,357
09/10/1999 1,352
09/17/1999 1,335
09/24/1999 1,277
10/01/1999 1,283
10/08/1999 1,336
10/15/1999 1,247
10/22/1999 1,302
10/29/1999 1,363
11/05/1999 1,370
11/12/1999 1,396
11/19/1999 1,422
11/26/1999 1,417
12/03/1999 1,433
12/10/1999 1,417
12/17/1999 1,421
12/23/1999 1,458
12/31/1999 1,469
- --------------------------------------------------------------------------------
The Bond Market
Inflation Expectations on the Rise
Six months ago we suggested the clash between deflationary and inflationary
forces was likely to keep inflation in check, even as the global economy showed
signs of recovery. While this remains likely over the long run, it appears that
several unsustainable forces, including the surging economy, the tight labor
market and rising stock prices, currently have the upper hand. As a result,
inflation fears have flourished and the bond market has suffered.
The Federal Reserve was active over the past six months. The Fed tightened
monetary policy again in August, and attacked the tight labor market in November
by increasing interest rates for a third time in 1999. However, Y2K concerns
prompted the Fed to flood the system with liquidity at year's end, increasing
the likelihood that further tightening will be necessary early next year.
Bond prices fell in many sectors of the market as interest rates continued to
rise. The benchmark 30-year Treasury yield rose to a 27-month high at 6.49%,
while the Lehman Brothers Aggregate Bond Index had its worst performance since
1994.
A notable exception to the overall poor performance of the market was
convertible bonds, which benefited from the spectacular rise in technology
stocks. Emerging market bonds also performed relatively well as the global
recovery supported this sector. Not surprisingly, inflation-indexed bonds were
aided by the expectation of higher inflation.
Looking ahead, the key to bonds next year is a smooth resolution of the
unsustainable forces currently present. We anticipate the economy will moderate
as higher borrowing costs begin to impact, pushing stock market gains back
toward long-term historical norms. In our view inflation will increase over the
short term, but remain stable overall. In this environment, interest rates will
likely remain range bound, making strategies that enhance yield and limit credit
risk attractive to bond investors.
Bond yields continued to move higher.
[GRAPH]
Source: Bloomberg
30-Year
Treasury
Yields (%)
----------
01/01/1999 5.09
01/08/1999 5.27
01/15/1999 5.11
01/22/1999 5.08
01/29/1999 5.09
02/05/1999 5.35
02/12/1999 5.42
02/19/1999 5.39
02/26/1999 5.57
03/05/1999 5.59
03/12/1999 5.52
03/19/1999 5.56
03/26/1999 5.59
04/02/1999 5.59
04/09/1999 5.46
04/16/1999 5.57
04/23/1999 5.60
04/30/1999 5.66
05/07/1999 5.81
05/14/1999 5.92
05/21/1999 5.75
05/28/1999 5.83
06/04/1999 5.96
06/11/1999 6.16
06/18/1999 5.97
06/25/1999 6.15
07/02/1999 6.00
07/09/1999 6.00
07/16/1999 5.88
07/23/1999 6.02
07/30/1999 6.10
08/06/1999 6.17
08/13/1999 6.10
08/20/1999 5.98
08/27/1999 5.98
09/03/1999 6.02
09/10/1999 6.04
09/17/1999 6.06
09/24/1999 5.97
10/01/1999 6.13
10/08/1999 6.19
10/15/1999 6.26
10/22/1999 6.35
10/29/1999 6.16
11/05/1999 6.06
11/12/1999 6.03
11/19/1999 6.16
11/26/1999 6.23
12/03/1999 6.25
12/10/1999 6.17
12/17/1999 6.37
12/23/1999 6.49
12/31/1999 6.48
6
<PAGE>
PIMCO Innovation Fund
Dennis McKechnie
Manager Spotlight
Dennis McKechnie is the portfolio manager of PIMCO Innovation Fund and a
managing director of PIMCO Equity Advisors. He has a degree in electrical
engineering and an MBA in finance--a unique blend of expertise that gives him a
distinct advantage in analyzing the technology sector. We talked to him recently
about the sector and the Innovation Fund.
Q: Technology has had a great run in the past two years. What would you say to
investors who are concerned that tech stocks are overvalued and this run-up will
end soon?
[PHOTO]
A: First, we should provide some context to the "great run" of the past two
years. Much of the recent run of technology began only fourteen months ago in
October 1998 with signs that the Asian economic crisis was subsiding. Technology
stocks began that period at very depressed levels, as they had been one of the
areas most negatively affected by the Asian economic meltdown.
Second, technology now has many separate and distinct sub-segments that give its
current fundamental strength additional staying power. All of the eggs are not
in one basket, so to speak. For instance, we are in the early stages of a
semiconductor pricing cycle at the same time the Internet is uncovering the
power of business-to-business marketplaces.
And finally, with regard to valuations, we are believers that the "New Economy"
does change the game. Technology is central. The demand for effective
information and solutions by non-technology companies is nearly frantic because
the penalty for being late or wrong is so severe. This demand is creating an
enormous pull for technology companies that makes their ability to do better
than expected more predictable. Greater predictability has historically driven
higher valuations.
Q: Could you name a few specific stocks that contributed to PIMCO Innovation
Fund's strong performance this year?
A: Qualcomm was a great performer for the Fund. It benefited from a move towards
a more royalty-based business model. Perhaps more importantly, overall cell
phone demand was well above estimates and steps were taken by the industry to
convert to Qualcomm's Code Division Multiple Access (CDMA) digital technology
standard in the future.
Another stellar performer for the Fund was i2Technologies. This company makes
software that coordinates supply chains for manufacturers, which Fortune 500
companies have identified as a key building block for their migration to
e-commerce.
Q: What lasting effect, if any, has Y2K left on the technology sector?
A: Y2K has had a very positive effect on the technology sector. It has drawn
technology decisions up to the highest levels within corporations. This
increased importance has made it a higher priority, which should lead to higher
spending levels in the future. A side effect of the event is that many companies
are moving to outsource their technology to expert companies off-site. This
creates an excited buyer with large budgets and the most advanced systems,
raising the bar for any other companies that want to stay in the game.
Q: Which areas of technology do you believe offer the most growth potential in
2000?
A: There are a number of them. Wireless Internet, broadband data to the home,
business-to-business Internet, higher performance fiber optic components, and
the semiconductor sector are just a few. If I had to pick one, it would be the
evolution of the wireless Internet. Over the next few years, e-mail and Web
sites will likely become accessible through the phone. Screens will be larger,
coverage will be denser, and offerings will become more complex. We are filling
the Fund with beneficiaries of this trend as they gain traction. There will be
lots of new software for applications, operating systems, performance monitoring
and more. We are doing lots of work in this area.
Q: What is your outlook for the technology sector?
A: We believe that the future for technology is quite bright. We are constantly
uncovering new companies with tremendous opportunity. It is our feeling that
most of the sub-segments of technology are in the early stages of multi-year
growth cycles. Technology will continue to take over larger percentages of the
overall economy.
Past performance is no guarantee of future results. The views of Mr. McKechnie
are not indicative of the future performance of any PIMCO Fund. Concentration of
the Fund's assets in one or a few sectors may entail greater risk than a fully
diversified stock fund and should be considered as only part of a diversified
portfolio. The Fund may also invest in foreign securities which may entail
greater risk due to foreign economic and political developments. Please refer to
page 16 for more complete performance information on the Innovation Fund.
7
<PAGE>
Recent News on PIMCO Funds
The following are highlights from a few of PIMCO Funds, numerous media
appearances. For reprints of these articles, call us at 1-888-87PIMCO.
. A Leading Technology Resource Dennis McKechnie, Portfolio Manager of PIMCO
Innovation Fund, has been in high demand with the leading financial networks
(CNBC and CNN). His wide diversity of technology knowledge has attracted viewers
who want to hear about more than just "dot-com." This expertise has been
acknowledged in print as well. A November 19 article in Investor's Business
Daily focused on PIMCO Innovation Fund's strong performance and Mr. McKechnie's
extensive background in technology.
. Talking about Growth Investing Ken Corba, Portfolio Manager of PIMCO Growth
Fund, and Mike Gaffney, Portfolio Manager of PIMCO Opportunity Fund, appeared
numerous times on CNBC during the second half of the year. Mr. Corba was
featured for his outlook and perspective on the large-cap growth marketplace,
addressing what sectors he viewed as favorable and out of favor. And Mr. Gaffney
demonstrated his analytical expertise within the small-cap growth area, taking
part in Q&A segments regarding the Russell 2000 and its various industries.
. Bill Gross Continues to Receive Highest Accolades Early in 1999 Morningstar
named Bill Gross as its Fixed Income Manager of the Year. Russ Kinnel, Editor of
Morningstar, recently upped the ante by choosing Gross, out of a list of other
notable managers, as "Fund Manager of the Decade...Because no one was nearly as
influential." And Morningstar's not alone in its assessment. Mutual Funds
Magazine (1/00) listed Gross as "the country's foremost fixed-income portfolio
manager," and The Chicago Tribune (11/99) called him "an icon of the bond
market."
Morningstar Inc., an independent organization, provides investors with
information regarding a wide range of investment products. One service offered
by Morningstar is assigning star ratings to the mutual funds it tracks. Funds
begin to be rated once they have a three-year record. The highest Morningstar
rating is five stars, and the lowest rating is one star. Following are the PIMCO
Fund family's five- and four-star rated Funds as of December 31, 1999.
- --------------------------------------------------------------------------------
PIMCO STOCK FUNDS Overall 3 Year 5 Year 10 Year
- --------------------------------------------------------------------------------
Innovation ***** 5 5 -
StocksPLUS ***** 4 5 -
Target **** 4 4 -
Growth **** 4 4 4
Capital Appreciation **** 4 4 -
- --------------------------------------------------------------------------------
PIMCO BOND FUNDS Overall 3 Year 5 Year 10 Year
- --------------------------------------------------------------------------------
Total Return ***** 4 4 5
Low Duration ***** 5 5 5
Short-Term ***** 5 5 5
High Yield ***** 5 5 -
Foreign Bond ***** 4 5 -
The chart above is based on December 31, 1999 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 3,469, 2,180 and
770 domestic equity funds and 1,617, 1,221 and 387 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 Renaissance C,
Growth C and Innovation C, ratings are based on institutional class shares.
Class A, B and C shares, which were initially offered on 1/17/97, have not yet
been rated by Morningstar. Had Class A, B and C shares been in existence for the
same time period as the institutional class shares, they may have received
different ratings due to Class A, B and C shares' higher expense and sales
charges. Ratings for other share classes of Renaissance, Growth and Innovation
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.
8
<PAGE>
Service Update
What's new @ www.pimcofunds.com
Introducing the PIMCO Funds Innovation Center:
Your Guide to the Technology Sector
The latest addition to the PIMCO Funds Web site is our new Innovation Center,
designed to give investors access to the unique insights of PIMCO Innovation
Fund manager Dennis McKechnie and his investment team.
Whether you already have technology holdings or are eager to begin investing in
this dynamic sector, you'll find the Innovation Center to be a useful resource.
Mr. McKechnie's broad vision of technology is reflected in the Center's
wide-ranging content, including timely articles, commentary and analysis to help
you gain a more complete understanding of the vast technology landscape--from
semiconductors to the Internet, cell phones to computer software.
Here are some highlights from the PIMCO Funds Innovation Center:
. Insight From Dennis McKechnie As manager of PIMCO Innovation Fund, Dennis
McKechnie has delivered impressive results for investors. You can read about his
investment process and strategy and benefit from his extensive background in
technology. And make sure to check out our special profile of Mr. McKechnie to
see how his tech background sets him apart from most other technology fund
managers.
. Manager Commentary Our management team brings its expertise right to your
desktop with weekly analysis and insight into the tech sector.
. Tech Sector Breakdown Learn about PIMCO's unique view of the trends and themes
that characterize this exciting sector.
. Taking Stock Detailed profiles of some of the Innovation Fund's top tech
holdings.
. Innovation, a Monthly Newsletter Download this monthly newsletter in its
entirety, in a user-friendly PDF format.
. Manager Q&A PIMCO Funds managers provide analysis of the market and commentary
on their funds.
. Archives Archives of daily manager commentaries are available for your
reference.
. News Read what others have to say about PIMCO Funds and our talented
management team.
Technology is a fast-paced, rapidly changing sector of the economy. And the
PIMCO Funds Innovation Center can help you keep pace with it. Make sure to visit
regularly for the most current information. To get started, go to
www.pimcofunds.com and choose the "Innovation Center" link from the PIMCO Funds
Home Page.
[GRAPHIC]
Make sure to visit the PIMCO Funds Innovation Center--a new source of timely
information and analysis about the tech sector from PIMCO Innovation Fund
manager Dennis McKechnie and his investment team.
9
<PAGE>
The PIMCO Funds Family
PIMCO Funds offers unique access to the investment expertise of PIMCO Advisors
L.P. PIMCO manages over $260 billion, including assets for 46 of the 100 largest
U.S. corporations. The firm's institutional heritage is reflected in the PIMCO
Funds, each seeking the highest caliber performance in a specific investment
style. To learn more about any of the PIMCO Funds, please call us at
1-888-87-PIMCO.
<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 ---------------------------------------------------------------------------------------------------------
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
Stock Funds the manager believes are reasonably
priced
---------------------------------------------------------------------------------------------------------
Mid-Cap Growth Growth of capital Stocks of medium-capitalized companies
the manager believes are reasonably
priced
- ------------------------------------------------------------------------------------------------------------------------------------
Value Equity Income Current income and long-term growth Stocks of companies with below-average
Stock Funds P/Es and above-average dividends
---------------------------------------------------------------------------------------------------------
Renaissance Long-term growth of capital and Stocks with below-average valuations
income
---------------------------------------------------------------------------------------------------------
Value Long-term growth of capital and Stocks of companies with below-average
income P/Es
---------------------------------------------------------------------------------------------------------
Small-Cap Value 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
- ------------------------------------------------------------------------------------------------------------------------------------
Short Duration Money Market Maximum current income, consistent Money market securities (less than or
Bond Funds with preservation of capital and equal to 90 days)
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 Shorter-term, investment grade bonds (1-3
year duration)
- ------------------------------------------------------------------------------------------------------------------------------------
Intermediate Duration Total Return Maximum total return Intermediate-term, investment grade bonds
Bond Funds (3-6 year duration)
- ------------------------------------------------------------------------------------------------------------------------------------
Long Duration Long-Term U.S. Government Maximum total return Long-term U.S. government bonds
Bond Funds (8+ year duration)
- ------------------------------------------------------------------------------------------------------------------------------------
International Global BondII Maximum total return Investment grade U.S. and foreign bonds
Bond Funds (3-7 year duration)
- ------------------------------------------------------------------------------------------------------------------------------------
Foreign Bond Maximum total return Investment grade foreign bonds (3-7 year
duration)
---------------------------------------------------------------------------------------------------------
Emerging Markets Bond Maximum total return Emerging market bonds (0-8 year duration)
- ------------------------------------------------------------------------------------------------------------------------------------
High Yield Bond Funds High Yield Maximum total return High-yield bonds (2-6 year duration)
- ------------------------------------------------------------------------------------------------------------------------------------
Inflation-Indexed Real Return Bond Maximum total return Inflation-adjusted government bonds
Bond Funds
- ------------------------------------------------------------------------------------------------------------------------------------
Convertible Convertible Maximum total return Convertible securities
Bond Funds
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Exempt Municipal Bond High current income exempt from Investment grade municipal bonds (3-10
Bond Funds federal taxes, preservation of year duration)
capital
---------------------------------------------------------------------------------------------------------
California Interm. High current income exempt from Investment grade municipal bonds (3-7 yr.
Municipal Bond Fund federal and California income tax avg. duration)
---------------------------------------------------------------------------------------------------------
New York Interm. High current income exempt from Investment grade municipal bonds (3-7 yr.
Municipal Bond Fund federal and New York income tax avg. duration)
- ------------------------------------------------------------------------------------------------------------------------------------
Stock and Bond Funds Strategic Balanced Maximum total return S&P Index Futures and short- and
intermediate-term investment grade bonds
---------------------------------------------------------------------------------------------------------
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 PIMCO
and current income Bond Funds
---------------------------------------------------------------------------------------------------------
30/70 Portfolio Current income, with long-term 30% in PIMCOStock Funds and 70% in PIMCO
capital appreciation as a Bond Funds
secondary objective
</TABLE>
For more information on the risks associated with these Funds, see page 29.
10
<PAGE>
Multi-Manager Series
PIMCO Funds Semi-Annual Report
Dear Shareholder:
Last year was a banner year for the stock market--a fitting conclusion to a
century of unprecedented economic expansion.
Despite some dips along the way, all the major stock indexes experienced
exceptional growth in 1999. The Dow was up 27 percent. The S&P 500 rose 21
percent. And the NASDAQ Index climbed a stunning 86 percent --a clear indication
of the dominant role the technology sector has played in the stock market's
tenacious bull run.
For bonds, on the other hand, 1999 was a turbulent time. Most bond sectors
reacted negatively to the continued strength of the economy and to rising
interest rates. In fact, it was the first year since 1994 that the bond market
reported negative returns.
In the first few hours and days of the new millennium, however, there was a
giant sigh of relief as the Y2K bug turned out to be, at most, a minor glitch
rather than a major catastrophe. And here at PIMCO, our Y2K preparations stood
us in good stead as the New Year came in without a hitch.
It was another good year for PIMCO's equity funds, too, as they continued to
experience strong relative performance across the board. Of special note is the
market-beating performance of our four growth-oriented funds. While past
performance is no indication of future results, all four funds--PIMCO Growth,
Target, Opportunity and Innovation Funds--beat the S&P 500 Index by a
considerable margin.
On the following pages we present detailed information on all the stock funds in
our Multi-Manager Series. I encourage you to review the information and
commentary carefully. And once again, I'd like to thank you for the trust you've
placed in us through your investment. We will continue to work hard to help you
meet your financial objectives.
If you have any questions regarding your investment, contact your financial
advisor, or call us at 1-888-87-PIMCO. Or visit our Web site at
www.pimcofunds.com.
Sincerely,
/s/ Stephen Treadway
Stephen Treadway
President
January 31, 2000
PIMCO Advisors Holdings L.P. (NYSE:PA), its operating subsidiary PIMCO Advisors
L.P. and Allianz AG (EURO:ALV) announced that they have reached a definitive
agreement for Allianz AG to acquire majority ownership of PIMCO Advisors,
including all of the interests held at PIMCO Advisors Holdings L.P. Under the
terms of the agreement, at the closing the units of PA Holdings will be
exchanged by way of a merger and there will be no further public ownership of
PIMCO Advisors. Additionally, key employees at each of PIMCO Advisors'
investment units, including PIMCO's Bill Gross, have significant profit-sharing
and retention arrangements to ensure continuity of the investment process and
staff.
- --------------------------------------------------------------------------------
We at PIMCO spent significant time and resources preparing for Year 2000. As a
consequence, we are pleased to report that we made it through the Year 2000
transition period successfully, and that all our systems and processes continue
to function normally. While we expect that the great majority of the risk from
this event is now behind us, it is still possible that the "Year 2000 bug" might
result in system failures. In this regard, we would like to remind you that
while we are dedicated to avoiding problems arising from Year 2000, we cannot
guarantee investment performance or that Year 2000 will not result in losses./1/
1 This is a Year 2000 Readiness Disclosure dated January 31, 2000.
11
<PAGE>
PIMCO Funds Financial Information
We are pleased to present an in-depth review of the PIMCO Multi-Manager Series
Funds as of December 31, 1999. 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 13-27 Fund Summaries
A summary of a Fund's performance record and portfolio composition, and a review
from the Fund's investment manager.
Pages 28-45 Schedule of Investments
The Schedule of Investments includes a listing of securities in the Fund's
portfolio as of December 31, 1999, including the number of shares or principal
amount and value as of that date.
Schedule of
Fund Name Fund Summary Investments
Capital Appreciation Fund Page 13 Page 28
Equity Income Fund Page 14 Page 29
Growth Fund Page 15 Page 30
Innovation Fund Page 16 Page 31
International Fund Page 17 Page 32
Mid-Cap Growth Fund Page 18 Page 35
Opportunity Fund Page 19 Page 36
Precious Metals Fund Page 20 Page 37
Renaissance Fund Page 21 Page 38
Small-Cap Value Fund Page 22 Page 39
Target Fund Page 23 Page 40
Tax-Efficient Equity Fund Page 24 Page 41
Value Fund Page 25 Page 44
Value 25 Fund Page 26 Page 45
Pages 46-55 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 Funds, and more
detailed information about the schedules and tables that appear in the report.
12
<PAGE>
December 31, 1999
PIMCO Capital Appreciation Fund
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
$957.4 million
NUMBER OF SECURITIES IN THE PORTFOLIO
87 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital Management
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
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>
6 month 13.80% 7.54% 13.36% 8.70% 12.45% 7.71% 10.97%
1 year 22.19% 15.47% 21.30% 16.31% 20.32% 21.04% 22.49%
3 years 24.17% 21.85% 23.28% 22.62% 23.27% 27.56% 21.79%
5 years 27.00% 25.57% 26.07% 25.92% 26.07% 28.56% 23.07%
Inception 19.60% 18.84% 18.89% 18.89% 18.72% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO PIMCO PIMCO S&P 500
Capital Capital Capital Index
Month 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
</TABLE>
* Past performance is no guarantee of future results.The adjusted returns above
include the effect of applicable sales charges. Excluding the 6-month and
1-year returns, these returns represent the blended performance of the Fund's
retail class shares (for the period from 1/20/97) and the prior performance of
the Fund's institutional class shares (for the period from 3/8/91), adjusted,
as necessary, to reflect retail share current sales charges and different
operating expenses. See page 27 for Footnotes, which include additional
details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- ---------------------------------------------------------
Cisco Systems, Inc. 2.3%
Internet networking
- ---------------------------------------------------------
General Electric Co. 2.2%
Electronics
- ---------------------------------------------------------
Oracle Corp. 2.1%
Software products
- ---------------------------------------------------------
Wal-Mart Stores, Inc. 2.1%
Retail
- ---------------------------------------------------------
Home Depot, Inc. 1.8%
Retail
- ---------------------------------------------------------
Motorola, Inc. 1.7%
Electronics & software
- ---------------------------------------------------------
Applied Materials, Inc. 1.7%
Semiconductors
- ---------------------------------------------------------
Royal Dutch Petroleum Co. 1.7%
Petroleum refining
- ---------------------------------------------------------
Immunex Corp. 1.7%
Chemical & allied products
- ---------------------------------------------------------
JDS Uniphase Corp. 1.7%
Telecommunications
- ---------------------------------------------------------
Top Ten Total 19.0%
- ---------------------------------------------------------
Top 5 Industries % of Total Investments
- ---------------------------------------------------------
Technology 40.1%
- ---------------------------------------------------------
Financial & Business Services 13.6%
- ---------------------------------------------------------
Consumer Discretionary 10.4%
- ---------------------------------------------------------
Capital Goods 6.7%
- ---------------------------------------------------------
Health Care 6.2%
- ---------------------------------------------------------
Portfolio Composition
- ---------------------------------------------------------
Common Stock 99.6%
- ---------------------------------------------------------
Cash Equivalents 0.4%
- ---------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO Capital Appreciation Fund turned in a solid performance for the six months
ended December 31, 1999, returning 13.80% for Class A shares, and handily
outperforming the S&P 500 Index return of 7.71% for the same period.
The technology sector was the greatest contributor to the Fund's
performance during this period. In particular, companies whose products address
business-to-business e-commerce needs, such as Oracle and Siebel Systems,
experienced strong price appreciation. This area of technology has become
critically important to companies seeking to participate in commerce on the
Internet. Another technology company that proved to be a strong performer for
the Fund was Cisco Systems. Cisco, which makes the networking hardware that
forms the backbone of the Internet, benefited from strong demand for its
Internet infrastructure equipment and its optical networking capabilities.
The healthcare sector also aided the Fund's performance, particularly in
the area of biotechnology. Immunex, the maker of the leading drug used for the
treatment of rheumatoid arthritis, saw its stock experience tremendous price
appreciation due to positive prescription trends as well as strong evidence that
its drug can be used to treat other ailments. Genentech, another biotech
company, turned in a strong performance as a result of its strong product
pipeline. In addition, Warner Lambert also posted positive returns, benefiting
from the success of its cholesterol drug, Lipitor.
The Fund also benefited from its exposure to the consumer discretionary
sector. In particular, Home Depot, the leader in home improvement retailing,
experienced a significant increase in sales due to a strong domestic economy,
which translated into a home buying and home renovating boom.
One disappointment for the Fund during this period was Tyco, the
manufacturing conglomerate. The company's stock price suffered as a result of
concerns over its accounting practices regarding its acquisitions. However, the
manager believes Tyco's accounting practices are sound and that the company
still has tremendous growth potential.
Looking ahead, the manager is optimistic that the Fund is poised to
continue its outperformance. The manager believes that its philosophy of
purchasing stocks of growing, profitable companies at sensible prices should
bode well for the Fund, especially as investors realize the importance of
reasonable valuation in growth investing.
13
<PAGE>
December 31, 1999
PIMCO Equity Income Fund
OBJECTIVE
Current income as a primary objective and long-term growth of capital
PORTFOLIO
Income-producing common stocks of companies with market capitalizations of more
than $2 billion
FUND INCEPTION DATE
3/8/91
TOTAL NET ASSETS
$156.1 million
NUMBER OF SECURITIES IN THE PORTFOLIO
48 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
NFJ Investment Group
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
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>
6 month -11.47% -16.60% -11.98% -15.44% -12.69% 7.71% -5.09%
1 year -2.31% -7.67% -2.93% -6.71% -3.81% 21.04% 3.34%
3 years 11.37% 9.29% 10.58% 9.93% 10.55% 27.56% 13.07%
5 years 17.31% 15.99% 16.47% 16.26% 16.45% 28.56% 17.27%
Inception 13.81% 13.09% 13.14% 13.14% 12.97% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO PIMCO PIMCO S&P 500
Equity Equity Equity Index
Month Income A Income B Income C
<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
</TABLE>
* Past performance is no guarantee of future results. The adjusted returns above
include the effect of applicable sales charges. Excluding the 6-month and
1-year returns, these returns represent the blended performance of the Fund's
retail class shares (for the period from 1/20/97) and the prior performance of
the Fund's institutional class shares (for the period from 3/8/91), adjusted,
as necessary, to reflect retail share current sales charges and different
operating expenses. See page 27 for Footnotes, which include additional
details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------
USX-U.S. Steel Group, Inc. 4.1%
Steel mfr
- --------------------------------------------------------
Harris Corp. 4.1%
Communications, semiconductors
- --------------------------------------------------------
Deluxe Corp. 4.0%
Printing & publishing
- --------------------------------------------------------
Morgan, J.P. & Co., Inc. 3.9%
Financial services
- --------------------------------------------------------
Union Planters Corp. 3.9%
Financial services
- --------------------------------------------------------
BFGoodrich Co. 2.2%
Aerospace & performance materials
- --------------------------------------------------------
Ohio Casualty Corp. 2.1%
Insurance carriers
- --------------------------------------------------------
Edwards (A.G.), Inc. 2.1%
Financial services
- --------------------------------------------------------
GATX Corp. 2.1%
Transportation services
- --------------------------------------------------------
Northrop Grumman Corp. 2.1%
Aerospace electronics
- --------------------------------------------------------
Top Ten Total 30.6%
- --------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------
Financial & Business Services 21.7%
- --------------------------------------------------------
Consumer Discretionary 16.4%
- --------------------------------------------------------
Energy 11.9%
- --------------------------------------------------------
Utilities 10.1%
- --------------------------------------------------------
Consumer Staples 9.1%
- --------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------
Common Stock 100.0%
- --------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-month period ended December 31, 1999, PIMCO Equity Income Fund
returned -11.47% for Class A shares.
The technology sector dominated the market dramatically in the third and
fourth quarters--to the exclusion of virtually all other sectors, which hurt the
performance of PIMCO Equity Income Fund. The Fund, which has an investment
universe that focuses on dividend-yielding stocks with low fundamental
valuations, had virtually no exposure to the sector and therefore did not
participate in its strong returns.
The Fund did benefit from its exposure to basic industries. For instance,
Fund holding Springs Industries, a textile manufacturer, turned in a good
performance during this period. It benefited from a recovery in the global
economy, particularly Asia, which boosted its sales. In addition, the company's
home furnishing division experienced an increase in sales due to the current
housing boom.
Another positive sector for the Fund during this period was energy. The
worldwide economic recovery has stimulated commerce, which in turn increased
corporate demand for energy. The sector also benefited from the tightening of
OPEC's oil production, which gave it greater pricing power.
The utility industry underperformed during this period. A historically
interest rate-sensitive sector, utility companies discovered that the second
half of 1999 was no exception. The rise in interest rates during the third and
fourth quarters, which negatively affected corporate borrowing as well as profit
margins, caused investors to punish this industry.
A disappointment for the Fund during this period was J.C. Penney. The
company's stock price suffered as a result of lagging same store sales as well
as a management turnaround plan that included decreasing the dividend paid by
the company to common shareholders. However, the manager remains optimistic
about the company, which has a relatively new e-commerce division that has
already exceeded expectations.
It should be noted that, at or around the time of the closing of the PIMCO
Advisors-Allianz transaction, the day-to-day management of PIMCO Equity Income
Fund will be assumed by PIMCO Equity Advisors. The Fund's philosophy of
investing in dividend-paying, undervalued securities will remain in place.
14
<PAGE>
December 31, 1999
PIMCO Growth Fund
OBJECTIVE
Long-term growth of capital; income is incidental
PORTFOLIO
Primarily common stocks of larger, well-established companies
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*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
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>
6 month 30.59% 23.40% 29.91% 24.91% 28.91% 7.71% 22.22%
1 year 41.09% 33.33% 39.78% 34.78% 38.83% 21.04% 38.09%
5 years 29.82% 28.36% 28.80% 28.65% 28.80% 28.56% 30.14%
10 years 19.67% 18.99% 19.06% 19.06% 18.77% 18.21% 19.36%
Inception 20.14% 19.71% 19.75% 19.75% 19.25% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO PIMCO PIMCO S&P 500
Month Growth A Growth B Growth 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
</TABLE>
* Past performance is no guarantee of future results. The adjusted returns above
include the effect of paying the applicable sales charges. Class A and B
shares commenced operations after the inception date shown. Total return for
the periods shown before the inception of Class A and B shares reflects the
performance for this Fund's oldest class of shares (Class C), adjusted to
reflect any current sales charges and any different operating expenses
associated with those shares. Had Class A share returns been adjusted to
reflect the different sales charges, but without regard to the lower operating
expenses of Class A shares, the adjusted total return figures for the 10-year
and since inception periods would have been lower, namely 18.92% and 19.34%,
respectively. See page 27 for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- -------------------------------------------------------
Nokia Corp. SP- ADR 6.6%
Telecommunications
- -------------------------------------------------------
EMC Corp. 5.7%
Hardware & software products
- -------------------------------------------------------
Cisco Systems, Inc. 5.6%
Internet networking
- -------------------------------------------------------
Home Depot, Inc. 4.4%
Retail
- -------------------------------------------------------
Microsoft Corp. 4.0%
Computer services
- -------------------------------------------------------
Morgan Stanley, Dean Witter, 3.7%
Discover and Co.
Financial svcs.
- -------------------------------------------------------
Qualcomm, Inc. 3.7%
Wireless communication
- -------------------------------------------------------
Wal-Mart Stores, Inc. 3.6%
Retail
- -------------------------------------------------------
Omnicom Group 3.5%
Advertising svcs
- -------------------------------------------------------
Citigroup, Inc. 3.4%
Financial svcs
- -------------------------------------------------------
Top Ten Total 44.2%
- -------------------------------------------------------
Top 5 Industries % of Total Investments
- -------------------------------------------------------
Technology 38.7%
- -------------------------------------------------------
Communications 17.1%
- -------------------------------------------------------
Financial & Business Services 16.7%
- -------------------------------------------------------
Consumer Discretionary 12.8%
- -------------------------------------------------------
Health Care 7.3%
- -------------------------------------------------------
Portfolio Composition
- -------------------------------------------------------
Common Stock 98.4%
- -------------------------------------------------------
Cash Equivalents 1.6%
- -------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six months ended December 31, 1999, PIMCO Growth Fund returned 30.59%
for Class A shares. This handily outperformed the S&P 500 Index return of 7.71%
and the Lipper Large-Cap Growth Fund Average return of 22.22%.
Technology was the best performing sector for the Fund during this period.
The sector benefited from an increase in corporate spending, as companies
recognized technology's ability to boost profit margins. Technology, an
important part of the "New Economy," led the market in the second half of 1999,
as it offered investors the greatest earnings growth potential of any sector.
Nokia, the Finnish cell phone equipment maker, was a standout within technology.
The company saw its stock price rise during this period as a result of increased
demand for cell phone handsets, which resulted from new subscription growth as
well as shorter upgrade cycles for current subscribers.
Another standout performer for the Fund was EMC, the data storage company.
Corporate demand for data storage continued to grow at a fast clip in the second
half of the year. With an approximately 85% market share in this area, EMC is
the greatest beneficiary of this trend. As the capabilities of computers and
networks continue to increase, the need for data storage will grow even further.
The retail sector also positively contributed to the Fund's performance.
Home Depot and Wal-Mart, both leaders in their market category, benefited from a
strong domestic economy that fueled an increase in retail sales.
The Fund was also helped by its exposure to the financial services sector,
despite the rising interest rate environment. Fund holding Morgan Stanley Dean
Witter 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 period was the pharmaceutical
industry. These companies suffered from a thinning product pipeline and an
unfavorable political environment. They were punished by investors, who were
displeased with the sector's slowing growth in the face of rising interest
rates.
Looking ahead, the manager remains cautiously optimistic about the market's
prospects. He expects a slowdown in the market's acceleration in the near term,
but believes that the current environment continues to favor growth
stocks--which should benefit PIMCO Growth Fund.
15
<PAGE>
December 31, 1999
PIMCO Innovation Fund
OBJECTIVE
Capital appreciation; no consideration given to income
PORTFOLIO
Primarily technology-related stocks of companies of all sizes
FUND INCEPTION DATE
12/22/94
TOTAL NET ASSETS
$3.5 billion
NUMBER OF SECURITIES IN THE PORTFOLIO
54 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
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>
6 month 94.16% 83.48% 94.10% 89.10% 93.10% 7.71% 73.24%
1 year 139.40% 126.24% 138.51% 133.51% 137.44% 21.04% 134.77%
3 years 67.31% 64.18% 66.22% 65.86% 66.21% 27.56% 53.65%
5 years 53.10% 51.38% 52.06% 51.98% 52.05% 28.56% 40.91%
Inception 52.72% 51.01% 51.68% 51.65% 51.68% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
<TABLE>
<CAPTION>
PIMCO PIMCO PIMCO S&P 500
Month Innovation A Innovation B Innovation 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 81,187 81,258 35,112
</TABLE>
* Past performance is no guarantee of future results. The adjusted returns above
include the effect of paying the applicable sales charges. Class B shares
commenced operations after the inception date shown. Total return for the
periods shown before the inception of Class B shares reflects the performance
for this Fund's oldest class of shares, adjusted to reflect any current sales
charges and any different operating expenses for those shares. See page 27 for
Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- -------------------------------------------------------
Qualcomm, Inc. 4.1%
Wireless communication
- -------------------------------------------------------
Oracle Corp. 3.9%
Software products
- -------------------------------------------------------
i2 Technologies, Inc. 3.8%
Software solutions
- -------------------------------------------------------
Doubleclick, Inc. 3.2%
Internet advertising
- -------------------------------------------------------
Ariba, Inc. 3.2%
Business to business
- -------------------------------------------------------
Cisco Systems, Inc. 2.9%
Internet networking
- -------------------------------------------------------
Gemstar International Group Ltd. 2.6%
Business solutions
- -------------------------------------------------------
Vignette Corp. 2.5%
Business svcs.
- -------------------------------------------------------
Siebel Systems, Inc. 2.5%
Business solutions
- -------------------------------------------------------
QLogic Corp. 2.5%
Semiconductors
- -------------------------------------------------------
Top Ten Total 31.2%
- -------------------------------------------------------
Top 5 Industries % of Total Investments
- -------------------------------------------------------
Technology 66.8%
- -------------------------------------------------------
Communications 7.9%
- -------------------------------------------------------
Financial & Business Services 6.5%
- -------------------------------------------------------
Health Care 6.4%
- -------------------------------------------------------
Consumer Discretionary 4.8%
- -------------------------------------------------------
Portfolio Composition
- -------------------------------------------------------
Common Stock 92.5%
- -------------------------------------------------------
Cash Equivalents 7.5%
- -------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO Innovation Fund turned in stellar results for the six-month period ended
December 31, 1999, returning 94.16% for Class A shares. This handily
outperformed the S&P 500 Index return of 7.71% for the same period.
Software was an area of strength for the Fund during this period. Having
completed their spending on Y2K preparedness, companies increased their
expenditures on other areas of information technology that had been neglected,
such as software. In particular, i2 Technologies, a maker of supply-chain
management software, benefited from this trend. Its software, which has
e-commerce applications, is used by companies such as Dell to manage the
ordering, production and shipping of products. The company has seen a rapid
increase in sales of its software and still has substantial growth potential, as
a large untapped market exists. For instance, only about 10% of Fortune 500
companies have Web sites on which business can actually be conducted. This
number is expected to reach nearly 100% in the next eighteen months, which
should greatly benefit software companies such as i2.
Another strong area for the Fund was telecommunications, which has seen
tremendous growth recently. Nokia continued to benefit from the increase in cell
phone subscriptions stimulated by `one-rate' plans. In addition, Nokia benefited
from the many recent technological advances in cell phone handset technology,
which has shortened upgrade cycles for cell phones. The explosion in
telecommunications has also benefited companies such as JDS Uniphase, a maker of
fiber-optic components for telecom networks. The company saw its sales rise as a
result of burgeoning demand for faster and more efficient networks.
Although technology led the market during this period, some non-tech
innovators also experienced strong price appreciation. In particular,
biotechnology stocks enhanced the Fund's performance. These companies, which
were funded five to seven years ago, are now bringing exciting products to
market and are showing strong revenues. For instance, Fund holdings Medimmune
and IDEC Pharmaceuticals both benefited from better-than-expected prescription
trends for their key products. We believe this area continues to have growth
potential, as many biotech companies have strong product pipelines.
Looking ahead, the manager's outlook remains positive for technology, as he
believes it is still in the early stages of a multi-year growth cycle. The
market continues to see technology as the sector that will define the economy's
future, and this should bode well for PIMCO Innovation Fund.
16
<PAGE>
December 31, 1999
PIMCO International Fund
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
$153.7 million
NUMBER OF SECURITIES IN THE PORTFOLIO
289 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Blairlogie Capital Management (an independent sub-advisor not owned by PIMCO
Advisors L.P.)
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
A Shares B Shares C Shares MSCI Lipper
EAFE International
Adjusted Adjusted Adjusted Index Fund Avg.
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
6 month 21.66% 14.98% 21.35% 16.35% 20.37% 22.29% 30.84%
1 year 27.61% 20.59% 26.97% 21.97% 26.00% 27.31% 40.81%
5 years 10.20% 8.96% 9.41% 9.13% 9.40% 13.15% 15.05%
10 years 7.04% 6.43% 6.49% 6.49% 6.24% 7.34% 10.22%
Inception 8.63% 8.17% 8.21% 8.21% 7.83% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO PIMCO PIMCO MSCI
Month International A International B International 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
</TABLE>
* Past performance is no guarantee of future results. The adjusted returns above
include the effect of paying the applicable sales charges. Class A and B
shares commenced operations after the inception date shown. Total return for
the periods shown before the inception of Class A and B shares reflects the
performance for this Fund's oldest class of shares (Class C), adjusted to
reflect any current sales charges and any different operating expenses
associated with those shares. Had Class A share returns been adjusted to
reflect the different sales charges, but without regard to the lower operating
expenses of Class A shares, the adjusted total return figures for the 10-year
and since inception periods would have been lower, namely 6.34% and 7.91%,
respectively. See page 27 for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- ------------------------------------------------------
United Kingdom/WEBS Index Fund 3.3%
- ------------------------------------------------------
Germany/Deutsche Telekom AG 2.7%
- ------------------------------------------------------
Sweden/MSCI Sweden Opal Series B 2.5%
- ------------------------------------------------------
Finland/Nokia OYJ 2.3%
- ------------------------------------------------------
Hungary/Magyar Tavkozlesi Rt. 2.0%
- ------------------------------------------------------
France/France Telecom SA 1.7%
- ------------------------------------------------------
Japan/Murata Manufacturing Co. 1.7%
- ------------------------------------------------------
Turkey/Turkiye Is Bankasi 'C' 1.5%
- ------------------------------------------------------
Japan/Toyota Motor Corp. 1.4%
- ------------------------------------------------------
Japan/Nippon Telegraph & Telephone 1.4%
- ------------------------------------------------------
Top Ten Total 20.5%
- ------------------------------------------------------
Top 5 Countries % of Total Investments
- ------------------------------------------------------
Japan 18.2%
- ------------------------------------------------------
Germany 13.3%
- ------------------------------------------------------
France 10.9%
- ------------------------------------------------------
Switzerland 5.1%
- ------------------------------------------------------
Turkey 5.1%
- ------------------------------------------------------
Regional Breakdown
- ------------------------------------------------------
Europe 58.1%
- ------------------------------------------------------
Asia 30.8%
- ------------------------------------------------------
Latin America 6.1%
- ------------------------------------------------------
Australia 1.4%
- ------------------------------------------------------
Portfolio Composition
- ------------------------------------------------------
Common Stock 96.4%
- ------------------------------------------------------
Cash Equivalents 3.6%
- ------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-month period ended December 31, 1999, PIMCO International Fund
posted a return of 21.66% for Class A shares.
Exposure to Europe positively contributed to the Fund's performance during
this period, as economic growth in this region was strong. Germany, a country in
which the Fund is overweight, experienced a significant recovery in its economy
in 1999 after having flirted with recession in 1998. In particular, top ten
holding Deutsche Telekom, the German telecommunications company, benefited from
the explosive growth in cell phone handset subscriptions as well as
infrastructure buildout.
Nokia, the Finnish cell phone handset maker, also greatly contributed to
the Fund's performance during this period. The company, which is now the largest
capitalized stock in Europe, benefited from an increase in first-time cell phone
subscriptions, stimulated by the introduction of affordable `one rate' plans.
The company'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.
Another geographical area of strength for the Fund was Asia. The Asian
economy's recovery accelerated during this period, as the private sector joined
the government in its economic intervention efforts. Toyota, a large holding in
the Fund, was a beneficiary of this recovery. The largest automaker in Japan,
Toyota saw its sales increase both domestically and internationally. In
particular, the company's luxury car division, Lexus, experienced a surge in its
U.S. sales due to a strong domestic economy and high consumer confidence.
One disappointment for the Fund in the latter half of 1999 was Bank of
Ireland. A leading financial services company, the Bank of Ireland had turned in
a strong performance in 1998 on the coattails of a strong domestic economy.
However, despite an increase in profits, the company's stock price was pulled
down along with other banks, by fears of increased foreign competition.
Looking ahead, the manager believes that the global economic recovery will
continue. The manager is optimistic that the Fund is well positioned to benefit
from this positive climate, which should enable it to continue its strong
performance.
17
<PAGE>
December 31, 1999
PIMCO Mid-Cap Growth Fund
OBJECTIVE
Growth of capital
PORTFOLIO
Primarily common stocks of companies with medium capitalizations that have
improving fundamentals and whose stock is reasonably valued
FUND INCEPTION DATE
8/26/91
TOTAL NET ASSETS
$1.0 billion
NUMBER OF SECURITIES IN THE PORTFOLIO
84 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital Management
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
A Shares B Shares C Shares
Russell Mid-Cap Lipper Mid-Cap
Adjusted Adjusted Adjusted Growth Index Core Fund Avg.
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
6 month 13.28% 7.05% 12.88% 7.88% 11.83% 7.15% 26.47%
1 year 12.54% 6.35% 11.68% 6.68% 10.68% 18.23% 38.29%
3 years 17.35% 15.16% 16.49% 15.75% 16.49% 18.86% 21.71%
5 years 22.12% 20.74% 21.22% 21.03% 21.22% 21.85% 21.59%
Inception 17.12% 16.33% 16.39% 16.39% 16.25% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO PIMCO PIMCO Russell
Mid-Cap Mid-Cap Mid-Cap Mid-Cap
Month Growth A Growth B Growth C Growth 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
</TABLE>
* Past performance is no guarantee of future results. The adjusted returns above
include the effect of applicable sales charges. Excluding the 6-month and
1-year returns, these returns represent the blended performance of the Fund's
retail class shares (for the period from 1/13/97) and the prior performance of
the Fund's institutional class shares (for the period from 8/26/91), adjusted,
as necessary, to reflect retail share current sales charges and different
operating expenses. See page 27 for Footnotes, which include additional
details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- -------------------------------------------------------
Medimmune, Inc. 2.2%
Chemical & allied products
- -------------------------------------------------------
Network Appliance, Inc. 2.0%
Electronics, computer networking
- -------------------------------------------------------
Citrix Systems, Inc. 2.0%
Electronics, computer networking
- -------------------------------------------------------
BEA Systems, Inc. 2.0%
Business services
- -------------------------------------------------------
Lam Research Corp. 1.9%
Semiconductors, integrated circuits
- -------------------------------------------------------
Symbol Technologies, Inc. 1.9%
Barcode equip.
- -------------------------------------------------------
Comverse Technology, Inc. 1.9%
Communications & software
- -------------------------------------------------------
Veritas Software Corp. 1.9%
Software co.
- -------------------------------------------------------
KLA-Tencor Corp. 1.8%
Business solutions
- -------------------------------------------------------
IDEC Pharmaceuticals Corp. 1.7%
Chem. & allied products
- -------------------------------------------------------
Top Ten Total 19.3%
- -------------------------------------------------------
Top 5 Industries % of Total Investments
- -------------------------------------------------------
Technology 45.9%
- -------------------------------------------------------
Financial & Business Services 14.0%
- -------------------------------------------------------
Consumer Discretionary 8.7%
- -------------------------------------------------------
Health Care 8.3%
- -------------------------------------------------------
Materials & Processing 5.7%
- -------------------------------------------------------
Portfolio Composition
- -------------------------------------------------------
Common Stock 98.6%
- -------------------------------------------------------
Cash Equivalents 1.4%
- -------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-month period ended December 31, 1999, PIMCO Mid-Cap Growth Fund
returned 13.28% for Class A shares, outperforming the Russell Mid-Cap Growth
Index return of 7.15%.
The narrow market seen in the first half of 1999 broadened in the second
half of the year, as smaller-capitalization stocks outperformed their
larger-capitalization counterparts. Investors finally recognized the strong
growth potential of smaller companies, and invested accordingly. The technology
sector was a strong contributor to the Fund's performance during this period.
One of the strongest themes within this sector was business-to-business
technology application companies, an area of high growth. These companies
benefited from improved earnings outlooks during this period as well as a rise
in sales that resulted from increased corporate spending. One example in this
area is Citrix Systems, which develops and sells innovative server-based
software to enable more efficient use of Microsoft Windows operating systems.
Citrix's sales received a boost from sales of the software, as companies
increasingly utilize technology to maintain or widen profit margins.
Veritas Software was another strong performer for the Fund. The company
makes software that provides enterprise data storage management solutions - 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
second half of 1999, as corporate Internet use and the need for data storage
rose.
Tiffany's was a standout during this period as well. The company benefited
from a strong domestic economy as well as a recovery in the global economy, both
of which stimulated its sales. In particular, Tiffany's benefited from new store
openings, the successful launch of its Web site and wider profit margins due to
greater sales of its high-end items.
With the exception of Tiffany's, consumer discretionary stocks were a
disappointment for the Fund. Companies such as Abercrombie & Fitch, Lands End
and Tommy Hilfiger all showed poor earnings that caused their stock prices to
suffer. However, the manager is optimistic that, in a climate of tight labor and
high income growth, consumer discretionary stocks should perform well.
Looking ahead, the manager is optimistic that medium-capitalization stocks
will continue to perform well in the coming year, as the economic climate should
be favorable to them. The manager is also optimistic that, in a market dominated
by high valuation stocks, investors will be attracted to more reasonable
valuations, which should bode well for PIMCO Mid-Cap Growth Fund.
18
<PAGE>
December 31, 1999
PIMCO Opportunity Fund
OBJECTIVE
Capital appreciation; no consideration given to income
PORTFOLIO
Primarily common stocks of small-capitalization companies
FUND INCEPTION DATE
2/24/84
TOTAL NET ASSETS
$584.4 million
NUMBER OF SECURITIES IN THE PORTFOLIO
98 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
A Shares B Shares C Shares Lipper Sm.
Russell Cap. Growth
Adjusted Adjusted Adjusted 2000 Index Fund Avg.
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
6 month 47.19% 39.09% 46.81% 41.81% 45.91% 10.95% 44.10%
1 year 65.06% 55.98% 63.95% 58.95% 62.99% 21.25% 62.31%
5 years 20.96% 19.60% 20.08% 19.90% 20.09% 16.69% 23.28%
10 years 21.42% 20.73% 20.80% 20.80% 20.55% 13.40% 17.94%
Inception 19.80% 19.37% 19.40% 19.40% 18.93% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO PIMCO PIMCO Russell
Month Opportunity A Opportunity B Opportunity C 2000
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
</TABLE>
* Past performance is no guarantee of future results. The adjusted returns above
include the effect of paying the applicable sales charges. Class A and B
shares commenced operations after the inception date shown. Total return for
the periods shown before the inception of Class A and B shares reflects the
performance for this Fund's oldest class of shares (Class C), adjusted to
reflect any current sales charges and any different operating expenses
associated with those shares. Had Class A share returns been adjusted to
reflect the different sales charges, but without regard to the lower operating
expenses of Class A shares, the adjusted total return figures for the 10-year
and since inception periods would have been lower, namely 20.65% and 18.99%,
respectively. See page 27 for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- -------------------------------------------------------
Medicis Pharmaceutical 'A' 2.6%
Pharmaceutical co.
- -------------------------------------------------------
Protein Design Labs, Inc. 1.7%
Genetic engineering
- -------------------------------------------------------
Rare Medium Group, Inc. 1.7%
Business solutions
- -------------------------------------------------------
Reckson Service Industries, Inc. 1.7%
Business to business
- -------------------------------------------------------
WinStar Communications, Inc. 1.6%
Communications
- -------------------------------------------------------
Xircom, Inc. 1.6%
Mobile communications
- -------------------------------------------------------
ImageX.com, Inc. 1.5%
Business solutions
- -------------------------------------------------------
Visual Networks, Inc. 1.5%
Computer software
- -------------------------------------------------------
Intraware, Inc. 1.5%
Business solutions
- -------------------------------------------------------
Pinnacle Holdings, Inc. 1.5%
Wireless communications
- -------------------------------------------------------
Top Ten Total 16.9%
- -------------------------------------------------------
Top 5 Industries % of Total Investments
- -------------------------------------------------------
Technology 34.9%
- -------------------------------------------------------
Health Care 16.4%
- -------------------------------------------------------
Communications 12.1%
- -------------------------------------------------------
Financial & Business Services 10.1%
- -------------------------------------------------------
Consumer Discretionary 7.6%
- -------------------------------------------------------
Portfolio Composition
- -------------------------------------------------------
Common Stock 95.2%
- -------------------------------------------------------
Cash Equivalents 4.8%
- -------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO Opportunity Fund experienced strong returns for the six-month period ended
December 31, 1999. The Fund returned 47.19% for Class A shares, greatly
outperforming the Russell 2000 Index, which returned 10.95% for the same period.
The technology sector was the greatest contributor to the Fund's
performance during this period. Technology proved extremely attractive to
investors because of its high earnings growth, despite rising interest rates. A
variety of areas within technology showed tremendous strength, including
software, Internet and information technology consulting companies. For
instance, Visual Networks, a top ten holding in PIMCO Opportunity Fund and the
maker of network management software, benefited from an increase in corporate
need for networking solutions.
The biotechnology sector also enhanced the Fund's performance during this
period. Investors showed renewed interest in this area because of its exciting
product offerings. For instance, Protein Design Labs, the second largest holding
in the Fund, benefited from its strong product pipeline. This specialized
biotech company uses genetic engineering and computer modeling to develop
humanized monoclonal antibodies and other potential drugs to prevent or treat
diseases such as viral infections, autoimmune diseases and certain cancers.
Protein Design Labs experienced an increase in its prescription drug sales
during this six-month period.
One stock that was a standout performer for the Fund this period was True
North Communications. The company, the sixth-largest advertising agency in the
world, benefited from the booming domestic economy, which has caused an increase
in corporate advertising expenditures. True North also benefited from the
increase in Internet advertising, as it owns a significant share of an Internet
advertising agency.
A disappointment for the Fund this period was Furniture Brands, a furniture
manufacturer. The company showed strong revenue growth and exceeded earnings
expectations, but saw its stock price suffer in an environment of rising
interest rates and investor disinterest for small-cap consumer stocks.
Looking ahead, the manager believes small-capitalization stocks will
continue the outperformance they began in the second half of 1999, as their
strong growth potential should remain attractive to investors. The manager
believes the global economy should strengthen in the coming year, while the
domestic economy should slow, and is optimistic that the Fund is well positioned
to benefit from this climate.
19
<PAGE>
December 31, 1999
PIMCO Precious Metals Fund
OBJECTIVE
Capital appreciation; no consideration given to income
PORTFOLIO
Primarily common stocks of companies that extract, process, distribute or market
precious metals
FUND INCEPTION DATE
10/10/88
TOTAL NET ASSETS
$15.9 million
NUMBER OF SECURITIES IN THE PORTFOLIO
46 (not including short-term instruments)
MANAGER
Van Eck Associates (an independent sub-advisor not owned by PIMCO Advisors L.P.)
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
A Shares B Shares C Shares Phil. Gold Lipper
& Silver Gold Oriented
Adjusted Adjusted Adjusted Index Fund Avg.
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
6 month 1.29% -4.29% 0.46% -4.54% -0.54% 2.84% 6.81%
1 year -6.53% -11.67% -7.85% -12.43% -8.61% 5.95% 3.63%
5 years -15.63% -16.58% -16.45% -16.77% -16.45% -8.84% -11.11%
10 years -7.22% -7.74% -7.69% -7.69% -8.02% -5.40% -5.84%
Inception -5.59% -6.06% -6.03% -6.03% -6.39% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO PIMCO PIMCO Phil.
Precious Precious Precious Gold & Silver
Month Metals A Metals B Metals C Index
<S> <C> <C> <C> <C>
10/31/1988 9,450 10,000 10,000 10,000
11/30/1988 9,475 10,021 10,021 10,126
12/31/1988 9,210 9,733 9,733 9,507
01/31/1989 9,674 10,218 10,218 9,869
02/28/1989 9,562 10,094 10,094 11,007
03/31/1989 9,490 10,012 10,012 10,341
04/30/1989 9,096 9,589 9,589 9,719
05/31/1989 8,574 9,033 9,033 9,467
06/30/1989 8,922 9,394 9,394 10,101
07/31/1989 9,240 9,723 9,723 10,428
08/31/1989 9,667 10,166 10,166 11,159
09/30/1989 9,663 10,156 10,156 11,342
10/31/1989 9,650 10,135 10,135 11,524
11/30/1989 10,881 11,423 11,423 13,042
12/31/1989 10,780 11,309 11,309 13,104
01/31/1990 11,013 11,546 11,546 14,235
02/28/1990 10,381 10,877 10,877 13,191
03/31/1990 9,778 10,238 10,238 12,315
04/30/1990 8,751 9,157 9,157 10,869
05/31/1990 9,141 9,558 9,558 11,732
06/30/1990 8,496 8,879 8,879 11,085
07/31/1990 9,241 9,651 9,651 11,905
08/31/1990 9,237 9,641 9,641 11,806
09/30/1990 9,282 9,682 9,682 11,838
10/31/1990 7,797 8,127 8,127 9,810
11/30/1990 7,584 7,900 7,900 9,314
12/31/1990 8,143 8,477 8,477 10,603
01/31/1991 7,119 7,406 7,406 8,755
02/28/1991 7,743 8,044 8,044 9,397
03/31/1991 7,674 7,962 7,962 9,210
04/30/1991 7,535 7,807 7,807 8,804
05/31/1991 7,644 7,921 7,921 8,995
06/30/1991 8,129 8,425 8,425 9,637
07/31/1991 8,099 8,384 8,384 9,610
08/31/1991 7,357 7,612 7,612 8,294
09/30/1991 7,436 7,684 7,684 8,613
10/31/1991 7,872 8,127 8,127 9,058
11/30/1991 7,882 8,147 8,147 9,193
12/31/1991 7,783 8,024 8,024 8,828
01/31/1992 7,911 8,158 8,158 9,127
02/29/1992 7,792 8,034 8,034 8,894
03/31/1992 7,297 7,509 7,509 7,872
04/30/1992 6,812 7,014 7,014 7,641
05/31/1992 7,228 7,437 7,437 8,197
06/30/1992 7,594 7,807 7,807 8,580
07/31/1992 7,911 8,127 8,127 9,029
08/31/1992 7,585 7,787 7,787 8,618
09/30/1992 7,466 7,663 7,663 8,790
10/31/1992 7,179 7,365 7,365 8,262
11/30/1992 6,584 6,747 6,747 7,191
12/31/1992 6,862 7,035 7,035 7,791
01/31/1993 6,674 6,839 6,839 7,816
02/28/1993 7,238 7,406 7,406 8,302
03/31/1993 8,337 8,518 8,518 9,486
04/30/1993 9,436 9,641 9,641 10,797
05/31/1993 11,179 11,423 11,423 12,141
06/30/1993 11,347 11,588 11,588 12,723
07/31/1993 12,634 12,896 12,896 14,084
08/31/1993 11,357 11,577 11,577 12,879
09/30/1993 10,218 10,413 10,413 11,376
10/31/1993 11,654 11,866 11,866 13,489
11/30/1993 11,436 11,639 11,639 12,971
12/31/1993 13,100 13,328 13,328 14,413
01/31/1994 13,199 13,421 13,421 14,406
02/28/1994 12,605 12,813 12,813 14,029
03/31/1994 12,625 12,813 12,813 14,609
04/30/1994 11,803 11,969 11,969 12,503
05/31/1994 12,199 12,371 12,371 13,147
06/30/1994 11,951 12,113 12,113 12,593
07/31/1994 12,139 12,298 12,298 12,210
08/31/1994 12,852 13,009 13,009 12,950
09/30/1994 14,001 14,163 14,163 14,448
10/31/1994 13,080 13,226 13,226 12,829
11/30/1994 11,545 11,670 11,670 11,222
12/31/1994 11,921 12,041 12,041 11,946
01/31/1995 10,149 10,238 10,238 10,640
02/28/1995 10,515 10,599 10,599 11,345
03/31/1995 11,585 11,670 11,670 13,327
04/30/1995 11,644 11,722 11,722 12,776
05/31/1995 11,496 11,577 11,577 13,112
06/30/1995 11,466 11,536 11,526 13,133
07/31/1995 11,743 11,804 11,794 12,970
08/31/1995 12,050 12,113 12,103 13,403
09/30/1995 12,209 12,257 12,257 13,571
10/31/1995 10,743 10,784 10,774 11,711
11/30/1995 11,407 11,450 11,444 13,233
12/31/1995 11,506 11,550 11,536 13,158
01/31/1996 13,892 13,945 13,926 15,412
02/29/1996 14,100 14,154 14,122 15,741
03/31/1996 13,843 13,896 13,854 15,716
04/30/1996 14,159 14,214 14,163 15,671
05/31/1996 14,803 14,860 14,801 16,269
06/30/1996 12,664 12,713 12,648 13,523
07/31/1996 12,407 12,455 12,391 13,587
08/31/1996 13,031 13,081 13,009 13,609
09/30/1996 12,001 12,047 11,969 12,585
10/31/1996 12,050 12,097 12,020 12,631
11/30/1996 11,555 11,600 11,516 13,133
12/31/1996 11,237 11,280 11,195 12,757
01/31/1997 10,524 10,564 10,473 12,041
02/28/1997 11,951 11,997 11,844 13,381
03/31/1997 10,554 10,594 10,452 11,377
04/30/1997 9,609 9,646 9,500 10,256
05/31/1997 9,961 9,999 9,866 11,398
06/30/1997 8,875 8,909 8,820 10,446
07/31/1997 8,373 8,405 8,328 10,699
08/31/1997 8,383 8,415 8,328 10,803
09/30/1997 8,855 8,889 8,789 11,965
10/31/1997 7,347 7,376 7,292 9,606
11/30/1997 5,659 5,681 5,618 7,738
12/31/1997 5,890 5,913 5,817 8,106
01/31/1998 6,443 6,467 6,340 8,192
02/28/1998 6,091 6,114 5,985 8,244
03/31/1998 6,403 6,427 6,278 8,924
04/30/1998 7,046 7,073 6,916 9,608
05/31/1998 6,041 6,064 5,943 8,163
06/30/1998 5,357 5,378 5,231 7,837
07/31/1998 5,156 5,176 5,043 6,875
08/31/1998 4,171 4,187 4,080 5,342
09/30/1998 5,931 5,953 5,785 8,194
10/31/1998 5,951 5,974 5,806 8,238
11/30/1998 5,679 5,701 5,535 7,753
12/31/1998 5,454 5,475 5,310 7,099
01/31/1999 5,342 5,362 5,202 6,912
02/28/1999 5,188 5,208 5,040 6,617
03/31/1999 5,260 5,280 5,116 6,530
04/30/1999 5,876 5,899 5,708 8,022
05/31/1999 4,921 4,940 4,771 6,651
06/30/1999 5,034 5,053 4,879 7,313
07/31/1999 4,613 4,630 4,469 6,869
08/31/1999 4,972 4,992 4,803 7,437
09/30/1999 5,681 5,703 5,482 8,864
10/31/1999 5,178 5,198 4,997 7,683
11/30/1999 5,065 5,085 4,879 7,418
12/31/1999 5,099 5,119 4,901 7,521
</TABLE>
* Past performance is no guarantee of future results. The adjusted returns above
include the effect of paying the applicable sales charges. Class A and B
shares commenced operations after the inception date shown. Total return for
the periods shown before the inception of Class A and B shares reflects the
performance for this Fund's oldest class of shares (Class C), adjusted to
reflect any current sales charges and any different operating expenses
associated with those shares. Had Class A share returns been adjusted to
reflect the different sales charges, but without regard to the lower operating
expenses of Class A shares, the adjusted total return figures for the 10-year
and since inception periods would have been lower, namely -7.82% and -6.21%,
respectively. See page 27 for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Stocks % of Total Investments
- ---------------------------------------------------
Harmony Gold Mining Co. Ltd. 6.5%
- ---------------------------------------------------
Meridian Gold, Inc. 6.1%
- ---------------------------------------------------
Newmont Mining Co. 6.1%
- ---------------------------------------------------
Homestake Mining Co. 5.9%
- ---------------------------------------------------
Gold Fields Ltd. SP-ADR 5.8%
- ---------------------------------------------------
ASA Ltd. 5.3%
- ---------------------------------------------------
Goldcorp, Inc. 'A' 5.0%
- ---------------------------------------------------
AngloGold Ltd. 4.5%
- ---------------------------------------------------
Agnico-Eagle Mines Ltd. 4.4%
- ---------------------------------------------------
Franco-Nevada Mining Corp. Ltd. 4.3%
- ---------------------------------------------------
Top Ten Holdings 53.9%
- ---------------------------------------------------
Regions % of Total Investments
- ---------------------------------------------------
Africa 37.6%
- ---------------------------------------------------
Canada 28.7%
- ---------------------------------------------------
United States 23.5%
- ---------------------------------------------------
Australia 5.2%
- ---------------------------------------------------
Europe 2.0%
- ---------------------------------------------------
Portfolio Composition
- ---------------------------------------------------
Common Stock 97.0%
- ---------------------------------------------------
Cash Equivalents 3.0%
- ---------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO Precious Metals Fund returned 1.29% for Class A shares.
The price of gold rose in the third quarter as a result of news that the
European Central Banks had agreed to restrict their gold selling and lending
activities. This resulted in a surge in the shares of many gold mining stocks,
which boosted the performance of the Fund. However, in the fourth quarter, the
price of gold declined as inflation appeared to be in check, the bond market
remained weak, and gold auction bidding proved to be less than exuberant. Gold
mining shares followed a pattern similar to that of gold, although excessive
hedging operations by a few of these companies created negative sentiment toward
the industry.
A standout performer for the Fund during this period was its largest
holding, South African mining company Harmony Gold. The company continued to
benefit from its business strategy of purchasing losing mining operations and
turning them into substantial profit makers, as it has proved particularly adept
at reducing the costs and thereby widening the profit margins of these
operations. The company has strong financial management and its outlook remains
positive.
Another company that positively contributed to the Fund's performance was
Meridian Gold, an exploratory gold mining company. The company benefited from an
increase in gold production, as it has succeeded in running its mines
efficiently and profitably. One of its largest and newest mines, El Penon in
northern Chile, proved larger and richer than expected. The mine produced a
large amount of precious metals as a result of a test run begun by Meridian in
September, which contributed to the company's higher level of production during
the period. The mine is expected to double the company's current gold production
rate once it is fully operational.
One disappointment for the Fund during this period was Placer Dome. The
company, which is highly leveraged to the price of gold, benefited from the
large increase in the price of gold in the third quarter. However, the company's
stock price suffered in the fourth quarter, as the price of gold fell.
It should be noted that, at or around the time of the closing of the PIMCO
Advisors--Allianz transaction, the PIMCO Precious Metals Fund will be closed due
to lack of investor interest.
20
<PAGE>
December 31, 1999
PIMCO Renaissance Fund
OBJECTIVE
Long-term growth of capital and income
PORTFOLIO
Primarily common stocks of companies with below-average valuations that have
improving business fundamentals
FUND INCEPTION DATE
4/18/88
TOTAL NET ASSETS
$546.0 million
NUMBER OF SECURITIES IN THE PORTFOLIO
63 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
A Shares B Shares C Shares Lipper Multi-
Russell Cap Value
Adjusted Adjusted Adjusted 1000 Value Fund Avg.
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
6 month -1.21% -6.64% -1.63% -5.52% 2.35% -4.90% -2.65%
1 year 9.83% 3.79% 8.97% 4.66% 8.16% 7.34% 7.78%
5 years 21.82% 20.45% 20.89% 20.70% 20.92% 23.08% 18.48%
10 years 14.56% 13.92% 13.97% 13.97% 13.70% 15.60% 13.26%
Inception 14.00% 13.45% 13.49% 13.49% 13.15% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO PIMCO PIMCO Russell 1000
Month Renaissance A Renaissance B Renaissance C Value Index
<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
</TABLE>
* Past performance is no guarantee of future results. The adjusted returns above
include the effect of paying the applicable sales charges. Class A and B
shares commenced operations after the inception date shown. Total return for
the periods shown before the inception of Class A and B shares reflects the
performance for this Fund's oldest class of shares (Class C), adjusted to
reflect any current sales charges and any different operating expenses
associated with those shares. Had Class A share returns been adjusted to
reflect the different sales charges, but without regard to the lower operating
expenses of Class A shares, the adjusted total return figures for the 10-year
and since inception periods would have been lower, namely 13.82% and 13.25%,
respectively. See page 27 for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- -------------------------------------------------------
Aetna, Inc. 4.6%
Insurance
- -------------------------------------------------------
Arrow Electronics, Inc. 4.5%
Electronics
- -------------------------------------------------------
Foundation Health Systems, Inc. 'A' 4.2%
Insurance (HMO)
- -------------------------------------------------------
Asia Pulp & Paper Co. Ltd. SP-ADR 3.7%
Paper products
- -------------------------------------------------------
Valero Energy Corp. 3.7%
Petroleum refining
- -------------------------------------------------------
Ace Ltd. 3.6%
Insurance
- -------------------------------------------------------
Tenet Healthcare Corp. 3.6%
Heath care services
- -------------------------------------------------------
Micron Technology, Inc. 3.5%
Semiconductors
- -------------------------------------------------------
Suiza Foods Corp. 3.5%
Wholesale
- -------------------------------------------------------
Nabors Industries, Inc. 3.4%
Oil & gas extraction
- -------------------------------------------------------
Top Ten Total 38.3%
- -------------------------------------------------------
Top 5 Industries % of Total Investments
- -------------------------------------------------------
Financial & Business Services 18.2%
- -------------------------------------------------------
Materials & Processing 16.0%
- -------------------------------------------------------
Energy 14.5%
- -------------------------------------------------------
Technology 11.8%
- -------------------------------------------------------
Consumer Staples 8.7%
- -------------------------------------------------------
Portfolio Composition
- -------------------------------------------------------
Common Stock 97.4%
- -------------------------------------------------------
Convertible Bonds & Notes 0.4%
- -------------------------------------------------------
Cash Equivalents 2.2%
- -------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-month period ended December 31, 1999, PIMCO Renaissance Fund posted
a return of -1.21% for Class A shares.
The second half of 1999 proved to be a difficult time for value investing.
High valuation growth stocks, particularly in the technology sector, dominated
the market. As a result, lower valuation issues were virtually ignored by
investors.
The Fund's performance was hurt by its exposure to the health care sector.
In particular, the HMO industry was punished by investors in the third quarter,
despite exceeding its earnings expectations. The area was unpopular with
investors because of external problems, such as class action lawsuits against
HMOs and federal attempts at HMO legislation, which received much attention from
the press. However, the outlook remains positive for this industry, as its
fundamentals remain strong and sentiment towards it is changing.
The greatest contributor to the Fund's performance during this period was
the technology sector. A continuation of the global economic recovery in the
second half of 1999 fueled demand for semiconductors and other technological
commodities. The semiconductor industry, in particular, achieved some pricing
power after several years of extreme pricing pressure. Micron Technology, a
semiconductor company and one of the top ten holdings in the Fund, experienced
revenue growth as a result of increased demand for its DRAM chips--as well as
greater pricing power.
Arrow Electronics, the second largest holding in the Fund, was a standout
performer. The company, the world's largest distributor of electronic components
and computer products to industrial and commercial customers, benefited from the
global economic recovery, which boosted demand for its products. The company's
global distribution network spans the world's three dominant electronics
markets--North America, Europe and the Asia/Pacific region--and it is poised to
continue its growth given the strong global economy.
The manager is optimistic about the Fund's outlook, as he believes stock
prices will ultimately reflect their fundamentals. In addition, he believes the
current environment of rising interest rates should bode well for value stocks
in general and PIMCO Renaissance Fund in particular.
21
<PAGE>
December 31, 1999
PIMCO Small-Cap Value Fund
OBJECTIVE
Long-term growth of capital and income
PORTFOLIO
Primarily common stocks of companies with small-sized capitalizations and
below-average price-to-earnings ratios relative to their industry groups
FUND INCEPTION DATE
10/1/91
TOTAL NET ASSETS
$319.3 million
NUMBER OF SECURITIES IN THE PORTFOLIO
101 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
NFJ Investment Group
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
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>
6 month -10.74% -15.65% -11.09% -15.48% -11.98% 10.95% -0.39%
1 year -6.82% -11.95% -7.52% -12.08% -8.39% 21.25% 6.33%
3 years 4.29% 2.34% 3.51% 2.57% 3.52% 13.08% 7.53%
5 years 12.52% 11.25% 11.68% 11.42% 11.69% 16.69% 13.68%
Inception 11.53% 10.77% 10.83% 10.83% 10.71% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO PIMCO PIMCO Russell
Small-Cap Small-Cap Small-Cap 2000
Month Value A Value B Value C Index
<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
</TABLE>
* Past performance is no guarantee of future results. The adjusted returns above
include the effect of applicable sales charges. Excluding the 6-month and
1-year returns, these returns represent the blended performance of the Fund's
retail class shares (for the period from 1/20/97) and the prior performance of
the Fund's institutional class shares (for the period from 10/1/91), adjusted,
as necessary, to reflect retail share current sales charges and different
operating expenses. See page 27 for Footnotes, which include additional
details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- -------------------------------------------------------
UST Corp. 1.3%
Tobacco products
- -------------------------------------------------------
Raymond James Financial, Inc. 1.2%
Financial services
- -------------------------------------------------------
Arthur J. Gallagher & Co. 1.1%
Insurance
- -------------------------------------------------------
C&D Technologies, Inc. 1.1%
Telecommunications & computer equip.
- -------------------------------------------------------
Intermet Corp. 1.1%
Mfr. metal co.
- -------------------------------------------------------
Arrow International, Inc. 1.1%
Electronics
- -------------------------------------------------------
Hanna (M.A.) Co. 1.1%
Rubber materials mfr.
- -------------------------------------------------------
CMP Group, Inc. 1.1%
Electric energy supplier
- -------------------------------------------------------
Shurgard Storage Centers, Inc. 1.1%
Self storage centers
- -------------------------------------------------------
Rollins Truck Leasing Co. 1.1%
Truck leasing co.
- -------------------------------------------------------
Top Ten Total 11.3%
- -------------------------------------------------------
Top 5 Industries % of Total Investments
- -------------------------------------------------------
Financial & Business Services 25.6%
- -------------------------------------------------------
Capital Goods 13.2%
- -------------------------------------------------------
Consumer Discretionary 13.0%
- -------------------------------------------------------
Utilities 10.1%
- -------------------------------------------------------
Materials & Processing 9.4%
- -------------------------------------------------------
Portfolio Composition
- -------------------------------------------------------
Common Stock 99.5%
- -------------------------------------------------------
Cash Equivalents 0.5%
- -------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-month period ended December 31, 1999, PIMCO Small-Cap Value Fund
posted a return of -10.74% for Class A shares.
This six-month period proved to be a very difficult one for value
investing. The technology sector dominated the market dramatically in the third
and fourth quarters -- to the exclusion of virtually all other sectors, which
hurt the performance of PIMCO Small-Cap Value Fund. The Fund, which has an
investment universe that focuses on small-capitalization, dividend-yielding
stocks with low fundamental valuations, had virtually no exposure to the
technology sector and therefore did not participate in its strong returns.
The Fund's exposure to basic industries helped its performance during this
period. The sector benefited from the recovery in the global economy,
particularly in Asia, which stimulated demand for basic materials. For instance,
Gleason Industries, a maker of machine tools, experienced an increase in sales
in the second half of 1999. In addition, its stock price surged in the fourth
quarter on news of a buyout offer at an approximately 31% premium -- a sign that
investors had undervalued the stock in the market.
Dallas Semiconductor, the only technology holding in the Fund, aided
performance during this period. The low valuation technology company makes
semiconductor chips for a variety of applications. It benefited from the strong
revival in the semiconductor industry, fueled by the global economic recovery,
as well as general investor interest in technology issues.
Another company that contributed to the Fund's performance was Jostens, a
maker of school yearbooks and class rings. This company experienced a dramatic
rise in its stock price when it announced it would be purchased by another
company, which was attracted to its low valuation and strong fundamentals.
The financial services sector was a disappointment for the Fund. In
particular, BankAtlantic suffered during 1999. The company, like many other
regional banks, saw its stock price punished by investors in a climate of rising
interest rates - despite its solid fundamentals.
Looking ahead, the manager is optimistic that the market will broaden and
that investors will once again find lower valuation companies with strong
fundamentals attractive. The manager remains committed to its low valuation,
high dividend-yielding investment criteria, which should bode well for the Fund
over the long term.
22
<PAGE>
December 31, 1999
PIMCO Target Fund
OBJECTIVE
Capital appreciation; no consideration given to income
PORTFOLIO
Primarily common stocks of companies with medium-sized capitalizations
FUND INCEPTION DATE
12/17/92
TOTAL NET ASSETS
$1.7 billion
NUMBER OF SECURITIES IN THE PORTFOLIO
59 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity Advisors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
A Shares B Shares C Shares S&P Lipper Mid-
Cap Cap Core
Adjusted Adjusted Adjusted 400 Index Fund Avg.
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
6 month 51.23% 42.92% 50.60% 45.60% 49.69% 7.36% 26.47%
1 year 66.25% 57.10% 65.05% 60.05% 64.05% 14.73% 38.29%
3 years 33.92% 31.42% 32.93% 32.36% 32.93% 21.81% 21.71%
5 years 29.74% 28.28% 28.77% 28.62% 28.77% 23.05% 21.59%
Inception 25.13% 24.13% 24.19% 24.19% 24.19% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO PIMCO PIMCO S&P
Month Target A Target B Target C Mid-Cap
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
</TABLE>
* Past performance is no guarantee of future results. The adjusted returns above
include the effect of paying the applicable sales charges. Class B shares
commenced operations after the inception date shown. Total return for the
periods shown before the inception of Class B shares reflects the performance
for one of this Fund's oldest classes of shares (Class C), adjusted to reflect
any current sales charges and any different operating expenses for those
shares. See page 27 for Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- -------------------------------------------------------
Comverse Technology, Inc. 4.7%
Telecomm. & software
- -------------------------------------------------------
JDS Uniphase Corp. 4.6%
Fiber optics & lasers
- -------------------------------------------------------
Citrix Systems, Inc. 3.3%
Software
- -------------------------------------------------------
SDL, Inc. 3.2%
Semiconductors & fiber optics
- -------------------------------------------------------
Sierra Semiconductor Corp. 3.1%
Semiconductors
- -------------------------------------------------------
Gemstar International Group Ltd. 2.8%
Electronics
- -------------------------------------------------------
Medimmune, Inc. 2.7%
Healthcare co.
- -------------------------------------------------------
Echostar Communications Corp. 2.6%
Satellites & electronics
- -------------------------------------------------------
Jabil Circuit, Inc. 2.6%
Industrial & commercial mach.
- -------------------------------------------------------
CMGI, Inc. 2.5%
Internet & direct marketing
- -------------------------------------------------------
Top Ten Total 32.1%
- -------------------------------------------------------
Top 5 Industries % of Total Investments
- -------------------------------------------------------
Technology 57.7%
- -------------------------------------------------------
Health Care 11.0%
- -------------------------------------------------------
Consumer Discretionary 9.3%
- -------------------------------------------------------
Communications 7.4%
- -------------------------------------------------------
Financial & Business Services 4.2%
- -------------------------------------------------------
Portfolio Composition
- -------------------------------------------------------
Common Stock 96.8%
- -------------------------------------------------------
Cash Equivalents 3.2%
- -------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-month period ended December 31, 1999, PIMCO Target Fund turned in a
strong performance, returning 51.23% for Class A shares. The Fund handily
outperformed the S&P Mid-Cap Index, which returned 7.36% , as well as its Lipper
Mid-Cap Core Fund Average, which returned 26.47%.
The Fund greatly benefited from its exposure to the technology sector, which
performed extremely well during this period. In particular, telecommunications
performed well due to the explosive growth in need for data and voice
transmissions. JDS Uniphase, a maker of fiber optic components for telecom
networks, benefited from this trend. The company is the largest independent
fiber optic component supplier to large telecom equipment providers such as
Nortel and Lucent, and it experienced a large increase in demand for telecom
components as a result of the rapid build-out of telecom networks.
Another holding that benefited from the growth in telecom needs was Comverse
Technology, the 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 voicemail for cell phones. An increase in cell phone
subscriptions as well as a shortening of cell phone handset upgrade cycles were
also key to Comverse's growth.
The Fund's exposure to biotechnology also enhanced its performance.
Medimmune, a company that develops and markets products for the prevention and
treatment of infectious diseases as well as for the prevention of organ
transplant rejections, showed strength during this period. The company saw its
revenue grow more than 50% in 1999 due to its strong product offerings. Its most
important drug, Synagis, is used for the treatment of respiratory problems in
premature infants. The market opportunity for the drug is tremendous as it
addresses an area of healthcare that is both sensitive and growing.
One disappointment for the Fund during this period was Minimed, the leading
maker of insulin pumps and glucose monitors. The company's stock price suffered
as a result of a recall of its pumps due to software problems. The company has
successfully resolved the situation and we are confident that its fundamentals
will remain strong.
Looking ahead, the Fund manager is optimistic that the market will favor
smaller-capitalization issues with greater growth potential, which should bode
well for PIMCO Target Fund. The manager is optimistic that, by employing its
strong research capabilities, it can continue to find quality companies with
sustainable and predictable earnings growth, which will enable the Fund to
continue to produce superior relative returns over the long term.
23
<PAGE>
December 31, 1999
PIMCO Tax-Efficient Equity Fund
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
241 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Parametric Portfolio Associates
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
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>
6 month 6.64% 0.82% 6.17% 1.17% 5.17% 7.71% 9.94%
1 year 17.38% 10.95% 16.49% 11.49% 15.49% 21.04% 22.31%
Inception 15.43% 11.10% 14.54% 11.99% 14.54% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO PIMCO PIMCO S&P 500
Tax-Efficient Tax-Efficient Tax-Efficient Index
Month Equity A Equity B Equity C
<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 12,318 12,731 13,364
</TABLE>
* Past performance is no guarantee of future results. The adjusted returns above
include the effect of applicable sales charges. See page 27 for Footnotes,
which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- -------------------------------------------------------
Microsoft Corp. 5.0%
Computer services
- -------------------------------------------------------
General Electric Co. 4.1%
Electronics
- -------------------------------------------------------
Cisco Systems, Inc. 3.0%
Internet networking
- -------------------------------------------------------
Intel Corp. 2.7%
Electronics, computer components
- -------------------------------------------------------
Wal-Mart Stores, Inc 2.5%
Retail
- -------------------------------------------------------
Lucent Technologies, Inc. 2.2%
Communications & software
- -------------------------------------------------------
SBC Communications, Inc. 2.0%
Communications
- -------------------------------------------------------
Citigroup, Inc. 1.8%
Financial services
- -------------------------------------------------------
Oracle Corp. 1.7%
Software
- -------------------------------------------------------
International Business Machines Corp. 1.6%
Business machines mfr.
- -------------------------------------------------------
Top Ten Total 26.6%
- -------------------------------------------------------
Top 5 Industries % of Total Investments
- -------------------------------------------------------
Technology 27.9%
- -------------------------------------------------------
Financial & Business Services 13.7%
- -------------------------------------------------------
Consumer Discretionary 10.3%
- -------------------------------------------------------
Health Care 10.0%
- -------------------------------------------------------
Communications 9.3%
- -------------------------------------------------------
Portfolio Composition
- -------------------------------------------------------
Common Stock 99.8%
- -------------------------------------------------------
Cash Equivalents 0.2%
- -------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO Tax-Efficient Equity Fund turned in a solid performance for the six-month
period ended December 31, 1999, returning 6.64% for Class A shares. These
results slightly underperformed the returns of the S&P 500 Index for the same
period.
High earnings growth expectations drove the market for much of the past six
months. As a result, the high-growth technology sector overwhelmingly
outperformed all other sectors. In particular, software, Internet and wireless
telecommunications all saw explosive growth during this period. For instance,
Internet search engine Yahoo! experienced enormous price appreciation during the
fourth quarter as a result of its inclusion in the S&P 500 Index, which many
investors interpreted as validation of the young company's formidable stature
among the corporate establishment.
One standout for the Fund was Oracle, the database software management
company. It benefited from increased demand for e-commerce database management
applications, for which it makes software. Oracle also saw its stock price rise
as a result of the deal it signed in November to sell Ford Motor Company supply
chain management software. The outlook remains positive for this company, as
many Wall Street analysts are predicting similar deals for the company in the
coming year.
Another standout for the Fund was Qualcomm, a digital wireless telecom
company. Qualcomm experienced increased revenues from royalties received through
the licensing of its Code Division Multiple Access (CDMA) technology. The
company also benefited from the sale of its cell phone handset division, which
was not profitable. Qualcomm should continue to see an increase in revenues
going forward as more cell phone handset makers utilize CDMA technology in their
products.
In keeping with its tax-efficient philosophy, the Fund did not pay a
capital gain for the second year in a row. Using active tax management
strategies, the manager was able to use harvested losses to offset capital
gains.
Looking ahead, the manager remains cautiously optimistic about the market's
prospects in the near term. The manager intends to maintain its disciplined,
long-term approach to stock selection based on fundamental valuations and the
principles of portfolio diversification, tax management and risk control, which
should bode well for the Fund in any economic climate.
24
<PAGE>
December 31, 1999
PIMCO Value Fund
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
FUND INCEPTION DATE
12/30/91
TOTAL NET ASSETS
$212.0 million
NUMBER OF SECURITIES IN THE PORTFOLIO
37 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
NFJ Investment Group
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
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>
6 month -5.81% -10.99% -6.18% -9.97% -6.88% 7.71% -2.65%
1 year 3.81% -1.90% 2.99% -1.16% 2.21% 21.04% 7.78%
3 years 12.72% 10.62% 11.88% 11.17% 11.90% 27.56% 13.61%
5 years 18.89% 17.55% 18.01% 17.80% 18.02% 28.56% 18.48%
Inception 14.65% 13.84% 13.91% 13.91% 13.81% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO PIMCO PIMO S&P 500
Month Value A Value B Value 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
</TABLE>
* Past performance is no guarantee of future results. The adjusted returns above
include the effect of applicable sales charges. Excluding the 6-month and
1-year returns, these returns represent the blended performance of the Fund's
retail class shares (for the period from 1/13/97) and the prior performance of
the Fund's institutional class shares (for the period from 12/30/91),
adjusted, as necessary, to reflect retail share current sales charges and
different operating expenses. See page 27 for Footnotes, which include
additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- -------------------------------------------------------
Conoco, Inc. 4.4%
Petroleum refining
- -------------------------------------------------------
Kerr-McGee Corp. 4.2%
Petroleum refining
- -------------------------------------------------------
Westvaco Corp. 4.2%
Paper & allied products
- -------------------------------------------------------
USX-U.S. Steel Group, Inc. 4.2%
Steel mfr.
- -------------------------------------------------------
Dana Corp. 4.0%
Mfr. Components, transportation
- -------------------------------------------------------
Public Service Enterprise Group, Inc. 4.0%
Electric & gas
- -------------------------------------------------------
Ultramar Diamond Shamrock Corp. 4.0%
Petroleum refining
- -------------------------------------------------------
Morgan, J.P. & Co., Inc. 4.0%
Financial services
- -------------------------------------------------------
Bell Atlantic Corp. 3.8%
Communications
- -------------------------------------------------------
GTE Corp. 3.8%
Communications
- -------------------------------------------------------
Top Ten Total 40.6%
- -------------------------------------------------------
Top 5 Industries % of Total Investments
- -------------------------------------------------------
Energy 16.7%
- -------------------------------------------------------
Consumer Discretionary 15.5%
- -------------------------------------------------------
Financial & Business Services 12.8%
- -------------------------------------------------------
Materials & Processing 12.1%
- -------------------------------------------------------
Utilities 8.0%
- -------------------------------------------------------
Portfolio Composition
- -------------------------------------------------------
Common Stock 98.3%
- -------------------------------------------------------
Cash Equivalents 1.7%
- -------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO Value Fund returned -5.81% for Class A shares for the six-month period
ended December 31, 1999.
The third and fourth quarters of 1999 proved to be an extremely difficult
period for value stocks. The technology sector, a traditionally high valuation
area, proved extremely popular with investors eager for high earnings growth in
the face of rising interest rates. At the same time, investors eschewed the
strong fundamentals offered by many lower valuation companies, which hurt the
performance of the Fund. Virtually all sectors other than technology were
ignored by investors during this period.
Due, again, to the high valuations, the Fund had a relatively small
exposure to the technology sector, but it was the greatest positive contributor
to the Fund's performance during this period. The Fund held two lower valuation
technology stocks during this period, Intel and Apple Computer, both of which
make commodity technology products. Apple continued to benefit from strong sales
of its popular iMac personal computer. The stock, however, was ultimately sold
from the portfolio when its valuation rose higher than the manager's investment
philosophy allows. Intel aided performance, as the company experienced a surge
in chip sales as a result of the global economic recovery.
J.P. Morgan, the banking and financial services company, contributed to the
Fund's performance during this period. The company benefited from higher trading
revenues. Investors were attracted to its low valuation, and its stock price
moved higher in the fourth quarter, despite rising interest rates.
UST produced disappointing returns for the Fund during this period. The
smokeless tobacco products company was hurt by news of class action lawsuits
against other tobacco companies. However, the outlook for UST is positive, as it
is not the subject of any lawsuits and its fundamentals remain intact.
It should be noted that, at or around the time of the closing of the PIMCO
Advisors-Allianz transaction, the day-to-day management of PIMCO Value Fund will
be assumed by PIMCO Equity Advisors. The Fund's philosophy of investing in
undervalued securities will remain in place.
25
<PAGE>
December 31, 1999
PIMCO Value 25 Fund
OBJECTIVE
Long-term growth of capital and income
PORTFOLIO
Approximately 25 common stocks of companies with medium market capitalizations
having below-average price-to-earnings ratios relative to their industry groups
FUND INCEPTION DATE
7/10/98
TOTAL NET ASSETS
$2.2 million
NUMBER OF SECURITIES IN THE PORTFOLIO
25 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
NFJ Investment Group
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
A Shares B Shares C Shares Lipper
S&P 500 Mid-Cap
Adjusted Adjusted Adjusted Index Fund Avg.
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
6 month -13.72% -18.45% -13.93% -18.19% -14.65% 7.71% 0.80%
1 year -8.83% -13.81% -9.36% -13.84% -10.22% 21.04% 9.68%
Inception -15.65% -18.81% -16.18% -18.43% -16.11% -- --
</TABLE>
Change in Value
$10,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO PIMCO PIMCO S&P 500
Month Value 25 A Value 25 B Value 25 C Index
<S> <C> <C> <C> <C>
07/31/1998 9,450 10,000 10,000 10,000
08/31/1998 7,771 8,212 8,212 8,554
09/30/1998 7,822 8,266 8,266 9,102
10/31/1998 8,426 8,894 8,894 9,843
11/30/1998 8,589 9,068 9,068 10,439
12/31/1998 8,735 9,210 9,218 11,041
01/31/1999 8,251 8,688 8,698 11,502
02/28/1999 7,973 8,394 8,393 11,145
03/31/1999 8,065 8,482 8,491 11,591
04/30/1999 8,992 9,460 9,468 12,040
05/31/1999 9,188 9,656 9,663 11,755
06/30/1999 9,229 9,700 9,696 12,408
07/31/1999 9,054 9,493 9,500 12,020
08/31/1999 8,632 9,058 9,066 11,961
09/30/1999 8,106 8,504 8,501 11,633
10/31/1999 7,787 8,156 8,164 12,369
11/30/1999 7,570 7,928 7,936 12,621
12/31/1999 7,962 8,020 8,358 13,364
</TABLE>
* Past performance is no guarantee of future results. The adjusted returns above
include the effect of applicable sales charges. See page 27 for Footnotes,
which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- --------------------------------------------------------
CNF Transportation, Inc. 4.9%
Motor freight transp.
- --------------------------------------------------------
York International Corp. 4.5%
Industrial & commercial mach.
- --------------------------------------------------------
GATX Corp. 4.3%
Transportation services
- --------------------------------------------------------
Lafarge Corp. 4.3%
Stone, clay, glass & concrete
- --------------------------------------------------------
Clayton Homes, Inc. 4.3%
Building constr.-gen. contract
- --------------------------------------------------------
Armstrong World Industries 4.2%
Rubber & misc. plastics producer
- --------------------------------------------------------
Meritor Automotive, Inc. 4.2%
Transportation equipment
- --------------------------------------------------------
Ryder System, Inc. 4.2%
Services-automotive repair
- --------------------------------------------------------
U.S. Industries, Inc. 4.2%
Mfr. consumer/industrial products
- --------------------------------------------------------
Sherwin-Williams Co. 4.2%
Retail-misc. retail
- --------------------------------------------------------
Top Ten Total 43.3%
- --------------------------------------------------------
Top 5 Industries % of Total Investments
- --------------------------------------------------------
Consumer Discretionary 23.6%
- --------------------------------------------------------
Capital Goods 16.6%
- --------------------------------------------------------
Materials & Processing 14.8%
- --------------------------------------------------------
Building 13.1%
- --------------------------------------------------------
Financial & Business Services 11.6%
- --------------------------------------------------------
Portfolio Composition
- --------------------------------------------------------
Common Stock 100.0%
- --------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO Value 25 Fund posted a return of -13.72% for Class A shares for the
six-month period ended December 31, 1999.
The second half of 1999 was a very difficult period for value investing.
After rotating towards more cyclical stocks in the second quarter of 1999, the
market rotated back in favor of growth stocks in the third quarter. In the third
quarter and, to an even greater degree in the fourth quarter, investors favored
the highest valuation growth stocks, particularly technology issues, to the
exclusion of lower valuation issues.
Despite having a small exposure to this area because of its generally high
valuations, the Fund benefited from its exposure to technology. Avnet, an
electronic component distributor, was a strong performer for the Fund during
this period. The company, which is attractively valued, benefited from a
recovering global economy, particularly in Asia, which stimulated increased
demand for its products. As a supplier of components to the semiconductor
industry, Avnet directly benefited from the rebound in the Asian marketplace.
The company's performance was also aided by recent acquisitions, as well as its
implementation of cost-cutting measures.
Another holding that contributed to the Fund's performance during this
period was Ryder Systems, the parent company of Ryder Truck Rental. The company
benefited from a successful restructuring of management, which caused its stock
price to rise. In addition, the company experienced higher leasing and rental
revenues during this period, fueled by the expanding economy and, in particular,
the U.S. housing boom.
One disappointment for the Fund during this period was York International,
a leading provider of heating, ventilation, air conditioning and refrigerator
(HVAC) equipment in the United States and abroad. The company's stock price was
pushed down by investor disapproval for the sale of its performance contracting
business, as well as poor earnings.
It should be noted that, at or around the time of the closing of the PIMCO
Advisors--Allianz transaction, the PIMCO Value 25 Fund will be reorganized with
and into the PIMCO Value Fund.
26
<PAGE>
December 31, 1999
- --------------------------------------------------------------------------------
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 include the effect of paying
the maximum initial sales charge of 5.5%. The adjusted figures for Class B
shares include the effect of paying the contingent deferred sales charge (CDSC),
which declines from 5% in the first year to 0% at the beginning of the seventh
year. The adjusted figures for Class C shares include the effect of paying the
1% CDSC, which may apply to shares redeemed during the first year of ownership.
The PIMCO stock funds can invest in foreign securities and the International
Fund invests primarily in these securities, which can involve special risks due
to foreign economic and political developments. These risks can be more
pronounced with emerging market securities. The Opportunity and Small-Cap Value
Funds generally invest in small-cap stocks, which can be riskier than the
overall stock market. The Innovation and Precious Metals Funds concentrate their
portfolios in one sector, making them more volatile than a more diversified
stock portfolio, and, therefore, should be considered as only part of a
diversified portfolio.
Line graphs have been included so an investor can compare a Fund's historical
performance to that of an appropriate broad-based index. Each index reflects a
group of unmanaged securities, and it is not possible to invest directly in an
unmanaged index. The Standard & Poor's 500 and Standard & Poor's Mid-Cap 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. The Philadelphia Gold and Silver Index is an
index of stocks of companies in the gold and silver mining industry.
Lipper averages are calculated by Lipper, 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, 1-888-87-PIMCO, www.pimcofunds.com.
Please read the prospectus carefully before you invest or send money.
27
<PAGE>
Schedule of Investments
Capital Appreciation Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 99.0%
- --------------------------------------------------------------------------------
Aerospace 1.5%
Honeywell International, Inc. 242,988 $ 14,017
---------
Capital Goods 6.6%
General Electric Co. 133,100 20,597
Tyco International Ltd. 353,300 13,735
United Technologies Corp. 158,800 10,322
TRW, Inc. 183,800 9,546
Textron, Inc. 122,600 9,402
---------
63,602
Communications 4.0%
ALLTEL Corp. 125,300 10,361
MCI WorldCom, Inc. (b) 179,400 9,519
GTE Corp. 133,100 9,392
AT&T Corp. 183,600 9,318
SBC Communications, Inc. 1 0
---------
38,590
Consumer Discretionary 10.4%
Wal-Mart Stores, Inc. 282,400 19,521
Home Depot, Inc. 256,200 17,566
CVS Corp. 343,300 13,711
Lowe's Cos., Inc. 190,700 11,394
McGraw-Hill Companies, Inc. 166,100 10,236
Dayton Hudson Corp. 138,700 10,186
Harley-Davidson, Inc. 124,100 7,950
Circuit City Stores 109,800 4,948
General Motors Corp. 51,700 3,758
Delphi Automotive Systems (b) 1 0
Mattel, Inc. 1 0
---------
99,270
Consumer Services 4.8%
New York Times Co. 292,500 14,369
CBS Corp. 214,000 13,683
Gannett, Inc. 156,800 12,789
United Parcel Service, Inc. 69,700 4,809
---------
45,650
Consumer Staples 2.3%
Safeway, Inc. (b) 325,500 11,576
Anheuser Busch Cos., Inc. 147,500 10,454
Kimberly-Clark Corp. 4,300 281
---------
22,311
Energy 4.9%
Royal Dutch Petroleum Co. 268,400 16,221
Vastar Resources, Inc. 182,700 10,779
USX Marathon Group 423,500 10,455
Atlantic Richfield Co. 107,100 9,264
AES Corp. (b) 3,900 292
---------
47,011
Financial & Business Services 13.5%
Omnicom Group 143,300 14,330
Marsh & McLennan Cos. 124,600 11,923
Capital One Financial Corp. 245,000 11,806
American Express Co. 70,100 11,654
Morgan Stanley, Dean Witter, Discover and Co. 80,900 11,548
MGIC Investment Corp. 185,600 11,171
Citigroup, Inc. 200,550 11,143
Firstar Corp. 448,300 9,470
Lehman Brothers Holdings, Inc. 111,100 9,409
Wells Fargo Co. 226,600 9,163
Fleet Boston Financial Corp. 250,200 8,710
Morgan, J.P. & Co., Inc. 66,600 8,433
Providian Financial Corp. 3,000 273
---------
129,033
Health Care 6.2%
Immunex Corp. (b) 147,900 16,195
Genentech, Inc. (b) 91,200 12,266
Warner-Lambert Co. 136,300 11,168
Bristol-Myers Squibb Co. 155,400 9,975
Schering-Plough Corp. 228,700 9,648
---------
59,252
Materials & Processing 4.9%
Alcoa, Inc. 148,900 12,359
Champion International `C' 198,200 12,276
Weyerhaeuser Co. 165,100 11,856
International Paper Co. 189,700 10,706
---------
47,197
Technology 39.9%
Cisco Systems, Inc. (b) 200,000 21,425
Oracle Corp. (b) 175,800 19,701
Motorola, Inc. 112,300 16,536
Applied Materials, Inc. (b) 128,400 16,267
JDS Uniphase Corp. (b) 98,000 15,809
Teradyne, Inc. (b) 236,600 15,616
Corning, Inc. 116,600 15,034
Conexant Systems, Inc. (b) 223,900 14,861
Veritas Software Corp. (b) 102,950 14,735
Sun Microsystems, Inc. (b) 185,200 14,341
Solectron Corp. (b) 149,600 14,231
Siebel Systems, Inc. (b) 168,400 14,146
Broadcom Corp. (b) 51,600 14,055
BMC Software, Inc. (b) 170,200 13,605
EMC Corp. (b) 124,100 13,558
Compuware Corp. (b) 352,800 13,142
Computer Associates International, Inc. 187,000 13,078
Texas Instruments, Inc. 122,800 11,896
Amdocs Ltd. (b) 343,800 11,861
Microsoft Corp. (b) 101,500 11,850
Lucent Technologies, Inc. 154,010 11,522
Altera Corp. (b) 216,100 10,710
Tellabs, Inc. (b) 166,500 10,687
Scientific-Atlanta, Inc. 191,100 10,630
Lexmark International Group, Inc. `A' (b) 108,400 9,810
Xilinx, Inc. (b) 213,200 9,694
National Semiconductor Corp. (b) 198,200 8,485
Computer Sciences Corp. (b) 76,000 7,192
Citrix Systems, Inc. (b) 54,000 6,642
America Online, Inc. (b) 4,800 362
Yahoo, Inc. (b) 400 173
---------
381,654
---------
Total Common Stocks 947,587
(Cost $697,230) =========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.4%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreement 0.4%
State Street Bank
4.000% due 01/03/2000 $ 3,840 3,840
(Dated 12/31/1999. Collateralized by
Federal Home Loan Bank 5.400% due
11/17/2003 valued at $3,920.
Repurchase proceeds are $3,841.)
---------
Total Short-Term Instruments 3,840
(Cost $3,840) =========
Total Investments (a) 99.4% $951,427
(Cost $701,070)
Other Assets and Liabilities (Net) 0.6% 6,008
---------
Net Assets 100.0% $957,435
=========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost. $261,248
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value. (10,891)
---------
Unrealized appreciation-net $250,357
=========
(b) Non-income producing security.
28 See accompanying notes
<PAGE>
Schedule of Investments
Equity Income Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 98.6%
- --------------------------------------------------------------------------------
Aerospace 4.2%
BFGoodrich Co. 125,000 $ 3,438
Northrop Grumman Corp. 59,300 3,206
---------
6,644
Capital Goods 6.3%
GATX Corp. 97,000 3,274
Hubbell, Inc. `B' 115,000 3,134
Dana Corp. 104,000 3,114
Tenneco Automotive, Inc. 32,800 305
---------
9,827
Communications 5.7%
U.S. West, Inc. 42,500 3,060
GTE Corp. 42,000 2,964
Bell Atlantic Corp. 47,000 2,893
---------
8,917
Consumer Discretionary 16.2%
Ford Motor Co. 59,300 3,169
UST, Inc. 125,100 3,151
Whirlpool Corp. 48,000 3,123
Eastman Kodak Co. 47,000 3,114
Armstrong World Industries 92,000 3,071
Springs Industries, Inc. `A' 75,000 2,995
Thomas & Betts Corp. 93,600 2,984
J.C. Penney Co. 134,000 2,672
Lanier Worldwide, Inc. 251,000 973
---------
25,252
Consumer Staples 8.9%
SUPERVALU, Inc. 159,000 3,180
Fortune Brands, Inc. 95,300 3,151
RJ Reynolds Tobacco Holdings, Inc. 155,000 2,732
Pactiv Corp. 164,000 1,742
Anheuser Busch Cos., Inc. 22,300 1,580
Brown-Forman Corp. 27,400 1,569
---------
13,954
Energy 11.8%
Kerr McGee Corp. 51,000 3,162
Ultramar Diamond Shamrock Corp. 139,000 3,153
Conoco, Inc. 125,500 3,122
KeySpan Corp. 131,900 3,058
Repsol SA SP - ADR 130,000 3,022
USX Marathon Group 115,000 2,839
---------
18,356
Financial & Business Services 21.4%
Deluxe Corp. 226,000 6,201
Morgan, J.P. & Co., Inc. 47,800 6,053
Union Planters Corp. 153,000 6,034
Edwards (A.G.), Inc. 103,000 3,301
Ohio Casualty Corp. 205,500 3,301
PNC Bank Corp. 70,100 3,119
KeyCorp 140,000 3,098
HRPT Properties Trust 252,600 2,273
---------
33,380
Health Care 2.0%
Mallinckrodt, Inc. 99,000 3,149
---------
Materials & Processing 8.1%
USX-U.S. Steel Group, Inc. 193,000 6,369
Westvaco Corp. 97,000 3,165
Georgia-Pacific Corp. (Timber Group) 126,000 3,103
---------
12,637
Technology 4.1%
Harris Corp. 238,000 6,352
---------
Utilities 9.9%
DTE Energy Co. 101,000 3,168
Central & South West Corp. 157,000 3,140
NICOR, Inc. 96,000 3,120
Public Service Enterprise Group, Inc. 88,500 3,081
New Century Energies, Inc. 98,000 2,977
---------
15,486
---------
Total Common Stocks 153,954
(Cost $169,116) =========
Total Investments (a) 98.6% $153,954
(Cost $169,116)
Other Assets and Liabilities (Net) 1.4% 2,108
---------
Net Assets 100.0% $156,062
=========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost. $ 10,915
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (26,077)
---------
Unrealized depreciation-net $(15,162)
=========
See accompanying notes 29
<PAGE>
Schedule of Investments
Growth Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 98.4%
- --------------------------------------------------------------------------------
Aerospace 1.0%
Honeywell International, Inc. 500,000 $ 28,844
-----------
Capital Goods 2.7%
General Electric Co. 500,000 77,375
-----------
Communications 17.1%
Nokia Corp. SP - ADR 1,000,000 190,000
Qualcomm, Inc. (b) 600,000 105,675
Nortel Networks Corp. 800,000 80,800
MCI WorldCom, Inc. (b) 1,500,000 79,594
AT&T Corp. - Liberty Media Group `A' (b) 650,000 36,888
-----------
492,957
Consumer Discretionary 12.8%
Home Depot, Inc. 1,875,000 128,555
Wal-Mart Stores, Inc. 1,500,000 103,687
Clear Channel Communications (b) 750,000 66,938
Kohls Corp. (b) 500,000 36,094
Gemstar International Group Ltd. (b) 500,000 35,625
-----------
370,899
Consumer Services 0.6%
United Parcel Service, Inc. 250,000 17,250
-----------
Energy 1.5%
Enron Corp. 1,000,000 44,375
-----------
Financial & Business Services 16.7%
Morgan Stanley, Dean Witter, Discover and Co. 750,000 107,062
Omnicom Group 1,000,000 100,000
Citigroup, Inc. 1,750,000 97,234
American Express Co. 500,000 83,125
American International Group, Inc. 600,000 64,875
Federal National Mortgage Association 500,000 31,219
-----------
483,515
Health Care 7.3%
Amgen, Inc. (b) 1,000,000 60,063
Genentech, Inc. (b) 400,000 53,800
Bristol-Myers Squibb Co. 600,000 38,513
Schering-Plough Corp. 800,000 33,750
Guidant Corp. 550,000 25,850
-----------
211,976
Technology 38.7%
EMC Corp. (b) 1,500,000 163,875
Cisco Systems, Inc. (b) 1,500,000 160,687
Microsoft Corp. (b) 1,000,000 116,750
JDS Uniphase Corp. (b) 500,000 80,656
Sun Microsystems, Inc. (b) 1,000,000 77,437
America Online, Inc. (b) 1,000,000 75,438
Motorola, Inc. 500,000 73,625
Solectron Corp. (b) 750,000 71,344
Broadcom Corp. (b) 250,000 68,094
Telefonaktiebolaget LM Ericsson SP - ADR 1,000,000 65,687
Texas Instruments, Inc. 500,000 48,437
Lucent Technologies, Inc. 500,000 37,406
Comverse Technology, Inc. (b) 250,000 36,187
Intel Corp. 300,000 24,694
Internet Capital Group LLC (b) 100,000 17,000
-----------
1,117,317
-----------
Total Common Stocks 2,844,508
(Cost $1,632,987) ===========
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
CORPORATE BONDS & NOTES 0.0%
- --------------------------------------------------------------------------------
Industrials 0.0%
Cabbell Financial Grantor Trust
7.187% due 12/31/2002 $ 508 $ 432
-----------
Total Corporate Bonds & Notes 432
(Cost $505) ===========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 1.5%
- --------------------------------------------------------------------------------
Repurchase Agreement 1.5%
State Street Bank
4.000% due 01/03/2000 44,521 44,521
(Dated 12/31/1999. Collateralized by
Federal National Mortgage Association
6.400% due 12/21/2001 valued at $45,413.
Repurchase proceeds are $44,536.)
-----------
Total Short-Term Instruments 44,521
(Cost $44,521) ===========
Total Investments (a) 99.9% $2,889,461
(Cost $1,678,013)
Other Assets and Liabilities (Net) 0.1% 1,952
-----------
Net Assets 100.0% $2,891,413
===========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost. $1,222,140
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (10,692)
-----------
Unrealized appreciation-net $1,211,448
===========
(b) Non-income producing security.
30 See accompanying notes
<PAGE>
Schedule of Investments
Innovation Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 93.7%
- --------------------------------------------------------------------------------
Communications 8.0%
Qualcomm, Inc. (b) 820,000 $ 144,423
Nokia Corp. SP - ADR 350,000 66,500
General Instrument Corp. (b) 580,000 49,300
Next Level Communications, Inc. (b) 245,000 18,344
------------
278,567
Consumer Discretionary 4.9%
Gemstar International Group Ltd. (b) 1,296,000 92,340
General Motors Corp. `H' (b) 810,000 77,760
------------
170,100
Financial & Business Services 6.6%
DoubleClick, Inc. (b) 450,000 113,878
VeriSign, Inc. (b) 340,000 64,919
Sapient Corp. (b) 345,000 48,623
------------
227,420
Health Care 6.5%
Medimmune, Inc. (b) 400,000 66,350
Biogen, Inc. (b) 770,000 65,065
IDEC Pharmaceuticals Corp. (b) 640,000 62,880
Immunex Corp. (b) 265,000 29,018
------------
223,313
Technology 67.7%
Oracle Corp. (b) 1,220,000 136,717
I2 Technologies, Inc. (b) 690,000 134,550
Ariba, Inc. (b) 630,000 111,746
Cisco Systems, Inc. (b) 950,000 101,769
Vignette Corp. (b) 546,000 88,998
Siebel Systems, Inc. (b) 1,040,000 87,360
QLogic Corp. (b) 540,000 86,333
Sun Microsystems, Inc. (b) 1,095,000 84,794
JDS Uniphase Corp. (b) 519,000 83,721
E-Tek Dynamics, Inc. (b) 585,000 78,756
Veritas Software Corp. (b) 527,500 75,498
Redback Networks, Inc. (b) 410,000 72,774
Juniper Networks, Inc. (b) 200,000 68,000
ASM Lithography Holding NV (b) 589,000 66,999
Apple Computer, Inc. 630,000 64,772
Motorola, Inc. 429,900 63,303
Tibco Software, Inc. 404,100 61,827
Applied Materials, Inc. (b) 450,000 57,009
EMC Corp. (b) 510,000 55,718
Applied Micro Circuits Corp. (b) 420,000 53,445
Broadvision, Inc. (b) 304,000 51,699
Broadcom Corp. (b) 185,000 50,389
Ciena Corp. (b) 865,000 49,738
Brocade Communications Systems, Inc. (b) 280,000 49,560
America Online, Inc. (b) 630,000 47,526
Xilinx, Inc. (b) 1,040,000 47,288
Electronics for Imaging, Inc. (b) 735,000 42,722
Internet Capital Group LLC (b) 250,000 42,500
RealNetworks, Inc. (b) 340,000 40,906
Extreme Networks, Inc. (b) 487,500 40,706
Microsoft Corp. (b) 290,000 33,858
Phone.com, Inc. (b) 290,000 33,621
Lucent Technologies, Inc. 380,000 28,429
Sierra Semiconductor Corp. (b) 170,000 27,253
Vitesse Semiconductor Co. (b) 500,000 26,219
Sanmina Corp. (b) 240,000 23,970
Atmel Corp. (b) 680,000 20,103
Texas Instruments, Inc. 200,000 19,374
Research In Motion Ltd. (b) 400,000 18,475
RF Micro Devices, Inc. (b) 222,500 15,227
Indigo NV (b) 102,223 59
------------
2,343,711
------------
Total Common Stocks 3,243,111
(Cost $1,673,963) ============
Principal
Amounts Value
(000) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 7.6%
- --------------------------------------------------------------------------------
Repurchase Agreement 7.6%
State Street Bank
4.000% due 01/03/2000 $ 264,173 $ 264,173
(Dated 12/31/1999. Collateralized by
Federal National Mortgage Association
6.400% due 09/27/2001 valued at $153,004
and Federal Home Loan Bank 5.400% due
11/17/2003 valued at $116,466.
Repurchase proceeds are $264,261.)
------------
Total Short-Term Instruments 264,173
(Cost $264,173) ============
Total Investments (a) 101.3% $ 3,507,284
(Cost $1,938,136)
Other Assets and Liabilities (Net) (1.3%) (45,216)
------------
Net Assets 100.0% $ 3,462,068
============
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost. $ 1,574,471
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (5,323)
------------
Unrealized appreciation-net $ 1,569,148
============
(b) Non-income producing security.
See accompanying notes 31
<PAGE>
Schedule of Investments
International Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 96.4%
- --------------------------------------------------------------------------------
Australia 1.4%
Broken Hill Property Co. 29,500 $ 387
National Australia Bank Ltd. 18,600 285
News Corp. Ltd. 28,500 277
Telstra Corp. Ltd. (b) 47,100 256
Westpac Banking Corp. 33,300 230
Rio Tinto Ltd. 9,800 211
Southcorp Ltd. 39,600 140
Foster's Brewing Group Ltd. 44,000 126
Amcor Ltd. 'A' 22,900 107
Tabcorp Holdings Ltd. 15,500 105
Leighton Holdings Ltd. 25,900 100
----------
2,224
Brazil 1.3%
Telecomunicacoes Brasileiras SA SP - ADR 4,600 591
Centrais Electricas Brasileiras SA 'B' 12,565,000 300
Cia Vale De Rio 8,700 241
Petroleo Brasileiro SA 824,000 210
Banco Itau SA 1,500,000 129
Banco Bradesco SA 14,446,000 113
Banco Bradesco SA (b) 938,037 0
Telecomunicacoes Brasileiras SA 1,133,000 97
Companhia Energetica de Minas Gerais 3,842,000 86
Companhia Siderurgica Nacional 2,155,000 84
Companhia Cervejaria Brahma 100,000 73
Souza Cruz SA 7,200 53
Aracruz Celulose SA `B' 21,000 51
----------
2,028
Chile 2.6%
Compania de Telecomunicaciones de Chile SA SP - ADR 40,855 746
Banco Santander Chile SP - ADR 41,850 638
Enersis SA SP - ADR 24,122 567
Empresa Nacional de Electricidad SA SP - ADR 39,367 559
Compania Cervecerias Unidas SA SP - ADR 11,400 366
Gener SA SP - ADR 20,933 324
Sociedad Quimica y Minera de Chile SA SP - ADR 9,200 290
Masisa SA SP - ADR 21,000 270
Madeco SA SP - ADR 20,742 231
Quimica Y Minera de Chile 531 17
----------
4,008
China 0.5%
Beijing Datang Power Generation Co. Ltd. 1,062,000 176
Jiangsu Expressway Co. Ltd. 918,000 150
Shanghai Petrochemical Co. Ltd. `H' 778,000 122
Guangshen Railway Co. Ltd. `H' (b) 874,000 98
Huaneng Power International, Inc. 383,000 91
Qingling Motors Co. `H' 508,000 62
Yizheng Chemical Fibre Co. Ltd. `H' 202,000 57
China Southern Airlines Co. Ltd. 258,000 56
----------
812
Finland 3.0%
Nokia OYJ 19,112 3,465
Sonera Group OYJ (b) 5,600 384
UPM-Kymmene Corp. 3,526 142
Kemira OYJ 19,300 118
Sanoma-WSOY OYJ `B' (b) 2,110 108
Jot Automation Group OYJ 7,600 71
Yit-Yhtyma OY 6,344 70
Hartwall OY AB 4,700 68
Viking Line AB 1,750 65
Rautaruukki OY 8,425 59
Okobank 2,564 29
----------
4,579
France 10.9%
France Telecom SA 19,571 2,589
Total SA 15,032 2,006
Carrefour Supermarche 7,480 1,380
Banque National de Paris 12,820 1,183
L'OREAL 1,390 1,115
AXA-UAP 7,900 1,101
Vivendi (Ex-Generale Des Eaux) 10,938 988
Pinault-Printemps Redout 2,950 779
Hermes International 4,045 610
Lagardere SCA (b) 10,500 571
Alcatel Alsthom 2,470 567
Sanofi-Synthelabo SA (b) 12,860 536
Legrand SA 1,900 452
Castorama Dubois 1,470 447
Credit Lyonnais SA 9,700 444
Renault SA 8,540 412
Lafarge SA 3,501 408
Compagnie de Saint Gobain 1,780 335
Sodexho Alliance SA 1,750 310
Groupe Danone 980 231
Societe BIC SA 3,770 172
Groupe GTM 1,620 157
VIVENDI Warrant (b) 2,750 9
Schneider SA 1 0
----------
16,802
Germany 13.3%
Deutsche Telekom AG 58,832 4,140
Mannesmann AG 8,980 2,167
DaimlerChrysler AG 22,519 1,767
Allianz AG 4,947 1,662
Siemens AG 11,293 1,437
Deutsche Bank AG 15,422 1,303
SAP AG-Vorzug 2,060 1,256
Bayer AG 20,600 979
BASF AG 17,900 936
Dresdner Bank AG 16,120 877
Muenchener Rueckversicherungs-Gesellschaft AG 3,190 813
Bayerische Vereinsbank AG 10,500 717
MAN AG 17,000 639
VEBA AG 11,940 583
Viag AG 21,320 391
Bayerische Motoren Werke AG 12,220 373
Metro AG 6,800 372
----------
20,412
Hong Kong 0.3%
Guangdong Kelon Electric 202,000 153
Zhejiang Expressway Co. 982,000 149
Shenzhen Expressway 600,000 95
----------
397
Hungary 3.6%
Magyar Tavkozlesi Rt. 434,100 3,042
MOL Magyar Olaj-es Gazipari Rt. 41,800 869
OTP Bank Rt. 13,010 762
Gedeon Richter Rt. 9,745 641
Danubius Hotel and Spa Rt. 7,490 136
Pick Szeged Rt. 1,090 51
----------
5,501
Indonesia 0.1%
PT Semen Gresik 85,000 135
PT Telekomunikasi Indonesia 100,880 57
----------
192
Ireland 2.1%
Allied Irish Banks PLC 80,200 915
CRH PLC 35,600 767
Kerry Group PLC 33,800 405
Irish Life & Permanent PLC 34,441 326
Jefferson Smurfit Group PLC 101,200 306
Eircom PLC 52,000 223
Eircom PLC SP-ADR 35,000 143
Bank of Ireland 9,200 73
----------
3,158
Italy 2.2%
Telecom Italia Mobile SpA 65,400 731
ENI SpA 93,000 512
Telecom Italia SpA 31,865 449
Assicuazioni Generali 12,535 414
Istituto Bancario San Paolo di Torino 20,757 282
Fiat SpA 6,540 187
Benetton Group SpA 75,700 174
Banca Popolare di Milano 19,200 150
Banca Commerciale Italiana 20,236 110
Cartiere Burgo SpA 15,100 99
32 See accompanying notes
<PAGE>
Value
Shares (000s)
- --------------------------------------------------------------------------------
Montedison SpA 97,344 $ 93
Banca Intesa SpA 21,885 89
Enel SpA 9,100 38
Beni Stabili SpA (b) 20,757 7
Banca Intesa SpA 3,486 6
--------
3,341
Japan 18.2%
Murata Manufacturing Co. 11,000 2,584
Toyota Motor Corp. 45,000 2,180
Nippon Telegraph & Telephone 127 2,175
Fanuc 16,300 2,076
Sharp Corp. 67,000 1,715
Sony Corp. 5,500 1,631
Bank of Tokyo-Mitsubishi Ltd. 106,000 1,477
Fujisawa Pharmaceutical 43,000 1,044
Matsushita Electric Industrial Co. Ltd. 36,000 997
Fuji Photo Film 26,000 949
Kirin Brewery Co. Ltd. 83,000 873
Hitachi Ltd. 52,000 835
Tokyo Electric Power 28,300 759
Canon, Inc. 18,000 715
NEC Corp. 27,000 643
Shiseido Co. Ltd. 42,000 613
Asahi Chemical Industry Co. Ltd. 118,000 606
Nomura Securities Co. Ltd. 31,000 560
Sekisui Chemical Co. Ltd. 125,000 554
Tokio Marine & Fire Insurance Co. 46,000 538
Sumitomo Electric Industries 46,000 532
Sumitomo Bank Ltd. 38,000 520
Mitsubishi Heavy Industries Ltd. 131,000 437
Bridgestone Corp. 19,000 418
Aoyama Trading Co. Ltd. 19,000 407
Fujitsu Ltd. 8,000 365
Sankyo Co. Ltd. 17,000 349
DAI Nippon Printing Co. Ltd. 21,000 335
Secom 3,000 330
Nippon Steel Corp. 123,000 288
Nissan Motor Co. Ltd. 63,000 248
Honda Motor Co. Ltd. 6,000 223
--------
27,976
Malaysia 1.5%
Tenaga Nasional Bhd. 185,000 477
Malayan Banking Bhd. 122,000 433
Telekom Malaysia Bhd. 106,000 410
Petronas Gas Berhad 99,000 232
Malaysia Internation Shipping Bhd. 137,000 225
Public Bank Bhd. 216,000 224
Commerce Asset-Holding Bhd. 49,000 126
Resorts World Bhd 37,000 106
Malaysian Airline System Bhd. 115,000 99
--------
2,332
Mexico 2.2%
Telefonos de Mexico SP - ADR 9,870 1,110
Cifra SA de CV `V' 155,793 312
Cemex SA de CV (b) 10,567 295
Grupo Televisa SA SP - GDR (b) 4,200 287
Grupo Modelo SA de CV `C' 101,500 279
Grupo Mexico SA `B' 34,800 172
Grupo Industrial Bimbo SA de CV `A' 73,540 164
Grupo Carso SA de CV `A1' (b) 32,850 164
Kimberly-Clark de Mexico SA de CV `A' 39,350 154
Formento Economico Mexicano SP - ADR 3,140 140
Alfa SA de CV `A' 21,050 99
Empresas La Moderna SA de CV (b) 15,400 89
TV Azteca SA de CV SP - ADR 4,100 37
Controladora Comercial Mexicana SA de CV 27,000 36
Industrias Penoles SA `CP' (b) 12,100 35
Desc SA de CV `B' 37,600 31
Desc SA de CV `C' 7,835 7
Transport Maritima SP-ADR 750 4
--------
3,415
Netherlands 3.9%
Royal Dutch Petroleum Co. 25,770 1,580
ING Groep NV 10,685 645
Koninklijke KPN NV 5,670 553
Koninklijke Philips Electronics NV 3,900 530
Unilever NV 7,953 439
Aegon NV 4,200 406
ABN-AMRO Holdings 13,600 340
Fortis NL 7,960 287
Verernigde Nederlandse Uitgeversbedrijven
verenigd Bezit 4,380 230
Akzo Noble NV 3,980 200
TNT Post Groep NV (b) 6,340 182
Elsevier NV 14,030 168
Heineken NV 3,100 151
Koninklijke Ahold NV 4,700 139
Wolters Kluwer NV 2,900 98
--------
5,948
New Zealand 0.9%
Telecom Corp. of New Zealand Ltd. 159,200 749
Carter Holt Harvey Ltd. 147,500 193
Lion Nathan Ltd. 59,600 139
Fletcher Challenge Energy 52,800 138
Brierley Investments Ltd. (b) 566,000 118
Fisher & Paykel Industries Ltd. 21,200 81
--------
1,418
Norway 2.2%
Norsk Hydro ASA 28,470 1,195
Orkla ASA 20,800 358
Storebrand ASA 37,700 287
Christiania Bank Og Kreditkasse 53,900 266
Petroleum Geo-Services (b) 14,100 252
Den Norske Bank ASA 61,060 251
Norske Skogindustrier ASA 5,600 236
Merkantildata ASA 17,900 217
Tandberg Television ASA (b) 8,500 118
Tomra Systems ASA (b) 6,400 109
Hafslund ASA `B' 20,200 78
Unitor ASA 4,000 30
--------
3,397
Poland 1.6%
Telekomunikacja Polska (b) 125,000 806
Bank Slaski SA W Katowicach 3,620 246
Elektrim Spolka Akcyjna SA 21,780 216
Polski Koncern Naftowy 15,553 194
Bank Rozwoju Eksportu SA 5,980 189
Prokom Software SA 5,400 167
Bank Handlowy W. Warszawie 9,470 140
Wielkopolski Bank Kredytowy SA 19,590 133
Big Bank Gdanski SA 42,500 132
Softbank SA 2,860 95
Stomil Olsztyn SA 14,500 90
Debica SA 4,930 52
--------
2,460
Portugal 2.5%
Portugal Telecom SA 101,450 1,113
EDP-Electricidade de Portugal SA 57,000 995
Banco Comercial Portugues-R SA 86,090 478
Banco Espirito Santo e Comercial de Lisboa SA 11,085 312
Jeronimo Martins - SGPS SA 9,500 243
Brisa Auto Estradas de Portugal SA 29,550 227
Sonae Investimentos-Sociedade Gestora
de Participacoes Sociais SA 3,380 178
Cimpor-Cimentos de Portugal SGPS SA 10,495 174
Banco Portugues de Investimento 39,500 168
--------
3,888
Singapore 2.2%
DBS Group Holdings Ltd. 45,423 745
Singapore Press Holdings 27,400 594
Oversea-Chinese Banking Corp. 56,700 521
Singapore Airlines Ltd. 29,000 329
United Overseas Bank 31,574 279
City Developments Ltd. 44,000 258
Singapore Telecommunications 124,000 256
Overseas Union Bank 30,722 180
Singapore Tech Engineering Ltd. 111,000 172
Keppel Corp. Ltd. 46,000 120
--------
3,454
See accompanying notes 33
<PAGE>
Schedule of Investments (Cont.)
International Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- -------------------------------------------------------------------------------
South Korea 0.1%
SK Telecom Co. Ltd. 60 $ 215
-----------
Sweden 2.5%
MSCI Sweden Opal Series B (b) 10,660 3,853
-----------
Switzerland 5.1%
Roche Holding AG 143 1,697
Novartis AG 1,114 1,636
Credit Suisse Group 5,125 1,019
UBS AG (b) 3,550 959
Nestle SA 438 802
Zurich Allied AG 925 527
Swisscom AG 1,150 465
New ABB Ltd. (b) 2,873 351
Schindler Holding AG 119 191
Holderbank Financiere Glarus AG 131 179
-----------
7,826
Taiwan 2.7%
Taiwan Fund, Inc. 56,300 1,147
Winbond Electronics Corp. (b) 41,420 958
Asustek Computer, Inc. 42,000 585
China Steel Corp. SP - GDR 29,900 448
Asia Cement Corp. SP - GDR 37,817 365
Advanced Semiconductor Engineering SP - GDR (b) 14,391 282
Evergreen Marine Corp. 31,320 263
Standard Foods Taiwan Ltd. (b) 32,000 132
-----------
4,180
Turkey 5.1%
Turkiye Is Bankasi `C' 48,121,400 2,307
Yapi ve Kredi Bankasi AS 35,295,854 1,090
Turkiye Garanti Bankasi AS 51,210,200 774
Migros Turk TAS 871,200 562
Ege Biracilik ve Malt Sanayi AS 5,793,000 443
Arcelik AS 6,369,000 417
Eregli Demir Ve Celik Fabrikalari TAS 8,214,000 341
Trakya Cam Sanayii AS 23,045,104 293
Dogan Sirketler Grubu Holding AS 9,125,000 269
Akbank TAS 8,374,649 247
Aygaz AS 1,179,000 228
Vestel Elektronik Sanayi 884,000 212
Adana Cimento Sanayi `A' 5,311,744 191
Haci Omer Sabanci Holding AS 2,868,000 167
Netas Northern Electric Telekomunikasyon AS 1,200,600 159
Brisa Bridgestone Sabanci Lastik San. Ve Tic AS 1,976,000 118
-----------
7,818
United Kingdom 4.4%
Morgan Stanley Capital LLC 7,000 1,576
WEBS Index Fund 234,000 5,016
-----------
6,592
-----------
Total Common Stocks 148,226
(Cost $111,899) ===========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 3.6%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Time Deposits 3.6%
State Street Bank (c)
2.500% due 01/04/2000 BP 3,400 5,492
-----------
Total Short-Term Instruments 5,492
(Cost $5,483) ===========
Total Investments (a) 100.0% $ 153,718
(Cost $117,382)
Other Assets and Liabilities (Net) 0.0% 22
-----------
Net Assets 100.0% $ 153,740
===========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost. $ 41,749
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (5,413)
-----------
Unrealized appreciation-net $ 36,336
===========
(b) Non-income producing security.
(c) Assets with an aggregate market value of $5,492 have been segregated with
the custodian to cover margin requirements for the following open futures
contracts at December 31, 1999:
# of Unrealized
Type Contracts Appreciation
- -------------------------------------------------------------------------------
FTSE 100 Index Futures (03/2000) 61 $ 167
34 See accompanying notes
<PAGE>
Schedule of Investments
Mid-Cap Growth Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 100.5%
- --------------------------------------------------------------------------------
Aerospace 1.0%
General Dynamics Corp. 202,000 $ 10,656
-----------
Capital Goods 3.9%
Waters Corp. (b) 259,200 13,738
Millipore Corp. 344,700 13,314
TRW, Inc. 240,400 12,486
-----------
39,538
Communications 2.4%
CenturyTel, Inc. 280,350 13,282
Westwood One, Inc. 155,800 11,841
-----------
25,123
Consumer Discretionary 8.9%
Tiffany & Co. 189,800 16,940
Dollar Tree Stores, Inc. 303,000 14,677
B.J.'s Wholesale Club, Inc. (b) 384,600 14,038
Intimate Brands, Inc. 297,940 12,849
Bed, Bath & Beyond, Inc. (b) 323,500 11,242
Furniture Brands International, Inc. (b) 509,500 11,209
MGM Grand, Inc. (b) 206,700 10,400
Mattel, Inc. 1 0
-----------
91,355
Consumer Services 1.2%
Times Mirror Co. `A' 181,700 12,174
-----------
Consumer Staples 3.3%
Dean Foods Co. 312,000 12,402
SUPERVALU, Inc. 538,200 10,764
McCormick & Co. 342,900 10,201
-----------
33,367
Energy 4.0%
Kerr McGee Corp. 208,100 12,902
Dynegy, Inc. 517,900 12,591
Occidental Petroleum Corp. 578,400 12,508
Apache Corp. 45,600 1,684
Anadarko Petroleum Corp. 47,000 1,604
-----------
41,289
Financial & Business Services 14.3%
USWeb Corp. 324,100 14,402
Zions Bancorporation 229,400 13,578
Valassis Communications, Inc. (b) 297,050 12,550
Ambac Financial Group, Inc. 231,200 12,066
Providian Financial Corp. 117,850 10,732
Capital One Financial Corp. 222,000 10,698
Apartment Investment & Management Co. `A' (b) 264,500 10,530
Liberty Property Trust 431,100 10,454
PMI Group, Inc. 211,000 10,299
Bank United Corp. `A' 372,800 10,159
Profit Recovery Group International, Inc. (b) 373,700 9,925
Golden State Bancorp, Inc. (b) 477,600 8,239
Peoples Heritage Financial Group 513,100 7,729
Ace Ltd. 301,200 5,026
-----------
146,387
Health Care 8.5%
Medimmune, Inc. (b) 141,000 23,388
IDEC Pharmaceuticals Corp. (b) 181,800 17,862
Allergan, Inc. 273,300 13,596
Bausch & Lomb, Inc. 197,700 13,530
Forest Laboratories `A' (b) 151,700 9,320
C.R. Bard, Inc. 173,800 9,211
-----------
86,907
Materials & Processing 5.8%
Boise Cascade Corp. 332,900 13,482
Willamette Industries 283,900 13,184
Temple-Inland, Inc. 196,300 12,944
Martin Marietta Materials, Inc. 251,900 10,328
Pall Corp. 445,200 9,600
-----------
59,538
Technology 46.7%
Network Appliance, Inc. (b) 257,200 21,364
Citrix Systems, Inc. (b) 169,400 20,836
BEA Systems, Inc. (b) 291,400 20,380
Lam Research Corp. (b) 180,900 20,182
Symbol Technologies, Inc. 314,800 20,009
Comverse Technology, Inc. (b) 135,250 19,577
Veritas Software Corp. (b) 135,950 19,458
KLA-Tencor Corp. (b) 171,200 19,067
Sierra Semiconductor Corp. (b) 96,400 15,454
CSG Systems International, Inc. (b) 376,700 15,021
Applied Micro Circuits Corp. (b) 116,500 14,825
CTS Corp. 195,700 14,751
Dendrite International, Inc. (b) 409,550 13,874
ISS Group, Inc. (b) 188,900 13,436
JDS Uniphase Corp. (b) 83,200 13,421
Harmonic Lightwaves, Inc. (b) 140,400 13,329
Adaptec, Inc. (b) 266,000 13,267
Tektronix, Inc. 335,500 13,043
Jabil Circuit, Inc. (b) 177,300 12,943
Amdocs Ltd. (b) 367,800 12,689
Adobe Systems, Inc. 187,900 12,636
Compuware Corp. (b) 335,000 12,479
QLogic Corp. (b) 77,900 12,454
Xilinx, Inc. (b) 262,000 11,913
Entrust Technologies, Inc. (b) 190,100 11,393
Rational Software Corp. (b) 225,800 11,092
Integrated Device Technology, Inc. (b) 380,700 11,040
Network Solutions, Inc. (b) 50,500 10,987
RF Micro Devices, Inc. (b) 153,500 10,505
SDL, Inc. (b) 47,400 10,333
LSI Logic Corp. (b) 146,400 9,882
Legato Systems, Inc. (b) 134,100 9,228
Cypress Semiconductor Corp. (b) 232,900 7,540
Amkor Technology, Inc. (b) 192,500 5,438
Vishay Intertechnology, Inc. (b) 162,100 5,126
-----------
478,972
Utilities 0.5%
Florida Progress Corp. 113,200 4,790
-----------
Total Common Stocks 1,030,096
(Cost $770,977) ===========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 1.4%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreement 1.4%
State Street Bank
4.000% due 01/04/2000 $ 14,412 14,412
(Dated 12/31/1999. Collateralized by
Federal National Mortgage Association
6.400% due 12/21/2001 valued at $14,702.
Repurchase proceeds are $14,417.)
-----------
Total Short-Term Instruments 14,412
(Cost $14,412) ===========
Total Investments (a) 101.9% $1,044,508
(Cost $785,389)
Other Assets and Liabilities (Net) (1.9%) (19,174)
-----------
Net Assets 100.0% $1,025,334
===========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost. $ 281,274
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (22,155)
-----------
Unrealized appreciation-net $ 259,119
===========
(b) Non-income producing security.
See accompanying notes 35
<PAGE>
Schedule of Investments
Opportunity Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 95.6%
- --------------------------------------------------------------------------------
Capital Goods 0.5%
Tower Automotive, Inc. (b) 193,900 $ 2,993
-----------
Communications 12.1%
WinStar Communications, Inc. (b) 128,500 9,670
Pinnacle Holdings, Inc. (b) 203,300 8,615
Millicom International Cellular SA (b) 130,100 8,115
Worldgate Communications, Inc. (b) 157,500 7,491
Citadel Communications Corp. (b) 110,500 7,168
Cumulus Media, Inc. (b) 131,300 6,662
True North Communications 138,600 6,194
Young Broadcasting Corp. (b) 99,550 5,077
ICG Communications, Inc. (b) 269,800 5,059
Orckit Communications Ltd. (b) 104,000 3,569
American Mobile Satellite Corp. (b) 152,800 3,218
-----------
70,838
Consumer Discretionary 7.7%
B.J.'s Wholesale Club, Inc. (b) 168,300 6,143
United Stationers, Inc. 186,700 5,333
Zale Corp. (b) 100,800 4,876
Quiksilver, Inc. (b) 311,500 4,828
Charlotte Russe Holding, Inc. (b) 219,200 4,603
Pacific Sunwear of California (b) 137,250 4,375
Furniture Brands International, Inc. (b) 197,800 4,352
Netratings, Inc. (b) 83,100 3,999
School Specialty, Inc. (b) 227,400 3,439
Station Casinos, Inc. (b) 126,100 2,829
-----------
44,777
Consumer Services 3.5%
The Cheesecake Factory (b) 156,300 5,471
Sotheby's Holdings `A' 181,700 5,451
SFX Entertainment, Inc. `A' (b) 142,650 5,162
Avis Rent A Car, Inc. (b) 164,375 4,202
-----------
20,286
Consumer Staples 0.6%
Performance Food Group Co. (b) 156,100 3,805
-----------
Energy 5.5%
UTI Energy Corp. (b) 335,600 7,740
Rowan Cos., Inc. (b) 330,200 7,161
Key Energy Group, Inc. (b) 967,100 5,017
Newpark Resources, Inc. (b) 762,800 4,672
Ocean Energy, Inc. (b) 574,000 4,449
Superior Energy Services (b) 426,600 2,880
-----------
31,919
Environmental Services 0.4%
IT Group, Inc. (b) 283,000 2,600
-----------
Financial & Business Services 10.2%
Rare Medium Group, Inc. (b) 289,300 9,872
Reckson Service Industries, Inc. (b) 156,500 9,762
Modem Media Poppe Tyson, Inc. (b) 85,800 6,038
Precision Response Corp. (b) 218,100 5,289
Charles River Associates, Inc. (b) 152,000 5,092
Astoria Financial Corp. 149,200 4,541
Annuity and Life Re 166,800 4,358
Meristar Hospitality Corp. 271,600 4,346
Technology Solutions Co. (b) 118,200 3,871
Allied Capital Corp. Funds 170,300 3,119
Profit Recovery Group International, Inc. (b) 115,300 3,063
-----------
59,351
Health Care 16.5%
Medicis Pharmaceutical `A' (b) 352,900 15,020
Protein Design Labs, Inc. (b) 145,600 10,192
Arthrocare Corp. (b) 131,200 8,003
INAMED Corp. (b) 176,200 7,731
Renal Care Group, Inc. (b) 308,800 7,218
Progenics Pharmaceuticals, Inc. (b) 144,500 7,062
Health Management Associates, Inc. `A' (b) 512,100 6,849
Alkermes, Inc. (b) 123,900 6,087
ResMed, Inc. (b) 139,500 5,824
Cyberonics, Inc. (b) 318,100 5,070
Gilead Sciences, Inc. (b) 89,200 4,828
Jones Pharma, Inc. 102,100 4,435
Magellan Health Services (b) 654,000 4,128
MID Atlantic Medical Services (b) 461,600 3,837
-----------
96,284
Materials & Processing 1.6%
Shaw Group Inc. (The) 209,600 5,306
Gaylord Container Corp. `A' (b) 596,900 4,066
-----------
9,372
Technology 35.1%
Xircom, Inc. (b) 122,600 9,195
ImageX.com, Inc. (b) 214,500 8,982
Visual Networks, Inc. (b) 110,500 8,757
Intraware, Inc. (b) 108,600 8,681
TranSwitch Corp. (b) 118,500 8,599
Fairchild Semiconductor International, Inc. (b) 279,400 8,312
National Information Consortium, Inc. (b) 259,300 8,298
Art Technology Group, Inc. (b) 63,700 8,162
About.com, Inc. (b) 89,400 8,024
The Vialink Co. (b) 207,800 7,559
Getty Images, Inc. (b) 143,500 7,014
nFront, Inc. (b) 318,850 6,377
BindView Development Corp. (b) 127,925 6,356
Whittman-Hart, Inc. (b) 117,700 6,312
Peregrine Systems, Inc. (b) 73,900 6,221
Optimal Robotics Corp. (b) 164,500 6,128
MKS Instruments, Inc. (b) 160,600 5,802
NETIQ Corp. (b) 110,300 5,742
L-3 Communications Holdings, Inc. (b) 135,500 5,640
CuraGen Corp. (b) 72,800 5,078
Maxygen, Inc. (b) 70,800 5,027
Advanced Energy Industries (b) 98,500 4,851
ResourcePhoenix.com, Inc. (b) 231,000 4,562
Westell Technologies, Inc. (b) 420,900 4,525
CBT Group PLC SP - ADR (b) 133,100 4,459
Espeed, Inc. (b) 124,000 4,410
Documentum, Inc. (b) 70,300 4,209
Jupiter Communications, Inc. 138,800 4,199
CSG Systems International, Inc. (b) 102,000 4,067
Critical Path, Inc. (b) 41,500 3,916
Aeroflex, Inc. (b) 365,350 3,791
Helix Technology Corp. (b) 82,500 3,697
Digital Island, Inc. (b) 34,000 3,234
Metron Technology (b) 186,900 3,001
Digital Microwave Corp. (b) 76,400 1,791
-----------
204,978
Transportation 0.7%
Atlantic Coast Airlines Holdings (b) 184,000 4,370
-----------
Utilities 1.2%
Independent Energy Holdings PLC (b) 216,800 7,222
-----------
Total Common Stocks 558,795
(Cost $401,761) ===========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 4.9%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreement 4.9%
State Street Bank
4.000% due 01/03/2000 $ 28,403 28,403
(Dated 12/31/1999. Collateralized by
Federal National Mortgage Association
6.400% due 09/27/2001 valued at $28,974.
Repurchase proceeds are $28,412.)
-----------
Total Short-Term Instruments 28,403
(Cost $28,403) ===========
Total Investments (a) 100.5% $ 587,198
(Cost $430,164)
Other Assets and Liabilities (Net) (0.5%) (2,787)
-----------
Net Assets 100.0% $ 584,411
===========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost. $ 168,951
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value. (11,917)
-----------
Unrealized appreciation-net $ 157,034
===========
(b) Non-income producing security.
36 See accompanying notes
<PAGE>
Schedule of Investments
Precious Metals Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- -------------------------------------------------------------------------------
COMMON STOCKS 97.9%
- -------------------------------------------------------------------------------
Australia 5.3%
Lihir Gold Ltd. (b) 230,000 $ 168
Sons of Gwalia Ltd. `A' 50,000 167
Delta Gold NL 100,000 153
Newcrest Mining Ltd. 44,000 150
Normandy Mining Ltd. 150,000 106
Ranger Minerals NL (b) 38,224 55
Emperor Mines Ltd. (b) 86,999 38
-----------
837
Canada 28.9%
Meridian Gold, Inc. (b) 145,000 984
Agnico-Eagle Mines Ltd. 95,000 701
Franco-Nevada Mining Corp. Ltd. 44,950 690
Placer Dome, Inc. 55,000 591
Barrick Gold Corp. 30,000 531
Namibian Minerals Corp. (b) 75,000 459
IAMGOLD, International African Mining Gold Corp. 85,000 191
Central Fund of Canada 40,000 168
Richmont Mines, Inc. (b) 95,000 148
Battle Mountain Canada Ltd. 50,000 108
Pangea Goldfields, Inc. (b) 7,700 20
-----------
4,591
South Africa 38.0%
Harmony Gold Mining Co. Ltd. (b) 162,795 1,045
Gold Fields Ltd. SP - ADR 206,494 936
ASA Ltd. 45,000 852
AngloGold Ltd. 14,200 724
Western Areas Gold Mining Co. Ltd. 120,000 448
Durban Roodeport Deep Ltd. (b) 190,039 339
Driefontein Consolidated Ltd. 70,000 338
Randfontein Estates Gold Mining Co.
Witwatersrand Ltd. 175,000 245
Anglo American Platinum Corp. Ltd. 7,000 213
AngloGold Ltd. SP - ADR 7,000 180
Avgold Ltd. (b) 250,000 173
Consolidated African Mines Ltd. 1,000,000 128
Northam Platinum (b) 100,000 125
Randgold & Exploration Co. Ltd. (b) 86,000 119
Afrikander Lease Ltd. (b) 200,000 79
Durban Roodepoort Deep Ltd. SP - ADR (b) 41,961 71
Durban Roodepoort Deep Options `B' (b) 20,980 7
Randfontein Estates Gold Options (b) 7,800 3
Durban Roodepoort Deep Options (b) 83,922 0
-----------
6,025
United Kingdom 2.0%
Rangold Resources Ltd. (b) 78,900 316
-----------
United States 23.7%
Newmont Mining Corp. 40,000 980
Homestake Mining Co. 120,000 938
Goldcorp, Inc. `A' 140,000 805
Stillwater Mining Co. (b) 15,000 478
Battle Mountain Gold Co. 140,000 289
Golden Cycle Gold Corp. 24,862 158
Royal Gold, Inc. (b) 30,000 109
-----------
3,757
-----------
Total Common Stocks 15,526
(Cost $17,050) ===========
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 3.0%
- --------------------------------------------------------------------------------
Repurchase Agreements 3.0%
State Street Bank
4.000% due 01/03/2000 $ 475 $ 475
(Dated 12/31/1999. Collateralized by
Federal Home Loan Mortgage Corporation
6.680% 12/28/2001 valued at $489.
Repurchase proceeds are $475.)
-----------
Total Short-Term Instruments 475
(Cost $475) ===========
Total Investments (a) 100.9% $ 16,001
(Cost $17,525)
Other Assets and Liabilities (Net) (0.9%) (144)
-----------
Net Assets 100.0% $ 15,857
===========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes of was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost. $ 1,820
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value. (3,344)
-----------
Unrealized depreciation-net $ (1,524)
===========
(b) Non-income producing security.
See accompanying notes 37
<PAGE>
Schedule of Investments
Renaissance Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 97.0%
- --------------------------------------------------------------------------------
Aerospace 2.7%
Orbital Sciences Corp. (b) 780,000 $ 14,479
----------
Capital Goods 4.7%
CNH Global NV 1,081,500 14,397
Metso OYJ 537,000 6,978
McDermott International, Inc. 345,000 3,127
Raytheon Co. `A' 51,000 1,265
----------
25,767
Communications 3.3%
Loral Space & Communications Ltd. 609,500 14,818
Comsat Corp. 153,171 3,044
ICO Global Communications (b) 100,000 363
----------
18,225
Consumer Discretionary 3.7%
Tupperware Corp. 528,000 8,943
Hitachi Ltd. 517,000 8,299
Great Atlantic & Pacific Tea Co., Inc. 110,000 3,066
----------
20,308
Consumer Services 0.2%
Renaissance Re Holdings Ltd. 23,000 940
----------
Consumer Staples 8.7%
Suiza Foods Corp. (b) 475,000 18,822
Corn Products International, Inc. 389,000 12,740
Philip Morris Cos., Inc. 260,000 6,029
Tate & Lyle PLC 639,345 4,095
Tyson Foods, Inc. 235,000 3,819
Flowers Industries, Inc. 115,200 1,836
----------
47,341
Energy 14.4%
Valero Energy Corp. 1,000,900 19,893
Nabors Industries, Inc. (b) 595,600 18,426
R & B Falcon Corp. (b) 891,000 11,806
Rowan Cos., Inc. (b) 446,900 9,692
Union Pacific Resources Group 538,700 6,868
Gulf Canada Resources Ltd. 1,573,700 5,311
Tosco Corp. 137,500 3,738
Ocean Energy, Inc. (b) 380,000 2,945
----------
78,679
Environmental Services 1.0%
Republic Services, Inc. 360,000 5,175
----------
Financial & Business Services 18.1%
Aetna, Inc. 452,600 25,261
Ace Ltd. 1,174,800 19,604
Pacific Century Financial Corp. 754,300 14,096
Everest Reinsurance Holdings, Inc. 408,200 9,108
St. Paul Cos., Inc. 235,800 7,944
Conseco, Inc. 300,000 5,362
Washington Mutual, Inc. 190,000 4,940
Fremont General Corp. 667,000 4,919
AmeriCredit Corp. (b) 210,700 3,898
SLM Holding Corp. 57,900 2,446
Aon Corp. 25,000 1,000
IPC Holdings Limited 20,000 298
----------
98,876
Health Care 7.7%
Foundation Health Systems, Inc. `A' (b) 2,297,000 22,826
Tenet Healthcare Corp. (b) 821,900 19,315
----------
42,141
Materials & Processing 15.9%
Asia Pulp & Paper Co. Ltd. SP - ADR 2,535,900 19,970
Ispat International NV 1,005,300 16,210
Smurfit-Stone Container Corp. (b) 588,500 14,418
Gaylord Container Corp. `A' (b) 2,014,200 13,722
Ucar International, Inc. (b) 675,000 12,023
Buenaventura SA 211,000 3,389
Mercer International, Inc. 561,800 2,598
Eastman Chemical Co. 40,000 1,908
IMC Global, Inc. 100,000 1,638
CK Witco Corp. 83,800 1,121
----------
86,997
Technology 11.8%
Arrow Electronics, Inc. (b) 957,000 24,284
Micron Technology, Inc. (b) 244,000 18,971
Matsushita Electric Industrial Co. Ltd. 455,000 12,603
Kulicke & Soffa Industries (b) 131,100 5,580
Hutchinson Technology (b) 130,000 2,763
----------
64,201
Utilities 4.8%
Niagara Mohawk Holdings, Inc. 688,300 9,593
Midamerican Energy Holdings Co. (b) 209,000 7,041
Citizens Utilities Co. `B' 376,100 5,336
Western Resources, Inc. 255,000 4,335
PG&E Corp. 6,700 137
----------
26,442
----------
Total Common Stocks 529,571
(Cost $539,263) ==========
- --------------------------------------------------------------------------------
CONVERTIBLE BONDS & NOTES 0.4%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Convertible Bonds & Notes 0.4%
APP Finance VI Mauritius Ltd.
0.000% due 11/18/2012 $ 10,000 1,791
APP Global Finance Ltd.
2.000% due 07/25/2000 500 549
----------
Total Convertible Bonds & Notes 2,340
(Cost $2,345) ==========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 2.2%
- --------------------------------------------------------------------------------
Repurchase Agreement 2.2%
State Street Bank
4.000% due 01/03/2000 11,761 11,761
(Dated 12/31/1999. Collateralized by
Federal Home Loan Bank 5.400% due
11/17/2003 valued at $11,998.
Repurchase proceeds are $11,795.)
----------
Total Short-Term Instruments 11,761
(Cost $11,761) ==========
Total Investments (a) 99.6% $ 543,672
(Cost $553,369)
Other Assets and Liabilities (Net) 0.4% 2,288
----------
Net Assets 100.0% $ 545,960
==========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost. $ 59,945
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (69,642)
----------
Unrealized depreciation-net $ (9,697)
==========
(b) Non-income producing security.
38 See accompanying notes
<PAGE>
Schedule of Investments
Small-Cap Value Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 98.8%
- --------------------------------------------------------------------------------
Aerospace 4.1%
Cordant Technologies, Inc. 103,000 $ 3,399
Kaman Corp. 259,000 3,334
AAR Corp. 171,000 3,067
Newport News Shipbuilding, Inc. 110,000 3,025
---------
12,825
Building 4.8%
MDC Holdings, Inc. 217,000 3,404
Centex Construction Products, Inc. 83,000 3,237
Butler Manufacturing Co. 133,000 2,968
Hughes Supply, Inc. 137,000 2,954
Hussmann International, Inc. 184,000 2,771
---------
15,334
Capital Goods 13.1%
C&D Technologies, Inc. 85,200 3,621
Intermet Corp. 311,000 3,614
Tecumseh Products Co. `A' 73,100 3,449
Gleason Corp. 144,000 3,349
Arvin Industries, Inc. 117,800 3,343
Trinity Industries, Inc. 116,000 3,299
Meritor Automotive, Inc. 170,000 3,294
Westinghouse Air Brake Co. 185,000 3,284
Borg-Warner Automotive, Inc. 80,000 3,240
Precision Castparts Corp. 123,000 3,229
GenCorp, Inc. 321,600 3,177
Barnes Group, Inc. 164,000 2,675
MTS Systems Corp. 304,000 2,356
---------
41,930
Consumer Discretionary 12.9%
Harman International Industries, Inc. 63,000 3,535
Claire's Stores, Inc. 154,000 3,446
Burlington Coat Factory Warehouse Corp. 243,000 3,372
Lancaster Colony Corp. 101,000 3,346
Banta Corp. 148,000 3,339
Kimball International `B' 197,400 3,257
Russ Berrie & Co., Inc. 123,000 3,229
Ennis Business Forms 410,000 3,178
Jostens, Inc. 130,000 3,161
Sturm Ruger & Co., Inc. 334,000 2,964
Enesco Group, Inc. 266,000 2,943
Haverty Furniture Cos., Inc. 218,000 2,751
Brown Shoe Co., Inc. 185,000 2,613
---------
41,134
Consumer Services 2.0%
Chemed Corp. 120,000 3,435
Lubys Cafeterias, Inc. 273,000 3,105
---------
6,540
Consumer Staples 4.4%
Michael Foods, Inc. 139,000 3,423
Corn Products International, Inc. 98,000 3,210
Universal Foods 156,000 3,179
Universal Corp. 137,000 3,125
Nash Finch Co. 190,500 1,214
---------
14,151
Energy 5.6%
Santa Fe Snyder Corp. (b) 390,000 3,120
Mitchell Energy & Development Corp. `B' 141,000 3,040
UGI Corp. 142,900 2,921
World Fuel Services Corp. 388,000 2,910
Cross Timbers Oil Co. 305,700 2,770
Berry Petroleum Co. 108,100 1,635
St. Mary Land & Exploration 58,200 1,440
---------
17,836
Financial & Business Services 25.4%
UST Corp. 127,000 4,032
Raymond James Financial, Inc. 196,000 3,663
Arthur J. Gallagher & Co. 56,000 3,627
Shurgard Storage Centers, Inc. 153,000 3,548
Rollins Truck Leasing Co. 297,000 3,545
Health Care Property Investors, Inc. 146,640 3,501
Franchise Finance Corp. of America 144,000 3,447
Cabot Industrial Trust 184,400 3,388
Washington Federal, Inc. 167,000 3,298
United Dominion Realty Trust 332,000 3,279
McGrath Rentcorp 187,000 3,273
Innkeepers USA Trust 396,000 3,241
National Golf Properties, Inc. 163,000 3,219
Presidential Life Corp. 171,000 3,142
Kelly Services, Inc. `A' 125,000 3,141
Selective Insurance Group 182,000 3,128
AmerUs Life Holdings, Inc. `A' 136,000 3,128
New Plan Excel Realty Trust 196,000 3,099
Commercial Federal Corp. 172,000 3,064
Susquehanna Bancshares, Inc. 191,000 3,032
Dain Rauscher Corp. 65,000 3,023
BankAtlantic Bancorp, Inc. `A' 724,000 2,987
Hudson United Bancorp 116,000 2,964
Glimcher Realty Trust 229,000 2,949
Wallace Computer Services, Inc. 151,700 2,522
---------
81,240
Health Care 4.1%
Arrow International, Inc. 124,000 3,596
Dentsply International, Inc. 138,000 3,260
Invacare Corp. 158,000 3,169
Owens & Minor, Inc. 351,000 3,137
---------
13,162
Materials & Processing 9.4%
Hanna (M.A.) Co. 328,000 3,588
Commercial Metals Co. 102,000 3,462
Caraustar Industries, Inc. 144,000 3,456
Lincoln Electric Holdings, Inc. 160,000 3,300
Cleveland-Cliffs, Inc. 100,000 3,113
CLARCOR, Inc. 163,800 2,948
Wausau-Mosinee Paper Corp. 244,000 2,852
Ethyl Corp. 704,000 2,772
Universal Forest Products, Inc. 181,000 2,670
Omnova Solutions, Inc. 230,400 1,786
---------
29,947
Technology 1.0%
Dallas Semiconductor Corp. 51,000 3,285
---------
Transportation 1.9%
USFreightways Corp. 71,000 3,399
Sea Containers Ltd. `A' 104,000 2,769
---------
6,168
Utilities 10.1%
CMP Group, Inc. 130,000 3,583
Energen Corp. 187,000 3,378
Avista Corp. 217,000 3,350
Peoples Energy Corp. 96,000 3,216
United Illuminating Co. 62,000 3,185
Washington Gas Light Co. 115,000 3,163
National Fuel Gas Co. 67,000 3,116
Public Service Co. of New Mexico 190,000 3,088
Hawaiian Electric Industries, Inc. 106,000 3,061
RGS Energy Group, Inc. 148,000 3,043
---------
32,183
---------
Total Common Stocks 315,735
(Cost $359,379) =========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.5%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreement 0.5%
State Street Bank
4.000% due 01/03/2000 $ 1,501 1,501
(Dated 12/31/1999. Collateralized by
Federal Home Loan Bank 5.400% due
11/17/2003 valued at $1,536.
Repurchase proceeds are $1,502.)
---------
Total Short-Term Instruments 1,501
(Cost $1,501) =========
Total Investments (a) 99.3% $317,236
(Cost $360,880)
Other Assets and Liabilities (Net) 0.7% 2,159
---------
Net Assets 100.0% $319,395
=========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost.
$ 15,455
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (59,099)
---------
Unrealized depreciation-net $(43,644)
=========
(b) Non-income producing security.
See accompanying notes 39
<PAGE>
Schedule of Investments
Target Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 97.5%
- --------------------------------------------------------------------------------
Capital Goods 1.9%
Weatherford International, Inc. (b) 400,000 $ 15,975
Waters Corp. (b) 300,000 15,900
-----------
31,875
Communications 7.5%
Echostar Communications Corp. (b) 450,000 43,875
WinStar Communications, Inc. (b) 425,000 31,981
Worldgate Communications, Inc. (b) 542,500 25,803
Nextlink Communications, Inc. `A' (b) 275,000 22,842
-----------
124,501
Consumer Discretionary 9.4%
Gemstar International Group Ltd. (b) 650,000 46,313
Tiffany & Co. 375,000 33,469
Harley-Davidson, Inc. 300,000 19,219
Bed, Bath & Beyond, Inc. (b) 450,000 15,637
Emmis Broadcasting Corp. `A' (b) 125,000 15,580
Tandy Corp. 275,000 13,527
Kohls Corp. (b) 175,000 12,633
-----------
156,378
Consumer Services 1.2%
Royal Caribbean Cruises Ltd. 400,000 19,725
-----------
Energy 1.0%
Cooper Cameron Corp. (b) 350,000 17,128
-----------
Financial & Business Services 4.2%
Young & Rubicam, Inc. 500,000 35,375
VeriSign, Inc. (b) 150,000 28,641
E*Trade Group, Inc. (b) 250,000 6,531
-----------
70,547
Health Care 11.1%
Medimmune, Inc. (b) 275,000 45,616
Immunex Corp. (b) 350,000 38,325
Minimed, Inc. (b) 400,000 29,300
Biogen, Inc. (b) 325,000 27,462
Alkermes, Inc. (b) 500,000 24,563
Allergan, Inc. 400,000 19,900
-----------
185,166
Technology 58.1%
Comverse Technology, Inc. (b) 550,000 79,613
JDS Uniphase Corp. (b) 480,000 77,430
Citrix Systems, Inc. (b) 450,000 55,350
SDL, Inc. (b) 250,000 54,500
Sierra Semiconductor Corp. (b) 325,000 52,102
Jabil Circuit, Inc. (b) 600,000 43,800
CMGI, Inc. (b) 150,000 41,531
Sanmina Corp. (b) 400,000 39,950
Network Appliance, Inc. (b) 450,000 37,378
RF Micro Devices, Inc. (b) 500,000 34,219
Gilat Satellite Networks Ltd. (b) 275,000 32,656
E-Tek Dynamics, Inc. (b) 225,000 30,291
Teradyne, Inc. (b) 450,000 29,700
Xircom, Inc. (b) 350,000 26,250
Apple Computer, Inc. 250,000 25,703
Rational Software Corp. (b) 500,000 24,563
CommScope, Inc. (b) 600,000 24,187
Harmonic Lightwaves, Inc. (b) 250,000 23,734
Maxim Integrated Products, Inc. (b) 500,000 23,594
Portal Software, Inc. (b) 225,000 23,147
Lexmark International Group, Inc. `A' (b) 250,000 22,625
LSI Logic Corp. (b) 300,000 20,250
Psinet, Inc. (b) 300,000 18,525
Redback Networks, Inc. (b) 100,000 17,750
Altera Corp. (b) 350,000 17,346
Ciena Corp. (b) 300,000 17,250
Broadvision, Inc. (b) 100,000 17,006
Juniper Networks, Inc. (b) 50,000 17,000
Amdocs Ltd. (b) 400,000 13,800
Extreme Networks, Inc. (b) 125,000 10,437
Whittman-Hart, Inc. (b) 175,000 9,384
Phone.com, Inc. (b) 60,000 6,956
American Satellite Network, Inc. - Warrant (b) 53,250 0
-----------
968,027
Transportation 1.4%
Kansas City Southern Industries, Inc. 300,000 22,388
-----------
Utilities 1.7%
Calpine Corp. (b) 450,000 28,800
-----------
Total Common Stocks 1,624,535
(Cost $874,587) ===========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 3.2%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreement 3.2%
State Street Bank
4.000% due 01/03/2000 $ 54,037 54,037
(Dated 12/31/1999. Collateralized by
Federal Home Loan Bank 5.400% due
11/17/2003 valued at $55,122.
Repurchase proceeds are $54,055.)
-----------
Total Short-Term Instruments 54,037
(Cost $54,037) ===========
Total Investments (a) 100.7% $1,678,572
(Cost $928,624)
Other Assets and Liabilities (Net) (0.7%) (11,417)
-----------
Net Assets 100.0% $1,667,155
===========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost. $ 756,883
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (6,935)
-----------
Unrealized appreciation-net $ 749,948
===========
(b) Non-income producing security.
40 See accompanying notes
<PAGE>
Schedule of Investments
Tax-Efficient Equity Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 99.3%
- --------------------------------------------------------------------------------
Aerospace 1.5%
Honeywell International, Inc. 10,225 $ 590
General Dynamics Corp. 3,100 164
Boeing Co. 1,800 75
---------
829
Building 0.2%
Owens Corning 4,000 77
Fleetwood Enterprises, Inc. 2,000 41
Centex Corp. 500 12
---------
130
Capital Goods 6.5%
General Electric Co. 15,100 2,337
United Technologies Corp. 4,100 267
Johnson Controls, Inc. 2,100 119
PPG Industries, Inc. 1,900 119
Tyco International Ltd. 3,000 117
Caterpillar, Inc. 2,300 108
Navistar International Corp. (b) 2,000 95
Avery Dennison Corp. 1,300 94
Paccar, Inc. 1,600 71
Ingersoll-Rand Co. 1,200 66
Textron, Inc. 700 54
Deere & Co. 1,200 52
TRW, Inc. 1,000 52
Briggs & Stratton 900 48
ITT Industries, Inc. 1,300 43
Parker Hannifin Corp. 500 26
Dover Corp. 400 18
Minnesota Mining & Manufacturing Co. 100 10
Cummins Engine Co., Inc. 200 10
Snap-On, Inc. 100 3
---------
3,709
Communications 9.3%
SBC Communications, Inc. 23,201 1,131
AT&T Corp. 17,100 868
MCI WorldCom, Inc. (b) 13,050 692
Qualcomm, Inc. (b) 3,200 564
Bell Atlantic Corp. 7,300 449
BellSouth Corp. 8,200 383
Nortel Networks Corp. 2,800 283
Nextel Communications, Inc. `A' (b) 2,100 217
GTE Corp. 2,400 169
MediaOne Group, Inc. (b) 2,000 154
U.S. West, Inc. 1,500 108
Vodafone Group PLC SP - ADR 2,000 99
ALLTEL Corp. 1,000 83
CenturyTel, Inc. 1,200 57
---------
5,257
Consumer Discretionary 10.2%
Wal-Mart Stores, Inc. 20,700 1,431
Home Depot, Inc. 10,500 720
Time Warner, Inc. 6,800 493
General Motors Corp. 4,900 356
Gap, Inc. 5,875 270
Eastman Kodak Co. 3,500 232
UST, Inc. 7,900 199
Walgreen Co. 5,900 173
Ford Motor Co. 3,200 171
MAY Department Stores Co. 4,600 148
Emerson Electric Co. 2,000 115
Dayton Hudson Corp. 1,400 103
TJX Cos., Inc. 4,800 98
Cendant Corp. (b) 3,300 88
Federated Department Stores, Inc. (b) 1,700 86
Brunswick Corp. 3,800 85
Liz Claiborne, Inc. 2,200 83
Costco Wholesale Corp. 900 82
McGraw-Hill Companies, Inc. 1,300 80
Whirlpool Corp. 1,200 78
Circuit City Stores 1,600 72
Masco Corp. 2,700 69
Pitney Bowes, Inc. 1,400 68
Dollar General Corp. 2,906 66
Lowe's Cos., Inc. 1,100 66
Toys R US, Inc. (b) 4,500 64
Avon Products, Inc. 1,800 58
Nike, Inc. `B' 900 45
Best Buy Co., Inc. (b) 800 40
Colgate-Palmolive Co. 600 39
American Greetings Corp. `A' 1,500 35
AutoZone, Inc. (b) 1,000 32
Great Atlantic & Pacific Tea Co., Inc. 700 20
Goodyear Tire & Rubber Co. 500 14
VF Corp. 400 12
Office Depot, Inc. 1,000 11
---------
5,802
Consumer Services 3.4%
CBS Corp. 8,799 563
McDonald's Corp. 6,200 250
Interpublic Group of Companies, Inc. 3,400 196
Carnival Corp. `A' 3,900 186
Viacom, Inc. `B' (b) 2,800 169
Gannett, Inc. 1,600 131
Times Mirror Co. `A' 1,800 121
Disney (Walt) Co. 3,000 88
Harrah's Entertainment, Inc. (b) 3,300 87
Knight-Ridder, Inc. 1,300 77
Tribune Co. 1,000 55
New York Times Co. 600 29
---------
1,952
Consumer Staples 6.4%
Procter & Gamble Co. 6,200 679
Coca-Cola Co. 1 1,600 676
Kimberly-Clark Corp. 6,100 398
General Mills, Inc. 8,400 300
Quaker Oats Co. 3,800 249
Safeway, Inc. (b) 5,500 196
Anheuser Busch Cos., Inc. 2,600 184
Pepsico, Inc. 4,600 162
Unilever NV - NY Shares 2,800 152
Seagram Co. Ltd. 3,300 148
Fortune Brands, Inc. 3,400 112
Nabisco Group Holdings Corp. 7,000 74
Alberto-Culver Co. 2,500 65
Sysco Corp. 1,600 63
Bestfoods 1,200 62
Adolph Coors Co. `B' 1,000 53
Sara Lee Corp. 1,900 42
Brown-Forman Corp. 500 29
Kellogg Co. 200 6
---------
3,650
Energy 5.6%
Exxon Corp. 19,556 1,575
Royal Dutch Petroleum Co. 6,100 369
Chevron Corp. 1,900 165
AES Corp. (b) 1,900 142
Phillips Petroleum Co. 3,000 141
Rowan Cos., Inc. (b) 4,800 104
Conoco, Inc. 3,560 89
Atlantic Richfield Co. 1,000 87
Halliburton Co. 2,000 81
Helmerich & Payne, Inc. 3,500 76
Peco Energy Co. 2,100 73
Tosco Corp. 2,500 68
Amerada Hess Corp. 1,000 57
Sunoco, Inc. 2,300 54
Texaco, Inc. 900 49
Enron Corp. 600 27
Union Pacific Resources Group 1,900 24
Southern Co. 1,000 24
---------
3,205
Financial & Business Services 13.6%
Citigroup, Inc. 18,300 1,017
Chase Manhattan Corp. 7,500 583
Morgan Stanley, Dean Witter, Discover and Co. 3,700 528
Wells Fargo Co. 10,800 437
BankAmerica Corp. 8,000 401
See accompanying notes 41
<PAGE>
Schedule of Investments (Cont.)
Tax-Efficient Equity Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
American International Group, Inc. 3,391 $ 367
American Express Co. 1,900 316
Paychex, Inc. 7,000 280
State Street Corp. 3,700 270
Bank of New York 6,200 247
MGIC Investment Corp. 4,000 241
MBNA Corp. 8,600 234
Charles Schwab Corp. 5,400 207
Providian Financial Corp. 2,200 200
Federal National Mortgage Association 3,100 194
Federal Home Loan Mortgage Corp. 4,000 188
Hartford Financial Services Group, Inc. 3,800 180
Merrill Lynch & Co. 2,000 167
Sun Trust Banks, Inc. 2,400 165
Comerica, Inc. 3,000 140
Marsh & McLennan Cos 1,300 124
SLM Holding Corp. 2,900 123
Firstar Corp. 5,200 110
Household International, Inc. 2,700 101
Omnicom Group 1,000 100
Mellon Financial Corp. 2,900 99
Automatic Data Processing, Inc. 1,800 96
Northern Trust Corp. 1,600 85
Golden West Financial Corp. 2,100 70
Lehman Brothers Holdings, Inc. 800 68
Southtrust Corp. 1,500 57
Fleet Boston Financial Corp. 1,421 49
Bear Stearns Co., Inc. 1,165 49
American General Corp. 600 46
Franklin Resources, Inc. 1,300 42
AFLAC, Inc. 800 38
PNC Bank Corp. 700 31
Capital One Financial Corp. 600 29
Lincoln National Corp. 400 16
Republic New York Corp. 200 14
Torchmark Corp. 300 9
---------
7,718
Health Care 10.1%
Bristol-Myers Squibb Co. 12,800 822
Merck & Co., Inc. 10,700 718
Johnson & Johnson 6,200 577
Pfizer, Inc. 17,600 571
Amgen, Inc. (b) 9,000 541
Schering-Plough Corp. 9,900 418
Abbott Laboratories 10,200 370
Eli Lilly & Co. 5,200 346
CIGNA Corp. 2,900 234
Medtronic, Inc. 5,700 208
Warner-Lambert Co. 2,400 197
Wellpoint Health Networks, Inc. (b) 2,000 132
Becton Dickinson & Co. 4,600 122
United Healthcare Corp. 1,900 101
Guidant Corp. 1,800 85
Biomet, Inc. 2,000 80
Boston Scientific Corp. (b) 3,000 66
Pharmacia & Upjohn, Inc. 1,100 50
St. Jude Medical, Inc. 1,000 31
---------
5,669
Materials & Processing 2.3%
Rohm & Haas Co. 9,100 370
Alcoa, Inc. 2,700 224
E.I. Du Pont de Nemours, Inc. 1,893 125
Engelhard Corp. 5,200 98
W.R. Grace & Co. (b) 6,000 83
Sealed Air Corp. 1,500 78
Praxair, Inc. 1,400 70
National Service Industries, Inc. 2,000 59
Fort James Corp. 1,900 52
Barrick Gold Corp. 2,500 43
Air Products & Chemicals 1,100 37
Hercules, Inc. 1,300 36
Nucor Corp. 400 22
---------
1,297
Technology 27.8%
Microsoft Corp. (b) 24,400 2,849
Cisco Systems, Inc. (b) 15,700 1,682
Intel Corp. 18,400 1,515
Lucent Technologies, Inc. 16,300 1,219
Oracle Corp. (b) 8,400 941
International Business Machines Corp. 8,500 918
Dell Computer Corp. (b) 17,700 903
America Online, Inc. (b) 10,100 762
Sun Microsystems, Inc. (b) 8,800 681
Hewlett Packard Co. 5,200 592
EMC Corp. (b) 5,200 568
Yahoo, Inc. (b) 1,100 476
Texas Instruments, Inc. 4,000 388
Applied Materials, Inc. (b) 3,000 380
Tellabs, Inc. (b) 4,600 295
3Com Corp. (b) 6,100 287
Compuware Corp. (b) 6,900 257
Computer Sciences Corp. (b) 2,400 227
Network Appliance, Inc. (b) 2,400 199
Gateway, Inc. (b) 2,200 159
Solectron Corp. (b) 1,600 152
BMC Software, Inc. (b) 1,500 119
Adaptec, Inc. (b) 1,500 75
Corning, Inc. 500 64
Lexmark International Group, Inc. `A' (b) 500 45
PerkinElmer, Inc. 600 25
---------
15,778
Transportation 0.8%
Kansas City Southern Industries, Inc. 3,100 231
Delta Air Lines, Inc. 1,500 75
FDX Corp. (b) 1,200 49
AMR Corp. (b) 500 34
Southwest Airlines Co. 1,500 24
Laidlaw, Inc. 3,800 20
---------
433
Utilities 1.6%
Edison International 13,100 343
Coastal Corp. 4,700 167
Columbia Gas Systems, Inc. 1,800 114
DTE Energy Co. 2,600 82
Duke Energy Corp. 1,400 70
Peoples Energy Corp. 1,200 40
Public Service Enterprise Group, Inc. 1,100 38
Consolidated Edison, Inc. 900 31
Central & South West Corp. 900 18
Constellation Energy Group, Inc. 400 12
Sempra Energy 500 9
---------
924
---------
Total Common Stocks 56,353
(Cost $47,350) =========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.2%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreement 0.2%
State Street Bank
4.000% due 01/03/2000 $ 134 134
(Dated 12/31/1999. Collateralized by
Federal Home Loan Mortgage Corporation
6.680% due 12/28/2001 valued at $140.
Repurchase proceeds are $134.)
---------
Total Short-Term Instruments 134
(Cost $134) =========
Total Investments (a) 99.5% $ 56,487
(Cost $47,484)
Other Assets and Liabilities (Net) 0.5% 269
---------
Net Assets 100.0% $ 56,756
=========
42 See accompanying notes
<PAGE>
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost. $ 10,658
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (1,655)
---------
Unrealized appreciation-net $ 9,003
=========
(b) Non-income producing security.
See accompanying notes 43
<PAGE>
Schedule of Investments
Value Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 98.5%
- --------------------------------------------------------------------------------
Aerospace 2.1%
Northrop Grumman Corp. 82,000 $ 4,433
---------
Capital Goods 6.2%
Dana Corp. 285,000 8,532
Parker Hannifin Corp. 90,000 4,618
---------
13,150
Communications 7.6%
Bell Atlantic Corp. 130,000 8,003
GTE Corp. 113,000 7,974
---------
15,977
Consumer Discretionary 15.5%
Tupperware Corp. 450,000 7,622
Thomas & Betts Corp. 210,000 6,694
Brunswick Corp. 210,000 4,672
Whirlpool Corp. 71,600 4,658
UST, Inc. 180,000 4,534
Liz Claiborne, Inc. 115,000 4,327
Lanier Worldwide, Inc. 122,000 473
---------
32,980
Consumer Services 2.1%
Central Newspapers, Inc. `A' 116,000 4,567
---------
Consumer Staples 4.2%
SUPERVALU, Inc. 235,000 4,700
Fortune Brands, Inc. 125,000 4,133
---------
8,833
Energy 16.7%
Conoco, Inc. 372,000 9,254
Kerr McGee Corp. 145,000 8,990
Ultramar Diamond Shamrock Corp. 375,000 8,508
Santa Fe International Corp. 175,000 4,528
Repsol SA SP - ADR 180,000 4,185
---------
35,465
Financial & Business Services 12.8%
Morgan, J.P. & Co., Inc. 67,000 8,484
Deluxe Corp. 275,000 7,545
PNC Bank Corp. 100,000 4,450
Union Planters Corp. 105,000 4,141
Conseco, Inc. 139,600 2,495
---------
27,115
Health Care 5.7%
Mallinckrodt, Inc. 250,000 7,953
Abbott Laboratories 115,000 4,176
---------
12,129
Materials & Processing 12.1%
Westvaco Corp. 275,000 8,972
USX-U.S. Steel Group, Inc. 270,000 8,910
USG Corp. (b) 85,000 4,006
IMC Global, Inc. 230,000 3,766
---------
25,654
Technology 5.5%
Intel Corp. 51,000 4,198
Unisys Corp. (b) 130,000 4,152
Harris Corp. 122,000 3,256
---------
11,606
Utilities 8.0%
Public Service Enterprise Group, Inc. 245,000 8,529
DTE Energy Co. 135,000 4,236
NICOR, Inc. 130,000 4,225
---------
16,990
---------
Total Common Stocks 208,899
(Cost $222,642) =========
Principal
Amounts
(000)s
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 1.7%
- --------------------------------------------------------------------------------
Repurchase Agreement 1.7%
State Street Bank
4.000% due 01/03/2000 $ 3,510 $ 3,510
(Dated 12/31/1999. Collateralized by
Federal National Mortgage Association
0.000% due 01/18/2000 valued at $3,581
Repurchase proceeds are $3,511.)
---------
Total Short-Term Instruments 3,510
(Cost $3,510) =========
Total Investments (a) 100.2% $ 212,409
(Cost $226,152)
Other Assets and Liabilities (Net) (0.2%) (392)
---------
Net Assets 100.0% $ 212,017
=========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost. $ 11,412
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value. (25,155)
---------
Unrealized depreciation-net $ (13,743)
=========
(b) Non-income producing security.
44 See accompanying notes
<PAGE>
Schedule of Investments
Value 25 Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 101.0%
- --------------------------------------------------------------------------------
Aerospace 4.2%
Cordant Technologies, Inc. 2,800 $ 92
--------
Building 13.2%
York International Corp. 3,600 99
Lafarge Corp. 3,400 94
Clayton Homes, Inc. 10,200 94
--------
287
Capital Goods 16.8%
GATX Corp. 2,800 95
Meritor Automotive, Inc. 4,800 93
Paccar, Inc. 2,000 89
Snap-On, Inc. 3,300 88
--------
365
Consumer Discretionary 23.9%
Armstrong World Industries 2,800 93
U.S. Industries, Inc. (b) 6,600 92
Ross Stores, Inc. 5,100 91
UST, Inc. 3,600 91
Brunswick Corp. 4,000 89
Cooper Tire & Rubber Co. 4,000 62
--------
518
Consumer Staples 3.5%
IBP, Inc. 4,200 75
--------
Financial & Business Services 11.7%
Old Republic International Corp. 6,700 91
American National Insurance Co. 1,300 83
Crescent Real Estate Equities Co. 4,400 81
--------
255
Materials & Processing 14.9%
Sherwin-Williams Co. 4,400 92
Louisiana-Pacific Corp. 6,100 87
USX-U.S. Steel Group, Inc. 2,400 79
IMC Global, Inc. 4,000 66
--------
324
Technology 3.6%
Avnet, Inc. 1,300 79
--------
Transportation 9.2%
CNF Transportation, Inc. 3,100 107
Ryder System, Inc. 3,800 93
--------
200
--------
Total Common Stocks 2,195
(Cost $2,333) ========
Total Investments (a) 101.0% $ 2,195
(Cost $2,333)
Other Assets and Liabilities (Net) (1.0%) (22)
--------
Net Assets 100.0% $ 2,173
========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost. $ 66
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value. (204)
--------
Unrealized depreciation-net $ (138)
========
(b) Non-income producing security.
See accompanying notes 45
<PAGE>
Financial Highlights - A, B and C Classes
<TABLE>
<CAPTION>
Net Asset Net Realized / Dividends Dividends in
Value Unrealized Gain Total Income from from Net Excess of Net
Selected Per Share Data for Beginning Net Investment (Loss) on Investment Investment Investment
the Year or Period Ended: of Period Income (Loss) Investments Operations Income Income
----------- --------------- --------------- ----------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Capital Appreciation Fund
Class A
12/31/1999 (a) $ 26.65 $ (0.01)(b) $ 3.36(b) $ 3.35 $ (0.02) $ 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
06/30/1999 26.01 0.06(b) 2.33(b) 2.39 (0.10) 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
06/30/1998 21.16 0.07(b) 6.55(b) 6.62 (0.09) 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
01/20/1997-06/30/1997 19.31 0.09 1.76 1.85 0.00 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
Class B
12/31/1999 (a) 26.29 (0.10)(b) 3.29(b) 3.19 0.00 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
06/30/1999 25.75 (0.13)(b) 2.32(b) 2.19 0.00 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
06/30/1998 21.10 (0.11)(b) 6.51(b) 6.40 (0.07) 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
01/20/1997-06/30/1997 19.31 0.01 1.78 1.79 0.00 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
Class C
12/31/1999 (a) 26.31 (0.10)(b) 3.30(b) 3.20 0.00 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
06/30/1999 25.78 (0.13)(b) 2.31(b) 2.18 0.00 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
06/30/1998 21.10 (0.12)(b) 6.53(b) 6.41 (0.05) 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
01/20/1997-06/30/1997 19.31 0.02 1.77 1.79 0.00 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
Equity Income Fund
Class A
12/31/1999 (a) $ 15.58 $ 0.19(b) $ (2.10)(b) $ (1.91) $ (0.25) $ 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
06/30/1999 16.04 0.39(b) 1.29(b) 1.68 (0.38) 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
06/30/1998 15.39 0.39(b) 2.73(b) 3.12 (0.38) 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
01/20/1997-06/30/1997 13.94 0.15 1.48 1.63 (0.18) 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
Class B
12/31/1999 (a) 15.50 0.13(b) (2.07)(b) (1.94) (0.20) 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
06/30/1999 15.99 0.28(b) 1.27(b) 1.55 (0.28) 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
06/30/1998 15.37 0.26(b) 2.73(b) 2.99 (0.28) 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
01/20/1997-06/30/1997 13.94 0.11 1.48 1.59 (0.16) 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
Class C
12/31/1999 (a) 15.52 0.13(b) (2.07)(b) (1.94) (0.20) 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
06/30/1999 16.01 0.27(b) 1.27(b) 1.54 (0.27) 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
06/30/1998 15.37 0.26(b) 2.74(b) 3.00 (0.27) 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
01/20/1997-06/30/1997 13.94 0.11 1.48 1.59 (0.16) 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
Growth Fund
Class A
12/31/1999 (a) $ 34.12 $ (0.13)(b) $ 10.05(b) $ 9.92 $ 0.00 $ 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
06/30/1999 32.62 (0.14)(b) 5.56(b) 5.42 0.00 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
06/30/1998 27.03 (0.08)(b) 9.99(b) 9.91 0.00 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
10/01/1996-06/30/1997 26.58 0.69 3.27 3.96 0.00 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
09/30/1996 25.73 0.06 3.72 3.78 0.00 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
09/30/1995 22.01 0.12 4.79 4.91 0.00 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
Class B
12/31/1999 (a) 31.15 (0.24)(b) 9.04(b) 8.80 0.00 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
06/30/1999 30.34 (0.35)(b) 5.08(b) 4.73 0.00 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
06/30/1998 25.59 (0.28)(b) 9.35(b) 9.07 0.00 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
10/01/1996-06/30/1997 25.46 0.35 3.29 3.64 0.00 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
09/30/1996 24.94 (0.07) 3.52 3.45 0.00 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
05/23/1995-09/30/1995 22.63 (0.03) 2.34 2.31 0.00 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
Class C
12/31/1999 (a) 31.15 (0.24)(b) 9.04(b) 8.80 0.00 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
06/30/1999 30.33 (0.35)(b) 5.09(b) 4.74 0.00 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
06/30/1998 25.58 (0.28)(b) 9.35(b) 9.07 0.00 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
10/01/1996-06/30/1997 25.46 0.45 3.18 3.63 0.00 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
09/30/1996 24.94 (0.12) 3.57 3.45 0.00 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
09/30/1995 21.52 (0.04) 4.65 4.61 0.00 0.00
- ---------------------------- ----------- --------------- --------------- ----------------- ------------ -------------
</TABLE>
* Annualized
(a) Unaudited
(b) Per share amounts based on average number of shares outstanding during the
period.
46 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Distributions in Ratio of
Distributions from Excess of Net Expenses
Net Realized Realized Capital Net Asset Value Net Assets End to Average
Capital Gains Gains Total Distributions End of Period Total Return of Period (000s) Net Assets
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
<S> <C> <C> <C> <C> <C> <C>
$ (5.00) $ 0.00 $ (5.02) $ 24.98 13.80% $ 79,800 1.10%*
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(1.65) 0.00 (1.75) 26.65 10.14 91,296 1.10
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(1.68) 0.00 (1.77) 26.01 32.39 72,803 1.10
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
0.00 0.00 0.00 21.16 9.58 6,534 1.11*
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(5.00) 0.00 (5.00) 24.48 3.36 59,119 1.85*
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(1.65) 0.00 (1.65) 26.29 9.39 55,094 1.85
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(1.68) 0.00 (1.75) 25.75 1.39 40,901 1.85
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
0.00 0.00 0.00 21.10 9.27 3,022 1.85*
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(5.00) 0.00 (5.00) 24.51 13.39 78,628 1.85*
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(1.65) 0.00 (1.65) 26.31 9.34 81,097 1.85
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(1.68) 0.00 (1.73) 25.78 31.40 71,481 1.85
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
0.00 0.00 0.00 21.10 9.27 13,093 1.86*
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
$ (2.64) $ 0.00 $ (2.89) $ 10.78 (11.74)% $ 14,451 1.13%*
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(1.76) 0.00 (2.14) 15.58 12.26 17,342 1.10
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(2.09) 0.00 (2.47) 16.04 21.35 12,954 1.11
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
0.00 0.00 (0.18) 15.39 11.77 1,756 1.13*
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(2.64) 0.00 (2.84) 10.72 (11.98) 17,181 1.88*
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(1.76) 0.00 (2.04) 15.50 11.35 21,732 1.85
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(2.09) 0.00 (2.37) 15.99 20.47 15,178 1.85
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
0.00 0.00 (0.16) 15.37 11.45 2,561 1.87*
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(2.64) 0.00 (2.84) 10.74 (11.99) 18,127 1.88*
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(1.76) 0.00 (2.03) 15.52 11.28 26,016 1.85
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(2.09) 0.00 (2.36) 16.01 20.51 23,122 1.85
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
0.00 0.00 (0.16) 15.37 11.42 6,624 1.87*
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
$ (5.66) $ 0.00 $ (5.66) $ 38.38 30.59% $ 258,000 1.17%*
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(3.92) 0.00 (3.92) 34.12 18.65 227,638 1.16
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(4.32) 0.00 (4.32) 32.62 41.03 180,119 1.16
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(3.51) 0.00 (3.51) 27.03 15.93 147,276 1.11*
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(2.93) 0.00 (2.93) 26.58 16.11 151,103 1.11
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(1.19) 0.00 (1.19) 25.73 23.70 134,819 1.10
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(5.66) 0.00 (5.66) 34.29 29.91 176,976 1.92*
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(3.92) 0.00 (3.92) 31.15 17.72 133,850 1.90
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(4.32) 0.00 (4.32) 30.34 39.97 80,719 1.91
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(3.51) 0.00 (3.51) 25.59 15.32 55,626 1.86*
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(2.93) 0.00 (2.93) 25.46 15.22 37,256 1.86
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
0.00 0.00 0.00 24.94 10.20 7,671 1.90*
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(5.66) 0.00 (5.66) 34.29 29.91 2,436,345 1.92*
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(3.92) 0.00 (3.92) 31.15 17.76 2,064,450 1.90
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(4.32) 0.00 (4.32) 30.33 39.99 1,853,002 1.91
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(3.51) 0.00 (3.51) 25.58 15.27 1,514,432 1.86*
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(2.93) 0.00 (2.93) 25.46 15.22 1,450,216 1.86
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
(1.19) 0.00 (1.19) 24.94 22.80 1,290,152 1.90
- ------------------ ----------------- ------------------- --------------- ------------- ---------------- -------------
</TABLE>
Ratio of Net
Investment
Income (Loss)
to Average Portfolio
Net Assets Turnover Rate
- -------------- ----------------
(0.06)%* 52%
- -------------- ----------------
0.24 120
- -------------- ----------------
0.27 75
- -------------- ----------------
0.59* 87
- -------------- ----------------
(0.81)* 52
- -------------- ----------------
(0.52) 120
- -------------- ----------------
(0.47) 75
- -------------- ----------------
(0.26)* 87
- -------------- ----------------
(0.81)* 52
- -------------- ----------------
(0.52) 120
- -------------- ----------------
(0.49) 75
- -------------- ----------------
(0.23)* 87
- -------------- ----------------
2.68%* 26%
- -------------- ----------------
2.64 76
- -------------- ----------------
2.39 45
- -------------- ----------------
2.85* 45
- -------------- ----------------
1.92* 26
- -------------- ----------------
1.89 76
- -------------- ----------------
1.63 45
- -------------- ----------------
2.11* 45
- -------------- ----------------
1.90* 26
- -------------- ----------------
1.86 76
- -------------- ----------------
1.60 45
- -------------- ----------------
2.15* 45
- -------------- ----------------
(0.77)%* 35%
- -------------- ----------------
(0.44) 131
- -------------- ----------------
(0.27) 123
- -------------- ----------------
0.13* 94
- -------------- ----------------
0.24 104
- -------------- ------- --------
0.50 111
- -------------- ----------------
(1.52)* 35
- -------------- ----------------
(1.19) 131
- -------------- ----------------
(1.02) 123
- -------------- ----------------
(0.62)* 94
- -------------- ----------------
(0.51) 104
- -------------- ----------------
(0.40)* 111
- -------------- ----------------
(1.52)* 35
- -------------- ----------------
(1.18) 131
- -------------- ----------------
(1.02) 123
- -------------- ----------------
(0.61)* 94
- -------------- ----------------
(0.51) 104
- -------------- ----------------
(0.20) 111
- -------------- ----------------
See accompanying notes 47
<PAGE>
Financial Highlights - A, B and C Classes
<TABLE>
<CAPTION>
Net Asset Net Realized/ Dividends Dividends in
Value Unrealized Gain Total Income from from Net Excess of Net
Selected Per Share Data for Beginning Net Investment (Loss) on Investment Investment Investment
the Year or Period Ended: of Period Income (Loss) Investments Operations Income Income
---------- --------------- ------------------ ------------------ ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Innovation Fund
Class A
12/31/1999 (a) $ 37.46 $ (0.23)(b) $ 34.43(b) $ 34.20 $ 0.00 $ 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
06/30/1999 24.28 (0.28)(b) 14.72(b) 14.44 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
06/30/1998 17.43 (0.19)(b) 8.21(b) 8.02 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
10/01/1996-06/30/1997 17.26 0.07 0.36 0.43 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
09/30/1996 14.74 (0.07) 2.94 2.87 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
12/22/1994-09/30/1995 10.00 (0.06) 4.80 4.74 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
Class B
12/31/1999 (a) 36.09 (0.39)(b) 33.28(b) 32.89 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
06/30/1999 23.60 (0.49)(b) 14.24(b) 13.75 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
06/30/1998 17.10 (0.33)(b) 8.00(b) 7.67 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
10/01/1996-06/30/1997 17.04 (0.03) 0.35 0.32 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
09/30/1996 14.66 (0.11) 2.84 2.73 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
05/22/1995-09/30/1995 11.81 (0.08) 2.93 2.85 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
Class C
12/31/1999 (a) 36.08 (0.39)(b) 33.27(b) 32.88 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
06/30/1999 23.59 (0.48)(b) 14.23(b) 13.75 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
06/30/1998 17.09 (0.33)(b) 8.00(b) 7.67 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
10/01/1996-06/30/1997 17.04 (0.02) 0.33 0.31 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
09/30/1996 14.65 (0.15) 2.89 2.74 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
12/22/1994-09/30/1995 10.00 (0.13) 4.78 4.65 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
International Fund
Class A
12/31/1999 (a) $ 12.45 $ 0.00(b) $ 2.56(b) $ 2.56 $ 0.00 $ 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
06/30/1999 14.33 0.01(b) (0.74)(b) (0.73) 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
06/30/1998 14.26 0.06(b) 1.13(b) 1.19 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
10/01/1996-06/30/1997 13.03 0.29 1.33 1.62 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
09/30/1996 12.19 0.07 0.77 0.84 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
09/30/1995 12.92 0.07 (0.56) (0.49) 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
Class B
12/31/1999 (a) 11.51 (0.05)(b) 2.37(b) 2.32 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
06/30/1999 13.46 (0.08)(b) (0.72)(b) (0.80) 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
06/30/1998 13.56 (0.05)(b) 1.07(b) 1.02 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
10/01/1996-06/30/1997 12.48 0.16 1.31 1.47 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
09/30/1996 11.75 0.00(b) 0.73(b) 0.73 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
05/22/1995-09/30/1995 11.30 0.00 0.45 0.45 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
Class C
12/31/1999 (a) 11.50 (0.05)(b) 2.37(b) 2.32 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
06/30/1999 13.45 (0.09)(b) (0.71)(b) (0.80) 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
06/30/1998 13.55 (0.06)(b) 1.08(b) 1.02 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
10/01/1996-06/30/1997 12.47 0.18 1.29 1.47 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
09/30/1996 11.75 (0.05) 0.77 0.72 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
09/30/1995 12.56 (0.02) (0.55) (0.57) 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
Mid-Cap Growth Fund
Class A
12/31/1999 (a) $ 22.82 $ 0.00(b) $ 2.99(b) $ 2.99 $ 0.00 $ 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
06/30/1999 24.00 0.03(b) (0.13)(b) (0.10) (0.01) 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
06/30/1998 20.24 0.02(b) 5.11(b) 5.13 (0.04) 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
01/13/1997-06/30/1997 18.14 (0.04) 2.14 2.10 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
Class B
12/31/1999 (a) 22.43 (0.08)(b) 2.97(b) 2.89 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
06/30/1999 23.77 (0.13)(b) (0.14)(b) (0.27) 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
06/30/1998 20.17 (0.16)(b) 5.09(b) 4.93 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
01/13/1997-06/30/1997 18.14 (0.11) 2.14 2.03 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
Class C
12/31/1999 (a) 22.44 (0.08)(b) 2.96(b) 2.88 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
06/30/1999 23.77 (0.13)(b) (0.13)(b) (0.26) 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
06/30/1998 20.18 (0.16)(b) 5.08(b) 4.92 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
01/13/1997-06/30/1997 18.14 (0.10) 2.14 2.04 0.00 0.00
- --------------------------- ---------- ------------ ------------ --------- -------- --------
</TABLE>
* Annualized
(a) Unaudited
(b) Per share amounts based on average number of shares outstanding during the
period.
(c) Ratio of expenses to average net assets excluding interest expense is 1.45%.
(d) Ratio of expenses to average net assets excluding interest expense is 2.20%.
48 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Distributions in
Distributions from Excess of Net
Selected Per Share Data for Net Realized Realized Capital Net Asset Value
the Year or Period Ended: Capital Gains Gains Total Distributions End of Period Total Return
------------------ ----------------- -------------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Innovation Funds
Class A
12/31/1999 (a) $ (6.39) $ 0.00 $ (6.39) $ 65.27 94.16%
- --------------------------------- --------- -------- --------- ---------- -----
06/30/1999 (1.26) 0.00 (1.26) 37.46 61.36
- --------------------------------- --------- -------- --------- ---------- -----
06/30/1998 (0.99) (0.18) (1.17) 24.28 48.10
- --------------------------------- --------- -------- --------- ---------- -----
10/01/1996-06/30/1997 (0.26) 0.00 (0.26) 17.43 2.41
- --------------------------------- --------- -------- --------- ---------- -----
09/30/1996 (0.35) 0.00 (0.35) 17.26 19.86
- --------------------------------- --------- -------- --------- ---------- -----
12/22/1994-09/30/1995 0.00 0.00 0.00 14.74 47.40
- --------------------------------- --------- -------- --------- ---------- -----
Class B
12/31/1999 (a) (6.39) 0.00 (6.39) 62.59 94.10
- --------------------------------- --------- -------- --------- ---------- -----
06/30/1999 (1.26) 0.00 (1.26) 36.09 60.17
- --------------------------------- --------- -------- --------- ---------- -----
06/30/1998 (0.99) (0.18) (1.17) 23.60 46.95
- --------------------------------- --------- -------- --------- ---------- -----
10/01/1996-06/30/1997 (0.26) 0.00 (0.26) 17.10 1.79
- --------------------------------- --------- -------- --------- ---------- -----
09/30/1996 (0.35) 0.00 (0.35) 17.04 18.99
- --------------------------------- --------- -------- --------- ---------- -----
05/22/1995-09/30/1995 0.00 0.00 0.00 14.66 24.10
- --------------------------------- --------- -------- --------- ---------- -----
Class C
12/31/1999 (a) (6.39) 0.00 (6.39) 62.57 94.10
- --------------------------------- --------- -------- --------- ---------- -----
06/30/1999 (1.26) 0.00 (1.26) 36.08 60.20
- --------------------------------- --------- -------- --------- ---------- -----
06/30/1998 (0.99) (0.18) (1.17) 23.59 46.97
- --------------------------------- --------- -------- --------- ---------- -----
10/01/1996-06/30/1997 (0.26) 0.00 (0.26) 17.09 1.73
- --------------------------------- --------- -------- --------- ---------- -----
09/30/1996 (0.35) 0.00 (0.35) 17.04 19.08
- --------------------------------- --------- -------- --------- ---------- -----
12/22/1994-09/30/1995 0.00 0.00 0.00 14.65 46.50
- --------------------------------- --------- -------- --------- ---------- -----
International Fund
Class A
12/31/1999 (a) $ (1.74) $ 0.00 $ (1.74) $ 13.27 21.66%
- --------------------------------- --------- -------- --------- ---------- -----
06/30/1999 (1.15) 0.00 (1.15) 12.45 (4.31)
- --------------------------------- --------- -------- --------- ---------- -----
06/30/1998 (0.82) (0.30) (1.12) 14.33 9.95
- --------------------------------- --------- -------- --------- ---------- -----
10/01/1996-06/30/1997 (0.39) 0.00 (0.39) 14.26 12.82
- --------------------------------- --------- -------- --------- ---------- -----
09/30/1996 0.00 0.00 0.00 13.03 6.89
- --------------------------------- --------- -------- --------- ---------- -----
09/30/1995 (0.24) 0.00 (0.24) 12.19 (3.70)
- --------------------------------- --------- -------- --------- ---------- -----
Class B
12/31/1999 (a) (1.74) 0.00 (1.74) 12.09 21.35
- --------------------------------- --------- -------- --------- ---------- -----
06/30/1999 (1.15) 0.00 (1.15) 11.51 (5.15)
- --------------------------------- --------- -------- --------- ---------- -----
06/30/1998 (0.82) (0.30) (1.12) 13.46 9.17
- --------------------------------- --------- -------- --------- ---------- -----
10/01/1996-06/30/1997 (0.39) 0.00 (0.39) 13.56 12.17
- --------------------------------- --------- -------- --------- ---------- -----
09/30/1996 0.00 0.00 0.00 12.48 6.21
- --------------------------------- --------- -------- --------- ---------- -----
05/22/1995-09/30/1995 0.00 0.00 0.00 11.75 4.00
- --------------------------------- --------- -------- --------- ---------- -----
Class C
12/31/1999 (a) (1.74) 0.00 (1.74) 12.08 21.37
- --------------------------------- --------- -------- --------- ---------- -----
06/30/1999 (1.15) 0.00 (1.15) 11.50 (5.15)
- --------------------------------- --------- -------- --------- ---------- -----
06/30/1998 (0.82) (0.30) (1.12) 13.45 9.18
- --------------------------------- --------- -------- --------- ---------- -----
10/01/1996-06/30/1997 (0.39) 0.00 (0.39) 13.55 12.18
- --------------------------------- --------- -------- --------- ---------- -----
09/30/1996 0.00 0.00 0.00 12.47 6.13
- --------------------------------- --------- -------- --------- ---------- -----
09/30/1995 (0.24) 0.00 (0.24) 11.75 (4.50)
- --------------------------------- --------- -------- --------- ---------- -----
Mid-Cap Growth Fund
Class A
12/31/1999 (a) $ (0.02) $ 0.00 $ (0.02) $ 25.79 13.28%
- --------------------------------- --------- -------- --------- ---------- -----
06/30/1999 (1.07) 0.00 (1.08) 22.82 (0.13)
- --------------------------------- --------- -------- --------- ---------- -----
06/30/1998 (1.33) 0.00 (1.37) 24.00 25.71
- --------------------------------- --------- -------- --------- ---------- -----
01/13/1997-06/30/1997 0.00 0.00 0.00 20.24 11.58
- --------------------------------- --------- -------- --------- ---------- -----
Class B
12/31/1999 (a) (0.02) 0.00 (0.02) 25.30 12.88
- --------------------------------- --------- -------- --------- ---------- -----
06/30/1999 (1.07) 0.00 (1.07) 22.43 (0.86)
- --------------------------------- --------- -------- --------- ---------- -----
06/30/1998 (1.33) 0.00 (1.33) 23.77 24.76
- --------------------------------- --------- -------- --------- ---------- -----
01/13/1997-06/30/1997 0.00 0.00 0.00 20.17 11.19
- --------------------------------- --------- -------- --------- ---------- -----
Class C
12/31/1999 (a) (0.02) 0.00 (0.02) 25.30 12.83
- --------------------------------- --------- -------- --------- ---------- -----
06/30/1999 (1.07) 0.00 (1.07) 22.44 (0.82)
- --------------------------------- --------- -------- --------- ---------- -----
06/30/1998 (1.33) 0.00 (1.33) 23.77 24.70
- --------------------------------- --------- -------- --------- ---------- -----
01/13/1997-06/30/1997 0.00 0.00 0.00 20.18 11.25
- --------------------------------- --------- -------- --------- ---------- -----
<CAPTION>
Ratio of Net
Ratio of Investment
Expenses Income (Loss)
Net Assets End to Average to Average Portfolio
of Period (000s) Net Assets Net Assets Turnover Rate
- ------------------- ---------------------- --------------------- ----------------------
<S> <C> <C> <C>
$ 848,616 1.30%* (0.98)%* 102%
---------- ---- ----- ---
313,946 1.30 (0.90) 119
---------- ---- ----- ---
85,800 1.31 (0.94) 100
---------- ---- ----- ---
56,215 1.28* (0.68)* 80
---------- ---- ----- ---
50,067 1.31 (0.61) 123
---------- ---- ----- ---
28,239 1.40* (0.60)* 86
---------- ---- ----- ---
1,054,848 2.05* (1.72)* 102
---------- ---- ----- ---
351,876 2.05 (1.64) 119
---------- ---- ----- ---
81,130 2.06 (1.69) 100
---------- ---- ----- ---
51,472 2.03* (1.43)* 80
---------- ---- ----- ---
33,778 2.06 (1.36) 123
---------- ---- ----- ---
6,509 2.30* (1.70)* 86
---------- ---- ----- ---
1,505,350 2.05* (1.72)* 102
---------- ---- ----- ---
580,251 2.05 (1.65) 119
---------- ---- ----- ---
219,258 2.06 (1.69) 100
---------- ---- ----- ---
162,889 2.03* (1.43)* 80
---------- ---- ----- ---
137,752 2.06 (1.36) 123
---------- ---- ----- ---
63,952 2.20* (1.40)* 86
---------- ---- ----- ---
$ 12,144 1.56%(f)* (0.01)%* 29%
---------- ---- ----- ---
18,865 1.55(c) 0.05 55
---------- ---- ----- ---
12,510 1.48 0.41 60
---------- ---- ----- ---
18,287 1.51* 0.58* 59
---------- ---- ----- ---
20,056 1.41 0.49 110
---------- ---- ----- ---
17,951 1.50 0.60 170
---------- ---- ----- ---
9,677 2.31(g)* (0.86)* 29
---------- ---- ----- ---
9,478 2.29(d) (0.67) 55
---------- ---- ----- ---
8,956 2.22 (0.37) 60
---------- ---- ----- ---
8,676 2.26* 0.18* 59
---------- ---- ----- ---
5,893 2.16 (0.26) 110
---------- ---- ----- ---
503 2.30* (0.10)* 170
---------- ---- ----- ---
108,003 2.31(h)* (0.85)* 29
---------- ---- ----- ---
101,320 2.30(e) (0.75) 55
---------- ---- ----- ---
132,986 2.22 (0.43) 60
---------- ---- ----- ---
168,446 2.25* (0.25)* 59
---------- ---- ----- ---
203,544 2.16 (0.26) 110
---------- ---- ----- ---
215,349 2.20 (0.20) 170
---------- ---- ----- ---
$ 136,694 1.10%* 0.04%* 76%
---------- ---- ----- ---
124,680 1.10 0.15 85
---------- ---- ----- ---
57,164 1.11 0.07 66
---------- ---- ----- ---
12,184 1.11* 0.17* 82
---------- ---- ----- ---
79,815 1.85* (0.71)* 76
---------- ---- ----- ---
84,698 1.85 (0.62) 85
---------- ---- ----- ---
84,535 1.86 (0.68) 66
---------- ---- ----- ---
28,259 1.85* (0.58)* 82
---------- ---- ----- ---
97,991 1.85* (0.71)* 76
---------- ---- ----- ---
112,507 1.85 (0.63) 85
---------- ---- ----- ---
140,438 1.86 (0.68) 66
---------- ---- ----- ---
53,686 1.86* (0.58)* 82
---------- ---- ----- ---
</TABLE>
(e) Ratio of expenses to average net assets excluding interest expense is 2.20%.
(f) Ratio of expenses to average net assets excluding interest expense is 1.45%.
(g) Ratio of expenses to average net assets excluding interest expense is 2.20%.
(h) Ratio of expenses to average net assets excluding interest expense is 2.20%.
See accompanying notes 49
<PAGE>
Financial Highlights - A, B and C Classes (Cont.)
<TABLE>
<CAPTION>
Net Asset Net Realized/ Dividends Dividends in
Value Unrealized Gain Total Income from Net Excess of Net
Selected Per Share Data for Beginning Net Investment (Loss) on from Investment Investment Investment
the Year or Period Ended: of Period Income (Loss) Investments Operations Income Income
------------ ---------------- ----------------- --------------- ------------ -------------
Opportunity Fund
<S> <C> <C> <C> <C> <C> <C>
Class A
12/31/1999 (a) $ 26.96 $ (0.11)(b) $ 11.86(b) $ 11.75 $ 0.00 $ 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1999 31.33 (0.21)(b) 0.46(b) 0.25 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1998 29.35 (0.27)(b) 4.19(b) 3.92 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
10/01/1996-06/30/1997 37.36 0.00 (3.10) (3.10) 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
09/30/1996 39.08 (0.11) 6.12 6.01 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
09/30/1995 28.87 (0.11) 11.19 11.08 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
Class B
12/31/1999 (a) 24.20 (0.18)(b) 10.53(b) 10.35 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
03/31/1999-06/30/1999 21.40 (0.09)(b) 2.89(b) 2.80 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
Class C
12/31/1999 (a) 24.19 (0.19)(b) 10.56(b) 10.37 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1999 28.86 (0.37)(b) 0.32(b) (0.05) 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1998 27.38 (0.46)(b) 3.88(b) 3.42 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
10/01/1996-06/30/1997 35.38 (0.04) (3.05) (3.09) 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
09/30/1996 37.64 (0.35) 5.82 5.47 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
09/30/1995 28.04 (0.34) 10.81 10.47 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
Precious Metals Fund
Class A
12/31/1999 (a) $ 4.90 $ 0.01(b) $ 0.05(b) $ 0.06 $ (0.03) $ 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1999 5.33 0.13(b) (0.45)(b) (0.32) (0.09) (0.02)
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1998 8.83 0.04(b) (3.54)(b) (3.50) 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
10/01/1996-06/30/1997 12.12 0.17 (3.29) (3.12) 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
09/30/1996 12.33 0.03 (0.24) (0.21) 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
09/30/1995 14.14 0.07 (1.88) (1.81) 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
Class B
12/31/1999 (a) 4.55 (0.02)(b) 0.04(b) 0.02 (0.02) 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1999 5.01 0.08(b) (0.42)(b) (0.34) (0.09) (0.03)
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1998 8.42 (0.01)(b) (3.40)(b) (3.41) 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
10/01/1996-06/30/1997 11.62 0.00 (3.03) (3.03) 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
09/30/1996 11.90 (0.03) (0.25) (0.28) 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/15/1995-09/30/1995 11.61 (0.01) 0.30 0.29 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
Class C
12/31/1999 (a) 4.53 (0.01)(b) 0.03(b) 0.02 (0.02) 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1999 5.00 0.10(b) (0.43)(b) (0.33) (0.11) (0.03)
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1998 8.43 0.00(b) (3.43)(b) (3.43) 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
10/01/1996-06/30/1997 11.62 (0.03) (2.99) (3.02) 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
09/30/1996 11.90 (0.07) (0.21) (0.28) 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
09/30/1995 13.75 (0.02) (1.83) (1.85) 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
Renaissance Fund
Class A
12/31/1999 (a) $ 18.21 $ (0.01)(b) $ (0.46)(b) $ (0.47) $ 0.00 $ 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1999 19.10 (0.01)(b) 1.45(b) 1.44 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1998 17.73 0.07(b) 4.91(b) 4.98 (0.08) 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
10/01/1996-06/30/1997 16.08 0.12(b) 3.90(b) 4.02 (0.12) 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
09/30/1996 14.14 0.23 2.79 3.02 (0.23) (0.07)
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
09/30/1995 12.50 0.36 1.61 1.97 (0.33) 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
Class B
12/31/1999 (a) 17.99 (0.07)(b) (0.47)(b) (0.54) 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1999 19.06 (0.13)(b) 1.39(b) 1.26 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1998 17.77 (0.07)(b) 4.91(b) 4.84 (0.02) 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
10/01/1996-06/30/1997 16.12 0.03(b) 3.92(b) 3.95 (0.05) 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
09/30/1996 14.13 0.09 2.83 2.92 (0.11) (0.04)
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
05/22/1995-09/30/1995 12.55 0.11 1.55 1.66 (0.08) 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
Class C
12/31/1999 (a) 17.91 (0.07)(b) (0.46)(b) (0.53) 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1999 18.96 (0.13)(b) 1.41(b) 1.28 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1998 17.69 (0.07)(b) 4.88(b) 4.81 (0.01) 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
10/01/1996-06/30/1997 16.05 0.03(b) 3.90(b) 3.93 (0.04) 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
09/30/1996 14.09 0.12 2.78 2.90 (0.13) (0.03)
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
09/30/1995 12.47 0.27 1.59 1.86 (0.24) 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
</TABLE>
*Annualized
(a) Unaudited
(b) Per share amounts based on average number of shares outstanding during the
period.
(c) Ratio of expenses to average net assets excluding interest expense is 1.26%.
(d) Ratio of expenses to average net assets excluding interest expense is 2.06%.
(e) Ratio of expenses to average net assets excluding interest expense is 2.06%.
(f) Ratio of expenses to average net assets excluding interest expense is 1.25%.
(g) Ratio of expenses to average net assets excluding interest expense is 2.05%.
50 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Ratio of
Distributions Distributions Ratio of Net Investment
from Net in Excess of Net Asset Net Assets Expenses to Income (Loss) Portfolio
Realized Capital Net Realized Total Value End Total End of Period Average Net to Average Net Turnover
Gains Capital Gains Distributions of Period Return (000s) Assets Assets Rate
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ (7.88) $ 0.00 $ (7.88) $ 30.83 47.19% $ 150,751 1.32%* (0.74)%* 122%
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(4.62) 0.00 (4.62) 26.96 3.98 121,507 1.31 (0.86) 175
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(1.94) 0.00 (1.94) 31.33 13.87 200,935 1.31 (0.88) 86
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(4.91) 0.00 (4.91) 29.35 (8.87) 213,484 1.25* (0.12)* 69
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(7.73) 0.00 (7.73) 37.36 18.35 134,859 1.13 (0.32) 91
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(0.87) 0.00 (0.87) 39.08 39.70 120,830 1.20 (0.40) 102
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(7.88) 0.00 (7.88) 26.67 46.81 13,464 2.08* (1.41)* 122
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
0.00 0.00 0.00 24.20 13.08 251 2.03* (1.65)* 175
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(7.88) 0.00 (7.88) 26.68 46.91 404,368 2.07* (1.50)* 122
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(4.62) 0.00 (4.62) 24.19 3.20 308,877 2.06 (1.62) 175
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(1.94) 0.00 (1.94) 28.86 13.01 500,011 2.06 (1.63) 86
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(4.91) 0.00 (4.91) 27.38 (9.40) 629,446 1.97* (0.95)* 69
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(7.73) 0.00 (7.73) 35.38 17.47 800,250 1.88 (1.07) 91
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(0.87) 0.00 (0.87) 37.64 38.60 715,191 1.90 (1.10) 102
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
$ 0.00 $ 0.00 $ (0.03) $ 4.93 1.29% $ 2,093 1.47%(i)* 0.32%* 36%
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
0.00 0.00 (0.11) 4.90 (6.06) 7,826 1.46(f) 2.40 62
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
0.00 0.00 0.00 5.33 (39.64) 4,709 1.31(c) 0.70 56
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
0.00 (0.17) (0.17) 8.83 (26.05) 4,016 1.37* 0.33* 46
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
0.00 0.00 0.00 12.12 (1.70) 6,245 1.32 0.19 35
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
0.00 0.00 0.00 12.33 (12.80) 7,670 1.40 0.60 9
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
0.00 0.00 (0.02) 4.55 0.46 4,823 2.30(j)* (0.75)* 36
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
0.00 0.00 (0.12) 4.55 (6.89) 3,921 2.21(g) 1.63 62
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
0.00 0.00 0.00 5.01 (40.50) 3,889 2.11(d) (0.07) 56
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
0.00 (0.17) (0.17) 8.42 (26.40) 4,248 2.13* (0.33)* 46
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
0.00 0.00 0.00 11.62 (2.35) 2,218 2.07 (0.56) 35
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
0.00 0.00 0.00 11.90 2.50 251 2.20* (0.20)* 9
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
0.00 0.00 (0.02) 4.53 0.46 8,941 2.30(k)* (0.51)* 36
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
0.00 0.00 (0.14) 4.53 (6.73) 11,491 2.20(h) 1.92 62
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
0.00 0.00 0.00 5.00 (40.69) 16,943 2.11(e) (0.07) 56
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
0.00 (0.17) (0.17) 8.43 (26.31) 25,113 2.15* (0.41)* 46
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
0.00 0.00 0.00 11.62 (2.35) 37,609 2.07 (0.56) 35
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
0.00 0.00 0.00 11.90 (13.50) 42,341 2.20 (0.20) 9
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
$ (3.45) $ 0.00 $ (3.45) $ 14.29 (1.21)% $ 72,020 1.25%* (0.14)%* 68%
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(2.33) 0.00 (2.33) 18.21 9.94 90,445 1.26 (0.04) 221
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(3.53) 0.00 (3.61) 19.10 30.98 85,562 1.26 0.35 192
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(2.25) 0.00 (2.37) 17.73 27.53 33,606 1.23* 0.95* 131
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(0.78) 0.00 (1.08) 16.08 22.37 20,631 1.25 1.60 203
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
0.00 0.00 (0.33) 14.14 16.10 12,933 1.30 2.90 177
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(3.45) 0.00 (3.45) 14.00 (1.63) 105,535 2.00* (0.88)* 68
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(2.33) 0.00 (2.33) 17.99 8.94 126,576 2.00 (0.78) 221
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(3.53) 0.00 (3.55) 19.06 29.99 100,688 2.01 (0.39) 192
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(2.25) 0.00 (2.30) 17.77 26.88 37,253 1.97* 0.20* 131
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(0.78) 0.00 (0.93) 16.12 21.54 15,693 2.00 0.85 203
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
0.00 0.00 (0.08) 14.13 13.30 1,760 2.10* 2.20* 177
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(3.45) 0.00 (3.45) 13.93 (1.57) 367,465 2.00* (0.89)* 68
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(2.33) 0.00 (2.33) 17.91 9.12 442,049 2.00 (0.79) 221
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(3.53) 0.00 (3.54) 18.96 29.98 469,797 2.01 (0.37) 192
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(2.25) 0.00 (2.29) 17.69 26.86 313,226 1.97* 0.21* 131
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
(0.78) 0.00 (0.94) 16.05 21.52 230,058 2.00 0.85 203
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
0.00 0.00 (0.24) 14.09 15.20 174,316 2.10 2.10 177
- ---------------- ------------- ------------- ------------ ---------- ------------- -------------- ---------------- ---------
</TABLE>
(h) Ratio of expenses to average net assets excluding interest expense is 2.05%.
(i) Ratio of expenses to average net assets excluding interest expense is 1.30%.
(j) Ratio of expenses to average net assets excluding interest expense is 2.05%.
(k) Ratio of expenses to average net assets excluding interest expense is 2.05%.
See accompanying notes 51
<PAGE>
Financial Highlights - A, B and C Classes (Cont.)
<TABLE>
<CAPTION>
Net Asset Net Realized/ Dividends Dividends in
Value Unrealized Gain Total Income from Net Excess of Net
Selected Per Share Data for Beginning Net Investment (Loss) on from Investment Investment Investment
the Year or Period Ended: of Period Income (Loss) Investments Operations Income Income
------------ ---------------- ----------------- --------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Small-Cap Value Fund
Class A
12/31/1999 (a) $ 15.93 $ 0.15(b) $ (1.87)(b) $ (1.72) $ (0.32) $ 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1999 17.58 0.26(b) (1.29)(b) (1.03) (0.17) 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1998 15.75 0.23(b) 2.49(b) 2.72 (0.13) 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
01/20/1997-06/30/1997 14.02 0.10 1.63 1.73 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
Class B
12/31/1999 (a) 15.79 0.09(b) (1.85)(b) (1.76) (0.17) 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1999 17.43 0.14(b) (1.27)(b) (1.13) (0.06) 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1998 15.71 0.09(b) 2.48(b) 2.57 (0.09) 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
01/20/1997-06/30/1997 14.02 0.08 1.61 1.69 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
Class C
12/31/1999 (a) 15.82 0.09(b) (1.85)(b) (1.76) (0.18) 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1999 17.44 0.14(b) (1.27)(b) (1.13) (0.04) 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1998 15.71 0.09(b) 2.49(b) 2.58 (0.09) 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
01/20/1997-06/30/1997 14.02 0.08 1.61 1.69 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
Target Fund
Class A
12/31/1999 (a) $ 17.72 $ (0.09)(b) $ 8.91(b) $ 8.82 $ 0.00 $ 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
03/31/1999-06/30/1999 16.35 (0.09)(b) 2.44(b) 2.35 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1998 16.82 (0.08)(b) 4.06(b) 3.98 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
10/01/1996-06/30/1997 17.11 (0.04)(b) 1.82(b) 1.78 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
09/30/1996 16.40 (0.05) 2.54 2.49 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
09/30/1995 13.13 (0.02) 3.45 3.43 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
Class B
12/31/1999 (a) 16.44 (0.16)(b) 8.22(b) 8.06 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1999 15.34 (0.19)(b) 2.27(b) 2.08 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1998 16.14 (0.19)(b) 3.84(b) 3.65 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
10/01/1996-06/30/1997 16.58 (0.12)(b) 1.75(b) 1.63 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
09/30/1996 16.06 (0.09) 2.39 2.30 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
05/22/1995-09/30/1995 13.93 (0.05) 2.18 2.13 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
Class C
12/31/1999 (a) 16.43 (0.15)(b) 8.22(b) 8.07 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1999 15.34 (0.19)(b) 2.26(b) 2.07 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
06/30/1998 16.13 (0.19)(b) 3.85(b) 3.66 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
10/01/1996-06/30/1997 16.58 (0.12)(b) 1.74(b) 1.62 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
09/30/1996 16.05 (0.16) 2.47 2.31 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
09/30/1995 12.95 (0.12) 3.38 3.26 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
Tax-Efficient Equity Fund
Class A
12/31/1999 (a) $ 11.59 $ 0.01(b) $ 0.76(b) $ 0.77 $ 0.00 $ 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
07/10/1998 - 06/30/1999 10.00 0.03(b) 1.56(b) 1.59 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
Class B
12/31/1999 (a) 11.51 (0.04)(b) 0.75(b) 0.71 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
07/10/1998 - 06/30/1999 10.00 (0.05)(b) 1.56(b) 1.51 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
Class C
12/31/1999 (a) 11.51 (0.04)(b) 0.75(b) 0.71 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
07/10/1998 - 06/30/1999 10.00 (0.05)(b) 1.56(b) 1.51 0.00 0.00
- -------------------------------- ------------ ---------------- ----------------- --------------- ------------ -------------
</TABLE>
*Annualized
(a) Unaudited
(b) Per share amounts based on average number of shares outstanding during the
period.
52 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Ratio of
Distributions Distributions Ratio of Net Investment
from Net in Excess of Net Asset Net Assets Expenses to Income (Loss) Portfolio
Realized Capital Net Realized Total Value End Total End of Period Average Net to Average Net Turnover
Gains Capital Gains Distributions of Period Return (000s) Assets Assets Rate
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0.00 $ 0.00 $ (0.32) $ 13.89 (10.74)% $ 109,134 1.25%* 2.03%* 31%
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
0.00 (0.45) (0.62) 15.93 (5.50) 107,569 1.25 1.74 60
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
(0.76) 0.00 (0.89) 17.58 17.33 75,070 1.25 1.27 41
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
0.00 0.00 0.00 15.75 12.34 6,563 1.30* 1.94* 48
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
0.00 0.00 (0.17) 13.86 (11.09) 71,425 2.00* 1.25* 31
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
0.00 (0.45) (0.51) 15.79 (6.22) 96,994 2.00 0.95 60
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
(0.76) 0.00 (0.85) 17.43 16.40 110,833 2.00 0.53 41
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
0.00 0.00 0.00 15.71 12.05 11,077 2.04* 1.23* 48
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
0.00 0.00 (0.18) 13.88 (11.11) 84,789 2.00* 1.25* 31
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
0.00 (0.45) (0.49) 15.82 (6.21) 112,926 2.00 0.95 60
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
(0.76) 0.00 (0.85) 17.44 16.42 130,466 2.00 0.52 41
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
0.00 0.00 0.00 15.71 12.05 20,637 2.05* 1.13* 48
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
$ (1.80) $ 0.00 $ (1.80) $ 24.74 51.23% $ 221,955 1.20%* (0.96)%* 59%
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
(0.98) 0.00 (0.98) 17.72 15.69 170,277 1.21 (0.57) 229
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
(4.45) 0.00 (4.45) 16.35 27.49 157,277 1.22 (0.49) 226
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
(2.07) 0.00 (2.07) 16.82 11.19 150,689 1.20* (0.31)* 145
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
(1.78) 0.00 (1.78) 17.11 16.50 156,027 1.18 (0.34) 141
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
(0.16) 0.00 (0.16) 16.40 26.50 121,915 1.20 (0.10) 128
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
(1.80) 0.00 (1.80) 22.70 50.60 125,134 1.95* (1.72)* 59
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
(0.98) 0.00 (0.98) 16.44 14.93 78,659 1.95 (1.31) 229
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
(4.45) 0.00 (4.45) 15.34 26.45 76,194 1.96 (1.24) 226
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
(2.07) 0.00 (2.07) 16.14 10.58 67,531 1.94* (1.05)* 145
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
(1.78) 0.00 (1.78) 16.58 15.58 49,851 1.93 (1.09) 141
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
0.00 0.00 0.00 16.06 15.30 7,554 2.00* (0.90)* 128
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
(1.80) 0.00 (1.80) 22.70 50.69 1,307,105 1.95* (1.71)* 59
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
(0.98) 0.00 (0.98) 16.43 14.86 910,494 1.95 (1.31) 229
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
(4.45) 0.00 (4.45) 15.34 26.53 952,728 1.96 (1.24) 226
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
(2.07) 0.00 (2.07) 16.13 10.52 969,317 1.94* (1.06)* 145
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
(1.78) 0.00 (1.78) 16.58 15.66 974,948 1.93 (1.09) 141
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
(0.16) 0.00 (0.16) 16.05 25.60 780,355 2.00 (0.90) 128
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
$ 0.00 $ 0.00 $ 0.00 $ 12.36 6.64% $ 8,712 1.10%* 0.09%* 14%
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
0.00 0.00 0.00 11.59 15.90 6,579 1.11* 0.25 13
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
0.00 0.00 0.00 12.22 6.17 11,470 1.85* (0.68)* 14
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
0.00 0.00 0.00 11.51 15.10 6,370 1.85* (0.50)* 13
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
0.00 0.00 0.00 12.22 6.17 16,355 1.85* (0.64)* 14
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
0.00 0.00 0.00 11.51 15.10 10,742 1.84* (0.52)* 13
- ---------------- -------------- ------------- ---------- ----------- ------------- ----------- -------------- -------------
</TABLE>
See accompanying notes 53
<PAGE>
Financial Highlights - A, B and C Classes (Cont.)
<TABLE>
<CAPTION>
Net Asset Net Realized/ Dividends Dividends in
Value Unrealized Gain Total Income from Net Excess of Net
Selected Per Share Data for Beginning Net Investment (Loss) on from Investment Investment Investment
the Year or Period Ended: of Period Income (Loss) Investments Operations Income Income
- -------------------------------- ------------- ----------------- ------------------ --------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Value Fund
Class A
12/31/1999 (a) $ 15.29 $ 0.13(b) $ (1.08)(b) $ (0.95) $ (0.15) $ 0.00
- -------------------------------- ------------- ----------------- ------------------ --------------- ------------ -------------
06/30/1999 15.64 0.24(b) 1.35(b) 1.59 (0.22) 0.00
- -------------------------------- ------------- ----------------- ------------------ --------------- ------------ -------------
06/30/1998 14.80 0.19(b) 2.46(b) 2.65 (0.18) 0.00
- -------------------------------- ------------- ----------------- ------------------ --------------- ------------ -------------
01/13/1997-06/30/1997 13.17 0.47 1.26 1.73 (0.10) 0.00
- -------------------------------- ------------- ----------------- ------------------ --------------- ------------ -------------
Class B
12/31/1999 (a) 15.26 0.07(b) (1.07)(b) (1.00) (0.10) 0.00
- -------------------------------- ------------- ----------------- ------------------ --------------- ------------ -------------
06/30/1999 15.63 0.12(b) 1.35(b) 1.47 (0.12) 0.00
- -------------------------------- ------------- ----------------- ------------------ --------------- ------------ -------------
06/30/1998 14.80 0.07(b) 2.46(b) 2.53 (0.07) 0.00
- -------------------------------- ------------- ----------------- ------------------ --------------- ------------ -------------
01/13/1997-06/30/1997 13.16 0.44 1.26 1.70 (0.06) 0.00
- -------------------------------- ------------- ----------------- ------------------ --------------- ------------ -------------
Class C
12/31/1999 (a) 15.26 0.07(b) (1.06)(b) (0.99) (0.10) 0.00
- -------------------------------- ------------- ----------------- ------------------ --------------- ------------ -------------
06/30/1999 15.63 0.12(b) 1.35(b) 1.47 (0.12) 0.00
- -------------------------------- ------------- ----------------- ------------------ --------------- ------------ -------------
06/30/1998 14.80 0.07(b) 2.46(b) 2.53 (0.07) 0.00
- -------------------------------- ------------- ----------------- ------------------ --------------- ------------ -------------
01/13/1997-06/30/1997 13.15 0.43 1.28 1.71 (0.06) 0.00
- -------------------------------- ------------- ----------------- ------------------ --------------- ------------ -------------
Value 25 Fund
Class A
12/31/1999 (a) $ 8.96 $ 0.09(b) $ (1.33)(b) $ (1.24) $ (0.11) $ 0.00
- -------------------------------- ------------- ----------------- ------------------ --------------- ------------ -------------
07/10/1998 - 06/30/1999 10.00 0.13(b) (1.12)(b) (0.99) (0.05) 0.00
- -------------------------------- ------------- ----------------- ------------------ --------------- ------------ -------------
Class B
12/31/1999 (a) 8.92 0.05(b) (1.30)(b) (1.25) (0.08) 0.00
- -------------------------------- ------------- ----------------- ------------------ --------------- ------------ -------------
07/10/1998 - 06/30/1999 10.00 0.07(b) (1.12)(b) (1.05) (0.03) 0.00
- -------------------------------- ------------- ----------------- ------------------ --------------- ------------ -------------
Class C
12/31/1999 (a) 8.93 0.05(b) (1.29)(b) (1.24) (0.08) 0.00
- -------------------------------- ------------- ----------------- ------------------ --------------- ------------ -------------
07/10/1998 - 06/30/1999 10.00 0.07(b) (1.12)(b) (1.05) (0.02) 0.00
- -------------------------------- ------------- ----------------- ------------------ --------------- ------------ -------------
</TABLE>
*Annualized
(a) Unaudited
(b) Per share amounts based on average number of shares outstanding during the
period.
(c) Ratio of expenses to average net assets excluding interest expense is 1.90%.
(d) Ratio of expenses to average net assets excluding interest expense is 1.90%.
(e) Ratio of expenses to average net assets excluding interest expense is 1.15%.
54 See companying notes
<PAGE>
<TABLE>
<CAPTION>
Ratio of
Distributions Distributions Ratio of Net Investment
from Net in Excess of Net Asset Net Assets Expenses to Income (Loss) Portfolio
Realized Capital Net Realized Total Value End Total End of Period Average Net to Average Net Turnover
Gains Capital Gains Distributions of Period Return (000s) Assets Assets Rate
- ---------------- -------------- ------------- ----------- ---------- ------------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ (2.57) $ 0.00 $ (2.72) $ 11.62 (5.81)% $ 19,768 1.10%* 1.75%* 65%
- ---------------- -------------- ------------- ----------- ---------- ------------- ------------ --------------- -----------
(1.72) 0.00 (1.94) 15.29 11.93 22,267 1.11 1.68 101
- ---------------- -------------- ------------- ----------- ---------- ------------- ------------ --------------- -----------
(1.63) 0.00 (1.81) 15.64 18.86 21,742 1.11 1.19 77
- ---------------- -------------- ------------- ----------- ---------- ------------- ------------ --------------- -----------
0.00 0.00 (0.10) 14.80 13.19 15,648 1.11* 1.71* 71
- ---------------- -------------- ------------- ----------- ---------- ------------- ------------ --------------- -----------
(2.57) 0.00 (2.67) 11.59 (6.18) 30,094 1.85* 1.03* 65
- ---------------- -------------- ------------- ----------- ---------- ------------- ------------ --------------- -----------
(1.72) 0.00 (1.84) 15.26 11.05 36,314 1.85 0.85 101
- ---------------- -------------- ------------- ----------- ---------- ------------- ------------ --------------- -----------
(1.63) 0.00 (1.70) 15.63 17.98 35,716 1.86 0.45 77
- ---------------- -------------- ------------- ----------- ---------- ------------- ------------ --------------- -----------
0.00 0.00 (0.06) 14.80 12.93 25,433 1.86* 0.96* 71
- ---------------- -------------- ------------- ----------- ---------- ------------- ------------ --------------- -----------
(2.57) 0.00 (2.67) 11.60 (6.12) 63,692 1.85* 1.02* 65
- ---------------- -------------- ------------- ----------- ---------- ------------- ------------ --------------- -----------
(1.72) 0.00 (1.84) 15.26 11.04 80,594 1.85 0.83 101
- ---------------- -------------- ------------- ----------- ---------- ------------- ------------ --------------- -----------
(1.63) 0.00 (1.70) 15.63 17.98 88,235 1.86 0.45 77
- ---------------- -------------- ------------- ----------- ---------- ------------- ------------ --------------- -----------
0.00 0.00 (0.06) 14.80 13.02 64,110 1.86* 0.97* 71
- ---------------- -------------- ------------- ----------- ---------- ------------- ------------ --------------- -----------
$ 0.00 $ 0.00 $ (0.11) $ 7.61 (13.72)% $ 252 1.19%* 2.35%* 94%
- ---------------- -------------- ------------- ----------- ---------- ------------- ------------ --------------- -----------
0.00 0.00 (0.05) 8.96 (9.85) 287 1.23(e)* 1.60 182
- ---------------- -------------- ------------- ----------- ---------- ------------- ------------ --------------- -----------
0.00 0.00 (0.08) 7.59 (13.93) 959 1.94* 1.19* 94
- ---------------- -------------- ------------- ----------- ---------- ------------- ------------ --------------- -----------
0.00 0.00 (0.03) 8.92 (10.47) 840 1.99(c)* 0.88* 182
- ---------------- -------------- ------------- ----------- ---------- ------------- ------------ --------------- -----------
0.00 0.00 (0.08) 7.61 (13.80) 962 1.94* 1.24* 94
- ---------------- -------------- ------------- ----------- ---------- ------------- ------------ --------------- -----------
0.00 0.00 (0.02) 8.93 (10.50) 833 1.99(d)* 0.89* 182
- ---------------- -------------- ------------- ----------- ---------- ------------- ------------ --------------- -----------
</TABLE>
See accompanying notes 55
<PAGE>
<TABLE>
<CAPTION>
Statements of Assets and Liabilities
December 31, 1999 (Unaudited)
Capital
Appreciation Equity Income Innovation
Amounts in thousands, except per share amounts Fund Fund Growth Fund Fund
------------ ------------- ------------ ------------
<S> <C> <C> <C> <C>
Assets:
Investments, at value $ 951,427 $ 153,954 $ 2,889,461 $ 3,507,284
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Cash and foreign currency 28 0 158 0
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Receivable for investments and foreign currency sold 10,580 2,187 0 38,942
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Receivable for Fund shares sold 268 180 10,229 44,960
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Interest and dividends receivable 655 525 566 113
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Variation margin receivable 0 0 0 0
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Other assets 0 0 0 33
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
962,958 156,846 2,900,414 3,591,332
============================================================ ============ ============= ============ ============
Liabilities:
Payable for investments and foreign currency purchased $ 4,286 $ 66 $ 0 $ 106,373
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Payable for Fund shares redeemed 444 575 4,651 18,101
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Dividends payable 0 0 0 0
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Accrued investment advisory fee 378 63 1,190 1,680
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Accrued administration fee 238 42 949 1,033
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Accrued distribution fee 88 24 1,617 1,432
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Accrued servicing fee 89 14 594 645
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Variation margin payable 0 0 0 0
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Other liabilities 0 0 0 0
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
5,523 784 9,001 129,264
============================================================ ============ ============= ============ ============
Net Assets $ 957,435 $ 156,062 $ 2,891,413 $ 3,462,068
============================================================ ============ ============= ============ ============
Net Assets Consist of:
Paid in capital $ 668,510 $ 170,636 $ 1,676,013 $ 1,792,055
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Undistributed (overdistributed) net investment income (810) 4,081 (17,502) (14,122)
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Accumulated undistributed net realized gain (loss) 39,378 (3,493) 21,454 114,988
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Net unrealized appreciation (depreciation) 250,357 (15,162) 1,211,448 1,569,147
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
$ 957,435 $ 156,062 $ 2,891,413 $ 3,462,068
============================================================ ============ ============= ============ ============
Net Assets:
Class A $ 79,800 $ 14,451 $ 258,000 $ 848,616
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Class B 59,119 17,181 176,976 1,054,848
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Class C 78,628 18,127 2,436,345 1,505,350
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Other Classes 739,888 106,303 20,092 53,254
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Shares Issued and Outstanding:
Class A 3,195 1,340 6,722 13,000
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Class B 2,415 1,603 5,162 16,852
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Class C 3,208 1,688 71,058 24,057
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Net Asset Value and Redemption Price*
Per Share (Net Assets Per Share Outstanding)
Class A $ 24.98 $ 10.78 $ 38.38 $ 65.27
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Class B 24.48 10.72 34.29 62.59
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Class C 24.51 10.74 34.29 62.57
- ------------------------------------------------------------ ------------ ------------- ------------ ------------
Cost of Investments Owned $ 701,070 $ 169,116 $ 1,678,013 $ 1,938,136
============================================================ ============ ============= ============ ============
</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>
International Mid-Cap Opportunity Precious Renaissance Small-Cap
Fund Growth Fund Fund Metals Fund Fund Value Fund Target Fund
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
$ 153,718 $ 1,044,508 $ 587,198 $ 16,001 $ 543,672 $ 317,236 $ 1,678,572
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
1,171 69 409 37 0 0 76
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
0 12,378 6,067 47 12,776 2,298 0
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
102 931 2,566 1 1,490 1,842 6,342
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
285 810 170 7 1,114 1,086 67
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
0 0 0 0 0 0 0
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
40 0 2 0 2 0 0
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
155,316 1,058,696 596,412 16,093 559,054 322,462 1,685,057
=============== ============= ============= ============= ============ ============ =============
$ 0 $ 15,084 $ 6,954 $ 0 $ 8,929 $ 109 $ 5,868
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
1,279 17,395 4,196 202 3,243 2,509 9,542
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
0 1 0 0 0 0 0
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
74 410 302 11 283 172 746
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
85 268 184 8 189 107 541
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
76 115 250 11 307 107 867
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
33 89 115 4 118 63 338
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
0 0 0 0 0 0 0
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
29 0 0 0 25 0 0
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
1,576 33,362 12,001 236 13,094 3,067 17,902
=============== ============= ============= ============= ============ ============ =============
$ 153,740 $ 1,025,334 $ 584,411 $ 15,857 $ 545,960 $ 319,395 $ 1,667,155
=============== ============= ============= ============= ============ ============ =============
$ 114,885 $ 754,197 $ 377,891 $ 33,372 $ 556,628 $ 386,860 $ 874,859
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
(1,954) (1,038) 9,978 (230) 38,842 814 57,671
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
4,310 13,056 39,508 (15,762) (39,815) (24,635) (15,323)
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
36,499 259,119 157,034 (1,523) (9,695) (43,644) 749,948
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
$ 153,740 $ 1,025,334 $ 584,411 $ 15,857 $ 545,960 $ 319,395 $ 1,667,155
=============== ============= ============= ============= ============ ============ =============
$ 12,144 $ 136,694 $ 150,751 $ 2,093 $ 72,020 $ 109,134 $ 221,955
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
9,677 79,815 13,464 4,823 105,535 71,425 125,134
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
108,003 97,991 404,368 8,941 367,465 84,789 1,307,105
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
23,916 710,834 15,828 0 940 54,047 12,961
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
915 5,300 4,888 425 5,041 7,859 8,972
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
801 3,155 505 1,060 7,538 5,152 5,512
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
8,942 3,874 15,158 1,972 26,388 6,110 57,575
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
$ 13.27 $ 25.79 $ 30.83 $ 4.93 $ 14.29 $ 13.89 $ 24.74
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
12.09 25.30 26.67 4.55 14.00 13.86 22.70
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
12.08 25.30 26.68 4.53 13.93 13.88 22.70
- --------------- ------------- ------------- ------------- ------------ ------------ -------------
$ 117,382 $ 785,389 $ 430,164 $ 17,525 $ 553,369 $ 360,880 $ 928,624
=============== ============= ============= ============= ============ ============ =============
<CAPTION>
Tax-Efficient
Equity Fund Value Fund Value 25 Fund
- --------------- ------------- -------------
<S> <C> <C>
$ 56,487 $ 212,409 $ 2,195
- --------------- ------------- -------------
0 104 0
- --------------- ------------- -------------
0 0 52
- --------------- ------------- -------------
358 156 0
- --------------- ------------- -------------
39 605 6
- --------------- ------------- -------------
0 0 0
- --------------- ------------- -------------
4 0 0
- --------------- ------------- -------------
56,888 213,274 2,253
=============== ============= =============
$ 5 $ 0 $ 60
- --------------- ------------- -------------
54 1,017 16
- --------------- ------------- -------------
0 0 0
- --------------- ------------- -------------
22 85 1
- --------------- ------------- -------------
17 62 1
- --------------- ------------- -------------
18 63 1
- --------------- ------------- -------------
12 30 1
- --------------- ------------- -------------
0 0 0
- --------------- ------------- -------------
4 0 0
- --------------- ------------- -------------
132 1,257 80
=============== ============= =============
$ 56,756 $ 212,017 $ 2,173
=============== ============= =============
$ 49,699 $ 224,128 $ 2,660
- --------------- ------------- -------------
(50) 10,182 (7)
- --------------- ------------- -------------
(1,896) (8,550) (341)
- --------------- ------------- -------------
9,003 (13,743) (139)
- --------------- ------------- -------------
$ 56,756 $ 212,017 $ 2,173
=============== ============= =============
$ 8,712 $ 19,768 $ 252
- --------------- ------------- -------------
11,470 30,094 959
- --------------- ------------- -------------
16,355 63,692 962
- --------------- ------------- -------------
20,219 98,463 0
- --------------- ------------- -------------
705 1,702 33
- --------------- ------------- -------------
938 2,596 126
- --------------- ------------- -------------
1,338 5,492 126
- --------------- ------------- -------------
$ 12.36 $ 11.62 $ 7.61
- --------------- ------------- -------------
12.22 11.59 7.59
- --------------- ------------- -------------
12.22 11.60 7.61
- --------------- ------------- -------------
$ 47,484 $ 226,152 $ 2,333
=============== ============= =============
</TABLE>
See accompanying notes 57
<PAGE>
Statements of Operations
December 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Capital
Appreciation Equity Innovation
Amounts in thousands Fund Income Fund Growth Fund Fund
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investment Income:
Dividends, net of foreign taxes $ 4,649 $ 3,438 $ 4,485 $ 155
- ------------------------------------------------------------------------- ----------- ----------- ----------- -----------
Interest 607 70 494 2,939
- ------------------------------------------------------------------------- ----------- ----------- ----------- -----------
Total Income 5,256 3,508 4,979 3,094
========================================================================= =========== =========== =========== ===========
Expenses:
Investment advisory fees 2,257 416 6,103 5,997
- ------------------------------------------------------------------------- ----------- ----------- ----------- -----------
Administration fees 1,415 276 4,825 3,689
- ------------------------------------------------------------------------- ----------- ----------- ----------- -----------
Distribution fees - Class B 202 76 528 2,032
- ------------------------------------------------------------------------- ----------- ----------- ----------- -----------
Distribution fees - Class C 286 86 7,697 3,084
- ------------------------------------------------------------------------- ----------- ----------- ----------- -----------
Servicing fees - Class A 106 20 264 568
- ------------------------------------------------------------------------- ----------- ----------- ----------- -----------
Servicing fees - Class B 67 25 176 677
- ------------------------------------------------------------------------- ----------- ----------- ----------- -----------
Servicing fees - Class C 95 29 2,566 1,028
- ------------------------------------------------------------------------- ----------- ----------- ----------- -----------
Distribution and/or servicing fees - Other Classes 272 16 14 30
- ------------------------------------------------------------------------- ----------- ----------- ----------- -----------
Trustees' fees 38 7 88 55
- ------------------------------------------------------------------------- ----------- ----------- ----------- -----------
Miscellaneous 24 25 221 56
- ------------------------------------------------------------------------- ----------- ----------- ----------- -----------
Total expenses 4,762 976 22,482 17,216
- ------------------------------------------------------------------------- ----------- ----------- ----------- -----------
Net Investment Income (loss) 494 2,532 (17,503) (14,122)
========================================================================= =========== =========== =========== ===========
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments 84,228 8,195 48,957 349,045
- ------------------------------------------------------------------------- ----------- ----------- ----------- -----------
Net realized gain (loss) on foreign currency transactions 0 0 0 0
- ------------------------------------------------------------------------- ----------- ----------- ----------- -----------
Net change in unrealized appreciation (depreciation) on investments 28,003 (34,549) 637,993 1,161,980
- ------------------------------------------------------------------------- ----------- ----------- ----------- -----------
Net change in unrealized appreciation (depreciation) on
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) 112,231 (26,354) 686,950 1,511,025
- ------------------------------------------------------------------------- ----------- ----------- ----------- -----------
Net Increase (Decrease) in Assets Resulting from Operations $ 112,725 $ (23,822) $ 669,447 $ 1,496,903
========================================================================= =========== =========== =========== ===========
</TABLE>
58 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
International Mid-Cap Opportunity Precious Renaissance Small-Cap
Fund Growth Fund Fund Metals Fund Fund Value Fund Target Fund
- ------------ ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
$ 799 $ 4,686 $ 674 $ 73 $ 3,133 $ 5,885 $ 632
- ------------ ----------- ----------- ----------- ----------- ----------- -----------
258 1,045 630 109 252 238 982
- ------------ ----------- ----------- ----------- ----------- ----------- -----------
1,057 5,731 1,304 182 3,385 6,123 1,614
============ =========== =========== =========== =========== =========== ===========
395 2,252 1,454 62 1,826 1,127 3,465
- ------------ ----------- ----------- ----------- ----------- ----------- -----------
452 1,479 888 46 1,217 699 2,514
- ------------ ----------- ----------- ----------- ----------- ----------- -----------
34 295 20 17 447 323 333
- ------------ ----------- ----------- ----------- ----------- ----------- -----------
377 373 1,195 41 1,523 382 3,701
- ------------ ----------- ----------- ----------- ----------- ----------- -----------
18 157 143 6 103 148 220
- ------------ ----------- ----------- ----------- ----------- ----------- -----------
11 98 7 6 149 108 111
- ------------ ----------- ----------- ----------- ----------- ----------- -----------
126 124 398 14 507 127 1,234
- ------------ ----------- ----------- ----------- ----------- ----------- -----------
19 133 8 0 1 24 8
- ------------ ----------- ----------- ----------- ----------- ----------- -----------
5 36 16 1 23 14 43
- ------------ ----------- ----------- ----------- ----------- ----------- -----------
75 12 24 22 15 4 56
- ------------ ----------- ----------- ----------- ----------- ----------- -----------
1,512 4,959 4,153 215 5,811 2,956 11,685
- ------------ ----------- ----------- ----------- ----------- ----------- -----------
(455) 772 (2,849) (33) (2,426) 3,167 (10,071)
============ =========== =========== =========== =========== =========== ===========
11,527 13,132 92,137 (415) 16,435 (12,563) 62,111
- ------------ ----------- ----------- ----------- ----------- ----------- -----------
(1,996) 0 0 (351) 2,761 0 0
- ------------ ----------- ----------- ----------- ----------- ----------- -----------
21,323 112,366 100,341 2,259 (32,710) (35,329) 517,671
- ------------ ----------- ----------- ----------- ----------- ----------- -----------
254 0 0 0 0 0 0
- ------------ ----------- ----------- ----------- ----------- ----------- -----------
154 0 0 (13) 3 0 0
- ------------ ----------- ----------- ----------- ----------- ----------- -----------
31,262 125,498 192,478 1,480 (13,511) (47,892) 579,782
- ------------ ----------- ----------- ----------- ----------- ----------- -----------
$ 30,807 $ 126,270 $ 189,629 $ 1,447 $ (15,937) $ (44,725) $ 569,711
============ =========== =========== =========== =========== =========== ===========
</TABLE>
Tax-Efficient
Equity Fund Value Fund Value 25 Fund
- ------------ ---------- -------------
$ 263 $ 2,999 $ 44
- ------------ ---------- -------------
15 258 3
- ------------ ---------- -------------
278 3,257 47
============ ========== =============
103 502 7
- ------------ ---------- -------------
79 377 6
- ------------ ---------- -------------
32 130 3
- ------------ ---------- -------------
49 281 4
- ------------ ---------- -------------
9 26 1
- ------------ ---------- -------------
11 43 1
- ------------ ---------- -------------
16 94 1
- ------------ ---------- -------------
21 26 0
- ------------ ---------- -------------
2 8 0
- ------------ ---------- -------------
1 7 1
- ------------ ---------- -------------
323 1,494 24
- ------------ ---------- -------------
(45) 1,763 23
============ ========== =============
(1,668) 17,218 (257)
- ------------ ---------- -------------
0 0 0
- ------------ ---------- -------------
5,713 (32,592) (187)
- ------------ ---------- -------------
0 0 0
- ------------ ---------- -------------
0 0 0
- ------------ ---------- -------------
4,045 (15,374) (444)
- ------------ ---------- -------------
$ 4,000 $ (13,611) $ (421)
============ ========== =============
See accompanying notes 59
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Amounts in thousands Capital Appreciation Fund Equity Income Fund Growth Fund
------------------------- -------------------------- -----------------------
Six Months Year Six Months Year Six Months Year
Ended Ended Ended Ended Ended Ended
December 31, June 30, December 31, June 30, December 31, June 30,
1999 1999 1999 1999 1999 1999
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from:
Operations:
Net investment income (loss) $ 494 $ 4,855 $ 2,532 $ 5,424 $ (17,503) $ (24,048)
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Net realized gain (loss) 84,228 127,483 8,195 28,130 48,957 413,535
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Net change in unrealized appreciation (depreciation) 28,003 (27,333) (34,549) (8,864) 637,993 (30,494)
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Net increase (decrease) resulting from operations 112,725 105,005 (23,822) 24,690 669,447 358,993
==================================================== ======================== ========================== =======================
Distributions to Shareholders:
From net investment income
Class A (74) (397) (312) (395) 0 0
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Class B 0 0 (316) (354) 0 0
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Class C 0 0 (330) (440) 0 0
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Other Classes (2,757) (5,209) (2,439) (4,130) 0 0
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
In excess of net investment income
Class A 0 0 0 0 0 0
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Class B 0 0 0 0 0 0
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Class C 0 0 0 0 0 0
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Other Classes 0 0 0 0 0 0
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
From net realized capital gains
Class A (13,464) (6,025) (2,856) (1,680) (30,753) (21,401)
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Class B (10,054) (3,186) (3,628) (1,999) (24,820) (11,617)
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Class C (13,520) (5,032) (3,749) (2,668) (344,135) (230,472)
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Other Classes (131,466) (56,464) (21,301) (16,320) (2,785) 0
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
In excess of net realized capital gains
Class A 0 0 0 0 0 0
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Class B 0 0 0 0 0 0
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Class C 0 0 0 0 0 0
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Other Classes 0 0 0 0 0 0
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Total Distributions (171,335) (76,313) (34,931) (27,986) (402,493) (263,490)
==================================================== ======================== ========================== =======================
Fund Share Transactions:
Receipts for shares sold
Class A 12,873 43,847 2,793 8,352 509,757 592,678
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Class B 4,219 21,095 3,603 9,636 33,284 68,949
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Class C 5,240 33,638 2,768 20,733 164,309 536,307
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Other Classes 272,885 592,800 5,904 35,370 12,257 7,429
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Issued as reinvestment of distributions
Class A 13,231 5,855 3,057 1,967 28,671 20,136
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Class B 9,304 3,012 3,572 2,148 22,709 10,649
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Class C 13,000 4,830 3,897 2,982 319,895 215,697
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Other Classes 119,912 49,228 23,647 20,074 2,784 0
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Cost of shares redeemed
Class A (34,242) (34,758) (3,495) (5,776) (537,620) (577,520)
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Class B (6,386) (11,806) (5,087) (5,140) (28,728) (31,680)
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Class C (16,403) (31,014) (7,406) (20,521) (332,035) (618,382)
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Other Classes (481,214) (725,336) (20,443) (66,231) (3,874) (556)
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Net increase (decrease) resulting from
Fund share transactions (87,581) (48,609) 12,810 3,594 191,409 223,707
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
Total Increase (Decrease) in Net Assets (146,191) (19,917) (45,943) 298 458,363 319,210
==================================================== ======================= ========================== =======================
Net Assets:
Beginning of period 1,103,626 1,123,543 202,005 201,707 2,433,050 2,113,840
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
End of period * $ 957,435 $1,103,626 $ 156,062 $ 202,005 $2,891,413 $2,433,050
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
*Including net undistributed (overdistributed)
investment income of: $ (810) $ 1,527 $ 4,081 $ 4,946 $ (17,502) $ 1
- ---------------------------------------------------- ------------------------ -------------------------- -----------------------
</TABLE>
60 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Innovation Fund International Fund Mid-Cap Growth Fund Opportunity Fund Precious Metals Fund
- -------------------------- ----------------------- ----------------------- ------------------------ -----------------------
Six Months Year Six Months Year Six Months Year Six Months Year Six Months Year
Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended
December 31, June 30, December 31, June 30, December 31, June 30, December 31, June 30, December 31, June 30,
1999 1999 1999 1999 1999 1999 1999 1999 1999 1999
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ (14,122) $ (10,056) $ (455) $ (761) $ 772 $ 1,713 $ (2,849) $ (6,871) $ (33) $ 416
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
349,045 82,075 9,531 16,040 13,132 867 92,137 92,947 (766) (5,908)
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
1,161,980 250,804 21,731 (16,663) 112,366 7,029 100,341 (86,017) 2,246 6,425
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
1,496,903 322,823 30,807 (1,384) 126,270 9,609 189,629 59 1,447 933
========================= ====================== ========================= ======================== ======================
0 0 0 0 (213) (33) 0 0 (33) (37)
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
0 0 0 0 0 0 0 0 (19) (75)
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
0 0 0 0 0 0 0 0 (50) (288)
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
0 0 0 0 (2,909) (390) 0 0 0 0
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
0 0 0 0 0 0 0 0 0 (10)
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
0 0 0 0 0 0 0 0 0 (20)
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
0 0 0 0 0 0 0 0 0 (78)
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
0 0 0 0 0 0 0 0 0 0
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
(69,914) (4,919) (1,384) (772) (91) (4,870) (27,707) (21,702) (1) 0
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
(89,354) (5,496) (1,275) (789) (56) (4,178) (2,803) 0 (2) 0
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
(128,950) (12,996) (13,867) (10,255) (68) (6,249) (91,653) (66,672) (5) 0
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
(4,360) (143) (2,937) (196) (501) (25,986) (3,505) 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 0
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
0 0 0 0 0 0 0 0 0 0
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
(292,578) (23,554) (19,463) (12,012) (3,838) (41,706) (125,668) (88,374) (110) (508)
========================= ====================== ========================= ======================== ======================
792,354 670,706 278,484 387,777 47,510 138,060 228,825 1,327,819 114,971 172,538
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
300,455 222,514 18,239 36,095 3,673 27,453 9,846 599 2,179 4,487
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
403,508 386,283 105,300 312,239 6,260 33,931 34,058 394,360 102,742 158,888
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
19,260 31,776 6,017 21,694 360,924 745,822 9,818 2,418 0 0
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
64,301 4,539 1,120 724 298 4,388 25,775 19,986 25 46
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
83,020 5,125 1,085 714 50 3,823 2,796 0 22 95
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
122,169 12,329 12,912 9,591 64 5,858 84,560 61,578 49 363
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
4,194 142 2,937 196 3,081 24,449 3,504 0 0 0
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
(620,433) (517,708) (289,289) (384,482) (51,109) (73,016) (246,510) (1,413,716) (121,104) (170,496)
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
(37,797) (31,174) (19,761) (35,264) (17,375) (25,970) (299) (534) (1,309) (4,167)
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
(131,682) (188,880) (117,870) (337,461) (31,122) (58,559) (63,706) (571,940) (106,293) (164,482)
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
(6,509) (16,345) (5,865) (3,792) (427,477) (579,895) (1,279) (139) 0 0
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
992,840 579,307 (6,691) 8,031 (105,223) 246,344 87,388 (179,569) (8,718) (2,728)
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
2,197,165 878,576 4,653 (5,365) 17,209 214,247 151,349 (267,884) (7,381) (2,303)
========================= ====================== ========================= ======================== ======================
1,264,903 386,327 149,087 154,452 1,008,125 793,878 433,062 700,946 23,238 25,541
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
$3,462,068 $1,264,903 $ 153,740 $ 149,087 $ 1,025,334 $1,008,125 $ 584,411 $ 433,062 $ 15,857 $ 23,238
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
$ (14,122) $ 0 $ (1,954) $ (1,499) $ (1,038) $ 1,312 $ 9,978 $ 12,827 $ (230) $ (95)
------------------------- ---------------------- ------------------------- ------------------------ ----------------------
</TABLE>
See accompanying notes 61
<PAGE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets (Cont.)
Amounts in thousands Renaissance Fund
-----------------
Six Months Ended Year Ended
December 31, 1999 June 30, 1999
(Unaudited)
<S> <C> <C>
Increase (Decrease) in Net Assets from:
Operations:
Net investment income (loss) $ (2,426) $ (4,312)
- ------------------------------------------------------------------------------------ ----------------- ----------------
Net realized gain (loss) 19,196 100,928
- ------------------------------------------------------------------------------------ ----------------- ----------------
Net change in unrealized appreciation (depreciation) (32,707) (42,518)
- ------------------------------------------------------------------------------------ ----------------- ----------------
Net increase (decrease) resulting from operations (15,937) 54,098
==================================================================================== ================= ================
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 (14,504) (10,816)
- ------------------------------------------------------------------------------------ ----------------- ----------------
Class B (22,515) (14,778)
- ------------------------------------------------------------------------------------ ----------------- ----------------
Class C (75,211) (55,218)
- ------------------------------------------------------------------------------------ ----------------- ----------------
Other Classes (168) (49)
- ------------------------------------------------------------------------------------ ----------------- ----------------
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 (112,398) (80,861)
==================================================================================== ================= ================
Fund Share Transactions:
Receipts for shares sold
Class A 20,749 158,557
- ------------------------------------------------------------------------------------ ----------------- ----------------
Class B 10,063 45,572
- ------------------------------------------------------------------------------------ ----------------- ----------------
Class C 45,727 101,621
- ------------------------------------------------------------------------------------ ----------------- ----------------
Other Classes 480 1,189
- ------------------------------------------------------------------------------------ ----------------- ----------------
Issued as reinvestment of distributions
Class A 13,698 9,525
- ------------------------------------------------------------------------------------ ----------------- ----------------
Class B 20,280 13,419
- ------------------------------------------------------------------------------------ ----------------- ----------------
Class C 69,512 51,677
- ------------------------------------------------------------------------------------ ----------------- ----------------
Other Classes 167 38
- ------------------------------------------------------------------------------------ ----------------- ----------------
Cost of shares redeemed
Class A (36,388) (161,529)
- ------------------------------------------------------------------------------------ ----------------- ----------------
Class B (25,695) (29,608)
- ------------------------------------------------------------------------------------ ----------------- ----------------
Class C (103,839) (159,492)
- ------------------------------------------------------------------------------------ ----------------- ----------------
Other Classes (284) (1,405)
- ------------------------------------------------------------------------------------ ----------------- ----------------
Net increase (decrease) resulting from Fund share transactions 14,470 29,564
- ------------------------------------------------------------------------------------ ----------------- ----------------
Total Increase (Decrease) in Net Assets (113,865) 2,801
==================================================================================== ================= ================
Net Assets:
Beginning of period 659,825 657,024
- ------------------------------------------------------------------------------------ ----------------- ----------------
End of period * $ 545,960 $ 659,825
- ------------------------------------------------------------------------------------ ----------------- ----------------
*Including net undistributed (overdistributed) investment income of: $ 38,842 $ 41,268
- ------------------------------------------------------------------------------------ ----------------- ----------------
</TABLE>
62 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Small-Cap Value Fund Target Fund Tax-Efficient Equity Fund Value Fund Value 25 Fund
- ------------------------- ------------------------- ------------------------- ------------------------ ------------------------
Six Months Year Six Months Year Six Months Period Six Months Year Six Months Period
Ended Ended Ended Ended Ended Ended July Ended Ended Ended Ended July
December 31, June 30, December 31, June 30, December 31, 10, 1998 December 31, June 30, December 31, 10, 1998
1999 1999 1999 1999 1999 to June 1999 1999 1999 to June
(Unaudited) (Unaudited) (Unaudited) 30, 1999 (Unaudited) (Unaudited) 30, 1999
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 3,167 $ 5,018 $ (10,071) $ (12,880) $ (45) $ (27) $ 1,763 $ 3,245 $ 23 $ 18
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
(12,563) (11,944) 62,111 124,994 (1,668) (228) 17,218 29,420 (257) (84)
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
(35,329) (15,379) 517,671 38,444 5,713 3,290 (32,592) (6,992) (187) 48
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
(44,725) (22,305) 569,711 150,558 4,000 3,035 (13,611) 25,673 (421) (18)
=========== =========== ============ ========== ============ ========== =========== ========== =========== ========
(2,407) (1,065) 0 0 0 0 (250) (297) (16) (4)
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
(900) (416) 0 0 0 0 (258) (285) (10) (2)
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
(1,080) (329) 0 0 0 0 (537) (644) (11) (1)
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
(1,269) (1,043) 0 0 0 0 (1,263) (1,851) (3) (1)
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
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 0 0 0 0 0 0 0 0
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
0 0 (16,039) (7,963) 0 0 (3,636) (2,116) 0 0
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
0 0 (8,779) (4,561) 0 0 (5,756) (3,839) 0 0
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
0 0 (95,378) (55,675) 0 0 (11,931) (9,026) 0 0
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
0 0 (874) 0 0 0 (17,432) (11,350) 0 0
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
0 (2,675) 0 0 0 0 0 0 0 0
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
0 (3,114) 0 0 0 0 0 0 0 0
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
0 (3,425) 0 0 0 0 0 0 0 0
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
0 (2,175) 0 0 0 0 0 0 0 0
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
(5,656) (14,242) (121,070) (68,199) 0 0 (41,063) (29,408) (40) (8)
=========== =========== ============ ========== ============ ========== =========== ========== =========== ========
55,793 89,486 825,802 1,155,256 2,851 7,152 12,891 40,949 1,303 1,532
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
5,244 36,302 25,676 17,814 5,422 7,039 2,378 6,401 443 1,252
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
14,863 57,300 103,544 164,138 6,034 11,845 8,838 17,743 748 1,157
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
10,043 60,011 3,676 6,773 18,012 4,070 28,566 34,047 0 388
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
2,270 3,546 13,199 7,489 0 0 3,583 2,146 16 3
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
820 3,299 8,042 4,207 0 0 5,191 3,688 10 2
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
1,017 3,581 89,524 52,783 0 0 11,766 9,133 10 1
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
1,121 2,992 874 0 0 0 18,568 13,104 0 1
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
(40,452) (53,980) (853,926) (1,168,422) (1,278) (1,370) (13,851) (42,344) (1,232) (1,197)
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
(20,266) (41,495) (19,264) (24,745) (1,084) (1,299) (5,515) (8,734) (194) (432)
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
(30,641) (64,820) (143,231) (317,299) (1,437) (2,363) (20,141) (32,134) (475) (343)
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
(27,679) (36,584) (1,643) (311) (3,715) (158) (17,221) (47,985) (184) (149)
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
(27,867) 59,638 52,273 (102,317) 24,805 24,916 35,053 (3,986) 445 2,215
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
(78,248) 23,091 500,914 (19,958) 28,805 27,951 (19,621) (7,721) (16) 2,189
=========== =========== ============ ========== ============ ========== =========== ========== =========== ========
397,643 374,552 1,166,241 1,186,199 27,951 0 231,638 239,359 2,189 0
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
$ 319,395 $ 397,643 $ 1,667,155 $1,166,241 $ 56,756 $ 27,951 $ 212,017 $ 231,638 $ 2,173 $ 2,189
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
$ 814 $ 3,303 $ 57,671 $ 67,742 $ (50) $ (5) $ 10,182 $ 10,727 $ (7) $ 10
- ------------ ----------- ------------ ---------- ------------ ---------- ----------- ---------- ----------- --------
</TABLE>
See accompanying notes 63
<PAGE>
Notes to Financial Statements
December 31, 1999 (Unaudited)
1. Organization
PIMCO Funds: Multi-Manager Series (the "Trust"), is registered under the
Investment Company Act of 1940, as amended, as open-end management investment
company organized as a Massachusetts business trust. The Trust currently
consists of twenty-six 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 statement of operations is
shown net of foreign taxes withheld on dividends from foreign securities.
Foreign taxes withheld were as follows: Capital Appreciation - $42,184; Equity
Income Fund - $362; International Fund - $65,567; Precious Metals Fund - $1,643;
Renaissance Fund - $55,595; Tax-Efficient Equity Fund - $838; and Value Fund -
$297.
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 and
Value 25 Funds; 0.55% for the Target and International Funds; 0.60% for the
Renaissance, Small-Cap Value, and Precious Metals Funds; 0.65% for the
Opportunity and Innovation Funds; 1.00% for the Small-Cap Growth Fund; and 0.45%
for all other Funds. Each of the Funds also has a sub-advisor which, under the
supervision of PIMCO Advisors, directs the investments of the Fund's assets.
Other than the sub-advisor of the Precious Metals and International Funds, all
of the sub-advisors are affiliates of PIMCO Advisors. The advisory fees received
by PIMCO Advisors are paid in all or in part to each of the sub-advisors in
accordance with the portfolio management agreements.
Administration Fee. PIMCO provides administrative services to the Trust for
which it receives from each Fund a monthly administrative fee based on each
share class' average daily net assets. The Administration Fee for the Retail
Classes is charged at the annual rate of 0.65% for the International Fund; 0.45%
for the Precious Metals Fund; and 0.40% for all other Funds. The Administration
Fee for the Institutional and Administrative Classes is charged at the annual
rate of 0.50% for the International and International Growth Funds and 0.25% for
all other Funds. The Administration Fee for Class D is charged at the annual
rate of 0.40%.
65
<PAGE>
Notes to Financial Statements (Cont.)
December 31,1999 (Unaudited)
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):
Distribution Fee (%) Servicing Fee (%)
- --------------------------------------------------------------------------------
Class A
All Funds -- 0.25
Class B
All Funds 0.75 0.25
Class C
All Funds 0.75 0.25
Class D
All Funds -- 0.25
PFD also receives the proceeds of the initial sales charges paid by the
shareholders upon the purchase of Class A shares and the contingent deferred
sales charges paid by the shareholders upon certain redemptions of Retail
Classes shares. For the period ended December 31, 1999, PFD received $6,933,038
representing commissions (sales charges) and contingent deferred sales charges.
Expenses. The Trust is also responsible for the following expenses: (i) salaries
and other compensation of any of the Trust's executive officers and employees
who are not officers, directors, stockholders or employees of PIMCO Advisors,
PIMCO, or its subsidiaries or affiliates; (ii) taxes and governmental fees;
(iii) brokerage fees and commissions and other portfolio transaction expenses;
(iv) the cost of borrowing money, including interest expenses; (v) fees and
expenses of the Trustees who are not "interested persons" of the Advisor, PIMCO,
Portfolio Managers, or the Trust, and any counsel retained exclusively for their
benefit; (vi) extraordinary expenses, including costs of litigation and
indemnification expenses; (vii) expenses such as organizational expenses, which
are capitalized in accordance with generally accepted accounting principles; and
(viii) any expenses allocated or allocable to a specific class of shares, which
include service fees payable with respect to the Administrative Class shares and
may include certain other expenses as permitted by the Trust's Multiple Class
Plan adopted pursuant to Rule 18f-3 under the Investment Company Act of 1940 and
subject to review and approval by the Trustees. The ratio of expenses to average
net assets per share class, as disclosed in the Financial Highlights, may differ
from the annual fund operating expenses per share class as disclosed in the
Prospectus for the reasons set forth above.
Each unaffiliated Trustee receives an annual retainer of $45,000, plus
$2,000 for each Board of Trustees meeting attended, and $500 for each Audit and
Performance Committee meeting attended, plus reimbursement of related expenses.
Each Audit and Performance Committee receives an additional annual retainer of
$1,000, the Chairman of the Audit and Performance Committees receives an
additional annual retainer of $2,000, the Chairman of the Independent Trustees
receives an additional annual retainer of $6,000, and each Vice Chairman of the
entire Board receives an additional annual retainer of $3,000. These expenses
are allocated to the Funds of the Trust according to their respective net
assets.
4. Purchases and Sales of Securities
Purchases and sales of securities (excluding short-term investments) for the
period ended December 31, 1999 were as follows (amounts in thousands):
U.S. Government/Agency
---------------------------------
Purchases Sales
- --------------------------------------------------------------------------------
Capital Appreciation Fund $ 494,990 $ 773,759
Equity Income Fund 45,905 65,026
Growth Fund 831,522 1,023,664
Innovation Fund 2,343,699 1,813,122
International Fund 39,500 52,576
Mid-Cap Growth Fund 719,963 801,172
Opportunity Fund 457,989 502,575
Precious Metals Fund 5,657 5,920
Renaissance Fund 399,457 485,913
Small-Cap Value Fund 110,894 121,871
Target Fund 711,909 755,821
Tax Efficient Equity Fund 30,768 6,228
Value Fund 145,200 137,644
Value 25 Fund 2,661 2,429
66
<PAGE>
5. Federal Income Tax Matters
As of June 30, 1999, the Fund listed in the table below had remaining capital
loss carryforwards that were realized in current and prior years. Additionally,
the International Fund, Precious Metals Fund, Small Cap Value Fund,
Tax-Efficient Equity Fund, and Value 25 Fund realized capital losses and/or
foreign currency losses during the period November 1, 1998 through June 30,
1999, which the Funds elected to defer to the following fiscal year pursuant to
income tax regulations. The amounts are $332,309, $3,967,828, $573,480,
$174,775, and $5,496 respectively. The Fund will resume capital gain
distributions in the future to the extent gains are realized in excess of the
available carryforwards.
Capital Loss Carryforwards
-------------------------------------
Realized Losses Expiration
- --------------------------------------------------------------------------------
Precious Metals Fund $ 1,635,971 6/30/2006
8,161,137 6/30/2007
Small Cap Value Fund 10,713,421 6/30/2007
Tax-Efficient Equity Fund 27,778 6/30/2007
Value 25 Fund 67,139 6/30/2007
6. Line of Credit
Effective December 14, 1999, the funds, along with certain other funds managed
by PIMCO, entered into an unsecured $350,000,000 bank line of credit agreement
with State Street Bank. 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 December 31, 1999.
7. In-Kind Transactions. For the period ended December 31, 1999, the following
funds realized gains (losses) from in-kind redemptions of approximately (amounts
in thousands):
December 31, 1999 June 30, 1999
- --------------------------------------------------------------------------------
Capital Appreciation Fund $ 0 $ 2,839
Mid-Cap Growth Fund 2,312 0
8. Acquisition by Allianz AG
The Allianz AG acquisition of majority ownership of PIMCO Advisors has been
approved by the Boards of Allianz AG and PIMCO on October 31, 1999, subject to
regulatory review and approval, as well as the vote of the shareholders on March
3, 2000.
67
<PAGE>
Notes to Financial Statements (Cont.)
December 31, 1999 (Unaudited)
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>
Capital Appreciation Fund Equity Income Fund
--------------------------------------------- ----------------------------------------------
Period Ended 12/31/1999 Year Ended 6/30/1999 Period Ended 12/31/1999 Year Ended 6/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
--------------------------------------------- ----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receipts for shares sold
Class A 498 $ 12,873 1,753 $ 43,847 202 $ 2,793 558 $ 8,352
- ------------------------------------ --------------------------------------------- ----------------------------------------------
Class B 167 4,219 863 21,095 258 3,603 658 9,636
- ------------------------------------ --------------------------------------------- ----------------------------------------------
Class C 209 5,240 1,380 33,638 199 2,768 1,408 20,733
- ------------------------------------ --------------------------------------------- ----------------------------------------------
Other Classes 10,639 272,885 23,619 592,800 438 5,904 2,442 35,370
- ------------------------------------ --------------------------------------------- ----------------------------------------------
Issued as reinvestment of distributions
Class A 564 13,231 249 5,855 286 3,057 140 1,967
- ------------------------------------ --------------------------------------------- ----------------------------------------------
Class B 405 9,304 131 3,012 337 3,572 153 2,148
- ------------------------------------ --------------------------------------------- ----------------------------------------------
Class C 565 13,000 209 4,830 367 3,897 212 2,982
- ------------------------------------ --------------------------------------------- ----------------------------------------------
Other Classes 5,074 119,912 2,085 49,228 2,201 23,647 1,420 20,074
- ------------------------------------ --------------------------------------------- ----------------------------------------------
Cost of shares redeemed
Class A (1,292) (34,242) (1,376) (34,758) (261) (3,495) (392) (5,776)
- ------------------------------------ --------------------------------------------- ----------------------------------------------
Class B (253) (6,386) (486) (11,806) (394) (5,087) (358) (5,140)
- ------------------------------------ --------------------------------------------- ----------------------------------------------
Class C (648) (16,403) (1,280) (31,014) (554) (7,406) (1,389) (20,521)
- ------------------------------------ --------------------------------------------- ----------------------------------------------
Other Classes (18,848) (481,214) (28,942) (725,336) (1,583) (20,443) (4,448) (66,231)
- ------------------------------------ --------------------------------------------- ----------------------------------------------
Net increase (decrease) resulting from
Fund share transactions (2,920) $ (87,581) (1,795) $ (48,609) 1,496 $ 12,810 404 $ 3,594
- ------------------------------------ --------------------------------------------- ----------------------------------------------
<CAPTION>
Growth Fund
---------------------------------------------------------
Period Ended 12/31/1999 Year Ended 6/30/1999
Shares Amount Shares Amount
----------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Class A 14,831 $ 509,757 18,586 $ 592,678
- ---------------------------------------------------- -----------------------------------------------------------
Class B 1,056 33,284 2,319 68,949
- ---------------------------------------------------- -----------------------------------------------------------
Class C 5,271 164,309 18,554 536,307
- ---------------------------------------------------- -----------------------------------------------------------
Other Classes 389 12,257 246 7,429
- ---------------------------------------------------- -----------------------------------------------------------
Issued as reinvestment of distributions
Class A 814 28,671 690 20,136
- ---------------------------------------------------- -----------------------------------------------------------
Class B 722 22,709 398 10,649
- ---------------------------------------------------- -----------------------------------------------------------
Class C 10,172 319,895 8,069 215,697
- ---------------------------------------------------- -----------------------------------------------------------
Other Classes 88 2,784 0 0
- ---------------------------------------------------- -----------------------------------------------------------
Cost of shares redeemed
Class A (15,594) (537,620) (18,127) (577,520)
- ---------------------------------------------------- -----------------------------------------------------------
Class B (913) (28,728) (1,081) (31,680)
- ---------------------------------------------------- -----------------------------------------------------------
Class C (10,667) (332,035) (21,434) (618,382)
- ---------------------------------------------------- -----------------------------------------------------------
Other Classes (121) (3,874) (19) (556)
- ---------------------------------------------------- -----------------------------------------------------------
Net increase (decrease) resulting from
Fund share transactions 6,048 $ 191,409 8,201 $ 223,707
- ---------------------------------------------------- -----------------------------------------------------------
<CAPTION>
Precious Metals Fund Renaissance Fund
----------------------------------------------- ---------------------------------------------
Period Ended 12/31/1999 Year Ended 6/30/1999 Period Ended 12/31/1999 Year Ended 6/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
----------------------------------------------- ---------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receipts for shares sold
Class A 23,145 $ 114,971 31,952 $ 172,538 1,259 $ 20,749 9,334 $ 158,557
- ------------------------------------ ----------------------------------------------- --------------------------------------------
Class B 472 2,179 868 4,487 595 10,063 2,613 45,572
- ------------------------------------ ----------------------------------------------- --------------------------------------------
Class C 22,626 102,742 31,755 158,888 2,774 45,727 5,944 101,621
- ------------------------------------ ----------------------------------------------- --------------------------------------------
Other Classes 0 0 0 0 29 480 69 1,189
- ------------------------------------ ----------------------------------------------- --------------------------------------------
Issued as reinvestment of distributions
Class A 5 25 9 46 1,028 13,698 625 9,525
- ------------------------------------ ----------------------------------------------- --------------------------------------------
Class B 6 22 20 95 1,553 20,280 887 13,419
- ------------------------------------ ----------------------------------------------- --------------------------------------------
Class C 10 49 76 363 5,351 69,512 3,434 51,677
- ------------------------------------ ----------------------------------------------- --------------------------------------------
Other Classes 0 0 0 0 13 167 3 38
- ------------------------------------ ----------------------------------------------- --------------------------------------------
Cost of shares redeemed
Class A (24,323) (121,104) (31,247) (170,496) (2,212) (36,388) (9,467) (161,529)
- ------------------------------------ ----------------------------------------------- --------------------------------------------
Class B (280) (1,309) (803) (4,167) (1,645) (25,695) (1,743) (29,608)
- ------------------------------------ ----------------------------------------------- --------------------------------------------
Class C (23,202) (106,293) (32,681) (164,482) (6,417) (103,839) (9,456) (159,492)
- ------------------------------------ ----------------------------------------------- --------------------------------------------
Other Classes 0 0 0 0 (17) (284) (82) (1,405)
- ------------------------------------ ----------------------------------------------- --------------------------------------------
Net increase (decrease) resulting from
Fund share transactions (1,541) $ (8,718) (51) $ (2,728) 2,311 $ 14,470 2,161 $ 29,564
- ------------------------------------ ----------------------------------------------- --------------------------------------------
<CAPTION>
Small-Cap Value Fund
----------------------------------------------------------
Period Ended 12/31/1999 Year Ended 6/30/1999
Shares Amount Shares Amount
---------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Class A 3,709 $ 55,793 5,904 $ 89,486
- ------------------------------------------------- ----------------------------------------------------------
Class B 359 5,244 2,397 36,302
- ------------------------------------------------- ----------------------------------------------------------
Class C 1,018 14,863 3,813 57,300
- ------------------------------------------------- ----------------------------------------------------------
Other Classes 675 10,043 3,981 60,011
- ------------------------------------------------- ----------------------------------------------------------
Issued as reinvestment of distributions
Class A 170 2,270 241 3,546
- ------------------------------------------------- ----------------------------------------------------------
Class B 61 820 228 3,299
- ------------------------------------------------- ----------------------------------------------------------
Class C 76 1,017 247 3,581
- ------------------------------------------------- ----------------------------------------------------------
Other Classes 83 1,121 203 2,992
- ------------------------------------------------- ----------------------------------------------------------
Cost of shares redeemed
Class A (2,773) (40,452) (3,663) (53,980)
- ------------------------------------------------- ----------------------------------------------------------
Class B (1,410) (20,266) (2,841) (41,495)
- ------------------------------------------------- ----------------------------------------------------------
Class C (2,125) (30,641) (4,402) (64,820)
- ------------------------------------------------- ----------------------------------------------------------
Other Classes (1,893) (27,679) (2,475) (36,584)
- ------------------------------------------------- ----------------------------------------------------------
Net increase (decrease) resulting from
Fund share transactions (2,050) $ (27,867) 3,633 $ 59,638
- ------------------------------------------------- ----------------------------------------------------------
</TABLE>
68
<PAGE>
<TABLE>
<CAPTION>
Innovation Fund International Fund
------------------------------------------------------- ------------------------------------------------------
Period Ended 12/31/1999 Year Ended 6/30/1999 Period Ended 12/31/1999 Year Ended 6/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
<S> <C> <C> <C> <C> <C> <C> <C>
17,397 $ 792,354 22,267 $ 670,706 21,911 $ 278,484 31,483 $ 387,777
------------------------------------------------------- -------------------------------------------------------
6,395 300,455 7,203 222,514 1,558 18,239 3,192 36,095
------------------------------------------------------- -------------------------------------------------------
8,755 403,508 12,856 386,283 8,968 105,300 26,758 312,239
------------------------------------------------------- -------------------------------------------------------
378 19,260 978 31,776 511 6,017 1,989 21,694
------------------------------------------------------- -------------------------------------------------------
1,150 64,301 166 4,539 91 1,120 64 724
------------------------------------------------------- -------------------------------------------------------
1,548 83,020 193 5,125 97 1,085 68 714
------------------------------------------------------- -------------------------------------------------------
2,280 122,169 465 12,329 1,154 12,912 913 9,591
------------------------------------------------------- -------------------------------------------------------
75 4,194 5 142 2,560 2,937 19 196
------------------------------------------------------- -------------------------------------------------------
(13,929) (620,433) (17,585) (517,708) (22,603) (289,289) (30,904) (384,482)
------------------------------------------------------- -------------------------------------------------------
(841) (37,797) (1,084) (31,174) (1,678) (19,761) (3,101) (35,264)
------------------------------------------------------- -------------------------------------------------------
(3,060) (131,682) (6,532) (188,880) (9,991) (117,870) (28,746) (337,461)
------------------------------------------------------- -------------------------------------------------------
(144) (6,509) (487) (16,345) (493) (5,865) (329) (3,792)
------------------------------------------------------- -------------------------------------------------------
20,004 $ 992,840 18,445 $ 579,307 (215) $ (6,691) 1,406 $ 8,031
------------------------------------------------------- -------------------------------------------------------
<CAPTION>
Mid-Cap Growth Fund Opportunity Fund
------------------------------------------------------ ------------------------------------------------------
Period Ended 12/31/1999 Year Ended 6/30/1999 Period Ended 12/31/1999 Year Ended 6/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------------ ------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
2,127 $ 47,510 6,247 $ 138,060 8,184 $ 228,825 53,826 $1,327,819
------------------------------------------------------ ------------------------------------------------------
168 3,673 1,268 27,453 388 9,846 19 599
------------------------------------------------------ ------------------------------------------------------
282 6,260 1,578 33,931 1,349 34,058 17,562 394,360
------------------------------------------------------ ------------------------------------------------------
16,306 360,924 33,953 745,822 395 9,818 106 2,418
------------------------------------------------------ ------------------------------------------------------
12 298 206 4,388 939 25,775 900 19,986
------------------------------------------------------ ------------------------------------------------------
2 50 181 3,823 118 2,796 0 0
------------------------------------------------------ ------------------------------------------------------
3 64 278 5,858 3,562 84,560 3,079 61,578
------------------------------------------------------ ------------------------------------------------------
123 3,081 1,138 24,449 146 3,504 0 0
------------------------------------------------------ ------------------------------------------------------
(2,302) (51,109) (3,372) (73,016) (8,742) (246,510) (56,632) (1,413,716)
------------------------------------------------------ ------------------------------------------------------
(790) (17,375) (1,230) (25,970) (12) (299) (8) (534)
------------------------------------------------------ ------------------------------------------------------
(1,425) (31,122) (2,749) (58,559) (2,518) (63,706) (25,198) (571,940)
------------------------------------------------------ ------------------------------------------------------
(18,913) (427,477) (26,494) (579,895) (51) (1,279) (6) (139)
------------------------------------------------------ ------------------------------------------------------
(4,407) $ (105,223) 11,004 $ 246,344 3,758 $ 87,388 (6,352) $ (179,569)
------------------------------------------------------ ------------------------------------------------------
<CAPTION>
Target Fund Tax-Efficient Equity Fund
------------------------------------------------------ --------------------------------------------------------
Period from
Period Ended 12/31/1999 Year Ended 6/30/1999 Period Ended 12/31/1999 07/10/1999 to 6/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------------ --------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
43,141 $ 825,802 74,975 $1,155,256 249 $ 2,851 699 $ 7,152
------------------------------------------------------ --------------------------------------------------------
1,388 25,676 1,206 17,814 478 5,422 682 7,039
------------------------------------------------------ --------------------------------------------------------
5,755 103,544 11,320 164,138 531 6,034 1,163 11,845
------------------------------------------------------ --------------------------------------------------------
182 3,676 402 6,773 1,597 18,012 382 4,070
------------------------------------------------------ --------------------------------------------------------
609 13,199 517 7,489 0 0 0 0
------------------------------------------------------ --------------------------------------------------------
404 8,042 312 4,207 0 0 0 0
------------------------------------------------------ --------------------------------------------------------
4,501 89,524 3,916 52,783 0 0 0 0
------------------------------------------------------ --------------------------------------------------------
41 874 0 0 0 0 0 0
------------------------------------------------------ --------------------------------------------------------
(44,386) (853,926) (75,504) (1,168,422) (111) (1,278) (132) (1,370)
------------------------------------------------------ --------------------------------------------------------
(1,066) (19,264) (1,698) (24,745) (94) (1,084) (128) (1,299)
------------------------------------------------------ --------------------------------------------------------
(8,087) (143,231) (21,938) (317,299) (126) (1,437) (230) (2,363)
------------------------------------------------------ --------------------------------------------------------
(83) (1,643) (18) (311) (331) (3,715) (15) (158)
------------------------------------------------------ --------------------------------------------------------
2,399 $ 52,273 (6,510) $(102,317) 2,193 $ 24,805 2,421 $ 24,916
------------------------------------------------------ --------------------------------------------------------
<CAPTION>
Value Fund Value 25 Fund
------------------------------------------------------ --------------------------------------------------------
Period from
Period Ended 12/31/1999 Year Ended 6/30/1999 Period Ended 12/31/1999 07/10/1999 to 6/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------------ --------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
889 $ 12,891 2,834 $ 40,949 168 $ 1,303 179 $ 1,532
------------------------------------------------------ --------------------------------------------------------
163 2,378 445 6,401 56 443 146 1,252
------------------------------------------------------ --------------------------------------------------------
614 8,838 1,253 17,743 93 748 135 1,157
------------------------------------------------------ --------------------------------------------------------
2,031 28,566 2,359 34,047 0 0 45 388
------------------------------------------------------ --------------------------------------------------------
312 3,583 158 2,146 2 16 0 3
------------------------------------------------------ --------------------------------------------------------
455 5,191 274 3,688 2 10 0 2
------------------------------------------------------ --------------------------------------------------------
1,030 11,766 678 9,133 1 10 0 1
------------------------------------------------------ --------------------------------------------------------
1,613 18,568 967 13,104 0 0 0 1
------------------------------------------------------ --------------------------------------------------------
(955) (13,851) (2,926) (42,344) (169) (1,232) (147) (1,197)
------------------------------------------------------ --------------------------------------------------------
(401) (5,515) (625) (8,734) (26) (194) (52) (432)
------------------------------------------------------ --------------------------------------------------------
(1,431) (20,141) (2,298) (32,134) (61) (475) (42) (343)
------------------------------------------------------ --------------------------------------------------------
(1,230) (17,221) (3,262) (47,985) (26) (184) (19) (149)
------------------------------------------------------ --------------------------------------------------------
3,090 $ 35,053 (143) $ (3,986) 40 $ 445 245 $ 2,215
------------------------------------------------------ --------------------------------------------------------
</TABLE>
69
<PAGE>
<TABLE>
<CAPTION>
PIMCO Funds: Multi-Manager Series
<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 State Street Bank & Trust Co., 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 you receive account
Information 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.
</TABLE>
<PAGE>
Introducing the PIMCO Funds Innovation Center
With the start of the New Year, we've introduced the PIMCO Funds Innovation
Center to our Web site. The Innovation Center offers investors a unique way to
look at technology investing. It's designed both for investors with existing
technology holdings and for those who have yet to invest in the sector. Its
features include:
[_] Insight from Dennis McKechnie As manager of PIMCO Innovation Fund, Dennis
McKechnie has delivered impressive results for investors. You can read
about his investment process and strategy and benefit from his extensive
background in technology.
[_] Manager Commentary Weekly analysis and insight into the tech sector.
[_] Taking Stock Detailed profiles of some of our top tech holdings.
[_] Monthly Newsletter Download a complete technology update in PDF format.
[_] Manager Q&A Fund managers provide comments on the market and their funds.
To log on to the PIMCO Funds Innovation Center, simply go to our Home Page at
www.pimcofunds.com, and click on the "Innovation Center" link.
Not available to all broker/dealers.
- --------------------------------------------------------------------------------
---------------
PRESORTED
[LOGO OF PIMCO FUNDS] STANDARD
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 Semi-Annual Report
This Update is published twice a year to provide PIMCO Funds shareholders with
general market commentary and fund information. It also includes the financial
report for the PIMCO Funds Multi-Manager Series.
[GRAPHIC]
Wondering how to size up your fund's performance? For some tips on choosing the
right market index benchmark, turn to page 4.
December 31, 1999
Multi-Manager Series
Share Classes
D
Capital Appreciation
Equity Income
Innovation
Mid-Cap Growth
Renaissance
Tax-Efficient Equity
Value
Page 3
Another Very Good Year for
PIMCO Innovation Fund
Page 4 Today's Investor
Your Fund's Market Index Benchmark
Page 6 Market Review
Page 7 Manager Spotlight
Dennis McKechnie
Page 8 In The News
Page 9 Service Update
Introducing the PIMCO Funds Innovation Center
Page 10 Overview: Comprehensive Fund Family
Page 11 PIMCO Funds Multi-Manager Series
Semi-Annual Report
[LOGO OF PIMCO FUNDS]
<PAGE>
PIMCO Innovation Fund
1999 Was Another Very Good Year
By any measure, PIMCO Innovation Fund had an exceptional 1999: it returned a
striking 140.42%, soundly outperforming the S&P 500 and NASDAQ Indexes in the
process.
Strong Short- and Long-Term Performance
But as impressive as its short-term results are, it's the Fund's long-term
performance that sets it apart. Many tech funds have produced high-flying
results over the last year or two, but few have 5-year numbers like the
Innovation Fund. The Fund's 5-year average annual return of 53.10% is the third
highest of 31 tech funds ranked by Lipper. Moreover, the Innovation Fund has
outperformed both the S&P 500 and the NASDAQ Indexes over the 1-, 3-, 5-year and
since inception periods.
In fact, PIMCO Innovation Fund has been delivering solid returns for its
shareholders for a longer period of time than many technology funds have been in
existence. Most of the Innovation Fund's competitors have track records that are
only half as long--or less. And that's important to know, because when you're
evaluating a technology fund--as with any mutual fund--you'll need to look at
long-term performance, not just recent results.
[PHOTO]
Dennis Mckechnie
Portfolio Manager,
PIMCO Innovation Fund
An Experienced Fund Manager
Behind the Innovation Fund's success is tech-savvy Fund manager Dennis McKechnie
and his broad vision of technology. Mr. McKechnie brings a unique blend of
investment experience and technological expertise to the job, which allows him
to identify promising companies and exciting new areas of growth. And by
investing in market leaders across the full breadth of the sector, Mr. McKechnie
has positioned the portfolio to take advantage of the gains occurring in most
tech industries without exposing the portfolio to the risks of a more highly
focused technology fund.
In short, PIMCO Innovation fund offers investors the kind of exceptional fund
management and solid performance record you've come to expect from PIMCO funds.
Morningstar has awarded the Fund an overall ***** rating, its highest rating
among 3,469 domestic stock funds.
PIMCO Innovation Fund Soundly Beat the S&P 500 and NASDAQ in 1999
1-year annual returns as of 12/31/99
[CHART]
PIMCO Innovation Fund 140.42%
NASDAQ Index 85.59%
S&P 500 Index 21.04%
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. The Innovation Fund can invest in
foreign securities, which can involve special risks due to foreign economic and
political developments. The Fund concentrates its portfolio in one sector,
making it more volatile than a more diversified stock fund, and therefore should
be considered as only part of a more diversified portfolio. Please refer to page
15 for detailed performance information.
3
<PAGE>
Today's Investor
A Valuable Point Of Reference
Your Fund's Market Index Benchmark
According to the mutual fund trackers at Morningstar, nearly 300 stock funds
delivered triple digit returns for 1999. Should you quickly sell any funds that
didn't do this well? Not so fast. To get a meaningful assessment of how your
stock funds did this year, you need to compare them to an appropriate benchmark.
[GRAPHIC]
The role of the measuring stick
For the sake of discussion, assume you invested in a diversified, large-cap
stock fund that returned 35% in 1999. Is that a good return? The answer depends
to a large extent on what you compare it to.
. Compared to the year's top performing fund return of 494%, 35% does not
seem very good. But then the year's top performing fund invested primarily in
small-cap, technology stocks --a much riskier investment than your diversified,
large-cap fund.
. Compared to the year's worst performing fund return of -80%, 35% seems
great. But the year's worst performing fund employed an advanced investment
technique called "shorting" to bet that small-cap, technology stocks as a group
would fall--hardly an "apples to apples" comparison with a diversified,
large-cap fund.
Obviously, the critical factor in your performance evaluation is your measuring
stick. To get the most valuable comparison, you need to choose a benchmark that
more closely mirrors your fund's objective, risk level and holdings.
Comparing your fund to its peers
One benchmark for mutual funds is an average of competitive funds. The advantage
of choosing a competitive fund average as a benchmark is that you are comparing
your fund to other actively managed mutual funds. The disadvantage is that the
decision about which funds to include in the average is subjective, and has been
a cause for concern in the past. For example, consider the competitive fund
averages published by Lipper, a mutual fund rating agency. In the past, Lipper
grouped funds according to their stated investment objective.
The word "benchmark" originally referred to the mark a surveyor made on a
permanent object to serve as a reference point for land surveys and tidal
observations. Today, the word has assumed a broader meaning and is used to refer
to any general standard of measurement.
But this method was criticized because funds can, and do, wander far from their
objective. As a result, Lipper recently rolled out a new system that groups
funds according to actual portfolio holdings.
Comparing your fund to a market index
The more commonly employed benchmark for mutual funds is a market index. An
index is a select group of holdings that represent the performance of a larger
market.
There are two principal advantages of choosing a market index as a benchmark:
(1) a market index is unmanaged, so any performance difference from your fund
can be readily attributed to your fund manager's efforts; and (2) index
performance is regularly published in the newspaper for easy reference. The
disadvantage of choosing a market index is that you may not be able to find an
index that closely resembles your fund's make-up. This problem has been remedied
greatly, however, by the introduction of more and more specialized indexes in
recent years. Consider which of the following major market indexes might be
appropriate benchmarks for your stock funds.
Dow Jones Industrial Average (DJIA)
The Dow Jones Industrial Average is probably the best known market index, but is
also probably the least useful as a benchmark. The DJIA is comprised of 30
large-cap companies that are meant to represent the stock market as a whole. But
this small number of mostly blue-chip names no longer accurately depicts today's
broad market.
Standard & Poor's 500 Index (S&P 500)
The Standard & Poor's 500 Index is widely regarded as the benchmark for large-
cap stock funds. The Index includes 500 common stocks with a heavy concentration
of large, well-established companies.
Standard & Poor's MidCap 400 Index (S&P 400)
The S&P 400 Index is one of several market indexes considered an acceptable
benchmark for mid-cap stock funds. The Index is comprised of 400 mid-sized
companies.
4
<PAGE>
Russell 2000 Index
The Russell 2000 Index is an appropriate market index benchmark for small-cap
stock funds. The Index includes 2000 small-cap companies widely distributed
across industry sectors.
NASDAQ Composite Index (The NASDAQ)
The NASDAQ stock market has become the most desirable place for technology
companies to list their stocks. As a result, the NASDAQ Composite Index has come
to be considered an accurate benchmark for technology sector funds. The Index
includes all of the domestic and foreign stocks listed on the NASDAQ stock
market, which means there are currently in excess of 5,300 stocks in the Index.
Of these, approximately 70% are in the technology industry.
MSCI EAFE Index
MSCI EAFE stands for Morgan Stanley Capital International--Europe, Australia,
Far East. This Index of foreign stocks is the appropriate benchmark for
international stock funds. The Index has historically been heavily weighted with
Japanese securities, however, so investors in international funds with limited
Japanese holdings may want to turn instead to the MSCI EAFE-ex-Japan Index.
Taking style into consideration
Some investors may want to take their benchmark search to an even higher level
by taking investment style into consideration. This ensures that if you invest
in a small-cap value fund your benchmark index is not a broad collection of
small-cap stocks, but rather just small-cap value stocks. To meet this more
specialized need, you can refer to any one of several growth and value specific
indexes, including the following from Russell:
For large-cap stock funds-
Russell 1000 Growth Index
Russell 1000 Value Index
For mid-cap stock funds-
Russell Mid-Cap Growth Index
Russell Mid-Cap Value Index
For small-cap stock funds-
Russell 2000 Growth Index
Russell 2000 Value Index
Using a benchmark effectively
Once you've identified your fund's market index benchmark, employ the following
guidelines to make the most of your comparisons.
. Keep a long-term perspective With market index data published regularly, it is
easy to fall into the trap of comparing your fund's performance too often.
Remember that investment decisions shouldn't be based on short-term performance.
A fund that does well in one set of market conditions may not be such a star
when those conditions change. Since you're probably investing for the long haul,
it's long-term performance that's crucial, not day to day fluctuations.
. Compare return and risk In addition to checking performance, look at your
fund's risk exposure relative to its benchmark. If your fund is only slightly
behind the index performance but taking less risk, you may want to hang in
there. On the other hand, if your fund is taking more risks than its benchmark
for no extra return, you may want to rethink your investment.
. Develop a personal benchmark
You've selected your funds as part of a larger portfolio that will meet your
personal goals. While it is valuable to know how your fund is performing
compared to its market index benchmark, the ultimate test is how well the fund
is meeting your own investment needs. If your fund is not matching its benchmark
but is still playing its role in your portfolio, it's probably still a keeper.
Specialized Market Indexes As Fund Benchmarks
Specialized market indexes can closely track the composition of your fund's
portfolio, making them an appropriate performance benchmark.
<TABLE>
<S> <C> <C>
If you invest in a The appropriate index is The index is composed of
Large-cap fund S&P 500 Index 500 large-cap stocks
Mid-cap fund S&P MidCap 400 Index 400 mid-cap stocks
Small-cap fund Russell 2000 Index 2000 small-cap stocks
Technology fund NASDAQ Composite Index All stocks listed on the NASDAQ stock market,
heavily weighted to technology stocks
International fund MSCI EAFE Index Foreign stocks
</TABLE>
The market indexes listed above are unmanaged, and it is not possible to invest
directly in these indexes.
5
<PAGE>
Market Review
The Stock Market
The Reign of the Bull Market Continues
The bull market reigned supreme again in 1999, with a variety of indices,
including the NASDAQ Composite Index and the Dow Jones Industrial Average,
reaching record highs.
Stocks ascended, despite rising interest rates.
[GRAPH]
<TABLE>
<CAPTION>
S&P
500
Index
-----
<S> <C>
01/01/1999 1,229
01/08/1999 1,275
01/15/1999 1,243
01/22/1999 1,225
01/29/1999 1,280
02/05/1999 1,239
02/12/1999 1,230
02/19/1999 1,239
02/26/1999 1,238
03/05/1999 1,275
03/12/1999 1,295
03/19/1999 1,299
03/26/1999 1,283
04/02/1999 1,294
04/09/1999 1,348
04/16/1999 1,319
04/23/1999 1,357
04/30/1999 1,335
05/07/1999 1,345
05/14/1999 1,338
05/21/1999 1,330
05/28/1999 1,302
06/04/1999 1,328
06/11/1999 1,294
06/18/1999 1,343
06/25/1999 1,315
07/02/1999 1,391
07/09/1999 1,403
07/16/1999 1,419
07/23/1999 1,357
07/30/1999 1,329
08/06/1999 1,300
08/13/1999 1,328
08/20/1999 1,337
08/27/1999 1,348
09/03/1999 1,357
09/10/1999 1,352
09/17/1999 1,335
09/24/1999 1,277
10/01/1999 1,283
10/08/1999 1,336
10/15/1999 1,247
10/22/1999 1,302
10/29/1999 1,363
11/05/1999 1,370
11/12/1999 1,396
11/19/1999 1,422
11/26/1999 1,417
12/03/1999 1,433
12/10/1999 1,417
12/17/1999 1,421
12/23/1999 1,458
12/31/1999 1,469
</TABLE>
Source: Bloomberg
In the first quarter of the year, large-cap growth stocks dominated the market,
as they did for much of 1998. However, in the second quarter, the market
rotated towards smaller-capitalization and lower-valuation issues. Rising
interest rates and a global economic recovery resulted in increased demand for
basic materials, which benefited these stocks.
This rotation was short-lived, however, as growth stocks, and in particular
technology stocks, resumed their lead in the third quarter.
In the fourth quarter, despite monetary tightening by the Federal Reserve, the
market continued to surge ahead. It remained dominated by growth-oriented
stocks, which experienced significant price appreciation during the period. This
outstanding performance was seen across all market capitalizations, with
smaller-capitalization securities showing the greatest strength. In particular,
the market was fueled by the technology sector, which continued to show strong
earnings growth.
Overall, technology powered the market this year, greatly overshadowing the
performance of other sectors. Telecommunications, e-commerce and software were
all areas that grew at a rapid pace and, as a result, their stock prices soared.
We believe this sector will remain attractive, as many areas of technology are
still in the early stages of growth.
The outlook remains positive for the equity market. The Federal Reserve's
tightening policy has helped maintain a low-inflation, high-growth economic
environment that investors believe will sustain the current level of equity
prices. We remain cautiously optimistic that the market will continue its
positive performance, albeit at a slower pace than in 1999.
The Bond Market
Inflation Expectations on the Rise
Six months ago we suggested the clash between deflationary and inflationary
forces was likely to keep inflation in check, even as the global economy showed
signs of recovery. While this remains likely over the long run, it appears that
several unsustainable forces, including the surging economy, the tight labor
market and rising stock prices, currently have the upper hand. As a result,
inflation fears have flourished and the bond market has suffered.
Bond yields continued to move higher.
[GRAPH]
<TABLE>
<CAPTION>
30 Year
Treasury
Yield
-----
<S> <C>
01/01/1999 5.09
01/08/1999 5.27
01/15/1999 5.11
01/22/1999 5.08
01/29/1999 5.09
02/05/1999 5.35
02/12/1999 5.42
02/19/1999 5.39
02/26/1999 5.57
03/05/1999 5.59
03/12/1999 5.52
03/19/1999 5.56
03/26/1999 5.59
04/02/1999 5.59
04/09/1999 5.46
04/16/1999 5.57
04/23/1999 5.60
04/30/1999 5.66
05/07/1999 5.81
05/14/1999 5.92
05/21/1999 5.75
05/28/1999 5.83
06/04/1999 5.96
06/11/1999 6.16
06/18/1999 5.97
06/25/1999 6.15
07/02/1999 6.00
07/09/1999 6.00
07/16/1999 5.88
07/23/1999 6.02
07/30/1999 6.10
08/06/1999 6.17
08/13/1999 6.10
08/20/1999 5.98
08/27/1999 5.98
09/03/1999 6.02
09/10/1999 6.04
09/17/1999 6.06
09/24/1999 5.97
10/01/1999 6.13
10/08/1999 6.19
10/15/1999 6.26
10/22/1999 6.35
10/29/1999 6.16
11/05/1999 6.06
11/12/1999 6.03
11/19/1999 6.16
11/26/1999 6.23
12/03/1999 6.25
12/10/1999 6.17
12/17/1999 6.37
12/23/1999 6.49
12/31/1999 6.48
</TABLE>
Source: Bloomberg
The Federal Reserve was active over the past six months. The Fed tightened
monetary policy again in August, and attacked the tight labor market in November
by increasing interest rates for a third time in 1999. However, Y2K concerns
prompted the Fed to flood the system with liquidity at year's end, increasing
the likelihood that further tightening will be necessary early next year.
Bond prices fell in many sectors of the market as interest rates continued to
rise. The benchmark 30-year Treasury yield rose to a 27-month high at 6.49%,
while the Lehman Brothers Aggregate Bond Index had its worst performance since
1994.
A notable exception to the overall poor performance of the market was
convertible bonds, which benefited from the spectacular rise in technology
stocks. Emerging market bonds also performed relatively well as the global
recovery supported this sector. Not surprisingly, inflation-indexed bonds were
aided by the expectation of higher inflation.
Looking ahead, the key to bonds next year is a smooth resolution of the
unsustainable forces currently present. We anticipate the economy will moderate
as higher borrowing costs begin to impact, pushing stock market gains back
toward long-term historical norms. In our view inflation will increase over the
short term, but remain stable overall. In this environment, interest rates will
likely remain range bound, making strategies that enhance yield and limit credit
risk attractive to bond investors.
6
<PAGE>
Manager Spotlight
PIMCO Innovation Fund
Dennis McKechnie
Dennis McKechnie is the portfolio manager of PIMCO Innovation Fund and a
managing director of PIMCO Equity Advisors. He has a degree in electrical
engineering and an MBA in finance--a unique blend of expertise that gives him a
distinct advantage in analyzing the technology sector. We talked to him recently
about the sector and the Innovation Fund.
Q: Technology has had a great run in the past two years. What would you say to
investors who are concerned that tech stocks are overvalued and this run-up will
end soon?
[PHOTO]
A: First, we should provide some context to the "great run" of the past two
years. Much of the recent run of technology began only fourteen months ago in
October 1998 with signs that the Asian economic crisis was subsiding. Technology
stocks began that period at very depressed levels, as they had been one of the
areas most negatively affected by the Asian economic meltdown.
Second, technology now has many separate and distinct sub-segments that give its
current fundamental strength additional staying power. All of the eggs are not
in one basket, so to speak. For instance, we are in the early stages of a
semiconductor pricing cycle at the same time the Internet is uncovering the
power of business-to-business marketplaces.
And finally, with regard to valuations, we are believers that the "New Economy"
does change the game. Technology is central. The demand for effective
information and solutions by non-technology companies is nearly frantic because
the penalty for being late or wrong is so severe. This demand is creating an
enormous pull for technology companies that makes their ability to do better
than expected more predictable. Greater predictability has historically driven
higher valuations.
Q: Could you name a few specific stocks that contributed to PIMCO Innovation
Fund's strong performance this year?
A: Qualcomm was a great performer for the Fund. It benefited from a move towards
a more royalty-based business model. Perhaps more importantly, overall cell
phone demand was well above estimates and steps were taken by the industry to
convert to Qualcomm's Code Division Multiple Access (CDMA) digital technology
standard in the future.
Another stellar performer for the Fund was i2Technologies. This company makes
software that coordinates supply chains for manufacturers, which Fortune 500
companies have identified as a key building block for their migration to
e-commerce.
Q: What lasting effect, if any, has Y2K left on the technology sector?
A: Y2K has had a very positive effect on the technology sector. It has drawn
technology decisions up to the highest levels within corporations. This
increased importance has made it a higher priority, which should lead to higher
spending levels in the future. A side effect of the event is that many companies
are moving to outsource their technology to expert companies off-site. This
creates an excited buyer with large budgets and the most advanced systems,
raising the bar for any other companies that want to stay in the game.
Q: Which areas of technology do you believe offer the most growth potential in
2000?
A: There are a number of them. Wireless Internet, broadband data to the home,
business-to-business Internet, higher performance fiber optic components, and
the semiconductor sector are just a few. If I had to pick one, it would be the
evolution of the wireless Internet. Over the next few years, e-mail and Web
sites will likely become accessible through the phone. Screens will be larger,
coverage will be denser, and offerings will become more complex. We are filling
the Fund with beneficiaries of this trend as they gain traction. There will be
lots of new software for applications, operating systems, performance monitoring
and more. We are doing lots of work in this area.
Q: What is your outlook for the technology sector?
A: We believe that the future for technology is quite bright. We are constantly
uncovering new companies with tremendous opportunity. It is our feeling that
most of the sub-segments of technology are in the early stages of multi-year
growth cycles. Technology will continue to take over larger percentages of the
overall economy.
Past performance is no guarantee of future results. The views of Mr. McKechnie
are not indicative of the future performance of any PIMCO Fund. Concentration of
the Fund's assets in one or a few sectors may entail greater risk than a fully
diversified stock fund and should be considered as only part of a diversified
portfolio. The Fund may also invest in foreign securities which may entail
greater risk due to foreign economic and political developments. Please refer to
page 15 for more complete performance information on the Innovation Fund.
7
<PAGE>
In The News
Recent News on PIMCO Funds
The following are highlights from a few of PIMCO Funds, numerous media
appearances. For reprints of these articles, call us at 1-888-87PIMCO.
. A Leading Technology Resource Dennis McKechnie, Portfolio Manager of PIMCO
Innovation Fund, has been in high demand with the leading financial networks
(CNBC and CNN). His wide diversity of technology knowledge has attracted viewers
who want to hear about more than just "dot-com." This expertise has been
acknowledged in print as well. A November 19 article in Investor's Business
Daily focused on PIMCO Innovation Fund's strong performance and Mr. McKechnie's
extensive background in technology.
. Talking about Growth Investing Ken Corba, Portfolio Manager of PIMCO Growth
Fund, and Mike Gaffney, Portfolio Manager of PIMCO Opportunity Fund, appeared
numerous times on CNBC during the second half of the year. Mr. Corba was
featured for his outlook and perspective on the large-cap growth marketplace,
addressing what sectors he viewed as favorable and out of favor. And Mr. Gaffney
demonstrated his analytical expertise within the small-cap growth area, taking
part in Q&A segments regarding the Russell 2000 and its various industries.
. Bill Gross Continues to Receive Highest Accolades Early in 1999
Morningstar named Bill Gross as its Fixed Income Manager of the Year. Russ
Kinnel, Editor of Morningstar, recently upped the ante by choosing Gross, out of
a list of other notable managers, as "Fund Manager of the Decade...Because no
one was nearly as influential." And Morningstar's not alone in its assessment.
Mutual Funds Magazine (1/00) listed Gross as "the country's foremost
fixed-income portfolio manager," and The Chicago Tribune (11/99) called him "an
icon of the bond market."
Morningstar Inc., an independent organization, provides investors with
information regarding a wide range of investment products. One service offered
by Morningstar is assigning star ratings to the mutual funds it tracks. Funds
begin to be rated once they have a three-year record. The highest Morningstar
rating is five stars, and the lowest rating is one star. Following are the PIMCO
Fund family's five- and four-star rated Funds as of December 31, 1999.
- --------------------------------------------------------------------------------
PIMCO STOCK FUNDS Overall 3 Year 5 Year 10 Year
- --------------------------------------------------------------------------------
Innovation ***** 5 5 -
Capital Appreciation **** 4 4 -
- --------------------------------------------------------------------------------
PIMCO BOND FUNDS Overall 3 Year 5 Year 10 Year
- --------------------------------------------------------------------------------
Total Return ***** 4 4 5
Low Duration ***** 5 5 5
Short-Term ***** 5 5 5
High Yield ***** 5 5 -
Foreign Bond ***** 4 5 -
The chart above is based on December 31, 1999 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 3,469, 2,180 and
770 domestic equity funds and 1,617, 1,221 and 387 taxable bond funds rated,
respectively.
Morningstar proprietary ratings reflect historical risk-adjusted performance and
are subject to monthly changes. Therefore, past ratings are not a guarantee of
future results. Overall ratings are calculated from a fund's 3-, 5- and 10-year
(if applicable) average annual total returns in excess of 90-day Treasury bill
returns with appropriate fee adjustments and a risk factor that reflects fund
performance below 90-day T-bill returns. With the exception of Growth C and
Innovation C, ratings are based on institutional class shares. Class A, B and C
shares, which were initially offered on 1/17/97, have not yet been rated by
Morningstar. Had Class A, B and C shares been in existence for the same time
period as the institutional class shares, they may have received different
ratings due to Class A, B and C shares' higher expense and sales charges.
Ratings for other share classes of Growth and Innovation 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.
8
<PAGE>
Service Update
What's new @ www.pimcofunds.com
Introducing the PIMCO Funds Innovation Center: Your Guide to the Technology
Sector
The latest addition to the PIMCO Funds Web site is our new Innovation Center,
designed to give investors access to the unique insights of PIMCO Innovation
Fund manager Dennis McKechnie and his investment team.
Whether you already have technology holdings or are eager to begin investing in
this dynamic sector, you'll find the Innovation Center to be a useful resource.
Mr. McKechnie's broad vision of technology is reflected in the Center's wide-
ranging content, including timely articles, commentary and analysis to help you
gain a more complete understanding of the vast technology landscape--from
semiconductors to the Internet, cell phones to computer software.
Here are some highlights from the PIMCO Funds Innovation Center:
. Insight From Dennis McKechnie
As manager of PIMCO Innovation Fund, Dennis McKechnie has delivered impressive
results for investors. You can read about his investment process and strategy
and benefit from his extensive background in technology. And make sure to check
out our special profile of Mr. McKechnie to see how his tech background sets him
apart from most other technology fund managers.
. Manager Commentary Our management team brings its expertise right to your
desktop with weekly analysis and insight into the tech sector.
. Tech Sector Breakdown Learn about PIMCO's unique view of the trends and
themes that characterize this exciting sector.
. Taking Stock Detailed profiles of some of the Innovation Fund's top tech
holdings.
. Innovation, a Monthly Newsletter
Download this monthly newsletter in its entirety, in a user-friendly PDF format.
. Manager Q&A PIMCO Funds managers provide analysis of the market and
commentary on their funds.
. Archives Archives of daily manager commentaries are available for your
reference.
. News Read what others have to say about PIMCO Funds and our talented
management team.
Technology is a fast-paced, rapidly changing sector of the economy. And the
PIMCO Funds Innovation Center can help you keep pace with it. Make sure to visit
regularly for the most current information. To get started, go to
www.pimcofunds.com and choose the "Innovation Center" link from the PIMCO Funds
Home Page.
[GRAPHIC]
Make sure to visit the PIMCO Funds Innovation Center--a new source of timely
information and analysis about the tech sector from PIMCO Innovation Fund
manager Dennis McKechnie and his investment team.
9
<PAGE>
The PIMCO Funds Family
PIMCO Funds offers unique access to the investment expertise of PIMCO Advisors
L.P. PIMCO manages over $260 billion, including assets for 46 of the 100 largest
U.S. corporations. The firm's institutional heritage is reflected in the PIMCO
Funds, each seeking the highest caliber performance in a specific investment
style. To learn more about any of the PIMCO Funds, please call us at 1-888-87-
PIMCO.
<TABLE>
<CAPTION>
Fund Name Objective Primary Portfolio Composition
<S> <C> <C> <C>
Stock Funds Equity Income Current income and long-term growth Stocks of companies with below-average P/Es
and above-average dividends
Value Long-term growth of capital and income Stocks of companies with below-average P/Es
Renaissance Long-term growth of capital and income Stocks of companies with below- average
valuations
Tax-Efficient Equity Maximum after-tax growth of capital A broadly diversified portfolio of at least 200
common stocks of companies with larger
market capitalizations
StocksPLUS Total return exceeding the S&P 500 S&P 500 Index stock index futures backed by a
Index 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 Growth of capital Stocks of medium-capitalized companies
the manager believes are reasonably priced
Innovation Capital appreciation Stocks of technology-related companies
Stock and Bond Strategic Maximum total return S&P 500 Index stock futures backed by a portfolio
Funds Balanced of short-term, fixed income securities, and inter-
mediate-term investment grade bonds
Bond Funds Short-Term Maximum current income consistent with Money market securities and short-term bonds
preservation of capital and daily (up to 1 year duration)
liquidity
Low Duration Maximum total return Shorter-term, investment grade bonds
(1-3 year duration)
Real Return Bond Maximum real return Inflation-indexed government bonds
Total Return Maximum total return Intermediate-term, investment grade bonds
(3-6 year duration)
Total Return Maximum total return Mortgage-related securities
Mortgage (2-6 year duration)
High Yield Maximum total return High-yield bonds (2-6 year duration)
Municipal Bond High current income exempt from Investment grade municipal bonds
federal income tax (3-10 year duration)
Foreign Bond Maximum total return Intermediate-term, investment grade foreign bonds
(3-6 year duration)
</TABLE>
10
<PAGE>
Multi-Manager Series
PIMCO Funds Semi-Annual Report
Dear Shareholder:
Last year was a banner year for the stock market--a fitting conclusion to a
century of unprecedented economic expansion.
Despite some dips along the way, all the major stock indexes experienced
exceptional growth in 1999. The Dow was up 27 percent. The S&P 500 rose 21
percent. And the NASDAQ Index climbed a stunning 86 percent--a clear indication
of the dominant role the technology sector has played in the stock market's
tenacious bull run.
For bonds, on the other hand, 1999 was a turbulent time. Most bond sectors
reacted negatively to the continued strength of the economy and to rising
interest rates. In fact, it was the first year since 1994 that the bond market
reported negative returns.
In the first few hours and days of the new millennium, however, there was a
giant sigh of relief as the Y2K bug turned out to be, at most, a minor glitch
rather than a major catastrophe. And here at PIMCO, our Y2K preparations stood
us in good stead as the New Year came in without a hitch.
It was another good year for PIMCO's equity funds, too, as they continued to
experience strong relative performance across the board. Of special note is the
market-beating performance of PIMCO Innovation Fund. While past performance is
no indication of future results, the fund beat the S&P 500 and NASDAQ Indexes by
a considerable margin. And it is one of the few technology funds with a strong
long-term track record.
On the following pages we present detailed information on all the stock funds in
our Multi-Manager Series. I encourage you to review the information and
commentary carefully. And once again, I'd like to thank you for the trust you've
placed in us through your investment. We will continue to work hard to help you
meet your financial objectives.
If you have any questions regarding your investment, contact your financial
advisor, or call us at 1-888-87-PIMCO. Or visit our Web site at
www.pimcofunds.com.
Sincerely,
/s/ Stephen Treadway
Stephen Treadway
President
January 31, 2000
PIMCO Advisors Holdings L.P. (NYSE:PA), its operating subsidiary PIMCO Advisors
L.P. and Allianz AG (EURO:ALV) announced that they have reached a definitive
agreement for Allianz AG to acquire majority ownership of PIMCO Advisors,
including all of the interests held at PIMCO Advisors Holdings L.P. Under the
terms of the agreement, at the closing the units of PA Holdings will be
exchanged by way of a merger and there will be no further public ownership of
PIMCO Advisors.
Additionally, key employees at each of PIMCO Advisors' investment units,
including PIMCO's Bill Gross, have significant profit-sharing and retention
arrangements to ensure continuity of the investment process and staff.
We at PIMCO spent significant time and resources preparing for Year 2000. As a
consequence, we are pleased to report that we made it through the Year 2000
transition period successfully, and that all our systems and processes continue
to function normally. While we expect that the great majority of the risk from
this event is now behind us, it is still possible that the "Year 2000 bug" might
result in system failures. In this regard, we would like to remind you that
while we are dedicated to avoiding problems arising from Year 2000, we cannot
guarantee investment performance or that Year 2000 will not result in losses.1
1 This is a Year 2000 Readiness Disclosure dated January 31, 2000.
11
<PAGE>
PIMCO Funds Financial Information
We are pleased to present an in-depth review of the PIMCO Multi-Manager Series
Funds as of December 31, 1999. 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 13-20 Fund Summaries
A summary of a Fund's performance record and portfolio composition, and a review
from the Fund's investment manager.
Pages 21-28 Schedule of Investments
The Schedule of Investments includes a listing of securities in the Fund's
portfolio as of December 31, 1999, including the number of shares or principal
amount and value as of that date.
Schedule of
Fund Name Fund Summary Investments
Capital Appreciation Fund Page 13 Page 21
Equity Income Fund Page 14 Page 22
Innovation Fund Page 15 Page 23
Mid-Cap Growth Fund Page 16 Page 24
Renaissance Fund Page 17 Page 25
Tax-Efficient Equity Fund Page 18 Page 26
Value Fund Page 19 Page 28
Pages 29 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 30 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 31 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 32-33 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 34-37 Notes to Financial Statements
A description of the significant accounting policies of the Funds, and more
detailed information about the schedules and tables that appear in the report.
12
<PAGE>
December 31, 1999
PIMCO Capital Appreciation Fund
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
$957.4 million
NUMBER OF SECURITIES IN THE PORTFOLIO
87 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital Management
- --------------------------------------------------------------------------------
PERFROMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
D Shares Lipper
S&P 500 Multi-Cap
Index Core Fund Avg.
- --------------------------------------------------------------------------------
6 month 13.84% 7.71% 10.97%
1 year 22.24% 21.04% 22.49%
3 years 24.17% 27.56% 21.79%
5 years 26.99% 28.56% 23.07%
Inception 19.60% -- --
Change in Value
$10,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO S&P 500
Capital Index
Appreciation
Fund D
<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
</TABLE>
*Past performance is no guarantee of future results. Excluding the 6-month
return, 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. See page 20 for Footnotes,
which will include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- ---------------------------------------------------------
Cisco Systems, Inc. 2.3%
Internet networking
- ---------------------------------------------------------
General Electric Co. 2.2%
Electronics
- ---------------------------------------------------------
Oracle Corp. 2.1%
Software products
- ---------------------------------------------------------
Wal-Mart Stores, Inc. 2.1%
Retail
- ---------------------------------------------------------
Home Depot, Inc. 1.8%
Retail
- ---------------------------------------------------------
Motorola, Inc. 1.7%
Electronics & software
- ---------------------------------------------------------
Applied Materials, Inc. 1.7%
Semiconductors
- ---------------------------------------------------------
Royal Dutch Petroleum Co. 1.7%
Petroleum refining
- ---------------------------------------------------------
Immunex Corp. 1.7%
Chemical & allied products
- ---------------------------------------------------------
JDS Uniphase Corp. 1.7%
Telecommunications
- ---------------------------------------------------------
Top Ten Total 19.0%
- ---------------------------------------------------------
Top 5 Industries % of Total Investments
- ---------------------------------------------------------
Technology 40.1%
- ---------------------------------------------------------
Financial & Business Services 13.6%
- ---------------------------------------------------------
Consumer Discretionary 10.4%
- ---------------------------------------------------------
Capital Goods 6.7%
- ---------------------------------------------------------
Health Care 6.2%
- ---------------------------------------------------------
Portfolio Composition
- ---------------------------------------------------------
Common Stock 99.6%
- ---------------------------------------------------------
Cash Equivalents 0.4%
- ---------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO Capital Appreciation Fund turned in a solid performance for the six months
ended December 31, 1999, returning 13.84% and handily outperforming the S&P 500
Index return of 7.71% for the same period.
The technology sector was the greatest contributor to the Fund's
performance during this period. In particular, companies whose products address
business-to-business e-commerce needs, such as Oracle and Siebel Systems,
experienced strong price appreciation. This area of technology has become
critically important to companies seeking to participate in commerce on the
Internet. Another technology company that proved to be a strong performer for
the Fund was Cisco Systems. Cisco, which makes the networking hardware that
forms the backbone of the Internet, benefited from strong demand for its
Internet infrastructure equipment and its optical networking capabilities.
The healthcare sector also aided the Fund's performance, particularly in
the area of biotechnology. Immunex, the maker of the leading drug used for the
treatment of rheumatoid arthritis, saw its stock experience tremendous price
appreciation due to positive prescription trends as well as strong evidence that
its drug can be used to treat other ailments. Genentech, another biotech
company, turned in a strong performance as a result of its strong product
pipeline. In addition, Warner Lambert also posted positive returns, benefiting
from the success of its cholesterol drug, Lipitor.
The Fund also benefited from its exposure to the consumer discretionary
sector. In particular, Home Depot, the leader in home improvement retailing,
experienced a significant increase in sales due to a strong domestic economy,
which translated into a home buying and home renovating boom.
One disappointment for the Fund during this period was Tyco, the
manufacturing conglomerate. The company's stock price suffered as a result of
concerns over its accounting practices regarding its acquisitions. However, the
manager believes Tyco's accounting practices are sound and that the company
still has tremendous growth potential.
Looking ahead, the manager is optimistic that the Fund is poised to
continue its outperformance. The manager believes that its philosophy of
purchasing stocks of growing, profitable companies at sensible prices should
bode well for the Fund, especially as investors realize the importance of
reasonable valuation in growth investing.
13
<PAGE>
December 31, 1999
PIMCO Equity Income Fund
OBJECTIVE
Current income as a primary objective and long-term growth of capital
PORTFOLIO
Income-producing common stocks of companies with market capitalizations of more
than $2 billion
FUND INCEPTION DATE
3/8/91
TOTAL NET ASSETS
$156.1 million
NUMBER OF SECURITIES IN THE PORTFOLIO
48 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
NFJ Investment Group
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
D Shares Lipper
S&P 500 Equity Inc.
Index Fund Avg.
- --------------------------------------------------------------------------------
6 month -11.63% 7.71% -5.09%
1 year -2.22% 21.04% 3.34%
3 years 11.41% 27.56% 13.07%
5 years 17.34% 28.56% 17.27%
Inception 13.83% -- --
Change in Value
$10,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO S&P 500
Equity Income Index
<S> <C> <C>
Fund D
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
07/31/1992 12,766 11,780
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
</TABLE>
*Past performance is no guarantee of future results. Excluding the 6-month
return, 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. See page 20 for Footnotes,
which will include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- ---------------------------------------------------------
USX-U.S. Steel Group, Inc. 4.1%
Steel mfr.
- ---------------------------------------------------------
Harris Corp. 4.1%
Communications, semiconductors
- ---------------------------------------------------------
Deluxe Corp. 4.0%
Printing, publishing & allied
- ---------------------------------------------------------
Morgan, J.P. & Co., Inc. 3.9%
Financial services
- ---------------------------------------------------------
Union Planters Corp. 3.9%
Financial services
- ---------------------------------------------------------
BFGoodrich Co. 2.2%
Aerospace & performance materials
- ---------------------------------------------------------
Ohio Casualty Corp. 2.1%
Insurance carriers
- ---------------------------------------------------------
Edwards (A.G.), Inc. 2.1%
Financial services
- ---------------------------------------------------------
GATX Corp. 2.1%
Transportation services
- ---------------------------------------------------------
Northrop Grumman Corp. 2.1%
Aerospace electronics
- ---------------------------------------------------------
Top Ten Total 30.6%
- ---------------------------------------------------------
Top 5 Industries % of Total Investments
- ---------------------------------------------------------
Financial & Business Services 21.7%
- ---------------------------------------------------------
Consumer Discretionary 16.4%
- ---------------------------------------------------------
Energy 11.9%
- ---------------------------------------------------------
Utilities 10.1%
- ---------------------------------------------------------
Consumer Staples 9.1%
- ---------------------------------------------------------
Portfolio Composition
- ---------------------------------------------------------
Common Stock 100.0%
- ---------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-month period ended December 31, 1999, PIMCO Equity Income Fund
returned -11.63%.
The technology sector dominated the market dramatically in the third and
fourth quarters--to the exclusion of virtually all other sectors, which hurt the
performance of PIMCO Equity Income Fund. The Fund, which has an investment
universe that focuses on dividend-yielding stocks with low fundamental
valuations, had virtually no exposure to the sector and therefore did not
participate in its strong returns.
The Fund did benefit from its exposure to basic industries. For instance,
Fund holding Springs Industries, a textile manufacturer, turned in a good
performance during this period. It benefited from a recovery in the global
economy, particularly Asia, which boosted its sales. In addition, the company's
home furnishing division experienced an increase in sales due to the current
housing boom.
Another positive sector for the Fund during this period was energy. The
worldwide economic recovery has stimulated commerce, which in turn increased
corporate demand for energy. The sector also benefited from the tightening of
OPEC's oil production, which gave it greater pricing power.
The utility industry underperformed during this period. A historically
interest rate-sensitive sector, utility companies discovered that the second
half of 1999 was no exception. The rise in interest rates during the third and
fourth quarters, which negatively affected corporate borrowing as well as profit
margins, caused investors to punish this industry.
A disappointment for the Fund during this period was J.C. Penney. The
company's stock price suffered as a result of lagging same store sales as well
as a management turnaround plan that included decreasing the dividend paid by
the company to common shareholders. However, the manager remains optimistic
about the company, which has a relatively new e-commerce division that has
already exceeded expectations.
It should be noted that, at or around the time of the closing of the PIMCO
Advisors-Allianz transaction, the day-to-day management of PIMCO Equity Income
Fund will be assumed by PIMCO Equity Advisors. The Fund's philosophy of
investing in dividend-paying, undervalued securities will remain in place.
14
<PAGE>
December 31, 1999
PIMCO Innovation Fund
OBJECTIVE
Capital appreciation; no consideration given to income
PORTFOLIO
Primarily technology-related stocks of companies of all sizes
FUND INCEPTION DATE
12/22/94
TOTAL NET ASSETS
$3.5 billion
NUMBER OF SECURITIES IN THE PORTFOLIO
54 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity
Advisors
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
D Shares Lipper
S&P 500 Science & Tech.
Index Fund Avg.
- --------------------------------------------------------------------------------
6 month 94.92% 7.71% 73.24%
1 year 140.42% 21.04% 134.77%
3 years 67.62% 27.56% 53.65%
5 years 53.27% 28.56% 40.91%
Inception 52.89% -- --
Change in Value
$10,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO S&P 500
Innovation Index
<S> <C> <C>
Fund D
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
04/30/1996 16,502 14,710
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
</TABLE>
*Past performance is no guarantee of future results. Class D shares commenced
operations after the inception date shown (12/22/94). 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. See page 20 for Footnotes,
which will include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- ---------------------------------------------------------
Qualcomm, Inc. 4.1%
Wireless communication
- ---------------------------------------------------------
Oracle Corp. 3.9%
Software products
- ---------------------------------------------------------
i2 Technologies, Inc. 3.8%
Software solutions
- ---------------------------------------------------------
Doubleclick, Inc. 3.2%
Internet advertising
- ---------------------------------------------------------
Ariba, Inc. 3.2%
Business to business
- ---------------------------------------------------------
Cisco Systems, Inc. 2.9%
Internet networking
- ---------------------------------------------------------
Gemstar International Group Ltd. 2.6%
Business solutions
- ---------------------------------------------------------
Vignette Corp. 2.5%
Business svcs.
- ---------------------------------------------------------
Siebel Systems, Inc. 2.5%
Business solutions
- ---------------------------------------------------------
QLogic Corp. 2.5%
Semiconductors
- ---------------------------------------------------------
Top Ten Total 31.2%
- ---------------------------------------------------------
Top 5 Industries % of Total Investments
- ---------------------------------------------------------
Technology 66.8%
- ---------------------------------------------------------
Communications 7.9%
- ---------------------------------------------------------
Financial & Business Services 6.5%
- ---------------------------------------------------------
Health Care 6.4%
- ---------------------------------------------------------
Consumer Discretionary 4.8%
- ---------------------------------------------------------
Portfolio Composition
- ---------------------------------------------------------
Common Stock 92.5%
- ---------------------------------------------------------
Cash Equivalents 7.5%
- ---------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO Innovation Fund turned in stellar results for the six-month period ended
December 31, 1999. Class D shares returned 94.92%, handily outperforming the S&P
500 Index return of 7.71% for the same period.
Software was an area of strength for the Fund during this period. Having
completed their spending on Y2K preparedness, companies increased their
expenditures on other areas of information technology that had been neglected,
such as software. In particular, i2 Technologies, a maker of supply-chain
management software, benefited from this trend. Its software, which has
e-commerce applications, is used by companies such as Dell to manage the
ordering, production and shipping of products. The company has seen a rapid
increase in sales of its software and still has substantial growth potential, as
a large untapped market exists. For instance, only about 10% of Fortune 500
companies have Web sites on which business can actually be conducted. This
number is expected to reach nearly 100% in the next eighteen months, which
should greatly benefit software companies such as i2.
Another strong area for the Fund was telecommunications, which has seen
tremendous growth recently. Nokia continued to benefit from the increase in cell
phone subscriptions stimulated by 'one-rate' plans. In addition, Nokia benefited
from the many recent technological advances in cell phone handset technology,
which has shortened upgrade cycles for cell phones. The explosion in
telecommunications has also benefited companies such as JDS Uniphase, a maker of
fiber-optic components for telecom networks. The company saw its sales rise as
a result of burgeoning demand for faster and more efficient networks.
Although technology led the market during this period, some non-tech
innovators also experienced strong price appreciation. In particular,
biotechnology stocks enhanced the Fund's performance. These companies, which
were funded five to seven years ago, are now bringing exciting products to
market and are showing strong revenues. For instance, Fund holdings Medimmune
and IDEC Pharmaceuticals both benefited from better-than-expected prescription
trends for their key products. We believe this area continues to have growth
potential, as many biotech companies have strong product pipelines.
Looking ahead, the manager's outlook remains positive for technology, as he
believes it is still in the early stages of a multi-year growth cycle. The
market continues to see technology as the sector that will define the economy's
future, and this should bode well for PIMCO Innovation Fund.
15
<PAGE>
December 31, 1999
PIMCO Mid-Cap Growth Fund
OBJECTIVE
Growth of capital
PORTFOLIO
Primarily common stocks of companies with medium capitalizations that have
improving fundamentals and whose stock is reasonably valued
FUND INCEPTION DATE
8/26/91
TOTAL NET ASSETS
$1.0 billion
NUMBER OF SECURITIES IN THE PORTFOLIO
84 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Cadence Capital
Management
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
D Shares Russell Lipper
Mid-Cap Mid-Cap Core
Growth Index Fund Avg.
- --------------------------------------------------------------------------------
6 month 13.26% 7.15% 26.47%
1 year 12.52% 18.23% 38.29%
3 years 17.47% 18.86% 21.71%
5 years 22.19% 21.85% 21.59%
Inception 17.16% -- --
Change in Value
$10,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO Russell
Mid-Cap Mid-Cap
Growth Fund D Index
<S> <C> <C>
08/31/1991 10,000 10,000
09/30/1991 9,947 9,942
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
02/28/1993 12,360 12,849
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
</TABLE>
*Past performance is no guarantee of future results. Excluding the 6-month
return, 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. See page 20 for Footnotes,
which will include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- ---------------------------------------------------------
Medimmune, Inc. 2.2%
Chemical & allied products
- ---------------------------------------------------------
Network Appliance, Inc. 2.0%
Electronics, computer networking
- ---------------------------------------------------------
Citrix Systems, Inc. 2.0%
Electronics, computer networking
- ---------------------------------------------------------
BEA Systems, Inc. 2.0%
Business services
- ---------------------------------------------------------
Lam Research Corp. 1.9%
Semiconductors, integrated circuits
- ---------------------------------------------------------
Symbol Technologies, Inc. 1.9%
Barcode equip.
- ---------------------------------------------------------
Comverse Technology, Inc. 1.9%
Communications & software
- ---------------------------------------------------------
Veritas Software Corp. 1.9%
Software co.
- ---------------------------------------------------------
KLA-Tencor Corp. 1.8%
Business solutions
- ---------------------------------------------------------
IDEC Pharmaceuticals Corp. 1.7%
Chem. & allied products
- ---------------------------------------------------------
Top Ten Total 19.3%
- ---------------------------------------------------------
Top 5 Industries % of Total Investments
- ---------------------------------------------------------
Technology 45.9%
- ---------------------------------------------------------
Financial & Business Services 14.0%
- ---------------------------------------------------------
Consumer Discretionary 8.7%
- ---------------------------------------------------------
Health Care 8.3%
- ---------------------------------------------------------
Materials & Processing 5.7%
- ---------------------------------------------------------
Portfolio Composition
- ---------------------------------------------------------
Common Stock 98.6%
- ---------------------------------------------------------
Cash Equivalents 1.4%
- ---------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-month period ended December 31, 1999, PIMCO Mid-Cap Growth Fund
returned 13.26%, outperforming the Russell Mid-Cap Growth Index return of 7.15%.
The narrow market seen in the first half of 1999 broadened in the second
half of the year, as smaller-capitalization stocks outperformed their larger-
capitalization counterparts. Investors finally recognized the strong growth
potential of smaller companies, and invested accordingly.
The technology sector was a strong contributor to the Fund's performance
during this period. One of the strongest themes within this sector was
business-to-business technology application companies, an area of high growth.
These companies benefited from improved earnings outlooks during this period as
well as a rise in sales that resulted from increased corporate spending. One
example in this area is Citrix Systems, which develops and sells innovative
server-based software to enable more efficient use of Microsoft Windows
operating systems. Citrix's sales received a boost from corporate purchasing of
the software, as companies increasingly utilize technology to maintain or widen
profit margins.
Veritas Software was another strong performer for the Fund. The company
makes software that provides enterprise data storage management solutions--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
second half of 1999, as corporate Internet use and the need for data storage
rose. Tiffany's was a standout during this period as well. The company benefited
from a strong domestic economy as well as a recovery in the global economy, both
of which stimulated its sales. In particular, Tiffany's benefited from new store
openings, the successful launch of its Web site and wider profit margins due to
greater sales of its high-end items.
With the exception of Tiffany's, consumer discretionary stocks were a
disappointment for the Fund. Companies such as Abercrombie & Fitch, Lands End
and Tommy Hilfiger all showed earnings disappointments that caused their stock
prices to suffer. However, the manager is optimistic that, in a climate of tight
labor and high income growth, consumer discretionary stocks should perform well.
Looking ahead, the manager is optimistic that smaller-capitalization stocks
will continue to perform well in the coming year, as the economic climate should
be favorable to them. The manager is also optimistic that, in a market dominated
by high valuation stocks, investors will be attracted to more reasonable
valuations, which should bode well for PIMCO Mid-Cap Growth Fund.
16
<PAGE>
December 31, 1999
PIMCO Renaissance Fund
OBJECTIVE
Long-term growth of capital and current income
PORTFOLIO
Primarily common stocks with below-average valuations that have improving
business fundamentals
FUND INCEPTION DATE
4/18/88
TOTAL NET ASSETS
$546.0 million
NUMBER OF SECURITIES IN THE PORTFOLIO
63 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
PIMCO Equity
Advisor
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
D Shares Lipper Multi-
Russell 1000 Cap Value
Value Index Fund Avg.
- --------------------------------------------------------------------------------
6 month -1.14% -4.90% -2.65%
1 year 9.90% 7.34% 7.78%
5 years 21.86% 23.08% 18.48%
10 years 14.57% 15.60% 13.26%
Inception 14.01% -- --
Change in Value
$10,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO Russell 1000
Renaissance Value Index
<S> <C> <C>
Fund D
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
09/30/1988 10,211 10,758
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
08/31/1989 12,269 13,945
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
</TABLE>
*Past performance is no guarantee of future results. Class D shares commenced
operations after the inception date shown (4/18/88). 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. See page 20 for Footnotes,
which will include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- ---------------------------------------------------------
Aetna, Inc. 4.6%
Insurance
- ---------------------------------------------------------
Arrow Electronics, Inc. 4.5%
Electronics
- ---------------------------------------------------------
Foundation Health Systems, Inc. 'A' 4.2%
Insurance (HMO)
- ---------------------------------------------------------
Asia Pulp & Paper Co. Ltd. SP-ADR 3.7%
Paper products
- ---------------------------------------------------------
Valero Energy Corp. 3.7%
Petroleum refining
- ---------------------------------------------------------
Ace Ltd. 3.6%
Insurance
- ---------------------------------------------------------
Tenet Healthcare Corp. 3.6%
Heath care services
- ---------------------------------------------------------
Micron Technology, Inc. 3.5%
Semiconductors
- ---------------------------------------------------------
Suiza Foods Corp. 3.5%
Wholesale
- ---------------------------------------------------------
Nabors Industries, Inc. 3.4%
Oil & gas extraction
- ---------------------------------------------------------
Top Ten Total 38.3%
- ---------------------------------------------------------
Top 5 Industries % of Total Investments
- ---------------------------------------------------------
Financial & Business Services 18.2%
- ---------------------------------------------------------
Materials & Processing 16.0%
- ---------------------------------------------------------
Energy 14.5%
- ---------------------------------------------------------
Technology 11.8%
- ---------------------------------------------------------
Consumer Staples 8.7%
- ---------------------------------------------------------
Portfolio Composition
- ---------------------------------------------------------
Common Stock 97.4%
- ---------------------------------------------------------
Convertible Bonds & Notes 0.4%
- ---------------------------------------------------------
Cash Equivalents 2.2%
- ---------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-month period ended December 31, 1999, PIMCO Renaissance Fund posted
a return of -1.14%.
The second half of 1999 proved to be a difficult time for value investing.
High valuation growth stocks, particularly in the technology sector, dominated
the market. As a result, lower valuation issues were virtually ignored by
investors.
The Fund's performance was hurt by its exposure to the health care sector.
In particular, the HMO industry was punished by investors in the third quarter,
despite exceeding its earnings expectations. The area was unpopular with
investors because of external problems, such as class action lawsuits against
HMOs and federal attempts at HMO legislation, which received much attention from
the press. However, the outlook remains positive for this industry, as its
fundamentals remain strong and sentiment towards it is changing.
The greatest contributor to the Fund's performance during this period was
the technology sector. A continuation of the global economic recovery in the
second half of 1999 fueled demand for semiconductors and other technological
commodities. The semiconductor industry, in particular, achieved some pricing
power after several years of extreme pricing pressure. Micron Technology, a
semiconductor company and one of the top ten holdings in the Fund, experienced
revenue growth as a result of increased demand for its DRAM chips--as well as
greater pricing power.
Arrow Electronics, the second largest holding in the Fund, was a standout
performer. The company, the world's largest distributor of electronic components
and computer products to industrial and commercial customers, benefited from the
global economic recovery, which boosted demand for its products. The company's
global distribution network spans the world's three dominant electronics
markets--North America, Europe and the Asia/Pacific region- and it is poised to
continue its growth given the strong global economy.
The manager is optimistic about the Fund's outlook, as he believes stock
prices will ultimately reflect their fundamentals. In addition, he believes the
current environment of rising interest rates should bode well for value stocks
in general and PIMCO Renaissance Fund in particular.
17
<PAGE>
December 31, 1999
PIMCO Tax-Efficient Equity Fund
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
241 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
Parametric Portfolio Associates
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
D Shares Lipper Large-
S&P 500 Cap Core
Index Fund Avg.
- --------------------------------------------------------------------------------
6 month 6.47% 7.71% 9.94%
1 year 17.19% 21.04% 22.31%
Inception 15.30% -- --
Change in Value
$10,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO S&P 500
Tax-Efficient Index
Equity Fund D
<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
12/31/1998 10,957 11,041
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
11/30/1999 12,028 12,621
12/31/1999 12,840 13,364
</TABLE>
*Past performance is not an indication of future results. The adjusted returns
above include the effect of paying the applicable sales charges. See page 20 for
Footnotes, which include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- ---------------------------------------------------------
Microsoft Corp. 5.0%
Computer services
- ---------------------------------------------------------
General Electric Co. 4.1%
Electronics
- ---------------------------------------------------------
Cisco Systems, Inc. 3.0%
Internet networking
- ---------------------------------------------------------
Intel Corp. 2.7%
Electronics, computer components
- ---------------------------------------------------------
Wal-Mart Stores, Inc 2.5%
Retail
- ---------------------------------------------------------
Lucent Technologies, Inc. 2.2%
Communications & software
- ---------------------------------------------------------
SBC Communications, Inc. 2.0%
Communications
- ---------------------------------------------------------
Citigroup, Inc. 1.8%
Financial services
- ---------------------------------------------------------
Oracle Corp. 1.7%
Software
- ---------------------------------------------------------
International Business Machines Corp. 1.6%
Business machines mfr.
- ---------------------------------------------------------
Top Ten Total 26.6%
- ---------------------------------------------------------
Top 5 Industries % of Total Investments
- ---------------------------------------------------------
Technology 27.9%
- ---------------------------------------------------------
Financial & Business Services 13.7%
- ---------------------------------------------------------
Consumer Discretionary 10.3%
- ---------------------------------------------------------
Health Care 10.0%
- ---------------------------------------------------------
Communications 9.3%
- ---------------------------------------------------------
Portfolio Composition
- ---------------------------------------------------------
Common Stock 99.8%
- ---------------------------------------------------------
Cash Equivalents 0.2%
- ---------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO Tax-Efficient Equity Fund turned in a solid performance for the six-month
period ended December 31, 1999. Its return of 6.47% closely tracking the returns
of the S&P 500 Index for the same period.
High earnings growth expectations drove the market for much of these six
months. As a result, the high-growth technology sector overwhelmingly
outperformed all other sectors. In particular, software, Internet and wireless
telecommunications all saw explosive growth during this period. For instance,
Internet search engine Yahoo! experienced enormous price appreciation during the
fourth quarter as a result of its inclusion in the S&P 500 Index, which many
investors interpreted as validation of the young company's formidable stature
among the corporate establishment.
One standout for the Fund was Oracle, the database software management
company. It benefited from increased demand for e-commerce database management
applications, for which it makes software. Oracle also saw its stock price rise
as a result of the deal it signed in November to sell Ford Motor Company supply
chain management software. The outlook remains positive for this company, as
many Wall Street analysts are predicting similar deals for the company in the
coming year.
Another standout for the Fund was Qualcomm, a digital wireless telecom
company. The company experienced increased revenues from royalties received
through the licensing of its Code Division Multiple Access (CDMA) technology.
The company also benefited from the sale of its cell phone handset division,
which was not profitable.
The company should continue to see an increase in revenues going forward as more
cell phone handset makers utilize CDMA technology in their products.
In keeping with the its tax-efficient philosophy, the Fund did not pay a
capital gain for the second year in a row. Using active tax management
strategies, the manager was able to use harvested losses to offset capital
gains.
Looking ahead, the manager remains cautiously optimistic about the market's
prospects in the near term. The manager intends to maintain its disciplined,
long-term approach to stock selection based on fundamental valuations and the
principles of portfolio diversification, tax management and risk control, which
should bode well for the Fund in any economic climate.
18
<PAGE>
December 31, 1999
PIMCO Value Fund
OBJECTIVE
Long-term growth of capital and current income
PORTFOLIO
Primarily common stocks of companies with market capitalizations of more than $2
billion that are under valued relative to the market and to their industry
groups
FUND INCEPTION DATE
12/30/91
TOTAL NET ASSETS
$212.0 million
NUMBER OF SECURITIES IN THE PORTFOLIO
37 (not including short-term instruments)
PIMCO ADVISORS INSTITUTIONAL MANAGER
NFJ Investment
Group
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 12/31/99
D Shares Lipper Mid-
S&P 500 Cap Value
Index Fund Avg.
- --------------------------------------------------------------------------------
6 month -5.78% 7.71% -2.65%
1 year 3.88% 21.04% 7.78%
3 years 12.78% 27.56% 13.61%
5 years 18.93% 28.56% 18.48%
Inception 14.67% -- --
Change in Value
$10,000 invested at the Fund's inception
[GRAPH]
<TABLE>
<CAPTION>
PIMCO S&P 500
Value Index
<S> <C> <C>
Fund D
12/31/1991 10,000 10,000
01/31/1992 10,286 9,814
02/29/1992 10,630 9,942
03/31/1992 10,388 9,748
04/30/1992 10,432 10,034
05/31/1992 10,338 10,083
06/30/1992 10,115 9,933
07/31/1992 10,470 10,339
08/31/1992 10,164 10,128
09/30/1992 10,302 10,247
10/31/1992 10,364 10,282
11/30/1992 10,918 10,632
12/31/1992 11,269 10,762
01/31/1993 11,503 10,852
02/28/1993 11,624 11,000
03/31/1993 11,983 11,232
04/30/1993 11,770 10,961
05/31/1993 11,933 11,254
06/30/1993 12,012 11,287
07/31/1993 11,951 11,242
08/31/1993 12,596 11,668
09/30/1993 12,624 11,579
10/31/1993 13,057 11,818
11/30/1993 12,921 11,706
12/31/1993 13,066 11,847
01/31/1994 13,668 12,250
02/28/1994 13,442 11,918
03/31/1994 12,716 11,398
04/30/1994 12,558 11,544
05/31/1994 12,553 11,734
06/30/1994 12,261 11,446
07/31/1994 12,769 11,822
08/31/1994 13,304 12,307
09/30/1994 12,895 12,006
10/31/1994 13,029 12,275
11/30/1994 12,370 11,828
12/31/1994 12,484 12,004
01/31/1995 12,820 12,315
02/28/1995 13,389 12,795
03/31/1995 13,754 13,173
04/30/1995 14,122 13,560
05/31/1995 14,655 14,102
06/30/1995 14,907 14,430
07/31/1995 15,559 14,909
08/31/1995 15,747 14,946
09/30/1995 16,179 15,577
10/31/1995 16,221 15,521
11/30/1995 16,915 16,202
12/31/1995 17,273 16,515
01/31/1996 17,762 17,077
02/29/1996 18,147 17,235
03/31/1996 18,289 17,401
04/30/1996 18,524 17,657
05/31/1996 18,894 18,113
06/30/1996 18,806 18,182
07/31/1996 17,789 17,379
08/31/1996 18,477 17,745
09/30/1996 18,977 18,744
10/31/1996 19,243 19,261
11/30/1996 20,889 20,717
12/31/1996 20,706 20,306
01/31/1997 21,397 21,575
02/28/1997 21,756 21,744
03/31/1997 20,989 20,851
04/30/1997 21,811 22,095
05/31/1997 23,093 23,441
06/30/1997 23,674 24,491
07/31/1997 25,233 26,439
08/31/1997 24,697 24,958
09/30/1997 26,177 26,325
10/31/1997 24,853 25,446
11/30/1997 25,454 26,624
12/31/1997 26,030 27,081
01/31/1998 26,129 27,381
02/28/1998 27,676 29,355
03/31/1998 28,792 30,859
04/30/1998 28,234 31,169
05/31/1998 28,108 30,633
06/30/1998 28,151 31,878
07/31/1998 26,963 31,538
08/31/1998 23,094 26,978
09/30/1998 24,417 28,707
10/31/1998 26,568 31,041
11/30/1998 28,085 32,923
12/31/1998 28,596 34,820
01/31/1999 27,901 36,276
02/28/1999 26,838 35,149
03/31/1999 26,774 36,555
04/30/1999 29,585 37,971
05/31/1999 30,384 37,074
06/30/1999 31,526 39,132
07/31/1999 31,176 37,910
08/31/1999 30,868 37,721
09/30/1999 29,973 36,689
10/31/1999 30,056 39,010
11/30/1999 29,582 39,803
12/31/1999 29,706 42,148
</TABLE>
*Past performance is no guarantee of future results. Excluding the 6-month
return, 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. See page 20 for Footnotes,
which will include additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
Top 10 Holdings % of Total Investments
- ---------------------------------------------------------
Conoco, Inc. 4.4%
Petroleum refining
- ---------------------------------------------------------
Kerr-McGee Corp. 4.2%
Petroleum refining
- ---------------------------------------------------------
Westvaco Corp. 4.2%
Paper & allied products
- ---------------------------------------------------------
USX-U.S. Steel Group, Inc. 4.2%
Steel mfr.
- ---------------------------------------------------------
Dana Corp. 4.0%
Mfr. Components, transportation
- ---------------------------------------------------------
Public Service Enterprise Group, Inc. 4.0%
Electric & gas
- ---------------------------------------------------------
Ultramar Diamond Shamrock Corp. 4.0%
Petroleum refining
- ---------------------------------------------------------
Morgan, J.P. & Co., Inc 4.0%
Financial services
- ---------------------------------------------------------
Bell Atlantic Corp. 3.8%
Communications
- ---------------------------------------------------------
GTE Corp. 3.8%
Communications
- ---------------------------------------------------------
Top Ten Total 40.6%
- ---------------------------------------------------------
Top 5 Industries % of Total Investments
- ---------------------------------------------------------
Energy 16.7%
- ---------------------------------------------------------
Consumer Discretionary 15.5%
- ---------------------------------------------------------
Financial & Business Services 12.8%
- ---------------------------------------------------------
Materials & Processing 12.1%
- ---------------------------------------------------------
Utilities 8.0%
- ---------------------------------------------------------
Portfolio Composition
- ---------------------------------------------------------
Common Stock 99.8%
- ---------------------------------------------------------
Cash Equivalents 0.2%
- ---------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
PIMCO Value Fund returned -5.78% for the six-month period ended December 31,
1999. These returns slightly underperformed its Lipper Mid-Cap Value Fund
Average, which returned -2.65%.
The third and fourth quarters of 1999 proved to be an extremely difficult
period for value stocks. The technology sector, a traditionally high valuation
area, proved extremely popular with investors eager for high earnings growth in
the face of rising interest rates. At the same time, investors eschewed the
strong fundamentals offered by many lower valuation companies, which hurt the
performance of the Fund. Virtually all sectors other than technology were
ignored by investors during this period.
Due, again, to the high valuations, the Fund had a relatively small exposure to
the technology sector, but it was the greatest positive contributor to the
Fund's performance during this period. The Fund held two lower valuation
technology stocks during this period, Intel and Apple Computer, both of which
make commodity technology products. Apple continued to benefit from strong sales
of its popular iMac personal computer. The stock, however, was ultimately sold
from the portfolio when its valuation rose higher than the manager's investment
philosophy would allow. Intel aided performance, as the company experienced a
surge in chip sales as a result of the global economic recovery.
J.P. Morgan, the banking and financial services company, contributed to the
Fund's performance during this period. The company benefited from higher trading
revenues. Investors were attracted to its low valuation, and its stock price
moved higher in the fourth quarter, despite rising interest rates.
UST produced disappointing returns for the Fund during this period. The
smokeless tobacco products company was hurt by news of class action lawsuits
against other tobacco companies. However, the outlook for UST is positive, as it
is not the subject of any lawsuits and its fundamentals remain intact.
It should be noted that, at or around the time of the closing of the PIMCO
Advisors--Allianz transaction, the day-to-day management of PIMCO Value Fund
will be assumed by PIMCO Equity Advisors. The Fund's philosophy of investing in
undervalued securities will remain in place.
19
<PAGE>
December 31, 1999
- --------------------------------------------------------------------------------
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.
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. The Innovation Fund concentrates its portfolio in one
sector, making it more volatile than a more diversified stock portfolio, and it,
therefore, should be considered as only part of a diversified portfolio. The
Mid-Cap Growth Fund invests primarily in medium-sized companies, which is often
associated with higher risks than stocks of larger companies, including higher
volatility.
Line graphs have been included so an investor can compare a Fund's historical
performance to that of an appropriate broad-based index. Each index reflects a
group of unmanaged securities, and it is not possible to invest directly in an
unmanaged index. The Standard & Poor's 500 and Standard & Poor's Mid-Cap are
indices of stocks of companies with larger- and medium-sized capitalizations,
respectively. Russell Mid-Cap Index and Russell 1000 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, not
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, 1-888-87-PIMCO, www.pimcofunds.com. Please read
the prospectus carefully before you invest or send money.
20
<PAGE>
Schedule of Investments
Capital Appreciation Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 99.0%
- --------------------------------------------------------------------------------
Aerospace 1.5%
Honeywell International, Inc. 242,988 $ 14,017
----------
Capital Goods 6.6%
General Electric Co. 133,100 20,597
Tyco International Ltd. 353,300 13,735
United Technologies Corp. 158,800 10,322
TRW, Inc. 183,800 9,546
Textron, Inc. 122,600 9,402
----------
63,602
Communications 4.0%
ALLTEL Corp. 125,300 10,361
MCI WorldCom, Inc. (b) 179,400 9,519
GTE Corp. 133,100 9,392
AT&T Corp. 183,600 9,318
SBC Communications, Inc. 1 0
----------
38,590
Consumer Discretionary 10.4%
Wal-Mart Stores, Inc. 282,400 19,521
Home Depot, Inc. 256,200 17,566
CVS Corp. 343,300 13,711
Lowe's Cos., Inc. 190,700 11,394
McGraw-Hill Companies, Inc. 166,100 10,236
Dayton Hudson Corp. 138,700 10,186
Harley-Davidson, Inc. 124,100 7,950
Circuit City Stores 109,800 4,948
General Motors Corp. 51,700 3,758
Delphi Automotive Systems (b) 1 0
Mattel, Inc. 1 0
----------
99,270
Consumer Services 4.8%
New York Times Co. 292,500 14,369
CBS Corp. 214,000 13,683
Gannett, Inc. 156,800 12,789
United Parcel Service, Inc. 69,700 4,809
----------
45,650
Consumer Staples 2.3%
Safeway, Inc. (b) 325,500 11,576
Anheuser Busch Cos., Inc. 147,500 10,454
Kimberly-Clark Corp. 4,300 281
----------
22,311
Energy 4.9%
Royal Dutch Petroleum Co. 268,400 16,221
Vastar Resources, Inc. 182,700 10,779
USX Marathon Group 423,500 10,455
Atlantic Richfield Co. 107,100 9,264
AES Corp. (b) 3,900 292
----------
47,011
Financial & Business Services 13.5%
Omnicom Group 143,300 14,330
Marsh & McLennan Cos. 124,600 11,923
Capital One Financial Corp. 245,000 11,806
American Express Co. 70,100 11,654
Morgan Stanley, Dean Witter, Discover and Co. 80,900 11,548
MGIC Investment Corp. 185,600 11,171
Citigroup, Inc. 200,550 11,143
Firstar Corp. 448,300 9,470
Lehman Brothers Holdings, Inc. 111,100 9,409
Wells Fargo Co. 226,600 9,163
Fleet Boston Financial Corp. 250,200 8,710
Morgan, J.P. & Co., Inc. 66,600 8,433
Providian Financial Corp. 3,000 273
----------
129,033
Health Care 6.2%
Immunex Corp. (b) 147,900 16,195
Genentech, Inc. (b) 91,200 12,266
Warner-Lambert Co. 136,300 11,168
Bristol-Myers Squibb Co. 155,400 9,975
Schering-Plough Corp. 228,700 9,648
----------
59,252
Materials & Processing 4.9%
Alcoa, Inc. 148,900 12,359
Champion International 'C' 198,200 12,276
Weyerhaeuser Co. 165,100 11,856
International Paper Co. 189,700 10,706
----------
47,197
Technology 39.9%
Cisco Systems, Inc. (b) 200,000 21,425
Oracle Corp. (b) 175,800 19,701
Motorola, Inc. 112,300 16,536
Applied Materials, Inc. (b) 128,400 16,267
JDS Uniphase Corp. (b) 98,000 15,809
Teradyne, Inc. (b) 236,600 15,616
Corning, Inc. 116,600 15,034
Conexant Systems, Inc. (b) 223,900 14,861
Veritas Software Corp. (b) 102,950 14,735
Sun Microsystems, Inc. (b) 185,200 14,341
Solectron Corp. (b) 149,600 14,231
Siebel Systems, Inc. (b) 168,400 14,146
Broadcom Corp. (b) 51,600 14,055
BMC Software, Inc. (b) 170,200 13,605
EMC Corp. (b) 124,100 13,558
Compuware Corp. (b) 352,800 13,142
Computer Associates International, Inc. 187,000 13,078
Texas Instruments, Inc. 122,800 11,896
Amdocs Ltd. (b) 343,800 11,861
Microsoft Corp. (b) 101,500 11,850
Lucent Technologies, Inc. 154,010 11,522
Altera Corp. (b) 216,100 10,710
Tellabs, Inc. (b) 166,500 10,687
Scientific-Atlanta, Inc. 191,100 10,630
Lexmark International Group, Inc. 'A' (b) 108,400 9,810
Xilinx, Inc. (b) 213,200 9,694
National Semiconductor Corp. (b) 198,200 8,485
Computer Sciences Corp. (b) 76,000 7,192
Citrix Systems, Inc. (b) 54,000 6,642
America Online, Inc. (b) 4,800 362
Yahoo, Inc. (b) 400 173
----------
381,654
----------
Total Common Stocks (Cost $697,230) 947,587
==========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.4%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreement 0.4%
State Street Bank
4.000% due 01/03/2000 $ 3,840 3,840
(Dated 12/31/1999. Collateralized by
Federal Home Loan Bank 5.400% due
11/17/2003 valued at $3,920.
Repurchase proceeds are $3,841.)
Total Short-Term Instruments (Cost $3,840) 3,840
==========
Total Investments (a) 99.4% $ 951,427
(Cost $701,070)
Other Assets and Liabilities (Net) 0.6% 6,008
----------
Net Assets 100.0% $ 957,435
==========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 261,248
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (10,891)
----------
Unrealized appreciation-net $ 250,357
==========
(b) Non-income producing security.
See accompanying notes 21
<PAGE>
Schedule of Investments
Equity Income Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- -------------------------------------------------------------------------------
COMMON STOCKS 98.6%
- -------------------------------------------------------------------------------
Aerospace 4.2%
BFGoodrich Co. 125,000 $ 3,438
Northrop Grumman Corp. 59,300 3,206
----------
6,644
Capital Goods 6.3%
GATX Corp. 97,000 3,274
Hubbell, Inc. 'B' 115,000 3,134
Dana Corp. 104,000 3,114
Tenneco Automotive, Inc. 32,800 305
----------
9,827
Communications 5.7%
U.S. West, Inc. 42,500 3,060
GTE Corp. 42,000 2,964
Bell Atlantic Corp. 47,000 2,893
----------
8,917
Consumer Discretionary 16.2%
Ford Motor Co. 59,300 3,169
UST, Inc. 125,100 3,151
Whirlpool Corp. 48,000 3,123
Eastman Kodak Co. 47,000 3,114
Armstrong World Industries 92,000 3,071
Springs Industries, Inc. 'A' 75,000 2,995
Thomas & Betts Corp. 93,600 2,984
J.C. Penney Co. 134,000 2,672
Lanier Worldwide, Inc. 251,000 973
----------
25,252
Consumer Staples 8.9%
SUPERVALU, Inc. 159,000 3,180
Fortune Brands, Inc. 95,300 3,151
RJ Reynolds Tobacco Holdings, Inc. 155,000 2,732
Pactiv Corp. 164,000 1,742
Anheuser Busch Cos., Inc. 22,300 1,580
Brown-Forman Corp. 27,400 1,569
----------
13,954
Energy 11.8%
Kerr McGee Corp. 51,000 3,162
Ultramar Diamond Shamrock Corp. 139,000 3,153
Conoco, Inc. 125,500 3,122
KeySpan Corp. 131,900 3,058
Repsol SA SP - ADR 130,000 3,022
USX Marathon Group 115,000 2,839
----------
18,356
Financial & Business Services 21.4%
Deluxe Corp. 226,000 6,201
Morgan, J.P. & Co., Inc. 47,800 6,053
Union Planters Corp. 153,000 6,034
Edwards (A.G.), Inc. 103,000 3,301
Ohio Casualty Corp. 205,500 3,301
PNC Bank Corp. 70,100 3,119
KeyCorp 140,000 3,098
HRPT Properties Trust 252,600 2,273
----------
33,380
Health Care 2.0%
Mallinckrodt, Inc. 99,000 3,149
----------
Materials & Processing 8.1%
USX-U.S. Steel Group, Inc. 193,000 6,369
Westvaco Corp. 97,000 3,165
Georgia-Pacific Corp. (Timber Group) 126,000 3,103
----------
12,637
Technology 4.1%
Harris Corp. 238,000 6,352
----------
Utilities 9.9%
DTE Energy Co. 101,000 3,168
Central & South West Corp. 157,000 3,140
NICOR, Inc. 96,000 3,120
Public Service Enterprise Group, Inc. 88,500 3,081
New Century Energies, Inc. 98,000 2,977
----------
15,486
----------
Total Common Stocks 153,954
(Cost $169,116) ==========
Value
(000s)
Total Investments (a) 98.6% $ 153,954
(Cost $169,116)
Other Assets and Liabilities (Net) 1.4% 2,108
----------
Net Assets 100.0% $ 156,062
==========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 10,915
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (26,077)
----------
Unrealized depreciation-net $ (15,162)
==========
22 See accompanying notes
<PAGE>
Schedule of Investments
Innovation Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCK 93.7%
- --------------------------------------------------------------------------------
Communications 8.0%
Qualcomm, Inc. (b) 820,000 $ 144,423
Nokia Corp. SP - ADR 350,000 66,500
General Instrument Corp. (b) 580,000 49,300
Next Level Communications, Inc. (b) 245,000 18,344
----------
278,567
Consumer Discretionary 4.9%
Gemstar International Group Ltd. (b) 1,296,000 92,340
General Motors Corp. 'H' (b) 810,000 77,760
----------
170,100
Financial & Business Services 6.6%
DoubleClick, Inc. (b) 450,000 113,878
VeriSign, Inc. (b) 340,000 64,919
Sapient Corp. (b) 345,000 48,623
----------
227,420
Health Care 6.5%
Medimmune, Inc. (b) 400,000 66,350
Biogen, Inc. (b) 770,000 65,065
IDEC Pharmaceuticals Corp. (b) 640,000 62,880
Immunex Corp. (b) 265,000 29,018
----------
223,313
Technology 67.7%
Oracle Corp. (b) 1,220,000 136,717
I2 Technologies, Inc. (b) 690,000 134,550
Ariba, Inc. (b) 630,000 111,746
Cisco Systems, Inc. (b) 950,000 101,769
Vignette Corp. (b) 546,000 88,998
Siebel Systems, Inc. (b) 1,040,000 87,360
QLogic Corp. (b) 540,000 86,333
Sun Microsystems, Inc. (b) 1,095,000 84,794
JDS Uniphase Corp. (b) 519,000 83,721
E-Tek Dynamics, Inc. (b) 585,000 78,756
Veritas Software Corp. (b) 527,500 75,498
Redback Networks, Inc. (b) 410,000 72,774
Juniper Networks, Inc. (b) 200,000 68,000
ASM Lithography Holding NV (b) 589,000 66,999
Apple Computer, Inc. 630,000 64,772
Motorola, Inc. 429,900 63,303
Tibco Software, Inc. 404,100 61,827
Applied Materials, Inc. (b) 450,000 57,009
EMC Corp. (b) 510,000 55,718
Applied Micro Circuits Corp. (b) 420,000 53,445
Broadvision, Inc. (b) 304,000 51,699
Broadcom Corp. (b) 185,000 50,389
Ciena Corp. (b) 865,000 49,738
Brocade Communications Systems, Inc. (b) 280,000 49,560
America Online, Inc. (b) 630,000 47,526
Xilinx, Inc. (b) 1,040,000 47,288
Electronics for Imaging, Inc. (b) 735,000 42,722
Internet Capital Group LLC (b) 250,000 42,500
RealNetworks, Inc. (b) 340,000 40,906
Extreme Networks, Inc. (b) 487,500 40,706
Microsoft Corp. (b) 290,000 33,858
Phone.com, Inc. (b) 290,000 33,621
Lucent Technologies, Inc. 380,000 28,429
Sierra Semiconductor Corp. (b) 170,000 27,253
Vitesse Semiconductor Co. (b) 500,000 26,219
Sanmina Corp. (b) 240,000 23,970
Atmel Corp. (b) 680,000 20,103
Texas Instruments, Inc. 200,000 19,374
Research In Motion Ltd. (b) 400,000 18,475
RF Micro Devices, Inc. (b) 222,500 15,227
Indigo NV (b) 102,223 59
----------
2,343,711
----------
Total Common Stocks 3,243,111
(Cost $1,673,963) ==========
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 7.6%
- --------------------------------------------------------------------------------
Repurchase Agreement 7.6%
State Street Bank
4.000% due 01/03/2000 $ 264,173 $ 264,173
(Dated 12/31/1999. Collateralized by
Federal National Mortgage Association
6.400% due 09/27/2001 valued at $153,004
and Federal Home Loan Bank 5.400% due
11/17/2003 valued at $116,466.
Repurchase proceeds are $264,261.)
----------
Total Short-Term Instruments 264,173
(Cost $264,173) ----------
Total Investments (a) 101.3% $3,507,284
(Cost $1,938,136)
Other Assets and Liabilities (Net) (1.3%) (45,216)
----------
Net Assets 100.0% $3,462,068
==========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $1,574,471
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (5,323)
----------
Unrealized appreciation-net $1,569,148
==========
(b) Non-income producing security.
See accompanying notes 23
<PAGE>
Schedule of Investments
Mid-Cap Growth Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 100.5%
- --------------------------------------------------------------------------------
Aerospace 1.0%
General Dynamics Corp. 202,000 $ 10,656
----------
Capital Goods 3.9%
Waters Corp. (b) 259,200 13,738
Millipore Corp. 344,700 13,314
TRW, Inc. 240,400 12,486
----------
39,538
Communications 2.4%
CenturyTel, Inc. 280,350 13,282
Westwood One, Inc. 155,800 11,841
----------
25,123
Consumer Discretionary 8.9%
Tiffany & Co. 189,800 16,940
Dollar Tree Stores, Inc. 303,000 14,677
B.J.'s Wholesale Club, Inc. (b) 384,600 14,038
Intimate Brands, Inc. 297,940 12,849
Bed, Bath & Beyond, Inc. (b) 323,500 11,242
Furniture Brands International, Inc. (b) 509,500 11,209
MGM Grand, Inc. (b) 206,700 10,400
Mattel, Inc. 1 0
----------
91,355
Consumer Services 1.2%
Times Mirror Co. 'A' 181,700 12,174
----------
Consumer Staples 3.3%
Dean Foods Co. 312,000 12,402
SUPERVALU, Inc. 538,200 10,764
McCormick & Co. 342,900 10,201
----------
33,367
Energy 4.0%
Kerr McGee Corp. 208,100 12,902
Dynegy, Inc. 517,900 12,591
Occidental Petroleum Corp. 578,400 12,508
Apache Corp. 45,600 1,684
Anadarko Petroleum Corp. 47,000 1,604
----------
41,289
Financial & Business Services 14.3%
USWeb Corp. 324,100 14,402
Zions Bancorporation 229,400 13,578
Valassis Communications, Inc. (b) 297,050 12,550
Ambac Financial Group, Inc. 231,200 12,066
Providian Financial Corp. 117,850 10,732
Capital One Financial Corp. 222,000 10,698
Apartment Investment & Management Co. 'A' (b) 264,500 10,530
Liberty Property Trust 431,100 10,454
PMI Group, Inc. 211,000 10,299
Bank United Corp. 'A' 372,800 10,159
Profit Recovery Group International, Inc. (b) 373,700 9,925
Golden State Bancorp, Inc. (b) 477,600 8,239
Peoples Heritage Financial Group 513,100 7,729
Ace Ltd. 301,200 5,026
----------
146,387
Health Care 8.5%
Medimmune, Inc. (b) 141,000 23,388
IDEC Pharmaceuticals Corp. (b) 181,800 17,862
Allergan, Inc. 273,300 13,596
Bausch & Lomb, Inc. 197,700 13,530
Forest Laboratories 'A' (b) 151,700 9,320
C.R. Bard, Inc. 173,800 9,211
----------
86,907
Materials & Processing 5.8%
Boise Cascade Corp. 332,900 13,482
Willamette Industries 283,900 13,184
Temple-Inland, Inc. 196,300 12,944
Martin Marietta Materials, Inc. 251,900 10,328
Pall Corp. 445,200 9,600
----------
59,538
Technology 46.7%
Network Appliance, Inc. (b) 257,200 21,364
Citrix Systems, Inc. (b) 169,400 20,836
BEA Systems, Inc. (b) 291,400 20,380
Lam Research Corp. (b) 180,900 20,182
Symbol Technologies, Inc. 314,800 20,009
Comverse Technology, Inc. (b) 135,250 19,577
Veritas Software Corp. (b) 135,950 19,458
KLA-Tencor Corp. (b) 171,200 19,067
Sierra Semiconductor Corp. (b) 96,400 15,454
CSG Systems International, Inc. (b) 376,700 15,021
Applied Micro Circuits Corp. (b) 116,500 14,825
CTS Corp. 195,700 14,751
Dendrite International, Inc. (b) 409,550 13,874
ISS Group, Inc. (b) 188,900 13,436
JDS Uniphase Corp. (b) 83,200 13,421
Harmonic Lightwaves, Inc. (b) 140,400 13,329
Adaptec, Inc. (b) 266,000 13,267
Tektronix, Inc. 335,500 13,043
Jabil Circuit, Inc. (b) 177,300 12,943
Amdocs Ltd. (b) 367,800 12,689
Adobe Systems, Inc. 187,900 12,636
Compuware Corp. (b) 335,000 12,479
QLogic Corp. (b) 77,900 12,454
Xilinx, Inc. (b) 262,000 11,913
Entrust Technologies, Inc. (b) 190,100 11,393
Rational Software Corp. (b) 225,800 11,092
Integrated Device Technology, Inc. (b) 380,700 11,040
Network Solutions, Inc. (b) 50,500 10,987
RF Micro Devices, Inc. (b) 153,500 10,505
SDL, Inc. (b) 47,400 10,333
LSI Logic Corp. (b) 146,400 9,882
Legato Systems, Inc. (b) 134,100 9,228
Cypress Semiconductor Corp. (b) 232,900 7,540
Amkor Technology, Inc. (b) 192,500 5,438
Vishay Intertechnology, Inc. (b) 162,100 5,126
----------
478,972
Utilities 0.5%
Florida Progress Corp. 113,200 4,790
----------
Total Common Stocks 1,030,096
(Cost $770,977) =========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 1.4%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreement 1.4%
State Street Bank
4.000% due 01/04/2000 $ 14,412 14,412
(Dated 12/31/1999. Collateralized by
Federal National Mortgage Association
6.400% due 12/21/2001 valued at $14,702.
Repurchase proceeds are $14,417.)
Total Short-Term Instruments (Cost $14,412) 14,412
==========
Total Investments (a) 101.9% $1,044,508
(Cost $785,389)
Other Assets and Liabilities (Net) (1.9%) (19,174)
----------
Net Assets 100.0% $1,025,334
==========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 281,274
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (22,155)
----------
Unrealized appreciation-net $ 259,119
==========
(b) Non-income producing security.
24 See accompanying notes
<PAGE>
Schedule of Investments
Renaissance Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 97.0%
- --------------------------------------------------------------------------------
Aerospace 2.7%
Orbital Sciences Corp. (b) 780,000 $ 14,479
----------
Capital Goods 4.7%
CNH Global NV 1,081,500 14,397
Metso OYJ 537,000 6,978
McDermott International, Inc. 345,000 3,127
Raytheon Co. 'A' 51,000 1,265
----------
25,767
Communications 3.3%
Loral Space & Communications Ltd. 609,500 14,818
Comsat Corp. 153,171 3,044
ICO Global Communications (b) 100,000 363
----------
18,225
Consumer Discretionary 3.7%
Tupperware Corp. 528,000 8,943
Hitachi Ltd. 517,000 8,299
Great Atlantic & Pacific Tea Co., Inc. 110,000 3,066
----------
20,308
Consumer Services 0.2%
Renaissance Re Holdings Ltd. 23,000 940
----------
Consumer Staples 8.7%
Suiza Foods Corp. (b) 475,000 18,822
Corn Products International, Inc. 389,000 12,740
Philip Morris Cos., Inc. 260,000 6,029
Tate & Lyle PLC 639,345 4,095
Tyson Foods, Inc. 235,000 3,819
Flowers Industries, Inc. 115,200 1,836
----------
47,341
Energy 14.4%
Valero Energy Corp. 1,000,900 19,893
Nabors Industries, Inc. (b) 595,600 18,426
R & B Falcon Corp. (b) 891,000 11,806
Rowan Cos., Inc. (b) 446,900 9,692
Union Pacific Resources Group 538,700 6,868
Gulf Canada Resources Ltd. 1,573,700 5,311
Tosco Corp. 137,500 3,738
Ocean Energy, Inc. (b) 380,000 2,945
----------
78,679
Environmental Services 1.0%
Republic Services, Inc. 360,000 5,175
----------
Financial & Business Services 18.1%
Aetna, Inc. 452,600 25,261
Ace Ltd. 1,174,800 19,604
Pacific Century Financial Corp. 754,300 14,096
Everest Reinsurance Holdings, Inc. 408,200 9,108
St. Paul Cos., Inc. 235,800 7,944
Conseco, Inc. 300,000 5,362
Washington Mutual, Inc. 190,000 4,940
Fremont General Corp. 667,000 4,919
AmeriCredit Corp. (b) 210,700 3,898
SLM Holding Corp. 57,900 2,446
Aon Corp. 25,000 1,000
IPC Holdings Limited 20,000 298
----------
98,876
Health Care 7.7%
Foundation Health Systems, Inc. 'A' (b) 2,297,000 22,826
Tenet Healthcare Corp. (b) 821,900 19,315
----------
42,141
Materials & Processing 15.9%
Asia Pulp & Paper Co. Ltd. SP-ADR 2,535,900 19,970
Ispat International NV 1,005,300 16,210
Smurfit-Stone Container Corp. (b) 588,500 14,418
Gaylord Container Corp. 'A' (b) 2,014,200 13,722
Ucar International, Inc. (b) 675,000 12,023
Buenaventura SA 211,000 3,389
Mercer International, Inc. 561,800 2,598
Eastman Chemical Co. 40,000 1,908
IMC Global, Inc. 100,000 1,638
CK Witco Corp. 83,800 1,121
----------
86,997
Technology 11.8%
Arrow Electronics, Inc. (b) 957,000 24,284
Micron Technology, Inc. (b) 244,000 18,971
Matsushita Electric Industrial Co. Ltd. 455,000 12,603
Kulicke & Soffa Industries (b) 131,100 5,580
Hutchinson Technology (b) 130,000 2,763
----------
64,201
Utilities 4.8%
Niagara Mohawk Holdings, Inc. 688,300 9,593
Midamerican Energy Holdings Co. (b) 209,000 7,041
Citizens Utilities Co. 'B' 376,100 5,336
Western Resources, Inc. 255,000 4,335
PG&E Corp. 6,700 137
----------
26,442
----------
Total Common Stocks 529,571
(Cost $539,263) ==========
- --------------------------------------------------------------------------------
CONVERTIBLE BONDS & NOTES 0.4%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Convertible Bonds & Notes 0.4%
APP Finance VI Mauritius Ltd.
0.000% due 11/18/2012 $ 10,000 1,791
APP Global Finance Ltd.
2.000% due 07/25/2000 500 549
----------
Total Convertible Bonds & Notes 2,340
(Cost $2,345) ==========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 2.2%
- --------------------------------------------------------------------------------
Repurchase Agreement 2.2%
State Street Bank
4.000% due 01/03/2000 11,761 11,761
(Dated 12/31/1999. Collateralized by
Federal Home Loan Bank 5.400% due
11/17/2003 valued at $11,998.
Repurchase proceeds are $11,795.)
----------
Total Short-Term Instruments 11,761
(Cost $11,761) ==========
Total Investments (a) 99.6% $ 543,672
(Cost $553,369)
Other Assets and Liabilities (Net) 0.4% 2,288
----------
Net Assets 100.0% $ 545,960
==========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 59,945
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (69,642)
----------
Unrealized depreciation-net $ (9,697)
==========
(b) Non-income producing security.
See accompanying notes 25
<PAGE>
Schedule of Investments
Tax-Efficient Equity Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 99.3%
- --------------------------------------------------------------------------------
Aerospace 1.5%
Honeywell International, Inc. 10,225 $ 590
General Dynamics Corp. 3,100 164
Boeing Co. 1,800 75
----------
829
Building 0.2%
Owens Corning 4,000 77
Fleetwood Enterprises, Inc. 2,000 41
Centex Corp. 500 12
----------
130
Capital Goods 6.5%
General Electric Co. 15,100 2,337
United Technologies Corp. 4,100 267
Johnson Controls, Inc. 2,100 119
PPG Industries, Inc. 1,900 119
Tyco International Ltd. 3,000 117
Caterpillar, Inc. 2,300 108
Navistar International Corp. (b) 2,000 95
Avery Dennison Corp. 1,300 94
Paccar, Inc. 1,600 71
Ingersoll-Rand Co. 1,200 66
Textron, Inc. 700 54
Deere & Co. 1,200 52
TRW, Inc. 1,000 52
Briggs & Stratton 900 48
ITT Industries, Inc. 1,300 43
Parker Hannifin Corp. 500 26
Dover Corp. 400 18
Minnesota Mining & Manufacturing Co. 100 10
Cummins Engine Co., Inc. 200 10
Snap-On, Inc. 100 3
----------
3,709
Communications 9.3%
SBC Communications, Inc. 23,201 1,131
AT&T Corp. 17,100 868
MCI WorldCom, Inc. (b) 13,050 692
Qualcomm, Inc. (b) 3,200 564
Bell Atlantic Corp. 7,300 449
BellSouth Corp. 8,200 383
Nortel Networks Corp. 2,800 283
Nextel Communications, Inc. 'A' (b) 2,100 217
GTE Corp. 2,400 169
MediaOne Group, Inc. (b) 2,000 154
U.S. West, Inc. 1,500 108
Vodafone Group PLC SP - ADR 2,000 99
ALLTEL Corp. 1,000 83
CenturyTel, Inc. 1,200 57
----------
5,257
Consumer Discretionary 10.2%
Wal-Mart Stores, Inc. 20,700 1,431
Home Depot, Inc. 10,500 720
Time Warner, Inc. 6,800 493
General Motors Corp. 4,900 356
Gap, Inc. 5,875 270
Eastman Kodak Co. 3,500 232
UST, Inc. 7,900 199
Walgreen Co. 5,900 173
Ford Motor Co. 3,200 171
MAY Department Stores Co. 4,600 148
Emerson Electric Co. 2,000 115
Dayton Hudson Corp. 1,400 103
TJX Cos., Inc. 4,800 98
Cendant Corp. (b) 3,300 88
Federated Department Stores, Inc. (b) 1,700 86
Brunswick Corp. 3,800 85
Liz Claiborne, Inc. 2,200 83
Costco Wholesale Corp. 900 82
McGraw-Hill Companies, Inc. 1,300 80
Whirlpool Corp. 1,200 78
Circuit City Stores 1,600 72
Masco Corp. 2,700 69
Pitney Bowes, Inc. 1,400 68
Dollar General Corp. 2,906 66
Lowe's Cos., Inc. 1,100 66
Toys R US, Inc. (b) 4,500 64
Avon Products, Inc. 1,800 58
Nike, Inc. 'B' 900 45
Best Buy Co., Inc. (b) 800 40
Colgate-Palmolive Co. 600 39
American Greetings Corp. 'A' 1,500 35
AutoZone, Inc. (b) 1,000 32
Great Atlantic & Pacific Tea Co., Inc. 700 20
Goodyear Tire & Rubber Co. 500 14
VF Corp. 400 12
Office Depot, Inc. 1,000 11
----------
5,802
Consumer Services 3.4%
CBS Corp. 8,799 563
McDonald's Corp. 6,200 250
Interpublic Group of Companies, Inc. 3,400 196
Carnival Corp. 'A' 3,900 186
Viacom, Inc. 'B' (b) 2,800 169
Gannett, Inc. 1,600 131
Times Mirror Co. 'A' 1,800 121
Disney (Walt) Co. 3,000 88
Harrah's Entertainment, Inc. (b) 3,300 87
Knight-Ridder, Inc. 1,300 77
Tribune Co. 1,000 55
New York Times Co. 600 29
----------
1,952
Consumer Staples 6.4%
Procter & Gamble Co. 6,200 679
Coca-Cola Co. 11,600 676
Kimberly-Clark Corp. 6,100 398
General Mills, Inc. 8,400 300
Quaker Oats Co. 3,800 249
Safeway, Inc. (b) 5,500 196
Anheuser Busch Cos., Inc. 2,600 184
Pepsico, Inc. 4,600 162
Unilever NV - NY Shares 2,800 152
Seagram Co. Ltd. 3,300 148
Fortune Brands, Inc. 3,400 112
Nabisco Group Holdings Corp. 7,000 74
Alberto-Culver Co. 2,500 65
Sysco Corp. 1,600 63
Bestfoods 1,200 62
Adolph Coors Co. 'B' 1,000 53
Sara Lee Corp. 1,900 42
Brown-Forman Corp. 500 29
Kellogg Co. 200 6
----------
3,650
Energy 5.6%
Exxon Corp. 19,556 1,575
Royal Dutch Petroleum Co. 6,100 369
Chevron Corp. 1,900 165
AES Corp. (b) 1,900 142
Phillips Petroleum Co. 3,000 141
Rowan Cos., Inc. (b) 4,800 104
Conoco, Inc. 3,560 89
Atlantic Richfield Co. 1,000 87
Halliburton Co. 2,000 81
Helmerich & Payne, Inc. 3,500 76
Peco Energy Co. 2,100 73
Tosco Corp. 2,500 68
Amerada Hess Corp. 1,000 57
Sunoco, Inc. 2,300 54
Texaco, Inc. 900 49
Enron Corp. 600 27
Union Pacific Resources Group 1,900 24
Southern Co. 1,000 24
----------
3,205
Financial & Business Services 13.6%
Citigroup, Inc. 18,300 1,017
Chase Manhattan Corp. 7,500 583
Morgan Stanley, Dean Witter, Discover and Co. 3,700 528
Wells Fargo Co. 10,800 437
BankAmerica Corp. 8,000 401
American International Group, Inc. 3,391 367
American Express Co. 1,900 316
Paychex, Inc. 7,000 280
State Street Corp. 3,700 270
Bank of New York 6,200 247
MGIC Investment Corp. 4,000 241
MBNA Corp. 8,600 234
Charles Schwab Corp. 5,400 207
26 See accompanying notes
<PAGE>
Value
Shares (000s)
- --------------------------------------------------------------------------------
Providian Financial Corp. 2,200 $ 200
Federal National Mortgage Association 3,100 194
Federal Home Loan Mortgage Corp. 4,000 188
Hartford Financial Services Group, Inc. 3,800 180
Merrill Lynch & Co. 2,000 167
Sun Trust Banks, Inc. 2,400 165
Comerica, Inc. 3,000 140
Marsh & McLennan Cos. 1,300 124
SLM Holding Corp. 2,900 123
Firstar Corp. 5,200 110
Household International, Inc. 2,700 101
Omnicom Group 1,000 100
Mellon Financial Corp. 2,900 99
Automatic Data Processing, Inc. 1,800 96
Northern Trust Corp. 1,600 85
Golden West Financial Corp. 2,100 70
Lehman Brothers Holdings, Inc. 800 68
Southtrust Corp. 1,500 57
Fleet Boston Financial Corp. 1,421 49
Bear Stearns Co., Inc. 1,165 49
American General Corp. 600 46
Franklin Resources, Inc. 1,300 42
AFLAC, Inc. 800 38
PNC Bank Corp. 700 31
Capital One Financial Corp. 600 29
Lincoln National Corp. 400 16
Republic New York Corp. 200 14
Torchmark Corp. 300 9
----------
7,718
Health Care 10.1%
Bristol-Myers Squibb Co. 12,800 822
Merck & Co., Inc. 10,700 718
Johnson & Johnson 6,200 577
Pfizer, Inc. 17,600 571
Amgen, Inc. (b) 9,000 541
Schering-Plough Corp. 9,900 418
Abbott Laboratories 10,200 370
Eli Lilly & Co. 5,200 346
CIGNA Corp. 2,900 234
Medtronic, Inc. 5,700 208
Warner-Lambert Co. 2,400 197
Wellpoint Health Networks, Inc. (b) 2,000 132
Becton Dickinson & Co. 4,600 122
United Healthcare Corp. 1,900 101
Guidant Corp. 1,800 85
Biomet, Inc. 2,000 80
Boston Scientific Corp. (b) 3,000 66
Pharmacia & Upjohn, Inc. 1,100 50
St. Jude Medical, Inc. 1,000 31
----------
5,669
Materials & Processing 2.3%
Rohm & Haas Co. 9,100 370
Alcoa, Inc. 2,700 224
E.I. Du Pont de Nemours, Inc. 1,893 125
Engelhard Corp. 5,200 98
W.R. Grace & Co. (b) 6,000 83
Sealed Air Corp. 1,500 78
Praxair, Inc. 1,400 70
National Service Industries, Inc. 2,000 59
Fort James Corp. 1,900 52
Barrick Gold Corp. 2,500 43
Air Products & Chemicals 1,100 37
Hercules, Inc. 1,300 36
Nucor Corp. 400 22
----------
1,297
Technology 27.8%
Microsoft Corp. (b) 24,400 2,849
Cisco Systems, Inc. (b) 15,700 1,682
Intel Corp. 18,400 1,515
Lucent Technologies, Inc. 16,300 1,219
Oracle Corp. (b) 8,400 941
International Business Machines Corp. 8,500 918
Dell Computer Corp. (b) 17,700 903
America Online, Inc. (b) 10,100 762
Sun Microsystems, Inc. (b) 8,800 681
Hewlett Packard Co. 5,200 592
EMC Corp. (b) 5,200 568
Yahoo, Inc. (b) 1,100 476
Texas Instruments, Inc. 4,000 388
Applied Materials, Inc. (b) 3,000 380
Tellabs, Inc. (b) 4,600 295
3Com Corp. (b) 6,100 287
Compuware Corp. (b) 6,900 257
Computer Sciences Corp. (b) 2,400 227
Network Appliance, Inc. (b) 2,400 199
Gateway, Inc. (b) 2,200 159
Solectron Corp. (b) 1,600 152
BMC Software, Inc. (b) 1,500 119
Adaptec, Inc. (b) 1,500 75
Corning, Inc. 500 64
Lexmark International Group, Inc. 'A' (b) 500 45
PerkinElmer, Inc. 600 25
----------
15,778
Transportation 0.8%
Kansas City Southern Industries, Inc. 3,100 231
Delta Air Lines, Inc. 1,500 75
FDX Corp. (b) 1,200 49
AMR Corp. (b) 500 34
Southwest Airlines Co. 1,500 24
Laidlaw, Inc. 3,800 20
----------
433
Utilities 1.6%
Edison International 13,100 343
Coastal Corp. 4,700 167
Columbia Gas Systems, Inc. 1,800 114
DTE Energy Co. 2,600 82
Duke Energy Corp. 1,400 70
Peoples Energy Corp. 1,200 40
Public Service Enterprise Group, Inc. 1,100 38
Consolidated Edison, Inc. 900 31
Central & South West Corp. 900 18
Constellation Energy Group, Inc. 400 12
Sempra Energy 500 9
----------
924
----------
Total Common Stocks 56,353
(Cost $47,350) ==========
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 0.2%
- --------------------------------------------------------------------------------
Principal
Amount
(000s)
Repurchase Agreement 0.2%
State Street Bank
4.000% due 01/03/2000 $ 134 134
(Dated 12/31/1999. Collateralized by
Federal Home Loan Mortgage Corporation
6.680% due 12/28/2001 valued at $140.
Repurchase proceeds are $134.)
----------
Total Short-Term Instruments 134
(Cost $134) ----------
Total Investments (a) 99.5% $ 56,487
(Cost $47,484)
Other Assets and Liabilities (Net) 0.5% 269
----------
Net Assets 100.0% $ 56,756
==========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 10,658
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (1,655)
----------
Unrealized appreciation-net $ 9,003
==========
(b) Non-income producing security.
See accompanying notes 27
<PAGE>
Schedule of Investments
Value Fund
December 31, 1999 (Unaudited)
Value
Shares (000s)
- --------------------------------------------------------------------------------
COMMON STOCKS 98.5%
- --------------------------------------------------------------------------------
Aerospace 2.1%
Northrop Grumman Corp. 82,000 $ 4,433
----------
Capital Goods 6.2%
Dana Corp. 285,000 8,532
Parker Hannifin Corp. 90,000 4,618
----------
13,150
Communications 7.6%
Bell Atlantic Corp. 130,000 8,003
GTE Corp. 113,000 7,974
----------
15,977
Consumer Discretionary 15.5%
Tupperware Corp. 450,000 7,622
Thomas & Betts Corp. 210,000 6,694
Brunswick Corp. 210,000 4,672
Whirlpool Corp. 71,600 4,658
UST, Inc. 180,000 4,534
Liz Claiborne, Inc. 115,000 4,327
Lanier Worldwide, Inc. 122,000 473
----------
32,980
Consumer Services 2.1%
Central Newspapers, Inc. 'A' 116,000 4,567
----------
Consumer Staples 4.2%
SUPERVALU, Inc. 235,000 4,700
Fortune Brands, Inc. 125,000 4,133
----------
8,833
Energy 16.7%
Conoco, Inc. 372,000 9,254
Kerr McGee Corp. 145,000 8,990
Ultramar Diamond Shamrock Corp. 375,000 8,508
Santa Fe International Corp. 175,000 4,528
Repsol SA SP - ADR 180,000 4,185
----------
35,465
Financial & Business Services 12.8%
Morgan, J.P. & Co., Inc. 67,000 8,484
Deluxe Corp. 275,000 7,545
PNC Bank Corp. 100,000 4,450
Union Planters Corp. 105,000 4,141
Conseco, Inc. 139,600 2,495
----------
27,115
Health Care 5.7%
Mallinckrodt, Inc. 250,000 7,953
Abbott Laboratories 115,000 4,176
----------
12,129
Materials & Processing 12.1%
Westvaco Corp. 275,000 8,972
USX-U.S. Steel Group, Inc. 270,000 8,910
USG Corp. (b) 85,000 4,006
IMC Global, Inc. 230,000 3,766
----------
25,654
Technology 5.5%
Intel Corp. 51,000 4,198
Unisys Corp. (b) 130,000 4,152
Harris Corp. 122,000 3,256
----------
11,606
Utilities 8.0%
Public Service Enterprise Group, Inc. 245,000 8,529
DTE Energy Co. 135,000 4,236
NICOR, Inc. 130,000 4,225
----------
16,990
----------
Total Common Stocks 208,899
==========
(Cost $222,642)
Principal
Amount Value
(000s) (000s)
- --------------------------------------------------------------------------------
SHORT-TERM INSTRUMENTS 1.7%
- --------------------------------------------------------------------------------
Repurchase Agreement 1.7%
State Street Bank
4.000% due 01/03/2000 $ 3,510 $ 3,510
(Dated 12/31/1999. Collateralized by
Federal National Mortgage Association
0.000% due 01/18/2000 valued at $3,581.
Repurchase proceeds are $3,511.)
----------
Total Short-Term Instruments (Cost $3,510) 3,510
==========
Total Investments (a) 100.2% $ 212,409
(Cost $226,152)
Other Assets and Liabilities (Net) (0.2%) (392)
----------
Net Assets 100.0% $ 212,017
==========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 11,412
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (25,155)
----------
Unrealized depreciation-net $ (13,743)
==========
(b) Non-income producing security.
28 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights
Selected Per Share Data
for the Year or Period Ended: Capital Appreciation Fund Equity Income Fund Innovation Fund
--------------------------- -------------------------- --------------------------
12/31/1999 (b) 06/30/1999 12/31/1999 (b) 06/30/1999 12/31/1999 (b) 06/30/1999
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 26.63 $ 26.01 $ 15.59 $ 16.04 $ 37.52 $ 24.28
- ------------------------------------------------------------------------- -------------------------- --------------------------
Net Investment Income (Loss) (a) (0.01) 0.06 0.19 0.40 (0.23) (0.29)
- ------------------------------------------------------------------------- -------------------------- --------------------------
Net Realized / Unrealized Gain (Loss) on
Investments (a) 3.37 2.34 (2.09) 1.27 34.77 14.79
- ------------------------------------------------------------------------- -------------------------- --------------------------
Total Income from Investment Operations 3.36 2.40 (1.90) 1.67 34.54 14.50
- ------------------------------------------------------------------------- -------------------------- --------------------------
Dividends from Net Investment Income (0.08) (0.13) (0.25) (0.36) 0.00 0.00
- ------------------------------------------------------------------------- -------------------------- --------------------------
Distributions from Net Realized Capital Gains (5.00) (1.65) (2.64) (1.76) (6.39) (1.26)
- ------------------------------------------------------------------------- -------------------------- --------------------------
Total Distributions (5.08) (1.78) (2.89) (2.12) (6.39) (1.26)
- ------------------------------------------------------------------------- -------------------------- --------------------------
Net Asset Value End of Period 24.91 26.63 10.80 15.59 65.67 37.52
- ------------------------------------------------------------------------- -------------------------- --------------------------
Total Return (%) 13.84 10.17 (11.63) 12.21 94.92 61.62
- ------------------------------------------------------------------------- -------------------------- --------------------------
Net Assets End of Period (000s) $ 401 $ 339 $ 114 $ 106 $ 44,373 $ 18,366
- ------------------------------------------------------------------------- -------------------------- --------------------------
Ratio of Expenses to Average Net Assets (%) 1.10* 1.10 1.13* 1.10 1.30* 1.30
- ------------------------------------------------------------------------- -------------------------- --------------------------
Ratio of Net Investment Income (Loss) to
Average Net Assets (%) (0.07)* 0.24 2.74* 2.73 (0.98)* (0.89)
- ------------------------------------------------------------------------- -------------------------- --------------------------
Portfolio Turnover Rate (%) 52 120 26 76 102 119
- ------------------------------------------------------------------------- -------------------------- --------------------------
</TABLE>
<TABLE>
<CAPTION>
Selected Per Share Data
for the Year or Period Ended: Mid-Cap Growth Fund Renaissance Fund Tax-Efficient Equity Fund
--------------------------- --------------------------- ----------------------------
12/31/1999 (b) 06/30/1999 12/31/1999 (b) 06/30/1999 12/31/1999 (b) 06/30/1999 (c)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 22.90 $ 23.99 $ 18.22 $ 19.10 $ 11.59 $ 10.00
- ----------------------------------------------------------------------- -------------------------- ----------------------------
Net Investment Income (Loss) (a) 0.00 0.03 (0.02) 0.00 0.01 0.03
- ----------------------------------------------------------------------- -------------------------- ----------------------------
Net Realized / Unrealized Gain (Loss) on
Investments (a) 3.03 (0.04) (0.44) 1.45 0.74 1.56
- ----------------------------------------------------------------------- -------------------------- ----------------------------
Total Income from Investment Operations 3.03 (0.01) (0.46) 1.45 0.75 1.59
- ----------------------------------------------------------------------- -------------------------- ----------------------------
Dividends from Net Investment Income 0.00 (0.01) 0.00 0.00 0.00 0.00
- ----------------------------------------------------------------------- -------------------------- ----------------------------
Distributions from Net Realized Capital Gains (0.02) (1.07) (3.45) (2.33) 0.00 0.00
- ----------------------------------------------------------------------- -------------------------- ----------------------------
Total Distributions (0.02) (1.08) (3.45) (2.33) 0.00 0.00
- ----------------------------------------------------------------------- -------------------------- ----------------------------
Net Asset Value End of Period 25.91 22.90 14.31 18.22 12.34 11.59
- ----------------------------------------------------------------------- -------------------------- ----------------------------
Total Return (%) 13.26 0.25 (1.14) 10.01 6.47 15.90
- ----------------------------------------------------------------------- -------------------------- ----------------------------
Net Assets End of Period (000s) $ 288 $ 359 $ 58 $ 192 $ 12 $ 869
- ----------------------------------------------------------------------- -------------------------- ----------------------------
Ratio of Expenses to Average Net Assets (%) 1.10* 1.10 1.25* 1.25 1.10* 1.11*
- ----------------------------------------------------------------------- -------------------------- ----------------------------
Ratio of Net Investment Income (Loss) to
Average Net Assets (%) 0.04* 0.16 (0.17)* (0.02) 0.16* 0.30*
- ----------------------------------------------------------------------- -------------------------- ----------------------------
Portfolio Turnover Rate (%) 76 85 68 221 14 13
- ----------------------------------------------------------------------- -------------------------- ----------------------------
</TABLE>
<TABLE>
<CAPTION>
Selected Per Share Data
for the Year or Period Ended: Value Fund
----------------------------
12/31/1999 (b) 06/30/1999
<S> <C> <C>
Net Asset Value Beginning of Period $ 15.29 $ 15.64
- --------------------------------------------------------------------------------------------------
Net Investment Income (a) 0.12 0.23
- --------------------------------------------------------------------------------------------------
Net Realized / Unrealized Gain (Loss) on Investments (a) (1.06) 1.37
- --------------------------------------------------------------------------------------------------
Total Income from Investment Operations (0.94) 1.60
- --------------------------------------------------------------------------------------------------
Dividends from Net Investment Income (0.15) (0.23)
- --------------------------------------------------------------------------------------------------
Distributions from Net Realized Capital Gains (2.57) (1.72)
- --------------------------------------------------------------------------------------------------
Total Distributions (2.72) (1.95)
- --------------------------------------------------------------------------------------------------
Net Asset Value End of Period 11.63 15.29
- --------------------------------------------------------------------------------------------------
Total Return (%) (5.78) 12.00
- --------------------------------------------------------------------------------------------------
Net Assets End of Period (000s) $ 23 $ 118
- --------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets (%) 1.10* 1.10
- --------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to Average Net Assets (%) 1.66* 1.61
- --------------------------------------------------------------------------------------------------
Portfolio Turnover Rate (%) 65 101
- --------------------------------------------------------------------------------------------------
* Annualized
(a) Per share amounts based on average number of shares outstanding during the period.
(b) Unaudited
(c) Commenced operations on July 10, 1998
</TABLE>
See accompanying notes 29
<PAGE>
Statements of Assets and Liabilities
For the six months ended December 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Tax-
Capital Equity Efficient
Appreciation Income Innovation Mid-Cap Renaissance Equity Value
Amounts in thousands, except per Fund Fund Fund Growth Fund Fund Fund Fund
share amounts ------------- --------- ------------ ----------- ----------- ---------- ---------
Assets:
<S> <C> <C> <C> <C> <C> <C> <C>
Investments, at value $ 951,427 $ 153,954 $ 3,507,284 $ 1,044,508 $ 543,672 $ 56,487 $ 212,409
- ---------------------------------------- ------------- --------- ------------ ----------- ----------- ---------- ---------
Cash and foreign currency 28 0 0 69 0 0 104
- ---------------------------------------- ------------- --------- ------------ ----------- ----------- ---------- ---------
Receivable for investments and foreign
currency sold 10,580 2,187 38,942 12,378 12,776 0 0
- ---------------------------------------- ------------- --------- ------------ ----------- ----------- ---------- ---------
Receivable for Fund shares sold 268 180 44,960 931 1,490 358 156
- ---------------------------------------- ------------- --------- ------------ ----------- ----------- ---------- ---------
Interest and dividends receivable 655 525 113 810 1,114 39 605
- ---------------------------------------- ------------- --------- ------------ ----------- ----------- ---------- ---------
Other assets 0 0 33 0 2 4 0
- ---------------------------------------- ------------- --------- ------------ ----------- ----------- ---------- ---------
962,958 156,846 3,591,332 1,058,696 559,054 56,888 213,274
======================================== ============= ========= ============ =========== =========== ========== =========
Liabilities:
Payable for investments and foreign
currency purchased $ 4,286 $ 66 $ 106,373 $ 15,084 $ 8,929 $ 5 $ 0
- ---------------------------------------- ------------- --------- ------------ ----------- ----------- ---------- ---------
Payable for Fund shares redeemed 444 575 18,101 17,395 3,243 54 1,017
- ---------------------------------------- ------------- --------- ------------ ----------- ----------- ---------- ---------
Dividends payable 0 0 0 1 0 0 0
- ---------------------------------------- ------------- --------- ------------ ----------- ----------- ---------- ---------
Accrued investment advisory fee 378 63 1,680 410 283 22 85
- ---------------------------------------- ------------- --------- ------------ ----------- ----------- ---------- ---------
Accrued administration fee 238 42 1,033 268 189 17 62
- ---------------------------------------- ------------- --------- ------------ ----------- ----------- ---------- ---------
Accrued distribution fee 88 24 1,432 115 307 18 63
- ---------------------------------------- ------------- --------- ------------ ----------- ----------- ---------- ---------
Accrued servicing fee 89 14 645 89 118 12 30
- ---------------------------------------- ------------- --------- ------------ ----------- ----------- ---------- ---------
Variation margin payable 0 0 0 0 0 0 0
- ---------------------------------------- ------------- --------- ------------ ----------- ----------- ---------- ---------
Other liabilities 0 0 0 0 25 4 0
- ---------------------------------------- ------------- --------- ------------ ----------- ----------- ---------- ---------
5,523 784 129,264 33,362 13,094 132 1,257
======================================== ============= ========= ============ =========== =========== ========== =========
Net Assets $ 957,435 $ 156,062 $ 3,462,068 $ 1,025,334 $ 545,960 $ 56,756 $ 212,017
======================================== ============= ========= ============ =========== =========== ========== =========
Net Assets Consist of:
Paid in capital $ 668,510 $ 170,636 $ 1,792,055 $ 754,197 $ 556,628 $ 49,699 $ 224,128
- ---------------------------------------- ------------- --------- ------------ ----------- ----------- ---------- ---------
Undistributed (overdistributed) net
investment income (810) 4,081 (14,122) (1,038) 38,842 (50) 10,182
- ---------------------------------------- ------------- --------- ------------ ----------- ----------- ---------- ---------
Accumulated undistributed net realized
gain (loss) 39,378 (3,493) 114,988 13,056 (39,815) (1,896) (8,550)
- ---------------------------------------- ------------- --------- ------------ ----------- ----------- ---------- ---------
Net unrealized appreciation (depreciation) 250,357 (15,162) 1,569,147 259,119 (9,695) 9,003 (13,743)
- ---------------------------------------- ------------- --------- ------------ ----------- ----------- ---------- ---------
$ 957,435 $ 156,062 $ 3,462,068 $ 1,025,334 $ 545,960 $ 56,756 $ 212,017
======================================== ============= ========= ============ =========== =========== ========== =========
Net Assets:
Class D $ 401 $ 114 $ 44,373 $ 288 $ 58 $ 12 $ 23
- ---------------------------------------- ------------- --------- ------------ ----------- ----------- ---------- ---------
Other Classes 957,034 155,948 3,417,695 1,025,046 545,902 56,744 211,994
- ---------------------------------------- ------------- --------- ------------ ----------- ----------- ---------- ---------
Shares Issued and Outstanding:
Class D 16 11 676 11 4 1 2
- ---------------------------------------- ------------- --------- ------------ ----------- ----------- ---------- ---------
Net Asset Value and Redemption Price
Per Share
(Net Assets Per Share Outstanding)
Class D $ 24.91 $ 10.80 $ 65.67 $ 25.91 $ 14.31 $ 12.34 $ 11.63
- ---------------------------------------- ------------- --------- ------------ ----------- ----------- ---------- ---------
Cost of Investments Owned $ 701,070 $ 169,116 $ 1,938,136 $ 785,389 $ 553,369 $ 47,484 $ 226,152
======================================== ============= ========= ============ =========== =========== ========== =========
</TABLE>
30 See accompanying notes
<PAGE>
Statements of Operations
For the six months ended December 31, 1999(Unaudited)
<TABLE>
<CAPTION>
Capital Mid-Cap Tax-
Amounts in thousands Appreciation Equity Income Innovation Growth Renaissance Efficient Value
Fund Fund Fund Fund Fund Equity Fund Fund
------------ ------------- ---------- -------- ----------- ----------- --------
Investment Income:
<S> <C> <C> <C> <C> <C> <C> <C>
Dividends, net of foreign taxes $ 4,649 $ 3,438 $ 155 $ 4,686 $ 3,133 $ 263 $ 2,999
- -------------------------------------------- ------------ ------------- ---------- -------- ----------- ----------- --------
Interest 607 70 2,939 1,045 252 15 258
- -------------------------------------------- ------------ ------------- ---------- -------- ----------- ----------- --------
Total Income 5,256 3,508 3,094 5,731 3,385 278 3,257
============================================ ============ ============= ========== ======== =========== =========== ========
Expenses:
Investment advisory fees 2,257 416 5,997 2,252 1,826 103 502
- -------------------------------------------- ------------ ------------- ---------- -------- ----------- ----------- --------
Administration fees 1,415 276 3,689 1,479 1,217 79 377
- -------------------------------------------- ------------ ------------- ---------- -------- ----------- ----------- --------
Servicing fees - Class D 0 0 30 0 0 1 0
- -------------------------------------------- ------------ ------------- ---------- -------- ----------- ----------- --------
Distribution and/or servicing
fees - Other Classes 1,028 252 7,389 1,180 2,730 137 600
- -------------------------------------------- ------------ ------------- ---------- -------- ----------- ----------- --------
Trustees' fees 38 7 55 36 23 2 8
- -------------------------------------------- ------------ ------------- ---------- -------- ----------- ----------- --------
Miscellaneous 24 25 56 12 15 1 7
- -------------------------------------------- ------------ ------------- ---------- -------- ----------- ----------- --------
Total Expenses 4,762 976 17,216 4,959 5,811 323 1,494
- -------------------------------------------- ------------ ------------- ---------- -------- ----------- ----------- --------
Net Investment Income (Loss) 494 2,532 (14,122) 772 (2,426) (45) 1,763
============================================ ============ ============= ========== ======== =========== =========== ========
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments 84,228 8,195 349,045 13,132 16,435 (1,668) 17,218
- -------------------------------------------- ------------ ------------- ---------- -------- ----------- ----------- --------
Net realized gain (loss) on foreign
currency transactions 0 0 0 0 2,761 0 0
- -------------------------------------------- ------------ ------------- ---------- -------- ----------- ----------- --------
Net change in unrealized appreciation
(depreciation) on investments 28,003 (34,549) 1,161,980 112,366 (32,710) 5,713 (32,592)
- -------------------------------------------- ------------ ------------- ---------- -------- ----------- ----------- --------
Net change in unrealized appreciation
(depreciation)on translation of assets
and liabilities denominated in foreign
currencies 0 0 0 0 3 0 0
- -------------------------------------------- ------------ ------------- ---------- -------- ----------- ----------- --------
Net Gain (Loss) 112,231 (26,354) 1,511,025 125,498 (13,511) 4,045 (15,374)
- -------------------------------------------- ------------ ------------- ---------- -------- ----------- ----------- --------
Net Increase (Decrease) in Assets
Resulting from Operations $112,725 $(23,822) $1,496,903 $126,270 $(15,937) $4,000 $(13,611)
============================================ ============ ============= ========== ======== =========== ========== =========
</TABLE>
See accompanying notes 31
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Amounts in thousands Capital Appreciation Fund Equity Income Fund Innovation Fund
------------------------- ------------------ -----------------------------
Six Six Six
Months Ended Year Ended Months Ended Year Ended Months Ended Year Ended
Increase (Decrease) in Net Assets from: December 31, June 30, 1999 December 31, June 30, 1999 December 31, June 30, 1999
1999 1999 1999
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ 494 $ 4,855 $ 2,532 $ 5,424 $ (14,122) $ (10,056)
- --------------------------------------- ------------- ------------ ------------ ---------- ----------- ----------
Net realized gain (loss) 84,228 127,483 8,195 28,130 349,045 82,075
- --------------------------------------- ------------- ------------ ------------ ---------- ----------- ----------
Net change in unrealized
appreciation (depreciation) 28,003 (27,333) (34,549) (8,864) 1,161,980 250,804
- --------------------------------------- ------------- ------------ ------------ ---------- ----------- ----------
Net increase (decrease)
resulting from operations 112,725 105,005 (23,822) 24,690 1,496,903 322,823
======================================= ============= ============ ============ ========== =========== ==========
Distributions to Shareholders:
From net investment income
Class D (1) (1) (2) (3) 0 0
- --------------------------------------- ------------- ------------ ------------ ---------- ----------- ----------
Other Classes (2,830) (5,605) (3,395) (5,316) 0 0
- --------------------------------------- ------------- ------------ ------------ ---------- ----------- ----------
From net realized capital gains
- --------------------------------------- ------------- ------------ ------------ ---------- ----------- ----------
Class D (67) (14) (22) (12) (3,624) (143)
- --------------------------------------- ------------- ------------ ------------ ---------- ----------- ----------
Other Classes (168,437) (70,693) (31,512) (22,655) (288,954) (23,411)
- --------------------------------------- ------------- ------------ ------------ ---------- ----------- ----------
Total Distributions (171,335) (76,313) (34,931) (27,986) (292,578) (23,554)
======================================= ============= ============ ============ ========== =========== ==========
Fund Share Transactions:
Receipts for shares sold
- --------------------------------------- ------------- ------------ ------------ ---------- ----------- ----------
Class D 33 360 28 89 13,169 30,881
- --------------------------------------- ------------- ------------ ------------ ---------- ----------- ----------
Other Classes 295,184 691,020 15,040 74,002 1,502,408 1,280,398
- --------------------------------------- ------------- ------------ ------------ ---------- ----------- ----------
Issued as reinvestment of distributions
- --------------------------------------- ------------- ------------ ------------ ---------- ----------- ----------
Class D 68 15 24 15 3,612 142
- --------------------------------------- ------------- ------------ ------------ ---------- ----------- ----------
Other Classes 155,379 62,910 34,149 27,156 270,072 21,993
- --------------------------------------- ------------- ------------ ------------ ---------- ----------- ----------
Cost of shares redeemed
- --------------------------------------- ------------- ------------ ------------ ---------- ----------- ----------
Class D (11) (165) (6) (112) (6,285) (15,840)
- --------------------------------------- ------------- ------------ ------------ ---------- ----------- ----------
Other Classes (538,234) (802,749) (36,425) (97,556) (790,136) (738,267)
- --------------------------------------- ------------- ------------ ------------ ---------- ----------- ----------
Net increase (decrease) resulting from
Fund share transactions (87,581) (48,609) 12,810 3,594 992,840 579,307
- --------------------------------------- ------------- ------------ ------------ ---------- ----------- ----------
Total Increase (Decrease) in Net Assets (146,191) (19,917) (45,943) 298 2,197,165 878,576
======================================= ============= ============ ============ ========== =========== ==========
Net Assets:
Beginning of period 1,103,626 1,123,543 202,005 201,707 1,264,903 386,327
- --------------------------------------- ------------- ------------ ------------ ---------- ----------- ----------
End of period * $ 957,435 $1,103,626 $ 156,062 $ 202,005 $ 3,462,068 $1,264,903
- --------------------------------------- ------------- ------------ ------------ ---------- ----------- ----------
* Including net undistributed
(overdistributed)
investment income of: $ (810) $ 1,527 $ 4,081 $ 4,946 $ (14,122) $ 0
- --------------------------------------- ------------- ------------ ------------ ---------- ----------- ----------
</TABLE>
32 See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Mid-Cap Growth Fund Renaissance Fund Tax-Efficient Equity Fund
------------------------- ------------------------ -----------------------------
Six Months Six Months Six Months Period from
Ended Year Ended Ended Year Ended Ended July 10, 1998
December 31, June 30, December 31, June 30, December 31, to
1999 1999 1999 1999 1999 June 30, 1999
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
$ 772 $ 1,713 $ (2,426) $ (4,312) $ (45) $ (27)
------------------------ ----------------------- -------------------------
13,132 867 19,196 100,928 (1,668) (228)
------------------------ ----------------------- -------------------------
112,366 7,029 (32,707) (42,518) 5,713 3,290
------------------------ ----------------------- -------------------------
126,270 9,609 (15,937) 54,098 4,000 3,035
======================== ======================= =========================
0 0 0 0 0 0
------------------------ ----------------------- -------------------------
(3,122) (423) 0 0 0 0
------------------------ ----------------------- -------------------------
------------------------ ----------------------- -------------------------
0 (9) (11) (13) 0 0
------------------------ ----------------------- -------------------------
(716) (41,274) (112,387) (80,848) 0 0
------------------------ ----------------------- -------------------------
(3,838) (41,706) (112,398) (80,861) 0 0
======================== ======================= =========================
------------------------ ----------------------- -------------------------
126 438 28 84 0 750
------------------------ ----------------------- -------------------------
418,241 944,828 76,991 306,855 32,319 29,356
------------------------ ----------------------- -------------------------
------------------------ ----------------------- -------------------------
0 10 11 13 0 0
------------------------ ----------------------- -------------------------
3,493 38,508 103,646 74,646 0 0
------------------------ ----------------------- -------------------------
------------------------ ----------------------- -------------------------
(236) (229) (153) (27) (794) 0
------------------------ ----------------------- -------------------------
(526,847) (737,211) (166,053) (352,007) (6,720) (5,190)
------------------------ ----------------------- -------------------------
(105,223) 246,344 14,470 29,564 24,805 24,916
------------------------ ----------------------- -------------------------
17,209 214,247 (113,865) 2,801 28,805 27,951
======================== ======================= =========================
1,008,125 793,878 659,825 657,024 27,951 0
------------------------ ----------------------- -------------------------
$ 1,025,334 $ 1,008,125 $ 545,960 $ 659,825 $ 56,756 $ 27,951
------------------------ ----------------------- -------------------------
$ (1,038)$ 1,312 $ 38,842 $ 41,268 $ (50) $ (5)
------------------------ ----------------------- -------------------------
</TABLE>
Value Fund
---------------------------
Six Months
Ended Year Ended
December 31, June 30,
1999 1999
(Unaudited)
$ 1,763 $ 3,245
--------------------------
17,218 29,420
--------------------------
(32,592) (6,992)
--------------------------
(13,611) 25,673
==========================
0 (2)
--------------------------
(2,308) (3,075)
--------------------------
--------------------------
(5) (11)
--------------------------
(38,750) (26,320)
--------------------------
(41,063) (29,408)
==========================
--------------------------
111 8
--------------------------
52,562 99,132
--------------------------
--------------------------
5 13
--------------------------
39,103 28,058
--------------------------
--------------------------
(199) 0
--------------------------
(56,529) (131,197)
--------------------------
35,053 (3,986)
--------------------------
(19,621) (7,721)
==========================
231,638 239,359
--------------------------
$ 212,017 $ 231,638
--------------------------
$ 10,182 $ 10,727
--------------------------
See accompanying notes 33
<PAGE>
Notes to Financial Statements
December 31, 1999 (Unaudited)
1. Organization
PIMCO Funds: Multi-Manager Series (the "Trust" is registered under the
Investment Company Act of 1940, as amended as an open-end management investment
company organized as a Massachusetts business trust. The Trust currently
consists of twenty-six 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 statement of operations is
shown net of foreign taxes withheld on dividends from foreign securities.
Foreign taxes withheld were as follows: Capital Appreciation - $42,184; Equity
Income Fund - $362; Renaissance Fund - $55,595; Tax-Efficient Equity Fund -
$838; and Value Fund - $297.
34
<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.
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: 0.60% for the Renaissance
Fund; 0.65% for the Innovation Fund; 0.50% for the Growth Fund; and 0.45% for
all other Funds. Each of the Funds also has a sub-advisor which, under the
supervision of PIMCO Advisors, directs the investments of the Fund's assets. All
of the sub-advisors are affiliates of PIMCO Advisors. The advisory fees received
by PIMCO Advisors are paid in all or in part to each of the sub-advisors in
accordance with the portfolio management agreements.
Administration Fee. PIMCO provides administrative services to the Trust for
which it receives from each Fund a monthly administrative fee based on each
share class's average daily net assets. The Administration Fee for Class D is
charged at the annual rate of 0.40%. The Administration Fee for the
Institutional and Administrative Classes is charged at the annual rate of 0.25%.
The Administration Fee for the A, B and C Classes is charged at the annual rate
of 0.40%.
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):
Distribution Fee(%) Servicing Fee(%)
- --------------------------------------------------------------------------------
Class A
All Funds -- 0.25
Class B
All Funds 0.75 0.25
Class C
All Funds 0.75 0.25
Class D
All Funds -- 0.25
35
<PAGE>
Notes to Financial Statements (Cont.)
December 31, 1999 (Unaudited)
PFD also receives the proceeds of the initial sales charges paid by the
shareholders upon the purchase of Class A shares and the contingent deferred
sales charges paid by the shareholders upon certain redemptions of Class A, B
and C shares. For the period ended December 31, 1999, PFD received $923,654
representing commissions (sales charges) and contingent deferred sales charges.
Expenses. The Trust is also responsible for the following expenses: (i) salaries
and other compensation of any of the Trust's executive officers and employees
who are not officers, directors, stockholders or employees of PIMCO Advisors,
PIMCO, or its subsidiaries or affiliates; (ii) taxes and governmental fees;
(iii) brokerage fees and commissions and other portfolio transaction expenses;
(iv) the cost of borrowing money, including interest expenses; (v) fees and
expenses of the Trustees who are not "interested persons" of the Advisor, PIMCO,
Portfolio Managers, or the Trust, and any counsel retained exclusively for their
benefit; (vi) extraordinary expenses, including costs of litigation and
indemnification expenses; (vii) expenses such as organizational expenses, which
are capitalized in accordance with generally accepted accounting principles; and
(viii) any expenses allocated or allocable to a specific class of shares, which
include service fees payable with respect to the Administrative Class shares and
may include certain other expenses as permitted by the Trust's Multiple Class
Plan adopted pursuant to Rule 18f-3 under the Investment Company Act of 1940 and
subject to review and approval by the Trustees. The ratio of expenses to average
net assets, as disclosed in the Financial Highlights, may differ from the annual
fund operating expenses per share class as disclosed in the Prospectus for the
reasons set forth above.
Each unaffiliated Trustee receives an annual retainer of $45,000, plus $2,000
for each Board of Trustees meeting attended, and $500 for each Audit and
Performance Committee meeting attended, plus reimbursement of related expenses.
Each Audit and Performance Committee receives an additional annual retainer of
$1,000, the Chairman of the Audit and Performance Committees receives an
additional annual retainer of $2,000, the Chairman of the Independent Trustees
receives an additional annual retainer of $6,000, and each Vice Chairman of the
entire Board receives an additional annual retainer of $3,000. These expenses
are allocated to the Funds of the Trust according to their respective net
assets.
4. Purchases and Sales of Securities
Purchases and sales of securities (excluding short-term investments) for the
period ended December 31, 1999 were as follows (amounts in thousands):
Non - U.S. Government/Agency
------------------------------------------
Purchases Sales
- --------------------------------------------------------------------------------
Capital Appreciation Fund $ 494,990 $ 773,759
Equity Income Fund 45,905 65,026
Innovation Fund 2,343,699 1,813,122
Mid-Cap Growth Fund 719,963 801,172
Renaissance Fund 399,457 485,913
Tax-Efficient Equity Fund 457,989 502,575
Value Fund 145,200 137,644
5. Line of Credit
Effective December 14, 1999, the funds, along with certain other funds managed
by PIMCO, entered into an unsecured $350,000,000 bank line of credit agreement
with State Street Bank. 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 December 31, 1999.
6. Federal Income Tax Matters
As of June 30, 1999, the Fund listed in the table below had remaining capital
loss carryforwards that were realized in current and prior years. Additionally,
the Tax-Efficient Equity Fund realized capital losses, in the amount of
$174,775, during the period November 1, 1998 through June 30, 1999, 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.
Capital Loss Carryforwards
----------------------------------------
Realized
Losses Expiration
- --------------------------------------------------------------------------------
Tax-Efficient Equity Fund $ 27,778 6/30/2007
7. In-Kind Transactions.
For the period ended December 31, 1999, the following funds realized gains
(losses) from in-kind redemptions of approximately (amounts in thousands):
December 31, 1999 June 30, 1999
- --------------------------------------------------------------------------------
Capital Appreciation Fund $ 0 $ 2,839
Mid-Cap Growth Fund 2,312 0
8. Acquisition by Allianz AG
The Allianz AG acquisition of majority ownership of PIMCO Advisors has been
approved by the Boards of Allianz AG and PIMCO on October 31, 1999, subject to
regulatory review and approval, as well as the vote of the shareholders on
March 3, 2000.
36
<PAGE>
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>
Capital Appreciation Fund Equity Income Fund
------------------------------------------------- -----------------------------------------------
Period Ended 12/31/1999 Year Ended 6/30/1999 Period Ended 12/31/1999 Year Ended 6/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------- -----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receipts for shares sold
Class D 1 $ 33 14 $ 360 2 $ 28 6 $ 89
- --------------------------- ------------------------------------------------- -----------------------------------------------
Other classes 11,512 295,184 27,601 691,020 1,095 15,040 5,060 74,002
- --------------------------- ------------------------------------------------- -----------------------------------------------
Issued as reinvestment
of distributions
Class D 3 68 1 15 2 24 1 15
- --------------------------- ------------------------------------------------- -----------------------------------------------
Other classes 6,605 155,379 2,673 62,910 3,189 34,149 1,924 27,156
- --------------------------- ------------------------------------------------- -----------------------------------------------
Cost of shares redeemed
Class D (1) (11) (7) (165) 0 (6) (7) (112)
- --------------------------- ------------------------------------------------- -----------------------------------------------
Other classes (21,040) (538,234) (32,077) (802,749) (2,792) (36,425) (6,580) (97,556)
- --------------------------- ------------------------------------------------- -----------------------------------------------
Net increase resulting from
Fund share transactions (2,920) $ (87,581) (1,795) $ (48,609) 1,496 $ 12,810 404 $ 3,594
=========================== ================================================= ===============================================
<CAPTION>
Innovation Fund
-------------------------------------------------
Period Ended 12/31/1999 Year Ended 6/30/1999
Shares Amount Shares Amount
-------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Class D 261 $ 13,169 951 $ 30,881
- --------------------------- -------------------------------------------------
Other classes 32,664 1,502,408 42,353 1,280,398
- --------------------------- -------------------------------------------------
Issued as reinvestment
of distributions
Class D 65 3,612 5 142
- --------------------------- -------------------------------------------------
Other classes 4,988 270,072 824 21,993
- --------------------------- -------------------------------------------------
Cost of shares redeemed
Class D (140) (6,285) (472) (15,840)
- --------------------------- -------------------------------------------------
Other classes (17,834) (790,136) (25,216) (738,267)
- --------------------------- -------------------------------------------------
Net increase resulting from
Fund share transactions 20,004 $ 992,840 18,445 $579,307
=========================== =================================================
</TABLE>
<TABLE>
<CAPTION>
Mid-Cap Growth Fund Renaissance Fund
------------------------------------------------- -----------------------------------------------
Period Ended 12/31/1999 Year Ended 6/30/1999 Period Ended 12/31/1999 Year Ended 6/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------- -----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receipts for shares sold
Class D 5 $ 126 20 $ 438 1 $ 28 5 $ 84
- --------------------------- ------------------------------------------------- -----------------------------------------------
Other classes 18,878 418,241 43,026 944,828 4,656 76,991 17,955 306,855
- --------------------------- ------------------------------------------------- -----------------------------------------------
Issued as reinvestment
of distributions
Class D 0 0 0 10 1 11 1 13
- --------------------------- ------------------------------------------------- -----------------------------------------------
Other classes 140 3,493 1,803 38,508 7,944 103,646 4,948 74,646
- --------------------------- ------------------------------------------------- -----------------------------------------------
Cost of shares redeemed
Class D (10) (236) (10) (229) (9) (153) (2) (27)
- --------------------------- ------------------------------------------------- -----------------------------------------------
Other classes (23,420) (526,847) (33,835) (737,211) (10,282) (166,053) (20,746) (352,007)
- --------------------------- ------------------------------------------------- -----------------------------------------------
Net increase resulting from
Fund share transactions (4,407) $(105,223) 11,004 $ 246,344 2,311 $ 14,470 2,161 $ 29,564
=========================== ================================================= ===============================================
<CAPTION>
Tax-Efficient Equity Fund
-------------------------------------------------
Period from 7/10/1998
Period Ended 12/31/1999 to 6/30/1999
Shares Amount Shares Amount
-------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Class D 0 $ 0 75 $ 750
- --------------------------- -------------------------------------------------
Other classes 2,855 32,319 2,851 29,356
- --------------------------- -------------------------------------------------
Issued as reinvestment
of distributions
Class D 0 0 0 0
- --------------------------- -------------------------------------------------
Other classes 0 0 0 0
- --------------------------- -------------------------------------------------
Cost of shares redeemed
Class D (74) (794) 0 0
- --------------------------- -------------------------------------------------
Other classes (588) (6,720) (505) (5,190)
- --------------------------- -------------------------------------------------
Net increase resulting from
Fund share transactions 2,193 $ 24,805 2,421 $ 24,916
=========================== =================================================
<CAPTION>
Value Fund
-------------------------------------------------
Period Ended 12/31/1999 Year Ended 6/30/1999
Shares Amount Shares Amount
-------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Class D 7 $ 111 1 $ 8
- --------------------------- -------------------------------------------------
Other classes 3,690 52,562 6,890 99,132
- --------------------------- -------------------------------------------------
Issued as reinvestment
of distributions
Class D 0 5 1 13
- --------------------------- -------------------------------------------------
Other classes 3,410 39,103 2,076 28,058
- --------------------------- -------------------------------------------------
Cost of shares redeemed
Class D (13) (199) 0 0
- --------------------------- -------------------------------------------------
Other classes (4,004) (56,529) (9,111) (131,197)
- --------------------------- -------------------------------------------------
Net increase resulting from
Fund share transactions 3,090 $ 35,053 (143) $ (3,986)
=========================== =================================================
</TABLE>
37
<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 & Trust Co., 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.
- --------------------------------------------------------------------------------
<PAGE>
Introducing the PIMCO Funds Innovation Center
With the start of the New Year, we've introduced the PIMCO Funds Innovation
Center to our Web site. The Innovation Center offers investors a unique way to
look at technology investing. It's designed both for investors with existing
technology holdings and for those who have yet to invest in the sector. Its
features include:
[GRAPHIC]
. Insight from Dennis McKechnie As manager of PIMCO Innovation Fund, Dennis
McKechnie has delivered impressive results for investors. You can read
about his investment process and strategy and benefit from his extensive
background in technology.
. Manager Commentary Weekly analysis and insight into the tech sector.
. Taking Stock Detailed profiles of some of our top tech holdings.
. Monthly Newsletter Download a complete technology update in PDF format.
. Manager Q&A Fund managers provide comments on the market and their funds.
To log on to the PIMCO Funds Innovation Center, simply go to our Home Page at
www.pimcofunds.com, and click on the "Innovation Center" link.
PZ034.2/00
[LOGO OF PIMCO FUNDS]
PIMCO Funds
Distributors LLC
2187 Atlantic Street
Stamford, CT 06902-6896
<PAGE>
PIMCO Funds Shareholder Update and Semi-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]
Wondering how to size up your fund's performance? For some tips on choosing the
right market index benchmark, turn to page 4.
December 31, 1999
Asset Allocation
Series
Share Classes
A B C
90/10 Portfolio
60/40 Portfolio
30/70 Portfolio
Page 2 Asset Allocation Committee Report
The Reign of Equities Continues
- --------------------------------------------------------------------------------
Page 3 Manager Spotlight
Q & A With Bill Gross
- --------------------------------------------------------------------------------
Page 4 Today's Investor
Your Fund's Market Index Benchmark
- --------------------------------------------------------------------------------
Page 6 Asset Allocation Series
PIMCO Funds Semi-Annual Report
- --------------------------------------------------------------------------------
Page 7 PIMCO Funds
90/10 Portfolio
- --------------------------------------------------------------------------------
Page 8 PIMCO Funds
60/40 Portfolio
- --------------------------------------------------------------------------------
Page 9 PIMCO Funds
30/70 Portfolio
- --------------------------------------------------------------------------------
Page 10 Underlying PIMCO Funds
[LOGO OF PIMCO FUNDS]
<PAGE>
Asset Allocation
Committee Report
The Reign of Equities Continues
Stocks
The bull market reigned supreme again this year, with a variety of indices,
including the NASDAQ Composite Index and the Dow Jones Industrial Average,
reaching record highs in 1999.
In the first quarter of the year, large-cap growth stocks dominated the market,
as they had done for much of 1998. However, in the second quarter, the market
rotated towards smaller-capitalization and lower-valuation issues. Rising
interest rates and a global economic recovery resulted in increased demand for
basic materials, which benefited these stocks. This rotation was short lived,
however, as growth stocks and, in particular, technology stocks, resumed their
lead in the third quarter.
In the fourth quarter, despite monetary tightening by the Federal Reserve, the
market continued to surge ahead. It remained dominated by growth-oriented
stocks, which saw significant price appreciations during the period. This
outstanding performance was seen across all market capitalizations, with
smaller-capitalization securities showing the greatest strength. In particular,
the market was fueled by the technology sector, which continued to show strong
earnings growth.
Overall, technology powered the market this year, greatly overshadowing the
performance of other sectors. Telecommunications, e-commerce and software were
all areas that grew at a rapid pace and, as a result, their stock prices soared.
We believe this trend will continue, as many areas of technology remain in early
stages of growth.
The outlook remains positive for the equity market. The Federal Reserve's
tightening policy has helped maintain a low-inflation, high-growth economic
environment that investors believe will help sustain the current level of equity
prices.
Bonds
Six months ago we suggested the clash between deflationary and inflationary
forces was likely to keep inflation in check, even as the global economy showed
signs of recovery. While this remains likely over the long run, it appears that
several unsustainable forces, including the surging economy, the tight labor
market and rising stock prices, currently have the upper hand. As a result,
inflation fears have increased and the bond market has suffered.
The Federal Reserve was active over the past six months. The Fed tightened
monetary policy again in August, and attacked the tight labor market in November
by increasing interest rates for a third time in 1999. However, Y2K concerns
prompted the Fed to flood the system with liquidity at year's end, increasing
the likelihood that further tightening will be necessary early next year.
Bond prices fell in many sectors of the market as interest rates continued to
rise. The benchmark 30-year Treasury yield rose to a 27-month high at 6.49%,
while the Lehman Brothers Aggregate Bond Index had its worst performance since
1994.
A notable exception to the overall poor performance of the market was
convertible bonds, which benefited from the spectacular rise in technology
stocks. Emerging market bonds also performed relatively well as the global
recovery supported this sector. Not surprisingly, inflation-indexed bonds were
aided by the expectation of higher inflation.
Looking ahead, the key to bonds next year is a smooth resolution of the opposing
inflationary and deflationary forces currently present.
Consumer Price Index Annual
Percentage Change
Inflation will increase over the short term, but remain stable overall.
<TABLE>
<CAPTION>
Consumer Price Index Annual
Percentage Change (%)
<S> <C>
12/31/1980 12.4
12/31/1981 8.9
12/31/1982 3.8
12/31/1983 3.8
12/31/1984 4.0
12/31/1985 3.8
12/31/1986 1.2
12/31/1987 4.4
12/31/1988 4.4
12/31/1989 4.6
12/31/1990 6.3
12/31/1991 3.0
12/31/1992 3.0
12/31/1993 2.8
12/31/1994 2.6
12/31/1995 2.6
12/31/1996 3.2
12/31/1997 1.7
12/31/1998 1.6
12/31/1999 2.7
</TABLE>
Portfolio Composition
For Tactical Program portfolios, we are maintaining a neutral stock/bond
position. While we remain cautiously optimistic that the overall stock market
will continue its positive performance, albeit at a slower pace than in 1999, we
are concerned with the significant rise in interest rate levels. It would be
reasonable at this point to anticipate stock market returns more in line with
historical norms.
In the fixed income markets, we do anticipate that the economy will moderate as
higher borrowing costs begin to impact corporate growth. In our view inflation
will increase over the short term, but remain stable overall. In this
environment, interest rates will likely remain range bound, making strategies
that enhance yield and limit credit risk attractive to bond investors.
2
<PAGE>
Manager
Spotlight
Managing Director and Portfolio Manager
Q&A with Bill Gross
Bill Gross is widely regarded as one of America's premier investment managers.
In fact, Worth magazine (10/99) named him one of "Wall Street's 25 Smartest
Players" and Money (10/99) dubbed him "The Bond King." Mr. Gross is portfolio
manager of PIMCO Total Return Fund, the largest bond fund in the country with
$30 billion in assets. We recently spoke to him about his outlook for the
economy and the bond market, as well as his strategy for Total Return Fund.
Q: It was not a good year for the bond market. What's the damage?
[PHOTO]
A: It was a cruel year for the bond market. 30-year Treasury bonds had their
worst year since the Government began issuing them in 1977. On a total return
basis, long-term Treasuries dropped over 10%. The Lehman Brothers Aggregate
Index didn't fair much better, losing almost 1%--its worst year since 1994. The
main culprits causing this anguish were a rapidly expanding economy and a "sky
is the limit" stock market.
Q: How did PIMCO Total Return Fund fare within the turbulence?
A: We were on the right side of the mess in 1999, thanks to our below benchmark
duration. Our overweight positions in higher quality spread products also
helped. We added a substantial amount of income by writing options. As a result,
the Fund outperformed many of its peers and the market as well.
Q: Will the current expansion break into record territory in 2000?
A: The short answer is yes. The economy will be starting its ninth year of
expansion and there is nothing on the horizon to suggest the party will
completely end. We do, however, expect that at some point, probably in the
second quarter, higher interest rates will slow consumer and business spending,
cooling off the economy somewhat.
Q: If that's the case, what about inflation?
A: Wage pressures, increased commodity prices and a weaker dollar should push
inflation higher over the short-term. In fact, CPI could move above 3% before
the middle of next year. However, I believe the technology boom that bolstered
productivity growth will continue to limit inflationary pressures over the
longer-term.
Q: What does this mean for interest rates?
A: 2000 promises to be a better year, as yields begin to reflect the reality of
a global recovery and the potential for higher inflation. Higher interest rates
in 1999 has created the opportunity to put money to work at higher yields,
offering increased income and total return potential in the future. Since early
last year I've maintained that 6.5% would be the top for long-term Treasury
yields. That remains my outlook. However, the current positioning of the
portfolio doesn't rely on the exact level of bond yields but rather on balancing
the risks and returns in order to make the portfolio successful in various
scenarios.
Q: Heading into the new year, what is the composition of the Fund?
A: The Fund's duration is below that of its benchmark, in anticipation of higher
yields. The portfolio is heavily weighted in mortgages as they are a good source
of high quality yield in an environment where corporate bankruptcies are on the
rise. A small allocation to emerging market debt takes advantage of the global
economic recovery. And the Fund continues to sell volatility at the outer ranges
of expected interest rates movements, a strategy that proved very successful
last year.
Past performance is no guarantee of future results. The views of Mr. Gross are
not indicative of the past or future performance of any PIMCO Fund.
3
<PAGE>
Today's
Investor
[GRAHIC]
A Valuable Point Of Reference
Your Fund's Market Index Benchmark
According to the mutual fund trackers at Morningstar, nearly 300 stock funds
delivered triple digit returns for 1999. Should you quickly sell any funds that
didn't do this well? Not so fast. To get a meaningful assessment of how your
stock funds did this year, you need to compare them to an appropriate benchmark.
The role of the measuring stick
For the sake of discussion, assume you invested in a diversified, large-cap
stock fund that returned 35% in 1999. Is that a good return? The answer depends
to a large extent on what you compare it to.
. Compared to the year's top performing fund return of 494%, 35% does not seem
very good. But then the year's top performing fund invested primarily in
small-cap, technology stocks --a much riskier investment than your diversified,
large-cap fund.
. Compared to the year's worst performing fund return of -80%, 35% seems great.
But the year's worst performing fund employed an advanced investment technique
called "shorting" to bet that small-cap, technology stocks as a group would
fall--hardly an "apples to apples" comparison with a diversified, large-cap
fund.
Obviously, the critical factor in your performance evaluation is your measuring
stick. To get the most valuable comparison, you need to choose a benchmark that
more closely mirrors your fund's objective, risk level and holdings.
Comparing your fund to its peers
One benchmark for mutual funds is an average of competitive funds. The advantage
of choosing a competitive fund average as a benchmark is that you are comparing
your fund to other actively managed mutual funds. The disadvantage is that the
decision about which funds to include in the average is subjective, and has been
a cause for concern in the past. For example, consider the competitive fund
averages published by Lipper, a mutual fund rating agency. In the past, Lipper
grouped funds according to their stated investment objective. But
The word "benchmark" originally referred to the mark a surveyor made on a
permanent object to serve as a reference point for land surveys and tidal
observations. Today, the word has assumed a broader meaning and is used to refer
to any general standard of measurement.
this method was criticized because funds can, and do, wander far from their
objective. As a result, Lipper recently rolled out a new system that groups
funds according to actual portfolio holdings.
Comparing your fund to a market index
The more commonly employed benchmark for mutual funds is a market index. An
index is a select group of holdings that represent the performance of a larger
market.
There are two principal advantages of choosing a market index as a benchmark:
(1) a market index is unmanaged, so any performance difference from your fund
can be readily attributed to your fund manager's efforts; and (2) index
performance is regularly published in the newspaper for easy reference. The
disadvantage of choosing a market index is that you may not be able to find an
index that closely resembles your fund's make-up. This problem has been remedied
greatly, however, by the introduction of more and more specialized indexes in
recent years. Consider which of the following major market indexes might be
appropriate benchmarks for your stock funds.
Dow Jones Industrial Average (DJIA)
The Dow Jones Industrial Average is probably the best known market index, but is
also probably the least useful as a benchmark. The DJIA is comprised of 30
large-cap companies that are meant to represent the stock market as a whole. But
this small number of mostly blue-chip names no longer accurately depicts today's
broad market.
Standard & Poor's 500 Index (S&P 500)
The Standard & Poor's 500 Index is widely regarded as the benchmark for
large-cap stock funds. The Index includes 500 common stocks with a heavy
concentration of large, well-established companies.
Standard & Poor's MidCap 400 Index (S&P 400)
The S&P 400 Index is one of several market indexes considered an acceptable
benchmark for mid-cap stock funds. The Index is comprised of 400 mid-sized
companies.
4
<PAGE>
Russell 2000 Index
The Russell 2000 Index is an appropriate market index benchmark for small-cap
stock funds. The Index includes 2000 small-cap companies widely distributed
across industry sectors.
NASDAQ Composite Index (The NASDAQ)
The NASDAQ stock market has become the most desirable place for technology
companies to list their stocks. As a result, the NASDAQ Composite Index has come
to be considered an accurate benchmark for technology sector funds. The Index
includes all of the domestic and foreign stocks listed on the NASDAQ stock
market, which means there are currently in excess of 5,300 stocks in the Index.
Of these, approximately 70% are in the technology industry.
MSCI EAFE Index
MSCI EAFE stands for Morgan Stanley Capital International--Europe, Australia,
Far East. This Index of foreign stocks is the appropriate benchmark for
international stock funds. The Index has historically been heavily weighted with
Japanese securities, however, so investors in international funds with limited
Japanese holdings may want to turn instead to the MSCI EAFE-ex-Japan Index.
Taking style into consideration
Some investors may want to take their benchmark search to an even higher level
by taking investment style into consideration. This ensures that if you invest
in a small-cap value fund your benchmark index is not a broad collection of
small-cap stocks, but rather just small-cap value stocks. To meet this more
specialized need, you can refer to any one of several growth and value specific
indexes, including the following from Russell:
For large-cap stock funds-
Russell 1000 Growth Index
Russell 1000 Value Index
For mid-cap stock funds-
Russell Mid-Cap Growth Index
Russell Mid-Cap Value Index
For small-cap stock funds-
Russell 2000 Growth Index
Russell 2000 Value Index
Using a benchmark effectively
Once you've identified your fund's market index benchmark, employ the following
guidelines to make the most of your comparisons.
Specialized Market Indexes As Fund Benchmarks
Specialized market indexes can closely track the composition of your fund's
portfolio, making them an appropriate performance benchmark.
If you invest in a The appropriate index is The index is composed of
Large-cap fund S&P 500 Index 500 large-cap stocks
Mid-cap fund S&P MidCap 400 Index 400 mid-cap stocks
Small-cap fund Russell 2000 Index 2000 small-cap stocks
Technology fund NASDAQ Composite Index All stocks listed on the NASDAQ
stock market, heavily weighted
to technology stocks
International fund MSCI EAFE Index Foreign stocks
The market indexes listed above are unmanaged, and it is not possible to invest
directly in these indexes.
. Keep a long-term perspective With market index data published regularly, it
is easy to fall into the trap of comparing your fund's performance too often.
Remember that investment decisions shouldn't be based on short-term performance.
A fund that does well in one set of market conditions may not be such a star
when those conditions change. Since you're probably investing for the long haul,
it's long-term performance that's crucial, not day to day fluctuations.
. Compare return and risk In addition to checking performance, look at your
fund's risk exposure relative to its benchmark. If your fund is only slightly
behind the index performance but taking less risk, you may want to hang in
there. On the other hand, if your fund is taking more risks than its benchmark
for no extra return, you may want to rethink your investment.
. Develop a personal benchmark You've selected your funds as part of a larger
portfolio that will meet your personal goals. While it is valuable to know how
your fund is performing compared to its market index benchmark, the ultimate
test is how well the fund is meeting your own investment needs. If your fund is
not matching its benchmark but is still playing its role in your portfolio, it's
probably still a keeper.
There are many standards by which to evaluate a mutual fund's performance. We've
only covered a few. To help you determine which benchmarks are the most
appropriate for your investments, talk to your financial advisor. He or she can
also help you ensure that your portfolio is still on track to meet your own
personal goals.
5
<PAGE>
Asset
Allocation
Series
PIMCO Funds Semi-Annual Report
Dear Shareholder:
Last year was a banner year for the stock market--a fitting conclusion to a
century of unprecedented economic expansion.
Despite some dips along the way, all the major stock indexes experienced
exceptional growth in 1999. The Dow was up 27 percent. The S&P 500 rose 21
percent. And the NASDAQ Index climbed a stunning 86 percent--a clear indication
of the dominant role the technology sector has played in the stock market's
tenacious bull run.
For bonds, on the other hand, 1999 was a turbulent time. Most bond sectors
reacted negatively to the continued strength of the economy and to rising
interest rates. In fact, it was the first year since 1994 that the bond market
reported negative returns.
In the first few hours and days of the new millennium, however, there was a
giant sigh of relief as the Y2K bug turned out to be, at most, a minor glitch
rather than a major catastrophe. And here at PIMCO, our Y2K preparations stood
us in good stead as the New Year came in without a hitch.
It was another good year for PIMCO's equity funds, too, as they continued to
experience strong relative performance across the board. Of special note is the
market-beating performance of our three growth-oriented funds. While past
performance is no indication of future results, all three funds--PIMCO Growth,
Target and Opportunity--beat the S&P 500 Index by a considerable margin.
On the following pages we present detailed information on our Asset Allocation
Portfolios. I encourage you to review the information and commentary carefully.
And once again, I'd like to thank you for the trust you've placed in us through
your investment. We will continue to work hard to help you meet your financial
objectives.
If you have any questions regarding your investment, contact your financial
advisor, or call us at 1-888-87-PIMCO. Or visit our Web site at
www.pimcofunds.com.
Sincerely,
/s/ Stephen Treadway
Stephen Treadway
President
January 31, 2000
PIMCO Advisors Holdings L.P. (NYSE:PA), its operating subsidiary PIMCO Advisors
L.P. and Allianz AG (EURO:ALV) announced that they have reached a definitive
agreement for Allianz AG to acquire majority ownership of PIMCO Advisors,
including all of the interests held at PIMCO Advisors Holdings L.P. Under the
terms of the agreement, at the closing the units of PA Holdings will be
exchanged by way of a merger and there will be no further public ownership of
PIMCO Advisors. Additionally, key employees at each of PIMCO Advisors'
investment units, including PIMCO's Bill Gross, have significant profit-sharing
and retention arrangements to ensure continuity of the investment process and
staff.
- --------------------------------------------------------------------------------
We at PIMCO spent significant time and resources preparing for Year 2000. As a
consequence, we are pleased to report that we made it through the Year 2000
transition period successfully, and that all our systems and processes continue
to function normally. While we expect that the great majority of the risk from
this event is now behind us, it is still possible that the "Year 2000 bug" might
result in system failures. In this regard, we would like to remind you that
while we are dedicated to avoiding problems arising from Year 2000, we cannot
guarantee investment performance or that Year 2000 will not result in losses.1
1 This is a Year 2000 Readiness Disclosure dated January 31, 2000.
6
<PAGE>
December 31, 1999
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
$14.8 million
PIMCO Funds 90/10 Portfolio
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
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>
6 month 9.91% 3.85% 9.54% 4.54% 8.44% 10.97% 10.13% 8.56%
1 year 19.00% 12.50% 18.13% 13.13% 17.02% 22.49% 20.54% 20.89%
Inception 27.80% 22.17% 26.91% 23.89% 26.82% -- -- --
</TABLE>
<TABLE>
<CAPTION>
PIMCO PIMCO PIMCO PIMCO Russell 3000 72% Russell 3000
90/10 90/10 90/10 Index 18% MSCI All Cntry. Wld Ex US,
Month Portfolio A Portfolio B Portfolio C 10% Lehman Broth. Agg.
Bond Index
<S> <C> <C> <C> <C> <C>
09/30/1998 9,450 10,000 10,000 10,000 10,000
10/31/1998 9,847 10,420 10,420 10,759 10,730
11/30/1998 10,357 10,950 10,950 11,417 11,312
12/31/1998 10,795 11,409 11,409 12,144 11,902
01/31/1999 10,881 11,490 11,490 12,556 12,200
02/28/1999 10,478 11,054 11,054 12,112 11,821
03/31/1999 10,737 11,318 11,318 12,556 12,245
04/30/1999 11,294 11,907 11,907 13,123 12,759
05/31/1999 11,140 11,735 11,735 12,873 12,469
06/30/1999 11,687 12,304 12,304 13,524 13,027
07/31/1999 11,524 12,121 12,121 13,114 12,788
08/31/1999 11,418 11,998 11,998 12,964 12,695
09/30/1999 11,235 11,805 11,805 12,632 12,488
10/31/1999 11,619 12,202 12,202 13,424 13,141
11/30/1999 11,936 12,526 12,526 13,800 13,500
12/31/1999 12,845 13,077 13,464 14,681 14,347
</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 10 for Footnotes, which include
additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
PIMCO Stock Funds % of
Total Investments
- --------------------------------------------------
Growth
- --------------------------------------------------
Enhanced Equity Fund 11.8%
- --------------------------------------------------
Target Fund 7.6%
- --------------------------------------------------
Growth Fund 5.1%
- --------------------------------------------------
Opportunity Fund 2.4%
- --------------------------------------------------
Blend
- --------------------------------------------------
StocksPLUS Fund 11.8%
- --------------------------------------------------
Mid-Cap Growth Fund 5.7%
- --------------------------------------------------
Capital Appreciation Fund 4.2%
- --------------------------------------------------
Small-Cap Growth Fund 1.8%
- --------------------------------------------------
Value
- --------------------------------------------------
Value Fund 15.9%
- --------------------------------------------------
Small Cap-Value Fund 2.7%
- --------------------------------------------------
International
- --------------------------------------------------
International Fund 17.8%
- --------------------------------------------------
Total Stock Funds 86.8%
- --------------------------------------------------
PIMCO Bond Funds
- --------------------------------------------------
Short Duration
- --------------------------------------------------
Money Market Fund 2.1%
- --------------------------------------------------
Intermediate Duration
- --------------------------------------------------
Total Return Fund 9.1%
- --------------------------------------------------
High Yield
- --------------------------------------------------
High Yield Fund 1.3%
- --------------------------------------------------
International
- --------------------------------------------------
Foreign Bond Fund 0.7%
- --------------------------------------------------
Total Bond Funds 13.2%
- --------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The 90/10 Portfolio seeks long-term capital appreciation. The Portfolio's
strategic allocation is 90% stock funds and 10% bond funds. As of December 31,
1999, the Portfolio's actual allocation was 87% stock funds and 13% bond funds.
This compares to an allocation of 84% stock funds and 16% bond funds on June 30,
1999. For the six-month period ended December 31, 1999 the Portfolio returned
9.91%.
The Portfolio's overweight position in fixed income detracted from returns
over the past six months as bond yields rose. However, by year-end the equity
weight had been increased in order to capture the performance of the asset
class. The decision to move to a more neutral stance reflected changes in our
proprietary asset allocation models, which began to favor equities over fixed
income.
Within the equity portion of the Portfolio we maintained an overweight
position in growth stocks versus value stocks and large-cap stocks versus small-
cap stocks. This was positive for performance as large-cap, growth stocks
continued to dominate. The Portfolio slightly favored non-U.S. equities, which
also had a positive impact on returns.
The Enhanced Equity Fund did well over the past six months, as investments
in technology, consumer services, financial services and health care were strong
performers. Holdings such as Qualcomm, Viacom, Morgan Stanley Dean Witter and
Amgen posted double-digit gains for the Fund. International Fund also had solid
performance over the past six months as exposure to Europe contributed to
returns. In particular, an overweight position in German equities boosted
performance as the country experienced a rebound in economic growth in 1999.
Holdings such as Deutsche Telecom and Nokia were top performers in the Fund.
Looking ahead, our latest research indicates that equities should be
favored over fixed income. For that reason we expect to continue to rotate
toward an overweight position in equities. In addition, we expect to continue
favoring growth over value, large-cap over small-cap and non-U.S. equities over
U.S. equities. Tactical moves within the Portfolio are based primarily on the
signals generated by a systematic process utilizing several proprietary asset
allocation models developed within PIMCO Advisors L.P.
7
<PAGE>
December 31, 1999
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
$16.1 million
PIMCO Funds 60/40 Portfolio
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
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>
6 month 6.77% 0.86% 6.38% 1.38% 5.41% 3.00% 6.94% 8.56% 0.56%
1 year 12.03% 5.87% 11.10% 6.10% 10.13% 8.73% 13.12% 20.89% -0.82%
Inception 18.22% 13.02% 17.33% 14.25% 17.35% -- -- --
</TABLE>
<TABLE>
<CAPTION>
PIMCO PIMCO PIMCO Lehman Broth. 48%Russ 3000
60/40 60/40 60/40 Russell 3000 Agg. Bond Index 12% All Cntry. Wld. Ex US,
Month Portfolio A Portfolio B Portfolio C Index 40% Lehman Broth. Agg.
Bond 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 11,814 12,216 14,681 9,951 12,733
</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 10 for Footnotes, which include
additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
PIMCO Stock Funds % of
Total Investments
- --------------------------------------------------
Growth
- --------------------------------------------------
Enhanced Equity Fund 8.1%
- --------------------------------------------------
Target Fund 5.5%
- --------------------------------------------------
Growth Fund 3.8%
- --------------------------------------------------
Opportunity Fund 1.7%
- --------------------------------------------------
Blend
- --------------------------------------------------
StocksPLUS Fund 8.2%
- --------------------------------------------------
Mid-Cap Growth Fund 3.9%
- --------------------------------------------------
Capital Appreciation Fund 2.7%
- --------------------------------------------------
Small-Cap Growth Fund 1.2%
- --------------------------------------------------
Value
- --------------------------------------------------
Value Fund 10.5%
- --------------------------------------------------
Small-Cap Value Fund 2.0%
- --------------------------------------------------
International
- --------------------------------------------------
International Fund 11.8%
- --------------------------------------------------
Total Stock Funds 59.4%
- --------------------------------------------------
PIMCO Bond Funds
- --------------------------------------------------
Short Duration
- --------------------------------------------------
Money Market Fund 2.5%
- --------------------------------------------------
Intermediate Duration
- --------------------------------------------------
Total Return Fund 32.3%
- --------------------------------------------------
High Yield
- --------------------------------------------------
High Yield Fund 3.9%
- --------------------------------------------------
International
- --------------------------------------------------
Foreign Bond Fund 1.9%
- --------------------------------------------------
Total Bond Funds 40.6%
- --------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The 60/40 Portfolio seeks long-term capital appreciation and current income. The
Portfolio's strategic allocation is 60% stock funds and 40% bond funds. As of
December 31, 1999, the Portfolio's actual allocation was 59% stock funds and 41%
bond funds. This compares to an allocation of 56% stock funds and 44% bond funds
on June 30, 1999. For the six-month period ended December 31, 1999, the
Portfolio returned 6.77%.
The Portfolio's overweight position in fixed income detracted from returns over
the past six months as bond yields rose. However, by year-end the fixed income
weight had been reduced in order to mitigate the impact of higher interest
rates. The decision to move to a more neutral stance reflected changes in our
proprietary asset allocation models, which began to favor equities over fixed
income.
Within the equity portion of the Portfolio we built an overweight position with
regard to growth stocks versus value stocks and large-cap versus small-cap. This
was positive for performance as large-cap, growth stocks continued to dominate.
The Portfolio slightly favored non-U.S. equities, which also had a positive
impact on returns.
The International Fund had solid performance over the past six months as
exposure to Europe contributed to returns. In particular, an overweight position
in German equities boosted performance as the country experienced a rebound in
economic growth in 1999. Holdings such as Deutsche Telecom and Nokia were top
performers in the Fund.
In what was a difficult period for fixed income in general, Total Return Fund
remained overweight in mortgage-backed securities, in an effort to enhance yield
without adding risk. This tactic was positive for performance. In addition,
duration was kept below the benchmark duration as interest rates rose.
Looking ahead, our latest research indicates that equities should be favored
over fixed income. For that reason we expect to continue to rotate toward an
overweight position in equities. In addition, we expect to continue favoring
growth over value, large-cap over small-cap and non-U.S. equities over U.S.
equities. Tactical moves within the Portfolio are based primarily on the signals
generated by a systematic process utilizing several proprietary asset allocation
models developed within PIMCO Advisors L.P.
8
<PAGE>
December 31, 1999
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
$8.7 million
PIMCO Funds 30/70 Portfolio
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Total Return For periods ended 12/31/99
<TABLE>
<CAPTION>
A Shares B Shares C Shares
24% Russ. 3000
Lipper 6% MSCI 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>
6 month 3.77% -0.93% 3.37% -1.61% 2.40% 1.41% 3.75% 0.56%
1 year 4.64% -0.07% 3.85% -1.10% 2.91% 0.71% 6.00% -0.82%
Inception 8.65% 4.73% 7.81% 4.66% 7.82% -- -- --
</TABLE>
<TABLE>
<CAPTION>
PIMCO PIMCO PIMCO Lehman Brothers 24%Russ 3000
30/70 30/70 30/70 Agg. Bond Index 6% MSCI All Cntry. Wld. Ex US,
Portfolio A Portfolio B Portfolio C 70% Lehman Broth.
Month Bond 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 10,589 10,989 9,951 11,272
</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 10 for Footnotes, which include
additional details.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
PIMCO Stock Funds % of
Total Investments
- --------------------------------------------------
Growth
- --------------------------------------------------
Enhanced Equity Fund 4.1%
- --------------------------------------------------
Target Fund 2.6%
- --------------------------------------------------
Growth Fund 1.9%
- --------------------------------------------------
Opportunity Fund 0.8%
- --------------------------------------------------
Blend
- --------------------------------------------------
StocksPLUS Fund 3.9%
- --------------------------------------------------
Mid-Cap Growth Fund 2.0%
- --------------------------------------------------
Capital Appreciation Fund 1.7%
- --------------------------------------------------
Small-Cap Growth Fund 0.6%
- --------------------------------------------------
Value
- --------------------------------------------------
Value Fund 6.8%
- --------------------------------------------------
Small-Cap Value Fund 0.9%
- --------------------------------------------------
International
- --------------------------------------------------
International Fund 6.3%
- --------------------------------------------------
Total Stock Funds 31.6%
- --------------------------------------------------
PIMCO Bond Funds
- --------------------------------------------------
Short Duration
- --------------------------------------------------
Money Market Fund 3.0%
- --------------------------------------------------
Intermediate Duration
- --------------------------------------------------
Total Return Fund 55.4%
- --------------------------------------------------
High Yield
- --------------------------------------------------
High Yield Fund 6.7%
- --------------------------------------------------
International
- --------------------------------------------------
Foreign Bond Fund 3.3%
- --------------------------------------------------
Total Bond Funds 68.4%
- --------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The 30/70 Portfolio seeks current income, with long-term capital appreciation as
a secondary objective. The Portfolio's strategic allocation is 30% stock funds
and 70% bond funds. As of December 31, 1999, the Portfolio's actual allocation
was 32% stock funds and 68% bond funds. This compares to an allocation of 28%
stock funds and 72% bond funds on June 30, 1999. For the six-month period ended
December 31, 1999 the Portfolio returned 3.77%.
The Portfolio's overweight position in equities enhanced returns as stocks
surged in the fourth quarter. The move to reduce the Portfolio's fixed income
exposure helped mitigate the impact of higher interest rates. These adjustments
were based on changes in our proprietary asset allocation models, which favored
equities over fixed income.
Within the Portfolio's equity portion, we maintained an overweight position
in growth stocks versus value stocks and large-cap over small-cap. This was
positive for performance as large-cap, growth stocks continued to dominate. The
Portfolio slightly favored non-U.S. equities, which also positively impacted
returns.
The Enhanced Equity Fund did well over the past six months, as investments
in technology, consumer services, financial services and health care were strong
performers. The International Fund had solid performance as exposure to a
stronger Europe contributed to returns.
In what was a difficult period for fixed income, Total Return Fund's
duration was kept below the benchmark as interest rates rose. The Fund remained
overweight in mortgages, in an effort to enhance yield without adding risk. This
tactic helped performance. In addition, a small allocation to select emerging
market bonds boosted relative returns as the sector benefited from economic
recovery.
Looking ahead, our latest research indicates that equities should continue
to be favored over fixed income. For that reason we expect to maintain an
overweight position in equities. In addition, we expect to continue favoring
growth over value, large-cap over small-cap and non-U.S. equities over U.S.
equities. Tactical moves within the Portfolio are based primarily on the signals
generated by a systematic process utilizing several proprietary asset allocation
models developed by PIMCO Advisors L.P.
9
<PAGE>
PIMCO Funds Profiles
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 $260
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 December 31, 1999.
<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 Growth of capital Stocks of medium-capitalized companies the manager
believes are reasonably priced
Small-Cap Growth 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>
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 year
Duration 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.
10
<PAGE>
Schedule of Investments
December 31, 1999 (Unaudited)
Value
90/10 Portfolio Shares (000s)
- --------------------------------------------------------------------------------
PIMCO FUNDS (b) 98.5%
- --------------------------------------------------------------------------------
International 211,265 $ 2,596
Value 199,317 2,322
StockPLUS 123,544 1,723
Enhanced Equity 130,731 1,722
Total Return 134,320 1,330
Target 45,043 1,115
Mid-Cap Growth 31,739 825
Growth 21,627 746
Capital Appreciation 24,623 618
Small-Cap Value 28,579 400
Opportunity 13,007 349
Money Market 301,847 302
Small-Cap Growth 20,845 257
High Yield 17,348 185
Foreign 9,279 93
-----------
Total Investments (a) 98.5% $ 14,583
===========
(Cost $14,202)
Other Assets and Liabilities (Net) 1.5% 217
-----------
Net Assets 100.0% $ 14,800
===========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 908
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (527)
-----------
Unrealized appreciation-net $ 381
===========
b) Institutional Class shares of each PIMCO Fund.
60/40 Portfolio
- --------------------------------------------------------------------------------
PIMCO FUNDS (b) 99.8%
- --------------------------------------------------------------------------------
Total Return 523,354 $ 5,181
International 154,840 1,903
Value 144,309 1,681
StockPLUS 93,823 1,309
Enhanced Equity 98,885 1,303
Target 35,710 884
High Yield 58,841 628
Mid-Cap Growth 24,008 624
Growth 17,845 616
Capital Appreciation 17,529 440
Money Market 398,969 399
Small-Cap Value 22,403 314
Foreign 31,404 313
Opportunity 10,259 275
Small-Cap Growth 15,583 192
-----------
Total Investments (a) 99.8% $ 16,062
===========
(Cost $15,936)
Other Assets and Liabilities (Net) 0.2% 30
-----------
Net Assets 100.0% $ 16,092
===========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 699
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (574)
-----------
Unrealized appreciation-net $ 125
===========
b) Institutional Class shares of each PIMCO Fund.
Value
30/70 Portfolio Shares (000s)
- --------------------------------------------------------------------------------
PIMCO FUNDS (b) 100.2%
- --------------------------------------------------------------------------------
Total Return 488,736 $ 4,838
Value 51,128 597
High Yield 54,455 583
International 44,535 547
Enhanced Equity 27,198 358
StockPLUS 24,313 339
Foreign 29,101 290
Money Market 265,226 265
Target 9,343 231
Mid-Cap Growth 6,592 171
Growth 4,879 168
Capital Appreciation 5,822 146
Small-Cap Value 5,740 80
Opportunity 2,686 72
Small-Cap Growth 4,304 53
-----------
Total Investments (a) 100.2% $ 8,738
===========
(Cost $8,868)
Other Assets and Liabilities (Net) (0.2%) (16)
-----------
Net Assets 100.0% $ 8,722
===========
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 176
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (306)
-----------
Unrealized depreciation-net $ (130)
===========
(b) Institutional Class shares of each PIMCO Fund.
See accompanying notes 11
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Selected Per Share Data for the Year or Period Ended: 90/10 Portfolio
--------------------------------------------------------------
Class A Class B
12/31/1999 (b) 06/30/1999 (c) 12/31/1999 (b) 06/30/1999 (c)
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 12.17 $ 10.00 $ 12.11 $ 10.00
- ----------------------------------------------------------------------------------------------------------------------------
Net Investment Income (a) 1.49 0.16 1.24 0.16
- ----------------------------------------------------------------------------------------------------------------------------
Net Realized / Unrealized Gain (Loss) on Investments (a) (0.31) 2.19 (0.11) 2.13
- ----------------------------------------------------------------------------------------------------------------------------
Total Income from Investment Operations 1.18 2.35 1.13 2.29
- ----------------------------------------------------------------------------------------------------------------------------
Dividends from Net Investment Income (0.16) (0.15) (0.11) (0.15)
- ----------------------------------------------------------------------------------------------------------------------------
Dividends in Excess of Net Investment Income 0.00 (0.03) 0.00 (0.03)
- ----------------------------------------------------------------------------------------------------------------------------
Distributions from Net Realized Capital Gains (0.59) 0.00 (0.59) 0.00
- ----------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.75) (0.18) (0.70) (0.18)
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value End of Period 12.60 12.17 12.54 12.11
- ----------------------------------------------------------------------------------------------------------------------------
Total Return (%) 9.91 23.69 9.54 23.03
- ----------------------------------------------------------------------------------------------------------------------------
Net Assets End of Period (000s) $ 1,004 $ 647 $ 2,144 $ 1,920
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets (%)* 0.65 0.65 1.40 1.40
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to Average Net Assets (%)* 24.20 1.91 20.43 1.87
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate (%) 7 48 7 48
- ----------------------------------------------------------------------------------------------------------------------------
Class C
- ---------------------------------
12/31/1999 (b) 06/30/1999 (c)
<C> <C>
$ 12.11 $ 10.00
- ---------------------------------
1.42 0.07
- ---------------------------------
(0.30) 2.22
- ---------------------------------
1.12 2.29
- ---------------------------------
(0.12) (0.15)
- ---------------------------------
0.00 (0.03)
- ---------------------------------
(0.59) 0.00
- ---------------------------------
(0.71) (0.18)
- ---------------------------------
12.52 12.11
- ---------------------------------
9.44 23.03
- ---------------------------------
$ 11,628 $ 7,969
- ---------------------------------
1.40 1.40
- ---------------------------------
23.39 0.77
- ---------------------------------
7 48
- ---------------------------------
</TABLE>
<TABLE>
<CAPTION>
60/40 Portfolio
--------------------------------------------------------------
Class A Class B
12/31/1999 (b) 06/30/1999 (c) 12/31/1999 (b) 06/30/1999 (c)
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 11.27 $ 10.00 $ 11.25 $ 10.00
- ----------------------------------------------------------------------------------------------------------------------------
Net Investment Income (a) 1.06 0.31 0.91 0.16
- ----------------------------------------------------------------------------------------------------------------------------
Net Realized / Unrealized Gain (Loss) on Investments (a) (0.31) 1.23 (0.21) 1.31
- ----------------------------------------------------------------------------------------------------------------------------
Total Income from Investment Operations 0.75 1.54 0.70 1.47
- ----------------------------------------------------------------------------------------------------------------------------
Dividends from Net Investment Income (0.22) (0.27) (0.17) (0.22)
- ----------------------------------------------------------------------------------------------------------------------------
Dividends in Excess of Net Investment Income 0.00 0.00 0.00 0.00
- ----------------------------------------------------------------------------------------------------------------------------
Distributions from Net Realized Capital Gains (0.44) 0.00 (0.44) 0.00
- ----------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.66) (0.27) (0.61) (0.22)
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value End of Period 11.36 11.27 11.34 11.25
- ----------------------------------------------------------------------------------------------------------------------------
Total Return (%) 6.77 15.50 6.38 14.83
- ----------------------------------------------------------------------------------------------------------------------------
Net Assets End of Period (000s) $ 2,979 $ 2,196 $ 3,920 $ 3,653
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets (%)* 0.65 0.65 1.40 1.40
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to Average Net Assets (%)* 18.63 3.76 16.07 1.92
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate (%) 24 39 24 39
- ----------------------------------------------------------------------------------------------------------------------------
Class C
12/31/1999 (b) 06/30/1999 (c)
<C> <C>
$ 11.24 $ 10.00
- --------------------------------
0.88 0.18
- --------------------------------
(0.17) 1.29
- --------------------------------
0.71 1.47
- --------------------------------
(0.17) (0.23)
- --------------------------------
0.00 0.00
- --------------------------------
(0.44) 0.00
- --------------------------------
(0.61) (0.23)
- --------------------------------
11.34 11.24
- --------------------------------
6.41 14.82
- --------------------------------
$ 9,166 $ 9,826
- --------------------------------
1.40 1.40
- --------------------------------
15.40 2.14
- --------------------------------
24 39
- --------------------------------
</TABLE>
<TABLE>
<CAPTION>
30/70 Portfolio
--------------------------------------------------------------
Class A Class B
12/31/1999 (b) 06/30/1999 (c) 12/31/1999 (b) 06/30/1999 (c)
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $ 10.33 $ 10.00 $ 10.32 $ 10.00
- ----------------------------------------------------------------------------------------------------------------------------
Net Investment Income (a) 0.53 0.58 0.52 0.32
- ----------------------------------------------------------------------------------------------------------------------------
Net Realized / Unrealized Gain (Loss) on Investments (a) (0.14) 0.11 (0.18) 0.31
- ----------------------------------------------------------------------------------------------------------------------------
Total Income from Investment Operations 0.39 0.69 0.34 0.63
- ----------------------------------------------------------------------------------------------------------------------------
Dividends from Net Investment Income (0.25) (0.36) (0.20) (0.31)
- ----------------------------------------------------------------------------------------------------------------------------
Dividends in Excess of Net Investment Income 0.00 0.00 0.00 0.00
- ----------------------------------------------------------------------------------------------------------------------------
Distributions from Net Realized Capital Gains (0.19) 0.00 (0.19) 0.00
- ----------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.44) (0.36) (0.39) (0.31)
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value End of Period 10.28 10.33 10.27 10.32
- ----------------------------------------------------------------------------------------------------------------------------
Total Return (%) 3.77 6.91 3.37 6.29
- ----------------------------------------------------------------------------------------------------------------------------
Net Assets End of Period (000s) $ 472 $ 407 $ 1,793 $ 1,738
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets (%)* 0.65 0.65 1.40 1.40
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to Average Net Assets (%)* 10.28 7.54 10.03 4.09
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate (%) 17 37 17 37
- ----------------------------------------------------------------------------------------------------------------------------
Class C
12/31/1999 (b) 06/30/1999 (c)
<C> <C>
$ 10.30 $ 10.00
- --------------------------------
0.59 0.26
- --------------------------------
(0.24) 0.36
- --------------------------------
0.35 0.62
- --------------------------------
(0.21) (0.32)
- --------------------------------
0.00 0.00
- --------------------------------
(0.19) 0.00
- --------------------------------
(0.40) (0.32)
- --------------------------------
10.25 10.30
- --------------------------------
3.39 6.27
- --------------------------------
$ 6,435 $ 4,969
- --------------------------------
1.40 1.40
- --------------------------------
11.40 3.39
- --------------------------------
17 37
- --------------------------------
</TABLE>
* Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
(b) Unaudited
(c) Commenced operations on September 30, 1998
12 See accompanying notes
<PAGE>
Statement of Assets and Liabilities
December 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Amounts in thousands, except per share amounts 90/10 Portfolio 60/40 Portfolio 30/70 Portfolio
-----------------------------------------------------
Assets:
<S> <C> <C> <C>
Investments, at value $ 14,583 $ 16,062 $ 8,738
- ----------------------------------------------------------------------------------------------------------------
Cash and foreign currency 30 87 53
- ----------------------------------------------------------------------------------------------------------------
Receivable for Fund shares sold 243 69 3
- ----------------------------------------------------------------------------------------------------------------
Interest and dividends receivable 103 109 52
- ----------------------------------------------------------------------------------------------------------------
14,959 16,327 8,846
================================================================================================================
Liabilities:
Payable for investments and foreign currency purchased $ 133 $ 199 $ 107
- ----------------------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed 5 8 0
- ----------------------------------------------------------------------------------------------------------------
Dividends payable 4 9 7
- ----------------------------------------------------------------------------------------------------------------
Accrued administration fee 5 6 3
- ----------------------------------------------------------------------------------------------------------------
Accrued distribution fee 9 9 5
- ----------------------------------------------------------------------------------------------------------------
Accrued servicing fee 3 4 2
- ----------------------------------------------------------------------------------------------------------------
159 235 124
================================================================================================================
Net Assets $ 14,800 $ 16,092 $ 8,722
================================================================================================================
Net Assets Consist of:
Paid in capital $ 13,511 $ 15,260 $ 8,742
- ----------------------------------------------------------------------------------------------------------------
Undistributed net investment income 1,475 1,279 318
- ----------------------------------------------------------------------------------------------------------------
Accumulated undistributed net realized (loss) (567) (572) (208)
- ----------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) 381 125 (130)
- ----------------------------------------------------------------------------------------------------------------
$ 14,800 $ 16,092 $ 8,722
================================================================================================================
Net Assets:
Class A $ 1,004 $ 2,979 $ 472
- ----------------------------------------------------------------------------------------------------------------
Class B 2,144 3,920 1,793
- ----------------------------------------------------------------------------------------------------------------
Class C 11,628 9,166 6,435
- ----------------------------------------------------------------------------------------------------------------
Other Classes 24 27 22
- ----------------------------------------------------------------------------------------------------------------
Shares Issued and Outstanding:
Class A 80 262 46
- ----------------------------------------------------------------------------------------------------------------
Class B 171 346 175
- ----------------------------------------------------------------------------------------------------------------
Class C 929 808 628
- ----------------------------------------------------------------------------------------------------------------
Net Asset Value and Redemption Price* Per Share
(Net Assets Per Share Outstanding)
Class A $ 12.60 $ 11.36 $ 10.28
- ----------------------------------------------------------------------------------------------------------------
Class B 12.54 11.34 10.27
- ----------------------------------------------------------------------------------------------------------------
Class C 12.52 11.34 10.25
- ----------------------------------------------------------------------------------------------------------------
Cost of Investments Owned $ 14,202 $ 15,936 $ 8,868
================================================================================================================
</TABLE>
* With respect to the Retail Classes, the redemption price varies by the length
of time the shares are held.
See accompanying notes 13
<PAGE>
Statement of Operations
For the six months ended December 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Amounts in thousands 90/10 Portfolio 60/40 Portfolio 30/70 Portfolio
-----------------------------------------------------
Investment Income:
<S> <C> <C> <C>
Dividends $ 1,529 $ 1,466 $ 483
- ----------------------------------------------------------------------------------------------------------------
Interest 1 1 0
- ----------------------------------------------------------------------------------------------------------------
Total Income 1,530 1,467 483
================================================================================================================
Expenses:
Administration fees 25 34 16
- ----------------------------------------------------------------------------------------------------------------
Distribution fees - Class B 8 14 7
- ----------------------------------------------------------------------------------------------------------------
Distribution fees - Class C 37 39 20
- ----------------------------------------------------------------------------------------------------------------
Servicing fees - Class A 1 3 1
- ----------------------------------------------------------------------------------------------------------------
Servicing fees - Class B 3 5 2
- ----------------------------------------------------------------------------------------------------------------
Servicing fees - Class C 12 13 7
- ----------------------------------------------------------------------------------------------------------------
Trustees' fees 1 1 0
- ----------------------------------------------------------------------------------------------------------------
Total expenses 87 109 53
- ----------------------------------------------------------------------------------------------------------------
Net Investment Income 1,443 1,358 430
================================================================================================================
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments 3 (44) (48)
- ----------------------------------------------------------------------------------------------------------------
Net change in unrealized (depreciation) on investments (155) (243) (117)
- ----------------------------------------------------------------------------------------------------------------
Net (Loss) (152) (287) (165)
- ----------------------------------------------------------------------------------------------------------------
Net Increase in Assets Resulting from Operations $ 1,291 $ 1,071 $ 265
================================================================================================================
</TABLE>
14 See accompanying notes
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Amounts in thousands 90/10 Portfolio 60/40 Portfolio
---------------------------------------------------------------------------
Six Months Ended Period from Six Months Ended Period from
December 31, 1999 September 30, 1998 December 31, 1999 September 30, 1998
(Unaudited) to June 30 1999 (Unaudited) to June 30 1999
Increase (Decrease) in Net Assets from:
Operations
<S> <C> <C> <C> <C>
Net investment income $ 1,443 $ 38 $ 1,358 $ 115
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 3 160 (44) 140
- ------------------------------------------------------------------------------------------------------------------------------------
Net capital gain distributions received from underlying funds 0 113 0 94
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) (155) 536 (243) 368
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase resulting from operations 1,291 847 1,071 717
====================================================================================================================================
Distributions to Shareholders:
From net investment income
Class A (12) (2) (53) (16)
- ------------------------------------------------------------------------------------------------------------------------------------
Class B (18) (10) (59) (33)
- ------------------------------------------------------------------------------------------------------------------------------------
Class C (107) (26) (140) (60)
- ------------------------------------------------------------------------------------------------------------------------------------
In excess of net investment income
Class A 0 (1) 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 0 (2) 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 0 (5) 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized capital gains
Class A (44) 0 (109) 0
- ------------------------------------------------------------------------------------------------------------------------------------
Class B (95) 0 (144) 0
- ------------------------------------------------------------------------------------------------------------------------------------
Class C (525) 0 (341) 0
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes (2) 0 (1) 0
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (803) (46) (847) (109)
====================================================================================================================================
Fund Share Transactions:
Receipts for shares sold
Class A 284 713 739 2,249
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 386 1,910 547 4,008
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 3,902 7,885 2,558 10,298
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 20 5 20
- ------------------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 56 3 156 6
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 110 12 200 24
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 612 30 494 32
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 2 0 2 0
- ------------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (18) (118) (145) (128)
- ------------------------------------------------------------------------------------------------------------------------------------
Class B (332) (164) (511) (567)
- ------------------------------------------------------------------------------------------------------------------------------------
Class C (1,248) (534) (3,874) (853)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase resulting from Fund share transactions 3,754 9,757 171 15,089
- ------------------------------------------------------------------------------------------------------------------------------------
Total Increase in Net Assets 4,242 10,558 395 15,697
====================================================================================================================================
Net Assets:
Beginning of period 10,558 0 15,697 0
- ------------------------------------------------------------------------------------------------------------------------------------
End of period * $ 14,800 $ 10,558 $ 16,092 $ 15,697
- ------------------------------------------------------------------------------------------------------------------------------------
*Including net undistributed investment income of: $ 1,475 $ 169 $ 1,279 $ 173
- ------------------------------------------------------------------------------------------------------------------------------------
30/70 Portfolio
- ---------------------------------------
Six Months Ended Period from
December 31, 1999 September 30, 1998
(Unaudited) to June 30 1999
<C> <C>
$ 430 $ 101
- ---------------------------------------
(48) 15
- ---------------------------------------
0 37
- ---------------------------------------
(117) (13)
- ---------------------------------------
265 140
=======================================
(12) (7)
- ---------------------------------------
(36) (35)
- ---------------------------------------
(113) (59)
- ---------------------------------------
0 0
- ---------------------------------------
0 0
- ---------------------------------------
0 0
- ---------------------------------------
(8) 0
- ---------------------------------------
(33) 0
- ---------------------------------------
(122) 0
- ---------------------------------------
0 0
- ---------------------------------------
(324) (101)
=======================================
195 487
- ---------------------------------------
228 1,840
- ---------------------------------------
2,376 5,337
- ---------------------------------------
0 20
- ---------------------------------------
14 3
- ---------------------------------------
69 26
- ---------------------------------------
226 42
- ---------------------------------------
0 0
- ---------------------------------------
(143) (86)
- ---------------------------------------
(233) (142)
- ---------------------------------------
(1,085) (432)
- ---------------------------------------
1,647 7,095
- ---------------------------------------
1,588 7,134
=======================================
7,134 0
- ---------------------------------------
$ 8,722 $ 7,134
- ---------------------------------------
$ 318 $ 49
- ---------------------------------------
</TABLE>
See accompanying notes 15
<PAGE>
Notes to Financial Statements
December 31, 1999 (Unaudited)
1. Organization
PIMCO Funds: Multi-Manager Series (the "Trust"), is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company organized as a Massachusetts business trust. The Trust currently
consists of twenty-six 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
16
<PAGE>
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):
Distribution Fee (%) Servicing Fee (%)
- --------------------------------------------------------------------------------
Class A
All Portfolios -- 0.25
Class B
All Portfolios 0.75 0.25
Class C
All Portfolios 0.75 0.25
PFD also receives the proceeds of the initial sales charges paid by the
shareholders upon the purchase of Class A shares and the contingent deferred
sales charges paid by the shareholders upon certain redemptions of Class A, B
and C shares. For the period ended December 31, 1999, PFD received $55,023
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 December 31, 1999 were as follows (amounts in thousands):
Purchases Sales
- --------------------------------------------------------------------------------
90/10 Portfolio $ 5,277 $ 900
60/40 Portfolio 4,500 3,895
30/70 Portfolio 3,186 1,258
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. (Insert any other related party
information here). Conflicts may arise as these companies seek to fulfill their
fiduciary responsibilities to both the Portfolios and Underlying Funds.
6. Line of Credit
Effective December 14, 1999, the funds, along with certain other funds managed
by PIMCO, entered into an unsecured $350,000,000 bank line of credit agreement
with State Street Bank. 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 December 31, 1999.
7. Acquisition by Allianz AG
The Allianz AG acquisition of majority ownership of PIMCO Advisors has been
approved by the Boards of Allianz AG and PIMCO on October 31, 1999, subject to
regulatory review and approval, as well as the vote of the shareholders on March
3, 2000.
17
<PAGE>
Notes to Financial Statements (Cont.)
December 31, 1999 (Unaudited)
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>
90/10 Portfolio 60/40 Portfolio
--------------------------------------------------------------------------------------------
Period Ended Period from Period Ended Period from
12/31/1999 9/30/1998 to 6/30/1999 12/31/1999 9/30/1998 to 6/30/1999
Shares Amount Shares Amount Shares Amount Shares Amount
---------------------------------------------------------------------------------------------
Receipts for shares sold
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A 23 $ 284 63 $ 713 66 $ 739 206 $ 2,249
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 31 386 172 1,910 50 547 374 4,008
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 322 3,902 703 7,885 228 2,558 949 10,298
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 0 2 20 0 5 2 20
- ------------------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of distributions
Class A 5 56 0 3 14 156 1 6
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 9 110 1 12 18 200 2 24
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 50 612 3 30 44 494 3 32
- ------------------------------------------------------------------------------------------------------------------------------------
Other Classes 0 2 0 0 0 2 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed
Class A (1) (18) (10) (118) (13) (145) (12) (128)
- ------------------------------------------------------------------------------------------------------------------------------------
Class B (28) (332) (14) (164) (46) (511) (51) (567)
- ------------------------------------------------------------------------------------------------------------------------------------
Class C (101) (1,248) (48) (534) (339) (3,874) (78) (853)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase resulting from
Fund share transactions 310 $ 3,754 872 $ 9,757 22 $ 171 1,396 $ 15,089
====================================================================================================================================
30/70 Portfolio
- --------------------------------------------
Period Ended Period from
12/31/1999 9/30/1998 to 6/30/1999
Shares Amount Shares Amount
<C> <C> <C> <C>
20 $ 195 47 $ 487
- --------------------------------------------
23 228 179 1,840
- --------------------------------------------
230 2,376 520 5,337
- --------------------------------------------
0 0 2 20
- --------------------------------------------
1 14 0 3
- --------------------------------------------
7 69 3 26
- --------------------------------------------
22 226 4 42
- --------------------------------------------
0 0 0 0
- --------------------------------------------
(14) (143) (8) (86)
- --------------------------------------------
(23) (233) (14) (142)
- --------------------------------------------
(106) (1,085) (42) (432)
- --------------------------------------------
160 $ 1,647 691 $ 7,095
===========================================
</TABLE>
<PAGE>
PIMCO Funds Asset Allocation Series
Actively managed portfolios of select PIMCO Funds
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
<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 State Street Bank & Trust Co., 801 Pennsylvania, Kansas City, MO 64105
- ------------------------------------------------------------------------------------------------------------------------------------
Shareholder PFPC Global Fund Services, Inc., P.O. Box 9688, Providence, RI 02940-9688
Servicing Agent and
Transfer Agent
- ------------------------------------------------------------------------------------------------------------------------------------
Independent PricewaterhouseCoopers LLP, 1055 Broadway, Kansas City, MO, 64105
Accountant
- ------------------------------------------------------------------------------------------------------------------------------------
Legal Counsel Ropes & Gray, One International Place, Boston, MA 02110
- ------------------------------------------------------------------------------------------------------------------------------------
For Account For PIMCO Funds Asset Allocation account information contact your financial advisor, or if you receive
Information 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.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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>
- --------------------------------------------------------------------------------
Introducing the PIMCO Funds Innovation Center
With the start of the New Year, we've introduced the PIMCO Funds Innovation
Center to our Web site. The Innovation Center offers investors a unique way to
look at technology investing. It's designed both for investors with existing
technology holdings and for those who have yet to invest in the sector. Its
features include:
[] Insight from Dennis McKechnie As manager of PIMCO Innovation Fund, Dennis
McKechnie has delivered impressive results for investors. You can read
about his investment process and strategy and benefit from his extensive
background in technology.
[] Manager Commentary Weekly analysis and insight into the tech sector.
[] Taking Stock Detailed profiles of some of our top tech holdings.
[] Monthly Newsletter Download a complete technology update in PDF format.
[] Manager Q&A Fund managers provide comments on the market and their funds.
To log on to the PIMCO Funds Innovation Center, simply go to our Home Page at
www.pimcofunds.com, and click on the "Innovation Center" link.
Not available to all broker/dealers. PZ028.2/00
[LOGO]
PIMCO Funds
Distributors LLC
2187 Atlantic Street
Stamford, CT 06902
<PAGE>
PIMCO Funds Asset Allocation Series
Institutional & Administrative Class
Semi-Annual Report
December 31, 1999
<PAGE>
Chairman's Letter
Dear Shareholder:
Last year was a banner year for the stock market--a fitting conclusion to a
century of unprecedented economic expansion.
Despite some dips along the way, all the major stock indexes experienced
exceptional growth in 1999. The Dow Jones Industrial Average was up 27%, the S&P
500 rose 21% and the NASDAQ Index climbed a stunning 86%--a clear indication of
the dominant role the technology sector has played in the stock market's
tenacious bull run.
For bonds, on the other hand, 1999 was a turbulent time. Most bond sectors
reacted negatively to the continued strength of the economy and to rising
interest rates. In fact, it was the first year since 1994 that the bond market
reported negative returns.
In the first few hours and days of the new millennium there was a giant sigh of
relief as the Y2K bug turned out to be, at most, a minor glitch rather than a
major catastrophe. Here at PIMCO, our Y2K preparations allowed the New Year to
arrive without a hitch.
It was another good year for PIMCO's equity funds as well, as they generally
experienced strong relative performance. Of special note is the market-beating
performance of our three growth-oriented funds. While past performance is no
indication of future results, all three funds--PIMCO Growth, Target and
Opportunity--beat the S&P 500 Index by a considerable margin.
On the following pages we present detailed information on our Asset Allocation
Portfolios. I encourage you to review the information and commentary carefully.
Once again, I'd like to thank you for the trust you've placed in us through your
investment. We will continue to work hard to help you meet your financial
objectives.
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,
William D. Cvengros
Chairman of the Board
January 31, 2000
<PAGE>
- --------------------------------------------------------------------------------
A Word About the Year 2000
We at PIMCO spent significant time and resources preparing for Year 2000. As a
consequence, we are pleased to report that we made it through the Year 2000
transition period successfully, and that all our systems and processes continue
to function normally. While we expect that the great majority of the risk from
this event is now behind us, it is still possible that the "Year 2000 bug" might
result in system failures. In this regard, we would like to remind you that
while we are dedicated to avoiding problems arising from Year 2000, we cannot
guarantee investment performance or that Year 2000 will not result in losses.1
/1/ This is a Year 2000 Readiness Disclosure dated January 31, 2000.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PIMCO Advisors Holdings L.P. (NYSE:PA), its operating subsidiary PIMCO Advisors
L.P. and Allianz AG (EURO:ALV) announced that they have reached a definitive
agreement for Allianz AG to acquire majority ownership of PIMCO Advisors,
including all of the interests held at PIMCO Advisors Holdings L.P. Under the
terms of the agreement, at the closing the units of PA Holdings will be
exchanged by way of a merger and there will be no further public ownership of
PIMCO Advisors. Additionally, key employees at each of PIMCO Advisors'
investment units, including PIMCO's Bill Gross, have significant profit-sharing
and retention arrangements to ensure continuity of the investment process and
staff.
- --------------------------------------------------------------------------------
2
<PAGE>
PIMCO Funds 90/10 Portfolio
SEMI-ANNUAL REPORT DECEMBER 31, 1999
FUND CHARACTERISTICS
Objective:
Long-term capital appreciation
Portfolio:
80-100% PIMCO Stock Funds
0-20% PIMCO Bond Funds
Inception Date:
February 26, 1999
Dividend Frequency:
Annually
Net Assets:
$14.8 million
INVESTMENT PERFORMANCE AND PORTFOLIO COMPOSITION
TOTAL RETURN INVESTMENT PERFORMANCE
<TABLE>
<CAPTION>
72% Russell 3000
Institutional Administrative 18% MSCI Lipper
Class Class Russell 3000 World ex-U.S. Multi-Cap Core
(Incep. 2/26/99) (Incep. 2/26/99) Index 10% LBAG Fund Average
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
6 months 10.37% 10.26% 8.56% 10.13% 10.97%
Inception 23.31% 23.09% - - -
</TABLE>
<TABLE>
<CAPTION>
Month PIMCO Russell 3000 72% Russell 3000
90/10 Index 18% MSCI World ex-U.S.
Portfolio 10% LBAG Index
<S> <C> <C> <C>
02/1999 10,000 10,000 10,000
03/1999 10,257 10,367 10,359
04/1999 10,788 10,835 10,793
05/1999 10,651 10,629 10,548
06/1999 11,173 11,165 11,020
07/1999 11,027 10,827 10,817
08/1999 10,926 10,704 10,739
09/1999 10,761 10,430 10,564
10/1999 11,137 11,084 11,117
11/1999 11,439 11,394 11,420
12/1999 12,331 12,121 12,136
</TABLE>
<TABLE>
<CAPTION>
PIMCO Stock Funds % of Total PIMCO Bond Funds % of Total
Investments Investments
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
Growth Short Duration
- --------------------------------------------------------------------------------------------------
Enhanced Equity Fund 11.8% Money Market Fund 2.1%
- --------------------------------------------------------------------------------------------------
Target Fund 7.6% Intermediate Duration
- --------------------------------------------------------------------------------------------------
Growth Fund 5.1% Total Return Fund 9.1%
- --------------------------------------------------------------------------------------------------
Opportunity Fund 2.4% High Yield
- --------------------------------------------------------------------------------------------------
Blend High Yield Fund 1.3%
- --------------------------------------------------------------------------------------------------
StocksPLUS Fund 11.8% International
- --------------------------------------------------------------------------------------------------
Mid-Cap Growth Fund 5.7% Foreign Bond Fund 0.7%
- --------------------------------------------------------------------------------------------------
Capital Appreciation Fund 4.2% Total Bond Funds 13.2%
- --------------------------------------------------------------------------------------------------
Small-Cap Growth Fund 1.8%
- --------------------------------------------------------------------------------------------------
Value
- --------------------------------------------------------------------------------------------------
Value Fund 15.9%
- --------------------------------------------------------------------------------------------------
Small-Cap Value Fund 2.7%
- --------------------------------------------------------------------------------------------------
International
- --------------------------------------------------------------------------------------------------
International Fund 17.8%
- --------------------------------------------------------------------------------------------------
Total Stock Funds 86.8%
- --------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
PORTFOLIO INSIGHTS
The 90/10 Portfolio seeks long-term capital appreciation. The Portfolio's
strategic allocation is 90% stock funds and 10% bond funds. As of December 31,
1999, the Portfolio's actual allocation was 87% stock funds and 13% bond funds.
This compares to an allocation of 84% stock funds and 16% bond funds on June 30,
1999. For the six-month period ended December 31, 1999 the Institutional
Portfolio returned 10.37%.
The Portfolio's overweight position in fixed income detracted from returns
over the past six months as bond yields rose. However, by year-end the equity
weight had been increased in order to capture the performance of the asset
class. The decision to move to a more neutral stance reflected changes in our
proprietary asset allocation models, which began to favor equities over fixed
income.
Within the equity portion of the Portfolio we maintained an overweight
position in growth stocks versus value stocks and large-cap stocks versus small-
cap stocks. This was positive for performance as large-cap, growth stocks
continued to dominate. The Portfolio slightly favored non-U.S. equities, which
also had a positive impact on returns.
The Enhanced Equity Fund did well over the past six months, as investments in
technology, consumer services, financial services and health care were strong
performers. Holdings such as Qualcomm, Viacom, Morgan Stanley Dean Witter and
Amgen posted double-digit gains for the Fund. International Fund also had solid
performance over the past six months as exposure to Europe contributed to
returns. In particular, an overweight position in German equities boosted
performance as the country experienced a rebound in economic growth in 1999.
Holdings such as Deutsche Telecom and Nokia were top performers in the Fund.
Looking ahead, our latest research indicates that equities should be favored
over fixed income. For that reason we expect to continue to rotate toward an
overweight position in equities. In addition, we expect to continue favoring
growth over value, large-cap over small-cap and non-U.S. equities over U.S.
equities. Tactical moves within the Portfolio are based primarily on the signals
generated by a systematic process utilizing several proprietary asset allocation
models developed within PIMCO Advisors L.P.
4
<PAGE>
PIMCO Funds 60/40 Portfolio
SEMI-ANNUAL REPORT DECEMBER 31, 1999
FUND CHARACTERISTICS
Objective:
Long-term capital appreciation and current income
Portfolio:
50-70% PIMCO Stock Funds
30-50% PIMCO Bond Funds
Inception Date:
February 26, 1999
Dividend Frequency:
Quarterly
Net Assets:
$16.1 million
INVESTMENT PERFORMANCE AND PORTFOLIO COMPOSITION
TOTAL RETURN INVESTMENT PERFORMANCE
<TABLE>
<CAPTION>
48% Russell
Lipper 3000 Lehman
Institutional Administrative Balance 12% MSCI Russell Brothers
Class Class Fund World ex-U.S. 3000 Aggregate
(Incep. 2/26/99) (Incep. 2/26/99) Average 40% LBAG Index Bond Index
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
6 months 7.13% 7.00% 3.00% 6.94% 8.56% 0.56%
Inception 15.49% 15.25% - - - -
</TABLE>
<TABLE>
<CAPTION>
Month PIMCO Russell 3000 LBAG 48% Russell 3000
60/40 Index Index 12% MSCI World ex-U.S.
Portfolio 40% LBAG Index
<S> <C> <C> <C> <C>
02/1999 10,000 10,000 10,000 10,000
03/1999 10,192 10,367 10,055 10,257
04/1999 10,573 10,835 10,087 10,555
05/1999 10,440 10,629 9,999 10,365
06/1999 10,780 11,165 9,967 10,663
07/1999 10,665 10,827 9,925 10,517
08/1999 10,608 10,704 9,920 10,464
09/1999 10,534 10,430 10,035 10,391
10/1999 10,785 11,084 10,072 10,766
11/1999 10,997 11,394 10,071 10,962
12/1999 11,549 12,121 10,022 11,403
</TABLE>
<TABLE>
<CAPTION>
PIMCO Stock Funds % of Total PIMCO Bond Funds % of Total
Investments Investments
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
Growth Short Duration
- ----------------------------------------------------------------------------------------------------
Enhanced Equity Fund 8.1% Money Market Fund 2.5%
- ----------------------------------------------------------------------------------------------------
Target Fund 5.5% Intermediate Duration
- ----------------------------------------------------------------------------------------------------
Growth Fund 3.8% Total Return Fund 32.3%
- ----------------------------------------------------------------------------------------------------
Opportunity Fund 1.7% High Yield
- ----------------------------------------------------------------------------------------------------
Blend High Yield Fund 3.9%
- ----------------------------------------------------------------------------------------------------
StocksPLUS Fund 8.2% International
- ----------------------------------------------------------------------------------------------------
Mid-Cap Growth Fund 3.9% Foreign Bond Fund 1.9%
- ----------------------------------------------------------------------------------------------------
Capital Appreciation Fund 2.7% Total Bond Funds 40.6%
- ----------------------------------------------------------------------------------------------------
Small-Cap Growth Fund 1.2%
- ----------------------------------------------------------------------------------------------------
Value
- ----------------------------------------------------------------------------------------------------
Value Fund 10.5%
- ----------------------------------------------------------------------------------------------------
Small-Cap Value Fund 2.0%
- ----------------------------------------------------------------------------------------------------
International
- ----------------------------------------------------------------------------------------------------
International Fund 11.8%
- ----------------------------------------------------------------------------------------------------
Total Stock Funds 59.4%
- ----------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
PORTFOLIO INSIGHTS
The 60/40 Portfolio seeks long-term capital appreciation and current income. The
Portfolio's strategic allocation is 60% stock funds and 40% bond funds. As of
December 31, 1999, the Portfolio's actual allocation was 59% stock funds and 41%
bond funds. This compares to an allocation of 56% stock funds and 44% bond funds
on June 30, 1999. For the six-month period ended December 31, 1999, the
Institutional Portfolio returned 7.13%.
The Portfolio's overweight position in fixed income detracted from returns
over the past six months as bond yields rose. However, by year-end the fixed
income weight had been reduced in order to mitigate the impact of higher
interest rates. The decision to move to a more neutral stance reflected changes
in our proprietary asset allocation models, which began to favor equities over
fixed income.
Within the equity portion of the Portfolio we built an overweight position
with regard to growth stocks versus value stocks and large-cap versus small-cap.
This was positive for performance as large-cap, growth stocks continued to
dominate. The Portfolio slightly favored non-U.S. equities, which also had a
positive impact on returns.
The International Fund had solid performance over the past six months as
exposure to Europe contributed to returns. In particular, an overweight position
in German equities boosted performance as the country experienced a rebound in
economic growth in 1999. Holdings such as Deutsche Telecom and Nokia were top
performers in the Fund.
In what was a difficult period for fixed income in general, the Total Return
Fund remained overweight in mortgage-backed securities, in an effort to enhance
yield without adding risk. This tactic was positive for performance. In
addition, duration was kept below the benchmark duration as interest rates rose.
Looking ahead, our latest research indicates that equities should be favored
over fixed income. For that reason we expect to continue to rotate toward an
overweight position in equities. In addition, we expect to continue favoring
growth over value, large-cap over small-cap and non-U.S. equities over U.S.
equities. Tactical moves within the Portfolio are based primarily on the signals
generated by a systematic process utilizing several proprietary asset allocation
models developed within PIMCO Advisors L.P.
6
<PAGE>
PIMCO Funds 30/70 Portfolio
SEMI-ANNUAL REPORT DECEMBER 31, 1999
FUND CHARACTERISTICS
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:
February 26, 1999
Dividend Frequency:
Monthly
Net Assets:
$8.7 million
INVESTMENT PERFORMANCE AND PORTFOLIO COMPOSITION
TOTAL RETURN INVESTMENT PERFORMANCE
<TABLE>
<CAPTION>
Institutional Administrative Lipper General 24% Russell 3000 Lehman Brothers
Class Class Bond Fund 6% MSCI Aggregate Bond
(Incep. 2/26/99) (Incep. 2/26/99) Average World ex-U.S. Index
70% LBAG
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
6 months 4.05% 3.92% 1.41% 3.75% 0.56%
Inception 7.99% 7.76% - -
</TABLE>
<TABLE>
<CAPTION>
Month PIMCO LBAG 24% Russell 3000
30/70 Index 6% MSCI World ex-U.S.
70% LBAG
Portfolio Index
<S> <C> <C> <C>
02/1999 10,000 10,000 10,000
03/1999 10,134 10,055 10,156
04/1999 10,353 10,087 10,320
05/1999 10,225 9,999 10,182
06/1999 10,378 9,967 10,312
07/1999 10,313 9,925 10,219
08/1999 10,284 9,920 10,191
09/1999 10,295 10,035 10,215
10/1999 10,425 10,072 10,418
11/1999 10,552 10,071 10,512
12/1999 10,799 10,022 10,698
</TABLE>
<TABLE>
<CAPTION>
PIMCO Stock Funds % of Total PIMCO Bond Funds % of Total
Investments Investments
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
Growth Short Duration
- ------------------------------------------------------------------------------------------------
Enhanced Equity Fund 4.1% Money Market Fund 3.0%
- ------------------------------------------------------------------------------------------------
Target Fund 2.6% Intermediate Duration
- ------------------------------------------------------------------------------------------------
Growth Fund 1.9% Total Return Fund 55.4%
- ------------------------------------------------------------------------------------------------
Opportunity Fund 0.8% High Yield
- ------------------------------------------------------------------------------------------------
Blend High Yield Fund 6.7%
- ------------------------------------------------------------------------------------------------
StocksPLUS Fund 3.9% International
- ------------------------------------------------------------------------------------------------
Mid-Cap Growth Fund 2.0% Foreign Bond Fund 3.3%
- ------------------------------------------------------------------------------------------------
Capital Appreciation Fund 1.7% Total Bond Funds 71.7%
- ------------------------------------------------------------------------------------------------
Small-Cap Growth Fund 0.6%
- ------------------------------------------------------------------------------------------------
Value
- ------------------------------------------------------------------------------------------------
Value Fund 6.8%
- ------------------------------------------------------------------------------------------------
Small-Cap Value Fund 0.9%
- ------------------------------------------------------------------------------------------------
International
- ------------------------------------------------------------------------------------------------
International Fund 6.3%
- ------------------------------------------------------------------------------------------------
Total Stock Funds 31.6%
- ------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
PORTFOLIO INSIGHTS
The 30/70 Portfolio seeks current income, with long-term capital appreciation as
a secondary objective. The Portfolio's strategic allocation is 30% stock funds
and 70% bond funds. As of December 31, 1999, the Portfolio's actual allocation
was 32% stock funds and 68% bond funds. This compares to an allocation of 28%
stock funds and 72% bond funds on June 30, 1999. For the six-month period ended
December 31, 1999 the Institutional Portfolio returned 4.05%.
The Portfolio's overweight position in equities enhanced returns as stocks
surged in the fourth quarter. The move to reduce the Portfolio's fixed income
exposure helped mitigate the impact of higher interest rates. These adjustments
were based on changes in our proprietary asset allocation models, which favored
equities over fixed income.
Within the Portfolio's equity portion, we maintained an overweight position in
growth stocks versus value stocks and large-cap over small-cap. This was
positive for performance as large-cap, growth stocks continued to dominate. The
Portfolio slightly favored non-U.S. equities, which also positively impacted
returns.
The Enhanced Equity Fund did well over the past six months, as investments in
technology, consumer services, financial services and health care were strong
performers. The International Fund had solid performance as exposure to a
stronger Europe contributed to returns.
In what was a difficult period for fixed income, the Total Return Fund's
duration was kept below the benchmark as interest rates rose. The Fund remained
overweight in mortgages, in an effort to enhance yield without adding risk. This
tactic helped performance. In addition, a small allocation to select emerging
market bonds boosted relative returns as the sector benefited from economic
recovery.
Looking ahead, our latest research indicates that equities should continue to
be favored over fixed income. For that reason we expect to maintain an
overweight position in equities. In addition, we expect to continue favoring
growth over value, large-cap over small-cap and non-U.S. equities over U.S.
equities. Tactical moves within the Portfolio are based primarily on the signals
generated by a systematic process utilizing several proprietary asset allocation
models developed by PIMCO Advisors L.P.
8
<PAGE>
Schedule of Investments
December 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
90/10 Portfolio
PIMCO FUNDS (b) 98.5%
International 211,265 $ 2,596
Value 199,317 2,322
StockPLUS 123,544 1,723
Enhanced Equity 130,731 1,722
Total Return 134,320 1,330
Target 45,043 1,115
Mid-Cap Growth 31,739 825
Growth 21,627 746
Capital Appreciation 24,623 618
Small-Cap Value 28,579 400
Opportunity 13,007 349
Money Market 301,847 302
Small-Cap Growth 20,845 257
High Yield 17,348 185
Foreign 9,279 93
Total Investments (a) 98.5% $ 14,583
--------
(Cost $14,202)
Other Assets and Liabilities (Net) 1.5% 217
Net Assets 100.0% $ 14,800
--------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 908
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (527)
--------
Unrealized appreciation-net $ 381
========
(b) Institutional Class shares of each PIMCO Fund.
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
60/40 Portfolio
PIMCO FUNDS (b) 99.8%
Total Return 523,354 $ 5,181
International 154,840 1,903
Value 144,309 1,681
StockPLUS 93,823 1,309
Enhanced Equity 98,885 1,303
Target 35,710 884
High Yield 58,841 628
Mid-Cap Growth 24,008 624
Growth 17,845 616
Capital Appreciation 17,529 440
Money Market 398,969 399
Small-Cap Value 22,403 314
Foreign 31,404 313
Opportunity 10,259 275
Small-Cap Growth 15,583 192
Total Investments (a) 99.8% $ 16,062
--------
(Cost $15,936)
Other Assets and Liabilities (Net) 0.2% 30
Net Assets 100.0% $ 16,092
--------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 699
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (574)
--------
Unrealized appreciation-net $ 125
========
(b) Institutional Class shares of each PIMCO Fund.
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Value
Shares (000s)
<S> <C> <C>
30/70 Portfolio
PIMCO FUNDS (b) 100.2%
Total Return 488,736 $ 4,838
Value 51,128 597
High Yield 54,455 583
International 44,535 547
Enhanced Equity 27,198 358
StockPLUS 24,313 339
Foreign 29,101 290
Money Market 265,226 265
Target 9,343 231
Mid-Cap Growth 6,592 171
Growth 4,879 168
Capital Appreciation 5,822 146
Small-Cap Value 5,740 80
Opportunity 2,686 72
Small-Cap Growth 4,304 53
Total Investments (a) 100.2% $ 8,738
--------
(Cost $8,868)
Other Assets and Liabilities (Net) (0.2%) (16)
Net Assets 100.0% $ 8,722
--------
Notes to Schedule of Investments (amounts in thousands):
(a) At December 31, 1999, the net unrealized appreciation
(depreciation) of investments based on cost for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value over
tax cost. $ 176
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax cost
over value. (306)
--------
Unrealized depreciation-net $ (130)
========
(b) Institutional Class shares of each PIMCO Fund.
</TABLE>
11
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
90/10 Portfolio
Selected Per Share Data for the Year or Period Ended: Institutional Administration
12/31/1999(b) 06/30/1999 (c) 12/31/1999 (b) 06/30/1999 (c)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $12.19 $10.91 $12.18 $10.91
Net Investment Income (a) 1.38 0.05 1.36 0.04
Net Realized / Unrealized Gain (Loss) on Investments (a) (0.14) 1.23 (0.14) 1.23
Total Income from Investment Operations 1.24 1.28 1.22 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 12.65 12.19 12.64 12.18
Total Return (%) 10.37 11.73 10.26 11.64
Net Assets End of Period (000s) $ 12 $ 11 $ 12 $ 11
Ratio of Expenses to Average Net Assets (%) 0.10 * 0.10 0.35 * 0.35
Ratio of Net Investment Income (Loss) to Average Net Assets (%) 22.36 * 1.17 22.09 * 0.95
Portfolio Turnover Rate (%) 7 48 7 48
<CAPTION>
60/40 Portfolio
Institutional Administration
12/31/1999 (b) 06/30/1999 (c) 12/31/1999 (b) 06/30/1999 (c)
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $11.27 $10.55 $11.27 $10.55
Net Investment Income (a) 1.22 0.09 0.98 0.09
Net Realized / Unrealized Gain (Loss) on Investments (a) (0.43) 0.73 (0.21) 0.72
Total Income from Investment Operations 0.79 0.82 0.77 0.81
Dividends from Net Investment Income (0.25) (0.10) (0.23) (0.09)
Distributions from Net Realized Capital Gains (0.44) 0.00 (0.44) 0.00
Total Distributions (0.69) (0.10) (0.67) (0.09)
Net Asset Value End of Period 11.37 11.27 11.37 11.27
Total Return (%) 7.13 7.80 7.00 7.71
Net Assets End of Period (000s) $ 16 $ 11 $ 12 $ 11
Ratio of Expenses to Average Net Assets (%) 0.10 * 0.10 0.35 * 0.35
Ratio of Net Investment Income (Loss) to Average Net Assets (%) 21.47 * 2.52 17.30 * 2.44
Portfolio Turnover Rate (%) 24 39 24 39
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
30/70 Portfolio
Institutional Administration
12/31/1999 (b) 06/30/1999 (c) 12/31/1999 (b) 06/30/1999 (c)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value Beginning of Period $10.33 $10.09 $10.33 $10.09
Net Investment Income (a) 0.59 0.15 0.58 0.14
Net Realized / Unrealized Gain (Loss) on Investments (a) (0.18) 0.23 (0.18) 0.23
Total Income from Investment Operations 0.41 0.38 0.40 0.37
Dividends from Net Investment Income (0.27) (0.14) (0.26) (0.13)
Distributions from Net Realized Capital Gains (0.19) 0.00 (0.19) 0.00
Total Distributions (0.46) (0.14) (0.45) (0.13)
Net Asset Value End of Period 10.28 10.33 10.28 10.33
Total Return (%) 4.05 3.78 3.92 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 (Loss) to Average Net Assets (%) 11.49 * 4.20 11.24 * 4.03
Portfolio Turnover Rate (%) 17 37 17 37
</TABLE>
* Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
(b) Unaudited
(c) Commenced operations on February 26, 1999
13
<PAGE>
Statement of Assets and Liabilities
December 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
90/10 60/40 30/70
Amounts in thousands, except per share amounts Portfolio Portfolio Portfolio
<S> <C> <C> <C>
Assets:
Investments, at value $14,583 $16,062 $8,738
Cash and foreign currency 30 87 53
Receivable for Fund shares sold 243 69 3
Interest and dividends receivable 103 109 52
--------------------------------------------
14,959 16,327 8,846
--------------------------------------------
Liabilities:
Payable for investments and foreign currency purchased $ 133 $ 199 $ 107
Payable for Fund shares redeemed 5 8 0
Dividends payable 4 9 7
Accrued administrator's fee 5 6 3
Accrued distribution fee 9 9 5
Accrued servicing fee 3 4 2
159 235 124
--------------------------------------------
Net Assets $14,800 $16,092 $8,722
--------------------------------------------
Net Assets Consist of:
Paid in capital $13,511 $15,260 $8,742
Undistributed net investment income 1,475 1,279 318
Accumulated undistributed net realized (loss) (567) (572) (208)
Net unrealized appreciation (depreciation) 381 125 (130)
--------------------------------------------
$14,800 $16,092 $8,722
============================================
Net Assets:
Institutional Class $ 12 $ 16 $ 11
Administrative Class 12 11 11
Other Classes 14,776 16,065 8,700
Shares Issued and Outstanding:
Institutional Class 1 1 1
Administrative Class 1 1 1
Net Asset Value and Redemption Price* Per Share
(Net Assets Per Share Outstanding)
Institutional Class $ 12.65 $ 11.37 $10.28
Administrative Class 12.64 11.37 10.28
--------------------------------------------
Cost of Investments Owned $14,202 $15,936 $8,868
--------------------------------------------
</TABLE>
14
<PAGE>
Statement of Operations
For the six months ended December 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
90/10 60/40 30/70
Amounts in thousands Portfolio Portfolio Portfolio
<S> <C> <C> <C>
Investment Income:
Dividends $1,529 $1,466 $ 483
Interest 1 1 0
------------------------------------------
Total Income 1,530 1,467 483
Expenses:
Administration fees 25 34 16
Distribution and/or servicing fees - Other Classes 61 74 37
Trustees' fees 1 1 0
------------------------------------------
Total expenses 87 109 53
Net Investment Income 1,443 1,358 430
==========================================
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments 3 (44) (48)
Net change in unrealized (depreciation) on investments (155) (243) (117)
------------------------------------------
Net (Loss) (152) (287) (165)
------------------------------------------
Net Increase (Decrease) in Assets Resulting from Operations $1,291 $1,071 $ 265
==========================================
</TABLE>
15
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Amounts in thousands 90/10 Portfolio
Six Months Ended Period from
December 31, 1999 September 30, 1998
Increase (Decrease) in Net Assets from: (Unaudited) to June 30, 1999
<S> <C> <C>
Operations:
Net investment income $ 1,443 $ 38
Net realized gain 3 160
Net capital gain distributions received from underlying funds 0 113
Net change in unrealized appreciation (depreciation) (155) 536
-------------------------------------------
Net increase resulting from operations 1,291 847
===========================================
Distributions to Shareholders:
From net investment income
Institutional Class 0 0
Administrative Class 0 0
Other Classes (137) (38)
In excess of net investment income
Institutional Class 0 0
Administrative Class 0 0
Other Classes 0 (8)
From net realized capital gains
Institutional Class (1) 0
Administrative Class (1) 0
Other Classes (664) 0
-------------------------------------------
Total Distributions (803) (46)
===========================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 0 10
Administrative Class 0 10
Other Classes 4,572 10,508
Issued as reinvestment of distributions
Institutional Class 1 0
Administrative Class 1 0
Other Classes 778 45
</TABLE>
16
<PAGE>
<TABLE>
<S> <C> <C>
Cost of shares redeemed
Institutional Class 0 0
Administrative Class 0 0
Other Classes (1,598) (816)
----------------------------------------
Net increase resulting from Fund share transactions 3,754 9,757
----------------------------------------
Total Increase in Net Assets 4,242 10,558
========================================
Net Assets:
Beginning of period 10,558 0
End of period * $14,800 $10,558
========================================
*Including net undistributed investment income of: $ 1,475 $ 169
========================================
</TABLE>
17
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Amounts in thousands 60/40 Portfolio
Six Months Ended Period from
December 31, 1999 September 30, 1998
Increase (Decrease) in Net Assets from: (Unaudited) to June 30, 1999
<S> <C> <C>
Operations:
Net investment income $ 1,358 $ 115
Net realized gain (loss) (44) 140
Net capital gain distributions received from
underlying funds 0 94
Net change in unrealized appreciation (depreciation) (243) 368
-----------------------------------------------
Net increase resulting from operations 1,071 717
===============================================
Distributions to Shareholders:
From net investment income
Institutional Class 0 0
Administrative Class 0 0
Other Classes (252) (109)
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 (1) 0
Administrative Class 0 0
Other Classes (594) 0
-----------------------------------------------
Total Distributions (847) (109)
===============================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 5 10
Administrative Class 0 10
Other Classes 3,844 16,555
Issued as reinvestment of distributions
Institutional Class 1 0
Administrative Class 1 0
Other Classes 850 62
</TABLE>
18
<PAGE>
<TABLE>
<S> <C> <C>
Cost of shares redeemed
Institutional Class 0 0
Administrative Class 0 0
Other Classes (4,530) (1,548)
---------------------------------------------------
Net increase resulting from Fund share transactions 171 15,089
===================================================
Total Increase in Net Assets 395 15,697
===================================================
Net Assets:
Beginning of period 15,697 0
End of period * $16,092 $15,697
===================================================
*Including net undistributed investment income of: $ 1,279 $ 173
===================================================
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
Amounts in thousands 30/70 Portfolio
Six Months Ended Period from
December 31, 1999 September 30, 1998
Increase (Decrease) in Net Assets from: (Unaudited) to June 30, 1999
<S> <C> <C>
Operations:
Net investment income $ 430 $ 101
Net realized gain (loss) (48) 15
Net capital gain distributions received from
underlying funds 0 37
Net change in unrealized appreciation (depreciation) (117) (13)
-------------------------------------------------
Net increase resulting from operations 265 140
=================================================
Distributions to Shareholders:
From net investment income
Institutional Class 0 0
Administrative Class 0 0
Other Classes (161) (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 (324) (101)
=================================================
Fund Share Transactions:
Receipts for shares sold
Institutional Class 0 10
Administrative Class 0 10
Other Classes 2,799 7,664
Issued as reinvestment of distributions
Institutional Class 0 0
Administrative Class 0 0
Other Classes 309 71
</TABLE>
20
<PAGE>
<TABLE>
<S> <C> <C>
Cost of shares redeemed
Institutional Class 0 0
Administrative Class 0 0
Other Classes (1,461) (660)
---------------------------------------------------------
Net increase resulting from Fund share transactions 1,647 7,095
=========================================================
Total Increase in Net Assets 1,588 7,134
=========================================================
Net Assets:
Beginning of period 7,134 0
End of period * $ 8,722 $7,134
=========================================================
*Including net undistributed investment income of: $ 318 $ 49
=========================================================
</TABLE>
21
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 (Unaudited)
1. Organization
PIMCO Funds: Multi-Manager Series (the "Trust"), is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company organized as a Massachusetts business trust. The Trust currently
consists of twenty-six 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 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,
22
<PAGE>
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) 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., 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):
Distribution Fee(%) Servicing Fee(%)
Class A
All Portfolios -- 0.25
Class B
All Portfolios 0.75 0.25
Class C
All Portfolios 0.75 0.25
PFD also receives the proceeds of the initial sales charges paid by the
shareholders upon the purchase of Class A shares and the contingent deferred
sales charges paid by the shareholders upon certain redemptions of Class A, B
and C shares. For the period ended December 31, 1999, PFD received $55,023
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 December 31, 1999 were as follows (amounts in thousands):
Purchases Sales
90/10 Portfolio $ 5,277 $ 900
60/40 Portfolio 18,215 2,980
30/70 Portfolio 3,186 1,258
23
<PAGE>
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 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 1 100%
30/70 Portfolio 1 100%
6. Line of Credit
Effective December 14, 1999, the funds, along with certain other funds managed
by PIMCO, entered into an unsecured $350,000,000 bank line of credit agreement
with State Street Bank. 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 December 31, 1999.
7. Acquisition by Allianz AG
The Allianz AG acquisition of majority ownership of PIMCO Advisors has been
approved by the Boards of Allianz AG and PIMCO on October 31, 1999, subject to
regulatory review and approval, as well as the vote of the shareholders on March
3, 2000.
24
<PAGE>
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
(shares and amounts in thousands):
<TABLE>
<CAPTION>
90/10 Portfolio
---------------------------------------------------------------------------
Period Ended 12/31/1999 Period from 09/30/1998 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 376 4,572 938 10,508
Issued as reinvestment of distributions
Institutional Class 0 1 0 0
Administrative Class 0 1 0 0
Other Classes 64 778 4 45
Cost of shares redeemed
Institutional Class 0 0 0 0
Administrative Class 0 0 0 0
Other Classes (130) (1,598) (72) (816)
---------------------------------------------------------------------------
Net increase resulting from Fund share
transactions 310 $3,754 872 $ 9,757
===========================================================================
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
60/40 Portfolio
---------------------------------------------------------------------------
Period Ended 12/31/1999 Period from 09/30/1998 to 06/30/1999
Shares Amount Shares Amount
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Receipts for shares sold
Institutional Class 0 $ 5 1 $ 10
Administrative Class 0 0 1 10
Other Classes 344 3,844 1,529 16,555
Issued as reinvestment of distributions
Institutional Class 0 1 0 0
Administrative Class 0 1 0 0
Other Classes 76 850 6 62
Cost of shares redeemed
Institutional Class 0 0 0 0
Administrative Class 0 0 0 0
Other Classes (398) (4,530) (141) (1,548)
------------------------------------------------------------------------------
Net increase resulting from Fund share
transactions 22 $ 171 1,396 $15,089
==============================================================================
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
30/70 Portfolio
---------------------------------------------------------------------------
Period Ended 12/31/1999 Period from 09/30/1998 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 273 2,799 746 7,664
Issued as reinvestment of distributions
Institutional Class 0 0 0 0
Administrative Class 0 0 0 0
Other Classes 30 309 7 71
Cost of shares redeemed
Institutional Class 0 0 0 0
Administrative Class 0 0 0 0
Other Classes (143) (1,461) (64) (660)
---------------------------------------------------------------------------
Net increase resulting from Fund share
transactions 160 $ 1,647 691 $7,095
===========================================================================
</TABLE>
27
