<PAGE> 1
CONTENTS
96
Chairman's Letter Financial Highlights
----------------------------- -----------------------------
1 110
Management Discussion Independent Auditors' Report
and Analysis -----------------------------
-----------------------------
111
8 Trustees and Officers
Portfolio Highlights -----------------------------
-----------------------------
28
Statements of Assets
and Liabilities
-----------------------------
32
Statements of Operations
-----------------------------
36
Statements of Changes
in Net Assets
-----------------------------
44
Schedules of Portfolio
Investments
-----------------------------
75
Notes to Financial Statements
-----------------------------
<PAGE> 2
MANAGEMENT DISCUSSION AND ANALYSIS
U.S. EQUITY FUNDS
Any doubts that the stock market was volatile, or could suffer a large monthly
decline, should have been erased this year. The 14.5% decline in the S&P 500
Stock Index in August 1998 was the second largest calendar month decline since
the 1930s. A combination of a liquidity crisis in the bond market, concern about
U.S. corporate profits, and worry over a global financial meltdown caused by the
threat of default in Brazil, China, Korea and Russia, all contributed to send
stock prices lower. The events that sent stock prices lower may have been
unique, but the fact that prices fell was not.
The GROWTH & INCOME FUND earned 15.2% for the fiscal year ending October 31,
1998. On the surface, it may seem like an "average" year for the Fund. What is
important about this year's performance is that the stocks which make up the
"dogs of the Dow" half of the Fund performed better in the market downturn. This
is what the theory has always proclaimed: better performance in a down market
due to higher dividend yield and stocks that already trade at a low ("dog")
valuation. The Fund was down 12.7% from the large cap market peak on July 17th
to its October 8th low. However, the S&P 500 dropped 18.8% over the same period.
The theory continues to work.
It works with individual companies, too. Eastman Kodak had a tough 1997, down
23.2% last fiscal year (12 months ending October 31, 1997). As a result, it made
the list of the "dogs of the Dow" stocks and was purchased into the Fund. This
fiscal year, true to theory, it rallied 32.8%, surpassing the 22% return of the
S&P 500. Reaping the benefits of its most recent restructuring plan, Kodak has
significantly improved earnings by decreasing its cost structure and inspiring
new investor confidence in this great American brand.
Some of our shareholders have asked why we would hold a socially troubled
company like Philip Morris. While Philip Morris' business activities
may be loathsome to many, we would be neglecting our responsibility to all
shareholders of the Fund if we did not invest according to the methodology we
have established. Had we strayed from the discipline, the Fund would not have
participated in Philip Morris' 34.2% rise this fiscal year, which beat the S&P
500. Interestingly, Philip Morris was one of the few stocks in the U.S. with a
positive return in August's general market decline.
The MARKET RETURN FUND had another splendid year, earning 18.5%. The Fund is a
combination of a short-term bond fund and S&P 500 futures and performs
consistently with the overall stock market. It is an excellent vehicle for IRAs
and other tax-deferred investments. This Fund will earn its first 3-year
Morningstar star rating in a few months, and we are anxiously awaiting its
recognition.
Small cap stocks had one of the worst years in a few decades. The market peaked
in April 1998 and fell a disappointing 37.3% until the trough in October 1998.
No matter how you define
ANNUAL REPORT 1
<PAGE> 3
MANAGEMENT DISCUSSION AND ANALYSIS (continued)
"bear" market, this was it. Our small cap funds, the VALUE STOCK FUND and the
GROWTH STOCK FUND, could not escape the difficult market. The Value Fund was
down 6.9% and the Growth Fund fell 8.7% for the 10 month period ending October
31, 1998. It is important to note that these two Funds, like all Payden & Rygel
Funds, invest in what they say they will invest, i.e., in this case, small cap
stocks. A quick look at the largest holdings of many funds named "small cap"
will uncover some of the largest cap stocks in the world. This does not help an
investor who is looking for diversification.
[EQUITY MARKET RETURN BAR GRAPH]
<TABLE>
<CAPTION>
INDEX YEAR ENDED 10/31 QUARTER ENDED 10/31
<S> <C> <C>
S&P 500 22 -1.6
S&P 600/SmallCap -11.1 -10.4
MSCI Europeland Far East 8 -6.6
MSCI/Far East -15.9 3.3
Dow Jones/Europe Stoxx 23.3 -9.8
</TABLE>
FOREIGN STOCK FUNDS
The EUROPEAN GROWTH & INCOME FUND started the year with a blaze, outpacing even
the torrid pace set by the U.S. market. The Fund finished the year with a solid
gain of 14.3%. Although the methodology for this Fund is similar to the "dogs of
the Dow" strategy, investors should note that both the timing and reason for
paying a dividend is very different in Europe than in the U.S. This means that
the performance characteristics of this Fund will differ from its U.S. cousin.
The diversification benefits of European stocks are outstanding and the
prospects for the "new" Europe under the common currency in 1999 are exciting.
The methodology works on individual companies in Europe, too. Pernod Ricard
earned a disappointing 0.8% return in fiscal year 1997. It fell into the "dogs
of Europe" stocks and was incorporated into our portfolio. This fiscal year, the
stock gained 43.5%, outpacing the Dow Jones Europe Stoxx index return of 16.1%.
The beverage industry giant sold its Orangina drink division to focus on
expanding its international operations in spirits and wine.
The INTERNATIONAL EQUITY FUND also participated in the solid returns generated
by European bourses this year. Unfortunately, these returns were offset by the
disappointing results in Asian and Latin American stock markets. The Fund earned
0.8% in fiscal year 1998.
The GLOBAL BALANCED FUND earned a solid 8.2% for fiscal year 1998. The Fund was
more conservative and evenly balanced than its 60% stock, 40% bond benchmark for
much of the year. The bond component also added stability, as the Fund continued
to have relatively low variability of return. Indeed, the return for this year
is similar to the 9.5% earned last fiscal year.
2 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 4
This Fund is an excellent choice for investors who are troubled by making their
own stock/bond/cash decisions, or for investors looking for instant
diversification.
U.S. BOND FUNDS
1998 was one of the most unusual years in recent memory in the U.S. bond market.
The first eight months of the year were relatively quiet, volatility was low and
yields on 10 year Treasuries traded in the 5.4% to 5.7% range. Then, in August,
concerns over Latin America, Asia and Russia, combined with the uncertainty
surrounding the Clinton presidency created a global "flight-to-quality." This
caused U.S. Treasury rates to drop nearly 1.2% in a little over a month as
investors sold risky assets and desperately put their funds in risk-free
Treasuries. In addition, the virtual collapse of Long Term Capital and other
hedge funds further exacerbated the effect of this "flight-to-quality" and
caused liquidity to be severely reduced in sectors which are normally highly
liquid.
YIELDS ON 10-YEAR TREASURY NOTES
[LINE GRAPH]
<TABLE>
<S> <C>
JAN 30 5.507
FEB 27 5.624
MAR 27 5.685
APR 24 5.662
MAY 29 5.554
JUN 26 5.45
JULY 31 5.496
AUG 28 5.064
SEPT 25 4.562
OCT 30 4.607
</TABLE>
This decline in rates was a positive factor for most fixed-income investors and
consequently, all of our fixed-income funds generated attractive returns during
this time. However, not all bonds performed equally well. This was due to the
constantly changing yield curve in conjunction with the widening of spreads
across all non-treasury securities (mortgage-backed securities, asset-backed
securities, and corporate bonds).
With interest rates falling during the year, our Funds with the longest duration
strategies, the TOTAL RETURN, INVESTMENT QUALITY BOND, AND U.S. GOVERNMENT
FUNDS, performed the best. Of these funds, the U.S. GOVERNMENT FUND turned in
the best performance due to the superior performance of U.S. Treasuries relative
to the poor performing corporate securities. This year, the Fund earned a
Morningstar Rating(TM) of [FOUR STARS],* and for the fiscal year ending October
31, 1998, the Fund gained 8.6%.
* Morningstar ratings are for the 3-year period ending October 31, 1998, out of
a total of 1,499 taxable bond funds. Morningstar's proprietary ratings reflect
historical risk-adjusted performance and are subject to change monthly.
Specifically, they are calculated from the fund's 3-year average annual returns
in excess of 90-day Treasury bill returns with appropriate adjustments for fees
and a risk factor that reflects performance below a 90-day Treasury bill return.
The top 10% of the funds in an investment category receive five stars and the
next 22.5% receive four stars.
ANNUAL REPORT 3
<PAGE> 5
MANAGEMENT DISCUSSION AND ANALYSIS (continued)
Fortunately, the TOTAL RETURN AND INVESTMENT QUALITY BOND FUNDS, both of which
have been overweight in corporate bonds, have also been structured with an
overweight to longer maturity securities. This increase in average maturity
helped mitigate the impact of the under-performing corporate securities. In
fact, the negative impact from spread widening was off-set by the general
decline in rates which contributed to an increase in capital gains. The TOTAL
RETURN FUND earned 7.7% this fiscal year, and the INVESTMENT QUALITY BOND FUND
earned 8.3%.
The SHORT BOND FUND and the LIMITED MATURITY FUND each handsomely exceeded the
return on money market securities. The SHORT BOND FUND earned 6.8% this fiscal
year, while the LIMITED MATURITY FUND posted a 5.9% return. We are generally
pleased with the performance of these Funds, which provide investors with a
liquid source of higher yielding investment for cash in their portfolio.
The HIGH INCOME FUND benefited from several core strategies, which resulted in
good results in a very volatile market. For the year-to-date through October 31,
the Fund returned 1.8%. Our focus on restructuring and consolidating (defensive)
industries, most notably cable, media and gaming, proved beneficial in an
environment of generally wider spreads. Our underweighting of the hard-hit
cyclicals (paper, chemicals, energy) was also a positive for relative returns.
In addition, the HIGH INCOME FUND benefited from the higher average credit
quality of the portfolio, which has been a mid-double B. Perhaps most important,
individual credit selection provided significant additional returns as the
Fund's upgrade to downgrade ratio stood at a strong 5 to 1.
The BUNKER HILL MONEY MARKET FUND earned a highly competitive yield this year.
This Fund maintains a constant net asset value, and is therefore appropriate for
investors whose first priority is safety of principal.
FLIGHT TO QUALITY
During August and September, the corporate bond market experienced one of its
worst performing periods in quite some time. As investors poured money into U.S.
Treasuries, all other non-Treasury securities were either sold or ignored. This
caused spreads on corporate bonds (i.e., the difference between corporate bond
yields and Treasury yields) to widen to levels not seen since the recession in
1990-1991. In addition, the liquidity of investment grade corporate bonds, was
significantly reduced as Wall Street dealers became reluctant to make markets in
bonds which had previously been almost as liquid as Treasuries. This severely
reduced liquidity caused spreads to widen even further in a snowball-like
effect. The chart on the following page illustrates the magnitude of this
phenomenon.
4 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 6
FLIGHT-TO-QUALITY CAUSED DECREASE IN YIELDS:
BOOSTING TREASURIES, BUT HURTING LESSER CREDITS.
[FLIGHT TO QUALITY BAR GRAPH]
<TABLE>
<CAPTION>
THIRD QUARTER BASIS POINT CHANGE
<S> <C>
10-year T-Note -100
30-year T-Bond -60
10-year Single-A Corporate -60
10-year Double-B Corporate 10
Emerging Market Debt 600
</TABLE>
In mid October, the Federal Reserve Board lowered rates 0.25%, which was the
second rate cut in less than 3 weeks, in response to the credit crunch brought
about by the factors mentioned above. The corporate bond market responded
positively to these cuts and spreads have since recovered from their widest
levels in early October.
Going forward, we plan on maintaining our overweight of investment grade
corporates, compared to the applicable benchmarks, due to the underlying
strength of the U.S. economy and the solid fundamental credit-paying ability of
these corporations. If market volatility subsides in the coming months, as
expected, spreads would also be expected to decrease, thereby generating
significant capital gains.
GLOBAL BOND FUNDS
Internationally, bond markets of the developed countries reacted to the
financial crisis in a similar fashion to the U.S. market. Interest rates fell
across Europe and Japan as investors shifted out of riskier assets into
government bonds. Higher-yielding credit instruments did not see the same
demand; thus, spreads widened while liquidity significantly contracted.
Performance across countries was fairly consistent, relative to past years. On a
local currency basis, European bonds were the highest returning, followed by the
U.S. and Japan. Volatility in the foreign exchange markets also picked up in the
second half of the year, with the U.S. dollar losing ground to the Japanese yen
and European currencies. For U.S. investors, this boosted returns on unhedged
foreign holdings.
ANNUAL REPORT 5
<PAGE> 7
MANAGEMENT DISCUSSION AND ANALYSIS (continued)
The GLOBAL FIXED INCOME FUND and GLOBAL SHORT BOND FUND were well positioned for
the fall in interest rates around the world. Through the purchase of long
maturity securities in both portfolios, the extra duration contributed excess
capital gains as bond yields fell. Also, the emphasis on government issues and
high quality securities paid off as these Funds outperformed their respective
benchmarks. The Global Fixed Income Fund has earned the highest Morningstar
Rating(TM) of [FIVE STARS].*
Looking ahead, we continue to be optimistic on the outlook for global
fixed-income securities. In the coming year, the tightened liquidity conditions
should slow economic growth worldwide. We believe that the resulting lower level
of inflation will push bond yields lower and allow central banks to lower
short-term interest rates as well. In addition, as credit markets stabilize, and
European Monetary Union is officially launched in January, 1999, the Funds
should find attractive opportunities for added return in oversold non-government
sectors.
TAX-EXEMPT BOND FUNDS
The municipal market was primarily affected by two competing forces over the
last year: (1) new issuances that were heavy and sporadic, and (2) uncertainty
in global financial markets which led to a flight-to-quality and lower interest
rates.
The supply trend that began in 1997, with $221 billion in new bond issuances,
continued into 1998. Municipalities, flush with cash from an expanding economy
and strong tax receipts, had many capital needs to meet. The first half of 1998
saw a heavy new debt load being financed, and many participants felt the market
would break the old total debt issuance record of $291 billion, set in 1993. A
supply record was set in May 1998 when the Long Island Power Authority brought a
$3.4 billion deal to market. This was the single largest municipal deal in
history. To absorb the heavy slate of supply, investors demanded higher yields,
and municipal valuations were pressured. In July, a seasonal lull in issuances
began, and continued through the rest of the year, as the flight-to-quality in
the Treasury market made it difficult to structure new deals. The diminished
supply picture through the end of the year enabled municipals to recapture some
value relative to other instruments.
Another factor that impacted the municipal market was the uncertainty in global
financial markets. The rally in the Treasury market had a carryover impact on
the municipal market, resulting in an increase in the absolute value of
municipal bonds.
* Morningstar ratings are for the periods ending October 31, 1998, out of a
total of 1499 (3-year period) and 954 (5-year period) taxable bond funds.
Morningstar's proprietary ratings reflect historical risk-adjusted performance
and are subject to change monthly. Specifically, they are calculated from the
fund's 3-year and 5-year average annual returns in excess of 90-day Treasury
bill returns with appropriate adjustments for fees and a risk factor that
reflects performance below a 90-day Treasury bill return. The top 10% of the
funds in an investment category receive five stars.
6 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 8
Bonds in the short end of the municipal yield curve experienced the sharpest
decline in interest rates during the year. Yields declined by 0.85% on bonds
with maturities within one year, whereas yields fell by 0.45% on bonds that
mature in two to five years. Consequently the yield curve steepened by 0.40%
from one to five years. Municipal credit spreads remained stable throughout the
year with the spread between AAA and BBB General Obligation bonds at 0.35%.
During the year, we were able to selectively add bonds with a yield advantage to
enhance the SHORT DURATION TAX EXEMPT BOND FUND'S overall yield. The move
improved the portfolio's risk-adjusted return, which increased the fund's
Morningstar Rating(TM) to [FOUR STARS].*
The TAX EXEMPT BOND FUND benefited from the change in the shape of the yield
curve during the year. Yields in the intermediate portion of the curve declined
by 0.45%, whereas the yield on long bonds fell by 0.30%. The Fund took advantage
of this by maintaining an overweight in the intermediate portion of the yield
curve compared to its benchmark. Unlike the taxable market, which suffered from
a widening in the yield premium demanded for lower credit bonds, credit spreads
in the municipal market actually narrowed during the year. When the year began,
credit spreads were at historically narrow levels. At that time, we held the
opinion that investors were not properly compensated for the additional risk
they assumed on lower credit bonds. We believe the risk\reward trade-off
continues to favor high quality instruments.
* Morningstar ratings are for the 3-year period ending October 31, 1998, out of
a total of 972 municipal bond funds. Morningstar's proprietary ratings reflect
historical risk-adjusted performance and are subject to change monthly.
Specifically, they are calculated from the fund's 3-year average annual returns
in excess of 90-day Treasury bill returns with appropriate adjustments for fees
and a risk factor that reflects performance below a 90-day Treasury bill return.
The top 10% of the funds in an investment category receive five stars and the
next 22.5% receive four stars.
Annual Report 7
<PAGE> 9
PORTFOLIO HIGHLIGHTS
This section includes Country Allocation, Country/Region Allocation, Portfolio
Composition and Sector Allocation charts. In the case of the Group's fixed
income Funds, these charts are designed to identify the country, region or type
of security where a Fund is exposed to changes in interest rates. In the case of
the Group's equity Funds, these charts are designed to identify the country,
region or industry sector where a Fund is exposed to changes in equity markets.
In either case, if a Fund makes use of futures or options contracts, the chart
includes the effect of those contracts. Unless indicated otherwise, information
in this section is as of October 31, 1998.
8 Payden & Rygel Investment Group
<PAGE> 10
GLOBAL SHORT BOND FUND
Country Allocation Maturity Composition
[GLOBAL SHORT BOND PIE CHART] [MATURITY COMPOSITION BAR CHART]
<TABLE>
<S> <C> <C> <C>
U.S. 30% New Zealand 5.5
United Kingdom 10% United Kingdom 4.8
New Zealand 5% Australia 3.7
Denmark 10% Germany 2.8
Germany 36% U.S. 2.5
Australia 4% Denmark 2.0
Sweden 5% Sweden 1.5
</TABLE>
FOREIGN CURRENCY EXPOSURE FULLY
HEDGED TO THE U.S. DOLLAR
<TABLE>
<CAPTION>
October 31, 1998 October 31, 1997
- --------------------------------------------------------------------------
<S> <C> <C>
Net Assets: $251,609,000 $220,865,000
Number of Issues: 22 21
Average Maturity: 3.0 years 2.1 years
SEC Yield: 3.91% 4.94%
</TABLE>
Investment Performance
[GLOBAL SHORT BOND LINE GRAPH]
<TABLE>
Merrill Lynch 1-3 year Treasury Index Global Short Bond Fund
<S> <C> <C>
Sep 18, 1996 10,044 10,060
Jan 1997 10,283 10,336
Jan 1998 11,022 11,016
Oct 31, 1998 11,649 11,671
</TABLE>
Average Annual Total Return
<TABLE>
<CAPTION>
1-Year 2-Years Since Inception*
------ ------- ----------------
<S> <C> <C> <C>
Global Short Bond Fund: 7.87% 7.44% 7.56%
Merrill Lynch 1-3 Year Treasury Index: 7.70% 7.09% 7.46%
*Fund Inception was 9/18/96
</TABLE>
Note: Past performance does not predict future performance. This information is
not part of the audited financial statements.
Annual Report 9
<PAGE> 11
GLOBAL FIXED INCOME FUND
Country Allocation Maturity Composition
[GLOBAL FIXED INCOME PIE CHART] [MATURITY COMPOSITION BAR CHART]
<TABLE>
<S> <C> <C> <C>
U.S. 40% Germany 10.3
Japan 5% U.S. 8.7
New Zealand 5% Greece 8.6
Greece 2% Sweden 8.0
U.K. 15% New Zealand 8.0
Germany 28% United Kingdom 7.4
Sweden 3% Japan 6.5
Denmark 2% Denmark 2.3
</TABLE>
Currency Exposure
96% United States
4% New Zealand/Japan
<TABLE>
<CAPTION>
OCTOBER 31, 1998 OCTOBER 31, 1997
---------------- ----------------
<S> <C> <C>
Net Assets: $524,650,000 $535,644,000
Number of Issues: 26 20
Average Maturity: 8.8 years 7.3 years
SEC Yield: 4.50% 5.39%
</TABLE>
Investment Performance
[GLOBAL FIXED INCOME LINE GRAPH]
<TABLE>
<CAPTION>
Global Fixed Income Fund JP Morgan Hedged Global Bond Index Lehman U.S. Treasury Index
<S> <C> <C> <C>
Sep 1, 1992 10,000 10,000 10,000
Jan 1993 10,201 10,440 10,364
Jan 1994 11,470 11,575 11,385
Jan 1995 11,240 11,222 11,051
Jan 1996 13,105 13,184 12,922
Jan 1997 13,854 14,294 13,201
Jan 1998 15,245 15,936 14,671
Oct 31, 1998 16,535 17,382 15,871
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
1-YEAR 5-YEARS SINCE INCEPTION*
------ ------- ----------------
<S> <C> <C> <C>
Global Fixed Income Fund: 11.81% 8.05% 8.49%
JP Morgan Hedged Global Bond Index: 12.70% 8.80% 9.37%
Lehman U.S. Treasury Index: 9.76% 6.43% 6.74%
*Fund Inception was 9/1/92
</TABLE>
Note: Past performance does not predict future performance. This information is
not part of the audited financial statements.
10 Payden & Rygel Investment Group
<PAGE> 12
GLOBAL BALANCED FUND
Country/Region Allocation Top Equity Holdings
[GLOBAL BALANCED FUND PIE CHART] [TOP EQUITY HOLDINGS BAR CHART]
<TABLE>
<S> <C> <C> <C>
United Kingdom 13% Bristol Myers Squibb 1.6%
Latin America 1% Wal-Mart Stores, Inc. 1.5%
Cash 10% General Electric Co. 1.5%
U.S. 39% Banco De Galicia y
Other Europe 31% Buenos Aires 1.5%
Japan 2% Tandy Corporation 1.5%
Far East 4% Home Depot, Inc. 1.4%
Tyco International, Ltd. 1.4%
Exxon Corp. 1.0%
Banque National de Paris 0.9%
Telefonica S.A. 0.9%
</TABLE>
EQUITIES 58%
BONDS 32%
CASH 10%
FOREIGN CURRENCY EXPOSURE
HEDGED 13% TO U.S. DOLLAR
<TABLE>
<CAPTION>
OCTOBER 31, 1998 OCTOBER 31, 1997
<S> <C> <C>
Net Assets: $7,078,000 $10,312,000
Number of Issues: 73 76
Number of Countries: 15 18
Average market Cap (Equities): $42.5 billion $29.2 billion
</TABLE>
Investment Performance
[GLOBAL BALANCED FUND LINE GRAPH]
<TABLE>
<CAPTION>
Global Balanced Fund Composite Index**
<S> <C> <C>
Dec 9, 1996 10,032 9,877
Jan 1997 9,861 9,851
Jan 1998 11,439 11,124
Oct 31, 1998 11,848 12,391
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
1 YEAR SINCE INCEPTION*
------ ----------------
<S> <C> <C>
Global Balanced Fund: 8.21% 9.36%
Composite Index: 15.18% 11.83%**
*Fund Inception was 12/9/96
**From 12/1/96
</TABLE>
Note: Past performance does not predict future performance. This information is
not part of the audited financial statements.
Annual Report 11
<PAGE> 13
INTERNATIONAL EQUITY FUND
Country/Region Allocation Top Holdings
[INTERNATIONAL EQUITY FUND PIE CHART] [TOP HOLDINGS BAR CHART]
<TABLE>
<S> <C> <C> <C>
Europe 55% Zurich Allied AG 2.3%
Japan 8% Cadbury Schweppes Ord. 1.7%
Cash 13% Granada Group PLC 1.6%
Far East 5% Unicredito Italiano SpA 1.5%
U.K. 19% Bayerische Hypo-und-
Vereinsbank 1.5%
Heineken N.V. 1.5%
Bank of Scotland 1.5%
Nestle S.A. 1.5%
CRH PLC 1.5%
Dixons 1.5%
</TABLE>
FOREIGN CURRENCY EXPOSURE UNHEDGED
<TABLE>
<CAPTION>
OCTOBER 31, 1998 OCTOBER 31, 1997
- ----------------------------------------------------------------------------
<S> <C> <C>
Net Assets: $18,323,000 $14,403,000
Number of Issues: 68 64
Number of Countries: 11 21
Average Market Capitalization: $45.5 billion $24.1 billion
</TABLE>
Investment Performance
[INTERNATIONAL EQUITY FUND LINE GRAPH]
<TABLE>
International Equity Fund Morgan Stanley EAFE Index**
<S> <C> <C>
Dec 9, 1996 10,108 9,874
Jan 1997 9,788 9,531
Jan 1998 10,909 10,541
Oct 31, 1998 10,839 11,092
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
1-YEAR SINCE INCEPTION*
------ ----------------
<S> <C> <C>
International Equity: 0.75% 4.34%
Morgan Stanley EAFE Index: 9.95% 5.55%**
*Fund Inception was 12/9/96
**From 12/1/96
</TABLE>
Note: Past performance does not predict future performance. This information is
not part of the audited financial statements.
12 Payden & Rygel Investment Group
<PAGE> 14
EUROPEAN GROWTH & INCOME FUND
Top Holdings by Country
<TABLE>
<CAPTION>
France The Netherlands
[FRANCE BAR CHART] [THE NETHERLANDS BAR CHART]
<S> <C> <C> <C>
Lafarge, SA 3.1% Koninklijke KPN Nederlands NV 3.2%
Pernod-Ricard 2.8% Royal Dutch Petroleum 2.5%
Eridania Beghin-Say 2.6% Elsevier NV 2.4%
Paribas 2.1% ABN AMRO Holdings NV 2.0%
Elf Aquitaine FFR50 1.8% Koninklijke Pakhoed NV 1.9%
Germany U.K.
[GERMANY BAR CHART] [U.K. BAR CHART]
<C> <C> <C> <C>
BASF AG 2.7% Scottish Power 2.5%
Bayer AG 2.5% British Telecom PLC 2.5%
Buderus 2.4% Rio Tinto 2.2%
Deutsche Telekom 2.2% Royal & Sun Alliance 2.1%
Preussag 2.1% National Power PLC 1.8%
</TABLE>
FOREIGN CURRENCY EXPOSURE UNHEDGED
<TABLE>
<CAPTION>
OCTOBER 31, 1998 OCTOBER 31, 1997
- --------------------------------------------------------------------------
<S> <C> <C>
Net Assets: $39,529,000 $13,608,000
Number of Issues: 74 55
Number of Countries: 4 5
Average Market Cap: $18.2 billion $14.4 billion
</TABLE>
Investment Performance
[EUROPEAN GROWTH LINE GRAPH]
<TABLE>
European Growth & Income Fund Morgan Stanley Europe Index
<S> <C> <C>
Jun 27, 1997 10,000 10,000
Jan 1998 10,951 11,306
Oct 31, 1998 11,648 12,719
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
1-YEAR SINCE INCEPTION*
<S> <C> <C>
European Growth & Income Fund: 14.31% 12.06%
Morgan Stanley Europe Index: 23.42% 19.71%
*Fund Inception was 6/30/97
</TABLE>
Note: Past performance does not predict future performance. This information is
not part of the audited financial statements.
Annual Report 13
<PAGE> 15
LIMITED MATURITY FUND
<TABLE>
<CAPTION>
Portfolio Composition
[LIMITED MATURITY FUND PIE CHART]
<S> <C> <C> <C>
Treasury/Agency 16% Mortgage Backed 23%
Asset Backed 20% Cash 3%
Commercial Paper 7% Corporate 31%
</TABLE>
Credit Quality
- -------------------------------------------------
AAA 63%
AA 14%
BBB 23%
<TABLE>
<CAPTION>
OCTOBER 31, 1998 OCTOBER 31, 1997
- --------------------------------------------------------------------------------
<S> <C> <C>
Net Assets: $117,042,000 $152,429,000
Number of Issues: 27 37
Average Maturity: 0.9 years 0.4 years
SEC Yield: 5.64% 5.51%
</TABLE>
Investment Performance
[LIMITED MATURITY LINE GRAPH]
<TABLE>
<CAPTION>
Limited Maturity Fund Merrill Lynch 90-day Treasury Bill Index
<S> <C> <C>
May 1, 1994 10,000 10,000
Jan 1995 10,308 10,366
Jan 1996 11,031 10,986
Jan 1997 11,577 11,569
Jan 1998 12,230 12,188
Oct 31, 1998 12,758 12,673
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
---------------------------
1-YEAR 3-YEARS SINCE INCEPTION*
------ ------- ----------------
<S> <C> <C> <C>
Limited Maturity Fund: 5.87% 5.58% 5.56%
Merrill Lynch 90-day Treasury Bill Index: 5.32% 5.38% 5.40%
*Fund Inception was 5/1/94
</TABLE>
Note: Past performance does not predict future performance. This information is
not part of the audited financial statements.
14 Payden & Rygel Investment Group
<PAGE> 16
SHORT BOND FUND
Portfolio Composition
[SHORT BOND FUND PIE CHART]
Mortgage Backed 38%
Asset Backed 2%
Treasury 15%
Corporate 45%
Credit Quality
AAA 55%
AA 2%
A 19%
BBB 24%
<TABLE>
<CAPTION>
OCTOBER 31, 1998 OCTOBER 31, 1997
---------------- ----------------
<S> <C> <C>
Net Assets: $108,661,000 $94,256,000
Number of Issues: 39 31
Average Maturity: 3.0 years 1.4 years
SEC Yield: 5.38% 6.05%
</TABLE>
Investment Performance
[SHORT BOND FUND LINE GRAPH]
<TABLE>
<CAPTION>
Short Bond Fund Merrill Lynch 1-3 year Treasury Index
<S> <C> <C>
Jan 1, 1994 10,051 10,064
Jan 1995 10,160 10,197
Jan 1996 11,279 11,258
Jan 1997 11,647 11,774
Jan 1998 12,338 12,621
Oct 1998 12,977 13,338
</TABLE>
AVERAGE ANNUAL TOTAL RETURN
---------------------------
<TABLE>
<CAPTION>
1-YEAR 3-YEARS SINCE INCEPTION*
------ ------- ----------------
<S> <C> <C> <C>
Short Bond Fund 6.80% 5.72% 5.54%
Merrill Lynch 1-3 year Treasury Index 7.70% 6.69% 6.14%
*Fund Inception was 1/1/94
</TABLE>
Note: Past performance does not predict future performance. This information is
not part of the audited financial statements.
ANNUAL REPORT 15
<PAGE> 17
U.S. GOVERNMENT FUND
Portfolio Composition
[U.S. GOVERNMENT FUND PIE CHART]
Treasury 17%
Agency 28%
Mortgage Backed 54%
Cash 1%
Credit Quality
AAA 100%
<TABLE>
<CAPTION>
OCTOBER 31, 1998 OCTOBER 31, 1997
---------------- ----------------
<S> <C> <C>
Net Assets: $71,855,000 $15,479,000
Number of Issues: 25 10
Average Maturity: 3.7 years 2.7 years
SEC Yield: 5.10% 5.35%
</TABLE>
Investment Performance
[U.S. GOVERNMENT FUND LINE GRAPH]
<TABLE>
<CAPTION>
U.S. GOVERNMENT FUND COMPOSITE INDEX
<S> <C> <C>
Jan 1 '95 10130 10162
Jan '96 11568 11540
Jan '97 11842 11941
Jan '98 12812 12963
Oct 1 '98 13531 13796
</TABLE>
[Composite Index: Lehman Intermediate Treasury Index, 1/95 through 12/97;
Merrill Lynch 1-5 Year Treasury Index, 1/98 Forward]
AVERAGE ANNUAL TOTAL RETURN
---------------------------
<TABLE>
<CAPTION>
1-YEAR 3-YEARS SINCE INCEPTION*
------ ------- ----------------
<S> <C> <C> <C>
U.S. Government Fund: 8.60% 6.62% 8.20%
Composite Index: 8.81% 7.22% 8.75%
*Fund Inception was 1/1/95
</TABLE>
Note: Past performance does not predict future performance. This information is
not part of the audited financial statements.
16 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 18
INTERMEDIATE BOND FUND
Portfolio Composition
[INTERMEDIATE BOND FUND PIE CHART]
Corporate 58%
Mortgage Backed 19%
Treasury/Agency 14%
Cash 1%
Asset Backed 8%
Credit Quality
AAA 31%
AA 4%
A 37%
BBB 28%
<TABLE>
<CAPTION>
OCTOBER 31, 1998 OCTOBER 31, 1997
---------------- ----------------
<S> <C> <C>
Net Assets: $88,872,000 $80,766,000
Number of Issues: 35 39
Average Maturity: 5.0 years 4.5 years
SEC Yield: 5.73% 5.87%
</TABLE>
Investment Performance
[INTERMEDIATE BOND FUND LINE GRAPH]
<TABLE>
<CAPTION>
INTERMEDIATE BOND FUND LEHMAN INTERMEDIATE GOVERNMENT/CORPORATE INDEX
<S> <C> <C>
Jan 1 '94 10118 10111
Jan '95 9824 9972
Jan '96 11235 11408
Jan '97 11455 11814
Jan '98 12379 12861
Oct 31 '98 13045 13712
</TABLE>
AVERAGE ANNUAL TOTAL RETURN
---------------------------
<TABLE>
<CAPTION>
1-YEAR 3-YEARS SINCE INCEPTION*
------ ------- ----------------
<S> <C> <C> <C>
Intermediate Bond Fund: 7.73% 6.34% 5.65%
Lehman Intermediate
Government/Corporate Index: 9.12% 7.46% 6.75%
*Fund Inception was 1/1/94
</TABLE>
Note: Past performance does not predict future performance. This information is
not part of the audited financial statements.
ANNUAL REPORT 17
<PAGE> 19
INVESTMENT QUALITY BOND FUND
Portfolio Composition
[INVESTMENT QUALITY BOND FUND PIE CHART]
Corporate 42%
Mortgage Backed 33%
Treasury/Agency 13%
Commercial Paper 3%
Asset Backed 9%
Credit Quality
AAA 41%
AA 3%
A 17%
BBB 39%
<TABLE>
<CAPTION>
OCTOBER 31, 1998 OCTOBER 31, 1997
---------------- ----------------
<S> <C> <C>
Net Assets: $173,974,000 $94,987,000
Number of Issues: 56 49
Average Maturity: 6.7 years 6.5 years
SEC Yield: 6.34% 6.08%
</TABLE>
Investment Performance
[INVESTMENT QUALITY BOND FUND LINE GRAPH]
<TABLE>
<CAPTION>
Invest Quality Lehman
Bond Fund Aggregate Index
<S> <C> <C>
Jan 1 '94 10190 10135
Jan '95 9707 9900
Jan '96 11465 11578
Jan '97 11646 11956
Jan '98 12800 13238
Oct 31 '98 13553 14083
</TABLE>
AVERAGE ANNUAL TOTAL RETURN
---------------------------
<TABLE>
<CAPTION>
1-YEAR 3-YEARS SINCE INCEPTION*
------ ------- ----------------
<S> <C> <C> <C>
Investment Quality Bond Fund: 8.33% 7.20% 6.49%
Lehman Aggregate Index: 9.34% 8.01% 7.34%
*Fund Inception was 1/1/94
</TABLE>
Note: Past performance does not predict future performance. This information is
not part of the audited financial statements.
18 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 20
TOTAL RETURN FUND
Portfolio Composition
[TOTAL RETURN FUND PIE CHART]
Treasury/Agency 38%
Corporate 27%
Mortgage Backed 23%
Asset Backed 10%
Cash 2%
Credit Quality
AAA 55%
AA 4%
A 12%
BBB 15%
BB 14%
<TABLE>
<CAPTION>
OCTOBER 31, 1998 OCTOBER 31, 1997
---------------- ----------------
<S> <C> <C>
Net Assets: $174,612,000 $98,863,000
Number of Issues: 53 59
Average Maturity: 6.7 years 6.5 years
SEC Yield: 6.14% 6.39%
</TABLE>
Investment Performance
[TOTAL RETURN FUND LINE GRAPH]
<TABLE>
<CAPTION>
Total Return Fund Lehman Aggregate Index**
<S> <C> <C>
Dec 1 '96 9959 9907
Jan '98 10917 11003
Oct 31 '98 11537 11705
</TABLE>
AVERAGE ANNUAL TOTAL RETURN
---------------------------
<TABLE>
<CAPTION>
1-YEAR SINCE INCEPTION*
------ ----------------
<S> <C> <C>
Total Return Fund: 7.72% 7.83%
Lehman Aggregate Index: 9.34% 8.56%
*Fund Inception was 12/9/96
**From 12/1/96
</TABLE>
Note: Past performance does not predict future performance. This information is
not part of the audited financial statements.
ANNUAL REPORT 19
<PAGE> 21
HIGH INCOME FUND
Portfolio Composition
[HIGH INCOME FUND PIE CHART]
Corporate 81%
Commercial Paper 5%
Cash 5%
Asset Backed 4%
Foreign Government 3%
Preferred Stock 2%
Credit Quality
AAA 10%
A 3%
BBB 1%
BB 31%
B 45%
<TABLE>
<CAPTION>
OCTOBER 31, 1998 OCTOBER 31, 1997
---------------- ----------------
<S> <C> <C>
Net Assets: $91,669,000 Fund
Number of Issues: 76 Not
Average Maturity: 6.8 years In
SEC Yield: 9.08% Operation
</TABLE>
Investment Performance
[HIGH INCOME FUND LINE GRAPH]
<TABLE>
<CAPTION>
High Income Fund Merrill Lynch High Yield Index
<S> <C> <C>
12/30/97 9950 10009
3/31/98 10329 10288
7/31/98 10556 10520
10/31/98 10128 9920
</TABLE>
TOTAL RETURN
------------
<TABLE>
<CAPTION>
SINCE INCEPTION*
----------------
<S> <C>
High Income Fund: 1.28%
Merrill Lynch High Yield Index: - 0.80%
*Fund Inception was 12/30/97
</TABLE>
Note: Past performance does not predict future performance. This information is
not part of the audited financial statements.
20 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 22
BUNKER HILL MONEY MARKET FUND
Portfolio Composition
[BUNKER HILL MONEY MARKET FUND PIE CHART]
<TABLE>
<S> <C>
Commercial Paper 62%
Treasury/Agency 26%
Certificates of Deposit 5%
Corporate 4%
Collateralized Mortgage Obligation 2%
Cash 1%
</TABLE>
<TABLE>
<CAPTION>
OCTOBER 31, 1998 OCTOBER 31, 1997
---------------- ----------------
<S> <C> <C>
Net Assets: $26,455,000 Fund
Number of Issues: 21 Not
Average Maturity: 66 days In
30-Day Yield: 4.97% Operation
</TABLE>
Investment Performance
[BUNKER HILL MONEY MARKET LINE GRAPH]
<TABLE>
<CAPTION>
BUNKER HILL FUND IBC/DONOGHUE INDEX*
<S> <C> <C>
Dec 17, 1997 10,000 10,000
Jan 1998 10,067 10,064
Oct 31, 1998 10,465 10,443
</TABLE>
*Source: IBC/Donoghue Taxable Money Market Fund Average
IBC's Money Fund Report
TOTAL RETURN
------------
<TABLE>
<CAPTION>
SINCE INCEPTION*
----------------
<S> <C>
Bunker Hill Fund: 4.65%
IBC/Donoghue Index: 4.43%
*Fund Inception was 12/17/97
</TABLE>
Note: Past performance does not predict future performance. This information is
not part of the audited financial statements.
ANNUAL REPORT 21
<PAGE> 23
SHORT DURATION TAX EXEMPT FUND
Portfolio Composition
- ---------------------
[SHORT DURATION TAX EXEMPT FUND PIE CHART]
<TABLE>
<S> <C>
Revenue Bonds 53%
General Obligation Bonds 40%
Pre-Refunded Bonds 5%
Cash 2%
</TABLE>
Credit Quality
<TABLE>
<S> <C>
AAA 59%
AA 6%
A 25%
BBB 10%
</TABLE>
<TABLE>
<CAPTION>
OCTOBER 31, 1998 OCTOBER 31, 1997
- -------------------------------------------------------------------------
<S> <C> <C>
Net Assets: $16,825,000 $38,176,000
Number of Issues: 18 37
Average Maturity: 2.4 years 2.0 years
SEC Yield: 3.35% 3.72%
</TABLE>
Investment Performance
- ----------------------
[SHORT DURATION TAX EXEMPT LINE GRAPH]
<TABLE>
<CAPTION>
SHORT DURATION TAX EXEMPT FUND LEHMAN 1-YEAR GENERAL OBLIGATION INDEX
<S> <C> <C>
Sep 1, 1994 9,974 10,001
Jan 1995 10,040 10,095
Jan 1996 10,756 10,756
Jan 1997 11,028 11,223
Jan 1998 11,551 11,738
Oct 31, 1998 11,912 12,160
</TABLE>
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
1-YEAR 3-YEARS SINCE INCEPTION*
------ ------- ----------------
<S> <C> <C> <C>
Short Duration Tax Exempt Fund: 4.55% 4.12% 4.29%
Lehman 1-Year General Obligation Index: 4.93% 4.66% 4.80%
</TABLE>
*Fund Inception was 9/1/94
Note: Past performance does not predict future performance. This information is
not part of the audited financial statements.
22 Payden & Rygel Investment Group
<PAGE> 24
TAX EXEMPT BOND FUND
Portfolio Composition
- ---------------------
[TAX EXEMPT BOND FUND PIE CHART]
<TABLE>
<S> <C>
Revenue Bonds 57%
General Obligation Bonds 35%
Pre-Refunded Bonds 7%
Cash 1%
</TABLE>
Credit Quality
<TABLE>
<S> <C>
AAA 65%
AA 21%
A 7%
BBB 7%
</TABLE>
<TABLE>
<CAPTION>
OCTOBER 31, 1998 OCTOBER 31, 1997
- --------------------------------------------------------------------
<S> <C> <C>
Net Assets: $67,889,000 $57,579,000
Number of Issues: 54 49
Average Maturity: 7.6 years 7.3 years
SEC Yield: 3.53% 4.08%
</TABLE>
Investment Performance
- ----------------------
[TAX EXEMPT BOND FUND LINE GRAPH]
<TABLE>
<CAPTION>
TAX EXEMPT BOND FUND LEHMAN QUALITY INTERMEDIATE INDEX**
<S> <C> <C>
Dec 21, 1993 10,026 10,000
Jan 1995 9,475 9,911
Jan 1996 10,801 11,178
Jan 1997 10,980 11,585
Jan 1998 11,891 12,502
Oct 31, 1998 12,330 13,058
</TABLE>
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
1-YEAR 3-YEARS SINCE INCEPTION*
------ ------- ----------------
<S> <C> <C> <C>
Tax Exempt Bond Fund: 6.32% 5.71% 4.40%
Lehman Quality Intermediate Index: 7.03% 6.22% 5.67%**
</TABLE>
*Fund Inception was 12/21/93
**From 1/1/94
Note: Past performance does not predict future performance. This information is
not part of the audited financial statements.
Annual Report 23
<PAGE> 25
GROWTH AND INCOME FUND
[Top Dividend Yields Bar Chart]
Top Dividend Yields
- -------------------
<TABLE>
<S> <C>
J.P. Morgan 4.0%
Philip Morris 3.4%
General Motors 3.2%
Chevron 3.0%
Caterpillar 2.7%
</TABLE>
[Best Total Return Bar Chart]
Best Total Return 10/31/97 - 10/31/98
- -------------------------------------
<TABLE>
<S> <C>
Philip Morris 34.2%
Kodak 32.8%
AT&T 30.7%
S&P Dep. Receipts 21.1%
Exxon 19.5%
</TABLE>
<TABLE>
<CAPTION>
OCTOBER 31, 1998 OCTOBER 31, 1997
- ----------------------------------------------------------------------
<S> <C> <C>
Net Assets: $250,553,000 $150,944,000
Number of Issues: 16 16
Gross Dividend Yield*: 2.42% 2.17%
Dividends Yield/S&P 500 1.49% 1.69%
</TABLE>
*Prior to fund expenses
(Source: Barrons)
Investment Performance
- ----------------------
[Growth and Income Fund Line Graph]
<TABLE>
<CAPTION>
Growth & Income Fund Standard & Poor's 500 Index
-------------------- ---------------------------
<S> <C> <C>
Nov 1 '96 10640 10756
Jan '97 11191 11201
Jan '98 13452 14216
Oct 31 '98 14877 16116
</TABLE>
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
1-YEAR SINCE INCEPTION*
------ ----------------
<S> <C> <C>
Growth & Income Fund: 15.15% 21.97%
S&P 500 Index: 21.99% 26.95%
</TABLE>
*Fund Inception was 11/1/96
Note: Past performance does not predict future performance. This information is
not part of the audited financial statements.
24 Payden & Rygel Investment Group
<PAGE> 26
MARKET RETURN FUND
Portfolio Composition
[MONEY MARKET RETURN FUND]
- ----------------------------
Treasury/Agency 32%
Mortgage Backed 31%
Corporate 19%
Asset Backed 10%
Cash 6%
S&P Depositary Receipts 2%
Equity Exposure
<TABLE>
<S> <C>
S&P Futures 98%
S&P Depositary
Receipts 2%
</TABLE>
<TABLE>
<CAPTION>
OCTOBER 31, 1998 OCTOBER 31, 1997
- --------------------------------------------------------------------
<S> <C> <C>
Net Assets: $43,390,000 $20,195,000
Number of Issues: 46 43
Average Maturity: 2.1 years 0.4 years
SEC Yield: 5.78% 5.62%
</TABLE>
Investment Performance
- ----------------------
[MARKET RETURN LINE GRAPH]
<TABLE>
<CAPTION>
MARKET RETURN FUND STANDARD & POOR'S 500 INDEX
<S> <C> <C>
Dec 1, 1995 10,163 10,193
Jan 1995 10,355 10,898
Jan 1996 10,552 10,540
Jan 1997 12,690 13,316
Jan 1998 16,090 16,901
Oct 31, 1998 17,803 19,161
</TABLE>
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
1-YEAR 2-YEARS SINCE INCEPTION*
------ ------- ----------------
<S> <C> <C> <C>
Market Return Fund: 18.48% 24.94% 21.84%
S&P 500 Index: 21.99% 26.95% 24.93%
</TABLE>
*Fund Inception was 12/1/95
Note: Past performance does not predict future performance. This information is
not part of the audited financial statements.
Annual Report 25
<PAGE> 27
VALUE STOCK FUND
Largest Holdings
[LARGEST HOLDINGS BAR CHART]
- ----------------------------------
Allegiance Corp. 3.9%
Apple Computer 3.4%
Protective Life Corp. 3.0%
Whitman Corp. 3.0%
Ambac Financial Group 3.0%
Duke Realty Investments Inc. 2.2%
Sector Allocation
<TABLE>
<S> <C>
Financials 24.4%
Consumer
Cyclicals 18.5%
Technology 18.3%
Basic Industries 10.3%
Health Care 9.5%
</TABLE>
<TABLE>
<CAPTION>
OCTOBER 31, 1998 OCTOBER 31, 1997
- --------------------------------------------------------------------
<S> <C> <C>
Net Assets: $23,544,000 Fund
Number of Issues: 81 Not In
Number of Industries: 11 Operation
</TABLE>
Investment Performance
- ----------------------
[VALUE STOCK FUND LINE GRAPH]
<TABLE>
<CAPTION>
VALUE STOCK FUND S&P 600 SMALL CAP INDEX
<S> <C> <C>
Dec 30, 1997 10,000 10,000
Jan 31, 1998 10,070 9,879
Oct 31, 1998 9,315 8,849
</TABLE>
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
SINCE INCEPTION*
----------------
<S> <C>
Value Stock Fund: - 6.85%
S&P 600 Small Cap Index: - 11.51%
</TABLE>
*Fund Inception was 12/30/97
Note: Past performance does not predict future performance. This information is
not part of the audited financial statements.
26 Payden & Rygel Investment Group
<PAGE> 28
GROWTH STOCK FUND
Largest Holdings
- ----------------
[Bar Chart]
<TABLE>
<S> <C>
JLG Industries 5.0%
Century Telephone Enterprises 4.6%
Altera Corporation 4.4%
De Vry, Inc. 3.3%
Protective Life 3.2%
Martin Marietta 3.1%
</TABLE>
Sector Allocation
<TABLE>
<S> <C>
Capital Goods 19.2%
Consumer
Cyclicals 19.1%
Basic Industries 15.3%
Financials 14.6%
Health Care 9.2%
</TABLE>
<TABLE>
<CAPTION>
OCTOBER 31, 1998 OCTOBER 31, 1997
- -------------------------------------------------------------------
<S> <C> <C>
Net Assets: $2,384,000 Fund
Number of Issues: 53 Not In
Number of Industries: 11 Operation
</TABLE>
Investment Performance
- ----------------------
[GROWTH STOCK FUND LINE GRAPH]
<TABLE>
GROWTH STOCK FUND S&P 600 SMALL CAP INDEX
<S> <C> <C>
Dec 30, 1997 10,000 10,000
Jan 31, 1998 9,990 9,879
Oct 31, 1998 9,134 8,849
</TABLE>
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
SINCE INCEPTION*
----------------
<S> <C>
Growth Stock Fund: - 8.64%
S&P 600 Small Cap Index: - 11.51%
</TABLE>
*Fund Inception was 12/30/97
Note: Past performance does not predict future performance. This information is
not part of the audited financial statements.
Annual Report 27
<PAGE> 29
DEAR SHAREHOLDERS:
Payden & Rygel and the world financial markets explored new territory in 1998.
Continued turmoil in international markets sparked a crisis of confidence in our
own markets, causing a tumble in stock prices and an unparalleled test of
liquidity in bonds. The Payden & Rygel Funds, however, due to a strong emphasis
on risk management, held up extremely well in this volatile environment.
And, this performance did not go unnoticed In the past six months, several of
our funds have received upgrades to their Morningstar Ratings(TM). Two of our
funds now have five-stars* (Global Fixed Income and Limited Maturity) and two
more funds received four-stars (Short Bond and U.S. Government).* Many of our
funds were also cited in the general financial media - Short Duration Tax
Exempt, for example, was cited three months in a row by Money magazine as one of
the leading short-term muni funds, and Global Fixed Income continues to receive
a variety of accolades from publications such as Fortune Magazine and Dow Jones
Investment Advisor.
Shareholders rewarded this excellence with both their savings and their trust.
Year-over-year through October 31, our Funds experienced a 30% growth in assets
- - in dollar terms, an increase of over $500 million. As you receive this report,
we are moving towards our next target - the $3 billion mark.
Hand in hand with this growth, Payden & Rygel has expanded services for our
customers. This past quarter, we introduced both trading and balance inquires to
our shareholders via the Internet. Based on your feedback, we revamped our
website to make it more user-friendly. We also redesigned many of our marketing
and informational materials to make our fund information easier to access and
understand. And in October, in conjunction with Metzler Bank of Germany, Payden
& Rygel announced the creation of a new global joint venture, Metzler/Payden
LLC, to create cross-oceanic investment
PAYDEN & RYGEL FUNDS GARNER RECOGNITION IN NATIONAL MEDIA
*Morningstar ratings are for the periods ending October 31, 1998, out of a total
of 1,499 (3-year period) and 954 (5-year period) taxable bond funds.
Morningstar's proprietary ratings reflect historical risk-adjusted performance
and are subject to change monthly. Specifically, they are calculated from each
fund's 3-year and, in the case of the Global Fixed Income Fund only, 5-year
average annual returns in excess of 90-day Treasury bill returns with
appropriate adjustments for fees and a risk factor that reflects performance
below a 90-day Treasury bill return. The top 10% of the funds in an investment
category receive five stars and the next 22.5% receive four stars.
<PAGE> 30
SECURE INTERNET ACCESS
opportunities and subadvise our international stock funds. Note that this
relationship will not affect the independence of either member firm.
Just as we have expanded our services, so we have expanded our product line. In
December, we started three new mutual funds. The EuroDirect Fund, a European
version of our Global Balanced Fund, invests in European-domiciled stocks and
bonds. The California Municipal Income Fund invests in California-issued
municipal bonds. Finally, Payden & Rygel brings its widely-recognized global
bond expertise to the emerging markets sector with our Emerging Markets Bond
Fund.
NEW FUNDS, NEW ASSETS, NEW GROWTH
Going forward, we believe Payden & Rygel will continue to offer a compelling
range of investment opportunities. We are pleased to see our shareholders
responding to them so enthusiastically.
As always, we work for you.
Best Wishes,
/s/ Joan A. Payden
Joan A. Payden
Chairman & CEO
Payden & Rygel Investment Group
Payden
&
Rygel
<PAGE> 31
STATEMENTS OF ASSETS AND LIABILITIES
October 31, 1998
<TABLE>
<CAPTION>
GLOBAL GLOBAL GLOBAL INTERNATIONAL
SHORT BOND FIXED INCOME BALANCED EQUITY
FUND FUND FUND FUND
------------ ------------ ---------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value*................... $247,429,162 $568,843,643 $7,474,088 $19,086,595
Foreign cash............................. 3,890 13,114 63,733 108,332
Cash..................................... 5,690
Receivable for:
Interest and dividends................. 6,896,824 13,018,226 77,076 42,015
Open forward currency contracts........ 827,732 543,131 4,307
Closed forward currency contracts...... 642,498
Investments sold....................... 17,845,340 291,654
Open futures and options contracts..... 107,680 11,900
Fund shares sold....................... 19,933 38 29
Paydowns...............................
Unamortized organization costs (Note
4)..................................... 602 1,499 1,402
Deferred expense subsidy (Note 5)........ 338,166 148,854 110,501
Other assets............................. 38,161 68,775 1,593 2,635
------------ ------------ ---------- -----------
Total Assets........................ 256,177,035 600,459,842 7,784,471 19,647,470
------------ ------------ ---------- -----------
LIABILITIES:
Payable for:
Open forward currency contracts........ 3,464,265 8,980,647 80,428 9,887
Closed forward currency contracts...... 683,668 1,018,939
Investments purchased.................. 449,848 1,178,567
Open futures contracts................. 1,158 511
Fund shares redeemed................... 65,603,627 1,017 998
Open option contracts..................
Open swap contracts....................
Payable to Payden & Rygel (Note 5)....... 247,781 142,219 94,468
Distributions payable....................
Accrued expenses:
Investment advisory fees............... 63,458 25,941 2,981 8,900
Administration fees.................... 12,692 29,968 358 890
Other expenses......................... 96,021 151,168 28,614 30,427
------------ ------------ ---------- -----------
Total Liabilities................... 4,567,885 75,810,290 706,623 1,324,648
------------ ------------ ---------- -----------
NET ASSETS.......................... $251,609,150 $524,649,552 $7,077,848 $18,322,822
============ ============ ========== ===========
NET ASSETS:
Paid in capital.......................... $246,620,024 $490,585,703 $6,007,310 $18,144,869
Undistributed net investment income...... 7,098,183 1,450,438 15,312 168,644
Accumulated distributions in excess of
net investment income..................
Accumulated net realized gains (losses)
from investments....................... (4,575,915) 20,128,203 565,572 (1,121,972)
Net unrealized appreciation
(depreciation) from:
Investments............................ 2,351,241 16,665,024 563,662 1,129,247
Translation of assets and liabilities
in foreign currencies............... 115,617 (4,179,816) (74,008) 2,034
------------ ------------ ---------- -----------
NET ASSETS.......................... $251,609,150 $524,649,552 $7,077,848 $18,322,822
============ ============ ========== ===========
Outstanding shares of beneficial
interest............................... 24,412,663 48,100,341 652,676 1,701,830
============ ============ ========== ===========
NET ASSET VALUE -- offering and
redemption price per share............. $ 10.31 $ 10.91 $ 10.84 $ 10.77
============ ============ ========== ===========
- ------------
* Investments, at cost................... $242,469,944 $548,550,299 $6,937,059 $17,936,928
</TABLE>
See notes to financial statements.
28 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 32
<TABLE>
<CAPTION>
EUROPEAN
GROWTH & GROWTH & MARKET LIMITED SHORT U.S.
INCOME INCOME RETURN MATURITY BOND GOVERNMENT
FUND FUND FUND FUND FUND FUND
----------- ------------ ----------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
$39,391,551 $250,391,665 $42,686,795 $116,204,174 $117,070,973 $91,695,807
370,580
144,278 117,762 359,791 822,497 1,426,124 598,744
9,955,695
328,550
41,317 256,561 1,008 5,886 171,985 2,037
46,330
2,748 3,826 1,347
181,488 184,077 262,019 760,144 489,599 268,813
2,473 22,952 5,634 23,699 15,970 11,291
----------- ------------ ----------- ------------ ------------ -----------
39,763,855 250,976,843 43,691,474 117,816,400 129,500,926 92,576,692
----------- ------------ ----------- ------------ ------------ -----------
20,207,396 20,367,472
108,950 27,188
5,362 104,078 2,544 437 22,891
156,779 183,584 246,193 707,279 447,983 230,556
3,816
16,255 26,397 9,691 25,776 21,140 14,123
1,950 12,279 2,077 5,523 5,514 3,684
54,837 97,576 37,068 35,591 49,436 55,612
----------- ------------ ----------- ------------ ------------ -----------
235,183 423,914 301,389 774,606 20,840,419 20,721,526
----------- ------------ ----------- ------------ ------------ -----------
$39,528,672 $250,552,929 $43,390,085 $117,041,794 $108,660,507 $71,855,166
=========== ============ =========== ============ ============ ===========
$40,308,503 $212,298,521 $41,243,414 $116,704,183 $108,293,787 $70,352,294
3,068 56,882 137,755 3,435 74,156
1,276,301 5,742,134 (1,509,862) (163,737) (418,818) 403,355
(4,816,350) 32,509,206 3,599,651 363,593 782,103 1,025,361
2,760,218
----------- ------------ ----------- ------------ ------------ -----------
$39,528,672 $250,552,929 $43,390,085 $117,041,794 $108,660,507 $71,855,166
=========== ============ =========== ============ ============ ===========
3,447,862 17,334,643 3,260,654 11,608,466 10,927,660 6,592,251
=========== ============ =========== ============ ============ ===========
$ 11.46 $ 14.45 $ 13.31 $ 10.08 $ 9.94 $ 10.90
=========== ============ =========== ============ ============ ===========
$41,455,751 $217,882,459 $43,094,228 $115,840,581 $116,160,770 $90,644,983
</TABLE>
See notes to financial statements.
ANNUAL REPORT 29
<PAGE> 33
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
October 31, 1998
<TABLE>
<CAPTION>
INTERMEDIATE INVESTMENT TOTAL SHORT DURATION
BOND QUALITY BOND RETURN TAX EXEMPT
FUND FUND FUND FUND
------------ ------------ ------------ --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value*............... $105,973,325 $231,775,974 $224,867,998 $ 16,550,064
Foreign cash.........................
Cash.................................
Receivable for:
Interest and dividends............. 1,274,546 2,864,966 2,163,681 250,704
Open forward currency contracts....
Closed forward currency
contracts....................... 42,090
Investments sold................... 3,264,025 412,094 1,027,502
Open futures and options
contracts.......................
Fund shares sold................... 156 23,142
Paydowns...........................
Unamortized organization costs (Note
4)................................. 1,201
Deferred expense subsidy (Note 5).... 293,303 444,502 161,902 303,640
Other assets......................... 16,134 23,374 7,187 3,941
------------ ------------ ------------ ------------
Total Assets.................... 110,821,333 235,108,972 227,656,153 18,158,993
------------ ------------ ------------ ------------
LIABILITIES:
Payable for:
Open forward currency contracts....
Closed forward currency
contracts.......................
Investments purchased.............. 16,898,452 57,415,555 48,398,859 1,014,379
Open futures contracts............. 201,125 267,344 326,250
Fund shares redeemed............... 3,066,068
Open option contracts.............. 1,471,875 2,943,750 2,943,750
Open swap contracts................ 1,115,183
Payable to Payden & Rygel (Note 5)... 244,292 376,812 130,569 298,776
Distributions payable................
Accrued expenses:
Investment advisory fees........... 18,967 41,081 40,653 4,662
Administration fees................ 4,948 8,803 8,711 874
Other expenses..................... 43,157 81,747 80,023 15,727
------------ ------------ ------------ ------------
Total Liabilities............... 21,948,884 61,135,092 53,043,998 1,334,418
------------ ------------ ------------ ------------
NET ASSETS...................... $ 88,872,449 $173,973,880 $174,612,155 $ 16,824,575
============ ============ ============ ============
NET ASSETS:
Paid in capital...................... $ 86,049,596 $169,150,752 $173,643,430 $ 16,466,877
Undistributed net investment
income............................. 140,213 203,469 11,644
Accumulated distributions in excess
of net investment income........... (1,352,736)
Accumulated net realized gains
(losses) from investments.......... 1,077,349 2,083,879 776,692 139,528
Net unrealized appreciation
(depreciation) from:...............
Investments........................ 1,605,291 2,535,780 1,544,769 206,526
Translation of assets and
liabilities in foreign
currencies......................
------------ ------------ ------------ ------------
NET ASSETS...................... $ 88,872,449 $173,973,880 $174,612,155 $ 16,824,575
============ ============ ============ ============
Outstanding shares of beneficial
interest........................... 9,072,357 17,111,232 17,065,215 1,664,941
============ ============ ============ ============
NET ASSET VALUE -- offering and
redemption price per share......... $ 9.80 $ 10.17 $ 10.23 $ 10.11
============ ============ ============ ============
- ------------
* Investments, at cost............... $104,528,281 $229,133,953 $224,766,484 $ 16,343,538
</TABLE>
See notes to financial statements.
30 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 34
<TABLE>
<CAPTION>
TAX EXEMPT BUNKER HILL HIGH VALUE GROWTH
BOND MONEY MARKET INCOME STOCK STOCK
FUND FUND FUND FUND FUND
----------- ------------ ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
$66,884,621 $26,501,928 $89,772,835 $23,542,392 $2,398,374
2,000
1,020,671 107,014 1,990,484 5,496 506
41,600
127,206
495 451 4,791 4,791
389,888 71,361 24,969 23,334 44,731
10,627 2,840 4,184 1,353 317
----------- ----------- ----------- ----------- ----------
68,305,807 26,812,844 91,792,923 23,618,966 2,448,719
----------- ----------- ----------- ----------- ----------
149,040 5,347 1,053
358,333 66,778 21,811 18,299 40,394
104,092
18,627 3,308 20,856 15,030 1,160
3,493 1,323 4,841 1,095 116
36,454 33,103 76,605 35,279 21,702
----------- ----------- ----------- ----------- ----------
416,907 357,644 124,113 75,050 64,425
----------- ----------- ----------- ----------- ----------
$67,888,900 $26,455,200 $91,668,810 $23,543,916 $2,384,294
=========== =========== =========== =========== ==========
$66,321,572 $26,455,200 $96,648,367 $28,976,306 $2,765,705
52,102 985,809 73,570 717
(1,312,266) (1,066,988) (3,314,131) (156,438)
2,827,492 (4,898,378) (2,191,829) (225,690)
----------- ----------- ----------- ----------- ----------
$67,888,900 $26,455,200 $91,668,810 $23,543,916 $2,384,294
=========== =========== =========== =========== ==========
6,843,864 26,455,200 9,382,439 2,536,685 261,661
=========== =========== =========== =========== ==========
$ 9.92 $ 1.00 $ 9.77 $ 9.28 $ 9.11
=========== =========== =========== =========== ==========
$64,057,129 $26,501,928 $94,671,213 $26,176,134 $2,624,064
</TABLE>
See notes to financial statements.
ANNUAL REPORT 31
<PAGE> 35
STATEMENTS OF OPERATIONS
Period ended October 31, 1998
<TABLE>
<CAPTION>
GLOBAL GLOBAL GLOBAL INTERNATIONAL
SHORT BOND FIXED INCOME BALANCED EQUITY
FUND FUND FUND FUND
----------- ------------ --------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income............................ $13,074,465 $29,185,617 $ 275,931 $ 131,714
Dividend income............................ 83,277 372,228
Foreign tax withholdings................... (7,412) (40,908)
----------- ----------- --------- -----------
Investment Income........................ 13,074,465 29,185,617 351,796 463,034
----------- ----------- --------- -----------
EXPENSES:
Investment advisory fees (Note 5).......... 812,952 1,557,710 46,512 117,688
Administration fees (Note 5)............... 162,590 311,542 5,581 11,769
Custodian fees............................. 99,673 139,290 17,408 27,747
Accounting fees (Note 5)................... 91,524 157,934 8,577 11,875
Legal fees................................. 4,167 5,566 84 281
Audit fees................................. 28,288 43,597 21,992 22,173
Professional fees.......................... 2,638 3,689 66 173
Insurance.................................. 13,742 38,753 839 1,209
Organization expenses (Note 4)............. 386 1,215 1,117
Trustees' fees and expenses................ 29,725 53,322 861 2,034
Transfer agent fees (Note 5)............... 40,362 69,010 11,494 13,391
Registration and filing fees............... 39,000 27,752 8,202 10,402
Printing costs............................. 44,709 102,451 7,109 2,945
Other expenses............................. 12,166 39,239 2,850 2,488
Expenses previously deferred (Note 5)......
Waived advisory fee (Note 5)...............
Expense subsidy (Note 5)................... (177,014) (68,722) (50,362)
----------- ----------- --------- -----------
Net Expenses............................. 1,204,908 2,549,855 64,068 174,930
----------- ----------- --------- -----------
Net Investment Income................. 11,869,557 26,635,762 287,728 288,104
----------- ----------- --------- -----------
REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gains (losses) from:
Investments.............................. (1,735,094) 23,361,934 588,342 (1,016,068)
Foreign currency transactions............ 9,796,745 (5,649,476) (146,780) (105,213)
Swap contracts........................... (684,589) (702,521)
Futures contracts........................ 21,181 3,491,012 34,894
Options contracts........................ (51,860)
Change in net unrealized appreciation
(depreciation) from:
Investments.............................. 1,914,473 8,197,391 43,870 646,432
Translation of assets and liabilities in
foreign currencies.................... (642,869) 2,467,711 19,414 57,610
Open swap contracts......................
Open futures contracts................... 556,695 31,688 (30,556)
Open options contracts written...........
----------- ----------- --------- -----------
Net Realized and Unrealized Gains
(Losses)............................ 8,669,847 31,670,886 571,428 (447,759)
----------- ----------- --------- -----------
CHANGE IN NET ASSETS RESULTING FROM
OPERATIONS............................... $20,539,404 $58,306,648 $ 859,156 $ (159,691)
=========== =========== ========= ===========
</TABLE>
- ------------
(a) The Fund commenced operations on December 30, 1997.
(b) The Fund commenced operations on December 17, 1997.
See notes to financial statements.
32 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 36
<TABLE>
<CAPTION>
EUROPEAN GROWTH & MARKET LIMITED SHORT U.S.
GROWTH & INCOME RETURN MATURITY BOND GOVERNMENT
INCOME FUND FUND FUND FUND FUND FUND
----------- ----------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 70,277 $ 377,464 $ 2,122,096 $8,473,415 $6,467,516 $3,509,510
958,771 4,314,982 13,333
(84,982)
------------------------------------------------------------------------------
944,066 4,692,446 2,135,429 8,473,415 6,467,516 3,509,510
------------------------------------------------------------------------------
135,841 1,120,128 97,322 404,336 285,676 171,501
16,301 134,415 20,855 86,644 61,216 36,750
61,239 23,597 13,242 17,642 12,976 7,358
15,675 74,369 15,952 53,763 39,037 24,358
3,671 3,404 487 1,659 1,402 961
23,764 21,215 17,368 20,472 19,253 17,520
381 2,073 360 298 523 692
1,250 11,667 1,527 11,230 6,927 1,529
1,710 4,228 21,659 399
3,235 23,088 3,677 14,689 10,756 6,282
34,643 191,257 17,730 29,468 21,082 17,264
16,279 61,125 19,069 5,208 27,930 35,980
4,300 30,411 4,866 24,195 21,028 8,528
9,905 17,746 6,017 9,397 6,751 3,712
(8,369) (448,051) (44,776) (29,672)
(130,835) (65,681) (84,807) (253,773) (162,799) (95,698)
----------- ----------- ----------- ---------- ---------- ----------
188,990 1,204,991 155,324 425,228 306,982 207,464
----------- ----------- ----------- ---------- ---------- ----------
755,076 3,487,455 1,980,105 8,048,187 6,160,534 3,302,046
----------- ----------- ----------- ---------- ---------- ----------
1,313,782 5,750,473 (366,841) (30,669) (347,317) 556,891
(183,868) (1,607,206) 338,178
(170,500)
(4,202,425) 18,949,308 (447,500) 191,381 715,861 859,991
2,154,445 4,462,160 (128,100) (25,463)
----------- ----------- ----------- ---------- ---------- ----------
(918,066) 24,699,781 2,040,613 160,712 408,122 1,391,419
----------- ----------- ----------- ---------- ---------- ----------
$ (162,990) $28,187,236 $ 4,020,718 $8,208,899 $6,568,656 $4,693,465
=========== =========== =========== ========== ========== ==========
</TABLE>
See notes to financial statements.
ANNUAL REPORT 33
<PAGE> 37
STATEMENTS OF OPERATIONS (CONTINUED)
Period ended October 31, 1998
<TABLE>
<CAPTION>
INTERMEDIATE INVESTMENT TOTAL SHORT DURATION
BOND QUALITY BOND RETURN TAX EXEMPT
FUND FUND FUND FUND
------------ ------------ ---------- --------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income......................... $6,676,538 $ 9,512,397 $6,291,451 $1,108,915
Dividend income.........................
Foreign tax withholdings................
---------- ----------- ---------- ----------
Investment Income..................... 6,676,538 9,512,397 6,291,451 1,108,915
---------- ----------- ---------- ----------
EXPENSES:
Investment advisory fees (Note 5)....... 287,093 405,163 269,905 80,235
Administration fees (Note 5)............ 61,520 86,821 57,837 15,044
Custodian fees.......................... 10,523 19,729 18,953 6,759
Accounting fees (Note 5)................ 36,610 49,832 35,517 13,092
Legal fees.............................. 1,331 2,306 1,360 171
Audit fees.............................. 18,987 20,258 19,653 18,115
Professional fees....................... 971 3,888 1,534 168
Insurance............................... 5,923 7,209 6,575 2,508
Organization expenses (Note 4).......... 927
Trustees' fees and expenses............. 10,973 16,238 12,221 2,359
Transfer agent fees (Note 5)............ 21,554 27,294 21,639 13,142
Registration and filing fees............ 26,540 57,693 29,891 8,589
Printing costs.......................... 15,179 23,346 18,753 5,215
Other expenses.......................... 7,744 8,642 9,121 5,726
Expenses previously deferred (Note 5)...
Waived advisory fee (Note 5)............ (43,834)
Expense subsidy (Note 5)................ (57,005) (86,648) (75,384) (60,181)
---------- ----------- ---------- ----------
Net Expenses.......................... 404,109 641,771 428,502 110,942
---------- ----------- ---------- ----------
Net Investment Income.............. 6,272,429 8,870,626 5,862,949 997,973
---------- ----------- ---------- ----------
REALIZED AND UNREALIZED GAINS (LOSSES):
Net realized gains (losses) from:
Investments........................... 209,968 472,565 487,655 154,177
Foreign currency transactions......... 35,594 35,594 (189,333)
Swap contracts........................ 285,087
Futures contracts..................... 826,368 1,532,363 563,904 (14,659)
Options contracts..................... 31,206 39,638 39,981
Change in net unrealized appreciation
(depreciation) from:
Investments........................... 215,480 1,306,962 (716,712) (21,056)
Translation of assets and liabilities
in foreign currencies..............
Open swap contracts................... 1,409,492
Open futures contracts................ 520,997 642,447 601,669
Open options contracts written........ (377,000) (753,075) (753,387)
---------- ----------- ---------- ----------
Net Realized and Unrealized Gains
(Losses)......................... 1,462,613 3,276,494 1,728,356 118,462
---------- ----------- ---------- ----------
CHANGE IN NET ASSETS RESULTING FROM
OPERATIONS............................ $7,735,042 $12,147,120 $7,591,305 $1,116,435
========== =========== ========== ==========
</TABLE>
- ------------
(a) The Fund commenced operations on December 30, 1997.
(b) The Fund commenced operations on December 17, 1997.
See notes to financial statements.
34 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 38
<TABLE>
<CAPTION>
TAX EXEMPT BUNKER HILL HIGH VALUE GROWTH
BOND MONEY MARKET INCOME STOCK STOCK
FUND FUND(b) FUND(a) FUND(a) Fund(a)
---------- ------------ ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
$3,006,259 $925,095 $ 3,735,234 $ 147,390 $ 7,280
135,300 22,306
---------- -------- ----------- ----------- ---------
3,006,259 925,095 3,735,234 282,690 29,586
---------- -------- ----------- ----------- ---------
210,770 25,057 156,900 85,126 15,281
39,519 10,023 26,897 8,513 1,528
9,525 5,484 6,950 11,203 5,980
25,475 11,085 18,669 9,353 6,252
844 253 832 666 465
18,811 16,112 16,441 16,090 16,016
565 196 943 187 26
4,195 103 301 130 24
353 174 1,850 1,850
6,752 1,480 5,679 1,422 260
17,653 16,183 13,876 12,347 9,221
18,377 30,804 65,588 25,407 16,514
11,562 1,566 6,631 1,569 254
9,881 1,114 1,260 570 42
(53,085) (38,723) (9,469)
(53,650) (71,361) (24,969) (23,334) (44,731)
---------- -------- ----------- ----------- ---------
320,279 48,452 243,087 112,376 19,513
---------- -------- ----------- ----------- ---------
2,685,980 876,643 3,492,147 170,314 10,073
---------- -------- ----------- ----------- ---------
238,206 (1,066,988) (1,935,995) (135,545)
(253,247) (1,253,165) (4,385)
(124,971) (16,508)
1,180,852 (4,898,378) (2,633,742) (225,690)
19,375 441,913
---------- -------- ----------- ----------- ---------
1,185,186 -- (5,965,366) (5,505,960) (382,128)
---------- -------- ----------- ----------- ---------
$3,871,166 $876,643 $(2,473,219) $(5,335,646) $(372,055)
========== ======== =========== =========== =========
</TABLE>
See notes to financial statements.
ANNUAL REPORT 35
<PAGE> 39
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GLOBAL SHORT BOND
FUND
-------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1998 1997
------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income....................................... $ 11,869,557 $ 6,262,905
Net realized gains (losses)................................. 7,398,243 1,385,926
Change in net unrealized appreciation (depreciation)........ 1,271,604 1,092,920
------------- ------------
Change in Net Assets Resulting from Operations............ 20,539,404 8,741,751
------------- ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income....................................... (16,746,627) (7,673,449)
In excess of net investment income..........................
Net realized gains from investments.........................
In excess of net realized gains from investments............
Return of capital...........................................
------------- ------------
Change in Net Assets from Distributions to Shareholders... (16,746,627) (7,673,449)
------------- ------------
FROM CAPITAL TRANSACTIONS:
Proceeds from fund shares sold.............................. 160,907,104 222,627,255
Reinvestment of distributions............................... 15,667,434 7,044,107
Cost of fund shares redeemed................................ (149,623,338) (38,787,906)
------------- ------------
Change in Net Assets from Capital Transactions............ 26,951,200 190,883,456
------------- ------------
Total Change in Net Assets............................. 30,743,977 191,951,758
NET ASSETS:
Beginning of period......................................... 220,865,173 28,913,415
------------- ------------
End of period............................................... $ 251,609,150 $220,865,173
============= ============
Undistributed net investment income......................... $ 7,098,183 $ 48,730
============= ============
FUND SHARES OF BENEFICIAL INTEREST:
Outstanding shares at beginning of period................... 21,726,743 2,871,151
------------- ------------
Shares sold................................................. 15,741,129 21,965,267
Shares issued in reinvestment of distributions.............. 1,541,064 694,777
Shares redeemed............................................. (14,596,273) (3,804,452)
------------- ------------
Change in shares outstanding................................ 2,685,920 18,855,592
------------- ------------
Outstanding shares at end of period......................... 24,412,663 21,726,743
============= ============
</TABLE>
- ------------
(a) The Fund commenced operations on December 30, 1997.
(b) The Fund commenced operations on December 17, 1997.
(c) The Fund commenced operations on June 27, 1997.
(d) The Fund commenced operations on December 9, 1996.
See notes to financial statements.
36 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 40
<TABLE>
<CAPTION>
GLOBAL FIXED INCOME GLOBAL BALANCED INTERNATIONAL EQUITY
FUND FUND FUND
----------------------------- --------------------------- ---------------------------
YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1998 1997 1998 1997(d) 1998 1997(d)
------------- ------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
$ 26,635,762 $ 34,212,828 $ 287,728 $ 284,055 $ 288,104 $ 82,538
20,449,089 30,450,300 476,456 325,352 (1,121,281) (262,004)
11,221,797 (14,317,158) 94,972 394,682 673,486 457,795
------------- ------------- ----------- ----------- ----------- -----------
58,306,648 50,345,970 859,156 1,004,089 (159,691) 278,329
------------- ------------- ----------- ----------- ----------- -----------
(20,851,285) (60,308,541) (152,943) (42,206) (120,151)
(490,802) (106,756)
(5,580)
------------- ------------- ----------- ----------- ----------- -----------
(20,851,285) (60,308,541) (643,745) (148,962) (120,151) (5,580)
------------- ------------- ----------- ----------- ----------- -----------
220,982,932 59,238,120 1,054,022 10,510,669 11,555,491 14,175,623
17,044,782 26,681,751 630,824 131,260 98,213 3,938
(286,477,747) (191,477,656) (5,134,779) (1,184,686) (7,453,929) (49,421)
------------- ------------- ----------- ----------- ----------- -----------
(48,450,033) (105,557,785) (3,449,933) 9,457,243 4,199,775 14,130,140
------------- ------------- ----------- ----------- ----------- -----------
(10,994,670) (115,520,356) (3,234,522) 10,312,370 3,919,933 14,402,889
535,644,222 651,164,578 10,312,370 -- 14,402,889 --
------------- ------------- ----------- ----------- ----------- -----------
$ 524,649,552 $ 535,644,222 $ 7,077,848 $10,312,370 $18,322,822 $14,402,889
============= ============= =========== =========== =========== ===========
$ 1,450,438 $ 299,249 $ 15,312 $ -- $ 168,644 $ --
============= ============= =========== =========== =========== ===========
52,744,225 62,918,935 955,640 -- 1,339,997 --
------------- ------------- ----------- ----------- ----------- -----------
20,993,302 5,735,467 97,127 1,049,707 1,008,157 1,344,022
1,635,751 2,605,537 60,560 11,941 8,628 393
(27,272,937) (18,515,714) (460,651) (106,008) (654,952) (4,418)
------------- ------------- ----------- ----------- ----------- -----------
(4,643,884) (10,174,710) (302,964) 955,640 361,833 1,339,997
------------- ------------- ----------- ----------- ----------- -----------
48,100,341 52,744,225 652,676 955,640 1,701,830 1,339,997
============= ============= =========== =========== =========== ===========
</TABLE>
See notes to financial statements.
ANNUAL REPORT 37
<PAGE> 41
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
EUROPEAN GROWTH & INCOME GROWTH & INCOME
FUND FUND
--------------------------- ---------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1998 1997(c) 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income...................... $ 755,076 $ 51,631 $ 3,487,455 $ 1,260,571
Net realized gains (losses)................ 1,129,914 (106,176) 5,750,473 13,164
Change in net unrealized appreciation
(depreciation)........................... (2,047,980) (8,152) 18,949,308 13,559,898
------------ ----------- ------------ ------------
Change in Net Assets Resulting from
Operations............................ (162,990) (62,697) 28,187,236 14,833,633
------------ ----------- ------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income...................... (571,208) (3,884,882) (860,076)
In excess of net investment income.........
Net realized gains from investments........ (30,729) (21,503)
In excess of net realized gains from
investments..............................
Return of capital..........................
------------ ----------- ------------ ------------
Change in Net Assets from Distributions
to Shareholders....................... (601,937) -- (3,906,385) (860,076)
------------ ----------- ------------ ------------
FROM CAPITAL TRANSACTIONS:
Proceeds from fund shares sold............. 35,828,900 14,157,125 126,514,631 145,410,059
Reinvestment of distributions.............. 532,203 3,669,635 543,287
Cost of fund shares redeemed............... (9,675,876) (486,056) (54,856,053) (8,983,038)
------------ ----------- ------------ ------------
Change in Net Assets from Capital
Transactions.......................... 26,685,227 13,671,069 75,328,213 136,970,308
------------ ----------- ------------ ------------
Total Change in Net Assets............ 25,920,300 13,608,372 99,609,064 150,943,865
NET ASSETS:
Beginning of period........................ 13,608,372 -- 150,943,865 --
------------ ----------- ------------ ------------
End of period.............................. $ 39,528,672 $13,608,372 $250,552,929 $150,943,865
============ =========== ============ ============
Undistributed net investment income........ $ -- $ -- $ 3,068 $ 400,495
============ =========== ============ ============
FUND SHARES OF BENEFICIAL INTEREST:
Outstanding shares at beginning of
period................................... 1,335,240 -- 11,822,224 --
------------ ----------- ------------ ------------
Shares sold................................ 2,924,624 1,382,337 9,096,249 12,473,647
Shares issued in reinvestment of
distributions............................ 46,180 261,501 42,701
Shares redeemed............................ (858,182) (47,097) (3,845,331) (694,124)
------------ ----------- ------------ ------------
Change in shares outstanding............... 2,112,622 1,335,240 5,512,419 11,822,224
------------ ----------- ------------ ------------
Outstanding shares at end of period........ 3,447,862 1,335,240 17,334,643 11,822,224
============ =========== ============ ============
</TABLE>
- ------------
(a) The Fund commenced operations on December 30, 1997.
(b) The Fund commenced operations on December 17, 1997.
(c) The Fund commenced operations on June 27, 1997.
(d) The Fund commenced operations on December 9, 1996.
See notes to financial statements.
38 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 42
<TABLE>
<CAPTION>
MARKET RETURN FUND LIMITED MATURITY FUND SHORT BOND FUND
------------------------- ---------------------------- ---------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1998 1997 1998 1997 1998 1997
----------- ----------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,980,105 $ 608,131 $ 8,048,187 $ 6,039,483 $ 6,160,534 $ 6,243,084
(1,974,047) 2,693,130 (30,669) (126,929) (179,639) (224,312)
4,014,660 (675,782) 191,381 57,988 587,761 (425,436)
----------- ----------- ------------- ------------ ------------ ------------
4,020,718 2,625,479 8,208,899 5,970,542 6,568,656 5,593,336
----------- ----------- ------------- ------------ ------------ ------------
(1,919,021) (605,389) (7,957,063) (5,948,776) (6,063,434) (6,017,570)
(1,741,650) (512,300)
----------- ----------- ------------- ------------ ------------ ------------
(3,660,671) (1,117,689) (7,957,063) (5,948,776) (6,063,434) (6,017,570)
----------- ----------- ------------- ------------ ------------ ------------
29,587,439 13,368,335 204,353,480 184,443,501 284,120,843 34,031,446
3,395,111 1,005,715 7,326,830 3,221,631 5,057,374 2,184,739
(10,148,009) (1,475,545) (247,319,408) (86,028,649) (275,278,590) (39,502,535)
----------- ----------- ------------- ------------ ------------ ------------
22,834,541 12,898,505 (35,639,098) 101,636,483 13,899,627 (3,286,350)
----------- ----------- ------------- ------------ ------------ ------------
23,194,588 14,406,295 (35,387,262) 101,658,249 14,404,849 (3,710,584)
20,195,497 5,789,202 152,429,056 50,770,807 94,255,658 97,966,242
----------- ----------- ------------- ------------ ------------ ------------
$43,390,085 $20,195,497 $ 117,041,794 $152,429,056 $108,660,507 $ 94,255,658
=========== =========== ============= ============ ============ ============
$ 56,882 $ 4,911 $ 137,755 $ 40,535 $ 3,435 $ 22,255
=========== =========== ============= ============ ============ ============
1,577,496 532,943 15,153,628 5,047,881 9,499,849 9,829,447
----------- ----------- ------------- ------------ ------------ ------------
2,185,139 1,080,769 20,275,080 18,330,395 28,694,879 3,426,440
267,883 83,247 728,544 320,424 511,364 220,346
(769,864) (119,463) (24,548,786) (8,545,072) (27,778,432) (3,976,384)
----------- ----------- ------------- ------------ ------------ ------------
1,683,158 1,044,553 (3,545,162) 10,105,747 1,427,811 (329,598)
----------- ----------- ------------- ------------ ------------ ------------
3,260,654 1,577,496 11,608,466 15,153,628 10,927,660 9,499,849
=========== =========== ============= ============ ============ ============
</TABLE>
See notes to financial statements.
ANNUAL REPORT 39
<PAGE> 43
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
U.S. GOVERNMENT FUND
--------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1998 1997
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income....................................... $ 3,302,046 $ 1,167,183
Net realized gains (losses)................................. 556,891 (19,304)
Change in net unrealized appreciation (depreciation)........ 834,528 (45,018)
------------ ------------
Change in Net Assets Resulting from Operations............ 4,693,465 1,102,861
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income....................................... (3,232,000) (1,170,369)
In excess of net investment income..........................
Net realized gains from investments.........................
In excess of net realized gains from investments............
Return of capital...........................................
------------ ------------
Change in Net Assets from Distributions to Shareholders... (3,232,000) (1,170,369)
------------ ------------
FROM CAPITAL TRANSACTIONS:
Proceeds from fund shares sold.............................. 96,042,359 14,417,612
Reinvestment of distributions............................... 3,232,563 598,123
Cost of fund shares redeemed................................ (44,359,827) (21,583,263)
------------ ------------
Change in Net Assets from Capital Transactions............ 54,915,095 (6,567,528)
------------ ------------
Total Change in Net Assets............................. 56,376,560 (6,635,036)
NET ASSETS:
Beginning of period......................................... 15,478,606 22,113,642
------------ ------------
End of period............................................... $ 71,855,166 $ 15,478,606
============ ============
Undistributed net investment income......................... $ 74,156 $ 4,110
============ ============
FUND SHARES OF BENEFICIAL INTEREST:
Outstanding shares at beginning of period................... 1,465,864 2,098,931
------------ ------------
Shares sold................................................. 8,965,339 1,365,481
Shares issued in reinvestment of distributions.............. 300,960 57,071
Shares redeemed............................................. (4,139,912) (2,055,619)
------------ ------------
Change in shares outstanding................................ 5,126,387 (633,067)
------------ ------------
Outstanding shares at end of period......................... 6,592,251 1,465,864
============ ============
</TABLE>
- ------------
(a) The Fund commenced operations on December 30, 1997.
(b) The Fund commenced operations on December 17, 1997.
(c) The Fund commenced operations on June 27, 1997.
(d) The Fund commenced operations on December 9, 1996.
See notes to financial statements.
40 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 44
<TABLE>
<CAPTION>
INVESTMENT QUALITY BOND
INTERMEDIATE BOND FUND FUND TOTAL RETURN FUND
--------------------------- --------------------------- ---------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1998 1997 1998 1997 1998 1997(d)
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
$ 6,272,429 $ 3,228,723 $ 8,870,626 $ 3,291,395 $ 5,862,949 $ 2,213,316
1,103,136 491,896 2,080,160 775,742 1,187,294 734,395
359,477 795,460 1,196,334 1,082,257 541,062 1,003,707
------------ ------------ ------------ ------------ ------------ ------------
7,735,042 4,516,079 12,147,120 5,149,394 7,591,305 3,951,418
------------ ------------ ------------ ------------ ------------ ------------
(6,159,563) (3,187,522) (8,681,652) (3,322,442) (6,227,413) (2,231,855)
(1,352,736)
(492,095) (524,754) (761,994)
------------ ------------ ------------ ------------ ------------ ------------
(6,651,658) (3,187,522) (9,206,406) (3,322,442) (8,342,143) (2,231,855)
------------ ------------ ------------ ------------ ------------ ------------
62,696,052 66,036,447 110,019,942 105,924,171 120,792,928 100,529,378
6,732,290 2,522,572 8,630,705 3,032,320 7,469,327 1,985,084
(62,404,870) (41,888,712) (42,604,046) (48,100,615) (51,761,918) (5,371,369)
------------ ------------ ------------ ------------ ------------ ------------
7,023,472 26,670,307 76,046,601 60,855,876 76,500,337 97,143,093
------------ ------------ ------------ ------------ ------------ ------------
8,106,856 27,998,864 78,987,315 62,682,828 75,749,499 98,862,656
80,765,593 52,766,729 94,986,565 32,303,737 98,862,656 --
------------ ------------ ------------ ------------ ------------ ------------
$ 88,872,449 $ 80,765,593 $173,973,880 $ 94,986,565 $174,612,155 $ 98,862,656
============ ============ ============ ============ ============ ============
$ 140,213 $ 16,277 $ 203,469 $ 22,564 $ -- $ 139,334
============ ============ ============ ============ ============ ============
8,314,810 5,497,972 9,488,598 3,294,124 9,642,346 --
------------ ------------ ------------ ------------ ------------ ------------
6,467,190 6,908,211 10,958,699 10,781,572 11,789,406 9,978,479
693,980 262,392 859,385 308,738 730,690 195,644
(6,403,623) (4,353,765) (4,195,450) (4,895,836) (5,097,227) (531,777)
------------ ------------ ------------ ------------ ------------ ------------
757,547 2,816,838 7,622,634 6,194,474 7,422,869 9,642,346
------------ ------------ ------------ ------------ ------------ ------------
9,072,357 8,314,810 17,111,232 9,488,598 17,065,215 9,642,346
============ ============ ============ ============ ============ ============
</TABLE>
See notes to financial statements.
ANNUAL REPORT 41
<PAGE> 45
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
SHORT DURATION TAX EXEMPT FUND
--------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1998 1997
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income....................................... $ 997,973 $ 1,331,922
Net realized gains (losses)................................. 139,518 68,232
Change in net unrealized appreciation (depreciation)........ (21,056) 175,031
------------ ------------
Change in Net Assets Resulting from Operations............ 1,116,435 1,575,185
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income....................................... (989,711) (1,330,765)
In excess of net investment income..........................
Net realized gains from investments......................... (24,982)
In excess of net realized gains from investments............
Return of capital...........................................
------------ ------------
Change in Net Assets from Distributions to Shareholders... (1,014,693) (1,330,765)
------------ ------------
FROM CAPITAL TRANSACTIONS:
Proceeds from fund shares sold.............................. 3,531,040 25,806,604
Reinvestment of distributions............................... 841,608 1,017,341
Cost of fund shares redeemed................................ (25,825,914) (25,227,895)
------------ ------------
Change in Net Assets from Capital Transactions............ (21,453,266) 1,596,050
------------ ------------
Total Change in Net Assets............................. (21,351,524) 1,840,470
NET ASSETS:
Beginning of period......................................... 38,176,099 36,335,629
------------ ------------
End of period............................................... $ 16,824,575 $ 38,176,099
============ ============
Undistributed net investment income......................... $ 11,644 $ 3,382
============ ============
FUND SHARES OF BENEFICIAL INTEREST:
Outstanding shares at beginning of period................... 3,788,693 3,630,620
------------ ------------
Shares sold................................................. 349,831 2,566,567
Shares issued in reinvestment of distributions.............. 83,570 101,327
Shares redeemed............................................. (2,557,153) (2,509,821)
------------ ------------
Change in shares outstanding................................ (2,123,752) 158,073
------------ ------------
Outstanding shares at end of period......................... 1,664,941 3,788,693
============ ============
</TABLE>
- ------------
(a) The Fund commenced operations on December 30, 1997.
(b) The Fund commenced operations on December 17, 1997.
(c) The Fund commenced operations on June 27, 1997.
(d) The Fund commenced operations on December 9, 1996.
See notes to financial statements.
42 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 46
<TABLE>
<CAPTION>
BUNKER HILL
MONEY GROWTH
MARKET HIGH INCOME VALUE STOCK STOCK
TAX EXEMPT BOND FUND FUND FUND FUND FUND
--------------------------- ------------ ------------ ------------ ------------
YEAR ENDED YEAR ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1998 1997 1998(b) 1998(a) 1998(a) 1998(a)
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,685,980 $ 2,313,132 $ 876,643 $ 3,492,147 $ 170,314 $ 10,073
(15,041) 177,591 (1,066,988) (3,314,131) (156,438)
1,200,227 1,118,221 (4,898,378) (2,191,829) (225,690)
------------ ------------ ------------ ------------ ----------- ----------
3,871,166 3,608,944 876,643 (2,473,219) (5,335,646) (372,055)
------------ ------------ ------------ ------------ ----------- ----------
(2,639,436) (2,313,809) (876,643) (2,506,338) (96,744) (9,356)
------------ ------------ ------------ ------------ ----------- ----------
(2,639,436) (2,313,809) (876,643) (2,506,338) (96,744) (9,356)
------------ ------------ ------------ ------------ ----------- ----------
28,997,082 17,559,290 122,840,129 108,306,167 29,506,755 3,411,739
2,202,021 1,920,237 525,885 2,303,959 76,937 7,540
(22,120,528) (13,058,170) (96,910,814) (13,961,759) (607,386) (653,574)
------------ ------------ ------------ ------------ ----------- ----------
9,078,575 6,421,357 26,455,200 96,648,367 28,976,306 2,765,705
------------ ------------ ------------ ------------ ----------- ----------
10,310,305 7,716,492 26,455,200 91,668,810 23,543,916 2,384,294
57,578,595 49,862,103 -- -- -- --
------------ ------------ ------------ ------------ ----------- ----------
$ 67,888,900 $ 57,578,595 $26,455,200 $91,668,810 $23,543,916 $2,384,294
============ ============ ============ ============ =========== ==========
$ 52,102 $ 5,558 -- $ 985,809 $ 73,570 $ 717
============ ============ ============ ============ =========== ==========
5,932,070 5,266,366 -- -- -- --
------------ ------------ ------------ ------------ ----------- ----------
2,944,498 1,829,792 122,840,129 10,586,004 2,597,818 339,066
224,591 200,726 525,885 229,780 6,925 726
(2,257,295) (1,364,814) (96,910,814) (1,433,345) (68,058) (78,131)
------------ ------------ ------------ ------------ ----------- ----------
911,794 665,704 26,455,200 9,382,439 2,536,685 261,661
------------ ------------ ------------ ------------ ----------- ----------
6,843,864 5,932,070 26,455,200 9,382,439 2,536,685 261,661
============ ============ ============ ============ =========== ==========
</TABLE>
See notes to financial statements.
ANNUAL REPORT 43
<PAGE> 47
GLOBAL SHORT BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
October 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- ----------- ---------------------------- -----------
<C> <S> <C>
AUSTRALIA (AUSTRALIAN DOLLAR) (4.2%)
5,800,000 FNMA Global Bond,
5.75%, 9/5/00 $ 3,665.5
9,700,000 Western Australia Treasury
Corp,
8.00%, 7/15/03 6,796.6
----------
AUSTRALIA (COST - $10,882.2) 10,462.1
DENMARK (DANISH KRONE) (9.5%)
137,800,000 Denmark - Bullet,
9.00%, 11/15/00 23,941.1
----------
DENMARK (COST - $23,557.1) 23,941.1
GERMANY (GERMAN MARK) (36.2%)
15,300,000 Bundesobligation - 122,
4.50%, 2/22/02 9,487.3
56,000,000 Bundesobligation - 123,
4.50%, 5/17/02 34,795.8
8,700,000 Dresdner Bank,
6.50%, 5/22/00 5,469.4
15,400,000 German Government Bond,
7.13%, 12/20/02 10,504.4
18,500,000 European Community Note,
6.50%, 3/10/00 11,611.2
5,600,000 European International Bank,
4.50%, 2/15/03 3,490.8
4,100,000 IBRD - Eurodem,
7.25%, 10/13/99 2,561.2
10,000,000 KFW International Finance,
7.50%, 1/24/00 6,319.1
11,000,000 LKB Bad - Wurt Finance,
6.00%, 5/10/99 6,718.0
----------
GERMANY (COST - $86,781.7) 90,957.2
GREAT BRITAIN (BRITISH POUND) (9.8%)
12,200,000 United Kingdom Treasury,
10.00%, 9/8/03 24,683.7
----------
GREAT BRITAIN
(COST - $25,071.8) 24,683.7
NEW ZEALAND
(NEW ZEALAND DOLLAR) (4.6%)
19,600,000 New Zealand Government Bond,
8.00%, 4/15/04 11,667.6
----------
NEW ZEALAND
(COST - $10,804.5) 11,667.6
SWEDEN (SWEDISH KRONA) (4.7%)
85,000,000 Swedish Government Bond,
10.25%, 5/5/00 11,839.3
----------
SWEDEN (COST - $12,037.7) 11,839.3
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- ----------- ---------------------------- -----------
<C> <S> <C>
UNITED STATES
(UNITED STATES DOLLAR) (27.8%)
23,500,000 FHLB, 5.63%, 3/19/01 $ 24,019.8
6,000,000 U.S. Treasury Notes,
5.63%, 11/30/00 6,153.7
8,570,000 U.S. Treasury Notes,
6.00%, 8/15/99 8,673.4
9,000,000 U.S. Treasury Notes,
6.63%, 7/31/01 9,528.3
11,600,000 U.S. Treasury Notes,
7.25%, 5/15/04 13,170.4
8,200,000 U.S. Treasury Notes,
7.75%, 1/31/00(a) 8,542.4
----------
UNITED STATES
(COST - $69,544.7) 70,088.0
INVESTMENT COMPANIES (1.5%)
3,790,168 Dreyfus Treasury Cash
Management Fund
(Cost - $3,790.2) 3,790.2
----------
TOTAL (COST - $242,469.9)(b) (98.3%) $247,429.2
==========
</TABLE>
Percentages indicated are based on net assets of $251,609,150.
(a) All or a portion of the security is held by the custodian in a segregated
account.
(b) For federal income tax purposes, cost is $243,240.2, and unrealized
appreciation (depreciation) of securities is as follows:
<TABLE>
<C> <S> <C>
Unrealized appreciation $ 5,652,312
Unrealized depreciation (1,463,355)
-----------
Net unrealized appreciation $ 4,188,957
===========
</TABLE>
FORWARD CURRENCY CONTRACTS
<TABLE>
<CAPTION>
UNREALIZED
DELIVERY CONTRACT CONTRACT APPRECIATION
DATE CURRENCY PRICE VALUE (DEPRECIATION)
- -------- -------------------------- -------- ----------- --------------
<S> <C> <C> <C> <C>
ASSETS:
01/20/99 Australian Dollar (sell) 0.63670 $10,632,890 $ 232,776
11/12/98 British Pound (sell) 1.70280 19,752,480 343,515
11/12/98 British Pound (sell) 1.70200 5,446,400 92,203
12/01/98 Danish Krone (sell) 6.27350 5,579,023 15,298
12/10/98 German Deutschemark (sell) 1.64400 23,783,455 123,180
01/11/99 Swedish Krona (sell) 7.78030 12,107,502 20,760
----------- -----------
$77,301,750 $ 827,732
=========== ===========
LIABILITIES:
12/01/98 Danish Krone (sell) 6.37330 $19,769,978 $ (259,431)
12/10/98 German Deutschemark (sell) 1.72501 67,361,928 (2,953,262)
01/28/99 New Zealand Dollar (sell) 0.51831 11,299,158 (251,572)
----------- -----------
$98,431,064 $(3,464,265)
=========== ===========
</TABLE>
See notes to financial statements.
44 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 48
GLOBAL FIXED INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
October 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- ------------- -------------------------- -----------
<C> <S> <C>
DENMARK (DANISH KRONE) (2.9%)
94,800,000 Danish Government Bond,
4.00%, 2/15/01 $ 15,014.2
----------
DENMARK (COST - $14,081.9) 15,014.2
GERMANY (GERMAN MARK) (28.2%)
22,700,000 Bundesobligation #124,
4.50%, 8/19/02 14,128.1
20,000,000 BW L Finance Bond, 5.25%,
5/15/01 12,544.5
30,000,000 German Government Bond
5.63%, 1/4/28 19,260.2
58,500,000 German Government Bond,
6.00%, 1/4/07 39,482.8
83,000,000 German Government Bond,
6.00%, 7/4/07 56,489.5
10,000,000 KFW, 5.00%, 1/4/09 6,287.9
----------
GERMANY (COST -$148,313.5) 148,193.0
GREAT BRITAIN (BRITISH POUND) (16.6%)
16,300,000 FNMA GBP, 6.88%, 6/7/02 28,365.3
30,300,000 UK Gilt, 7.25%, 12/7/07 58,928.5
----------
GREAT BRITAIN (COST -
$83,136.1) 87,293.8
GREECE (GREEK DRACHMA) (2.1%)
3,000,000,000 Hellenic Republic, 8.80%,
6/19/07 11,071.8
----------
GREECE (COST - $10,834.2) 11,071.8
NEW ZEALAND
(NEW ZEALAND DOLLAR) (6.0%)
50,900,000 New Zealand Government
Bond, 8.00%, 11/15/06 31,438.9
----------
NEW ZEALAND (COST -
$28,505.4) 31,438.9
SWEDEN (SWEDISH KRONA) (3.1%)
114,000,000 Swedish Government Bond,
6.50%, 10/25/06 16,434.5
----------
SWEDEN (COST - $15,161.8) 16,434.5
UNITED STATES
(UNITED STATES DOLLAR) (49.2%)
12,550,000 Caterpiller Financial,
6.74%, 4/5/00 12,863.8
1,000,000 FHLB Discount Note 993.8
32,580,000 FNMA, 6.00%, 5/15/08 (a) 34,544.2
7,500,000 John Deer Capital Corp.,
6.35%, 3/15/01 7,678.1
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- ------------- -------------------------- -----------
<C> <S> <C>
6,600,000 John Deer Capital Corp.,
6.39%, 9/18/00 $ 6,740.3
5,000,000 Paccar Financial, 6.39%,
6/15/00 5,112.5
43,200,000 U.S. Treasury Bonds,
6.25%, 8/15/23 (a) 48,343.8
12,000,000 U.S. Treasury Notes,
5.75%, 11/15/00 (a) 12,335.4
10,800,000 U.S. Treasury Notes,
6.00%, 2/15/26 (a) 11,793.5
21,600,000 U.S. Treasury Notes,
6.38%, 5/15/00 (a) 22,258.6
39,800,000 U.S. Treasury Notes,
7.25%, 5/15/04 (a) 45,188.1
18,000,000 U.S. Treasury Notes,
7.25%, 8/15/04 20,503.3
27,200,000 U.S. Treasury Notes,
7.88%, 8/15/01 (a) 29,671.9
----------
UNITED STATES (COST -
$247,147.3) 258,027.3
INVESTMENT COMPANIES (0.3%)
1,370,060 Dreyfus Treasury Cash
Management Fund
(Cost - $1,370.1) 1,370.1
----------
TOTAL (COST - $548,550.3)(B) (108.4%) $568,843.6
----------
----------
</TABLE>
Percentages indicated are based on net assets of $524,649,552.
(a) All or a portion of the security is held by the custodian in a segregated
account.
At October 31, 1998, the Fund's open futures contracts were as follows:
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION CURRENT APPRECIATION
# CONTRACT TYPE DATE MARKET VALUE (DEPRECIATION)
- --- ---------------------- ---------- ------------ --------------
<C> <S> <C> <C> <C>
397 10 Year Treasury
Futures Dec. 98 $47,788,875 $ 4,265
28 Japanese Bond Futures Dec. 98 33,328,412 552,430
--------
$556,695
--------
--------
</TABLE>
(b) For federal income tax purposes, cost is $556,538.7, and unrealized
appreciation (depreciation) of securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $16,110,187
Unrealized depreciation (3,805,217)
-----------
Net unrealized appreciation $12,304,970
-----------
-----------
</TABLE>
ANNUAL REPORT 45
<PAGE> 49
GLOBAL FIXED INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
October 31, 1998
FORWARD CURRENCY CONTRACTS
<TABLE>
<CAPTION>
UNREALIZED
DELIVERY CONTRACT CONTRACT APPRECIATION
DATE CURRENCY PRICE VALUE (DEPRECIATION)
- -------- -------------------- ---------- ------------ --------------
<S> <C> <C> <C> <C>
ASSETS:
11/12/98 British Pound (sell) 1.7028 $ 29,117,880 $ 506,388
11/05/98 German Mark (sell) 1.6555 17,845,340 4,850
01/22/99 Greek Drachma (sell) 285.1500 10,520,779 4,610
01/11/99 Swedish Krona (sell) 7.7803 15,911,983 27,283
------------ -----------
$ 73,395,982 $ 543,131
------------ -----------
------------ -----------
LIABILITIES:
11/12/98 British Pound (sell) 1.6235 $ 49,516,750 $(1,515,443)
11/12/98 British Pound (sell) 1.6142 5,488,110 (200,725)
12/10/98 Danish Krone (sell) 6.5727 14,119,007 (636,505)
12/10/98 Danish Krone (sell) 6.4240 202,366 (4,338)
12/10/98 German Mark (sell) 1.7250 128,463,023 (5,632,037)
12/10/98 German Mark (sell) 1.6849 6,172,546 (120,724)
12/10/98 German Mark (sell) 1.6801 6,190,292 (102,978)
12/10/98 German Mark (sell) 1.6730 5,080,693 (62,845)
11/30/98 Japanese Yen (sell) 118.3000 26,030,431 (520,927)
01/28/99 New Zealand 6,568,125 (55,000)
Dollars (sell) 0.5255 6,532,750 (90,375)
01/28/99 New Zealand
Dollars (sell) 0.5226 6,584,375 (38,750)
01/28/99 New Zealand
Dollars (sell) 0.5268 ------------ -----------
$260,948,468 $(8,980,647)
------------ -----------
------------ -----------
</TABLE>
See notes to financial statements.
46 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 50
GLOBAL BALANCED FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
October 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- ----------- --------------------------- -----------
<C> <S> <C>
COMMON STOCKS (50.1%)
BASIC MATERIALS (0.8%)
110 Clariant AG $ 56.9
BUILDING & CONSTRUCTION (2.4%)
4,200 CRH PLC 54.9
600 Lafarge 61.3
310 Suez Lyonnaise Des Eaux 55.5
---------
BUILDING & CONSTRUCTION 171.7
CONSUMER CYCLICALS (7.9%)
620 Daimler-Benz AG Designs 48.1
5,000 Dixons Group PLC 53.4
3,500 Granada Group PLC 53.3
2,800 Home Depot Inc.(b) 121.8
33 Ines 0.2
740 Metro AG 45.6
30 Novartis 54.1
300 PSA Peugeot Citroen 50.1
215 Toppan Printing Corp. LTD 2.2
30 Toyota Motor Corp. 0.7
1,900 Wal-Mart Stores, Inc.(b) 131.1
---------
CONSUMER CYCLICALS 560.6
CONSUMER STAPLES (3.2%)
1,472 General Electric Company(b) 128.8
1,600 Tyco International LTD 99.1
---------
CONSUMER STAPLES 227.9
DIVERSIFIED OPERATIONS (2.3%)
570 Mannesmann AG 56.1
100 Sulzer AG 57.6
900 Veba 50.3
---------
DIVERSIFIED OPERATIONS 164.0
ENERGY (3.9%)
3,400 British Petroleum Company
PLC 49.9
450 Elf Aquitaine 52.1
2,250 Endesa S.A. 56.6
986 Exxon Corp.(b) 70.3
1,040 Royal Dutch Petroleum 50.2
---------
ENERGY 279.1
FINANCIALS (10.8%)
150 Allianz AG 51.5
3,500 Allied Irish Banks PLC 44.9
1,600 Assicurazioni Generali 57.3
8,600 Banca Commerciale Italiana 53.2
6,308 Banco Galicia Y Bueno -
Sponsored ADR(b) 107.6
5,400 Bank of Scotland 58.7
1,000 Banque Nationale De Paris 63.3
700 Bayerische Hypo-und-
Vereinsbank 55.6
500 Capital One Financial Corp. 50.9
9,500 Unicredito Italiano SpA 51.0
920 Fortis Amev NV 59.8
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- ----------- --------------------------- -----------
<C> <S> <C>
4,600 Lloyds TSB Group PLC $ 56.9
25 Schweizerische
Rueckversicherungs-Gesellschaft 55.7
---------
FINANCIALS 766.4
FOOD & BEVERAGE (4.5%)
5,000 Associated British Foods
PLC 46.9
4,000 Cadbury Schweppes PLC 61.3
600 Henkel KGaA 51.3
1,050 Heineken NV 55.9
25 Nestle 53.2
5,320 Sainsbury (J) PLC 47.0
---------
FOOD & BEVERAGE 315.6
HEALTH CARE (4.4%)
1,206 Bristol-Myers Squibb
Company(b) 133.3
1,740 Glaxo Wellcome PLC 54.0
110 L'Oreal 62.9
4,700 Smithkline Beecham PLC 58.8
---------
HEALTH CARE 309.0
TECHNOLOGY (3.0%)
77 Fuji Photo Film 2.8
1,200 Getronics 49.8
59 Murata Manufacturing Corp.
LTD 2.0
110 SAP AG 53.6
2,100 Tandy Corp. 104.1
---------
TECHNOLOGY 212.3
TELECOMMUNICATIONS (6.1%)
500 Alcatel Alsthom 55.7
4,500 Cable & Wireless PLC 50.5
1,700 Deutsche Tele 46.3
1,100 MediaOne Group Inc(a) 46.5
109 Nippon Comsys Corp. 1.4
635 Nokia Oyj 57.8
8,800 Telecom Italia Mobile 51.1
1,400 Telefonica S.A. 63.1
4,500 Vodafone 60.3
---------
TELECOMMUNICATIONS 432.7
TRANSPORTATION (0.7%)
2,200 Deutsche Lufthansa 47.8
TOTAL COMMON STOCKS (COST - $3,159.8) 3,544.0
---------
BONDS AND NOTES (38.2%)
GERMANY (GERMAN MARK) (8.4%)
300,000 Bundesobligation #114,
6.50%, 3/15/00(b) 188.5
600,000 German Government Bond,
6.00%, 7/4/07 408.4
---------
GERMANY 596.9
</TABLE>
ANNUAL REPORT 47
<PAGE> 51
GLOBAL BALANCED FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
October 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- ----------- --------------------------- -----------
<C> <S> <C>
GREAT BRITAIN (BRITISH POUND) (5.5%)
200,000 UK Gilt, 7.25%, 12/7/07(b) $ 389.0
NEW ZEALAND (DOLLAR) (3.5%)
400,000 New Zealand Government
Bond, 8.00%, 11/15/06(b) 247.1
SWEDEN (SWEDISH KRONA) (3.0%)
1,500,000 Swedish Government Bond,
10.25%, 5/5/00 208.9
UNITED STATES
(UNITED STATES DOLLAR) (17.8%)
150,000 U.S. Treasury Bonds, 6.25%,
8/15/23(b) 167.9
700,000 U.S. Treasury Notes, 5.75%,
10/31/02(b) 734.0
130,000 U.S. Treasury Notes, 6.38%,
5/15/00(b) 134.0
200,000 U.S. Treasury Notes, 6.50%,
10/15/06(b) 224.4
---------
UNITED STATES 1,260.3
---------
TOTAL BONDS AND NOTES (COST - $2,549.4)
2,702.2
---------
INVESTMENT COMPANIES (17.3%)
1,227,862 Dreyfus Treasury Cash
Management Fund (Cost - 1,227.9
$1,227.9)
---------
TOTAL (COST - $6,937.1)(c) (105.6%)
$7,474.1
---------
---------
</TABLE>
Percentages indicated are based on net assets of $7,077,848.
Distribution of investments by country of issue, as a percentage of total value
of investment securities, as follows:
<TABLE>
<C> <S> <C>
United States 46.6%
Ireland 1.3%
Japan 0.1%
Spain 1.6%
Great Britain 13.9%
France 5.4%
Germany 14.8%
Sweden 2.8%
Italy 2.8%
Switzerland 3.7%
New Zealand 3.3%
Netherlands 2.9%
Finland 0.8%
-------
100.0%
</TABLE>
At October 31, 1998, the Fund's open futures contracts were as follows:
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION CURRENT APPRECIATION
NO. CONTRACT TYPE DATE MARKET VALUE (DEPRECIATION)
- --- ---------------- ---------- ------------ --------------
<C> <S> <C> <C> <C>
2 Russell 2000 Dec-98 $ 381,000 $ 37,600
4 S&P 500 Dec-98 1,105,200 (2,500)
2 Nikkei 225 Dec-98 228,362 (9,955)
1 ASX All
Ordinaries
Index Dec-98 41,610 1,970
2 MSCI Taiwan Nov-98 56,212 4,573
---------- ----------
$ 31,688
</TABLE>
(a) Non-income producing security.
(b) All or a portion of the security is held by the custodian in a segregated
account.
(c) For federal income tax purposes, cost is $7,003.1, and unrealized
appreciation (depreciation) of securities is as follows:
<TABLE>
<C> <S> <C>
Unrealized appreciation $ 576,420
Unrealized depreciation (105,382)
---------
Net unrealized $ 471,038
appreciation
---------
---------
</TABLE>
FORWARD CURRENCY CONTRACTS
<TABLE>
<CAPTION>
UNREALIZED
DELIVERY CONTRACT CONTRACT APPRECIATION
DATE CURRENCY PRICE VALUE (DEPRECIATION)
- -------- ----------------- --------- ---------- --------------
<C> <S> <C> <C> <C>
ASSETS:
LIABILITIES:
11/04/98 British Pound
(buy) 1.68220 $ 154,747 $ (718)
11/02/98 Dutch Guilder
(buy) 1.85430 48,008 (334)
11/30/98 French Franc
(buy) 5.50400 101,179 (947)
11/04/98 Italian Lira
(buy) 1,626.350 48,897 (348)
11/30/98 Japanese Yen
(sell) 118.3000 211,327 (4,229)
12/22/98 Japanese Yen
(sell) 130.9700 534,474 (71,498)
01/28/99 New Zealand
Dollar (sell) 0.52680 52,680 (310)
01/28/99 New Zealand
Dollar (sell) 0.52545 52,545 (440)
01/28/99 New Zealand
Dollar (sell) 0.52262 52,262 (723)
11/04/98 Singapore
Dollar (sell) 1.63750 14,310 (88)
11/02/98 Swiss Franc (buy) 1.33400 54,511 (793)
---------- --------
$1,324,940 $(80,428)
========== ========
</TABLE>
See notes to financial statements.
48 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 52
INTERNATIONAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
October 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS (74.2%)
BASIC MATERIALS (1.2%)
430 Clariant AG $ 222.4
BUILDING & CONSTRUCTION (3.9%)
19,500 CRH PLC 255.1
2,450 Lafarge 250.5
1,150 Suez Lyonnaise Des Eaux 205.9
---------
BUILDING & CONSTRUCTION 711.5
CONSUMER CYCLICALS (7.9%)
2,750 Daimler - Benz Ag Designs 213.4
23,500 Dixons Group PLC 251.1
18,000 Granada Group PLC 274.1
400 Honda Motor Co. Ltd. 12.0
267 Ines 1.9
3,650 Metro AG 224.8
124 Novartis 223.5
1,450 PSA Peugeot Citroen 241.9
685 Toppan Printing Corp. Ltd. 7.0
170 Toyota Motor 4.1
---------
CONSUMER CYCLICALS 1,453.8
DIVERSIFIED OPERATIONS (3.8%)
2,200 Mannesmann AG 216.6
400 Sulzer AG 230.5
4,450 Veba 248.6
---------
DIVERSIFIED OPERATIONS 695.7
ENERGY (10.2%)
23,500 British Energy PLC 229.8
16,800 British Petroleum Co. PLC 246.7
2,050 Elf Aquitaine 237.2
8,600 Endesa S.A. 216.4
39,100 Eni Spa 232.7
14,300 Iberdrola S.A. 230.6
4,600 Repsol SA 230.5
5,100 Royal Dutch Petroleum 246.4
---------
ENERGY 1,870.3
FINANCIALS (18.6%)
19,600 Alleanza Assicurazioni 241.7
640 Allianz AG 219.5
18,300 Allied Irish Banks PLC 235.0
6,000 Assicurazioni Generali 215.0
37,500 Banca Commerciale Italiana 231.9
23,500 Bank of Scotland 255.4
3,567 Banque Nationale De Paris 225.9
3,250 Bayerische
Hypo-und-Vereinsbank 258.1
48,600 Unicredito Italiano SpA 261.1
3,600 Fortis Amev NV 233.9
18,000 Lloyds TSB Group PLC 222.7
17,200 Royal Bank of Scotland Group
PLC 228.1
95 Schweizerische
Rueckversicherungs-
Gesellschaft 211.6
620 Zurich Allied AG 376.9
---------
FINANCIALS 3,416.8
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
<C> <S> <C>
FOOD & BEVERAGE (8.0%)
23,800 Associated British Foods PLC $ 223.2
18,000 Cadbury Schweppes PLC 275.8
4,800 Heineken NV 255.8
2,600 Henkel KGaA 222.2
120 Nestle 255.3
25,800 Sainsbury(J)PLC 228.1
---------
FOOD & BEVERAGE 1,460.4
HEALTH CARE (6.1%)
6,600 Glaxo Wellcome PLC 204.8
420 L'Oreal 240.0
20 Roche Holding 233.4
1,350 Sanofi SA 211.4
18,000 Smithkline Beecham PLC 225.1
---------
HEALTH CARE 1,114.7
TECHNOLOGY (3.2%)
323 Fuji Photo Film 11.8
5,600 Getronics 232.4
441 Murata Manufacturing Corp.
Ltd. 14.9
900 Rohm Company 79.6
505 SAP AG 246.1
---------
TECHNOLOGY 584.8
TELECOMMUNICATIONS (10.1%)
2,200 Alcatel Alsthom 245.1
20,400 Cable & Wireless PLC 228.8
8,600 Deutsche Tele 234.3
3,300 France Telecom 230.2
391 Nippon Comsys Corp. 5.1
2,500 Nokia Oyj 227.6
34,000 Telecom Italia Mobile 197.5
5,500 Telefonica S.A. 247.9
17,100 Vodafone 229.1
---------
TELECOMMUNICATIONS 1,845.6
TRANSPORTATION (1.2%)
10,300 Deutsche Lufthansa 223.9
TOTAL COMMON STOCKS (COST - $12,440.1) 13,599.9
---------
UNITED STATES
(UNITED STATES DOLLAR) (16.3%)
1,000,000 FHLMC Discount Note(a) 994.6
2,000,000 FHLMC Discount Note(a) 1,989.7
---------
UNITED STATES (COST -$2,984.3) 2,984.3
INVESTMENT COMPANIES (13.7%)
2,512,475 Dreyfus Treasury Cash
Management Fund
(Cost - $2,512.5) 2,512.5
---------
TOTAL (COST - $17,936.9)(b) (104.2%) $19,096.7
=========
</TABLE>
ANNUAL REPORT 49
<PAGE> 53
INTERNATIONAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
October 31, 1998
Percentages indicated are based on net assets of
$18,322,822.
Distribution of investments by country of issue, as a percentage of total value
of investment securities, as follows:
<TABLE>
<C> <S> <C>
United States 28.8%
Great Britain 17.4%
Germany 12.1%
France 10.9%
Switzerland 9.2%
Italy 7.2%
Netherlands 5.1%
Spain 4.9%
Ireland 2.6%
Finland 1.1%
Japan 0.7%
------
100.0%
</TABLE>
At October 31, 1998, the Fund's open futures contracts were as follows:
<TABLE>
<CAPTION>
CURRENT UNREALIZED
EXPIRATION MARKET APPRECIATION
NO. CONTRACT TYPE DATE VALUE (DEPRECIATION)
- --- ------------------ ---------- ---------- --------------
<C> <S> <C> <C> <C>
12 December Nikkei
225 Futures Dec-98 $1,395,708 $(59,727)
9 December ASX All
Ordinaries Index Dec-98 975,240 17,654
Futures
20 November MSCI
Taiwan Futures Nov-98 562,400 11,517
--------
$ (30,556)
--------
</TABLE>
(a) All or a portion of the security is held by the custodian in a segregated
account.
(b) For federal income tax purposes, cost is $18,039.9 and unrealized
appreciation (depreciation) of securities, is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $1,202,232
Unrealized depreciation (145,375)
----------
Net unrealized
appreciation $1,056,857
==========
</TABLE>
FORWARD CURRENCY CONTRACTS
<TABLE>
<CAPTION>
UNREALIZED
DELIVERY CONTRACT CONTRACT APPRECIATION
DATE CURRENCY PRICE VALUE (DEPRECIATION)
- -------- ---------------------- -------- ---------- --------------
<S> <C> <C> <C> <C>
ASSETS:
11/02/98 Swiss Franc (sell) 1.3340 295,961 $ 4,307
=======
LIABILITIES:
11/04/98 British Pound (buy) 1.6822 $ 498,467 $(2,311)
11/02/98 Dutch Guilder (buy) 1.8543 136,089 (947)
11/30/98 French Franc (buy) 5.5040 126,770 (1,187)
11/04/98 Italian Lira (buy) 1,626.35 117,611 (837)
11/04/98 Singapore Dollar (buy) 1.6375 80,136 (492)
11/03/98 Spanish Peseta (buy) 139.80 39,819 (367)
11/02/98 Swiss Franc (buy) 1.3340 257,404 (3,746)
---------- -------
$1,256,296 $(9,887)
========== =======
</TABLE>
See notes to financial statements.
50 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 54
EUROPEAN GROWTH & INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
October 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
OR
SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
COMMON STOCKS (96.6%)
<C> <S> <C>
BASIC MATERIALS (11.4%)
4,363 Akzo Nobel NV $ 169.6
24,883 BASF 1,054.9
23,973 Bayer Ag 974.3
26,951 Imperial Chemical Inds. PLC 242.1
2,209 Preussag 815.1
3,948 Thyssen 710.5
45,762 Usinor 523.0
---------
BASIC MATERIALS 4,489.5
BUILDING & CONSTRUCTION (15.1%)
16,150 Bilfinger & Berger 321.8
1,510 Bouygues 304.7
2,039 Dyckerhoff 628.0
719 Dyckerhoff AG 212.8
2,717 Hochtief AG 99.3
48,942 Hollandsche Beton Groep 660.5
21,915 Koninklijke Hoogovens 664.3
31,217 Koninklijke Pakhoed 769.0
12,161 Lafarge 1,243.2
2,842 St. Gobain Compaignie 420.5
26,546 Stork N.V. 662.5
---------
BUILDING & CONSTRUCTION 5,986.6
CONSUMER CYCLICALS (12.1%)
681 Accor S.A. 143.0
1,726 Buhrmann N.V. 31.0
1,372 Canal Plus 332.9
6,605 Casino Guichard 657.4
587 Casino Guichard Perrach-PFD 35.9
8,884 Douglas Holdings(a) 509.7
67,742 Elsevier NV 954.1
21,916 Great Universal Stores PLC 235.6
12,417 KLM-Konin Luchtvaart MIJ NV 375.0
41,212 Marks & Spencer PLC 305.3
6,191 Metro AG 381.4
41,428 Nedlloyd Groep 554.7
1,443 PWA-Papier Waldhof Aschaff 274.6
---------
CONSUMER CYCLICALS 4,790.6
CONSUMER STAPLES (4.6%)
10,433 BIC 642.2
2,267 Buderus AG 943.3
183 Man Ag 59.7
3,920 Merck KGAA 161.0
---------
CONSUMER STAPLES 1,806.2
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
OR
SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
<C> <S> <C>
DIVERSIFIED OPERATIONS (6.6%)
19,141 AGIV AG $ 393.0
202,439 BTR PLC 354.2
42,001 General Electric Company PLC 335.8
15,946 Lagardere S.C.A. 641.7
73,618 Rio Tinto PLC 893.7
---------
DIVERSIFIED OPERATIONS 2,618.4
ENERGY (12.8%)
15,914 BG PLC 104.3
22,317 British Petroleum Co PLC 327.7
6,049 Elf Aquitaine 700.1
5,319 National Grid Group PLC 36.4
82,372 National Power PLC 715.8
19,930 Royal Dutch Petroleum 962.7
100,031 Scottish Power PLC 984.9
6,534 Thomson CSF 227.0
2,755 Total SA-B 317.8
12,026 Veba 671.8
---------
ENERGY 5,048.5
FINANCIALS (16.1%)
33,942 Abbey National PLC 660.4
41,825 ABN Amro Holding 784.0
54,966 Allied Zurich PLC (a) 657.1
4,180 ASR Verzekeringsgroep 364.9
995 Banque Nationale De Paris 63.0
3,555 Bayerische
Hypo-und-Vereinsbank 282.3
42,203 Commercial Union PLC 668.8
6,459 Dresdner Bank 251.6
30,198 HSBC Holdings Ord 687.7
1,914 Ing Groep N.V. 92.7
11,156 Paribas 820.0
89,071 Royal & Sun Alliance Insurance
Group 815.8
1,769 Societe Generale 234.0
---------
FINANCIALS 6,382.3
FOOD & BEVERAGE (8.6%)
24,100 Bass PLC 292.5
54,966 British American Tobacco
PLC(a) 496.5
3,519 Diageo 38.0
5,752 Eridania Beghin-Say 1,035.3
2,325 LVMH 431.0
16,346 Pernod-Ricard 1,088.6
---------
FOOD & BEVERAGE 3,381.9
</TABLE>
ANNUAL REPORT 51
<PAGE> 55
EUROPEAN GROWTH & INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
October 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
OR
SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
<C> <S> <C>
TELECOMMUNICATIONS (9.3%)
76,024 British Telecom PLC $ 982.7
31,945 Deutsche Tele 870.4
8,100 France Telecom 564.9
32,481 Koninklijke KPN NV 1,262.9
---------
TELECOMMUNICATIONS 3,680.9
TOTAL COMMON STOCKS
(COST - $40,249.1) 38,184.9
---------
INVESTMENT COMPANIES (3.1%)
1,206,653 Dreyfus Treasury Cash
Management Fund
(Cost - $1,206.7) 1,206.7
---------
TOTAL (COST - $41,455.8) (b) (99.7%) $39,391.6
---------
---------
</TABLE>
Percentages indicated are based on net assets of $39,528,672.
Distribution of investments by country of issue, as a percentage of total value
investment securities, as follows:
<TABLE>
<C> <S> <C>
France 26.47%
Great Britain 24.97%
Germany 24.41%
Netherlands 21.09%
United States (cash
equivalent) 3.06%
-------
100.00%
</TABLE>
(a) Non-income producing security.
(b) For federal income tax purposes, cost is $41,533.8 and unrealized
appreciation (depreciation) of securities is as follows:
<TABLE>
<C> <S> <C>
Unrealized appreciation $ 2,674,067
Unrealized depreciation (4,816,351)
-----------
Net unrealized depreciation $(2,142,284)
-----------
-----------
</TABLE>
See notes to financial statements.
52 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 56
GROWTH & INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
October 31, 1998
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE (000)
- ---------- ----------------------------- -----------
COMMON STOCKS (47.7%)
BASIC INDUSTRIES (12.7%)
<C> <S> <C>
166,435 Du Pont (E.I.) De Nemours &
Company $ 9,570.0
228,519 International Paper Company 10,611.9
144,046 Minnesota Mining &
Manufacturing Company 11,523.7
----------
BASIC INDUSTRIES 31,705.6
CONSUMER DURABLES (7.5%)
160,348 Caterpillar International 7,215.7
168,973 General Motors Corporation 10,655.9
14,577 Goodyear Tire & Rubber 785.3
----------
CONSUMER DURABLES 18,656.9
CONSUMER NON-DURABLES (5.4%)
265,862 Phillip Morris Companies
Incorporated 13,592.2
ENERGY (9.4%)
140,471 Chevron Corporation 11,448.4
169,703 Exxon Corporation 12,091.3
----------
ENERGY 23,539.7
FINANCIAL (3.7%)
97,011 J.P. Morgan & Company 9,143.3
HEALTH CARE (0.1%)
2,725 Merck & Company Inc. 368.5
</TABLE>
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE (000)
- ---------- ----------------------------- -----------
<C> <S> <C>
TECHNOLOGY (4.4%)
136,280 Eastman Kodak $ 10,561.7
8,859 Raytheon Co. - Class A 496.1
----------
TECHNOLOGY 11,057.8
TELECOMMUNICATIONS (4.5%)
182,024 AT&T Corporation 11,331.0
----------
TOTAL COMMON STOCKS
(COST - $110,563.1) 119,395.0
INVESTMENT COMPANIES (52.3%)
1,063,754 S & P Depositary Receipt 117,012.9
13,983,764 Dreyfus Treasury Cash
Management Fund 13,983.8
----------
INVESTMENT COMPANIES
(COST - $107,319.4) 130,996.7
----------
TOTAL (COST - $217,882.5)(a) (100.0%) $250,391.7
==========
</TABLE>
Percentages indicated are based on net assets of
$250,552,929.
(a) For federal income tax purposes, cost is $217,882.5, and unrealized
appreciation (depreciation) of securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $35,363,128
Unrealized depreciation (2,853,922)
-----------
Net unrealized appreciation $32,509,206
===========
</TABLE>
See notes to financial statements.
ANNUAL REPORT 53
<PAGE> 57
MARKET RETURN FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
October 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
<C> <S> <C>
ASSET BACKED SECURITIES (3.5%)
706,123 Contimortgage Home Equity,
5.93%, 3/15/27 $ 704.4
750,000 Ford 1998 A Class D,
7.50%, 5/15/03(b) 735.0
95,402 Pacific SW97-1,
6.06%, 6/15/02(b) 95.4
---------
ASSET BACKED SECURITIES 1,534.8
COLLATERALIZED BOND OBLIGATIONS (6.6%)
1,000,000 Century,
7.22%, 2/15/11(b) 958.8
1,000,000 Gramercy,
8.94%, 10/25/02(b) 972.5
1,000,000 GS Escrow Corporation,
6.75%, 8/1/03(b) 935.0
COLLATERALIZED BOND ---------
OBLIGATIONS 2,866,3
MORTGAGE BACKED SECURITIES (27.0%)
336,347 Bear Stearns Mortgage
Securities,
6.60%, 4/25/24 336.3
63,973 Bear Stearns Mortgage,
7.25%, 11/25/27 64.0
131,229 Drexel Burnham Lambert CMO
Trust,
6.50%, 5/1/16 131.2
553,308 FHLMC Series 1009,
6.04%, 10/15/20 557.6
699,589 FHLMC #1054 H,
6.44%, 3/15/21 710.1
240,646 FHLMC Series 1519,
5.84%, 1/15/06 240.9
739,518 FHLMC,
5.89%, 3/15/18 741.6
792,349 FHLMC,
7.22%, 11/1/18 810.6
1,138,015 FNMA G94-7 F,
5.95%, 12/17/19 1,140.4
1,327,425 FNMA Series 1994-87,
6.14%, 3/25/09 1,334.1
71,623 FNMA Series G94-6,
8.00%, 10/17/00 72.3
1,000,000 FNMA,
6.39%, 9/25/22 1,007.8
656,974 FNMA,
7.09%, 6/1/15 665.6
1,887,515 GMBS 90-5A,
5.60%, 12/25/20 1,887.5
118,285 Headlands Mortgage Securities,
6.95%, 11/25/27 118.3
469,966 Headlands Mortgage Securities,
6.75%, 11/25/27 473.2
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
<C> <S> <C>
103,416 Merit Securities,
5.55%, 5/28/25 $ 103.4
657,575 Merrill Lynch Mortgage
Investors,
6.59%, 6/15/16 666.4
446,764 Residential Funding
Corporation,
7.00%, 8/25/27 446.8
214,936 Residential Funding,
5.75%, 1/25/24 214.0
---------
MORTAGE BACKED SECURITIES 11,722.1
AGENCY MORTGAGE PASSTHROUGHS (3.9%)
126,670 FNMA 364174,
11.00%, 10/1/06 135.6
1,545,791 FNMA 406525,
5.64%, 2/1/28 1,555.5
---------
AGENCY MORTGAGE PASSTHROUGHS 1,691.1
CORPORATE BONDS (18.9%)
CONSUMER CYCLICALS (2.4%)
1,000,000 Station Casinos, 995.0
9.63%, 6/1/03
ENERGY (1.7%)
750,000 Gulf Canada Resources Limited,
9.25%, 1/15/04 755.6
FINANCIAL (6.1%)
1,000,000 Contifinancial,
7.50%, 3/15/02 650.0
2,000,000 Merrill Lynch Hutchinson,
7.59%, 8/26/99(b) 2,000.0
---------
FINANCIAL 2,650.0
INDUSTRIAL GOODS (2.9%)
1,250,000 Ryerson Tull Incorporated,
8.50%, 7/15/01 1,276.6
MULTIMEDIA (3.5%)
500,000 News America Holdings,
7.45%, 6/1/00 515.6
500,000 TCI Communication,
6.38%, 3/12/01 499.6
500,000 Time Warner Incorporated,
4.90%, 7/29/99(b) 498.8
---------
MULTIMEDIA 1,514.0
TRANSPORTATION (2.3%)
1,000,000 Northwest Airlines
Corporation,
8.38%, 3/15/04 995.0
---------
CORPORATE BONDS 8,186,2
</TABLE>
54 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 58
MARKET RETURN FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
October 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
<C> <S> <C>
U.S. GOVERNMENT AGENCIES (19.5%)
1,500,000 FHLB Discount Note $ 1,483.5
1,500,000 FHLMC Discount Note 1,492.3
5,500,000 FHLMC Discount Note 5,470.6
---------
U.S. GOVERNMENT AGENCIES 8,446.4
U.S. TREASURY NOTES (12.1%)
1,000,000 U.S. Treasury Notes, 1,017.9
5.50%, 5/31/00
1,000,000 U.S. Treasury Notes, 1,044.2
5.50%, 2/28/03
2,000,000 U.S. Treasury Notes, 2,056.6
5.63%, 2/28/01
1,000,000 U.S. Treasury Notes, 1,134.9
6.63%, 5/15/07
---------
U.S. TREASURY NOTES 5,253.6
INVESTMENT COMPANIES (6.9%)
1,941,278 Dreyfus Treasury Cash 1,941.3
Management Fund
9,500 S & P 500 Depositary Receipt 1,045.0
---------
INVESTMENT COMPANIES 2,986.3
---------
TOTAL (COST - $43,094.2)(a) (98.4%) $42,686.8
=========
</TABLE>
Percentages indicated are based on net assets of
$43,390,085.
At October 31, 1998, the Fund's open futures contracts were as follows:
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION CURRENT APPRECIATION
# CONTRACT TYPE DATE MARKET VALUE (DEPRECIATION)
- --- -------------------- ---------- ------------ --------------
<C> <S> <C> <C> <C>
6 5 Year Treasury
Futures Dec-98 $ 687,844 $ 16,048
153 S&P 500 Futures Dec-98 42,273,900 3,991,036
----------
$4,007,084
==========
</TABLE>
All of the securities listed above are held by the custodian in a segregated
account.
(a) For federal income tax purposes, cost is $43,094.2, and unrealized
appreciation (depreciation) of securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 272,690
Unrealized depreciation (680,123)
---------
Net unrealized depreciation $(407,433)
=========
</TABLE>
(b) Security exempt from registration under Rule 144(a) of the Securities Act of
1993. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
See notes to financial statements.
ANNUAL REPORT 55
<PAGE> 59
LIMITED MATURITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
October 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
<C> <S> <C>
ASSET BACKED SECURITIES (14.0%)
7,000,000 Chase Manhattan Auto, 5.75%,
10/15/01 $ 7,061.3
114,509 Chase Manhattan Grantor Trust
1995-A, 6.00%, 9/17/01 114.6
2,056,360 Olympic Automobile Receivables
Trust, 7.88%, 7/15/01 2,097.2
7,000,000 Premier Auto Trust, 6.58%,
10/6/00 7,060.8
----------
ASSET BACKED SECURITIES 16,333.9
COLLATERALIZED BOND OBLIGATIONS (5.9%)
7,000,000 SBC Glacier Finance Limited,
5.75%, 9/10/02 6,921.3
----------
COLLATERALIZED BONDS 6,921.3
OBLIGATIONS
MORTGAGE BACKED SECURITIES (23.2%)
445,382 Bear Stearns Mortgage, 7.25%,
11/25/27 445.4
4,327,872 FNMA 92-60 CMO, 7.50%, 4/25/99 4,337.2
1,662,154 FNMA 94-79, 7.00%, 4/25/99 1,659.7
3,990,962 FNMA 97-17, 6.05%, 11/18/25 3,999.9
5,068,002 FNMA 97-20, 5.90%, 3/25/27 5,038.1
1,018,659 FNMA, 9.50%, 9/1/24 1,086.5
4,468,697 GNMA 78075, 8.00%, 12/15/27 4,637.6
2,444,735 Headlands Mortgage, 7.75%,
3/25/12 2,481.4
3,450,997 Independent National Mortgage,
7.00%, 3/25/26 3,452.3
----------
MORTGAGE BACKED SECURITIES 27,138.1
COMMERCIAL PAPER (6.8%)
3,000,000 General Electric Credit Corp
CP, 5.15%, 11/30/98 3,000.0
5,000,000 Toyota Motor Credit CP, 5.03%,
1/11/99 4,950.5
----------
COMMERCIAL PAPER 7,950.5
CORPORATE BONDS (31.1%)
FINANCE (16.4%)
7,000,000 Ahmanson Finance Note, 5.88%,
2/27/01 7,131.3
6,000,000 MBNA America Bank, 6.07%,
5/5/99 6,001.1
6,000,000 Merrill Lynch, 7.59%,
8/26/99(b) 6,000.0
----------
FINANCE 19,132.4
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
<C> <S> <C>
INDUSTRIAL GOODS & SERVICES (2.6%)
3,000,000 Paccar Financial Corp., 5.75%,
2/15/01 $ 3,048.7
MULTIMEDIA (9.8%)
5,000,000 TCI Communication, 6.38%,
3/12/01 4,995.5
6,500,000 Time Warner Incorporated,
4.90%, 7/29/99 (b) 6,483.7
----------
MULTIMEDIA 11,479.2
TECHNOLOGY (2.3%)
2,700,000 AT&T Capital Corporation,
6.39%, 1/22/99 2,703.2
----------
CORPORATE BONDS 36,363.5
U.S. GOVERNMENT AGENCIES (7.5%)
5,000,000 FHLMC Discount Note
4,969.1
3,784,035 FHLMC, 5.74%, 4/15/08
3,785.0
----------
U.S. GOVERNMENT AGENCIES 8,754.1
U.S. TREASURY NOTES (8.4%)
9,500,000 U.S. Treasury Notes, 6.25%,
8/31/00 9,822.9
----------
U.S. TREASURY NOTES 9,822.9
INVESTMENT COMPANIES (2.5%)
2,919,879 Dreyfus Treasury Cash
Management Fund 2,919.9
----------
TOTAL (COST - $115,840.6) (a) (99.4%)
$116,204.2
==========
</TABLE>
<TABLE>
<S> <C>
Percentages indicated are based on net
assets of $117,041,794.
(a) For federal income tax purposes, cost is
$115,840.6, and unrealized appreciation
(depreciation) of securities is as follows:
</TABLE>
<TABLE>
<S> <C>
Unrealized appreciation $ 525,310
Unrealized depreciation (161,717)
---------
Net unrealized appreciation $ 363,593
---------
---------
</TABLE>
(b) Security exempt from registration under Rule 144(a) of the Securities Act of
1993. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
See notes to financial statements.
56 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 60
SHORT BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
October 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- ---------- ----------------------------- -----------
<C> <S> <C>
ASSET BACKED SECURITIES (1.9%)
689,619 Fleetwood Credit Corp.
Grantor Trust 1996 - A, $ 699.3
6.75%, 10/17/11
1,362,882 Pacific SW97 - 1, 6.06%,
6/17/02 (c) 1,363.3
----------
ASSET BACKED SECURITIES 2,062.6
COLLATERALIZED MORTGAGE OBLIGATIONS (20.4%)
2,500,000 Capstead Securities
Corporation IV, 7.60%, 2,507.5
8/25/07
3,719,032 FHLMC CMO, 5.84%, 4/15/26 3,716.5
2,958,073 FHLMC, 5.89%, 3/15/18 2,966.4
3,990,962 FNMA 97 - 17F, 6.05%,
11/18/25 3,999.9
2,500,000 FNMA, 5.05%, 12/8/98 2,487.0
2,135,041 FNMA, Series 1997-32, 5.88%,
4/25/27 2,149.7
1,269,941 Paine Webber Mortgage
Acceptance Corp., 7.50%, 1,270.4
7/25/23
782,440 Residential Funding
Corporation, 5.81%, 10/25/23 782.9
2,305,242 Westam Mortgage Financial
Corp, 9.40%, 12/1/18 2,305.2
----------
COLLATERALIZED MORTGAGE
OBLIGATIONS 22,185.5
MORTGAGE BACKED SECURITIES (20.1%)
5,000,000 FHLMC TBA, 7.00%, 5/1/28 (b) 5,100.0
5,000,000 FNMA TBA, 6.50%, 4/1/13 (b) 5,071.9
4,393,908 GNMA, 9.00%, 6/15/09 4,727.8
1,501,154 Headlands Mortgage, 7.75%,
3/25/12 1,523.7
2,455,218 Morgan Stanley Capital 6.22%,
6/3/30 2,509.2
2,883,996 NASC 98-6 A1A, 6.28%, 3/15/30 2,942.3
----------
MORTGAGE BACKED SECURITIES 21,874.9
CORPORATE BONDS (49.1%)
ENERGY (3.3%)
3,500,000 Valero Energy, 6.75%,
12/15/02(c) 3,584.0
FINANCIAL (22.0%)
2,000,000 Ahmanson Finance Note, 5.88%,
2/27/01 2,037.5
4,000,000 AT&T Capital Corp, 6.25%,
5/15/01 4,085.0
3,500,000 AT&T Capital Corporation,
6.57%, 1/21/00 3,556.9
2,000,000 Credit Suisse First Boston,
8.09%, 8/26/99 (c) 2,000.0
5,000,000 MBNA Corp, 6.15%, 10/1/03 5,087.5
3,000,000 Merrill Lynch, 7.49%,
08/26/00 (c) 3,000.0
2,000,000 Salomon Inc, 6.88%, 12/15/03 2,100.0
2,000,000 Salomon Inc, 7.13%, 8/1/99 2,028.0
----------
FINANCIAL 23,894.9
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- ---------- ----------------------------- -----------
<C> <S> <C>
INDUSTRIAL GOODS & SERVICES (3.9%)
4,000,000 Honeywell Inc, 6.75%, 3/15/02 $ 4,205.0
INDUSTRIAL MACHINERY & EQUIPMENT (7.6%)
5,000,000 Caterpiller Finance Services,
6.95% 10/10/00 5,187.5
3,000,000 John Deer Capital Corp,
5.85%, 1/15/01 3,037.5
----------
INDUSTRIAL MACHINERY & 8,225.0
EQUIPMENT
MULTIMEDIA (5.0%)
3,500,000 TCI Communication, 6.38%,
3/12/01 3,496.9
2,000,000 Time Warner Incorporated,
4.90%, 7/29/99 (c) 1,995.0
----------
MULTIMEDIA 5,491.9
TRANSPORTATION (7.3%)
3,000,000 Ford Motor Credit Global,
6.50%, 2/28/02 3,082.5
2,500,000 GMAC Global Note, 5.875%,
1/22/03 2,521.9
2,150,000 GMAC, 8.50%, 1/1/03 2,375.8
----------
TRANSPORTATION 7,980.2
----------
CORPORATE BONDS 53,381.0
U.S. TREASURY NOTES (16.2%)
3,000,000 U.S. Treasury Notes, 6.25%,
8/31/00 3,102.0
8,000,000 U.S. Treasury Notes, 5.38%,
2/15/01 8,184.7
1,000,000 U.S. Treasury Notes, 5.50%,
5/31/03 1,047.4
5,000,000 U.S. Treasury Notes, 6.25%,
4/30/01 5,225.9
----------
U.S. TREASURY NOTES 17,560.0
INVESTMENT COMPANIES (0.0%)
6,997 Dreyfus Treasury Cash
Management Fund 7.0
----------
TOTAL (COST - $116,160.8) (a) (107.7%) $117,071.0
----------
----------
</TABLE>
ANNUAL REPORT 57
<PAGE> 61
SHORT BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
October 31, 1998
Percentages indicated are based on net assets of
$108,660,507.
At October 31, 1998, the Fund's open futures contracts were as follows:
<TABLE>
<CAPTION>
CURRENT UNREALIZED
EXPIRATION MARKET APPRECIATION
# CONTRACT TYPE DATE VALUE (DEPRECIATION)
- --- ------------------------ ---------- ----------- --------------
<S> <C> <C> <C> <C>
120 30 Year Treasury Futures Dec-98 $15,468,750 $(128,100)
</TABLE>
All of the securities listed above are held by the custodian in a segregated
account.
(a) For federal income tax purposes, cost is $116,160.8, and unrealized
appreciation (depreciation) of securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $1,073,333
Unrealized depreciation (163,130)
----------
Net unrealized appreciation $ 910,203
----------
----------
</TABLE>
(b) Security was purchased on a delayed delivery basis.
(c) Security exempt from registration under Rule 144(a) of the Securities Act of
1993. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
See notes to financial statements.
58 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 62
U.S. GOVERNMENT FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
October 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- ---------- ----------------------------- -----------
<C> <S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS
(28.7%)
4,365,820 FHLMC,
5.84%, 4/15/26(a) $ 4,362.9
3,000,000 FHLMC,
5.75%, 11/15/09 3,018.0
2,300,000 FNMA 1997-35 PC,
6.75%, 5/18/18 2,323.8
3,539,000 FNMA 93-103 PG,
6.25%, 6/25/19(a) 3,618.1
3,464,896 FNR 97-67FC, 5.80%,
12/18/19(a) 3,460.8
3,798,216 FNMA G94-7 F, 5.95%,
12/17/19(a) 3,806.2
----------
COLLATERALIZED MORTGAGE
OBLIGATIONS 20,589.8
SUPRANATIONAL (8.6%)
6,000,000 International Bank Recon &
Development,
5.63%, 3/17/03(a) 6,195.0
----------
SUPRANATIONAL 6,195.0
MORTGAGE BACKED SECURITIES (39.4%)
3,000,000 FHLMC,
6.50%, 5/1/13(c) 3,040.3
2,420,438 FNMA,
6.27%, 7/1/05 2,468.8
2,786,154 FNMA,
5.63%, 2/1/28 2,848.8
2,731,533 FNMA, 5.917%, 3/1/28 2,794.7
7,000,000 FNMA TBA,
6.00%, 4/1/13(c) 7,015.3
10,000,000 FNMA TBA,
6.50%, 4/1/13(c) 10,143.7
----------
MORTGAGE BACKED SECURITIES 28,311.6
U.S. GOVERNMENT AGENCIES (27.6%)
3,000,000 FHLB Discount Note 2,973.6
3,000,000 FHLB,
5.13%, 9/15/03 3,033.9
5,500,000 FHLMC,
5.75%, 7/15/03 5,717.1
3,000,000 FNMA,
5.25%, 1/15/03 3,060.9
5,000,000 FNMA Note,
5.72%, 4/14/00 5,076.8
----------
U.S. GOVERNMENT AGENCIES 19,862.3
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- ---------- ----------------------------- -----------
<C> <S> <C>
U.S. TREASURY (22.3%)
1,500,000 U.S. Treasury Notes,
5.63%, 11/30/99 $ 1,519.5
3,000,000 U.S. Treasury Notes,
6.38%, 5/15/00 3,091.5
2,000,000 U.S. Treasury Notes,
6.25%, 8/31/00 2,068.0
1,200,000 U.S. Treasury Strip,
0.00%, 8/15/99 1,159.4
4,500,000 US Treasury Notes,
6.25%, 3/31/99(a) 4,534.1
3,500,000 US Treasury Notes,
5.50%, 2/28/03(a) 3,654.7
----------
U.S. TREASURY 16,027.2
INVESTMENT COMPANIES (1.0%)
709,902.46 Dreyfus Treasury Cash
Management Fund 709.9
----------
TOTAL (COST - $90,645.0)(b) (127.6%) $91,695.8
----------
----------
</TABLE>
Percentages indicated are based on net assets of
$71,855,166.
At October 31, 1998, the Fund's open futures contracts were as follows:
<TABLE>
<CAPTION>
CURRENT UNREALIZED
EXPIRATION MARKET APPRECIATION
# CONTRACT TYPE DATE VALUE (DEPRECIATION)
- - ------------------------ ---------- ---------- --------------
<S> <C> <C> <C> <C>
30 30 Year Treasury Futures Dec-98 $3,867,188 $(25,463)
</TABLE>
(a) All or a portion of the security is held by the custodian in a segregated
account as collateral for open futures contracts.
(b) For federal income tax purposes, cost is $90,645.0, and unrealized
appreciation (depreciation) of securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $1,100,969
Unrealized depreciation (50,145)
----------
Net unrealized appreciation $1,050,824
==========
</TABLE>
(c) Security was purchased on a delayed delivery basis.
See notes to financial statements.
ANNUAL REPORT 59
<PAGE> 63
INTERMEDIATE BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
October 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- ---------- ----------------------------- -----------
<C> <S> <C>
ASSET BACKED SECURITIES (9.4%)
1,800,000 Green Tree Financial
Corporation,
6.93%, 7/15/28 $ 1,831.5
1,600,000 Navistar Financial
Corporation,
6.75%, 3/15/02 1,628.0
919,753 Structured Asset Notes Trans,
7.16%, 10/28/03 930.8
4,000,000 SBC Glacier Finance Limited,
5.75%, 9/10/02 3,955.0
----------
ASSET BACKED SECURITIES 8,345.3
COLLATERALIZED MORTGAGE OBLIGATIONS (1.7%)
240,180 Merit Securities Corporation,
5.44%, 9/28/30 240.2
1,276,468 Residential Funding
Corporation,
7.00%, 8/25/27 1,276.5
----------
COLLATERALIZED MORTGAGE
OBLIGATIONS 1,516.7
MORTGAGE BACKED SECURITIES (21.4%)
9,500,000 FNMA TBA,
6.50%, 4/1/28(b) 9,556.3
4,800,000 FNMA,
6.50%, 9/1/13 4,869.0
974,029 GNMA #399001,
8.00%, 12/15/26 1,010.2
1,293,675 GNMA,
8.00%, 7/15/25 1,341.8
2,200,000 GNMA,
8.00%, 7/1/28 2,281.8
----------
MORTGAGE BACKED SECURITIES 19,059.1
CORPORATE BONDS (68.5%)
ENERGY (11.3%)
4,550,000 Commonwealth Edison Note,
7.63%, 4/15/13 4,944.9
1,000,000 Transport de Gas,
10.25%, 4/25/01(c) 963.8
4,000,000 Valero Energy,
6.75%, 12/15/02(c) 4,096.0
----------
ENERGY 10,004.7
FINANCE (16.4%)
4,000,000 Ahmanson Finance Note,
5.88%, 2/27/01 4,075.0
1,000,000 Ahmanson Finance Note,
8.25%, 10/1/02 1,076.3
850,000 Citicorp, 6.65%, 5/15/00 873.4
4,500,000 Credit Suisse First Boston,
8.09%, 8/26/99(c) 4,500.0
3,000,000 Grand Metropolitan
Investment,
8.63%, 8/15/01 3,270.0
850,000 Transamerica Financial Corp.,
7.40%, 7/29/99 863.6
----------
FINANCE 14,658.3
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- ---------- ----------------------------- -----------
<C> <S> <C>
INDUSTRIAL GOODS AND SERVICES (26.3%)
4,500,000 Apache Corporate Note,
6.50%, 12/15/07 $ 4,423.9
4,925,000 Hanson Overseas, PLC,
6.75%, 9/15/05 5,140.5
1,250,000 Honeywell Incorporated,
6.60%, 4/15/01 1,300.0
1,000,000 Hutchinson Whampoa,
6.95%, 8/1/07(c) 917.6
3,000,000 Merrill Lynch Hutchinson,
7.49%, 08/26/00(c) 3,000.0
5,000,000 Merrill Lynch Hutchinson,
7.59%, 8/26/99(c) 5,000.0
3,500,000 Paccar Financial Corporation,
6.86%, 2/15/00 3,583.1
-----------
INDUSTRIAL GOODS AND SERVICES 23,365.1
MULTIMEDIA (9.4%)
1,000,000 Disney Global Bond,
6.38%, 3/30/01 1,033.8
3,000,000 News America Holdings,
8.63%, 2/1/03 3,330.0
4,000,000 TCI Communication,
6.38%, 3/12/01 3,996.4
-----------
MULTIMEDIA 8,360.2
TRANSPORTATION (5.1%)
3,500,000 General Motors Acceptance
Corp., 5.75%, 1/5/00 3,521.8
1,000,000 Mass Transit, 6.00%, 10/1/00 998.2
----------
TRANSPORTATION 4,520.0
----------
CORPORATE BONDS 60,908.3
U.S. TREASURY (17.5%)
4,000,000 U.S. Treasury Notes, 5.50%,
5/31/03 4,189.7
10,000,000 U.S. Treasury Notes, 6.63%,
5/15/07 11,349.2
----------
U.S. TREASURY 15,538.9
INVESTMENT COMPANIES (0.7%)
604,982 Dreyfus Treasury Cash
Management Fund 605.0
----------
TOTAL (COST - $104,528.3)(a) (119.2%) $105,973.3
==========
</TABLE>
Percentages indicated are based on net assets of
$88,872,449.
All of the securities listed above are held by the custodian in a segregated
account.
60 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 64
At October 31, 1998, the Fund's open futures contracts were as follows:
<TABLE>
<CAPTION>
NUMBER CURRENT UNREALIZED
OF EXPIRATION MARKET APPRECIATION/
CONTRACTS CONTRACT TYPE DATE VALUE (DEPRECIATION)
- --------- ------------------- ---------- ----------- --------------
<C> <S> <C> <C> <C>
15 5 Year Treasury
Future Dec-98 $ 1,719,609 $ 40,120
170 10 Year Treasury
Future Dec-98 20,463,750 362,119
64 30 Year Treasury
Future Dec-98 8,250,000 135,008
--------
$537,247
========
</TABLE>
At October 31, 1998, the Fund's open options contracts were as follows:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS EXPIRATION EXERCISE APPRECIATION/
WRITTEN CONTRACT TYPE DATE PRICE (DEPRECIATION)
- --------- ----------------------- ---------- -------- --------------
<C> <S> <C> <C> <C>
200 Call Option on 30 Year
U.S. Treasury Future Mar-99 $124 $(574,438)
200 Put Option on 30 Year
U.S. Treasury Future Mar-99 $124 197,438
---------
$(377,000)
=========
</TABLE>
(a) For federal income tax purposes, cost is $104,542.9, and unrealized
appreciation (depreciation) of securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $1,604,893
Unrealized depreciation (174,436)
----------
Net unrealized appreciation $1,430,457
==========
</TABLE>
(b) Security was purchased on a delayed delivery basis.
(c) Security exempt from registration under Rule 144(a) of the Securities Act of
1993. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
See notes to financial statements.
ANNUAL REPORT 61
<PAGE> 65
INVESTMENT QUALITY BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
October 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
<C> <S> <C>
ASSET BACKED SECURITIES (5.6%)
1,500,000 Green Tree Financial
Corporation, 6.93%, 7/15/28 $ 1,526.3
3,285,060 IMC Home Equity Loan Trust
1997-6 A, 5.42%, 1/20/28 3,268.6
4,000,000 SBC Glacier Finance Limited,
5.75%, 9/10/02 3,955.0
919,754 Structured Asset Notes Trans,
7.16%, 10/28/03 930.8
----------
ASSET BACKED SECURITIES 9,680.7
COLLATERALIZED MORTGAGE OBLIGATIONS (2.1%)
2,543,802 BSMSI, 6.49%, 1/25/07 2,569.2
673,119 FNMA 91-84 CMO, 5.68%, 2/25/06 673.4
436,691 Merit Securities Corporation,
5.44%, 9/28/30 436.7
----------
COLLATERALIZED MORTGAGE
OBLIGATIONS 3,679.3
COLLATERALIZED BOND OBLIGATIONS (5.2%)
4,000,000 Century, 7.13%, 2/15/11(c) 3,835.0
5,000,000 FC CBO, 8.43%, 6/3/09(c) 5,243.8
----------
COLLATERALIZED BOND
OBLIGATIONS 9,078.8
MORTGAGE BACKED SECURITIES (41.2%)
2,579,437 FHLMC Gold Pool # E67534,
7.00%, 9/1/12 2,632.6
3,259,520 FHLMC, 8.50%, 6/1/17 3,419.4
5,800,000 FNMA TBA, 6.50%, 4/1/13(b) 5,883.4
26,500,000 FNMA TBA, 6.50%, 4/1/28(b) 26,657.2
8,200,000 FNMA TBA, 7.00%, 4/1/13(b) 8,351.1
7,500,000 FNMA TBA, 7.00%, 4/1/28(b) 7,650.0
8,000,000 FNMA TBA, 7.50%, 4/1/28(b) 8,190.0
1,396,443 FNMA 92-62, 5.88%, 5/25/99 1,398.9
2,373,569 GNMA #412603, 7.50%, 5/15/26 2,444.0
4,824,032 GNMA 48928, 8.00%, 6/15/28 5,003.4
----------
MORTGAGE BACKED SECURITIES 71,630.0
COMMERCIAL PAPER (6.3%)
7,000,000 General Electric Credit Corp,
5.03%, 12/21/98 7,000.0
4,000,000 General Motors Acceptance
Corp, 5.38%, 11/19/98 4,000.0
----------
COMMERCIAL PAPER 11,000.0
CORPORATE BONDS (54.4%)
CONSUMER CYCLICALS (1.8%)
3,000,000 Mirage Resorts, 6.75%, 8/1/07 3,056.2
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
<C> <S> <C>
DIVERSIFIED OPERATIONS (0.3%)
448,861 General Electric Capital
Mortgage Services, 8.30%, $ 465.5
7/25/23
ENERGY (2.7%)
4,000,000 Valero Energy, 6.75%,
12/15/02(c) 4,096.0
500,000 Virginia Electric Power
Company, 7.38%, 7/1/02 539.4
----------
ENERGY 4,635.4
FINANCE (19.3%)
6,000,000 Ahmanson Finance Note, 8.25%,
10/1/02 6,457.5
200,000 Citicorp, 6.65%, 5/15/00 205.5
6,500,000 Credit Suisse First Boston,
8.09%, 8/26/99(c) 6,500.0
1,500,000 Grand Metropolitan Investment,
8.63%, 8/15/01 1,635.0
5,000,000 Health and Finance Co, 6.75%,
12/18/02(c) 5,187.5
8,000,000 MBNA American Bank, 6.10%,
12/15/00 8,130.0
2,220,000 MBNA Master Credit Card Trust,
6.60%, 11/15/04 2,355.4
1,500,000 Salomon Incorporated, 7.25%,
5/1/01 1,567.5
1,500,000 Salomon, Incorporated, 5.51,
7/23/01 1,500.0
190,000 Transamerica Financial
Corporation, 7.40%, 7/29/99 193.1
----------
FINANCE 33,731.5
INDUSTRIAL GOODS AND SERVICES (12.1%)
500,000 Hanson Overseas, PLC, 6.75%,
9/15/05 521.9
1,000,000 Hutchinson Whampoa, 6.95%,
8/1/07(c) 917.6
7,000,000 Merrill Lynch Hutchinson,
7.49%, 8/26/00(c) 7,000.0
8,000,000 Merrill Lynch Hutchinson,
7.59%, 8/26/99(c) 8,000.0
3,000,000 Raytheon Company, 6.75%,
8/15/07 3,168.7
1,500,000 Swire Pacific Ltd., 8.50%,
9/29/04 1,534.7
----------
INDUSTRIAL GOODS AND SERVICES 21,142.9
</TABLE>
62 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 66
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
<C> <S> <C>
MULTIMEDIA (8.3%)
2,500,000 TCI Communication, 6.381%,
3/12/01 $ 2,497.8
5,000,000 Tele-Communications, 8.25%,
1/15/03 5,531.2
3,000,000 Time Warner Incorporated,
7.75%, 6/15/05 3,281.2
3,000,000 US West, 6.375%, 7/15/08 3,127.5
----------
MULTIMEDIA 14,437.7
TRANSPORTATION (9.9%)
4,100,000 AMR Corporate Note, 9.82%,
10/25/11 5,473.5
4,500,000 CSX Note, 8.10%, 9/15/22 5,008.5
6,000,000 Norfolk Southern, 7.70%,
5/15/17 6,727.5
----------
TRANSPORTATION 17,209.5
----------
CORPORATE BONDS 94,678.7
U.S. TREASURY (18.3%)
16,000,000 U.S. Government Strip, 0%,
8/15/20 4,702.9
700,000 U.S. Treasury Bonds, 6.25%,
8/15/23 783.3
1,500,000 U.S. Treasury Note, 6.625%,
4/30/02 1,606.5
2,300,000 U.S. Treasury Notes, 6.25%,
8/31/00 2,378.2
500,000 U.S. Treasury Notes, 7.50%,
2/15/05 580.6
13,000,000 U.S. Treasury, 5.5%, 5/31/03 13,616.6
7,250,000 U.S. Treasury, 6.625%, 5/15/07 8,228.2
----------
U.S. TREASURY 31,896.3
INVESTMENT COMPANIES (0.1%)
132,214 Dreyfus Treasury Cash
Management Fund 132.2
----------
TOTAL (COST - $229,134.0)(a) (133.2%) $231,776.0
==========
</TABLE>
Percentages indicated are based on net assets of $173,973,880.
All of the securities listed above are held by the custodian in a segregated
account.
At October 31, 1998, the Fund's open futures contracts were as follows:
<TABLE>
<CAPTION>
NUMBER CURRENT UNREALIZED
OF EXPIRATION MARKET APPRECIATION/
CONTRACTS CONTRACT TYPE DATE VALUE (DEPRECIATION)
- --------- ------------------ ---------- ----------- --------------
<C> <S> <C> <C> <C>
295 30 Year Treasury
Future Dec-98 $38,027,344 $647,759
========
</TABLE>
At October 31, 1998, the Fund's open options contracts were as follows:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS EXPIRATION EXERCISE APPRECIATION/
WRITTEN CONTRACT TYPE DATE PRICE (DEPRECIATION)
- --------- ---------------------- ---------- -------- --------------
<C> <S> <C> <C> <C>
400 Call Option on 30 Year
U.S. Treasury Future Mar-99 $124 $(1,148,875)
400 Put Option on 30 Year
U.S. Treasury Future Mar-99 $124 394,875
-----------
$ (754,000)
===========
</TABLE>
(a) For federal income tax purposes, cost is $229,134.0, and unrealized
appreciation (depreciation) of securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $3,350,329
Unrealized depreciation (708,308)
----------
Net unrealized appreciation $2,642,021
==========
</TABLE>
(b) Security was purchased on a delayed delivery basis.
(c) Security exempt from registration under Rule 144(a) of the Securities Act of
1993. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
See notes to financial statements.
ANNUAL REPORT 63
<PAGE> 67
TOTAL RETURN FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
October 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL VALUE
OR SHARES SECURITY DESCRIPTION (000)
- ------------ ---------------------------- ----------
<C> <S> <C>
ASSET BACKED SECURITIES (8.8%)
3,000,000 Citibank Credit Card, 5.75%, $ 3,034.7
1/15/03
3,000,000 Evergreen Funding, 7.01%, 2,722.5
11/15/10(c)
400,000 Green Tree Financial 407.0
Corporation, 6.93%, 7/15/28
3,500,000 Premier Auto Trust, 6.32%, 3,627.9
3/6/02
919,754 Structured Asset Notes 930.8
Transaction, 7.16%, 10/28/03
4,750,000 Triangle Funding, 7.60%, 4,494.7
10/15/05(c)
----------
ASSET BACKED SECURITIES 15,217.6
COLLATERALIZED BOND OBLIGATIONS (4.4%)
1,000,000 Ares Leveraged Bond, 7.52%, 990.0
11/30/04(c)
750,000 Ares Leveraged Bond, 9.77%, 748.1
11/30/04(c)
270,000 EMC Corporate Convertible 783.0
Note, 3.25%, 3/15/02
5,000,000 FC CBO, 8.43%, 6/3/09(c) 5,243.8
COLLATERALIZED BOND ----------
OBLIGATIONS 7,764.9
MORTGAGE BACKED SECURITIES (29.2%)
3,173,319 FHLMC #A01499, 8.50%, 4/1/19 3,338.9
2,307,331 FHLMC Gold, #C00542, 7.50%, 2,362.8
8/1/27
778,779 FHLMC Gold, 8.50%, 3/1/23 818.0
3,512,486 FNMA Series 1997-32, 5.88%, 3,536.7
4/25/27
2,800,000 FNMA TBA, 6.50%, 4/1/13(b) 2,840.2
21,900,000 FNMA TBA, 6.50%, 4/1/28(b) 22,029.9
5,200,000 FNMA TBA, 7.00%, 4/1/13(b) 5,295.8
5,500,000 FNMA TBA, 7.00%, 4/1/28(b) 5,610.0
5,000,000 GNMA TBA, 8.00%, 11/15/28(b) 5,178.1
----------
MORTGAGE BACKED SECURITIES 51,010.4
CONVERTIBLE BONDS (4.6%)
1,250,000 Mark IV Industrial, 7.50%, 1,212.5
9/1/07
100,000 Staples Inc. Convertible, 216.7
4.50%, 10/1/00
1,500,000 Hewlett Packard Convertible 815.6
Note, 0.00%, 10/14/17
10,500,000 Hewlett Packard, 0.00%, 5,709.4
10/14/17
----------
CONVERTIBLE BONDS 7,954.2
CORPORATE BONDS (30.6%)
COMMUNICATIONS (0.8%)
1,500,000 Telefonica Argentina, 8.38%, 1,458.7
10/1/00(c)
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
OR SHARES SECURITY DESCRIPTION (000)
- ------------ ---------------------------- ----------
<C> <S> <C>
ENERGY (2.3%)
1,250,000 CAL Energy Company, 9.50%, $ 1,373.4
9/15/06
2,000,000 Petro Mexicanos, 7.75%, 1,980.0
10/29/99(c)
775,000 Tragas, 10.25%, 4/25/01(c) 746.9
----------
ENERGY 4,100.3
FINANCE (10.6%)
3,400,000 Chase Manhatten, 6.40%, 3,491.8
7/16/01
1,325,000 Contifinancial Corporation, 848.0
8.38%, 8/15/03
9,000,000 Credit Suisse First Boston, 9,000.0
8.09%, 8/26/99(c)
2,000,000 GS Escrow Corp, 6.75%, 1,870.0
8/1/03
225,000 Salomon Incorporated, 6.63%, 230.3
11/30/00
3,000,000 Salomon, Incorporated, 3,000.0
5.51%, 7/23/01
----------
FINANCE 18,440.1
INDUSTRIAL GOODS & SUPPLIES (8.1%)
750,000 AK Steel Corporation, 9.13%, 778.1
12/15/06
1,000,000 Cemex, 9.50%, 9/20/01(c) 986.3
300,000 Hutchinson Whampoa, 6.95%, 275.3
8/1/07(a)(d)
7,000,000 Merrill Lynch Hutchinson, 7,000.0
7.49%, 08/26/00(c)
4,000,000 Merrill Lynch Hutchinson, 4,000.0
7.59%, 8/26/99(c)
1,550,000 Office Depot, 0.00%,11/1/08 1,046.3
----------
INDUSTRIAL GOODS & SUPPLIES 14,086.0
MULTIMEDIA (3.3%)
300,000 Omnicom Group, 4.25%, 1/3/07 492.8
750,000 Rogers Cablesystem, 10.00%, 815.6
12/1/07
3,500,000 TCI Communication, 6.38%, 3,496.9
3/12/01
1,000,000 Time Warner Pass-Thru, 1,018.8
6.10%, 12/30/01(c)
----------
MULTIMEDIA 5,824.1
TECHNOLOGY (4.4%)
9,500,000 Silicon Graphics, 5.25%, 7,659.4
9/1/04
</TABLE>
64 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 68
<TABLE>
<CAPTION>
PRINCIPAL VALUE
OR SHARES SECURITY DESCRIPTION (000)
- ------------ ---------------------------- ----------
<C> <S> <C>
TRANSPORTATION (1.1%)
40,000 Union Pacific Cap, 6.25%, $ 1,850.0
4/1/28
----------
CORPORATE BONDS 53,418.6
FOREIGN BONDS (0.4%)
750,000 Argentina, 10.95%, 755.6
11/1/99(c)
----------
FOREIGN BONDS 755.6
U.S. GOVERNMENT AGENCIES (22.8%)
5,000,000 FHLB Discount Note 4,945.6
35,000,000 FHLMC Discount Note 34,911.9
----------
U.S. GOVERNMENT AGENCIES 39,857.5
U.S. TREASURY (25.8%)
17,000,000 U.S. Treasury Notes, 5.63%, 17,221.3
11/30/99
1,500,000 U.S. Treasury Notes, 6.25%, 1,551.0
8/31/00
23,500,000 U.S. Treasury Strip, 0.00%, 6,951.3
8/15/20
17,000,000 US Treasury Notes, 6.63%, 19,293.6
5/15/07
----------
U.S. TREASURY 45,017.2
INVESTMENT COMPANIES (2.2%)
3,871,988 Dreyfus Treasury Cash 3,872.0
Management Fund
----------
TOTAL (COST - $224,766.5)(a) (128.8%) $224,868.0
==========
</TABLE>
Percentages indicated are based on net assets of $174,612,155.
All of the securities listed above are held by the custodian in a segregated
account.
At October 31, 1998, the Fund's open futures contracts were as follows:
<TABLE>
<CAPTION>
NUMBER CURRENT UNREALIZED
OF EXPIRATION MARKET APPRECIATION/
CONTRACTS CONTRACT TYPE DATE VALUE (DEPRECIATION)
- --------- ------------------ ---------- ----------- --------------
<C> <S> <C> <C> <C>
360 30 Year Treasury
Future Dec-98 $46,406,250 $787,763
</TABLE>
At October 31, 1998, the Fund's open options contracts were as follows:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS EXPIRATION EXERCISE APPRECIATION/
WRITTEN CONTRACT TYPE DATE PRICE (DEPRECIATION)
- --------- ---------------------- ---------- -------- --------------
<C> <S> <C> <C> <C>
400 Call Option on 30 Year
U.S. Treasury Future Mar-99 $124 $(1,148,875)
400 Put Option on 30 Year
U.S. Treasury Future Mar-99 $124 394,875
-----------
$ (754,000)
===========
</TABLE>
At October 31, 1998, the Fund's open swap contracts were as follows:
<TABLE>
<CAPTION>
UNREALIZED
NOTIONAL SETTLE APPRECIATION/
PRINCIPAL CONTRACT TYPE DATE (DEPRECIATION)
- ---------- ---------------------------- -------- --------------
<C> <S> <C> <C>
25,000,000 Lehman Brothers Index Return
Swap 11/01/98 $1,157,795
40,000,000 Lehman Brothers Index Return
Swap 12/01/98 251,697
----------
$1,409,492
==========
</TABLE>
For the contract with the notional value of $25 million, the Fund pays at a rate
equal to LIBOR (London Interbank Offered Rate) minus 0.15% and receives at a
rate equal to the Lehman Government/Corporate Index. For the contract with the
notional value of $40 million, the Fund pays at a rate equal to LIBOR plus 0.75%
and receives at a rate equal to Lehman Corporate Index.
(a) For federal income tax purposes, cost is $224,766.5, and unrealized
appreciation (depreciation) of securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 2,151,405
Unrealized depreciation (2,049,891)
-----------
Net unrealized appreciation $ 101,514
===========
</TABLE>
(b) Security was purchased on a delayed delivery basis.
(c) Security exempt from registration under Rule 144(a) of the Securities Act of
1993. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
See notes to financial statements.
ANNUAL REPORT 65
<PAGE> 69
SHORT DURATION TAX EXEMPT FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
October 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
<C> <S> <C>
GENERAL OBLIGATIONS (44.4%)
LIMITED (2.8%)
415,000 Denver, CO,
7.75%, 11/15/21, pre-refunded
11/15/01 $ 469.4
UNLIMITED (41.6%)
1,000,000 Dade County, FL (FGIC),
12.00%, 10/01/01 1,227.5
1,700,000 District of Columbia (MBIA),
6.60%, 6/1/03(a) 1,804.1
1,000,000 Lewisville, TX Indt. School
Dist (PSF),
6.25%, 8/15/02 1,080.0
1,000,000 Minnesota State,
4.00%, 11/1/01 1,012.5
1,500,000 New York, NY,
6.00%, 8/1/00 1,560.0
300,000 District of Columbia (MBIA),
6.60%, 6/1/03, pre-refunded
6/1/00 319.5
----------
UNLIMITED 7,003.6
----------
GENERAL OBLIGATIONS 7,473.0
REVENUE (51.7%)
AIRPORT (6.1%)
1,000,000 Denver, CO City/Co. Airport
(MBIA),
4.80%, 11/15/00 1,023.8
HEALTH CARE (16.1%)
1,000,000 MO State Health & Educ.
Facilities,
4.25%, 12/1/99 (a) 1,007.6
1,000,000 NY State Dormitory-Mental
Health Svcs., 6.00%, 2/15/03 1,080.0
615,000 Phila., PA Hosp. & Higher Ed.-
Temple Univ.,
5.00%, 11/15/00 625.8
----------
HEALTH CARE 2,713.4
HOUSING (8.8%)
450,000 AK Housing Finance Corp.
(MBIA),
4.35%, 12/1/98 450.3
1,000,000 MI State Building Authority
(AMBAC),
5.00%, 10/1/00 1,028.8
----------
HOUSING 1,479.1
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
<C> <S> <C>
RESOURCE RECOVERY (6.0%)
1,000,000 MA Industrial Finance Agency,
4.20%, 12/1/99 $ 1,001.8
STUDENT LOAN (6.0%)
1,000,000 New England Educ. Loan Mkt.
Corp., 5.00%, 7/1/99 1,007.9
TRANSPORTATION (6.0%)
1,000,000 Pocahontas Parkway
Association,
5.00%, 8/15/05 1,011.2
WATER & SEWER (2.7%)
435,000 Portland, OR Sewer, 6.50%,
6/1/00 455.1
----------
REVENUE 8,692.3
INVESTMENT COMPANIES (2.3%)
384,757 Dreyfus Tax Exempt Cash
Management Fund 384.8
----------
TOTAL (COST - $16,343.5)(b) (98.4%) $16,550.1
----------
----------
</TABLE>
FGIC: Financial Guaranty Insurance Company
MBIA: MBIA Insurance Corp.
PSF: Permanent School Fund
AMBAC: Ambac Assurance Corporation
Percentages indicated are based on net assets of
$16,824,575.
(a) All or a portion of the security is held by the custodian in a segregated
account.
(b) For federal income tax purposes, cost is $16,343.5, and unrealized
appreciation (depreciation) of securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $206,526
Unrealized depreciation --
--------
Net unrealized appreciation $206,526
--------
--------
</TABLE>
See notes to financial statements.
66 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 70
TAX EXEMPT BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
October 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
<C> <S> <C>
GENERAL OBLIGATIONS (34.6%)
LIMITED (5.9%)
700,000 Clark Co., NV School Dist.
(MBIA),
5.88%, 6/15/13 $ 781.4
2,000,000 Massachusetts State (FGIC),
5.00%, 8/1/07(a) 2,132.5
1,000,000 Port of Seattle, WA,
5.25%, 5/1/03 1,052.5
----------
LIMITED 3,966.4
UNLIMITED (28.7%)
1,500,000 Charleston County., SC,
5.75%, 6/1/08 1,648.0
1,200,000 Chicago, IL, Metro. Water
Reclamation Dist.,
6.30%, 12/1/09 1,365.0
1,760,000 Dade County, FL (AMBAC),
7.70%, 10/1/08 2,263.8
1,750,000 District of Columbia,
5.75%, 6/1/10 1,942.5
1,000,000 Florida St., Dept. of Trans.
Right of Way,
6.00%, 7/1/07 1,145.0
1,000,000 Fort Worth, TX, Independent
School Dist. (PSF),
0.00%, 2/15/06 741.2
1,000,000 Honolulu, HI, City & County,
5.00%, 10/1/02 1,041.2
1,600,000 Jersey City, NJ
6.25%, 10/1/10 1,878.0
1,200,000 Kingsport, TN Public
Improvements,
5.60%, 9/1/03 1,291.5
500,000 Lake Orion, MI Comm. School
Dist. (AMBAC),
5.80%, 5/1/15 536.9
1,000,000 Mississippi State,
5.80%, 6/1/09 1,076.3
1,250,000 Pennsylvania State (MBIA),
5.20%, 6/15/04 1,331.3
1,000,000 Texas Public Finance
Authority,
5.38%, 10/1/03 1,071.3
1,000,000 Virginia State,
6.10%, 6/1/06 1,105.0
1,000,000 Washington State,
5.25%, 9/1/05 1,075.0
---------
UNLIMITED 19,512.0
---------
GENERAL OBLIGATIONS 23,478.4
REVENUE (59.6%)
AIRPORT (7.7%)
700,000 Dade County, FL Aviation-Miami
Int'l. (FSA),
5.75%, 10/1/05 770.0
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
<C> <S> <C>
1,200,000 L.A., CA, City Dept. of
Airport (FGIC),
5.50%, 5/15/07 $ 1,309.5
2,000,000 Philadelphia, PA Authority
(FGIC),
5.00%, 7/1/08 2,085.0
1,010,000 S.F., CA City & Co. Int'l
Airport (FGIC),
5.00%, 5/1/06 1,071.9
----------
AIRPORT 5,236.4
EDUCATION (10.6%)
1,000,000 Avon, IN Community School
Building Corp. (AMBAC),
5.25%, 1/1/22 1,021.2
1,600,000 District of Columbia,
6.00%, 4/1/05(a) 1,770.0
1,250,000 N.Y. State Dorm Authority
(AMBAC),
6.13%, 7/1/07(a) 1,409.4
2,810,000 University of Texas Permanent,
5.90%, 7/1/02(a) 3,027.8
----------
EDUCATION 7,228.4
ELECTRIC & GAS (4.5%)
300,000 City of Knoxville, TN Gas
System,
4.85%, 3/1/06 307.5
575,000 IN Municipal Power Agency
(MBIA),
5.13%, 1/1/01 593.7
1,000,000 Long Island Power Authority
(AMBAC),
5.50%, 12/1/06 1,095.0
1,000,000 MA Municipal Wholesale
Electric Co.,
6.38%, 7/1/01 1,058.7
----------
ELECTRIC & GAS 3,054.9
HOUSING (4.0%)
485,000 CA Housing Authority (MBIA),
5.20%, 8/1/26 496.5
1,000,000 ID Housing and Finance Assoc.,
5.20%, 7/1/27(a) 1,021.2
1,000,000 Virginia State Housing Dev.
Authority,
6.30%, 7/1/11(a) 1,052.5
170,000 Wisconsin Housing & Economic
Dev.,
5.30%, 11/1/05 177.2
----------
HOUSING 2,747.4
POLLUTION CONTROL (5.9%)
200,000 Harris Co., TX IDC-Exxon,
3.40%, 3/1/24(b) 200.0
1,400,000 MN Public Facilities
Authorities,
6.00%, 3/1/07 1,589.0
</TABLE>
ANNUAL REPORT 67
<PAGE> 71
TAX EXEMPT BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
October 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
<C> <S> <C>
2,000,000 NY Environmental Facilities
Corp. (MBIA),
5.50%, 6/15/09(a) $ 2,184.9
----------
POLLUTION CONTROL 3,973.9
RESOURCE RECOVERY (1.7%)
1,115,000 MA State Industrial Finance
Agency,
4.20%,12/1/99 1,117.0
SALES TAX (1.6%)
1,000,000 RI Convention Center Authority
(MBIA),
6.40%, 5/15/05, pre-refunded
05/15/01 1,085.0
STUDENT LOAN (1.5%)
1,000,000 MA Educational Financing
Authority (MBIA),
4.55%, 12/1/06 995.0
TRANSPORTATION (15.8%)
1,025,000 Arapahoe Co., CO, E-470,
6.90%, 8/31/15, pre-refunded
08/31/05 1,227.4
1,500,000 Arapahoe Co., CO E-470,
6.95%, 8/31/20, pre-refunded
08/31/05 1,801.9
1,000,000 MA Bay Transportation
Authority,
5.60%, 3/1/08 1,108.8
1,500,000 NY Metro. Transportation
Authority (MBIA),
5.00%, 7/1/12 1,541.2
2,500,000 Pocahontas Parkway Assoc.,
5.25%, 8/15/07(a) 2,546.9
1,465,000 Port Authority N.Y. & N.J.,
5.80%, 12/1/12 1,562.1
1,000,000 S.F., CA Bay Area Rapid
Transit (AMBAC),
4.75%, 7/1/23 965.0
----------
TRANSPORTATION 10,753.3
WATER & SEWER (6.3%)
2,000,000 District of Columbia Water &
Sewer Authority (FSA),
5.50%, 10/1/17 (a) 2,175.0
500,000 Lower Bucks Co., PA Joint Muni
Authority (FSA)
5.00%, 11/15/15 501.9
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
<C> <S> <C>
1,000,000 Ohio State Water Development
Authority (AMBAC),
5.70%, 6/1/09 $ 1,093.8
500,000 Portland, OR Sewer,
6.50%, 6/1/00 523.1
----------
WATER & SEWER 4,293.8
----------
REVENUE 40,485.1
SPECIAL TAX (3.9%)
1,000,000 CT State Special Tax
Obligation,
6.25%, 10/1/09, pre-refunded
10/1/01 1,090.0
1,380,000 Washington, D.C. Amer. Adv. of
Science (AMBAC),
6.00%, 01/01/08 1,556.0
----------
SPECIAL TAX 2,646.0
INVESTMENT COMPANIES (0.4%)
275,073 Dreyfus Tax Exempt Cash
Management Fund 275.1
----------
TOTAL (COST - $64,057.1)(c) (98.5%) $66,884.6
----------
----------
</TABLE>
AMBAC: AMBAC Indemnity Corporation
FGIC: Financial Guaranty Insurance Company
MBIA: MBIA Insurance Corp.
PSF: Permanent School Fund
FSA: Financial Security Assurance Inc.
Percentages indicated are based on net assets of
$67,888,900.
(a) All or a portion of the security is held by the custodian in a segregated
account.
(b) This security is a floating rate instrument.
(c) For federal income tax purposes, cost is $64,057.1, and unrealized
appreciation (depreciation) of securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $2,853,585
Unrealized depreciation (26,093)
----------
Net unrealized appreciation $2,827,492
==========
</TABLE>
See notes to financial statements.
68 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 72
BUNKER HILL MONEY MARKET FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
October 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
OR SHARES SECURITY DESCRIPTION COST (000)
- --------- ------------------------------ -----------
<C> <S> <C>
COMMERCIAL PAPER (65.8%)
DIVERSIFIED OPERATIONS (3.8%)
1,000,000 General Electric Credit Corp
CP,
5.50%, 11/18/98 $ 1,000.0
ENERGY (3.8%)
1,000,000 Chevron Oil Commercial Paper,
5.05%, 12/14/98 1,000.0
FINANCE (28.1%)
1,000,000 American Express Credit,
5.12%, 1/5/99 1,000.0
1,000,000 American General Finance,
5.15%, 1/5/99 1,000.0
1,000,000 Associates Corporate Note,
6.68%, 9/17/99 1,012.1
1,000,000 CIT Group Holdings,
6.10%, 8/9/99 1,006.4
1,000,000 Credit Suisse First Boston,
5.09%, 1/28/99 987.6
450,000 Dresdner Bank Commercial
Paper,
5.51%, 1/15/99 450.0
1,000,000 Norwest Corp Commercial Paper,
5.02%, 1/27/99 987.9
1,000,000 UBS Commercial Paper,
5.25%, 1/5/99 990.5
---------
FINANCE 7,434.5
INDUSTRIAL MACHINERY & EQUIPMENT (3.7%)
1,000,000 Caterpillar Financial Service
CP,
5.02%, 1/13/99 989.8
MULTIMEDIA (9.4%)
2,500,000 Walt Disney Commercial Paper,
5.42%, 11/20/98 2,492.8
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
OR SHARES SECURITY DESCRIPTION COST (000)
- --------- ------------------------------ -----------
<C> <S> <C>
TECHNOLOGY (9.4%)
2,500,000 IBM Credit Corp Commercial
Paper,
5.45%, 11/10/98 $ 2,496.6
TRANSPORTATION (7.6%)
1,000,000 Ford Motor Credit CP,
5.49%, 11/18/98 1,000.0
1,000,000 General Motors Acceptance
Corp,
5.38%, 11/19/98 1,000.0
---------
TRANSPORTATION 2,000.0
---------
COMMERCIAL PAPER 17,413.7
CERTIFICATES OF DEPOSIT (4.9%)
300,000 Morgan Guaranty Bank CD,
5.71%, 1/8/99 300.0
1,000,000 Toronto Dominion CD,
5.64%, 7/14/99 1,002.6
---------
CERTIFICATES OF DEPOSIT 1,302.6
COLLATERALIZED MORTGAGE OBLIGATION (2.0%)
534,906 FNMA 92 60 C CMO,
7.50%, 4/25/99 536.9
---------
COLLATERALIZED MORTGAGE
OBLIGATION 536.9
---------
U.S. GOVERNMENT AGENCIES (26.5%)
4,000,000 FHLB Discount Note 3,997.2
3,000,000 FHLB Discount Note 2,991.6
---------
U.S. GOVERNMENT AGENCIES 6,988.8
INVESTMENT COMPANIES (1.0%)
259,930 Dreyfus Treasury Cash
Management Fund 259.9
---------
TOTAL (COST - $26,501.9) (100.2%) $26,501.9
=========
</TABLE>
Percentages indicated are based on net assets of
$26,455,200.
See notes to financial statements.
ANNUAL REPORT 69
<PAGE> 73
HIGH INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
October 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
<C> <S> <C>
ASSET BACKED SECURITIES (4.0%)
250,000 Ford 1998 A Class D,
7.50%, 5/15/03(a) $ 245.0
1,000,000 Ford 98-B,
7.50%, 11/15/03(a) 980.0
1,000,000 Gramercy,
8.94%, 10/25/02(a) 972.5
750,000 Triangle Funding LTD,
7.76%, 10/15/03(a) 711.6
750,000 Triangle Funding,
7.60%, 10/15/05(a) 709.6
---------
ASSET BACKED SECURITIES 3,618.7
COLLATERALIZED BOND OBLIGATIONS (0.3%)
250,000 Ares Leveraged Bond,
9.77%, 11/30/04(a) 249.4
---------
COLLATERALIZED BOND
OBLIGATIONS 249.4
COMMERCIAL PAPER (4.9%)
4,500,000 American Express Credit,
5.18%, 11/2/98 4,500.0
---------
COMMERCIAL PAPER 4,500.0
PREFERRED STOCK (2.2%)
10,278 Cablevision PFD, 11.13% 1,104.9
1,064 Granite Broadcasting, 12.75% 861.6
---------
PREFERRED STOCK 1,966.5
FOREIGN BONDS (2.5%)
1,000,000 Argentina Global,
11.38, 1/30/17 967.5
1,500,000 Mexican UTD STS,
8.63%, 3/12/08 1,338.7
---------
FOREIGN BONDS 2,306.2
CORPORATE BONDS (78.9%)
BUILDING & CONSTRUCTION (2.7%)
750,000 Cathay International,
13.00%, 4/15/08 (a) 300.0
1,000,000 Cemex,
12.75%, 7/15/06(a) 1,040.0
1,000,000 Kaufman & Bros. Home,
9.63%, 11/15/06 1,040.0
---------
BUILDING & CONSTRUCTION 2,380.0
CABLE SYSTEMS (10.4%)
1,500,000 Adelphia Communications,
10.50%, 7/15/04 1,612.5
1,800,000 Classic Cable,
9.88%, 8/1/08(a) 1,835.9
1,315,000 Century Communications,
8.38%, 12/15/07 1,354.5
1,000,000 CSC Holdings Inc.,
9.25%, 11/1/05 1,055.0
750,000 Jones Intercable,
9.63%, 3/15/02 810.0
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
<C> <S> <C>
1,250,000 Lenfest Communication,
8.38%, 11/1/05 $ 1,350.0
1,400,000 Rogers Cablesystem,
10.00%, 12/1/07 1,522.5
---------
CABLE SYSTEMS 9,540.4
CONSUMER CYCLICALS (2.0%)
2,000,000 Revlon Cons Products,
8.63%, 2/1/08 1,800.0
CONSUMER STAPLES (2.6%)
1,500,000 HMH Properties,
7.88%, 8/1/08 1,451.2
1,000,000 Jitney-Jungle Stores,
10.38%, 9/15/07 960.0
---------
CONSUMER STAPLES 2,411.2
ENERGY AND UTILITIES (6.7%)
1,000,000 CAL Energy Company,
9.50%, 9/15/06 1,098.8
1,000,000 Calpine Corp.,
9.25%, 2/1/04 1,025.0
1,250,000 Cliffs Drilling,
10.25%, 5/15/03 1,312.4
1,250,000 Gulf Canada Resources Limited,
9.25%, 1/15/04 1,259.4
500,000 Gulf Canada Resources,
9.63%, 7/1/05 493.8
1,000,000 Nuevo Energy, 8.88%,
6/1/08(a) 985.0
---------
ENERGY AND UTILITIES 6,174.4
FINANCIALS (7.7%)
1,500,000 Bay View Capital,
9.13%, 8/15/07 1,335.0
750,000 Contifinancial Corporation,
8.38%, 8/15/03 480.0
3,000,000 Credit Suisse First Boston,
8.09%, 8/26/99(a) 3,000.0
2,000,000 GS Escrow Corp,
6.75%, 8/1/03(a) 1,870.0
500,000 IBJ International Preferred,
8.79%, 12/29/49 390.0
---------
FINANCIALS 7,075.0
GAMING (5.9%)
1,000,000 Boyd Gaming Corp.,
9.50%, 7/15/07 960.0
1,000,000 Grand Casinos,
9.00%, 10/15/04 1,030.0
500,000 Grand Casinos,
10.13%, 12/1/03 525.0
</TABLE>
70 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 74
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
<C> <S> <C>
250,000 Hollywood Casino,
12.75%, 11/1/03 $ 247.5
1,500,000 Horseshoe Gaming,
9.38%, 6/15/07 1,447.6
1,250,000 Station Casinos,
9.63%, 6/1/03 1,243.7
---------
GAMING 5,453.8
HEALTH CARE (2.2%)
1,000,000 Genesis Health,
9.75%, 6/15/05 918.8
1,090,000 Tenet Healthcare,
8.63%, 12/1/03 1,133.6
---------
HEALTH CARE 2,052.4
INDUSTRIAL GOODS AND SERVICES (8.6%)
1,500,000 American Standard,
7.38%, 2/1/08 1,492.5
1,500,000 Columbus McKinnon,
8.50%, 4/1/08 1,395.0
1,500,000 Federal Mogul Co,
7.75%, 7/1/06 1,488.0
250,000 Hayes Wheels International,
11.00%, 7/15/06 270.0
1,250,000 Mark IV Industrial,
7.50%, 9/1/07(a) 1,212.5
500,000 Navistar International,
8.00%, 2/1/08 485.0
1,000,000 Owens-Illinois Incorporated,
7.85%, 5/15/04 1,045.0
500,000 Ryerson Tull, Incorporated,
8.50%, 7/15/01 510.6
---------
INDUSTRIAL GOODS AND SERVICES 7,898.6
MULTIMEDIA (10.3%)
1,500,000 Chancellor Media,
8.13%, 12/15/07 1,432.5
250,000 Globo Communicacoes,
10.63%, 12/5/08(a) 142.5
1,000,000 Granite Broadcasting,
8.88%, 5/15/08 860.0
1,000,000 Grupo Televisa,
11.88%, 5/15/06 980.0
1,500,000 HMV Media Group,
10.25%, 5/15/08(a) 1,215.0
500,000 Jacor Communication Co.,
9.75%, 12/15/06 542.5
1,500,000 Loews Cineplex,
8.88%, 8/1/08(a) 1,462.5
500,000 Multicanal,
10.50%, 2/1/07 382.5
1,000,000 Primedia Inc,
7.63%, 4/1/08 975.0
1,500,000 Sinclair Broadcasting,
9.00%, 7/15/07 1,455.0
---------
MULTIMEDIA 9,447.5
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
OR SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
<C> <S> <C>
TECHNOLOGY (2.2%)
2,000,000 Unisys Corp.,
7.88%, 4/1/08 $ 2,020.0
TELECOMMUNICATIONS (16.2%)
1,000,000 Clearnet Communications,
0.00%, 12/15/05 795.0
1,500,000 Comcast Cellular,
9.50%, 5/1/07 1,522.5
1,000,000 Flag Limited,
8.25%, 1/30/08(a) 950.0
1,500,000 GST USA Inc.,
0.00%, 12/15/05 975.0
2,000,000 Intermedia Communications,
8.60%, 6/1/08 1,895.0
1,500,000 IXC Communications Inc.,
9.00%, 4/15/08 1,470.0
1,500,000 Level 3 Communications,
9.13%, 5/1/08 1,395.0
2,000,000 Mcleodusa Inc.,
9.25%, 7/15/07 1,990.0
1,000,000 Nextlink Comm.,
9.00%, 3/15/08 900.0
500,000 Nextlink Comm.,
9.45%, 4/15/08 260.0
1,500,000 Orange PLC,
8.00%, 8/1/08 1,447.5
1,500,000 RSL Comm.,
9.13%, 3/1/08 1,245.0
---------
TELECOMMUNICATIONS 14,845.0
TRANSPORTATION (1.4%)
1,250,000 Northwest Airlines
Corporation,
8.38%, 3/15/04 1,243.8
---------
CORPORATE BONDS 72,342.1
INVESTMENT COMPANIES (5.2%)
4,789,921 Dreyfus Treasury Cash
Management Fund 4,789.9
---------
TOTAL (COST - $94,671.2) (b) (98.0%) $89,772.8
=========
</TABLE>
Percentages indicated are based on net assets of
$91,668,810.
(a) Security exempt from registration under Rule 144(a) of the Securities Act of
1993. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(b) For federal income tax purposes, cost is $94,684.7, and unrealized
appreciation (depreciation) of securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 196,074
Unrealized depreciation (5,107,972)
-----------
Net unrealized depreciation $(4,911,898)
===========
</TABLE>
See notes to financial statements.
ANNUAL REPORT 71
<PAGE> 75
VALUE STOCK FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
October 31, 1998
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ----------------------------- -----------
<C> <S> <C>
COMMON STOCKS (74.4%)
BASIC INDUSTRIES (7.0%)
5,800 Arch Coal Inc. $ 103.3
21,780 Bethlehem Steel
Corporation(a) 196.0
8,170 Boise Cascade Office
Products(a) 75.1
13,290 Commonwealth Industries Inc. 100.5
5,360 Crompton & Knowles Corp. 86.1
3,810 FMC Corp.(a)(c) 194.5
4,670 Lyondell Chemical Co. 78.8
16,960 Methanex Corporation(a) 98.6
10,030 Morton International(c) 249.5
11,900 National Steel Corp. - Cl B 76.6
8,430 Solutia Inc. 184.9
14,220 Walter Industries Inc.(a)(c) 199.1
----------
BASIC INDUSTRIES 1,643.0
CAPITAL GOODS (3.1%)
4,780 Lear Corporation(a)(c) 153.6
4,530 McDermott International Inc. 132.8
14,540 Reynolds & Reynolds Company 261.7
8,835 Smith (A.O.) Corp.(c) 180.6
----------
CAPITAL GOODS 728.7
CONSUMER CYCLICALS (13.1%)
19,630 Aztar Corp.(a) 101.8
5,850 A H Belo Corp. 106.4
5,110 Burlington Coat Factory WHRS 76.7
25,100 Charming Shoppes(a) 94.1
11,470 Cordiant Communications Group 111.8
11,430 Danaher Corp.(c) 456.5
13,040 Hasbro Inc.(c) 457.2
9,480 Hertz Corp.-Cl A(c) 339.5
14,650 Hollinger International
Inc.(c) 190.5
7,140 Host Meriott Corp.(a) 103.5
7,040 Information Resources Inc.(a) 55.9
30,110 Johns Manville Corparation(c) 395.2
3,750 Mohawk Industries Inc.(a) 113.2
3,960 Saks Inc.(a) 90.1
16,740 Terra Industries Inc. 125.6
9,650 Viad Corp.(c) 264.8
----------
CONSUMER CYCLICALS 3,082.8
CONSUMER STAPLES (5.5%)
12,120 Advantica Restaurant Group(a) 77.2
9,820 Dial Corp.(c) 270.7
4,970 Keebler Foods Co.(a) 142.9
13,110 Perrigo Company(a) 104.1
32,900 Whitman Corp.(c) 705.3
----------
CONSUMER STAPLES 1,300.2
ENERGY (4.4%)
9,270 Ashland Inc.(c) 446.1
4,220 Tidewater Inc. 119.5
17,070 Tosco Corporation(c) 479.0
----------
ENERGY 1,044.6
</TABLE>
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ----------------------------- -----------
<C> <S> <C>
FINANCIALS (18.2%)
4,870 ARM Financial $ 93.4
7,210 Advanta Corp. 86.1
12,030 Ambac Financial Group Inc.(c) 700.0
5,140 American Annuity Group Inc. 118.2
3,850 AmerUs Life Holdings Inc. 92.9
3,390 W R Berkley Corp. 102.2
24,950 Capstead Mortgage Corp. 78.0
22,040 Duke Realty Investments(c) 526.2
6,370 Everest Reins Hldgs Poison
Pill 0.1
6,370 Everest Reinsurance Holdings
Inc. 219.4
6,930 Frontier Insurance Group 113.0
4,160 Heller Financial Corp.(a) 99.8
6,970 Liberty Financial
Companies(c) 175.1
18,050 Mackenzie Financial Corp. 203.1
4,430 Old Republic International
Corporation 84.2
19,180 Protective Life Corp.(c) 710.9
6,710 Provident Companies Inc. 195.0
4,435 Raymond James Financial Inc. 101.7
8,510 Reinsurance Group of
America(c) 469.1
3,820 Simon Property Group Inc. 114.4
----------
FINANCIALS 4,282.8
HEALTH CARE (7.4%)
24,820 Allegiance Corporation(c) 923.0
18,320 Apria Healthcare Group
Inc.(a) 74.4
53,990 Laboratory CRP of American
Hldgs(a) 87.7
24,030 Quest Diagnostics Inc.(a)(c) 399.5
3,390 Wellpoint Health
Network(a)(c) 249.6
----------
HEALTH CARE 1,734.2
TECHNOLOGY (14.5%)
10,890 Adaptec Inc.(a) 176.3
6,890 Andrew Corp.(a) 112.8
21,560 Apple Computer, Inc.(a)(c) 800.4
13,060 Cirrus Logic Inc.(a) 126.9
18,590 CompuCom Systems Inc.(a) 90.6
3,490 Lexmark International Group
Inc.(a)(c) 244.1
26,850 Quantum Corp.(a)(c) 469.9
21,540 Silicon Graphics Inc.(a) 242.3
8,730 Sterling Software Inc.(a) 228.6
12,470 Storage Tech Corp.(a)(c) 417.0
22,190 Thermo Instruments
Systems(a)(c) 270.4
10,500 Wang Laboratories(a)(c) 224.4
----------
TECHNOLOGY 3,403.7
TRANSPORTATION (1.2%)
9,960 Consolidated Freightways
Corp.(a) 107.7
3,200 U.S. Airways(a)(c) 181.0
----------
TRANSPORTATION 288.7
TOTAL COMMON STOCKS (COST - $20,142.4) 17,508.7
</TABLE>
72 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 76
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ----------------------------- -----------
<C> <S> <C>
U.S. GOVERNMENT AGENCY (16.9%)
4,000,000 FHLB Discount Note(c) $ 3,975.1
----------
U.S. GOVERNMENT AGENCY (COST-
$3,975.1) 3,975.1
INVESTMENT COMPANIES (8.7%)
2,058,572 Dreyfus Treasury Cash
Management Fund
(Cost - $2,058.6) 2,058.6
----------
TOTAL (COST - $26,176.1) (b) (100.0%) $ 23,542.4
==========
</TABLE>
Percentages indicated are based on net assets of $23,543,916.
At October 31, 1998, the Fund's open futures contracts were as follows:
<TABLE>
<CAPTION>
NUMBER CURRENT UNREALIZED
OF EXPIRATION MARKET APPRECIATION/
CONTRACTS CONTRACT TYPE DATE VALUE (DEPRECIATION)
- --------- ----------------------------- ---------- ---------- --------------
<S> <C> <C> <C> <C>
26 December Russell 2000 Futures Dec-98 $4,953,000 $441,913
</TABLE>
(a) Non-income producing security.
(b) For federal income tax purposes, cost is $26,190.7, and unrealized
appreciation (depreciation) of securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 803,051
Unrealized depreciation (3,451,380)
-----------
Net unrealized depreciation $(2,648,329)
===========
</TABLE>
(c) All or a portion of the security is held by custodian in a segregated
account.
See notes to financial statements.
ANNUAL REPORT 73
<PAGE> 77
GROWTH STOCK FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
October 31, 1998
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
COMMON STOCKS (95.3%)
<C> <S> <C>
BASIC INDUSTRIES (15.1%)
3,270 Alpine Group Inc.(a) $ 55.2
2,220 Ecolab Inc. 66.3
1,130 Lafarge Corporation 38.1
1,320 MacDermid Inc. 48.4
1,510 Martin Marietta Materials Inc. 74.1
270 Southdown Inc. 14.7
430 Vulcan Materials Co. 51.0
770 Wausau-Mosinee Paper Corp. 13.4
--------
BASIC INDUSTRIES 361.2
CAPITAL GOODS (19.2%)
960 American Power Conversion(a) 40.7
970 Cognex Corp.(a) 15.0
2,040 Crane Company 58.8
3,400 Griffon Corp.(a) 33.4
7,190 JLG Industries Inc. 119.1
2,150 Jacobs Engineering Group(a) 70.1
330 Lear Corporation(a) 10.6
3,190 Spartech Corp. 57.4
3,510 Thermedics Inc.(a) 37.7
710 Wallace Computer Service Corp. 15.5
--------
CAPITAL GOODS 458.3
COMMUNICATIONS (4.6%)
1,930 Century Telephone Enterprise 109.6
CONSUMER CYCLICALS (19.1%)
1,790 Aaron Rents Inc. 26.4
1,660 Abercrombie & Fitch Co.(a) 65.9
270 Central Newspapers Inc. 17.8
1,700 Danaher Corp. 67.9
3,600 DeVry Inc.(a) 79.2
1,370 International Game Technology 30.9
530 International Speedway Corp.
Class A 16.4
2,140 Jones Apparel Group Inc.(a) 36.9
370 Media General Inc. 16.6
410 Meredith Corp. 15.2
250 Payless Shoesource Inc.(a) 11.7
2,550 Viad Corp. 70.0
--------
CONSUMER CYCLICALS 454.9
CONSUMER STAPLES (3.2%)
1,590 IHOP Corp.(a) 62.4
900 United Video Satellite
Group(a) 14.3
--------
CONSUMER STAPLES 76.7
ENERGY (0.3%)
750 Varco International Inc.(a) 8.1
</TABLE>
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE (000)
- --------- ------------------------------ -----------
<C> <S> <C>
FINANCIALS (14.6%)
1,170 Executive Risk Inc. $ 55.6
2,385 Keycorp 72.3
560 Legg Mason Inc. 14.9
450 Metris Company Inc. 14.8
1,220 Orion Capital Corp. 41.7
3,090 Presidential Life Corp. 56.0
2,040 Protective Life Corp. 75.6
230 Transatlantic Holdings Inc. 17.9
--------
FINANCIALS 348.8
HEALTH CARE (9.2%)
8,000 Bio-Technology General
Corp.(a) 58.5
760 First Health Group Corp.(a) 17.5
3,330 Health Mgmt Associates
Inc.-A(a) 59.3
1,190 Lincare Holdings Inc.(a) 47.5
3,930 Luxottica Group 35.4
--------
HEALTH CARE 218.2
TECHNOLOGY (8.8%)
2,530 Altera Corp.(a) 105.3
3,570 Coherent Inc.(a) 41.9
1,520 Excel Switching Corp.(a) 30.8
4,310 X-Rite Inc. 30.7
--------
TECHNOLOGY 208.7
UTILITIES (1.2%)
1,080 Washington Gas Light Co. 28.6
--------
TOTAL COMMON STOCKS (COST - $2,498.8) 2,273.1
INVESTMENT COMPANIES (5.3%)
125,256 Dreyfus Treasury Cash
Management Fund
(Cost - $125.3) 125.3
--------
TOTAL (COST - $2,624.1)(b) (100.6%) $2,398.4
========
</TABLE>
Percentages indicated are based on net assets of $2,384,294.
(a) Non-income producing security.
(b) For federal income tax purposes, cost is $2,624.1, and unrealized
appreciation (depreciation) of securities is as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 109,209
Unrealized depreciation (334,899)
---------
Net unrealized depreciation $(225,690)
=========
</TABLE>
See notes to financial statements.
74 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 78
NOTES TO FINANCIAL STATEMENTS
October 31, 1998
1. ORGANIZATION
Each of the Payden & Rygel Global Short Bond Fund, Payden & Rygel Global Fixed
Income Fund, Payden & Rygel Short Duration Tax Exempt Fund, Payden & Rygel Tax
Exempt Bond Fund, Payden & Rygel U.S. Government Fund, Payden & Rygel Limited
Maturity Fund, Payden & Rygel Short Bond Fund, Payden & Rygel Intermediate Bond
Fund, Payden & Rygel Investment Quality Bond Fund, Payden & Rygel Market Return
Fund, Payden & Rygel Total Return Fund, Payden & Rygel Global Balanced Fund,
Payden & Rygel International Equity Fund, Payden & Rygel European Growth &
Income Fund, Payden & Rygel Growth & Income Fund, Payden & Rygel Bunker Hill
Money Market Fund, Payden & Rygel High Income Fund, Payden & Rygel Value Stock
Fund and Payden & Rygel Growth Stock Fund (the "Funds") is a series of The
Payden & Rygel Investment Group (the "Group"). The Group, except for the Payden
& Rygel Bunker Hill Money Market Fund, is a no-load, open-end management
investment company organized as a Massachusetts business trust on January 22,
1992 and registered under the Investment Company Act of 1940, as amended (the
"1940 Act"). The Bunker Hill Money Market Fund's Class D Shares are subject to a
Distribution Plan. Each of the Funds, other than the International Equity and
High Income Funds, has been classified as non-diversified. As provided in the
1940 Act, a diversified fund has, with respect to at least 75% of its total
assets, no more than 5% of its total assets invested in the securities of one
issuer, plus cash and cash items, Government securities, and securities of other
investment companies.
The objective of the Global Short Bond, Global Fixed Income, Global Balanced,
U.S. Government, Limited Maturity, Short Bond, Intermediate Bond, Investment
Quality Bond and Total Return Funds is to realize a high level of total return
consistent with preservation of capital. The Limited Maturity Fund further seeks
to earn a total return that, over time, is greater than that available from
money market funds. In order to achieve these objectives, each Fund invests
primarily in debt obligations. The Limited Maturity, Short Bond, Intermediate
Bond, Investment Quality Bond and Total Return Funds invest in debt obligations
of the U.S. Treasury, U.S. government agencies, U.S. dollar-denominated foreign
and domestic public corporations and mortgage-backed securities. The U.S.
Government Fund primarily invests in debt obligations of the U.S. Treasury, U.S.
government agencies and mortgage-backed securities.
The Global Short Bond and Global Fixed Income Funds invest primarily in U.S. and
foreign government notes and bonds and U.S. and foreign corporate debt
securities. The Global Short Bond, Global Fixed Income and Total Return Funds
can also have substantial investments in foreign currency contracts. The
objective of the Short Duration Tax Exempt and Tax Exempt Bond Funds is to earn
federal tax-free income by investing in debt obligations which are exempt from
federal income tax and consistent with preservation of capital. The objective of
the Market Return Fund is to provide a total return in excess of the Standard &
Poor's 500 Stock Index ("S&P 500 Index"). To
ANNUAL REPORT 75
<PAGE> 79
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 1998
achieve this objective, the Market Return Fund invests primarily in equity-based
investments, such as stock index futures contracts and equity swap contracts, as
well as in fixed income securities.
The objective of the Global Balanced Fund is to realize a high level of total
return consistent with preservation of capital. This Fund invests in common
stocks, bonds and money market instruments of both domestic and foreign issuers.
The Global Balanced Fund can also have investments in foreign currency
contracts.
The objective of the International Equity Fund is long-term capital
appreciation. This Fund invests in equity securities (common and preferred
stock) of issuers whose corporate headquarters are outside the United States
("foreign equities"). Normally, the Fund's assets are invested in securities of
issuers headquartered in at least five different countries.
The Growth & Income Fund seeks to provide growth of capital and some current
income. To achieve these objectives the Growth & Income Fund normally invests
approximately half of its assets in the ten stocks in the Dow Jones Industrial
Average with the highest dividend yields. This strategy is commonly referred to
as investing in the "dogs" of the Dow. The remaining assets are invested in
securities intended to replicate the total return of the S&P 500 Index, normally
Standard & Poor's Depositary Receipts or additional common stocks.
The European Growth & Income Fund normally invests its assets in common stocks
of approximately ten issuers located in each of France, Germany, the Netherlands
and the United Kingdom. In each country, the Fund selects the ten stocks with
the highest dividend yield. These stocks come from among the thirty issuers with
the largest market capitalizations which are included in each country's leading
stock index. The Fund, also known as the "Euro Dogs" Fund, follows investment
objectives and policies that are analogous to the Group's Growth & Income Fund.
The Bunker Hill Money Market Fund invests in only high-quality corporate, bank,
and government debt instruments that Payden & Rygel (the "Adviser") believes
present minimal credit risk. To be considered high-quality, a security generally
must be rated in one of the two highest categories for short-term securities by
at least two nationally recognized rating services or, if unrated, must be
determined by the Adviser to be of comparable quality. The Fund must limit its
investments to securities with remaining maturities of 397 days or less and must
maintain a dollar-weighted average maturity of 90 days or less.
The High Income Fund invests in a portfolio of higher yielding, below investment
grade bonds. Securities below investment grade are speculative and subject to
greater market fluctuations and greater risk of loss of principal and income
than higher rated bonds. The Fund invests at least 65% of its assets in high
yield bonds and up to 20% of its total assets in convertible bonds, preferred
stocks, Brady bonds or "emerging market" bonds.
76 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 80
The Value Stock Fund seeks long-term capital appreciation by investing in stocks
with a value discipline. Companies selected for investment exhibit one or more
of the following criteria: (a) a share price which appears to be inexpensive
relative to the growth rate of cash flow or the growth rate of sales; (b) an
ability to generate free cash flow internally; and (c) a positive catalyst,
e.g., a new product.
The Growth Stock Fund seeks long-term capital appreciation by investing in
stocks with a growth discipline. Companies selected for investment exhibit one
or more of the following criteria: (a) a potential expansion in profitability
based on factors such as industry and the company's competitive advantages; (b)
a potential to achieve above average returns on equity; and (c) above average
growth in earnings before interest and taxes.
There can, however, be no assurance that any of the Funds' investment objectives
will be achieved.
Each of the Funds offer Class R shares. The Bunker Hill Money Market Fund also
offers Class D shares. Class D shares are subject to certain fees under a
distribution plan (the "Distribution Plan"); Class R shares do not participate
in the Distribution Plan. Class D shares pay the Distributor an annual fee of up
to 0.35% of the average daily net assets of the Fund attributable to Class D
shares, in accordance with Rule 12b-1 under the 1940 Act.
The Group is authorized to issue an unlimited number of shares of each class,
which are units of beneficial interest.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Funds:
Securities Valuation
Domestic and foreign fixed income securities and other assets for which market
quotations are readily available (other than obligations with remaining
maturities of 60 days or less) are valued on the basis of quotations obtained
from dealers or pricing services with consideration of such factors as
institutional-sized trading in similar groups of securities, quality, yield,
coupon rate, maturity, type of issue, trading characteristics and other market
data. Options, futures, swaps and other similar assets are valued at the last
available bid price in the case of listed securities or on the basis of
information provided by the institution with which the Fund entered into the
transaction in the case of other securities. Investments in investment companies
are valued at their net asset values as reported by such companies. Securities
for which market quotations are not readily available are valued at fair value
as determined in good faith pursuant to guidelines established by the Board of
Trustees. Debt securities with remaining maturities of sixty days or less are
valued on an amortized cost basis unless the Adviser determines that such basis
does not represent fair value. Non-U.S.
ANNUAL REPORT 77
<PAGE> 81
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 1998
dollar securities are translated into U.S. dollars using the spot exchange rate
at the close of the London market. The differences between cost and market of
investments are reflected as either unrealized appreciation or depreciation.
Equity securities listed or traded on any domestic (U.S.) securities exchange
are valued at the last sale prices or, if there have been no sales during the
day, at the last bid prices. Securities traded only on the over-the-counter
market are valued at the latest bid prices. Foreign equity securities are valued
based upon the last sale prices on the foreign exchange or market on which they
are principally traded as of the close of the appropriate exchange or, if there
have been no sales during the day, at the last bid prices. Money market
investments are valued at amortized cost, which approximates market value. Under
the amortized cost valuation method, discount or premium is amortized on a
constant basis to the maturity of the security.
Investment Transactions and Related Income
Investment transactions are accounted for on the date the security is purchased
or sold (trade date). Interest income is recognized on the accrual basis. All
premiums and discounts are amortized or accreted for both financial statement
and tax reporting purposes as required by Federal income tax regulations.
Dividend income is recorded on the ex-dividend date. Realized gains or losses on
investment transactions are determined on the identified cost basis.
Foreign Currency Translation
The accounting records of the Funds are maintained in U.S. dollars. The Global
Short Bond, Global Fixed Income, Global Balanced, International Equity and Total
Return Funds may purchase securities that are payable in foreign currencies. For
these five Funds, investment securities, other assets and liabilities
denominated in a foreign currency are translated into U.S. dollars at the
current exchange rates. Purchases and sales of securities, income receipts and
expense payments are translated into U.S. dollars at the exchange rates on the
dates of the transactions.
Each of these five Funds isolates that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of securities, purchases and sales of foreign currencies, currency
gains or losses realized between the trade and settlement dates of securities
transactions, and the differences between the amounts of interest or expenses
recorded on each of these Fund's books and the U.S. dollar equivalents of the
amounts actually received or paid. Net unrealized foreign exchange gains and
losses arise from changes in the value of assets and liabilities, including
investments in securities, resulting from changes in the exchange rates.
78 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 82
Repurchase Agreements
Any of the Funds may enter into repurchase agreements (agreements to purchase
U.S. Treasury notes and bills, subject to the seller's agreement to repurchase
them at a specified time and price) with well-established registered securities
dealers or banks. Repurchase agreements are the equivalent of loans by the
Funds. With respect to such agreements, it is each Fund's policy to take
possession of the underlying securities and, on a daily basis, mark-to-market
such securities to ensure that the value, including accrued interest, is at
least equal to the amount to be repaid to each Fund under each agreement.
Options Transactions
When any of the Funds (except the Bunker Hill Money Market Fund, which does not
invest in any option transactions) writes a covered call or put option, an
amount equal to the premium received is included in that Fund's statement of
assets and liabilities as a liability. The amount of the liability is
subsequently marked-to-market to reflect the current market value of the option.
If an option expires on its stipulated expiration date or if the Fund enters
into a closing purchase transaction, a gain or loss is realized. If a written
call option is exercised, a gain or loss is realized for the sale of the
underlying security and the proceeds from the sale are increased by the premium
originally received. If a written put option is exercised, the cost of the
security acquired is decreased by the premium originally received. As writer of
an option, the Fund has no control over whether the underlying securities are
subsequently sold (call) or purchased (put) and, as a result, bears the market
risk of an unfavorable change in the price of the security underlying the
written option.
When any of the Funds (except Bunker Hill Money Market Fund, which does not
invest in any option transactions) purchases a call or put option, an amount
equal to the premium paid is included in that Fund's statement of assets and
liabilities as an investment, and is subsequently marked-to-market to reflect
the current market value of the option. If an option expires on the stipulated
expiration date or if a Fund enters into a closing sale transaction, a gain or
loss is realized. If a Fund exercises a call option, the cost of the security
acquired is increased by the premium paid for the call. If a Fund exercises a
put option, a gain or loss is realized from the sale of the underlying security,
and the proceeds from such sale are decreased by the premium originally paid.
Written and purchased options are non-income producing securities.
The option techniques are used to hedge against changes in interest rates,
foreign currency exchange rates or security prices in order to establish more
definitely the effective return on securities or currencies held or intended to
be acquired by a Fund, to reduce the volatility of the currency exposure
associated with investment in non-U.S. securities, or as an efficient means of
adjusting exposure to the bond, equity and currency markets and not for
speculation.
ANNUAL REPORT 79
<PAGE> 83
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 1998
Futures Contracts
Any Fund (except the Bunker Hill Money Market Fund) may purchase or sell futures
contracts and options on futures contracts, which provide for the future sale by
one party and purchase by another party of a specified quantity of a financial
instrument or foreign currency at a fixed price on a future date. Upon entering
into such a contract, a Fund is required to deposit and maintain as collateral
such initial margin as required by the exchange on which the contract is traded.
Pursuant to the contract, that Fund agrees to receive from or pay to the broker
an amount equal to the daily fluctuation in the value of the contract. Such
receipts or payments are known as variation margin and are recorded as
unrealized gains or losses by that Fund. When the contract is closed, that Fund
records a realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed. The
Funds may invest in futures contracts to hedge against anticipated future
changes in interest or exchange rates or security prices. The potential risk to
the Funds is that the change in value of the underlying securities may not
correlate to the change in value of the contracts, or that the counterparty
defaults.
The Market Return, Global Balanced, Growth & Income, European Growth & Income,
International Equity, Value Stock and Growth Stock Funds may invest in stock
index futures contracts, each of which is an agreement pursuant to which two
parties agree to take or make delivery of an amount of cash equal to the
difference between the value of the index at the close of the last trading day
of the contract and the price at which the index contract was originally
written. Variation margin accounting procedures as discussed above apply to
these index futures contracts. Each Fund invests in these futures contracts to
meet its objectives at a lower cost than investing directly in equity
securities, while permitting the equivalent of an investment in a portfolio of
equity securities. The potential risk to a Fund is that the change in value of
the underlying index may not correlate to the change in value of the contracts.
Equity Swap Contracts
The Market Return, Global Balanced, Growth & Income and European Growth & Income
Funds may enter into equity swap transactions, each of which involves an
agreement between the Fund and another party to exchange payments calculated as
if they were interest on a fictitious ("notional") principal amount. A Fund will
typically pay a floating rate of interest and receive the total return of a
specified equity index. A Fund usually enters into such transactions on a "net"
basis, with the Fund receiving or paying, as the case may be, only the net
amounts of the two payment streams. The net amount of the excess or deficiency,
if any, of the Fund's obligations over its entitlements with respect to each
swap is accrued on a daily basis and is recorded as an unrealized gain or loss
by that Fund.
These Funds invest in swap transactions to permit the Funds to meet their
objectives at a lower cost than investing directly in equity securities, while
permitting the equivalent of an investment in a
80 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 84
portfolio of equity securities. The potential risk to a Fund is that the swap
position may correlate imperfectly with the markets or the asset or liability
being hedged, or that its counterparty defaults.
Forward Currency Contracts
The Global Short Bond, Global Fixed Income, Total Return, High Income, Market
Return, European Growth & Income, Global Balanced and International Equity Funds
each may enter into forward foreign currency exchange contracts for the purchase
or sale of specific foreign currencies at fixed prices on future dates. Risks
may arise upon entering into these contracts from the potential inability of
counter parties to meet the terms of their contracts and from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar. These
eight Funds enter into forward contracts as a hedge against specific
transactions or portfolio positions to protect against adverse currency
movements. The forward foreign currency exchange contracts are adjusted by the
daily exchange rate of the underlying currency and any gains or losses are
recorded for financial statement purposes as unrealized until the contract
settlement date, at which time a Fund records a realized gain or loss equal to
the difference between the value of the contract at the time it was opened and
the value at the time it was closed.
Delayed Delivery Transactions
Any of the Funds may purchase securities on a when issued or delayed delivery
basis and sell securities on a 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 more than
three days in the future, or after a period longer than the customary settlement
period for that type of security. No interest will be earned by a Fund on such
purchases until the securities are delivered; however, the market value may
change prior to delivery.
TBA Sale Commitments
The Funds may enter into TBA sale commitments, such as dollar roll agreements,
to hedge its portfolio positions or to sell mortgage-backed securities it owns
under delayed delivery arrangements. Proceeds of TBA sale commitments are not
received until the contractual settlement date. During the time a TBA sale
commitment is outstanding, equivalent deliverable securities, or an offsetting
TBA purchase commitment deliverable on or before the sale commitment date, are
held as "cover" for the transaction.
Unsettled TBA sale commitments are valued at the current market value of the
underlying securities, generally according to the procedures described under
"Securities Valuation" above. The contract is "marked-to-market" daily and the
change in market value is recorded by the Fund as an unrealized gain or loss. If
the TBA sale commitment is closed through the acquisition of an
ANNUAL REPORT 81
<PAGE> 85
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 1998
offsetting purchase commitment, the Fund realizes a gain or loss from the sale
of the securities based upon the unit price established at the date the
commitment was entered into.
Distributions to Shareholders
Distributions to shareholders are recorded on the ex-dividend date. Dividends
from net investment income and net realized gains on foreign currency
transactions are declared and paid monthly for all Funds, except for (i) the
International Equity, Global Balanced, European Growth & Income, High Income and
Growth & Income Funds which are declared and paid quarterly, (ii) the Value
Stock and Growth Stock Funds which are declared and paid semi-annually, and
(iii) the Bunker Hill Money Market Fund which are declared daily and paid
monthly. Net realized gains on investments, if any, are declared and distributed
at least annually. All distributions are paid in the form of additional shares
unless cash payment is requested.
Distributions to shareholders are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
Federal Income Taxes
It is the policy of each Fund to meet the requirements for qualification as a
regulated investment company as defined in applicable sections of the Internal
Revenue Code of 1986, as amended (the "Code"), and to make distributions of net
investment income and net realized gains sufficient to relieve it from all
Federal income or excise taxes. Accordingly, no provision for Federal income or
excise tax is necessary.
Each Fund files a tax return annually using tax accounting methods required
under provisions of the Code, which may differ from generally accepted
accounting principles, the basis on which these financial statements are
prepared. The differences arise primarily from the treatment of foreign currency
transactions and futures contracts and the deferral of certain losses under
Federal income tax regulations. Accordingly, the amounts of net investment
income and net realized gains or losses reported in these financial statements
may differ from those reported in each Fund's tax return and, consequently, the
character of distributions to shareholders reported in the financial highlights
may differ from that reported to shareholders for Federal income tax purposes.
Distributions which exceed net investment income and net realized gains for
financial reporting purposes but not for tax purposes, if any, are shown as
distributions in excess of net investment income and net realized gains in the
accompanying statements. Return of capital distributions and net investment
losses for tax purposes are reclassified to paid in capital.
82 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 86
Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
Other
Shared expenses incurred by the Group are allocated among the series of the
Group on the basis of relative net assets. Series-specific expenses are charged
to each series as incurred. Fund expenses not specific to any class are
allocated between the classes based upon net assets of each class. Class-
specific expenses are charged to each Class as incurred.
ANNUAL REPORT 83
<PAGE> 87
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 1998
3. PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments (excluding short-term investments and
long-term U.S. Government securities) for the period ended October 31, 1998,
were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
------------ ------------
<S> <C> <C>
Global Short Bond Fund................................. $458,209,794 $446,059,652
Global Fixed Income Fund............................... 852,920,036 899,286,444
Global Balanced Fund................................... 10,950,409 14,775,392
International Equity Fund.............................. 32,284,475 31,655,744
European Growth & Income Fund.......................... 34,476,125 8,991,508
Growth & Income Fund................................... 83,478,550 20,682,709
Market Return Fund..................................... 35,682,506 10,032,490
Limited Maturity Fund.................................. 101,658,944 58,735,412
Short Bond Fund........................................ 232,144,814 177,810,283
U.S. Government Fund................................... 192,694,039 154,932,561
Intermediate Bond Fund................................. 188,866,985 171,681,882
Investment Quality Bond Fund........................... 562,772,147 470,186,537
Total Return Fund...................................... 317,940,491 283,693,008
Short Duration Tax Exempt Fund......................... 13,542,882 33,204,967
Tax Exempt Bond Fund................................... 35,661,182 23,889,954
High Income Fund....................................... 109,973,100 22,906,798
Value Stock Fund....................................... 36,380,584 14,302,169
Growth Stock Fund...................................... 7,055,101 4,420,747
</TABLE>
Purchases and sales of long-term U.S. Government securities for those Funds with
activity for the period ended October 31, 1998, were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
------------ ------------
<S> <C> <C>
Global Short Bond Fund................................. $205,040,942 $177,566,273
Global Fixed Income Fund............................... 184,110,707 111,713,714
Global Balanced Fund................................... 2,277,443 2,692,375
Market Return Fund..................................... 9,273,711 4,045,625
Limited Maturity Fund.................................. 110,838,516 89,068,692
Short Bond Fund........................................ 446,588,898 448,148,836
U.S. Government Fund................................... 162,936,942 125,565,660
Intermediate Bond Fund................................. 30,014,574 20,479,261
Investment Quality Bond Fund........................... 50,881,794 17,429,626
Total Return Fund...................................... 129,973,768 88,204,486
High Income Fund....................................... 27,401,100 28,030,259
</TABLE>
84 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 88
The Short Bond Fund's activity in written options for the year ended October 31,
1998 was as follows:
<TABLE>
<CAPTION>
NUMBER OF CONTRACTS
CONTRACTS PREMIUM
----------- ---------
<S> <C> <C>
Options outstanding at beginning of period................. 0 $ 0
Options sold............................................... 200 545,875
Options canceled in closing transactions................... (200) (545,875)
Options expired prior to exercise.......................... 0 0
----------- ---------
Options outstanding at end of period....................... 0 $ 0
</TABLE>
The Intermediate Bond Fund's activity in written options for the year ended
October 31, 1998 was as follows:
<TABLE>
<CAPTION>
NUMBER OF CONTRACTS
CONTRACTS PREMIUM
---------- ----------
<S> <C> <C>
Options outstanding at beginning of period................. 0 $ 0
Options sold............................................... 680 1,631,088
Options canceled in closing transactions................... (280) (536,213)
Options expired prior to exercise.......................... 0 0
---------- ----------
Options outstanding at end of period....................... 400 $1,094,875
</TABLE>
The Investment Quality Bond Fund's activity in written options for the year
ended October 31, 1998 was as follows:
<TABLE>
<CAPTION>
NUMBER OF CONTRACTS
CONTRACTS PREMIUM
--------- ----------
<S> <C> <C>
Options outstanding at beginning of period................. 40 $ 60,638
Options sold............................................... 1,080 2,725,962
Options canceled in closing transactions................... (320) (596,850)
Options expired prior to exercise.......................... 0 0
-------- ----------
Options outstanding at end of period....................... 800 $2,189,750
</TABLE>
ANNUAL REPORT 85
<PAGE> 89
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 1998
The Total Return Fund's activity in written options for the year ended October
31, 1998 was as follows:
<TABLE>
<CAPTION>
NUMBER OF CONTRACTS
CONTRACTS PREMIUM
---------- ----------
<S> <C> <C>
Options outstanding at beginning of period................. 40 $ 60,950
Options sold............................................... 1,080 2,725,963
Options canceled in closing transactions................... (320) (597,163)
Options expired prior to exercise.......................... 0 0
---------- ----------
Options outstanding at end of period....................... 800 $2,189,750
</TABLE>
The Growth Stock Fund's activity in written options for the year ended October
31, 1998 was as follows:
<TABLE>
<CAPTION>
NUMBER OF CONTRACTS
CONTRACTS PREMIUM
---------- ---------
<S> <C> <C>
Options outstanding at beginning of period.................. 0 $ 0
Options sold................................................ 30 38,460
Options canceled in closing transactions.................... (30) (38,460)
Options expired prior to exercise........................... 0 0
---------- --------
Options outstanding at end of period........................ 0 $ 0
</TABLE>
The Value Stock Fund's activity in written options for the year ended October
31, 1998 was as follows:
<TABLE>
<CAPTION>
NUMBER OF CONTRACTS
CONTRACTS PREMIUM
--------- ---------
<S> <C> <C>
Options outstanding at beginning of period.................. 0 $ 0
Options sold................................................ 226 289,522
Options canceled in closing transactions.................... (226) (289,522)
Options expired prior to exercise........................... 0 0
-------- ---------
Options outstanding at end of period........................ 0 $ 0
</TABLE>
None of the other Funds had activity in written options for the year ended
October 31, 1998.
86 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 90
4. UNAMORTIZED ORGANIZATION COSTS
The organization costs incurred on behalf of the Funds listed below are being
reimbursed to Payden & Rygel and are being amortized on a straight-line basis
over a period not exceeding five years. The organization costs and the amounts
reimbursed as of October 31, 1998 are as follows:
<TABLE>
<CAPTION>
CUMULATIVE AMORTIZED
ORGANIZATION ORGANIZATION
COSTS COSTS
------------ ------------
<S> <C> <C>
Global Short Bond Fund.................................. $ 2,047 $ 1,445
Global Balanced Fund.................................... 4,063 2,564
International Equity Fund............................... 3,799 2,397
European Growth & Income Fund........................... 4,958 2,210
Growth & Income Fund.................................... 11,447 7,621
Market Return Fund...................................... 49,138 47,791
Total Return Fund....................................... 3,255 2,054
Bunker Hill Money Market Fund........................... 848 353
High Income Fund........................................ 625 174
Value Stock Fund........................................ 6,641 1,850
Growth Stock Fund....................................... 6,641 1,850
</TABLE>
5. RELATED PARTY TRANSACTIONS
Investment advisory services are provided to the Funds by Payden & Rygel. Under
the terms of the investment advisory agreement Payden & Rygel is entitled to
receive fees monthly, computed on the average daily net assets of each of the
Funds separately at an annualized rate. The rate for the Global Short Bond and
Global Fixed Income Funds is 0.30% on net assets up to $2 billion, decreasing to
0.25% on net assets over $2 billion. The rate for the Short Duration Tax Exempt
and Tax Exempt Bond Funds is 0.32% on net assets up to $500 million, 0.28% on
the next $500 million, and 0.25% on net assets over $1 billion. The rate for the
U.S. Government, Limited Maturity, Short Bond, Intermediate Bond, Investment
Quality Bond, Market Return and Total Return Funds is 0.28% on net assets up to
$1 billion, decreasing to 0.25% on net assets over $1 billion. The rate for the
Global Balanced Fund is 0.50% on net assets up to $1 billion and 0.40% on net
assets over $1 billion. The rate for the International Equity Fund is 0.60% on
net assets up to $1 billion and 0.45% on net assets over $1 billion. The rate
for the Growth & Income Fund is 0.50% on net assets up to $2 billion and 0.30%
on net assets over $2 billion. The rate for the European Growth & Income Fund is
0.50% on net assets up to $2 billion and 0.40% on net assets over $2 billion.
The rate for the Bunker Hill Money Market Fund is 0.15% on all net assets. The
rate for the High Income Fund is 0.35% on all net assets. The rate for the Value
Stock Fund and Growth Stock Fund is 0.60% on net assets up to $1 billion and
0.50% on net assets over $1 billion.
ANNUAL REPORT 87
<PAGE> 91
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 1998
Payden & Rygel has voluntarily agreed to waive 0.05% of its fee for advisory
services for the Short Bond, U.S. Government, and Intermediate Bond Funds, and
0.20% of its fee for advisory services for the Growth & Income Fund through
October 31, 1998; 0.35% of its fee for advisory services for the High Income
Fund and 0.60% of its fee for advisory services for the Value Stock Fund and
Growth Stock Fund through June 30, 1998; and 0.10% of its fee for advisory
services for the European Growth & Income Fund through April 30, 1998. In
addition, Payden & Rygel has agreed to guarantee that, for so long as it acts as
investment adviser to a Fund, the expenses of the Fund attributable to Class R
Shares, including advisory fees (but excluding interest, taxes, portfolio
transaction expenses, blue sky fees, 12b-1 plan fees and extraordinary expenses)
will not exceed the percentage indicated below of that Fund's average daily net
assets on an annualized basis. In that regard, Payden & Rygel has voluntarily
agreed to lower the expense guarantee for the Limited Maturity Fund from 0.60%
to 0.40% for the Class R shares through October 31, 1998. Finally, Payden &
Rygel has voluntarily agreed to temporarily limit each Fund's total expenses
attributable to Class R shares, including advisory fees, to the percentage
indicated below of that Fund's average daily net assets on an annualized basis
through October 31, 1998 (exclusive of interest, taxes, portfolio transaction
expenses, blue sky fees, 12b-1 plan fees and extraordinary expenses).
88 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 92
<TABLE>
<CAPTION>
CLASS R SHARES
----------------------
VOLUNTARY
EXPENSE EXPENSE
GUARANTEE LIMIT
--------- ---------
<S> <C> <C>
Global Short Bond Fund...................................... 0.70% 0.45%
Global Fixed Income Fund.................................... 0.70% n/a
Global Balanced Fund........................................ 0.85% 0.70%
International Equity Fund................................... 1.05% 0.90%
European Growth & Income Fund............................... 0.90% 0.70%
Growth & Income Fund........................................ 0.80% 0.54%
Market Return Fund.......................................... 0.60% 0.45%
Limited Maturity Fund....................................... 0.40% 0.30%
Short Bond Fund............................................. 0.60% 0.30%
U.S. Government Fund........................................ 0.60% 0.35%
Intermediate Bond Fund...................................... 0.60% 0.40%
Investment Quality Bond Fund................................ 0.60% 0.45%
Total Return Fund........................................... 0.60% 0.45%
Short Duration Tax Exempt Fund.............................. 0.60% 0.45%
Tax Exempt Bond Fund........................................ 0.60% 0.50%
Bunker Hill Money Market Fund............................... 0.50% 0.30%
High Income Fund............................................ 0.75% 0.55%
Value Stock Fund............................................ 1.00% 0.80%
Growth Stock Fund........................................... 1.00% 0.80%
</TABLE>
Each Fund remains liable to Payden & Rygel for expenses subsidized in any fiscal
year so long as any reimbursement will not cause the annual expense ratio for
the year in which it is made to exceed the amount of the expense guarantee or
expense limit (whichever is in effect at the time of reimbursement). The
deferred expense subsidies, as identified in the statements of assets and
liabilities, represent the cumulative amount of expenses subsidized for the
Funds and will be recognized as net expense in the statements of operations as
expense previously deferred in future periods, if expense limits permit.
For the Global Balanced, International Equity and European Growth & Income
Funds, Payden & Rygel entered into a sub-advisory agreement with Scottish Widows
Investment Management ("Sub-advisor"). Under terms of the sub-advisor agreement,
the Sub-Advisor received fees monthly from
ANNUAL REPORT 89
<PAGE> 93
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 1998
Payden & Rygel at a rate of 0.40% on the first $1 billion of average daily net
assets and 0.30% on the average daily net assets over $1 billion for the Global
Balanced and International Equity Funds. In the case of the Global Balanced
Fund, fees were based on the average daily net assets allocated to the
Sub-Advisor. For the European Growth & Income Fund the Sub-Advisor received a
fee equal to 50% of the advisory fee earned and received. The Sub-Advisor's fee
did not represent a separate or additional charge against the Funds.
Effective October 1, 1998 the Advisor terminated its agreement with Scottish
Widows Investment Management and appointed Metzler/Payden LLC as Sub-Advisor,
subject to shareholder approval. On November 9, 1998 the shareholders of the
Global Balanced, International Equity and European Growth & Income Funds
ratified the new Sub-Advisor agreement. Metzler/Payden LLC is a joint venture
between the Advisor and Metzler Asset Management GmbH, an affiliate of B.
Metzler seel. Sohn & Co. Holding AG, a major German financial institution
located in Frankfurt, Germany. Metzler/Payden LLC is owned 50% by the Advisor
and 50% by MP&R Ventures, Inc. a Metzler affiliate. During the period October 1,
1998 through November 9, 1998 the Sub-Advisor received monthly fees in
accordance with the terms of the Scottish Widows' Sub-Advisor Agreement.
Effective November 10, 1998, the Sub-Advisor will receive fees monthly from
Payden & Rygel equal to 100% of the advisory fee earned and received by the
Advisor.
Under the distribution agreement with the Group, Payden & Rygel Distributors is
not entitled to receive any fees from the Group.
Treasury Plus, Inc., a wholly owned subsidiary of Payden & Rygel, serves as
administrator to the Group. Under the terms of the administration agreement with
the Group, Treasury Plus, Inc. receives fees monthly, computed on the average
daily net assets of the Group at an annualized rate of .06%.
Investors Fiduciary Trust Company ("IFTC"), a Missouri trust company, serves as
transfer agent to the Funds. Under the terms of the transfer agency agreement
with the Group, IFTC is entitled to receive fees based upon a specified amount
per shareholder with specified minimum-per-Fund amounts and surcharges, plus
certain out-of-pocket expenses.
IFTC also serves as fund accountant. Under the terms of the fund accounting
agreement with the Group, IFTC receives fees based on specified
minimum-per-Group amounts, plus certain out-of-pocket expenses.
All expenses incurred by the Funds are paid directly by Payden & Rygel subject
to subsequent reimbursement by the Funds. For Funds which have not fully
reimbursed Payden & Rygel for expenses paid on their behalf as of October 31,
1998, as identified in the Statements of Assets and
90 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 94
Liabilities as deferred expenses subsidy, the cumulative amounts of expenses
paid by Payden & Rygel and the reimbursement of expenses by the Funds are as
follows:
<TABLE>
<CAPTION>
CUMULATIVE TOTAL OF CUMULATIVE TOTAL OF
EXPENSES PAID BY REIMBURSEMENT
PAYDEN & RYGEL OF EXPENSES
------------------- -------------------
<S> <C> <C>
Global Short Bond Fund..................... $1,992,802 $1,745,021
Global Balanced Fund....................... 229,344 87,125
International Equity Fund.................. 315,754 221,286
European Growth & Income................... 323,274 166,495
Growth & Income Fund....................... 1,664,737 1,481,153
Market Return Fund......................... 424,608 178,415
Limited Maturity Fund...................... 1,622,365 915,086
Short Bond Fund............................ 1,393,489 945,506
U.S. Government Fund....................... 617,923 387,367
Intermediate Bond Fund..................... 1,203,966 959,674
Investment Quality Bond Fund............... 1,272,214 895,402
Total Return Fund.......................... 618,476 487,907
Short Duration Tax Exempt Fund............. 770,988 472,212
Tax Exempt Bond Fund....................... 1,350,585 992,252
Bunker Hill Money Market Fund.............. 84,137 17,359
High Income Fund........................... 170,334 148,523
Value Stock Fund........................... 90,914 72,615
Growth Stock Fund.......................... 46,421 6,027
</TABLE>
Certain officers and/or trustees of the Group are affiliated with Payden &
Rygel, Payden & Rygel Distributors and/or Treasury Plus, Inc. Such officers and
trustees receive no fees from the Funds for serving as officers and/or trustees
of the Group.
6. FEDERAL INCOME TAXES
At October 31, 1998, the following Funds had capital loss carryforwards in the
amounts indicated for Federal income tax purposes. These carryforwards are
available to offset future capital gains, if any.
ANNUAL REPORT 91
<PAGE> 95
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 1998
<TABLE>
<CAPTION>
CAPITAL LOSS CARRYFORWARDS
-------------------------------------------------------------------
EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING
2002 2003 2004 2005 2006 TOTAL
-------- -------- -------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Global Short Bond Fund... $37,169 $3,854,157 $3,891,326
International Equity
Fund................... 1,066,872 1,066,872
Limited Maturity Fund.... $ 1,971 $ 64,303 61,717 38,977 166,968
Short Bond Fund.......... 341,923 6,293 195,694 543,910
Tax Exempt Bond Fund..... 759,831 $92,036 460,399 1,312,266
High Income Fund......... 1,053,468 1,053,468
Value Stock Fund......... 2,857,631 2,857,631
Growth Stock Fund........ 156,438 156,438
</TABLE>
7. FUND TERMINATION
On November 20, 1998 the Board of Trustees approved the closing of the Payden &
Rygel Intermediate Bond Fund, effective on November 30, 1998, at which time all
portfolio holdings were transferred in kind, expenses owed to service providers
were paid, and a final distribution of net investment income and net realized
capital gains was made.
8. EXEMPT-INTEREST INCOME DESIGNATION (UNAUDITED)
The Group designates the following exempt-interest income for the taxable year
ended October 31, 1998:
<TABLE>
<CAPTION>
EXEMPT-INTEREST
EXEMPT-INTEREST DIVIDENDS
DIVIDENDS PER SHARE
--------------- ---------------
<S> <C> <C>
Short Duration Tax Exempt Fund................... $ 967,958 $0.41
Tax Exempt Bond Fund............................. 2,639,436 0.39
</TABLE>
The amounts noted above include exempt-interest income from alternative minimum
tax paper in the amounts indicated below:
<TABLE>
<CAPTION>
EXEMPT-INTEREST INCOME
FROM ALTERNATIVE
MINIMUM TAX PAPER
----------------------
<S> <C>
Short Duration Tax Exempt Fund............................ $131,642
Tax Exempt Bond Fund...................................... 78,349
</TABLE>
92 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 96
The percentage breakdown of the exempt-interest income by state for the Fund's
taxable year ended October 31, 1998 was as follows:
<TABLE>
<CAPTION>
SHORT DURATION
TAX EXEMPT TAX EXEMPT
FUND BOND FUND
-------------- ----------
<S> <C> <C>
Alabama.............................................. 0.0% 0.1%
Alaska............................................... 2.5 0.1
Arizona.............................................. 0.7 0.0
California........................................... 5.2 6.0
Colorado............................................. 5.2 2.5
Connecticut.......................................... 0.1 1.8
Delaware............................................. 2.5 0.1
District of Columbia................................. 7.2 6.8
Florida.............................................. 10.9 5.2
Georgia.............................................. 2.2 2.9
Hawaii............................................... 0.0 1.6
Idaho................................................ 0.0 1.7
Illinois............................................. 0.5 4.5
Indiana.............................................. 0.0 2.6
Louisiana............................................ 0.0 0.3
Maryland............................................. 1.1 1.7
Massachusetts........................................ 8.9 7.0
Michigan............................................. 1.0 0.4
Minnesota............................................ 2.4 1.2
Mississippi.......................................... 0.7 1.9
Missouri............................................. 3.9 0.0
Nevada............................................... 1.6 1.5
New Jersey........................................... 0.5 0.3
New Mexico........................................... 0.3 0.1
New York............................................. 9.5 14.1
Ohio................................................. 9.5 3.8
Oregon............................................... 1.8 0.8
</TABLE>
ANNUAL REPORT 93
<PAGE> 97
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 1998
<TABLE>
<CAPTION>
SHORT DURATION
TAX EXEMPT TAX EXEMPT
FUND BOND FUND
-------------- ----------
<S> <C> <C>
Pennsylvania......................................... 2.8 5.8
Rhode Island......................................... 0.0 0.1
South Carolina....................................... 4.6 4.0
Tennessee............................................ 0.1 2.1
Texas................................................ 9.7 9.6
Utah................................................. 0.4 0.4
Virginia............................................. 3.5 5.4
Washington........................................... 0.1 3.3
Wisconsin............................................ 0.6 0.3
----- -----
Total................................................ 100.0% 100.0%
===== =====
</TABLE>
94 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 98
(This page intentionally left blank)
<PAGE> 99
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
GLOBAL SHORT BOND FUND
-----------------------------------------------------
YEAR ENDED YEAR ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31,
1998 1997 1996(a)
------------ ----------- ------------
<S> <C> <C> <C>
Net asset value -- beginning of period......... $ 10.17 $ 10.07 $ 10.00
-------- -------- -------
Income (loss) from investment activities:
Net investment income........................ 0.92 0.58 0.05
Net realized and unrealized gains (losses)... (0.15) 0.11 0.06
-------- -------- -------
Total from investment activities........ 0.77 0.69 0.11
-------- -------- -------
Distributions to shareholders:
From net investment income................... (0.63) (0.59) (0.04)
In excess of net investment income...........
From net realized gains......................
In excess of net realized gains..............
-------- -------- -------
Total distributions to shareholders..... (0.63) (0.59) (0.04)
-------- -------- -------
Net asset value -- end of period............... $ 10.31 $ 10.17 $ 10.07
======== ======== =======
Total return................................... 7.87% 7.02% 1.10%*
======== ======== =======
Ratios/supplemental data:
Net assets, end of period (000).............. $251,609 $220,865 $28,913
Ratio of expenses to average net assets...... 0.44% 0.45% 0.45%**
Ratio of net investment income to average net
assets.................................... 4.38% 4.84% 4.86%**
Ratio of expenses to average net assets prior
to subsidies and waivers.................. 0.51% 0.53% 2.31%**
Ratio of net investment income to average net
assets prior to subsidies and waivers..... 4.31% 4.76% 3.00%**
Portfolio turnover rate...................... 245% 219% 0%**
</TABLE>
- ------------
The Funds commenced operations on following dates:
<TABLE>
<S> <C>
(a) September 18, 1996. (g) January 1, 1995.
(b) December 9, 1996. (h) September 1, 1994.
(c) June 30, 1997. (i) January 1, 1994.
(d) November 1, 1996. (j) December 21, 1993.
(e) December 1, 1995. (k) December 17, 1997.
(f) May 1, 1994. (l) December 30, 1997.
</TABLE>
* Not annualized
** Annualized
See notes to financial statements.
96 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 100
<TABLE>
<CAPTION>
GLOBAL FIXED INCOME FUND
-------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$ 10.16 $ 10.35 $ 10.32 $ 9.77 $ 10.62
-------- -------- -------- -------- --------
0.45 1.03 0.54 0.89 0.44
0.72 (0.16) 0.19 0.53 (0.65)
-------- -------- -------- -------- --------
1.17 0.87 0.73 1.42 (0.21)
-------- -------- -------- -------- --------
(0.42) (1.06) (0.70) (0.87) (0.42)
(0.22)
-------- -------- -------- -------- --------
(0.42) (1.06) (0.70) (0.87) (0.64)
-------- -------- -------- -------- --------
$ 10.91 $ 10.16 $ 10.35 $ 10.32 $ 9.77
======== ======== ======== ======== ========
11.81% 8.84% 7.41% 15.10% (2.09)%*
======== ======== ======== ======== ========
$524,650 $535,644 $651,165 $540,041 $430,210
0.49% 0.49% 0.53% 0.50% 0.55%**
5.13% 5.69% 5.67% 8.94% 4.24%**
0.49% 0.49% 0.53% 0.50% 0.55%**
5.13% 5.69% 5.67% 8.94% 4.24%**
223% 289% 176% 227% 348%**
</TABLE>
See notes to financial statements.
ANNUAL REPORT 97
<PAGE> 101
FINANCIAL HIGHLIGHTS (CONTINUED)
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
GLOBAL BALANCED
FUND
----------------------------
YEAR ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31,
1998 1997(b)
----------- ------------
<S> <C> <C>
Net asset value -- beginning of period...................... $10.79 $ 10.00
------ -------
Income (loss) from investment activities:
Net investment income..................................... 0.20 0.05
Net realized and unrealized gains (losses)................ 0.63 0.90
------ -------
Total from investment activities..................... 0.83 0.95
------ -------
Distributions to shareholders:
From net investment income................................ (0.17) (0.05)
In excess of net investment income........................
From net realized gains................................... (0.61) (0.11)
In excess of net realized gains...........................
------ -------
Total distributions to shareholders.................. (0.78) (0.16)
------ -------
Net asset value -- end of period............................ $10.84 $ 10.79
====== =======
Total return................................................ 8.21% 9.49%*
====== =======
Ratios/supplemental data:
Net assets, end of period (000)........................... $7,078 $10,312
Ratio of expenses to average net assets................... 0.69% 0.70%**
Ratio of net investment income to average net assets...... 3.11% 3.32%**
Ratio of expenses to average net assets prior to subsidies
and waivers............................................ 1.43% 1.64%**
Ratio of net investment income to average net assets prior
to subsidies and waivers............................... 2.37% 2.38%**
Portfolio turnover rate................................... 156% 211%**
</TABLE>
- ------------
The Funds commenced operations on following dates:
<TABLE>
<S> <C>
(a) September 18, 1996. (g) January 1, 1995.
(b) December 9, 1996. (h) September 1, 1994.
(c) June 30, 1997. (i) January 1, 1994.
(d) November 1, 1996. (j) December 21, 1993.
(e) December 1, 1995. (k) December 17, 1997.
(f) May 1, 1994. (l) December 30, 1997.
</TABLE>
* Not annualized
** Annualized
See notes to financial statements.
98 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 102
<TABLE>
<CAPTION>
INTERNATIONAL EUROPEAN GROWTH & GROWTH & INCOME
EQUITY FUND INCOME FUND FUND
-------------------------- -------------------------- --------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1998 1997(b) 1998 1997(c) 1998 1997(d)
----------- ------------ ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
$ 10.75 $ 10.00 $ 10.19 $ 10.00 $ 12.77 $ 10.00
------- ------- ------- ------- -------- --------
0.16 (0.28) 0.17 (0.04) 0.21 0.17
(0.07) 1.04 1.28 0.23 1.71 2.74
------- ------- ------- ------- -------- --------
0.09 0.76 1.45 0.19 1.92 2.91
------- ------- ------- ------- -------- --------
(0.07) (0.01) (0.17) (0.24) (0.14)
(0.01)
------- ------- ------- ------- -------- --------
(0.07) (0.01) (0.18) 0.00 (0.24) (0.14)
------- ------- ------- ------- -------- --------
$ 10.77 $ 10.75 $ 11.46 $ 10.19 $ 14.45 $ 12.77
======= ======= ======= ======= ======== ========
0.75% 7.59%* 14.31% 1.90%* 15.15% 29.19%*
======= ======= ======= ======= ======== ========
$18,323 $14,403 $39,529 $13,608 $250,553 $150,944
0.89% 0.90%** 0.69% 0.69%** 0.54% 0.54%**
1.47% 0.92%** 2.77% 1.72%** 1.55% 1.60%**
1.15% 1.57%** 1.20% 2.48%** 0.77% 0.89%**
1.21% 0.25%** 2.26% (0.07)%** 1.32% 1.25%**
181% 66%** 34% 9%** 10% 2%**
</TABLE>
See notes to financial statements.
ANNUAL REPORT 99
<PAGE> 103
FINANCIAL HIGHLIGHTS (CONTINUED)
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
MARKET RETURN FUND
----------------------------------------------------
YEAR ENDED YEAR ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31,
1998 1997 1996(e)
----------- ----------- ------------
<S> <C> <C> <C>
Net asset value -- beginning of period........... $ 12.80 $ 10.86 $10.00
------- ------- ------
Income (loss) from investment activities:
Net investment income.......................... 0.73 0.63 0.50
Net realized and unrealized gains (losses)..... 1.46 2.64 0.86
------- ------- ------
Total from investment activities.......... 2.19 3.27 1.36
------- ------- ------
Distributions to shareholders:
From net investment income..................... (0.71) (0.63) (0.50)
In excess of net investment income.............
From net realized gains........................ (0.97) (0.70)
In excess of net realized gains................
------- ------- ------
Total distributions to shareholders....... (1.68) (1.33) (0.50)
------- ------- ------
Net asset value -- end of period................. $ 13.31 $ 12.80 $10.86
======= ======= ======
Total return..................................... 18.48% 31.74% 14.06%*
======= ======= ======
Ratios/supplemental data:
Net assets, end of period (000)................ $43,390 $20,195 $5,789
Ratio of expenses to average net assets........ 0.45% 0.45% 0.00%**
Ratio of net investment income to average net
assets...................................... 5.69% 5.36% 5.95%**
Ratio of expenses to average net assets prior
to subsidies and waivers.................... 0.69% 0.96% 4.14%**
Ratio of net investment income to average net
assets prior to subsidies and waivers....... 5.45% 4.85% 1.81%**
Portfolio turnover rate........................ 48% 140% 146%**
</TABLE>
- ------------
The Funds commenced operations on following dates:
<TABLE>
<S> <C>
(a) September 18, 1996. (g) January 1, 1995.
(b) December 9, 1996. (h) September 1, 1994.
(c) June 30, 1997. (i) January 1, 1994.
(d) November 1, 1996. (j) December 21, 1993.
(e) December 1, 1995. (k) December 17, 1997.
(f) May 1, 1994. (l) December 30, 1997.
</TABLE>
* Not annualized
** Annualized
See notes to financial statements.
100 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 104
<TABLE>
<CAPTION>
LIMITED MATURITY FUND
--------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1998 1997 1996 1995 1994(f)
----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
$ 10.06 $ 10.06 $ 10.06 $ 10.00 $ 10.00
-------- -------- ------- ------- -------
0.56 0.54 0.53 0.56 0.19
0.02 0.07 (0.01)
-------- -------- ------- ------- -------
0.58 0.54 0.53 0.63 0.18
-------- -------- ------- ------- -------
(0.56) (0.54) (0.53) (0.57) (0.18)
-------- -------- ------- ------- -------
(0.56) (0.54) (0.53) (0.57) (0.18)
-------- -------- ------- ------- -------
$ 10.08 $ 10.06 $ 10.06 $ 10.06 $ 10.00
======== ======== ======= ======= =======
5.87% 5.46% 5.41% 6.43% 1.84%*
======== ======== ======= ======= =======
$117,042 $152,429 $50,771 $18,414 $14,248
0.29% 0.30% 0.30% 0.33% 0.41%**
5.58% 5.52% 5.45% 5.59% 4.74%**
0.47% 0.52% 0.62% 0.83% 2.92%**
5.40% 5.30% 5.13% 5.09% 2.23%**
91% 135% 217% 166% 86%**
</TABLE>
See notes to financial statements.
ANNUAL REPORT 101
<PAGE> 105
FINANCIAL HIGHLIGHTS (CONTINUED)
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
U.S. GOVERNMENT FUND
------------------------------------------------------
------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1998 1997 1996 1995(g)
----------- ----------- ----------- ------------
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net asset value -- beginning of period.... $ 10.56 $ 10.54 $ 10.61 $ 10.00
------- ------- ------- -------
Income (loss) from investment activities:
Net investment income................... 0.56 0.60 0.58 0.53
Net realized and unrealized gains
(losses)............................. 0.33 0.02 (0.04) 0.61
------- ------- ------- -------
Total from investment activities... 0.89 0.62 0.54 1.14
------- ------- ------- -------
Distributions to shareholders:
From net investment income.............. (0.55) (0.60) (0.58) (0.53)
In excess of net investment income......
From net realized gains................. (0.03)
In excess of net realized gains
------- ------- ------- -------
Total distributions to
shareholders.................... (0.55) (0.60) (0.61) (0.53)
------- ------- ------- -------
Net asset value -- end of period.......... $ 10.90 $ 10.56 $ 10.54 $ 10.61
------- ------- ------- -------
------- ------- ------- -------
Total return.............................. 8.60% 6.10% 5.20% 11.61%*
------- ------- ------- -------
------- ------- ------- -------
Ratios/supplemental data:
Net assets, end of period (000)......... $71,855 $15,479 $22,114 $10,894
Ratio of expenses to average net
assets............................... 0.34% 0.45% 0.45% 0.45%**
Ratio of net investment income to
average net assets................... 5.38% 5.49% 5.59% 6.31%**
Ratio of expenses to average net assets
prior to subsidies and waivers....... 0.54% 0.63% 0.78% 1.84%**
Ratio of net investment income to
average net assets prior to subsidies
and waivers.......................... 5.18% 5.31% 5.26% 4.92%**
Portfolio turnover rate................. 287% 160% 152% 87%**
</TABLE>
- ------------
The Funds commenced operations on following dates:
<TABLE>
<S> <C>
(a) September 18, 1996. (g) January 1, 1995.
(b) December 9, 1996. (h) September 1, 1994.
(c) June 30, 1997. (i) January 1, 1994.
(d) November 1, 1996. (j) December 21, 1993.
(e) December 1, 1995. (k) December 17, 1997.
(f) May 1, 1994. (l) December 30, 1997.
</TABLE>
* Not annualized
** Annualized
See notes to financial statements.
102 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 106
<TABLE>
<CAPTION>
SHORT BOND FUND
--------------------------------------------------------------------
--------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1998 1997 1996 1995 1994(h)
----------- ----------- ----------- ----------- ------------
----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
$ 9.92 $ 9.97 $ 10.04 $ 9.68 $10.00
-------- ------- ------- ------- ------
0.63 0.58 0.54 0.54 0.34
0.02 (0.05) (0.06) 0.36 (0.32)
-------- ------- ------- ------- ------
0.65 0.53 0.48 0.90 0.02
-------- ------- ------- ------- ------
(0.63) (0.58) (0.54) (0.54) (0.34)
(0.01)
-------- ------- ------- ------- ------
(0.63) (0.58) (0.55) (0.54) (0.34)
-------- ------- ------- ------- ------
$ 9.94 $ 9.92 $ 9.97 $ 10.04 $ 9.68
-------- ------- ------- ------- ------
-------- ------- ------- ------- ------
6.80% 5.52% 4.86% 9.56% 0.21%*
-------- ------- ------- ------- ------
-------- ------- ------- ------- ------
$108,661 $94,256 $97,966 $19,157 $2,592
0.30% 0.40% 0.40% 0.40% 0.48%**
6.04% 6.00% 5.67% 5.72% 4.47%**
0.50% 0.49% 0.57% 1.03% 4.56%**
5.84% 5.91% 5.50% 5.09% 0.39%**
596% 208% 212% 170% 187%**
</TABLE>
See notes to financial statements.
ANNUAL REPORT 103
<PAGE> 107
FINANCIAL HIGHLIGHTS (CONTINUED)
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
TOTAL RETURN FUND
--------------------------------
YEAR ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31,
1998 1997(b)
----------- ------------
<S> <C> <C>
Net asset value -- beginning of period...................... $ 10.25 $ 10.00
-------- -------
Income (loss) from investment activities:
Net investment income..................................... 0.57 0.46
Net realized and unrealized gains (losses)................ 0.20 0.23
-------- -------
Total from investment activities....................... 0.77 0.69
-------- -------
Distributions to shareholders:
From net investment income................................ (0.58) (0.44)
In excess of net investment income........................ (0.13)
From net realized gains................................... (0.08)
In excess of net realized gains...........................
-------- -------
Total distributions to shareholders.................... (0.79) (0.44)
-------- -------
Net asset value -- end of period............................ $ 10.23 $ 10.25
======== =======
Total return................................................ 7.72% 7.10%
======== =======
Ratios/supplemental data:
Net assets, end of period (000)........................... $174,612 $98,863
Ratio of expenses to average net assets................... 0.44% 0.45%**
Ratio of net investment income to average net assets...... 6.07% 6.21%**
Ratio of expenses to average net assets prior to subsidies
and waivers............................................ 0.52% 0.69%**
Ratio of net investment income to average net assets prior
to subsidies and waivers............................... 5.99% 5.97%**
Portfolio turnover rate................................... 208% 206%**
</TABLE>
- ------------
The Funds commenced operations on following dates:
<TABLE>
<S> <C>
(a) September 18, 1996. (g) January 1, 1995.
(b) December 9, 1996. (h) September 1, 1994.
(c) June 30, 1997. (i) January 1, 1994.
(d) November 1, 1996. (j) December 21, 1993.
(e) December 1, 1995. (k) December 17, 1997.
(f) May 1, 1994. (l) December 30, 1997.
</TABLE>
* Not annualized
** Annualized
See notes to financial statements.
104 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 108
<TABLE>
<CAPTION>
INTERMEDIATE BOND FUND
-------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1998 1997 1996 1995 1994(i)
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$ 9.71 $ 9.60 $ 9.85 $ 9.30 $ 10.00
------- ------- ------- ------- -------
0.60 0.56 0.56 0.57 0.35
0.12 0.11 (0.17) 0.55 (0.70)
------- ------- ------- ------- -------
0.72 0.67 0.39 1.12 (0.35)
------- ------- ------- ------- -------
(0.58) (0.56) (0.56) (0.57) (0.35)
(0.05) (0.08)
------- ------- ------- ------- -------
(0.63) (0.56) (0.64) (0.57) (0.35)
------- ------- ------- ------- -------
$ 9.80 $ 9.71 $ 9.60 $ 9.85 $ 9.30
======= ======= ======= ======= =======
7.73% 7.26% 4.06% 12.43% (3.52%)*
======= ======= ======= ======= =======
$88,872 $80,766 $52,767 $34,391 $14,312
0.39% 0.45% 0.45% 0.45% 0.46%**
6.12% 5.96% 5.90% 6.10% 5.39%**
0.49% 0.55% 0.58% 0.68% 2.03%**
6.02% 5.86% 5.77% 5.87% 3.82%**
121% 192% 196% 189% 358%**
</TABLE>
See notes to financial statements.
ANNUAL REPORT 105
<PAGE> 109
FINANCIAL HIGHLIGHTS (CONTINUED)
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
INVESTMENT QUALITY BOND
FUND
-----------------------------------------
-----------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31,
1998 1997 1996
----------- ----------- -----------
----------- ----------- -----------
<S> <C> <C> <C>
Net asset value -- beginning of period................... $ 10.01 $ 9.81 $ 9.96
----------- ---------- ----------
Income (loss) from investment activities:
Net investment income.................................. 0.60 0.58 0.63
Net realized and unrealized gains (losses)............. 0.20 0.22 (0.17)
----------- ---------- ----------
Total from investment activities.................... 0.80 0.80 0.46
----------- ---------- ----------
Distributions to shareholders:
From net investment income............................. (0.59) (0.60) (0.61)
In excess of net investment income.....................
From net realized gains................................ (0.05)
In excess of net realized gains........................
----------- ---------- ----------
Total distributions to shareholders................. (0.64) (0.60) (0.61)
----------- ---------- ----------
Net asset value -- end of period......................... $ 10.17 $ 10.01 $ 9.81
----------- ---------- ----------
----------- ---------- ----------
Total return............................................. 8.33% 8.44% 4.86%
----------- ---------- ----------
----------- ---------- ----------
Ratios/supplemental data:
Net assets, end of period (000)........................ $173,974 $94,987 $32,304
Ratio of expenses to average net assets................ 0.44% 0.45% 0.00%
Ratio of net investment income to average net assets... 6.12% 6.03% 6.41%
Ratio of expenses to average net assets prior to
subsidies and waivers............................... 0.50% 0.53% 0.64%
Ratio of net investment income to average net assets
prior to subsidies and waivers...................... 6.06% 5.95% 5.77%
Portfolio turnover rate................................ 156% 317% 197%
</TABLE>
- ------------
The Funds commenced operations on following dates:
<TABLE>
<S> <C>
(a) September 18, 1996. (g) January 1, 1995.
(b) December 9, 1996. (h) September 1, 1994.
(c) June 30, 1997. (i) January 1, 1994.
(d) November 1, 1996. (j) December 21, 1993.
(e) December 1, 1995. (k) December 17, 1997.
(f) May 1, 1994. (l) December 30, 1997.
</TABLE>
* Not annualized
** Annualized
See notes to financial statements.
106 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 110
<TABLE>
<CAPTION>
INVESTMENT QUALITY SHORT DURATION TAX EXEMPT
BOND FUND FUND
-------------------------- --------------------------------------------------------------------
-------------------------- --------------------------------------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1995 1994(i) 1998 1997 1996 1995 1994(h)
----------- ------------ ----------- ----------- ----------- ----------- ------------
----------- ------------ ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 9.09 $10.00 $ 10.08 $ 10.01 $ 10.08 $ 9.93 $ 10.00
---------- --------- ---------- ---------- ---------- ---------- -----------
0.57 0.37 0.42 0.38 0.38 0.42 0.04
0.87 (0.91) 0.03 0.07 (0.06) 0.15 (0.07)
---------- --------- ---------- ---------- ---------- ---------- -----------
1.44 (0.54) 0.45 0.45 0.32 0.57 (0.03)
---------- --------- ---------- ---------- ---------- ---------- -----------
(0.57) (0.37) (0.41) (0.38) (0.38) (0.42) (0.04)
(0.01) (0.01)
---------- --------- ---------- ---------- ---------- ---------- -----------
(0.57) (0.37) (0.42) (0.38) (0.39) (0.42) (0.04)
---------- --------- ---------- ---------- ---------- ---------- -----------
$ 9.96 $ 9.09 $ 10.11 $ 10.08 $ 10.01 $ 10.08 $ 9.93
---------- --------- ---------- ---------- ---------- ---------- -----------
---------- --------- ---------- ---------- ---------- ---------- -----------
16.39% (5.49)%* 4.55% 4.55% 3.28% 5.88% (0.35)%*
---------- --------- ---------- ---------- ---------- ---------- -----------
---------- --------- ---------- ---------- ---------- ---------- -----------
$25,822 $3,030 $16,825 $38,176 $36,336 $16,019 $20,150
0.45% 0.49%** 0.44% 0.45% 0.45% 0.45% 0.45%**
6.20% 5.25%** 3.99% 3.75% 3.81% 4.12% 3.20%**
1.11% 4.52%** 0.68% 0.62% 0.70% 0.91% 2.87%**
5.55% 1.22%** 3.75% 3.58% 3.56% 3.66% 0.78%**
252% 513%** 53% 57% 35% 80% 0%**
</TABLE>
See notes to financial statements.
ANNUAL REPORT 107
<PAGE> 111
FINANCIAL HIGHLIGHTS (CONTINUED)
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
TAX EXEMPT BOND
FUND
---------------------------------------
---------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31,
1998 1997 1996
----------- ----------- -----------
----------- ----------- -----------
<S> <C> <C> <C>
Net asset value -- beginning of period...................... $ 9.71 $ 9.47 $ 9.59
---------- ---------- ----------
Income (loss) from investment activities:
Net investment income..................................... 0.40 0.44 0.45
Net realized and unrealized gains (losses)................ 0.20 0.24 (0.12)
---------- ---------- ----------
Total from investment activities....................... 0.60 0.68 0.33
---------- ---------- ----------
Distributions to shareholders:
From net investment income................................ (0.39) (0.44) (0.45)
In excess of net investment income........................
From net realized gains...................................
In excess of net realized gains...........................
---------- ---------- ----------
Total distributions to shareholders.................... (0.39) (0.44) (0.45)
---------- ---------- ----------
Net asset value -- end of period............................ $ 9.92 $ 9.71 $ 9.47
---------- ---------- ----------
---------- ---------- ----------
Total return........................................... 6.32% 7.33% 3.52%
---------- ---------- ----------
---------- ---------- ----------
Ratios/supplemental data:
Net assets, end of period (000)........................... $67,889 $57,579 $49,862
Ratio of expenses to average net assets................... 0.49% 0.45% 0.45%
Ratio of net investment income to average net assets...... 4.08% 4.60% 4.73%
Ratio of expenses to average net assets prior to subsidies
and waivers............................................ 0.57% 0.59% 0.61%
Ratio of net investment income to average net assets prior
to subsidies and waivers............................... 4.00% 4.46% 4.57%
Portfolio turnover rate................................... 36% 42% 23%
</TABLE>
- ------------
The Funds commenced operations on following dates:
<TABLE>
<S> <C>
(a) September 18, 1996. (g) January 1, 1995.
(b) December 9, 1996. (h) September 1, 1994.
(c) June 30, 1997. (i) January 1, 1994.
(d) November 1, 1996. (j) December 21, 1993.
(e) December 1, 1995. (k) December 17, 1997.
(f) May 1, 1994. (l) December 30, 1997.
</TABLE>
* Not annualized
** Annualized
See notes to financial statements.
108 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 112
<TABLE>
<CAPTION>
BUNKER HILL
TAX EXEMPT BOND MONEY MARKET HIGH INCOME VALUE STOCK GROWTH STOCK
FUND FUND FUND FUND FUND
-------------------------- -------------------- -------------------- -------------------- --------------------
-------------------------- -------------------- -------------------- -------------------- --------------------
YEAR ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1995 1994(j) 1998(k) 1998(l) 1998(l) 1998(l)
----------- ------------ -------------------- -------------------- -------------------- --------------------
----------- ------------ -------------------- -------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
$ 8.90 $ 10.00 $ 1.00 $ 10.00 $ 10.00 $10.00
---------- ----------- --------------- --------------- --------------- -------------
0.46 0.33 0.05 0.47 0.07 0.03
0.69 (1.10) (0.34) (0.75) (0.89)
---------- ----------- --------------- --------------- --------------- -------------
1.15 (0.77) 0.05 0.13 (0.68) (0.86)
---------- ----------- --------------- --------------- --------------- -------------
(0.46) (0.33) (0.05) (0.36) (0.04) (0.03)
---------- ----------- --------------- --------------- --------------- -------------
(0.46) (0.33) (0.05) (0.36) (0.04) (0.03)
---------- ----------- --------------- --------------- --------------- -------------
$ 9.59 $ 8.90 $ 1.00 $ 9.77 $ 9.28 $ 9.11
---------- ----------- --------------- --------------- --------------- -------------
---------- ----------- --------------- --------------- --------------- -------------
13.25% (7.85)%* 4.65%* 1.28%* (6.85)%* (8.66)%*
---------- ----------- --------------- --------------- --------------- -------------
---------- ----------- --------------- --------------- --------------- -------------
$40,052 $25,474 $26,455 $91,669 $23,544 $2,384
0.45% 0.50%** 0.29%** 0.54%** 0.79%** 0.77%**
4.97% 4.47%** 5.23%** 7.75%** 1.20%** 0.39%**
0.74% 1.07%** 0.71%** 0.71%** 1.23%** 2.89%**
4.69% 3.90%** 4.81%** 7.58%** 0.76%** (1.73%)**
42% 98%** 0%** 134%** 143%** 186%**
</TABLE>
See notes to financial statements.
ANNUAL REPORT 109
<PAGE> 113
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees and Shareholders of
Payden & Rygel Investment Group
We have audited the accompanying statements of assets and liabilities, including
the schedules of portfolio investments, of Payden & Rygel Investment Group (the
"Funds"), including Payden & Rygel Global Short Bond Fund, Payden & Rygel Global
Fixed Income Fund, Payden & Rygel Global Balanced Fund, Payden & Rygel
International Equity Fund, Payden & Rygel European Growth & Income Fund, Payden
& Rygel Growth & Income Fund, Payden & Rygel Market Return Fund, Payden & Rygel
Limited Maturity Fund, Payden & Rygel Short Bond Fund, Payden & Rygel U.S.
Government Fund, Payden & Rygel Intermediate Bond Fund, Payden & Rygel
Investment Quality Bond Fund, Payden & Rygel Total Return Fund, Payden & Rygel
Short Duration Tax Exempt Fund, Payden & Rygel Tax Exempt Bond Fund, Payden &
Rygel Bunker Hill Money Market Fund, Payden & Rygel High Income Fund, Payden &
Rygel Value Stock Fund and Payden & Rygel Growth Stock Fund as of October 31,
1998, the related statements of operations for the period then ended, the
statements of changes in net assets and the financial highlights for the periods
presented. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1998, by correspondence with the Funds' custodians and brokers. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Funds as of October 31, 1998, the results of their operations, the changes in
their net assets, and the financial highlights for the respective stated
periods, in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Dayton, Ohio
December 10, 1998
110 PAYDEN & RYGEL INVESTMENT GROUP
<PAGE> 114
TRUSTEES AND OFFICERS
Trustees
Joan A. Payden, Chairman and Chief Executive Officer
President, Payden & Rygel
Lynda L. Faber
Retired, formerly Senior Vice President, Payden & Rygel
John P. Isaacson
Principal, Payden & Rygel
J. Clayburn La Force
Dean Emeritus, The John E. Anderson Graduate
School of Management
Thomas V. McKernan, Jr.
President and Chief Executive Officer
Automobile Club of Southern California
Christopher N. Orndorff
Principal, Payden & Rygel
Dennis C. Poulsen
Chairman of the Board, Rose Hills Company
Stender E. Sweeney
Private Investor
W.D. Hilton, Jr.
Managing Trustee, NGC Settlement Trust
Officers
John C. Siciliano, President and Chief Operating Officer
Gregory P. Brown, Vice President
Yot Chattrabhuti, Vice President
Bradley F. Hersh, Vice President and Treasurer
Edward S. Garlock, Secretary
ANNUAL REPORT 111
